The newly-appointed politician passed the Puerto Rico Financial Emergency and Fiscal Responsibility Law Sunday, freezing debt payments until May 1. Until then, he is expected to allocate funds to government-run health, education, law enforcement, and infrastructure institutions in a “lockbox” to ensure their payment, Reuters reported.
Rossello took office on Jan. 2, representing the pro-statehood New Progressive Party.
“What this law allows us to do is, based on Puerto Rico’s resources, comply with those who have invested, with those who have believed in Puerto Rico, while denoting that our priority is to pay for essential services and the people’s work,” Rossello said during a Facebook Live announcement.
“As you will see within the coming days, it will be a very powerful instrument to allow the people of Puerto Rico and also the government to restore credibility, but also to maintain the essential services that are so important for our people.”
The bill also allows Rossello to reverse former governor Alejandro Garcia Padilla’s executive actions on debt regulation. Padilla, a member of the pro-commonwealth Popular Democratic Party, issued a moratorium on debt payments last year which was opposed by creditors and bondholders — it granted the Puerto Rican government the option to default on payments.
Rossello’s prioritizing of debt payments contrasts Padilla’s refusal to submit a debt repayment plan. The latter claimed that an April 2016 Moratorium Act gave Puerto Rico the right to cancel parts of its debt.
While many U.S. municipalities have the legal right to declare bankruptcy — which allows for the protection of core services and public assets — Puerto Rico’s colonial status denies it the same option.
Earlier this year, Rossello expressed interest in convincing U.S. President Donald Trump’s administration to consider making Puerto Rico the country’s 51st state.
“The Republican platform is very clear in terms of the status of Puerto Rico,” Rossello said during an interview.
“Having a Republican House, a Republican Senate and a Republican president, there's no excuse for not carrying it out.”
Puerto Rico, referred to as a “commonwealth” by the U.S., has been a colony of the North American country since 1898 after ceding from the Spanish empire. Puerto Ricans currently do not have the right to vote in presidential elections and have no voting powers in the U.S. Congress.
The new legislation will allocate funds to government-run institutions in a "lockbox" while ensuring payment of Puerto Rico's debts.
Puerto Rico Passes ‘Emergency’ Law Regulating $70 Billion Debt
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