Carlos Mercader, of PRFAA. (GFR Media/Archivo)

Washington – The Government of Puerto Rico intends to conduct a preliminary analysis of the possible effects of the cutbacks proposed by US President Donald Trump. These proposed cutbacks infringe upon important social programs at a local level, many of them geared towards low-income communities, arts, sciences, and urban centers.

But until May, the Government will not have a specific idea of the magnitude implied by the cutbacks the White House is pursuing, which are nonetheless facing resistance from both Democrats and Republicans in Congress.

As El Nuevo Día informed on Thursday, the scope of the cutbacks has already raised alarms in Puerto Rico’s public housing system—which could lose nearly $50 million, if the proposed cutbacks are carried out at all levels—and the Island’s Legal Services Corporation, which could stand lo lose two-thirds of its funding.

Trump’s proposals come at a time when Puerto Rico’s Government has agreed to carry out deep budget cuts and is facing a $1.2-billion fiscal abyss in our healthcare system, due to the depletion—by end of year—of the $6.4 billion granted to Puerto Rico in Medicaid funds under the Affordable Care Act (Obamacare).

“We will have to make adjustments, and work in Congress to get Puerto Rico considered,” stated Carlos Mercader, executive director of the Puerto Rico Federal Affairs Administration (PRFAA), yesterday. Last Thursday, Mercader reviewed the current state of federal programs for each one of the main government offices in San Juan.

Although the specific details of the budget—disclosing each proposed allocation for the 2017 – 2018 federal fiscal year—will not be presented until May, the PRFAA announced that a preliminary analysis would be launched in the Island’s governmental departments.

As part of the general bases for the federal budget—which Trump referred to Congress on Thursday—the White House is projecting a $54-billion increase in military and homeland security spending, but a reduction in allocations for many other departments.

The cutbacks are aimed particularly at the Departments of Labor (21%), Healthcare (17.9%), Commerce (16%), Housing (13.2%), Transportation (13%), Interior (12%), Energy (5.6%), Treasury (4.1%), Justice (2.8%), Small Business Administration (5%), and NASA (0.8%).

“This process won’t be exempt from controversies and changes,” Mercader stated.

Trump’s plan eliminates funding for entities such as the US Legal Services Corporation, the Corporation for Public Broadcasting, and the National Endowment for the Arts, among many others.

Secretary of Housing Fernando Gil Enseñat stated that if the reduction to the US Department of Housing and Urban Development (HUD) is applied at a general level, Puerto Rico could see a reduction of at least $42 million. However, that doesn’t include possible cutbacks in the Section 8 program, which helps subsidize rented housing.

The elimination of the $375 million received in the US Legal Services Corporation could subtract almost $11 million from the funds for Puerto Rico’s Legal Services Corporation.

In terms of agriculture, Trump has proposed removing the Rural Business-Cooperative Service Program and the Water & Waste Disposal Loan & Grant Program.

The organization Cambio Puerto Rico (“Change for Puerto Rico”) warned that the cutbacks in sanitary and safe water infrastructure could have a negative impact on the already weakened Aqueduct and Sewer Authority.


Mercader stated that he held separate meetings on Tuesday with two agency directors in order to examine the current federal program participation, to identify the programs that are especially important and the ones where Puerto Rico has been absent.

Nevertheless, the Governor’s representative in Washington stated that in the short-term, the primary task is still trying to convince Congress to extend the Medicaid funds granted by Obamacare. This week, Puerto Rico Chief of Staff William Villafañe said that the Government of Puerto Rico is expecting an $800-million influx in Medicaid funds.

“We requested a minimum of $800 million to $1.3 billion. We could make adjustments with that amount, but we are looking for a continuation of the funds” granted by Obamacare, which Rosselló’s administration calculated at approximately $1.3 billion per year, according to Mercader.

In the 10-year fiscal plan approved last Monday by the Oversight Board in charge of Puerto Rico’s public finances, Governor Rosselló estimated potential savings of over $6 billion in the budget for the Mi Salud program.

The Puerto Rican Government’s Mi Salud program has relied on $1.6 billion in Medicaid funds, for a total budget of $2.8 billion. The remaining $340 million in Medicaid funds aside from Obamacare come from a permanent law. 

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