CAGUAS, Puerto Rico — Standing at his lottery ticket concession in this town speckled with graceful colonial-era buildings, Félix Muñiz Rivera said the island’s economic meltdown had proved one thing amid all the uncertainty: Puerto Rico’s political leaders, no matter the party, could not be trusted to pull the commonwealth out of the quagmire they created.
“The politicians, red and blue, have stolen this country; they have finished this country,” said Muñiz, 74, who grew up here and helped inaugurate this now half-closed pedestrian mall where he runs his business. “When a patient is sick, he needs medicine. When a patient is in critical condition, he needs intensive care. That’s what the junta is.”
The junta is the name here for the federal control board that could end up overseeing the reboot of Puerto Rico’s economy, chiefly by ensuring that the island repays its crippling $72 billion debt in an orderly way, funds its pensions and balances the budget — steps likely to require layoffs and cuts in services.
The debt stems, in large part, from decades of the government’s spending and borrowing more money than it could pay back, a habit that steered the country into economic collapse and now threatens the public pension system.
But as the House on Thursday takes up a contentious White House-backed bill to establish the independent board, Puerto Ricans are sharply divided over the legislation as they try to decide what is worse: the homegrown leaders whom they feel have failed them or a federally appointed independent board that many distrust.
So while there is widespread backing here for the bill, there is a strong and vocal opposition, including by those elected officials who would be forced to govern with a control board looking over their shoulders, union officials, many young people and artists, and advocates for Puerto Rican independence.
They are among a burgeoning opposition that has grown stronger recently, with some threatening civil disobedience if the measure becomes law. Puerto Rico’s leading candidates in this year’s governor’s race also oppose the bill, known as Promesa, for Puerto Rico Oversight, Management, and Economic Stability Act. Last Sunday, Puerto Rico’s nonvoting resident commissioner in Congress lost his primary, in part because he supported the legislation.
"We are the ones who have to solve this, not the federal government," said Mariana Reyes, 41, a community activist and former journalist who runs La Junta, a burger spot that features music and art in San Juan. "Those chavos" — the money — "for the bondholders, where will they come from: layoffs, pensions, services. What's not fair is not fair."
In their view, the bill would benefit the hedge funds that lent Puerto Rico the money, not Puerto Rico. And they argue that the island’s fate, its laws and regulations, should not be trumped by people who, for the most part, will not be Puerto Rican and will know little about the intricacies of life on the island.
If approved by Congress, the board would be run by seven members selected by President Barack Obama from candidates proffered by Republicans and Democrats in Congress. At least one of the seven members must be a resident of Puerto Rico.
Coursing through the opposition movement is frustration and an infuriating feeling that the federal government believes Puerto Rico incapable of fixing its own problems without paternalistic intervention. It speaks loudly to Puerto Rico’s longstanding, emotionally fraught conflict over its in-between status as a U.S. commonwealth, neither state nor independent country.
Colonia, or colony, is the word most often bandied about here. For the most part, Puerto Ricans on the island, who are all American citizens, simultaneously embrace their ties to the mainland and complain about their stepchild status.
“The message the bill carries is that we can’t handle it; we don’t have the tools,” said Janiel González, 33, an artist who owns a grass-roots gallery in the pedestrian mall, Paseo Gautier Benítez. “If the board was coming to put all the politicians who robbed us in prison, well, let them come. But they are coming to control our money.”
And yet supporters of the bill said controlling where the money goes is exactly the point; political leaders and their appointees have proved themselves unable to handle the job. Without the bill, what is the alternative? More of the same? Allowing a federal judge to decide the lawsuits, which would most likely favor bondholders and not the people of Puerto Rico?
“People want to know where the money goes,” said María Osorio Correa, 61, who has seen her hours at Sam’s Club cut six months ago from 28 to 16 a week, with no benefits. “If the junta comes, the politicians will have to do what the junta says. We are tired of those jackasses.”
Osorio’s son, like so many other Puerto Ricans, left for the mainland several years ago, pushed out by Puerto Rico’s unemployment rate, stagnant job market, widespread crime and high cost of living. Since 2,000, 334,000 Puerto Ricans have left, the bulk in the past five years.
The situation is only expected to get worse. On July 1, Puerto Rico will miss its next debt payment, $2 billion, to bondholders, many of them U.S. citizens. Without the legislation, more lawsuits are bound to follow.
But there are flash points: The board would hold veto power over government officials if their proposals stood to financially hurt the island. The legislation gives the governor the power, unlikely to be used, to reduce the federal minimum wage for young people. And it allows for the sale of Puerto Rican assets.
Some once-ardent supporters, including a Puerto Rican economist who helped draft earlier versions of the bill, are disappointed. Miguel A. Soto-Class, the president of the Center for a New Economy, said the bill’s path to restructuring the debt is overly complicated and does little to develop Puerto Rico’s economy in the long term.
“It could be as good as you can get,” he said. “But if as good as it can get is not going to fix the problem, then what’s the purpose?”
Obama and his administration have been emphasizing in recent days that the legislation, which would also ensure the viability of Puerto Rico’s public pension funds, is critical to the island’s financial health. “He made absolutely clear that there is no ‘Plan B’ here,” said Pedro Pierluisi, the departing resident commissioner, after a meeting with Obama on Wednesday.
But the bill, a result of intense compromise, faces challenges in the House and the Senate. Democrats want to see more done for Puerto Rico’s working class. Republicans are nervous that it does not do enough for creditors, who lobbied vigorously against it.
Sitting at her jewelry kiosk at the pedestrian mall, Sylvette Villafañe-Ruíz said she was torn. But, for her, opening the door to the control board boiled down to this: “It can’t get any worse.”
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