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    "title": "Puerto Rico - Compact of Permanent Union, November 8-19, 1975",
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    "ocrText": "The original documents are located in Box 7, folder \"Puerto Rico - Compact of Permanent\nUnion, November 8-19, 1975\" of the White House Special Files Unit Files at the Gerald R.\nFord Presidential Library.\nCopyright Notice\nThe copyright law of the United States (Title 17, United States Code) governs the making of\nphotocopies or other reproductions of copyrighted material. Gerald Ford donated to the United\nStates of America his copyrights in all of his unpublished writings in National Archives collections.\nWorks prepared by U.S. Government employees as part of their official duties are in the public\ndomain. The copyrights to materials written by other individuals or organizations are presumed to\nremain with them. If you think any of the information displayed in the PDF is subject to a valid\ncopyright claim, please contact the Gerald R. Ford Presidential Library.\nACTION MEMORANDUM\nWASHINGTON\nLOG NO.:\nDate: October 28\nTime:\ndue /10\n500pm\n5'30\nFOR ACTION: Phil Buchen\nOCCI (for information): Jim Connor\nRobert Hartmann\nJack Marsh\nBrent Stcowcroft\nAlan Greenspan\nBill Seidman\nJim Lynn\nFROM THE STAFF SECRETARY\nDUE: Date:\nNovember 10\nTime: 530pm\nSUBJECT:\nCompact of Permanent Union between\nPuerto Rico earid the U.S.\nACTION REQUESTED:\nFor Necessary Action\nFFor Your Recommendations\nPrepare Agenda carid Brief\nIDraft Reply\nX For Your Comments\nDraft Remarks\nREMARKS:\nplease neeturn tto judy johnstongground floor west wing\n#\nop 2\nyou\nBUBASE SUTTACH TTHIS OCCPYTTON MATERIAL SERMITTED.\nTEE your Hunve any your atitipipleten a\ndesire\nim\nsubmitting\nequire\npiplease\nJulants Ms Cadifon\nPolor the\ntelephone Scooebtay\nssident.\nDigitized from Box 7 of the White House Special Files Unit Files at the Gerald R. Ford Presidential Library\n5\n2.\nAppoint a special in-house task force to develop\nan alternative proposal to be submitted to the\nCongress next January, together with a report out-\nlining your objections to the instant proposal.\n3.\nInform Governor Hernandez-Colon of Puerto Rico that\nyou have serious problems with the proposed Compact\nin its current form and suggest that, together, we\nmight profitably use the additional time to jointly\ndevelop a more appropriate proposal for submission\nto the Congress upon its return.\n4. Direct OMB, in consultation with the Domestic Council\nand the National Security Council, to prepare a report\noutlining your objections to the proposed Compact and\nsuggesting to the Congress that the real issue for\ndebate and resolution is whether Puerto Rico should\nbe made a State of the Union or given its independence.\nRECOMMENDATIONS\nDECISION\nOption 1\ngm\nOption 2\nOption 3\nOption 4\nACTION MEMORANDUM\nWASHINGTON\nLOG NO.:\nDate:\nTime:\nOctober 28\n500pm\nFOR ACTION: Phil Buchen\nCC (for information): Jim Connor\nRobert Hartmann\nJack Marsh\nBrent Scowcroft\nAlan Greenspan\nBill Seidman\nJim Lynn\nFROM THE STAFF SECRETARY\nDUE: Date:\nNovember 10\nTime: 530pm\nSUBJECT:\nCompact of Permanent Union between\nPuerto Rico and the U.S.\nACTION REQUESTED:\nFor Necessary Action\nFor Your Recommendations\nPrepare Agenda and Brief\nDraft Reply\nX For Your Comments\nDraft Remarks\nREMARKS:\nplease return to judy johnston, ground floor west wing\nRecommend the following:\nThat the President (1) inform the Governor of Puerto\nRico (either the outgoing Governor or the incoming Governor,\nas appropriate) that he has serious problems with the\nproposed compact in its current form; and (2) direct OMB,\nin consultation with the Domestic Council and the National\nSecurity Council, to prepare a report indicating the nature\nof the Administration's objections for submission to the\n95th Congress in January.\nDo not recommend that we develop an alternative\nproposal to be submitted to Congress or that the President\nmeet with the new Governor of Puerto Rico to work out an\nalternative proposal\nPLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.\n11/11/76\nIf you have any questions or if you anticipate a\ndelay in submitting the required material, please\nJame Mr. Cadlion\nFor\nthe\ntelephone the Staff Secretary immediately.\nresident.\nTHE WHITE HOUSE\nACTION MEMORANDUM\nWASHINGTON\nLOG NO.:\nDate: October 28\nTime:\n500pm\nFOR ACTION: Phil Buchen\nCC (for information): Jim Connor\nRobert Hartmann\nJack Marsh\nBrent Scowcooft\nAlan Greenspan\nBill Seidman\nJim Lynn\nNC\nFROM THE STAFF SECRETARY\nDUE: Date:\nNovember 10\nTime: 530pm\nSUBJECT:\nCompact of Permanent Union between\nPuerto Rico and the U.S.\nACTION REQUESTED:\nFor Necessary Action\nFor Your Recommendations\nPrepare Agenda and Brief\nDraft Reply\nX For Your Comments\nDraft Remarks\nREMARKS:\nplease return to judy johnston, ground floor west wing\nCARED\nPLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.\nIf you have any questions or if you anticipate a\ndelay in submitting the required material, please\nK. R. COLE, JR.\ntelephone the Staff Secretary immediately.\nFor the President\nACTION MEMORANDUM\nWASHINGTON\nLOG NO.:\npm\nDate:\nTime:\nOctober 28\n500pm\nFOR ACTION: Phil Buchen\ncc (for information): Jim Connor\nRobert Hartmann\nJack Marsh\nBrent Scowcroft\nAlan Greenspan\nBill Seidman\nJim Lynn\nFROM THE STAFF SECRETARY\nDUE: Date:\nNovember 10\nTime: 530pm\nSUBJECT:\nCompact of Permanent Union between\nPuerto Rico and the U.S.\nACTION REQUESTED:\nFor Necessary Action\nFor Your Recommendations\nPrepare Agenda and Brief\nDraft Reply\nX For Your Comments\nDraft Remarks\nREMARKS:\nplease return to judy johnston, ground floor west wing\nMr. Hastmann should see\nap Option3 3 6 4\nBoth\nRTA\nPLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.\nIf you have any questions or if you anticipate a\ndelay in submitting the required material, please\nJusts Ms Cadlion\ntelephone the Staff Secretary immediately.\nFor the resident\nACTION MEMORANDUM\nWASHINGTON\nLOG NO.:\nDate:\nTime:\nOctober 28\n500pm\nFOR ACTION: Phil Buchen\ncc (for information): Jim Connor\nRobert Hartmann\nJack Marsh\nBrent Scowcroft\nAlan Greenspan\nBill Seidman\nJim Lynn\nFROM THE STAFF SECRETARY\nDUE: Date:\nNovember 10\nTime: 530pm\nSUBJECT:\nCompact of Permanent Union between\nPuerto Rico and the U.S.\nACTION REQUESTED:\nFor Necessary Action\nFor Your Recommendations\nPrepare Agenda and Brief\nDraft Reply\nX For Your Comments\nDraft Remarks\nREMARKS:\nplease return to judy johnston, ground floor west wing\nI\n6.\nno\npub\nGERALD\nPLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.\nIf you have any questions or if you anticipate a\ndelay in submitting the required material, please\nJames Mc Codition\ntelephone the Staff Secretary immediately.\nFor the resident\nMEMORANDUM\nTHE WHITE HOUSE\nWASHINGTON\nNovember 15, 1976\nLIMITED OFFICIAL USE\nMEMORANDUM FOR:\nJIM CANNON\nFROM:\nBRENT SCOWCROFT\nwafor\nSUBJECT:\nCompact of Permanent Union Between\nPuerto Rico and the United States\nI have the following comments regarding the proposed Compact:\n1. Although I understand that the President is required to submit\ncomments on the proposed Compact, many of the issues raised may\nnow be moot as a result of the recent election in Puerto Rico. That\nelection, at least in a vague way, was a mandate for statehood as\nopposed to some of the more-difficult-to-characterize thrusts of the\nproposed Compact. It appears highly likely that the new government\nin Puerto Rico would want to take a new look at this proposal.\n2. In light of these developments, I prefer Option 1.\n3. I agree that the proposed provisions on navigable waters are\nobjectionable. Serious questions of national security would be raised\nby acceptance of these proposals.\n4. Authorization for Puerto Rico to participate in international\norganizations and enter into international agreements in its own right\nlikewise would raise serious problems. The problem is not so much\ncomparability with the states, but rather with the proposed infringement\non the power and responsibility of the President, with the advice and\nconsent of the Senate, to conduct the foreign policy of the United States.\nAlthough commonwealth status is sui generis and would not necessarily\nneed to be parallel with or limited by the rights and responsibilities\nof the states in all respects, it does seem that the proposed derogation\nof the President's foreign policy power raises serious constitutional\nquestions as well as the obvious far-reaching practical ones.\nLIMITED OFFICIAL USE\nLIMITED OFFICIAL USE\n2\n5. Option 4, at least as presently stated, presents problems.\nWe are committed to grant independence to Puerto Rico should the\nPuerto Ricans opt for it. They have not done so. Option 4 seems\nto raise the possibility of cutting them adrift should we choose to do\nso. Nor do I believe that independence vs. statehood is \"the real\nissue\". The real issue is whether we can carry out the responsibilities\nthat we have assumed toward the people of Puerto Rico in a relationship\nthat does not fit within our present traditional framework but which is\ntailored specifically to the facts of the case and which will und oubtedly\nchange over time.\nAll of these considerations strongly suggest Option 1 as the most\nappropriate response at this time.\nLIMITED OFFICIAL USE\nMEMORANDUM\nTHE WHITE HOUSE\nWASHINGTON\nNovember 11, 1975\nMEMORANDUM FOR:\nJEANNE W. DAVIS\nNSC\nFROM:\nJAMES F. CONNOR\nSECRE TARY TO THE CABINET\nOn October 23rd the attachedmemorandum was sent to all the\nCabinet members, including Secretary Kissinger at State\nDepartment. We have received responses from all Cabinet\ndepartments except State Department. I checked with\nMr. Springsteen's office and they report that on October 30th\nState Department sent a response via the NSC to the\nattention of General Scowcroft. Could you please let me\nknow the status of this. Otherwise we will have to submit\nthe report to the President minus State Department's comments.\nThank you.\nencl.\nSee am response attached\nJohn\nTHE WHITE HOUS:\nWASHINGTON\nOctober 23, 1975\nMEMORANDUM FOR\nTHE CABINET\nSUBJECT:\nReport of the Ad Hoc Advisory Group\non Puerto Rico\nAttached is the report of the Ad Hoc Advisory Group on\nPuerto Rico entitled \"Compact of Permanent Union Between\nPuerto Rico and the United States. 11 Prior to submitting\nthe report to the President, it would be appreciated if\nwe could have the comments and recommendations\nof the Departments concerned.\nIt would be further appreciated if your comments could\nbe received by this office by close of business Thursday,\nH\nOctober 30, 1975.\nJAMES E. CONNOR\nSECRETARY TO THE CABINET\nAttachment\nMEMORANDUM\nNATIONAL SECURITY COUNCIL\n7095\nNovember 1, 1975\nMEMORANDUM FOR:\nJIM CONNOR\nFROM:\nJeanne W. Davi\nms\nSUBJECT:\nReport of Ad Hoc Advisory\nGroup on Puerto Rico\nIn response to your October 22 query, it is our understanding\nthat Jim Cannon has already acknowledged receipt of the report.\nAs you note, the formal Executive Branch response to the\nreport is being coordinated by Jim Falk and the NSC Staff.\n7095 - add-on\nMEMORANDUM\nNATIONAL SECURITY COUNCIL\nOctober 31, 1975\nMEMORANDUM FOR: JIM CAVANAUGH\nFROM:\nJEANNE W. DAVIS\nSUBJECT:\nReport of the Ad Hoc Advisory Group on\nPuerto Rico\nAttached are the Department of State's comments and recommendations\non the report of the Ad Hoc Advisory Group on Puerto Rico,\nresponding to Jim Connor's request to the various Departments and\nAgencies.\n7095 - add-on\nMEMORANDUM\nNATIONAL SECURITY COUNCIL\nOctober 31, 1975\nMEMORANDUM FOR: JIM CAVANAUGH\nFROM:\nJEANNE W. DAVIS\nane\nSUBJECT:\nReport of the Ad Hoc Advisory Group on\nPuerto Rico\nAttached are the Department of State's comments and recommendations\non the report of the Ad Hoc Advisory Group on Puerto Rico,\nresponding to Jim Connor's request to the various Departments and\nAgencies.\n7095 add-on\n7521399\nDEPARTMENT OF STATE\nWashington, D.C. 20520\nUNCLASSIFIED\nOctober 30, 1975\nMEMORANDUM FOR LIEUTENANT GENERAL BRENT SCOWCROFT\nTHE WHITE HOUSE\nSubject: Report of the Ad Hoc Advisory Group\non Puerto Rico\nThe Department was requested by memo of\nOctober 23, 1975 from Mr. James E. Connor to\nsubmit comments and recommendations on the\nReport of the Ad Hoc Advisory Group on Puerto\nRico entitled \"Compact of Permanent Union Between\nPuerto Rico and the United States.\" Our comments\nand recommendations are attached.\nGeorge S. Springsteen\nExecutive Secretary\nAttachment:\nAs Stated\nUNCLASSIFIED\nCOMMENTS AND RECOMMENDATIONS OF THE DEPARTMENT\nOF STATE ON THE REPORT OF THE AD HOC ADVISORY GROUP\nON PUERTO RICO ENTITLED \"COMPACT OF PERMANENT UNION\nBETWEEN PUERTO RICO AND THE UNITED STATES\"\nSections 2 (d), 9 (d), (e) and (f), and 10 of the\nproposed Compact are of particular interest to the\nDepartment of State. With certain differences these\nsections were included within the April 12 draft of\nthe Puerto Rican delegation to the Ad Hoc Advisory\nGroup, and the comments transmitted to Mr. Cook by the\nLegal Adviser on May 2, 1975 remain applicable.\nSection 2 (d) permits the participation of the\nFree Associated State of Puerto Rico in international\norganizations, as well as in certain types of agree-\nments with other countries. It is noted that the pro-\nvision requires for participation in international\norganizations a determination on a case-by-case basis\nby the President of the United States. The Department\nbelieves that such a requirement adequately protects\nthe responsibility of the Federal Government for the\nconduct of Puerto Rico's foreign relations in this\narea. We also note that past experience has demon-\nstrated the advisability of obtaining Congressional\nconcurrence for Puerto Rican membership in certain\ninternational organizations; nothing in Section 2 (d)\nwould prevent seeking such concurrence in the future.\nAs a general rule, the Department believes that agree-\nments with other countries should be concluded by the\nUnited States on behalf of, and with appropriate con-\nsideration of the interests of Puerto Rico or by\nPuerto Rico with the prior concurrence of the Department,\nand the Congress where appropriate, and recommends\nthat the text of the Compact so indicate. U.S. dele-\ngations concerned with negotiating such agreements\nwould, of course, include appropriate Puerto Rican\nrepresentation.\nSection 9 deals with Common Market and Trade\nCompact. Section 9 (d) of the Compact authorizes the\nFree Associated State to levy, increase, reduce or\neliminate U.S. tariffs and quotas on imports from\nforeign countries, in a manner consistent with the\ninternational obligations of the United States, and\nsubject to certain specified provisos. This provision\nwould nullify the commonality of tariff treatment cur-\nrently enjoyed by the United States and Puerto Rico,\n- 2 -\nwhich has heretofore been a cornerstone of the Common\nMarket concept. It would also permit actions contrary\nto the U.S. national interest as reflected in current\nU.S. quota or other import restraint programs (e.g.,\ntextiles). We assume that other interested agencies\n(i.e., Commerce, Treasury, STR, Agriculture and Labor)\nwill be commenting on these problems as well.\nWe, therefore, recommend that the language in\nSection 9 (d) regarding \"mutually agreeable procedures\"\nbe made sufficiently specific to avoid the problems\ncited above.\nSection 9 (e) would permit Puerto Rico to import\nfrom other countries materials and articles duty-free\nfor subsequent shipment and sale to other parts of\nthe U.S. Customs territory (again without paying U.S.\nduties) provided that the F.A.S. shipping price contains\nat least 35% value added in Puerto Rico. This pro-\nvision would authorize treatment similar to that\naccorded developing countries in the U.S. Generalized\nSystem of Preferences, but would not be subject to\nany of that program's controls or limitations. Thus,\nproducts excluded by law from our GSP would be eligible\nfor duty-free entry from Puerto Rico. A number of\nagencies (e.g., Commerce, Labor, STR, Agriculture,\nTreasury, Customs) will undoubtedly oppose this idea,\nand State also has reservations.\nSection 9 (f) includes, inter alia, three pro-\nvisions relating to the conduct of the Foreign Policy:\n1) It obligates the U.S., in international\ntrade negotiations, to take into account Puerto Rico's\nstate of economic development and to promote its interests\nby seeking the most favorable conditions for Puerto\nRico's exports;\n2) It accords observer status to Puerto Rico\nwithin U.S. negotiating delegations;\n3) It obligates the U.S., upon request and after\nconsultation and agreement, to seek for Puerto Rico\nacceptance as an associated developing state quali-\nfying to participate in benefits from systems of pre-\nferences for developing countries.\n- 3 -\nThe Department of State has no objection in\nprinciple to the provisions of this Subsection. How-\never, we would prefer to limit the scope of the langu-\nage concerning Puerto Rican participation in so-called\n\"negotiating delegations.\" Many such delegations are\nvery small and deal with technical aspects of trade.\nIn practice, it would be difficult to assure in every\ncase that representation of the Free Associated State\ncould be included. It is consequently recommended\nthat the wording of this provision be changed to:\n\"The U.S. shall accord the Free Associated\nState opportunity to participate, as part of\nU.S. delegations, in general trade negotiations,\nand in those specific trade negotiations where\nthe interests of the Free Associated State are\nsubstantial. Representatives of the Free\nAssociated State in such delegations shall be\nkept fully informed and shall be consulted con-\ncerning negotiating positions and decisions of\ninterest to them.'\nIn reference to the final point (seeking to ob-\ntain acceptance of Puerto Rico as an associated devel-\noping State), while the Department accepts in principle\nsuch a commitment, we must note for the record our\nopinion that other developed nations are unlikely to\ngrant generalized trade preferences to Puerto Rico\nunless they can be assured that goods from the United\nStates are not diverted through and exported as pro-\nducts of Puerto Rico.\nSection 10 of the Compact authorizes the President\nof the United States and the Governor of the Free\nAssociated State to make adjustments in the number of\naliens admitted to Puerto Rico. The Department has no\nobjection to the establishment of what is, in effect,\na separate immigration system for Puerto Rico. How-\never, the establishment of such a system will require\ncareful planning and, we believe, legislative modi-\nfication of the Immigration and Nationality Act, speci-\nfically the definition of the United States in Section\n101 (a) (38).\n- 4 -\nAs a final point for the record, the Department\nwishes to note that under existing arrangements the\nU.S. passport issuance function is currently admin-\nistered by the Governor of Puerto Rico. The Department\nsuggests that the practice should be examined with a\nview toward conformity with preferable Federal pro-\ncedures - such an examination could occur during the\nlegislative process attendant to the Compact, or at\na later time by and upon the establishment of the\nJoint Commission as envisaged in Section 14 of the\nCompact.\n10/29/75\nMEMORANDUM\nNATIONAL SECURITY COUNCIL\n7095\nNovember 1, 1975\nMEMORANDUM FOR:\nJIM CONNOR\nFROM:\nJeanne W. Davi\nand\nSUBJECT:\nReport of Ad Hoc Advisory\nGroup on Puerto Rico\nIn response to your October 22 query, it is our understanding\nthat Jim Cannon has already acknowledged receipt of the report.\nAs you note, the formal Executive Branch response to the\nreport is being coordinated by Jim Falk and the NSC Staff.\n*netso- Jand Fall will\nsend proposed Presidented\narknowledgment tomorrow\n11/3/75\nJune would like to reces all\nwellas 6 one orporate\ncomments prom Calumb as\ninto one repaiD to the Presided\nSen ONSED comments to Jam Falk 11/3\nNovember 12, 1975\nJim Falk -\nAttached are the comments received\nfrom the Department of Labor on the\nPuerto Rico Report.\nTrudy Fry\ncc: Steve Low\nOn 11/11/75 Jim Falk advised Eleanor Conn ors that copies of all comments\nshould go to both Steve Low & Jim Falk --- Jim Falk has given Steve the\nearlier reports received.\nU.S. DEPARTMENT OF LABOR\nOFFICE OF THE SECRETARY\nWASHINGTON\nNOV 10 1975\nMr. James E. Connor\nSecretary to the Cabinet\nThe White House\nWashington, D.C. 20500\nDear Mr. Connor:\nThis is in reply to your request of October 23, 1975\nfor my comments and recommendations on the report of\nthe Ad Hoc Advisory Group on Puerto Rico entitled\n\"Compact of Permanent Union between Puerto Rico and\nthe U.S.\"\nIn April 1975, I had a request to comment on the draft\nreport, from Marlow W. Cook, Co-chairman of the Ad Hoc\nAdvisory Group on Puerto Rico. A copy of my response\nof May 6 to Mr. Cook is enclosed. Except with respect\nto Section 2 of the Compact, the comments I made at\nthat time were not incorporated into the final report\nand several substantive concerns remain unanswered.\nFor these reasons I am unable to endorse the Compact\nin its present form.\nWe regret the delay in providing this information to\nyou.\nSincerely,\nSecretary of Labor\nEnclosure\nU.S. DEPARTMENT OF LABOR\nOFFICE OF THE SECRETARY\nWASHINGTON\nNOV 10 1075\nMr. James E. Connor\nSecretary to the Cabinet\nThe White House\nWashington, D.C. 20500\nDear Mr. Connor:\nThis is in reply to your request of October 23, 1975\nfor my comments and recommendations on the report of\nthe Ad Hoc Advisory Group on Puerto Rico entitled\n\"Compact of Permanent Union between Puerto Rico and\nthe U.S.\"\nIn April 1975, I had a request to comment on the draft\nreport, from Marlow W. Cook, Co-chairman of the Ad Hoc\nAdvisory Group on Puerto Rico. A copy of my response\nof May 6 to Mr. Cook is enclosed. Except with respect\nto Section 2 of the Compact, the comments I made at\nthat time were not incorporated into the final report\nand several substantive concerns remain unanswered.\nFor these reasons I am unable to endorse the Compact\nin its present form.\nWe regret the delay in providing this information to\nyou.\nSincerely,\nJohn T. Dunlon\nSecretary of Labor\nEnclosure\nLL-3\npay\n110-4\nMAY 6 1975\nMr. Narlow W. Cook\nCo-Chairman\nAd Red Advisory Group on\nPuerto Rica,\n1016 16th Street, N.W.\nWashington, D.C. 20036\nDear Mr. Cook:\nThis is in reply to your request for my comments on the\nproposed bill \"To Establish the Compact of Permanent\nUnion Between Puerto Rico and the United States.\"\nI am in general agreement with the underlying purpose of\nthe proposed compact which, if adopted, would establish\na permanent relationship between Puerto Rico and the United\nStates. However, I have serious reservations concerning\nseveral of the provisions and their effect upon rights of\nworkers in Puerto Rico.\nUNENPLOYMENT INSURANCE\nSections 4 (a) and 6 (b) of the proposed compact would have en\neffect upon the Federal unemployment insurance system of\nwhich Puerto Rico is a part. The Puerto Rican unemployment\ninsurance law is an approved law under the Federal Unemployment\nTax Act and meets the requirements of Title III of the Social\nSecurity Act. Puerto Rico qualifies in the same manner as\na state for purposes of the Federal-State unemployment\ninsurance system. It pays Federal-State extended benefits\nand is reimbursed 50 parcent of the cost of such benafits\nby the Federal Government. In addition, Puerto Rico is\neligible for Federal supplemental benefits payable under\nthe Emergency Unemployment Compensation Act of 1974 and\nadvance payment of benefits under Title III of the Social\nSecurity Act. Puerto Rico has, in fact, applied for an\nadvance of $10 million to pay benefits in April 1975.\nIt is not clear whether the proposed compact would prevent\nthe continuation of Puerto Rican participation in the\nFILE COPY FILE\nOffice of the Security\ninitials\n2\nFederal-State unemployment insurance system. The UI\nprogram is supported by a Federal tax payable by employers\nunder the Federal Unemployment Tax Act. Section 4 (a) of\nthe proposed compact which makes internal revanues laws\nof the United States inapplicable to Puerto Rico is\nqualified by section 6 (b). Section 6 (b) would preserve\nthe application of grant and loan programs ** a * to the\ncitizens of the United States residing in the Free\nAssociated State of Puerto Rico.\" The Federal Unemploy-\nment Tax Act, the keystone of state participation in the\nUI system, is not limited to a state or its citizens. It\napplies broadly to employers and employees in the United\nStates, irrespective of whether they are citizens. Further,\nsection 3304 (a) (9) (A) of the Act specifically precludes a\nstate from denying unemployment benefits to an otherwise\neligible individual solely because he is residing in or\nfiling his claim in another state or Canada. Accordingly,\nPuerto Rico might fail to qualify for Federal benefits.\nThe remainder of section 6 (b) and section 6 (c) and (d)\nare unclear as to whether the Free Associated State would\nassume full responsibility for collecting revenues to\nsupport programs such as unemployment insurance. No\ndecision has been made at this time as to what system of\ncontributory payments will be initiated and when it will\nbe initiated. It seems clear, however, that Puerto Rico\nis unable at the present time to support an unemployment\ninsurance program without Federal assistance. It would\nbe a tragic mistake to discontinue the flow of benefits\nto workers in Puerto Rico because of the failure of\nPuerto Rico to qualify under the Act.\nWORKER ADJUSTMENT ASSISTANCE\nSection 9 of the proposed compact would continue the\nfree flow of goods to and from the United States and\nPuerto Rico. Section (c), however, would require customs\nduties and other similar taxes to be paid into the Treasury\nof Puerto Rico. While we would defer to the Treasury\nDepartment with respect to substantive comments on this\nsection, we note that this would provide Puerto Rico with\npreferential treatment with regard to such tax collections\nnot available to the states at large. of importance to\nthe Department of Labor is section (d) which might preclude\nworkers in Puerto Rico from receiving worker adjustment\nassistance under the Trade Act of 1974.\n3\nSection 9 (d) would authorize Puerto Rico to impose,\nincrease, reduce or eliminate tariffs on finished\nproducts, semi-finished, agricultural or raw materials\nimported directly from foreign countries or transhipped\nthrough the United States. The Trade Act of 1974\nspecifies that in order for a group of workers to be\neligible for adjustment assistance, the increase of\nimports must contribute importantly to the required\nadverse effect of the workers and their employers.\nWhile this section of the Trade Act does not refer\nspecifically to tariff changes, the legislative history\nof the Act indicates that such assistance was deemed\nnecessary to offset the adverse effects on workers that\nmight result from the exercise of the trade negotiating\nauthority provided in the Act. If Puerto Rico is\nempowered to raise or lower tariffs unilaterally, the\nrights of adversely affected employees under the Trade\nAct would be nullified.\nENTRY OF ALIENS INTO PUERTO RICO\nSection 10 (a) of the proposed compact would enable the\nGovernment of Puerto Rico to limit the number of aliens\nor to increase the quota of resident aliens who may be\nadmitted to Puerto Rico with the concurrence of the\nPresident and the Government. I assume that since this\nis a separate section in the compact, any program affecting\naliens such as the Department of Labor's alien certification\nresponsibility would be considered under the immigration\nand naturalization laws rather than the general labor\nstatutes. With this understanding, I defer to the Bureau\nof Immigration and Naturalization for substantive comments\non this section. I would hope, however, that this\nsection would not be used to import lower paid workers\ninto Puerto Rico so as to deprive citizens of employment.\nTHE FAIR LABOR STANDARDS ACT AND RELATED ACTS\nSection 17 (a) of the proposed compact would effectively\nrevise the application of the Fair Labor Standards Act\nto Puerto Rico. It provides that the minimum wage in\nPuerto Rico should be equivalent to the minimum wage in\n4\nthe United States as soon as economically possible,\nbut reserves to Puerto Rico the authority to set the\nminimum wage and hours of work standards except for\nshipping and aviation and certain other enterprises.\nIn the most recent amendments to the Fair Labor\nStandards Act, the Congress set a schedule for the\neventual achievement of parity of minimum wage rates\nin Puerto Rico with those in the states. The amendments\nalso extended the applicable mainland rates for employees\nof restaurants and hotels, food service employees of\nretail or service establishments and employees of the\nFederal Government to such employees in Puerto Rico. As\na result of industry committee actions since the enactment\nof the 1974 amendments, a large number of workers in\nindustries in Puerto Rico are reaping the benefit of minimum\nwages close to those for state-side workers. While we\nrecognize the unique economic and employment situation\nexisting in many industries in Puerto Rico, we would none-\ntheless, be opposed to provisions which would adversely effect\nworkers in the Commonwealth.\nIt is not clear as to the meaning of those \"enterprises\nwhose products or services are sold or rendered substantially\nin the United States\" which would be subject to the Fair Labor\nStandards Act. If this category is intended to cover the\nso-called \"run-away shop,\" then it should be made clear that\nthis will include industries which, in one or more of their\noperations, compete substantially with their counterparts in\nthe states. For example, the clothing industry sells over\n50 percent of its output in Puerto Rico, but at the same time,\nbecause of wage and tax advantages, has virtually cornered\nthe market in military hats and caps.\nThe proposed language dealing with minimum wages and\nmaximum hours does not specifically refer to child labor,\nage discrimination and equal pay and thus may not relieve\nPuerto Rico employers from compliance with these requirements.\nIn fact, giving Puerto Rico \"exclusive jurisdiction over\nall matters pertaining to labor-management relations\"\nmay not be broad enough to exclude Puerto Rico from the\nprovisions of Title VII, ADEA and equal pay. However,\nif this provision was interpreted to exclude these\ncategories from FLSA or other coverage, then there would\nbe no protection for persons affected by the various acts at\npresent unless and until Puerto Rico enacted comparable laws.\nThis also should not preclude the application of existing Federal\n5\nlaws. The Department of Labor has fought for these\nGERALD\nissues for many years and, particularly in the case of\nchild labor, would be opposed to any provisions which\nwould abrogats these rights.\nSERVICE CONTRACT, PUBLIC CONTRACTS, CONTRACT WORK HOURS\nAND RELATED ACTS\nThe Service Contract Act, Walsh-Healey and the Contract\nWork Hours and Safety Standards Act do not apply to\ncontracts issued by the Government of Puerto Rico or its\nagencies. However, contracts issued by the United States\nto be performed in Puerto Rico for work on service contracts\nwould be affected by section 17(a) of the compact. To\neliminate this protection while not preserving the FLSA\nminimum otherwise specified in SCA could result in a\ndisastrous lowering of wages for some workers. Similarly,\nwage determinations under Walsh-Healey are not applicable\nto Puerto Rico, but are governed by FLSA or by a minimum\nestablished by industry committees. This protection\nfor workers will be lost with the adoption of the compact\nas now written.\nAlthough the Davis-Bacon Act is not applicable to Puerto\nRico, many of its related statutes, such as the National\nHousing Act, 12 U.S.C. 1715(c) contain labor standards\nthat apply directly to Puerto Rico. The labor standards\nin these related acts are aimed primarily at preventing\neconomic disruption of the economy of a locality by\ninsuring that local contracting firms are not subjected\nto unfair competition from outside the locality and pay\nwages which are substandard for the locality in which the\nFederal public works are to be constructed. The very\ndifficulties that Congress sought to remedy in 1931 with\nits enactment of the Davis-Bacon Act could occur in\nPuerto Rico.\nOCCUPATIONAL SAFETY AND HEALTH ACT\nSection 17(c) of the compact would reserve to Puerto\nRico exclusive jurisdiction over matters related to\noccupational safety and health. For Puerto Rico to ex-\nclude itself from coverage under the Occupational Safety\nand Health Act of 1970 without having an equally effective\nprogram in its place would constitute a grave disservice\n6\nto its workers. Section 18 of the Act provides a viable\nmeans under which Puerto Rico could administer its own\nprogram and obtain financial assistance from the Federal\nGovernment. Section 18 provides that a state would have\njurisdiction under its own law for any occupational and\nsafety issue in which no standard is in effect under\nsection 6 of the Act. A state can assume responsibility\nfor the development and enforcement of occupational safety\nand health standards where a Federal standard has been\npremulgated under section 6. Grants are made to thesstates\nunder section 23 (g) for the purpose of assisting it in\nadministering and enforcing programs for occupational\nsafety and health contained in state plans approved by\nthe Secretary of Labor pursuant to section 18. Thus, if\nthe Act applied to Puerto Rico, it would have the benefit\nof the Federal expertise developed by OSHA and NIOSH and,\nin addition, could receive 50 percent funding for the\nimplementation of its program from the United States.\nINTERNATIONAL LABOR ORGANIZATIONS\nSection 2 of the proposed compact recognizes the jurisdiction\nand authority of the United States to conduct foreign\naffairs. However, section 2 (e) proposes that Puerto Rico\nshall belong to international organizations and make\nunilateral non-political agreements with other countries.\nThe Department of State is charged with the conduct of\nforeign affairs on behalf of the United States, including\nparticipation in international organizations. By agreement\nwith the State Department, the Department of Labor partici-\npates in the formulation of policy with respect to the\nInternational Labor Organization. The no is an international\norganization which would be included in the proposal to\npermit independent membership by Puerto Rico.\nPuerto Rico's present inability to participate in inter-\nnational organizations relates to its status as neither an\nindependent nation nor a territory, (some international\norganizations permit territories to be admitted to member-\nship). ILO, however, has not adopted a system of \"associate\"\nmembership for states which cannot be admitted to full\nmembership. In the past, some political entities achieved\nfull membership in ILO before achieving full sovereignty,\nbut one of the requirements is that the entity must have\n7\nautonomy in labor matters. At the present time, Puerto\nRico does not have such autonomy. Even under the compact\nas it is proposed, Puerto Rico would not have autonomy\nover all aspects of labor matters related to Puerto Rico\nand thus would probably be excluded from membership in\nILO. While there are many areas in which international\norganizations operate in which it would be mntually\nadvantageous to Puerto Rico and the United States for\nPuerto Rico to participate, we would be opposed to such\nparticipation without the approval of the Executive Branch\nor the Congress.\nCONCLUSION\nThere are many other aspects of the proposed compact to\nwhich we would pose objections or request clarifications.\nSome of our objections are in areas not directly related\nto labor laws and I would defer to those agencies which\nhave a primary interest in the subject matter.\nI am most concerned, however, with the impact on workers\nin Puerto Rico if the Federal labor laws are abrogated.\nI feel that the compact as it now stands is ambivalent as\nto the position which Puerto Rico wishes to maintain in\nthis regard. It is my opinion that working men and women\nwill suffer irreparable harm should they be deprived of\nthe protection of Federal labor laws. Because of the many\ndeficiencies which I see in the compact in this respect,\nI cannot endorse it in its present form.\nSincerely,\nJohn T. Dunlop\n/\nSecretary of Labor\nPERSONALLY\nTHE SECY OF LABOR\nLLC: SPPetters:btr 4/28/75\nN2428, x38065\nRewritten:SPPetters:btr 5/2/75\n..\nNovember 17, 1975\nJim Falk -\nAttached are OMB's comments\non the Puerto Rico report. Missing\nare comments from Justice and\nDOT -- we are following on these.\nTrudy Fry\ncc: Steve Low\nWTM\nRESIDENT\nOFFICE\n&\nEXECUTIVE OFFICE OF THE PRESIDENT\nBECUTIVE\nUNITED\nOFFICE OF MANAGEMENT AND BUDGET\nSTATES\nWASHINGTON, D.C. 20503\nNOV 1 1 1975\nMEMORANDUM TO MR. JAMES E. CONNOR\nSecretary to the Cabinet\nFROM:\nDonald G. Ogilvie\nSUBJECT:\nOMB recommendations re Ad Hoc Group\nReport on Puerto Rico\nThis is in response to your October 23 request for comments\nand recommendations concerning the report of the Ad Hoc\nAdvisory Group on Puerto Rico entitled, \"Compact of\nPermanent Union between Puerto Rico and the U.S.\" We pre-\nviously had notified you we would need some additional time\nbeyond your deadline of October 30 for comments and recommen-\ndations. The following comments and recommendations are an\ninterim response to your request. They indicate a number of\nmajor policy questions which should be answered before the\nreport of Ad Hoc Group is submitted to the President.\nWe would note, at the outset, that in contrast to the\nextensive interagency review and coordination on questions\nconcerning possible changes in the political status of the\nTrust Territory and Guam, OMB was not requested to provide\nits views on this proposed compact at any previous time.\nIn fact, we question whether there has been any coordinated\nFederal agency involvement in the preparation of the proposed\nnew compact. If there had been such involvement by OMB, many\nof the questions outlined below could have been addressed and\nresolved at a much earlier point of time.\nWe believe this proposed compact should be given very\ndeliberate consideration both because (1) it is proposed as\na substitute for the present Federal Relations Act which\ndefines the political, fiscal, national security and other\nfundamental relations between the U.S. and Puerto Rico and\n2\n(2) if recommended by the Executive Branch it would set\nnumerous precedents which would have direct effects in\nongoing negotiations with the Trust Territory of the\nPacific Islands and the soon to be commenced discussions\nwith the U.S. Territory of Guam. Further, transmission\nto the Congress of any recommendations for the revision\nof the present relations between the Federal Government\nand Puerto Rico inevitably will provoke comparisons with\nthe Administration's proposed compact to establish a\nCommonwealth of the Northern Mariana Islands in the\nWestern Pacific.\nWe have only had time to make a quick review of the report\nwithout the benefit of the views of other agencies. However,\neven this quick look indicates at least the following major\npolicy questions:\n1. Why should the Administration agree to the proposal to\nextend to the citizens of Puerto Rico the right to vote\nfor the President and the Vice President of the U.S.?\nUnder the present Federal law, citizens of Puerto Rico\ngenerally are not required to pay Federal income or other\ntaxes. The same situation exists in Guam, the Virgin\nIslands, American Samoa, and is proposed for the Common-\nwealth of the Northern Mariana Islands.\nThe Ad Hoc Group proposes that this exemption from\nFederal taxes be maintained but that the citizens of\nPuerto Rico be granted the right to vote for the\nPresident and Vice President. If this right were\nto be extended to them, it would raise the issue of\nextending that same right to U.S. citizens in the\nother named areas.\n2. Why should the Administration agree to the proposed\nacceptance of a new, novel, term in American political\nrelations (\"Free Associated State\") to re-define Puerto\nRico's status?\nIf that term were accepted for Puerto Rico, could it\nalso be applied to Guam, the Virgin Islands, American\nSamoa, or the Northern Mariana Islands?\n3\n3. Why should the Administration agree to the proposed\nauthority for the Free Associated State to participate\nin International Organizations?\nThis is a proposal which has direct and immediate significance\nfor proposals now under active consideration in the Executive\nBranch pertaining to requests by both Guam and the Trust\nTerritory of the Pacific Islands to participate in Inter-\nnational Organizations. The policy up until now for both\nthese latter areas has been to oppose such participation.\n4. Why should the Administration agree to the proposal that\nPuerto Rico\n\"\nwould levy, increase, reduce, or\neliminate tariffs and quotas on articles imported\ndirectly from foreign countries or transshipped through\nthe United States \" after prior consultation and coordination\nwith Federal authorities?\nOnce again, similar proposals are certain to be advanced by\nthe other named areas.\n5. Why should the Administration agree to the proposal to provide\nnew authority under which Puerto Rico could import materials\nand articles duty free for subsequent shipment or sale to\nother parts of the United States customs territory provided\nthe F.A.S. (free at side) shipping price includes at least\n33% value added in Puerto Rico?\nGuam and the Virgin Islands (but not Puerto Rico) under\ncurrent law can make such duty-free imports provided F.A.S.\nprice includes at least 50% value added in those areas\n(except for watches and watch movements for which recent\nlegislation reduced the valued added requirement to only\n30%).\n6. Why should the Administration agree to the proposal that\nPuerto Rico be represented in the U.S. Congress by one\nrepresentative in the House of Representatives and one\nrepresentative in the Senate?\nAt present, Puerto Rico, Guam and the Virgin Islands\nand the District of Columbia each has only one represenative\nto the House.\nFORD LIBRARY\n4\n7. Why should the Administration agree to the proposal\nthat Puerto Rico would have the privilege to submit\nobjections to the applicability to Puerto Rico of\nproposed bills or Federal rules, regulations, or\norders before they are enacted or take final effect\nand if such objections are raised to require specific\nactions on them to determine whether the inclusion of\nPuerto Rico is essential and also whether it would be\ncompatible with this proposed compact?\nOnce again, comparable proposals by the other areas are\nlikely to be requested if this proposal is accepted.\n8. Why should the Administration agree to the proposal\nthat Puerto Rico would have exclusive jurisdiction over\nall matters pertaining to minimum wages and working\nhours, except for the shipping and aviation industries,\nwhich would continue to be covered by appropriate Federal\nlaws?\nOnce again, we question whether this is a desirable\nprecedent.\nWe believe the following steps need to be taken in reviewing\nthe report and recommendations concerning Puerto Rico:\n1. that the views provided to you by the Cabinet\nR.\nagencies be transmitted to OMB;\nFORD\n2. that OMB request the views on the report of other\nGERALD\nFederal agencies not represented in the Cabinet;\nLIBRARY\n3. that OMB obtain estimates from all agencies of the\npotential impacts on the Federal budget of the\nproposed compact;\n4. that OMB work with the Office of Micronesian Status\nNegotiations and the Department of the Interior to\ndevelop a comparative analysis of the provisions of\n(1) this proposed compact; (2) the proposed Commonwealth\nof the Northern Mariana Islands; (3) the recommendations\npreviously approved by the President for proposed changes\nin Guam's future political status; and (4) the present\nnegotiating instructions for Ambassador Williams with\nregard to the five districts of the Trust Territory not\nincluded in the Northern Mariana Islands Commonwealth\nproposal.\n5\nBased on these views, facts and analyses we could identify\nany other major policy questions as well as work to resolve\nthe policy questions identified above which the Ad Hoc\nAdvisory Group's recommendations raise. Realistically,\nit will take several weeks to complete this kind of effort.\nHowever, we believe such a review could be completed in time\nto determine whether or not to transmit the Ad Hoc Group\nrecommendations to the Congress early in the next session.\nWe strongly recommend that the Report of the Ad Hoc Advisory\nGroup on Puerto Rico be given very deliberate consideration\nbefore the President makes any decision about whether or not\nto transmit it to the Congress because the proposed compact\nwhich it contains would fundamentally re-write the existing\nFederal Relations Act for Puerto Rico.\nLIBRARY\nEXECUTIVE OFFICE OF THE PRESIDENT\nOFFICE OF MANAGEMENT AND BUDGET\nWASHINGTON, D.C. 20503\nNOV 14 1575\nMEMORANDUM TO MR. JAMES E. CONNOR\nFORD\nSecretary to the Cabinet\nFROM:\nDonald G. Ogilvie\n(Signed) Don\nLIBRARY\nSUBJECT:\nOMB recommendations re Ad Hoc Group\nReport on Puerto Rico\nThis is in response to your October 23 request for comments\nand recommendations concerning the report of the Ad Hoc\nAdvisory Group on Puerto Rico entitled, \"Compact of\nPermanent Union between Puerto Rico and the U.S.\" We pre-\nviously had notified you we would need some additional time\nbeyond your deadline of October 30 for comments and recommen-\ndations. The following comments and recommendations are an\ninterim response to your request. They indicate a number of\nmajor policy questions which should be answered before the\nreport of Ad Hoc Group is submitted to the President.\nWe would note, at the outset, that in contrast to the\nextensive interagency review and coordination on questions\nconcerning possible changes in the political status of the\nTrust Territory and Guam, OMB was not requested to provide\nits views on this proposed compact at any previous time.\nIn fact, we question whether there has been any coordinated\nFederal agency involvement in the preparation of the proposed\nnew compact. If there had been such involvement by OMB, many\nof the questions outlined below could have been addressed and\nresolved at a much earlier point of time.\nWe believe this proposed compact should be given very\ndeliberate consideration both because (1) it is proposed as\na substitute for the present Federal Relations Act which\ndefines the political, fiscal, national security and other\nfundamental relations between the U.S. and Puerto Rico and\n2\n(2) if recommended by the Executive Branch it would set\nnumerous precedents which would have direct effects in\nongoing negotiations with the Trust Territory of the\nPacific Islands and the soon to be commenced discussions\nwith the U.S. Territory of Guam. Further, transmission\nto the Congress of any recommendations for the revision\nof the present relations between the Federal Government\nand Puerto Rico inevitably will provoke comparisons with\nthe Administration's proposed compact to establish a\nCommonwealth of the Northern Mariana Islands in the\nWestern Pacific.\nWe have only had time to make a quick review of the report\nwithout the benefit of the views of other agencies. However,\neven this quick look indicates at least the following major\npolicy questions:\n1. Why should the Administration agree to the proposal to\nextend to the citizens of Puerto Rico the right to vote\nfor the President and the Vice President of the U.S.?\nUnder the present Federal law, citizens of Puerto Rico\ngenerally are not required to pay Federal income or other\ntaxes. The same situation exists in Guam, the Virgin\nIslands, American Samoa, and is proposed for the Common-\nwealth of the Northern Mariana Islands.\nThe Ad Hoc Group proposes that this exemption from\nFederal taxes be maintained but that the citizens of\nPuerto Rico be granted the right to vote for the\nPresident and Vice President. If this right were\nto be extended to them, it would raise the issue of\nextending that same right to U.S. citizens in the\nother named areas.\n2. Why should the Administration agree to the proposed\nacceptance of a new, novel, term in American political\nrelations (\"Free Associated State\") to re-define Puerto\nRico's status?\nIf that term were accepted for Puerto Rico, could it\nalso be applied to Guam, the Virgin Islands, American\nSamoa, or the Northern Mariana Islands?\nFORD\nLIBRARY\n3\n3.\nWhy should the Administration agree to the proposed\nauthority for the Free Associated State to participate\nin International Organizations?\nThis is a proposal which has direct and immediate significance\nfor proposals now under active consideration in the Executive\nBranch pertaining to requests by both Guam and the Trust\nTerritory of the Pacific Islands to participate in Inter-\nnational Organizations. The policy up until now for both\nthese latter areas has been to oppose such participation.\n4. Why should the Administration agree to the proposal that\nPuerto Rico \"\nwould levy, increase, reduce, or\neliminate tariffs and quotas on articles imported\ndirectly from foreign countries or transshipped through\nthe United States \" after prior consultation and coordination\nwith Federal authorities?\nOnce again, similar proposals are certain to be advanced by\nthe other named areas.\n5. Why should the Administration agree to the proposal to provide\nnew authority under which Puerto Rico could import materials\nand articles duty free for subsequent shipment or sale to\nother parts of the United States customs territory provided\nthe F.A.S. (free at side) shipping price includes at least\n33% value added in Puerto Rico?\nGuam and the Virgin Islands (but not Puerto Rico) under\ncurrent law can make such duty-free imports provided F.A.S.\nprice includes at least 50% value added in those areas\n(except for watches and watch movements for which recent\nlegislation reduced the valued added requirement to only\nFORD\n30%).\n6. Why should the Administration agree to the proposal that\nLIBRARY\nPuerto Rico be represented in the U.S. Congress by one\nrepresentative in the House of Representatives and one\nrepresentative in the Senate?\nAt present, Puerto Rico, Guam and the Virgin Islands\nand the District of Columbia each has only one represenative\nto the House.\n4\n7.\nWhy should the Administration agree to the proposal\nthat Puerto Rico would have the privilege to submit\nobjections to the applicability to Puerto Rico of\nproposed bills or Federal rules, regulations, or\norders before they are enacted or take final effect\nand if such objections are raised to require specific\nactions on them to determine whether the inclusion of\nPuerto Rico is essential and also whether it would be\ncompatible with this proposed compact?\nOnce again, comparable proposals by the other areas are\nlikely to be requested if this proposal is accepted.\n8. Why should the Administration agree to the proposal\nthat Puerto Rico would have exclusive jurisdiction over\nall matters pertaining to minimum wages and working\nhours, except for the shipping and aviation industries,\nwhich would continue to be covered by appropriate Federal\nlaws?\nOnce again, we question whether this is a desirable\nprecedent.\nWe believe the following steps need to be taken in reviewing\nthe report and recommendations concerning Puerto Rico:\n1. that the views provided to you by the Cabinet\nagencies be transmitted to oMB;\n2. that OMB request the views on the report of other\nFederal agencies not represented in the Cabinet;\n3. that OMB obtain estimates from all agencies of the\npotential impacts on the Federal budget of the\nproposed compact;\n4. that OMB work with the Office of Micronesian Status\nNegotiations and the Department of the Interior to\ndevelop a comparative analysis of the provisions of\n(1) this proposed compact; (2) the proposed Commonwealth\nof the Northern Mariana Islands; (3) the recommendations\npreviously approved by the President for proposed changes\nin Guam's future political status; and (4) the present\nnegotiating instructions for Ambassador Williams with\nregard to the five districts of the Trust Territory not\nincluded in the Northern Mariana Islands Commonwealth\nproposal.\n5\nBased on these views, facts and analyses we could identify\nany other major policy questions as well as work to resolve\nthe policy questions identified above which the Ad Hoc\nAdvisory Group's recommendations raise. Realistically,\nit will take several weeks to complete this kind of effort.\nHowever, we believe such a review could be completed in time\nto determine whether or not to transmit the Ad Hoc Group\nrecommendations to the Congress early in the next session.\nWe strongly recommend that the Report of the Ad Hoc Advisory\nGroup on Puerto Rico be given very deliberate consideration\nbefore the President makes any decision about whether or not\nto transmit it to the Congress because the proposed compact\nwhich it contains would fundamentally re-write the existing\nFederal Relations Act for Puerto Rico.\nLIBRARY"
}