Governor Alejandro Garcia Padilla and a key “Commonwealth” party predecessor this week disagreed with President Obama’s White House on the solution to Puerto Rico’s worsening economic problems.
Garcia asserted that it was a diversion to attribute the territory’s economic woes to its political status, according to a report.
Former Governor Rafael Hernandez Colon was quoted as arguing that “To think that we will solve our problems with a change of status is an illusion; it is not a serious approach based on reality. Our problems can be solved with Commonwealth or cannot be solved.”
Under its territory status, often misleadingly called “Commonwealth,” Puerto Rico must comply with all U.S. requirements governing its economy but does not receive many billions of dollars a year benefiting U.S. States and does not have votes in the government that makes its national economic laws and regulations.
Garcia and Hernandez Colon’s contention contradicted findings of President’s Obama’s Task Force on Puerto Rico. In a report personally embraced by the President, the Task Force wrote, “identifying the most effective means of assisting the Puerto Rican economy depends on resolving the ultimate question of status … In short, the long-term economic well-being of Puerto Rico would be dramatically improved by an early decision on the status question.”
The question of Puerto Rico’s status can be resolved by the territory becoming a State of the U.S. or a separate nation, either fully independent from or in an association with the U.S. that either nation can end.
Puerto Ricans chose statehood in a plebiscite at the time of Garcia’s election 13 months ago. The territory status that Garcia urged them to vote for was rejected by 54% of the vote. Statehood won 61.2% against the nationhood options.
Statehood would bring Puerto Rico’s government, people, and economy many billions of dollars a year more than it would require in taxes. It would also give Puerto Rico more political power on national economic policies than two-fifths of the existing States.
Nationhood would enable Puerto Rico to develop an economy free of U.S. standards.
Garcia is close to Hernandez Colon and two of the former governor’s sons. One is Garcia’s Director of the Puerto Rico Federal Affairs Administration and the other is Garcia’s chairman of the “Commonwealth” party’s Federal affairs committee.
Puerto Rico’s Planning Board has estimated that the territory’s economy will decrease .8% during the fiscal year ending next June 30th, worse than the year before and continuing a decline that has lasted most of the past decade. The situation is bad but the territory’s economy has not been encouraging for a third of the past century, as incomes in Puerto Rico have fallen further behind incomes in the States.
Garcia, however, has dismissed fact-based reports on the territory’s economy as “pessimism.” He recently contended that expansion of the economy “is gathering speed and strength.”
The national agencies that rate government bonds disagree. They, the data, and economists in Puerto Rico are in accord that the territory’s economic prospects are bleak.
After borrowing for a dozen years to pay for operating the Commonwealth government — more than any State but much more populous California and New York — Puerto Rico’s bonds have lost value: 16% this year alone. The combination of the Commonwealth’s excessive borrowing and its poor apparent economic future has resulted in negative ratings for Puerto Rico’s bonds.
Other authorities agree with the Obama Administration that Puerto Rico needs to become a State or a nation to significantly change its worrisome economic path. The chairman of the U.S. Senate committee with lead responsibility for territories, Ron Wyden (D-OR), concluded in August, “[F]or Puerto Rico to meet its economic and social challenges and to achieve its full potential … Puerto Rico must either exercise full self-government as a sovereign nation or achieve equality among the States.”
In a recent editorial, The Washington Post noted that the territory’s economic problems are “structural — traceable, ultimately, to its muddled political status.”
Puerto Rico’s representative to the Federal government and statehood party president, Pedro Pierluisi (D), told fellow members of the U.S. House of Representatives this week that “As long as Puerto Rico remains a territory — deprived of equal treatment under critical Federal spending and tax credit programs, forced to borrow heavily to make up the difference, and lacking the ability to vote for the president and members of Congress who make our national laws — the island will be in a position merely to manage, rather than to surmount, its economic problems.”
“One of the most important reasons why Puerto Rico must discard this status in favor of either statehood or nationhood is because the current status has failed, and will continue to fail, to provide the island’s 3.6 million American citizens with the economic opportunities and quality of life they deserve,” Pierluisi continued.
His perspective was shared by leaders of the opposite end of the ideological spectrum in the territory. “[T]he underlying problem” of the economy is “the status of Puerto Rico,” Independence Party Secretary General Juan Dalmau declared this week. Party Secretary for North American Relations Manuel Rodriguez-Orellana wrote that “Puerto Rico’s colonial condition” is a “root cause” of its chronic economic weakness.