Sunday, May 31, 2020

Executive director of fiscal board asks gov to address ‘vulnerable’ individuals

By on May 19, 2020

Natalie Jaresko, executive director of the Financial Oversight and Management Board (Cybernews)

Meet to discuss pandemic, funds for earthquake-affected region

SAN JUAN – The executive director of the Financial Oversight and Management Board (FOMB), Natalie Jaresko said Tuesday that she sent Gov. Wanda Vázquez a letter confirming the latter’s request to disburse $500 to retirees and private sector employees, but asked that more attention be given to the most vulnerable population.

“We have received your proposal to make available an additional ~$349 million to issue incentive checks of up to $500 to private sector employees and retirees. In this spirit we agree that direct cash subsidies represent a viable mechanism to maintain economic activity, particularly in the current unprecedented environment due to the acute cessation of activity as a result of stay-at-home orders. In parallel we recognize the both the Government of Puerto Rico and the U.S. Federal Government have already taken swift action to buoy household finances via several mechanisms including incremental unemployment support and the Economic Impact Payments Plan, both of which are already disbursing funds to the people of Puerto Rico, ”Jaresko said in the letter.

“Notwithstanding, it is critical to recognize that there are significant segments of the Puerto Rican population that fall into the broad category described as the ‘vulnerable’ population which includes the homeless, low-income, food insecure, and disabled individuals, both adult and children. Additionally, there is a significant ‘informal economy’ in Puerto Rico that falls outside the scope of existing programs. When the economic engine comes to a grinding halt due to a cessation of daily activities, funds distributed into the ‘formal’ workforce (as is suggested by this new stimulus program) are not passed on to the informal part of the economy. Further, while we recognize a number of these individuals do receive public services support under other programs (e.g. OASDI [Old-Age, Survivors, and Disability Insurance program], NAP [Nutritional Assistance Program] grants, etc.), there remains a significant portion of the population that has been largely left exposed during this crisis,” she added.

 To roughly estimate the numbers, Jaresko said, Puerto Rico Emergency Measures Support Package provided 218,000 individuals with direct support via the self-employed and government employee bonus programs. Furthermore, approximately 300,000 individuals are currently enrolled in the expanded unemployment programs. Finally, the U.S. Treasury has funded around $3 billion under the Puerto Rico EIP Plan (“Economic Impact Payment Plan”) which will support these same individuals plus an additional ~2,300,000 residents of Puerto Rico when fully distributed. Assuming another 80,000 are ineligible primarily for income threshold reasons, we estimate 150,000 – 250,000 Puerto Ricans fall outside of any Federal or local stimulus program approved to date.

“Thus, establishing a stimulus program to help these vulnerable individuals could cost approximately $150 to $250 million to the Government, assuming a $1,000 support level per individual,” Jaresko wrote. “Given the significant support provided to the ‘formal’ economy as described above, we believe the current situation represents an ideal opportunity to focus urgent incremental efforts on the people who need it the most. Addressing the ‘vulnerable,’ as described above, as well as those with ‘accessibility’ issues due to lack of internet, transportation, disability or other personal factors preventing access should represent the key target group if additional funding is to be made available, as proposed by the Government of Puerto Rico.”

The “next step would be for your Government to craft and present a specific proposal to the Oversight Board for distribution of these funds to the ‘vulnerable’ segment…. In closing, we are aligned with your commitment to fully utilize available funds to help the people of Puerto Rico. Although, rather than providing further support to parts of the population who are being supported through other Federal and local stimulus packages, we suggest a solution that helps provide an equitable solution to a broader spectrum of our population,” she concluded.

The chairman of the fiscal board, José Carrión, and Jaresko met with the governor to discuss fiscal issues related to the COVID-19 pandemic and the urgent efforts necessary in the earthquake-affected Southwestern region.

The meeting, the board said, focused on the Government’s proposal to issue incentive checks of up to $500 to private sector employees and retirees, and to provide $50 million to fund reconstruction and revitalization projects for municipalities in the southwest region of the island.

“The shock of the COVID-19 pandemic to the people and business community of Puerto Rico is severe, particularly since several municipalities continue to struggle with recurring earthquakes,” Carrión said in a separate statement.