SAN JUAN, Puerto Rico – U.S. Sen. Bernie Sanders on Monday said that the Federal Reserve must use its emergency authority to facilitate an orderly restructuring of Puerto Rico’s $70 billion debt in a way that protects the island’s people from Wall Street “vulture funds” trying to profit off the territory’s financial crisis.
“What vulture funds on Wall Street are demanding is that Puerto Rico fire teachers, close schools, cut pensions and abolish the minimum wage so that they can reap huge profits off the suffering and misery of the children and the people of Puerto Rico,” Sanders said at a town meeting here. “We cannot allow that to happen,” Sanders added. “We will not allow that to happen.”
Reeling from a decade-long economic depression, Puerto Rico has lost 20 percent of its jobs since 2006. About 60 percent of all adults are either unemployed or have stopped looking for work. The childhood poverty rate has shot up to 56 percent.
Wall Street investors – who bought bonds at a deep discount which yield steep interest rates of up to 34 percent – have pressured Puerto Rico’s government to adopt stern austerity measures. Over the last five years, for example, more than 150 public schools have been closed. Goldman Sachs, Citigroup, UBS and other financial firms have received hundreds of millions of dollars in fees to manage Puerto Rico’s bond sales.
“We have got to make it clear to these Wall Street vulture funds that they cannot have it all,” Sanders said.
Sanders said creditors must work with Puerto Rico to develop a fair debt repayment plan to help the island’s economy recover and give the territory time to expand its tax base, create jobs and reduce the poverty rate.
He also said the Federal Reserve should provide emergency loans to Puerto Rico to facilitate an orderly restructuring of its debt.
The senator renewed his opposition to a proposal by U.S. House Republicans to create an undemocratic control board in Washington to oversee the territory’s budget and spending.
In order to create jobs, Sanders has introduced legislation to invest $1 trillion over five years to rebuild the nation’s crumbling roads, bridges and other infrastructure projects that would support 13 million good-paying jobs in the United States and put 150,000 people to work in Puerto Rico.
He also proposed an aggressive push to replace an energy system almost entirely reliant on fossil fuels and turn instead to clean energy sources like wind and solar power would help the economy and the environment.
Sanders also called on President Obama to release Oscar Lopez Rivera, a political prisoner that has already served 34 years in prison for his commitment to the independence of Puerto Rico. “I say to President Obama: let him out,” Sanders said. “Free Oscar Lopez Rivera. He has done his time. And if you do not do this, I will. Oscar Lopez Rivera’s incarceration violates the principles of justice, democracy and respect for human rights. To keep him in prison for such a long time is wrong.”
To read Sanders’ prepared remarks, click here.