PDP Warns Against Rosselló’s Fiscal Plan
SAN JUAN — Popular Democratic Party (PDP) politicians Jorge Colberg Toro, Luis Vega Ramos and Jesús Santa claimed that New Progressive Party (NPP) gubernatorial candidate Ricardo Rosselló’s fiscal plan will lead the government to a “total breakdown.”
The NPP politician’s presented plan for the 2016-2017 fiscal year involves cutting the budget by 10 percent, or $898 million.
“The serious consciences on direct services would bring about cuts on the healthcare card program; the elimination of participants; elimination of funds to the Comprehensive Cancer Center, the Medical Center, contributions to the retirement system, special education services; and public employee layoffs,” they assured on a press conference held in PDP headquarters.
The PDP leaders presented an analysis of Rosselló’s announced cuts, using as a base a report from the Office of Management & Budget (OGP by its Spanish acronym), which breaks down budget cut scenario in case a court ordered fund seizures to pay the debt, ascending to $1,181 million in the present fiscal year.
“By projecting a $898 million reduction or 23% less from the debt’s total, the result of the projections would be devastating for the island. Apart from the identified cuts, Rosselló’s proposal would entail cuts to the School of Visual arts, the Music Conservatory, the Institute of Puerto Rican Culture, and sports and recreation programs,” they affirmed.
Colberg explained the active budget ascends to $8,897 million, out of which 53% or $4.47 billion are destined to cover direct services in health, the Medical Center, University of Puerto Rico assignments, contributions to municipalities, retirement systems, payment of budgetary developments, and agencies’ operation.
This, in addition to transportation, purchase of materials and supplies, as well as assignments to third-sector organizations. The remaining 47% of the budget, or the departure of $4,247 million, make the total payroll expense for the central government’s 89,950 employees.
“The OGP’s projections in case a court impounded the government’s accounts is pretty similar to Rosselló’s proposal. A cut of that magnitude would have nefarious consequences. The OGP report projects, as a scenario, the reduction of workdays to more than 7,000 employees and, if combined, the layoff number would reach up to 19,000 public employees, which would be devastating,” expressed Colberg.
Vega Ramos emphasized the differences from PDP President and gubernatorial candidate David Bernier’s plan, which rejects cuts from payrolls and services, advocating instead for a complete restructure of the public debt that doesn’t entail a payment that exceeds $300 million annually in interests for a five-year period.
“The difference is clear and entails serious consequences, While Rosselló believes in massive cuts and layoffs to pay bondholders the complete debt, now and at any cost, Bernier proposes job creations and restructuring the debt to prevent massive budget cuts, The difference between them is abysmal,” he asserted, accusing Rosselló of prioritizing bondholders’ interests, whereas Bernier “places first the people’s needs.”
For his part, Rep. Santa said that Bernier’s plan attends to local bondholders’ claims responsibly, guaranteeing that bondholders who purchased originally will get paid the debt’s original value, while those who purchased financial instruments on secondary markets would need to accept the value they paid on that subsequent transaction.
“As pointed out by the PDP president, that implies that if a person bought a bond originally priced at $100 for $30 on the secondary market, when reduced by a 10% from the principal, that bondholder will receive a compensation of $27, which is more than fair in an equally risky market. In addition, that proposal addresses the claims from local bondholders,” expressed Santa.