On April 29, the New York Times ran an editorial entitled “Puerto Rico on the Brink,” which detailed a litany of economic problems facing the U.S. territory. “Lawmakers in Washington and San Juan need to come up with a plan that addresses the financial and economic problems of the territory,” the editorial stated, noting further that “[t]he island’s difficulties also affect investors in the 50 states who own the tax-exempt bonds issued by Puerto Rico’s government and utilities.”
The New York Times Editorial Board suggested that much could be done to revive Puerto Rico’s struggling economy, including stronger efforts to boost tourism, manufacturing and the service sector through targeted investments. The editorial also recommended that the Puerto Rico government raise taxes and Congress approve legislation to permit Puerto Rican government-owned companies and municipalities to restructure their debt using Chapter 9 of the Federal Bankruptcy Code, an option that does not exist in the U.S. territory but is available in the 50 states.
Finally, the editorial noted that in addition to fixing its finances, Puerto Rico “has to answer a bigger question about its future” – its status. The Times recommended that the Puerto Rican government hold another plebiscite to follow up the 2012 vote, using the $2.5 million appropriated by Congress in 2014.
In a reponse printed in the Times today, Puerto Rico Resident Commissioner Pedro Pierluisi commended the newspaper for identifying the “main culprit” of Puerto Rico’s economic woes: Puerto Rico’s territorial status.
“The Constitution gives Congress license to treat Puerto Rico worse than the states under federal law, and Congress often uses that license,” wrote Pierluisi.
Noting Puerto Rico’s lack of voting representation in the country that makes its laws, Pierluisi observed that if Puerto Rico were a state, the island would automatically have authorization for government-owned companies to adjust their debt in Chapter 9 bankruptcy proceedings.
“No people have ever prospered while being treated unequally, and it is not reasonable to expect Puerto Rico to be the exception to that rule.” wrote Pierluisi. “For my constituents to have the bright economic future they deserve, Puerto Rico must become a state.”