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WASHINGTON WATCH: January 11, 2022


THE LONG GAME: Biden, Dems commemorate January 6th; Senate Dems pivot to voting rights bill

President Biden and top congressional Democrats marked the one-year anniversary of the insurrection at the Capitol on Thursday. Although Biden did not mention Donald Trump by name, he did explicitly lay the blame at the feet of the “defeated former President” in a blistering speech delivered from Statuary Hall. During her remarks on the House floor, Speaker Nancy Pelosi (D-CA) heaped praise on police officers and congressional staff members for their heroism. “Because of them and our members, the insurrection failed,” she said. Republicans were mostly absent from the ceremonies. One high-profile Republican who made his presence felt: former Vice President Dick Cheney, who showed solidarity with his daughter, Rep. Liz Cheney (R-WY), Trump’s most vocal critic within the GOP. On the Senate side, Majority Leader Chuck Schumer (D-NY) has vowed to put senators on the record regarding Biden’s $1.7 trillion domestic spending and climate package. Despite Sen. Joe Manchin’s announcement last month that he opposes the bill, the West Virginia

Democrat sent a counteroffer to the White House in late December. However, The Washington Post reported over the weekend that talks between Manchin and the administration have once again broken down. Instead, Democrats appear to be pivoting to address another key priority: voting rights legislation. The President is scheduled to visit Atlanta today to deliver a speech designed to spur action on the issue. However, some voting rights advocates have told the White House to put the brakes on such a speech until the administration outlines a concrete plan to pass the legislation. Schumer told colleagues last week that he would force a vote on changing the Senate’s rules by January 17 if Republicans continue to stop voting rights legislation from reaching the floor.

Washington Watch is published weekly when Congress is in session. Published monthly during extended recess or adjournment.

Spotlight on Puerto Rico

A new house session, a new opportunity for Puerto Rico

As the U.S. House of Representatives begins the second session of the 117th Congress, its leadership will decide whether it will take up any of the pending legislation affecting Puerto Rico.

Among the matters expected to be debated is Puerto Rico’s access to Medicaid. While President Biden has expressed his desire to grant Puerto Rico parity in funding, his chief legislative vehicle to achieve that, the Build Back Better (BBB) bill, is currently blocked following Senator Joe Manchin (D-WV)’s rejection of the measure. This bill, if passed, would have increased Puerto Rico’s Medicaid funding to $3.6 billion per year, and would have increased federal matching to 83% (it is currently 55%, down from 76% prior to December 4 last year). Without the BBB, the two most plausible choices are to keep the current allocation of $2.943 billion and 55% matching, or to go back to the terms set by a previous House bill, which would assign nearly $3 billion for the next four years and return federal matching to 76%. Without reconciliation, however, any bill passed by the House would require 60 votes to overcome a Republican filibuster.

Another matter waiting to be considered this year is status, as represented by two competing bills introduced last year and currently in the House Natural Resources Committee: The Puerto Rico Statehood Admission Act, introduced by Darren Soto (D-FL), which would enact a binding referendum on statehood, and the Puerto Rico Self-Determination Act, introduced by Nydia Velázquez (D-NY), which calls for a Status Convention and an eventual referendum on status alternatives for Puerto Rico. Lawmakers such as Rep. Ritchie Torres (D-NY) have stressed the importance of reaching a consensus around one of the two status bills and bringing them up for a full House vote. Velázquez spoke in favor of her bill as recently as December, stating during an interview with El Nuevo Día that “my commitment is to finish Puerto Rico’s colonial status and creating a process that is democratic.”

Despite high vaccination rates, Omicron surges

For months, Puerto Rico has been, and remains, the most vaccinated jurisdiction of the United States—by the end of last year, 80.3% of its eligible population had been fully vaccinated, and 40% had received a booster shot. Until recently, this had been enough to keep COVID deaths and hospitalizations down, even after the Island drew back on its COVID restrictions. Then Omicron arrived, erasing much of the progress. On December 1, the daily average of new cases had been 64 and by January 1, that average had shot up to 5,088. The positivity rate, which on December 1 had been 2.94%, had by the following monthskyrocketed to 32.43%, with more than 113,000 infections—one third of all COVID infections on the Island—occurring during that span. The Puerto Rico Department of Health announced on Monday that Puerto Rico had reached a new hospitalization record: 750. Prior to Omicron, the previous record had been reached on December 10, 2020, when 657 people were hospitalized due to COVID.

Puerto Rico’s government has responded to this new outbreak more decisively than the federal government, with stricter measures like mandatory closings of businesses from 12:00 a.m. to 5:00 a.m.; a ban on gatherings in places that serve alcohol; a more general ban on gatherings of more than 250 people; new capacity limits in businesses; a booster shot mandate for education and healthcare workers; proof of vaccination (or recent testing) required at food or drink establishments; travel restrictions, and more. It has also led to a delay to the start of the school year.

Judge Declares Intention to Ratify Plan of Adjustment

Judge Laura Taylor Swain, who for years has held the final fate of the Island’s bankruptcy process in her hands, has declared that she will ratify the latest version of the Commonwealth Plan of Adjustment (POA). The agreement between the Financial Oversight and Management Board (FOMB) and Puerto Rico’s creditors will allow creditors to exchange their bonds in exchange for a substantial reduction in the Island’s $33 billion overall debt—as soon as final corrections are made. Once these are made, “the Court will be ready to materially submit its conclusions on fact and law, in the same manner [as proposed by the FOMB], concurrent with a confirmation order,” the judge stated.

Among the corrections ordered by Swain are technical modifications to the POA's language, guaranteeing that creditors whose properties were seized by eminent domain will be compensated by having their claims be paid for in full. The Oversight Board will review the order by Swain and intends to file the Sixth Modified Eighth Amended Plan of Adjustment by January 14, 2022, as required by the court.

DOJ steps in to defend PROMESA

In a move that is unlikely to substantively alter the circumstances surrounding the Puerto Rico bankruptcy case, the U.S. Department of Justice (DOJ) moved on Friday to intervene in Puerto Rico’s ongoing bankruptcy case to defend PROMESA, the law that created the Financial Oversight and Management Board (FOMB), against claims of unconstitutionality. The DOJ’s decision came after one bondholder and two real estate companies objected to the terms of the Debt Adjustment Plan agreed upon by the FOMB and most of Puerto Rico’s creditors, arguing on grounds of improper use of eminent domain. Judge Laura Taylor Swain had given DOJ until February 7 to respond. According to court records, bondholders who had signed onto the plan could begin to pull out of the agreement if it is not ratified by January 31.

Puerto Rico expects to receive $200 million in Pharma opioid crisis suits, settlements

The Puerto Rican government could receive more than $206 million this year in bankruptcy agreements and damages paid by pharmaceutical companies, distributors, and other industries due to their role in the U.S. opioid crisis. The payments correspond to the agreements reached between prosecutors in more than 90% of U.S. states and territories, who alongside the U.S. Justice Department sued these companies.

The Puerto Rico Justice Department’s Office of Monopolistic Affairs (OAM, in Spanish) is currently litigating multiple suits, joining other plaintiffs—including the U.S. Justice Department—against Purdue Pharma, Johnson & Johnson and Mallinckrodt PLC, as well as three distributors. According to the Puerto Rico Institute of Forensic Sciences, from 2017 to 2021, at least 468 Puerto Ricans have died from overdosing on opioids like fentanyl.


View From The White House

  • The Treasury Department announced on Friday that it would redirect more than $1 billion in rental assistance funds from states and municipalities that have not used the bulk of their money to those facing a backlog of requests for help.

  • In seeking to fulfill the administration’s promise to deliver a half a billion rapid Covid test kits to Americans, the Department of Defense awarded a pair of contracts to manufacturers to purchase millions of existing over-the-counter test kits.

  • The National Counterintelligence and Security Center issued a warning on Friday that mobile phone and Internet users are at risk of being tracked by the same commercial surveillance tools that have been used by rogue governments to track journalists and political dissidents around the world.

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