Sen. Bernie Sanders (I-Vt.) is rolling out a wide-ranging bill to tackle Puerto Rico’s debt crisis ahead of a critical July 1 deadline.
Sanders’s legislation would give the island territory the ability to file for bankruptcy and support an emergency infusion of Federal Reserve funding to help it restructure its debt.
{mosads}Sanders filed the bill late last week, but it was largely overshadowed by coverage of his meetings with President Obama and top Senate Democrats.
“The people of Puerto Rico are experiencing a humanitarian crisis as a result of a depression that has now lasted more than a decade,” he said in a statement. “Our goal must not only be to give Puerto Rico the flexibility it needs to restructure its debt, but to make sure that it can rebuild its economy, create good-paying jobs and expand its tax base.”
The Vermont senator is a vocal opponent of a measure approved by the House last week. He says that bill, backed by leaders of both parties in the House, would only create “huge profits” for Wall Street by forcing Puerto Rico to cut pensions and public services to cover its debts.
The territory’s government has already missed payments for hundreds of millions of dollars as it struggles with years of economic decline and an exodus of Puerto Ricans to the U.S. mainland. It faces default on a $2 billion payment on July 1.
Sanders’s legislation would also create a Reconstruction Finance Cooperation of Puerto Rico, which would have a seven-person board to help oversee and facilitate and oversee the restructuring of Puerto Rico’s debt.
According a summary of the bill from the senator’s office, each of the members would have to be full-time residents of Puerto Rico, and four would be picked by the Puerto Rican legislature.
“The solution to Puerto Rico’s debt crisis is not more austerity. The solution is more economic development, more jobs and less poverty,” Sanders said.
Sanders’s legislation would also make Puerto Ricans eligible for federal income and child tax credits, aim to increase access to healthcare, set aside funding to bolster the island’s infrastructure and energy grid, and fund clean energy projects.
Sen. John Cornyn (R-Texas) told reporters earlier this month that the Senate would likely take up the House bill, but it’s unclear what changes lawmakers will demand or if it will be able to go straight to the Senate floor.
The House bill has drawn criticism from Democrats for not expanding Medicaid or the earned income tax credit to Puerto Rico, and for including a provision that allows Puerto Rico to avoid paying the federal minimum wage to some workers.