Testifying at a House Natural Resources Committee hearing on November 7, Natalie Jresko, Executive Director of Puerto Rico’s Financial Oversight and Management Board, said that the island’s government could run out of money by the end of the year if it does not receive an “unprecedented” infusion of Federal aid.
The hearing, “Examining Challenges to Puerto Rico’s Recovery and the Role of the Financial Oversight and Management Board,” focused on the Oversight Board’s role in Puerto Rico’s immediate and long-term recovery from Hurricane Maria.
The board, created by the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), signed into law in June 2016, was tasked with overseeing Puerto Rico’s debt restructuring and procedures for approving critical infrastructure projects.
In May 2017, the board filed for the equivalent of bankruptcy protection, declaring that the U.S. territory was “unable to provide its citizens effective services” because its economy was being crushed by $74 billion in debts and $49 billion in pension liabilities. The hurricane escalated the island’s financial chaos into a humanitarian crisis, bringing with it widespread power blackouts, closed businesses, reduced tax revenues, and a fleeing population.
In the wake of the hurricane devastation, the board’s mandate “to achieve fiscal responsibility and access to the capital markets” became more complicated. The Natural Resources Committee hearing memo stated:
“With the devastation and humanitarian crisis brought on by Hurricanes Irma and Maria, the role of the Oversight Board must be reexamined and clarified, as necessary. As the Oversight Board’s powers were constructed to address the fiscal crisis of Puerto Rico and not the humanitarian crisis caused by hurricanes, new powers may need to be legislated to maximize the Oversight Board’s response.”
In October 2017, Congress approved, and President Trump signed, an emergency aid measure permitting the Federal Emergency Management Agency to allocate $5 billion in disaster aid to Puerto Rico.
For background reading on Puerto Rico, see the May 1998 issue of Congressional Digest on “Puerto Rico Political Status,” covering the debate over Puerto Rican statehood.
