Puerto Rico's Governor Alejandro García Padilla. (YouTube, screenshot)
Caribbean, Latin America: Week in Review, Puerto Rico

Puerto Rico Submits Budget With $674 Million in Cuts

May 21, 2015 By Staff

Top Story — Puerto Rico’s government submitted a budget request on Wednesday of around $9.8 billion, representing austerity cuts of some $674 million as the U.S. territory continues to face a harsh financial crisis after eight years of economic recession.

Struggling under the weight of $72 billion in public debt, the island’s Governor Alejandro García Padilla decided not to announce the budget on television, as has been tradition, but instead presented the bill after the legislature had recessed. In addition to setting aside $1.5 billion aimed at paying off Puerto Rico’s massive public debt, the cuts reportedly also include plans to close some 95 schools and 20 public agencies in an effort to reduce costs.

The budget proposal, which calls Puerto Rico’s economic situation a “historic fiscal crisis,” comes after massive protests last week over proposals to slash $166 million from the University of Puerto Rico’s budget — cuts that have since been rolled back after lawmakers agreed on a proposal to raise the sales tax from 7 percent to 11.5 percent.

Puerto Rico has faced years of austerity measures amid its continuing financial crisis, which saw, among other measures, the laying off of more than 20,000 public workers in 2009. The island’s government recently attempted to file Chapter 9 bankruptcy due to the growth of public debt.

Puerto Rico alone is prohibited from filing Chapter 9 bankruptcy as a territory under U.S. law. However, the island territory’s Resident Commissioner Pedro Pierluisi — a non-voting member of U.S. House of Representatives — has introduced a bill in Congress that would allow the commonwealth to do exactly that. If allowed to declare bankruptcy, Puerto Rico’s $72 billion in public debt — accounting for around 70 percent of the islands GDP — would make its bankruptcy filing the largest in U.S. history.

Headlines from the Western Hemisphere

North America

  • At least 10 people were killed and 20 injured in a gunfight in the southern Mexican state of Guerrero, a day after authorities announced they would investigate the reported disappearance of 15 people from another town seized by vigilantes.
  • The accused Sinaloa Cartel enforcer known as “El Chino Ántrax” said in a U.S. court on Wednesday that he helped move cocaine and marijuana into the United States, for which he was arrested in the Netherlands in 2013 and later extradited.


  • The United States and Cuba meet on Thursday for the fourth round of talks since the Nov. 17 announcement that the two countries intend to restore diplomatic relations.
  • Former Haitian Prime Minister Laurent Lamothe, who was forced out of office in December, has officially registered to enter the upcoming presidential race.

Central America

  • Guatemala’s central bank chief was arrested on Wednesday, the latest political casualty of a probe into a corruption scheme that has already brought down a vice president and brought calls to resign against President Otto Pérez Molina, whose own personal secretary was also targeted by an arrest warrant on Wednesday.
  • Nicaragua’s government on Wednesday barred a French cartoonist with the satirical magazine Charlie Hebdo from entering the country, although reasons were unclear.


  • The Exxon Mobil oil company on Wednesday said it has made a major oil discovery off the coast of Guyana in waters claimed by Venezuela, a finding sure to add to a bitter disagreement between the two countries over the disputed maritime territory.
  • At least twelve people were injured in Lima on Tuesday after a police unit focused on evicting squatters clashed with members of an informal settlement on the outskirts of Lima, where they lived alongside an Incan burial ground.
  • Colombians are celebrating the rescue of an 11-month-old baby from a mudslide that killed 78 people on Monday, but the authorities say it is unlikely anyone else has survived the disaster.

Southern Cone

  • Manuel Contreras, Chile’s former secret police chief under Dictator Augusto Pinochet, was handed a 15-year sentence on Wednesday — bringing the total years to which he has been sentenced for human rights abuses to 505 years.
  • The body of Brazilian journalist Evany José Metzker, known for reporting on corruption and who was allegedly working on a story about underage prostitution and narco-trafficking, was found decapitated on Wednesday, with his hands tied behind his back.
  • The decision by two Argentine judges to reduce a pedophile’s sentence because his six-year-old victim had already been victimized before the pedophile attacked him and for allegedly displaying “transvestite conduct” has sparked an outcry in the South American country, with many calling for their impeachment.