By Mar-Vic Cagurangan and Mike Cohen
Facing competition with China's silk road sweetheart loans and public works projects, Washington has been splashing dollars among the United States’ allies in the Pacific region and ramping up development programs for the freely associated states. The Biden administration is seeking more than $7 billion over the next two decades for economic assistance to Palau, the Federated States of Micronesia and the Marshall Islands under the recently concluded negotiations for the expiring provisions of the Compacts of Free Association.
Guam, Hawaii, the Northern Marianas and American Samoa—hosts to large populations of FAS migrants—watch on the periphery, waiting for word as to how much will be tossed in their direction. As the 20-year Compact impact funding expires on Sept. 30, these host jurisdictions were hoping to receive more than the lump sum of $30 million in mandatory compact funding they share among themselves every year.
In her letter to Secretary of State Antony Blinken on April 15, 2022, Guam Gov. Lou Leon Guerrero listed her demands, including full reimbursement for futurecompact impact expenses, debt using past unreimbursed to offset any debt Guam owes to the federal government and expansion of federal benefits for FAS citizens living on Guam.
But nothing more is coming. The Biden administration’s 2024 budget request proposed zero funding for compact impact.
"Their mindset is to increase access to federal benefits for COFA migrants residing in the states and territories while infusing infrastructure into COFA nations to reduce the need for migration," said James Moylan, Guam’s delegate to the U.S. Congress. "But we know that will not eliminate legal migration and we know that Guam and Hawaii will continue to be the most popular destination for COFA migrants. We can't blame them as we are known for our hospitality.”
The compacts allow citizens of Palau, the Federated States of Micronesia and the Marshall Islands to enter, work and study in the U.S. visa-free. Based on 2018 estimates, Guam was host to 18,874 FAS migrants; Hawaii 16,680; CNMI, 2,535; and American Samoa, 25. In recent years, Arkansas came into the picture, reporting a growing population of FAS migrants living in the state. State officials sought federal funds to cover the cost of the Pacific islanders’ health care.
"It is unfortunate that the Biden administration’s 2024 budget submittal did not provide any reimbursements for communities that host migrants of the Compact of Free Association nations,” Moylan said.
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Rep. Bruce Westerman of Arkansas, chair of the U.S. House Committee on Natural Resources, will head a congressional delegation to visit Guam to witness firsthand the impact of the COFA on the territory. “We are just awaiting the dates. I would like to note that Chairman Westerman’s district in Arkansas is also a host community for COFA migrants, and thus he is very familiar with the impact it places on a district’s financial resources,” Moylan said.
In a letter dated Nov. 7, 2022 to Congressman Ed Case of Hawaii, Leon Guerrero said Guam's total costs for services to FAS citizens was $147 million in 2017 alone. The cost of hosting migrants, she added, represented 15.6 percent of the government of Guam's total budget appropriations for that year. A large percentage of Guam's 33,000 plus Medicaid recipients are COFA citizens.
The costs of providing social services are shouldered in advance by Guam and other host jurisdictions, with an assurance of federal reimbursements.
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, education, social, or public sector services, or infrastructure related to such services, as a result of hosting compact citizens. In some years, the allocation was bigger with the inclusion of discretionary funding.
Guam receives the lion’s share of $34 million in mandatory and discretionary compact impact funding divided among the four jurisdictions. Guam gets $16.8 million; Hawaii receives $14.8 million; CNMI, $2.2 million; and American Samoa, $22,000. Last year, the U.S. Department of the Interior’s Office of Insular Affairs released a total of $35 million in compact grants. The Biden administration's 2024 budget proposal shows this allocation is no longer a priority for the White House.
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“While Guam remains supportive of a prosperous and mutually beneficial U.S.-FAS relationship, it is crucial to recognize that eliminating the $30 million appropriation would hinder the government of Guam's ability to maintain payments for our school lease obligations and other social services. The appropriation was the only means that offered partial relief to affected state and territorial governments,” Leon Guerrero said in an April 23 letter to Secretary of the Interior Debra A. Haaland.
At the Guam legislature, Sen. Frank Blas Jr. said the administration's move to cut compact impact funding is a major blow for the island, which will now shoulder the full costs of hosting FAS migrants. “The loss of this funding comes at a very inopportune time as our island is struggling to recover from the devastating economic effects of the Covid-19 pandemic,” he said. “Complicated even further by rising costs, increasing crime, a flailing healthcare system, and deteriorating conditions in our schools, the money could have helped in addressing these issues, most especially with the services provided to Compact migrants.”
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 level of funding for Compact impact reimbursements has been a sore spot in the relationship between the host communities and the federal government. Instead of additional funds, the host jurisdictions stand to receive zero dollars.
“It is fundamentally unfair for our federal government to ignore its obligations under the Compacts of Free Association that are national in interest and scope and then impose the responsibility for providing basic services to FAS citizens on state and territorial governments,” said Rep. Ed Case of Hawaii.
“The Compacts of Free Association are critical to both our country and the freely associated states and must be continued. However, it is unfair to expect states and localities like Hawai’i, Guam, Arkansas and elsewhere with the most Compact residents to shoulder hundreds of millions of dollars of costs to provide much-needed services for what are uniquely federal responsibilities,” he added.
Case noted that federal compact impact aid paid to date covered only a fraction of the costs incurred by host governments.
On March 14, Case and Rep. Steve Womack, a Republican from Arkansas introduced “The Compact Impact Fairness Act” that would restore access to a range of federal benefits for FAS citizens who reside in the United States.
A similar bill was filed in the U.S. Senate by Sens. Mazie K. Hirono (D-HI) and John Boozman (R-AR).
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“The Compact Impact Fairness Act is one solution to this shortfall, and the Biden administration has endorsed it as part of its fiscal year 2024 budget request,” Case said. “The bill would both fulfill much of the federal responsibility and free up state resources to be allocated to state services for all citizens and residents.”
The Compact Impact Fairness Act, which was previously introduced in 2021, builds upon Hirono’s legislation to restore Medicaid eligibility for COFA citizens, which was signed into law in 2020. “COFA citizens are important members of our communities who, despite paying federal taxes, do not currently have the same access to federal benefits as other legal residents in the U.S.,” Hirono said.
“The Compact Impact Fairness Act makes good on our commitment to COFA nations and citizens, recognizing their importance to our national security, our economy, and our communities. Importantly, this bill would also provide relief to states like Hawaii with large COFA communities,” Boozman said.
“Marshallese families are an integral part of Arkansas. Across the nation, COFA citizens support U.S. defense efforts, pay taxes, and are core elements of our economy and communities,” said Womack.
The Compact Impact Fairness Act would restore eligibility for COFA citizens to receive public benefits such as the Supplemental Nutrition Assistance Program, Temporary Assistance for Needy Families, Supplemental Security Income, Social Services Block Grants, education assistance, and other programs that they were restricted from accessing as part of the 1996 welfare reform law.
“I support the funds for affected destinations to account for the additional needs for health, safety, and education in these states and territories,” said Rep. Uifa’atali Amata Radewagen, American Samoa’s delegate to Congress. “I strongly support the freely associated states and the renewal of COFA, as they are our closest possible U.S. allies, and regarding these compact impact funds, federal support is necessary both at the origin and destination points. I’m optimistic in the legislative process ahead.”
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