Would Independence Be Good for Puerto Rico?

As Puerto Rico is discussed increasingly in floor speeches, candidates’ statements, and media, it is increasingly noted that Puerto Rico has only two viable options under the U.S. Constitution: statehood in the United States, or independence with or without a relationship with the United States. The people of Puerto Rico voted for statehood in 2012, but independence is also an option.

The question is, would independence be good for Puerto Rico?

A Government Accountability Office study makes it clear that Puerto Rico would be better off economically as a State than it is as a territory.

The report looked at how the financial situation of the island would have been different if Puerto Rico and residents of the territory had been treated equally with the States and their residents in 29 Federal programs in Federal Fiscal Years 2010 and 2011 and in tax laws in 2009 and 2010.

The GAO study showed dollar ranges, given that there are other factors involved, but it determined that there would be significant differences:

  • Puerto Rico would have received $1.5 billion to $1.8 billion more under Supplemental Security Income (SSI) aid to low-income elderly and disabled individuals.
  • Puerto Rico would have received some $1.5 billion more in Medicare funding for the elderly and the disabled, with the lower estimate due to increased funding in other programs
  • $515 million to $1.415 billion more in Medicaid funding would have been provided.
  • Funding for the SNAP (food stamps) program might have been reduced by $200 million, or it could have been increased by as much as  $700 million, depending on other factors.
  • Puerto Rico would have received an additional $115 million in highway construction funding.

Puerto Rico’s Resident Commissioner, Pedro Pierluisi, concluded that “statehood will mean $9 billion to $10 billion in additional Federal funding … on an annual basis.”

Looking at the examples of Alaska and Hawaii, the most recent territories to become States, we can also conclude that Puerto Rico would see increased tourism and increased business investments if Puerto Rico became the 51st state. Independence would mean the loss not only of the support given to the territory by the U.S. now, but also the loss of these potential increases.

While territories can work out plans for support from the United States if they choose to become independent, as history has shown with the Philippines (which has a Mutual Defense Treaty with the U.S.), Puerto Rico would face other losses besides economic ones.

Puerto Ricans would probably also lose U.S. citizenship eventually, as the people of the Philippines did. For many patriotic Puerto Ricans, this would be a wrenching loss.

Puerto Rico would probably lose much military support. While the U.S. does have a treaty with the Philippines, the Philippines receives no assistance from the Coast Guard or the National Guard. Concerns about terrorism and drug-related crime in Puerto Rico may make this a bad time to lose the ongoing support of the U.S. military and the U.S. Homeland Security Department.

This could also be a bad time to lose the ability to travel freely to and from the United States. With more Puerto Ricans on the mainland than on the island, the loss of easy travel without a passport could be a hardship to families and friends seeking to stay in touch.

6 Comments

A. M. V.

This is not journalism, it’s propaganda. This article was written for one presuppose: convince the reader that statehood is the only viable option for Puerto Rico. It makes ZERO attempt at being a balanced or unbiased piece. This is nothing more than mindless fear mongering; using the Philippines as an example of WHAT NOT TO DO, without providing ANY historical background as to the detrimental effects the one-sided treaty it made with the US has had on its economic development. Also, it fails to mention that the same GAO study it it quotes also concluded that statehood would mean EVEN MORE TAXES ON PUERTO RICANS. The author of this piece should be honest with the reader and title it “Puerto Rico and Statehood: a Reductive Guide on a Complicated Matter”

Associate Writer

A.M.V.,
Thank you for your comment. We agree that the GAO report indicated an overall increase in total individual and corporate federal income taxes paid. The increased corporate taxes would come from treating a Puerto Rican presence of a corporation equally with its State-based presence. Congressional investigations have indiated that special tax treatment for U.S. based corporations in Puerto Rico represents a loss of federal revenue that does not actually trickle down to help Puerto Ricans. (See our story: http://puertoricorepo.wpengine.com/foreign-taxation-in-puerto-rico/#.Vo1TzfkrJpj) In addition, lower income families in the fify state qualify for the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC). Due to Puerto Rico’s relatively low wages, many Puerto Ricans would qualify for the EITC and CTC if Puerto Rico were a state, putting more money in their pockets. (http://puertoricorepo.wpengine.com/a-proven-work-incentive-but-only-for-states/#.Vo1UhfkrJpg) With respect to U.S. citizenship, there is no guarantee that it would be preserved, no precedent for it, and lots of reason to think that a statutory grant of citizenship by the U.S. Congress would not last forever given Puerto Rico’s lack of representation before Congress. We appreciate your thoughtfulness on the issue and for being in touch. We appreciate your perspectives and hope you will continue to comment.

A. M. V.

Thank you for addressing some of the issues I brought up in my earlier comment, but once again this editorial tries to influence the reader with irracional fear by making it seem that US citizenship is the very oxygen we breathe, and that the very notion of living without it is enough to drive us mad. No one can say for sure the type of arrangement that could be reached between the US and an independent Puerto Rico. The subject is complex and requires both parties to define what terms and conditions would govern their future relationship. Once again your answer touches none of these points and only cherry picks certain facts that support the propaganda you want to push on us. On the other hand, the “benefits” that you highlight from the GAO are constantly quoted as evidence that Puerto Rico would be better off as a state. Above all else, it’s major selling point is that we would receive more federal funds. I can understand the nearsightedness of wanting more money to spend. Who wouldn’t like a few more dollars in their pocket? Especially now that Puerto Rico is going through its gravest financial crisis yet; and on top of that over 40% of the Island’s population lives below the poverty line. So it’s no surprise you try so hard to push money in our face, as if it had an entrancing effect that renders further analysis useless. But how does this constant dollar chasing affect Puerto Rico in the long run? Puerto Rico ALREADY DEPENDS ALMOST COMPLETELY on Federal Funds to operate because we barely have any production of our own. The Island’s government is like an addict, and federal funds seem to be its drug of choice. The GAO report only serves to enable this RAMPANT AND OUT OF CONTROL DEPENDENCY that has made Puerto Rico into a welfare state that benefits welfare-dependant-rent-seeking corporations that come mostly from the US. Puerto Rico’s status is not a subject that can be dismissed with more money. It’s a complex situation that requires serious and in depth analysis, and you have not provided it.

Mike Clubb

you are contradicting yourself so often that it’s hard to figure out your position. this island has proved that it is incapable of responsible government. without the U.S. it would be worse than haiti……

Zealot 51

TO “ASSOCIATE WRITER”:
Whoever you may be, you are definitely “part of the problem” at “THE PUERTO RICO REPORT” (which the Zealot would ignore if it were not frequently a valuable publication). Your response above is shamefully sloppy: witness such gaffes as “indiated” plus the third and fourth words of the phrase that reads, “…in the fify state qualify….” Moreover, you made no effort whatsoever to correct the error committed above by “THE PUERTO RICO REPORT” when it declared that “Puerto Ricans would probably also lose U.S. citizenship eventually, as the people of the Philippines did.” HELLO?!? Filipinos were NEVER U.S. citizens at any moment during their homeland’s 48 years as a U.S. territory! Your publication may lose all of its minimal remaining credibility if this sort of imcompetence is permitted to continue.

Zealot 51

CORRECTION: In the final sentence of his contribution above, the Zealot misspelled “incompetence.” Most embarrassing — especially given the context!

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.