Politics | Thu Jun 2, 2016 2:56pm EDT

Sanders to offer Puerto Rico debt bill that would protect pensioners

Three days before Puerto Rico's Democratic presidential primary, Bernie Sanders leveled a blistering attack on a restructuring bill moving through the U.S. Congress and offered a radically different approach to fixing the territory's $70 billion debt problem.

Sanders, a U.S. senator from Vermont who is giving front-runner Hillary Clinton a tougher-than-expected challenge for the Democratic Party's presidential nomination, will formally introduce his legislation next week, a spokesman said on Thursday.

Unlike a bipartisan House of Representatives bill that would establish a federal oversight board to renegotiate the massive debt with investors, Sanders' bill would create a "Reconstruction Finance Corporation of Puerto Rico" that would protect public pensioners from cutbacks and "concentrate losses among vulture funds," according to a summary.

"It is morally reprehensible that Wall Street vulture funds are demanding that Puerto Rico fire even more teachers, close more schools, cut pensions and slash the minimum wage so that they can reap huge profits off the misery of the people of Puerto Rico," Sanders said in a statement.

The term vulture funds is a derogatory reference to specialized investing in deeply discounted or distressed assets, typically bonds, by buying them up on the cheap in hopes of profiting on the expectation of a credit restructuring

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