CNMI governor seeks revival of 702 funding as 902 talks resume Feb. 17
- Admin
- 14 hours ago
- 4 min read
By Bryan Manabat
Saipan-- CNMI Gov. David Apatang is seeking the restoration of Covenant Section 702 financial assistance as the commonwealth prepares for the next round of 902 consultations with the federal government on Feb. 17. The administration says renewed support under the long‑dormant provision is essential to stabilizing the CNMI’s economy and addressing decades‑old infrastructure needs.
Apatang’s push mirrors the position taken by the late Gov. Arnold Palacios, who repeatedly argued that the Covenant’s 702 commitments were never meant to end permanently.
Palacios maintained that the CNMI’s structural vulnerabilities—limited land, a small labor pool and a tourism‑dependent economy exposed to external shocks—were precisely the conditions the Covenant negotiators envisioned when they crafted the financial assistance provision nearly 50 years ago.
His administration raised the issue in the previous 902 consultations, urging Washington to revive or modernize 702‑style support to help the
commonwealth recovers from typhoons, the pandemic, and airline reductions.
In a recent interview with reporters, Apatang emphasized that 702 remains his top priority ahead of the talks.
“My main goal is to work on 702,” he said. “But we need to discuss issues with Interagency Group on Insular Areas about what kind of assistance they can deliver for the Commonwealth. Immigration, labor, cabotage — these are among the agendas that we need to talk about. My team will link with the different agencies in the Commonwealth and assess their needs.”
The upcoming consultations are taking place as federal officials continue to lay the groundwork for the Feb. 17 meeting. Deputy Assistant Secretary Angel A. Demapan and Office of Insular Affairs Budget Director Jeff Dunn were in the CNMI last week, meeting with government leaders to prepare for the talks, during which the Commonwealth is seeking a seven‑year schedule of federal budgetary support.
Demapan and Dunn met with Apatang, Lt. Gov. Dennis Mendiola and key Cabinet officials to review fiscal reform milestones requested by the White House Office of Management and Budget. Discussions centered on the CNMI’s ongoing budget challenges, audit improvements and federal requirements tied to economic and financial reform.
Throughout the week, the federal delegation also met with the Governor’s Council of Economic Advisors, the Marianas Visitors Authority and the Department of Finance. Their agenda included reviewing tourism growth targets, inspecting the Garapan Revitalization Project and assessing audit‑compliance progress with partners such as RMA Associates and Ernst & Young.
Apatang welcomed the continued federal engagement, saying it strengthens cooperation and supports long‑term economic stability as the Commonwealth prepares for next week’s formal consultations.
Section 702 once provided millions in annual U.S. financial assistance for capital improvement projects, but the last long‑term funding agreement expired in 2003. Since then, the CNMI has relied on competitive federal grants and disaster‑related appropriations — a patchwork that both Palacios and Apatang have argued falls short of the Covenant’s original intent.
Federal officials, in past consultations, have maintained that the United States fulfilled its 702 obligations through the 1978–2003 funding period and that any new assistance must come through Congress, not through automatic Covenant entitlements. That position has long been a sticking point in 902 discussions.
Major policy changes shaped by past 902 consultations
While 902 consultations are not binding, they have historically influenced several major federal policy decisions affecting the CNMI. Among the most significant:
• Federalization of CNMI immigration (2009): Years of 902 discussions preceded the Consolidated Natural Resources Act of 2008, which transferred immigration authority to the U.S. Department of Homeland Security and created the CW transitional worker program.
• Creation and modification of the CNMI‑Only Visa Waiver Program: CNMI objections raised in 902 talks helped preserve visa‑free entry for Chinese tourists after federalization, though later security‑driven changes removed Russia and tightened requirements.
• Minimum wage adjustments: CNMI economic concerns raised in consultations contributed to congressional delays and pauses in scheduled federal minimum wage increases.
• Military training proposals: 902 discussions helped shape federal decisions on training plans for Tinian and Pagan, leading to scaled‑back proposals and strengthened environmental review.
• Economic and disaster‑recovery support: Consultations have been used to advocate for improved FEMA integration, Medicaid adjustments and federal assistance following typhoons and economic downturns.
These precedents underscore the role of 902 consultations as a venue for the CNMI to influence federal policy, even when the outcomes fall short of commonwealth requests.
The Feb. 17 talks are expected to shape the CNMI’s path forward on fiscal recovery, budgetary support and federal partnership. Section 902 of the Covenant allows the CNMI and the United States to meet periodically to discuss matters of mutual interest.
The most recent 902 consultation held in Saipan in 2024 focused on three priority issues: direct financial assistance, tourism and transportation infrastructure, and access to skilled labor.
The upcoming consultations mark the latest chapter in a process that has historically been used to address major economic and policy challenges facing the commonwealth.
While 902 talks are not binding negotiations, they serve as a formal mechanism for the CNMI to present its needs directly to federal decision‑makers and seek coordinated solutions on issues ranging from fiscal stability to long‑term economic development.
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