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Puerto Rico - US Relations

Donald Trump lashed out at the country's territory of Puerto Rico, contending that its leaders are incompetent, foolish and corrupt in overseeing its recovery from two devastating 2017 hurricanes. Trump complained 03 April 2019 that the Caribbean island was getting $91 billion in government assistance to help it rebuild from hurricanes Irma and the more powerful Maria, which may have killed nearly 3,000 people, although the aid figure is a 20-year projection. About $11 billion had been spent on the island of $41 billion in announced federal government recovery funding. Trump claimed that Puerto Rico, whose 3.2 million residents are American citizens, has gotten "more money than has ever been gotten for a hurricane before, & all their local politicians do is complain & ask for more money. The pols are grossly incompetent, spend the money foolishly or corruptly, & only take from USA."

"The best thing that ever happened to Puerto Rico is President Donald J. Trump," he said. "So many wonderful people, but with such bad Island leadership and with so much money wasted. Cannot continue to hurt our Farmers and States with these massive payments, and so little appreciation!" He said money spent on Puerto Rico is "taking dollars away from our Farmers and so many others. Disgraceful!" He said, "Puerto Rico got far more money than Texas & Florida combined, yet their government can’t do anything right, the place is a mess - nothing works."

Trump said federal relief workers and the U.S. military "worked emergency miracles, but politicians like the crazed and incompetent Mayor of San Juan (Carmen Yulín Cruz) have done such a poor job of bringing the Island back to health." Puerto Rico Gov. Ricardo Rossello, angered by Trump's complaints about relief aid to the island, told CNN, "If the bully gets close, I'll punch the bully in the mouth. It would be a mistake to confuse courtesy with courage."

Elected governor in 2016, Ricardo Rossello of the New Progressive Party said that the new U.S. President-elect Donald Trump would support statehood for the Caribbean island, which is the oldest U.S. colony in the world. "The Republican platform is very clear in terms of the status of Puerto Rico," said Rossello, adding that it supports the right of U.S. citizens in Puerto Rico to be recognized as the 51st state if they decide to seek such legal situation. "Having a Republican House (of Representatives), a Republican Senate and a Republican president, there's no excuse for not carrying it out," said Rossello.

Rossello planned to hold elections to choose two senators and five representatives for Puerto Rico in Congress, rights not afforded under the island's commonwealth status. Those lawmakers will then go to Washington to demand statehood. This is how Tennessee joined the union in the 18th century. Until that time, territories had asked for statehood and then waited for Congress to declare them states. Tennessee’s bold move essentially meant that they decided they were a state, declared themselves a state, and persuaded Congress to agree.

In his 1980 campaign, Ronald Reagan promised to take the lead in obtaining statehood for Puerto Rico. The day he announced his candidacy, Reagan included statehood for the island in his proposal for a "North American Accord." In a Wall Street Journal article, he pledged he "would take the lead in persuading the people of Puerto Rico, the mainland United States, all citizens - that statehood will be good for all of us." The platform also declared the party "vigorously" supported statehood, including provisions for the islanders to retain Spanish as their official language and to "assume gradually" the burden of federal taxation. That position - itself considered "annexationist" by some anti-statehood Puerto Ricans - sharply differed from the Carter administration's policy and the Democratic platform, which pledged self-determination and promised to support whatever status Puerto Ricans chose in a referendum. A 1980 congressional resolution took the same position.

Reagan took office in January 1981, but not only was nothing since been heard from the White House about statehood, the administration also went after theisland's budget with a meat-ax. The most severe blow came when Puerto Rico's food stamp allocation was cut by 25 percent, in a manner not applied to the states, despite the fact 58 percent of the island's families had been receiving food stamps, and high food costs reduced the stamps buying power. About 400,000 Puerto Ricans were affected by the food stamp cuts of about $90 million a year. Puerto Rico's per-capita income was half that of Mississippi and even the official unemployment rate was 18 percent - far less than the actual. Thus, the elimination of CETA jobs also hit Puerto Rico a body blow. Cuts in other social and economic programs were applied to the island just as to the states, with no recognition of its different and deeper economic problems - an irony, in view ofthe special food stamp cut for Puerto Rico alone. The common-wealth's loss of federal assistance came to $650 million.

Since 1953, the United States has maintained a consistent position regarding the status of Puerto Rico and the competence of United Nations organs to examine that status, based on resolution 748 (VIII), by which the General Assembly released the United States from its obligations under Chapter XI of the Charter of the United Nations. It has maintained that Puerto Rico has exercised its right to self-determination, has attained a full measure of self-government, has decided freely and democratically to enter into a free association with the United States and is therefore beyond the purview of United Nations consideration. The Puerto Rican forces in favor of decolonization and independence have contested this affirmation.

Offering three alternatives — statehood, commonwealth, and independence — a plebiscite on July 23, 1967, with a relatively low turnout of voters, chose to continue under the auspices of the commonwealth. In 1967, there was a plebiscite over Puerto Rico’s political status with the options being commonwealth, statehood, or full independence. In that instance, independence was soundly defeated, with statehood coming in second (39 percent) to the island’s current commonwealth status (60 percent). Congress in 1979 passed a resolution supporting Puerto Rico’s right to self-determination. Under new leadership the pro-statehood party was renamed Partido Nuevo Progresista (PNP) and went on to elect three governors.

The status plebiscite held in Puerto Rico on November 14, 1993, produced a vote in favor of retaining commonwealth status - under which the island is associated to the United States as a self-governing polity - as this option won a relative majority of the votes cast in the electoral event, which were distributed as follows: Statehood, 788,296 (46.3%); Commonwealth, 826,326 (48.6%); Independence, 75,620 (4.4%); and blank and void ballots, 10,748 (0.7%). Commonwealth won a majority of 38,030 votes over statehood. 1,700,990 of the 2,312,912 registered voters cast ballots, for a turnout rate of 73.5%.

In 1997, the statehooders came to Washington to push for a statehood bill. They used millions of dollars in lobbying and political support to convince Congress that Puerto Ricans wanted to become a State and used millions to silence the other voices from Puerto Rico. Even with a PNP governor, in the last political status vote of 1998 the commonwealth received 49 percent, statehood 46 percent, and independence 4 percent. Once again in 1998, Puerto Ricans demonstrated their preference for the status quo. In November 2000, Puerto Rico elected the first female governor, Sila María Calderón, who ran as an anti-statehood candidate for the PDP.

The United States had its fair share of terrorist incidents in the 20th Century, but surprisingly few had been grave, compared to incidents in other parts of the world. The exceptions were attacks by Puerto Rican terrorists who had been active in this country for more than three decades. These terrorists attained worldwide notoriety in 1950, when they attempted to assassinate President Harry Truman. Four years later, in 1954, they followed with an armed assault in the U.S. House of Representatives, wounding five congressmen. These groups have carried out attacks in the United States and in Puerto Rico on various targets such as banks, FBI offices, and military installations. Their most deadly attack to date occurred in 1975, when they bombed the Fraunces Tavern in New York, killing 4 people and injuring 63 others.

Puerto Rico served for centuries as a Spanish outpost, and in the early 20th century it was crucial to U.S. plans to protect the Panama Canal from German U-boats patrolling Caribbean shipping lanes.

Puerto Rico's relations with Washington derive from the ambiguous absorption of Puerto Rico into the national fold. Given Puerto Rico’s role as the “Gibraltar of the Caribbean" it served as the American watchdog at the entrance of the Panama Canal. The island territory was neither fully part of the United States nor an independent country. “Since [Puerto Rico] was subject to the sovereignty of and was owned by the United States, it was foreign to the United States in a domestic sense,” pronounced Justice Henry Brown in the Supreme Court’s landmark Downes v. Bidwell (182 U.S. 244) decision in 1901 — which was intended to clarify the island’s position, but ended up only adding a new layer of uncertainty instead.

Primarily as a result of this contradic decision, Congress governed Puerto Rico through a series of statutes that enabled the United States to extract island resources and exploit its strategic location at the center of the Caribbean while paying little attention to the economic, cultural, and political realities on the island. Lawmakers found themselves in the position of “fabricat[ing] the jurisdictional fiction of an unincorporated territory,” notes a scholar, effectively “relegating the island to the perpetual status of a ward who will never become part of his patron’s family.”

Although the United States began acquiring Caribbean territories in the late 1800s, the impetus for such acquisitions was based on Manifest Destiny—the concept that the United States had a moral claim on territory stretching to the Pacific Ocean and beyond—and on the 1823 Monroe Doctrine, which asserted that European nations should not meddle in the Western Hemisphere. The desire for security and control of economic resources such as sugar and tobacco also fueled some U.S. policymakers’ ambitions for Caribbean territory during the antebellum era.

Though the Civil War temporarily halted America’s focus on the Caribbean, by the 1880s, large American businesses sought new markets, and the U.S. government desired influence beyond the North American continent. Within U.S. society, the emergence of a social elite and the travels of entrepreneurs, tourists, missionaries, and settlers also encouraged the public to look at expanding the United States’ role in world affairs. Even anti-expansionists such as President Grover Cleveland had a mixed record as far as pursuing an aggressive foreign policy and checking U.S. expansionist initiatives in the early 1890s. Territorial expansion was a key platform for President William McKinley during the 1896 and 1900 elections, especially the expansion southward into the Caribbean where an American-owned isthmian canal was being built to connect the Atlantic and Pacific oceans.

When Cuban revolutionaries began calling for independence from Spain in 1895, the United States found itself in an awkward situation given Cuba’s proximity and its strategic Caribbean location. The American press began sensationalizing the events in Cuba, and popular opinion rallied behind the revolutionaries. McKinley and his deputies pressured Spanish officials to stop the uprising before it became uncontrollable, warning that failure to comply might precipitate American intervention.

By February 1898 the diplomatic situation had deteriorated and the relationship between the U.S. and Spain was tottering. The explosion on February 15 of the U.S.S. Maine, an American battleship newly arrived in Havana Harbor, killed 266 sailors and became the tipping point for American intervention. Though the circumstances of the explosion were unclear, many, including some in Congress, blamed Spain.20 President McKinley resisted the immediate calls for war, but with conditions in Cuba expected to worsen, he acknowledged the conflict in a message to Congress on April 11. He blamed Spain and demanded an end to the war to protect U.S. interests and promote peace in the Caribbean. The House voted 325 to 19 in favor of war, passing a joint resolution that stopped short of recognizing an independent Cuban government. But the Senate added language to the House measure recognizing the Cuban Republic three days later on April 16, by a 67 to 21 vote. When the conference committee convened, negotiations lasted until after one o’clock in the morning. The final resolution acknowledged Cuban freedom but did not acknowledge Cuba as a republic. Congress formally declared war on April 25.

As an island economy, Puerto Rico depends on imports for food and other basic goods. But its control over imports is heavily restricted by a nearly century-old law that prohibits foreign ships from making a stop at Puerto Rico or any offshore U.S. territory before docking on the mainland. Rather, according to the 1920 Merchant Marine Act, also known as the Jones Act, goods destined for Puerto Rico must be received on the mainland and then shipped to the island by U.S. vessels. The tedious requirement undermines Puerto Rico’s economic sovereignty and adds a complexity to the process of importation, in turn increasing the cost of imported goods compared to other Caribbean islands not stuck under the thumb of the United States. Reports by the World Economic Forum and Federal Reserve Bank of New York have found that the rule hurts the island’s potential for economic development.

Puerto Rican residents are U.S. citizens; a recent poll found most U.S. citizens don't even know this. But Puerto Ricans don’t actually enjoy all the rights accorded to citizens unless they move to the U.S. mainland. The U.S. granted citizenship to Puerto Ricans, also known as Boricuas, in 1917, nearly 20 years after taking control of the island. But the move was an act of Congress, meaning Puerto Ricans are not formally recognized as U.S. citizens through the Constitution—unless they relocate to a U.S. state. Boricuas do not have the right to vote in U.S. elections as long as they live on the island. Residents of Puerto Rico go to the polls to vote in primaries, which are hosted by political parties, to nominate candidates, but don't actually have a say when it comes to electing the next president in the November general election. And while Puerto Rico has a representative in U.S. Congress, the member is a non-voting delegate, meaning they can talk about the island's issues but do little to address them. The late 20th century was an era of political deadlock in Puerto Rico in which the future of the island’s relationship with the federal government was a major issue in virtually every election. Puerto Rico’s two major parties—the Partido Popular Democrático (Popular Democratic Party, or PPD), which supported commonwealth status, and the Partido Nuevo Progresista (New Progressive Party, or PNP), which supported statehood—alternately controlled the insular government. After PNP Resident Commissioner Jorge Luis Córdova-Díaz defeated PPD incumbent Santiago Polanco-Abreu in 1968, Resident Commissioners political affliations alternated between the PPD and the PNP until 2008.

Intertwined in the status debate was the future of section 936 of the United States Internal Revenue Code. Since 1952, Puerto Rico had been under the auspices of section 931, which stipulated that after liquidating operations on the island American corporations could move their profits from Puerto Rican banks without paying federal taxes. Amended under the Tax Reform Act of 1976, section 931 was replaced by section 936, which allowed corporations to move their profits tax-free at any time. So-called 936 corporations became the backbone of the Puerto Rican economy for the next 20 years. The tax breaks drew high-tech industries to the island, especially companies that manufactured precision instruments, alongside many pharmaceutical companies. Because section 936 applied only while Puerto Rico remained a U.S. territory, the corporations that benefited from the policy tended to ally with the PPD.

Most U.S. observers blamed Puerto Rico's debt crisis on "mismanagement" by its local administrators, a conveniently near-sighted view of a situation that is the direct product of ongoing colonialism. As the island’s comparative advantage as the only low-wage tax haven with direct access to the U.S. waned, Washington’s solution was Section 936 of the Internal Revenue Code, which granted federal tax exemptions to U.S. corporations on products made in Puerto Rico, attracting mainly pharmaceutical industries that generated high (untaxed) profits while creating few jobs. The local government, in turn, pursued massive debt-fueled investment in infrastructure, whose use by these industries it heavily subsidized. The resulting debt addiction spiralled out of control in the 1990s, fed by lenders offering easy credit. Public finances were further undermined by rampant corruption and a renewed economic downturn once Congress began a ten-year phase-out of Section 936 in 1996.

Unlike U.S. states, Puerto Rico — a U.S. territory — cannot declare bankruptcy, a fact that has led to the 2015 crisis. Due to its failure to repay a $58 million to creditors on 04 August 2015, Puerto Rico defaulted for the first time in its history. Sending the Puerto Rican government into a "death spiral," according to Governor Alejandro Garcia Padilla, the island defaulted after paying only $628,000 of a $58 million debt repayment. Overspending over the last few years despite the island's shrinking economy, Puerto Rico owes roughly $70 billion dollars to creditors. The island also saw high unemployment, and a large number of islanders searching for employment on the US mainland.

The Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA - Spanish for "promise") is the House’s bipartisan legislation that addresses the fiscal crisis in Puerto Rico and prevents a taxpayer bailout for the island. Because Puerto Rico is a U.S. territory, it is ultimately Congress’s responsibility—as the Constitution says. The goals of PROMESA are to protect American taxpayers, stop Puerto Rico’s debt crisis from becoming a major humanitarian disaster, and put Puerto Rico on a path to recovery.

The legislation institutes an oversight board appointed by Congress and the White House that will have major authority over the debt-restructuring process, beginning with auditing the financial records of the government. This will bring transparency and order to the current chaos on the island. The oversight board will also make sure that Puerto Rico makes real, lasting reforms so that Puerto Rico never gets into this situation again. For example, the oversight board will enforce balanced budgets if the Puerto Rican government fails to do so.

Democratic Congressman Luis Gutierrez leveled fierce criticism against the bill, saying it was “wholly undemocratic” and would “impose a junta” on Puerto Rico. “We’re debating how we will take power from the people who are virtually powerless already,” he said. “You are imposing a junta—because that’s what they’re calling it,” he continued. “There will be no difference between this junta and the junta of Pinochet in Chile, as far as the international community is concerned.”

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Page last modified: 02-04-2019 18:30:23 ZULU