Congress debates Puerto Rico aid as more islanders head for CT

Puerto Rican Day festival gathering in Hartford's Bushnell Park in June.

Jacqueline Rabe Thomas / CTMIrror.org

Puerto Rican Day festival gathering in Hartford’s Bushnell Park in June.

Washington – Puerto Rico’s financial problems, which are nearing a crisis stage, have sped the migration of its residents to the mainland, including Connecticut, but Congress is stalled on proposals to help the island.

A Senate panel on Thursday debated a proposal sponsored by Sen. Richard Blumenthal, D-Conn., and another released by the White House on Wednesday that would change bankruptcy laws regarding Puerto Rico, which is running out of cash and soon will be unable to make payments on a $72 billion debt.

“At the end of the year, Puerto Rico will have to choose whether to pay its citizens or pay its creditors,” Puerto Rican Gov. Alejandro Garcia Padilla testified at a Senate Energy and Natural Resources Committee hearing.

Treasury Department attorney Antonio Weiss testified that Puerto Rico’s economic crisis began before the Wall Street crash of 2008 and the island economy has not recovered like the U.S. mainland’s has.

“That has sparked the largest pace of outmigration from Puerto Rico since the 1950s, and that pace is escalating,” Weiss said.

U.S. Census Bureau figures show there has been nearly steady growth in Connecticut’s Puerto Rican population since 2005, when it was almost 205,000. By 2014 the number of Puerto Ricans living in Connecticut had grown to about 301,000, with a sharp spike in growth — about 42,000 residents — between 2013 and 2014.

Much of that growth could be attributable to births in the community and migration to Connecticut from other states. But other census figures show there also was a spike in the number of Puerto Ricans who migrated to Connecticut from the island between 2013 and 2014.

Orlando J. Rodriguez, associate commission analyst for Connecticut’s Latino and Puerto Rican Affairs Commission, said Puerto Rico’s economic troubles are driving its residents to the mainland, and Connecticut. But he said many don’t stay in the state.

“It’s not like there’s a lot of jobs here,” he said.

Connecticut has more Puerto Rican residents per capita — 7.1 percent of the populaition — than any other state. The presence of family in the state is a draw, Rodriguez said.

“You live with an aunt or uncle or brother, and if you find a job, you stay. If not you go somewhere else,” Rodriguez said.

Last week, the Pew Research Center said Puerto Ricans are leaving their island at a pace not seen in 50 years. It said that last year, 84,000 people left Puerto Rico for the U.S. mainland, a 38 percent increase from 2010.

Will Congress Act?

Congress has weighed for months whether it should help Puerto Rico – and done nothing.

Puerto Rican migrationEarlier this year, Blumenthal introduced legislation that would allow Puerto Rican municipal governments and state corporations to declare bankruptcy and rework their debts.

The White House went beyond that this week, urging Congress to extend “Chapter 9″  bankruptcy relief to the island’s commonwealth government as well. U.S. state governments are barred from filing for Chapter 9 bankruptcy, although U.S. cities can, and the Obama administration says the measure should only be extended to U.S. territories like Puerto Rico.

The White House also asked Congress to set up a financial control board to oversee Puerto Rico’s finances to ensure transparency, expand Medicaid and extend the Earned Income Tax Credit and Child Tax Credit to the island’s residents.

Charles Venator-Santiago, a political science professor at the University of Connecticut who is also with the school’s Institute for Latino Studies, said the White House’s proposals would be “very helpful,” even if they did not solve all of Puerto Rico’s economic problems.

Allowing the commonwealth to declare bankruptcy would “free up about $30 billion a year,” Venator-Santiago said, and the financial control board “is the only way they are going to crack down on corruption on the island.”

Blumenthal joined other Democratic senators on Thursday in introducing legislation to extend the Earned Income Tax credit and the Child Tax Credit to Puerto Rican residents.

“The Parity for Puerto Rico Act is a crucial step towards ensuring equality between Puerto Rico’s low-income working families and families on the mainland,” Blumenthal said. “At a time when Puerto Rico’s 3.5 million U.S. citizens face tremendous suffering, in large part because of unfair and unequal treatment under U.S. law, this legislation will assist struggling families, encourage employment, and help get the Puerto Rican economy back on track.”

But some Republicans are resistant to helping Puerto Rico, considering such aid a “bailout” and chafing at the cost of extending tax credits to island residents. The cost of the earned income tax credit was estimated at $150 million per year.

The island’s creditors, which include some of the nation’s largest hedge funds, also oppose allowing the island, or its municipalities, to declare bankruptcy.

The hedge funds want to be able to negotiate repayments directly with its debtors, which include the Puerto Rico Electric Power Authority.

At Thursday’s hearings, Sen. Bernie Sanders, I-Vt., expressed outrage that “vulture funds” are insisting on returns on their investments “and the children of Puerto Rico are going hungry.”

“Let us be clear about the extent of the human tragedy,” said Sanders, who is running for president. “Wall Street should not be believing they can get blood from a stone.”

While the Obama administration warns of a looming humanitarian crisis in Puerto Rico, GOP senators expressed skepticism Thursday about plans to help the island.

“It’s going to take Congress some time to work through these proposals,” said Sen. Lisa Murkowski, R-Alaska, the committee’s chair.

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