ANALYSIS/OPINION:
President Obama signed into law the Puerto Rico Oversight, Management and Economic Stability Act (PROMESA), which, similar to the D.C. control board, was designed to alleviate financial pressures in the U.S. territory.
However, the thrashing Puerto Rico and the U.S. Virgin Islands have taken from Hurricanes Irma and Maria mean both are now awash in deeper shades of red ink.
First, a quick recap of the D.C. control board, whose official name was the District of Columbia Financial Responsibility and Management Assistance Authority. Established by Congress and signed into law by President Bill Clinton in 1995, it had five members — none of them elected officeholders. Their jobs were to restore the city’s finances to fiscal solvency, restructure the government bureaucracy and put the nation’s capital on rock-solid financial footing.
The board was dissolved in 2001 only after the city proved it had achieved four consecutive years of a balanced budget.
Like the District, Puerto Rico and the U.S. Virgin Islands are broke and broken.
The fiscal health of the U.S. Virgin Islands continues to decline, and Brooklyn-born Gov. Kenneth Mapp guesstimated in a meeting Tuesday with President Trump that at least $750 million is needed for immediate infrastructure needs.
A couple of snapshots convey the U.S. Virgin Islands’ dire straits: Before the hurricanes struck, the government owed more than $2 billion to creditors and bondholders, and the territory, which has a population of 100,000, owed billions more in pension and health care obligations.
Picture this, too: Basement pipes burst beneath a public hospital emergency room, and wastewater backed up throughout the drains. Patients, employees and visitors had to use portable toilets lined up curbside because the government didn’t have the cash for new plumbing. (And, yes, Mr. Mapp said federal infrastructure funds would be used for the hospital.)
Meanwhile, our sisters and brothers in Puerto Rico haven’t a bedpan to excrete in or, in many cases, a hospital window to throw the contents out of.
Puerto Rico also has investors and creditors lined up to get paid, and they were there long before Mr. Obama put presidential ink to PROMESA — and before Irma and Maria barreled across the eastern Caribbean.
Specifically, Puerto Rico is saddled with:
• $70 billion in outstanding debt.
• A 45 percent poverty rate amid an islandwide population of 3.4 million.
• A 14 percent unemployment rate.
Americans have another cause for concern: Pharmaceuticals are big business in Puerto Rico, representing 72 percent of its exports in 2016, and valued at $14.5 billion.
A population decline is nagging the island as well, from 3,808,610 residents in 2000 to 3.4 million in 2016. Many of them moved into the Lower 48 of the mainland, where cities and counties along the I-95 corridor are encouraging Puerto Ricans to relocate. Chicago already gave them a shoutout.
While the numbers were different, the District suffered the same ills as the islands two decades ago. The lessons from the control board era were far too many to enumerate here, but there were key lessons. Chief among them:
• Do not believe the numbers given by government. Research independently.
• Shrink the size of government and the budget.
• Bring in and train new people who are not entrenched in local bureaucracies.
• Erase the red ink as quickly as possible.
• Maintain democracy.
• Rebuild with deadlines and a steady hand.
PROMESA might need to be revised. At a minimum, though, Congress must scrub the numbers before the wintry ill winds of the 2018 off-election begin blowing.
When he met Caribbean leaders Tuesday, Mr. Trump said that federal costs this hurricane season had “thrown our budget a little out of whack.”
Well, to be blunt: He, Congress and we ain’t seen nothin’ yet.
• Deborah Simmons can be contacted at dsimmons@washingtontimes.com.
• Deborah Simmons can be reached at dsimmons@washingtontimes.com.
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