Federal team heads to economically troubled Puerto Rico
SAN JUAN, PUERTO RICO | The Obama administration is sending a team of federal officials to help Puerto Rico manage an economic crisis that has spooked investors as the U.S. territory braces for its eighth year of recession.
The team will be composed of officials from the Departments of Education, Health and Human Services, and Housing and Urban Development, as well as the Environmental Protection Agency, officials said.
Officials will travel to Puerto Rico starting in December to work with the U.S. territory’s government on how best to maximize federal funds in those areas to help boost its economy. The officials will work in an advisory capacity, making sure federal money available to Puerto Rico is being taken advantage of and is being appropriately administered. No additional federal funds are planned beyond current allocations.
Formation of the team follows recent speculation that Washington might step in to help the Caribbean territory’s government as it struggles with $69 billion in public debt and a 13.9 percent unemployment rate, higher than any U.S. state.
The island’s general obligation bonds have been hovering at just above nearjunk status.
Former Puerto Rico House Speaker Jenniffer Gonzalez said she considers the move as a type of receivership.
“It shows the lack of trust that the federal government has concerning the capacity of the current administration over economic and fiscal matters,” said Ms. Gonzalez, a representative affiliated with the pro-statehood New Progressive Party.
While Gov. Alejandro Garcia Padilla did not respond to requests for comment regarding the announcement, his chief of staff Ingrid Vila rejected Ms. Gonzalez’s comments.
“There is no federal takeover of Puerto Rico,” she said. “Our economic plan is working, and we are continuing to work through the next phases of our plan, which includes tapping the Obama administration for advice on how we can maximize our federal resources, so that we can grow the Commonwealth’s economy.”
The U.S. administration official stressed that the federal government routinely has conversations about similar initiatives with governors, mayors and county leaders across the U.S., noting there’s a current initiative called “Strong Cities, Strong Communities” in which federal teams work inside city halls to encourage economic growth.
The team was created by a presidential task force that has previously worked with Puerto Rico on issues related to its political status. President Clinton created the task force in 2000 to analyze Puerto Rico’s status, but President Obama’s administration expanded its scope to make recommendations on policies affecting areas such as education, health care and economic development.
The task force includes members from every Cabinet agency and issued its last report in March 2011.