White House Intergovernmental Affairs Report on Puerto Rico Status

Press Briefing by Ruben Barrales, Deputy Assistant to the President and Director of Intergovernmental Affairs and Kevin Marshall, Deputy Assistant Attorney General, Office of Legal Counsel, Department of Justice on Puerto Rico's Status Via Telephone

MR. BARRALES: Thank you all for being on the call. This is Ruben Barrales. And, again, Kevin Marshall is with us on another phone, as well. I'm just going to briefly go over the report, which happens to be very short, very simple and very straightforward, and then I and Kevin are available to answer any questions that you might have.

We were pleased to be able to take the report to members of Congress this afternoon, to the President for his review, to other elected officials around Puerto Rico and other interested individuals in Puerto Rico and throughout the mainland who have expressed interest in the issue.

I assume you all have a copy of the report. It is, again, as I said, fairly simple, going over the guiding principles, the executive orders pertaining to Puerto Rico, an historical overview that gives those of you who don't have any experience with Puerto Rico and this issue gives you a quick overview, and a legal analysis of the options for Puerto Rico's status. In there we identify what we consider to be the three options allowed for -- (inaudible).

Number one is the current status, which is called the commonwealth status, which is a territorial status. It is the one that Puerto Rico has now, allows for limited self-government. Then there is statehood, which, obviously, is a permanent status. And there is independence, which is another permanent status. I need to reiterate that commonwealth or territorial status is one that we see as can be indefinite, but really at the will of Congress.

The task force makes its recommendations, and in the recommendations we do ask that Congress take up the issue within a year and allow for the people of Puerto Rico to be able to vote and decide whether they wish to retain the current territorial status or move towards a permanent status. And it provides for another recommendation that if the people choose to elect and vote for permanent status, that they be given the option of one of the two, statehood or independence. And then if they initially vote to retain the current status, which they can do, and keep it as a territory indefinitely -- (inaudible) -- periodically, Congress may wish to provide for a vote to gauge the people's will as time moves one.

So it's pretty straightforward. It really is -- as you all know, I'm sure many of you know that the issue has been going on for over a hundred years. There have been attempts to resolve it. We have worked with all parties on the island. The task force has met with anyone who has requested a meeting. We've read volumes and volumes of material. We have been, and are willing to work with any of the parties on the island or here on the mainland to help move the process forward successfully. And we hope to work in cooperation with all of those involved. And at this point, we hope that Congress will take a look at the recommendations and hopefully move the question forward.

So with that, I'm going to see if -- or ask if Kevin has anything he might want to add.

MR. MARSHALL: I just want to comment on the legal question a little bit. The primary issue is whether the Constitution allows for some commonwealth status that couldn't be altered without the consent of Puerto Rico. And we conclude that it -- the Constitution does not. In reaching that conclusion, we're reaffirming the position that the Justice Department has taken for the last 14 years in both the first Bush administration and the Clinton administration and in the current administration.

But appreciate the importance of the question for Puerto Rico and for the United States. We have in the Office of Legal Counsel done a thorough reconsideration of issue, and concluded that that position is correct. And as part of that, I have met with several superb lawyers representing various interested parties and I've also received excellent written material from them, including from the former head of the office where I work and the former attorney general. And we've appreciated that input very much and I think it's made the report better.

Q My question, or at least one of them, is this is a report of, sir, a road map of the status issue? Or is it a plan of action?

MR. BARRALES: Well, it is, again, for those who are not very familiar with the issue, it does provide an historical overview very briefly -- so in that sense, maybe, a road map of what's happened to date. And then it provides what I hope is a level playing field for those who are interested in moving the process forward in terms of what we think the options are that are available and our recommendations for a way to move forward, in terms of our recommendations within the report.

There may be other ways to move forward, and we're interested in working with anyone who wants to help in that regard.

Q Now, should the content of this report be represented as an endorsement as to any of the alternatives?

MR. BARRALES: No, this is an inter-agency report. The executive order was very specific that it is an inter-agency report, review the information, met with individuals, read material and is now presenting its recommendations and report -- more of a progress report, you might describe it as -- to the President and to members of Congress. So it is not construed as a position of the administration.

MR. MARSHALL: Can I add something? This is Kevin. It was not part of our mission to state a preference or pick among the options. Our job was simply to identify what the options were under the Constitution and what a good way of getting them might be. So the report shouldn't be interpreted as endorsing any of the options that it lays out for the status of Puerto Rico.

Q I wanted to ask you -- I didn't hear the very beginning of the call that you said what is the next step? That you guys are going to be presenting this to Congress this afternoon?

MR. BARRALES: We did electronically and in hard copy deliver copies of the report to members of Congress, and also to the governor's office -- and mainly electronically to other folks who are interested in the issue.

Q Okay. So what happens next? I mean, are they required to -- you're saying that they hope that they take some action. Are they required to? Is there a time line for them to respond or to do something?

MR. BARRALES: It's an excellent question. There's absolutely no requirement, and so I think that's important for people to understand. We are trying to help move the process forward, and so we've provided what we hope are helpful recommendations and analysis of the issue.

Q Okay. And this vote, I mean -- so I guess there was no date or time frame for the vote to actually take place because -- unless Congress -- until Congress actually acts on these recommendations --

MR. BARRALES: As a matter of fact, in the recommendations, we do recommend that Congress set a date certain for an election, hopefully within a year, or at least start hearings within the year to begin moving the process forward.

Q Okay. And let's just say that they don't take any action, I mean, in the status. As you said, this is an attempt to try to get -- to move things forward. So if there was no action taken, it would still be the status quo, then, here?

MR. BARRALES: Well, yes, but I want to make it clear that, for example, the process could move forward as we recommend, and the people of Puerto Rice could decide to keep it (inaudible). They could decide to keep -- (inaudible) -- and, you know, if that's what they choose, I think my sense would be, you know, (inaudible) folks would support.

Q I would like to know if in any way this report is contrary to the representation that the United States made in 1953 before the United Nations?

Q Why? Why not? The commonwealth at that time was defined as a self-governing body and not a (inaudible) anymore.

MR. BARRALES: I understand. I'm very familiar with that. No, it doesn't -- the report, itself, doesn't change the status quo at all, and basically we think the people of Puerto Rico should be given an option to choose the particular status that (inaudible) that they think would work best for (inaudible). And, no, I don't think it conflicts at all with what happened in the --

Q The popular Democratic Party, or the executive branch, is saying already that it's a vague report, that, in some sense, you are forcing the issue because that will be -- you are trying Puerto Rico to go to statehood or independence, and probably the alternative to have the votes is the commonwealth or a new commonwealth.

MR. BARRALES: Yes, we really -- it would have been a much simpler process if it we already knew where we were going to conclude. No, we worked very diligently and fair in terms of reviewing all the options. And, again, it is not up to the task force; it's up to people of Puerto Rico and the Congress to decide what the future of Puerto Rico should be.

We just tried to very honestly look at the situation, speak with all the individuals involved, the representatives of the people of Puerto Rico -- from the governor's office, to the legislature, to others -- and we think that, again, the people and the Congress should decide. And we very much hope that this helps with that discussion and we look forward to working with anyone who, in a constructive manner, wants to help move this forward.

Q I have a question regarding the time between the second -- or between the first and the second recommendation. You said that Puerto Rico should hold a plebiscite next year. And depending on the result, so the next plebiscite would be on the current status or the independence or the conversion of Puerto Rico in another state of the U.S. So do you have a time for this second plebiscite in Puerto Rico?

MR. BARRALES: That's an excellent question, because as you acknowledged, we have a time line for the first where we're asking Congress to take a look at within a year.

But, no, we don't. We thought that was the right approach in terms of the process. And really, it's going to be up to the people of Puerto Rico and Congress to work out what might be the best time line in between. It might relate to when regularly scheduled elections are held, or it may be -- there may be other factors at that time that determine the timing of that election.

MR. MARSHALL: I don't think so. I think that we would be happy to see Congress move and get past the first step; and then the second one, I think, as soon as would be feasible after the first step is resolved.

Q I have a couple of questions, if I could. The first one is, why did you -- why do you, in your proposal, why do you suggest that there be a plebiscite between -- for people to decide whether they want to remain as a commonwealth or go into either independence or say -- why don't you just have a plebiscite where all three choices were given at the same time?

MR. BARRALES: I think that's a good question. Kevin might have something to add to that. Let me just say that I think it's important for the people of Puerto Rico and the Congress to decide consciously whether or not they want to remain as a territory, or to move towards a configuration that is a permanent one -- either statehood or independence. And I think it's important to make a conscience decision along those lines.

Now, again, we, as a task force, are not -- we are not taking sides on which way. And if Puerto Rico chooses to remain as a territory or a commonwealth, then more power to them; or if they choose the -- one of the two permanent options. But we wanted it to be a conscience choice.

MR. MARSHALL: I would just say that in the recommendations, we do make the point that in ascertaining the will of the people of Puerto Rico, which is, of course, paramount, we want to try to do it in a way that gives clear guidance to Congress or future actions. Some of the prior votes, I think we'd all agree, have not provided clear guidance. And it seemed to us that there was a clear distinction between on the one hand, the current status -- which can be indefinite, but wouldn't be described as permanent -- and on the other hand, statehood and independence. And even though those two are different from each other, they're both a change and what could be called a permanent status, so that choice seemed like a natural first step.

Q All right. And what about the free association? Is that, in any way -- has that come into the picture in your discussions? A possibility of Puerto Rico taking this other step that's not quite independence, but --

MR. BARRALES: Let me address -- Kevin, I'm sure, will have something to add. Actually, no, we think it is quite independence. We really think free association would be a configuration of the people and Congress choosing independence. In other words, we could see a scenario where if the people and Congress chose to move in the direction of independence, they might (inaudible), but we want to remain closely associated with the United States, that that would be moving towards independence. And then the details of which we don't get into in the report, but there are issues that relate to dual citizenship, that relate to other ties that would bind the two together.

Q Okay. Well, if they chose independence, but they really mean free association, how would that play out?

MR. MARSHALL: I think in terms of the recommendations we laid out, I think that would fit in recommendation two. If they were to decide between statehood and independence and to choose for independence, that would be a kind of independence. I think you'll see a fuller explanation of that in the legal analysis. We could talk about Micronesia and the Marshall Islands in Palau. We make clear that free association is a form of independence, but still a variation.

So I think ultimately that would be for Congress, the kind of step two stage, to spell that out and determine how to go about determining the exact nature of the independence, because we do explain that.

Q Free association would be a choice for people to make, for voters in Puerto Rico to make?

MR. BARRALES: Potentially. We do not prohibit that, in terms of our recommendation.

Q I just have one last issue I wanted to discuss with you guys. You very clearly say in the recommendation that it is the people of Puerto Rico -- and you reiterated that in this conference -- that it is the people of Puerto Rico that would have to make a choice as to status, right?

Q Now, it makes me think -- and I want you to react to that conclusion -- that this report could be interpreted as more the White House passing the ball along to the Congress and the people, than actually intervening with a voice as to what should be done.

MR. BARRALES: Well, I think most people would agree that to resolve the issue, it's going to involve the will of the people of Puerto Rico and the authority of Congress. So those are really the two entities, if you will -- the people of Puerto Rico and the United States Congress -- that will really be able to help us reach a conclusion here.

Q But some people might have expected the White House to propose or put forward a position as to what will be the best option, or what will be the option the White House would endorse or agree upon. And the report doesn't do that -- in fact, the White House is actually passing the hot potato to other hands. You understand?

MR. BARRALES: I know what you're saying, but the task force -- our job was to recommend to the President, and to the Congress, some suggestions for moving the process forward. And the hot potato you refer to, no one is going to cook that potato, we need to put it in the kitchen. And the people who are going to actually make this happen are the people of Puerto Rico and the Congress of the United States.

Again, I have not seen the document itself, but the significance of this is that for the first time in 107 years in general, and since the 1952 PR Constitution in particular, the Executive of the Federal Government has acknowledged:

1. That the United States of America maintains a colonial relationship with Puerto Rico, in the form of a territory under the plenary powers of the U.S. Congress under the territorial clause of the U.S. Constitution.

2. That the current political status of Puerto Rico and that four million American citizens in that territory are subject to the whims of Congress, making the United States of America lord and sovereign over a people that practically have no say over it.

3. The Executive has no authority over the final disposition of the issue, and defers to the sovereign over Puerto Rico, the Congress of the United States of America, to deal with the issue. This is legally true under the Treaty of Paris of 1898, which ceded Puerto Rico to the U.S. after the Spanish-American War.

4. And most important of all, it sentences that the "enhanced Commonwealth" aspirations of the status-quo supporters are un-constitutional and not negotiable. Therefore, that the only options are Statehood or independence. Since less than 5% of the people of Puerto Rico desires independence from the U.S., our great nation must get ready to admit its 51st State.

To answer your question, yes, to pull our own weight. Not that we haven't, but yes, in equal terms with the other 50.

That Puerto Rico would be a democrat state is mere speculation. You cannot anticipate actual Puerto Rico's voting trends based on voting trends on some mainland so-called Puerto Rican communities. In fact, it has been reported in more places than one that "Hispanics" carried Bush-Cheney in the last election, particulary in the I-4 corridor of Florida, which counts with a large conservative Puerto Rican population, as opposed to the liberal/democrat "Puerto Rican" communities of the north east.

I'll bet you a case of rum that the actual Puerto Rico, not to be confused with East Harlem, would be a Republican state. Just with its large Catholic or Evangelical Christian population, and its small business/entrepeneur-dominated economy it would be easy for the GOP to secure a strong base here.

The money we dole out to them as a territory is nothing compared to what they would cost us as a state. Three-fourths of the whole island would be eligible for welfare handouts of one kind or another because of their low income overall. How do you explain the concept of property tax and school tax to people who have never paid either? You know how much most of us here in the States hate to pay to live on the land we already bought and paid for. Besides, we cant afford to feed another 2 million mouths.

"How do you explain the concept of property tax and school tax to people who have never paid either?"

Excuse me, my fellow American. That Puerto Rico is a tax-free heaven is just another myth.

To start with, the only tax from which taxpayers in Puerto Rico are exempt from is that on IRC section 933 income. Pretty soon here a troll named 4Freedom is going to raise the issue of IRC S. 936 companies or Controlled Foreign Corporations. These tax shelters have been in the process of being faced out for the last ten years. At the sound of midnight this coming 12/31, they will cease to exist altogether.

Puerto Rico taxpayers, employees and employers, pay FEDERAL Social Security taxes at the same rate as those on the mainland, but the return on those taxes are capped by Congress below mainland levels.

Puerto Rico employers pay into FUTA or federal unemployment tax at the same rate as those on the mainland, again, for only a fraction of the return as compared with mainland employers.

All property owners in Puerto Rico pay property taxes. We pay on real estate, we pay on inventory.

All businesses pay a tax on their gross sales to the municipalities, after paying an income tax to the "state".

Other than no personal federal income tax, the only advantages here is that there is no death tax or estate tax.

And, again, the federal personal income tax exemption extends only to SOME Puerto Rico-generated income. And that income is taxed to the jing-jang by the local government. 35% in my case.

It is my belief that Puerto Ricans favor territorial status over statehood maybe 55%-45%, maybe 60-40. There are a few percent of academics that claim to favor independence, but I think they are posers, in actual fact almost no one favors any kind of independence that would involve giving up their US citizenship.

Which is why I picked up on the "free association" part of the discussion, as if they were trying to come up with some kind of mechanism by which it was an option to claim "independence" while retaining US citizenship. What that would look like, how that would differ from the present arrangement, is not clear to me.

"Free association" to me sounds like a con, a way of easing them out the door, and should be rejected unless they remain explicitly US citizens, they and their children. Liberians thought they were "sort-of" Americans, but when push came to shove they were not. PR should reject "free association" if their US citizenship is diminished in any way.

Statehood, on the other hand, means that Puerto Rico's "round peg" will be forced into a square hole. They already have the best of both worlds, US protection, US citizenship, without the plain vanilla uniformity that may come with statehood. They are the free-est and most prosperous country in Latin America; I'm not sure why they would want to give that up to be just another state.

But I certainly don't think they aspire to be another Liberia, or Dominican Republic. Thats why some modified version of the status quo is their best bet. US, but uniquely their own.

And that income is taxed to the jing-jang by the local government. 35% in my case.

Exactly. In my case my overall tax burder was going to go up. There may be some tax advantages for businesses there (as you say, most of them have been phased out) but for ordinary workers taxes there are not low.

Its worth it, though. Its a nice place to live.

"How often does the subject of the status vote come up? It can't be every year."

This is a perennial problem and it will not go away until the Congress of the U.S.A. lives up to their responsibility under the Treaty of Paris of 1898.

As the wise Justice Harlan stated too long ago:

"In my opinion, Congress has no existence and can exercise no authority outside of the Constitution. Still less is it true that Congress can deal with new territories just as other nations have done or may do with their new territories. This nation is under the control of a written constitution, the supreme law of the land and the only source of the powers which our government, or any branch or officer of it, may exert at any time or at any place. Monarchical and despotic governments, unrestrained by written constitutions, may do with newly acquired territories what this government may not do consistently with our fundamental law. To say otherwise is to concede that Congress may, by action taken outside of the Constitution, engraft upon our republican institutions a colonial system such as exists under monarchical governments. Surely such a result was never contemplated by the fathers of the Constitution. If that instrument had contained a word suggesting the possibility of a result of that character it would never have been adopted by the people of the United States. The idea that this country may acquire territories anywhere upon the earth, by conquest or treaty, and hold them as mere colonies or provinces,—the people inhabiting them to enjoy only such rights as Congress chooses to accord to them,—is wholly inconsistent with the spirit and genius, as well as with the words, of the Constitution." - Justice John Harlan, dissenting in the Insular Cases, 1901

I have it from good authority that die-hard pro-Castro symps, namely the Macheteros, number at less than 1,000 individuals. And I'll be generous, actual pro-independence supporters, as reflected in each general election (http://www.ceepur.org) couldn't even retain their electoral franchise in the 2004 vote, when they mustered less than 3% of the votes cast. These are the outward socialists. I'm not worried about them and you shouldn't be more worried about them than you would of the ANSWER crowd on the mainland.

The only answer I can give you to your appreciation of the problem is Justice Harlan's:

"The idea that this country may acquire territories anywhere upon the earth, by conquest or treaty, and hold them as mere colonies or provinces,—the people inhabiting them to enjoy only such rights as Congress chooses to accord to them,—is wholly inconsistent with the spirit and genius, as well as with the words, of the Constitution." - Justice John Harlan, dissenting in the Insular Cases, 1901

Truly, marron, I appreciate your sympathies and warmth towards us. But it is contradictory to the nature of our Republic to maintain the status quo.

Very warm greetings from the tropical, not-so-far-eastern United States of America.

And Merry Christmas y próspero año nuevo.

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