The Department of Education, in demolition mode. Federal offices, semi-paralyzed by the threat of massive layoffs. The health care system, already precarious, awaits an abrupt cutback. Assistance plans, such as the PAN, are in question. However, that does not sum up the effects of the enormous hurricane provoked by President Donald Trump, who has antagonized the United States with rivals and allies, now confused; never was the term better applied, in one of the biggest trade wars in modern history.
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Lee este artículo en español.
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What should Puerto Rico do to face this storm?
If we continue with the metaphor, we already know the course of the cyclone: it is coming straight at us. We are used to suffering the onslaught of nature, but this time we require a much more effective preparation due to the complexity of the scenario.
Trump is acting in a brutally practical way. He needs to marshal resources to fulfill his main campaign promise: to reduce the tax burden on large corporations, businesses and American families.
Immediate action compels an urgent Puerto Rico dialogue involving the government, political parties, the private sector, non-profit organizations and those who are mobilized, with or without resources, to make this a better place to live.
The confirmation hearings in Puerto Rico’s Capitol, within the legitimate discussion of each candidate’s credentials, seem to ignore the sense of urgency. As of last Friday, there remained a score of agencies waiting to fill their leadership positions. A lethargy, given the scenario, incomprehensible between the legislature and La Fortaleza. How to manage the new normal in the allocation of federal funds under the designs of Donald Trump? If the right people are not in place, the damage could be greater to our ailing public finances. There are programs in health and education that depend almost entirely on federal funds. Two examples: the Temporary Assistance for Needy Families (TANF) program for people over 65 and people with disabilities is 80% funded with federal resources and the program that supports some 53,000 families living in public housing complexes is 96% funded with resources provided from the federal capital.
Those familiar with the maneuvers being plotted in Washington speak of the so-called “claw back”, which will seek to recover allocated money that has not yet been invested in the projected works. The federal bureaucracy demands a project, its execution and then mechanisms for reimbursement. How much money does Puerto Rico have in this limbo?
The local private sector, always more agile than the government, is already moving its pieces to mitigate the effect of the cuts. The restrictions already in place for the use of the Nutritional Assistance Program (PAN) card have triggered reactions in the management of inventories and product supply.
The tariff war will affect agriculture. Puerto Rico only produces about 15% of what it consumes. Any increase in food prices, due to taxes, would probably be passed on to Puerto Rican consumers, resulting in an increase in the cost of living.
The room for maneuver of the local economy is limited, because Puerto Rico sustains its central structure on income taxes, both corporate and individual, as well as on consumption and property taxes. The latter, let us remember, go directly to municipal coffers. The only way to broaden the revenue base is to promote greater economic activity. This is the great challenge. The government has to bet on the sectors that generate more income: industry and tourism. Here, more long-term visions emerge that encourage hope, far from speculative movements on the definition of status in the midst of the Trump upheaval.
The polarization that has affected Puerto Rico’s politics is a cause for concern and, moreover, represents a bad business at a time when we need to join efforts and create joint work fronts. Although the winds blowing from Washington are uncertain and confusing, we cannot afford to fall into unacceptable immobility. Other states have already taken the initiative, organizing meetings that encourage constructive dialogue to identify local measures to address the decrease in federal funds. They have also established a moral urgency: to protect their health and education plans. Perhaps we could start there, joining forces to ride out the storm at the lowest possible cost.
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This content was translated from Spanish to English using artificial intelligence and was reviewed by an editor before being published.
