Bernie Sanders breaks with White House on Puerto Rican rescue plan

[cali]

Democratic presidential candidate Bernie Sanders is breaking with the Obama administration and House lawmakers over a plan to restructure Puerto Rico's $70 billion in debt, saying the legislation would make "a terrible situation even worse."

The Vermont senator writes in a letter released Monday that the deal reached last week between the White House and House Republicans and Democrats would empower an "unelected and undemocratic oversight board" and allow the governor of Puerto Rico to slash the minimum wage to $4.25 an hour for up to five years.

"We must stop treating Puerto Rico like a colony and start treating the American citizens of Puerto Rico with the respect and dignity that they deserve," Sanders wrote in a letter to Senate colleagues.

<snip>
Sanders warned that the control board would have the power to cut the budget, slash pensions and take other measures. He notes that most of the control board would be chosen by Ryan and Senate Majority Leader Mitch McConnell, R-Ky.

Puerto Rican officials have argued for a less powerful board that could not control the island's finances.

Republicans say the legislation would force the control board to both consider creditors and also find a way to fund pensions. The Puerto Rican government has underfunded pensions by more than $40 billion.

Sanders said the legislation "looks out for the needs of Wall Street vulture funds first and foremost. That is unacceptable."

http://www.ctvnews.ca/world/bernie-sanders-breaks-with-white-house-on-puerto-rican-rescue-plan-1.2913275

[yourpaljoey]

1. Sanders is correct

[tularetom]

2. It didn't work in Flint MI, it won't work in Puerto Rico

You can't unilaterally impose austerity on a sovereign entity without something going horribly wrong.

I still like Obama but sometimes I wonder what going on in his head.

[JRLeft]

3. He's a republican.

[Else You Are Mad]

31. Exactly.

Look at what austerity did to Greece et. al. when it was forced upon those nations in the EU. There were riots nearly daily, nearly 50% unemployment, the rise of far right nationalist parties, etc.

Austerity is just another bank bailout and not a solution for those being actually affected by the financial crisis.

[BeyondGeography]

4. Classic Bernie

Score an easy point, without mentioning that he would keep the bickering going while Puerto Rico needs to restructure its debts yesterday. The plan allows for that. When you need emergency legislation from a Republican House and Senate, this is what you get. The next step is to elect HRC President and get Democratic control of the Senate so the board won't run amok. He left that part out, too.

[cali]

6. It's an austerity plan that gives congressional rethugs way too much authority

Does it surprise anyone that Bernie opposes right wing measures?

[BeyondGeography]

8. He wants what amounts to a bailout, which is a nightmare politically

(meaning you can't pass it) and may even be illegal under Dodd-Frank. No one is applauding here, but what is the legislative alternative?

[brentspeak]

9. He's been proposing granting P.R. chapter 9 protection for a while now

http://www.sanders.senate.gov/newsroom/press-releases/sanders-statement-on-puerto-rico

I guess in the minds of Hillary fans, anything that would prevent banks from shaking debt-ridden people down is a "bailout".

[BeyondGeography]

11. "Hillary fan,"...spare me

There are actual issues to resolve here that have nothing to do with Bernie losing the primary:

“The type of assistance Senator Sanders is asking the Fed to provide would not be legally possible,” said Donald Kohn, who served on the Federal Reserve’s Board of Governors from 2002 to 2010. “[It is] not what the Congress intended. Among other things, [the law] requires that any facility be broadly based and not intended for a particular troubled borrower.”

The reforms in the 2010 Dodd-Frank bill sharply curtailed the central bank’s ability to make emergency loans to struggling banks, partnerships, or corporations in order to keep them afloat. While questioning whether the Puerto Rican government counts as a bank, partnership, or corporation in the first place, Kohn also cited another section of the law saying the Federal Reserve must “prohibit borrowing from programs and facilities by borrowers that are insolvent,” as Puerto Rico will soon be, and that emergency lending powers are “not to aid a failing financial company.”

The Federal Reserve has given Congress the same message, and other fiscal policy experts agree. University of Pennsylvania professor Peter Conti-Brown, an expert on the Fed’s legal authority, told the Washington Examiner that Dodd-Frank “specifically forbids this kind of targeted bailout,” while Cato Institute director of financial regulation studies Mark Calabria added that “the intent and clear language forbids ‘one-off’ rescues to single entities.”

Warren Gunnels with the Sanders campaign argued in an e-mail to ThinkProgress that because only a fraction of Dodd-Frank’s reforms have been finalized and implemented, the Federal Reserve can still step in. “The Federal Reserve has the authority to facilitate an orderly restructuring of Puerto Rico’s debt through a reverse auction process that will lead to major haircuts for Wall Street vulture funds,” he said.

http://thinkprogress.org/politics/2016/05/20/3779144/sanders-puerto-rico-bailout/

Sanders isn't even arguing that there's a legal problem; there is. The "window" is that the law has yet to be fully applied. You're going to sell that to Paul Ryan and Mitch McConnell? Flimsy.

[Demsrule86]

16. Chapter 9 won't help

the locals. And you have a right wing congress...this is why Bernie would make a terrible president. He has no workable solution.

[brentspeak]

33. With Hillary, we would have a RW president

And that's certainly not a workable solution.

[pinebox]

10. He wants chapter 9. Come on, we all know this.

[Yavin4]

15. So what's Bernie's solution, and how would he get it past this congress

A president cannot do anything with the budget without congress.

[Demsrule86]

14. Another example of pie in the sky Bernie

He won't get a better deal out of a rightie Congress... but it is ok with him for the people to suffer...while he waits for purity...this is exactly why he would make a lousy president.

[snowy owl]

25. You haven't learned a thing in the last thirty years, have you?

You still fall for the financier's tricks. This is wrong. There is more than one way to deal with it. There always is. This one benefits the money changers only.

[BeyondGeography]

30. Pointless post

which ignores the reality of Puerto Rico's immediate need to restucture debt, congressional approval and the law.

But, don't worry, Bernie is secure on Mt. Moral Superiority, and you can wave to him from the foothills.

[CorkySt.Clair]

29. The consumate backseat driver

Bernie always knows better than everyone else

[Blue_Tires]

5. I don't remember Bernie doing anything about this in the Senate

correct me if I'm wrong...

[Sunlei]

13. Our Congress 'controls' PR.

[snowy owl]

26. Cheap answer to a real problem. What's anybody done? Bernie is trying.

He's standing up for the people. What don't you get about that/

[polly7]

7. GOOD. nt.

[Sunlei]

12. Congress won't even let PR 'American citizens' vote in General Elections. WTF!,Fed. $ to 'Massas'

Another bailout with Americans Federal billions for Corporations in the works.

[Octafish]

17. US Taxpayer forced to pay the BANKSTERS billion in bonuses.

Where's the Austerity for Wall Street? They're the ones who shafted Puerto Rico, Detroit and a whole lot more places.

[ProfessorPlum]

18. this is more of the same SHOCK DOCTRINE inhumanity that gets done to every country, eventually

the government runs up a debt, the bankers then demand that the government makes life hell for the ordinary citizens, even if the former leaders abscond with the funds. Austerity as a means for bankers to extract wealth from ordinary citizens. It is a horrifying, evil crime, and needs to stop. This same playbook has been run on Poland, South Africa, Russia, Greece.

It is vulture capitalism in its worst form, designed to exploit crises (and faked crises) to line the pockets of predators, while real people suffer and die.

I'm not surprised that Sanders is on the right side of this issue.

I'm just surprised that the rest of the Democrats aren't.

[cali]

20. I find it frightening. And revealing.

[BeyondGeography]

21. Right now, Sanders is on the pointless bitch-and-moan side of the issue

Unless you think he has the ability to convince Paul Ryan and Mitch McConnell to let Puerto Rico declare bankruptcy while the Fed forks over fresh money.

[ProfessorPlum]

37. fuck that

Bitching and moaning is the first step to stopping this kind of theft. The only "other side" of this issue is to stand back and let the populace get a rogering from the banksters.

What's your plan to stop it, and how does it differ qualitatively from what Sanders is beginning to do?

[BeyondGeography]

38. I stand with Sanders surrogate and theft enabler Raul Grijalva

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.

Read more: http://www.politico.com/story/2016/05/bernie-sanders-puerto-rico-deal-223470#ixzz49V4kfndh

[ProfessorPlum]

41. so your plan is to let it happen despite having _reservations_ about

the people of PR getting screwed over? Well, isn't that useful! I'm sure your reservations (and those of Grijalva, who I usually have a lot of respect for) will matter a lot when the banksters put the screws and people start starving, dying, and suffering from the austerity that gets imposed.

They will probably think "Thank goodness Grijalva had some reservations about what is being done to us! That makes it all better!"

[snowy owl]

27. Exactly. Thanks. That people don't get that yet? What will it take?

[catnhatnh]

19. Are you truly a democrat?

Picture the poorest minimum wage worker you know, what their life is like and how they struggle.What they have and what they have to do without.


Then picture allowing the government to cut their pay by over 40%.

[Cheese Sandwich]

22. austerity = class war. Just another excuse to rob the poor.

[ThePhilosopher04]

23. If you side with austerity, you are not progressive and no friend of ordinary Americans.

[cali]

24. No shit.

[snowy owl]

28. and not a true Democrat - at least as they used to stand

Siding with the rich - unbelievable.

[ThePhilosopher04]

32. Right wingers now occupy both sides of the political coin, especially if Hillary is the nominee.

[DCBob]

34. Sounds like Grijalva is supporting it.

Rep. Raul Grijalva of Arizona, the ranking Democrat on the House Natural Resources Committee, expressed some dislikes about the bill's creation of a fiscal oversight board that will have significant authority to resolve Puerto Rico's money and debt problems. He returned last week from a three-day trip to Puerto Rico for briefings on the fiscal crisis and its effect on the island's residents.

"This legislation is a compromise, so of course there are aspects that cause me concern," Grijalva said. "But I am even more concerned about the humanitarian crisis unfolding on the island. The Treasury Department tells us that this combination of oversight and debt restructuring will work, and that it is a significant achievement."

http://www.nbcnews.com/news/latino/house-introduces-new-bill-deal-puerto-rico-debt-crisis-n576631

==========

I trust his judgement on this issue.

[ymetca]

35. It won't work

All these austerity plans are specifically designed not to work. The objective is to transfer the debt onto another host, then impose austerity on that host too. This is the death knell phase of global capitalism before the whole thing collapses. Hopefully we won't all be paying for cans of clean air before it is over..

[DCBob]

36. I am sure Grijalva knows more about this than you do.

[EndElectoral]

39. What's HRC's position on this?

[imagine2015]

40. K & R

[Tarc]

42. "Sanders has been virtually absent from Senate proceedings during his lengthy primary campaign..."

Not exactly good optics there.

Also, does Sanders have an alternate plan?