Governor’s Office Contradicted On Aid To Low-Income Puerto Ricans…House And Senate Pass Bills To Increase Medicare In Puerto Rico…Key Republican Backs Vote In House For Non-State D.C….House Committee Supports Navy Vieques Clean-Up Plan

June 27, 2003
Copyright © 2003 THE PUERTO RICO HERALD. All Rights Reserved.

. .. Governor’s Office Contradicted on Aid to Low-Income Puerto Ricans

A senior congressional aide this week confirmed that low-income Puerto Ricans would be eligible for an up to two-thirds increase in federal payments they now qualify for under bills that have passed both Houses of the Congress. The increased payments to Puerto Ricans could run into the hundreds of millions of dollars a year.

The statement contradicted one by a Washington spokeswoman for Puerto Rico Governor Sila Calderon ("commonwealth" party/no national party). The aide said that the Calderon Administration was not lobbying for passage of the legislation because it understood from a private company not working for the territorial government that Puerto Ricans would not benefit from the bills.

Low-income Puerto Rican workers with three or more children qualify for the payments. Some 40,000 claimed the payments last year although an estimated 100,000 qualify. The average payment per worker reportedly was $1,500.

In order to claim the payments, the workers have to file a federal income tax form. Most Puerto Ricans do not file a federal income tax form because the federal government has not required most Puerto Ricans to file one.

The payments are an extension of the credit against income taxes due that federal income tax payers can take for each of their children. During the Clinton Administration, the payments were created for workers whose incomes were too low to have a federal tax liability and, thus, were unable to benefit from the Child Credit.

The payments were to be at the same amount as the credit on a per child basis. The assistance theoretically refunds the federal ‘payroll’ (Social Security and Medicare) taxes paid by low-income workers. Payroll taxes total 7.65 percent of salary.

The payments are limited to the amount of payroll taxes the workers paid and to 10 percent of their salary over $10,500. In the States, similar Earned Income Credit payments to low-income workers are also subtracted from the Refundable Child Credit payments. Earned Income Credit payments are not subtracted from the payments to Puerto Rican workers because the earned Income Credit has not been extended to Puerto Ricans.

Because of the Earned Income Credit, the payments really benefit workers with three or more children. Since Puerto Ricans pay federal payroll taxes even though most do not pay federal income taxes, the Refundable Child Credit was extended to low-income Puerto Ricans with three or more children.

The tax cut law enacted in 2001 in response to a proposal by President Bush increased the Child Credit to $600 per child and provided for the credit to rise to $1,000 per child in 2005, and to go to varying amounts after 2005. The law also increased a limit on the amount of the Refundable Child Credit payments from 10 percent of salary over $10,500 to 15 percent. The increase in the limit was needed to enable low-income workers to benefit from the increase in the amount of the Child Credit.

The tax cut law enacted just weeks ago in response to another proposal by President Bush moved up the date of the increase in the amount of the Child Credit from 2005 to this year. It did not, however, include a Senate provision to move up the increase in the limit on the payments to low-income workers necessary to enable workers with incomes up to $26,625 to benefit from increased Child Credit.

In response to Democratic criticism, both Houses of the Congress quickly passed bills to increase the limit and President Bush has urged the Republican leaders of the Congress to send him a bill to sign. House Republican leaders passed the bill reluctantly, however, complaining that the Child Credit should not be another program for providing aid to low-income individuals.

They also added provisions to the bill that would increase its cost to some $90 billion over 10 years. Democrats charge that the provisions were added to make the bill too expensive for the Senate to pass. The Senate bill does not include similar provisions and it would cost less than $10 billion over 10 years. The differences have delayed final congressional approval of the increase in the limit on the payments.

In spite of the millions of dollars that the Calderon Administration is spending on lawyers, lobbyists, and consultants in Washington as well as its own personnel, the Calderon Administration has not figured out that enactment of a bill could mean increased assistance for half a million Puerto Ricans.

House and Senate Pass Bills to Increase Medicare in Puerto Rico

Friday morning, both Houses of the Congress passed bills to make major changes in the Medicare, the health insurance program for the elderly and the disabled.

The primary purpose of the bills is to help Medicare beneficiaries pay for prescription medicines outside of hospitals.

Both bills would also increase the rates that Medicare pays for hospital services in Puerto Rico. Currently, the rates are based 50 percent on the rates that Medicare pays everywhere else in the nation and 50 percent on local costs.

The Senate bill would fully extend the national rates to Puerto Rico. The House bill would change the formula to be 75 percent based on the national rates and 25 percent based on local costs. The increase would be phased in from 2004 to 2006. National rates would increase payments in Puerto Rico $50 million to $75 million a year.

Both bills would also increase the limit on federal contributions to Medicaid in Puerto Rico. Medicaid is the health insurance program for low-income individuals. The federal government pays a portion of the costs of a State or territory’s Medicaid program. In the States, the portion is at least 50 percent. Arbitrary limits on the payments in the case of the territories limit the federal contribution to Puerto Rico’s program to about 20 percent. The difference is hundreds of millions of dollars a year.

The Senate bill would reportedly increase the cap on Medicaid grants to Puerto Rico $45 million a year to pay for medicine for individuals who qualify for Medicaid as well as Medicare. The House bill would increase the cap $25 million for this purpose.

Senator Charles Schumer (D-NY) reportedly proposed the Senate provision. The Senate Finance Committee’s version of the bill would have increased the cap $30 million. The Schumer amendment reportedly originated with a request from the territory of Guam for a similar increase.

The initial Senate Puerto Rico increases were formally proposed by Finance Committee Chairman Charles Grassley (R-IA) and senior Democrat Max Baucus (D-MT) at the request of Senators John Kerry (D-MA) and Rick Santorum (R-PA). They made the proposal at the request of lobbyists for San Juan, Puerto Rico Mayor Jorge Santini (statehood/R), the Puerto Rico Hospital Association, and a Pennsylvania company with hospital interests in Puerto Rico.

The idea of the increase in the rates for hospital services in Puerto Rico dates to a proposal that President Clinton made at the request of the Hospital Association, Puerto Rico’s then Resident Commissioner, Carlos Romero-Barcelo (statehood/D), and then Governor Pedro Rossello (statehood/D).

The proposal obtained substantial bipartisan support in the Congress in a 2000 version of the Medicare reform legislation passed by both Houses of the Congress Friday morning. It was blocked however by then gubernatorial candidate Calderon’s primary ally in the Senate, Trent Lott (R-MS). Governor Calderon’s Resident Commissioner, Anibal Acevedo Vila ("commonwealth"/D), reintroduced the idea after taking office in 2001.

Key Republican Backs Vote in House for Non-State D.C.

The Republican chairman of the U.S. House of Representatives committee with jurisdiction over most District of Columbia issues confirmed this week that he is developing legislation to enable the non-State federal district to have a Representative with a vote on the final passage of legislation in the House.

The plan could have important implications for the political status of Puerto Rico and the other territories of the U.S. It would raise the question of whether territories could also obtain Representatives in the House.

Three territories -- American Samoa, Guam, and the U.S. Virgin Islands -- as well as D.C. currently each have a Delegate to the House who can vote in committees but not on the final passage of legislation. Puerto Rico’s Resident Commissioner in Washington is treated like a Delegate in the House.

Federal courts have consistently ruled that the national Constitution only permits States to have representatives in the Congress with votes on the final passage of bills. Congressional Republicans have traditionally opposed statehood or full voting representation for D.C. -- where Democrats outnumber Republicans 11 to 1.

Some congressional Republicans have also opposed statehood for Puerto Rico, the territory for which statehood is a real possibility -- concerned that it, too, would be a ‘Democratic State.’ However, other Republicans favor statehood for Puerto Rico. They recognize that —

  • Most Puerto Rican statehood leaders are Republicans,
  • Most Puerto Ricans have not joined a national political party,
  • Many Puerto Ricans agree with some national Republican policies, and
  • Republicans could be competitive with Democrats in Puerto Rico if they champion statehood for the territory.

House Government Reform Committee Chairman Tom Davis (VA) gave no details regarding his plan for a D.C. Representative but an aide said later that it would also add another seat in the House for a State and take months to develop. The additional seat is expected to go to heavily Republican Utah.

Giving Utah another Representative would ensure that giving D.C. a Representative would not result in any reduction in the current, slim 12 vote advantage Republicans have over Democrats in the House. Utah lost a fourth Representative in the House when the Congress reapportioned 435 seats among the States after the 2000 Census.

The Davis plan would increase the number of Members of the House to 437. Increasing the membership could also have implications for the possibility of Puerto Rican statehood.

A State’s representation in the House is based on its population. Puerto Rico would be entitled to six Representatives if it became a State. That would either require the number of members of the House to be increased or require seats to be taken away from existing States. Representatives of some States have been concerned that the number of members would be kept at 435 and Puerto Rican statehood would cost their State seats . . . or cost them their own seats.

The House’s number of members is set by law. Through most of the nation’s history, the size of the House was increased as new States were admitted into the Union. The current 435 number was set in 1912. It was increased temporarily to 437 after Alaska and Hawaii were admitted as States with one Representative each but it was reduced to 435 after the subsequent national census.

Permanently increasing the number of members of the House to accommodate new D.C. and Utah Representatives could affect congressional thinking about whether to increase the size of the House in the event of a Puerto Rican statehood admission.

A key, unanswered question about the forthcoming Davis plan is whether it will involve an amendment to the Constitution. An effort to give D.C. a Representative with a full vote in the House by a law could well be negated by a constitutional challenge in the courts if not in the Congress or by the President. Residents of D.C. were granted the power to vote for the President and the Vice President of the U.S. by a constitutional amendment.

Either method for giving D.C. a Representative in the House would raise the question of whether it should also be applied to the U.S.’ five ‘territories,’ which include the Commonwealth of the Northern Mariana Islands in addition to the Commonwealth of Puerto Rico, Samoa, Guam, and the Virgin Islands.

Proposing that D.C. be given a Representative by law would presumably be a greater encouragement to residents of the territories to also seek Representatives in the House than proposing that D.C. be granted a Representative by a constitutional amendment.

Obtaining federal approval of a law is much easier than obtaining a constitutional amendment which also requires approval of three-fourths of the States.

Although proposing that D.C. be granted a Representative by a constitutional amendment could prompt some territorial residents to seek inclusion of their territory in the amendment, the difficulty of obtaining an amendment could encourage more to simply seek statehood for Puerto Rico.

Further, the Davis proposal would not give D.C. full congressional representation. It would not grant D.C. two members of the U.S. Senate.

For this reason, D.C.’s Delegate, Eleanor Holmes Norton (D), Thursday said she does not support Davis’s idea even though she praised him for it. D.C.’s Mayor, however, was said by his spokesman to be "excited" about the proposal as a step towards full congressional representation. The Chairman of D.C.’s Council was less effusive but called the proposal "a positive step."

In arguing for full congressional representation, D.C. leaders consistently stress that residents of the district pay all federal taxes. They have even put the words "Taxation Without Representation" on the district’s automobile license plates. The statement recalls the "No taxation without representation" slogan of the British colonies that later formed the U.S.

D.C. leaders stress the taxation point to argue for their proposal but Norton and others have also used it to make a distinction between D.C.’s voting representation argument and the argument for voting representation for territories. The federal government has not extended all of its taxes to Puerto Rico and other territories although it has extended some.

Citizens in the U.S.’s five populated territories are not the only Americans who may be encouraged to seeker greater representation in the federal government by Davis’ proposal. American Citizens Abroad, an organization of U.S. citizens living in foreign countries, immediately responded to the news by saying that its idea of a Delegate to the House for the four million citizens in foreign countries should be reconsidered.

U.S. citizens from States in foreign countries are, however, represented in the Congress by Senators as well as voting Representatives since they vote in their last district of residence in the State.

House Committee Supports Navy Vieques Clean-up Plan

The House Committee on Appropriations Thursday expressed support for the Navy’s plan to remove explosives and other contaminants from its former range on the island of Vieques, Puerto Rico. A statement added to its report on the bill funding military operations for the fiscal year that begins October 1 stated the expectation that the Navy would fund the plan.

The statement did not, however, address the greater concern among Puerto Ricans regarding the plan: The plan is not intended to clean the range to the extent that would be needed for the federal government to give or sell the land to a government entity in Puerto Rico or a private party. This is because federal law requires most of the range to be maintained as a Wildlife Refuge and the area most contaminated with ordnance to be maintained as a Wilderness Area. The law also prohibits the U.S. Department of the Interior, which now controls the land, from giving it up.

Federal agencies can generally give land that they do not need to the U.S. General Services Administration. GSA can sell or give away the land if no federal agency needs it. The federal government cleans land not needed by an agency in accordance with its planned future use.

In late 2000, the Interior and Navy Departments proposed legislation that would have had the federal government fully clean-up and dispose of three-quarters of the range if the residents of Vieques voted for the range to be closed May 1, 2003 in a federally-authorized referendum. The legislation was required by an agreement regarding the range between then President Bill Clinton and then Puerto Rico Governor Pedro Rossello (statehood party/D).

The legislation was dropped, however, when current Governor Sila Calderon ("commonwealth"/no national party) took actions that violated several provisions of the agreement. One of the actions was to conduct an unauthorized referendum with an impossible option of the Navy ending military training at the range immediately. That option won the vote but the Navy closed the range this past May 1st -- the date that Clinton and the Navy said was the earliest possible and the date Rossello accepted but Calderon would not.

The "Washington Update" appears weekly.

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