Former Puerto Rico Governor to PJM: ‘Dramatic Change in Public Policy’ Hurting Island
Former Republican Puerto Rico Gov. Luis Fortuño said a “dramatic change in public policy” under his successor has worsened the island’s financial situation.
“As you know, I’ve been very careful not to criticize my successor but certainly there was a major shift in fiscal policy, the market didn’t take it well, the rating agencies didn’t take it well and fiscal policy or any change in fiscal policies may have consequences, and in this case it did,” Fortuño said during an interview with PJM about Puerto Rico’s financial situation.
Democratic Gov. Alejandro García Padilla, who unseated Fortuño in the 2012 election, recently said Puerto Rico’s $72 billion is not payable.
“There is no other option. I would love to have an easier option. This is not politics, this is math,” García Padilla said.
In 2008, Fortuño was elected the first Republican governor of Puerto Rico since 1969. He previously served as Puerto Rico’s non-voting member of Congress. Fortuño endorsed Mitt Romney in the 2012 presidential election and was floated as a potential vice presidential candidate. Fortuño told PJ Media he is supporting former Republican Florida Gov. Jeb Bush for president.
Fortuño said he chose to reduce the size of Puerto Rico’s budget to avoid a financial crisis. During his term, Fortuño said he was close to balancing the budget after eliminating more than two-thirds of the deficit.
“My policies required tight budget controls. We slashed expenses by 20 percent, and in his case he [García Padilla] expanded their budget significantly. When the market and the rating agencies reacted negatively, instead of sitting down with the market players and with the rating agencies to go over the details in a transparent way, he actually said he would sue them,” Fortuño said.
“This is two years ago, so things didn’t go well and as a result of a number of decisions that were made. All I can say is, I wish things were different, but elections bring about changes. In this case, it was a dramatic change in public policy at home and we were moving in the right direction. We were not out of the woods yet.”
In the last 10 years, Fortuño said the island’s economy was in “negative territory” except in 2011 and 2012.
“I’m convinced it was a direct result of our pro-growth policies. That was the only window of economic growth in the last 10 years,” he said. “In the last 30 months, the economy has tanked. Fiscal policy has an effect on economic results.”
Fortuño, a partner at Steptoe & Johnson LLP in Washington, said the debt crisis could have been avoided.
“My family lives down there. I wish them well but I am deeply concerned with the situation and I only hope they will get out of this one,” he said.
PJ Media asked Fortuño if he thinks Republicans will be able to make limited government and spending restraint a positive message in the 2016 election.