Since taking office in January, President Trump has already signed more than 90 executive orders — directives to make changes in U.S. policy that do not require congressional input. None has focused explicitly on Puerto Rico. Yet many of them will affect the territory, perhaps event more than they will affect any of the states.
From the Center for a New Economy
A report from The Center for a New Economy identifies three areas of particular concern:
- Reconstruction funding through FEMA has been obligated but less than half of the funds have been spent. The federal government has already clawed back unspent funds obligated in response to the pandemic. It could do the same with the unspent funds for Puerto Rico’s reconstruction.
- Cuts at the U.S. Department of Education and plans to dismantle the agency entirely are likely to hit Puerto Rico hard, since the territory relies more on this department than states do. Not only does Puerto Rico have higher levels of special needs students, whose needs are covered by the federal department of Education, but the Island also has fewer local resources than states do.
- Medicaid funding is also threatened. While Medicaid cuts have not been the subject of any executive orders and would require congressional buy-in, it is clear that budget cuts required to meet the goals of both the Trump administration and congressional budget policymakers will require reduced Medicaid spending. Puerto Rico is especially vulnerable because the formula that determines the territory’s payments from the federal government currently mandates that 83% of all Medicaid costs will be paid by the U.S. This percentage will decrease to 55% at the end of September 2027 unless Congress passes a new law to keep it at 83%. Roughly half of the residents of Puerto Rico rely entirely on Medicaid for their health care needs.
The report also references the pause in grant funding. While this freeze of funds is currently making its way through the courts, many programs have found that they cannot access the funds they had been awarded. In many cases, the only portals used to pay expenses have been removed from the web. In other cases, confusion prevents disbursement of funds.
Finally, the report points out that Puerto Rico imports significant amounts of goods from Canada and Mexico, the primary adversaries in the trade war being waged by the administration. Prices of goods from these countries are expected to rise, and residents of Puerto Rico are less able to absorb rising prices than the wealthier Americans living in the states. Puerto Rico’s poverty rate is 41.6%, and 85% of food in Puerto Rico is imported. Many residents don’t have the flexibility to deal with the consequences of the tariffs without hardship.
Read the full report:
2025.03-Puerto-Rico-Analyzing-Federal-Policy-Changes
Wait — there’s more
In addition to the concerns mentioned in the CNE report, Puerto Rico faces additional challenges. Severe cuts at the National Oceanic and Atmospheric Administration and the Weather Service are expected to affect response to this year’s hurricane season. Already, weather balloons which would normally be in use to support predictions and decision making have been canceled.
The National Park Service has also been affected. Staff losses are expected to make U.S. national parks less safe and convenient for visitors, as well as threatening upkeep and conservation. Puerto Rico’s national parks, including El Yunque and the San Juan historic site, are important to the economy as well as to the cultural and natural heritage of the Island.
Executive orders denying funding and support for research on climate change will be particularly problematic for Puerto Rico, where climate change is already affecting the daily lives of residents.
It is also possible that the many efforts to end support for diversity and inclusion may impact Puerto Rico. Executive orders declaring English the official national language and threatening birthright citizenship may also create problems, some of which may not be predictable at present.
The thousands of government jobs being eliminated could also affect Puerto Rico’s economy, casting workers who are either Federal employees or the beneficiaries of Federal spending of into unemployment.
Broadly speaking, it’s fair to say that Puerto Rico is at least as vulnerable as the states in all cases that cut federal funding. After all, federal spending for and in Puerto Rico is threatened, and, as we’ve covered extensively before, Puerto Rico does not have a voting representation in Washington.
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