Now more than ever, the situation in Puerto Rico requires Congressional intervention. Despite the business and economic disruptions caused by the COVID-19 global pandemic, hurricane preparedness does not become any less of a pressing issue to island residents’ safety and security and business investment remains critical. But there remain obstacles:
- The Oversight Board members nominated by Congress and the Obama Administration have long served past their three-year appointment terms, which expired in August 2019.
- The current Oversight Board members have struggled to finalize and execute upon debt restructuring agreements for the island, curtailing the island’s ability to re-enter the capital markets and make plans for the island’s financial future. Moreover, the many unexplained delays seen with finalizing the PREPA restructuring agreement puts the island’s residents, businesses and government at risk of another major power outage due to the electric grid’s current low level of hurricane resiliency.
- The PREPA restructuring agreement has the approval of approximately 90% of PREPA’s investors but yet the current Oversight Board continues to delay Court proceedings necessary for its implementation. And the new Governor of the island has also wavered in her support after taking over suddenly from the previous Governor following his resignation. This pattern of obstruction and delay has the effect of hampering the Puerto Rico government’s energy transformation plans, which are predicated on resolving PREPA’s debt and planning a new path forward for reorganizing and rebuilding PREPA and the island’s energy infrastructure.
- Meanwhile, if a solid energy infrastructure plan can be implemented there are key new business opportunities for the island, particularly as Congress and the White House look to bring more pharmaceutical and medical equipment manufacturing back to the United States to safeguard America’s supply chain and production of essential goods. The island’s success also requires Congressional oversight to determine the source of the roadblocks preventing disbursement of a significant portion of the island’s approved hurricane relief monies. The island and its government can succeed…with Congress’s help and oversight.
Slow arrival of Maria aid to Puerto Rico bodes ill for coronavirus support
(The Bond Buyer, 5/14/20)
“Puerto Ricans are still waiting for the bulk of federally promised Hurricane Maria aid to arrive. According to the Puerto Rico Office of Recovery, Reconstruction, and Resilience, the federal government has “allocated” $49 billion in Hurricane Maria and Hurricane Irma aid to the island. Of this, only $15.3 billion has been “disbursed” to the island. The Puerto Rico Office of Recovery, Reconstruction, and Resilience said the pace of approval of projects for permanent improvements has increased. In the first 18 months after Maria less than 100 permanent projects were approved. By comparison, the federal government approved in March 346 permanent projects and in April 490 permanent projects.”
Puerto Rico is shovel-ready for the COVID-19 recovery (opinion)
(The Hill, 5/13/20)
“By restoring a 21st century version of Section 936 of the U.S. Tax Code, Congress could help put Puerto Rico back on track and safeguard the U.S. from pandemics.”
Puerto Rico Governor Backs Tax-Incentive Bill for Drugmakers
“Puerto Rico is home to 49 pharmaceutical companies and 70 medical-device makers, which represent about 33% of the island’s GDP, according to government figures.”
Puerto Rico Manufacturers on a Mission to Become a National Security Ally
(Caribbean Business, 4/17/20)
“The White House initiative has opened an opportunity for Puerto Rico to tout its capacity as a willing partner in efforts to bring back those manufacturers at this critical juncture in the health crisis. Pointedly, the Puerto Rico Manufacturers Association (PRMA) is touting its wares as a willing partner in bolstering national security in a recent missive sent to Navarro.”
Stateside Puerto Ricans demand answers on unused hurricane aid to Puerto Rico: The Puerto Rican government has only spent $15.2 million of the $1.5 billion available to the island in block grant funds from HUD
(NBC News, 3/10/20)
Just Wipe Out Public Debt! — Not a Solution for Puerto Rico or Anyone Else (opinion)
(MuniNet Guide, 2/22/20)
“Congress must take the time to pass a legitimate, forward-looking plan supported by qualified financial experts to stimulate reinvestment in Puerto Rico, which can be used to encourage economic development, increase tax revenues and facilitate paying down the debt while reestablishing the island’s access to capital markets. Congress should enact a “Marshall”-like plan for Puerto Rico by investment and recovery, with over $91 billion of authorized Federal Disaster Aid over the next 20 years which now should be front-end loaded.”
“The coordination and implementation of this aid should be used to effectively and efficiently reinvest in Puerto Rico with the next generation of infrastructure and services to stimulate and support economic development, recovery and financial stability. Congress can enact legislation to replace Section 936 of the IRS Code with tax and other incentives for attracting new businesses and encouraging existing businesses to expand in Puerto Rico, creating the new good jobs with accompanying new corporate and individual taxpayers that will significantly increase tax revenues, which creates the high tide that raises all boats.”
Trump slashed Puerto Rico’s Medicaid money as part of budget deal
“The budget deal unveiled by lawmakers this week allocates up to $5.7 billion in Medicaid funds for the island over two years — instead of $12 billion over four years that Republican and Democratic leaders on two key congressional committees had endorsed after months of negotiating a long-term financial path for Puerto Rico.”