Federal judge rules Puerto Ricans eligible for several benefits

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A federal judge ruled that Puerto Ricans are eligible for federal benefits they’ve been heretofore denied: Supplemental Security Income (SSI), Supplemental Nutrition Assistance Program (SNAP), and the Medicare Part D Low-Income Subsidy (LIS).

U.S. District Court Judge for Puerto Rico William Young issued the decision on Monday. In his decision, Young said that the federal government’s policies barring the provision of the benefits to Puerto Rico residents was unconstitutional under the Equal Protection Clause of the Bill of Right’s Fourteenth Amendment.

U.S. Representative Nydia Velazquez
U.S. Rep. Nydia Velazquez (D, N.Y.) said the court ruling would begin the process of ending Puerto Ricans disparate treatment for federal benefits.

He ordered the federal government to immediately commence payment to the nine Puerto Rico residents who were plaintiffs. In response to a government request, he put an administrative stay on his ruling for 60 days.

“Given the high poverty rate, having expanded access to SNAP, Supplemental Security Income and Medicare Part D Low-Income programs would be beneficial to the island and expensive for the federal government, which is expected to appeal the decision,” said Howard Cure, director of municipal bond research at Evercore.

“I think the favorable ruling for Puerto Rico stems from the inconsistency in how other U.S. territories receive federal program aid,” Cure said. “The decision could also have an impact on the statehood referendum [planned for November] since having expanded access to these programs could negate the desire and benefits of becoming a state.”

Meanwhile, Puerto Rico business and economic consultant Heidie Calero said though these programs are directed to the very poor and the needy, "as an economist I think Puerto Rico would best be served if these funds were channeled to reconstruct the island’s infrastructure and improve public education so we can compete globally and take care of our poor and needy with our own resources.”

Calero, president of H. Calero Consulting Group, continued, “True, there are very needy people in the island and in fairness they should receive assistance as U.S. citizens. True also in fairness, U.S. taxpayers help fund these programs and though poor people may not pay taxes, other not-so poor people in Puerto Rico should also bear part of the burden of financing these programs with local tax dollars.

“Hence, it would not surprise me if the decision to grant the above three programs to
Puerto Rico is upheld but by the same token, federal taxes would also apply to Puerto Rico to help fund these programs,” Calero said. “This also brings to the forefront the long-standing debate of ‘No taxation without representation.’ Hence, will this mean that Puerto Rico’s Resident Commissioner will have a vote as well a voice?”

"Additional federal aid for low-income residents clearly benefits Puerto Rico’s economy, but the deal is not yet done as we would expect the federal government to appeal the ruling,” said Genevieve Nolan, Moody's Puerto Rico government analyst.

Rep. Nydia Velazquez (D, N.Y.) tweeted, “This is an important ruling to at last begin eliminating Puerto Rico's disparate treatment for federal benefits. I filed an amicus brief in this case in February of last year. While there is still work ahead this is an important milestone toward progress.”

SSI provides money to low-income people who are disabled, blind, or over 65. It also provides money to families with disabled children. SNAP provides allocations for poor people to buy food. LIS provides financial assistance to old poor people covered by Medicare to purchase prescription drugs.

Young cited estimates that if the federal government paid these benefits on island, $1.5 billion to $1.8 billion would be paid annually for SSI, somewhere between $200 million and $700 million would be paid for SNAP benefits, and a few hundred million dollars would be paid for LIS benefits.

Young’s decision follows and to some degree relied on an April decision by a three-judge panel in the U.S. Court of Appeals for the First Circuit. In that decision the judges found that Puerto Ricans were eligible for SSI payments. The Social Security Administration has not yet started to pay the benefits to island residents.

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