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Puerto Rico's financial oversight board was a central part of last year’s PROMESA bill, a law passed in the U.S. Congress that allowed the commonwealth to avoid defaulting on billions of dollars in bond payments for a time. The board's revised plan, announced Monday, calls for austerity measures and big cuts in public spending.

The plan includes cuts to the University of Puerto Rico, a reduction in pension benefits and a $550 million reduction in the island's annual health care budget. The health care cuts could carry large consequences, as more than half of the island’s population is on government-provided health care.

Hector Cordero-Guzman, a professor at City University of New York's Baruch College, said Washington, D.C.'s consideration of the island in Congress and in the courts is as important as the plan itself.

“If Puerto Rico is seen as a cost and a liability then the crisis will continue to spiral out of control and people will continue to leave,” he said.

Migration numbers to the mainland are among some of the highest in history with many Puerto Ricans settling in Florida and Texas.

Creditors have been told they will have to take a haircut on the more than $70 billion owed them by the Puerto Rican government. Maryellen Tighe, a journalist at Debtwire Municipals, said everyone involved with this recovery plan will feel the pinch.

“The board has been very clear that this is not just a burden that will just be borne by pensioners or just be borne by bondholders,”she said.

Tighe said the next move will likely be negotiations in which the government will sit down at the table with creditors and hammer out the details.

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Follow Andy Uhler at @andy_uhler