WASHINGTON: Maybe, instead of worrying about the quality of life Central American refugees are fleeing, our Congress – Democrats and Republicans – should be concerned about the American Territory of Puerto Rico and the Puerto-Rican Americans in crisis there.
Beyond the tourist areas of the coastline and the Caribbean beaches, Puerto Rico still needs help with economic and infrastructure recovery
The Puerto Rican government-debt crisis goes back as far as 1973 when the P.R. government began to spend more than what it collected. DC and Wall Street capitalists have, with the approval of Congress, worked hard over the past two decades to privatize much of Puerto Rico’s economy. Usually to the detriment of their economy and any chance they may have for economic recovery, particularly post Hurricane Maria.
Puerto Rico’s out of control debt
To cover it’s out of control debt, the Puerto Rica government issued bonds, basically promises to pay back money borrowed. After four decades of fiduciary mismanagement, those bond were downgraded to junk status.
As they were unable to pay back borrowed money, Puerto Rico was no longer able to sell bonds. Puerto Rico began using savings to pay its debt while the U.S. Congress enacted PROMESA, Puerto Rico Oversight, Management, and Economic Stability Act
The bill, signed by President Obama, includes a congressional oversight board with ultimate control over the commonwealth’s budget. Stating its goal is to help Puerto Rico restructure its then crushing $72 billion-dollar debt (October 2017). In November 2017, The Borgen Project calls the debt at $123 billion dollars.
Obama said it will provide “more stability, better services, and greater prosperity over the long term for the people of Puerto Rico.”
It is interesting to note that Puerto Rico’s debt is “triple tax-exempt.” Meaning bond owners will not pay federal, state or local taxes on the interest they earn.
Some of the biggest bondholders in 2017 include mutual funds run by household names like OppenheimerFunds, Franklin Templeton, Goldman Sachs (), BlackRock ( ) and T. Rowe Price. What Promesa does is prevent current now junk bond owners from suing the island for non-payment of nearly $2 billion in bond payments.
Puerto Rico Board Says Debt Is $6 Billion Over Limit
The Wall Street Journal (Jan. 15, 2019) writes in the article Puerto Rico Board Says Debt Is $6 Billion Over Limit that:
The Puerto Rico oversight board filed court papers on Monday seeking to nullify general obligation debt issued after 2012, based on constitutional restrictions on the amount of debt backed by the island government’s full faith and credit.
The objection covers Puerto Rico’s sale of $3.5 billion of high-yielding general obligationsin 2014, the largest-ever deal for junk-rated municipal debt.
The oversight board, which is helming Puerto Rico’s court-supervised bankruptcy, said the post-2012 general obligations “should be disallowed in their entirety” to ease the restructuring of tens of billions of dollars in bond and pension debts owed by the central government.
“Where a government transaction is found to have violated a clear public policy embodied in statutory or constitutional law, allowing any remedy to a private counterparty would undermine that public policy, which exists to protect the people of Puerto Rico,” the filing said.
A spokesman for a group of general obligation bondholders including Aurelius Capital Management, LP, Monarch Alternative Capital LP and Autonomy Capital didn’t immediately respond to a request for comment.
Consequences of neoliberal privatization schemes.
A failing electrical grid, long ignored by the government-owned Puerto Rico Electric Power Authority, was the first thing to collapse when Hurricane Maria hit. And it is the last thing to be repaired. Supposedly tasked to restore electricity to the island, the Louis Berger Group received $860 million, Fluor $1.3 Billion, and PowerSecure more than half a million dollars.
However, the work by these companies is reportedly sub-standard. Corruption has siphons off much of the money into the hands of the company and political leaders. Sixteen months following the Hurricane parts of the island are still dark. The elderly and ill are still without electricity to keep medicines cool, produce clean water and power banks or ATMs to be able to acquire necessary funds.
At the beginning of April 2018, despite millions spent to repair the electrical grid, the island suffered another serious blackout. Allegedly, a contractor drove an excavator into critical electrical facilities.
Despite billions of dollars spent on the island’s electrical infrastructure to repair decades-old damage and the damage caused by Maria, pockets were lined and lights are still dark.
The Borgen Project 101, a non-profit group that explores extreme poverty around the world, released their 10 Facts About Poverty in Puerto Rio. Had Democrats been given this information about the real needs of the people, they might not have been on the beach, or in the theater.
From the Borgen Project 101
43.5 percent of Puerto Ricans are living below the poverty line. This is more than double the amount of citizens living in Mississippi. The poverty level, as defined by the Health and Human Services in 2017, was $20,420 a year for a family of three, or $24,600 for a family of four. The median income of Puerto Rican households is a little over $19,000 per year.
The unemployment rate of Puerto Ricans is 10.1 percent as of April 2017. The main reason for this is a lack of jobs and the slow rate of economic improvement.
Puerto Rican youth from the ages of 16-24 have higher rates of non-participation in school and in work as opposed to other racial groups living in the United States. Youth without high school diplomas are three times more likely to be unemployed, underemployed or working for very low wages. The minimum wage in P.R. was reduced to $4.25 per hour.
Puerto Ricans have a higher risk of cancer, diabetes, alcohol consumption, asthma, and infant mortality rates. They have a 33.7 incidence rate per 1,000 counts while this rate is only 18.7 among non-Hispanic whites.
Puerto Rico has had to close 184 public schools due to the economic crisis forcing students to relocate.
Poverty in Puerto Rico has also been affected by the large cuts to the healthcare industry in March 2017. Puerto Rico Medicaid and Medicare rates are about half of what other U.S. states get and nearly all that money is in danger of being exhausted.
Puerto Rico’s drinking water system has been tested and found with elevated levels of bacteria and chemicals as of May 2017. The drinking water serving 70% of the island, has also failed lead safety regulations. The government-run water utility company, while neglecting to conduct the required safety tests, routinely shows failing results for the safety tests they do conduct, according to a new NRDC report.
Puerto Rico is unable to provide its citizens with effective support due to its crippling debt. The island has a debt of approximately 123 billion dollars.
Population decline will hinder the island’s ability to recover and grow. As many Puerto Ricans leave the island, there will be fewer workers, which in turn leads to less productive capacity and lower consumer demand.
640,000 Puerto Ricans on the island receive food stamps.
Puerto Rico’s Brain Drain
As to the future of education, one issue that Puerto Rico struggles with is the lack of college-level jobs left on the island as businesses, running from the higher taxes of the progressive socialist government, seek more pro-business environments. Graduating islanders follow those jobs out of the territory.
“A strong system of education typically is a lifeline for economies, producing workers prepared to take on the needs of society. For Puerto Rico to rebound, at the most simplistic level, it will need educated workers.”
“Cutting funding to the island’s public university, which enrolls the largest percentage of students on the island, is not a new idea. Last spring, massive protests roiled in the streets of San Juan as students demonstrated against Governor Alejandro Garcia Padilla’s proposal to slash $166 million from the university’s budget.” – The Atlantic
The result being that skilled and educated people left the island, seeking work in Florida, New York, and New Jersey.
Puerto Ricans suffering post-Hurricane Maria
For tourists who want to visit San Juan or Historic Puerto Rico, things are back to normal. You can tourism travel, as our Democrats did. And while there you can ignore the elderly, poor and disenfranchised.
But unlike a tourist, should those representatives of government taken the time out to see the true devastation?
The New York Times reports (Frances Robles – Containers of Hurricane Donations Found Rotting in Puerto Rico Parking Lot)
SAN JUAN, P.R.(August 2018) — At least 10 trailers full of food, water and baby supplies sent to the victims of Hurricane Maria are left to rot at a state elections office in Puerto Rico, where they broke open and became infested by rats.
Radio Isla, a local radio station, posted a video Friday showing cases of beans, water, Tylenol and other goods covered in rat and lizard droppings.
The Puerto Rico elections commission offices had been used as a collection center for goods donated from around the country for victims of the devastating hurricane that struck the island last year. For weeks, hurricane survivors lacked running water and electricity. Widespread power failures and a severe diesel shortage kept stores, restaurants and banks closed, making it difficult for people to purchase groceries.”
The Puerto Rico story missed by the MSM
The Congressional Hispanic Caucus Bold PAC, are the Democrat’s trip organizer. The group includes 30 Democrats and “109 lobbyists and corporate executives”. Among those in attendance were members of some of Washington elite firms as well as representatives from R.J. Reynolds, Facebook, Comcast, Amazon, PhRMA, Microsoft, Intel, Verizon, and unions like the National Education Association.
“This year’s winter retreat promises to be our most widely attended yet with over 220 guests, including 39 Members of Congress and CHC BOLD PAC supporters expected to attend and participate!” a planning memo said.
The purpose of these meetings is to allow a lobbyist to gather favor with Congressional Representatives to invest in their agenda. An agenda that often has little to do with the betterment of the lives of Americans.
Bold PAC self describes as:
“The fastest growing Democratic Political Action Committee dedicated to increasing the diversity of our leadership in the House and Senate. It champions progressive Democrats fighting for change.”
Had this trip been about Puerto Rico, it would have included more than the zero Republican participants. Bold PAC flew the members south for two days of receptions and play. The PAC’s goals are to convince lawmakers to provide more federal relief. Relief that too often ends up in the hands of the elite. Relief that does little to assist the impoverished, young and elderly, that suffer.
Despite what Democrats say, this trip was less about Puerto Rico and more about increasing the Democrats political and ideological power.
Students against Government
In 2015 The Atlantic featured The Future of Puerto Rican Education. In that piece, the writer highlights that the island’s public universities are in danger of losing federal funding.
“Puerto Rico’s economic outlook is not rosy at the moment. The island is sinking under the accumulated weight of roughly $72 billion in debt and a declining population as inhabitants flee to the mainland in search of better jobs and opportunities.
The island is twice as poor as the poorest U.S. state, Mississippi, based on per-capita income, but the cost of living is 13 percent higher than in the United States, according to the Council for Community and Economic Research.”
This is a prediction that seems to have become true.
A failed PROMESA
Puerto Rico’s beauty and Puerto Rico’s beasts both inhabit the Caribbean island. The political relationship between the island of P.R. and the mainland U.S. has been under debate for decades. The debate centers on whether Puerto Rico should remain a U.S. territory, become a U.S. state, or function as an independent country.
Ultimately the U.S. Congress is the only one who can make decisions regarding the political status of Puerto Rico, as stated under the Territorial Clause. Which may have everything to do with the latest Democrats political junket.
Since President Obama signed PROMESA in 2016, Congress is overseeing the growing debt-crisis in Puerto Rico. A board has directed the island’s government to make austerity budget cuts to the educational and welfare system.
Carlos Ariel Ortiz, business administration professor at Ana G. Méndez University, says many Puerto Ricans feel like they have “no voice and no vote” to stop austerity measures imposed by the board, known locally as the “junta.”
Democrats back in Washington
Returning to Washington the 39 members of Congress who traveled to Puerto Rico over the weekend are taking fire from Fox News, President Trump’s communications team and the president himself. The President took the opportunity to sandblast the Dems for “partying on the beach instead of negotiating.”
“I’ve been here all weekend,” the president tells the reporters outside the White House. “A lot of the Democrats were in Puerto Rico celebrating something. I don’t know, maybe they’re celebrating the shutdown.”
The optics of the trip are bad. The continued devastation of Puerto Rico has everything to do with the Island’s failed liberal Democrat leadership. Leadership that left bottles of water and supplies provided by the Federal Government to sit unused in a warehouse.
But not everyone who visited is blind to the island’s plight.
“What I saw was an island that still needs a lot of help,” said Rep. Mike Levin (D-Calif.), a freshman from the San Diego area, who added that he had never been to Puerto Rico before. “A lot of the preexisting challenges here were exacerbated by the hurricane.”
With the soft sand beaches, blue water, palm trees, and the ever present breeze, Puerto Rico is America’s Caribbean. Only traveling here does not require passports, visas or custom lines, making it hard to pass up for a long weekend.
When you ask anyone what we can do in the states to help the Island, the answer is always the same. Come. Enjoy our waters, our food, our hospitality.
IHG Hotel’s Intercontinental San Juan was open during the hurricane. The over 60-year-old building rode out the storm, keeping its staff working. Following the storm, the hotel providing haven to residents left homeless and guests whose vacations were unexpectedly extended.
Islander or guest, money was not the first concern of the InterContinental. As General Manager Michaell Hermann says
“Many of the hotel properties came together to help the people following the hurricane. Not only were they our guests, but the islanders are our future. Without the people living and working here, we would not have a future.”
As a government official said during a tourism roundtable:
“When you come to Puerto Rico, stay in our hotels, eat in our restaurants, you are making a direct impact on the people by helping to sustain jobs, create incomes.”
What Republicans should do
If the circumstances were the same in Houston, Americans would be up in arms. As they should be for our American brothers and sisters in Puerto Rico. Republican leaders should take this moment to visit not the beaches, but the people still suffering in Puerto Rico.
Congress should use the power to control that they have via PROMESA to fulfill their promise. The promise to defend and protect the United States of America, including its territories.
However, Puerto Rico is easy for politicians to ignore because they do not vote in our Presidential election. Fighting for Central Americans may be humane, but our duty is to America, and Puerto Rican Americans first.
Only Puerto Ricans, like residents of other U.S. territories, do not have voting representation in the United States Congress. They do not have rights to vote for the President or Vice President. However, they do have more delegates than Iowa. This means they can impact who is elected as a party’s presidential candidate.
Giving Illegal Aliens the rights to vote and receive government assistance over Puerto-Rican Americans is not only criminal, but it is disingenuous.
Democrats back in DC
Following the Democrats beach weekend, Juan Castro (D-TX) visited areas of the island still suffering from failing infrastructure and Hurricane Maria.
Castro is the first 2020 candidate to see the continuing hurricane damage up close. He joined San Juan Mayor Carmen Yulín Cruz for a walk around a damaged neighborhood and a recovery center. Meeting with a small group of community activists, Castro talked over how the Department of Housing and Urban Development, which he ran under Obama, could develop the island “the right way.”
However, it is doubtful that the average Puerto Rican will hold their breath waiting for relief from their failed government. After all, when money is being spent by the Federal government, Democrats will always find a way to siphon it off for their own purposes.
Lead Image: Beyond the coastline and Caribbean like beaches, Puerto Rico still needs help with economic and infrastructure recovery – by Jacquie Kubin