For Immediate Release
Friday, April 20, 2018
AFSCME President Lee Saunders Slams Puerto Rico Oversight Board PlanWASHINGTON —
The following statement was issued by AFSCME President Lee Saunders following the release of the federally-appointed Puerto Rico fiscal oversight board’s financial plan:
“The Fiscal Plan issued by the Oversight Board is a betrayal of the people of Puerto Rico. By issuing a plan that relies upon unrealistic projections of economic growth, the Board is condemning Puerto Rico to economic decline for years to come. Ironically, the Board is engaging in the same fantastical thinking regarding Puerto Rico’s economic growth that created the current situation. We call on the Board to reconsider this disastrous decision and develop a plan in the interests of the people.”
Background on the Financial Oversight and Management Board plan:
The new fiscal plan certified by the Financial Oversight and Management Board for Puerto Rico on April 19 is based on unrealistically-optimistic assumptions of economic growth and related revenue collection. Despite the catastrophic damage caused by Hurricane Maria and a projected 12-percent decline in population, the plan purports to generate a six-year surplus of $6.7 billion in part due to severe cuts in public-employee compensation and pensions. Although federal recovery funds will undoubtedly produce higher short-term growth due to the stimulative effect of rebuilding, in the long term the certified fiscal plan will fail to overcome the negative effects of austerity measures and put Puerto Rico on a path to a second restructuring. The anticipated large payouts to creditors and bondholders can only be achieved by reducing assistance to the poor and cutting the compensation of workers. Once Puerto Rico begins to struggle under the certified fiscal plan and the projections are not achieved, a new round of cuts to workers and services will ensue and Puerto Rico will be forced to turn to the PROMESA process again.