Page 24 - Suffolk University Law Review
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SUFFOLK UNIVERSITY LAW REVIEW [Vol. L:587
decisions in a sovereign manner, and to address their urgent economic and
social needs, including unemployment, marginalization, insolvency and
poverty." 173
VIII. SELF-DETERMINATION AFTER EMERGING FROM THE FISCAL PLAN
It is not feasible to exercise the right to self-determination and produce
status change under PROMESA's terms. PROMESA tasks FOMB with the
obligation to adopt a fiscal plan for Puerto Rico that "provide[s] a method to
achieve fiscal responsibility and access to the capital markets."174 It is essential
to comply with this plan to improve Puerto Rico's financia! circumstances, so
that the government can provide necessary services and pay its debt once
restructured. Puerto Rico' s tax base is the backbone of the fiscal plan. This
base comprises all of the tax resources that the people of Puerto Rico have at
their disposal under the fiscal autonomy that Puerto Rico enjoys as a
commonwealth. Statehood-the only plausible change the people would
consider-would alter the tax base. The imposition of federal taxes would
substantially reduce the revenues of the Commonwealth's government, making
it impossible to comply with the fiscal plan. No status change that alters the
basis on which the fiscal plan depends will be legislated by Congress for the
duration of the plan.
Thus, the implementation of the fiscal plan by the FOMB for the next eight
to ten years will occur within the context of the present political relationship of
Puerto Rico as a commonwealth of the United States. This period will be
significantly problematic because the political party in power in Puerto Rico
will resist painful austerity measures which could provoke widespread protests.
Similar scenarios have already occurred in Greece and other countries. Even
after the FOMB 's reign 'ends, and confidence in the fiscal responsibility of
Puerto Rico' s government is restored, allowing the country to borrow from the
financia! markets again, Puerto Rico's political relationship with the United
States will remain questionable. After the significant harm Puerto Rico' s
government will endure as a result of PROMESA, Puerto Rico' s relationship
with the United States-based on the principie of consent of the govemed-
will have been jeopardized.
David Rezvani states that "the origins of PITs almost always coincide with a
catastrophic event or crisis that applies between a potential core state and a
potential PIT. Such a crisis reorders perceptions, norms, and creates a political
173. See id. (calling for United States to allow Puerto Rico to exercise right of self-determination); see a/so
U.N. GEN. ASSEMBLY, SPECIAL COMMITTEE ON THE SJTUATION WITH REGARD TO THE {MPLEMENTATION OF THE
DECLARATION ON THE GRANTING OF INDEPENDENCE TO COLONIAL COUNTRIES AND PEOPLES 1, 3, U.N. Doc.
A/AC.106 (June 23, 2014), http://www.un.org/en/ga/search/view_doc.asp?symbol=A/AC.109/2015/L.6
(providing basis for 2016 report).
174. See Puerto Rico Oversight, Management, and Economic Stability Act ยง 20l(b)(l) (delegating
financia} responsibilities to fiscal control board).
decisions in a sovereign manner, and to address their urgent economic and
social needs, including unemployment, marginalization, insolvency and
poverty." 173
VIII. SELF-DETERMINATION AFTER EMERGING FROM THE FISCAL PLAN
It is not feasible to exercise the right to self-determination and produce
status change under PROMESA's terms. PROMESA tasks FOMB with the
obligation to adopt a fiscal plan for Puerto Rico that "provide[s] a method to
achieve fiscal responsibility and access to the capital markets."174 It is essential
to comply with this plan to improve Puerto Rico's financia! circumstances, so
that the government can provide necessary services and pay its debt once
restructured. Puerto Rico' s tax base is the backbone of the fiscal plan. This
base comprises all of the tax resources that the people of Puerto Rico have at
their disposal under the fiscal autonomy that Puerto Rico enjoys as a
commonwealth. Statehood-the only plausible change the people would
consider-would alter the tax base. The imposition of federal taxes would
substantially reduce the revenues of the Commonwealth's government, making
it impossible to comply with the fiscal plan. No status change that alters the
basis on which the fiscal plan depends will be legislated by Congress for the
duration of the plan.
Thus, the implementation of the fiscal plan by the FOMB for the next eight
to ten years will occur within the context of the present political relationship of
Puerto Rico as a commonwealth of the United States. This period will be
significantly problematic because the political party in power in Puerto Rico
will resist painful austerity measures which could provoke widespread protests.
Similar scenarios have already occurred in Greece and other countries. Even
after the FOMB 's reign 'ends, and confidence in the fiscal responsibility of
Puerto Rico' s government is restored, allowing the country to borrow from the
financia! markets again, Puerto Rico's political relationship with the United
States will remain questionable. After the significant harm Puerto Rico' s
government will endure as a result of PROMESA, Puerto Rico' s relationship
with the United States-based on the principie of consent of the govemed-
will have been jeopardized.
David Rezvani states that "the origins of PITs almost always coincide with a
catastrophic event or crisis that applies between a potential core state and a
potential PIT. Such a crisis reorders perceptions, norms, and creates a political
173. See id. (calling for United States to allow Puerto Rico to exercise right of self-determination); see a/so
U.N. GEN. ASSEMBLY, SPECIAL COMMITTEE ON THE SJTUATION WITH REGARD TO THE {MPLEMENTATION OF THE
DECLARATION ON THE GRANTING OF INDEPENDENCE TO COLONIAL COUNTRIES AND PEOPLES 1, 3, U.N. Doc.
A/AC.106 (June 23, 2014), http://www.un.org/en/ga/search/view_doc.asp?symbol=A/AC.109/2015/L.6
(providing basis for 2016 report).
174. See Puerto Rico Oversight, Management, and Economic Stability Act ยง 20l(b)(l) (delegating
financia} responsibilities to fiscal control board).
