Puerto Rico’s future in limbo as disputes break out over funds
In late September, just over a week after winds of 155 mph flattened homes and struck down power lines and more than 30 inches of rain inundated parts of Puerto Rico, a leader of the recovery efforts with the Army Corps of Engineers offered his blunt assessment of the damage.
“This is a massive undertaking, one in which I don’t think we’ve undertaken before in terms of this magnitude,” Col. James DeLapp told CNN. The closest thing he could think of by way of comparison: “When the Army Corps led the effort to restore ... electricity in the early stages of the Iraq war in 2003 and 2004.”
It took years and tens of billions of dollars to rebuild Iraq, where DeLapp was a commander. And now it’s going to take that kind of effort to remake Puerto Rico after Hurricane Maria. Congress has approved $6 billion to help the island.
“Without unprecedented levels of help from the United States government, the recovery we were planning for will fail,” Natalie A. Jaresko, executive director of a board created by Congress that oversees the commonwealth’s finances, told the House Natural Resources Committee last month. A week later, the Puerto Rican government asked for $94.4 billion in additional aid — $33 billion more than Texas requested for its hurricane recovery.
When the White House released its latest funding request Nov. 17 — $44 billion in all — only a small amount in direct aid was designated for Puerto Rico. The administration said in its letter to Congress that it is awaiting estimates on damages from Puerto Rico and the U.S. Virgin Islands before providing more money. But it also said that for the first time that Congress should waive restrictions on reconstruction so Puerto Rico can be built to a better standard than before the storm.
As the funding dispute continues, Puerto Rico is struggling to restore power and drinking water, and buckles under a $74 billion debt that has left it unable to pay for nearly anything. Meanwhile, there are many in Washington who are looking at the near-total devastation on the island as a once-ina-lifetime opportunity to transform the U.S. territory in a fundamental way. They are pushing not just for an improved electrical grid or sturdier buildings, but also for a business-friendly, free-market tax haven that would be a boon for the U.S.
In late October, House Speaker Paul Ryan, R-Wis., went to the American Enterprise Institute, the conservative-leaning Washington think tank. There, in a private talk, he turned to Puerto Rico, and he explained that he wanted to see the island transformed into the “Singapore of the Caribbean,” according to Andrew G. Biggs, a resident scholar at AEI who was told of the comments and later disclosed them at a public forum.
That term was coined by John Paulson, a hedge fund manager who bought hotels and property in Puerto Rico. In 2014, he predicted that a law allowing U.S. investors to pay little or no tax if they moved to the island would spur an influx of money. That prediction hasn’t panned out.
Biggs wholeheartedly endorses the idea of reinventing the island, and is no mere scholar at AEI. He is also a member of the Financial Oversight and Management Board for Puerto Rico — the body created by Congress in 2016 to oversee the island’s disastrous finances. He said he’s spoken with congressional staff members, who ask: “How come we don’t have Singapore of the Caribbean?” His response: “We’re working on it,” with the warning that such changes won’t happen overnight.