The Center for American Progress has applauded the federal government’s new recommendations to help Puerto Rico because they will just treat Puerto Rico like a State. “No need to reinvent the wheel in Puerto Rico,” author Michael Madowitz says. Just treat Puerto Rico more like a State, and we’re set.
The government’s recommendations included four big changes:
- Allow Puerto Rico to use chapter 9 bankruptcy protection.
- Get Puerto Rico’s finances in order.
- Treat Puerto Rico equally under Medicaid and Medicare.
- Extend the Earned Income Tax Credit and the Child Care credits to Puerto Rico.
It would be good to see Puerto Rico treated equally with states. But it’s not a complete, permanent solution.
Puerto Rico used to have chapter 9 bankruptcy protection just as the States do. Then Congress changed the rules.
When Puerto Rico tried to pass its own bankruptcy protection law last summer, the U.S. Court of Appeals for the First Circuit said, “In denying Puerto Rico the power to choose federal Chapter 9 relief, Congress has retained for itself the authority to decide which solution best navigates the gauntlet in Puerto Rico’s case.”
Congress has the power to change the rules for Puerto Rico at any time, without the consent of Puerto Rico’s government or people. States have rights and protections which territories do not. It’s that simple.
The federal government can create special tax laws that apply to Puerto Rico, including laws that give Puerto Rico the same tax benefits as the States — and future laws which take that away. Puerto Rico used to have special tax privileges which it no longer has.
States are treated equally, because the U.S. Constitution requires it. When Puerto Rico is a State, it will have the same rights as States. Until then, changes that treat Puerto Rico more like a state are good, but they should not distract us from the important work of making Puerto Rico a State, as the residents of Puerto Rico chose to do in the last referendum.
[…] Rico can declare bankruptcy, as Detroit did. Detroit is a city — a municipality as defined in chapter 9 of the bankruptcy law — but Puerto Rico is a territory. The video above calls Puerto Rico […]