Jeff Hurd Urges Work Toward 'Best Path Forward For Puerto Rico's Long-term Fiscal Viability'

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During a House Natural Resources Committee hearing before the Congressional recess, Rep. Jeff Hurd (R-CO) spoke about Puerto Rico's ongoing financial crisis and the best methods to amend it.

Transcript

00:00Good morning everyone. The Subcommittee on Indian and Insular Affairs will come to order.

00:11Without objection, the Chair is authorized to declare recess of the subcommittee at any time.

00:16The subcommittee is meeting today to hear testimony for an oversight hearing

00:20entitled, Puerto Rico's Fiscal Recovery Under Promesa and the Road Ahead. Under Committee Rule

00:264F, any oral opening statements at hearings are limited to the Chairman and the ranking

00:32minority member. I therefore ask unanimous consent that all other members' opening statements be

00:37made part of the hearing record if they are submitted in accordance with Committee Rule 3-0.

00:42Without objection, so ordered. I ask unanimous consent that the gentleman from Florida, Mr. Soto,

00:48the gentlewoman from New York, Ms. Ocasio-Cortez, and the gentleman from New York, Mr. Torres,

00:54be allowed to sit and participate in today's hearing. Without objection, so ordered.

01:00I will now recognize myself for an opening statement. Today, the Subcommittee on Indian

01:06and Insular Affairs is meeting to discuss Puerto Rico's Fiscal Recovery under the Puerto Rico Oversight

01:10Management and Economic Stability Act, also known as Promesa. We will explore the next steps in

01:16resolving Puerto Rico's debt crisis and work to ensure that proper safeguards are in place to prevent

01:22future financial risk. Almost a decade ago, Congress enacted Promesa to address the island's

01:28fiscal collapse. At the time, Puerto Rico had more than $100 billion in liabilities

01:34and had lost access to capital markets. Promesa was put in place by Congress as a comprehensive

01:40financial oversight and restructuring framework for the island. Promesa established the Fiscal Oversight

01:46and Management Board, or FOMB, to oversee Puerto Rico's financial recovery.

01:53Because Puerto Rico is not eligible to declare bankruptcy, Title III of Promesa introduced a

01:58court-supervised bankruptcy-like debt restructuring process. Under Title III, only the FOMB acting as

02:06representative for the Puerto Rican government can propose plans of adjustment. Plans of adjustment serve

02:13as debt restructuring petitions to a federal court. Today, FOMB has overseen the restructuring of roughly

02:2080 percent of Puerto Rico's outstanding debt under Title III. It has been the largest public debt

02:26restructuring in United States history. The Puerto Rico Electric Power Authority, or PREPA, is the last major

02:34bond issuer with unresolved debt. In 2016, PREPA owed over $9 billion to creditors. This massive debt was the

02:41result of decades of political interference, mismanagement, and natural disasters that all

02:46left the public utility financially unstable and operationally inadequate. Restructuring PREPA's debt has

02:53been slow. This is due to multiple factors, perhaps most significantly because of its sheer complexity.

03:00Negotiations continue to this day. However, once PREPA's obligations are resolved, all major outstanding debt

03:06on the island will have been restructured. Beyond debt restructuring, the FOMB also encourages fiscal

03:12discipline and economic growth through annual certification of comprehensive fiscal plans

03:18for Puerto Rico. These plans paint a blueprint for the Puerto Rican government to operate within.

03:24Aided by the FOMB's budgetary control enforcement, a decrease in overall expenditures, increase in net revenue,

03:31and emphasis on funding essential services on the island have been realized. Additionally, I would

03:38like to commend the Puerto Rican government for its role in this recovery, as shown by their adoption of

03:44formal debt management policies. Notably, the government now limits the annual debt service to no more than

03:508% of its own source revenues. The government also created the Office of the Budget of Legislative Assembly,

03:57which is modeled loosely after the Congressional Budget Office and informs the legislature of the

04:02fiscal impacts of policy proposals. These are all positive developments. It signals productive

04:09collaboration between FOMB and Puerto Rico's government. Under PROMESA, the FOMB is set to terminate

04:15after four consecutive years of balanced budgets and the restoration of market access to the island.

04:20Notably, on June 25, 2025, Jennifer Gonzalez Colon signed Puerto Rico's first certified balanced budget

04:28into law. This is an important step toward fulfilling PROMESA's conditions for FOMB termination. The FOMB has

04:38made clear that it intends to sunset once Puerto Rico's finances meet PROMESA's statutory conditions.

04:44I look forward to hearing more about that from our witnesses.

04:47The challenges to Puerto Rico's full financial recovery remain, but to be clear, significant

04:53progress has been made. With continued political fiscal with continued political resolve, transparency,

05:01and fiscal responsibility, the goals of PROMESA can be fully realized. Today's hearing is an opportunity

05:08for Congress to assess the FOMB's progress and help determine the best path forward for Puerto Rico's

05:14long-term fiscal viability. I want to thank each of our witnesses for being with us,

05:20and I look forward to today's conversation.

05:22I look forward to today's conversation. With that, the Chair now recognizes the

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