There is a lot of activity going on in Washington, D.C. these days. Back in August, the Senate approved a $1 trillion bipartisan infrastructure bill. That bill, however, has been on hold in the House, as Democrats negotiated amongst themselves the contents of the Build Back Better (“BBB”) bill. We are still combing through the text, but to keep you informed, we wanted to share some of the key points in the BBB bill regarding Puerto Rico as of today.
In a short three years, CNE has not only elevated and persuaded Congress and the Executive to more adequately address Puerto Rico’s challenges, but it has achieved substantial changes in federal law.
The Puerto Rican economy is simultaneously recovering from three systemic shocks: the COVID-19 pandemic, the considerable damage inflicted by Hurricanes Irma and Maria, and the upcoming creditor’s vote on the Plan of Adjustment negotiated by the FOMB.
H.R. 4406 helps Puerto Rico avoid a short-term Medicaid funding cliff and provides some stability by setting forth clear funding levels for the next five years. However, the proposed five-year deal falls short of parity with the states, is not a permanent fix, and perpetuates the “separate and unequal” treatment of Medicaid beneficiaries in the territories, who are being told, once again, to accept a “good enough” deal.
On June 30, 2016, President Obama signed into law the Puerto Rico Oversight and Management Economic Stability Act. As we look back and take stock of the events that have taken place since 2016, the unavoidable conclusion is that the territorial bankruptcy regime set up by that law has failed to achieve most of the goals set forth by its authors.
Last week, the Office of the Inspector General of the HUD released a 45-page report which detailed the multiple instances when the political leadership in OMB, a critical control center within the Executive Office of the President, purposefully delayed processes to release disaster aid.
The FOMB for Puerto Rico certified a new fiscal plan for the central government on Friday, April 23. The new Fiscal Plan, just like the others, is based on four core elements: (1) budget consolidation (spending cuts and revenue increases); (2) structural reforms; (3) debt relief; and (4) federal funding for disaster relief and COVID-19 assistance.
In Washington D.C., the symbolic deadline for a new President to make a lasting imprint on the nation is exactly 100 days. After all, first impressions matter. As the Administration and the new Congress near their 100-day mark respectively Puerto Rico has, for better or worse, not been lost in the mix of national priorities.