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Rep. Darren Soto Presents Puerto Rico Recovery Blueprint

Rep. Darren Soto (D-FL) has issued a report with recommendations to help Puerto Rico in four key areas: disaster relief, economic development, debt reform and Medicaid.

The report, based on communications with leaders from Puerto Rico and members of Florida’s Puerto Rican community, is intended to be the Congressman’s recovery blueprint for the U.S. territory.

“Members of the Natural Resources Committee will be coming down to the island to have tours, inspections, and review the current state of Puerto Rico,” he told the West Orlando News. “This fact-finding mission will kick-start the process of hosting critical oversight hearings on the failed disaster relief. Americans including those in Puerto Rico deserve answers and to ensure this never happens again.”

Soto is a member of the Natural Resources Committee, which has jurisdiction over all matters in Congress involving the U.S. territories, and is also the co-chair of the Congressional Hispanic Caucus’ Puerto Rico, Insular Areas Task Force.

Disaster Relief

“We passed $19.9 billion for Puerto Rico disaster relief in May of 2018,” this section of the report begins. “Additionally, federal agencies announced over $30 billion in eligible relief funding for the island. However, the Puerto Rican government has stated it has only received $2.3 billion of the over $50 billion in available federal funds more than a year after Hurricane Maria.”

Not only did Puerto Rico receive significantly less disaster aid than the affected States, but what was promised has not been delivered.

Soto concludes that the money has not been delivered for “nonsensical” reasons. Governor Rossello has claimed that Puerto Rico is being forced to jump through hoops with bureaucratic requirements that are not imposed on the States. Soto says that this is based on feelings that Puerto Rico can’t be trusted with the funds — and that the extra requirements are illegal.

Soto’s plans to solve the problems include three action steps:

  • Holding critical oversight hearings to put pressure on the Administration
  • Passing reforms related to cost sharing, FEMA title recognition, and potentially Sec. 428, among other reforms
  • Filing suit for violation of Impoundment Act and DRRA

Economic Development

Soto takes a historical view of Puerto Rico’s economy, beginning with the loss of small farms in the 19th century. The report claims that the end of Section 936, corporate tax breaks that were of questionable value to the Island, was the beginning of Puerto Rico’s economic recession.

The report also expresses concerns about the 2018 tax reform bill and the Jones Act.

Soto’s action steps in this area:

  • Holding critical oversight hearings
  • Passing reforms to repeal new export taxes, boost agriculture and renewable energy sectors, establish economic opportunity zones, and make potential adjustments to the Jones Act, among other reforms

PROMESA/Debt Reform

The report reminds readers that Puerto Rico lost its ability to declare bankruptcy in 1984, for no clear reason. A Fiscal Oversight and Management Board was put in place as part of PROMESA in 2016. Soto points out that the actions of the board, including a focus on austerity and high operating costs, have been controversial.

Soto’s proposed action steps:

  • Holding critical oversight hearings
  • Passing reforms to amend PROMESA or give Puerto Rico Chapter 9 eligibility in the alternative, require an audit of the debt, amend bankruptcy code regarding bond holder priority status, among other reforms

Medicaid Reform

This section of the report begins by reminding readers of Puerto Rico’s unequal position in Medicaid. “Puerto Rico has a higher poverty rate than any state. If Puerto Rico were a state, the federal government would pay 83% of its Medicaid costs under the current formula. However, as a territory, the island only receives nearly 55% cost sharing from the federal government. Part of Puerto Rico’s large debt is attributed to borrowing to fund its share of the Medicaid Program.”

The report continues, “Medicaid uncertainty and shortfalls have wreaked havoc on their healthcare system: resulting in thousands of patients being left without sufficient access to care, nearly 6,000 of Puerto Rico’s 15,000 doctors leaving the island over the past 10 years, and hospitals left in disrepair due to insufficient funding. Hurricane Maria has exacerbated the destruction of Puerto Rico’s healthcare infrastructure.”

Soto’s action steps in this area:

  • Holding critical oversight hearings
  • Passing reforms to create a sufficient, permanent Medicaid formula for Puerto Rico (and possibly other territories), boost recruitment of doctors to the island, and increase hospital reconstruction funding

Clearly, Soto’s intended next step is to hold congressional hearings on these four primary concerns. Other members of Congress have proposed hearings on some of these issues in the past.

Download Puerto Rico Recovery Blueprint.

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