The Senate Committee on Energy and Natural Resources held a hearing on Tuesday to consider “the states of the territories.” Puerto Rico Governor Pedro Pierluisi was one of the expert witnesses.
His testimony began on a positive note. “Puerto Rico is emerging from a challenging period with strength and optimism,” the governor said, “But much work remains to be done.”
“[T]he Federal Reserve Bank of New York reported that Puerto Rico has been the jurisdiction that has recovered best in its region, highlighting the considerable drop in unemployment, increase in job creation to greater than pre-pandemic levels, and positive economic growth that had not been seen in years,” Pierluisi continued. “As our economy recovers and we continue to promote our socioeconomic development, we must also ensure that Puerto Rico’s power grid is reliable and resilient, we must speed up our reconstruction, continue to protect the health of our people, and most critically, work with Congress to receive fair treatment in domestic social programs such as Medicaid and Medicare.”
The governor went on to detail progress and needs relating to these issues.
Pierluisi reported that a Plan of Adjustment resolving Puerto Rico’s indebtedness had been approved.
“[T]he successful restructuring means that the total amount of central government debt now goes from $34 billion to $7.4 billion, a 78% reduction. The POA makes debt repayment possible by cutting Puerto Rico’s maximum annual debt service payments from as much as $4.2 billion to $1.15 billion a year, meaning that the government before had to devote 28 cents of every dollar to debt repayment, and now it will be only 7.8 cents.”
He mentioned that the Fiscal Oversight and Management Board had approved a revised fiscal plan designed to work towards economic growth for Puerto Rico.
Praising the work of the Board, the governor also pointed out that the FOMB adds an extra layer of bureaucracy to the work of the government, and asked to begin a conversation with the Committee on the role of the FOMB going forward.
Recovery and reconstruction
Now that Puerto Rico has access to the disaster relief funds promised after Hurricane Maria, the Island has been able to make significant progress toward recovery.
“A major focus of my administration has been to accelerate the progress of over 7,300 projects with permanent work funding with a total obligation of $20.1 billion of federal share. As such, over 330 projects have already been completed, and over 500 are currently under construction,” he explained. “We expect that in 2022 at least 2,000 projects with a construction value of over $4 billion will be either in construction bids or in construction activity, including the first projects to repair the electrical transmission and distribution system, as well as water aqueducts and plants, roads, schools, industrial buildings, recreational parks, sport installations, and hospitals.”
Pierluisi acknowledged that the work on Puerto Rico’s electrical grid has included “growing pains,” but spoke optimistically of the progress that had been made.
“[T]he path towards modernization has been set and we are committed to providing modern and reliable electric service to all on the island. The grid reconstruction is well underway, with hundreds of substations repaired, thousands of poles and streetlights replaced, and over 15,000 new solar customers connected,” said the governor. “Also, more than 130 FEMA funded projects totaling over $7.4 billion are in design and contracting stages, and work continues to safely integrate 1,000 MW of utility-scale renewable energy generation. We are confident that with the federal funding and private sector collaboration, Puerto Rico’s electric system will be up to the standards our people need and deserve.”
Referencing the dilapidation of the energy grid before Hurricane Maria, Pierluisi also reiterated the Island’s commitment to the use of renewable energy sources.
The governor pointed out that Puerto Rico is treated unequally with states in federal programs, and stated that Puerto Rico cannot solve these problems on its own.
Taking Medicaid as an example, Pierluisi said, “The simple reality is this: federal Medicaid funding in the fifty states and the District of Columbia does not run out and states with similar economic circumstances are required to contribute far smaller matching amounts than Puerto Rico.”
He expressed appreciation for the Biden administration’s commitment to equity in Medicaid, as shown in the Build Back Better bill, and also for the bills that members of the Committee had introduced in Congress to address the inequality. “I ask this Committee to ensure that the Medicaid program basically apply to Puerto Rico as in the states,” he concluded.
The status question
“124 years of unequal treatment towards the American citizens living in Puerto Rico have taken a toll on our society. And it is important to realize that even after the successful restructuring of our public finances and the rebuilding of our infrastructure, Puerto Rico will remain hindered until our century-long status question is resolved,” Pierluisi told the committee. “The people of Puerto Rico voted and chose permanent union with the United States through statehood as their path forward. So many Puerto Ricans have defended American democratic values at home and abroad that lack of representation and voting rights, as well as congressional inaction, are unacceptable.”
“Congress must call for a vote on the political future of Puerto Rico and commit to implementing the will of the majority,” the testimony finished. “That is what democracy is all about. It is time to act.”
Sen. Martin Heinrich (D-NM) picked up the topic during questioning. “I was quite proud to introduce the Puerto Rico Statehood Admission Act along with a number of my fellow Senators, and if passed this legislation would serve as Congress’s formal offer of statehood to Puerto Rico,” he said. “There have been a number of plebiscites in Puerto Rico on the question of statehood – including one just last November, I believe. What have Puerto Ricans communicated through these plebiscites?”
“Their desire to have a permanent union with the United States,” Pierluisi responded. “And what they’re saying – loud and clear – they’ve been saying it now for quite a while – is that they want equality. They want to be treated the same as their fellow citizens in the States.”
Pierluisi referred to the Puerto Rico Statehood Admissions Act mentioned by Heinrich, saying, “Now, I recognize that there are other competing bills. And I also know that there’s an ongoing effort to try to get a consensus bill. But what I’ll say to this Committee is that it is very important that we get a vote. That for the first time ever, Congress, at the very least, asks the people of Puerto Rico, the American citizens of Puerto Rico to vote on their political future, and then commit to implementing the will of the majority. That’s what democracy is all about.”
The competing bill proposes a status convention followed by another plebiscite asking for a vote among multiple status options.
“If you want to do a multiple option Bill, you can. I am not afraid,” said Pierluisi. “I’m not afraid of the people’s will. And that’s all we’re asking. It is only fair. And I know that Congress will have the last say. The way that the statehood works or could work is if a majority in both the House and the Senate vote for it. And we know that we’ll have to go through that process. But the very first step is the one that you’re asking for.”
Heinrich introduced S 780, the Senate companion bill to HR 1522, the Puerto Rico Statehood Admissions Act, in the Senate.
“But if for some reason you want to have multiple options, and they’re well defined,” Pierluisi continued, “I have no problem whatsoever with it, so long as you ask the people of Puerto Rico once and for all.”
Heinrich replied,”[E]ven with the majority of Puerto Ricans voting in favor of statehood, there is still an argument that a status convention is needed. Do you believe, Governor, that a status convention is necessary given the outcome of the recent plebiscites?”
“You would simply be prolonging an endless debate,” Pierluisi responded.” The best thing is ask the people directly. There will be a debate. They will be informed by the debate, and Congress should act on this.”
At this point, Heinrich asked all the witnesses their thoughts on the “current system where an American citizen on the mainland is treated differently than an American citizen in a territory. For any of you, what message does that send?”
Governor Bryan of the U.S. Virgin Islands said, “It’s a slap in the face.”
Heinrich agreed, saying, “I think it would shock most Americans to learn that if they decide to move to a different location, that they get treated differently based on that, and I think that would be a surprise to most folks.”