Sen. Ron Johnson, R-Wis., who’s at risk of losing his seat in November, voted for Puerto Rico fiscal rescue legislation when it faced a key procedural hurdle on Wednesday.
The Puerto Rico bill has scrambled the typical political coalitions on both sides of the aisle in Congress. Many conservatives opposed it as a “bailout,” many Democrats voted against it because it fails to bail out the troubled island, and party leaders on both sides insisted it was necessary to prevent a crisis that could necessitate cash infusion from the federal government.
That made Johnson’s vote particularly interesting. He walked onto the floor well after the bill had cleared the 60-vote threshold required to advance — an easy opportunity to vote against the legislation that one of the most vulnerable senators in the country might jump at — and gave the bill a boost.
“I just voted the way I should vote, because it’s a good bill,” Johnson told the Washington Examiner. “It’s not a bailout. It’s not a taxpayer bailout. I actually think it’s going to provide some pretty strong financial controls, which is what I think is necessary for Puerto Rico.”
Not everyone in Johnson’s situation agreed. Sen. Rob Portman, R-Ohio, who is also facing a competitive re-election campaign this fall, voted against the legislation moments before Johnson appeared. Portman withheld his support because he was denied a vote on legislation that could help mine worker pensions.
“If we’re going to help Puerto Rico escape bankruptcy, then we should also help the 90,000 miners we talked about in West Virginia, Ohio, and other states who are suffering the effects of these coal bankruptcies,” Portman said Tuesday on the Senate floor. “They don’t deserve to be left behind as the Senate addresses other bankruptcies.”
Johnson voted differently than Portman, but his explanation also had a populist bent. Johnson argued that Puerto Rico’s creditors were trying to prevent Congress from taking action that would alleviate the debt crisis.
“I think there’s been ads run by people having a vested interest because they swooped in, took a risk, bought these bonds cheap and they’re expecting to make a big profit off of it. They took a huge risk,” he said. “Obviously they were looking for financial advantage; good for them. But, we actually have to be responsible and figure out some way to get Puerto Rico on a sustainable path. And this, from my standpoint, is probably as good a result as we can get.”
Johnson’s vote also keeps him out of an argument with House Speaker Paul Ryan, another Wisconsin Republican, which might have attracted out-sized attention in their home state. “Ryan muscled this through the House,” a senior Senate GOP aide pointed out.
Instead, Johnson and Ryan can now reinforce each other’s messages that this is not a bailout.
“This bill won’t add a single dollar to the deficit,” Ryan said on the House floor in support of the the rescue package. “This bill actually prevents a bailout. That’s the whole point. But I will tell you this: There very likely will be a bailout, if we don’t pass this bill. Because there will be no other choice. But if we pass this bill, Puerto Rico will get a handle on its debt. Its economy will grow, and taxpayers will be safe.”
Still, some conservatives worry that the Puerto Rico bill will set a template for future bankruptcies in the states. Specifically, the legislation gives priority for pensions to be paid out ahead of certain creditors, in contradiction of the priority that existed when the loans were made.
The Puerto Rico bill isn’t binding on the states, but Democrats might claim this arrangement as a significant political precedent, especially with lawmakers such as Portman already arguing that the Puerto Rico bill is a justification for boosting coal state pensions.
“Why do you think the [Obama] White House loves this so much?” the senior GOP aide said. “This is now the roadmap to bail out all pension funds and screw over bondholders.”
