Puerto Rico's debt crisis and economic decline have hammered the island's citizens as the government slashed spending to free up money for bond payments, a
"With a poverty rate already at an alarming 45%, the island's austerity budget is quickly turning its debt crisis into a full-fledged humanitarian disaster," the report from the advocacy group Hedge Clippers argues. Citizens are bearing the brunt of the crisis, according to the report, as the government looks to save money on health care, legal services, pensions and education.
The report, "Puerto Rico: Pain & Profit," was released Tuesday, the day after Gov. Alejandro García Padilla said in an annual speech to the legislature that he had already cut government spending by 22% in his first three years in office, and that he would give priority to paying police, teachers, firefighters and nurses over making a debt payment due in May.
García Padilla, pleading for help from U.S. Congress for authority to restructure the island's $70 billion of public bonds, has said the debt is unpayable unless the economy improves or the debt can be restructured.
Some people with connections to the island in a teleconference for the report called for federal help. U.S. lawmakers last week appeared to be leaning toward the idea of a federal oversight board for Puerto Rico that would be authorized to tackle the commonwealth's debt, pension, and economic crises through a broad restructuring.
Hedge Clippers is supported by a coalition of labor unions and community groups working against income inequality.
According to the report, the commonwealth government cut the island's Medicare funding by 11% in January.
Additional cuts are expected to the island's equivalent of Medicaid, Mi Salud, in the next two years. About 45% of residents rely on Mi Salud. The program could run out of grant money at the end of 2016, which could trigger dropping 900,000 people from the program.
The general crisis has hit the island's hospitals and community health centers hard, the report states. The island's only children's hospital cut its budget by 14% in the last two years.
In response to government budget cuts, Puerto Rico Legal Services, which serves poor people, was forced to lay off 56 of its 288 employees.
In the teleconference, current and former Puerto Rico residents talked about the crisis's impact on them and their families.
Yulissa Arce told about her grandmother who worked as an elementary school cafeteria worker for 27 years. After the government's reform of its pension system her grandmother's monthly pension of $400 has been cut nearly in half, forcing the older woman to choose between paying for food or for medications.
Arce said her grandmother was lucky because she had other family members to support her, while some seniors have no one.
Julio Lopez-Varona lives in Connecticut after leaving Puerto Rico seven years ago. His parents live in Puerto Rico. His father provides legal services for Puerto Ricans to travel to the states as agricultural workers. However, he will be retiring soon and he worries that the legal services program won't replace him, leaving no one to provide the service.
When his father retires he will rely on Social Security and what his wife, Lopez-Varona's mother, receives in a Puerto Rico government pension. Given the pension system's underfunding, Lopez-Varona is concerned that there won't be enough money for his parents.
Cruz Cortez works as a special education teacher in Puerto Rico. Because of the budget crisis, Cortez's classroom lacks materials and she worries whether her pay will appear each payday. Puerto Rico residents have been experiencing increasing taxes even as salaries have fallen.
