Hurricane

Repealing the Jones Act would help Puerto Rico. But it could hurt Florida.

A massive container ship docked at PortMiami. Florida’s domestic shipping industry could be negatively affected if the Jones Act is repealed in Puerto Rico.
A massive container ship docked at PortMiami. Florida’s domestic shipping industry could be negatively affected if the Jones Act is repealed in Puerto Rico. cmgurrero@elnuevoherald.com

As the debate over the Jones Act rages in the nation’s capital, lawmakers from Florida are faced with a difficult choice.

While Democrats and Republicans from Florida are urging the federal government to do everything in their power to help Puerto Rico, they are also beneficiaries of a law that protects Florida’s shipping industry at the expense of the island, a political quandary in a state with over 1 million Puerto Rican residents.

Pushing for a permanent repeal of the Jones Act would undoubtedly win the support of the state’s Puerto Rican community and voters sympathetic to hurricane recovery efforts, but it could hurt the state’s domestic shipping industry and thousands of jobs.

The domestic shipping industry is an economic behemoth in Florida, contributing 52,140 maritime jobs and $9.6 billion to Florida’s economy, according to a 2014 study by PricewaterhouseCoopers. The Port of Jacksonville is the nation’s hub for Jones Act shipping to Puerto Rico, and Florida ranks second among all states in jobs affected by the domestic maritime industry.

“Our top priority is ensuring the people of Puerto Rico have the resources they need to recover and rebuild both in the short and long term,” said Rep. John Rutherford, R-Jacksonville. “JAXPORT and the maritime industry in Northeast Florida are critically important to these efforts and have been for decades. The Jones Act reinforces this commerce by promoting investments in infrastructure that ensure shipments travel reliability between Jacksonville and Puerto Rico quickly.”

The Jones Act is a 1920 law that requires U.S. ships transporting goods within the country to be built, owned and operated by U.S. citizens or permanent residents. Opponents of the Jones Act, including New York Rep. Nydia Velázquez and Arizona Sen. John McCain, argue that the law makes goods more expensive on islands like Puerto Rico, therefore making it harder for the U.S. territory to recover from Hurricane Maria.

“Our legislation would permanently exempt Puerto Rico from the Jones Act, an antiquated, protectionist law that has driven up costs and crippled Puerto Rico’s economy,” McCain said in a statement after he introduced a bill that would repeal the Jones Act in Puerto Rico last week. “For years, I have fought to fully repeal the Jones Act, which has long outlived its purpose to the benefit of special interests.”

After a week of intense public pressure, President Donald Trump suspended the Jones Act in Puerto Rico for 10 days last Wednesday, though he said “we have a lot of shippers and a lot of people who work in the shipping industry who don't want the Jones Act lifted.”

Rep. Darren Soto, the first Puerto Rican in Congress from Florida, acknowledged the difficulties of a long-term Jones Act repeal. He wants the Trump administration to pursue an additional temporary suspension of the Jones Act instead of a full repeal.

“Over the long term I don’t think its an all-or-nothing deal,” Soto said. “It’s one of those issues where Florida benefits under the Jones Act and Puerto Rico does not. We don’t have to get rid of the Jones Act or have it go away, but 10 days is going to be insufficient. I expect we'll need emergency services for over a month or so, so we’re going to need a longer waiver than that.”

When Hurricane Maria devastated Puerto Rico, suspending the Jones Act became a rallying cry for lawmakers from both parties.

“The Jones Act... makes everything more expensive,” said Velázquez. “One of the biggest issues we have right now is the availability of fuel in Puerto Rico.”

Shipping interests spend millions every year to lobby Washington on the Jones Act. According to Senate lobbying records, 47 different groups have lobbied Congress on the Jones Act in 2017.

The shipping industry also contributes campaign cash to lawmakers from both parties in Florida. For example, the American Maritime Officers Association, the largest union of U.S. merchant marine officers, contributed over $550,000 to members of Congress during the 2016 election. Miami Republicans Ileana Ros-Lehtinen and Mario Diaz-Balart each received around $10,000 from the union while Republican Sen. Marco Rubio and Democratic Sen. Bill Nelson both received $2,500 from the union.

Nelson, the highest-ranking Democrat on the Senate Transportation Committee, is a longtime proponent of the Jones Act. In 2012, he wrote a letter affirming his support for the Jones Act to the American Maritime Partnership, an interest group representing the domestic shipping industry.

“The Jones Act strengthens our maritime industry, which increases our economic competitiveness and our national security,” Nelson said in the letter. “I support this law and the maritime industry.”

Nelson and Rubio’s office did not immediately respond to a request for comment on whether they support permanently repealing the Jones Act in Puerto Rico due to Hurricane Maria.

There isn’t any indication McCain’s bill to repeal the Jones Act effort will gain enough votes in Congress. A spokesman for Sen. Mike Lee, R-Utah., who is a cosponsor of McCain’s bill, said, “we have not secured a floor vote for this but we are still pushing to do so.”

“There are two categories of people who have come out against, one is the people who have been traditionally against, that has been epitomized by John McCain and libertarians, and members with large numbers of Puerto Ricans in their districts who are in their heart trying to do whatever they can to help Puerto Rico,” said an advisor to the domestic maritime industry familiar with the current discussions with Congress on the Jones Act. “Those groups are 10 percent of Congress and the other 90 percent are just trying to figure out what’s going on. They just heard in a soundbite fashion that the Jones Act might be an impediment to the recovery.”

The advisor argued that transitioning away from the Jones Act in the middle of a disaster would be highly disruptive to Puerto Rico’s recovery, and that a permanent repeal would hurt Florida in the long run.

“All the American shipping companies that serve Puerto Rico are Florida based,” the advisor said. “Florida is the number two state in country for Jones Act jobs and potentially on its way to be number one.”

But opponents of the Jones Act argue that Puerto Rico is disproportionately hurt by higher shipping costs. They note that the U.S. Virgin Islands, which was also heavily damaged by Hurricane Maria, is not subject to the Jones Act.

“The federal government should have uniformity when it comes to the U.S. territories,” Velázquez said. “I would support eliminating it forever.”

Alex Daugherty: 202-383-6049, @alextdaugherty

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