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Puerto Rico gets about $322 million annually in Medicaid allocations. (Archive)

Washington - While Republicans were making desperate efforts to ensure support in the House, the Senate was stuck in the process of approving the budget agreement that would allow Puerto Rico a $15 billion in direct federal emergency assistance, if strict conditions imposed by Congress are overcome.

Approval of the bipartisan bill was not guaranteed, which could cause, as from 12:01 a.m. today, a partial federal government shutdown, even if only for a few hours.

The main challenge was to have the votes in the House, where the most conservatives raised their voices against the cost of the agreement and many Democrats opposed  because Speaker Paul Ryan still did not offer guarantees for an open debate on a bill in favor of the " dreamers,"  those hundreds of thousands brought to the United States by their parents. 

"We will bring a solution to the floor, one that the president will sign, we must pass this budget agreement first though so that we can get onto that," said Ryan, regarding the Soñadores issue.

“We will bring a solution to the floor, one that the president will sign, we must pass this budget agreement first though so that we can get onto that," Ryan said regarding the “dreamers”, however he stressed that it will be a bill that President Donald Trump would like to sign.

House minority leader Nancy Pelosi urged her members to oppose the bill in solidarity with the “dreamers”.

Before the debate came to the House, Republican Rand Paul was holding up the Senate. He wanted to vote an amendment on budget caps, causing the vote to probably occur early in the morning. "This is a negligent expense," he said, mentioning the scandal of the $ 156 million contract that FEMA granted to an Atlanta company, which only has its owner as an employee, and failed to comply with the shipment of meals to Puerto Rico .

The deal of the bill includes a variety of additional ítems to the third supplementary allocations package to mitigate the 2017 disasters –like Hurricane Maria- for a total of $89 billion.

Among other things, the bill extends the current budget until March 23, sets spending levels for the rest of this fiscal year, which ends in September, and the next, 2018-2019, and allows to lift the federal public debt until March of 2019.

The bill offers $4,8 billion in Medicaid funds to Puerto Rico up to September 30, 2019, the Senate leadership estimates it represents 100 percent access to the program within the conditions set for the island to receive those funds.

The bill conditions the disbursement of $1,2 billion of that allocation to the fact that the government meets federal regulations regarding the submission of statistics against fraud in Medicaid and that the US Health and Human Services Secretary certifies, next July 1, that the conditions imposed have been complied with.

Resident Commissioner Jennifer Gonzalez said that Rosselló´s government “has already complied” by setting a unit against fraud in Medicaid and that the Centers for Medicare and Medicaid Services have validated that.

Puerto Rico gets about $322 million annually in Medicaid allocations. Now, the bill grants not only $4,8 billion for the next 20 months in Medicaid funds, but saves the government of Puerto Rico some $1,2 billion of the annual fund of the Mi Salud plan –which has depended on $1,8 billion in federal funds-

Puerto Rico may access about $ 10 billion from the community development program of the federal Department of Housing, known as CDBG, which finances infrastructure projects.

The language of the legislation disclosed yesterday, specifies, as El Nuevo Dia reported, that out of the $28 billion in CDGB funds to mitigate disasters, $11 billion must be for state and local governments affected by hurricane Maria. Only Puerto Rico and the US Virgin Islands would have exclusive access to those $11 billion.

De ese pote saldrán $2,000 millones para ayudar a reconstruir, con tecnología moderna, el sistema eléctrico de Puerto Rico y de las Islas Vírgenes.

When Governor Rosselló estimated in $94 billion the damage caused by hurricane Maria, he also estimated in about $17 billion the cost to build a modern and resilient power grid.

The bill kept the language that allows FEMA to finance the reconstruction of the power grid and not only the repairs.

$16,500 billon

Commissioner Gonzalez said in a brief that by adding allocations to repair military and civil facilities, the bipartisan agreement saves some $16,5 billion for Puerto Rico.

Among other items, she highlighted the funds of up to $519,3 million to repair the facilities of the National Guard in Puerto Rico and the Virgin Islands and $150 million to the Customs infrastructure.

The bill grants $16 million to repair the telescope at the Arecibo Observatory.

The offer of a new line of credit of up to $4 billion for jurisdictions devastated by natural disasters, and that suffered significant loss of revenue, was not included in the final version

Only a few were surprised. Three and a half months after the approval of another FEMA line of credit of up to $ 4,9 billion, from which Puerto Rico expected to get close to $ 4,7 billion, the Federal Treasury - doubtful of the claims of the local government regarding the fact that they would run out of liquidity in November and the reports about $ 6,875 billion in hundreds of accounts released  in December -, has not disbursed a single cent.

The Virgin Islands already has $371 million of that loan.

Ricardo Rosselló´s government failed to remove from the bill that language included in the resolution passed in December in the House, which requires federal agencies and the Board to submit reports on the implementation of the recovery plan.

According to the measures implemented after the Whitefish scandal, the Board can revise any contract granted by the government of Puerto Rico for reconstructed for $10 million or more.

The bill provides $150 million in loans from the CDL and to pay the matching of funds of FEMA projects. That is, they are recognizing that Puerto Rico lacks funds but offer loans as aid.

However, the bill does exempt Puerto Rico to match those funds allocated through the US Corps of Engineers and for federal highways. For the repair of highways in states and territories, the allocation totals 1,374 billion.

For all jurisdictions affected by hurricanes and forest fire, such as Texas and Florida, the bill provides up to $15 billion in funds of the US Corps of Engineers. The traditional FEMA fund to assist disasters, through which families and local governments get reimbursements to mitigate damage, will increase in $23,5 billion.

Tax on Rum

The increase on the reimbursement of the federal tax to imported rum from Puerto Rico and the Virgin Islands will extend until 2022, retroactive to 2017. This means that the reimbursement will reach $ 13.25 for each gallon of imported rum, as it has been in recent years.

Besides, it excludes Puerto Rico and the Virgin Islands imported rum from the changes made by the federal tax reform in the federal tax for rum and beer.

The federal tax reform reduced from $13.50 to $2.70 the federal tax on the first 100,000 gallons of imported alcoholic beverages, included rum.

Then, the tax rises up to $ 13.34 until it exceeds the 22.13 million imported gallons, when it goes back to the fixed rate of $ 13.50. But, the agreement would exclude the island from these recent changes.

Puerto Rico gets about $400 million annually as reimbursement for the federal rum tax, but gives 46 percent to distillers.

This increase in the reimbursement represents a difference of close to $67 million for the Puerto Rican economy, a figure that together with the increase in Medicaid funds may be included in the revised Fiscal Plan that the Board intends to approve on February 23, according to a government´s spokesperson.

Commissioner Gonzalez also said that the bill extends to all Puerto Rico tax credits from the program “opportunity zones” created by the federal tax reform. She thinks this may help companies on the island on investment in property and tourism.

It will also allow American companies to do business as domestic US companies to claim for the 35 percent tax cut for 2017, a measure granted by the amendment on Section 199 of the Internal Revenue Code. As from last January 1, however, corporate domestic tax in the US went down from 35 to 2 percent.

Opposing votes

Meanwhile, Puerto Rican Democrats Nydia Velázquez (New York) and Luis Gutiérrez (Illinois) voted against the bill, which they consider a lack of commitment from speaker Ryan to solve the uncertainty of about 760,000 undocumented who will loose their permission to work on March 5.

Velazquez and Gutierrez regretted having voted against a bill that offers signifcant aid to the island.

But they also said that they cannot morally leave those undocumente aside, who after the repeal of DACA fear to be deported.

Congresswoman Velázquez said that "regardless the fate of this bill, I will continue fighting for more aid and will not rest until Puerto Rico is recovered."


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