A5
THE ASTORIAN • SATuRdAy, JuNE 1, 2019
PRO-CON
Did US shortchange
Puerto Rico on disaster aid?
AP Photo/Gerald Herbert
Destroyed communities are seen in the aftermath of Hurricane Maria in Toa Alta, Puerto Rico, in 2017. It resulted in a near-total shutdown of the U.S. territory’s economy.
PRO: US way too stingy in
helping Puerto Rico recover
from Hurricane Maria
CON: US sending billions
more to Puerto Rico than to
Texas, Florida and Louisiana
W
W
ASHINGTON — The
ference in a church in San Juan, on
recent restructuring of part
Oct. 3, 2017, was hideously symbolic.
of Puerto Rico’s debt —
An estimated 3,000 people died
bonds backed by sales tax revenue
from the storm, many of them from
— will not leave the island’s econ-
lack of access to medical care that
omy with a sustainable debt, unless its could have been provided with a
other creditors give up vastly more.
proper response to the disaster. Elec-
tricity was only fully restored almost
They will fight this outcome, and
a year later.
also fight to get as much of the hurri-
cane relief money as possible in their
And for the same reasons, Puerto
pockets.
Rico still faces an unsustainable debt
Here is a scandal: Puerto Rico has
burden. Nobel Laureate economist
a Federal Oversight and Management
Joseph Stiglitz succinctly stated the
Board (FOMB) created by the U.S.
crux of the problem last month:
Congress and appointed by the presi-
“The U.S. government explic-
dent of the United States, which is in
itly said because Puerto Rico was our
charge of its finances.
colony, we will not allow you to ...
Its budget, financed by Puerto
adopt your own bankruptcy law ...
Rico’s taxpayers, is $1.5 billion over
but as a colony we have decided that
five years, or $300 million a year.
our bankruptcy law won’t cover you
How much money is that rela-
either... And it’s a moral outrage.”
tive to Puerto Rico’s economy? Well,
The board seems willing to help
if it was the U.S. economy, it
Puerto Rico’s creditors with
would be more than $85 bil-
cuts in public spending and
lion dollars a year.
needed services, while making
To be clear: Its management
over-optimistic assumptions
board is not a government,
about future economic growth,
but just a board that examines
thus allowing more money to
and projects the government’s
go to debt service.
MARK
finances.
Puerto Rico was already
WEISBROT
Imagine the U.S. Congres-
stuck in an unusually long eco-
sional Budget Office with its
nomic decline — also result-
own budget of $85 billion a
ing in large part from its colo-
year. Its actual annual budget is $50.7 nial status — before the devastation
of Hurricane Maria.
million.
In August of 2017 it had already
The vast majority of the FOMB’s
suffered a lost decade, going without
budget, some $1.1 billion, goes to
economic growth since 2005. Its pov-
advisers and consultants. And there
are serious potential conflicts of inter- erty rate was 58 percent, about three
est among the board itself.
times that of the 50 states.
How can this scale of corruption,
And the FOMB approved an aus-
terity program that forecast a second
overseen by the U.S. Congress, even
lost decade — no economic growth
happen?
through 2024. An economic decline of
It’s because Puerto Rico is a col-
ony of the United States. Puerto
this duration is extremely rare.
Ricans are U.S. citizens but they have
The board has a new plan that is
no voting representatives in Congress. more optimistic, but even less realis-
tic than the old one. There is a serious
Yet they are bound by its decisions,
risk that Puerto Rico will again get
and those of the executive branch.
caught in a downward spiral of auster-
For the same reasons, Puerto Rico
ity to pay for unsustainable debt ser-
was vastly unprepared when Hurri-
cane Maria hit the island on Sept. 20,
vice, more emigration and continued
2017.
economic decline.
And the U.S. government’s
As what amounts to a colony of the
response to residents’ emergency
United States, this is way too high a
needs was painfully slow and
price for Puerto Rico to pay.
negligent.
Mark Weisbrot is co-director of
A video of President Donald Trump the Center for Economic and Policy
tossing rolls of paper towels as if they Research, a progressive think tank in
were puffy basketballs at a press con- Washington, d.C.
ASHINGTON — August
blamed paperwork, unions, bad roads,
and September of 2017 were
downed power lines and a lack of truck
tough months for several
drivers.
coastal states and U.S. territories. Hurri-
Months later FEMA responded
cane Harvey clobbered Texas and Lou-
to criticism by asserting, “An ideal
isiana. A few weeks later, Hurricane
response to any disaster is one that is
Maria devastated Puerto Rico and the
federally supported, state managed and
Virgin Islands.
locally executed.”
In response, Congress provided sig-
FEMA’s efforts build on and are sub-
nificant disaster relief — though not as
ject to “the capacity of the state, terri-
torial, tribal and local governments.”
quickly as one might hope. Some think
It was a polite way of saying that the
Puerto Rico has been shortchanged. The
agency didn’t get the “state management
numbers tell a more nuanced story.
and local execution” it needed.
To begin with, Washington has allo-
cated $42.3 billion in federal disas-
Finally, while no one can doubt
ter relief for Puerto Rico, according to
Maria’s devastation, Puerto Rican offi-
cials may be exploiting it to obscure their
the Federal Emergency Management
own failures and siphon more money
Agency’s “spending explorer” tracking
from Washington.
website.
In short, Puerto Rican officials have
That’s 42% of disaster relief appropri-
ated for states and territories — and that
adopted former White House chief of
does not include some $17 billion in the
staff and Chicago mayor Rahm Eman-
uel’s now-famous motto: “You
new disaster relief package mov-
ing through Congress.
never want a serious crisis to go
By contrast, Texas was allo-
to waste.”
cated $25.8 billion, Florida $8.1
Puerto Rico has long
billion, and Louisiana $2.9 bil-
embraced the high-tax, bloat-
lion, according to FEMA.
ed-government and gener-
ous-welfare state being pro-
One can claim $42.3 billion is
posed by so many Democratic
MERRILL
not enough — and Puerto Rican
officials are doing exactly that — MATTHEWS presidential candidates. That
approach has impoverished the
but it certainly is a lot, and much
island and run off businesses and
more than other hard-hit states.
high-earners.
Not all of the allocated funds have
The island’s unemployment rate is
been distributed. Government relief
8.7 percent, compared to 3.6% nation-
agencies go through a process — this
wide. Nearly half of the population is
is the government, after all — both to
ensure fairness and to limit fraud, though on Medicaid. And the government is the
island’s largest employer, about 20%
emergencies can initiate an expedited
of the workforce — down from 26% a
process.
decade ago.
Importantly, FEMA was already con-
sumed with Harvey’s aftermath when
Last year, the Government Account-
ability Office criticized “the Puerto Rico
Maria hit, which may have slowed the
government’s inadequate financial man-
response. People and resources were
agement and oversight practices,” noting
strained. Government can be slow to act
that “Puerto Rico has roughly $70 billion
in the best of times — and this was far
in outstanding public debt and $50 bil-
from the best of times.
lion in unfunded pension liabilities and,
Secondly, Puerto Rico’s location,
topography and inadequate infrastructure since August 2015, has defaulted on over
$1.5 billion in debt payments.”
created their own set of challenges.
These are the same Puerto Rican offi-
As National Public Radio reported
cials who managed the Maria crisis.
about a week after the disaster, “at the
Puerto Rican politicians and their
port of San Juan, row after row of refrig-
erated shipping containers sit humming.
defenders see the catastrophe as a way
They’ve been there for days, goods
to get even more money from Washing-
ton. Or, as Rahm Emanuel put it, “It’s an
locked away.” One shipping company
opportunity to do things you think you
had more than 3,400 commercial crates
could not do before.”
at its terminal. At other ports “stranded
Merrill Matthews is a resident scholar
crates total an estimated 10,000.”
at the Institute for Policy Innovation.
People on the ground in Puerto Rico