A federal control board on Monday ordered Puerto Rico to cut its public pension system by 10 percent, furlough tens of thousands of government workers and eliminate Christmas bonuses to generate immediate savings amid an economic recession.
The seven-member board created by Congress to oversee the U.S. territory's finances voted unanimously to add those measures to a 10-year fiscal plan presented by the island's governor.
Board members said the spending cuts are necessary so that the government will have enough funds to pay for essential services such as education, health and public safety.
"Puerto Rico is about to capsize," said board member David Skeel. "The island is overwhelmed by debt. Puerto Rico is in real danger of running out of money for even the most basic essential services."