Despite the claim by various sectors that Puerto Rico’s debt is unpayable and the protests in front of the Capitol on Tuesday to stop the approval of the law that provides a plan to adjust it (PDA), the island’s governor, Pedro Pierluisi, signed project 1003 last night to those ends.
“The restructuring of the debt of the government of Puerto Rico it is essential in order to end the bankruptcy process and to be able to return to the progress that our people expect and deserve. We have been fighting for more than five years to reach an agreement that allows us to comply with our obligations, in a sustainable way, and at the same time allows us to have the resources to grow our economy and guarantee essential services to our people, “said the governor in statements. written.
The first president of Puerto Rico, a US territory, stamped his signature after yesterday the document was approved by the House of Representatives and the Senate.
In the Senate, the measure passed a final vote with the minimum number of votes, 14-13. Minutes earlier, in an open voice vote, the measure obtained 14 votes in favor and 11 against, according to the newspaper Primera Hora.
The decisive vote in that legislative body was of the senator of the New Progressive Party (PNP) Gregorio Matías, who had expressed resistance to the measure until the last minute. The legislator said he had changed his position after a commitment by the Executive to protect certain benefits of public employees and police.
“My demand was that the steps be taken to enforce laws 80 (of 2020, which creates a retirement window for public employees) and 81 (of 2021, which creates the ‘dignified retirement’ of the police). The governor is going to follow up on Law 80 and implement Law 81. In addition, he is going to change the retirement date of the policemen to 62 years, from 58 years that it is now, but so that they can contribute to Social Security, “he said. Matías to The New Day.
In the House, the measure was put to a vote shortly after it was approved in the Senate. 34 of its members voted in favor and 12 against.
Demonstrations inside and outside the Capitol against the debt adjustment law
The demonstrations against the legislative piece were felt both inside and outside the chamber of the House of Laws.
“Traitors, irresponsible, we will not forget,” were some of the cries of detractors from the steps inside the Capitol in San Juan.
Opposing PPD mayors
It even transpired that mayors of the Popular Democratic Party (PPD) called legislators from the community to ask them to vote against the project.
Several mayors of that community, led by the president of the Association of Mayors, Luis Javier Hernández, met this Monday with the leaders of the Chamber and Senate to demand a specific language for the municipalities affected by the reduction of the Equalization Fund.
Minority legislators complain that they are not allowed to participate in the process
Additionally, some minority legislators such as the independent José Vargas Vidot questioned not having participated in the conference committee to establish the guidelines of the measure.
“The last conference report was criticized because minorities were not given participation and that there was a lack of transparency, but we must be consistent because today they intend to do the same. It is intended to approve a report negotiated on a Sunday night at a restaurant in Dorado. This server has not been given access to any document, not even a piece of paper. This is an agreement between leaders of the PNP and PPD and I say leaders because many of their members did not even know about the agreement, ”argued Vargas Vidot.
“Where is participation? Where is transparency?” Criticized the senator. “They want to cover up their mistakes and their complicity in the crisis of this debt, they want to bury the municipalities, the University of Puerto Rico and the cooperatives and above all they are going to mortgage the future of Puerto Rico with an unsustainable debt. The people will not forget the smiling photo with which they sealed that agreement, “added the legislator as quoted by Primera Hora.
The Debt Adjustment Plan was approved after language changes. Among the alterations made this weekend to the plan presented by the Fiscal Oversight Board (JSF), legislators agreed with the governor to protect the current and future pensions of public workers.
Specifically, an amendment was established to article 104 that eliminates the freeze accrued pension benefits as well as other possible adjustments for increased cost of living. This freeze particularly affects teachers who entered the public system before 2014.
The PDA initially presented by the Fiscal Oversight Board, The federal entity that controls the island’s finances, contained cuts to the pensions of public sector retirees.
As to the funds to the University of Puerto Rico, the language was maintained that establishes that the university system will receive a fixed allocation of $ 500 million for five years from the General Fund. In the case of municipalities, a special fund is created for recycling, rubble and garbage, subject to surpluses from Medicaid.
University sector dissatisfied with language changes
Shortly before the plan became law, protesters, many from the university sector, demonstrated against the plan.
María del Mar Rosa, Organizational Coordinator of the Association of University Professors of Puerto Rico (APPU), argued that debt adjustment cannot be at the expense of citizens’ needs.
“In any bankruptcy process, a person goes and says what their basic needs are, and then negotiates the debt that they have to pay. The Fiscal Control Board has to do that and it has not, and that is why the debt continues to be put before the people, ”said the professor.
“We want that the university be named essential service, that the budget of the university returns to be one with which we can handle. Right now we have a budget of $ 501 million and the university is falling apart. They are closing programs, we are losing accreditations, enrollment has risen incredibly, that is why we have lost students, ”added Del Mar Rosa.
In the opinion of the educator, there is no way to pay the amount demanded by the Board without putting the rights of workers and students at risk.
“What this enabling law does is set in motion a debt adjustment plan that is unsustainable … even if the ‘promissory note’ has been lowered, that monthly payment that this annuity has been, we know that it is unsustainable and we cannot pay it. It is over 1,100 million and we cannot pay it. And in Puerto Rico, economists and experts have said that we cannot pay more than 400 or 600 (millions) ”, he compared.
Following the approval of the law, the Board, created as part of the PROMESA law in the United States Congress in 2016, said that it will carefully evaluate the legislation passed to determine if it facilitates the confirmation of the Adjustment Plan.
“The Oversight Board has made it clear what terms would be acceptable in the legislation necessary to provide for the issuance of the new general obligation bonds as part of the amended 7th Adjustment Plan,” the agency said in written statements.
Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.