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U.S. Senator Bernie Sanders says debt-burdened Puerto Rico should be allowed to file for bankruptcy to tackle its fiscal crisis and benefit its own people, the presidential hopeful said in a statement Tuesday.
“I strongly believe Puerto Rico should be afforded the same bankruptcy protections that exist for municipalities across the United States,” said Sanders. “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.”
Analysts have drawn parallels between Puerto Rico and Greece regarding the scale of indebtedness and the risk of default.
RELATED: Puerto Rico's Debt Options 'Limited' Compared to Greece
Puerto Rico is not legally eligible to file for bankruptcy with the U.S., even though it is a U.S. territory.
Sanders stressed that while the U.S. must provide viable options to Puerto Rico to address its unsustainable debt situation, lawmakers should also acknowledge that years of austerity policies and “the greed of large financial institutions” over the course of nearly a decade of recession underlie Puerto Rico's current crisis. Much of Puerto Rico’s debt is held in mutual funds or other investment accounts by individual investors on the U.S. mainland.
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We must make sure that Puerto Rico can rebuild its economy, create good-paying jobs and expand its tax base. pic.twitter.com/fcOHgXBnnh
— Bernie Sanders (@SenSanders)
July 7, 2015
As the Caribbean island struggles to make payments on its burdensome US$72 billion debt, Puerto Rican people also face dire economic straights, the Vermont senator highlighted.
“Today, more than 45 percent of the people in Puerto Rico are living in poverty, the childhood poverty rate is greater than 56 percent and real unemployment is much too high,” said Sanders.
“Our goal must be not only 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,” he added.
RELATED: Surging in Polls, Bernie Sanders Blasts Clinton, Pledges Taxes
Last week, Puerto Rico made a successful debt payment, despite widespread expectations of a default, after Puerto Rican authorities called on the U.S. to allow the island to file for bankruptcy to restructure its crippling debt. Economic reports have recently revealed that years of economic struggle in Puerto Rico are now coming to a deeper fiscal crisis than previously thought.
Rival Democratic presidential candidate Hillary Clinton has also said Puerto Rico should be granted access to bankruptcy rights, but that the U.S. is not considering a bailout as an option.
Puerto Rico's debt crisis is not theirs alone. For PR's economy to grow & their people to thrive, they need real tools & real support. -H
— Hillary Clinton (@HillaryClinton)
July 1, 2015
Puerto Ricans can vote in U.S. party presidential primaries, but cannot vote in presidential elections. The Puerto Rican population in mainland Florida, approaching 1 million people, which represents some 20 percent of the state's Latino population, is thought to have contributed to Obama's success in Florida in both 2008 and 2012, according to the Washington Post.
Some predict Puerto Rico will continue to be on candidates' agenda as the U.S. presidential campaign heats up.
RELATED: Puerto Rican politician Rafael Bernabe on the island’s debt and similarities with Greece
