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The Fiscal Oversight Board is Necessary Now

The events taking place in Puerto Rico –just when the leadership in the U.S. House of Representatives is expected to introduce their changes to a bill that will deal with the public financial crisis in the island– reveal the need for Congress to make way for a federal fiscal oversight board that, with significant Puerto Rican presence, will restructure the $70-billion debt and enable incentives to start us on the path towards the recovery of our government coffers and local economic development.

The visit of Jacob Lew, secretary of the U.S. Treasury, to the island –which is the second one in just a few months– puts some perspective to the grave economic and humanitarian implications, if Congress were to leave Puerto Rico without the mechanisms to efficiently deal with the debt and deliver basic services to its citizens. The circumstantial gravity is highlighted by the visit from Raúl Grijalva, spokesperson for the Democratic minority in the U.S. House of Representatives. Both officials, aside from reporting to the Puerto Rican government on the state of negotiations in Washington regarding Puerto Rico, also lend visibility to the financial difficulties on the island.

In the meantime, the government leadership in Puerto Rico is tied in a divisive struggle. This weakens the efforts to convince Congress of granting Puerto Rico the necessary tools to face the crisis without punishing our people. The last thing Puerto Rico needs, right in the middle of its defenseless quandary, is a new impasse between legislative and executive powers regarding the general budget bill for the 2017 fiscal year.

This controversy –added to the threat the Governor has made to veto the amendments of the Moratorium Law, as well as to the lack of compliance from local government in presenting the audited financial statements that validate the fiscal crisis– paints an eloquent picture of the need to create a federal fiscal oversight board that will manage the budgetary and financial issues of the island.

We favor the appointment of a federal body that includes Puerto Rican involvement, along with initiatives for economic stimulus and the restructuring of the public debt. This is what the people of Puerto Rico urgently need.

The president of our House of Representatives, Jaime Perelló, as well as all other members of this agency, have been called upon to avoid becoming engrossed in the worrisome threat exposed by the Chairman of the Committee of Budget and Finance, Rafael Hernández Montañez: another controversy focused on the ideological differences regarding the budget plan.

The virtual ultimatum given by Hernández Montañez to Governor Alejandro García Padilla –in which he demands the draft budget bill include the necessary allocations for the payment of general obligations, lest a harmful impasse occur– is of no help to the main cause of Puerto Rico.

To begin with, the budget plan is in its drafting phase in the hands of the Office of Management and Budget and of all other bodies that must take part in their respective incomes and line items. Also, since the budget document requires a proposal from Fortaleza and approval from the Legislature, the most prudent thing is for conversations to flow between the parties so that the final result responds to the interests of the people.

The understanding of the grave financial and operational reality of the government (and setting aside all claims to the spotlight from individuals, political parties and ideologies) should be the base for the dialogues that will lead to the approval of the budget document.

What would be appropriate, in true discharge of the public service of elected officials and executives, is a spirit of solidary collaboration to prepare an articulate budget based on the reality of the financial situation.

Their energy and determination must be focused on getting Congress to amend the bill, in order to help Puerto Rico face this serious fiscal problem with an actual chance of success. That is another debt that the political elite has with our people.

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