Severe Budget Cuts Loom As Puerto Rico's Debt Crisis Continues

The financial crisis in Puerto Rico is putting a damper on the holiday season, as more budget cuts are coming. There is talk of shutting down basic services like schools and hospitals.

MICHEL MARTIN, HOST:

Let's go to Puerto Rico for our next story. The Commonwealth is still mired in debt to the tune of nearly $70 billion. A federal oversight board is working on a plan to restructure at least some of that debt, but that could mean severe budget cuts. There's talk of shutting down such basic services as schools and hospitals, a prospect that could surely cast a cloud over Christmas for many island residents.

So we thought this would be a good time to check in on Puerto Rico. Luis Trelles is a producer for the podcast Radio Ambulante. He joins us from San Juan to talk about how residents are coping. Luis, thanks so much for joining us.

LUIS TRELLES, BYLINE: Oh, thank you. Thank you, Michel.

MARTIN: So you've been covering the debt crisis over the past year. Could you just talk a little bit about the plan that's being discussed over the summer? As people will probably remember, Congress passed a law putting in place this federal oversight and management board. Can you just tell us a bit more?

TRELLES: Exactly. The oversight board recently started to operate here. It's met three times now, and they recently announced for the people of Puerto Rico that they can expect deep cuts to the government in the coming year. And not only that, but government pensions might be on the table as well. So people are concerned.

MARTIN: Can you tell us a little bit more about how conditions are there now? Are people feeling the effects of this debt crisis in any tangible way?

TRELLES: Yes. Yes, they are. It's been a very hard year for Puerto Rico. It's been one bad news after the other in terms of the economy, in terms of austerity measures and the debt crisis. And so I talked with Teresa Garcia (ph). She's a retired chemist. She's in her 70s. She's very concerned about what's going on, and when I talked to her recently, this is what she told me.

TERESA GARCIA: (Speaking Spanish).

TRELLES: And what she's saying here is that she has definitely been affected because she doesn't receive what she used to get paid by the government. It's been cut down by about a third. And her husband is a diabetic, and he's been having trouble sleeping at night, you know, how economic worries have a tendency to creep up on you. And she's just concerned for herself and for her husband as well.

MARTIN: I understand that, though, the cost of services is actually rising. I wanted to know, first of all, how is that possible? And secondly, how are people like Teresa Garcia coping?

TRELLES: It's getting more expensive to live in Puerto Rico definitely. Gas prices are up. Electricity has usually been very high, and it's getting - the cost of it is getting higher. And people are feeling it. Teresa Garcia - she and her husband have really cut down on anything that is not basic household expenses.

MARTIN: So many people look forward to Christmas at this time of year. What does Christmas look like in San Juan in the middle of all this?

TRELLES: Well, the holiday season is very important. Usually in Puerto Rico people take it seriously. They look forward to it. But this year, it's been different. There's a tense calm that has settled over the island. People are expecting more cuts to come in the coming year. In previous years, you could see Christmas lights and decorations all around, but there's been none of that this year. And almost no one is decorating their house in part because of the rising power bills. But what's really interesting is that she just doesn't see that Christmas spirit this year and that she's not feeling it either.

MARTIN: What lies ahead? Could you just give us some sense of what is coming in the coming months?

TRELLES: Well, the oversight board has taken control of the island's finances, and they have the power to renegotiate some of that debt. But as part of that process, they will be looking for more and deeper austerity measures, so there's a wait-and-see attitude, and people are expecting that something better will come, but they're also bracing for what's ahead.

MARTIN: That's Luis Trelles. He's a producer for NPR's Spanish language podcast Radio Ambulante. Luis, thanks so much for speaking with us.

TRELLES: Thank you, Michel.

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