The 2005 Report of the President’s Task Force on Puerto Rico contained this clear statement about the relationship between the United States and Puerto Rico:
The Federal Government may relinquish United States sovereignty by granting independence or ceding the territory to another nation; or it may, as the Constitution provides, admit a territory as a State, thus making the Territory Clause inapplicable. But the U.S. Constitution does not allow other options.
“Ceding the territory to another nation” just means “give Puerto Rico away.” Commenters have pointed this out. Hector Pesquera, for example, was quoted as saying, “Congress can give Puerto Rico away, sell it or set it on fire without asking anyone’s opinion.” A meagerly-supported petition at change.org asked the federal government to “give Puerto Rico back to Spain.”
The 2005 Report continues,
Some have proposed a “New Commonwealth” status. Under this proposal, the island would become an autonomous, non-territorial, non-State entity in permanent union with the United States under a covenant that could not be altered without the “mutual consent” of Puerto Rico and the federal Government. The U.S. Constitution, however, does not allow for such an arrangement. For entities under the sovereignty of the United States, the only constitutional options are to be a State or territory.
The 2007 Report of the President’s Task Force on Puerto Rico phrased it differently, but just as clearly:
The plenary Congressional authority over a non-state area thus lasts as long as the area retains that status. It terminates when the area loses that status either by virtue of its admission as a State, or by the termination of the sovereignty of the United States over the area by the grant of independence, or by its surrender to the sovereignty of another country.
In other words, yes, Congress could give Puerto Rico away.
In a Senate subcommittee hearing in 2013, Puerto Rico’s Governor Alejandro Garcia Padilla referenced Plessy vs. Ferguson, the “separate but equal” law in criticizing the decision to leave a “commonwealth” option off the 2012 plebiscite ballot. Listeners were confused by the reference.
The idea — indeed, the fact — that Congress has plenary power over a territory is not the same as the idea that “separate but equal” accommodations make segregation acceptable. The federal government decides whether “commonwealth” is possible under the U.S. constitution, and they repeatedly have decided that it is not.
The federal government determined that Puerto Rico can’t make laws about bankruptcy that conflict with the U.S. bankruptcy code, and Congress will be the body that determines whether Puerto Rico will have protection under chapter 9.
The Supreme Court decided in 2016 that Puerto Rico as a territory does not have the “power, dignity and authority” of a state.
The federal government determines what kinds of relationships Puerto Rico may have with nations other than the United States, and the U.S. government has stepped in when Puerto Rico has tried to make relationships like a sovereign nation.
Even in 1880 (National Bank v. County of Yankton), the decision held that, “It is certainly now too late to doubt the power of Congress to govern the Territories.”
It is still too late.
Congress could legally give Puerto Rico to Spain, but there is no reason to think that this is an action Congress will take. With more than five million U.S. citizens of Puerto Rican heritage living in the States, it is fair to assume that this would be an unpopular move. Puerto Ricans living in the States, unlike the 3.2 million living in Puerto Rico, have voting representatives in Congress and a voice in Presidential elections. This gives them a degree of political power that Puerto Rico, as a territory under the plenary power of Congress, does not have.