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  1. “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

    Hello, this is why!!!

    “Washington D.C. Financial Control Board


    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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