Trump slashes crucial funding for hurricane-ravaged Puerto Rico

The move comes days after the White House reportedly slashed funding for Palestinian refugees.

Young residents gather at their family's home, still without electricity, on Christmas day on December 25, 2017 in Morovis, Puerto Rico. Thirty percent of the devastated island is still without electricity. (CREDIT: Mario Tama/Getty Images)
Young residents gather at their family's home, still without electricity, on Christmas day on December 25, 2017 in Morovis, Puerto Rico. Thirty percent of the devastated island is still without electricity. (CREDIT: Mario Tama/Getty Images)

Days after withholding precious funding for Palestinian aid groups, the Trump administration is slashing crucial funding for hurricane-ravaged Puerto Rico as well.

According to a letter published in Puerto Rican newspaper El Nuevo Dia on Wednesday, officials from the Federal Emergency Management Agency (FEMA) and the Treasury Department have claimed that the island has a least $1.7 billion in available cash, and no need for the emergency $1 billion loan already approved by Congress.

“Because the Commonwealth’s central cash balance, as publicly reported, has consistently exceeded $1.5 billion in the months following [Hurricane Maria]…the Federal Government will institute, as a matter of policy, a Cash Balance Policy […],” officials wrote. “Under this Cash Balance Policy, funds will be provided…when the Commonwealth’s central cash balance decreases to a certain level.”

That level, they added, would be determined by the federal government.

Bloomberg noted this week that, while Puerto Rico had billions in its accounts as of late last year, most of that money was already earmarked “for specific uses,” barring officials from tapping into it to keep the government running.

Gerardo Portela, executive director of Puerto Rico’s Fiscal Agency and Financial Advisory Authority (AAFAF), said that the loan refusal has prompted the island’s government to begin parceling out funds to vital utility and water companies.

“As part of the negotiations, Fafaa has complied with all demands of the federal agencies. However, despite Fafaa’s continuous efforts to date, the federal Treasury Department and FEMA have not provided the final terms and conditions under which they will disburse the funds allocated by the federal Congress,” Portela said in a release. “As previously published, these public corporations face severe liquidity problems that threaten essential services for the people of Puerto Rico by interrupting their operations if immediate action is not taken.”

As of this week, approximately 40 percent of the island is still without power, according to Puerto Rican Rep. Eddie Charbonier. Overall, the damage caused by the hurricane could top $95 billion.

Earlier this week, the Trump administration came under fire for its decision to withhold aid funding to the U.N. Relief and Works Agency for Palestine Refugees in the Near East (UNRWA). U.S. officials told The Jerusalem Post on Tuesday that Trump — on the advice of Secretary of State Rex Tillerson, Secretary of Defense James Mattis and National Security Adviser H.R. McMaster — was planning to approve only $60 million of the United States’ first $125 million installment payment to UNRWA. The remaining $65 million would be held, they said, “for future consideration.”

“This is not merely a decision to cut money. This is a political decision that is aiming to liquidate the rights of the Palestinian refugees,” PLO Executive Committee Member Mustafa Barghouti said, responding to Trump’s reported decision. “It will not affect the determination of the Palestinians to keep the issue of refugees alive.”

U.S. officials defended the decision in a statement to Haaretz this week.

“The United States has been UNRWA’s single largest donor for decades. In years past, we contributed some 30 percent of UNRWA’s total income,” they said. “It is time for a change.”

The move hurts the aid organization dramatically. In a statement on Wednesday, UNRWA Commissioner-General Pierre Krähenbühl said the organization now “faces a formidable challenge” in its quest to protect refugees.

This article has been updated to clarify the fact that U.S. officials sent their letter to Puerto Rican authorities earlier this week.