The Puerto Rican government’s economic team is in Washington D.C. this week to “disclose and advance plans to stabilize the government’s finances and revive the island’s economy,” the Treasury Department said Monday.
Treasury Secretary Melba Acosta and Government Development Bank President Javier Ferrer are heading the delegation that is meeting with U.S. Treasury Department, the federal Office of Management and Budget and the President’s National Economic Council members through today.
Through these meetings, to be held in the Eisenhower Executive Office Building of the White House and at the U.S. Treasury Department, Puerto Rico’s economic team seeks to update federal government representatives on Puerto Rico’s fiscal status, and the steps the Gov. Alejandro García-Padilla administration has taken and implemented to “stabilize the local economy and manage government finances, and explore various avenues of collaboration with President Barak Obama’s administration.”
Among other matters, Acosta said she will submit proposals to the federal government to address a debt of about $190 million dating back to the 1970s related to the Cerrillo Dam in Ponce. This debt, contracted and disputed by the Government of Puerto Rico since the 70s, is part of the financial problems the new administration is inheriting, she said.
Since taking over office in January, the government’s economic team has unveiled multiple measures to reduce the government’s structural deficit and revive the economy.
These include measures to straighten out the cash-strapped Commonwealth Retirement System, changes to the systems to increase sales and use tax uptake, the imposition of a fixed 4 percent excise tax to foreign firms, and reducing government budget expenses.
But despite the moves, in the past month, the three major stateside credit agencies — Moody’s, Standard & Poor’s and Fitch Ratings — have downgraded Puerto Rico’s credit status to near-junk status, while sending out severe warnings of future action unless the budget gap is closed and the retirement system is funded.