Press Releases

Remarks by Counselor Antonio Weiss on Puerto Rico Before the National Tax Association

(Archived Content)

​As Prepared for Delivery

Thank you for the kind introduction and for inviting me to participate in today’s conference.  Before I begin and in observance of Veteran’s Day, I would like to recognize the veterans in our audience and thank you for your service to our country. 
 
There is another group of veterans who have participated in every major United States military engagement since World War I, our fellow citizens in Puerto Rico.  This long history of service includes the exceptional heroism and gallantry of Puerto Rico’s 65th Infantry Regiment, known as the Borinqueneers, who served in the Korean War.  Since 9/11, more than 25,000 active duty Puerto Rican soldiers have served across all branches of the armed forces, carrying out more than 38,000 deployments.  A recent survey showed that more than half of the Island’s residents have either served in the military or have a family member who has served.  Nine Puerto Ricans have been awarded Medals of Honor. ‎This history of service is remarkable.
 
The commitment of these veterans should remain at the forefront of our minds as we seek to resolve a severe fiscal crisis that has been a threat to the economic security and well-being of the 3.5 million Americans living in Puerto Rico.
 
My remarks this afternoon will focus on the federal government’s response to this crisis, including the passage of the Puerto Rico Oversight, Management, and Economic Stability Act, known as PROMESA.  I will discuss the human impact of the crisis, and the Administration’s legislative plan for arresting it and restoring economic growth.  I will also review the powerful restructuring tools that PROMESA provides and how they can be used to address the Island’s unsustainable debt burden.  I will conclude by reflecting on the important work that remains to be done both in Puerto Rico, through the local government and Oversight Board, and in Washington.
 
THE PROBLEM
 
For many, the problems facing the Island appeared to emerge from nowhere. In reality, Puerto Rico fell into recession in 2006 and its GNP has contracted by 18 percent since then without recovery.  The recession was exacerbated by years of excessive borrowing, as the government of Puerto Rico grew increasingly reliant on deficit financing.  Debt service grew to roughly a third of central government receipts. This past spring, the Commonwealth declared a debt moratorium and was forced to resort to emergency measures to provide sufficient cash to keep essential services running.  Competing claims among the holders of 18 different issuers of Puerto Rico’s $70 billion debt complicated negotiations. Lawsuits flooded the courts. 
 
The fiscal crisis threatened to set off a humanitarian crisis.  More than a dozen hospitals closed floors and curtailed services because the central government and its health care agencies could not pay their bills. 
 
Nowhere is the human impact of the crisis more apparent than in the record rate at which Puerto Ricans are leaving the Island.  2.5 percent of the population left last year in the greatest wave of outmigration since the 1950s.  Many are young, working-age citizens seeking economic opportunity.  As they depart, the population ages, and the future revenue base erodes.