Oct 6, 2017

The island economy needs massive federal support

From our Expert Voices conversation on Puerto Rico's recovery from Hurricane Maria.

Puerto Rico requires extensive assistance from the federal government, starting with a waiver of matching requirements for FEMA programs. The local economy simply will not be able to generate the necessary tax revenues.

Now is also the time for Congress to pass a long-term waiver of the Jones Act, end the Medicaid policies that treat Puerto Rico differently from states and cap total reimbursement, and issue a Community Development Block Grant for Disaster Recovery to rebuild infrastructure, housing and businesses and implement coastal resiliency programs.

Further down the line, the Puerto Rico Electric Power Authority has to be reformed. As a public monopoly, PREPA is inefficient, subject to political influences in decision-making and governed by the interests of bondholders. It is imperative to promote the development of a smart grid and to modernize the transmission system, in addition to encouraging alternative sources of energy.

Last, Congress should heed the recommendations of its own Task Force on Economic Growth for Puerto Rico: equal treatment for the island under the Child Tax Credit (CTC) program, an extension of the Earned Income Tax Credit and support for business development.

The bottom line: It is time for Congress to act before the humanitarian crisis facing 3.4 million American citizens reaches a point of no return.

Other voices in the conversation:

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