GOV. GARCIA PADILLA’S RECORD SHOWS FISCAL AND ECONOMIC FAILURE
Sustained Economic Decline, Pension Shortfalls, Job Losses & Brain Drain
- GDP shrank by almost 2% in 2014
- 63 plants closed in 2014
- Lowest labor force participation rate in the Western Hemisphere at 41%
- 14% unemployment rate
- The Economist predicts that Puerto Rico will be the eight-worst performing economy in the world this year
- Cost of living is 13 percent more expensive than the U.S. mainland
- Pension fund is only 7 percent funded
- Nearly 100,000 Puerto Ricans have left the island since Governor García Padilla took office in 2013
Government Development Bank: Broke and Unregulated
- The GDB operates in the shadows, outside the regulatory authority of the FDIC, SEC or the Federal Reserve
- Experts call the GDB the Puerto Rican Government’s “Piggy Bank” and a “Black Box”
- Billions in unsustainable debt liabilities, with plans to borrow more
Emulating Argentina
- The Debt Enforcement and Recovery Act repudiates billions in debt owed to investors—including many Puerto Ricans—and eviscerates the rights of bondholders
- This Argentina-style treatment of bondholders was a factor in the downgrade of the Island’s bonds to junk status
- Hired the same lawyers as Argentina to carry out its anti-business agenda
Erosion of the Rule of Law
- Refuses to honor the rulings of the island’s judicial system, thus jeopardizing the livelihood of more than 1,000 employees of Doral Bank that live and work on the Island
- Law 66—the Fiscal and Operational Sustainability Act—enables the Puerto Rican Government to cancel contracts unilaterally with private businesses
The Way Forward: A Financial Control Board
- Members of Congress have expressed grave concerns about the direction Governor García Padilla and his administration are taking Puerto Rico
- To ensure American taxpayer’s are not left holding the bag, to restore economic opportunity and ensure contracts are respected, it’s time for Congress to institute a financial control board for Puerto Rico
- In the 1990’s, such a board successfully oversaw the District of Columbia