A sink­ing feel­ing in Puerto Rico

The is­land’s res­i­dents hope to buoy their for­tunes by be­com­ing a state

The Washington Times Daily - - OPINION - By Cal Thomas Cal Thomas is a na­tion­ally syn­di­cated colum­nist. His lat­est book is “What Works: Com­mon Sense So­lu­tions for a Stronger Amer­ica” (Zon­der­van, 2014).

“Puerto Rico, my heart’s de­vo­tion. Let it sink back in the ocean.” — “West Side Story”

The Com­mon­wealth of Puerto Rico is drown­ing. The is­land, so pop­u­lar with tourists, is $123 bil­lion in debt. That’s more debt than the $18 bil­lion bank­ruptcy filed by the city of Detroit in 2013. In May, San Juan de­clared a form of bank­ruptcy af­ter cred­i­tors filed law­suits de­mand­ing their money. A fed­eral district judge ap­pointed by Chief Jus­tice John Roberts will han­dle the case.

How did this hap­pen? Luis For­tuno, for­mer gov­er­nor of the Com­mon­wealth of Puerto Rico, who served as pres­i­dent of the New Pro­gres­sive Party of Puerto Rico (PNP), which ad­vo­cates for the is­land to be­come a U.S. state, be­lieves he knows.

Mr. For­tuno was elected in 2009. In a tele­phone in­ter­view from his Wash­ing­ton law of­fice, he tells me that dur­ing his one term, he cut gov­ern­ment ex­penses by $2 bil­lion and the is­land’s bond rat­ing went up. “We re­fi­nanced the debt on bet­ter terms” and by the time he left of­fice in 2013, “we had brought down the bud­get every year and low­ered cor­po­rate taxes. Peo­ple be­lieved they could take risks again.”

In the 2012 elec­tion, Mr. For­tuno lost to Demo­crat Ale­jan­dro Gar­cia Padilla by a nar­row (0.6 per­cent) mar­gin. Mr. For­tuno blames the Ser­vice Em­ploy­ees In­ter­na­tional Union for con­tribut­ing to his op­po­nent’s cam­paign. “They in­vested heav­ily against me,” he says. Mr. Padilla re­newed the spend­ing poli­cies of the past and, though he left of­fice ear­lier this year, the dam­age was done.

Ac­cord­ing to the Amer­i­can Bank­ruptcy In­sti­tute Jour­nal, most of Mr. For­tuno’s cuts in pub­lic ex­pen­di­tures were never im­ple­mented by his suc­ces­sor. The is­land’s Of­fice of Man­age­ment and Bud­get re­ported that one year fol­low­ing leg­is­la­tion that called for spend­ing re­duc­tions, 31 gov­ern­ment agen­cies had, in­stead, in­creased spend­ing.

As the jour­nal noted, under Mr. For­tuno, “Puerto Rico im­ple­mented tax re­form and per­mit re­form, leg­is­lated a worldlead­ing pub­lic-pri­vate part­ner­ship (P3) act, re­duced gov­ern­ment ex­penses and paid its sup­pli­ers.”

In light of such suc­cess, why would vot­ers re­turn con­trol of the is­land to a party that was re­spon­si­ble for its fis­cal down­turn? Some­times ide­ol­ogy beats suc­cess and com­mon sense. Mr. For­tuno says it didn’t help that “61 per­cent of el­i­gi­ble vot­ers failed to vote.”

A ref­er­en­dum on the sta­tus of Puerto Rico was held in Puerto Rico on June 11. Three op­tions were open to vot­ers: re­main with the com­mon­wealth, in­de­pen­dence or state­hood. State­hood won.

Would a Repub­li­can Congress and a Repub­li­can pres­i­dent ever back state­hood for a ter­ri­tory that seems over­whelm­ingly Demo­cratic and pos­si­bly add two sen­a­tors and one vot­ing House mem­ber to that party’s to­tal in Wash­ing­ton?

Mr. For­tuno doesn’t be­lieve it is a given that Democrats would win those seats. He draws a dis­tinc­tion be­tween the mostly lib­eral Puerto Ri­cans who have left the is­land for places like New York City and those who re­main. He says cur­rent res­i­dents “are so­cial and eco­nomic con­ser­va­tives,” sug­gest­ing Repub­li­cans could pick up seats.

Per­haps, but the U.S. tax­payer would also have to pick up Puerto Rico’s huge debt and with our debt at $20 tril­lion, it is doubt­ful Congress, at least under a Repub­li­can ma­jor­ity, would be will­ing to add more red ink.

Per­haps those eco­nomic and so­cial con­ser­va­tives Mr. For­tuno says re­main on the is­land might come to their senses and elect some­one who rep­re­sents his views, which were be­gin­ning to bear fruit, be­fore a bare ma­jor­ity pan­icked and re­turned to the failed poli­cies of the past.


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