Ocasio-Cortez Campus Visit: the Defunding of the UPR and the Puerto Rican debt crisis

Alexandria Ocasio-Cortez, Congressional candidate turned icon of the New Left, visited Columbia this September to speak on the importance of the midterm elections and politics in the age of President Donald Trump. As a part of her speech, she condemned President Trump and his allies in Congress for their “attack” on democratic institutions: the public criticism, defunding, and undermining of institutions such as the judiciary, the free press, and universities that have traditionally served as checks to executive and legislative power. Ocasio-Cortez, who was raised in New York by Puerto Rican parents, cited recent cuts to the budget of the University of Puerto Rico as one example of this phenomenon.

Ocasio-Cortez’s assertion that the defunding of the University of Puerto Rico (UPR) is politically motivated is not without historical support. As a major locus of activism and political organizing in a largely rural territory with few major urban centers, the university has frequently attracted ire from politicians who disapprove of the tactics employed by student activists. Just last year, students organized a monthslong strike in response to tuition increases that doubled the amount some students were expected to pay, and a similar strike over tuition increases occurred in 2010.

UPR is a consistent target for tuition increases, but to understand the increases alongside the deeply disruptive budget cuts that the university suffers, it is first necessary to understand the nature of the Puerto Rican debt crisis. Plagued for years by a growing debt burden exacerbated by unfavorable economic policy and inept governance, Puerto Rico’s debt problem came to a head in the final year of the Obama Administration, when the territory officially defaulted on its loan payments. Unable to file for Chapter 9 bankruptcy because of its unique political status as a territory, Puerto Rico was subjected to a Fiscal Oversight Board of the Administration's creation. Referred to locally with no small amount of disdain as la junta, the board has been tasked with navigating the complex debt restructuring process and—controversially, depending on who you ask—ensuring bondholders are paid.

Critics of the board argue that some of its members, which include American and Puerto Rican businessmen, academics, and public servants, are beholden to the very bondholders with whom they are tasked with negotiating. As the university has become an increasingly important site of resistance against not only the Fiscal Oversight Board, but also the entire framework of austerity and the prioritization of bondholder repayment central to the board’s restructuring plan, some have argued that the decision to target the university in the scramble to shrink the island’s budget is politically motivated—a contention supported by the fact that, as Ocasio-Cortez pointed out in her talk, the university’s budget is rather insignificant in the context of the massive volume of cuts the board needs to make to keep Puerto Rico under its budget.

Regardless of whether the budget cuts to the UPR are driven by political motives, their implications for the future of the island are serious. The university has historically been the primary vehicle for upward mobility in Puerto Rican society, and generations of the island’s doctors, engineers, and academics have been trained on its 11 campuses. Budget cuts, which restrict the university’s ability to hire and retain professors, maintain adequate facilities, and provide students with financial aid, jeopardize—or, at the very least, seriously limit—young Puerto Ricans’ access to a quality education. The results could be far-reaching. As the quality of higher education available on the island declines in the face of funding constraints, many may opt to attend college in the mainland United States instead, or forgo college altogether. Already, the island is suffering from serious “brain drain,” as skilled Puerto Ricans migrate to the mainland seeking economic opportunity. Attacks on one of the few vehicles of economic empowerment remaining in Puerto Rico will only worsen the problem.

The fate of the University of Puerto Rico is emblematic of broader problems concerning the debt restructuring process in Puerto Rico. In the last two years, Puerto Rican government officials, federal agencies, and the Fiscal Oversight Board have demonstrated a short-sighted perspective favoring short-term budget reductions to long-term growth potential. Just as the university’s woes may spell disaster for the future of the island’s workforce, so too do measures aimed at dismantling existing institutions and essentially selling their parts for cash hinder Puerto Rico’s ability to chart a path to economic prosperity. Until those in charge adopt a long-term view focused on the development, rather than the destruction, of democratic institutions, Puerto Rico’s troubles are unlikely to abate.