Thursday, January 28, 2010

Los Fondos Federales! (The Federal Funds)

President Obama's decision to freeze spending on some domestic programs, in order to trim the burgeoning U.S budget deficit, does not bode well for Puerto Rico. Although the island is not a state, as a U.S territory, it does receive a considerable amount of federal money (including nearly $6 billion in stimulus funds in 2009). Much of these funds are used in areas such as health care, infrastructure and education. The local economy and government see federal funds as a panacea. The standard of living in Puerto Rico would certainly be much lower without it. Some local economists have been warning on the dangers of depending too heavily on money coming from DC though. Instead of relying on federal funds, Puerto Rico should restructure and create a more dynamic economy.

Nevertheless, one of the key figures in making sure that the island gets a piece of the pie is the Resident Commissioner, who serves as a non-voting member in the U.S House of Representatives, Pedro Pierluisi. The inclusion of Puerto Rico in the healthcare reform bill is something which Mr. Pierluisi has been actively seeking. Yesterday, I came across the following article in the El Nuevo Día: "Freno en las asignaciones federales discrecionales" (translation: "Brakes on Federal Discretional Assignations"). The article lists a number of federal programs, such as the $2 billion Nutritional Assistance Program, which are unlikely to receive an increase in funds. At a time when the U.S is facing a national debt in the trillions, the Puerto Rican government needs to be more savvy in terms of stimulating its economy and stop looking to Washington as its life raft.

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