Debt, Financial Crisis, and Puerto Rico’s Political Status

Recent headlines about Puerto Rico have focused on Puerto Rico’s debt and its related financial crisis.  While the island’s significant fiscal problems have overshadowed the status debate lately, some press coverage is ultimately finding its way back to questions involving Puerto Rico status as U.S. territory and the impact that status has had in causing and resolving current problems.

International Business Times clearly linked the two issues in a recent article, “Puerto Rico’s Debt Woes Play into Statehood Debate,” reporting that “[s]ome statehood supporters have tied the island’s dire economic straits to its murky political status,” while “[o]pponents say the financial burden of statehood — including billions of dollars in federal taxes — would be a serious economic blow to the island.”

The article mentions a number of factors that connect the financial crisis with Puerto Rico’s status:

• Puerto Rico’s unequal treatment in federal programs
• The fact that Puerto Rico is excluded from Chapter 9 bankruptcy
• Concerns that Congress won’t support statehood if Puerto Rico is in extreme financial turmoil

The International Business Times article shares perspectives from different sides of the debate without favoring a particular status for Puerto Rico, concluding with a recent quote from former Florida Governor Jeb Bush in favor of statehood and pointing out that “the presidential candidates are keeping an eye on Puerto Ricans’ growing clout in Florida.”

Jose Aponte-Hernandez wrote in The Hill that “the main problem has been and remains the political status.” Pointing out that the uncertainty of the current “colonial government” prevents Puerto Rico from full development, Aponte-Hernandez said, “Washington has to intervene, and it must be now. There are several bills pending in this Congress aimed at giving Puerto Rico equality with the rest of the States.”  Congress has the power to take the next step toward resolution of the status question, and Aponte-Hernandez, for one, considers it a responsibility.

The Latin Post quoted Resident Commissioner Pedro Pierluisi on the subject. Pierluisi, Puerto Rico’s non-voting representative in congress, says firmly that “The root cause of these enduring problems is our political status.”

There are also news sources that do not see the island’s status as the cause of the financial difficulties. Most of these look, like the recent New York Times editorial, to the territorial government, suggesting that “bad policies, mismanagement, excessive debt and bad luck” have created the financial crisis. The Times doesn’t let the United States off the hook, though. They conclude, after discussing the need for resolution of Puerto Rico’s status, with, “The island’s financial problems are a reminder that benign neglect has had terrible consequences for millions of Americans.”

Pierluisi responded with a letter to the editor, calling Puerto Rico’s political status the “main culprit”in the island’s fiscal crisis and emphasizing that “[n]o people have ever prospered while being treated unequally, and it is not reasonable to expect Puerto Rico to be the exception to that rule.”

The Huffington Post led its coverage with statements by Rep. Luis Gutierrez. “We’re spending billions of dollars rebuilding Afghanistan and Iraq, and we can’t help the fiscal crisis where there’s [3.7] million American citizens? This is absurd, what is happening,” the Post quoted Gutierrez as saying. “Then again, it’s not like they have senators or congressmen here who can vote and legislate.”

Calling for more government assistance for Puerto Rico, Gutierrez stated that “Congress has a responsibility” to act.

“Just think of how bondholders, Wall Street, is now going to be able to control the day-to-day priorities of the government of Puerto Rico,” Gutierrez concludes. “That’s just shameful that we allow something like that.”

The Independent, a UK paper, touches on numerous aspects of the fiscal crisis, including status.  “Some blame its step-child relationship with America, neither a fully-fledged US state nor an independent nation.”  The article concludes with a quote by former Puerto Rican Senate president and Secretary of State Kenneth McClintock, who believes gaining statehood is the only solution. “Seeking statehood is the only way that Puerto Rico can expect to find the tools necessary to crawl out of the hole we are in.  It’s the only scenario where Puerto Rico will cease to be in this fiscal black hole.”