Warren said Treasury officials should do all they can as quickly as they can to help Puerto Rico - much like they did to help the financial system during the 2008 Great Recession. "In my view, the people in Puerto Rico should not be forced to suffer even more so that a handful of wealthy investors can make a 100 percent return on their investments".
Puerto Rico's fiscal problems could turn into a humanitarian crisis, a top U.S. Treasury official warned on Thursday.
Puerto Rico has been trying to persuade different investor groups to sign on to deals to restructure debt.
Yet without bipartisan support in Congress, Treasury is limited in what it can achieve.
"Wall Street should not be believing you can get blood from stone", said Sanders, who rattled off statistics such as the loss of 20 percent of Puerto Rico's jobs since 2006 and a childhood poverty rate of 56 percent.
While Treasury has also called on Puerto Rico to fix its traditionally opaque financial reporting practices and instill more credible fiscal oversight, the proposal is generally in line with what the island itself has said it needs from Congress and its creditors.
Sen. Lisa Murkowski (R-Alaska), the committee's chairman, said that she was sympathetic to Puerto Rico's plight but she needed verifiable numbers about the island's finances before she could help craft a solution.
Padilla largely welcomed the proposed measures in a statement, saying that "they have the support of my administration".
Like USA states, Puerto Rico is not allowed under current law to seek bankruptcy protection. But on Thursday, skeptical lawmakers told Puerto Rican officials and a high-ranking Treasury aide that such a haircut is easier said than done, and accused the White House of abdicating its responsibility to help Puerto Rico.
"Super Chapter 9 would be de facto amendment of the Puerto Rican Constitution by Congressional legislative fiat without the participation of the Puerto Rican people".
Daniel Hanson, analyst at Height Securities, estimated that the total cost of the Treasury plan is likely about $5.1 billion per year, or $51 billion over 10 years.
Why must one USA territory be required to abide by maritime shipping laws and not another?
A few members of Congress, including New York Senator Chuck Schumer, have advocated in favor of giving Puerto Rico the same bankruptcy rights as USA states.
ALLEN: Puerto Rico's governor, Alejandro Garcia Padilla, is endorsing the White House proposal.
It includes Medicaid expansion and an expansion of low-income tax credits. That puts a heavier burden on the island's budgets during good times, and gives the territory's government nearly no room to maneuver during bad times. Such an offer, or so-called 'superbond, ' could exchange just one credit for various existing bonds, possibly depending on the ranking of those credits, said a source familiar with the situation.
Senator Bernie Sanders Slams Vulture Funds Ripping Off Puerto Rico
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