SANDERS PUSHES DEMS TO REJECT PUERTO RICO DEBT DEAL, ENGINEERED BY BANKS WHICH DESTROYED DETROIT

Democratic Presidential candidate Bernie Sanders/Photo: Mark Ralston, Getty Images

Breaks with Pres. Obama
Puerto Rico subjected to situation similar to Detroit bankruptcy deal, which stole city’s assets, impoverished retirees, continued state control

By Seung Min Kim

May 23, 2016

Bernie Sanders is pushing fellow Senate Democrats to reject the Puerto Rico debt deal reached by the Obama administration and Speaker Paul Ryan (R-Wis.) last week — a move that may help trigger fresh opposition to the agreement from the left.

In a letter to Senate colleagues released Monday, Sanders rips the agreement to restructure the island’s $70 billion in debt, arguing that the deal favors Wall Street creditors at the expense of residents in Puerto Rico.

Puerto Rican unions earlier called a general strike against government’s austerity measures.

“I am urging the Senate Democratic Caucus to make it clear to the Republican leadership that this legislation is unacceptable and will not be supported by Senate Democrats,” Sanders wrote in the letter to Senate Democrats. “At a time when the people of Puerto Rico are suffering, the legislation introduced in the House would make a terrible situation even worse.”

In particular, Sanders takes issue with a new oversight board created under the legislation to oversee Puerto Rico’s finances because the majority of the seven-member panel would be controlled by Republicans with little input from Puerto Rico citizens. The board will have expansive power over Puerto Rico’s economy.

Ryan and Senate Majority Leader Mitch McConnell (R-Ky.) get two picks each to the oversight board, while House Minority Leader Nancy Pelosi (D-Calif.) and Senate Minority Leader Harry Reid (D-Nev.) each choose one. President Barack Obama also gets an appointment to the board.

Puerto Rico already has a general poverty rate of 46.2 percent.

“In my view, we must never give an unelected control board the power to make life and death decisions for the people of Puerto Rico without any meaningful input from them at all,” Sanders wrote to his colleagues. “We must not balance Puerto Rico’s budget on the backs of children, senior citizens, the sick and the most vulnerable people in Puerto Rico.”

Sanders also takes aim at a provision that allows the Puerto Rican governor to cut the minimum wage to $4.25 an hour, while giving Wall Street creditors excessive influence over the U.S. territory’s finances. Workers also cannot benefit from the Obama administration’s new overtime rule for workers making less than $47,000 per year.

Lowering the minimum wage does not apply to current workers, however, and will be subject to the oversight board’s approval and be optional for the Puerto Rican governor.

Hedgefund billionaires are trying to murder Puerto Rico.

The deal “looks out for the needs of Wall Street vulture funds first and foremost,” Sanders wrote. “That is unacceptable.”

Sanders has been particularly outspoken on the issue of Puerto Rico’s finances as he campaigns against Hillary Clinton ahead of the island’s June 5 caucuses. Clinching the Democratic nomination is almost mathematically out of reach for Sanders, though he has vowed to stay in the campaign until the Democratic National Convention in Philadelphia in July.

Sanders released a statement in opposition to the Puerto Rico deal last week, insisting that the United States “must stop treating Puerto Rico like a colony.” Meanwhile, Clinton endorsed the bipartisan deal, although she made it clear that she has “serious concerns” about a handful of provisions in the legislation.

Hillary Clinton endorses Puerto Rican debt deal.

How the caucus reacts to Sanders’ call could also be the first big test of his influence back on Capitol Hill since his surprising success in the Democratic presidential primary. Key Democratic lawmakers have given the deal their seal of approval, including Pelosi.

Arizona Rep. Raul Grijalva, the top Democrat on the House Natural Resources Committee who helped negotiate the deal, will support the bill despite his own reservations. Grijalva was the first Democrat in Congress to endorse Sanders in the Democratic primary.

Another liberal favorite in the Senate — Elizabeth Warren of Massachusetts — has also not taken a position on the bill.

Colin Wilhelm contributed to this report.