El Nuevo Día - Expert opinion by Kenneth Rivera Robles
Recently, Judge William G. Young of the federal district court for Puerto Rico decided the case of Peña Martinez v. US ("the Peña-Martinez Case"). The case discusses the benefits of federal programs to which residents of Puerto Rico should be entitled.
What was requested in the Peña Martínez case?
Several residents of Puerto Rico objected to the lack of access to three federal financial assistance programs. Some had moved from the United States to Puerto Rico and had stopped receiving these benefits when they moved. Others had always been residents of Puerto Rico and had never received them and object to not having the same access to which a U.S. resident would be entitled. All of the plaintiffs are U.S. citizens, so the only difference with a U.S.-born person is their place of residence.
What are the three federal programs?
The first is Supplemental Security Income ("SSI"), which provides additional income to people who are 65 years of age or older, blind or have special needs. This benefit is extended to residents of the 50 states, the District of Columbia and residents of the Northern Mariana Islands. In Puerto Rico it does not apply and instead we receive a program called Aid to the Aged, Blind and Disabled ("AABD"). AABD is a Social Security program that ceased to be used in the U.S. in 1974 but remained in effect in Puerto Rico, Guam and the Virgin Islands. Under AABD the income threshold for eligibility is higher than under SSI. For example, under SSI for 2020 an eligible single person could earn up to $783 per month. Under AABD an eligible person as a general rule can earn up to $64 per month. Second, benefits under AABD tend to be lower than under SSI.
The second is the Supplemental Nutrition Assistance Program (known as "SNAP") which provides assistance to purchase food. SNAP has not applied in Puerto Rico since 1981, when we were removed from the program and included in the Nutritional Assistance Program ("NAP") or PAN, as it is mostly known in Puerto Rico. As in the previous program, the requirements under NAP are stricter than under SNAP and the benefits to be received per person are lower.
The third is the Low Income Subsidy (known as "LIS") to help purchase insurance coverage under Part D of the Medicare Program. LIS does not apply locally but additional amounts are sent under the Medicaid Program.
What did the federal government argue?
The federal government outlined three main concerns. The first is that it would not be fair to give Puerto Rico residents access to the three federal programs because we do not pay federal income taxes. This assertion is not correct since according to the IRS in 2019 Puerto Rico paid $3.528 billion in federal income taxes, including income tax. The second concern is that it would be too costly for the U.S. government. The third argument is that granting these economic benefits to Puerto Rico would cause economic dislocation on the island, as giving additional incentives could adversely affect the labor market because people would choose to stop working. This argument does not consider that many of the programs have specific requirements such as being blind or of legal age to be eligible.
These arguments arise from two Federal Supreme Court cases, Harris v. Rosario of 1980 and Califano v. Gautier of 1978.
What did Judge Young decide?
The judge analyzed the factors outlined by the government and dismissed them, ruling in favor of the plaintiffs and concluding that it is unconstitutional to limit access to benefits to U.S. citizens merely because they are residents of Puerto Rico. The case frequently cites US v. Vaello, ("the Vaello Case") decided by the federal Circuit Court of Appeals earlier this year.
How is the Peña-Martínez case different from the Vaello case?
There are three main differences. The Vaello case involved a person who lived in the U.S. and moved to Puerto Rico and stopped receiving benefits. In Peña-Martinez some of the plaintiffs always lived in Puerto Rico. Second, the Vaello case only dealt with SSI benefits. The third difference is that in the Peña-Martinez case, Judge Young issues an injunction prohibiting the government from continuing the unconstitutional and exclusionary application of these programs in Puerto Rico. In addition, he extends the injunction to all similarly situated applicants who are residents of Puerto Rico. This is done to force the case to reach the federal Supreme Court and become case law.
What would be the economic consequence of adopting the Peña-Martínez case?
The two most recent economic analyses are one from the Government Accountability Office in 2014 and from the Congressional Research Service in 2016.
Under SSI a person receives average monthly benefits of $438 in the U.S., while in Puerto Rico the average monthly benefit under AABD was $73.85. In Puerto Rico there were only 34,401 people eligible for AABD but if SSI were adopted there would be more than 300,000 people eligible. If SSI were adopted, annual funding would increase from $24 million to more than $1.5 billion.
In NAP Puerto Rico receives about $1.9 billion annually, and if SNAP is adopted, additional annual funding could reach $700 million. Beneficiaries would increase from 644,000 to 1,140,000.
Under LIS it is estimated that 493,000 people would be eligible, while right now they are not. This benefit has not been quantified by the studies.
If all of these benefits were extended, it would appear that we could raise more than $2.5 billion annually. These funds would be used for purchases from local businesses and health care providers and would have a great impact on the well-being of Puerto Ricans.
The question is, whether in a place with a poverty rate of 43.1% and an unemployment rate of 8.5%, such exclusion from these federal programs is justified.