Washington - When Congress reconvenes tomorrow, the ghost of corruption and the crisis that Puerto Rico's government faced this summer will haunt the efforts to approve funds to prevent the collapse of the health care system and to reform PROMESA, two key issues until the end of the year.

Medicaid. Although its final content is still uncertain, the bill most likely to become law by the end of 2019 is that legislation seeking to allocate billions in additional Medicaid funding.

Puerto Rico's government is in a race against time to access new Medicaid allocations since non-permanent funds run out at the end of the year and those usually distributed annually would run out by April 2020, leaving the government health plan without enough funds to operate and with an annual deficit of about $1.2 billion.

Gov. Wanda Vazquez is scheduled to arrive in Washington tonight to meet with federal government and congressional officials. Priorities in her agenda include lobbying efforts for Medicaid allocations and the release of funds for Puerto Rico's recovery and reconstruction after Hurricane María struck the island two years ago.

The House Energy and Commerce Committee leadership is promoting bipartisan legislation they approved on July 17 that would allocate $12 billion in Medicaid funds to Puerto Rico over the next four fiscal years.

The bill moved forward a week after the federal arrests for corruption that included former Health Insurance Administration (PRHIA) Director Ángela Ávila and some contractors, but also after new controls and audits were imposed on the use of Medicaid funds.

According to Resident Commissioner Jenniffer González, if there hadn´t been allegations of corruption and misappropriation of PRHIA funds –which joined the crisis leading to Rosselló Nevares´ resignation- “there wouldn´t have been any reason” for the bill not to be taken to a vote in the House floor, “nor for the amendments” made to it.

For the bill to become law, it first requires an agreement with the Senate majority leadership that –since July- has been requesting the U.S. Health Department for details about oversight mechanisms on Medicaid funds in Puerto Rico.

Although they filed the request before the U.S. Health Secretary Alex Azar on July 30, last Friday, the answers had not reached the chairman of the Senate Finance Committee, Republican Charles Grassley (Iowa), according to his spokesperson.

"The bill will have more controls... The (Republican majority of the) Senate does not agree with the House version," said Commissioner González, who a few weeks ago said the government of Puerto Rico has “zero” credibility in Washington.

The House Democrat leadership supports the bipartisan bill approved in the Committee.

Florida Democrat Representative Darren Soto (Florida), member of the House Energy and Commerce Committee and the lead author of the bill, hopes there will be no new restrictions and expects his legislation will be taken to a vote in the House.

"I expect a vote on the floor by September or October. Passing this historic bill would contribute to addressing Puerto Rico's Medicaid program, by funding the hospital system, encouraging doctors to continue working on the island and, most importantly, it would help save lives," Soto said.

After meeting with Republican advisors to the Senate Finance Committee last week, Puerto Rico Health Secretary Rafael Rodríguez said that "what they are asking for is accountability.

"If you are going to increase payments to providers, to cover hepatitis C medication, Medicare Part B coverage, well, tell us how you are going to do it," Rodríguez said about the claims by the Senate Finance Committee.

The House bill would allow the federal government to fund 83 percent of the cost of Medicaid services in Puerto Rico during fiscal years 2020 and 2021. Federal funding would drop to 76 percent in 2022 and 2023.

According to the measure, Puerto Rico would receive about $3 billion annually on average.

According to Congressional sources, Senate Republicans may want to limit appropriations to two years and reduce the annual federal contribution.

"We have to really focus, and we believe the governor agrees, on making sure they don't change things, that they grant allocations for four years," said the president of the Puerto Rico Hospital Association, Jaime Plá, who will be in Washington this week.

The House left for recess on July 26 while the Senate did it on August 1.


The immediate agenda on Puerto Rico would include legislation by House Natural Resources Committee Chairman, Democrat Raúl Grijalva (Arizona), on possible amendments to PROMESA.

The draft bill that Grijalva circulated, as reported by El Nuevo Día at the end of July, promotes the creation of two positions: a federal reconstruction coordinator and a power grid revitalization officer.

However, the bill would eliminate the infrastructure revitalization coordinator created by Promesa. It also proposes allowing the government to cancel the unsecured debt and establish a commission to audit the debt.

Other initiatives in Grijalva's bill include legislation by Democratic Congresswoman Nydia Velázquez (New York) to avoid conflicts of interest between contractors of the Oversight Board overseeing the island's public financial decisions and language for the Treasury Department to finance the expenses of the fiscal entity.

Grijalva told El Nuevo Día before the August recess that he wants to call a public hearing on his bill this month. But before that, he will visit San Juan next weekend to talk with different sectors about the recovery process and the proposals he included in his draft bill.

 “One of the goals of the visit is to get feedback on what our legislation should include…Grijalva will make a more definite decision after the visit and after a hearing,” said Adam Sarvana, spokesman for the Natural Resources Committee.

Soto said he is open to the idea of creating a federal reconstruction and a revitalization officer for the Electric Power Authority (PREPA).

He expressed support for the idea of canceling the unsecured debt and authorizing a commission to conduct an audit of the government's obligations.

Resident Commissioner González said the proposal to cancel the debt will trigger "controversy” with the Republicans.  She said she finds it "dangerous" that, through the creation of the revitalization officer for the transformation of the power grid, Congress might be directly handling that process.

"I want to know what is the vision behind that," González said, indicating that she requested a meeting with Grijalva's office after she meets this week with Rob Bishop (Utah), Ranking Republican of the House Committee on Natural Resources.

Due to the slow release of funds and after corruption cases in Puerto Rico Education Department and the Health Insurance Administration, González along with

Rick Scott (Florida) and Republican Congressman Sean Duffy (Wisconsin) - asked President Donald Trump to appoint a federal reconstruction coordinator.


This summer, Grijalva told El Nuevo that he will also promote a hearing on Puerto Rico's political status. But, he warned it will not focus on Rep. Soto's pro-statehood bill, which seeks to turn Puerto Rico into a U.S. state with a three-month transition period and without requiring a federal plebiscite on the island.

He wants to promote a general debate on the island´s political status at a time when the statehood proposal has been blocked by Trump and Senate Republican Majority Leader Mitch McConnell (Kentucky).

Soto anticipates a hearing on status no later than October and says it will allow "educating the committee, especially new members," because the committee hasn´t discussed the island's political future since June 2015.

Once that hearing is held, Soto will ask to take his bill to a vote, since he claims to have received positive responses from his colleagues in the committee. "They understand that Puerto Rico already voted for statehood in 2017," in reference to the referendum in which statehood got 97 percent of the votes with a low voter turnout -23 percent- and amid a boycott by the opposition.  

Meanwhile, Commissioner González plans to introduce a new pro-statehood bill seeking, initially, to turn Puerto Rico into an incorporated territory and allowing a referendum, contrary to Soto's initiative, which she also supports.

González does not believe that Trump and McConnell have blocked the path to statehood. She prefers to describe that as "challenges" for statehood supporters. She asked McConnel for a meeting in June.

However, in November 2018 González and Bishop signed a letter acknowledging that, since the U.S. Department of Justice could not validate the 2017 plebiscite, as proposed by a 2014 law, statehood opponents found a door to challenge that referendum.

However, Soto´s and González' proposals clash with the views of Puerto Rican Democrats Velázquez and Alexandria Ocasio Cortez, who, separately, have expressed that the federal government must commit to a binding process of self-determination and decolonization for Puerto Rico.

Velázquez is evaluating to introduce her own proposal.

Tax Credits

On the other hand, the chairman of the Ways and Means Committee, Democrat Richard Neal (Massachusetts), is also waiting for the leadership to know when his tax relief bill for the "working class" and "middle class" families, which includes federal subsidies to boost tax credits in Puerto Rico for Earned Income Tax Credit (EITC) and Child Tax Credit (CTC)

The bill - approved in the committee, but with an uncertain future in the Senate - seeks for the federal government to finance to a large extent the implementation of those tax credits in Puerto Rico, which can have an economic impact of about $1.2 billion annually for the island.

Although Republicans tend to reject such proposals, Commissioner González said the intention of those who defend them is to try to include them in a bill that extends tax measures, which is often approved late in the year. "Approving them independently is more uphill," she said.

EITC has an allocation of $204 million from the Puerto Rican government, according to the Oversight Board fiscal plan. With Neal's bill, that program could receive another $612 million from the Treasury, according to the Center for a New Economy.

The local program includes tax credits ranging from $300 to $2,000.  The federal EITC program allows a maximum tax credit of $6,557.

The government of Puerto Rico, the Board, and broad sectors on the island support Neal´s bill.

The initiative to subsidize the CTC, which also has an impact of nearly $600 million annually, would put an end to the fact only families with three or more children can apply for that federal benefit in Puerto Rico.


As for Vieques, there are initiatives pending in Congress that were included in a House bill to authorize Defense spending and that now depends on a conference committee on both legislative houses.

One of the proposals, by Congresswoman Ocasio Cortez (New York), would allocate $10 million to use closed detonation chambers, instead of open-air detonation chambers to clean up military ordnance in Vieques.

Another amendment, by Commissioner González, would order the Office of the Comptroller General to complete a study and present a report to congressional committees on Armed Forces on the status of the Vieques and Culebra clean up processes.

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