Recurring rumors are circulating that the fiscal control board will select José Carrión or Carlos García as its chairman. According to sources, the board is also set to appoint Bill Cooper as executive director of the board. Cooper, Staff Director of the House Energy and Mineral Resources Subcommittee and Senior Policy Advisor for the U.S. House Natural Resources Committee was Chairman Rob Bishop’s (R-UT) point person regarding PROMESA.
If Cooper is selected, his energy background may be highly beneficial because energy continues to be one of Puerto Rico’s largest economic challenges. Last month, during a visit to Puerto Rico, Cooper said, “All debt had to be examined. All debt had to be on the table. Summarily excusing any particular debt would have kept PROMESA from passage,” he also noted that the control board is tasked with establishing claims priorities.
Financial control board to hold first “official” meeting next week in DC
Regardless of the selection of a chair or and executive director, the first official meeting of the recently appointed financial control board for Puerto Rico is expected to take place next week in Washington, D.C. President Obama appointed members to the board on August 31. The panel is expected to approve the Commonwealth’s revised 5-year fiscal plan this month; García Padilla has not yet submitted the plan. The GOP’s appointed board members are Carlos García, David Skeel, José Carrión and Andrew Biggs. The Democratic appointed board members are José Ramón González, Ana Matosantos and Arthur González.
Millstein & Co contract extended
The recently created Puerto Rico Fiscal Agency and Financial Advisory Authority (FAFAA) extended the Commonwealth’s contract with Millstein and Company. The contract, worth $8.86 million, is the first FAFAA contract for the company run by former Treasury official Jim Millstein, who has advised the García Padilla administration on fiscal and restructuring matters during the recent financial crisis facing the island.
Commonwealth says no bond payments to be made in remainder of year
Puerto Rico Office of Management and Budget (OMB) Director Luis Cruz Batista said that the Commonwealth will not pay bondholders for the remainder of the 2016 calendar year. Cruz said that the government’s plan is to focus on paying for “essential services,” and that the financial control board could amend the current FY17 budget to include bond payments.
Congressional Task Force not expected to make big moves before December
The Congressional Task Force on Puerto Rico’s economic development will not be making major policy recommendations by September 15th—the date mandated by PROMESA, the law that created the Task Force. The September 15 update will be less focused on specific recommendations and more on next steps for the work ahead. Members of the Task Force held its first official meeting yesterday and the deadline to submit ideas to the Task Force was extended to October 14th.
Among the most significant proposals being pushed before the group are: Medicare/Medicaid parity, a new federal tax incentive for U.S. manufacturing companies doing business on the island, including Puerto Rico in the Earned Income Tax Credit (EITC), and a 5-year payroll tax holiday for Puerto Rican workers, among other ideas.
Puerto Rico House of Representatives still Speaker-less
The Puerto Rico House of Representatives is still without official leadership, as its interim President has not been able to secure enough votes for the confirmation of a new Speaker.
Economic Activity Index falls
Puerto Rico’s Economic Activity Index (EAI) went down by 1.6% to 123.9 points. According to the latest numbers, non-agricultural employment also fell by 0.2%, while power generation fell 2.1%. Cement sales tumbled significantly for a 23.2% reduction. The bright spot of the EAI was gasoline consumption, which increased by 3.7%. The EAI has been on negative ground since 2013.