Puerto Rico: Devastation without representation

The Trump administration fumbled the beginning of the relief effort for Puerto Rico following the devastation caused by Hurricane Maria. Critics have argued that the lack of immediate attention stems from racism, incompetence or some combination of both.

On this occasion though, the fault is not all with President Trump. A major reason underlying the lack of urgency among mainland politicians, to rush to provide assistance, is structural. Puerto Rico does not have input into the political system. It casts no votes in presidential elections, it sends no representatives to Congress. Imagine what the response would have been had a similar disaster hit Iowa, a state with roughly the same population as Puerto Rico. Iowa’s two senators and four representatives would have been vigilant in demanding immediate action. It would not take pictures of the suffering of American citizens to get the federal government to move. And indeed, if those Iowa senators had needed to trade their future votes on things other senators needed (think: tax reform, health care), so as to generate support for relief efforts, they would have done so. That is what happens in politics; that is what is supposed to happen.

{mosads}The current disaster only highlights the structural defect that infects our relationship with our fellow citizens in Puerto Rico. There are many ways in which Puerto Rico is treated less well than it would be if it were a state. The island’s inability to partake in the rough and tumble political process transforms it from a potential partner to a reluctant supplicant. It is an arrangement that impoverishes both Puerto Rico and the rest of the United States.

The structural infirmity also explains the failure to resolve the enormous debt crisis that Puerto Rico is mired in, a crisis that is partially the cause of the lack of an adequate infrastructure to tackle the damage caused by the hurricane. Donald Trump talked, perhaps inadvertently, about the need to “wipe out” the Puerto Rican debt. The president, however, doesn’t have the power to just write down the debts of anyone, let alone a territory or state. The overwhelming majority of Puerto Rico’s debt actually is governed by the local law of Puerto Rico. In theory, the Puerto Rican legislature could pass a law to wipe out its own debts; that is, it could do what President Trump suggested needed to be done.

Not surprisingly, the Constitution constrains states and territories from wiping out their debts whenever it suits them. The Contracts Clause constrains states from opportunistically abrogating contractual rights; and its protections have been held to be particularly rigorous in the context of states trying to abrogate rights held against them. But states get into financial crises (things like hurricanes happen, for example). And they sometimes need to be able to wipe out some of their debts. Since the Great Depression, Congress has passed laws that allow state municipalities to file for federal bankruptcy protection and pare down their debts.

The ability to repair to federal bankruptcy law, however, was taken away from Puerto Rico. A statute passed in 1984 and no one in Congress seemed to have noticed, cared or bothered that Puerto Rico was suddenly taken out of the protections of the federal municipal bankruptcy laws. The end result is that Puerto Rico is constrained by the Contracts Clause in taking steps to wipe out its debt, but gets no federal municipal bankruptcy law to help it do that within an orderly system in exchange. Had Puerto Rico had representatives in Congress, they would have yelled bloody murder and done something. Indeed, if Puerto Rico were a state, the Bankruptcy Clause of the Constitution requires that it be treated the same as other states.

This peculiar arrangement is a legacy of our colonial past. The time is past due when we should allow the citizens of Puerto Rico to make a choice. They can vote to become a state – as did other former territories – or they can choose to be an independent country. (The recent election Puerto Rico should arguably not be taken at face value because there was widespread boycotting of the election, in large part because most on the island realized it was just for show.) At a time when many Americans are sending thoughts, prayers and dollars to our fellow citizens, we should be giving them something more precious – the opportunity to determine their future.

Robert Rasmussen and Mitu Gulati are law professors at the law schools at USC and Duke, respectively. Their paper, “Puerto Rico and the Netherworld of Sovereign Debt Restructuring,” describes the foregoing structural bind in greater detail.