One year after PROMESA's passage, Puerto Ricans continue to face economic hardship

As Puerto Ricans mark the one-year anniversary, the promise of PROMESA to pull Puerto Rico back from a fiscal cliff has gone unfulfilled. If anything, conditions for 3.4 million people in Puerto Rico and for their families in the states have only gotten worse. 

When Congress and President Obama approved the PROMESA law a year ago this week, the unemployment rate in Puerto Rico was 11.2 percent -- more than twice the U.S. national rate -- and 150 public schools had been shut down as part of a series of public service cuts put in place to reduce the island government’s budget. A year later, the unemployment rate is 11 percent, 184 more schools have been shut down and more families have been forced to leave their homes.

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Faced with a shrinking economy and a shortage of vital services, hundreds of thousands left the island.

Worker, community and human rights groups, including our network VAMOS4PR, opposed PROMESA when it was proposed because the measures it put in place to address the crisis favored the interests of debt holders over those of working families.

An unelected Financial Oversight Board has complete control over decisions about the island’s economy and, to date, the Board has consistently responded to the island’s economic woes by asking for more cuts to public services.

When Gov. Ricardo Rosselló presented a 2018 budget with over $800 million in cuts to vital services, the Board rejected it and told him that if he doesn’t make more cuts, they’ll make good on their threats to institute furloughs and cut pay for public employees. The Board’s use of public employees as a political football is inhumane. Teachers and other public workers provide vital services in their communities and their pay allows them to put food on their tables and to spend money locally. Cut their jobs and their pay and the local economy will grind to a halt.

Cuts will not heal Puerto Rico’s economy. Only solutions that put more money into the pockets of working families and defend the rights of workers will put Puerto Rico back on the right path. And corporations operating on the island have too long profited from tax breaks that have stunted the growth of Puerto Rico’s economy. Corporations must pay their fair share to ensure long-term financial viability.

Currently, PROMESA’s Title III provisions have placed decisions about debt restructure in the hands of Judge Laura Taylor Swain in federal bankruptcy court. To ensure the interests of the Puerto Rican people over those of greedy banks and bondholders, her approach should be guided by three basic principles.

First, there should be no payments to bondholders before the economy is back on its feet.

Second, the full debt must be audited. Puerto Ricans deserve to know what they are being asked to pay for. And preliminary reports from an independent audit commission found last year that as much as half of the debt was likely acquired in violation of Puerto Rican laws and its constitution.

And third, the debt must be restructured as a whole, not piecemeal. Now that the Financial Oversight Board rejected a separate deal for Puerto Rico’s electric power authority, that debt must be pulled into the restructure process supervised by Judge Swain. This can help protect the most vulnerable Puerto Ricans from being forced to pay for the authority’s daunting debt.

Since PROMESA was approved, tens of thousands of people in Puerto Rico and in the states have taken to the streets again and again to demand that the interests of the Puerto Rican people be placed ahead of those of bondholders. But in congressional committee meetings and in meetings of the Financial Oversight Board representatives of bondholders are taking the lion’s share of attention. It is unacceptable that bankers and hedge fund managers get their payday while children and retirees suffer.

Puerto Rican families fear for their future. Children are losing their schools and young people are uncertain whether they will be able to attend college or get good-paying jobs. Retirees fear for their pensions and consistent access to healthcare. Young families are squeezed by the lack of economic opportunities.

This is unjust and undemocratic and VAMOS4PR will continue to fight back. We are educating Puerto Ricans and others in the U.S. about the hardship that people on the island face and we are building our coalition to demand long-term solutions. Our fight started before PROMESA, and will continue until Puerto Ricans can see a promise for a prosperous future.

Héctor Figueroa is president of 32BJ Service Employees International Union.


The views expressed by this author are their own and are not the views of The Hill.