March 24, 2018–The scandalous holdup of billions in disaster aid authorized by Congress for Puerto Rico last October, appears finally to be about to end. The signal was given by Treasury Secretary Steve Mnuchin during a high-profile visit to the Island on March 22, where he and Governor Ricardo Rosselló announced that they had agreed upon the conditions under which the money can be released. The disbursement still requires approval from the Puerto Rican legislature, the Puerto Rican Financial Oversight and Management Board (FOMB), and the bankruptcy court. This is expected to occur quickly.
The money in question is $4.9 billion in community disaster loans of the type that are usually given in emergencies and ultimately forgiven. However, in the case of Puerto Rico (even as opposed to the Virgin Islands, which has received their funds), the Trump Treasury Department demanded that Puerto Rico agree to make repayment of the Federal loans the highest priority for repayment, even if it meant having insufficient funds for basic services. Secretary of the Treasury Mnuchin also declared that loan forgiveness should be ruled out.
The Puerto Rican government balked, and it appears that the Administration has backed down to some degree. No longer is the loan obligation to be above payments for services, and the question of ultimate loan forgiveness has been left open, for later discussions. Among the pressures put on the Administration was a March 8 letter from 58 Congressmen, who demanded that the Administration stop “acting like a bank or hedge fund in the quest for profit,” and treat suffering Puerto Rico as it treats other parts of the United States.
While the Puerto Rican government ostensibly has had cash on hand, the refusal of the Trump Administration to release the funds has compounded the Island’s crises. Puerto Rico had to deplete its operating funds to permit the power company to avoid further outages, and does not have the funds for necessary rebuilding. While the Army Corps of Engineers and FEMA are still operating to provide emergency services, these stop-gap measures must eventually be replaced by a viable infrastructure and functioning economy, which—unless you count the casinos–is nowhere in sight.
Tags: Nydia Velasquez, Puerto Rico, Ricardo Rossello, Steve Mnuchin