foreign policy? build a wall. kkk -- [indiscernible] [laughter] if only there was a way for is a to prove john miller real person. oh, i know, show was john miller's birth certificate. host: last night's "snl." "newsmakers" is next. thank you for joining us on this sunday. enjoy the rest of your weekend. have a great weekend. [captions copyright national cable satellite corp. 2016] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] >> next, "newsmakers" with you

talk congressman john bishop -- rob bishop. then, journalists discuss the leak of the panama papers. 12:50 p.m., president obama gives the commencement speech to the graduating class of rutgers university. ,"st: this week on "newsmakers the chairman of the natural resources committee, representative rob bishop republican of utah, thank you for being with us, sir. we also have with us nick timiraos, economics correspondent for "the wall street journal," and mary clare jalonick, congressional reporter with the associated press. let's begin with what the financial situation is in puerto rico and how do you view it, sir? rep. bishop: the financial situation is horrible for them. they have not had audits in the last two years. no one knows what is assets and what is not. we know they have about a $70 billion bonded indebtedness, and about a $44 billion asset

deficit in their pension fund, and they don't have the resources to pay that. something has to put this financial house back in order. host: and it has to be the u.s. congress? rep. bishop: unfortunately, yeah. article four of the constitution still says general control of our territories falls within congress. until you give them independence or make them a state, yeah, congress is ultimately responsible. doesn't matter how much home rule we get, we still have the ultimate responsibility. ms. jalonick: so you all have tried several different versions of legislation to try to aid the territory with the $70 billion in debt. what is the status of the most recent version of this and is this something you think that you can get passed? rep. bishop: yeah, because in all the versions out there that people are referencing, the fundamental issue has always been the same. there needs to be some way of providing some kind of security. so there will be an oversight board that will go down there, work with the government to come up with a plan in which they

will get their financial house in order, they will be able to pay off their debts. and then they will work with the creditors who by and large want to stay in puerto rico. they want to be involved, they want to get the money back. so they will be able to come up with that plan. the board will have the ability of making sure that plan is adhered to and followed through, and that gives security to the creditors that they can stay involved and they may have some readjustments or restructuring of the debts they have, but most of it would be voluntary, and i think we can give some kind of financial order going forward to it. that is based on precedent, has been done in the past. i'm confident it will work here. that basic concept of what we want to do has been agreed by everybody that is a player. i think regardless of what the final version is, that basic structure will be there. ms. jalonick: is this something that - you have had a lot of opposition from different sides,

and as you have said, it is not to the central structure of the bill, but to smaller parts of it. creditors are concerned that they won't be a priority. democrats, the obama administration, are concerned about pensions. democrats in congress are concerned about lowering the minimum wage for young workers in the land transfer. what compromises have you made to some of these people who are concerned about this bill, and do you think that your final version will be able to make it through congress? rep. bishop: well, every discussion draft was somewhat of a compromise, trying to get everyone together. the common bond is the underlying assumptions that we met, that there would be no bailout, there is not going to be government money going down there, the taxpayers of america are going to be held harmless, but that everyone will eventually get paid. the investors will get paid, whether it is pensions or the bonds, the ones that are general obligation bonds, all of those will eventually be made whole. property rights will be

respected and the constitution of puerto rico will be respected at the same time. all those things have not changed and that will be the basis of what is going on. if we piddle around with some language to try to tweak something so it is very clear that is what the intent is, we may do that. mr. timiraos: what of the nature -- there was the hope that the bill would be out earlier this past week. there have been delays. the treasury secretary on friday morning said delays can happen because you are making progress. can you tell us about what has been the nature of these final delays? what is the holdup at this point? rep. bishop: um -- [laughs] the holdup is that different players, some on our part, some on the other side, have other ideas they want explored, and for common courtesy and to make sure we get this right, it is worth it to take the time to explore those ideas.

at this stage in the game, we need to make sure we move forward and that further discussions on this bill need to be done in the open, they don't need to be done in negotiations between individuals. but saying that, with one shot getting this right, we need to do it right. once this bill starts moving, i think it moves through congress very quickly. it will be on the president's desk, and we want to make sure that if there are significant constitutional issues or legal issues we want to explore all of those and make sure it is done right the first way. but the bill will be dropped soon, and still is open for amendment process along the way, and i think you will see other people trying to do amendments on this bill. some will be successful, some won't. mr. timiraos: and what happens if this bill can't get past congress? what is going to happen to puerto rico if this legislation falls apart at the five-yard line? rep. bishop: armageddon hits, the millennium starts, entire world collapses, thermonuclear war all over the place. this is so significant for puerto rico, that 3.5 million

americans are down there, they are in dire straits, there has to be some kind of structure. it is a problem that has developed for decades but it needs to be addressed quickly, it needs to be addressed soon, addressed in the proper way. we can't screw it up. i mean, it is that bad. if puerto rico spins out into economic chaos, we may never have a chance of recovering again and you are going to hurt people, and that can't be. that is why this cannot be seen as a partisan bill. i truly anticipate and expect a majority of republicans and majority of democrats supporting it, because it can't be reduced to partisan politics. this is too important to do that. ms. jalonick: what would you say to someone in puerto rico who may be dealing with economic troubles on the island and maybe watching this right now? nick and i went to puerto rico with the secretary of the treasury earlier this week -- rep. bishop: oh, fine, you wouldn't go with me, you went with him, great. [laughter] ms. jalonick: we saw schools dealing with bug infestations,

electricity problems, hospital having trouble getting drugs for children. what you say to people there who might be suffering under these economic problems about what congress is trying to do and how congress might have help coming? rep. bishop: you know, there are some voices saying you have made bad decisions for the past several decades, suffer, live with it. that is not an appropriate response to it. yeah, there are bad decisions made, but we have a chance of doing it the right way and we will do it the right way. for puerto rico's success, they not only have to get financially sound and structured, but they also have to have economic growth that takes place in the island. one of the biggest problems they have with jobs that have left is because of the extremely high energy prices, and that is one

of the reasons why our committee's dealing with it because there is an energy section in this bill that i think is significant that is going to try and drive the cost of doing business so those jobs, those manufacturing jobs, can return to the island. so we have some progrowth elements that sentence -- in fact, i did when i was explaining the issue -- put aside, but those are equally as significant, and that is why it has to be part of the bill. ms. jalonick: in that same vein, if someone who holds a pension in puerto rico -- you are talking to someone who holds a pension that might be concerned because it is either underfunded or not funded at all. how does this bill make sure they are taken care of as well? there are concerns about priorities. rep. bishop: this bill is the only way you can get some kind of security because it tries to establish a process to make these decisions as it goes forward to guarantee that property rights are respected and that people are paid back. if you don't do this bill, that is where everything spins out of control, and that is when you really have to be worried about those pensions, because if everything collapses you have no

guarantees of anything. mr. timiraos: so the puerto rican constitution does outline a sort of payment priority that says the general obligation debt of the commonwealth has the most senior priority, pensions come later. and so there have been conservative lawmakers in your party and bondholders have been arguing that the general obligation debt, the legislation should clarify that they will have an explicit protection ahead of pensions, their bonds will not be written down for the pensioners. the treasury secretary told us on monday that any write-downs need to balance the macroeconomic concerns because if you were to write down pensions, you are creating more economic harm on the island. how do you see the balance of pensions and general obligation bonds? will there be an explicit priority in the legislation? rep. bishop: the legislation will not take away any existing constitutional or property rights that are there. so the secretary is right. the problem is you have got to make sure that you have an

economic growth model and a funding model that can pay everyone back. so we are not in the process of picking winners and losers in this, and that is why you have the board in the first place, so they can make the orderly process of going through that. so yeah, the constitution does give certain people priorities, assuming that you have met the requirements of the constitution. there is limitation of how much debt you can go into. if you have exceeded that, who knows what a court would say as to whether that justifies constitutional exception or not? but that is why you have the board in the first place. the board would have the authority to sort those situations out and try the things in a consensual manner and voluntary, but everyone has the right to go to court at the end of the day. but at the same time, you can solve almost all of these problems by the structure of this organizational board that we are going to have in the first place. so the goal is to get everyone paid, not to say, you know, only those who are first in line get paid and the rest, screw it. everyone is going to be dealt with and fairly by this board without having to make changes

in prioritizations or constitutional language. mr. timiraos: and you referenced debt sustainability standards that the puerto rican constitution also specifies. so we have heard bondholders talk a lot about the payment priority that they believe they are owed. do you think that some of these debts were issued perhaps out of -- unconstitutionally, because they exceeded the sustainability standards? rep. bishop: no, no, they haven't done an audit in two years, and that is the first thing the board will demand, to have an audit. and that is why it is so important to actually get the board in here and get it done right and do it quickly. host: how much power will the board have versus the government of puerto rico? rep. bishop: well, the original plan will be done in consensus with the government of puerto rico, so they will buy into it. the board will have the authority to make sure that the plan is adhered to, and to be honest, if the board can come up with a more successful way or

if there is some breakdown in the politics of it, the board has the ability of overwriting that. but the board has the major responsibility of making sure that the plan is in place, a plan is adhered to, and order is brought back, so the investors can actually be repaid. ms. jalonick: you said that you are hoping to get this passed quickly through the house and the senate. that would be kind of an anomaly in congress on things usually moving pretty slowly. you have strong support from paul ryan. he has spoken out a lot about this. mitch mcconnell hasn't said quite as much. is the senate part of your negotiations at all, or at least providing input, and do you think you have a product that could pass both the house and the senate pretty quickly? rep. bishop: yeah, i think the product we have is a great product, and solves the problem, and i think as soon as you realize this is something that solves the problem, and the alternative is far worse, then we can move it through very quickly.

ms. jalonick: so has the senate been providing input as you guys have been negotiating this? rep. bishop: everyone has been providing input. that is part of my problem, everyone has input. [laughter] a little less input right now would be very helpful. ms. jalonick: what about the government of puerto rico? do you feel like they are comfortable with this? they have spoken broadly that this is a good approach, but do you think they will be comfortable with this if this bill becomes law, that this will work well in terms of them being ok with it? rep. bishop: well, any -- look, anybody who is an elected official in puerto rico is not necessarily happy with the situation in which they find themselves. and because this has not been just a recent phenomenon, this goes back over decades, i guess everyone can point fingers to somebody else if they wish. the issue is how do you actually solve this problem, and i think we have had conversations with elected leadership in puerto rico. they have been, i think, very helpful and very positive and forthright in coming and helping us craft what i think is a good solution to it.

so i appreciate their input. they made not be totally happy with everything that is going to be involved, and i doubt that anyone is going to be totally happy. i'm not totally happy with the bill yet and i've had more input than some of these people have. but i don't want to deemphasize how productive they have been an d helpful they have been because they have. and recognizing this is a difficult situation for them, i think they have come up with some solutions that actually can work. and if i believe the public opinion polls that are coming out in puerto rico, this is an extremely popular approach by the people of puerto rico because they realize this is there salvation so their jobs can be maintained, their lifestyle can improve, and the pensions maybe can be secured in the future. without it, it is a crapshoot. it has all sorts of negative implications.

mr. timiraos: what about the obama administration? the treasury department has been working closely with lots of different groups, including your committee, on this. what is it like to work with the obama administration on this bill? rep. bishop: once again, ironically, the obama administration i think has been very helpful and supportive, especially in the overall draft. no one in the obama administration is talking about what we are trying to establish with the board and the process and procedure. there are some times when i wish they would be a little less technical in trying to come up with which adjectives they think are appropriate, but at the same time, i cannot do anything but compliment them for the help and assistance as we have gotten to this point. they have been extremely helpful to get to where we are. mr. timiraos: that is a tone we have not heard a lot over the past few years between the congress and white house. this is a technically complex, politically charged policy issue that you have been working on. why do you think this issue -- there is a long stuff things that have been been done -- tax reform, immigration, entitlement

spending. why do you think this is the one issue where we are seeing an unusually bipartisan approach? rep. bishop: i actually don't know. i can't explain that phenomenon to you, other than perhaps it is that this is a unique situation that is only going to get worse. it will become a humanitarian crisis of even greater intensity than it already is. and you don't really have a lot of options on how to solve the problem. this is clearly the best solution. it is based on precedent of what has happened and worked in the past. so i think everyone came up to the idea that the big plan, the overall image, is actually viable, and let's work together to make sure that it happens. we're still talking about some of the small issues that surround it. some have constitutional implications, they may have legal implications. we want to work through that, and we can work through that not only in the drafting phase, but also in the amendment process as we take it through committee and then onto the floor and over to

the senate. host: is there a date by which action becomes too late? rep. bishop: heh. in my mind, i think that happened about three weeks ago. no -- yes and no. already they have had three defaults on the payments. may 1 was a huge default. there is another one coming up july 1, which is an even bigger potential problem. i would like to have this process going through so at least the creditors know it will be in effect by that time. but the answer is no, because the problem does not go away, only exacerbates. whenever you do it, it is good. the sooner you do it, it is better. host: what do you say to taxpayers who are maybe hearing from their representative in their district that this is a bailout for puerto rico? rep. bishop: there is absolutely no reason why anyone should say that. i don't care how do you want to define the word "bailout," this is not a bailout. there is no taxpayer money going

down there, no taxpayer put in jeopardy. this is a structural reorganization of their economic situation so that people can be paid and property rights can be respected. there is no bailout to it. however, if this thing fails and we don't do it, there is going to be a large, huge hue and cry for a bailout, for taxpayer money going directly to puerto rico to help the situation, and i can't even support that. so this is the appropriate approach. this is the best approach. if you don't do this, then you have a good chance of actually maybe ending up at the end of the day with a bailout and that is the worst scenario. that is what the speaker and everyone else involved took off the table from the beginning. that would not be one of the criteria. ms. jalonick: there are ads out there saying that it is a bailout, and we don't know who is behind them because they don't have to disclose their donors.

do you think that those ads, which seemingly ran every few minutes on news channels here in washington, and i know in other places around the country, do you think that has hurt your effort, that they have labeled it a bailout? rep. bishop: you know, ironically, no. the ads were so over-the-top and so unbelievable that once people were told what we are really doing with the -- they were like, oh, i get that. they were in my district as well. the nicest thing they did was put a telephone number on where to call to say i don't want a bailout, and our staff was able to simply say this is what the bill does, and with one exception out of the literally hundreds of calls we got, people were saying, "oh, that makes sense." i'm appreciative of them actually putting the number in there. if they had not put the number in there, no one would have taken the time to look it up and they would have just been mad. this way they gave us a chance to explain what is happening and people realize that what we are doing has a great deal of logic to it.

host: we have time for about five more minutes. ms. jalonick: one thing that has complicated the effort a bit is that some of these provisions that democrats don't like in the bill. one would allow puerto rico if it decides it wants to do so to lower the minimum wage for some younger workers. another would transfer federal lands on the island of vieques to the island of puerto rico. rep. bishop: and so the negative aspects are what? ms. jalonick: i'm asking why are those provisions important in the bill, and i'm assuming they remain unchanged in the final version. rep. bishop: well, we will have to see what the final version is, and as i said before, amendments will be allowed. but the minimum wage is one of those elements that could become a progrowth -- because it is very limited to the area of who has been affected by that. but in an area that has been trying to create jobs, you don't want to put in factors there that retard the effort of creating jobs. so that is a progrowth concept that should be in there. and there will be discussions about that as time goes on.

same thing with the island. puerto rico should have had the portion of that island in the first place. when dod decided no longer to use it for military purposes, it was originally intended to go back to the territory of puerto rico. that is where it should be. it makes sense to do it. they can do a more efficient job of actually managing it and it can be a benefit for the people. right now they have hunting and fishing restrictions that have been put in that happened pretty arbitrarily done. people of puerto rico know what they should be doing in those areas and this would be an asset to the territory. there is no reason -- they should have had it already. there is no reason we need to keep holding on to that. mr. timiraos: there have been a number of divisions also on the republican side over how to treat this bill. i wonder, you have very strong support from house speaker paul ryan on this. would the gop leadership advance a bill through the house floor that is not able to secure a majority of votes from the republican conference?

rep. bishop: well, i cannot answer for what somebody else would or would not do. all i can say is that there is no reason this does not get a majority of votes both from republicans and democrats. it is based on sound conservative principles. and the principle of an oversight board that will establish in conjunction with the territorial government a plan so that property rights are respected and that everyone gets their investment paid back. and i'm sorry, that should be a principle that attracts both republicans and democrats. and when -- if everyone takes a step back and realizes that this is still what we are trying to do, then divisions over partisan politics on some of these peripheral issues should be insignificant. that is why i think at the end of the day it should get a majority of republicans and democrats. there should be no reason it does not. mr. timiraos: one of the concerns a number of republicans have raised, though, on this issue of how you treat pensioners versus bondholders, people think that this legislation may set a precedent for states that have some level of fiscal distress. are those legitimate worries here?

rep. bishop: no. in the first portion, that is one of the reasons why we put all of this in the section of the code which it is, because it only deals with territories. there have been some proposals which i thought may actually establish a precedent that could be in practice but not in reality or not technically but could in reality establish some kind of precedent. that has been taken off the table as well. so there is a firewall. there will be no precedent. this is specifically an issue that deals with territories, and it is written specifically for the territory, and let's face it, i said article four of the constitution says congress still has the responsibility for the territories. congress does not have the responsibility for states. municipalities, which are subdivisions of states, have rights, they are sovereign rights. you can't compare them. this is truly an apple and orange situation that is totally different. any reading that this would establish a precedent that can

be used for states is misreading the situation. there is no connection to it. now, you could write it so that there would be but that is what we have specifically avoided doing. that is why we are not going to chapter nine or coming up with super chapter nine or any of that kind of crap. ms. jalonick: yeah, one thing that has complicated house bills for the last three years is the freedom caucus, the group of conservatives in the house who have often slowed to a halt pieces of legislation that people wanted to see move. do you think the same thing could happen here? have you been in conversations -- there are several members of your committee who are part of that group. do you think that could be a complication once this moves to the house floor? rep. bishop: no, no more than any other group that is out there. we have been meeting with members of the freedom caucus, some of whom, as you mentioned, are actually on the committee, which is why they are involved in it. we have tried to be very open with what they are trying to do. look, you could do any kind of

subgroup in the house and say they may be a problem later on. i don't think any one group will stick out more than any other group. host: chairman, we out of time. thank you very much for being on "newsmakers." appreciate it. rep. bishop: i appreciate your invitation to be here. it is very kind of you. [captions copyright national cable satellite corp. 2016] host: and we're back with our reporters, mary clare jalonick of the associated press and nick timiraos of "the wall street journal." you were both in puerto rico recently. could you describe what you saw and how dire it is on the island? mr. timiraos: you hear a couple of different things. some people argue -- look at puerto rico, beautiful beaches, parties on the waterfront every night there isn't a crisis, this is into detroit. a couple things important to remember. they had been in recession for 10 years. hit u.s. state come

we have not seen anything like that since the great depression. they are losing my thousand people a week to the u.s. mainland, because they are u.s. citizens and all you need to go to our lenders take jetblue. you lose that much preparation over a relatively short period of time, it is difficult to pay owed money.who are when i went to increase tax revenues if you tax base is shrinking. -- you are not going to increase tax revenues if you tax basis re-think at there's kind of a disconnect. say there is not a real crisis here, and yet the economy in a session for 10 years, losing 1% of your preparation every year. if this was happening in a u.s. state you would see a lot more people were concerned about it. that is why the chairman's comments today were pretty interesting, because he shares those macroeconomic concerns you have been hearing from the treasury department. host: before we get to politics, sticking to the economy side of this, why does wall street care?

mr. timiraos: well, lost because because most of these bonds are held either by american hedge funds or mutual funds. gets -- these are not debts held overseas. they are held in puerto rico or in retirement funds for americans. this is a big concern because even though there were some funds that in 2013, 2014, when it became clear that puerto being ratings were downgraded, they set them all right, we will step back from this come this is too risky, there were others who went in and said commune on, this is ok, we can get our economy is going to get better, and their economy has not gotten better. , where do clare jalonic things stand in congress and crying is acting anytime soon? seems like thet continued delays on the bill, at least according to the chairman, or because they are getting close to a final product.

whether they can get that through the house or the senate is an open question. the definitely seems to be a good faith effort on everyone's part. paul ryan is very supportive. nancy pelosi doesn't like some of the provisions of the bill but has stopped short of criticizing it too much because she clearly wants to get something done, too. has been someone involved around the periphery of these negotiations, meaning that they are hoping this bill can pass the senate as well. as we know can just looking at congress in the last two years -- last few years, very few things pass easily through congress. we have the span of conservatives, the freedom caucus. a lot of them don't love this legislation, mainly because of the president -- they are concerned it would be a precedent for states, even though bishop says it is not in the language is not in their that would allow it to be a precedent.

that would be a concern. we will just have to see if everybody plays nice on this. it is unclear at this point. host: could it be -- nick, i think you asked this question -- could it be that the speaker says i can bring this to the floor with enough republican votes, maybe not the majority of republicans, but enough republican votes and i can count on more democrat votes and we can get something passed? ms. jalonick: we will see. we kind of joke, everything at this point is a test for paul ryan come his first year as speaker, but this will be a test for paul ryan comest to see if he can get his caucus together on this bill. if they pass this with a majority of democratic votes, that might be a problem for some of the caucus. it will be interesting to watch how this moves through and if bishop and ryan are able to get it through the house. i think if they can get into the