Trump And The Senate Need To Quickly Restore Financial Oversight To Puerto Rico

Trump And The Senate Need To Quickly Restore Financial Oversight To Puerto Rico

This month, a dozen prominent fiscal conservative organizations called for maintaining and enhancing oversight of U.S. taxpayer dollars in Puerto Rico. Groups as diverse as Grover Norquist’s Americans for Tax Reform, Heritage Action, the National Taxpayers Union, the Council for Citizens Against Government Waste, and Freedom Works wrote President Trump asking him to reappoint members of the Puerto Rico Oversight Board as soon as possible. The president is reportedly getting ready to do just that.

What would cause these taxpayer guardians to come together on this? Back in 2017, a Republican Congress passed and President Obama signed a law called “PROMESA” to help get the U.S. territory of Puerto Rico’s fiscal and debt house in order. Part of that law established a Puerto Rico Oversight Board to ensure that the territory’s governor and legislature cleaned up their acts, cut spending, and implemented government best practices and transparency.

In the last several years, Puerto Rico has taken some steps in that direction, but much more work remains to be done. For example, the board now has to approve a fiscal plan every year before the governor and legislature can pass a budget. This plan requires a consistent method of public accounting, puts records online for public viewing, and more.

PROMESA also empowered the Puerto Rico Oversight Board to manage the crushing debt that Puerto Rico’s various government and quasi-governmental agencies have incurred over many decades of fiscal mismanagement. Cutting deals between creditors and debtors is one of the most important powers the board has. Notably, conservative groups on the letter were on both sides of the PROMESA debate, but they are united in believing now that a Puerto Rico without an oversight board is far worse than a Puerto Rico with one.

In between PROMESA and now, Puerto Rico was rocked by two major hurricanes. In response, Congress has appropriated billions of dollars in aid. Given that Puerto Rico is just recently standing up better fiscal controls and accountability, now is the time when taxpayers need the Puerto Rico Oversight Board doing the job Congress gave them to do.

Unfortunately, the First Circuit Court of Appeals ruled earlier this year that President Trump must re-appoint, and the U.S. Senate must confirm, members of the Puerto Rico Oversight Board. With the board in limbo, and perhaps soon to sunset entirely, Puerto Rico’s old backroom fiscal profligacy has started to reassert itself.

Gov. Ricardo Rossello and the legislature have begun passing laws that run contrary to the intent of the Oversight Board, and if the board goes away entirely Puerto Rico will be back in the mess that necessitated PROMESA in the first place. For example, in March Rossello withdrew a labor reform plan he had agreed to with the oversight board—a withdrawal closely timed to the First Circuit’s destablizing ruling.

In response to all this, conservative leaders in Washington have called on President Trump to re-appoint the Puerto Rico Oversight Board, and for a speedy Senate confirmation of these appointments. The U.S. Senate recently moved to reduce the number of post-cloture debate hours for sub-Cabinet executive appointments from 30 to just two hours. There’s no reason the Senate cannot move quickly on these appointments, assuming the White House sends over the appointments to the Senate this week, as reports indicate.

Failure to do this will be a disaster for both taxpayers and for the people of Puerto Rico. The 3 million people living in the U.S. territory of Puerto Rico are American citizens, and they deserve a local government free of cronyism and corruption. We wouldn’t tolerate that in places like Louisiana, the District of Columbia, or Rhode Island, and we should not tolerate it in Puerto Rico.

The Puerto Rico Oversight Board is necessary corrective to decades of fiscal mismanagement. It needs to get back to work, if for no other reason than to make sure taxpayer dollars Congress has sent are used for their intended purpose.

Ryan Ellis is the president of the Center for a Free Economy, a 501(c)(4) non-profit in the Washington, DC area focused on free market tax, budget, and health-care policy. For more than a decade, Ellis was tax policy director at Americans for Tax Reform. Ellis is an IRS Enrolled Agent and has managed a tax preparation small business since 2002.
Photo

"Puerto Rico"by kwilms is licensed under CC BY-NC-ND 2.0

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