Sean Duffy

Wisconsin Congressman Sean Duffy, with the support of House Speaker Paul Ryan, sponsored a law to help Puerto Rico deal with its debt crisis. Unfortunately, the legislation is similar to the financial manager law used in Michigan to take away local control in cases of financial crisis. In signing the bill, President Obama noted that it was less than a perfect solution to the island's financial problems.


Two hundred and forty years ago this week, the founders of the American experiment signed their names to a document that declared: “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed.”

The disconnect between founding principles and contemporary practices has often been in evidence: in an initial acceptance of human bondage, in the brutal dislocations of Native Americans, in the denial of the franchise to women and people of color and to those who lacked the wealth to pay a poll tax, in the refusal to embrace the constitutional requirement of equal protection under the law for all Americans. There has been tremendous progress, to be sure. But the continued rejection of the demand of the people of the District of Columbia for statehood offers one ongoing reminder that the promise of the founding document (that just powers would derive “from the consent of the governed”) is unrealized for millions of Americans. Another reminder is the unequal treatment of Puerto Rico proposed by House Speaker Paul Ryan and Congressman Sean Duffy, a pair of Wisconsin Republicans who have led the fight to take basic democratic rights away from American citizens who live on the island.

Last week, as members of Congress rushed to finish their business before jetting off for the Fourth of July break, the Senate joined the House in voting for the “Puerto Rico Oversight, Management, and Economic Stability Act” or “PROMESA.” Sponsored by Duffy with encouragement from Ryan, this assault on core premises of the American experiment is now the law.

But it is bad law.

Ryan and Duffy, both proponents of crude austerity schemes that blame the victims of speculators for the harm done to communities, states and nations, refused to accept reasonable proposals for addressing a debt crisis that has hobbled Puerto Rico. The debt crisis is real, as have been the crises faced by many American communities and states. A long and severe economic downturn, speculation and policy missteps have combined to create a circumstance that Treasury Secretary Jacob Lew said has “already harmed the health, safety and welfare of the 3.5 million Americans living in Puerto Rico.” Yet, rather than respond with an eye toward renewing and strengthening the economy of the commonwealth, Ryan and congressional Republicans came up with austerity schemes to punish the vast majority of Puerto Ricans. And, with the assistance of key Democrats in the House and then the Senate, those schemes have been approved and signed into law by a president who has observed with considerable understatement that this emergency “solution” is “not perfect.”

Congress could have taken steps that would have allowed the economically hard-hit island “commonwealth” to restructure debts as American states do — and as Obama had proposed for Puerto Rico. But Ryan and his compatriots refused to extend standard bankruptcy protections to Puerto Rico, and instead demanded the establishment of an unelected Financial Oversight and Management Board, which is now empowered “to assist the government of Puerto Rico, including instrumentalities, in managing its public finances, and for other purposes.”

“The Republicans’ solution to the Puerto Rico debt crisis is colonialism at its worst,” complained Vermont Sen. Bernie Sanders, an outspoken critic of the legislation.

The PROMESA legislation, as drafted by Duffy, actually announces, “The provisions of this act shall prevail over any general or specific provisions of territory law, state law, or regulation that is inconsistent with this act.”

Though Puerto Ricans are U.S. citizens, their future will be defined not by an elected government that derives “just powers from the consent of the governed” but by the seven-member oversight board (four members of which must be appointed from lists submitted to President Obama by Speaker Ryan and Senate Majority Leader Mitch McConnell). The board has sweeping powers to make cuts. Among the austerity measures imagined in the legislation is a scheme that would allow Puerto Rico to temporarily abandon federal minimum-wage requirements for younger workers.

Congressman Luis V. Gutierrez, D-Ill., who opposed PROMESA in the House (where it was approved 297-127, with the support of a majority of both Republicans and Democrats), said that “this process is driven by Wall Street’s demands, not by the legitimate needs of the Puerto Rican people to keep schools open, hospitals staffed, and first responders at work protecting the people. In the rush to do something, the U.S. Congress has ignored the Puerto Rican people, stolen their democracy, and layered on pet projects to weaken wages, threaten the environment, and reassert in a most dramatic way the colonial rule of the United States over Puerto Rico.”

If Financial Oversight and Management Board austerity proves to be unpopular, tough. While Puerto Rican voters can elect officials to represent their interests, those officials are restricted in their ability to do so by legislation that declares:

“Neither the Governor nor the Legislature may —

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“(1) exercise any control, supervision, oversight, or review over the Oversight Board or its activities; or

“(2) enact, implement, or enforce any statute, resolution, policy, or rule that would impair or defeat the purposes of this act, as determined by the Oversight Board.”

Activists in Puerto Rico said the law sounds a lot like the emergency manager plans that Michigan Gov. Rick Snyder has imposed on the cities of Flint and Detroit.

Unfortunately, this is how austerity works. In a difficult circumstance, power is taken from the great mass of citizens and handed to those who are most likely to address a crisis by cutting employment and services. That’s economically unsound and socially painful. Voters would never embrace harsh austerity, which is why politicians such as Duffy and Ryan ground their austerity schemes in assaults on democracy — abandoning the founding vision that governmental powers should derive “from the consent of the governed.”

John Nichols is associate editor of The Capital Times. and @NicholsUprising

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Associate Editor of the Cap Times