House Democrats revive Puerto Rico Status Act

Democrats on the House Natural Resources Committee began a revival attempt on the Puerto Rico Status Act on Thursday, aiming to give the island territory's voters the choice of statehood.

The bill, which died at the end of the last congressional session, would establish a binding plebiscite - a direct vote on the island to choose between statehood, independence, or sovereignty in free association with the United States status. The third option would also recognize Puerto Rico as an independent nation. 

"The choice would be binding on the United States Congress," said Raúl M. Grijalva, D-Ariz., the committee's ranking Democrat. "That is the historic part. That is a significant part."

The bill's supporters include Rep. Darren Soto, D-Fla., who acknowledged during a press conference that the biggest obstacle to moving the bill forward is Rep. Bruce Westerman, R-Ark., who was the ranking member in the last Congress and now chairs the Resource Committee. 

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"We're here to ask a few simple things," said Soto. "One for our dear friend Chairman Westerman to hold a hearing. Let's have a vote on the bill. We've had exhaustive hearings, but I know you'll probably want one or two more. Let's do this." 

The previous version of the bill passed the House in December 2022 with bipartisan support. Even then, Westerman was not onboard. "This rushed bill falls far short of a solution," he said in a statement at the time.  It hasn't gone through any semblance of regular order, has had zero hearings, fails to include all status options available for Puerto Rican voters to consider, creates murky citizenship questions, and does absolutely nothing to improve the condition of Puerto Rico's economy, energy security, infrastructure, or fiscal stability."  

Assuming the revived version of the bill could make it out of committee and somehow pass in the Republican-controlled House it would more than likely be killed in the Senate.  The U.S. Republican 2016 party platform supported Puerto Rico statehood but the possibility of upsetting the balance of power has changed some minds.

A change in Puerto Rico's status could affect bond issuance as Puerto Rican bonds are currently triple tax-exempt. A change to becoming a state would bring its debt into line with the other 50 states, while choosing soverignty would move its bonds into a completely different category. Analysts have said the loss of the exemption would hurt the island's base for future deals.

Bond defaults are still an imminent possibility in Puerto Rico as paper issued by the Puerto Rico Industrial, Tourist, Educational, Medical & Environmental Control Facilities Financing Authority are currently careening towards default. The funds were slated for an energy cogeneration plant that's now entangled in a law requiring coal ash to be shipped off the island.     

Puerto Rico went bankrupt in 2015 which spurred Congress to pass PROMESA, a law that created an unelected and unpopular oversite board to manage the island's finances.  

Puerto Rico statehood is also complicated by three political parties on the island with differing viewpoints. The Independence Party wants to split with the U.S., the New Progressive Party favors statehood while the Popular Democratic Party would prefer to remain a commonwealth. Puerto Rico has held six non-binding plebiscites over statehood questions, the last in 2020, which showed a slim majority of 52% voting for statehood. 

The uncomfortable notion of colonialism was raised repeatably during the press conference.

 "We cannot be lecturing the world about democracy while we refuse to take on this issue by denying this bill the chance to have hearings on a floor vote," said Rep. Nydia M. Velázquez D-N.Y. "We are keeping Puerto Ricans trapped in an unjust political limbo."