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Uncle Sam’s Billions: "Gimme Your Money And Keep Your Flag"


August 14, 2003
Copyright © 2003 CARIBBEAN BUSINESS. All Rights Reserved.

If you had a partner whose contribution to the business paid one-third of the operating budget, how would you treat him or her?

Last year, the head of an agency of the government of Puerto Rico decided–contrary to law, regulation and custom–to remove the U.S. flag from the lobby of the agency and display the Puerto Rican flag alone. Puerto Ricaness champion Maria Fernos said at the time that whether law, regulation, or custom required her to fly the Stars & Stripes in a local government agency was "a matter of interpretation."

Well, here’s some interpretation for you. This fiscal year, 35% of the budget of the Women’s Procurement Office–the agency she heads–will be paid by Uncle Sam. Yep! Out of the agency’s total budget of $8.25 million in the current fiscal year (ends June 30, 2004), $2.89 million is federal funds.

So, never mind "law, regulation, and custom." Common sense alone would seem to mandate a less hypocritical attitude than "gimme your money and keep your flag."

The same can be applied to many of the leaders of the administration currently governing Puerto Rico, whose anti-American discourse has been the order of the day for the past two and a half years.

Thirty-five percent of the local Education Department’s budget, 50% of the Health Department’s, 67% of the Families and Children Administration’s, 93% of the Public Housing Administration’s, and 95% of the Family Socioeconomic Development Administration’s budgets will come from Washington this year. No strings attached. That last one, the FSDA, distributes more than $1.35 billion of Uncle Sam’s money in Nutritional Assistance Program checks that allow 48% of the families on the island, more than one million Puerto Ricans, to buy food and other necessities.

In fact, almost a third of the government of Puerto Rico’s FY 2004 operating budget–not counting the budgets of public corporations–will be paid by U.S. taxpayers.

We’re talking about approximately $4.8 billion in federal grants that are within Congress’ discretion to give and that go directly to the local government to give out. And that’s only about one-third of the approximately $14 billion in direct federal spending on the island. When other federal assistance to the island is added–like $4 billion in mortgage and flood insurance, student loans, and other odds and ends–total federal funds to Puerto Rico came to $18.8 billion in federal fiscal year 2002, the most recent year for which a consolidated federal funds report is available from the U.S. Census Bureau.

It is truly mind boggling how many sectors in Puerto Rico, lately to include the government of Puerto Rico itself, can behave so cavalierly about the island’s relationship with the U.S. when there’s so much at stake.

More than cavalier, the attitude of some is simply hypocritical. One may understand an independentista who says, "look, I don’t care for your flag, and I don’t need your money." But for the government of Puerto Rico–that quite besides the legal and constitutional considerations that govern its relationship with the U.S. federal government, depends so largely on federal funding–to boast a similarly anti-American sentiment and still take the money is plainly and simply hypocritical.

It is also stupid. If you had a partner whose contribution to the business paid one-third of the operating budget, would you insult him?

The notion, long held by many, that no matter how harsh Puerto Rico’s rhetoric against the U.S. becomes, including lawsuits and threats of lawsuits, Washington "would never go crazy" and cut federal funds to the island, never mind cut us off completely, may no longer hold up.

The Navy’s imminent shutdown of Roosevelt Roads in the wake of the Vieques fiasco is proof positive that times are changing. Puerto Rico will now be of no strategic value to the rest of the U.S. Do we have to see the whole island’s economy wrecked before we heed the warning? As business people know, a cost center that brings no benefit to the business is eventually eliminated. That day is getting closer. And the silent majority is letting it happen.

This Caribbean Business article appears courtesy of Casiano Communications.
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