No rush in Washington to solve Puerto Rico’s status woes

Election after election Puerto Rico’s pro statehood New Progressive Party (PNP) rally their followers and make a claim for the island to be admitted as the 51st state of the Union. “Statehood now!” said the posters and banners of one PNP legislative candidate. The PNP’s 2013-2016 platform called on the electorate to vote for statehood, stating that “then we can choose statehood and for the first time go to Washington with a single voice.”

Such PNP discourse paints statehood as something that is available for the taking, only if Puerto Ricans were to ask for it. Both PNP pre-candidates for governor, Pedro Pierluisi and Ricardo Rosselló, for example, propose skipping another vote and immediately asking for admission as a state. Nevertheless, a quick glance beyond the horizon reveals that the United States government and the powers that be are entirely complacent with the current Commonwealth status.

{mosads}With few Americans believing that Puerto Rico should be accepted as a state, congresspersons have little to no pressure from their respective districts to tend to the status question. This apathy is demonstrated by the flop and fail of sporadic and isolated initiatives that pushed for the status question to be resolved, such as HR 856 in 1997, HR 900 in 2007, HR 2499 in 2010, and most recently HR 2000 in 2013. HR 2499 – which was approved in the House with 52% of the Congressional vote, died in the Senate amidst the lack of response from the White House. More than two thirds of the “nay” votes came from members of the Republican Party; an obstacle indeed for the PNP in the face of the current and future GOP-controlled Congresses. HR 856, on the other hand, was approved by the House by one vote with 85 percent of “nays” coming from the GOP Similarly, the bill died in the Senate. Though the surge of new Puerto Rican migrants to certain congressional districts may heighten in the interest among a few congressman, so far it has not been enough to make waves.

Rhetoric on behalf of stateside politicians and presidential candidates is also mere chatter. During the 2008 campaign, for example, then-candidate Barack Obama stated that “as President, I will work closely with the Puerto Rican government, its civil society, and with Congress to create a genuine and transparent process for self-determination that will be true to the best traditions of democracy.” George W. Bush went a bit further, stating that “for Puerto Rico to be a state would be good.” Nevertheless, neither pressed the issue in Congress, doing little more than naming special task forces and producing informative reports. They were able to pick up significant amounts of campaign donations, though, as candidate Jeb Bush is doing now. The island in effect has become a quick cash-cow pit-stop for any candidate willing to express even a remote interest in the Puerto Rican question. This has been highlighted most recently by Alaska Rep. Don Young (R), who conveniently stopped in a few days prior to chairing a subcommittee hearing on Puerto Rico’s political status.

Nor is the island’s economic and financial arrangement an incentive for Congress to admit Puerto Rico as the 51st state, as some PNP lawmakers would like to think. Bondholders and investors, for example, reap the benefits of Puerto Rico’s triple tax exemption bonds, something that would be disappear if the island were to become a state. These forces have powerful lobbies, as demonstrated by their blockage of Pierluisi’s HR 870, which sought to extend the U.S. Bankruptcy Code Chapter 9 to Puerto Rico. These bondholders and investors are joined by powerful lobbies hired by the U.S. shipping industry to maintain colonial maritime laws which force Puerto Rico to ship all of its product with U.S.-flagged, -produced, and -manned ships. To top it off, millions of dollars are pumped into Washington lobbies annually by Controlled Foreign Corporations who utilize Puerto Rico as a tax shelter. These multi-national firms – though domestically American – enjoy special tax treatment and are treated as foreign corporations, paying an effective tax rate of about 2 percent compared to the U.S. corporate tax rate of 35 percent. These companies’ stakes are so large that only seven of them represent 20 percent of the Commonwealth’s government revenues. Puerto Rico, in turn, has become a corporate welfare paradise for business interests.

Meanwhile, Puerto Rico’s social situation appears to be manageable. Though unemployment and poverty are widespread, starvation and civil unrest are not an issue. Despite the more $13.5 billion pumped into Puerto Rico annually, federal expenses are reasonable when considering the $22.6 billion spent on locals on U.S. imports, $34 billion in capital flight and $1.5 billion in maritime law costs. The price tag to maintain Puerto Rico a Commonwealth is relatively painless for the U.S. Congress and is miniscule enough to keep even fiscally obsessed congresspersons at bay. To top it off, the lack of a clear consensus towards an alternative status option invalidates the sense of urgency communicated by the PNP. The result is a de facto purgatory, enjoyed by big business interests; reaped by political fundraisers; and tolerable by the U. S. Congress. Frankly, most can care less.

Gallardo is a municipal legislator and is based out of Puerto Rico. He has an M.P.A. from Valdosta State University and a Juris Doctor from the University of Puerto Rico. You can connect with him on Twitter or Facebook at @LuisGallardoPR or luisogallardo@gmail.com