[Congressional Record Volume 164, Number 83 (Monday, May 21, 2018)]
[Senate]
[Pages S2782-S2783]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                  Puerto Rico Economic Empowerment Act

  Mr. President, having said my piece about NAFTA, I would like to turn 
to the main purpose for which I am standing here.
  Last Thursday, I introduced a bill, cosponsored by Senator Rubio, 
titled the Puerto Rico Economic Empowerment Act of 2018. The bill works 
to help the people in Puerto Rico as they continue to face a stagnant 
economy and recover from massive damage caused by recent hurricanes.
  This bill will be a critical step toward resurrecting growth in 
Puerto Rico. It directly targets relief to Puerto Ricans themselves and 
small businesses on the island.
  In brief, the bill provides the following: First, the bill provides a 
payroll tax holiday for employees in Puerto Rico for 2 years, cutting 
their payroll taxes in half in order to give economic relief to the 
hard-working people of Puerto Rico who face an economy that has been 
stagnant and mismanaged for far too long.
  Second, the bill provides equal treatment with respect to the Federal 
child tax credit for Puerto Rican families with one or two children, 
not just for those who have three or more. This will provide more 
equitable treatment for Puerto Rican families with respect to the 
Federal child tax credit, to help families to reduce child poverty.
  Third, the bill provides greater flexibility for Puerto Rico in 
various Small Business Administration programs to assist Puerto Rico's 
small business owners during a time of prolonged economic downturn.
  Fourth, the bill confronts the longstanding problem in trying to 
monitor Puerto Rico's economy, which stems from lack of inclusion of 
Puerto Rico in many Federal statistical surveys. The bill also calls 
for the establishment of a Federal statistical research data center in 
Puerto Rico.
  These and other provisions in the bill follow recommendations of the 
bipartisan Congressional Task Force on Economic Growth in Puerto Rico. 
I had the opportunity of chairing that task force with four Members 
from the House and four Members from the Senate. We also made sure the 
task force was evenly split with regard to political affiliation. I 
know such evenhanded bipartisanship and compromise is rare around here, 
but we were able to do it, and we came up with a 125-page report that 
made many different suggestions. Not wanting that work to go to waste, 
Senator Rubio and I have been working hard to draft those proposals 
into this bill, and I am confident it truly embodies the purpose and 
bipartisan spirit of that bicameral task force. Although I do not have 
a score on the bill yet, previous scores on similar provisions would 
add up to over $3.25 billion in relief, largely in tax relief to our 
fellow Americans in Puerto Rico. Once I obtain an updated score, I will 
recalibrate the offset accordingly, if necessary.
  In the meantime, the fiscal cost of the bill is entirely offset by 
redirecting funds from the Prevention and Public

[[Page S2783]]

Health Fund established under the so-called Affordable Care Act. 
Redirecting from that fund helped provide offsets for the 21st Century 
Cures Act and for the Bipartisan Budget Act of 2018, both of which 
received bipartisan support.
  I hope all of my colleagues can join Senator Rubio and me in support 
of this bill. After all, our prior efforts have not solved many of the 
ongoing issues in Puerto Rico. For example, toward the end of 2015, we 
passed PROMESA into law.
  PROMESA was the result of the efforts by the Obama administration 
officials to share in Puerto Rico's outstanding debt obligations. It 
largely took their bankruptcy scheme but usefully added provisions 
intended to spark economic development in Puerto Rico, particularly in 
the energy space. One promise of PROMESA touted by the Obama 
administration officials was that it would circumvent a viscous and 
wasteful sequence of lawsuits. Theoretically, the law was going to stop 
creditors and the government of Puerto Rico from facing off in 
prolonged court battles.
  I voted for PROMESA because Puerto Rico's long span of fiscal 
irresponsibility needed to be stopped, and a promise of limiting 
litigation was inviting. Unfortunately, the law has failed to prevent a 
tidal wave of litigation as was promised.
  PROMESA also set up an oversight board to facilitate voluntary debt 
resolution negotiations or movement of disputes to a court-supervised, 
bankruptcy-like process. The promise of voluntary debt resolutions has 
not been fulfilled, even for a restructuring agreement between 
creditors and Puerto Rico's power authority called PREPA, which had 
been agreed upon by both sides.
  The oversight board was also intended to oversee and monitor budgets 
for the various indebted arms of the government of Puerto Rico. On this 
front, I have also been disappointed as it seems the oversight board 
has largely been operating in the dark, often relying on the government 
of Puerto Rico for information of questionable validity. That said, I 
am not without hope. The oversight board has recently been slightly 
more aggressive in its demands for transparency from the government of 
Puerto Rico, and I hope they are successful in obtaining useful, 
verifiable information.
  However, the government of Puerto Rico has been and remains largely 
opaque. As just one example, I have asked government officials in 
Puerto Rico for audited financial statements for nearly 3 years now. 
Let me repeat that. I have been waiting nearly 3 years for audited 
financial statements from Puerto Rico. Unfortunately, to the best of my 
knowledge, the government of Puerto Rico has not provided audited 
financial information since fiscal year 2014. This is obviously 
problematic when trying to figure out how to best help Puerto Rico, and 
this is not a one-off issue. Recently, following numerous claims by 
government officials in Puerto Rico of severe, even crisis-level 
liquidity shortages, Puerto Rico finally got around to looking into 
hundreds of scattered government bank accounts and revealed late last 
year that it found nearly $7 billion of stranded cash. This is just one 
of many examples of how disorganized and inconsistent accounting 
continues to prevail in Puerto Rico, damaging the credibility of the 
government, but it doesn't end there.
  There have recently been attempts by the government in Puerto Rico to 
potentially politicize the Puerto Rico Institute of Statistics. 
Obviously, this is concerning. In a report by the Congressional Task 
Force on Economic Growth in Puerto Rico, Members of Congress from both 
Chambers and both sides of the aisle expressed that the Institute of 
Statistics ``has emerged as a highly professional, autonomous, and 
apolitical organization that is bringing greater transparency to 
economic, financial and fiscal conditions on the island.'' Indeed, a 
recommendation of the task force was for the institute to continue to 
protect its independence. Unfortunately, the institute has been forced 
to litigate its independence, given an ill-conceived effort by the 
government of Puerto Rico to overhaul and potentially politicize the 
institute.
  I know there is bipartisan support for our fellow Americans in Puerto 
Rico. Indeed, I heard a lot of support by Members on the floor 
following the devastating hurricanes that hit the island. Some Members 
seemed genuinely concerned, while others seemed more interested in 
trying to cast doubts on or politicize the disaster response from the 
Federal Government led by the administration. Nonetheless, I remain 
committed to working with anyone from either side to help and support 
the people of Puerto Rico.
  However, that work must involve compromise and mutual understanding 
of each other's concerns, and that has not always been the case, in my 
view. I have tried to work to provide tax relief to people in Puerto 
Rico. Yet I continue to hear from some, including former Obama 
administration officials, that I must include access for Puerto Rico to 
the earned-income tax credit.
  I have been clear about my concerns that administration of such a 
provision carries with it many possible problems, as highlighted by a 
report by the nonpartisan Joint Committee on Taxation. Moreover, Puerto 
Rico already had its own earned-income tax credit, which it 
subsequently did away with. It seems to want to resurrect the idea now, 
and they have every right and ability to institute such a credit on the 
island. However, I cannot support the ``advice'' from some that I must 
support a provision involving cutting a big check from the Federal 
general fund to the government of Puerto Rico for them to administer 
such a credit.
  I also cannot support the views of some in Puerto Rico, including 
government officials, that they were somehow left out of our tax reform 
efforts because they did not receive a special carve-out unavailable to 
anyone else.
  Subsidiaries of firms headquartered in the United States that are 
organized as controlled foreign corporations in Puerto Rico for Federal 
tax purposes were treated the same as similarly situated taxpayers 
anywhere else. In addition, if being somehow left out of tax reform 
means provisions to provide some sort of tax haven status, as some in 
Puerto Rico asked for, then I think proponents of such a view do not 
understand recent history. In my more than 40 years in the Senate, I 
have always been a proud advocate of accountability and oversight. That 
is why I support greater transparency in the Puerto Rican government, 
as well as the oversight board.
  I also support ongoing Federal efforts, including those of the 
Treasury Department, to carefully and closely monitor Federal funds 
provided to Puerto Rico for disaster and other relief. As always, we 
owe a duty to taxpayers to prudently safeguard their hard-earned 
dollars from being channeled to inefficient or wasteful uses.
  These and other reasons are why, in conjunction with Senator Rubio 
and anyone else here who wishes to join us, I am advocating for the 
provisions contained in the Puerto Rico Economic Empowerment Act of 
2018 that I introduced.
  Let me end by reiterating that I want to work on a bipartisan basis 
and in the spirit of compromise with anyone in this Chamber to help our 
fellow Americans in Puerto Rico. Truly, theirs is an uphill battle as 
they continue to face many different adversities. That has been the 
case for years, and I hope we can set our troublesome partisan 
politicking aside and get to work.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. SCHUMER. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.