Newt Gingrich Interviews Luis Fortuño, Governor of Puerto Rico
by Manny Rosales on June 21, 2010 at 4:37 PM
In an exclusive interview for TheAmericano.com Newt Gingrich talks to the Governor of Puerto Rico about the economy, the Puerto Rico Democracy Act of 2010, and more.
Speaker Gingrich: Let's start with the challenge you faced when you became governor and the economy and what you've done since then.
Governor Fortuño: Certainly. When I became governor, we had been experiencing the worst and deepest recession since the 30s. It commenced two full years before it started in the rest of the country. We're starting to come out of it. Secondly, I faced the largest state budget deficit, proportionally speaking, in the country. It was 45% of our state budget. We didn't have money to meet our first payroll. We had to rush legislation through our state legislature to be able to pay and meet that payroll. On top of that, the state government owed suppliers of goods and services over $1.3 billion on top of the almost $3.5 billion deficit. We paid up all that money, we brought down from 45% to 30% that budget deficit, and now with the new budget that is being approved as we speak, it will come down to 12% of our budget and we'll balance our budget in the first term. But on top of that, I'll do away with a lot of special interest deductions and credits and what have you, and we'll be lowering income taxes across the board this year, which is going against the current of what's happening in Washington. On top of that, another major issue that I faced was an out of control permitting process. There were so many permits to do anything and we essentially are doing away with more than half of the permits. Actually at the end of the day we're going to have one permit and we approved legislation along those lines. One regulation is going through public hearings as we speak and we'll just get one permit to move forward your projects.
We also approved legislation and we're starting to put out projects-we've already put out 5 projects with a program, the most advanced public-private partnership legislation in the country, and it is really truly cutting edge. And we've seen a couple of states try this. Our P3 legislation is the most advanced in the country and provides for a program, not just a couple of projects. And we're putting out an airport, water projects, energy projects, highway projects, school construction, and maintenance. So we are cutting edge in this sense. We want to create the best business climate in the country in Puerto Rico. Again, we are part of America-same legal system-but we have some advantages that we want to exploit fully.
Speaker Gingrich: Now when you suddenly are sitting here, and you're the governor, and you're faced with this huge problem, what were the principles you applied and how did you think about solving it?
Governor Fortuño: It's very simple. The way we all solve those problems in our own homes and families and small businesses. What we did was let's go back to basics, let's shrink the number of agencies-there was a lot of duplication in the agencies-and let's make sure that the money gets where it should. That is, services where they're needed, and start paying up as you would in any business. You know, if you're hired as a CEO, what would you do? You put your housing order and move forward, and that's exactly what we've done.
Actually the rating agencies have noticed. Our rating has gone up three nudges already in 16 months and I know it will continue to do so. The cost of us borrowing money when I came in was 300 basis points-3% above the average of municipal bonds across the country. Today we pay exactly the same amount that is the average across the country. So that gap was closed in 16 months.
Speaker Gingrich: To make that into a practical difference, how big a difference in cost to the people of Puerto Rico is 300 basis points? Governor Fortuño: In terms of the cost that we're saving, it's over $300 million that we're saving already. Every taxpayer is saving all that money. Just because we are using common sense in how we are handling ourselves.
Speaker Gingrich: Is that an annual number, 300 million?
Governor Fortuño: Yes, indeed.
Speaker Gingrich: So you say, in theory, $3 trillion over the decade?
Governor Fortuño: Exactly. And just by keeping our commitments and bringing common sense back to the government and just tightening our belts. Starting with my own salary. I lowered my own salary 10%. Every secretary's salary-5%. We eliminated a lot of contracts. We made sure that whatever was spent in government was spent wisely and for the right reasons.
Speaker Gingrich: You must have had a lot of special interests who were unhappy with this and you had to get things through the legislature. How did you organize that and how did you prevail?
Governor Fortuño: Well I must say I'm fortunate enough that the Speaker of the House and the President of the Senate at the state level have been extremely supportive. But the bottom line here is that we opened up our books and we said this is the truth, this is what we're faced with. They are both republicans as well, so they understood that we we're doing the right thing. And they understood that if we wanted to lower taxes in the first term, then we had to cut expenses and bring back the government to a proper size.
Speaker Gingrich: So did that involve having to give up on a number of programs or having to shrink a number of bureaucracies or how did you do that?
Governor Fortuño: Well, certainly. We even had to lay off 16,000 public employees. I'll give you an example. A lot of services were being provided manually. We opened up an E-government type of service to obtain some certificates and documents that you needed and you print them at home now. You don't need anyone to handle that. And we're saving hundreds of billions of dollars by doing it that way.
Speaker Gingrich: Now what is the popular reaction and what do the polls tell you about how the people of Puerto Rico are responding to this?
Governor Fortuño: It's interesting. People don't necessarily like everything that we've done, but they at the same time say it's the right thing to do. So they realize that now we're going to be able to lower taxes, and once we start lowering taxes...because there's a natural distrust of government-and I understand why. Because government, normally, will not keep up its promises. Our commitments will be met. And when that's starting to happen, people realize we mean business. And that's why they say I don't like exactly everything that has happened, but it's the right thing to do. And that's the answer we're getting from most people.
Speaker Gingrich: In parallel to everything you've done to get the state government back on track, you've also been a real leader in looking at having a referendum in Puerto Rico on the status of the island. Could you share with us what your thinking is, what the status of it is now and what your hopes are?
Governor Fortuño: We've been a territory since 1898, we've been American citizens and proud to be Americans citizens since 1917, and have fought every single war with valor, in greater numbers proportionately speaking than 49 of the 50 states. So we really have contributed to this country in more than one way. What we are asking Congress is to provide for a process that will allow us to vote directly and express to Congress what our status preference would be. I have my own preferences, but I want our constituents to express that. Back in the 90s when you were Speaker, there was an intent to do that but it didn't go through it on the Senate side. This time around it went through the House with bipartisan support with a 54 vote margin, and it's before the Senate as we speak. It's non binding but all it does is to ask the question as to what is your status preference. Regardless of what the result is we would have to come back to Congress, start again, and perhaps look at legislation to implement that result... and ask the question again, because we need a mandate on whatever the end result may be. That's how every single territory did it before they became states.
Speaker Gingrich: One of the big questions people ask me, because as you know I've been very supportive of having a referendum. And I think the people of Puerto Rico in the long run have an obligation to decide who they really want to be, because I don't think we as a country can continue to run a commonwealth that is not quite America but is America and runs all sorts of United Nations problems eventually. One of the big challenges I get from some people is the question of English as a language. From your perspective, if it's the language of the US government what does that mean if Puerto Rico then becomes a state? What's your sense as you look at that long term process?
Governor Fortuño: English has been one of our two official languages since 1902. It is a law that all children must be taught in both languages. We polled this issue, and 95 percent of parents want their children to learn English and be totally fluent in English, as anybody else would in the 50 states. This should not be an issue. Even today as a territory if you want to file documents in the state government in English you can do so, if you want to file in Spanish you can do so as well. But English is the language of opportunity and we all understand that. All of us as parents want our children to be totally fluent in English. That is an aspiration that every single parent has in Puerto Rico.
Speaker Gingrich: Republicans at times seem uncertain as to how to reach out and how to have the kind of opportunities that we should have dealing with many Latinos who are very religious in background, very work ethic oriented, very pro family... with all those values you would think this would be a no-brainer. What would your advice be to the national Republicans both as they think about Puerto Rico and as they think about having an effective ability to work in the Latino community across the whole country?
Governor Fortuño: The late President Reagan said, "Latinos are Republicans, they just don't know it," and he was so right. Actually, I started in the Republican Party as a student in DC, stuffing envelopes for his campaign. So he brought many of us into the party. Bottom line here is that we are socially conservative, fiscally conservative, we have a natural distrust of government, we want lower taxes, education is key to us, and we want our small and medium-sized businesses to flourish. Those are republican values. So we don't have to run away from our values and our principles, we have to underscore them. But we also need to embrace that community, and the tenor that is used in the public discourse, especially on some issues like immigration, has to be tamed. We can say the same things in many different ways. The tenor being used by some of our colleagues pushes away the Hispanic community. Instead of pushing them away we need to embrace them.