By Peter Schroeder - 04/27/16
The new Speaker is pressing his conference to back legislation providing debt relief for Puerto Rico, but it’s not clear the Wisconsin Republican can muster a majority of his members. House Majority Leader Kevin McCarthy (R-Calif.) sidestepped a question Tuesday on whether a bill would come to the floor only if a majority of Republicans back it.
“The one thing the Speaker always wants to make sure is that he protects the taxpayers and that we don’t have a bailout here,” he said on Tuesday. Conservatives are grumbling about helping the territory rework a massive debt burden built over decades, while rank-and-file members were spooked by outside ads lambasting the package as a “bailout” for the island.
The Center for Individual Freedom is behind the ads and not required to disclose its donors. But many believe hedge funds that stand to gain from not passing the bill are involved in the ads, which are regularly seen during cable news broadcasts in Washington, D.C.
To build support for legislation, Ryan has publicly and repeatedly shot down the claim that there will be a bailout for Puerto Rico. No taxpayer dollars would go to Puerto Rico under current legislation, he has noted. He has also insisted a final measure will win bipartisan support, signaling a willingness to work with his own conference and Democrats to write the bill.
But as deadlines for action slip with no bill materializing, exactly how the Speaker and his leadership team design a measure that calms GOP nerves without driving away Democrats is becoming a major question. Ryan assured conservatives last year that for immigration bills, he would respect the House GOP’s informal “Hastert” rule to only bring legislation to the floor that has support from a majority of the conference, according to a leadership aide. The pledge helped Ryan win support from the conservative House Freedom Caucus for his Speakership.
John Boehner (R-Ohio), Ryan’s predecessor as Speaker, was weakened when he brought legislation to fund the government or lift the debt ceiling to the floor that needed many Democratic votes to win passage. Bringing a Puerto Rico bill to the floor without a majority of Republicans could be dangerous for Ryan. Ryan has been mum on whether the Hastert Rule — named for former Speaker Dennis Hastert (R-Ill.) — for is part of the equation this time around.
He is pursuing majorities in both parties on the Puerto Rico legislation, and has repeatedly emphasized a need for bipartisanship, the leadership aide said. The aide noted that Ryan and Minority Leader Nancy Pelosi (D-Calif.) have agreed on the need to address the matter since December, even if they differ on the details. GOP leaders never expected to be able to win over all of their colleagues on the issue, the aide said, and are focused primarily on winning as many votes in both parties as possible.
But close watchers of the Puerto Rico bill believe most of the work by Ryan’s team at this point remains on convincing Republicans to support the legislation. Some think the effort to move legislation could actually be helped if Puerto Rico defaults on May 1 on about $422 million in debt payments, since this could grab lawmaker attention and loosen up support.
“The Natural Resources Committee faces an unprecedented challenge having to reconcile the desires of its members, the Treasury Department, and various creditors and insurers,” said Judd Gregg, the former GOP senator and current Hill columnist who is now advising some Puerto Rico bondholders. “Puerto Rico’s looming default, however, should accelerate political compromises and begin muting the outsize influence of obstructionist junior bondholders.”
There are few signs the bill will soon gain momentum.
McCarthy told reporters he did not see how Congress could pass anything before a May 1 default. In fact, he cast doubt on legislation becoming law before July 1, Puerto Rico’s deadline for a $2 billion payment. “I’m hopeful we’d have it out of the House by then,” said McCarthy.
Outwardly, Ryan and other GOP leaders downplay any issues. In a Tuesday interview with “CBS This Morning,” Ryan said the committee was working through “technical aspects.” McCarthy argued that the reason for delay on legislation is the fault of the Treasury Department, which the GOP says has not signed off on a final measure, making it impossible for Democrats to get on board
Despite those protests, Treasury does have concerns with the House measure.
Secretary Jack Lew told Univision in a recent interview that the current bill does not completely work, particularly because of provisions allowing Puerto Rico to restructure its debt. Further complicating Ryan’s work is a new push from the left to rework the bill. That effort is led by the AFL-CIO and the Service Employees International Union, which want the legislation to protect pensions and worker rights.
“What we’re seeing here in Washington is extremely disheartening,” said Heather Slavkin Corzo, head of the AFL-CIO’s investment office. “Congress must pass legislation that protects the interests of the people of Puerto Rico.” Several of the labor coalition’s demands run directly counter to those sought by conservatives.
For example, conservatives have pushed to allow Puerto Rico to pay some workers a lower minimum wage as a means of boosting its economy, while the unions argued specifically against that. Meanwhile, the ball is clearly in Ryan’s court.
Senate Majority Leader Mitch McConnell (R-Ky.) said Tuesday the Senate would “let” the House go first on any Puerto Rico bill.
Scott Wong contributed.