President Donald Trump wants to cut off federal aid still going to Puerto Rico in the wake of Hurricane Maria one year ago, citing concerns about the island’s political leadership and the money being used instead to pay off the island’s massive debt.
Axios first reported the move on Monday, noting that “White House officials have told congressional appropriators and leadership” of the plan.
The Axios report cited sources who said the plan was spurred on by an Oct. 23 Wall Street Journal article that said that “Puerto Rico bond prices soared … after the federal oversight board that runs the U.S. territory’s finances released a revised fiscal plan that raises expectations for disaster funding and economic growth.”
“Sources with direct knowledge told me Trump concluded — without evidence — that Puerto Rico’s government was scamming federal disaster funds to pay down its debt,” Axios national reporter Jonathan Swann wrote. He also cited another source who said the move was based on misinterpretation of the article in question.
However, Swann acknowledged that other sources gave him a more vague — and very evidence-based — reason for the move.
“He was unhappy with what he believed was mismanagement of money,” an aide said.
While Congress has taken steps to ensure that the money isn’t being used to directly pay down debt, Trump tweeted he believes the money is being used for “other obligations.”
The people of Puerto Rico are wonderful but the inept politicians are trying to use the massive and ridiculously high amounts of hurricane/disaster funding to pay off other obligations. The U.S. will NOT bail out long outstanding & unpaid obligations with hurricane relief money!
— Donald J. Trump (@realDonaldTrump) October 23, 2018
“The people of Puerto Rico are wonderful but the inept politicians are trying to use the massive and ridiculously high amounts of hurricane/disaster funding to pay off other obligations. The U.S. will NOT bail out long outstanding & unpaid obligations with hurricane relief money!” he tweeted Oct. 23, the same day as the Wall Street Journal article.
So, as far as the White House is concerned, more hurricane recovery money to Puerto Rico is out of the question. But whether that means the money will actually stop remains to be seen.
In its report confirming the Axios account, CNN noted that the future of Puerto Rican relief funds will likely be decided before Democrats take over the House of Representatives in January.
“While there are no talks to cut funds that have already been appropriated, a White House aide said negotiations have focused on keeping Puerto Rico relief funding out of a supplemental spending bill that would fund relief efforts in parts of the South that were ravaged by hurricanes this year,” CNN reported.
“Talks over stopping future funding for Puerto Rico come as lawmakers look to avoid a government shutdown when temporary spending bills expire in early December. The funding fight could be the last of Trump’s presidency waged by a Republican-controlled Congress, as Democrats have an incoming majority in the House.”
The Axios writer seems to be confident that the only source of the president’s belief that Puerto Rico’s government is using the money to pay down the debt is the Wall Street Journal article, which was the Axios source claims misinterpreted.
I suppose any publication can only know what its sources tell it regarding the president’s thinking, but I’m still going to wait and see on that one.
In 2017, for instance, Sinclair Broadcast Group investigative journalist Sharyl Attkisson, reporting on the 2016 Zika virus outbreak on the island, said Puerto Rico Gov. Ricardo Roselló “told us that narrative had something to do with the serious fiscal crisis Puerto Rico has been fighting in recent years.
Some saw Zika, he says, as a way to get precious funds from U.S. taxpayers. If that was the goal, it worked. Of 1.6 billion tax dollars the US devoted to the Zika fight, the CDC says more than 47 million dollars was sent to Puerto Rico.”
“I think it was a narrative that was trying to build up also, that we can get some additional funding for Puerto Rico. The reality is, I think it came back to bite us, because if you establish that narrative and … we lost tourism,” Roselló said.
It could just be that Roselló is, in fact, a very powerful version of the mayor from “Jaws,” concerned about the tourism dollars at all costs. Congress, as previously noted, did implement safeguards in Maria funding to stop aid for Maria from being used to finance the island’s Brobdingnagian debt.
(Puerto Rico filed a form of bankruptcy in 2017 after finding itself unable to pay down $123 billion in debt it had accrued via a law that allowed the United States territory to raise money via tax-free bonds, The New York Times reported.)
Beyond any concerns regarding the debt, however, there’s also the island’s profoundly broken political system, a system which ensured much of the money spent on Hurricane Maria relief was used inefficiently.
In August, trailers full of relief supplies 11 months old were discovered in the parking lot of a government facility. Reports of red tape greatly diminishing the efficacy of the response weren’t difficult to find. Certain elected officials on the island, meanwhile, seemed more interested in fighting Trump and raising their own profile than dealing with the fallout from the storm. (San Juan Mayor Carmen Yulín Cruz comes immediately to mind.)
While there were certainly federal agency failures on the island, those can reliably be fixed. Puerto Rico’s political system can’t be, at least in the short term. Whether the money is being used to pay off debt or not — and, as Axios notes, we haven’t seen evidence of that yet — political mismanagement can certainly be proved. This is a situation where drastic steps need to be taken.
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