Puerto Rico's revival

SAN JUAN, Puerto Rico-Since the congressional supercommittee appears unable, or unwilling, to take a lesson from Indiana or Virginia-where Republican governors have made spending cuts and delivered budget surpluses without damaging the social safety net-members might wish to consider Puerto Rico and what its governor, Luis Fortuno, is doing.

Fortuno is Puerto Rico's first Republican governor in 42 years. In 2009 when he took office, the U.S. territory had a $3.3 billion budget deficit. Three years earlier, Moody's Investors Service downgraded the commonwealth's bond rating to junk status while in deep recession.

Like Virginia Gov. Bob McDonnell and Indiana's Mitch Daniels, Fortuno is turning the economy around by cutting government spending 20 percent, which has lowered the deficit by 81 percent. He eliminated more than 20,000 government jobs, reformed government services, trimming costs, and cut operational spending 10 percent, eliminating official vehicles, cell phones and credit cards.

Following five years of recession, the commonwealth's economy is showing signs of recovery. Moody's took notice, upgrading Puerto Rico's bond status to A3, its highest rating in 35 years. Standard and Poor's raised its outlook on Puerto Rico's credit from "stable" to "positive." It is Standard and Poor's first positive review since 1983.

Over the next six years, newly implemented tax cuts will return $1.2 billion to those who earn the money. Added to this is a 7 percent tax credit for corporations and a reduction in the corporate tax rate from 41 percent to 30 percent.

As for "infrastructure," about which President Obama so often speaks, according to the governor's office, Puerto Rico has created an "aggressive public-private partnership law to encourage private investment and bring efficiencies to schools, roads, airports, and water and energy projects."

What's not to like about this? It produces results Democrats say they want, especially infrastructure, and it does it with economic policies Republicans endorse.

In an interview in his office, located inside La Fortaleza (The Fortress), one of the few medieval castles remaining in the Americas, I asked Gov. Fortuno what advice he would offer his fellow Republicans on illegal immigration and how to win more Hispanic votes.

"I think the Republican Party has done an awful job handling this issue," he said. "It makes no sense for us not to bring more Hispanics into the party because Hispanics are naturally conservative. The tenor of the public discourse surrounding this issue has sounded anti-Hispanic at times."

What would Fortuno recommend to change the tone?

"First, show up; show respect," he replied. "Most Republican candidates don't do that. They talk about 15-foot fences and then try to address the issues of greatest concern in the Hispanic community. They are no different from other communities most of the time. On immigration, Republicans say, 'We want legal immigration and we are the country, thanks to legal immigration,' so we need to try to address this issue with a different tone than we've had so far."

Another issue: What about Cuba's post-Castro future?

Fortuno thinks any resumption of relations between the United States and the communist nation should be conditioned on an improvement in human rights, which he said are "grossly" violated by the Castro brothers.

What about the growing relationship between Venezuela and Iran?

"Daily flights," the governor interrupted.

What can the United States do to lessen Iran's influence in the region?

"Energy is the big issue," Fortuno said. "As I travel and talk with leaders, they feel the U.S. has not helped them sufficiently to fill their energy needs. Economic development is the only way to address [Iran's influence]. Each country has its own challenges, but the U.S. needs to help fill that economic void and if we don't, others will."

The 51-year-old governor is handsome and charismatic.

He'll need that and more to win reelection in 2012. While Fortuno is gaining ground in popularity after the massive government layoffs (he now trails his likely Democratic opponent by single digits), changing from a dependency culture to one of personal responsibility takes time.

Maybe the supercommittee should visit San Juan. A little face time with Luis Fortuno might improve the group's chances of a debt resolution.

© 2011 Tribune Media Services Inc.