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Compact impact aid expiring this year but discussion remains up in the air


By Mar-Vic Cagurangan

Washington has completed its negotiations with the freely associated states, pledging the renewal of U.S. economic provisions under the Compacts of Free Association. Palau, the Federated States of Micronesia and the Marshall Islands are pleased with the new proposed deals, anticipating larger streams of U.S. dollars in exchange for ceding their sovereignty over their lands, air and water that will be the playground for military exercises, and potential alternate sites of defense operations “when needed.”


While the three compact states received full attention, U.S. jurisdictions that host compact migrants await what’s in store for them.


Guam, Hawaii, the Northern Marianas and American Samoa have no seat at the compact negotiating table. The compacts are treaties negotiated on the diplomatic level, while compact aid funding is an appropriation matter discussed separately in the U.S. Congress.


The 20-year compact impact funding for host jurisdictions, which is appropriated annually, is set to expire this year. The U.S. Department of the Interior, which is tasked with distributing the compact funds, has yet to submit a budget justification for fiscal 2024.


“I’m optimistic both about renewing the Compacts of Free Association with all three sovereign nations, and this compact (impact) funding,” said Rep. Uifa’atali Amata Coleman Radewagen, American Samoa’s delegate to the U.S. Congress.


“This funding should be a standard part of the Department of the Interior appropriations that will be developed during the year. If appropriations are not passed by Sept. 30, a continuing resolution typically prevents a funding gap and preserves current levels,” she added.


The compacts allow Micronesians, Palauans and Marshallese to enter and work visa-free on U.S. soil. In 2003, the U.S. Congress allocated $30 million annually in mandatory compact funding for Guam, Hawaii, the Northern Mariana Islands and American Samoa to assist in defraying costs due to increased demands placed on health, educational, social, or public sector services, or infrastructure related to such services, as a result of hosting compact citizens.


Prior to 2003, Hawaii did not receive compact reimbursements, but state officials persistently made a case for funding assistance as FAS migrant population in the state continued to surge.


In some years, Congress has provided additional discretionary funding support on top of the mandatory aid. Last year, the U.S. Department of the Interior’s Office of Insular Affairs released a total of $35 million in compact grants.


“I support this funding to continue to work with our COFA partners in the Pacific region and provide necessary federal resources to Guam, Hawaii, CNMI and American Samoa, which is a good policy whenever people choose to move there for any reason from any of the three freely associated states,” Radewagen said.


The White House’s proposed new economic packages for compact nations are headed to the House Committee on Natural Resources, but discussions on the expiring compact aid have yet to begin.


“We, along with other representatives of host communities have a seat, which means we will ensure that equity is pursued in the final agreement,” Guam Delegate James Moylan said. “We have yet to introduce any measure dealing with COFA, as we don’t want to complicate the process. Our perspective is to approach this through the (natural resources committee) and let the process take its course.”


The amount of compact aid has been a sore spot for host jurisdictions, particularly Guam which has reported $1.2 billion in total estimated costs from 2004 to 2017.


According to the Government Accountability Office’s audit, Hawaii, Guam, and the CNMI reported estimated costs totaling $3.2 billion during the period fiscal years 2004 through 2018. In fiscal years 2004 through 2019, Hawaii, Guam, and the CNMI received a combined total of approximately $509 million in compact grants.


The Department of the Interior has acknowledged that the funding is insufficient to cover the expenses incurred by the host communities. “We don’t question the numbers, but of course, Congress doesn’t give us that amount,” Doug Domenech, former DOI assistant secretary, said in an earlier interview. “We provide the money that Congress provides to us.”


Guam receives the lion’s share of the annual $34 million in mandatory and discretionary compact impact funding divided among four jurisdictions. Guam gets $16.8 million; Hawaii receives $14.8 million; CNMI, $2.2 million and American Samoa, $22,000.


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The 2018 census puts the number of FAS migrants on Guam at 18,874, an increase of 9 percent from 2013 which accounts for 11 percent of the total Guam population. The number of FAS migrants in Hawai’i increased by 12 percent to 16,680, a number that accounts for approximately 1 percent of the total Hawai’i population. The CNMI showed a decrease of 5 percent in the FAS population to 2,535, accounting for 5 percent of the CNMI population.


“The $1.9 million Congress provided the Marianas in compact impact funding last year is very important, especially when the commonwealth government is facing cash flow problems and the economy is depressed because of Covid,” Congressman Gregorio “Kilili” Sablan, the CNMI’s representative to the U.S. Congress said. “The right time to extend compact impact funding, which is not authorized beyond this year, is when the Compacts of Free Association are before Congress for approval.”


For Guam, Moylan said the amount he will propose is still under discussion with the administration. Without the discretionary funding, Guam typically received $14 million.


“They have the needed data to help establish a starting point. I can assure you it will be well above the $14 million we received,” he said.


Congressman Ed Case of Hawaii said he will work closely with his colleagues from the U.S. territories “to ensure impact aid continues in the upcoming FY24.”



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