Delegate Gregorio Kilili C. Sablan (Ind-MP) clarified on Friday that if U.S. Congress enacted an oversight board to manage Puerto Rico’s fiscal crisis this would have “nothing to do” with any other territories or commonwealths and does not apply to the Northern Marianas at all.
But, he added, because of the uniformity requirement of Congressional legislation, Sablan said, the NMI would be included “in the authorization to establish an oversight board.”
Gov. Ralph DLG Torres earlier expressed concern that this bill would “impose” and “is infringing” the CNMI’s self-government.
To “protect” the Commonwealth, Sablan said on Friday, he is watching the draft legislation closely and is asking, “for language that would protect us and the other territories from the application oversight board for Puerto Rico.”
This language would entail “lack of effect on the Covenant” and “mutual consent” provisions.
“We are spearheading a letter or request to the Congressional research service joined by our colleagues American Samoa, Guam, and the U.S. Virgin Islands…to give us a greater understanding of this very complex situation,” Sablan told reporters Friday.
“The uniformity clause essentially says that if you introduce a major piece of legislation to one commonwealth or territory then the same should be applied to the rest of the other territories or Commonwealth.”
“A lack of effect on the Covenant” language basically says that the law does not take away anything from the NMI Covenant. This language was used when Congress authorized the position of delegate for the NMI to Congress.
“The legislation that provides an oversight board for Puerto Rico does not, in any way, form, or matter, set an oversight board for the NMI. But it also opens up a path for eventually in the future—if Congress deems it necessary” to establish an oversight board for the NMI, Sablan said. This is where the mutual consent requirement to establish the board would come in.
The bill, to establish a five-member board to oversee Puerto Rico’s fiscal crisis, or what Sablan calls essentially a “fourth branch” of government for Puerto Rico, is being considered to prevent Puerto Rico’s current fiscal problems from descending into a humanitarian crisis.
Puerto Rico has amassed a debt of over $70 billion.
Sablan explained that House Speaker Paul Ryan (R-WI 1st District) set a deadline last December for his House committees to draft a responsible solution to Puerto Rico’s debt crisis by March 31. And House natural resources committee chair Rep. Rob Bishop (R-UT) met the speaker’s deadline by issuing a draft bill on March 30.
The government and Puerto Rico and a variety of quasi-governmental entities in that commonwealth have amassed a debt in the excess of $70 billion. And another $46 million it owes to its retirees, which they are not unable to pay.
Without some intervention from the federal government, Puerto Rico will be unable to continue to paying police, teachers, and providing healthcare and many of the other essential services of government.
“A fiscal crisis would actually turn into a humanitarian crisis if nothing is done,” Sablan said.
“It is a difficult situation and as a vice ranking member of Natural Resources committee I am monitoring very closely. I am also watching it closely because whenever Congress is at work on legislation that affects one of the non-state areas, such Puerto Rico, I have to be sure to use the opportunity [to see] if the legislative proposal could benefit the Northern Marianas and to protect us if the legislation could potentially hurt our islands.
For instance, there was a proposal to extend federal bankruptcy laws to Puerto Rico and to the other non-state areas, including the Marianas, to which Sablan consulted with Torres and agreed that extending bankruptcy was not in the interests of the NMI.
The current proposed solution creates an oversight board as part of the Puerto Rico government but outside the control of the governor or the legislature.
The oversight board has broad power including the ability to propose an adjustment of how much Puerto Rico owes to its various creditors, which will be put into effect after confirmation by a federal court.
Sablan said legislation is expected to be introduced on April 12 and he would be participating in a hearing on the bill the next day.
Sablan said he has also asked Torres to submit testimony or a letter to Bishop about his concerns.
Sablan listed some benefits that could carry over to territories as part of the Puerto Rico solution like including the CNMI into the national Medicaid program. Instead of availing of block grants, Sablan said, this could allow the NMI to enter into main Medicaid program and withdraw funds “from a larger pot of money.”
Sablan also said other benefits could include earned income tax credits.
“To avoid the humanitarian crisis this is part one,” Sablan said of the proposed bill. “Part two will require help to Puerto Rico and, we are asking, help to the rest of the territories.”
He said if the NMI not be included, “we could be potentially be losing out on the extension of programs that we really need after 2019.”