[Congressional Record Volume 142, Number 7 (Monday, January 22, 1996)]
[Senate]
[Page S284]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        THE STATE OF PUERTO RICO

 Mr. SIMON. Mr. President, Senator Charles A. Rodriguez, the 
majority leader of the Puerto Rico Senate, recently had an op ed piece 
in the Washington Post that speaks with candor about our fellow 
Americans from Puerto Rico. We should be paying attention to his words, 
which I ask to be printed in the Record.
  The reality is that commonwealth status--supported strongly by 
powerful American corporations who benefit from it financially--is 
simply another form of old-fashioned colonialism.
  Puerto Ricans should have the rights that Americans have in our 50 
States.
  Eventually, Puerto Rico will either go independent or become a State. 
From the viewpoint of our 50 States and from the viewpoint of the 
people of Puerto Rico, statehood makes much more sense.
  But that is a decision they have to make.
  The special financial breaks that certain corporations get should not 
be a barrier to an improved life for the citizens of Puerto Rico, and 
that is the reality today.
  The op-ed follows:

                       [From the Washington Post]

                        The State of Puerto Rico

                       (By Charles A. Rodriguez)

       Two years ago, when Puerto Rico voted to remain a U.S. 
     commonwealth--again rejecting statehood--many thought the 
     issue was settled for years to come. In fact, the plebiscite 
     raised more questions than it resolved.
       The vote exposed the undue influence of discredited 
     economic arrangements on the island's political process and 
     the myth of commonwealth autonomy, both cornerstones of our 
     second-class U.S. citizenship. Today proponents of the status 
     quo are on the defensive in both Puerto Rico and in 
     Washington.
       The plebiscite was held as the Clinton administration 
     sought repeal of Section 936 of the federal tax code, which 
     exempts U.S. companies' Puerto Rican operations from federal 
     taxation--a subsidy that has cost the Treasury nearly $70 
     billion since 1973.
       Faced with immediate loss of their lucrative tax break or 
     eventual termination if islanders voted for statehood, 
     companies spent millions of dollars fending off Congress 
     while cajoling workers to vote against statehood or else face 
     job losses and plant relocations.
       Meanwhile, status quo proponents campaigned for ``enhanced 
     commonwealth,'' replete with promises of expanded political 
     autonomy and parity with the 50 states in the financing of 
     federal programs--all this while preserving the immunity of 
     Puerto Rico's 3.7 million U.S. citizens from federal 
     taxation.
       Despite the cacophony of economic demagoguery and 
     ``something for nothing'' hyperbole, commonwealth failed for 
     the first time in 40 years to get an outright majority. It 
     won with a plurality of 48.6 percent, against 46.3 percent 
     for statehood and 5.1 percent for independence. Compare this 
     narrow margin of victory with that of 1952 (68 percent) and 
     that of 1967 (21 percent), and the tide against the status 
     quo becomes unmistakable. The false promise behind the 
     alternative of ``enhanced commonwealth'' will do nothing to 
     stem it. For given its current budget-cutting exercises, 
     Congress is clearly in no mood to maintain even current 
     levels of federal funding for Puerto Rico programs, much less 
     ante up the additional $3 billion to $4 billion necessary to 
     bring them up to par with the states.
       Meanwhile, a groundswell of public opinion has arisen in 
     Washington against preserving ``corporate welfare.'' That's 
     why Section 936 is again under review, as it should be: It 
     has made the island dependent on the whims of Congress and 
     has stifled alternative economic development schemes.
       Worse, as now constituted, 936 has failed to generate the 
     jobs and capital investment that were its reasons for being. 
     Witness our chronic unemployment rate, which is twice the 
     mainland's, and our per capita income, half of Mississippi's.
       Revision of 936 could present Puerto Rico with 
     opportunities to attain significant new economic and 
     political objectives; full participation and parity in all 
     federal programs, sustained economic growth and, eventually, 
     statehood.
       Rep. Don Young (R-Alaska), chairman of the House Resources 
     Committee, has floated one promising proposal toward these 
     ends. In exchange for ending 936 he would phase in full 
     state-like programs for Puerto Rico and encourage private-
     sector growth through capital grants for infrastructure 
     development and through private and nonprofit enterprise 
     financing to spur new industries.
       Young's proposal would also, for the first time, subject 
     island residents to federal taxation. Combined with the $3 
     billion savings from ending the 936 tax credit, this would 
     mean that the U.S. Treasury would see no diminution in 
     revenues.
       Many statehood advocates balk at this ``halfway'' solution 
     to securing first-class citizenship for Puerto Ricans. They 
     maintain that economic equality would weaken efforts to 
     achieve political equality through a 51st star. In other 
     words, total economic and political equality or nothing.
       Other point to the absurdity of Puerto Ricans agreeing to 
     pay more taxes while everyone else is looking to reduce 
     theirs. But the fact is that we already have high tax rates 
     in Puerto Rico. They're necessary to finance activities 
     typically provided elsewhere by the federal government. It's 
     safe to assume that as program costs are shifted to 
     Washington, Puerto Ricans will see little change in their tax 
     burden.
       Nonetheless, revision of 936 might accelerate the movement 
     to statehood: No longer would 936 companies have a vested 
     interest in maintaining the status quo.
       Given today's economic and political climate, Puerto Rico 
     may face the same hard choice under option: cut programs or 
     raise taxes. But as a colony deprived of Washington 
     representation we will have no say in the discussions leading 
     up to that fateful decision.
       It's no wonder that 2.5 million Puerto Ricans have left the 
     island for the mainland knowing that the political and 
     economic benefits of statehood far outweigh the burdens of 
     federal taxation. We share their ambition to be full-fledged 
     Americans here at home, just as we always have shared with 
     all U.S. citizens the duty to defend democracy 
     abroad.

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