• The San Juan Daily Star

On day 2 of hearings, judge hears from citizens who oppose POA

U.S. District Court Judge Laura Taylor Swain

By The Star Staff

On day two of confirmation hearings for Puerto Rico’s plan of adjustment on Tuesday, Title III Judge Laura Taylor Swain heard pleadings from citizens who staunchly opposed confirmation of the plan to take the island out of bankruptcy.

On Monday, the first day of hearings, bondholders and creditors spoke against and in favor of the plan that would restructure some $33 billion in debt and over $50 billion in pension liabilities.

Not all of the citizens cited to appear Tuesday showed up for the hearing, and Swain ended it early in the afternoon. Puerto Rico filed for bankruptcy in 2017.

Today, the judge will hear the testimony of members of the Financial Oversight and Management Board for Puerto Rico and expert witnesses that will help her determine if the plan can be confirmed.

According to the oversight board, the plan is a “historic opportunity” for Puerto Rico to reduce the commonwealth’s outstanding debt by almost 80%, to $7.4 billion. The plan includes a base contribution to a pension reserve trust of a minimum of $175 million per year. If in any given year the certified fiscal plan as of the effective date of the plan projects a primary budget surplus exceeding $1.75 billon, the base contribution to the pension reserve trust would rise to 50% of that projected surplus. In addition, the government would contribute to the pension reserve trust for 10 years.

After opening arguments from the oversight board and other proponents as well as opponents on Monday, Swain heard from the public on the second day.

The first speaker identified herself as a retired widow and U.S. citizen. She said she “vehemently” opposes confirmation of the plan as it will directly affect citizens for decades in a catastrophic way. She pointed out that a large amount of the budget has been committed to bondholders and little has gone for public schools, the police department, and other general functions needed to get the Puerto Rican government running.

“Put yourself on the right side of history,” she told the judge.

A second speaker, a member of Puerto Rico’s women’s movement, argued that the proposed plan puts profit before people. She said her mother is a retired public servant who lives on a $500 monthly pension.

Since 2017, that pension has nearly dissolved, she said. Despite the assertions about pension payments in the plan, she said she is concerned about how her mother’s pension will be affected going forward. She also noted few resources for schools and the police. The debt adjustment plan is not expected to impact pensions lower than $2,000 a month.

The third person similarly highlighted that essential services such as education and healthcare are not being properly taken care of by the government. She said her daughter is one of the students who voted in favor of a strike at the University of Puerto Rico because she is afraid that Puerto Rico will lose its chance for education in the future.

Another speaker who took her turn before a midday break stated that she has worked for Puerto Rico’s Department of Education for 20 years. She said the system does not work and employees are not compensated fairly. The government’s mismanagement has caused the current debt problems, she said.

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