Puerto Rico Statehood: Bad Business For The U.S. Or The Next Swing State?

There is this saying -- the habit does not make the monk -- and whether or not this is true for Puerto Rico will soon be known.

Whether it is the appearance that counts or the reality, the U.S. -- and by extension the world -- will know on Nov. 6 just how Puerto Ricans will proceed with charting their own future. While the 50 states elect a president, they will take part in a plebiscite, initiating yet another step toward self-determination. Their choices are simple: residents will first be asked whether they want to remain a U.S. territory, and regardless of their responses they must then choose from three alternatives to the current status -- independence, nationhood in free association with the U.S. or statehood, a move, that if successful this time around, would make Puerto Rico the 51^st state of America.

Puerto Ricans have wavered between the idea of statehood and the status quo in the past, and there are conflicting feelings still as to what being a part of the Union may mean for the for the island. Some say statehood is bad business for the U.S., as Puerto Rico would be competing with Mississippi for the title of the poorest state. The fear the island would suck the most federal funding while contributing the least to the federal treasury. Others say that achieving parity would bring economic stability over time.

"People are getting tired here of having to beg for things states automatically get," said Secretary of State Kenneth McClintock. "Many people who support statehood have moved to the States to enjoy the benefits of statehood. Some people are getting impatient."

The idea of Puerto Rico as a state would be folly for both the island and the U.S., said former commonwealth Sen. Manuel Rodriguez Orellana, who is now the Puerto Rican Independence Party's secretary for North American affairs.

Rodriguez pointed out that the U.S. is a nation of many nationalities while Puerto Rico, though one nation, has its own identity culturally, socially and linguistically -- rendering indepence the best move.

"There's no reason for the United States to try to incorporate a Latin American country," he said. "If they want a country, why not Jamaica? They speak English there. It doesn't make sense."

Puerto Rico, an unincorporated territory of 3.7 million in the northeastern Caribbean, has been that way for 114 years. Though its residents have been U.S. citizens since 1917, questions of the island's ultimate status has remained the central political issue for a long time. As it now stands, Puerto Ricans enjoy every right that is given to Americans except its residents, who are bound by federal law, cannot vote for the president and do not have voting representation in Congress. Puerto Ricans on the island don't pay federal income taxes but are taxed to contribute to Social Security and Medicare.

Third Time Wasn't The Charm

Statehood votes in Puerto Rico have thrice failed -- in 1967, 1993 and 1998.

Those efforts had nothing to do with the people but were "pure party politics, of the demagogic kind," said Alex Betancourt Serrano, an associate professor of political science at the University of Puerto Rico.

Whatever the reason behind the referendums, the people spoke.

In the last plebiscite, in 1998, 46.5 percent voted for statehood while 2.5 percent favored independence and 0.3 percent preferred nationhood in free association with the U.S. Only 0.1 percent wished to remain a territory, popularly called commonwealth, the current status. A majority, 50.3 percent, chose "none of the above."

Prior to that, the 1993 referendum resulted in 48.6 percent of the people favoring a "commonwealth" proposal that's different from the present status; 46.3 percent wanted statehood; and 4.4 percent backed independence. Federal officials denied implementing the "commonwealth" proposal because of constitutional and policy objections. It also lacked majority support.

And decades before, the 1967 referendum also got 60.4 percent vote for a "commonwealth" proposal different from the current status. Thirty-nine percent voted for statehood while 0.6 percent voted for independence. The Congress and president at the time considered the legislation to implement the commonwealth proposal but rejected it.

But if the U.S. wanted Puerto Rico as a state, it would have already done so despite the people's preference, Rodriguez said.

"The United States has an obligation under international law to initiate the process of decolonization," he said. "They are not an innocent bystander. They keep saying we can't make up our minds. We've tried statehood already. It's not going to happen. The United States has to take an initiative to say 'we are willing to help in the process.' The United States doesn't have the political will to decolonize."

What's In A Name?

Puerto Rico has a dynamic economy but has seen negative growth for the past four years. The industrial sector and agriculture are drivers of the economy and a source of income for many, federal data showed. Firms from the U.S. mainland have invested heavily in the island since the 1950s and tourism does well for the island with estimated arrivals of more than 3.6 million tourists in 2008.

As of July, the Bureau of Labor Statistics reported a 13.7 percent unemployment rate for Puerto Rico, compared to 8.3 percent on the U.S. mainland. That's down from 15 percent in March. The island's labor participation rate is approximately 40 percent and nearly half the population is living below the poverty level.

Puerto Rico's GDP per capita was an estimated $16,300 two years ago and was an eyesore when compared to Mississippi's $21,000.

Besides employment challenges, Puerto Rico also has problems closing its budget deficit and restoring economic growth. Compounding those issues is the fact that many Americans still treat Puerto Rico as foreign.

McClintock said investors are demanding a higher rate of return from Puerto Rico, as they are safeguarding themselves against problems that the U.S. has faced, but in truth, has never been an issue for the territory -- revolutions and/or riots.

Bringing the island into the American fold, McClintock said, would be like a family having a new baby.

"Everybody wants to visit and meet the new baby in the family," he said. "Statehood triggers greater interests and greater investment in the jurisdiction."

Professor Jose Garriga Pico echoes sentiments that statehood is a pathway to stability.

"Puerto Ricans don't enjoy the weak economy," he said. "We don't really want to depend on federal aid."

Instead, Garriga said Puerto Ricans already know they are Americans -- despite the language and cultural differences -- and if given the opportunity be a part of the union, the island's manufacturing sector could grow.

"[It's] because of the diminished political power we are not in the same positions [as other states]," he said. "A lot of insecurities have been created for the investors. Statehood would bring stability."

Or perhaps breaking ties with the U.S. could facilitate for the island's establishing bilateral agreements with other countries and be a flexible free agent in the market, according to Rodriguez, the independence advocate.

"Making Puerto Rico a state is about business," he said, citing more federal funding and low treasury contributions. "It doesn't make sense for the United States. It is a call for greater social instability. It makes all the sense in the world for the United States to comply with human rights [and offer] decolonization."

With the U.S. not in the business of doing bad business, Rodriguez said an independent Puerto Rico would benefit the American taxpayer because there will be no need for federal funds.

"You have a growing statehood movement for the wrong reasons," he said. "Not out of patriotism, but out of economic dependence. Only with sovereignty we can enter into bilateral agreements that are beneficial to us. We are past the time when people close their frontier to trade."

Losing Democracy And Transparency

With statehood comes rights and responsibilities and for Betancourt, the consideration of equal status for Puerto Rico is chiefly formality.

"What this means is that as a matter of institutional arrangement we would participate in the same logic regarding the allocation of resources and participation in Congress and the Senate," he wrote in an email.

But what are the political effects if Puerto Rico should become a state?

When Betancourt looks at statehood, its transformations and redistributions of power, he sees something different from others.

"The first one is that, contrary to what the statehood party would like us to believe, the little remnants of democracy and accountability that we have left in the island would evaporate," he said. "Politics in the United States is absolutely corporatized. The representations of the constituency of senators and congressmen have been replaced by the corporate personhood and its stronghold on Washington.

"Every major piece of important legislations that passes through Congress is conceived, developed and literally written by lobbyists," he added. "It is into that logics of power distribution and manipulation that Puerto Rico would enter into statehood. It is in that sense that I say our democracy would be eviscerated and we would enter into the oligarchic power plays of the United States."

Possibly The Next Swing State

There's a healthy mixture of Republicans and Democrats in Puerto Rico. In fact, McClintock sums it up best: the island identifies with the Democrats in economic issues and its programs, but when it comes to social issues Puerto Ricans are conservatives.

Should it get statehood, Puerto Rico could be the next swing state. There are already talks that if the island got two senators and at least one representative, if it becomes a state, the balance of Congress could shift.

"Unfortunately Puerto Rico will be a swing state. We won't identify with Democrats or Republicans," McClintock said. "Democrats and Republicans would have to nominate good candidates and [offer] good ideas in order to capture the votes of Puerto Rico."

But others say that contrary to chatter from some political scientists and pundits, there would be no shift in the balance of power.

"The senators and congressman would be happy to oblige to the current political dynamics in Washington," Betancourt wrote.

Regardless of who is sitting in the big chair at the White House next year, Rodriguez said there is a good chance here for the next president to improve the U.S.'s relationship with Latin America through Puerto Rico.

The Republicans have already spoke openly about helping Puerto Rico to statehood if it chooses that option.

"I expect the people of Puerto Rico will decide that they want to become a state and I can tell you that I will work with [Puerto Rico Gov. Luis Fortuno] to make sure that if that vote comes out in favor of statehood that we will go through the process in Washington to provide statehood to Puerto Rico," presidential candidate Mitt Romney said earlier this year.

But as the political parties on Puerto Rico seek to differentiate themselves through their ideologies, much like their U.S. counterparts, Betancourt believes that when it comes to central issues of democracy, citizen participation in power and structural inequality "both parties are on the same side."