The Puerto Rican Debt Crisis: Tax Breaks Offered to Rich While Austerity Measures Imposed on Poor

Democracy NowThe Obama administration recently warned Puerto Rico faces a humanitarian crisis unless Congress takes steps to address its crushing debt. The White House wants lawmakers to approve bankruptcy protection for the U.S. territory, expand Medicaid and impose a control board to oversee Puerto Rico’s finances.

We speak to Rafael Bernabe, a professor, sociologist, historian, politician and a leading voice of the left in Puerto Rico. He ran for governor in 2012, representing the emerging Working People’s Party in Puerto Rico.


AMY GOODMAN: This is Democracy Now!,, The War and Peace Report. I’m Amy Goodman, with Juan González.

JUAN GONZÁLEZ: Well, Puerto Rican officials appeared before the Senate to push lawmakers to allow the U.S. territory access to Chapter 9 of the Bankruptcy Code. Puerto Rican Governor Alejandro García Padilla has said the territory’s debt of more than $72 billion is not payable, and he outlined a five-year plan to address the debt crisis. That plan includes raising tuition at the University of Puerto Rico, cutting investment in healthcare and contracting for-profit companies to run public road and ports. In return, the plan calls for debt restructuring that would require hedge funds and other creditors to voluntarily accept reduced payments. Padilla called on the hedge funds to come to the negotiating table.

GOVERNOR ALEJANDRO GARCÍA PADILLA: [translated] Now, the most important conclusion from this plan is that even if we impose all the measures in it, it would not be sufficient to meet the needed equilibrium. The massive public debt of Puerto Rico is an impediment to growth. That’s why the time is now that the creditors come to the table and share the sacrifice.
AMY GOODMAN: Thousands of public sector workers have protested against Governor Padilla’s austerity plan.


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