On Friday, the U.S. House of Representatives brushed aside a veto threat from President Trump and passed a $21 billion plus spending bill prompted by the earthquakes that began in Puerto Rico December 28th. The measure would primarily benefit the U.S. territory.
Seventeen Republicans joined Democrats to pass the legislation to which an additional $224 million in amendments was added during House consideration. These include $170 million proposed by Puerto Rico Resident Commissioner Jenniffer Gonzalez-Colon (R) to increase the amount for additional food assistance for Puerto Ricans contained in the bill from $40 million to $210 million.
The biggest items in the bill were unrelated to the earthquakes. One would provide Federal subsidies for Earned Income Tax Credits (EITC) and payments to low-income workers in the five U.S. territories on an ongoing basis. This would cost an estimated $6.921 billion over the first 10 years.
Another major item would extend the payments portion of the Child Tax Credit (CTC) program from workers in Puerto Rico with three or more children to those with one or two, as in the States. It would cost an estimated $6.647 billion over the first two years. Such an extension was the major concrete recommendation of the bipartisan, bicameral Congressional Task Force on Economic Growth in Puerto Rico established by PROMESA in its December 2016 report, and a similar measure is pending in the U.S. Senate.
Equality in the CTC and EITC programs has been a major priority of Gonzalez-Colon.
Another Gonzalez-Colon proposal included in the bill would increase the amount of the Federal tax on rum granted to the Governments of Puerto Rico and the U.S. Virgin Islands and continue this increase and an increase now in law on a temporary basis on an ongoing basis. The tax is $13.50 per proof gallon. Ongoing law grants the territories $10.50 of the tax based on production in each territory, with them splitting the tax on foreign rum. Temporary law increases the amount to $13.25. Under the bill, the territories would get the whole $13.50 on an ongoing basis.
The Congress’ Joint Committee on Taxation estimated that the rum tax grants provision would provide the islands with $1.749 billion over the first decade but the territories use up to 44% of the monies to subsidize their rum companies.
The bill would also partially reimburse employers affected by the earthquakes in Puerto Rico who kept employees on the payroll despite business interruptions. It was estimated that this measure would provide them with $68 million. Gonzalez-Colon succeeded in having a similar measure added to assistance bills for Hurricanes Maria and Irma.
Another tax provision would increase the amount of New Market Tax Credits that could be taken for investments in Puerto Rico by $500 million, although the Congress’ Joint Committee on Taxation estimated that only $307 million of the allowance would be used over 10 years
A final tax provision would increase the Low Income Housing Tax Credits that could be taken for investments in the territory by $50 million a year. The Joint Committee on Taxation estimated that $442 million in such credits would be taken over decade.
The major items of direct spending for Puerto Rico in the bill in addition to the funding for food would appropriate —
* $2 billion for Community Development Block Grants — in addition to the $20 billion plus that has been allocated in relation to Hurricanes Maria and Irma.
* $1.26 billion for Community Development Fund grants.
* $1.25 billion for repairing roads.
* $100 million for fixing schools.
Also provided would be $24.75 million for Energy Department technical assistance to Puerto Rico and the Virgin Islands related to their electrical grids — including $3 million due to an amendment proposed by V.I. Delegate Stacey Plaskett (D).
In addition, there would be $1 million for studying the impact of Puerto Rico’s disasters on its schoolchildren through an amendment proposed by Representative Donna Shalala (D-FL).
The one non-territories provision added to the bill was an appropriation of $45 million related to Hurricane Harvey recovery proposed as an amendment by Rep. Dan Crenshaw (R-TX) with Rep. Lizzie Fletcher (D-TX).
There is no hint that the Senate’s Republican majority plans to act on the legislation.
Claims have been made that Puerto Rico received more disaster assistance than any other place in the United States, but estimates indicate that Hurricane Katrina brought $120.5 billion to Louisiana. The State of Louisiana has six Congressmen in Washington in addition to its two Senators, which is roughly the same amount of voting representation Puerto Rico would have in Congress to fight for funding if it were a state.
Read the Trump administration statement of opposition to the bill here.
