In a shift away from previous legislative gridlock, Puerto Rico lawmakers moved quickly this month to pass tax increases and spending reductions to help address severe budget problems. But analysts say they have yet to see any positive reaction in prices for the commonwealth's barely investment-grade debt.
In the past two fiscal years, Puerto Rico legislators and the prior administration battled over annual general obligation bonds bills, holding up borrowing plans for months. In spring 2006, when then-Gov. Anibal Acevedo Vila, a member of the Popular Democratic Party, and lawmakers failed to reach agreement on how to deal with a deficit, the government shut down all non-essential services for two weeks after it ran out of money and eventually had to borrow funds from the Government Development for Puerto Rico.