• New Federal GAO Study Reveals Surprising Financial Analysis of Puerto Rican Statehood

    The Government Accountability Office (GAO) released a cool study about making Puerto Rico a new state. You can read it here

    They ran all numbers with the the 50 states being the same, but with the addition of a 51st for federal expenses and tax income. It does not cover any changes to Puerto Rican internal economics should statehood occur. This is just early financial statements to live with a new state.

    Key Points Are:

    1. Medicare, Medicaid, Supplemental Nutrition Assistance (SNAP) and Supplemental Security Income (SSI) benefits would rise in Puerto Rico.

    2. US Federal personal income tax would have gained $2.2 billion from the island in 2010.

    3. Of this, approximately $800 million would have gone back in the form on low income credits.

    4. Only 30% of Puerto Rican residents would have a federal tax liability.

    5. At a corporate level, the estimates vary from $700M to $9.3B in federal taxes. This could cause an exodus of several multinationals.

    6. The GAO is concerned over Puerto Rico’s public debt.

    Politicians have taken to this study, with statehood proponents showing the financial benefits to the average Puerto Rican resident.

  • Senate Introduces Statehood Bill

    The Senate Energy and Natural Resources Committee is getting involved. Senator Martin Heinrich (D – New Mexico) introduced a Puerto Rican statehood bill (Puerto Rico Status Resolution Act) based on his own state’s struggles.

    “My home state of New Mexico spent 66 years as a territory before gaining statehood in 1912—the longest of any state. Puerto Rico has spent nearly 116 years as an American territory. That’s long enough. The debate over Puerto Rico’s status needs to be settled once and for all so that its people can focus on fostering a more prosperous future.” says Heinrich.

    This is a good point. Puerto Rico’s status has long been in question.

    For his Puerto Rico Status Resolution Act to pass, island voters will get to choose. The US government will support the cost of the vote (via this bill). If a majority say yes, the President of the US must approve and so must Congress.

    Despite ongoing economic woes on the island, the federal support being giving to Puerto Rican statehood is growing in 2014. The only negative leanings for the island continue to be debt related issues.

  • Congress Warns Against Enhanced Commonwealth Status – Push For Yes/No 51st State Vote?

    A letter from Senate Energy and Natural Resources Committee Chairman Ron Wyden (D-OR) and Ranking Minority Member Lisa Murkowski (R-AK) came out Friday. Aimed at Gov. Garcia Padilla, this is another in a long line of attacks aimed at the “New Commonwealth” proposal for Puerto Rico.

    Previous letters claim the plan is, truthfully, “inconsistent with the Constitution and basic laws of the United States in several respects.”

    This new correspondence calls the proposal “non-viable” and urges Garcia Padilla to start working on a more meaningful proposal.

    I think, that given Congress’ year-long rebukes for the New Progressive Party’s ideas, it is time to lay the beleaguered “Enhanced Commonwealth” idea down once and for all.

    When the Senate Energy and Natural Resources Committee – the Congressional committee tasked with statehood claims – is calling your proposal dead, and to start working on something else, I can’t see the point in continuing it. 2014 could be an interesting year for statehood. But all sides are going to need to wrangle all the political capital they can before pushing the issue.

  • Will Puerto Rico’s Finances Kill It’s Chance Of Statehood?

    Marking the 1 year anniversary of the controversial statehood vote we look at the nitty gritty financial details of Puerto Rico.

    Can Puerto Rico’s financial situation prevent it from becoming a state? Recent news is pointing towards this.

    This article discusses the reasons behind the rise in cost of living in Puerto Rico and its effects on working families. Increases in the prices of energy, food and other costs are higher than on the US mainland and now the Puerto Rico government is implementing new taxes for water and sewage, along with taxes on businesses that make $1 million or more a year. The increase in taxes is seen as a way to deal with Puerto Rico’s debt problem.

    UBS AG and other US brokerage firms, in September, also have warned about the Puerto Rico financial situation. They issued strong warnings against buying the bonds Puerto Rico uses to fund its finances. This caused bond ratings to get downgraded.

    Gov. Padilla is making the rounds (as best he can) to stop public worry and shore up financial support. His recently introduced austerity measure, while effective on paper, are not believed to be enough to turn the tide. Combine this is raised taxes on business and you have a very similar situation to how the Euro crisis is playing out.

    But Puerto Rico may not be able to declare bankruptcy due to being a territory – so is there any actual recourse? And why is there such a debt problem?

    There are 3 main reasons:

    1) Puerto Rico is unable to participate in the bond market (due to downgrades) so it must finance with short term loans. This sort of financing is not suitable for longterm growth and stability.

    2) With a domestic debt load of $87,000,000+ this puts a burden of over $23,000 for every resident. With a shrinking population and tax base there is less government income. This creates a downward spiral of less jobs, less businesses, higher taxes, etc. When will governments learn this is NOT the answer to financial problems? (Sadly never)

    3) Average income on the island is less than $13,000 and unemployment is touching 13%.

    Some American analysts are even calling for Puerto Rico to be cast off as it were and given independence. This is a far cry from an accepting and welcoming 51st state. Could Puerto Rico even be accepted with such a poor financial standing? And when mainland cities like Detroit are going bankrupt, and not receiving federal aid, why should Puerto Rico?

    These are questions we do not expect the federal or Puerto Rico government to really answer soon.

    But even despite all this, what do the people think?

    On November 19th all Puerto Ricans and statehood supporters are encouraged to gather for the Puerto Rican Day of Equality. Citing “520 years” (the time Puerto Rico has been a colony) this march urged Congress to finally address the issue of Statehood/Independence.

    We believe Rep. Pedro Pierluisi’s bill will get a push of support from this march. Pierluisi’s official stance is to get this bill running by the end of 2014.

    Here is their flyer:resize

  • Puerto Rican Statehood and the Changing Republican Party

    Former Speaker of the House of Representatives of Puerto Rico, José Aponte-Hernández, has an interesting piece about politics in the US being used for Puerto Rican statehood by 2016.

    On the issue of the changing GOP – if the Republicans want to stay relevant, with an ever shrinking base, can they do it by integrating Puerto Ricans?

    This would lead to an interesting case where both the Democrats and Republicans are vying for Puerto Rican support. As a possible bargaining chip both parties could push for faster/easier Puerto Rican statehood.

    As we mentioned earlier, depending on the numbers, either side in the House or Senate might try to force the issue for their own gain starting in 2014.

    And as Florida stands to act as a presidential battleground state in 2016 (as much as I hate to even start thinking about that), anything a party could do to bring Puerto Ricans into the fold is on the table.

    The time is indeed ripe for the statehood movement.

  • Luis Fortuno Makes The Case For Puerto Rican Statehood

    Former governor, Luis Fortuno, says Puerto Ricans living in the US should not be allowed to vote on Puerto Rico changing it status from US commonwealth to a state. Mr. Fortuno is pro-statehood and wants the White House to act in 2013 or 2014 on this.

    Reps. Luis Gutierrez (D-Ill.) and Nydia Velazquez (D-NY) are opposed to this, and have now come out as outspoken critics of HR 2000. Their stance is now that that such a measure is biased towards statehood.

    They claim: “This flawed piece of legislation would force a federally sanctioned vote in which making Puerto Rico the 51st State would be the only option on the ballot, despite the fact that more than half of the voters rejected that option in a referendum held last year.”

    While they do have a point, continuing the triple-option voting is what got us into this mess. We’ll continue to see if they get an more traction in Congress.

    Never the less, Fortuno presses on for statehood.

    But should it fail, then what? Are we left with more of the same? Or should a failed vote cast Puerto Rico off?

    Ed Morales raised an interesting point in his oped – should Puerto Rico not become a state, and the whole issue swings back to total independence, what do about citizenship? His idea is a period of dual citizenship for all current Puerto Ricans.

  • 54 Years of the 50th State – And What It Means for #51

    54 years ago Hawaii became the 50th state. But it was not an admission without problems.

    Hawaii multiethnic population is not “typical” of the United States. It has been an independent country before. And Congressmen only wanted it admitted to balance out Alaska because of political divisions in the House and Senate.

    Sound familiar?

    In Puerto Rico’s case though there are some differences.

    There is no other strong candidate for a joint 51/52 state expansion. (Side note – “North Colorado”, a Colorado initiative to create a more rural/Republican section is the closest analogy to a modern Hawaii/Alaska split.)

    The language and cultural differences in Puerto Rico are not much different than some parts of the Southern US.

    There are still divisions though inside of Puerto Rico what should happen for statehood. This is the same as Hawaii, with some still calling for independence. So while most people accept Hawaii as a state without a second thought, should Puerto Rico gain statehood it’s opponents are going to face an uphill (if not impossible, it’s been 50+ years for Hawaii) battle.

    THis bolsters the case for a push for statehood. The Popular Democratic Party is meeting Sunday to discuss statehood at the annual convention.

  • Political Drama for Puerto Rican as the 51st State – August, 2013 Edition

    HR 2000, which would ask ‘yes or no’ for Puerto Rican statehood is gathering controversy. Representative Luis Gutiérrez (D-Ill.) and Nydia Velázquez (D-N.Y.) both are outspoken opponents of the bill, saying it is flawed.

    Their suggestion instead? Hold a constitutional convention. While not unheard of, in our opinion the convention would strip Puerto Ricans of the choice to become a 51st state.

    Garcia Padilla also continues to raise ire at home in Puerto Rico and here in Congress.

    His most recent idea is to form Puerto Rico not as a state, and not as the Commonwealth it is, but instead as an “enhanced Commonwealth.”

    What is meant by “enhanced Commonwealth” is very vague. His appearance before Congress trying to explain his stance did not get very far.

    Oregon Democrat Ron Wyden – chair of the committee dealing with the Puerto Rican status issue currently – says the “enhanced Commonwealth” or “new Commonwealth” is not a viable option.

    I think what we are seeing is the political maneuvering of trying all other alternatives of making Puerto Rico the 51st state.

    Meanwhile, the 51st state movement everywhere appears DOA. There has been no progress on the “New Columbia” front. Puerto Rico continues to be the most likely choice (after all the politics play out) for the next state.

  • Pierluisi: Puerto Rico Wants To Be A State — Garcia Padilla: Puerto Rico Does Not Want To Be A State

    The drama of Puerto Rica’s status is 2013 continues.

    During a meeting with the UN Special Committee on Decolonization, Mr. Pierluisi said – “Let me be clear, Mr. Chairman. In the absence of concrete and timely action from the U.S. government, I will not hesitate to raise this case before the United Nations or any other appropriate international forum.”

    While the sentiment is definitely there, Pierluisi’s allusion to threating the US with UN involvement is a bit heavy-handed.

    It should be noted that the UN Special Committee on Decolonization is a supported of Puerto Rican self-determination and perhaps Pierluisi was getting passionate. 2013 has seen him making lots of political movement to keep the issue of Puerto Rican being the 51st state on people’s minds.

    But then today, Puerto Rican governor Alejandro Garcia Padilla says the exact opposite. As reported here – “Puerto Ricans don’t want to be a U.S. state. We’re Puerto Ricans, we’re a nation, not a province of another (one) and we want to continue being Puerto Ricans.”

  • “To set forth the process for Puerto Rico to be admitted as a State of the Union” – Surprising Congressional Action

    Yesterday Pedro Pierluisi filed a bill in the US House of Representatives pushing for a direct answer to statehood. The bill, known as The Puerto Rico Status Resolution Act (H.R.2000), seeks to provide a federal acceptance to voted statehood should a majority of votes want it.

    The language is very simple and direct. The question posed is:

    Do you want Puerto Rico to be admitted as a state of the United States?

    That’s it. It’s going to be hard for either side to argue statistics or percentages. The issue of Puerto Rican government is really. Throwing in statehood, sovernigty, commonwealth, or “nothing” all in one vote is rife with confusion (as we’ve seen for all previous votes.)

    If the votes approve, the Congress has 180 days to admit Puerto Rico as a new state. This bill currently has 30 co-sponsors from across the nation, including Guam and Alaska.

    Pro-independent Puerto Ricans would be wise to push for a similar bill. They face a tough battle with this bill and news that the Federal government has set aside $2.5million for pro-statehood campaigns.

    About the Bill Sponsor:

    Mr. Pierluisi is the Puerto Rican delegate to the US House, and had a non-voting position. His bill has been pushed to the House Natural Resources committee.