SAN JUAN— It’s the lunch hour at Baker’s Bakery, a fixture in Río Piedras, one of Puerto Rico’s oldest neighborhoods, but the bustle at the counter is long gone. The door opens and shuts only a few times an hour as customers, holding tighter than ever to their money, judiciously pick up some sugar-sprinkled pastries and a café con leche.
On the first day of the new sales tax, which jumped to 11.5 percent from 7 percent, the government’s latest rummage for more revenue, Puerto Rico’s malaise was unmistakable.
After nearly a decade of recession, Puerto Rico’s government says it cannot pay its $73 billion debt much longer. Governor Alejandro García Padilla warns that more austerity is on the way, a necessity for an island now working feverishly to rescue itself. With so many bracing for another slide toward the bottom, the sense of despair grows more palpable by the day.
“So many people are leaving you can’t even find suitcases,” said Erica Lebron, 30, as she sat outside a housing project bodega.
Before long, Puerto Ricans will face more tax increases — the next one is in October. Next on the list of anticipated measures, these for government workers, are fewer vacations, overtime hours, and paid sick days. Others in Puerto Rico may face cuts in health care benefits and even bus routes, all changes that economic advisers say must be made to restart the economy.
People ricochet from anger to resignation back to anger again. Along San Juan’s colonial-era streets, in homes and shops, Puerto Ricans blame the government for the economic debacle. Election after election, they say, political leaders took the easy way out, spending more than they had, borrowing to prop up the budget, pointing fingers at one another and failing to own up to reality.
Now there is a chorus of calls for Congress to relax the law as it relates to Puerto Rico. And some powerful Democrats are also rallying behind the idea of granting Puerto Rico, a US territory, the ability to file bankruptcy for some of its debt-laden agencies.