Friday, December 4, 2020

US Treasury Demands Action from Congress Regarding Puerto Rico

By on November 12, 2016

Antonio Francesco Weiss, Counselor to the Secretary of the U.S. Treasury, advocated Friday for the urgent approval of a fiscal plan for Puerto Rico, in order to initiate renegotiations for the island’s $70 billion debt.

Likewise, he stated “Congress must act to eliminate the healthcare funding gap in order to protect the well-being of the island’s 3.5 million residents,” and to help Puerto Rico build a viable path toward economic growth that boosts larger local investment on infrastructure.

Counselor to the secretary of the U.S. Treasury, Antonio Weiss, testifies before a House Natural Resources Committee oversight hearing on Treasury's analysis of Puerto Rico, on Feb. 25, 2016. (Manuel Balce Ceneta/AP)

Counselor to the secretary of the U.S. Treasury, Antonio Weiss, testifies before a House Natural Resources Committee oversight hearing on Treasury’s analysis of Puerto Rico, on Feb. 25, 2016. (Manuel Balce Ceneta/AP)

In a message during Veterans’ Day celebrations, Weiss, who has managed the Commonwealth’s affairs at the U.S. Treasury, recounted data surrounding Puerto Rico’s fiscal crisis and its negative social impact, highlighting the emigration of 2.5% of Puerto Ricans from the island last year, the largest migratory wave since the 1950s.

Although he emphasized that an “appropriately used” Puerto Rico Oversight, Management & Economic Stability Act (Promesa) contains the necessary elements to take the U.S. territory out of its current fiscal crisis. He insisted on the need to approve additional measures to this legislation to prevent the current situation from transcend into a humanitarian crisis.

“The Commonwealth and Oversight Board must reach consensus on a Fiscal Plan as soon as possible. Restructuring negotiations to reduce Puerto Rico’s unsustainable debt load must commence. Congress must act to address Puerto Rico’s critical health care challenges and provide targeted incentives to reinvigorate the economy. Any delay in achieving these crucial objectives will simply prolong the state of crisis,” maintained Weiss on his speech.

Among the additional “most powerful and fiscally responsible tools to support growth and long-term stability,” he suggested the earned income tax credit (EITC) to apply to Puerto Rico, which would help increase the island’s low labor participation rate, 23 porcentual points below the mainland’s

He also requested healthcare equity and the expansion of the Child Tax Credit (CTC), since presently families with one or two children in Puerto Rico can’t request it. Weiss affirmed that extending the CTC for all families would improve the lives of approximately 650,000 additional families, and along an EITC expansion, around 40,000 minors would be benefitted.

Read more: Governor hopes Oversight Board declares debt unpayable

On the other hand, the Treasury counselor said he will support the transition between the government in office and the new administration. He approved of Gov. Alejandro García Padilla’s fiscal plan, presented on Oct. 14, because it includes the Treasury Department’s vision that “austerity alone is self-defeating and will only lead to further economic contraction,” and will seek to address the problem with the public pension system, which will lose its money within three years.

 

Ricardo Rosselló reacts

Puerto Rico’s governor-elect, Ricardo Rosselló Nevares, said he has maintained communication with Weiss and U.S. Secretary of Treasury Jacob “Jack” Lew to initiate conversations regarding debt renegotiations.

“It is a great opportunity at this moment, as for the change in administration, because it provides an optimum space for possible changes to renegotiate the debt’s terms. So as long as it is an effective way, using the scaffolding provided by Promesa, I understand there are two principal points in order to be effective on this: transparency and for us to have a fiscal plan that people know can be executed,” expressed the New Progressive Party politician during a press conference, in which he announced his transition team.

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