CNE report warns shifting federal policies threaten Puerto Rico’s recovery
Funding cuts and trade tariffs could undermine health care, education and disaster reconstruction.
Puerto Rico-based think tank Center for a New Economy (CNE) has released a new policy brief warning that recent changes in federal policies could significantly impact the island’s ongoing economic and social recovery.
The report calls attention to three critical areas at risk: disaster recovery funds, Medicaid funding and public education.
“Federal funding has been essential to rebuilding Puerto Rico’s infrastructure, supporting its health care system and ensuring educational opportunities for its residents,” said Sergio M. Marxuach, CNE’s policy director, noting the gravity of potential reductions in federal support. “Any cuts to these resources would directly affect the island’s most vulnerable communities and jeopardize the progress made in recent years.”
Disaster recovery funds remain a major concern. Puerto Rico has received billions in federal assistance following devastating hurricanes, earthquakes and the COVID-19 pandemic. However, uncertainty over whether obligated funds might be rescinded casts doubt on vital, ongoing reconstruction efforts. Any interruption could significantly delay or halt recovery projects, threatening the island’s ability to rebound fully.
Similarly, Medicaid funding, which provides critical health care access for approximately 1.5 million low-income Puerto Ricans, faces potential reductions. Given the island’s reliance on federal assistance to sustain its Medicaid program, any cuts would severely strain an already fragile health care system, worsen fiscal challenges and limit residents’ access to essential medical services.
Education funding is also vulnerable, as Puerto Rico’s public schools rely heavily on federal allocations totaling nearly $2.4 billion.
“Any reductions could jeopardize the future of its students,” Marxuach warned.
Cuts to these funds could compromise the quality of education, leading to long-term detrimental effects on the island’s social and economic prospects, he said.
The policy brief also addresses potential economic repercussions from recent shifts in U.S. trade policies, specifically newly imposed tariffs.
Enrique Figueroa, a research associate at CNE, explained the risks Puerto Rico faces due to its heavy dependence on imports. The island currently imports diverse products, including $72 million worth of potatoes from Canada and nearly $26 million in beer from Mexico. Tariffs on such items could increase consumer prices and disrupt local supply chains.
“Given the deep interconnection between Puerto Rico and federal policy, the island must remain vigilant in safeguarding its interests,” Marxuach continued. “A change in federal priorities could have a disproportionate impact on Puerto Rico’s recovery and on the delivery of essential services, exacerbating existing challenges and delaying progress.”
Meanwhile, Carlota García-Encina, a principal researcher from Spain’s Real Instituto Elcano and a professor of International Relations, provided insight into how shifting U.S. policies affect Europe. She stressed the importance of clearly defining strategic alignment and realistic objectives in relations with the U.S. under new policy directions.
