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S&P500
2361.13
+2.56
+0.11%
NASDAQ
5897.55
+22.41
+0.38%
NYSE
11496.665
+2.829
+0.0246%
GOOG
831.41
+10.49
+1.28%
YHOO
46.78
+0.21
+0.45%
AAPL
144.12
+0.32
+0.22%
AMZN
874.32
+18.32
+2.14%
FB
142.65
+0.89
+0.63%
BPOP
39.66
+0.19
+0.48%
EVTC
15.75
0.00
0.00%
OFG
11.25
+0.21
+1.90%
FBP
5.49
+0.01
+0.18%
GTS
17.24
+0.13
+0.76%

[Editorial] Life During Wartime in Promesa

By on January 27, 2017

editorial-philipe-schoeneIn the parallel universe where an alt-right con on the level of Donald J. Trump becomes the leader of the free world, lyrics by the former frontman for the Talking Heads David Byrne appropriately state Puerto Rico’s plight as it enters a critical juncture. “This ain’t no party, this ain’t no disco; this ain’t no fooling around; No time for dancing, or lovey dovey; I ain’t got time for that now,” resounds the chorus in the tune “Life During Wartime.”

“No party, no disco, no time for fooling around” fittingly describes this tangled stretch run to a gauntlet of deadlines that, if blown, could cost Puerto Rico very dearly. Seemingly, key members of Gov. Ricardo Rosselló’s administration—namely Elias Sánchez, the governor’s nonvoting representative on the fiscal control board and Jenniffer González, Puerto Rico’s nonvoting member of Congress—are not fans of the Heads. They helped to orchestrate a response to a letter from the oversight board that outlined steps—call them stern suggestions—to follow as conditions to grant the Rosselló administration an extension on the deadline for the presentation of a fiscal plan from the original date of Jan. 31 to Feb. 28 and push the stay on litigation out by 75 days to May 1, 2017.

All sides—the various creditor constituencies, Gov. Rosselló and the members of the control board—realize that it makes good sense to extend those deadlines, just as it is in everyone’s best interest to see the moratorium law penned by former Gov. Alejandro García Padilla extended by 60 days. All it would take is signing an executive order by Gov. Rosselló and for the control board to allow it. As this newspaper was going to press, there was a La Fortaleza bill in the works to amend the existing moratorium law. The question again is whether the bill will be permitted by the oversight board.

The law enabling the Puerto Rico Oversight, Management & Economic Stability Act (Promesa) grants the control board complete control over Puerto Rico’s government and financial affairs. The board has the power to revert measures signed into law. Listen to another chorus from Life During Wartime—“Heard about Houston? Heard About Detroit? Heard About Pittsburgh, P.A.?” This ain’t no party; we have no say here.

“Why stay in college? Why go to night school? Gonna be different this time,” the tune continues. Those are the questions that “we the people” are asking as politicians wield populist rhetoric in the stretch run prior to the Jan. 31 and Feb. 15 deadlines. No time for fooling around.

Fiscal Oversight Board Chairman José Carrión III and Resident Commissioner-elect Jenniffer González held a meeting in Fajardo to discuss Puerto Rico's economic development. (Inter News Service)

Fiscal Oversight Board Chairman José Carrión III and Resident Commissioner Jenniffer González (File)

The first letter from Rosselló replying to the oversight board’s conditions to make healthcare cuts and raise taxes is littered with affirmations of what the incoming administration will not do. Rosselló emphasizes that his “approach is in stark contrast to some of the board’s initiatives.” Specifically, the governor declines to increase taxes, pursue massive layoffs, reduce access to healthcare and limit access to higher education. This is populist rhetoric that serves no one.

La junta’s response to that letter—“essentially you have not answered our questions”—was a brief missive that seemed to signal we were heading for a standoff . As this newspaper was going to press, Sánchez was forced to send a second letter addressing la junta’s nonconformity in a more conciliatory tone. The next Promesa oversight hearings to be held in Fajardo on Saturday, Jan. 28 will help to ascertain whether the board grants the important extensions. This is not a time to be calling bluffs.

The Rosselló administration and the control board, for that matter, would best serve the people of Puerto Rico by being intellectually honest. Work together to beat the deadlines, negotiate to find liquidity and confront the U.S. Treasury for options that go beyond technical assistance until the island can get critical infrastructure projects moving that can help to create jobs in Puerto Rico.

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