Bernie Sanders said Thursday that Wall Street financiers who loaned money to Puerto Rico may “have to take a haircut” on their returns from the fiscally troubled island.
“The lenders are not going to get 100% of their dollars back. They’re going to have to take a haircut — probably a pretty significant haircut,” the Vermont independent senator told CNN en Espanol’s Juan Carlos Lopez on “DirectoUSA.”
Sanders and other senators are pushing Wall Street lenders to renegotiate their terms as part of a federal deal for Puerto Rico. Puerto Rico went into default this summer as it has continued struggling to repay $70 billion in outstanding debt.
President Barack Obama proposed a deal Wednesday that would place new limits on the U.S. territory. Treasury officials detailed a plan that would have the U.S. step in and create a new “bankruptcy regime” that could restructure the island’s debt, but would require congressional approval.
And the Senate Energy and Natural Resources Committee, which Sanders serves on, heard from Puerto Rican leaders on the status of the economy.
“Puerto Rico is now in very, very difficult straits. People are leaving the island, unemployment is high, schools are being closed,” Sanders told CNN. “Bottom line is you cannot get blood from a stone. You can’t push more austerity on a people who are already hurting. The goal is to rebuild the economy.”