Schumer and Statehood for Puerto Rico

Several days ago Senate Minority Leader Chuck Schumer (D-N.Y.) mentioned that he would like to make Washington, D.C., and Puerto Rico states if they ask for it. 

This statement constitutes a shift in the Senate’s Democratic leadership concerning Puerto Rico. With notable exceptions, the Senate — under Republican and Democratic leadership — has been reluctant to address Puerto Rico’s status question, preferring to let the House tackle the issue in the hope it eventually fades away. This studied inaction has historically had the support of the pro-territorial Popular Democratic Party (PPD) and its lobbyists.

Schumer’s statement marks a change in attitude. His open support for statehood, of course, is given in the context of the upcoming electoral contest and the fight for Democrats to regain control of the Senate. The Republican Party’s decision to expeditiously nominate and schedule the confirmation of Judge Amy Coney Barrett to fill Justice Ruth Bader Ginsburg’s vacancy, notwithstanding its earlier parliamentary rule, has exacerbated political ill will between Republican and Democratic senators. Schumer’s reaction to Senate Majority Leader Mitch McConnell’s (R-Ky.) decision to move on the confirmation hearings has been generally understood to refer to the possibility of revoking the 60 vote filibuster rule and/or the expansion of Supreme Court’s seats, among other possible measures. Now, we need to add statehood for Puerto Rico and Washington, D.C., to this list.

The reasons for Schumer’s statement are self-evident. Given the narrow majority of the Republican Party in the Senate, the addition of two new states would mean four more senators. The general expectation is that both Puerto Rico and Washington, D.C., would be Democratic states, which is the reason why McConnell and other Republican senators have come out forcefully against statehood. In this sense, Schumer’s political logic is impeccable, at least in the short-term. In the long-term, however, there is no guarantee that Puerto Rico, once admitted into the union, would continue to be a Democratic state. The examples of Hawaii and Alaska in 1959 are cautionary examples of the shifts in political loyalties once the territories are admitted as states. That being said, it is important to note that there are constitutional and political differences between Puerto Rico and Washington, D.C., that do not make for an easy comparison.

As a matter of political observation, one must note the close ideological affinities between the pro-territorial PPD and the Republican Party, especially among its wealthier sectors. It is not a stretch to think that were Puerto Rico to be admitted into the Union, these groups would migrate to the Republican Party looking for greater state’s rights within the federalist model and a lesser tax footprint on their income. The best example of these affinities has been its long held practice of aligning themselves with the most recalcitrant sectors of the Republican Party to impede any movement towards statehood.

In fact, the PPD’s current candidate for resident commissioner and previous governor of Puerto Rico, Aníbal Acevedo Vilá, has been actively promoting a return to the tax incentive models analogous to the earlier 936 section of the Internal Revenue Code. This section allowed for certain tax advantages to American corporations as if they were operating in a foreign jurisdiction. This model is only possible under the current unincorporated territory, which exempts Puerto Rico from the application of the Constitution’s Tax Uniformity Clause. The recent reminder of the Treasury Department to the government of Puerto Rico of the imminent cancellation of the 4 percent tax credit given to American controlled foreign corporations under territorial law 154 is a clear sign that this model is politically spent.  

Among so many other issues, these elections are of fundamental importance for Puerto Rico with regards to its political future. Given the bankruptcy of the government of Puerto Rico, the imposition of a Fiscal Oversight and Management Board under PROMESA, the severe damages suffered to the infrastructure due hurricane María, and the coronavirus pandemic and its levelling of the economy, it is clear for all to see that the only way out of this dead end requires we address the root cause of our inequities. Five Congress members and two senators representing the interests of Puerto Rico in Congress is a step in the right direction. 

Puerto Rico’s insular politics dovetails with the political processes in the mainland. Puerto Ricans in Florida, for example, have become a political force that could alter the electoral forces in the state, decisively affecting its Electoral College results. It should be noted that according to recent polls a majority of Puerto Ricans in Florida favor statehood for Puerto Rico.

President Trump and current Republican leadership have expressed their opposition to statehood for Puerto Rico. If the Republican Party were to prevail in this upcoming election, the statehood question will not have significant support either in Congress or the White House for the next four years. Current Resident Commissioner Jenniffer González, who advocates for statehood and is a supporter of President Trump, should reconsider her inexplicable contradictory stance. 

Given the recent statements made by Democratic presidential candidate Joe Biden and Schumer — who could well become the next Senate majority leader — supporting statehood for Puerto Rico, there is a real opportunity of moving the issue forward. Contrary to the plebiscites of  2012 and 2017, which the political opposition were able to tarnish as inconclusive, a majority vote for statehood in the upcoming referendum would send a clear and powerful signal that Washington politicians would be hard pressed to ignore.   

Andrés L. Córdova is a law professor at Inter American University of Puerto Rico, where he teaches contracts and property courses. He is also an occasional columnist on legal and political issues at the Spanish daily El Vocero de Puerto Rico.