NPC Luncheon with Governor Alejandro García Padilla of Puerto Rico - En Español | National Press Club

Run time: 62 minutes

Governor Alejandro García Padilla of Puerto Rico spoke at a National Press Club luncheon on December 16, 2015.

Click here for the English language (non-translated) version.



NPC Luncheon with Governor Alejandro García Padilla of Puerto Rico - En Español | National Press Club

Community health centers in Puerto Rico could suffer in economic turmoil

Puerto Rico's federally qualified community health centers, which treat a growing number of the island's underserved residents, could be hardest hit by the U.S. territory's continuing financial troubles that are devastating its public healthcare programs.



The centers, which serve nearly 1 in 10 patients on the island, are particularly dependent on Medicaid funding, according to a recent study by the Milken Institute School of Public Health at George Washington University (PDF).



Medicaid accounts for 54% of community health center revenue, as compared to 42% across the U.S.



“We can't buy equipment or contract with employees if we don't have the money in our budget. We have to work with what we have,” said Leyda Nazario, president of the board of directors for the San Juan-based Puerto Rico Primary Care Association, which oversees the island's federally qualified community health centers.



Puerto Rico is struggling with a $72 billion debt crisis and is facing over $3 billion in federal funding cuts, including significant cuts to Medicaid and Medicare, which together serve more than 75% of the island's 3.5 million people.



The island already receives lower Medicaid funding levels than the rest of the U.S., with per capita spending about 70% lower than the national average. Reimbursements to the territory's widely used Medicare Advantage plans are 40% lower than comparable plans on the mainland, according to the study.



Medicare Part A spending for hospital care is also about a third lower than on the mainland, and the program must cover a far greater range of services because Part B coverage for physician services like those provided by health centers is not automatic like it is on the mainland. The study noted 18% of Puerto Ricans were only covered by Part A, and the absence of a Medicare low income subsidy program has put additional stress on the Medicaid program.



The Affordable Care Act provided an additional $5.4 billion in federal Medicaid funding to Puerto Rico between 2011 and 2019, but the island has to come up with $1.8 billion by 2018 for Medicaid or it will have to significantly cut the program.



Community health centers in Puerto Rico would also suffer from expected 11% cuts in payments to Medicare Advantage plans. Roughly 9% of patients who use community health centers have Medicare, most through Medicare Advantage. Medicare Advantage is much more popular in Puerto Rico than in the U.S. because the island leans on it to make up for inadequate Medicare funding. Puerto Rico has a 75% participation rate in Medicare Advantage compared to 32% on the mainland, and 16 out of Puerto Rico's 20 community health centers participate in the program.

Rules differ on the island

Unlike their mainland counterparts, Puerto Rican centers aren't able to benefit from the cost savings that come from physician extenders, because nurse practitioners are not covered by Puerto Rican insurers, and physician assistants aren't allowed to practice on the island. They therefore have a higher average physician-to-patient ratio than mainland centers.



Community health center officials in Puerto Rico say they're also concerned about the sustainability of their clinics if direct funding from agencies like the federal Bureau of Primary Health Care, a part of the Health Resources and Services Administration, isn't expanded.



Alicia Suarez, executive director of the Puerto Rico Primary Care Association, said the grants have allowed centers to expand their services, buy new equipment, expand their hours and invest in information technology. But cuts to already low Medicaid and Medicare funding could be catastrophic, Suarez added.



The White House has said a territorial bailout is not on the table, so activists are pressuring Congress to pass legislation that would allow the territory to file for bankruptcy protection. Presidential candidates have weighed in on this idea, mostly commenting along party lines. The Obama administration has also proposed expanding Medicaid benefits.



The GWU study found that despite all of their troubles, Puerto Rican health centers outperform their mainland counterparts on 10 measures of quality or health incomes, including rates for toddler immunization, Pap testing and colorectal screening, as well as the percentage of hypertensive patients with blood pressure controlled. Leyda believes this stems from the centers' strong investment in education and prevention.



“We have to prove here that we use the money that we receive from them in a very positive way and to increase the quality of life of our patients, Leyda said. “We have to be creative … in providing health services for our population.”



Pedro Pierluisi, Puerto Rico's nonvoting representative in Congress, warns that as U.S. citizens, Puerto Ricans with the means to do so, could fly to the mainland to receive care, putting a strain on the U.S. healthcare system.

Adam Rubenfire

Adam Rubenfire

Adam Rubenfire covers breaking healthcare news and supply chain for Modern Healthcare. His beat responsibilities include capital equipment, group purchasing organizations, food service and general medical supplies. His work has appeared in the Wall Street Journal, Automotive News and Crain’s Detroit Business. He has a bachelor’s degree in organizational studies from the University of Michigan. He joined Modern Healthcare in 2014.

By Adam Rubenfire

Community health centers in Puerto Rico could suffer in economic turmoil

The Fed Raises Key Interest Rate, Potentially Slowing Job Market Growth [Video] * * * * *

The Federal Reserve announced Wednesday that it is raising its benchmark interest rate, putting downward pressure on job creation in order to address long-term concerns about inflation and financial stability.

The central bank’s Federal Open Market Committee decided to raise the target federal funds rate -- or the interest the Fed sets for banks to lend to one another overnight -- one-quarter of a percentage point to a range of 0.25 percent to 0.5 percent.

Fed officials expressed confidence that the job market is finally growing enough that it will soon put upward pressure on prices.

"The Committee judges that there has been considerable improvement in labor market conditions this year, and it is reasonably confident that inflation will rise, over the medium term, to its 2 percent objective," the FOMC said in its official statement.

Speaking at a press conference after the announcement, Federal Reserve Chairwoman Janet Yellen said that if the Fed were to wait much longer, “we would likely end up having to tighten policy relatively abruptly at some point to keep the economy from overheating and inflation from significantly overshooting our objective.” Raising the interest rate abruptly, Yellen said, would increase the risk of pushing the economy back into recession.

Yellen also alluded to fears that keeping the key interest rate at or near zero would deprive the Fed of the ability to respond to "adverse shock" in the economy by cutting interest rates further.

“It would be nice to have a buffer, in terms of having raised the federal funds rate, to a certain extent to give us some meaningful scope to respond” to a downward turn, Yellen added. “That is an important consideration for the committee.”

The federal funds rate is used as a benchmark for interest rates on virtually all credit, including home mortgages, automobile loans and student loans, giving it far-reaching influence over the economy.

The Fed lowers the federal funds rate to boost employment by reducing borrowing costs. It raises rates to slow job market growth, when it believes the country is at or near what it calls full employment -- the level of job creation the economy can tolerate without stoking excessive price inflation.

It's a testament to the depth of the Great Recession and fragility of the recovery that until Wednesday, the federal funds rate had remained at zero to 0.25 percent since December 2008. 

The European Central Bank, by contrast, continues to escalate its monetary stimulus efforts, leading some to worry that the dollar could appreciate in value too much relative to the euro, hurting U.S. manufacturing and creating other risks for the global economy.

Nonetheless, the Fed’s initial quarter-point increase is in itself unlikely to have a major impact. And the widely anticipated move will not come as a shock to investors, who have already priced it into their calculations. But if Wednesday's rate hike lays the groundwork for a series of future increases, it would have much more significant implications for the economy.

The Fed’s FOMC indicated that it will continue to exercise caution. It did not commit to raising rates consistently, saying instead that it would “monitor actual and expected progress toward its inflation goal” before deciding to raise rates once again.

“The Fed is really trying hard to move as slowly as possible so the economy has time to absorb those movements without it having a big economic impact,” said Tara Sinclair, chief economist at the job search website Indeed.com. “They are not putting on the brakes, just giving less gas.”

The Fed is really trying hard to move as slowly as possible so the economy has time to absorb those movements without it having a big economic impact... They are not putting on the brakes, just giving less gas.Tara Sinclair, chief economist, Indeed.com

The central bank can point to steady job growth to justify its decision. The economy has, on average, created 237,000 jobs per month in the past 12 months, bringing the official unemployment rate down to 5 percent.

Yellen rejected the notion that the economic expansion is due to expire because it has already lasted as long as many previous boom cycles.

"I think it’s a myth that expansions die of old age,” Yellen said. “The fact that this has been quite a long expansion doesn’t lead me to believe that its days are numbered."

The failure of job market growth to boost inflation more significantly, however, has prompted some economists to counsel the Fed against raising rates. The price of consumer goods and services, excluding the more volatile costs of food and energy, rose 1.3 percent in the 12 months ending in October -- well below the Fed’s 2 percent target.

Josh Bivens, who studies Federal Reserve policy for the progressive Economic Policy Institute, called an interest rate hike a “mistake” in remarks at a Dec. 1 congressional briefing for that very reason.

Bloomberg/Getty Images

Members of the Fed Up campaign, a coalition of progressive groups opposed to an interest rate hike, demonstrate at the Jackson Hole symposium on Aug. 27, 2015.

Bivens and other, mostly liberal, economists who believe it is too soon for an interest rate hike argue that lackluster inflation is actually a sign that the Fed’s other area of concern, the job market, is not growing fast enough.

"I am against the hike, because to me you hike interest rates when you are trying to cool down an economy that is overheating and threatening to generate wage and price inflation," Bivens said in an interview this week. "There is just no evidence of that in the data. In fact, both wages and prices are growing much more slowly than they should be if the economy is healthy."

Counting people working part time because they cannot find full-time work, and those who have given up looking for work, the unemployment rate is actually 9.9 percent, according to the Bureau of Labor Statistics.

The larger number of job seekers for available job openings, Bivens and other liberal economists argue, helps explain why average wages have grown only 2.3 percent in the 12 months ending in November -- significantly less than year-over-year rates in the months before the recession. Prices will only begin rising in earnest once wage growth accelerates, they assert, which the Fed should allow by leaving rates unchanged.

Yellen acknowledged concerns about the pace of job market growth, agreeing that the official unemployment rate masks ways in which it is still not operating at capacity. She noted the "depressed level" of labor force participation, which includes people who have given up looking for work, and "somewhat abnormal" levels of part-time employment. "Wage growth has yet to show a sustained pickup," she said.

 

But the FOMC, which Yellen leads, said on Wednesday that it is forecasting that inflation will reach 2 percent in the medium term. Fed officials acted now, the committee said, "recognizing the time it takes for policy actions to affect future economic outcomes." 

Yellen addressed the issue of below-target inflation at Wednesday's press conference. "With inflation currently still low, why is the committee raising the federal funds target?" she asked. 

Fed officials believe that low energy prices and a strong dollar are keeping inflation temporarily low, Yellen said.

Sinclair, who also teaches economics at George Washington University, noted that the rock-bottom interest rates can create uncertainty for businesses concerned about when rates will ultimately rise.

“The Fed is working toward predictability and stability overall,” Sinclair said. “Bringing the interest rate back to more historical norms is helpful for companies to make plans.”

Predictability is one reason Mike Brey, president and CEO of the Maryland-based retail chain Hobby Works, said he believes a rate hike now, though painful, may ultimately be better than delaying it.

I feel the exact same way I feel about the economy as I do about the Redskins: I need to see a lot more before I am a true believer.Mike Brey, CEO & president, Hobby Works

“We are enjoying low interest rates and if things continue this way, we’d be seriously looking at opening another store and low rates would really help us,” Brey said. “It seems like [a rate hike] has to happen eventually, though, so part of me wants it to happen very slowly and eventually. My worry is that we do nothing for a while and then suddenly we do a lot.”

This year has been Hobby Works' best since before the recession, Brey said. The store, which has several locations in the Maryland and Virginia suburbs of Washington, increased its payroll 15 percent to accommodate rising demand for its products -- particularly its popular recreational drones.

But Brey said he remains “torn” about the Fed’s decision, because he worries that congressional dysfunction may thwart his business’ progress once again. He had a similarly good run in 2011, but he said Congress’ last-minute government shutdown negotiations that produced the across-the-board spending cuts known as sequestration depressed consumer confidence anew at the end of the year and well into 2012.

Brey said he feels “the exact same way I feel about the economy as I do about" Washington's NFL team. "I need to see a lot more before I am a true believer.”

This story has been updated with additional comments from Janet Yellen.

The central bank's long-awaited decision will hit you in your wallet.

Daniel Marans

The Fed Raises Key Interest Rate, Potentially Slowing Job Market Growth

Nada de negociaciones ocultas sobre Puerto Rico

ALEXANDRIA, Virginia, 11 de diciembre de 2015 /PRNewswire-HISPANIC PR WIRE/ -- La siguiente declaración debe atribuirse a Jeffrey Mazzella, presidente del Center for Individual Freedom (Centro para la libertad individual).

"El Congreso debe rechazar todo anexo al proyecto de ley de gastos generales relacionado con la crisis de la deuda de Puerto Rico.

El pueblo de los Estados Unidos no dio poder a este Congreso para que pudiera usar decisiones políticas de suma importancia como moneda de cambio en negociaciones presupuestarias subrepticias consecuencia de la incapacidad para recortar gastos pródigos. El destino de la economía de Puerto Rico y los precedentes fijados para una solución a su crisis de la deuda son demasiado importantes como para que se decidan en un juego político secreto y apresurado.

Si el Congreso considera adecuado intervenir en Puerto Rico, debe hacerlo a la vista y recorriendo todo el proceso legislativo, después de evaluar minuciosamente la gama completa de opciones de políticas disponibles. Un intento apresurado de aprobar un consejo de control todopoderoso o Súper Capítulo 9 es una traición a la confianza de los electores y el pueblo de Puerto Rico.

El Center for Individual Freedom seguirá monitoreando de cerca esta situación y promoviendo un proceso de resolución transparente que equilibre las necesidades del gobierno de Puerto Rico con los derechos de todas las partes".

SOURCE Center for Individual Freedom

Nada de negociaciones ocultas sobre Puerto Rico

Puerto Rico: $957 Million Due Jan. 1 [VIDEO] * * * * *

Puerto Rico: $957 Million Due Jan. 1

Fitch Maintains Rating Watch Negative on Puerto Rico Debt

NEW YORK--(BUSINESS WIRE)--Fitch Ratings has maintained the Rating Watch Negative on the 'CC' rating for the following Commonwealth of Puerto Rico debt:

--Commonwealth of Puerto Rico GO bonds;

--Puerto Rico Electric Power Authority (PREPA) power revenue bonds;

--Puerto Rico Aqueduct and Sewer Authority (PRASA) senior lien revenue bonds;

--Puerto Rico Sales Tax Financing Corporation (COFINA) senior lien sales tax revenue bonds and first subordinate lien sales tax revenue bonds;

--Employees Retirement System of the Commonwealth of Puerto Rico (ERS) pension funding bonds;

--Puerto Rico Public Buildings Authority (PBA) government facilities revenue bonds guaranteed by the Commonwealth and rated by Fitch;

--PRASA Commonwealth guaranty revenue bonds.

The 'CC' rating indicates Fitch's belief that default of some kind appears probable, with the Rating Watch reflecting the commonwealth's stated intent to restructure its debt in the near term.

The commonwealth continues to seek federal assistance, and numerous proposals are active in the U.S. Congress. These proposals include granting of bankruptcy authorization, financial and bonding support, and increased federal oversight. Fitch will continue to monitor developments at the federal level and evaluate any enacted legislation for its impact on prospects for bondholders.

The recent decision by the U.S. Supreme Court to take up the appeal of lower court rejections of the 2014 restructuring law introduces additional uncertainty, particularly for negotiations with PREPA creditors.

KEY RATING DRIVERS

TAX-SUPPORTED DEBT: The commonwealth's tax-supported bonds (GO & guaranteed, COFINA, and ERS) have been downgraded to the current level as a result of willingness to pay concerns and liquidity challenges. The most recent downgrade on June 29, 2015 was precipitated by public comments made by the governor supporting broad debt restructuring, a strategy the commonwealth has begun to pursue since that time. Although the commonwealth made the decision to make the full debt service payment on GO guaranteed debt on Dec. 1, it did so while at the same time ordering that revenues budgeted to pay debt service on debt of certain public corporations and instrumentalities (none rated by Fitch) may be redirected. Fitch believes that the political environment and liquidity pressures leave all of the commonwealth's debt vulnerable to default until restructuring plans become clearer.

PREPA: On Sept. 2, 2015, the Authority announced that it had reached a restructuring agreement in principle with certain bondholders holding approximately 35% of the aggregate principal amount of bonds outstanding. The proposal would preclude full and timely payment of the power revenue bonds according to the original terms, if approved by the required holders and executed. Although existing agreements with certain creditors may allow the scheduled debt service payment to be made on Jan. 1, 2016, Fitch remains concerned that PREPA's net cash receipts and existing funds on hand are insufficient to meet longer term working capital, debt service and other funding requirements.

PRASA: PRASA's rating is driven by and currently capped at the commonwealth's GO rating given the commonwealth's ability to affect PRASA's operations materially both directly and indirectly. Commonwealth officials have indicated that PRASA may not be part of a larger restructuring of commonwealth debt, citing the fact that the authority's operations are currently self-sufficient. However, Fitch does not believe it is appropriate to distinguish ratings on the commonwealth's debt without greater clarity on the form any restructuring will take. The authority announced plans to come to market with a $750 million transaction in August 2015 but was not successful in selling those bonds. Cash flows have been severely and negatively affected by delays in the financing.

RATING SENSITIVITIES

COMMONWEALTH DECISIONS: Future rating action will likely be linked to commonwealth decisions. As issuer-specific plans become clearer, downgrades to 'C' would be triggered at the point that default appears inevitable. The commonwealth has declared its debt unpayable in aggregate without distinction among its numerous securities. Therefore, at this stage Fitch does not believe that there is sufficient information available to consider default of any of the specific credits that Fitch rates to be inevitable.

Any negotiated resolution would be evaluated for its effect on bondholders. Any restructuring that does not result in full and timely payment of bonds according to the original terms promised, would likely result in a further downgrade to 'C' upon agreement by the required holders and 'D' upon execution.

Fitch's public finance ratings do not address the loss given default of the rated liability, focusing instead on the vulnerability to default of the rated liability.

CREDIT PROFILE

The commonwealth has a complex debt structure including GO, sales tax, guaranteed, and public corporation debt. The $70 billion reported figure for Puerto Rico's public debt includes not only debt supported by commonwealth tax revenues and legislative appropriations but also debt of PREPA and PRASA and other revenue-supported debt that is not the obligation of the central government. GO and GO-guaranteed bonds equal 26% of total public sector debt as reported by the commonwealth and sales tax-backed COFINA debt another 22%. PREPA, with $9 billion of reported debt outstanding, equals another 13% and PRASA only about 5%.

SECURITY

GO & GUARANTEED BONDS are secured by the good faith, credit and taxing power of the commonwealth of Puerto Rico. Strong legal provisions for GO debt include a constitutional first claim on commonwealth revenues, including transportation-related and rum excise tax revenues that are dedicated to specific authorities and other bonds.

PREPA BONDS are secured by a senior lien on net revenues of the electric system.

PRASA BONDS are secured by a gross lien of all authority revenues related to PRASA's combined water and sewer system. In addition, certain revenue refunding bonds and loans granted to address certain regulatory violations are backed by a commonwealth guarantee.

COFINA BONDS have a security interest in and are payable from commonwealth sales and use tax revenues. COFINA is an independent governmental instrumentality of the commonwealth and affiliate of the GDB established by specific legislation.

ERS BONDS are a limited, non-recourse obligation of the pension system, payable from and secured by a pledge of statutorily required employer contributions to the system.

For additional information on Fitch's analysis of the commonwealth credits please see the following releases:

--'Fitch Rates Puerto Rico Aqueduct & Sewer Authority's 2015A Sr. Revs 'CC'; Maintains Negative Watch' dated Aug. 17, 2015;

--'Fitch Downgrades Puerto Rico's GO and Related Ratings to 'CC'; Maintains Rating Watch Negative' dated June 29, 2015;

--'Fitch Maintains Puerto Rico Electric Power Auth's Rev Bonds on Negative Watch' dated Dec. 11, 2014.

Additional information is available at 'www.fitchratings.com'.

Related Research:

--'Fitch: Puerto Rico Appropriation Debt Default Highlights Liquidity Strain & Government Priorities' (Aug. 3, 2015);

--'Fitch: Chapter 9 Extension Would Be a Positive for Puerto Rico' (Aug. 6, 2014);

--'Commonwealth of Puerto Rico' Full Rating Report (March 10, 2014).

Fitch recently published an exposure draft of state and local government tax-supported criteria (Exposure Draft: U.S. Tax-Supported Rating Criteria, dated Sept. 10, 2015). The draft includes a number of proposed revisions to existing criteria. If applied in the proposed form, Fitch estimates the revised criteria would result in changes to fewer than 10% of existing tax-supported ratings. Fitch expects that final criteria will be approved and published by Jan. 20, 2016. Once approved, the criteria will be applied immediately to any new issue and surveillance rating review. Fitch anticipates the criteria to be applied to all ratings that fall under the criteria within a 12-month period from the final approval date.

Applicable Criteria

Exposure Draft: U.S. Tax-Supported Rating Criteria (pub. 10 Sep 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=869942

Revenue-Supported Rating Criteria (pub. 16 Jun 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=750012

Tax-Supported Rating Criteria (pub. 14 Aug 2012)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686015

U.S. Public Power Rating Criteria (pub. 18 May 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864007

U.S. State Government Tax-Supported Rating Criteria (pub. 14 Aug 2012)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686033

U.S. Water and Sewer Revenue Bond Rating Criteria (pub. 03 Sep 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=869223

Related Research

Commonwealth of Puerto Rico

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=737975

Additional Disclosures

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=996573

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Contacts

Fitch Ratings

Primary Analyst (Commonwealth GO and Guaranteed, COFINA, ERS)

Laura Porter

Managing Director

+1-212-908-0575

Fitch Ratings, Inc.

33 Whitehall Street

New York, NY 10004

or

Primary Analyst (PREPA)

Dennis Pidherny

Managing Director

+1-212-908-0738

Fitch Ratings, Inc.

33 Whitehall Street

New York, NY 10004

or

Primary Analyst (PRASA)

Doug Scott

Managing Director

+1-512-215-3725

Fitch Ratings, Inc.

111 Congress, Suite 2010

Austin, TX 78701

or

Committee Chairperson

Jessalynn Moro

Managing Director

+1-212-908-0608

or

Media Relations:

Sandro Scenga, +1 212-908-0278

sandro.scenga@fitchratings.com

Fitch Maintains Rating Watch Negative on Puerto Rico Debt

Senate Republicans Introduce Bill for Puerto Rico Relief

Under pressure to help Puerto Rico avoid a bond default on Jan. 1, Senate Republicans introduced a bill on Wednesday to extend several forms of assistance to the island. 

But the measure stopped well short of embracing proposals from the Obama administration, which include giving Puerto Rico access to bankruptcy court.

The senators acted as Antonio Weiss, a counselor to Treasury Secretary Jacob J. Lew, warned that without congressional action, Puerto Rico risked “another lost decade.”

The Republicans’ measure would include up to $3 billion in cash relief, a payroll tax break for residents of the island and a new independent authority that could borrow for Puerto Rico — but with no taxpayer guarantee.

“Consistent with the views of Congress and the administration that there will be no ‘bailout’ ” of Puerto Rico, said a bill summary, “the full faith and credit of the United States is not pledged for the payment of debt obligations issued by the authority.”

The bill also called for Puerto Rico — and all the states — to disclose, for the first time, the true financial condition of their pension systems for government workers. Currently, governments use actuarial numbers, which can significantly understate a pension plan’s cost. Shifting to fair-value numbers could help with coming negotiations in which Puerto Rico has said it plans to divert money from its bondholders and use it to pay pensions.

The proposed new disclosures would also make it easier to identify other states whose pension systems are so distressed that they may have to try similar negotiations in the future.

To get the $3 billion, the bill proposed tapping a $12 billion public-health fund created under the Affordable Care Act, for research and preventive medicine programs nationwide. The bill summary said the money was as yet “unobligated,” and could be “repurposed” with federal supervision to help tide Puerto Rico through an alarming cash squeeze this winter.

To give Puerto Rican workers a tax break, the bill would reduce by 50 percent the Social Security taxes now withheld from their paychecks.

And in an echo of the control board that Congress imposed on the District of Columbia in the 1990s, the Republicans’ bill would designate a “chief financial officer” for Puerto Rico to advise the island’s governor on drafting and sticking to an annual budget.

The designee would remain in place even if the government changes hands in next year’s election, giving Puerto Rico a better chance of seeing through its five-year economic recovery plan no matter who is elected. The five-year plan was announced in September.

The legislation was introduced by the Republican chairmen of three Senate committees with jurisdiction over Puerto Rico’s affairs: Senator Orrin Hatch of Utah, whose Finance Committee has jurisdiction over tax policy; Senator Charles Grassley of Iowa, whose Judiciary Committee is responsible for bankruptcy law; and Senator Lisa Murkowski of Alaska, whose Committee on Energy and Natural Resources has jurisdiction over matters involving America’s territories.

Each of those committees has recently held a hearing on Puerto Rico’s travails, taking expert testimony on the severity of the island’s debt crisis and what might be done to restore stability and economic growth. In each of the hearings, Republicans said they wanted to help, but were troubled by a lack of information about the Puerto Rican government’s spending practices.

“Despite repeated attempts by Congress to clarify how the interplay between federal tax, health care and pension policies affect the territory’s economy, we have been unable to receive audited financial statements from Puerto Rico or adequate information from federal health officials,” Mr. Hatch said in a statement. “Federal taxpayers and the Puerto Rican people deserve better.”

He and the other senators said they had decided to go ahead with a bill based on the limited information they already had. They said it would take time to solve Puerto Rico’s problems, and in the meantime they hoped to get more financial information.

Lawmakers from both parties have been working toward a Jan. 1 deadline, when Puerto Rico owes bond payments of as much as $902 million, according to the Center for a New Economy, a nonpartisan research institute in San Juan. So far, the island has been struggling to stay current on most of its obligations. But officials say they are running out of cash and it is not clear that Puerto Rico will have enough money to pay what it owes on Jan. 1.

About $332 million of that bond payment is for general-obligation bonds, which are constitutionally guaranteed in Puerto Rico. It would be unprecedented, and unlawful, for Puerto Rico to skip such a payment outside of bankruptcy — yet Puerto Rico is barred from using Chapter 9 bankruptcy.

The Obama administration has expressed doubt that Puerto Rico could successfully restructure without being able to impair all of its bonds, including those with constitutional protection. But Republican lawmakers suspect that if Puerto Rico were to get the tools to legally impair its general-obligation debt, it would not be long before fiscally troubled states, like Illinois, came calling for the same thing.

On the details of how to revive Puerto Rico’s failing pension system, or changing the way doctors on the island are paid by federal programs like Medicare, the bill proposes only further study.

The legislation was introduced during end-of-the-session drama in Washington, as the governor of Puerto Rico came to Washington to make one last plea for help.

Speaking at the Peterson Institute for International Economics, Mr. Weiss, the Treasury official, said that the National Economic Council and the Treasury had already “convened a broad, administration-wide effort” among federal agencies “to develop the most effective policy response to the crisis.”

“But,” he added, “it has become clear that resolving Puerto Rico’s crisis requires congressional action.”

A version of this article appears in print on December 10, 2015, on page B4 of the New York edition with the headline: Senate Republicans Introduce Bill for Relief of Puerto Rico’s Financial Problems. Order Reprints| Today's Paper|Subscribe

From left, Senators Orrin G. Hatch, Chuck Grassley and Richard Blumenthal at a hearing earlier this month on Puerto Rico's fiscal problems. Credit Pablo Martinez Monsivais/Associated Press

By MARY WILLIAMS WALSH

Senate Republicans Introduce Bill for Puerto Rico Relief

Pierluisi Announces that University Students in Puerto Rico Are Now Eligible for Prestigious Rhodes Scholarship

Resident Commissioner Pedro Pierluisi issued the following statement today regarding the recent decision by The Rhodes Trust to make U.S. citizens that attended college in Puerto Rico or the other U.S. territories eligible to receive a Rhodes Scholarship:

“The Rhodes Scholarship is the oldest and arguably the most prestigious international scholarship in the world.  Every year, 32 graduates of universities in the United States between the ages of 18 and 24 are selected as Rhodes Scholars and given the opportunity to study for at least two years at Oxford University in England.  Past recipients include President Bill Clinton, National Security Advisor Susan Rice, retired Supreme Court Justice David Souter, multiple U.S. senators, and astronomer Edwin Hubble.

“In 2012, I noticed that the Rhodes Scholarship was open to Americans who attended college in the 50 states or the District of Columbia, but not to graduates of universities in Puerto Rico and the four other U.S. territories.  My office contacted officials at The Rhodes Trust—which administers the Rhodes Scholarship—and asked them to reconsider this longstanding policy and to open the scholarship opportunity to students from Puerto Rico.

“I am pleased to announce that our efforts have borne fruit.  The Rhodes Trust recently announced that, starting in 2016, U.S. citizens and legal permanent residents who attend universities in Puerto Rico or in the other territories will become eligible, for the first time ever, to apply for a U.S. Rhodes Scholarship.

“If you are a student, parent or university official, and you want to learn more about the Rhodes Scholarship, visit http://www.rhodesscholar.org/.  To see the press release issued by the Rhodes Trust regarding the opening of the competition to students from Puerto Rico, see http://www.rhodesscholar.org/news-and-announcements/2016-rhodes-scholarships-open-to-all-u.s.-territories.

“Puerto Rico’s universities are home to incredibly talented and hard-working scholars in many different academic fields, and I am so pleased that these students will now be eligible to compete, alongside their fellow students from the states, for a Rhodes Scholarship.”

Pierluisi Announces that University Students in Puerto Rico Are Now Eligible for Prestigious Rhodes Scholarship

Puerto Rico Says Sick Will Head North Without Health-Care Fix

Puerto Rico’s elected officials have a message for their counterparts on the mainland: Fix health-care funding disparities or care for our poor and elderly in your hospitals.

Almost 70 percent of the island’s 3.5 million people get health care through Medicaid, Medicare and Medicare Advantage. Funding formulas for these federal programs shortchange Puerto Rico because it’s not a state, commonwealth officials say.

Puerto Ricans are U.S. citizens “who can hop on a plane and go to Florida, Texas and the Carolinas and get full Medicaid funding and other federal benefits,” said Pedro Pierluisi, Puerto Rico’s non-voting representative in Congress.

As Puerto Rico runs out of a cash to pay its $70 billion debt, commonwealth and U.S. officials are warning that an economic and fiscal crisis could become a humanitarian one. Puerto Rico, where 46 percent of citizens live in poverty, gets a lower percentage of federal funds for Medicaid than 26 other states even though none comes close to its levels of poverty. Making up for inadequate federal funding has contributed to Puerto Rico’s debt crisis, commonwealth officials say.

Puerto Rico racked up more debt than any state except California and New York to balance budgets as the island’s economy has shrunk 15 percent since 2006. Commonwealth obligations have been trading at distressed levels for two years. A tax-exempt general-obligation security with an 8 percent coupon changed hands Dec. 3 at an average yield of 11.2 percent, for an equivalent taxable yield of 18.5 percent for top earners.

As part of a four-part plan to address Puerto Rico’s fiscal and economic crisis announced in October, the Obama administration is asking Congress to fix the commonwealth’s funding disparity under Medicaid. The U.S. Treasury is also pressing Congress to give Puerto Rico sweeping powers to reduce its debt burden through bankruptcy, provide fiscal oversight and give Puerto Ricans access to the Earned Income Tax Credit.

Delays in health-care reimbursements have forced some medical centers to close floors and eliminate specialized services, according to congressional testimony on Oct. 22 by Antonio Weiss. Weiss is the Treasury Department’s point person on Puerto Rico.

Doctors are leaving at a rate of one per day, part of the record 84,000 people who left the island in 2014, Weiss said. Fewer doctors mean patients wait longer to see specialists and more visits to emergency rooms, said Ricardo Rivera, executive director for the Puerto Rico Health Insurance Administration.

“We have people who have to wait nine months for a specialist,” Rivera said. “That’s a crisis.”

Congress Unmoved

So far, the Republican-controlled Congress is unmoved. Legislation introduced by Pierluisi to improve Puerto Rico’s treatment under federal health programs and give the commonwealth’s agencies access to bankruptcy has stalled.

Equalizing federal health-care funding and extending programs like the Earned Income Tax Credit and Child Tax Credit to Puerto Rico would cost $30 billion and reward its fiscal recklessness, said Orrin Hatch, the Republican chairman of the Senate’s Finance Committee.

“We will very likely have to consider ideas to alter the means by which we allocate federal health funds to Puerto Rico.” Hatch said in a Nov. 30 news release. “However, if we decide to go that route, it is essential that we move forward in a fiscally responsible manner.”

Medicaid spending in Puerto Rico totaled about $2.8 billion last year. The federal government contributed $1.6 billion, or 57 percent of the cost.

Federal Contribution

By contrast, the federal government pays 74 percent Medicaid costs for Mississippi, which has the lowest per-capita income among U.S. states. Despite having half the poverty rate of Puerto Rico and 500,000 fewer people, Mississippi gets $4.1 billion in Medicaid money from the federal government.

Before the Obama administration and Congress boosted Medicaid funding for Puerto Rico by $6.4 billion with a one-time grant under the Affordable Care Act, its share of aid was even lower because federal law caps aid. In 2005, the federal government picked up 18 percent of Puerto Rico’s Medicaid spending.

The federal government contributes a range of 50 percent to 75 percent share of Medicaid costs to states depending on the wealth of the state. The territories receive a capped lump-sum grant.

“If the territories spend significantly more than that, they’re just on the hook for any difference,” said Benjamin Sommers, an assistant professor of health policy and economics at the Harvard T.H. Chan School of Public Health who has studied Puerto Rico’s health-care system. “Congress could have decided that the territories would be treated equivalently to the states in terms of their availability for Medicaid. They didn’t do that.”

One potential rationale for the disparity is that Puerto Rico residents don’t pay federal income taxes, Sommers said. Puerto Rico’s employees and employers pay payroll taxes that finance Social Security and Medicare.

Block Grant

The commonwealth projects the one-time Medicaid grant it received under Obamacare will be depleted by March 2018. If the funding isn’t replenished, the territory will go back to receiving aid under a formula which caps the federal government’s match.

“The system will collapse,” said Rivera, the executive director for Puerto Rico’s Health Insurance Administration.

Disparities also exist in Medicare funding.

Puerto Rico’s hospitals don’t get the same reimbursements as U.S. hospitals. Mainland hospitals receive a payment based on the nationwide average operating and capital costs, while Puerto Rico gets a lower rate based, in part, on the average costs of hospitals in Puerto Rico.

The commonwealth is also excluded from low income subsidies for Medicare’s prescription-drug program.

Humanitarian Crisis

Senator Bill Nelson, a Florida Democrat, introduced legislation last week making Puerto Rico’s Medicare beneficiaries eligible for those subsidies.

Puerto Rico is working on a plan to make its Medicaid system more efficient, Rivera said. The commonwealth hopes to submit the plan to the Centers for Medicare and Medicaid Services as soon as the end of the month.

Puerto Rico could save $150 million a year by cutting Medicaid benefits it provides above federal minimum standards, according to a report commissioned by the commonwealth by three former International Monetary Fund economists.

Dennis Rivera, chairman of the Puerto Rico Health Care Crisis Coalition, a group of doctors, hospitals, insurers, unions and business that’s lobbying the federal government for more health-care funding remains optimistic the Obama administration and Congress will come to Puerto Rico’s aid.

“American citizens will not allow Puerto Rico to dig into a deep humanitarian crisis where health care is going to collapse,” he said.

Martin Z Braun

Puerto Rico Says Sick Will Head North Without Health-Care Fix

November Jobs Report: Everything You Need to Know * * * * *

Yes, it was that time again, folks. It’s Jobs Friday, when for one ever-so-brief moment, the interests of Wall Street, Washington and Main Street were all aligned on one thing: jobs.

The Bureau of Labor Statistics said nonfarm payrolls increased by a seasonally adjusted 211,000 job in November. The unemployment rate was unchanged at 5%, reflecting an expansion in the labor force as more Americans came off the sidelines and began searching for jobs. Economists had been expecting 200,000 jobs and 5%. The consensus seems to be that the report gave the Fed plenty of reason to raise rates later this month.

Here at MoneyBeat HQ, we crunched the numbers, tracked the markets and compiled the commentary before and after the data crossed the wires. Feel free to continue the conversation in the comments section. And while you’re here, why don’t you sign up to follow us on Twitter.

Here’s how it all went down:

Before Thursday morning, today’s jobs report was seen as an afterthought. Sure, every month there’s this hype about “the most important jobs report ever,” or some such, but this month it didn’t have that weight at all. The Fed was set to raise rates, everything was lined up. The jobs report would have to be a total disaster to change that.

Then the ECB happened.

The market seems to have gotten its feet back under it after yesterday’s Draghi surprise. Dow futures are up about 30 points, and S&P futures are up about 4. The yield on the U.S. 10-year Treasury note’s come in a hair, at 2.31%. The euro’s down about 0.5% to the dollar, and oil is up 1.3%.

Still, a lot of damage was done yesterday, both on the charts, and in people’s perceptions. If the ECB can’t deliver, can the Fed really start raising rates? It can if the economy justifies it, and that’s where this report comes in. Suddenly, this report matters again.

Analysts estimate payrolls expanded by 200,000 in November. Fed Chairwoman Janet Yellen told lawmakers Thursday that payroll gains of fewer than 100,000 are needed to absorb new entrants into the labor force and that fewer than 200,000 new jobs a month are needed to bring the jobless rate down further and draw discouraged workers back into the labor market. November payroll gains of even 50,000 would still leave the three-month average at more than 150,000 and it would leave the 12-month average above 200,000. In other words, it would take a very big miss on job growth to change the Fed’s view on job growth, and, again, a very big miss might be seen as anomalous.

In short, if the numbers are anywhere near consensus Friday, the headline from the jobs report is likely to be that the Fed is on track to raise short-term interest rates on December 16.

In our Morning MoneyBeat column today, Mark Hamrick of Bankrate said we’d need to see something substantially below 80,000 for the Fed to hold off. “And even then, I’m not sure we’d avoid a December rate hike.”

“The books aren’t going to be rewritten on any of [the numbers],” said Mr. Hamrick, senior economic analyst at Bankrate. “It’s the trend. The single set of numbers we’ll be getting for November cannot radically change the trend.”

After two months of lackluster job gains, the October jobs report offered the healthiest number so far this year: 271,000 jobs, which helped boost the monthly average to 206,000. Economists don’t think employers kept up that pace last month, though hiring data released Wednesday by payroll processor ADP suggests the number could be better than expected. Even if payrolls disappoint, they would have to be pretty terrible to dissuade Fed officials from a rate increase.

The odds of this report coming in so bad that it actually changes the economic picture are low, but that doesn’t mean it can’t move the market.

“Policy bets aside, the release may have market-moving potential from a sentiment perspective,” said Ilya Spivak, a currency strategist at DailyFX.

“Looking at the outcome through this prism, a soft result that keeps Fed rate hike bets intact may spur fears that U.S. growth is an insufficient counterweight to weakness in the Eurozone and China, undermining risk appetite. That may punish higher-yielding FX like the Australian and New Zealand dollars while boosting the safety-linked Japanese yen. A strong result might establish a narrative of U.S. resilience even as tightening looms ahead, producing the opposite dynamic.”

Another item worth watching when the report crosses: wage growth.

Hourly compensation for the nonfarm business sector grew 3.4% in the third quarter from a year earlier, the second-biggest increase since the third quarter of 2009. And last month’s jobs report showed a 2.5% pickup in average hourly earnings compared with October 2014. Ms. Yellen said Wednesday it was too soon to say if recent evidence of firming wages foretell a long-awaited sustained pickup. Friday’s report will offer more clues.

Leading into Friday’s jobs report, several Fed officials this week, including Ms. Yellen, have signaled that the central bank is ready to move on rates in two weeks, barring any major surprise between now and then.

Thursday, in front of the Joint Economic Committee in Washington, Ms. Yellen indicated she’s ready to up rates before year-end because the domestic economy is improving. The day before that, on Wednesday, she gave a speech to the Economic Club of Washington, providing a similar message.

After her testimony Thursday, Sam Bullard, senior economist at Wells Fargo Securities, said he’s “hopeful with Yellen’s fairly optimistic comments on the outlook that maybe she believes (or already knows) the employment report is, on balance, solid and supportive to the December rate move.”

The monthly  jobs reports also offer insight into hiring in a variety of job sectors, so this report will offer clues on how different industries are responding to lower oil prices, weak demand overseas and a stronger dollar.

Cheap oil continues to weigh heavily on the mining industry, which lost 5,000 jobs in October and has shed 109,000 jobs since peaking in December 2014. Meanwhile, low oil prices have benefited other sectors, including manufacturing and construction.

Bond yields are little changed before the jobs report. The 2-year yield is near a 5-year high while the 10-year yield is near the highest in more than three weeks. Economists expect 200k growth and 5% unemployment rate. Barring a huge negative surprise from the data, a rate hike in two weeks is baked in the cake. But with soft ISM manufacturing and services data earlier this week, expectations are growing that the Fed would be slow in doing more tightening in 2016, a case that would prevent a sharp rise in bond yields. The 10-year US yield was 2.319% vs 2.328% Wednesday. The two-year yield was 0.955%.

November Jobs Report: Everything You Need to Know