The most recent Community Report of the U.S. Census (2010) indicated that 56% of Puerto Rico’s children live in poverty. However, the 2014 Annie E. Casey Foundation’s KIDS COUNT® Data Bookreports that 83% of Puerto Rico’s children lived in “high poverty areas” as of 2012. That number is startlingly higher than the numbers for the states. Even Mississippi and New Mexico, the poorest states in the United States, show only 28% and 22% of their children in this position, respectively. (The District of Columbia, also not a state, shows up at 31%.)
What does it mean to live in a high poverty area, and how does that differ from living in poverty?
First, the official poverty level may not tell the whole story. The foundation explains that the national poverty level is outdated and may not capture the reality of modern life. In 1963, the poverty level was defined as three times the cost of basic food for a family. Now, the costs of housing, transportation, and childcare for working parents are much higher in relation to the price of the cheapest food. It is possible for a child to have enough to eat and yet still face some of the consequences of poverty.
High poverty areas, areas in which the majority of the residents are below the official poverty level, are more likely to have problems with crime and less likely to have the educational opportunities of more affluent neighborhoods. Access to health care and healthy foods may also be limited.
As Puerto Rico’s economy has declined since 2010, it is possible that the 56% U.S. Census childhood poverty rate from that year has inched toward the 83% “high poverty” level found in the Casey Foundation’s 2014 report.
What does this mean for Puerto Rico’s future?
- Claims that Puerto Rico can offer an educated workforce for new companies moving to the territoryare less plausible when contrasted with the fact that most of the children in Puerto Rico live in poverty and are likely to lack educational and enrichment opportunities.
- Puerto Ricans are leaving their island for the mainland in record numbers, often in order to give their children a better chance for the future. As young people and families leave, the population of Puerto Rico is aging. The result will be a smaller workforce and fewer innovative new businesses.
- The children of Puerto Rico do not have the kind of safety net children have in the States, and may not have the same opportunities. Those who are living in poverty in Puerto Rico are less likely to have family tax credits, for example, which have been found to encourage investment in education on the mainland. It is possible that it is not only more common to live in poverty in Puerto Rico, but also more difficult to grow out of it.
Much of the discussion of Puerto Rico’s economic crisis has focused on Puerto Rico bonds, taxes, and possible strategies to reinvigorate the economy. Yet there are human costs of the current economic challenges, too, and, if left unresolved, these human costs can be expected to continue an unfortunate economic downward spiral as well.
The post How Many of Puerto Rico’s Children Live in Poverty? appeared first on Puerto Rico Report.
Read the whole story
· ·
A new Federal Labor Department report today says that Puerto Rico had only 981,399 jobs in September.
This is 7,075 fewer than in August — and 296,161 fewer than in April 2006. That’s a loss of 23.2% of all jobs over the past eight and a half years.
It is also the lowest employment since March, 1992.
Governor Alejandro Garcia Padilla was very narrowly elected in November 2012 on a promise to bring 50,000 additional jobs to Puerto Rico by this past July 1st.
From the time that he took office at the beginning of January, 2013, the Commonwealth economy has lost 49,204 jobs.
In addition, the percentage of Puerto Ricans in the territory’s labor force has sunk below 40%. The number is more than a third less than in the States.
Even with the low percentage of people still considered in the labor force and and Puerto Rico’s loss of hundreds of thousands of people in its population, the Commonwealth has an unemployment rate of 14.1%.
The post Commonwealth Economy Costs Puerto Rico 23% of its Jobs appeared first on Puerto Rico Report.
A federal district court judge in Puerto Rico has ruled against same sex marriage in the U.S. territory, diverging from the national trend in the federal judiciary of permitting such marriages.
Puerto Rico passed a law banning same-sex marriages in 1930. Earlier this year, Lambda Legal and Puerto Rico Para Todos brought suit on behalf of five same-sex couples (Conde-Vidal v. Garcia-Padilla), challenging the law. On Tuesday, United States District Judge Juan Perez-Gimenez dismissed the challenge, allowing the 1930 law to stand. In a press release, Lambda Legal called the decision “aberrant,” and indicated its plans to appeal the decision.
“Because no right to same-gender marriage emanates from the Constitution, the Commonwealth of Puerto Rico should not be compelled to recognize such unions,” wrote Judge Perez-Gimenez, who was appointed to the bench by President Carter in 1979. “Puerto Rico, acting through its legislature, remains free to shape its own marriage policy.” Perez-Gimenez further ruled that the people of a jurisdiction through their elected representatives should decide the issue rather than judges.
Judge Perez-Gimenez also referenced Baker v. Nelson, a 1972 Supreme Court decision, which stated that “The institution of marriage as a union of man and woman, uniquely involving the procreation and rearing of children within a family, is as old as the book of Genesis.”
“Traditional marriage is the fundamental unit of the political order,” Judge Perez-Gimenez wrote. “And ultimately the very survival of the political order depends upon the procreative potential embodied in traditional marriage.”
The ruling represents a departure from the holdings of related federal cases. In 2012, the U.S. First Circuit Court of Appeals, which covers Maine, New Hampshire, Massachusetts, Rhode Island and Puerto Rico, ruled that the Defense of Marriage Act (DOMA) – a Federal law defining marriage as a union between one man and one woman – is unconstitutional. On October 7th, the Ninth Circuit Court of Appeals struck down the discriminatory marriage bans for same-sex couples in Nevada and Idaho. The previous day, the U.S. Supreme Court allowed marriage case decisions from the Seventh Circuit, Fourth Circuit and Tenth Circuit Courts of Appeal to stand, meaning that same-sex couples in states covered by these circuits would be able to marry.
Puerto Rico is often considered to be one of the more socially conservative areas in the United States. Defense of Marriage acts were proposed in Puerto Rico’s Legislative Assembly in 2008 (during which the bill took on the common name Resolución 99) and in 2009, although neither passed.
Seven States ban same sex marriages: Alabama, Georgia, Mississippi, Missouri, Nebraska, North Dakota, and South Dakota.
The post Same Sex Marriage Denied in Puerto Rico appeared first on Puerto Rico Report.
Read the whole story
· ·
Governor Alejandro Garcia Padilla acknowledged late yesterday that the Legislative Assembly will not pass legislation this year providing for a plebiscite on options for resolving the question of Puerto Rico’s political status, as he had asked.
The U.S. Congress enacted a law providing for the plebiscite in January.
In his State of the Commonwealth address in April, the Governor asked the Legislative Assembly to pass the necessary local legislation in its session that began in August. The session ends November 18th.
Tuesday, Senate Majority Leader Anibal Jose Torres said that he saw “no way” a bill for the plebiscite — which has not even been drafted yet — could be approved this year. The House of Representatives Co-Chairman of the joint Senate-House Committee on the Status of Puerto Rico, Jose “Cony” Varela, agreed.
The two legislators are members of the territory’s “status” party headed by Garcia Padilla.
They cited lack of time as the reason for the Legislative Assembly not acting this year.
And Garcia said that legislation for the plebiscite could pass as early as January next year.
But the lack of time is due to a deep division in his party over what a “commonwealth” option for the plebiscite should be.
Yesterday, Garcia noted that the party is not based on a particular status aspiration, as are the territory’s statehood and independence party.
It is a party that has various economic and social goals. The statehood and independence parties do as well but see statehood and independence as the way to achieve their economic and social goals as well as to obtain a democratic form of government at the national government level.
President Obama’s Task Force on Puerto Rico’s Status and many in Congress, such as Senate Finance Committee Chairman Ron Wyden, agree that the most effective way to address Puerto Rico’s serious economic and social challenges is to resolve the question of the territory’s ultimate status: whether it will be a State of the U.S. or a nation.
“Commonwealth” party leaders do not even agree on what Puerto Rico’s status is now.
Puerto Rico is an unincorporated territory of the United States. Most “commonwealth” party leaders say it is a “commonwealth” but the faction of the party responsible for the lack of agreement on what “commonwealth status” should be acknowledges that Puerto Rico is really an unincorporatedterritory.
Garcia Padilla, who leads another faction, has agreed with former Governor Rafael Hernandez Colon that the U.S. Government has given up a part of the Congress’ power written in the U.S. Constitution to govern unincorporated territory as it wishes so long as it does not violate the fundamental rights of individuals. Specifically given up, they claim, is the authority to govern Puerto Rico on matters that State governments handle and on tax matters.
The Governor and former Governor agree that Congress retains its Territory Clause power to govern Puerto Rico on other matters.
President Obama’s Task Force, like the administrations of both Presidents Bush and Bill Clinton and Congress under both Republican and Democratic majorities, does not agree that the U.S. Government has given up any power over Puerto Rico.
The Federal plebiscite law enacted in January provides for a vote on status options that can resolve the question of the territory’s ultimate status. Puerto Rico’s Elections Commission is to formally propose the options but the proposals must be agreed to by the U.S. Department of Justice.
In addition to the options being able to resolve the question of Puerto Rico’s ultimate status, the options cannot be incompatible with the Constitution, laws, and policies of the U.S.
Garcia has proposed that a “commonwealth” option not change Puerto Rico’s political status but, instead, exempt Puerto Rico from Federal tax, transportation, labor, and trade laws and provide for equal funding for the territory in all Federal social programs, which would cost about $8 billion a year.
The proposal would not meet the requirements of the Federal plebiscite law because it would not resolve the question of Puerto Rico’s ultimate status. As long as Puerto Rico is a territory, its people can petition the U.S. Government for statehood or nationhood.
The proposal would also conflict with Federal tax, transportation, labor, trade, and social program laws.
The “sovereigntist” faction of the party has proposed that Puerto Rico become a nation in an association with the U.S. that either nation could end. This would meet the requirement of the Federal plebiscite law for the option to be able to resolve the question of Puerto Rico’s ultimate status.
But the “sovereigntist” proposal would also require the U.S. to continue granting citizenship to all individuals born in a nation of Puerto Rico and require the U.S. to give Puerto Rico new financial assistance — proposals that would conflict with Federal laws and policies.
San Juan Mayor Carmen Yulin Cruz, a leader of the “sovereigntist” faction and a former House of Representatives member, has said that there are not “enough votes” among “commonwealth” party members in the Legislative Assembly to pass either proposal.
There are also not enough votes in the party’s Governing Board to resolve the dispute.
Garcia called a meeting to try to do so two months ago, but the only definitional agreement reached was that any “commonwealth” proposal should provide for permanent U.S. citizenship (which is only possible under statehood).
A four-member committee of former party presidents was set up to negotiate further. It includes: Hernandez Colon; former Governor Anibal Acevedo Vila, a key leader of the nationalist wing; former Senate President Miguel Hernandez Agosto, a past advocate of sovereignty; and former San Juan Mayor Hector Luis Acevedo, who has not been an outspoken status ideologue.
The committee does not appear to have made progress on the issue.
The Governing Board, which has 30 members, also agreed that if it can finally agree on a proposed “commonwealth” for the plebiscite, the proposal would have to be adopted by the larger party Council, which has hundreds of members, or an even larger party General Assembly that has thousands of members.
President Obama proposed and Congress approved the Federal plebiscite law because Garcia and the “commonwealth” party majorities in each house of the Legislative Assembly elected in November 2012 have refused to accept the validity of a plebiscite under Commonwealth law held the same day of their election. The vote rejected Puerto Rico’s current territory status – which Garcia supported — by 54% and chose statehood among the alternatives by 61.2%.
The White House supported the 2012 plebiscite and hailed its results. But Obama Administration officials were concerned that lobbying by Garcia and “commonwealth” party legislators against the plebiscite’s petition for Federal action to transition the territory to statehood would result in congressional inaction on the people of Puerto Rico’s self-determination decision.
White House officials and congressional committee leaders reasoned that losers would have less credibility in disputing a plebiscite held under the auspices of a Federal law and the U.S. Justice Department.
The post “Commonwealth” Party Dispute on “Commonwealth” Delays Plebiscite Bill appeared first onPuerto Rico Report.
Read the whole story
· · · · ·
The president of the statehood party has promised that the first law he will sign if elected governor in 2016 will move Puerto Rico towards statehood.
Pedro Pierluisi, who got more votes in the 2012 elections than Governor Alejandro Garcia Padilla (“commonwealth” party) and is far more popular than Garcia in polls since then, is the leading candidate to be Garcia’s statehood party opponent in 2016. Pierluisi is currently the territory’srepresentative to the Federal government — resident commissioner — with a seat in the U.S. House of Representatives that only permits voting in committees.
Garcia’s very low standing in the polls makes Pierluisi’s promise a serious possibility for Puerto Rico’s first law in 2017.
Two other potential statehood party candidates are Ricardo Rossello, son of former Governor Pedro Rossello (10993-2001), and Senator Thomas Rivera Schatz. They are equally strong advocates of equality for Puerto Ricans: statehood.
In explaining his pledge, Pierluisi added that “[t]he details of the bill” he would sign if elected cannot be specified now because of the possibility of another status plebiscite during the next two years. But he said that the legislation could provide for a plebiscite under the Federal authorization for a status vote enacted into law in January or it could petition the Federal government to admit Puerto Rico as a State based on the plebiscite that the Commonwealth government held along with the 2012 elections.
The resident commissioner has led 131 other members of the U.S. House and three U.S. senators in sponsoring legislation that would require a plan to transition Puerto Rico to statehood if Puerto Ricans vote for the status a second time.
In the 2012 plebiscite, Puerto Ricans rejected the current territory status by 54% and chose statehood among the alternatives by 61.2%.
Because very narrowly elected Governor Garcia and the “commonwealth” party majorities in each house of the Legislative Assembly elected along with him disputed the plebiscite and its results, President Obama proposed and Congress passed legislation providing for another vote under U.S. Justice Department auspices.
The Obama White House supported the 2012 plebiscite and hailed its results. But Obama aides were concerned that lobbying by Garcia and his allies against the plebiscite’s petition to the Federal government for a transition to statehood would lead to congressional inaction on the self-determination decision of Puerto Ricans.
A vote approved by the Federal Justice Department would be more difficult for the losers of the vote to dispute, as ‘commonweathers’ are now, than one held under Commonwealth law.
Garcia and other commonwealthers argued that the 2012 plebiscite was unfair because it termed Puerto Rico’s current political status as “territorial” and it did not include their proposal for an unprecedented “commonwealth status.”
All three branches of the Federal government have determined that Puerto Rico is subject to the broad powers of Congress provided by the U.S. Constitution’s Territory Clause to make all rules for territories.
The “commonwealth” party’s proposal for a “commonwealth status” that it wanted on the ballot is one that has been rejected by the Obama, George W. Bush, and Clinton Administrations and congressional committee leaders of both national political parties for constitutional and other reasons.
Under it, Puerto Rico would be a nation but the U.S. would be permanently bound to Puerto Rico. Federal laws would apply but only to the extent that the Commonwealth government agreed. The Commonwealth government could also limit the jurisdiction of U.S. courts in Puerto Rico. The Commonwealth would additionally be empowered to enter into international agreements and organizations as if it were a truly sovereign nation. The U.S. would be permanently obligated to provide Puerto Ricans with all assistance currently given and to continue to grant U.S. citizenship based on birth in Puerto Rico. Etc.
Because the U.S. Justice Department has to approve the status proposals for the plebiscite authorized by the January Federal law, Garcia has asked his “commonwealth” party to revise the Federally-rejected definition of “commonwealth status.” Despite months of talks, party leaders are deadlocked between Garcia’s proposal for a governing arrangement that under which Puerto Rico would be subject to some Territory Clause powers but not others and a proposal that Puerto Rico become a nation in an association with the U.S. that either nation could end but with continued granting of U.S. citizenship and U.S. financial assistance at current levels.
The Federal law for the plebiscite requires that ballot options be statuses that can “resolve” the question of Puerto Rico’s future status and not conflict with the Constitution, laws, or policies of the U.S. The possible options are statehood, independence, and nationhood in an association with the U.S that either nation could end but without continued granting of U.S. citizenship and U.S. financial assistance as at present.
A “commonwealth” proposal would not qualify because, as President Obama’s Task Force on Puerto Rico’s Status has reported, Puerto Rico would be subject to Congress’ Territory Clause authority under any “commonwealth” arrangement. And as long as Puerto Rico is a territory, its people can petition for statehood or nationhood.
The post First Insular Law in 2017 Could Move Puerto Rico to Statehood appeared first on Puerto Rico Report.
Read the whole story
· · · ·
A renewed slide in investor confidence, on the heels of worsening economic and budgetary trends in Puerto Rico, raises the specter that in the absence of enlightened political leadership in San Juan, the U.S. Congress may soon have to establish a federal oversight board to manage the Commonwealth’s grave fiscal situation.
In the past six weeks, Puerto Rico’s junk-rated bonds have slumped while investment-grade municipals have rallied. The S&P Municipal Bond Puerto Rico Index dropped 3.25 percent, while returns on the S&P National Index were up 1.1 percent. Earlier this month, trading in credit-default swaps suggested that Puerto Rico was viewed as the world’s most likely government to default within one year. Given the recent collapse in world oil prices, now it is Venezuela that has bondholders feeling most jittery, with Puerto Rico’s debt priced as the next most risky.
ADVERTISEMENT
Investors have become pessimistic even though the Commonwealth has recently managed to borrow $900 million from a group of banks led by J.P. Morgan, Morgan Stanley and Bank of America. The island’s government was actually hoping to raise $1.2 billion, and it was granted at a punishing interest rate of 7.75 percent. In years past, the Commonwealth had always been able to obtain short-term credit for its seasonal needs at rates below two percent. According to Bloomberg News, the hedge funds which bought Puerto Rico’s last bond issue in March – it was priced to yield an eye-popping 8.75 percent – have been losing confidence and have pared back their holdings.
The market action suggests that sophisticated investors are beginning to realize that Puerto Rico’s economic and fiscal situation is unlikely to turn around anytime soon. The economy has been shriveling for eight years, such that a measure of the island’s GDP as of August was off by one-fifth from August 2006 – and down all the way to a level not seen since 1994. The first data points for September are the unemployment rate, which rose to 14.1 percent from 13.1 percent in July, and auto sales, which were down 17 percent for the third quarter versus the prior year. The underlying reason is a steady exodus of population and jobs: total employment in 2014 through September stood 21.5 percent below the 2006 average. The exodus has led to an erosion of the tax base and to political pressure to salvage government jobs and help vulnerable populations.
Indeed, the fundamentals of Puerto Rico resemble those of New York City in the mid-1970s and of other municipalities on which a Financial Control Board has been imposed. NYC lost a chunk of its middle class and 16 percent of its jobs between 1969 and 1977. It was also saddled with too much debt – Puerto Rico’s tax-supported debt amounts to nearly $12,000 per inhabitant, twelve times the median of state debt per capita in the continental United States – and NYC’s access to financing came to an end when the leading banks resisted underwriting any more bonds.
Behind every fiscal crisis there is a shortfall of political skill and forceful leadership, and Governor Alejandro García Padilla is looking increasingly inept. His plan to balance the budget by tinkering with revenue measures and curbing employee compensation, while avoiding layoffs and the restructuring with intent to privatize inefficient state-owned companies, is insufficiently aggressive. Three months into the new fiscal year, the plan is already falling short. On the funding side, meantime, the strategy is to pledge ever-greater portions of earmarked taxes to back new indebtedness, despite undermining the obligations that are not similarly supported.
And then there is García Padilla’s economic team, recently reshuffled but not improved. Treasury Secretary Melba Acosta has displayed poor judgment, most notoriously by disavowing a tax refund that was to be paid to Doral Financial, one of the island’s largest lenders. Recently, the matter went to court and the ruling was in favor of Doral. Acosta’s reaction? “We have no budgetary allocation to pay for that gift.”
Governor García Padilla has since nominated her to become head of the Government Development Bank. Her successor at the Treasury’s helm is Juan Zaragoza, who has been serving as a top, paid advisor to Ms. Acosta. Apparently, he has remained all along the managing partner of a prominent accounting firm that has represented many clients in tax matters. Now he must defend himself against a formal complaint filed by opposition senators, who accuse him of having failed to avoid conflicts of interest.
Given the current morass, it is hard to recall the happy decades during which Puerto Rico was the belle of the municipal bond market. As a territory, it was able to run deficits and fund them by selling almost as many bonds as New York and California did – because its debt pays tax-exempt interest in all 50 states, a favorable trait that was used and abused. The time is rapidly approaching when the U.S. Congress may well have to take matters in its own hands and, empowered by Clause 2 of the Constitution, establish a financial control board to take the unpopular austerity and reform measures that circumstances warrant.
Porzecanski is the director of the International Economic Relations Program at American University’s School of International Service.
