The White House has asked the Senate to approve of the current PROMESA board members, cutting it close with the upcoming deadline.
PROMESA is a 2016 bill that established a Fiscal Oversight and Management Board (FOMB) that was intended to help Puerto Rico restructure crippling debt. Puerto Rico is not allowed to declare bankruptcy for its municiple entities the way states can. When Governor Alejandro Garcia Padilla announced that Puerto Rico couldn’t pay its debt, the FOMB was the solution. They were supposed to help Puerto Rico get its financial house in order and to reduce the debt to manageable proportions.
The members of the FOMB were appointed by President Obama. The process was thoughtful and included input from the legislature, but the candidates were not officially approved by the Senate.
Puerto Rico’s creditors sued, saying that the FOMB was unconstitutional because of that lack of approval. In February of this year, they won that case.
The creditors, who fought against PROMESA back in 2016, apparently hoped that the board’s decisions would be rolled back. They hope to get full repayment of the debt, rather than the restructuring planned by the FOMB.
The court held that the board’s decisions would stand. They gave President Trump 90 days to produce a new slate or to submit the current board to the Senate. The board made legal efforts to overturn the decision and to give the White House a longer window, but failed in both those attempts.
Now that the White House has submitted the current board members to the Senate, the Senate must approve the postings before the deadline. Otherwise, the board will be back in hot water.