Last week, the House Judiciary Committee held a hearing on an amendment bill that would allow Puerto Rico's public corporations to restructure their debt under Chapter 9 of the Bankruptcy Code. All U.S. municipalities, except its territories, can seek relief under Chapter 9, if needed. Passing this bill in Congress -- which would help grow Puerto Rico's economy, create jobs and promote long-term economic stability -- is an extremely important issue for Puerto Rico's Millennial generation.
You may have seen the headlines indicating the Island's steep economic problems: over $70 billion in debt, high unemployment and a shrinking economy. With the current situation, Puerto Rico's population is migrating to the U.S. in search of better opportunities now more than ever. While the current administration has reduced the budget deficit and promoted new job-creating investments in the Island, Puerto Rico's inability to restructure the debt of its public corporations will continue to hinder economic development.
Even more troubling, our government will need to continue issuing bonds at exorbitant interest rates, reaching almost 10 percent, just to finance short-term operational costs and to pay debt with more debt. This means that current and future revenues won't be used to invest in improving our roads, our hospitals and our schools. The effects of our current inability to restructure this debt will affect the quality of life and opportunities of my generation and those after us.
In an effort to address this challenge, Governor García Padilla's administration sought to improve debt restructuring by passing a local measure, the Puerto Rico Public Corporation Debt Enforcement and Recovery Act, in July 2014. This bill aimed to allow public utilities to negotiate with bondholders to reduce their debt. However, the Recovery Act was recently overturned in a U.S. District Court, which said the Act violated the U.S. Constitution by allowing a state government to modify municipal debt. That decision has left Puerto Rico with no legal framework, at either the federal or territory level, to adjust its debt. With no method of debt restructuring, Puerto Rico remains economically stagnant -- with no way to move forward on the path to prosperity. Without the Recovery Act, the road to economic stability must include the Puerto Rico Chapter 9 Uniformity Act, the amendment introduced by our sole representative in Congress, Resident Commissioner Pedro Pierluisi.
The fact that political leaders from Governor García Padilla and Resident Commissioner Pierluisi's parties are both in support of the Chapter 9 amendment is not only exceptional, given our Island's deep party politics, it is exemplary of the grave need to restructure Puerto Rico's financial obligations in order to ensure a better future. The bipartisan support of Puerto Rican leaders of this amendment is encouraging since, even with a Chapter 9 provision, Puerto Rico's future will depend on our leaders working together to achieve consensus and execute a concerted action plan for economic recovery.
While the dire headlines on the Island's outlook have been numerous, so have been the proliferation of young professionals, entrepreneurs, and investors who have decided to give Puerto Rico a second chance and join its economic transformation by starting new businesses, growing companies to create jobs, and exporting goods and services. As a social entrepreneur, I work with other Millennials to develop innovative public-private partnerships that advance economic development, like engaging the Puerto Rican diaspora to also contribute to the Island's economic transformation. But the impact of our generation's current efforts will remain short if the fiscal burden remains on us. We should not have to pay with our own future for the poor management and judgment of previous leaders and political administrations.
As a generation, we join the chorus of bipartisan and multi-sectorial voices in Puerto Rico and mainland who have testified and requested that Congress be fair and grant our Island the ability to restructure the debt of its public corporations. Congress must propel this bill forward so that my generation and those after us can remain competitive and have a fair shot in achieving our fullest social and economic potential.