Sanders Statement Opposing Puerto Rico Bill

WASHINGTON, June 29 – Sen. Bernie Sanders issued the following statement opposing the Puerto Rico Oversight, Management, and Economic Stability Act:

“This is a terrible piece of legislation, setting horrific precedent and must not be passed. The United States of America should not treat Puerto Rico like a colony.

“We cannot and must not take away the democratic rights of the 3.5 million Americans of Puerto Rico and give virtually all power on the island to a seven-member control board which, will be dominated by four Republicans. This legislation strips away the most important powers of the governor of Puerto Rico, the legislature of Puerto Rico and the municipal governments of Puerto Rico. We must not allow that to happen. That is not what the United States is about, and that is not how we should treat a territory of the United States. In the year 2016, the United States must not become a colonial master.

“Any decisions that are made regarding the future of Puerto Rico must be made by the people of Puerto Rico and their elected representatives. But this legislation is not just about taking away the democratic rights of the people of Puerto Rico. It is about punishing them politically.

“Since 2006, Puerto Rico has been in the midst of a major economic depression. In the last 10 years, Puerto Rico has lost 20 percent of its jobs. About 60 percent of Puerto Rico’s adult population are either unemployed or have given up looking for work.

“In the last five years alone, more than 150 public schools have been shut down, and the childhood poverty rate has shot up to 58 percent. There is now a mass migration of professionals out of Puerto Rico to the mainland because there is simply no work on the island.

“In the midst of this human suffering and economic turmoil, it is morally repugnant that billionaire hedge fund managers on Wall Street are demanding that Puerto Rico fire teachers, close schools, cut pensions and lower the minimum wage so that they can reap huge profits off the suffering and misery of people on the island.

“We have got to understand that Puerto Rico’s $70 billion in debt is unsustainable and unpayable. That’s just a fact. You cannot get blood out of a stone.

“And the reason it is unpayable has a lot to do with the greed of Wall Street vulture funds. In recent years, vulture funds have purchased a significant amount of Puerto Rico’s debt. In fact, it has   been estimated that more than one-third of Puerto Rico’s debt is owned by these vulture funds, who are getting interest rates of up to 34 percent on tax-exempt bonds that they purchased for as little as 29 cents on the dollar.  

“Let’s be clear, this issue is a significant part of what this entire debate is about – billionaire hedge fund managers who purchased Puerto Rican bonds for pennies on the dollar, now want a 100 percent return on their investment while children in Puerto Rico go hungry. That is morally unacceptable.

“Now, it is bad enough for Republicans to write legislation that takes away the democratic rights of U.S. citizens living in Puerto Rico. But, adding insult to injury, this legislation does something even more insulting.  At a time when health, education and nutrition programs will likely be cut, this legislation requires the taxpayers of Puerto Rico to pay for it at an unbelievable sum of $370 million to fund this control board. Let me repeat, this legislation will cost the taxpayers of Puerto Rico $370 million, according to the Congressional Budget Office. How many more schools will Puerto Rico be forced to close to pay for this? How much further will pensions be cut? How many more people will be thrown into poverty to pay for this unelected control board in Puerto Rico?  

“Puerto Rico must be given the time it needs to grow its economy, create jobs, reduce the poverty rate and expand its tax base so that it can pay back its debt in a way that is fair and that is just.

“In my view, we need austerity, not for the people of Puerto Rico, but for billionaire Wall Street hedge fund managers who have exacerbated the financial crisis in Puerto Rico. We must tell them loudly and clearly that they cannot get everything they want while workers in Puerto Rico have no jobs, education programs are cut and children go hungry.

“I am very disappointed that this important legislation is being pushed through Congress without allowing any amendments. That is not the way business should be done here in the Senate. If allowed, I would offer an amendment in the form of legislation that I have introduced, which would allow Puerto Rico’s debt to be restructured through the creation of a Reconstruction Finance Corporation.

“Let us never forget that in 2008, when Wall Street’s greed, recklessness and illegal behavior nearly destroyed our economy, the Federal Reserve provided $16 trillion in virtually zero-interest loans to every major financial institution in this country as well as central banks and corporations throughout the world in their time of need.

“Well, if the Federal Reserve and the Treasury Department could move quickly to stabilize our economy and global markets in 2008, we can surely help the 3.5 million American citizens in Puerto Rico who are suffering today.

“The Fed can and should provide low-interest loans to Puerto Rico and facilitate an orderly restructuring of Puerto Rico’s debt.

“This legislation is both a political and economic disaster for the people of Puerto Rico.  This legislation takes away their democratic rights and self-governance, and will impose harsh austerity measures, which will make the poor in Puerto Rico even poorer.  This is legislation should not be passed by the United States Congress.”

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