Governor Alejandro Garcia Padilla’s Secretary of the Family said late last week that Puerto Rico’s political status was a major cause of economic inequality and other social problems in the territory.
Idalia Colon Rondon called for action to resolve the question of the territory’s ultimate status. For its future status, Puerto Rico can be a U.S. State or a separate nation. In a plebiscite last November, 54% of the vote rejected the current territory status and 61.2% choose statehood over nationhood.
Colon made the statements in agreeing with expressions of the head of Puerto Rico’s union of social workers at a joint appearance. Association of Professional Social Workers President Larry Alicea had said that the territory’s status was a major problem in addressing Puerto Rico’s substantial social challenges.
“Commonwealth” party administration official Colon said, “the stark differences between the poor and those with many resources cannot continue to exist in our country.” She was referring to the territory but many ‘commonwealthers’ want Puerto Rico to be a new kind of nation — one in a permanent association with another nation (the U.S.) with many of the benefits of the States as well as many powers of nationhood.
The territory is currently considered to be a State under most Federal laws but it is treated differently under some, particularly those providing for major social programs and levying income taxes. Income from the territory is not taxed but that only directly benefits some two-fifths of Puerto Ricans in addition to businesses headquartered in the States.
Major Federal social programs providing substantially less in benefits — if any — outweighs the advantages of the Federal government not having extended all income taxes yet. Especially disadvantaged are the 45.5% of Puerto Rico’s population who live in poverty. The discrimination also denies the territory’s economy billions of dollars a year.
Puerto Rico’s secretary of the Family has to deal with many of the adverse consequences of the unequal treatment due to the territory’s status, which is often misleadingly called “Commonwealth.” Significantly contributing to the consequences is the territory’s unequal treatment in key Federal programs for low-income and helpless members of society, many of which are administered by Puerto Rico’s Family Department.
Temporary Assistance for Needy Families
A key program for needy families in which Puerto Rico is treated far less well than a State would be is Temporary Assistance for Needy Families (TANF). It gives grants to help poor families in which no one is working. In addition to the basic grant, States can qualify for additional TANF Contingency Grants in cases of sharp increases in unemployment and Supplemental Grants in States that used to have low levels of TANF spending.
In Federal Fiscal Year 2011, limited Federal funding provided less than $71.6 million for basic TANF in Puerto Rico. The territory is not eligible for TANF Contingency Grants, however, and cannot benefit from TANF Supplemental Grants.
The State with the closest number of people below the poverty level, North Carolina, got almost $410.2 million for TANF programs in FY 2011. The States with the closest number of unemployed, Kentucky and Oregon, got nearly $168.6 million and more than $175.1 million respectively.
Child Care and Development Funds
In addition, Child Care and Development Fund Mandatory and Matching Grants are closely related to TANF. As a territory, the Commonwealth of Puerto Rico is excluded from receiving Fund grants.
In FY 2011, the State of North Carolina received almost $121.6 million in Child Care and Development grants. Kentucky received nearly $39.5 million. Oregon was given close to $39 million.
Another major area of discrimination against Puerto Rico because it is not a State particularly affecting families is in the Supplemental Nutrition Assistance Program, formerly called Food Stamps. The territory was treated equally in the program until an effort to cut the cost of the Food Stamps program nationally wound up only limiting funding for Puerto Rico. Members of the U.S. Senate — in which the Commonwealth has no representation — ensured that all States were exempted from the cost reduction.
Equal treatment in Nutrition Assistance in Fiscal Year 2009 could have covered 448,000 more Puerto Ricans and increased assistance for the 1,485,000 who got it — a total injection into Puerto Rico’s economy of up to $825 million a year.
Supplemental Security Income
The Supplemental Security Income (SSI) program provides direct assistance to low-income elderly and disabled individuals in the States. Instead of SSI benefits to Puerto Ricans, the Government of Puerto Rico receives a grant under the program that preceded SSI in the States.
In Fiscal Year 2011, SSI gave individuals up to $698 a month. Puerto Rico’s limited grant only enabled it to provide $73.85 per month.
The benefits went to less than 37,000 impoverished elderly and disabled people. North Carolina had 224,962 SSI recipients in FY 2011. If Puerto Rico were a State, at least 220,000 Puerto Ricans would qualify for SSI.
The program would provide an estimated $1.58 billion a year more than Puerto Rico gets under its “Commonwealth” (or territory) status for aid to the needy aged and disabled.
A “Commonwealth” party definition of a proposed new “Commonwealth” status in 1993 called for the extension of SSI to Puerto Rico. House Republican leaders rejected the proposal as unrealistic, and the Clinton Administration said that Puerto Rico would at least have to pay part of the cost.
SSI not applying to Puerto Rico also reduces the amounts of money that hospitals in the territory receive under Medicare because some hospital payments are based on the number of patients who receive SSI.
Earned Income Credit
Puerto Ricans do not benefit at all from one income tax-based program for assisting low-income working families and only some who would benefit in a State benefit from another. The Refundable Earned Income Tax Credit program sends checks to workers whose incomes are too low to have a Federal tax liability. Coverage of low-income workers in the territory would provide them — and Puerto Rico’s economy — with an estimated $520 million a year.
The Refundable Child Tax Credit is a companion program, supplementing the income of workers with children whose wages are too low to have a Federal tax liability. In Puerto Rico, only employees with three or more children benefit. In a State, workers with any number of children do.
Some 152,000 families in Puerto Rico are currently assisted to the extent of about $309 million a year. Extending the program to workers with one child or two in Puerto Rico would provide them with a total of approximately $180 million a year.
Medicaid funds health care for low-income individuals and families. Puerto Rico can expect to receive some $1.162 billion for the program this fiscal year. If it were a State it would receive at least $2.631 billion, $1.469 billion a year more.
In addition, instead of less than 1.4 million low-income people receiving health care benefits, 2.1 million would.
Because it is not a State, the Commonwealth of Puerto Rico is also treated far less well in a number of other major Federal programs, most notably Medicare health insurance for the elderly and the disabled. As new major area of unequal treatment due to the territory’s status is ‘Obamacare’ health insurance subsidies for middle-class individuals and families, which is denying them — and Puerto Rico — about $1.125 billion a year.