Zehner: My Heart’s Devotion

The island territory of Puerto Rico is struggling —and statehood could help.

by Callum Zehner | 10/10/17 12:30am

To most American citizens, the small Caribbean island of Puerto Rico seems to be distant and wholly irrelevant to the country as a whole. Indeed, only 54 percent of Americans are aware that the 3.5 million inhabitants of the island are U.S. citizens. And they are suffering, not just from Hurricane Maria, but from underlying issues worsened by the island’s territorial status. Washington has a duty, therefore, to protect its citizens by accepting Puerto Rico into its ranks as the 51st state in the Union.

Hurricane Maria has been the source of recent attention on Puerto Rico. With damage that knocked out the vast majority of the island’s electric grid, contaminated much of its potable water supply and wiped out 80 percent of crop value, the hurricane has grabbed headlines. However, Maria has only exacerbated severe economic issues that Puerto Rico has been quietly reeling from for at least a decade.

The island’s economy is floundering. After years of heavy borrowing to support general government services, Puerto Rico has amassed $123 billion in debt and pension obligations (equating to 180 percent of gross national income). Due to the nature of its half-this-half-that status, Puerto Rico’s public companies have been unable to file for Chapter 9 bankruptcy, the method that rescued the city of Detroit. In May of this year, the island finally declared a form of bankruptcy, made possible by the passing of a federal law, the Puerto Rico Oversight, Management and Economic Stability Act, in 2016. The pseudo-bankruptcy, however, was contingent on Puerto Rico relinquishing control over its own finances, which has made the island’s citizens feel increasingly disenfranchised and even more like colonial subjects than citizens of the United States. Statehood would give the island’s municipalities the ability to declare insolvency, helping to manage its debt burden. Though this alone would only deal with less than half of its debt, the benefits that come from statehood would help to alleviate much of the economic malaise that created the debt crisis.

In the last decade, the Puerto Rican economy has shrunk every year but one. Last year, Puerto Rico’s gross domestic product shrunk -1.1 percent. Statehood would help the economy grow. With statehood, Puerto Rico would receive as much as $10 billion more in federal funds annually, a large sum in a $103 billion economy. The federal government would also pay an increased proportion of Medicaid bills; the 80 percent of the bill currently footed by Puerto Ricans would go down to 20 percent. The U.S. Government Accountability Office has also stated that investment would likely greatly increase as businesses would now be working with a familiar, standardized legal system, thereby boosting confidence. Paradoxically, the federal personal income tax Puerto Ricans would start paying would actually be beneficial. Forty-six percent of Puerto Ricans live below the federal poverty line, so many of them would get a rebate through the system of progressive tax credits for low-income workers. Because statehood would relieve most of the substantial Medicaid debt burden, boost investment and therefore reverse the rapid population decline, it would also ensure that another debt crisis would not plague Puerto Ricans.

Another factor to take into account is the Puerto Ricans themselves and the degree to which they desire a say in the affairs of the U.S. Under the current arrangement, Puerto Ricans are not able to vote in presidential elections and have no real voice in Congress. The territory has a Resident Commissioner in the House of Representatives who can speak on the House floor and introduce bills, but she cannot currently vote on any bills. Therefore, there are millions of Americans who have no say whatsoever in the federal legislative process. Were statehood to be granted, Puerto Rico would have two senators and around six congressmen. This would have a significant impact on the layout of the House, as the island has a greater population than 21 states. Especially since certain federal laws such as the PROMESA substantially impact the island, it is obvious that Puerto Ricans should have a part to play in the federal process.

Puerto Rico is not in an ideal place. It is gripped by debt, its economy is shrinking and its population is in free fall. Statehood may not solve everything, but it will give the island the means by which it can get back on its feet. The ability to contribute to national politics and to have greater agency over its finances as well as a tighter relationship with the U.S. will be highly advantageous to the territory. Both the Republican and Democratic parties support statehood for the island, and Puerto Ricans themselves are in favor of it, with 61 percent of voters supporting it in a 2012 plebiscite. Puerto Ricans treasure being Americans. It is up to Congress to step in and protect them.