Statehood the best option for Puerto Rico’s future

From Franklin D. López, secretary general for National Affairs, Equality

In a letter to the editor to The Hill titled “Deception by Supporters of Puerto Rico’s statehood” (Jan. 15), José A. Hernández-Mayoral misses the real issues that the United States government is facing regarding the status of Puerto Rico.

Puerto Rico is sailing through uncharted waters in a very serious and dire economic situation! Unfortunately, neither the local territorial government nor the private sector are addressing the real fundamental issues: the imposition of $1.6 billion in new taxes and the massive emigration and its direct affect on the island’s economic foundation.

Simple logic tells you that if you have a market of 3.7 million people and 1.25 million — the part of the population that is well educated and consumes 50 percent — emigrate to the lower 48 states, territorial tax revenues will be reduced significantly, causing an economic catastrophe and collapse. That is happening in Puerto Rico, promoted by the barrage of 54 new taxes and tariffs, increases in the utilities (water and electricity are the most expensive in the United States) and the anti-American and separatist rhetoric of the present territorial administration.

These taxes and tariffs have a recessionary effect that will shrink economic growth in 2014 to a negative 0.8 percent. The U.S. Census estimated that Puerto Rico’s population will drop to 1950 levels of 2.2 million. The local paper, El Nuevo Día, recently revealed in a poll that 33 percent of the total population of Puerto Rico (1,250,000 people) expressed that they “most likely will emigrate to the United States.” In several polls published by the same paper, 93 percent of the citizens living in the American territory expressed that they have considered or are considering moving to the United States.

According to the U.S. Census of 2010, Puerto Rico has 262,000 empty housing dwellings. The Puerto Rico Bank Association said that 50,000 units are in arrears 90 days or longer, and that 17,000 units are in foreclosure. The government has not factored in the catastrophic effect over the tax collection base in their forecast. If your market shrinks by the effects of massive emigration combined with a shrinking economy, you have the perfect recipe for insolvency and collapse.

The Treasury Department and the White House have said that “Puerto Rico’s economic problems are directly affected by the its present status.” If President Obama really believes in his Lexington doctrine of “nation building first,” then he must pursue a hands-on policy in resolving Puerto Rico’s status.

What would be the best status for Puerto Rico?

In another poll, 93 percent of American citizens in Puerto Rico said that if the island is granted independence or some sort of sovereign status, they will emigrate to the U.S. That means that the island will have a population smaller than 300,000 and will cost U.S. taxpayers twice as much in providing services to the emigrated population. Under this scenario, Puerto Rico’s government is in a path of secure insolvency.

Puerto Rico pays more federal taxes than six states, and more than 272,000 Americans citizens from Puerto Rico have served the nation’s call to defend liberty and freedom abroad that is denied to them in the territory. The United States must end its segregationist and discriminatory policy on the American citizens living on the island.

The only choice is statehood! Statehood will attract badly needed population to the island. The one million plus who have left Puerto Rico from 2001-2013 will most like return. Besides that, Puerto Rico could be the catalytic agent to bringing back the $7 trillion a year from Latin American markets to America’s sphere of influence. This is a defining moment for Puerto Rico, as well as the United States.
Washington, D.C.

‘Forty Hours’ act would address ACA problem

From Steve Caldeira, president and CEO of the International Franchise Association
Even a full year before the Affordable Care Act’s employer mandate takes effect, the evidence shows that employers are cutting hours and shifting to more part-time work to reduce costs. Yet, in the Congress Blog opinion piece “ ‘Forty Hours Is Full-Time’ plan would only make the problem worse” (Jan. 10), UC Berkeley Professor Ken Jacobs attempts to argue that Congress can write laws that raise the cost of employing people by thousands of dollars a year with no measurable impact on employment. 

By returning the definition of full time to the more traditional 40 hours a week, the “Forty Hours Is Full Time” Act would address an inevitable problem with the ACA without fundamentally overhauling the law. Among franchise decision makers, 31 percent report they have already reduced worker hours, while 27 percent report they have already replaced full-time workers with those working part time.

Jacobs’s idea that attempts to tie employer’s hands on hours is no solution at all. Already, decision makers at all businesses with 40 to 70 employees report that will work to stay below the 50 full-time equivalent employee threshold to avoid higher costs, even if it means stopping efforts to grow.

Would returning to the traditional definition of full-time lead to more workers at risk of hour reductions? Hardly. Jacobs’s numbers assume hours can only be cut so far. However, among businesses with many low-skilled workers, the difference between a part-time workforce and full-time workforce is less pronounced, enabling more drastic cuts to occur than Jacobs assumes.

By reducing costs and granting employers and employees more flexibility, the “Forty Hours Is Full-Time” Act will mitigate the worst effects of the ACA while maintaining the integrity of the law.
Washington, D.C.