One of the things that will certainly change when Puerto Rico becomes a state is federal benefits. There are 50 states in the Union already, so most questions about what statehood will be like for Puerto Rico are disingenuous at best: it will be like the other states. Which is to say that most day to day decisions will be decided by the elected government of Puerto Rico. Statehood has far fewer mysteries than independence. But the question of Puerto Rico’s federal benefits is a fair one. That will certainly change, and the details are not 100% clear.
Puerto Rico’s federal benefits
Puerto Rico’s federal benefits right now are similar to those enjoyed by the states, but not identical. The Supreme Court has ruled that the U.S. territories, of which Puerto Rico is one, can be treated differently from the states. This nearly always means that Puerto Rico gets less in federal benefits than the states. Residents of Puerto Rico do not receive Supplemental Security Income benefits. Nutrition assistance and health care funding is available, but at much lower rates than in states. Access to tax credits like the Child Tax Credit and the Earned Income Tax Credit comes and goes.
Statehood will end that.
One of the essential things to know about statehood is that all states are on an equal footing. Washington can’t say that Mississippi doesn’t pay enough in taxes so they don’t get benefits. It’s unconstitutional to do that. They couldn’t do that to a state of Puerto Rico, either.
The Government Accountability Office
In 2013, the Government Accountability Office pubished a report showing how statehood would change federal benefits for Puerto Rico. They determined that some things would not change. Social Security for the elderly and disabled probably would be the same, they figured, and so would school lunch programs. The list goes on. But there were 11 programs that they decided would probably change:
- Medicaid
- Medicare
- SNAP
- SSI
- Federal-Aid Highways
- Pell Grants
- Temporary Aid to Needy Families
- Title I grants
- Children’s Health Insurance Program
- GI Bill
- Federal Student Loan Program
In each case, Puerto Rico residents would receive more if Puerto Rico were a state than they did when Puerto Rico was a territory.
What complicates the issue?
On the face of it, the situation is simple: Puerto Rico would receive billions more in federal funds as a state.
However, there are some complicating factors that can keep us from knowing exactly how things would play out for any individual.
Income tax is one of the issues — for some people. Since many of these programs are aimed toward needy families, the recipients would not be affected by income tax. That is, a household that can receieve food stamps or SSI will not be paying federal income taxes. In fact, with federal tax credits and predictable adjustments to state taxes, they will probably pay less in income taxes than they do now. However, for wealthy people who currently enjoy tax breaks in Puerto Rico, living in a state could very well be more expensive. They are getting federal benefits right now in the form of tax breaks, but they wouldn’t be eligible for most of the expanded federal benefits under statehood. The GAO estimated that income tax revenues would increase significantly with statehood, but that assumes that current residents all stay in Puerto Rico.
Congress itself is another issue. Congress decides how much federal benefits provide to beneficiaries. For example, monthly SNAP benefits in 2021 averaged $253 per person and in 2024 they were $188. The current average monthly NAP benefit in Puerto Rico is $115, so either of the SNAP payments would have been significantly higher. Still, Congress makes new decisions all the time, so the exact amount of benefits can change. Puerto Rico would receive the same benefits as the rest of the states in any case.
Finally, statehood would bring multiple changes. Every territory that has become a state has become more prosperous, so Puerto Rico would probably do the same. Many people who now need federal benefits to survive would thrive under the level playing field that statehood brings, so they might not need those benefits any longer. Residents of Puerto Rico could vote in presidential elections and would have senators and voting members of Congress, and so would have more of a say in decisions made in Congress. This could also change the direction of decision-making in Washington.
It’s hard to see a downside to statehood, isn’t it? Contact your legislators and let them know that you want to see them on the right side of history, supporting admission for Puerto Rico.
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