Would Helping Puerto Rico Cost Too Much?

At the December 1st Senate Judiciary Committee hearing about Puerto Rico’s fiscal and economic challenges, Puerto Rico Resident Commissioner Pedro Pierluisi responded to complaints that helping Puerto Rico would cost too much, and that Puerto Rico’s failure to provide audited financial reports should make Puerto Rico ineligible for financial help from the federal government.

While Pierluisi acknowledged that Puerto Rico’s local government had made mistakes, he didn’t accept the idea that Congress should therefore be able to refuse to help.

He began by speaking about the problems caused by Puerto Rico’s lack of a political voice:

When Puerto Rico becomes a state, as I know it will, my constituents will vote for the president and members of Congress who make our laws, and they will be treated equally under those laws.

Until then, Puerto Rico must depend on the goodwill of senators and representatives from the states…  We are reduced to the role of a supplicant, pleading for equal treatment, or at least more equitable treatment.

What a shameful arrangement—for us, but also for you.

But he went on to speak about the specifics.  “Puerto Rico has been treated unequally under Medicaid and Medicare for 50 years; under the SSI (Social Security Income) and EITC (Earned Income Tax Credit) programs for over 40 years; and under the CTC (Child Tax Credit) program for nearly 20 years,” he pointed out. “The argument that Congress needs audited financial statements from Puerto Rico before it can act to rectify these devastating, decades-old disparities defies logic.”

Pierlusi went on to demand that Congress enact legislation currently waiting for action, legislation that would make Puerto Rico more equal in the funds received for Medicare and Medicaid, extend the EITC and CTC to Puerto Rico, and allow chapter 9 bankruptcy protection. “Of course these provisions will cost money,” he acknowledged, “just as it costs the federal government money every year when it spends $2.5 billion to support the Medicaid program in Iowa, or sends over $400 million in checks to working families in Utah under the EITC program, or provides $100 million to vulnerable individuals in Vermont under the SSI program.”

• Total Medicaid spending in 2014 for Iowa was in fact $4,038,005,449 according to data compiled by the Kaiser Family Foundation, and Iowa is not a particularly expensive state when it comes to Medicaid. They’re ranked at #33. The Government Accountability Office puts Medicaid spending for Puerto Rico in 2010 (the most recent year reported) at $685,000,000 — about 16% of the 2014 spending in Iowa.
• EITC credits to Utah totaled $452,000,000 in 2013, according to the IRS, and again this is not one of the highest numbers among the states. EITC payments to Puerto Rico in 2013? $0.00.
• Total monthly SSI benefits to Vermont in December 2011 were $147,883,000. In Puerto Rico, the total was $623,071,000. Vermont’s population is 626,562, compared with 3.5 million in Puerto Rico, so the amount per person in Puerto Rico is about three quarters of the amount per person for Vermont.

Puerto Rico simply doesn’t receive the same funding as the States. Because the island is a territory, Congress is legally allowed to treat Puerto Rico unequally. But all the people of Puerto Rico are Americans, and they have been U.S. citizens by birth since Congress enacted a law granting U.S. citizenship to Puerto Ricans in 1917.

Does Congress ever refuse social spending to Iowa because it is too expense? No. Is Utah ever shut out from federal programs due to cost?  No. Is it reasonable to expect equal treatment from Congress for Puerto Rico when the island lacks a voice in the democratic process?