Per the OMB guidelines located here, hispanic is considered an ethnicity:
http://www.whitehouse.gov/omb/fedreg_directive_15
The WH is making this up out of whole cloth, and I can’t believe that anyone at FR would cite them as a source.
Because guess what, Argentinians don’t think they are in any kind of category with Mexicans, Guatamalans or Puerto Ricans. And that goes three ways back at them.