SAN JUAN, Puerto Rico — A majority of federal control board members approved new austerity measures for Puerto Rico on Thursday, saying they would help revitalize the economy and create more jobs amid the U.S. territory’s 11-year recession, while the island’s governor fired off a flurry of tweets promising to defy them.
The measures contained within several fiscal plans that will serve as the island’s economic blueprint for the next five years include a 10 percent average cut to a pension system facing nearly $50 billion in liabilities.
Other measures include the closure of prisons, consolidation of dozens of state agencies and significant reductions in government subsidies to Puerto Rico’s 78 municipalities and its largest public university. The board also said Puerto Rico’s government should cut sick leave and vacation pay by half and eliminate a Christmas bonus.
“No one should believe these reforms are being implemented without clear and direct benefit to the people of Puerto Rico,” said Natalie Jaresko, executive director of the board that was set up by Congress. “This will require tough choices and disciplined execution, but the payback is clearly worth it.”
One board member, Ana Matosantos, voted against the plans, saying they cut too deeply and do not provide a realistic path to a turnaround for Puerto Rico’s government.
Gov. Ricardo Rossello disagreed via Twitter while Jaresko was still talking, saying the board doesn’t have the power to implement any austerity measures. The board could go to court seeking to force Rossello to enforce the measures.
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