Amata comments on developments in Congress impacting American Samoa
December 12, 2005

Reprinted from Samoa News
December 12, 2005

PAGO PAGO, AMERICAN SAMOA. Aumua Amata says press reports on developments in Congress that impact American Samoa, suggest two things: First, the Congress is getting some mixed messages about what we are asking. Second, we are getting mixed and even misleading messages from our Delegate about what is going on in Washington.

Aumua explained, "Here is what we know for sure. The policy terminating Section 936 became federal law 10 years ago.That was not because Section 936 for American Samoa cost the federal government too much, it was because Section 936 for Puerto Rico cost too much.

"We also know that both the Clinton and Bush Administrations, as well as a bipartisan consensus in Congress, determined that Section 936 was a bad model of tax policy. Both parties called it 'corporate welfare.'"

The nine-year veteran House Majority Leadership staffer said that for ten years the "policy" of the Delegate was to sit by and hope that the big drug companies benefiting from Section 936 in Puerto Rico would get it restored, or that the government of Puerto Rico and its lobbyists would get a substitute that was equivalent. The problem was that their proposals were based on protecting corporate profits from federal taxes, and that is the "corporate welfare" model that Congress rejected.

Amata added, "We also know that our delegate and the local government failed to propose alternatives that would help out tuna companies. If there appeared to be a good chance Section 936 would be restored, doing nothing else might have been justified.

"Since it was pretty clear Section 936 was not coming back before the sun set on it at the end of this year, our representatives should have been working with the tuna companies on a wage based substitute. This should have been part of a long term economic development strategy at both the federal and local level.

Continued Amata, "Since I pointed these facts out publicly, our delegate and his staff have produced an avalanche of press releases ignoring the idea of a wage based credit. Even though Congress might be willing to give that to the tuna companies for more than one year, and the tuna companies have indicated support for it in the past, our delegate does not want to even talk about a wage based credit.

"He also suddenly is very actively interested in long term economic planning. However, this is where the messages he is sending become very mixed and even misleading.

"First, he is telling our people that the extension of Section 936 for American Samoa is not related to the last ditch desperate attempt by Puerto Rico to save Section 936 for American Samoa as part of a scheme to restore Section 936 for Puerto Rico. He actually is trying to tell us the Governor of Puerto Rico intervened just out of the goodness of his heart, when everyone in Puerto Rico and Washington knows better.

"Then he tries to tell us the House extended Section 936 for American Samoa pending the outcome of the GAO study on long term economic policy for Puerto Rico after Section 936 has ended.

This is misleading. The real reason the House extended Section 936 is that the Department of the Interior and the U.S. House recognized that American Samoa had done nothing to prepare for the transition to the post-Section 936 period. The tax credit had already been phased out in Puerto Rico and the private sector there has had time to adapt and let market forces go to work.

"In the case of American Samoa, they are considering giving us one more year to try to adjust and adapt. No matter what the GAO reports about Puerto Rico's economy after Section 936, we in American Samoa need our own economic strategy.

"But our delegate won't respond to my employment or wage based credit proposal. Why? Well, it may be because the former Governor of Puerto Rico proposed a wage based credit for Puerto Rico, and the current Governor opposes that solution because it is identified with his predecessor, who is of an opposing political party.

"So our Delegate can't support a wage based credit because he has tied our fate to the politics of the current Governor of Puerto Rico. Yet, with a straight face, he claims the support of Puerto Rico for the Section 936 extension for American Samoa is just about American Samoa and has nothing to do with Puerto Rico.

"All of this mess is bad enough, but it gets worse. Our own Governor tries to do something positive, and our Delegate pounces on him as if he had violated some sacred code by not asking permission first. Well, the way our federal system works is that Governors are free to propose whatever they think is best without getting permission.

"Given how our Delegate has reacted, it is not hard to understand why the Governor did not dare to let the delegate know what he was going to propose. Even if the Governor's proposal is also based too much on protecting profits, so Congress may not accept it, at least he is trying to do something positive. He should not be pounded down for trying on the grounds he did not get permission first and say 'Eni, may I?'

"If the Senate extends Section 936 and that helps our companies, that is good. It is good that Chairman Bill Thomas and the Department of the Interior want to help American Samoa. But it is not good for American Samoa's economic policy to be that we hope Puerto Rico will get Section 936 back next year, and that will mean we get it for more than one year too.

"We need a local and federal economic policy for American Samoa, and there is no sign Congress will extend Section 936 for more than one year, no matter what the GAO study on Puerto Rico brings about."

Aumua Amata concluded by saying, "We need less confusion, less mixed and misleading signals. We need less press releases reacting to what we propose, and more leadership that welcomes ideas and evaluates proposals on the merits, instead of ones that are based on politics here, much less in Puerto Rico."

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