Puerto Rico's collapsing economy could win the election for Hillary Clinton

The 2016 presidential election could come down to Florida. With four days until Election Day, FiveThirtyEight projects there’s a 19 percent chance that Florida’s 29 electoral votes will put either Hillary Clinton or Donald Trump over the 270-vote threshold to win — making Florida, by far, the most likely state to tip the election.

Florida, in turn, might come down to the Latino vote. If Hillary Clinton wins Florida — and if Florida gives her the presidency — it will be because she’s motivated the state’s Latino voters to turn out in unusually high numbers. Latino early votes are up 150 percent over 2012 — and many of those are people who don’t usually vote at all.

And the Latino vote could come down to the state’s Puerto Rican population — which has surged in the past decade. About 130,000 Puerto Ricans left the island for Florida between 2006 and 2013, and they now make up more than a quarter of the state’s Latino electorate.

The outsize importance of Florida’s Puerto Ricans to Hillary Clinton’s election hopes is a lesson in the ripple effects that a single demographic group can create in a single state. But it’s also a delicious historical irony.

The rise of the Puerto Rican vote in Florida is the result of a chain of events stretching back 20 years, when Congress closed a Puerto Rico-specific tax loophole. That chain of events ultimately led hundreds of thousands of Puerto Ricans to leave the island for the mainland — and Florida in particular.

In 1996, Congressional Republicans shut out Puerto Ricans. In 2016, Puerto Ricans might finally get their revenge by securing the White House for a Democrat.

How the closing of a tax loophole led to a Puerto Rican exodus

In the middle of the 20th century, the federal government wanted to encourage manufacturers that were tempted to move or expand to developing countries to move to Puerto Rico instead. But since Puerto Rico has the same labor standards as the US, that wasn't exactly appealing to businesses — especially when Congress decided in 1974 to bring Puerto Rico's minimum wage up to the rest of the US's, as well.

So instead, the government granted big tax breaks to businesses that had operations in Puerto Rico. Starting in 1976, basically any profit a company could trace to Puerto Rico wouldn't be taxed. The tax breaks gave Puerto Rico a pharmaceutical industry.

This cost the US a lot of money in lost tax revenues, and by the 1990s, it had become a political target. (Some of the most active supporters of eliminating Puerto Rico’s tax loophole were, ironically, members of Congress from Florida.) Bill Clinton’s 1993 budget suggested reforming the loophole, and using the tax revenue to encourage economic growth on the island in other ways.

Congressional Republicans, however, had other things they wanted to use that tax revenue for. In 1996, they passed a bill that increased the federal minimum wage while cutting a variety of business taxes. They paid for those tax cuts by phasing out the tax loophole that had benefited Puerto Rico — essentially, sharply raising taxes on companies operating on the island to cut them slightly on all companies operating in the US, mainland and island alike.

Politicians in Puerto Rico warned against the closing of the tax loophole without any relief for the island. So did Latino politicians in the US, like Sen. Bob Menendez (D-NJ). And President Clinton, when he signed the bill, warned that closing the loophole without providing any job training or social benefits “ignores the real needs of our citizens in Puerto Rico.“

Richard Ellis/AFP via Getty

But there was no incentive for Congress to listen. For one thing, the tax break didn’t officially end for 10 years. More importantly, though, Puerto Ricans were citizens, but they didn’t have representation in Congress and were all but disenfranchised in presidential elections — there was no political incentive to help them.

When the tax break finally ended in 2006, it threw Puerto Rico into a recession. (Many of the companies that benefited from the tax break moved to the Cayman Islands.) That was swiftly followed by the Great Recession of the late 2000s, which basically kicked Puerto Rico while it was down.

It's been struggling ever since.

In 2013, 45.4 percent of Puerto Ricans were living in poverty. By 2016, the island was sinking under $72 billion in debt — and forced to choose between paying creditors and continuing to provide government services.

The government has had to close 150 schools; as of this summer, some medical clinics had been operating for eight months without government funds (including payment for workers), and the island’s only medevac service had stopped operating until the government paid its bills.

Congress has only started paying attention to the Puerto Rican crisis over the past couple of years, as the island’s fiscal “death spiral” has posed serious financial problems for American bondholders. But Puerto Ricans themselves have been responding for years — by leaving the country.

Puerto Rican voters have played a huge part in turning Florida’s Latinos blue — and winning the state for Democrats in presidential years

Here’s the thing about the politics of Puerto Rico.

Puerto Rico’s citizens are essentially disenfranchised as far as the federal government’s concerned: They don’t have voting representation in Congress, and they can’t vote in the presidential election. So Congress had no incentive to pay attention to them. But because they’re still citizens, it’s easy for Puerto Ricans to “emigrate” to the mainland US — where they can immediately register to vote, and where their votes really do count.

More Puerto Ricans left the island for the mainland from 2010 to 2013, according to the Pew Hispanic Trends Project, than during the 1980s and 1990s combined.

Nearly a third of the Puerto Ricans who left the island for the mainland between 2006 and 2012 settled in a single state: Florida. In particular, many settled in the Orlando area and along the “I-4 corridor” in the center of the state. By 2014, there were nearly as many Puerto Ricans in Florida as New York.

(Pew Research Center)

Electorally, this had a huge impact. Puerto Ricans were essentially new voters — they weren’t reducing one state’s voting power by moving elsewhere — but unlike actual immigrant groups, they didn’t have to go through the time and trouble to become naturalized citizens. They were eligible to vote the minute they settled on the mainland.

And in Florida, which was always a swing state, they were voters whose votes counted very much. By 2016, Puerto Ricans made up over a quarter of Florida’s eligible Latino voters.

A decade ago, the Latino vote in Florida was bipartisan — in 2004, registered Latino Republicans outnumbered registered Democrats in the state. But over the past decade, that’s changed.

It’s not just Democrats outpacing Republicans — the number of unaffiliated voters has also continued to rise. And because political parties in Puerto Rico don’t exactly map onto parties in the US, Puerto Rican voters are particularly likely to be unaffiliated when they register to vote in Florida.

In presidential elections, though, they’ve voted for Democrats. They’ve turned Orlando blue — and kept the state purple.

According to Florida vote expert and former Democratic operative Steve Schale, “No place is starker than Osceola County, a place Bush won by five in 2004, but Obama won by 24 just eight years later. That, my friends, is what Puerto Rican growth is doing to politics.”

Latinos are turning out in big numbers in Florida — and many of those appear to be Puerto Rican voters

In 2016, though, the long-building trend might be coming to a head. Early voting is up immensely in Florida — Schale estimates that 57 percent of election votes in Florida have already been cast. And the Latino vote, in particular, is far outpacing expectations.

By the Wednesday before the election, more Latinos had voted early (in person or by mail) in Florida than voted early by either method through the entire early voting period in 2012 — with several (typically high-turnout) days of early voting left. In-person early voting is up 150 percent since 2012.

While early-vote statistics aren’t broken down by nationality, it looks like Puerto Ricans are leading the way. Throughout the early voting period, the two counties with the biggest Puerto Rican populations (Orange and Osceola) have made up a bigger-than-projected share of votes throughout the state.

This isn’t just a matter of the Hillary Clinton turnout machine — Florida expanded early voting in the 2012 elections, and all demographic groups are voting early in bigger numbers than they have in the past. In fact, if you look just at party registration, Republicans appear to be beating Democrats by a slight margin in early voting (the opposite of what happened in 2012).

But that margin might be misleading. The biggest change in early voting in Florida since 2012 isn’t the growth of Latino early voting: It’s the growth of early voting among unaffiliated voters. More than twice as many voters with no official party affiliation have voted early in 2016 than this point four years ago.

There’s certainly a lot of evidence that many of those voters are Puerto Ricans who will, in practice, vote for Democrats. As you might expect, the biggest spikes in unaffiliated early voting have come from the counties in the Orlando area with the biggest Puerto Rican population.

It’s always hard to know how predictive early voting will be. Largely this is because it’s difficult to know whether someone who votes early would otherwise have voted on Election Day (and therefore the other party will make up the gap on Tuesday), or whether it’s someone who wouldn’t otherwise have voted, creating a permanent difference in vote totals.

But this is where Hillary Clinton and Democrats might have their best news: It looks like many of the people they’re turning out are people who’ve never voted before, or don’t vote often. In other words, there’s evidence they’re going to end up with more voters, period, than they did in 2016.

Almost a quarter of Latinos who’ve voted early in Florida have never voted before. Fifty-three percent of Latino Democrats have voted once, at most, in the past three elections.

And Latinos without a party affiliation — disproportionately Puerto Ricans — are the biggest surge of all. Sixty percent of unaffiliated Latinos who’ve voted early are low-propensity voters (according to Steve Schale’s definition).

Looking at it another way, nearly half of all unaffiliated voters who have voted in 2016 so far are people who don’t usually vote. And a quarter of those low-propensity, unaffiliated voters are Latinos.

Not all unaffiliated Latino voters are Puerto Rican, and not all Puerto Rican voters are unaffiliated (though Latino Democrats are also turning out in droves). But the evidence is suggestive.

If Clinton wins the presidency in 2016, it may well be because of Florida. If she wins Florida, it will probably be because of Latinos. If she wins Florida Latinos in numbers sufficient to win the state, it will be because of Puerto Ricans. And if Hillary Clinton’s strength with Puerto Ricans in Florida is sufficient to secure the presidency, she will have the Congressional Republicans who once ignored her husband’s warning to thank.

CORRECTION: This article originally identified Sen. Bob Menendez as Puerto Rican; he’s Cuban-American.

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