balancing act

Budget

A tough, balancing act

Clinton proposes his plan for the American territories 9 but Congress is a tough group to contend with

By David North

Bill Clinton’s proposed budget for the islands cuts $2O million from the Northern Marianas and transfers most of those funds to American Samoa and, to a lesser extent, Guam.

Budgets presented by US presidents, however, unlike those tabled by finance ministers in parliamentary democracies, are not the last word. The Congress, now controlled by Republicans, plays a major and independent role in setting budget priorities.

The Marianas, full of Japanese tourists, is relatively affluent and American Samoa, with its lightly taxed tuna facto ries instead of tourists, is always broke.

But the transfer was much more than a simple movement of funds from a rich jurisdiction to a poorer one.

If Tonga used to be called the Friendly Islands, the Commonwealth of the Northern Mariana Islands (CNMI) could be termed the Friendless Islands, at least in Washington. With no delegate to the House of Representatives (because past CNMI leaders blew the opportunity to get one) and with highly publicised immigration and labour exploitation problems, no one of importance stands up for CNMI’s interests.

Further, on the question of federal pay ments, these islands are in a bad bar gaining position. First, it is well known that as much as 95 percent of the income taxes levied on individuals in the islands have been rebated to them by the CNMI government - a peculiar system which has lured some mainland

multi-millionaires to settle there.

Second, Governor FroilanTenorio, who wants to correct the strange tax struc ture, has indicated he would rather forego the flow of federal funds in exchange for keeping powers over immigration and the minimum wage.

The Governor may lose both the money and the labour and migration powers.

The President’s provisions for the

In the allocation of

funds for the next

financial year, it is likely Guam ’s anti tree snake fund will remain intact.

islands were relatively tiny items in the $1.6 trillion-budget he sent to Capitol Hill. Among the allocations were; * to FSM, $B7 million in compact funds (i.e. no strings); * to the Marshall Islands, $4O million in those funds plus another $3.1 million for nuclear cleanup; * to newly independent Palau, $22 mil lion; * another $22 million in specialised grants to be spread among the three

Associated States; * $5 million to Guam for its costs stem ming from migrants from the Associated States and to help control the brown tree snake; * $24 million in normal subsidy to the American Samoan Government, plus another $l6 million (ex-CNMI funds) to improve the frayed Samoan infrastruc ture; and * $6 million for CNMI.

Clinton’s people had several things to worry about in addition to the needs of CNMI and Samoa. First, the US has a treaty obligation to the Associated States, hence the generous allocation to FSM, the Marshalls and Palau. Secondly, because of a historic accident (CNMI used to get $27 million a year from the mainland), they could divert some money from one set of islands to anoth er without raising little flags saying, in effect:“this is new money”.

Thirdly, the Department of Interior’s decision to close down the Office of Territorial and International Affairs was a small bone to be handed to the pop ulist Congress.

What will Samoa do with the extra money?

The funds, if they get through Congress at all, would be used not to help balance the ASG’s bloated territori al budget, but to fix up Samoa’s hospital and to bury the utility lines to prevent them from being blown down in the next hurricane. Samoans discussing the burial of the lines are careful to point out that while this is a common practice in America’s tonier suburbs (because it looks nicer), aesthetics have nothing to do with that practice in hurricane-prone Samoa.

But given the Republican Congress’s avid desire to cut the budget more deeply than Clinton did, Samoa will be lucky to retain the $24 million operating subsidy, which is a million or so higher than it has been in the past. It will be a miracle if ASG gets the $ 16 million for its infrastructure.

The chunk of money which is the safest is the anti-brown snake fund. The snakes in question, which apparently arrived from Papua New Guinea after World War 11, run wild in Guam without natural enemies, often short-circuit (above-ground) electrical wires, kill songbirds and threaten babies.

Everyone hates snakes, even Republicans. ■