Washington Watch – Spotlight on Puerto Rico: Commonwealth Steps In As Federal Shutdown Continues

By Jennice Fuentes / Fuentes Strategies

As the partial federal government shutdown enters its third week, the Commonwealth government has stepped up to keep Puerto Rico’s key national parks open. Governor Ricardo Rosselló announced a renewed agreement with the National Park Service to keep El Morro fortress and other installations open until January 22. Under the agreement, the Commonwealth will pay federal employees’ salaries during the shutdown so that the historic sites remain open to the public.

Meanwhile, amidst reports that the shutdown could eventually impact recipients of the Nutritional Assistance Program (NAP, which is the SNAP equivalent in Puerto Rico), the Governor identified reserve funds that could be tapped to keep food stamp benefits flowing for Puerto Ricans.

Fact Checkers Dispute Claims on Tax Reform

The Center for Investigative Journalism (CPI in Spanish) has released a fact-check document disputing Governor Rosselló’s claim that his tax reform law has cut taxes for businesses. CPI labeled the alleged benefits of the new law as “misleading.” Specifically, CPI said that, although it is true that certain corporate tax rates fell from 20% to 18.5%, the reality is that business expense deductions – for travel, food and entertainment – were also cut in half. Prior to the new law, businesses could deduct up to 50% of those expenses. Now, they can only deduct up to 25%. Therefore, some companies are likely to see an increased tax bill.

CPI also clarified that self-employed individuals will pay more in taxes as their current exemption was reduced by 67%, and the tax retention rate will go up from 7% to 10%. In addition, fact-checkers highlighted that the newly reinstalled local Earned Income Tax Credit (EITC) is very limited. For example, a taxpayer with no dependents only qualifies for the local EITC if his/her earnings range from $18,000 to $20,500 per year.

Lawmakers Reintroduce Bill to Create 9/11-style Independent Commission to Investigate Federal Response to Hurricane Maria

Democratic lawmakers in the U.S. Congress have reintroduced a bill that would create a 9/11-style independent commission to investigate the Trump administration’s disaster response to Hurricane Maria in Puerto Rico. Congresswoman Nydia Velázquez (D-NY) joined Senators Kirsten Gillibrand (D-NY), Chuck Schumer (D-NY), Kamala Harris (D-CA), Richard Blumenthal (D-CT), and Elizabeth Warren (D-MA) in sponsoring the “National Commission of the Federal Response to Natural Disasters in Puerto Rico Act.” According to proponents of the measure, the legislation “…would analyze several factors that impact the disaster response. Those factors include death toll accuracy and methodology, federal preparedness guidelines issued ahead of the hurricane season, the vulnerability of Puerto Rico’s economic situation, adequacy of the Island’s telecommunications, and the capacity of the Federal government to quickly mobilize and respond to disasters and emergencies in Puerto Rico.”

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