Obama’s Fiscal 2017 Budget Proposal Includes Puerto Rico-Related Measures
SAN JUAN — As part of his administration’s fiscal year 2017 budget proposal, President Barack Obama is asking Congress to include several measures aimed at improving Puerto Rico’s treatment under federal healthcare and tax-credit programs.
The proposal also calls for providing the commonwealth with debt-restructuring tools, as the island’s government continues to push Congress to obtain access to a bankruptcy regime. Resident Commissioner Pedro Pierluisi stated Tuesday that although there could be debate over the nature and scope of this regime, “there is a virtual consensus among objective observers that Puerto Rico requires such authority. Those politicians in Washington, D.C., or San Juan who deny this are completely divorced from reality.”
The Obama administration is recommending state-like treatment for the commonwealth under such federal health programs as Medicaid and Medicare, as well as under the earned income tax credit (EITC) — a tool used to incentivize employment.
“I thank the Obama administration for defending the 3.5 million American citizens in Puerto Rico who are facing an unprecedented crisis. The measures in the president’s budget, if approved by Congress, will help Puerto Rico restructure its debt, grow its economy and ensure that Puerto Ricans have access to health services. I urge Congress to provide Puerto Rico with the tools we need to achieve sustainable long-term solutions,” Gov. Alejandro García Padilla stated Tuesday.
As for the overall federal budget proposal—to the tune of a record $4.1 trillion—House Speaker Paul Ryan (R., Wis.) stated Tuesday that Obama “will leave office having never proposed a budget that balances—ever. This isn’t even a budget so much as it is a progressive manual for growing the federal government at the expense of hardworking Americans.”
The House GOP leader added that the lower chamber’s majority is already working on a balanced budget “that grows our economy in order to secure a Confident America.”
Meanwhile, Pierluisi welcomed the White House’s Puerto Rico-related measures, noting he had already filed legislation to achieve these initiatives. While blasting Puerto Rico’s “shameful treatment” under Medicaid, he noted the Obama administration is seeking $30 billion in increased funding for the island’s healthcare system over the next decade.
Under the Medicare program, the administration’s budget proposal is seeking a different funding formula for Puerto Rico, which is expected to increase payments to island hospitals by $70 million during the next 10 years.
As for Puerto Rico’s unequal treatment under the EITC, Pierluisi stated Obama is now proposing an additional $6.6 billion over the next 10 years for Puerto Rico working families. The EITC program aims to encourage employment among low-income individuals, thus increasing the labor-force participation rate. Puerto Rico currently boasts one of the lowest labor participation rates, currently hovering around 40%.
The commonwealth is banking on congressional action during the first months of the year, particularly over access to a debt-restructuring mechanism, as it tries to avoid additional defaults amid an increasingly steeper debt-service schedule this summer. House Speaker Ryan has said the lower chamber aims to come up with a solution to the Puerto Rico issue before the end of March.
“I intend to work with my colleagues in Congress, both Republican and Democrat, in an effort to enact legislation for Puerto Rico that provides a debt restructuring authority, institutes an independent and temporary board to help the Puerto Rico government better manage its finances, and grants the territory with more equitable treatment under federal programs, including Medicaid, Medicare, and the EITC,” Pierluisi stated.