Fed­eral team heads to eco­nom­i­cally trou­bled Puerto Rico

The Washington Times Daily - - Business - BY DAN­ICA COTO

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.

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