Puerto Rico unveils 1st balanced budget in a decade; US territory struggles to reduce $73B in debt

SAN JUAN, Puerto Rico - Puerto Rico's governor has presented the first balanced budget in more than a decade, fulfilling a promise to cut spending at a time when the island's economic problems have spread fear among U.S. investors.

Gov. Alejandro Garcia Padilla on Tuesday proposed $1.4 billion in cuts and adjustments by consolidating 25 government agencies and imposing an average 8 percent spending cut for most agencies, among other things. He also pledged $775 million to pay off debt -- $525 million more than in last year's budget.

The $9.64 billion budget aims to strengthen and revive the economy as the U.S. territory enters its eighth year in recession and struggles to reduce some $73 billion in public debt.

Legislators will now debate the proposed budget, which needs to be approved before June 30.

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