President Obama has tapped a former bankruptcy judge, a corporate law professor and former deputy commissioner in the Social Security Administration to serve among others on a board tasked with reforming Puerto Rico's troubled finances.
Obama announced seven candidates for the Financial Oversight and Management Board for Puerto Rico, which was created under a new law aimed at helping the bankrupt U.S. territory return to solvency. Under terms set in the bipartisan law, four of the board members were picked by House Speaker Paul Ryan, R-Wis., and Senate Majority Leader Mitch McConnell, R-Ky., and three picks were left up to Obama.
One of the principal tasks of the board will likely be restructuring the island's $70 billion in outstanding debt.
"With a broad range of skills and experiences, these officials have the breadth and depth of knowledge that is needed to tackle this complex challenge and put the future of the Puerto Rican people first," Obama said in a statement Wednesday. "In order to be successful, the Financial Oversight and Management Board will need to establish an open process for working with the people and government of Puerto Rico, and the members will have to work collaboratively to build consensus for their decisions."
One of Obama's picks is Jose R. Gonzalez, Chief Executive Officer and President of Federal Home Loan Bank of New York, who also has experience as a bank executive in Puerto Rico.
Another, Arthur J. Gonzalez, is a New York University Law School fellow and former chief judge on the U.S. Bankruptcy Court for the Southern District of New York. His third pick was Ana J. Matosantos, a consultant and former director of the California Department of Finance and chief deputy director for budgets.
House Speaker Paul Ryan, R-Wis., and House Minority Leader Nancy Pelosi, D-Calif., appear to be satisfied with Obama's board picks, which follows relatively bipartisan cooperation on the Puerto Rico financial overhaul bill that cleared Congress in June.
"Drawing from a wide variety of practical experiences and policy prowess, the members have what it takes to serve Puerto Rico and help get the territory on a path to fiscal health," Ryan said in a statement.
Pelosi praised the board choices, but said Congress should also extend U.S. mainland tax cuts to Puerto Rico's residents and increase federal funding for Medicare on the island to help turn the economy around.
"Congress must now focus its attention on helping the people of Puerto Rico by addressing disparities in federal healthcare programs and spurring economic growth through the extension of the earned income tax credit to the island," Pelosi said.
The Republican designees on the list are David A. Skeel Jr., a corporate law professor at the University of Pennsylvania Law School; Carlos M. Garcia, CEO and founder of BayBoston Managers LLC and board chairman of Caribbean Financial Group Holdings, L.P.; Puerto Rico native Jose B. Carrion III, president and principal partner of HUB International; and Andrew G. Biggs, a resident scholar at the American Enterprise Institute and former deputy commissioner in the Social Security Administration.
Treasury Secretary Jack Lew said in a statement that Puerto Rico's looming fiscal crisis requires the island's government, long accused of poor management and bloat, to quickly submit a multi-year fiscal plan to the board.
"Time is of the essence," Lew said. "The Puerto Rico government should bring together all of its resources to develop and submit a plan to the Oversight Board as soon as possible."