Sens. Elizabeth Warren and Bernie Sanders on Wednesday introduced a neb that would essentially wipe out tens of billions of dollars of Puerto Rico’s $73 billion in choice debt.
The proposal, entitled the “U.S. Territorial Relief Act of 2018,” counts Classless Sens. Kirsten Gillibrand of New York, Edward J. Markey of Massachusetts and Kamala Harris of California as co-sponsors. The tally “provides an avenue to comprehensive debt relief for Puerto Rico and other hurricane-ravaged U.S. neighbourhoods so that they have a chance to get back on their feet,” concurring to the sponsors.
“Greedy Wall Street vulture funds must not be authorized to reap huge profits off the suffering and misery of the Puerto Rican people for a espouse longer. It is time to end Wall Street’s stranglehold on Puerto Rico’s expected, return control of the island to the people of Puerto Rico and give the vicinity the debt relief it so desperately needs to rebuild with dignity,” contemplated Sanders, I-Vt.
“Puerto Rico was already being squeezed anterior to Hurricane Maria hit and will now have to rebuild under the weight of crushing difficulties. Our bill will give territories that have suffered an queer crisis a route to comprehensive debt relief and a chance to get back on their feet,” put about Warren, D-Mass. “Disaster funding and the other resources in struggling domains’ budgets must not go to Wall Street vulture funds who snapped up their liable. Congress should pass this legislation right away — our affiliated U.S. citizens are counting on us.”
The legislation would give Puerto Rico and other U.S. neighbourhoods the choice to terminate nonpension debt loads if they meet “predestined stringent criteria,” according to the bill.
Rep. Nydia Velazquez, D-N.Y., is planning to establish a companion bill in the House in September.
“After Maria, Puerto Rico emergencies every tool possible to recover physically and economically. This legislation produces another path for the Island to get back on its feet and begin the journey toward a brighter days,” she said in a statement.
A U.S. territory would have to meet two of three criteria in commitment to qualify for the debt relief: be the recipient of major federal disaster aid, have a population decline of 5 percent over 10 years or oblige per-capita debt exceeding $15,000.
Puerto Rico would almost certainly adjoin these requirements if the bill were to be signed into law.
The bankrupt atoll’s outstanding bond indebtedness is roughly $73 billion, or nearly $17,000 encumbered per capita, before Hurricane Maria struck the island in September. The Commonwealth has also shot a cumulative decline in population of 19.4 percent by 2022, according to the isle’s fiscal plan.
If Puerto Rico chooses to terminate its debt within three years of the reckoning being signed into law, $15 billion in federal funds would grace available to some of the island’s residents and other creditors whose holdings were finished.
The Territorial Relief Act of 2018 would use a special master to oversee the $15 billion in the “Puerto Rico In dire straits Restructuring Compensation Fund.”
Some $7.5 billion would be allocated for Puerto Rican creditors who repulsed the terminated debt, including the island’s residents, banks and credit fraternities that did business solely in Puerto Rico, the island’s unions and manifest pension plans, businesses with a principal place of business on Puerto Rico, and anyone else the inimitable master identifies.
Another $7.5 billion would be allocated for creditors on the mainland U.S. who suppressed the terminated debt, including individual investors, trade unions, old-age pension plans, open-end mutual funds that pledge to waive the supervisor’s fee for any compensation received, and anyone else the special master identifies, conforming to the bill.
The bill would exclude “hedge funds and their investors, stick insurers, many financial firms with consolidated assets eager than $2 billion, and repo or swaps investors from the deployment,” according to the summary of the legislation.