A review of the current relationship between the United States and Puerto Rico, within the context of recent developments, makes evident the need for Congress to address Puerto Rico’s status as soon as possible.
Besides the legal, political and economic factors that inevitably color the issue, the claim is moral. That is, whether Puerto Rico has a right to organize itself as a political entity, with equal rights and duties as the 50 states. It is, fundamentally, an issue of equality.
Puerto Rico became a territory of the United States by virtue of the Treaty of Paris of 1898 between the United States and Spain after the Spanish-American War.
{mosads}Between 1901 and 1922 the Supreme Court of the United States decided a series of cases that have come to be known as the Insular Cases, which declared that Puerto Rico was an unincorporated territory under Article IV, section 3, of the Constitution, “belonging to but, not part of the United States”.
This judicial doctrine finds no textual support under the Constitution, and was (and is) predicated on an ethnically and racist distinction that Puerto Ricans are not political subjects deserving of the full protection of the rights recognized in the United States Constitution, contrary to territorial history since the Northwest Ordinance of 1787.
Notwithstanding, in 1917 the United States Congress granted American citizenship to Puerto Ricans. Since then, thousands of Puerto Ricans have served in the armed forces and given their blood and life in the altar of freedom, to use Lincoln’s phrase.
In Balzac v. Porto Rico (1922) the Supreme Court reiterated that the granting of citizenship did not change the unincorporated nature of the in Puerto Rico’s political status. The statutory nature of our citizenship, in conjunction with our unincorporated territorial status, precludes the full protection of the guarantees contained in the 10th Amendment.
In 1950 Congress delegated to Puerto Rico the authority to draft its territorial Constitution with a republican form of government, which was approved and implemented in 1952. For the last 65 years the local Popular Democratic Party (PPD) has touted this “arrangement” as some sort of recognition of “sovereignty”.
In 2016, the Supreme Court handed down the cases of Commonwealth of Puerto Rico v. Sanchez Valle and Commonwealth of Puerto Rico v. Franklin California Tax-Free Trust, which denied Puerto Rico any kind of separate sovereignty from the United States, and reaffirmed its territorial status. The PPD is still reeling from the political effects of these decisions.
Also in 2016, Congress enacted Puerto Rico Oversight, Management, and Economic Stability Act, with the ironic acronym of PROMESA, creating a Financial Oversight Board to supervise the Government of Puerto Rico during the current fiscal and economic crisis.
It is clear to all observers that Puerto Rico’s economy has been in a downturn spiral since the recession of 2007-08, leading to a collapse in the housing market, a shrinking of all sectors of the economy, massive migration to the mainland and a reduction in the population tax base, affecting government revenues and the possibility of it meetings its financial commitments to its creditors.
In fact, in 2016 the government of Puerto Rico defaulted in its payment to its bondholders and other creditors and continued to seriously underfund its various pension plans. In May 2017 the government of Puerto Rico through the Financial Oversight Board filed for bankruptcy like protection under Title III of PROMESA, with a public debt estimated at $74 billion dollars.
On Sept. 20, 2017 Puerto Rico was hit by Hurricane Maria, which devastated the island’s economy and infrastructure, causing damages estimated upward of $94 billion dollars.
Notwithstanding the recognition that Maria has been the largest natural disaster confronted by FEMA, the response from the administration and Congress has been slow to assigning funds in equal footing as compared to other states such as Texas, Florida and California, which have also suffered recent natural disaster events.
The aftereffects of María, not only on the general population but also on the solvency of its public institutions, has made clear to all observers that Puerto Rico’s current situation is unsustainable. As of this writing the government of Puerto Rico is waiting on a $4.5 billion loan from the Treasury Department in order to cover its ongoing operational costs.
As if all this was not enough, in December, Congress passed a tax reform which, among other provisions, imposes a 12.5 percent tax on earnings repatriated to the United States by American Controlled Foreign Corporations (CFC), treating Puerto Rico as a foreign jurisdiction and directly affecting the manufacturing and pharmaceutical base which generate approximately 70,000 jobs and contribute close a third of current revenues for the government of Puerto Rico. Congress’ discretionary treatment of Puerto Rico under the tax reform for the benefit of economic sectors other than the whole of the American citizens in Puerto Rico is, again, justified by the doctrine unincorporated territory which exempts Puerto Rico from the Uniformity Clause, Article I, Section 8, of the Constitution.
The Puerto Rican electorate has favored the alternative of statehood over continued territorial status or independence in the status plebiscites held in 1998, 2012 and 2017. Congress has failed to act on this clear democratic mandate, allowing either by neglect or design for the continuation of the territorial status for the benefit of certain powerful economic interests. After 120 years it is time for Congress to assume its institutional and political obligations and act for the benefit of its citizens in Puerto Rico.
Andrés L. Córdova is a professor at Inter American University of Puerto Rico School of Law.