Puerto Rico Gov. García Padilla - May 2016 Porker of the Month
On May 2, 2016, the Commonwealth of Puerto Rico officially defaulted on a $370 million bond payment, the third such default since August 2015. Gov. García Padilla’s tax-and-spend policies helped push the island’s debt to $72 billion, along with $46 billion in pension liabilities.
After fiscally conservative Gov. Luis Fortuno was voted out of office, Gov. García Padilla began reversing his predecessor’s efforts to stabilize Puerto Rico’s fiscal situation. He proposed a massive new $783 million spending package and raised sales taxes by 64 percent, from 7 percent to 11.5 percent, all while stating, “I can assure you that Puerto Rico will not default. Puerto Rico will pay our debts. It is a constitutional obligation. But for me it is also a moral obligation.”
On February 7, 2014, Moodys downgraded Puerto Rico’s bond rating to “junk” status. As the decline continued, Gov. García Padilla refused to even provide fiscal audits for two consecutive years. On June 28, 2015, Gov. García Padilla backed out of his previous assurances and glibly admitted, “The debt is not payable. There is no other option.”
He then set out to not only allow two defaults to occur in the months that followed, but on April 6, 2016, he signed into law a one-year moratorium on debt payments. Gov. García Padilla defended the moratorium and the continued defaults as necessary to be able to maintain basic services, while conveniently neglecting to mention that the government would continue to provide “free” electric power to local communities, which has been used to build and power such “basic services” as a recreational ice rink.
CAGW President Tom Schatz said, “Puerto Rico’s debt crisis was exacerbated by Gov. García Padilla’s reckless tax and spending agenda, and now the island is suffering the consequences. Puerto Rico should make every effort to stabilize its fiscal situation by implementing pro-growth policies and reversing the destructive growth of the state bureaucracy. To avert a taxpayer bailout of the island, Congress must act on the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), which includes essential measures such as a financial control board that can put Puerto Rico’s fiscal house in order.”
For hastening Puerto Rico’s descent into fiscal calamity and refusing to honor its debt obligations, CAGW names Gov. Alejandro García Padilla its May Porker of the Month.
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Citizens Against Government Waste is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government. Porker of the Month is a dubious honor given to lawmakers, government officials, and political candidates who have shown a blatant disregard for the interests of taxpayers.
Tags: Puerto Rico, Gov. García Padilla, CAGW, May 2016, Porker of the Month To share or post to your site, click on "Post Link". Please mention / link to the ARRA News Service. and "Like" Facebook Page - Thanks!
Posted by Bill Smith at 4:00 PM - Post Link
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