an amendment. >> is there any other discussion on this commitment? >> mr. chairman? >> mr. pierluisi. >> i have always advocated for strict compliance with our constitution. in fact, when this crisis began, when the government of puerto rico approved a local bankruptcy law this was back in june 2014, the first thing i did was to introduce legislation giving puerto rico access to chapter nine of the bankruptcy code. i was simply asking congress to treat puerto rico as a state for purposes of bankruptcy. that bill was assigned to the judiciary committee. it didn't get traction. there were some reservations giving puerto rico access to chapter nine.

a long story short is that matters continued to curating in puerto rico to the point where the u.s. treasury department comes and submits a proposal to congress saying, puerto rico is not a state. order rico is a territory. and under the u.s. constitution, which is supreme, because it goes over any state or territorial constitution, whether i like it or not, as the representative of puerto rico in congress, actually i don't like it, under the u.s. constitution, we have plenary power over the territories, over the american citizens living in the territories. and so legislation was introduced for the purpose of creating an oversight board for puerto rico. you cannot do that for a state,

by the way, under our u.s. constitution, under our national constitution. but you can do it for a territory. i am embarrassed that this is happening. but this bill creates an oversight board, and then instead of providing for chapter nine, it gives the board the power to oversee the potential restructuring of debt obligations coming from puerto rico. and the truth of the matter is that this is different than chapter nine because it not only deals with debt issued by public instabilities, it also deals with debt issued by the commonwealth of puerto rico, the central government. but we do have the power to this. and what we are trying to do is to put the house in order, to bring stability to the government of puerto rico. it's not even paying tax refund. it's not paying private

contractors and suppliers by the tune of about $2 billion right now. it's not making contributions to the public pension system. and there's already litigation because of defaults. so we don't want that chaos. we have the power to deal with it now. wisdom or opinion, and i'm talking about secretary lew and his staff come is that we should have all bondholders, all creditors at the table. all of them should be part of the solution, not part of the problem. now, the bill recognizes that there are different priorities for different bondholders, and respects the legal standing of them all. i would anticipate, and by the way, it has happened, and if you negotiations that have already taken place, the way that the offers have been made by the governor of puerto rico makes a distinction between general

obligation bond holders, or another issue that issued bonds in puerto rico commend special revenue bond holders and so one. so don't expect or don't anticipate that this board federal appointed board will do the wrong thing. it will do the right thing for the all spin would the gentleman yield? >> i will. >> first of all states are not allowed to file bankruptcy if it. so states and territories are alike in that sense. you say it's not a bankruptcy but we know that it is. it's taken right out of the code. this oversight board can cram down, and the word respect as a suggestion word. it's not a required work. and so i'm sorry, i've been burned and my constituents have been burned too many times to leave things open to discussion, debate and suggestion. i think there should be from language in year.

just a moment. all the priorities should remain in place. >> i reclaim my time. just simply to end, this is not chapter nine. my word come it is not. the board is the gatekeeper. you don't have that in chapter nine. >> any further discussions? mr. macarthur? >> i thank you, mr. chairman. i oppose this amendment. i understand that gentlemen's intent of respecting the priority of bondholders, particularly the general obligation bond holders. every lawyer in this room would love to try a case where they can make their case, and the judge would rule before the to the other side. and that's not the fairway to adjudicate things. the representatives of the general obligation bond holders have done a terrific job of making their case very publicly. but the are over 20 classes of

bondholders, and our questions, questions even about the constitutionally issued debt. was it all issued within the limits that the constitution prescribed? we cannot play judge and jury today. and decide and comply which group of bondholders stands at the front of the line. i fully support the idea that the general obligation bond holders should be respected as such, and i'm sure they will be by the control board. furthermore, the language of this bill which i think is better in this conversion than the prior version explicitly states the following. it says any adjustment must respect the relative lawful priorities or lawful liens as may be applicable in the constitution, other laws or agreements of a covert territory in effect prior to the date of enactment of this act. it can't be more clear that our intention is to respect the privacy, the priority of bondholders. i think the intent of this

amendment is to make it even better for one class of bondholders. added don't think we should do that. i think would be ill advised. at the control board do their job and i yield back. thank you. >> further discussion on the amended? let me yield to myself then purchase a second i there i also will be opposing this amendment, not willingly but i will close the limit for many reasons and appreciate what you just said. this would simply make sacrosanct these g.o. bonds whether they exceed 15% cap one of the that changes the rules of the game. we don't really know how many of these have or probably done or not because there's nothing any financial audits done in the last couple years. and until that takes place we actually don't know the situation. that's the purpose of the oversight board. their first job is to order the financials, then they can make decisions as to this. this would give priority to

groups that may not deserve that particular priority. that's the biggest problem with this amendment which is why i am voting no. and yielding back. is there any further discussions? mr. labrador? >> mr. chairman, thank you and appreciate this bit of this and because this is my language in this section and i was trying to do exactly what the gentleman from louisiana strong to do, to make sure that the board and the court respected the priorities. i open two, if you want to amend, this is just me speaking, if you want to amend your amendment. if the committee feels that the word comply with is better than respected, i am open to that. i do think the rest of your amendments kind of gets into, we are making a judgment, then we decide who gets the priority instead of letting the courts decide according to what the

puerto rico constitution, but if this committee felt that the word comply with as much, that phrase is better than respected, i am open to that minute, dylan which i put in because if there are edwards on always willing to use them. but i'm not open to the rest of the language because i actually think the rest of the language confuses what we're trying to accomplisaccomplish which is wet the court to look at the constitution of the territory and determine what the priorities are. i don't want to prejudge what those priorities should be. >> is there further discussion? mr. gohmert? >> i don't want to be changing the priorities of the bondholders from what they currently should be, and so i will not be voting for this, but i don't think for a moment that

the judge, the board can be considered as doing for sure the right thing. because we saw what happened with the obama administration got involved in the auto bailout. they rammed through, in violation of the myriad bankruptcy laws, a bankruptcy plan for car manufacturers. it violated bankruptcy law. it violated the constitution. that's why ginsburg but a 24 hour hold on it. and when i was speaking with the late justice scalia, i said, you know, i'm not a big fan of ginsburg, but i was so proud of her, she put a 24 hour hold on that outrageous,

unconstitutional, illegal bankruptcy plan regarding our automakers. and he said, well, you know, actually the white house was feeding information to the court back channel, which would be unethical, that if we allowed this day to go more than 24 hours, everybody anyway related to the auto industry would lose their job, and that scared five judges. so the illegal, unconstitutional bankruptcy plan went through your so even though i'm voting no, i don't have the kind of faith that this could administration will necessarily be pushing for the right thing, and i'm all of this confidence is being placed in this board, but having witnessed what this administration did to the auto industry, even forcing the sale of chrysler to a foreign car manufacturer, i mean, so much

damage done to the law, to the constitution, to american interests. forcing secured creditors in violation of the bankruptcy code and the constitution to become unsecured, taking unsecured creditors and making him secured creditors, it was outrageous what happened. but when you look at the constitution of the board, and we have all this faith the board is going to do the right thing, the board has the power to force the cuts from the 30 or so percent working from the government, bring that size do down, yeah, they're going to do these things. we have a board of nine people, unless it's changed since i read it last. four of those will be selections of harry reid and nancy pelosi as recommended to the president.

they will recommend eight year he will pick four of their eight choices, and then the tiebreaker will be totally selected by the president. so this administration basically will have five of the nine, and anybody on this side of the aisle thinks that that board will actually cut the government workers, cut potential government union workers, and i would encourage them to look at the issue. but on the particular amendment itself, i'm not prepared to sit in place of judgment. >> would the gentleman yield for a second before you about? just a small correction. the board is only seven i believe, and for are picked by republicans. three are picked i the president, which is important. i think that's a very important point.

i yield back. >> okay. are you done with yield back here i'm sorry. is there anyone else? mr. duncan? >> thank you, mr. chairman. i agree with it. we probably need to tweak this amendment. i like comply with versus respect. following up with the gentleman from texas comments about the chrysler bailout. from what i remember the pensioners, the pensions themselves were held hamas for the shareholders took a haircut. i think a big fear that we have with the puerto rico issue is that the pensions will be held harmless, and the bondholders will have to take the haircut. and that isn't, in my undertaken in direct conflict with the puerto rico constitution, which

we don't have the power to change. the puerto rico constitution which gives general obligation bond preference over pensions. i think it's a slippery slope if we tried to change about and so i've had concerns about the portion of the deal all along. i like parts of this amendment. i wish we could change the word. with that i yield back. >> is there further discussion? if not, any amendments? >> i just want to make a comment that i don't think there's anybody here that lifted the auto bailout more than i did. there's a lot of misinformation out there. i can tell you, i lost all my stock of my tension was impact and thanks to do. sometimes you come together to save the country which is a place. so let's just be careful with misinformation with one of the biggest nightmare times i remember in my life. we saved this country from total economic collapse. we have another territory with people living in fear not being

able to get medicine, people fearful of what's going to happen to their future. and that's what today is about. and all of us are having to make compromise of things we are concerned about, simply because we care about people, and argumentative issues at stake. i had to say that, mr. chairman. and i thank you for your leadership and trying to bring us together on a very tough, difficult issue. >> it's okay, i bought my cruiser before the bailout so i was fine. any other discussion? then the vote is on the enemy. all those in favor say aye. opposed say no. the admin fails. now, we are about two-thirds of the way through this sucker. still got about 10 more to go. i think we can move very quickly through your. let me go to mr. graves. you have an amendment which is

number two. >> does that need to be passed out? why did you going and explained while it it is being passed out? >> mr. chairman, this amendment very simply just states no federal funds should offer it for this act for the payment of any liability in territory, or territorial instrumentality. here's the deal. as you know this bill is before it was introduced was alleged to have been categorized as a bailout. look, let's be clear. in the future there could be an effort to directly bail out the territory. that's not what this legislation does. it is designed to offer a bailout. so this provision is decided make it clear that this legislation does not put federal funds on the table to address the liability of the territory. it does not preempt in any way future actions of this congress, of the administration and attempt to directly put federal

funds on the table, which i would oppose. but all it does is directly clarify that this bill cannot be labeled as a bailout. >> would the gentleman yield for a question speak with just for a question. >> no federal funds shall be authorized by this act. what about future funds in, say, scr or and under those? does this prohibit any federal funding going for bailout for puerto rico speak what it does not but let's be clear. this pertains to this bill. the allegation before the bill was even file before any of us david read the text was that this bill was a bailout. i'm trying to make that crystal clear and prevent that from happening. we are not preventing and in the future we could be given an opportunity perhaps to vote up or down on efforts that could be made in the future to directly appropriate funds. >> will the gentleman you for further codification? we have heard from republican

leaders it would be no taxpayer dollars used to bailout at five, and that's what you're going to do with this, right? >> i am trying to prevent this bill, make it clear that this bill is not a bailout. that this bill does not provide, does not authorize any federal funds. i can't control what people in this room may be in the future, and other members of cosmic of run-ins on any future i want to make it clear this bill is not a bailout. >> would the gentleman yield for another question? >> sure. >> unless this is change they were going to be thousand and thousands of acres that were owned by the department of interior that were being sold, and the money, which would be federal money, from that massive sale was going to be going to puerto rico. would your -- >> i believe that was removed. >> okay. >> can i get an amen, mr. chairman? i believe that was removed. it was not included in this legislation. >> you guys know how to go to my heart, don't you?

stab at directly many times. yes, that is no longer part of this bill. >> would the gentleman yield for another question? >> yes. >> i think your state the fact that this is not a bailout but the oversight board itself is a responsibility -- let me just finish. the oversight board itself is, as i recall, the financial responsibility of the territory. and yet it has to be funded up front. this could have the unintended consequence of not allowing the civil rights board to do its work. >> that's a good question. as i recall from reading this, i believe the text was changed actually required that puerto rican funds effectively be used to seed and found the oversight board. and i'm getting a head shake from my good friend. amen. in previous versions of the bill it was different where federal

funds -- this version does not have that the board is to be paid with territorial funds effectively. >> is there further discussion? if not -- do you? >> i will be brief. >> please spin my concern, mr. graves, is about this could affect the board's ability to perform its work. the truth of the matter is we look at this bill it doesn't provide any authorization for federal spending in puerto rico. it doesn't. there's no provision year of a signing fund. but the way the board works, it can be staffed internally using puerto rico funds. but also federal agencies may assist the board on a reimbursable or non-reimbursable basis. i wouldn't want -- i will be quick. i wouldn't want to discourage that from happening.

my intent here is to make this work. i see where you're coming from. obviously, this is not a bailout and you want to send that message loud and clear. i join you there, but i'm concerned that i don't want through this language to make the boards work more difficult than necessary. i yield to you. >> mr. pierluisi, i'm certainly very sensitive and respectful of the efforts to assure and we get puerto rico unsustainable trajectory. if perhaps for different reasons. i do while the recent taxpayer funds to go to bailout puerto rico to be honest with you. if you read the provision, it's has no funds off with with any payment at the liability of the territory or territorial instrumentality. it doesn't talk about funds that could be used by a federal agency to look at something that puerto rico is doing or not doing while it's a we did offer that and i would probably vote

for it. that's not what this one does. this is designed to make it crystal clear that this is not a bailout. it doesn't preempt the future if someone does want to offer an amendment to attempt to bailout ththe this is designed to make t crystal clear that this legislation within the foregoing is not a bailout. >> i reclaim my time. actually, would you agree to changing or tinkering with your language so that it says for payment on any existing bonded indebtedness speak with no. >> is that more precise because there could be future debt debt is incurred, and that would effectively be a bailout if we raise concerns. >> wanted to strike the word existing and then for payment on any indebtedness? >> can i -- would the gentleman yield? >> i will. >> look, everything you've been saying so far is correct. the board is not paid by federal

funds, and just this does not impact the border this impact liability. and if this amendment were to be adopted and we want to try to we find out the door than happy to pledge to work with yalta trying to find it if it goes to the floor if it is adopted. >> i would as well. i think the intention is been i tried to convey very clearly. just in response to your last statement, bonded indebtedness is certainly the majority of the debt we are dealing with here, but as the gentleman would acknowledge there is other do as well. i just wanted to i can go home until the folks that represent that their dollars are not being diverted. i certainly, if you can agreed to adopt as i would love to work with you. >> further discussion? all of those in favor say aye? opposed say meiko. the amendment passes and is adopted. let's go back to mr. fleming, number 90. that's been passed out to you. you've had it before.

mr. fleming, you are recognized. >> mr. chairman, i'd like to sub for the record a letter i resources and the former governor of puerto rico mr. pallone. and so he expresses his concern the oversight board will overrule the democratic will of the people of puerto rico. now as mr. pelosi, excuse me, mr. pierluisi, has helpfully reminded this committee many times from this crisis has come about through decades of fiscal mismanagement. in some ways it's a debt crisis does reflect the will of the people of port or become because they have repeatedly voted for representatives and governors to give them liberal social policies and generous benefits, which is why we are here today talking about an oversight board. at the same time i am sympathetic to the governor's argument about self-governance. fortunately, the bill already contains the answer.

it was written broadly so that its provisions could one day apply to any of the five u.s. territories but it creates special circumstances that apply only to puerto rico in this bill. two pair fries -- two pair fries, except for puerto rico in an oversight board is established only if the territory legislature adopts a resolution. signed by the governor requesting the establishment. in the case of puerto rico, the oversight board is being established by this bill. i think that's a mistake. the oversight board would have much more legitimacy if the people, through their elected representatives, ask for the tough medicine in this bill. it's also a test for the people of puerto rico dependably to accept a balanced budget and this is a reductions in the size of government and then they should not gain access to the debt restructuring ability in title iii. which is intrinsically tied to the function of the oversight board. i'm pleased to be joined on this

amendment i mr. mcclintock as a cosponsor. i yield back. >> is the discussion? >> thank you, mr. chairman. oversight board, control board, have a long and nasty history of opposing extreme austerity on people. for that reason i've been clear in my opposition to the oversight board from the beginning. this amendment would make the establishment of over support in puerto rico much, much less likely. getting rid of an oversight board, while appealing to me, is probably also a feeling to my colleagues on this side of the aisle, but we are concerned about the effects that he mentioned about extreme austerity of the families of puerto rico. but i strongly oppose this amendment because it is a poison pill. if this command or adopted it would remove most of and all support for the majority. it would therefore kill the

bill, which is the sole purpose, my friends can this amendment. i urge my colleagues to join in opposing this. i yield back. >> further discussion? mr. pierluisi. >> i personally am under extreme political pressure in dealing with this issue. and i don't want him my fellow elected officials in puerto rico to have to bear it as well. it is very difficult to accept oversight over the government of puerto rico. daily reason i'm doing it is because i am convinced, as so many others, that puerto rico needs a broad debt restructuring mechanism. and the wheel of my colleagues here in caucus seems to be that the only way that we will be

afforded this a debt restructuring mechanism is there a federal oversight board. now, puerto rico is in crisis and we do have a responsibility here under the territory clause of the constitution to watch over the well being of the american citizens living in puerto rico. it is our responsibility, whether i like it or not, i would rather have puerto rico as a state. and we wouldn't be considering this legislation. but we are because puerto rico is not the state. it is not treated like a state and, frankly, part of the problem is caused by the current status. .. >> the district of colombia did not have to opt in.

so if we look at at a precedent and that's a precedent we have been looking at in creating this board, i'm providing this -- that restructuring mechanism, then we shouldn't be asking the political class in puerto rico to consent. i agree with mr. grijalba, i think this is simply another way of trying to dismantle or -- this bill to poison the well for this bill and i tell you, mr. fleming, let's not play with fire. >> will the gentleman yield for a question? >> i am very confident that the vast majority of puerto rico get it, they want congress to intervene in a fairway. the political class, that's a different story because by the way in puerto rico they're

saying, hey, why are you running for election if there's going to be a federal oversight board. i'm running for governor and saying, you know what, we have to accept this reality, we have to take this board the way it is because we need debt relief in an orderly, legal way. i will yield to you now. >> so if i understand what you're saying is you can't find even a small group of good men and women who want to do the right thing and take the tough medicine and have reforms necessary to get away from the liberal progressivepolis that have so damaged the economy of puerto rico? you're saying that you can't find just enough to do that? >> i will reclaim now my time. i'm saying that it's not worth the risk. that we need to act, we need to act, we have the power to act. it is our responsibility as provided in the u.s. constitution and we should do

all we can so that the government of puerto rico stabilizes itself, doesn't collapse and so puerto rico is put back on it really fast. >> if i could ask one more question, what happens after the emergency is over? will the leadership in puerto rico, will they return to the same policies that caused this problem to begin? >> there will be elections in november the same way we have elections in the u.s. mainland in november. democracy works its way. we will see who gets elected for the governship, for my position as resident commissioner as well as in the legislature of puerto rico. it's total speculation to try to anticipate what future puerto rico will do but this crisis is unprecedented and we shouldn't be assuming that the government of puerto rico will do the wrong thing.

no, on the contrary, whatly do myself -- what i will do myself and i will with this board so that we get house back in order, fiscally in order and we get puerto rico to grow again. i yield back. >> further discussion? mr. gomert. >> thank you, mr. chair and i greatly respect my friend from puerto rico and i appreciate his effort on behalf of his constituents. the point continues to be made that puerto rico is not a state. puerto rico must -- and i missed it, has not voted to become a state. but that's also the reason that puerto rico, guam, samoa, virgin islands, actually every american

entity except for the district of colombia that does not elect a full-voting member of congress, does not pay federal income tax and that's why i filed a bill that allow the district of colombia not to have -- pay federal income tax, but one of the things i've not really heard anybody address, we talked about in here the need for the minimum wage to be raised and when we -- there was an article written recently that indicated for an individual who just accepts the available federal welfare payments. we may be looking at $1,700 a month to take home whereas the current minimum wage it's about $1,200 to take home. well, the incentive there is

obviously not to work, but i know my friends at heritage have encouraged as a solution lowering the minimum wage, obviously, that would even increase the disparity between what you take home if you don't work and what you take home if you do work. if you you lowered the minimum wage. that's obviously not going to fix the problem there. if the minimum rage is raised in puerto rico, since my friend of california has indicated, they have a higher minimum wage, people would go to puerto rico from california except that people are leaving to california coming to florida and texas because we don't have as much regulation, we don't have the higher minimum wage, we have less litigation and it's more --

more of a helpful environment for creating entrepreneurism and creating jobs. so when -- i keep thinking of the beauty of puerto rico and all that puerto rico has to offer and could not understand why in the world puerto rico has not already become the united states' hong kong that's flourishing and growing since there's no federal income tax until i saw that there's a 39% corporate tax, not for federal but just for local, there's a 6 to 7% sales tax from last i saw, and in addition to the corporate tax being higher than the federal corporate tax, there's also a 33% flat income tax rate, texas has no income tax. we have a sales tax. puerto rico has all of the above and a 6% excise tax and it

appears that really is going to have to be one of the things addressed, lowering the number of people in the government, lowering tax rates so it becomes that attractive hong kong and businesses want to flood in, but i'm not hearing those things addressed. but i didn't want people to think that it was all disadvantaged in puerto rico by not being a state because when that was found out that none of the territories paid federal income tax, i've had many constituents ask if we couldn't apply in texas to be a territory . i will certainly yield. >> briefly. i just want to set the record straight in november 2012 and 53% of the voters rejected puerto rico's current political status and 61% of the voters supported statehood. actually i'm on the options

given, more people voted for statehood than for any other option and i have introduced a bill before this congress -- it already has 110 cosponsors, bipartisan cosponsorship providing for the admission of puerto rico as a state. once there is a vote on statehood like we had in hawaii and alaska before they became states. >> my time has expired. >> mr. macarthur. >> my next amendment, i'm going to be asking that we remove the other territories in this bill. but as it stands now, wiping out this requirement that the legislature and the governor signed off on an oversight board, we would be in a position to imposing oversight board on any territory for any reason whether they were in fiscal difficulty or not.

it seems to me it's a complete erosion in the territories. puerto rico will sign this because they need to relief that they're getting in exchange for this and therefore i oppose this amendment. >> thank you. let me also yield myself that i oppose this amendment from the practicality of it. the opt-in will make this bill moot. i don't think in the reality of it is something that we should actually impose on somebody to try and do. is there other further discussion for this amendment? any amendments to it if not we will vote on the amendment? all those in favor say aye, oppose say nay. the nays have it. record the vote. >> mr. bishop.

>> no. [roll call] [roll call] [roll call]

[roll call] >> those who have not voted. >> mr. gomer has not been recorded. mr. casa votes no.

>> it's hard to hear that, i know. [laughter] >> mr. young votes no. is there anyone else who has not voted or wishes to change? the clerk will report. >> mr. chairman, the nays are 33. >> the amendment is not adopted. i think we have six amendments still to go. so let's go as quickly as we

possibly can. six or seven. mr. macarthur, number 55. you already had that passed out. you're recognized. >> thank you, mr. chairman. this amendment addresses an error, i think, an error in the bill that came from an over abundance of caution, the bill as it stands authorizes oversight board with same extraordinary powers for each of the nation easter toirs except that none of the rest of them face looming crisis that now faces puerto rico. no territory other than puerto rico has asked us to get involved. the u.s. virgin islands have asked not to be part of this and i worked with representative plaskett on this amendment and my concern is that it could have the unintended consequence of eroding other territories access to capital markets and the costs if a control board can simply be brought in at any time.

i have the written opinion of not one but three constitutional lawyers that this is unnecessary language that we can focus this entirely on puerto rico and not the others. and what my amendment does is simply restores the bill to its purpose of restoring fiscal stability to puerto rico alone. and not apply it to the other territories. and i ask for its adoption. i yield back. >> is there further discussion? >> thank you, mr. chairman. this amendment will limit the scope of puerto rico only since -- since it is the one facing the crisis. the bill as introduced provides a process for restructuring and fiscal responsibility for all territories should the other territories request it. the other territories are included because leaving them out could lead the bill declared unconstitutional, all of our

efforts over the last months would be wasted and more importantly, puerto rico would be left with no solution if this amendment were to be adopted. in fact, certain creditors have already stated publicly that they would challenge the legality of the bill if it covers only puerto rico as a violation of u.s. constitution in clause. i oppose the amendment because it is litigation bait and urge my colleagues not to vote for it. >> let me yield myself on this one. this hurts. this is an amendment which i will be voting no in committee but i want you to know that understand the premise of it and i want to still keep working as we go to the floor to see if we can work some of the details out to adopt it at that particular situation. look, treasury department as has been stated, is leary of this

type of approach which would threaten the entire bill. they said that in the testimony. at the same time another professor disagreed with that. i think there's a question there that should be explored at some time. i don't know what the correct answer is right now and if, indeed, questions constitutionality on this bill, litigants have said waiting to go to court on this particular issue. i do think hopefully we can work that out. there has to be a way of working out so the substance of what mr. macarthur can be done without throwing into question whether there's a constitutional issue or not. since i'm not ready to do that, i'm going to vote no on this particular amendment recognizing that i would still would like to go forward and see if we can follow some language that would be comfortable including the treasury in the white house

because i do understand the premise of what you're saying and actually agree with the premise of what you're saying. is there any other discussion? any other amendment? >> mr. chair, may i be recognized? i would like to yield my time to mr. macarthur. >> to me it's cristcall clear -- crystal clear and so it's a false fear but i would be happy to work with you outside of this process and if this can be improved for a floor amendment i would be happy to bring it up there instead, if that would be a more productive use and withdraw it at this time. >> yeah, actually i think it

would be. >> then, i withdraw the amendment and work on it and bring it back to the floor. >> and my attention is to actually get something that we can bring to the floor. >> okay, i withdraw then. >> amendment is withdrawn and thank you for your cooperation in working that way. i understand your involved in this issue a lot. you've been involved in legislation and you have a lot of ideas that maybe we can work oncoming to the floor. >> thank you, mr. chairman. this amendment simply exempts from this act that portion of debt issued by puerto rico that was backed by its constitutional pledge of full faith and credit taxing power. the common wealth, $72 billion of outstanding bonds. this would exempt roughly $18 billion of constitutionally protected debt. only about 12% bonds are owned

by hedge bonds. 40% are held by puerto rican residents. i lay out the reasons for this amendment in my remarks yesterday. i agree there's no reason to treat san juan's municipal debt any different than san josé's but constitutionally issued debt is different and reliability must be maintained. this is important to every state that relies on constitutional full-faith and credit pledges. the federal government has until now never threatened or even considered undermining constitutional full-faith and credit guaranties by allowing chapter 9 provisions to sovereign debt, whether that debt is issued by territory or a state. if congress is willing to undermine the common wealth constitutionally guarantied bonds today, there's every reason to believe that it would be willing to undermine state's tomorrows. this in turn invites credit market to question any constitutional debt guaranty as

no longer secured on constitutional bedrock but reater dependent on shifting winds of congress. and if they do, the value of those bonds is devalued and interest rates paid by taxpayers on that debt will increase. the governors of six states have already issued this warning that quote, granting puerto rico such unprecedented bankruptcy authority reducing ability to vital services and the whole notion of full-faith and credit debt. i suspect that's virgin islands desperately wants out of this. economist of capital policy has noted that, quote, there's evidence that the mere intersection of this legislation is already having adverse effects on the market. the cost of credit default swaps on illinois, general obligation debt which is essentially function as insurance against

default have gone up nearly 100% this year, signaling a uncertainty over the protections to full faith and credit debt, unquote. he estimates that a minor 10-15 basis point in financing cost will cost american taxpayers an additional 4 billion to $8 billion. could have respected the $18 billion of debt while applying chapter 9 to the remaining $54 billion of municipal debt. its supporters claim this is their intent. respect the relative lawful priorities in the constitution, other laws or agreement, well, the problem with this is among these other laws is the government's repudiation of this debt and includes other

contradictory instructions. the only problem is sovereign debt is subject to balancing and therefore subordination by the control board. this amendment removes any ambiguity by productioning the debt from the effect of this bill. if the supporters of this bill are sincere in stated objective of wanting puerto rico's constitutionally issued debt to be protected, then they should have no objection to this amendment. if they are not sincere, then they should oppose the amendment, but at least openly admit their true intentions and accept responsibility for the billions of dollars of increased interest costs that taxpayers across the country will have to pay on their state debts as markets add just to this new world in which credit depends upon the whims of congress. it's not only in states like california, new york to protect the faith and guaranties, it's

also in the interest of the puerto rico to uphold the full faith and credit clause in their constitution because they were desperately need that credibility in order to reenter the credit market once their affairs are put back in order. >> any further discussion? >> thank you, mr. chairman. mr. chairman, treasury officials estimated it would take a decade at least to untangle the credit claims that puerto rico is unable to restructure its debt and the situation leads to competing litigation. years of litigation and creditor dispute and accelerate the departure of puerto rican families. the amendment will make these things more likely by exempting certain categories of puerto rican debt from the carefully, crafted compromise process of voluntary restructuring of all

debt provided in the underlining bill. i witnessed for myself the impact the crisis is having on their lives of our fellow citizens. as i indicated in my opening statement, on this markup, this is not the bill that i or the members on my side would have written, but when measured against the worsening crisis in puerto rico, it is legislation that is necessary. we will -- we should not let the narrow interest that this amendment seeks to protect undo the hard work and careful consideration of competing interest to went to draft the legislation. i urge my colleagues to oppose this amendment and yield back, mr. chairman. >> mr. graves. >> i share with the concerns of the gentleman from california. and any future effort to potentially bail out any states and irresponsible financial

decisions, but if the jason from wyoming, i we wanted to ask you a quick question. you refer today a statement that was in there that said that investors need today recognize that there was a potential for congress to come back in the future and potentially change the law, is that accurate? >> that is accurate. >> thank you, mr. chairman, i want to ask you a quick question, as i recall, i think it's the tenth amendment distinguishes the status of a state compared that of a territory and, in, effect, we would be prohibited from carrying out similar actions here in regard to sovereign state debt. is that accurate understanding? >> yes. >> thank you, mr. chairman. i yield back. >> is there further discussion? >> mr. chairman. i rise in opposition to this amendment. first in terms of the impact that the potential restructuring we are authorizing could have in

the municipal markets, there's no such evident impact. there has been testimony coming from john miller, managing director of nuven asset management, mr. miller who oversees $100 billion of tax exempt municipal investments in america, this is one of the largest holders of municipal debt testified that to the contrary approving this legislation will be generally viewed positively in the markets. it'll stabilize puerto rico itself, the government of puerto rico but it'll also have a positive impact elsewhere. mutual funds respected, traditionally mutual funds like alliance have also stated that there's not going to be any impact in the municipal markets

at lagger if we approve this legislation as is. wall street journal and bloomberg have also issued editorials supporting this legislation and saying that it's not going to have a negative impact on the municipal at large. to the contrary if we don't do anything, that could have an impact in the municipal markets because the bonds of puerto rico are held by thousands of investors, institutionally and we need to get the housing in order. in terms of the status of puerto rico, again, i have to say this is not going to set a precedent for the states. i hate that that's the case because i would love puerto rico to be a state, but puerto rico is a territory and as a territory we can do -- we can treat puerto rico differently

than the states so long as we have a rational basis for doing so. that has been the position of the u.s. supreme court for ages now. when we talk about constitutional debt coming from puerto rico, it's not the same as constitutional debt coming from the states because puerto rico's constitution is subject to the u.s. constitution and particularly the territorial clause in the u.s. constitution. that's why we have the power to create general obligation bond holders differently than they are treated elsewhere in america. lastly, i am not promoting being unfair to any class of creditors. all i'm saying is that all of them should be part of the solution, not part of the problem. we cannot simply be listening to one particular class over the others.

we should be encouraging them all to engage in negotiations and once, for example, two-thirds of them agree on a potential restructuring of the debt of any government entity in puerto rico, then this bill allows the board to take that deal to court and enforce it on all the creditors. that's going to be good for any debt issuer in puerto rico. lastly, when we talk about chapter 9, well, i introduced chapter 9, so puerto rico to chapter bill so puerto rico would be treated as a state and it was in congress' will to do so. so that's not what we are talking about now. we are talking about something similar, but again it's in the hands of the board that wouldn't happen in any state. it's happening only in puerto rico as a territory. i oppose this amendment. >> is there further discussion?

mr. fleming. .. >> with respect to the general bondholders deciding to sell out to other funds on the way because they heard rumors of congress beginning to intervene, that's the whole problem. if word gets out there that congress is willing to intervene and to create a retrogressive chapter nine bankruptcy system, then, of course, all of that is being eroded.

the full faith and credit has been eroded and no longer applies. it can be reversed at any point in what is dashed in what is it worth to begin with? i yield the remainder of my time to mr. mcclintock. >> i want to address the argument was that are different than territories and this can't possibly apply, chapter nine get possibly apply to a state, of course captain i can be applied to state. chapter nine was specifically written for units of penalties which are subdivisions of states. the only reason chapter nine has not applied to the states is because congress has never threatened to do so because doing so undermines the full faith and credit guarantees other state constitutions. this measure makes clear that congress has now changed the status quo, that it is now willing to breach that faith, and once we've done so, full faith and credit is no longer an ironclad guarantee that your bonds will be backed by the full

faith and credit of the issuing entity. the claim that this couldn't possibly happen ignores the fact that it is already happening. as i stated were watching the insurance insurance for state general obligation bonds already increasing just on the prospect of us taking this action. six state governors have already issued warnings that this will affect their states. and as i said i think the virgin islands could understands the threat to their own debt of this measure and the spiraling interest cost that it will mean. again if you don't want to protect the full faith and credit of the states, vote for r the measure but accept responsibility for the aftermath. yield back. >> further discussion? mr. macarthur? >> i don't we've been at this for a while but i think this is important enough that it would just be gone as well.

distance to go for the same reason the similar prior amendment failed. we are trying to fully judge and jury. we are trying to decide among 20 plus classes of bondholders fear. and i understand the intent but we simply are not equipped to adjudicate all of the to the claims of all the different bondholders sitting in this room today. for example, very briefly, let's take a widow who happened to by the very first general obligation bond that was issued in excess of puerto rico's constitutional limit. because some bonds were sold in excess of what they were allowed. that widow by her bonds, it's one bond after it was constitutionally guaranteed. she thought she was buying a general obligation bond. and let's compare her to a hedge fund. i have nothing against hedge funds.

i've been at fault with them but a hedge fund who bought four times removed a general obligation bond from somebody else. it was bought in the puerto rico and sold and sold and sold, and mr. mcclintock wants to adjudicate the rights of those parties here and now. by just, by declaration. it's a mistake for us to do that. let the control board apply the letter that we have laid down here in the bill that respected rights of the parties have to be honored, and let them adjudicate. let them certify claims that go to the court for further review, but let's not try to exclude nearly 20% of the bonds i fayyad here in the committee room. i yield back. >> is there further discussion? let me also reiterate that i have to vote in opposition to this as well for the reasons that mr. macarthur just said. it goes too far in exempting an entire class which may or may

not have been legally done, it allows, does not allow us to make or of the oversight committee, oversight not control, oversight board to actually make that kind of adjudication for which they are empowered. is there other discussion? any amendments? if not willful. all in favor say aye. opposed say nay. independent of the chair the no's have it. roll call, please. [roll call] [roll call]

[roll call] [roll call] [roll call] [roll call] [roll call]

>> is there anyone who hasn't voted? the clerk will report. >> mr. chairman, on this vote as a snack or 12 and a nose or 27. 27. >> i'm going to ask at this point for the clerk to pass out all of the remaining ones that republican specifically funding 80, fleming 92, fleming 93, bishop number two and fleming 91. as revised. and then as soon as that is done, mr. labrador, i think you are the next one. and labrador 043.

no, no, no. that's the next one we were doing after. [inaudible conversations] [inaudible conversations] [inaudible conversations]

>> okay. committee will come back to order. i recognize the gentleman from idaho to explain the eminence. and without objection the amendment is considered as read. >> thank you, madam chair. my commitment is attempting to clarify language to require the fiscal plan to endeavor to provide for the payment of pension benefits projected to become do and payable during the period covered by the fiscal plan. i will admit i'm going to be withdrawing the amendment. i just want to put this on the record, and as the bill currently states, the fiscal plan is supposed to provide adequate funding of public pensions. that's what the language is. adequate funding. i have not been able to get a real definition of what adequate funding means.

i understand the history of this, was the white house was attempting to protect the pensions comply to protected in detroit. and we said to which is what the intent of this committee is, not to protect the pensions like of a protected in detroit. so i just want to make it clear, my language was attempting to make it clear that what happened in detroit was not going to happen because, by the oversight board or in the courts. i've talked to a few experts who have told me my language may be less clarifying than what the language that was already in the bill, so that's what i'm withdrawing the amendment but i've been assured by the author of the bill and the committee that some lenders will go into the report that will strongly stay, that we will not, the committee report that will strongly state that our intent is to make sure that what happened in detroit does not happen in puerto rico. then we will have a crisis if

that's what happens. as the bond experts have told us, what happened in detroit was an anomaly and that's what the bond market did not react to detroit because it was a one-time event. if the same thing happens in puerto rico then it will become a pattern, and in the bond markets will react in a very negative way and that will affect each and every one of our constituents. so with that in mind i will be withdrawing the amendment but i just want to make sure that we have a strong statement in the report. thank you very much, and i yield back. >> the gentleman withdraws. the next amendment for our consideration is offered by mr. bishop of utah. it is bishop number two. i recognize myself for five minutes to explain the amendment, and without objection the amendment is considered as read.

this is a minor technical fix. it ensures the deal is protected, that deal has taken two years to negotiate. it reiterates and clarifies the purpose of paragraph three just to protect pre-existing voluntary agreement. i ask for your support. is there further discussion of the amendment? question is on the amendment. all in favor say aye. those opposed, no. the ayes have it and the amendment is agreed to. the are further amendments, and i'm going to return the chair to the chairman. [inaudible conversations] >> thank the vice chair. you did a hell of a lot better than i've been.

the next one is going to be 091 by mr. fleming as revised. that was passed out, the revised 91, mr. fleming. >> thank you, mr. chairman. i've consulted with mr. labrador after comments he made that he supported 91 in the change come in the aspect that is applied to, changing the word respect to complied with and, therefore, we've agreed upon this as a good substitute for my 91 amendment. and ask about we make it in order and pass it. >> is there further discussion? >> mr. chairman? >> mr. pierluisi. >> just for verification purposes are we talking about amendment 91? >> the revised version which is

just the first two lines on page 37, line 22, it strikes respects and puts complies with. >> i rise in opposition. by concerned with this language is that it could be interpreted as meaning that you cannot restructure any of the general obligation bond debt. and as i've stated before, it is one thing to say that we are going to respect priorities and treat bondholders differently, to be of a type of securities you are holding and their rights. it's quite an honor to say they cannot be part of any restructuring. everybody should be at the table, and i anticipate that there will be differences in the treatment to all the bondholders

or the classes of bondholders that puerto rico half. so again for the purpose of ensuring that we have broad, orderly, legal restructuring of the debt owed by the puerto rico government and its instrumentalities, i have to oppose this amendment. i yield back. >> mr. chairman? >> mr. wittman. >> i would like to reckon is the gentleman from louisiana, dr. fleming. >> i thank the gentleman for yielding. against the word respect, the lethal word, has a meaning. simply put, if you don't have the required to comply with those priorities, the general obligation bond holders have no primary whatsoever. they could slide to the bottom, pinchers like to the topic something all of us have a concern here that you would, in

fact, the new meaning to a general obligation on holder, which is full faith and credit. so for that reason this bill, this law should require that those priorities be fully put in place and complied with, rather than at the last minute through some shell game be moved about. and again just like we saw in the general motors situation where priorities were turned upside down against law. i yield back. >> mr. chairman, i yield back. >> is there further discussion? >> look, i'm going to weigh in with one word. because to be honest with you, i don't know what to do on this one. originally i said this was comfortable. i am hoping go buy some of the council that we may have problems with this if it goes forward on the floor. so unwilling, i do know what i'm willing to do. i will be willing to work on this particular language if you

want to. if it's not adopted in this bill i would be willing to work with you. i think i'm going to devote no. simply because i don't know what i'm doing. mr. gray's. >> the gentleman from louisiana, i wil would be happy to supports issue would be willing to add begin to the extent practical. practical, comply with. i would be happy to vote if that provide any comfort. >> if the gentleman would yield. again, i think that adding more adjustment language. these are complies with the law in the constitution for it doesn't. i would prefer to move forward. >> is there further discussion? >> mr. chairman? i intend to vote for this because of the word relative. relative is still in there so it was a comply with the relative lawful priorities or lawful

lanes, as may be applicable. so the word relative to be says in relation to each other, relative to each other. for that reason i believe that the enemy is okay. >> any other discussion? all those in favor of the men say i come. opposed say nay. i rule the ayes have it. roll call. [roll call] [roll call]

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[roll call] >> is there anyone who hasn't voted our wants to change? the clerk will report. >> mr. chairman on this vote the yeas are 16 and the nays are 23. >> the amendment does not agree to. but, but mr. fleming, i was selected if we can explore some i going forward with this on that one. number 80, mr. fleming, the next ones we have from your are yours. let's go with 80.

it should say i think we have three more to do, right? a are all mr. fleming's so let's go with number 80. >> mr. chairman, thank you. as my staff and i researched this bill and how we got here, it quickly became apparent that something was fishy. puerto rico like other territories and states as a balanced budget requirement. yet they continue to grow their debt an astronomical rate that should not be possible. it turns out the english language was addition by congress approves requires that revenues match expenditures. in other words, their budget must balance each do. however, the spanish-language translation of the constitution uses the word -- i hope i'm close on that, which means

revenues by the puerto rican government has interpreted to more broadly mean resources. in some crazy stretch of imagination they count that as a resource and, therefore, they are able to balance the budget in quotes by issuing more and more debt. this has to stop. my amendment would require puerto rico, the puerto rican government to correctly interpret the constitution going forward. if they will not be oversight board and its restructuring authority will sunset after to use. this is more than result because the oversight board is supposed to balance the puerto rican budget as part of the fiscal plan. so it should be a simple matter for puerto rican government to certify to the chair and ranking member of this committee that they will honor a balanced budget requirements in the puerto rican constitution going forward. if they cannot or will not think it's clear puerto rico is not serious about keeping their fiscal house in order after the oversight board work.

and we will end up right back here in the same place. specifically the amendment with states to the government of puerto rico must certify the appropriate congressional committees that they will honor the balanced budget requirement in article six, section seven of the puerto rican constitution, and that they will not interpret this to include debt issued by the government of puerto rico. if they will not do the simple things in the authority of the oversight board will sunset along with its debt restructuring ability and we will have to negotiate a whole new approach. honestly requiring puerto rico to correctly interpret the constitution should of been a precondition for any congressional action, but this seems like a reasonable compromise. i yield back. >> is there further discussion? >> in opposition to this amendment let me state that the financial situation of puerto

rico is complex and messy. achieving a balanced budget of two years may not be realistic at all. if they fail to achieve a balanced budget in that short time frame this amendment would abolish the oversight board, and the entity task of achieving a balanced budget for the commonwealth. this amendment is not intended to be helpful. a dislike of the amendments, designed to kill this legislation. finally, i would note the people of puerto rico don't nuclear vacation on the interpretation of their own constitution. they frankly need congress to take the necessary steps to ensure future financial stability. i would also note that a two-year limit, in fact, the budget proposed by the majority here don't balance within two years, not even close to it. if that's the measurement that we're using here, then obviously

not applicable to puerto rico either. the amendment is not intended to achieve the goals stated. it's intended to kill the legislation and i posted, and i yield back, mr. chairman. >> further discussion? mr. pierluisi? >> i oppose the amendment, and let me explain why. first of all, this legislation creates the board that is in charge of approving a long-term fiscal plan for puerto rico your at least five years worth of budgets and fiscal discipline. and one of the factors that the board is told has to take into account is puerto rico's ability to balance its budget. it's one of the factors light after no fiscal plan will be approved by the board unless the government of puerto rico is balancing its books. it's a simple as that. been the board as well is in

charge of approving the budget of the government of puerto rico on a yearly basis. and ensuring that they are properly balanced. so that's the board's job. we should be expecting the board to do what is, what is entrusted to do. now, in terms of puerto rico's constitution, that is a matter for the supreme court of puerto rico to handle. the supreme court of puerto rico is the ultimate interpreter of our own constitution. and this language that you are laying out hasn't been ruled yet or held yet by the supreme court of puerto rico. so let's focus on the important thing. we want fiscal discipline in puerto rico. the board will be overseeing the government of puerto rico. in fact, the board can only cease to exist after puerto rico

manages to balance its budget for five consecutive years, four consecutive years, and it has adequate access to the markets. that's the bill we are providing for. we don't need this amendment, and i agree with ranking member that i just believe it's more geared towards messing with our purpose and the bill's prospects on the floor and in the senator i yield back. >> further discussion? mr. wittman. >> mr. chairman, i would like to you to the gentleman from louisiana, dr. fleming. >> though, i get to tell you the hard-working people in louisiana, we're going to some difficult times. we are happy to close at $2 billion budget gap, annual gap. by law and the constitution. we have to actually balance our budget every year. we are not allowed to go out and borrow money which is exactly

puerto rico does. all this amendment does is it correctly defines what raven and resources are. and currently a territory is considering borrow the money, the money that people get let in good faith to this territory are going to lose much of the principle, in many cases widows and retirees. all it says is, let's be honest about what a balanced budget but it does. the state of louisiana and the hard-working people that represent know what a balanced budget is, and they know they have to go through the tough times right now to make that happen. increased taxes, cuts to services. so what we're saying here is, well, we're going to put this oversight board in place, but puerto rico doesn't have to live up to the same standard as the state of louisiana and many other states. and make no mistake about it. the are a number of states that are nearing the situation in puerto rico.

may be as many as 15, and they are going to be saying, well now, if puerto rico can bail out of this situation, why can't we? i'm going to have constituents i like the face and they will say it doesn't make sense if puerto rico can consider are the money to be revenue. it really doesn't make sense at all. so this is a very commonsense amendment, and it makers are appropriate for this bill. >> is there further discussion? let me express once again my opposition to this. two years is not enough, sorry. any amendments? if not we will poker all those in favor say aye. opposed say nay. independent of the chairman the nays have it. let's go to number 92 by mr. fleming. >> this one passed out to you.

y'all got it in paper form. mr. fleming coming to recognize. >> mr. chairman, my second amendment rights to the party of creditors with some additional changes throughout title ii, to clarify the relative priority of pensions. again i am motivated by the memory of the gm of bailout. while union retirees will be able to receive what they had been promised, the fact is that politicians in puerto rico made promises that they couldn't afford to pay. and parenthetically that's to all across america. politicians of yesteryear have make policies to the american people, the people they represent, that they could never live up to, and future politicians as well. they're hoping to swindle the very people who lent them money in order to pay the pension benefits the first place. the evidence is puerto rico just released their fiscal year 2017 budget this week, and increases the government spending across the board, including pensions for government workers. this is what we're talking about

a moment ago. while puerto rico is in this very dire strait, they're increasing their spending, including money flowing into pensions. this budget proves that the current government of puerto rico is trying to live out a fantasy in which actions do have consequences. this, not congresses failed to act, is the root of their problems. might and clarifies the oversight board will provide adequate funding or reasonable alternatives to satisfy contribution obligations but solely to the extent of such contributions are due under the terms of the applicable pension plan which may be restructured. it also finds the language to ensure that funds are not transferred entities to pay for pension shortfalls. finally, it puts a play on underfunded pensions and two after the oversight board is able to complete an analysis of the pension system and

determines how it is going to honor its constitutional debts. again, this has proved necessary by the budget just proposed by the governor which deliberately defaults on debt to pad the government's pension accounts and i urge adoption. >> is the further discussion? >> i rise in opposition to the amendment. this amendment against it are pensioners to the bottom of the barrel and flies in the face of hard earned bipartisan agreement on this bill. not to mention denying pensioners hard earned savings. if you want to place conditions on who should be getting paid back, and this restriction deal, pensioners simply cannot be the one taking the. i oppose the legislation and yield back. >> further discussion? very briefly. >> i will be brief.

this bill is not picking winners and losers. it has the right framework and provides for further restructuring at all stakeholders are involved. there's language, by the way, prohibiting entered after transfer. you can have this, you're concerned about transferring assets just favor one set of creditors over another. we shouldn't be expecting that the board will be making the wrong calls. on the contrary, the board, we should trust the board, a federally appointed board, to do the right thing. if you get to the legalities of this, the supreme court of puerto rico have held that once your pension is vested you have a property right in a. you have a contractual right. and so pension holders will be treated accordingly. that doesn't mean that they are

told out of the equation, but we should allow the board to review the pension systems in puerto rico and study them. they are seriously underfunded. and pass the bill provides, ensuring that the fiscal plan and the budget of the government of puerto rico provide this pension system adequate funding so the system can honor their obligations. throwing 330,000 american citizens in puerto rico under the bus cannot be a solution. obviously, there's a crisis. we are suffering through it, including the retirees, we shouldn't do this bill as picking winners or losers, and we shouldn't be harming or intentionally harming pensioners in puerto rico. i oppose the amendment. >> let me just respond as well. i am voting no because it gives

with priorities and the intricate transfer as well as alternatives that's duplicative language already in the bill. it would have the practical effect of those who are coming on pensions to go for months without receiving when it. early on a. so i urge a no vote. is there any other discussion? if not all those in favor? opposed? the no's have it. we have one dynamic left. ms. torres, want speakers sorry, mr. chairman, i know the hour is late but in the to strike the last word. >> actually the hour is pretty early in the afternoon but it is late for all of us. you have that right. go for it. spirit as. thank you, mr. chairman. while i'm happy to be having this very important discussion on puerto rico today, i saw significant reservations about the oversight board provisions in this bill. for one, i'm concerned with the members of the puerto rico

oversight board would be chosen. as the bill as currently written there is nothing guaranteeing that the board members represent a diverse set of background and experiences. while there are several fields that members can come from, including experts in finance, invisible bond markets, management, law, business and government, there is still nothing to say that all members can't come from just one of those fields. for example, all members could come from the financial services sector or law. the oversight board should reflect that the diverse interests of puerto rico, and a long-term commitment to the commonwealth. the board should look like puerto rico, and as it is currently written there is no guarantee that it will. i am also concerned that under this current proposal, future of

women's could circumvent the bipartisan selection process intended in this bill. while all ayes were on puerto rico right now, i'm sure we all have the best intentions of bringing the commonwealth out of this crisis. what happens when this issue is out of the public spotlight? we are leading the board open to political gamesmanship them in a position. i know it has taken us a lot of work on both sides of the aisle, and with the administration to get us to this point. but we cannot afford to make puerto rico solvent only to set it up to fail once again. i hope my concerns are taking into consideration as this legislation moves forward. and ask for assurance from you, mr. chairman, that this committee will provide the necessary long-term oversight to the board to make sure that it truly is addressing the needs of

the puerto rico people. i yield back. thank you. >> thank you. all right. we are now ready for the last amendment which is due 93. i reserved a point of order against the amendment. mr. fleming, you are recognized. >> mr. chairman, i want to thank my colleague for approaching me with this bill that would prevent future bailouts. h.r. 5276. in an effort to keep within the scope of this bill i limit his approach to only puerto rico at his original bill would also apply to state and local governments, as it should. the stated purpose is to ensure that taxpayers never have to make a direct payment to puerto rico to bail them out for the poor fiscal management and bloated government spending. this would simply prevent that from happening by prohibiting direct purchasing of debt or extending lines of code or using the federal reserve to purchase their bonds.

it is a simple commitment but it is important clarification. i do understand there is a point of order by the parliamentarian. >> is there any discussion to build? good. the point of order is, it still violates rule 10 because the discussion areas that are not in the jurisdiction of this committee. such, the amendment is follows. we are now to the point, author any other amendments? good, all right. if not, the question is in adoption. as you know the voting is just stupid will do this quickly. all in favor? opposed? the bill is amended. the no's have it. you want a roll call vote first? all right. call the roll quick, please. [roll call] [roll call]

[roll call] [roll call] [roll call]

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[roll call] >> is that everybody? the clerk will report. and actually, after this, we've got to do this. this is technical. >> mr. chairman, on this vote the yeas are 29 and the nays or 10. >> the bill is approved as amended, and ordered favor with reported without objection motion reconsider is laid on the table. if you guys want to vote i still have to do some of the crap here. he might as well leave. minority, wait, wait. i don't have time for that. don't applaud. just go vote. minority has emotion.

>> i hereby reserve the right of the minority to file additional views on the measure ordered before the committee day. >> please vote quietly. i mean, a we quietly. i ask unanimous consent the staff be allowed -- supported. i asking in his consent the staff be allowed to make changes to the bill ordered a reported a subject to the approval of the minority. hearing no objections order. i also ask unanimous consent that for any bill reported today with an end to the bill be considered reported within amendmenamendment to strike allr the enacting clause with its perfecting amendment. hearing no objections order. i want to give a heartfelt thanks to the office of legislative council especially -- for their tireless work on this bill. that was not an easy task if there is no for the business and without objection the committee stands adjourned. done. [inaudible conversations]

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>> california's presidential primary is june 7, and today donald trump campaigns in san diego. you can see that rally live on c-span at 5 p.m. eastern. this weekend on c-span the libertarian party convention in orlando, florida. saturday at 8 p.m. eastern. >> our campaign 2016 bus continues to travel throughout the country to recognize winners from this year's studentcam competition. recently the bus stop in massachusetts to visit several winning students from the state.

they would to folks were all the students at first through eighth grade attend a full similar to honor seventh graders. for the honorable mention video jerk the bus made a stop to recognize i will mention winners, eighth graders. a special thanks to our cable partners comcast cable and charter communications for helping to coordinate these visits. you can get all the winning documentaries at studentcam.org. >> president obama traveled today to hiroshima, becoming the first sitting u.s. president to visit a japanese city where the is dropped an atomic bomb

august 6, 1945. here's a few minutes of the president's remarks. >> the united states, japan forged not only an alliance but a friendship, that has won far more for people than we could ever claim through war. the nations of europe built a union that replaced battlefields with bonds of commerce and democracy. oppressed peoples and nations won liberation. an international community established institutions and treaties that worked to avoid war and aspire to restrict and roll back, and ultimately eliminate the existence of nuclear weapons. still, every act of aggression

between nations; every act of terror and corruption and cruelty and oppression that we see around the world shows our work is never done. we may not be able to eliminate man's capacity to do evil, so nations, and the alliances that we've formed, must possess the means to defend ourselves. but among those nations like my own that hold nuclear stockpiles, we must have the courage to escape the logic of fear, and pursue a world without them. we may not realize this goal in my lifetime. but persistent effort can roll back the possibility of catastrophe. we can chart a course that leads

to the destruction of these stockpiles. we can stop the spread to new nations, and secure deadly materials from fanatics. and yet that is not enough. for we see around the world today how even the crudest rifles and barrel bombs can serve up violence on a terrible scale. we must change our mindset about war itself, to prevent conflict through diplomacy, and strive to end conflicts after they've begun; to see our growing interdependence as a cause for peaceful cooperation and not violent competition; to define our nations not by our capacity to destroy, but by what we build.

and perhaps above all, we must reimagine our connection to one another as members of one human race. >> you can see all the president obama's remarks at hiroshima tonight on c-span. will alter from the japanese prime minister. that's at 8 p.m. eastern. >> ahead of the washington, d.c. region subway system known as metro testified on capitol hill about safety and reliability issues facing the transits of the industry of the house transportation committee, we will alter from the head of the federal transit administration. >> we will go ahead and called the hearing to order and i want to welcome everybody and all of our witnesses today. today will discuss how the

washington metro system is going to address the safety and reliability issues. the issues important to all the members here because we would have constituents, then we want to make sure when they commit to see the nation's capital efficient able to move around the region safely and efficiently. the federal government is investing billions in the metro and get the system is unsafe and it's not reliable. metro has been played by long-standing well documented safety issues and the forcefully investigations in the 1980s to the 1990s and today have a common refrain and that's a lack of communication and safety procedures which would writers and workers at risk. the focus of today is have a system that's going to change. the metro's new general manager will talk of it is committed to improving safety in addressing the maintenance backlog. the committee will be watching to ensure that the talk turned into action. the federal transit

administration, fta, is playing an important role as the metro's temporary direct safety oversight entity. the fta said today to share with us what is going to do to promote safety and reliability at the metro. congress can't legislate communication and it can't by a safety culture. they have to take action on the responsibility providing safe transit in our nations capital. and it has to be held accountable to the federal, state and local taxpayers that are funding them. i look for trickery for discussion and i'm going to yield the rest of my time to congresswoman comstock. >> thank you, mr. chairman. i ask unanimous consent to offer an extensive opening statement for the record but first of all -- >> without objection. >> when the general manager paul wiedefeld terminated 20 managers, seven of whom were considered senior. i think we all hope this is just the beginning of a new era of accountability and transparency

at metro, and in our washington delegation all support for you in this action. we need to find new ways to run israel. [inaudible] -- and legislation of the front and places the new board members are more focused on being experience board members and transportation management experts. on cost issues, according to fta and dod data, metros will cause run 120% to one to 50% higher than comparable transit system. that is why i appreciate mr. wiedefeld said at a recent that he attended with me that he is not asking for more money at this time but is very much focused on addressing these issues and how we can restructure metro and that we can address some of these issues and limitations that are coming up another can find ways to do better. i'm concerned -- the authorities

shall not contract or subcontract the work normally performed by the employees within the bargaining unit to find a discriminate which result in a layoff, transfer or demotion of its employees. does this prevent metro from having the kind of flexibility to realize the cost savings of contracting out work and having the best people at the best price do this work? i know i've talked with new general manager about this issue. also met with businesses who are doing trackwork, tell us they can do this at lower cost than we are truly paying and our current cost seem to run well ahead of cause. i also want to see how we are using new technology to document the trac trackwork being done. technologies that can save money and increase safety and transparency and already being used at other rail systems around the country. i hope we can exore that more. since i am chairman of the

research and technology subcommittee of sides with going to be looking into having hearings on that so anywhere we can assist you about we want to find the best, most cost efficient systems to save taxpayers money. finally, i want to address the disturbing report that was on the news last night about a rape that occurred last month on metro in broad daylight, 10:00 in the morning. clearly, we also have, and it is from people all the time, concerns about basic personal safety. i've had people approach me in my own station tell me about personal safety issues, this is something that is unacceptable but also a concern that is made done with this report was made and how are we doing all these things that i appreciate, we talk about this new era of transparency as well as the culture of safety that we all need. and finding better ways to save money. i do appreciate you talked about putting more people on the front lines in the station. i think this very troubling incident is one of many reasons

why we get more people out of the back office and on the front lines protecting our customers and our constituents. again, i think the chairmen and our witnesses today. i think that chairman for this important hearing and for his efforts on this, and i look forward to hearing from our witnesses today. thank you. >> thank you very much. i know turn to the ranking member for opening statement. >> take it very much mr. chairman. i have to begin by saying how much i appreciate this hearing. i think the fact were having this hearing today points out important wmata is of course to its immediate constituents but also to the federal government itself. we are locked into this together and into wmata's problems together, and unwinding them together.

i stress wmata's uniqueness. no other metro system across the united states has to respond to three different jurisdictions. that is a built-in structural problem that neither wmata, nor for that matter, those of us in the federal government has been able to welcome wmata some of it over. it's a better, and it is -- it is there and it is one of the reasons for its complexities, and both complexities play prominently into the changes that are needed. for example, just this morning secretary fox announced that he was appointing a high-level official from his office to help hasten the work of the three jurisdictions in setting up their own safety oversight mechanism. the new chairman has taken steps that have been acknowledged to

be bold and necessary. to be sure, inconveniencing the public. but here we have a a dual, we have issues that collide. we want the public to be safe and we want the public to be able to ride and to get where they're going quickly. how wmata salsa that during this -- salz that when they're overhauling the system is one of the issues we want to face today. the basic challenge wmata will meet after this single year of essentially building much of the system is how to keep it that way. ..

that somehow has to be dug out and the culture notion is , it has not been defined. congress of course passed math 21 giving federal transit administration oversight over global public transportation in the united states and we reinforce that in the fast act and there are issues that pile onto fta that it would like to offload and i think the safe track plan of the general manager will help to do that. some of metro's funds are being held up because