Is Puerto Rico Getting Screwed — Again?

You may not realize this — a surprising number of Americans don’t — but Puerto Rico is a part of the United States.  During the 1898 war with Spain, it was one of several territories conquered in an overt land-grab designed to promote American sea power throughout the Caribbean and Pacific Ocean.  It currently has a population of well over 3 million, all American citizens.  They have no right to elect the President; they have no representation in Congress.

At present, the territory is experiencing a public debt crisis that is out of control.  The opinion of the present territorial administration is that it cannot be solved without the assistance of the central government of the United States.  The Senate proposed an economic aid bill with $3 billion in aid; the House version, which has just been approved by committee, has expanded the bureaucracy but removed the aid.  (Update:  This version is the one that finally passed.)

A Little Background

The flag of Puerto Rico looks just like Cuba’s, but with the colors reversed — and that’s no coincidence.  After all, the same war that won us Guantanamo Bay gained us Puerto Rico as a territory, and over the past century the respective populations of P.R. and Cuba have continued to have more in common than either with the mainland.  Spanish is the primary language — spoken harshly in Cuba and fluidly in Puerto Rico, but still recognizably the same — and poverty seems endemic in both places.

For nearly 120 years, we’ve had a tradition of screwing them (us) over through policy choices ranging from incompetence (masquerading as optimistic idealism) through neglect and all the way out the other side to overt violence.  Over time, this mishandling has led to economic crisis and open revolt — not once or twice but over and over again.

Some high points of our mutual history include:

  • In 1901, two years after we took possession, Territorial Governor Allen resigned, became president of the American “Sugar Trust”, and took advantage of the corruption he had created to gain complete control of the island’s lucrative sugar production.
  • In 1914, the House of Delegates voted unanimously for independence.  Congress had no reaction.
  • In 1917, by Act of Congress, Puerto Ricans became eligible for conscription for service in the First World War.
  • In 1920, the Jones Act was passed, eliminating Puerto Rico’s trade advantages by artificially restricting direct shipping from there to other American ports.
  • In 1934, Blanton Winship became governor, and immediately set about a brutal repression of the nationalist movement that culminated in the Ponce Massacre and his subsequent removal.
  • During the revolts of the 1950s, the territorial government used infantry, artillery, and US Air Force bombers against their own population.  We’re talking about American citizens, remember.
  • First in 1938, then in the 1970s, and again in 2007, the Federally mandated minimum wage hikes in Puerto Rico forced multiple business closures due to the local economic imbalance.  Each was followed by mass emigration to the mainland.  The population is presently experiencing long-term decline due in large part to these conditions.

It should be mentioned that many of Puerto Rico’s economic woes are due entirely to the inefficiency — one might even suggest “corrupt nature” — of the local government.  The present debt crisis is one example; after several lucrative tax advantages for the territory expired in 2005, the government began simply issuing more and more bonds rather than finding ways to either cut spending or increase revenue.  Public utilities are all held by government-owned corporations, each of which is remarkably hidebound and inefficient, and several of which grant no-bid contracts without central oversight.  Even the P.R. Department of the Treasury is hopelessly inept, as it is unable to collect nearly half of the taxes owed and has no comparison basis for instituting audits.

One small light of hope has recently appeared, however, with the increasing normalization of relations between the United States and Cuba.  Since Puerto Rico is a very near neighbor, there is an excellent chance that trade prospects will improve drastically as a result, greatly mitigating the negative effect of the Jones Act.

Provisions Of The Bill

At first glance, the House version of the bill has some serious problems, and anyone unfamiliar with the major difficulties that have led to the present economic crisis on Puerto Rico will be aghast at the scope of these.  Examining the text of the present bill shows us a few of these.

The first thing that jumps out is a provision to lower the minimum wage below Federally mandated levels.  Given that our country is presently engaged in a fight to double the present wage, this seems highly unpopular, even a suspicious proviso.  And yet, in the light of the evident consequences of both the historic and present wage laws in Puerto Rico, this isn’t as extreme as it may seem.  Additionally, since it applies to a very limited segment of the population, and since it’s not unique to Puerto Rico (Northern Marianas, another territory, has a similar exemption), this suddenly becomes reasonable.

The bill’s ostensible purpose is to establish an Oversight Board to assist the local government in economic matters.  It will have broad plenipotentiary powers, including both subpoena and law enforcement, and is not answerable to the Territorial Government but instead only to Congress.  Notably, it has the power to accept bribes (s104.d.) but not act on them (s109); it can, however, compel the Territorial Government to do the same.

On the one hand, this is clearly a direct blow to the sovereignty of the territory.  On the other, extreme measures are just as evidently required in order to rescue Puerto Rico from economic stagnation.  Whether this board will have the ability to accomplish this task remains an unknown.

Curiously, the bill also authorizes the sale of lands within the Vieques National Wildlife Refuge on Vieques Island (s405).  The proceeds of such a sale would go entirely to the Territorial Government, and it would have to comply with all environmental regulations.  Those provisions make this seem reasonable; however, there’s no explanation for the purpose of this specific provision.  One might speculate the potential either for an expansion of the military base there and on the adjoining mainland, or instead for the possibility of an environmentally-motivated white knight to come and rescue the government.  Alternately, it seems fairly likely that for-profit development might be the desired goal.

One thing this bill fails completely to do is address the question of statehood versus independence.  It also doesn’t touch the restrictive provisions of the Jones Act or any of the other contributory causes of Puerto Rico’s current economic crisis.  As such, while I approve enthusiastically of the minimum wage proviso and cautiously of the rest of the bill, I find I must object in general on the grounds that it may, perhaps, alleviate the present problems but fail utterly in repairing many of those external and artificial restrictions that have contributed to the present situation.

Final Notes

Some of the differences between a Puerto Rican citizen and a mainlander:

  • Citizens are eligible for the Draft, but not for the IRS, SSI benefits, or full Medicare payments.
  • Residents are granted equal protection under the law, but on the other hand, they are ineligible for the protections granted by most of the amendments — in particular, the Bill of Rights and the Fourteenth Amendment.
  • Puerto Ricans are ineligible for the provisions of the Affordable Care Act.
  • Puerto Rico has a constitution that can, at any time, be suspended by Act of Congress.
  • Most Puerto Ricans believe they are a nation of their own; almost all speak Spanish first and English second (if at all).

It is for the above reasons (and others) that the United Nations in particular and the world in general condemns the American administration of Puerto Rico as contrary to the principles of self-government.  Considering the commitment of our Founding Fathers to individual freedom, liberty, and above all to the right of representation, the above is especially reprehensible.

On the other hand, much of the blame for continuing the current — and obviously unsatisfactory — situation must lie with the population of Puerto Rico, which seems incapable of agreement for a plan for self-determination.  In three successive referendums (Update:  Now four.  11 June 2017), no consensus has been reached; the earliest were heavily divided, and the most recent, while strongly in favor of statehood, was fatally flawed in that it failed to include a vast number of ballots which were cast without any preference marked — a well-organized protest undertaken by the Nationalist Party.

One thing we can all agree on, though:  Something must be done, and soon, or Puerto Rico’s government may well collapse under the burdens of debt and incompetence — incompetence both of the Territorial Government and the US Congress.

(Update:  On May 3, 2017, the government of Puerto Rico filed in court for debt restructuring protection under PROMESA, effectively a form of bankruptcy.)

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