Sanders blasts Puerto Rico bill

Reworked legislation helping Puerto Rico steer through its debt crisis has found one high-profile detractor: Sen. Bernie Sanders (I-Vt.).

The Democratic presidential candidate offered the toughest criticism on Capitol Hill of legislation unveiled late Wednesday, dismissing the measure out of hand and calling for a radically different approach.

{mosads}“The legislation … is a move in exactly the wrong direction,” he said in a statement.

Sanders’s harsh criticism of the measure stands in stark contrast to the sentiment from many top policymakers Thursday, who generally saw the revised package as a solid, if not perfect, compromise.

The legislation, which would establish an outside control board to oversee Puerto Rico’s finances while allowing the territory to restructure its $72 billion in debt through the courts, was backed by the White House, Speaker Paul Ryan (R-Wis.) and House Minority Leader Nancy Pelosi (D-Calif.).

Even more politically extreme members of the House, like Rep. Raúl Grijalva (D-Ariz.), the co-chair of the Congressional Progressive Caucus, and Rep. Raúl Labrador (R-Idaho), one of the founders of the conservative House Freedom Caucus, were optimistic about the legislation.

Instead, Sanders blasted one of the central pieces of the bill — the outside control board — calling it unacceptable and undemocratic.

In particular, Sanders was not pleased that on the seven member board, four will be picked from a list of candidates drawn up by Republicans. Under the current bill, the president must pick two board members from a list of candidates submitted by the Speaker, another two from the Senate majority leader, while one each is reserved for the House and Senate minority leaders. The president can then fill the final spot with his own candidate.

And while Wall Street investors in Puerto Rican debt have had a large presence in Washington during the bill’s formation, Sanders argued those hedge funds and other investors should suffer the most when Puerto Rico reworks its obligations.

“We need austerity for billionaire Wall Street hedge fund managers who have exacerbated the financial crisis in Puerto Rico. We don’t need more austerity for children in Puerto Rico who are going hungry,” said Sanders.

Instead of the compromise bill, Sanders called on Congress to take up a bill that simply lets Puerto Rico declare bankruptcy on its debt ­— a nonstarter with congressional Republicans.

As an alternative, he reiterated his call that the Federal Reserve should step in and use emergency powers to help the island navigate its debt crisis. For its part, the Fed has told lawmakers it does not believe it has the power to assist a particular municipality that cannot pay back all its debt obligations.