You're watching...
Governor Luis Fortuno, (R-Puerto Rico), explains how he was able to cut government spending by 20% in Puerto Rico and avert a downgrade of its debt.
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
You could -- the Puerto Rico miracle.
When governor Luis for two -- took office in 2009.
He was the island's first Republican governor in decades.
And Puerto Rico was on the verge of having its credit downgraded to junk status.
60% of the islands workforce at the time had been employed by the government.
Governor for -- -- you got to work immediately eventually cutting government spending by 20%.
And that's not real cuts that's not reductions in the rate of spending that's real cutting.
Which is what passes for a cut in Washington's bizarre world today cut in increase not cut in real cut.
Mainland America could learn a lot from Puerto Rico and governor for -- -- -- joins us now.
Governor I've been -- beautiful island many times but I've never met the governor what a pleasure to have you on the show.
It is my pressure again.
How did you succeed.
And taking the financial mess that you inherited.
And -- leave -- 171000.
People of their jobs with the government and cut 20% and spending.
And balance the budget.
Well Michael men's Wear vials salary I caught it by 10%.
Much disagree and my wife.
I active ongoing within the cabinet secretaries.
I want on down the line have vehicles official be able cellphones and then I went into that you know -- Spending -- And that's how we've achieved a 20% mark.
And as you were mentioning ending true it's real cuts and not Washington -- -- -- what we've been able to do is that when I came into office our state budget deficit was -- largest proportionally in the country.
It was 44% of revenue most.
Now -- below 7%.
We're closing in very quickly and that has allowed us to -- the same -- Compact Begin cutting taxes both of the corporate and and needing new level yeah I.
Would like to -- what was the reaction amongst the people.
When you got through all of these budget cuts the people who lost their jobs and they've already got the entitlements of the people lost their cell -- -- -- -- -- -- Well the first year with pretty tough.
But I was doing what I am convinced is correct.
And that while we need is is principal leadership everywhere at the state level that and in Washington.
And I EA went on TV IA IDC essentially laid out what I we found this edition was much worst -- what I thought.
But ever since then we have Begin a cutting taxes across the board.
We have the first one rating increase in 27 years.
And the economy for the first time in six years is growing.
Not just employment numbers blood semen sales car sales home sales are going -- -- by double digits.
And so on so forth.
-- it sounds like Puerto Rico is very different from the rest of the states we are suffering and you were booming.
-- the island of Puerto Rico become.
And economic beacon for free enterprise and prosperity.
In the Caribbean perhaps even a model for the rest of us up north.
But -- tell you we we failing to this recession a couple of years before the rest of the nation did for local reasons.
So we're starting to come out of it earlier but -- -- has been the longest recession in our history.
Six years long.
I was pretty painful but we did what we need to do again we have a bond not rating upgrade.
We are cutting taxes we're streamlining our per rating process.
I mean the I had the same time we have brought back common sense to garment which actually was lacking German.
Attic with governor you're a champion of the free market and we congratulate you on your good work which -- to see it when Europe and New York next time thanks for joining us.
Love to thank -- -- and how the government can.
