Tuesday, March 15, 2011

White House task force report to focus on PR economy

White House task force report to focus on PR economy; release said imminent


The long-anticipated White House report on Puerto Rico’s political status and economy will be released this week, most likely Wednesday, CARIBBEAN BUSINESS sources say.

While the report will carry recommendations on the century-old status dilemma, the bulk of it will concern economic development and how Puerto Rico can benefit more fully from federal government programs and funding, the sources said.

The report was expected to be released “at some point this week,” one source said, while another said the plan was to release it on Wednesday.

“There is a whole lot there. It offers a bagful of goodies. This is going to keep you busy for a while,” one CARIBBEAN BUSINESS source said of the report, which sources indicate weighs in at 100 pages.

The President’s Task Force on Puerto Rico’s Status will offer concrete proposals to spur the island economy and increase participation in federal programs, the sources said. There are specific transportation, energy and federal program proposals.

While political status is perhaps the largest individual section of the report, it ranges over so many different areas that status is not its dominant feature, sources said.

What also distinguishes the report from previous White House efforts is that it is designed as a starting point for a concerted effort by the federal government regarding the several issues it covers, the sources said. The report contains specific recommendations and lays out goals on how and when to implement the actions.

White House officials view the report as a “starting point” for long-term efforts between the island and the federal government to address the different issues that it raises, sources said. In some areas, the report also recommends meetings between federal and local officials, as well as community members, to forge additional strategies beyond what the report recommends.

The report is expected to recommend the establishment of an International Transit Lounge at San Juan’s Luis Muñoz Marín International Airport (SJU by its airport code). Reopening an international transit lounge at SJU will be a powerful lure to attract more international flights to Puerto Rico and across the Eastern Caribbean, proponents say.

In response to the Sept. 11, 2001 terrorist attacks, restrictions at airports across the U.S. required all international passengers to present visas to clear a U.S. Customs & Border Protection checkpoint, even passengers merely changing planes at a U.S. airport to continue to another foreign destination. Prior to the restrictions, international passengers could catch connecting flights to other international destinations via transit lounges through which they could avoid having to pass through customs or obtain a visa.

At one time, Puerto Rico had some 26 international airlines operating through SJU in Isla Verde but, by the beginning of 2009, the number had been whittled to five airlines, and only one, Spain’s Iberia, was a major carrier. Government and industry officials say the post-9/11 restrictions are a major factor in the erosion of international air traffic.

The Fortuño administration has been intensively lobbying Obama administration officials and reaching out to officials in the Eastern Caribbean’s tiny, tourism-dependent islands that will also see big benefits from an international transit lounge in San Juan, since it would expand the airlift to their countries as well.

The White House report is also expected to champion a proposed submarine power cable between Puerto Rico and the U.S. Virgin Islands that will expand the Puerto Rico Electric Power Authority’s customer base while lowering the cost of power in the USVI.

The report sees a potential role for Puerto Rico as a regional energy powerhouse, and the USVI cable as the start of a regional submarine electrical grid that could bring dramatically cheaper and cleaner energy to much of the Caribbean.

The White House report also should provide direction on longstanding attempts by the island to win full participation in federal programs like the Child Tax Credit, the Earned Income Tax Credit and the federal Empowerment Zone and Renewal Community tax incentives.

Resident Commissioner Pedro Pierluisi told CARIBBEAN BUSINESS that the report would also recommend increased technical support from the federal government to Puerto Rico so that the island makes better use of federal funding and performs better in competitive discretionary-funding programs.

“They are concerned about our capacity to tap existing resources and about the lack of coordination, sometimes at the federal level and sometimes at the local level,” Pierluisi said.

The resident commissioner also said the report would take into account the “new reality we are facing in America” about the need to control spending and bring down the national debt.

“This can’t be viewed in a vacuum. It does the task force no good to recommend something that is dead on arrival. Some of the things I would love to see might not be there, not because the task-force members don’t want them, but because of this new reality we are living with,” Pierluisi said.

Former President Bill Clinton established the task force in December 2000 to come up with recommendations on the island’s political-status dilemma, and former President George W. Bush continued its work. In October 2009, President Barack Obama signed an order expanding the task force’s scope to include, in addition to political status, job creation, education, healthcare, clean energy and economic development. The task force had two public hearings last year, one in San Juan and the other in Washington, D.C., on the issue as part of the process to develop the report.

The task force is co-chaired by Cecilia Muñoz, who is the White House Interagency Affairs director, and Associate Attorney General Tom Perrelli, the third-ranking official at the U.S. Justice Department.

The White House was first expected to release the report on Oct. 31 and then on Dec. 31. Task-force members spent much of the last two months reviewing the final draft and making last-minute changes.

“They were already late, so they thought it was better to get it right, even if it meant waiting a few more weeks,” one source told CARIBBEAN BUSINESS.