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Puerto Rico Debt Crisis Enters Critical Phase

San Juan cruise ship
A cruise ship passes through San Juan Bay. Puerto Rico’s finances have become unmoored. / PR Tourism Co.

Puerto Rico’s debt situation reaches a critical point May 1, the date a $425 million debt payment comes due.  Of course, the island – already spending about one third of its budget to pay debt, at great cost to government services – has no money. It has $72 billion in debt and an economy that will be in recession for 10 years come May, a trend quickly becoming known as “the lost decade.”

Congress has proposed a plan that calls for a financial oversight board, controlled mainly by outsiders, to which Puerto Rico objects, although it looks likely to remain part of the bill since trust between Washington and San Juan has seriously eroded. There are other parts of the bill that Puerto Rico finds objectionable, such as a two-tiered minimum wage (a mostly Republican idea that voters are beginning to see enacted elsewhere, such as Democratic New York).

In recent days the Wall Street Journal and the New York Times each have editorialized in favor of a more tempered proposal, one not so influenced by the hedge funds that bought Puerto Rico bonds at big discount late in the game and are looking for a big payday. Neither newspaper, however, would do away with the financial control board, which would be similar to the one Washington, D.C. labored under for several years. Each paper considers the debt restructuring provision of the bill too lengthy and onerous.

Puerto Rico and Puerto Ricans living stateside have been lobbying for extension of federal bankruptcy laws to Puerto Rico that would be applicable to certain heavily-indebted agencies (not the entire island, as has been misrepresented).

This is where the Florida connection comes in.

The WSJ warned in its editorial, titled “Puerto Rico on the Brink”: “Republicans can do nothing, watch Puerto Rico default and slide into a deep recession while Democrats exploit the issue. Adiós to Florida’s 29 electoral votes and Marco Rubio ’s Senate seat.” About 1 million Puerto Ricans reside in Florida, nearly rivaling the Cuban population.

Cue the NY Times (“Only Congress Can Rescue Puerto Rico”): “If Congress does not act now, Puerto Rico’s financial crisis could drag on for years. The island’s government would have to cut more public services, and more of the island’s 3.5 million people would seek a better life on the mainland.” Over  112,000 Puerto Ricans migrated to the states from the island in the first 10 months of 2015.

Stay tuned.

˜˜María Padilla, Editor

Double-Digit Increase in Puerto Ricans

Palm trees

More than 112,000 Puerto Ricans left the island in the first 10 months of 2015, an all-time record reported in Orlando Latino earlier this week. The next question is, how does this affect Central Florida? And the answer is, it’s too soon to quantify.

Recent figures don’t indicate where Puerto Ricans’ guagua aérea landed, but it’s well documented that Central Florida is the major destination for islanders who buy the one-way ticket looking to escape the island’s sputtering economic engine damaged by 10-year old recession and a fiscal crisis caused by $72 billion in debt.

But it’s a good moment to crunch the latest census numbers dating to 2014 to sketch the impact of the Puerto Rican flight to the tri-county area of Orange, Osceola and Seminole thus far compared with 2005.

                    2005              2014     Percentage Increase      

Orange         115,341             173,669                   50.5%

Osceola         50,334               91,804                    82.4%

Seminole       27,087*              37,731                  39.3%*

*Seminole figures are for 2014 and 2009, the earliest year available.
Source: census.gov

Puerto Ricans comprise 15 percent of the tri-county area, but in Osceola the figure is significantly higher, more like 30 percent, the largest concentration of Puerto Ricans in all of Florida. (The state draws Puerto Ricans from other states as well.)

In 2015,  Florida’s Puerto Rican population soared to over 1 million and today Puerto Ricans nearly rival the number of Cubans in the Sunshine State, thanks to the guaguas aérea that land in Orlando International Airport  each day.

˜˜Maria Padilla, Editor

Another Record Migration Year for Puerto Rico

The San Juan airport. / photo PR Tourism Co.
The San Juan airport, also known as the Luis Muñoz Marín International Airport. / photo PR Tourism Co.

NEW  figures point to another year of record migration from Puerto Rico to the United States in 2015. In the first 10 months of 2015 about 112,500 more people left the island than arrived in Puerto Rico, according to a recent report by Ricardo Cortés Chico in El Nuevo Día, Puerto Rico’s main newspaper.

The figures do not include the last two months of 2015, but even so they already top the 84,000 people who reportedly left the island in all of  2014,  reflecting a stagnant economy and government belt tightening in order to make payments on $72 billion in debt.

The people movement – based on the passenger traffic through the island’s principal airports in San Juan, Aguadilla and Ponce – is believed to be an indicator of migration.

The 112,500 outmigration would indicate that more than 11,000 people are leaving the island each month.

The 2015 migration also equals the entire population of some island towns – combined. The exodus “would be comparable to the nearly complete disappearance of the populations of  Arecibo and Cataño,”  Cortés Chico wrote.

Puerto Rico has reported more outmigration than immigration since 2006, considered the start of an ongoing economic recession.  In fact, the long recession will hit 10 years in May. But beginning in 2011, about 50,000 or more people have left the island each year, accounting for a conservative outmigration of 250,000 in that five-year period, based on Pew Hispanic Research data.  El Nuevo Día‘s report is based on data from the federal Bureau of Transportation Statistics.

Florida is the No. 1 destination for outbound Puerto Ricans, surpassing the traditional Puerto Rican migrant center of New York. In fact, the Florida now counts over 1 million Puerto Ricans, more than any other state, thanks also to the migration of Puerto Ricans from the Mid Atlantic corridor to the Sunshine State. Central Florida has the highest concentration of Puerto Ricans in the state.

PR outmigration 2005- 2014
From January through October 2015, another 112,500 people are reported to have left Puerto Rico for the states. / Pew Hispanic Research 

Puerto Rico continues to negotiate payment of its $72 billion debt with creditors as well as Congress,  where the island is pushing to be included under federal bankruptcy laws. Congress, however, is intent on creating a financial control board to oversee the island’s financial affairs.

Borinqueneers Set to Get Congressional Gold Medal

Veterans of the 65th Infantry Regiment known as Borinqueneers living in Florida (PRNewsFoto/Borinqueneers Congressional...)
Veterans of the 65th Infantry Regiment known as Borinqueneers who live in Florida. / PRNewsFoto/Borinqueneers

Puerto Rico’s Borinqueneers finally will get their due April 13, when Congress will honor the soldiers with the Congressional Gold Medal for their “valor, determination and bravery” during the Korean War in a ceremony on Capitol Hill.

The Congressional Gold Medal is Congress’ highest honor. The Borinqueneers, named for the soldiers of the 65th Army Infantry based in Puerto Rico whose native people called Boriken, fought in every major conflict of the 20th century. The regiment earned a total of nine Distinguished Service Crosses,  250 Silver Stars, 600 Bronze Stars, more than 2,700 Purple Hearts, and 15 Unit Citations for its extraordinary service –  just during the Korean War.

The veterans, now in their 80s and 90s, number more than 1,000 and many live in Florida, where there have been various ceremonies for the Borinqueneers in Central Florida. About 230 are expected to attend the ceremony in Washington, D.C.

They are the first-ever living Hispanics to receive this award. The only other Hispanic to receive the Congressional Gold Medal is the late baseball great Roberto Clemente, who also was Puerto Rican.

The 65th Infantry formed in 1899, shortly after the United States took over Puerto Rico at the end of Spanish-Cuban-American War. It was a racially and ethnically segregated unit, as was the unfortunate custom at the time. Ironically, the award ceremony will take place in the Capitol’s Emancipation Hall.

The Korean War nearly proved to be the regiment’s undoing – as soldiers endured freezing temperatures and near suicidal missions at the Korean-Chinese border.

In addition, Borinqueneers were ordered to shave their mustaches “until such a time as they gave proof of their manhood”; obligated to use separate shower facilities from non-Hispanic soldiers and were prohibited from speaking Spanish under penalty of court-martial, among other indignities, according to the official Borinqueneers site.

The regiment and its veterans are well known in Puerto Rico, but not so much outside the island. In the early 2000s efforts began to tell the Borinqueneers‘ stories. Over 10 years later, in 2013,  Rep. Bill Posey (R-FL), Puerto Rico’s nonvoting delegate Pedro Pierluisi (D) and and later Sen. Richard  Blumenthal (D-CT), among others, pushed the bill that officially awarded the surviving Borinqueneer veterans the Congressional Gold Medal.

˜˜Maria Padilla, Editor