Today, the Subcommittee on Indian and Insular Affairs conducted an oversight hearing to evaluate Puerto Rico’s fiscal recovery under the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA). The session was led by Subcommittee Chairman Jeff Hurd, who commented on the progress made since PROMESA’s implementation nearly a decade ago.
“Nearly a decade after PROMESA’s enactment, Puerto Rico has made real progress toward financial stability, thanks to meaningful reforms and difficult but necessary restructuring. Today’s hearing is about ensuring that this progress continues—through transparency, accountability, and a clear path to long-term fiscal independence,” said Hurd.
Puerto Rico’s debt crisis began in 2015 due to various factors such as economic stagnation, structural imbalances, and unstable borrowing practices. This situation led Congress to pass PROMESA in 2016. The act established a seven-member Financial Oversight and Management Board (FOMB) with extensive authority over Puerto Rico’s finances. The FOMB is responsible for reviewing and certifying fiscal plans and budgets for the Commonwealth of Puerto Rico. It also reviews contracts and makes policy recommendations to the Puerto Rican government.
PROMESA aims to create a comprehensive fiscal oversight and restructuring framework designed to enable long-term pro-growth fiscal reforms and structural transformation for restoring Puerto Rico’s economic health. Although PROMESA has been effective in reducing Puerto Rico’s debt and recent efforts have balanced its budget, the U.S. Government Accountability Office noted ongoing issues with transparency and capacity. Today’s hearing highlighted these challenges for continued fiscal reform while emphasizing the need for ongoing oversight to sustain economic recovery.
