WASHINGTON – Treasury Secretary Jack Lew and Department of Health and Human Services Secretary Sylvia Burwell are urging Congress to pass legislation to help Puerto Rico before the commonwealth is forced to confront more serious health care and economic challenges.
Lew and Burwell made their requests in a letter sent to congressional leaders on Tuesday that was meant to "underscore the need for additional legislation early in this [congressional] session to address the economic and fiscal crisis in Puerto Rico. The commonwealth is struggling with nearly $70 billion in debt and at least $46 billion in unfunded pension liabilities.
PROMESA, the law Congress passed last summer to help Puerto Rico, is an example of "important progress achieved to date with bipartisan support," the two said, but added that "the work is not done."
The letter mainly focuses on the need for Congress to pass legislation that would avert a "Medicaid Cliff" for the territory in April and implement an Earned Income Tax Credit to incentivize employment. Puerto Rico, which is set to lose a large amount of Medicaid funding it had been getting from the Affordable Care Act, would face an "imminent shortfall" in health care funding that could leave up to 900,000 Americans without coverage if Congress does not act soon, Lew and Burwell wrote.
While the Congressional Task Force on Economic Growth in Puerto Rico, created under PROMESA to analyze challenges in Puerto Rico and propose federal solutions, only recommended studying the possibility of an EITC on the island, Lew and Burwell said an EITC would be a "powerful driver to bolster Puerto Rico's future."
"Our analysis of the situation over the last several years demonstrates that an EITC would be the most effective and powerful tool" to address structural challenges like the high unemployment and lesser participation in the formal economy, they wrote.
Lew and Burwell also said it will be important for Congress to consider solutions like an expanded Child Tax Credit, continued authorization for Treasury to provide the commonwealth technical assistance, reliance on data in benchmarking economic growth, and initiatives to incentivize small business development.
