Economy

Reason.tv: Cutting Government Spending-An Interview with Puerto Rico Governor Luis Fortuño

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Since coming into power in 2009, Gov. Luis Fortuño  (R-Puerto Rico) has cut government spending by 20 percent, lowered taxes and raised the territory's bond status to its highest rating in 35 years – all during a punishing economic climate.

Gov. Fortuño  sat down with Reason Magazine Editor in Chief Matt Welch to discuss Puerto Rico's turnaround, federal immigration policy, the drug war, education reform, his support of statehood and a possible future in mainland politics.

Interview by Matt Welch. Shot by Jim Epstein and Meredith Bragg. Edited by Bragg.

Approximately 29 minutes.

Go to Reason.tv for HD, iPod and audio versions of this video and subscribe to Reason.tv's Youtube channel to receive automatic notifications when new material goes live.

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  1. Isn’t Puerto Rico one of those places that gets representation without taxation?

    1. Uh, no. PR doesn’t have any votes in Congress or the Electoral College.

      1. I lived there for 2 years. They pay what amounts to a state income tax. No federal but they get SS bennies.

        It’s a pretty sweet deal. And they have cockfighting and OTB’s in every town.

        1. Looking at the Wiki, it appears that federal employees in PR actually do have to pay federal income tax. Ha.

          1. I still don’t understand why we don’t just pay gov’t employees less and skip the taxation work.

            1. Blame Nixon, or one of those other dead people.

            2. It’s because not everyone in every position is subject to the same taxes. A single person, a mother of two and a married couple are all subject to different tax rates and qualify for different refunds, but all could be the same level federal employee making the same amount of money. Also, peoples’ situations and tax rates can vary from year to year. Re-setting every Federal employee’s salary every year to account for these changes would be a nightmare (not to mention intra-year changes in tax status).

          2. Yeah, the people at Rosie Roads had to pay, but not those of us in the private sector. Those Navy bastards would come into town and tear shit up every time they came in, so I didn’t care for them anyway. I do have to say, though, the bombing range on Vieques had some of the most beautiful beaches in the world when they were open.

            1. Vieques is one of my favorite places in the world. Beaches — now open to the public — like Maui, but with a tiny, tiny fraction of the tourists.

  2. What’s with Matt’s hair? You Reason folk just refuse to let the story be about your interview subject, don’t you?

    1. Noticed that too… but on a different note: Luis Fortuno is a beast.

      Puerto Rico is a really interesting economic case to look at, as their economy is quite different from that of the mainland, but they are subject to the same legal system, regulations and social welfare. I did one of my senior theses on the impact of US Federal transfer payments on the economic development of Puerto Rico (e-mail me if you’d like a copy).

  3. Sounds like life is pretty good on Progress Island, USA

  4. If Puerto Rico wants statehood, then I’m okay with it, as long as we eliminate an existing state first. Or hell, combine two current states into one. We don’t need both a Virginia and a West Virginia. We don’t need separate Dakotas.

    Bottom line, I’m not replacing all my flags. The colors on Old Glory don’t run, so there’s no economic sense for me to buy a new one, goddammit.

    1. What about stimulus, broken windows, running colors and all that?

    2. I agree on the flag — we should just freeze the canton at 50 stars. It’s a neat design, and none of the 51 star designs are particularly appealing. (though this one is pretty creative)

      From what I understand, the separate Dakotas were created as a ploy to help the GOP keep an edge in the Senate. (they were combined into a single territory before becoming states) The more things change…

      1. We are the world.

      2. Bullshit!!!

        the stripes need to fucking go

        Just a blue field with like 789 stars in it!!!

    3. Fuck no. We don’t want West Virginia back. I’d rather merge all the New England states together.

      1. Can we sell them to Canada after that?

        1. Bundle…make em take Mass along with the good stuff.

      2. Seriously, why hasn’t the United States Balkanized yet?

        1. They tried that once, but Lincoln was willing to sacrifice 600,000 lives to prevent it.

          1. Whenever I drive past Gettysburg on Route 15, I think “600,000 dead Americans to keep Alabama in the Union?”

            1. Think of it as a cool way to justify an Electric Map.

    4. The colors on Old Glory don’t run, so there’s no economic sense for me to buy a new one, goddammit.

      I’ve got a Commerce Clause in my pants that says you have to.

    5. I’d prefer to break up a few existing states, actually. Texas and California are way too big.

      It’s also probably the only way the GOP would approve any new states — DC and all the other US possessions lean Democrat. Maybe they admit PR as a state and split Texas in half?

      1. Texas already gave up too much of our territory. Hands off!

        1. You don’t want more representation in the Senate?

        2. We want Santa Fe back!

      2. Cut the panhandle and Dallas off, call it South Oklahoma…. that would start a new civil war, actually.

        1. Fuck you I will NEVER be an Okie!!!!

          1. We could use some of their legislators though…their govt seems a little more on the ball than ours.

      3. Oregon and Washington need to be split down the middle along the ridge of the cascades.

    6. We should hold a national referendum to determine which state to kick out of the union.

      Or determine it by reality TV show–Survivor-type, where all the governors are marooned on a deserted island.

    7. just get those damned yellow fringes off

  5. Welch just couldn’t let Fortu?o have his Reagan admiration without challenge. He had to tarnish the governor’s memories.

  6. I think he lost Matt toward the end with the “values” talk, but recovered nicely with school choice advocacy.

  7. Daniels/Fortu?o 2012!

    1. He wasn’t born in the United States.

      1. Uh, never mind, you just have to be a US citizen at birth (which Puerto Ricans are), you don’t actually have to be born in the US.

        1. Did you even watch the video? That’s two wrong comments you’ve made about things that were mentioned in it.

          1. Well, the other comment wasn’t wrong, it’s just that you had to check a Wiki to learn something that was discussed in the video.

          2. No, I didn’t watch the video. I didn’t know there were prerequisites for posting on this thread.

            I corrected the one mistake in 2 flerking minutes, by the way. Gimme a break.

      2. That didn’t hurt me.

  8. After I watch this vid I’m going to pass it on to my friends that live there, see what they have to offer about the governor.

    Did Welch ask about La Perla and its status as the Hamsterdam-like de facto drug market of old San Juan? I’m curious as to whether the governor would even acknowledge it. Everyone else does (natives, cops, dealers, and tourists).

  9. Clean. Articulate. Shit.

    1. Fiscal discipline just isn’t that funny.

    2. Who prepped Stewart? Clown nose off. Very convenient.

  10. @Ska: It loses a certain “no se que” without the experience of hundreds of protesters screaming for his blood outside the Capitolio and blocking your commute home from work. He’s not popular here, especially after Ley No. 7 (the law responsible for the huge number of public sector layoffs).

    Welch asked about drugs but not about La Perla (which, speaking of Hamsterdam, is seen at the end of an episode of The Wire when Omar and his boricua boyfriend go into hiding for a while). The drug market in La Perla is a drop in the bucket in the context of the larger drug trafficking issue; it’s like asking Governor Brown to talk about Fry’s Electronics when asking about Silicon Valley’s economic impact.

  11. Can we sell them to Canada after that?

    For a few hours’ worth of federal deficit, we can crack ’em off and shove ’em up against Ireland.
    And we can give RIRA a few thousand fuel-air bombs.

  12. Right after we sell DC to Somalia.

    1. Sell? Even the Somalias are smarter than to pay for DC.

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  16. If you’re going to split Texas, the place to draw the line, culturally, economically, etc., is down I35. East Texas and West Texas are practically different states already.

    1. Then what happens to Arlington?

  17. Reason linked to some tongue-in-cheek article about splitting up existing states to get the number to 100, with the goal of making the Senate more aligned with the population.

    Ah, here it is.

    1. I don’t know why I ever read anything on Mother Jones. Dear lord that was stupid.

  18. Just a point of semantics: democratically elected officials don’t “come into power;” they “assume office.”

  19. 20% cut? Unbelievable! Other Republicans pat themselves on the back for making 2% cuts.

    I can count 18 reasons why Luis Fortuno should be our next President.

  20. Based on what Fortu?o has said in this interview and his record as governor, he’d be one of the few people that I’d vote for to be president.

  21. If you’re going to split Texas, the place to draw the line, culturally, economically, etc., is down I35. East Texas and West Texas are practically different states already.
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  22. NO S? INGL?S POR NING?N CARAJO PERO USO UN TRADUCTOR PARA PODER LEER ESTE ART?CULO, LO ?NICO QUE TENGO QUE DECIR VIVO EN PUERTO RICO, JAM?S SER? ESTADOUNIDENSE SOY PUERTORRIQUE?O, LATINO E HISPANO Y ?VIVA PUERTO RICO LIBRE, AFUERA LOS ESTADOUNIDENSES O APRENDAN ESPA?OL!

  23. A few comments about an evidently rehearsed interview.

    Mr. Fortuno, a millionaire,reduced 10% of his $70,000 salary. What a sacrifice! Living at the governor’s mansion, he gets free housing, utilities, transportation, food, etc.
    If I were to reduce my income by $7,000, I would be in serious trouble.

    If the interviewer had made his homework, he would have found that the unemployment statistics given by Fortuno are the other way around. It went from 14% to 17%, according to goverment statistics, unless official statistics are wrong.

    I admit Mr. Fortuno is a smart guy. To be able to reduce personal taxes before the next election and after the implementation of so many recessionary measures, he imposed a new tax on US based companies operating in PR from where he expects to obtain the $1,400 millions his tax reduction is going to cost. The deal is that US taxpayers pay for such tax reform since Fortuno is asking the IRS to allow the companies to claim the new PR tax as a credit in the US Income Tax Return. Not a bad deal for PR. But there are risks, if the companies decide to move its operations or the US government or politicians find out and decide to stop it. I hope Fortuno succeeds on this one.

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  25. Film is a different medium than print. Rather than characters making speeches, Rand’s philosophy ought to be shown via the characters doing something interesting.

  26. Whoa…since when did you guys start doing game commentary?

  27. As one who was born and lived there for 16 years and still has family there, I can tell you that 1 out of 3 workers work for the Government and that 50% of the population in the island receives some sort of Federal Aid. As in the Total Corporate Tax Rate is one of the highest in the World (Why would you want to take your business there?). I used to be for Statehood but now, after living in the USA Mainland for more than 28 years I’ve decided that Puerto Rico needs their Independence. No matter how many cuts and how much work is done to reduce the budget, Puerto Rico will never get out of the hole and ALWAYS (never mind the US Bases there, they keep diminishing in value as the Cold War is over) will be a Financial Hole for the USA. This is due in great part to the entitlement (‘Mantengo’) mentality of half of the Island. Therefore they need to Swim or Sink. Besides, deep down inside, at least half of the population has that “feeling”. The ELA (Commonwealth) needs to go one direction or the other.

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