Washington - Although willing to promote the bill on Puerto Rico he has just submitted, yesterday the chairman of the Senate Finance Committee, Orrin Hatch (Utah), shared his disappointment regarding PROMESA and the lack of transparency of the Government of Puerto Rico.
Republican Hatch went to the US Senate floor to highlight his bill "Puerto Rico Economic Empowerment Act of 2018", he introduced together with Marco Rubio (Florida), to process recommendations made in a 2016 report made by the Congressional Task Force on Economic Development in Puerto Rico, which he chaired.
His speech was expected since last Friday, but in addition to explaining the main initiatives in his bill, Hatch seized the opportunity to share his frustrations regarding the authorities of the Island.
On one hand, the senator -who will retire from the Senate in December, but still controls tax issues-, denounced the lack of transparency of the Government of Puerto Rico and, to some extent, of the Oversight Board in charge of the Island’s finances. He also defended federal restrictions to access funds to mitigate the disaster caused by Hurricane Maria.
Hatch also regretted that voluntary negotiations on public debt restructuring ordered under PROMESA have not advanced and that the statute has not avoided the multiple lawsuits between the creditors and the Government.
"The promise of voluntary debt resolutions has not been fulfilled, even for a restructuring agreement between creditors and Puerto Rico's power authority, called PREPA, which had been agreed upon by both sides," he stressed.
The Republican senator recalled that he has claimed the audited financial statements of the Puerto Rican Government since 2015 and, to his knowledge, they have not been provided since 2014 fiscal year.
"In my more than 40 years in the Senate I have always been a proud advocate for accountability and oversight. That is why I support greater transparency in the Puerto Rican Government, as well as the Oversight Board. I also support ongoing federal efforts, including those at the Treasury Department, to carefully and closely monitor federal funds provided to Puerto Rico for disaster and other relief. As always, we owe a duty to taxpayers to prudently safeguard their hard-earned dollars from being channeled into inefficient or wasteful uses," said Hatch.
Hatch also alluded to the sudden revelation the Puerto Rican Government made in December regarding almost $ 7 billion in “scattered” bank accounts. "This is just one of many examples of how disorganized and inconsistent accounting continues to prevail in Puerto Rico, damaging the credibility of the government," he noted.
At the same time, when talking about the measures he included in his bill 2873, Hatch closed the door to revise the federal tax reform law in order to give preferential treatment to Controlled Foreign Corporations (CFC) based in Puerto Rico, and to promote the access of the Island´s residents to the Earned Income Tax Credit (EITC).
Both the Government of Ricardo Rosselló and the private sector still demand the review of the federal tax reform, with the objective of granting special treatment to CFCs in Puerto Rico, now subject to a 13.1 percent tax on their intellectual property, even if they do not repatriate their earnings.
Hatch said he cannot support "the views of some in Puerto Rico, including Government officials that they were somehow left out of our tax reform efforts because they didn't receive a special carve out unavailable to anyone else."
Through his bill, Hatch proposes to reduce from 6.2 percent to 3.1 percent the payroll deduction of Social Security payments for 24 months, with the idea of workers receiving a larger check. The measure promotes full access to the reimbursement for the federal child tax credit in Puerto Rico, which can be up to $ 2,000 per dependent, and that on the Island has only applied to those who have three or more children, due to a technical error.
The bill also facilitates access to loans and benefits from the Small Business Administration (SBA), and proposes to improve statistics on the Island. Hatch said his measures could represent a $3.5 billion economic injection for the Island.
Regarding the importance of having reliable data, Hatch came out in defense of the Puerto Rico Institute of Statistics and said that it is threatened by "an ill-conceived effort by the Government of Puerto Rico to overhaul and potentially politicize the Institute."
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