WASHINGTON – Several House Democrats joined Thursday in calling on congressional Republicans to go beyond what one described as cosmetic support for Puerto Rico under tax reform and disaster aid.

“What has become very evident to me is the cosmetic concern,” Rep. Joe Crowley, D-N.Y., said at a news conference on Capitol Hill where lawmakers were joined by Puerto Rican residents still trying to recover from Hurricane Maria.

“If anything, the tax bill is a missed opportunity,’’ Crowley said, suggesting the tax legislation should make residents of Puerto Rico fully eligible for the federal earned income tax credit and child tax credit.

Rep. Nydia Velazquez, D-N.Y., flanked by fellow New York Democratic Reps. Jose Serrano, left, and Joe Crowley
Rep. Nydia Velazquez, D-N.Y., flanked by fellow New York Democratic Reps. Jose Serrano, left, and Joe Crowley Brian Tumulty, The Bond Buyer

Reps. Nydia Velazquez and Jose Serrano, who both were born in Puerto Rico, echoed that message.

“Puerto Rico is treated as a foreign country,” said Velazquez, characterizing the tax treatment of the territory as immoral, heartless and wrong.

Serrano said the island needs to be eligible for the same business tax incentives and personal tax breaks as the mainland.

“Puerto Rico and the territories always get treated different and that’s the whole argument and everything else is details,” Serrano told The Bond Buyer. “The argument is you can’t treat American citizens differently simply because they live in a territory and not in a state.”

Lisette Jimenez Fosse, an English-as-a-second language teacher at the Angeles Pastor School in San Juan, was among three residents who gave personal testimonials about the slow recovery effort.

Fosse tearfully described holding a door closed with her body during the hurricane. “Never in my life have I seen such devastation,” she said.

She said some of her third through fifth grade students have not yet returned to school even though the building reopened two weeks after Maria. And electricity at the school has been restored, but it goes off periodically throughout the school day.

Despite the continuing need for recovery help, Republicans are delaying a vote on another round of disaster aid until later this month, said Serrano, a member of the House Appropriations Committee.

Tax reform has been a priority for Republicans. The House and Senate have passed differing bills, which are being reconciled in a House-Senate conference committee.

Puerto Rico’s debt problems can be traced to the federal elimination of a tax preference known as Section 936 and the last remaining part of it would be repealed under tax reform, said Eduardo Bhatia, minority leader of the Senate of Puerto Rico. That section of the tax code gave U.S. corporations some tax advantages if they based some part of their company operations in Puerto Rico.

Bhatia who attended the news conference but did not speak, told The Bond Buyer that the tax legislation “would create an enormously disadvantaged situation for the island.”

“Foreign corporations will have their system, domestic corporations will have their system,” he said.

Puerto Rico is subject to the federal minimum wage and other regulations imposed by other federal agencies such as the Environmental Protection Agency, he said.

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