US President Donald Trump has accused Puerto Rico's politicians of using "massive and ridiculously high amounts of hurricane/disaster funding" to pay off other debts, and said he would not allow a bailout with relief money.
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"The US will NOT bail out long outstanding & unpaid obligations with hurricane relief money!," Trump said on Twitter on Tuesday without providing evidence.
Trump's tweet came as Puerto Rico's federally appointed financial oversight board on Tuesday unanimously approved a revised fiscal reform plan meant to put the bankrupt island on a path toward solvency, but faced opposition from its elected government for being too strict.
The seven board members voted in favour of the plan even though some raised concerns about its ultimate viability to help Puerto Rico resume fiscal balance and economic growth.
"Frankly speaking, I don't like this fiscal plan," said Ana Matosantos, a board member who expressed concerns over the magnitude of government spending cuts, which she said could "seriously weaken" services to citizens.
As in previous versions, the US commonwealth's revised fiscal plan calls for a range of fiscal and structural reforms as well as stiff reductions in government spending.
In addition to revised data on actual revenues and expenses, the new plan was updated to account for lower levels of migration from the island following last year's Hurricane Maria, as well as an additional $20 billion in federal disaster relief funding. It also imposes more cuts to government spending, which have raised opposition from the island's government.
"This is not a fiscal plan for economic development, this is an austerity plan," Governor Ricardo Rossello said as the board met in San Juan to approve revised fiscal plans for both the commonwealth and the University of Puerto Rico.
The revised plan for the commonwealth calls for a reduction of $US427 million in government spending across agencies for this fiscal year, almost doubling to $US926 million in fiscal year 2020.
Overall, the plan also projects a cumulative $US30 billion surplus during the next 15 years, mainly triggered by the more than $US80 billion in disaster relief funding for the Caribbean island following Maria and Hurricane Irma.
Rossello said that "money will be available to bondholders, but to the detriment of the most vulnerable and our people. This is simply unfair."
Trump said he would not allow a bailout with relief money.
However, both the board's executive director Natalie Jaresko and chairman Jose Carrion immediately rejected the idea that disaster relief funding was being used to pay off debt obligations.
Asked at a news conference on Tuesday about Trump's tweet, Jaresko responded that federal disaster relief funding does not go directly into the calculation of the surplus figures, except for the impact these monies have on the island's economy.
Carrion further stated that the panel has no evidence that the commonwealth government is using disaster relief funds to pay for other purposes than the ones for which they were allocated.
Australian Associated Press
