On February 24, Congresswoman Nydia Velázquez (D-NY), Congressman Luis Gutiérrez (D-IL), and former Puerto Rico Governor Anibal Acevedo Vilá conducted an educational briefing on Capitol Hill entitled, “Puerto Rico and The Economic Crisis: What Responsibility does the United States Have to the Island?
The main focus of the briefing was to evaluate the United States’ commitments to Puerto Rico in the wake of the recent fiscal mismanagement. The speakers raised concern over the current U.S. approach to Puerto Rico, and emphasized the need to revitalize the economic and political relationship. The speakers conceded that the current debt crisis could be addressed through careful negotiation between the United States and Puerto Rico.
One of the central themes of the discussion was the repeal of Section 936 of the U.S. Tax Code and the implications it had on the Puerto Rican economy. The full repeal of the section in 2006 is often viewed as a cause of Puerto Rico’s economic problems, although other experts cite abuses with the former program that impeded its effectiveness on the island and contributed towards its repeal, the fact that nationwide manufacturing also decreased at roughly the same time without the loss of a tax provision similar to 936, and the fact that U.S. based companies continue to receive significant tax benefits for maintaining a presence in Puerto Rico.
Congresswoman Velázquez emphasized the need for the United States to draft pro-growth solutions to boost the economy. Ten percent of Puerto Rico’s population has left the country since 2004 as a result of the economic slump. In such dire circumstances, Congress cannot turn its back on Puerto Rico. Congressman Gutiérrez echoed the sentiments of the Congresswoman, calling on Congress to assume its responsibilities during this fiscally turbulent time.
Congressman Gutiérrez provided a skeptical analysis of the situation. From 1898 to 1952, the U.S. advocated for self-governance within the region. However, since 1952, there has been minimal effort to provide Puerto Rico with the resources to govern autonomously. Statehood was never on the agenda, as the United States continued to view Puerto Rico as an unincorporated territory. Despite this, Congress continues to exert its plenary powers over the region.
Congressman Gutiérrez raised much contention with this, arguing that by establishing such a setup, Congress must exert plenary responsibilities. If Congress is unable to arrive at a decision, it is the duty of the Executive Branch to assume this responsibility.
The Congressman went further to state that Puerto Rico is, in fact, a colony of the United States. The military intervention in 1898 established the very beginning of this relationship. Given the extensive powers Congress has over the island, it is unjust to shift the responsibility of the debt crisis on to the people and local government of Puerto Rico.
According to the speakers at the briefing, the issue at hand is clear – the United States must define in clear terms its interests in Puerto Rico. The relationship, historically, is rooted deeply in economic and military needs. However, many of the economic policies disadvantage Puerto Rico. Puerto Rico is required to abide by federal regulation standards; however, it does not receive the same federal funding as other states. The issue here is a structural one – not cyclical. In order to make reforms, a new economic relationship has to be established. Congressman Gutiérrez criticized the U.S. proposition to elect a financial board that would ensure it cuts expenses and deficits. This board, which would not be elected by the Puerto Rican people, is a clear example of the issue; revoking self-governance is diminishing democracy.
The briefing provided an understanding of the Puerto Rican officials’ perspectives on the debt crisis. The speakers made it entirely clear that they believe Congress has offered little tangible support as the island grapples to deal with the $72 billion debt. Instead, it is depriving the people of the little autonomy they have left and adding more control mechanisms.