Correcting Historically Discriminatory Policies Against Residents of U.S. Territories
Published on August 11, 2020
For decades, Puerto Rico and the U.S. territories have been deprived of access to federal programs specifically designed to provide a safety net, break persistent poverty cycles and jumpstart the economy. These limitations unfairly discriminate against the residents of U.S. territories and perpetuate long-standing inequities. Three recent court decisions suggest discriminatory policies against the residents of U.S. territories will no longer stand. In April, a three-judge panel affirmed it is unconstitutional to exclude the residents of Puerto Rico from participating in the Supplemental Security Income (SSI) program.  In June, a federal judge in the U.S. District of Guam also ruled it is unconstitutional to deny SSI benefits to individuals solely based on place of residency. This month, another federal judge opined there is no rational basis for discriminatory policies against the residents of Puerto Rico. Ahead of the consideration of FY 2021 appropriation bills and a possible opinion from the highest court (as is expected in United States v. Vaello-Madero) it would be prudent for the Social Security Administration (SSA), and other federal agencies to initiate a request for additional agency funding to effectively administer and extend the program to the new eligible population. After all, the federal government has an important role to play in ensuring long-standing discriminatory policies are not upheld.
The CNE DC office will continue to urge the Federal government to be prepared and effectively implement the programs if the rulings stand.  Towards that end, we will push the appropriate agency leads and congressional committees to ensure this issue is at the forefront of funding negotiations.  This is a unique opportunity to expose and correct discriminatory policies that negatively impact more than 4 million U.S. citizens. The economic implications for Puerto Rico and the U.S. territories are substantial.
Below is a comprehensive analysis with a tally on the potential economic impact for Puerto Rico of the latest court ruling by CNE’s Policy Director, Sergio M. Marxuach.
Rosanna Torres
Director, Washington DC Office
Center for a New Economy
Peña Martinez v. U.S. Department of Health and Human Services
By: Sergio M. Marxuach, Policy Director
On August 3, 2020, Judge William G. Young, of the District of Massachusetts, sitting by designation in the U.S. District Court for the District of Puerto Rico, issued an opinion in the case of Peña Martinez v. the U.S. Department of Health and Human Services.
In that case, nine plaintiffs, all residents of Puerto Rico, challenged on constitutional grounds their exclusion from the Supplemental Security Income program (“SSI”); the Supplemental Nutrition Assistance Program (“SNAP”); and the Medicare Part D Low-Income Subsidy program (“LIS”). Specifically, the Plaintiffs argued that their exclusion from those welfare programs solely because of their status as residents of Puerto Rico violated the equal protection component of the Fifth Amendment’s Due Process Clause.
Judge Young, following the same “rational-basis” constitutional analysis set forth most recently in United States v. Vaello-Madero (2020), dismissed the arguments of the federal government and agreed with the Plaintiffs.
The economic impact of this decision, should it become binding, final, and applied to its full extent, is significant:
- LIS – According to Judge Young’s opinion there are approximately 500,000 persons who could benefit from this program in Puerto Rico. The SSA estimates the average annual LIS benefit to be $5,000 dollars in the U.S. That means residents of Puerto Rico could receive up to $2.5 billion in annual benefits under this program. Caveat: total benefits could be lower given that drug insurance premiums, deductibles, and co-payments are probably lower in Puerto Rico than in the 50 states.
- SSI – CNE has already estimated that if this program were applied in full to Puerto Rico, the annual benefits would be approximately $1.8 billion.
- SNAP – Advocates for SNAP parity estimate that Puerto Rico would receive an additional $1 billion in benefits if it is granted the same treatment as the states under SNAP. Caveat: total benefits would probably be lower if able-bodied adults without dependents between the ages of 18 and 49 are required to meet certain work requirements.
In sum, we estimate that certain residents of Puerto Rico could receive up to $5.3 billion in new benefits, or approximately 7.5% of Puerto Rico’s GNP, on an annual recurrent basis.