A Fiscal Control Board That Represents Us All

The PROMESA bill raises serious questions due to the lack of participation given to the Puerto Rican Government, as well as the absence of legislation designed to stimulate the economy.

The bill that proposes the creation of a Fiscal Control Board for Puerto Rico –halted in Congress due to differences within the Republican Party– is an initiative that we have endorsed from day one.

However, we believe that it is important to go into detail on what this board's governance entails and that there are key questions that Congress must answer, such as the criteria in appointing its members since, as it is currently defined, the entity lacks local representation. In the same way, it is essential that they establish to whom the board will ultimately report.

As it has been described in the legislation, whose main author is Congressman Sean Duffy from Wisconsin and which was tabled yesterday on a Commission level in the U.S. House of Representatives, the Board would have broad powers over Puerto Rico's fiscal issues and it would restrict restructuring processes for the public debt.

In that sense, it is vital to determine the suggested organization's structure, in order to guarantee that its members adequately represent Puerto Rico's best interest, as well as the bondholder's and the very federal government's.

There is no doubt that the Board is a necessary resource for fiscal administration, particularly inasmuch as it establishes guides for budgetary management, an area that has been historically weak and negligent in the island's governmental past.

Nonetheless, the way the legislation is redacted, local government authorities would remain with no power whatsoever to decide anything concerning fiscal planning and the budget, faculties that would then lie in the hands of the federal organization, which could also request changes be made to any law that, in their opinion, does not comply with the fiscal plans they have countersigned.

Hence, local representation on the board, which currently does not exist, becomes imminent for the entity to be able to understand the complex socioeconomic situation that Puerto Rico is in, so it does not make mistakes due to a lack of knowledge or for being a purely technocratic entity. Puerto Rico has first-rate professionals who can contribute plenty to the Board's tasks, and who are willing to contribute their best for the greater well being of the island they inhabit.

In addition to a Board with federal authority and an actual Puerto Rican presence, it's important for the federal government to begin implementing a series of economic relief and boosting measures that make way for the development of economic activity on the island. These support measures include fairness in federal health program allocations, as well as in the federal tax credit that applies to low- and middle-income workers.

We would like to remind the Department of Treasury and the White House that it is up to the President to go beyond words to support Puerto Rico in this pivotal moment. In that sense, the White House should lobby in favor of legislation that grants Puerto Rico parity in the Medicaid program, funds that largely sustain the Government Health Plan, which serves about 1.5 million people on the island. Similarly, it is up to the federal Department of Health to offer Puerto Rico a fairer treatment in the distribution of funds for Medicare, which offers medical services to retirees and the disabled.

Puerto Rico deserves having Congress and the White House treat it with justice and in equal conditions as the American institutions and jurisdictions that have gone through critical fiscal situations, like in the case of the banks –which received federal financial support– and cities like Detroit, which was able to file for protection under Chapter 9 of the U.S. Bankruptcy Code, and New York, where the established federal organization did not assume total control of fiscal issues.

Puerto Rico requires measures that are tailored to its peculiarities, but the common denominator should be to confer it a fair treatment that helps it comply with its responsibilities, restore its credibility in the markets, and stimulate its economy so it can get back on its feet.   

A Fiscal Control Board that grants a genuine democratic participation is the first step towards achieving those goals.