Once again the U.S. government is neglecting the fate of the people of Puerto Rico when it suits the interests of the powerful, the wealthy bondholders who own Puerto Rico’s debt obligations. Puerto Rico’s governor, Alejandro Garcia Padilla, contends that to pull the island out of a “death spiral,” the Commonwealth must be able to renegotiate payment on its roughly $72 billion in debts.

Democratic Socialists of America (DSA) calls on all political parties in Puerto Rico, the U. S. Congress, and the Obama Administration to join together to develop a long-term plan that addresses the root causes of this crisis.

The U.S. government should provide economic aid to help restructure Puerto Rico’s government and public corporate debt so as to lower its debt burden and the costs of repayment. By refusing to consider such policies, political elites in Washington are guaranteeing that severe austerity programs will lead to brutal cuts in ordinary people’s living standards. This lowering of the quality of life for ordinary Puerto Ricans aims to ensure that the wealthy holders of Puerto Rican debt are repaid. The repayment crisis is in large part due to a long-term economic crisis caused by corporate disinvestment from the island. Thus, the costs of restoring economic health to the island should be borne primarily by those who continued to profit during the crisis.

DSA urges the broad social justice movement to work to ensure that our brothers and sisters in Puerto Rico receive the federal aid that would allow them to emerge from this long-standing economic crisis in a humane and equitable manner. This can be done, but only if the federal government does not treat Puerto Rico in a manner analogous to how the European elites are treating Greece. The economic crisis has forced many Puerto Ricans to leave their homeland, with recent migration meaning Puerto Ricans will soon surpass people of Cuban descent as the largest Hispanic group in Florida.

Puerto Rico is a U.S. territory with Commonwealth status whose residents, since 1917, are U.S. citizens by birth. Although its 3.6 million residents are U.S. citizens, Puerto Ricans cannot vote in the U.S. general presidential elections because Puerto Rico is not a state.

The island’s economy has been shrinking or stagnant for a decade, and the official unemployment rate sits at nearly 12 percent. Lawmakers in Washington and San Juan need to come up with a plan that addresses the financial and economic problems of the territory, which must include a lowering of the debt burden borne by Puerto Rico. The federal government failed to bail out a Detroit devastated by disinvestment by the auto industry; Puerto Rico must not be allowed to suffer due to disinvestment by biopharmaceuticals and other industries that have moved abroad in search of even cheaper production costs.

Because Puerto Rico is a territory, government-owned companies such as the electric utility are not allowed to restructure their debt in Chapter 9 bankruptcies. Twenty-five percent of Puerto Rican debt is held by these state-owned enterprises. Congress should approve a new bill that would allow these and other Puerto Rican government-owned companies, as well as municipalities, to use Chapter 9. Most Democrats support this legislation, but Republicans are steadfastly opposed. If need be, the entire government of Puerto Rico should be able to file for bankruptcy. States cannot file under Chapter 9, but Puerto Rico is not a state.

In short, the present crisis is the culmination of decades of U.S. policies that distorted Puerto Rico’s political and economic development.

After the United States conquered the island in 1898 as the result of the Spanish-American war, Puerto Rico’s economy, which had been based on a mix of small landowners and subsistence farmers, was transformed into an agro-industrial economy dominated by U.S. companies. Later, in the 1940s, in Operation Bootstrap, U.S. policy promoted a manufacturing sector (combined with the forced sterilization of many Puerto Rican women) but one limited to manufacturing industries that benefitted U.S. transnational corporations. Puerto Rico was never allowed to define its own economic destiny by, for example, negotiating bilateral trade agreements; Puerto Rico also has had to adhere to fiscal policy directed by the United States. External control and extraction of profits stunted the country’s productive base. Recent changes in the U.S. tax code have caused the loss of thousands of manufacturing jobs and have been one of the factors leading to the current crisis.

Sixty percent of the island’s population – over 2 million patients – receives their care through Medicare, Medicare Advantage or Medicaid. Puerto Ricans pay the same Social Security and Medicare taxes as the fifty states, yet Puerto Rico’s Medicaid program receives a 70 percent lower reimbursement rate compared to mainland states. This low rate is being temporarily supplemented by a federal grant that will soon expire. As democratic socialists, we believe access to quality health care is a right, not a privilege; it is time to restore federal Medicaid reimbursement parity for Puerto Ricans.

In addition, the federal government has not adequately addressed the serious environmental legacy problems stemming from U.S. military exercises in Puerto Rico. There has been a decades-long pattern of delay and inaction when it comes to remediating the environmental problems that were left behind by the U.S. Navy on the island of Vieques and elsewhere.

Democratic Socialists of America calls on Congress to support the right of the people of Puerto Rico to self-determination, including the right to define their relationship with the United States in accordance with international law. The people of Puerto Rico must have a democratic voice in all issues and policies that directly affect them. We also urge Congress to grant Puerto Rico the forms of debt relief, debt rescheduling, and federal aid that will allow Puerto Rico to grow its way out of the long-term depression in a manner that enhances the quality of life of all residents of the island, not just its elite.

Passed by the DSA National Political Committee: July 2, 2015.

Estados Unidos no debe transformar a Puerto Rico en una próxima Grecia



Declaración Nacional Política de DSA sobre la crisis en Puerto Rico