Puerto Rico will default on its debt on May 1st unless Congress can move legislation to avert disaster. Unfortunately for Puerto Rico, Republicans control both chambers of Congress.
Of course they may control both chambers, but the situation is actually worse than that. Congressional Republican leadership may want to move legislation to avoid a default, but their own caucus members won’t necessarily follow their lead.
Case in point, Speaker of the House Paul Ryan has been unable to persuade enough House Republicans to vote for a bill to save the U.S. territory.
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.
The “Center of Individual Freedom.” Nothing says ‘freedom’ like defaulting on sovereign debt.
By my calculation, we’re just days away from Paul Ryan officially becoming John Boehner when he’s forced to pass a bill with the help of congressional Democrats rather than his own members.
The only other choice is to let Puerto Rico default which, regardless of your opinion of the island, would be an embarrassment for the Speaker and the country.
Given today’s events, I would be remiss not to mention that Paul Ryan is still trying to adhere to the “Hastert rule” of only passing legislation with the help of your own caucus. As a judge pointed out in court this morning, that rule was created by a “serial child molester.”