Rossell- Says Oversight Board's Austerity Risks Breaking the Law

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Puerto Rico Gov. Ricardo Rossell- suggested Tuesday that the federal Oversight Board's plans for austerity may be against federal law.

In a statement sent from the governor's office, Rossell-'s chief of staff William Villafañe said that "The Fiscal Supervision Board officials cannot act outside of the law that created the body. If the board were to force the implementation of a fiscal plan that affects people's essential services, it would be acting contrary to the PROMESA law."

The complaints mark an escalation of tensions between the island government and the federal board appointed last year to oversee fiscal and economic policies as Puerto Rico tries to restructure nearly $70 billion of bonds.

"The board is warned that it must act in conformance with the law," Villafañe continued.

"The commitment of Governor Ricardo Rossell- is to achieve economies that allow government efficiency, doing more with fewer expenses, without affecting essential services to the people and without laying off public employees," Villafañe said.

Villafañe also criticized a statement by the board's new interim executive director, Ram-n Ruiz Comas. According to the El Vocero news web site, Ruiz Comas told WKAQ 580AM on Tuesday morning that if Rossell- didn't present an acceptable fiscal plan by the end of February, the board would provide its own and the plan would be considered the legally valid plan.

Villafañe responded: "To make expressions prejudging a fiscal plan proposal that the board has not yet seen demonstrates on the part of the board improvisation and lack of a collaborative attitude for the benefit of the Puerto Rican people."

Rossell- met with U.S. Rep. Sean Duffy – an author of the Puerto Rico Oversight, Management and Economic Stability Act – in San Juan on Monday morning. On Tuesday Villafañe said, "The board must be aware that the federal congress will supervise the board." He went on to say that when the governor presents a fiscal plan Congress will be aware of the way the board evaluates it.

Duffy told Rossell- that Duffy is available to amend PROMESA to ensure that the board treats Puerto Rico fairly, according to a governor's office press statement. Duffy didn't respond to a request for comment.

Villafañe's complaints and warnings extend tensions between the board and local government. Even before the governor took office in January, a Rossell- official complained that the board was seeking a $2 billion cut in spending. On Feb. 13 the governor rejected the board's claimed right to review bills before they are submitted to the Puerto Rico legislature.

On Jan. 18 the board sent a letter to Rossell- stating that spending cuts and/or tax raises equaling 44% of the general fund would have to be made in the next 18 months. At its Jan. 28 meeting board chairman José Carrion for emphasis said twice that some governor-proposed changes to the board's Jan. 18 proposals may be OK, "as long as the ultimate fiscal plan is based on solid savings and revenue projections, a once and done approach, and not simply on hope or predictions that various changes will generate more revenues in the future."

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