Bernie Sanders Speaks on Need for Puerto Rico Fiscal Restructuring, Not Litigation

In response to the first lawsuits from Puerto Rico’s creditors, Sen. Bernie Sanders’ Latino outreach director Arturo Carmona released a statement from Sanders.

“It is unacceptable that Wall Street vulture funds have chosen to take Puerto Rico to court instead of working out a fair deal,” the statement began. “Puerto Rico must be given the time it needs to restructure its debt and grow its economy.”

Recent hearings on Puerto Rico’s debt crisis have repeatedly included statements by experts reaffirming that Puerto Rico’s financial problems are real and will require some real help in order to avoid severe consequences for the people of Puerto Rico, and for the economy in the long run.

“Vulture funds on Wall Street must understand that they cannot profit from this crisis while Puerto Rico suffers high unemployment rates, struggles to rebuild its economy and children go hungry,” the Sanders statement continued. “Congress must act immediately.”

Sanders pointed out that States have the option to allow their municipalities to restructure debt “under the supervision of a bankruptcy court” rather than by suffering under multiple lawsuits from creditors. Puerto Rico had this option, too, until 1984, when updates in the law resulted in Puerto Rico’s exclusion from chapter 9 protection.

This is not the first time that Sanders has spoken up on the topic of Puerto Rico. In July of 2015, when he cosponsored the Puerto Rico Chapter 9 Uniformity Act of 2015, he said, “I strongly believe Puerto Rico should be afforded the same bankruptcy protections that exist for municipalities across the United States.  We need to do everything we can to allow Puerto Rico to restructure its debt in a rational way that does not harm its people, ordinary investors or pension funds in the United States. Chapter 9 protections would be a good first step.”

Sanders went on at that time to say, “But we also should recognize that the reason Puerto Rico has such unsustainable debt has everything to do with the policies of austerity and the greed of large financial institutions.”

Sanders also wrote a letter to Treasury Secretary Jack Lew in October, 2015, demanding action on the part of the federal government:

• No more austerity:  “The economic situation in Puerto Rico will not improve by eliminating more public schools, slashing pensions, laying off workers, and allowing corporations to pay starvation wages by suspending the minimum wage and relaxing labor laws.”
• Audit the debt:  “[T]here needs to be an independent and transparent audit of Puerto Rico’s debt… [I]f any debt was issued to creditors in violation of Puerto Rico’s constitution, it must be immediately set aside.”
• Bankruptcy protection:  “Puerto Rico must be given the same authority granted to every state in this country to restructure the debt of public utilities and municipalities under the supervision of a bankruptcy court.”
• Healthcare justice:  “The federal government should not be discriminating against the people of Puerto Rico by providing much lower Medicare and Medicaid reimbursement rates. [They] are American citizens. They deserve equal rates.”

Sanders has not made a statement on statehood or other status options for Puerto Rico.