Archive Blog 2020 Whether you’re a serial investor, high net worth individual (HNWI), or just someone who sees now as a great time to diversify your assets in the face of troubling … [24] These actions were taken in mid- to late March when Puerto Rico was still envisioning lifting strict quarantine and self-isolation protocols on April 12. The measures enacted to date that are most significant for Puerto Rico include: Direct payments (“recovery rebates”) to low- and middle-income families. See “Commonwealth of Puerto Rico Plan for Distribution of Recovery Rebates Enacted by Pub. L. 110-185,” April 8, 2008, https://www.treasury.gov/press-center/press-releases/Documents/pr_stimulus_final_rebateplan.pdf. A federal control board that oversees Puerto Rico's finances filed a long-awaited plan that would reduce the U.S. territory's debt by more than 60 percent and pull the island out of bankruptcy . For a discussion of these provisions in SNAP, see Dottie Rosenbaum et al., “USDA, States Must Act Swiftly to Deliver Food Assistance Allowed by Families First Act,” CBPP, April 7, 2020, https://www.cbpp.org/research/food-assistance/usda-states-must-act-swiftly-to-deliver-food-assistance-allowed-by-families. We are going to see a deployment in expenses due to the entry of federal financial aid, but this rise in demand would not continue," the economist said, stressing that aid is temporary. An email has been sent to with a link to confirm list signup. [11] (Puerto Rico will use the same eligibility criteria as the federal government, providing payments of $1,200 for most adults and $500 for children under age 17, with these payments phasing out at higher income levels.[12]). Would you like to receive our e-Edition every Wednesday? [3] [7] Samantha Washington, “Child Tax Credit and Earned Income Tax Credit Lifted 10.6 Million People out of Poverty in 2018,” CBPP, October 31 2019, https://www.cbpp.org/blog/child-tax-credit-and-earned-income-tax-credit-lifted-106-million-people-out-of-poverty-in-2018. [35] Chuck Marr, Yixuan Huang, and Vincent Palacios, “House Ways and Means Committee Legislation Would Expand EITC and Child Tax Credit,” CBPP, March 2, 2020, https://www.cbpp.org/research/federal-tax/house-ways-and-means-committee-legislation-would-expand-eitc-and-child-tax. We'd love to hear eyewitness Error! The federal EITC is not available to people who live in Puerto Rico, while the Child Tax Credit is only available to families there with three or more children. To reach as much of this population as possible, the federal government should disburse payments directly and automatically (i.e., without requiring the filing of a tax return) to Puerto Rico residents who are beneficiaries of Social Security or certain veterans payments. The declining population, a long-term recession and extensive hurricane damage have left Puerto Rico with a largely poor and elder population, both factors that increase vulnerability to the disease. SAN JUAN, Puerto Rico—Nowhere else in the United States has the recession caused such economic and social upheaval as on this Caribbean island, the home or temporary refuge of 3 million Americans. For instance, the federal government provides Puerto Rico with fixed sums of money — which do not rise automatically when need increases — to finance critical programs such as Medicaid, the Commonwealth’s equivalent of SNAP (known in Puerto Rico as the Nutrition Assistance Program, or NAP), and Supplemental Security Income (known in Puerto Rico as Aid for the Aged, Blind, and Disabled). [34] Moreover, unlike SNAP, NAP doesn’t automatically expand to meet increased need when the economy turns down. A few clouds. racist or sexually-oriented language. The amount available to the Puerto Rico Treasury to distribute will equal the aggregate benefits that would have been provided to residents of Puerto Rico if a mirror tax system had been in effect, as estimated by the U.S. Treasury. [17] CBPP, “Policy Basics: How Many Weeks of Unemployment Compensation Are Available?” April 28 2020, https://www.cbpp.org/research/economy/policy-basics-how-many-weeks-of-unemployment-compensation-are-available#ui-map. The economy is going to be very weak," Negrón added. He opined that the current levels of safety and sanitation will impact several generations, altering consumer behavior and brining new opportunities for business reinvention. [32] Dorothy Rosenbaum, “Latest Coronavirus Response Package Doesn’t Boost SNAP – the Next One Should,” CBPP, March 27, 2020, https://www.cbpp.org/blog/latest-coronavirus-response-package-doesnt-boost-snap-the-next-one-should; and Dottie Rosenbaum, Stacy Dean, and Zoë Neuberger, “The Case for Boosting SNAP Benefits in Next Major Economic Response Package,” CBPP, April 22, 2020, https://www.cbpp.org/research/food-assistance/the-case-for-boosting-snap-benefits-in-next-major-economic-response-package. While the mainland U.S. added millions of jobs following the Great Recession, Puerto Rico never got back on its feet. Starting Sunday, I will basically spend the night in each of the above cities before returning to Puerto Rico. [11] See press release from the Puerto Rico Treasury Department, May 1, 2020, http://www.hacienda.gobierno.pr/sobre-hacienda/sala-de-prensa-virtual/comunicados-de-prensa/gobernadora-vazquez-garced-anuncia-aprobacion-del-plan-de-distribucion-del-pago-de-impacto-economico-de-1200. In Cleveland, we will check my eyes, but I can tell you the surgery went very well. Over the past decade, well over 500,000 residents have moved off the Commonwealth in search of better opportunities — the equivalent of Miami or Atlanta losing its entire population. Cleveland, Chicago, Dallas, Austin, Dallas, and Back Home to Puerto Rico. "Among Puerto Rico’s greatest economic challenges are chronically high poverty, especially among children, and low labor-force participation. The economy likely remained downbeat at the outset of the new fiscal year—which began in July—after economic activity started to contract in March due to the outbreak of the pandemic and regular earthquakes. [31] More funding is needed in Puerto Rico to help families afford food and boost overall consumer spending while the economy remains weak. [38] Chad Stone and Sharon Parrott, “Labor Market Conditions Should Determine Duration, Size of COVID-19 Relief Measures,” CBPP, April 13, 2020, https://www.cbpp.org/research/economy/labor-market-conditions-should-determine-duration-size-of-covid-19-relief-measures. [7] In 2019, Puerto Rico introduced its own, locally funded EITC, which is helpful. [13] See videoconference between Puerto Rico Resident Commissioner Jenniffer González and Puerto Rico Treasury Secretary Francisco Parés, “¿Tienes dudas sobre cómo van a distribuir los $1,200?” El Nuevo Día, May 1, 2020, https://www.elnuevodia.com/noticias/locales/nota/tienesdudassobrecomovanadistribuirlos1200-2565626/. In May 2017, the federal board filed Puerto Rico's bankruptcy, the largest ever in the $3.8 trillion municipal-bond market. The economy is quite weak and I think the aspiration should be to return to the way we were before COVID-19 and the earthquakes," Rivera said. Recession Will Have Ripple Effect On Puerto Rico's Economy, Everything that happens on the mainland has a direct effect on the local economy, Brenda A. Vázquez Colón, The Weekly Journal. [25] For a discussion of fiscal policies effective in fighting recessions, see Chad Stone, “Fiscal Stimulus Needed to Fight Recessions: Lessons From the Great Recession,” CBPP, April 16, 2020, https://www.cbpp.org/research/economy/fiscal-stimulus-needed-to-fight-recessions. 2 Puerto Rico’s population last saw modest increases in the 1990s, and in recent years has experienced accelerating declines. [21] CBPP, “How Much Will States Receive Through the Education Stabilization Fund in the CARES Act?” April 3, 2020, https://www.cbpp.org/research/state-budget-and-tax/how-much-will-states-receive-through-the-education-stabilization-fund. [5] Annie E. Casey Foundation Kids Count Data Center, “Children in poverty (100 percent poverty) in Puerto Rico,” https://datacenter.kidscount.org/data/tables/43-children-in-poverty-100-percent-poverty?loc=53&loct=4#detailed/4/any/false/37,871,870,573,869,36,868,867,133,38/any/321,322. "In 2019 we had moderate growth, but the coronavirus has created gigantic challenges at the trade level, so we will see an increase in bankruptcies, unemployment, and the closure of between 10,000 and 12,000 businesses. In Poor Regions, Easing Virus Lockdowns Brings New Risks, Moderna on Track for Large COVID-19 Vaccine Test in July. U.S. media announced that, according to a survey by the National Association of Business Economics (NABE) made to 45 economists, the U.S. is in a recession and will remain that way during the first half of the year. Puerto Rico has been ravaged by economic recession over the past thirteen years. Be Proactive. [27] Judith Solomon, “Puerto Rico’s Medicaid Program Needs an Ongoing Commitment of Federal Funds,” CBPP, April 22, 2019, https://www.cbpp.org/research/health/puerto-ricos-medicaid-program-needs-an-ongoing-commitment-of-federal-funds. A recession in the United States could affect the exports of manufacturing companies on the island because that is its main market. You have permission to edit this article. The same could happen in Puerto Rico, which has been in a recession for more than a decade, further aggravated by the effect of hurricanes, earthquakes, and COVID-19, with a direct effect on residents and business owners. Yet, Puerto Rico residents do not have access to the same assistance that is available to people facing such challenges in the mainland United States. Puerto Rico has been in recession virtually since 2006, when a federal tax break for corporate income expired, prompting many businesses to leave. [15] FRED Economic Data: Initial Claims in Puerto Rico, updated April 30, 2020, https://fred.stlouisfed.org/series/PRIICLAIMS. Since then last saw modest increases in the fourth quarter of 2006 the above before. Economy along with it email has been sent to with a link to confirm list signup Puerto. 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