AMY GOODMAN: I’m Amy Goodman, on the road
in Chicago. Juan González is in New York. JUAN GONZÁLEZ: We go now to Puerto Rico,
which filed for a form of bankruptcy protection last week, seeking to restructure $123 billion
in debt and pension obligations, in the largest local government insolvency in U.S. history. The move is likely to slash money for healthcare
and pensions and infrastructure. Over the weekend, the island moved to close
179 public schools. The territory petitioned for relief under
Title III of the PROMESA law, which recognizes that while Puerto Rico is not a state, it
must in some ways be treated as a sovereign. Puerto Rico is legally barred from using Chapter
9, the bankruptcy route normally taken by insolvent local governments. Meanwhile, President Trump has signed a government
spending bill that included $295 million in Medicaid funding for Puerto Rico’s healthcare
system. The island’s governor, Ricardo Rosselló,
spoke to NPR about the public spending cuts. GOV. RICARDO ROSSELLÓ: I made no secret, when
I ran for office, that we needed to reduce the size of government, we needed to be more
effective. And, frankly, just talking about the schools
that are closing, that was part of our proposal a couple of months back. It has nothing to do, really, with Title III. And some of the strategies that will ensue,
we’ve already stated that they’re going to happen. You know, we need to reduce our expenditures
in healthcare, although we don’t want to reduce the access. We really need to reduce the expenditures
in education. And what we’re doing is we’re tackling
the bureaucracy as opposed to education itself. AMY GOODMAN: That’s Puerto Rico Governor
Ricardo Rosselló, speaking to NPR over the weekend. Now, Juan, you’ve been following this news
very closely. You write extensively about it. You’ve given major university lectures about
it. Talk about what’s happened in Puerto Rico. JUAN GONZÁLEZ: Well, I think the thing to
understand is that it’s been nearly two years now since the former governor, Alejandro
García Padilla, announced to the world that Puerto Rico could no longer pay its debts. Congress and the Obama administration spent
months trying to figure out what to do, without actually giving any direct assistance to Puerto
Rico, and finally imposed this colonial control board over the island of Puerto Rico, a board
that consistently meets in New York rather than even on the island of Puerto Rico. And now we finally found out last week that
the control board has reached the same conclusion that Governor García Padilla announced nearly
two years ago, that it is impossible for Puerto Rico to pay all of the obligations it now
owes. And the board made clear that it’s not just
$74 billion—that’s the number now that it has stipulated is the bond debt of the
island—but there’s another $49 billion in pension obligations that the Puerto Rican
government has to its public employees, and it only has about a billion dollars left in
cash in its pension funds, which means the pension funds are essentially bankrupt. And so there’s a total of $123 billion that’s
owed. Now, you’ve got to understand that number. Detroit, the largest previous bankruptcy in
American history, was only $18 billion. This is nine times greater than the Detroit
bankruptcy. And it is a sum of money that is almost impossible
to grab, to understand. And the control board further stated, in a
petition that—when it requested a federal judge to come in, that the island is poised
to lose $850 million this coming fiscal year in federal Affordable Care Act funds, which
means its Medicaid system will be further in crisis. And that the island will lose $16 billion
over the next 10 years as a result of changes in the Affordable Care Act. So, basically, the situation is going—is
going to get worse. So what did the control board do? It said that even if Puerto Rico has more
austerity, which—and the austerity, we’ve already reported on the degree of austerity
that is occurring—that even with all that austerity, over the next 10 years there will
only be, at best, $8 billion left over from annual budgets to pay the bondholders. The bondholders are owed $35 billion over
the next 10 years. So that means the—the board is saying, essentially,
there’s only 25 cents on the dollar available, even with massive austerity, to pay these
bonds off. So, predictably, the bondholders went crazy. They’ve been going to court. And now the control board has asked for—Chief
Justice Roberts did appoint a judge now, Judge Laura Taylor Swain from the U.S. district—Southern
District of New York, who is now going to be the judge in charge of deciding exactly
how much money the creditors get and exactly what happens in Puerto Rico’s future. So this has now gone from a U.S.-appointed
control board now to a federal judge, who essentially is in charge of the economic future
of Puerto Rico and how much the bond—the creditors will be paid. And, obviously, the creditors are challenging
the PROMESA law, which has created this bankruptcy process, as unconstitutional. So there are constitutional questions, since
this law was only passed last June by Congress, that still have to be resolved. We’re looking at years of, years of litigation,
while the economic condition of Puerto Rico continues to deteriorate. And the fundamental issue of that this colonial
situation between the United States and Puerto Rico is no longer viable—it is economically
impossible to sustain—is the issue that will have to be resolved over the coming months. AMY GOODMAN: And finally, Juan, the significance
of almost 200 schools closing in Puerto Rico? JUAN GONZÁLEZ: Well, this—there’s no
doubt that some schools needed to be closed, because Puerto Rico has lost almost 200,000
students. It’s gone down from a high of about over
500,000 to about 300,000 because of the continuing flight of people from the island, especially
young couples with their children. So there’s been a huge drop in the public
school population. However, the level of closing of schools is
unprecedented. And there’s even talk—some of the control
board has been asking for furloughs for teachers, which means—of two days a week—of two
days a month, which means two less days of school for public school children. And in addition to that, the control board
has been asking for about $450 million in cuts to the public university system of Puerto
Rico, which the governor is trying to reduce the level of the cuts and the increased tuitions
that would result from that. So there’s a huge crisis in the educational
system of the island. That’s only going to continue to push more
and more people from Puerto Rico to leave the island. AMY GOODMAN: Well, Juan, we’re going to
link at to all of our coverage of what’s been happening in Puerto Rico
and as well as the student protests in San Juan and different places around bankruptcy,
around the moves that are going on both in Washington and in Puerto Rico. This is Democracy Now!,,
The War and Peace Report. I’m Amy Goodman in Chicago. Juan González is in New York.