The Federal Reserve should use its authority to extend aid to Puerto Rico to help the island with its $70 billion debt crisis, Democratic presidential candidate Sen. Bernie Sanders said at a campaign event Monday.
Sanders (I-Vt.) called for the Fed to use authority it has under Section 13.3 of the Federal Reserve Act to give aid to entities outside the banking system in “unusual and exigent circumstances.” He compared possible Fed assistance to the central bank’s role in extending aid to large banks during the 2008 financial crisis.
“If the Fed could bail out Wall Street, it can help the three-and-a-half million American citizens of Puerto Rico,” he said.
He also criticized the emerging plan in Congress to give Puerto Rico debt restructuring authority by establishing a fiscal oversight board. That proposal “must be rejected,” Sanders said.
“The Republican plan in Congress to establish an unelected oversight board that would be given the power to slash pensions, cut education and healthcare and increase taxes on working families is not the answer,” Sanders (I-Vt.) said today in San Juan.
Sanders said it’s “morally unacceptable” that “billionaire hedge fund managers have been calling for more austerity in Puerto Rico.”
“Austerity will not solve this crisis,” he added.
Puerto Rico is scheduled to hold its Democratic presidential caucus on June 5.
One of the top Democratic lawmakers involved in the discussions over giving Puerto Rico debt restructuring tools — Rep. Raúl Grijalva of Arizona, the ranking member on the House Natural Resources Committee — was the first member of Congress to endorse Sanders for president.