The Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), legislation written by the United States Congress to deal with Puerto Rico's sovereign debt crisis, was released on Wednesday, and it's already drawing criticism.
"We are concerned that the current draft fails to respect democracy in Puerto Rico," stated Eric LeCompte, a United Nations debt expert who advises Puerto Rico's religious leaders on the crisis and is the executive director of the religious development group Jubilee USA, an alliance of more than 75 US organizations and 550 faith communities. "We also need to be certain that we don't balance budgets on the backs of the poor."
Puerto Rico has been a territory of the U.S. since 1898, after the Spanish-American war. It is more than $70 million dollars in debt.
PROMESA will create a five-member board with the power to approve budgets and impose across-the-board spending cuts if Puerto Rico's legislature can't pass an approved budget.
However, Jubilee USA notes that many sectors of Puerto Rico, especially children, already live in austere conditions.
More than half of Puerto Rico's children live in homes that receive government assistance. Puerto Rico cut spending for health, education and took money from pensions to pay its debt. The U.S. territory's only children's hospital, which doesn't have an MRI machine, cut its budget 14 percent over two years, the organization revealed in a statement.
Jubilee USA has recommended a number of solutions to Puerto Rico's debt crisis, including a plan that involves "investing in people," not making them bear the weight of the financial crisis.
"Debt restructuring is critical to ending this crisis," noted LeCompte, referencing a process that would allow Puerto Rico to renegotiate its debts.
"Puerto Rico won't see any economic growth until the debt is brought back to sustainable and payable levels."