SAN JUAN, PUERTO RICO -- The truck lurched forward into the warm mid-December night, its six huge speakers blaring a Puerto Rican Christmas carol with a bamba beat and a distinctly political message.

"The Son of Heaven was born in Bethlehem and Carlos Romero was born in Borinquen," sang the six-member band in praise of the white-haired man who was waving and tossing Christmas candies to children along the route.

"Arriba el caballo!" shouted one of the onlookers to Carlos Romero Barcelo, 57, the island's former governor. Nicknamed el caballo, the horse, for his tireless campaigning to make this impoverished island of 3.6 million into the nation's 51st state, he was on the road again to convince Puerto Ricans that statehood is the key to their future.

After 92 years under the U.S. flag, Puerto Rico appears closer than ever before to resolving its status. The U.S. House of Representatives, President Bush and all three of the island's major political parties have endorsed legislation that would allow Puerto Ricans to vote on whether to remain a semi-autonomous U.S. commonwealth or seek statehood or independence.

Statehood seems to be the leading choice, according to most polls and many politicians here. "I like everything like the other states. I like the American people," said Angel Sanchez, a 39-year-old restaurant worker who joined Romero Barcelo's Christmas caravan in a small mountain town.

Sanchez, who lived in Rochester, N.Y., for five years before returning home, drew a sharp distinction between his island and the others in the Caribbean. "We don't want to be like Cuba or Santo Domingo," the capital of the nearby Dominican Republic. "If we be like Santo Domingo, we be poor."

His comments, in broken English, mirrored the political paradox of Puerto Rico, an island that pledges loyalty to the U.S. flag while it boasts, almost defiantly, of its 500-year-old Hispanic tradition.

Supporters of continuing the island's commonwealth status say that a state where fewer than 1 in 5 people can speak English with ease would be condemned to become an "American Quebec," resisting efforts to blend into a larger, more heterogeneous nation.

Give up Spanish? "There is no such thing as surrendering Spanish," snapped Romero Barcelo, reflecting a raw nerve in the current debate. "Am I to tell a mother she cannot sing a lullaby to her child in Spanish?

" . . . The nation doesn't need another state that speaks English," he said. "A state that speaks Spanish would help the nation."

Language is a key issue affecting statehood, but clearly not the only issue. With a per capita income of $5,673 in 1988 -- half that of the poorest state, Mississippi -- Puerto Rico as the 51st U.S. state would be entitled to massive amounts of federal aid. Fully 60 percent of the island's population lives in what the federal government classifies as poverty.

Yet by Caribbean standards, Puerto Rico is an economic paradise. The island already receives generous U.S. tax benefits and more than $6 billion a year in federal funds. With 1.6 million cars jammed into a space two-thirds the size of Connecticut, and Big Macs competing with beans and rice as the island's staple, Puerto Rico is far more prosperous than most of its Latin neighbors.

Many politicians here agree that statehood probably would win a "status" referendum if it were held now. Thanks to support from Bush and the widespread belief that statehood would funnel billions of dollars more in federal aid to Puerto Rico, Romero Barcelo's campaign has placed backers of the island's current commonwealth status on the defensive.

"The fight for statehood is a fight for equal rights," he argued during a break in his holiday campaigning. "The Congress has given equal rights to the blacks. We should have as much rights as the blacks, shouldn't we?

"The only nation in America that has a colony is the United States," he said. Statehood is at once an economic, diplomatic and moral solution for the island, he said.

Not only would Puerto Rico become the first state in the union to have a Spanish-speaking majority, but statehood backers point out that it would have a large voice in Washington, with two senators and six or seven members of the House. Census Bureau officials say it would rank about 24th in population, between Kentucky and Arizona.

It is the financial argument for statehood that thousands of people here find compelling. Many would suddenly get between $300 and $400 a month more in federal welfare payments under statehood, which would automatically remove many of the current limits Congress has imposed on welfare programs on the island.

"Statehood is for the poor," Romero Barcelo has written, contending the higher federal payments -- as much as $3.2 billion a year by some estimates -- would boost Puerto Rico to a new level of prosperity. Statehood advocates promise that new tourism in what Romero Barcelo calls "the frontier state" would add 100,000 jobs.

But others, including current Gov. Rafael Hernandez Colon, a longtime adversary of Romero Barcelo, contend that statehood would spell economic disaster for Puerto Rico. Businesses and individuals here currently are exempt from paying federal income taxes. Loss of this exemption, Hernandez Colon said, would take away "the engine that keeps our economy running."

The departure of the more than 600 industries lured here by the tax breaks, he said, would leave Puerto Rico "a tropical South Bronx."

"It would condemn us to be a Caribbean ghetto," said Jose R. Gonzalez, branch manager of First Boston Corp., an investment banker and a former Hernandez Colon adviser. Without industry, the state of Puerto Rico would become a permanent drain on the U.S. Treasury with little hope of achieving the economic prosperity of the mainland, he said.

Studies conducted by Fomento, the island's economic development agency, show that even under the best of circumstances it could take 50 years for Puerto Rico to catch up with Mississippi. "In other words, we do not have the money to join the country club and pay the monthly dues," said Gonzalez. "Let's face it, the United States is a rich man's club."

Fomento director Alfredo Salazar said many of the island's 160,000 manufacturing jobs could be on the line under statehood. Denied the tax advantages that lured them to Puerto Rico, the industries will flee to Ireland, Singapore and other low-tax nations, he fears. "They're not going to stay here, for the love of God," he said.

Statehood forces counter that every state made economic progress after joining the union. As a state, Puerto Rico would become "co-owners of the riches of the nation," says a statehood booklet. "The petroleum of Texas will become part of our patrimony, as will the nickel of Arizona."

Thus far, the major companies have been silent on what they would do under statehood. "But they haven't been silent on Wall Street," said Jose M. Berrocal, a counselor to the governor. Berrocal said the companies are telling financial analysts they'll move elsewhere.

Until two years ago, the prospect of statehood was unimaginable to most of the island's political leaders. Commonwealth, the semi-autonomous status decreed by Congress and endorsed by voters here in 1952, consistently had led in the polls. Independentistas, the sometimes violent advocates of independence, typically have drawn no more than 5 percent of the vote.

Then, stung by his narrow reelection in a 1988 race that turned on charges he secretly favored independence, Hernandez Colon declared in his January 1989 inaugural address that it was time for the island's political status to be resolved "once and for all," and called on Congress to authorize a plebiscite.

Many of his Popular Democratic Party's own leaders were shocked by the decision, believing what Hernandez Colon had often declared -- that "status was not an issue." In an interview at La Fortaleza, the 450-year-old Spanish fort that serves as his executive mansion, the governor said he was shaken by the bitter statehood campaign that had portrayed him as favoring formation of a Puerto Rican "republic."

One statehood television ad showed a Puerto Rican's U.S. passport being ripped apart; another showed an American flag being lowered to the sound of taps. The ads seemed to threaten some of the most cherished benefits that Puerto Ricans long have enjoyed under their current status.

Residents here have held U.S. citizenship since 1917, and have been drafted for its wars. Virtually all U.S. laws apply here and the island, like the District of Columbia, has a single non-voting delegate in Congress. Unlike District residents, however, Puerto Ricans cannot vote for president.

"Status" has dominated Puerto Rico's politics since the days when it was a Spanish colony. "This issue at stake is our identification as a people, as a nation . . . and where, in the balance, we do stand," said Luis E. Agrait, a professor of Latin American politics at the University of Puerto Rico.

The first plebiscite on the issue was held in 1967, when 60.4 percent voted for continuing commonwealth status and 38.9 percent for statehood, with independence forces boycotting the vote.

But resulting legislation that would have given the island increased autonomy under commonwealth status died in Congress. Statehood forces won the next gubernatorial election and began pushing their agenda.

Hernandez Colon says he is hopeful that Congress will approve referendum legislation early next year. But his advisers are not so sanguine, citing sharp differences between the House and Senate referendum bills, and questioning whether Washington is ready to act on a potentially costly issue that has drawn little attention on the mainland.

The House endorsed a referendum proposal without dissent earlier this year only to have the issue die in the Senate. Sen. J. Bennett Johnston (D-La.), chairman of the Senate committee with jurisdiction over territorial issues, hopes to win passage of legislation that would allow a referendum late in 1991.

Despite the massive lobbying campaign the Puerto Rican government and political parties have launched to sell Congress on the issue -- spending what one island official estimated at more than $7 million this year -- many congressional aides in Washington and political leaders here speak skeptically of the legislation's prospects in the Senate.

"You talk to them privately and the votes are just not there," said Jose Trias-Monge, the retired chief justice of the Puerto Rican Supreme Court and a leading intellectual.

The delay in Congress has put Hernandez Colon on the defensive, and he acknowledged that his own political base is "crumbling" amid charges he is neglecting the island's problems.

Crime, fed by drugs, a lack of affordable housing and a 14.6 percent unemployment rate, is soaring. The dream of every Puerto Rican laborer may be to have a small, whitewashed concrete-block house, but burglaries have become so widespread that even the homes being built in mountain villages come complete with barred windows and gates.

Homicides on the island hit 579 as of last week compared to 467 in all of last year and robberies spilled into San Juan's tourist areas, with two gunmen taking $42,000 from a major hotel and a police officer killing a suspect fleeing from a jewelry store in Old San Juan. The U.S. Postal Service stunned many by stopping mail deliveries to a large housing project in suburban Bayamon, saying it was unsafe for letter carriers to enter the project.

If the referendum does occur, the governor said it will force island residents to reexamine Puerto Rico's identity.

"You have to think of us as one of the most overpopulated countries in the world. We have no natural resources, very little land for very many people," Hernandez Colon said. "We have a cultural and a historical identity unlike any state. We're more like Costa Rica than Georgia. We are a Latin American people . . . one of the countries established by Spain. At the same time, we cherish our ties to the United States and we're irrevocably bound to the United States."


Population: 3.6 million.*

Language: Spanish. 19% speak English with ease, 23% with difficulty and 58% are unable to speak English.

Politics: Popular Democratic Party favors current status, New Progressive Party favors statehood, Puerto Rican Independence Party, favors independence.

Per Capita Income: $5,673 (1988)

Unemployment: 14.6%

*Does not include an estimated 2.5 million Puerto Ricans living in the 50 states.

SOURCE: Puerto Rico Governor's Office.