“Roberts asked Landau why it doesn’t make sense to think Congress
wanted to keep Chapter 9 for the states and make the territory come to
it for help.
Landau said frankly, it would be very anomalous [for]
Puerto Rico [to be] in a worse position, let’s say, than Guam and the
Virgin Islands.”
Roberts said Landau “came up with a very good
answer.” But Roberts asked why did Congress lump Puerto Rico with the
District of Columbia in saying in the bankruptcy code that there were
not states except for the purpose of defining who would be a debtor
under Chapter 9.
Ginsburg also asked McGill, “What explains Congress wanting to put
Puerto Rico in this anomalous position of not being able to restructure its debts?”
Ginsburg gave three reasons. First he said, Congress has always micro-managed
Puerto Rico’s debt, citing a change to the Jones Act aid that limited the amount of debt it
could take on. Second, he said, Puerto Rico debt is triple tax-free and
therefore is held by bondholders all over the U.S. Finally, he noted,
when Congress amended the bankruptcy code in 1984 to say Puerto Rico is a
state except for defining who a debtor is under Chapter 9, it was
concerned about the amount of indebtedness of both Puerto Rico, which
had about $9 billion of debt, and D.C., which had about $1.6 billion of
debt.
Hello, this is why!!!
“Washington D.C. Financial Control Board
Background
Article I, Section 8 The United States Constitution
grants Congress the authority “To exercise exclusive Legislation in all
Cases whatsoever, over such District (not exceeding ten Miles square)
as may, by Cession of particular States, and the acceptance of Congress,
become the Seat of the Government of the United States.” However, after
several attempts at governing bodies of various structures and
independence,[2] Congress in 1973 passed legislation (the District of Columbia Home Rule Act) investing local government in a mayor and 13-member city council,
to be elected by the District’s citizens. However, all legislation and
executive actions were subject to congressional oversight and approval.[3]
By the mid-1990s, however, DC’s elected officials had mired the
capital in a financial crisis. In particular, the mayoral
administrations of Marion Barry and Sharon Pratt Kelly
had frequently outspent their budgets, squandering city finances by the
hiring vast numbers of city employees (so many that the city could not
keep track of precisely how many), mismanagement, and extravagances.
A Government Accounting Office audit conducted during Kelly’s administration
in 1994 projected a $1 billion shortfall by Fiscal Year 1999; when Barry regained the office of
mayor in 1995, his new administration found that FY96 would include a
deficit of over $700 million.
Barry soon petitioned Congress for financial rescue — although his
proposal did not include significant cuts in the city’s budget or
payroll but relied on federal funding to compensate for the gap in
funding. At that time, however, Republicans had just taken control of Congress,
based partly on promises of fiscal restraint; instead of injecting federal cash into the city,
Congress enacted legislation to create the Control Board, assuming budgetary and
spending oversight over the mayor’s office.”
The 1984 exclusion of Puerto Rico and the District of Colombia had a purpose/intent and it served it well in the D.C. situation and it will do so in the Puerto Rico case where inept and corrupt local politicians have made D.C. look like small potatoes in terms of ineptness, corruption and over spending.
muddlaw 
“Roberts asked Landau why it doesn’t make sense to think Congress
wanted to keep Chapter 9 for the states and make the territory come to
it for help.
Landau said frankly, it would be very anomalous [for]
Puerto Rico [to be] in a worse position, let’s say, than Guam and the
Virgin Islands.”
Roberts said Landau “came up with a very good
answer.” But Roberts asked why did Congress lump Puerto Rico with the
District of Columbia in saying in the bankruptcy code that there were
not states except for the purpose of defining who would be a debtor
under Chapter 9.
Ginsburg also asked McGill, “What explains Congress wanting to put
Puerto Rico in this anomalous position of not being able to restructure its debts?”
Ginsburg gave three reasons. First he said, Congress has always micro-managed
Puerto Rico’s debt, citing a change to the Jones Act aid that limited the amount of debt it
could take on. Second, he said, Puerto Rico debt is triple tax-free and
therefore is held by bondholders all over the U.S. Finally, he noted,
when Congress amended the bankruptcy code in 1984 to say Puerto Rico is a
state except for defining who a debtor is under Chapter 9, it was
concerned about the amount of indebtedness of both Puerto Rico, which
had about $9 billion of debt, and D.C., which had about $1.6 billion of
debt.
Hello, this is why!!!
“Washington D.C. Financial Control Board
Background
Article I, Section 8 The United States Constitution
grants Congress the authority “To exercise exclusive Legislation in all
Cases whatsoever, over such District (not exceeding ten Miles square)
as may, by Cession of particular States, and the acceptance of Congress,
become the Seat of the Government of the United States.” However, after
several attempts at governing bodies of various structures and
independence,[2] Congress in 1973 passed legislation (the District of Columbia Home Rule Act) investing local government in a mayor and 13-member city council,
to be elected by the District’s citizens. However, all legislation and
executive actions were subject to congressional oversight and approval.[3]
By the mid-1990s, however, DC’s elected officials had mired the
capital in a financial crisis. In particular, the mayoral
administrations of Marion Barry and Sharon Pratt Kelly
had frequently outspent their budgets, squandering city finances by the
hiring vast numbers of city employees (so many that the city could not
keep track of precisely how many), mismanagement, and extravagances.
A Government Accounting Office audit conducted during Kelly’s administration
in 1994 projected a $1 billion shortfall by Fiscal Year 1999; when Barry regained the office of
mayor in 1995, his new administration found that FY96 would include a
deficit of over $700 million.
Barry soon petitioned Congress for financial rescue — although his
proposal did not include significant cuts in the city’s budget or
payroll but relied on federal funding to compensate for the gap in
funding. At that time, however, Republicans had just taken control of Congress,
based partly on promises of fiscal restraint; instead of injecting federal cash into the city,
Congress enacted legislation to create the Control Board, assuming budgetary and
spending oversight over the mayor’s office.”
The 1984 exclusion of Puerto Rico and the District of Colombia had a purpose/intent and it served it well in the D.C. situation and it will do so in the Puerto Rico case where inept and corrupt local politicians have made D.C. look like small potatoes in terms of ineptness, corruption and over spending.
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