[Senate Hearing 107-360]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 107-360

                        FISCAL YEAR 2003 BUDGET

=======================================================================

                                HEARING

                               BEFORE THE

                      COMMITTEE ON INDIAN AFFAIRS
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

                                   ON

  PRESIDENT'S BUDGET REQUEST FOR INDIAN PROGRAMS FOR FISCAL YEAR 2003

                               __________

                             MARCH 5, 2002
                             WASHINGTON, DC

                                -------
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                            WASHINGTON : 2002

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                      COMMITTEE ON INDIAN AFFAIRS

                   DANIEL K. INOUYE, Hawaii, Chairman

            BEN NIGHTHORSE CAMPBELL, Colorado, Vice Chairman

FRANK MURKOWSKI, Alaska              KENT CONRAD, North Dakota
JOHN McCAIN, Arizona,                HARRY REID, Nevada
PETE V. DOMENICI, New Mexico         DANIEL K. AKAKA, Hawaii
CRAIG THOMAS, Wyoming                PAUL WELLSTONE, Minnesota
ORRIN G. HATCH, Utah                 BYRON L. DORGAN, North Dakota
JAMES M. INHOFE, Oklahoma            TIM JOHNSON, South Dakota
                                     MARIA CANTWELL, Washington

        Patricia M. Zell, Majority Staff Director/Chief Counsel

         Paul Moorehead, Minority Staff Director/Chief Counsel

                                  (ii)

  
                            C O N T E N T S

                              ----------                              
                                                                   Page

                             March 5, 2002

Statements:
    Campbell, Hon. Ben Nighthorse, U.S. Senator from Colorado, 
      vice chairman, Committee on Indian Affairs.................     2
    Carter, Clarence, director, Office of Community Services, 
      Department of Health and Human Services....................    10
    Corwin, Tom, deputy assistant secretary, Office of Elementary 
      and Secondary Education, Department of Education...........    17
    DeLuca, James C., chief, Division of Indian and native 
      American Programs, Department of Labor.....................     3
    Dye, David, deputy assistant secretary, Employment and 
      Training, Department of Labor..............................     3
    Henke, Tracy A., Principal Deputy Assistant Attorney General, 
      Office of Justice Programs, Department of Justice..........    25
    Inouye, Hon. Daniel K., U.S. Senator from Hawaii, chairman, 
      Committee on Indian Affairs................................     1
    Martin, Cathie, acting director, Office of Indian Education, 
      Department of Education....................................    17

                                Appendix

Prepared statements:
    Campbell, Hon. Ben Nighthorse, U.S. Senator from Colorado, 
      vice chairman, Committee on Indian Affairs.................    31
    Carter, Clarence.............................................    45
    Corwin, Tom..................................................    59
    Dorgan, Hon. Byron L., U.S. Senator from North Dakota........    32
    Dye, David (with attachments)................................    34
    Henke, Tracy A. (with attachments)...........................    69
    Johnson, Hon. Tim, U.S. Senator from South Dakota............    32

                             March 7, 2002

Statements:
    Campbell, Hon. Ben Nighthorse, U.S. Senator from Colorado, 
      vice chairman, Committee on Indian Affairs.................   235
    Hartz, Gary, acting director, Office of Public Health, 
      Department of Health and Human Services....................   236
    Inouye, Hon. Daniel K., U.S. Senator from Hawaii, chairman, 
      Committee on Indian Affairs................................   234
    Lincoln, Michel, deputy director, Indian Health Service, 
      Department of Health and Human Services....................   236
    Liu, Michael, assistant secretary, Office of Public and 
      Indian Housing, Department of Housing and Urban Development   255
    Trujillo, Michael, M.D, director, Indian Health Service, 
      Department of Health and Human Services....................   236

                                Appendix

Prepared statements:
    Bird, Michael, executive director, National Native American 
      Aids Prevention Center (with Attachments)..................   276
    Domenici, Hon. Pete V., U.S. Senator from New Mexico.........   263
    Liu, Michael (with attachments)..............................   264
    National Congress of American Indians (with attachments).....   272
    Sarris, Greg, chairperson, Federated Indians of Graton 
      Rancheria..................................................   269
    Trujillo, Michael, M.D.......................................   269
Additional material submitted for the record:
    Sioux Funeral Home Thrives On Chronic Ills of Local 
      Reservation, article by Jonathan Eig, staff reporter, Wall 
      Street Journal.............................................   300
    Tables.......................................................   324
    Trends in Racial and Ethnic-Specific Rates for the Health 
      Status Indicators: United States, 1990-98, study by the 
      Centers for Disease Control and Prevention, Department of 
      Health and Human Services..................................   308

                             March 14, 2002

Statements:
    Campbell, Hon. Ben Nighthorse, U.S. Senator from Colorado, 
      vice chairman, Committee on Indian Affairs.................   361
    Conrad, Hon. Kent, U.S. Senator from North Dakota............   364
    Deer, Montie, chairman, National Indian Gaming Commission....   380
    Domenici, Hon. Pete V., U.S. Senator from New Mexico.........   365
    Dorgan, Hon. Byron L., U.S. Senator from North Dakota........   364
    Inouye, Hon. Daniel K., U.S. Senator from Hawaii, chairman, 
      Committee on indian Affairs................................   360
    McCaleb, Neal, assistant secretary, BIA, Department of the 
      Interior...................................................   362
    Regas, Diane C., acting assistant administrator, Office of 
      Water, Environmental Protection Agency.....................   376

                                Appendix

Prepared statements:
    Campbell, Hon. Ben Nighthorse, U.S. Senator from Colorado, 
      vice chairman, Committee on Indian Affairs.................   387
    Deer, Montie (with attachments)..............................   394
    Kindle, William H., president, Rosebud Sioux Tribe...........   388
    McCaleb, Neal................................................   440
    Murkowski, Hon. Frank H., U.S. Senator from Alaska...........   388
    Regas, Diane C. (with attachment)............................   449
Additional material submitted for the record:
    Responses to questions submitted by Hon. Daniel K. Inouye, 
      chairman, Committee on Indian Affairs......................   391

Note: Other material submitted for the record will be retained in 
  committee files.

 
                        FISCAL YEAR 2003 BUDGET

                              ----------                              


                         TUESDAY, MARCH 5, 2002


                                       U.S. Senate,
                               Committee on Indian Affairs,
                                                    Washington, DC.
    The committee met, pursuant to call, at 10:03 a.m. in room 
485, Senate Russell Building, Hon. Daniel K. Inouye (Chairman 
of the committee) presiding.
    Present: Senators Inouye, Conrad, and Campbell.

 STATEMENT OF HON. DANIEL K. INOUYE, U.S. SENATOR FROM HAWAII, 
             CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS

    The Chairman. The committee meets this morning for the 
first in a series of three hearings on the President's budget 
request for Indian programs for fiscal year 2003. This first 
hearing will focus on Indian programs administered by the 
Departments of Justice, Labor, and Education.
    In addition, those Indian programs administered by the 
Department of Health and Human Services that are outside the 
Indian Health Service will be addressed today. On Thursday of 
this week the committee will receive testimony from the 
Department of Housing and Urban Development and Indian Health 
Service.
    On Thursday of next week, March 14, the committee will 
receive testimony on the President's budget request for the 
Bureau of Indian Affairs, the National Indian Gaming 
Commission, and the Environmental Protection Agency. In those 
coming hearings, the committee will be exploring how the United 
States trust responsibility for Indian lands and resources 
would be maintained if the President's proposals to privatize 
the administration of Federal programs are approved by the 
Congress.
    Today, however, we look forward to hearing from the Federal 
agencies as to the objectives that the President's budget 
request for Indian programs under the respective jurisdiction 
seeks to accomplish in fiscal year 2003.
    With that, I would like to call upon the first witness, the 
Deputy Assistant Secretary of Employment and Training 
Administration, David Dye. Before I recognize Mr. Dye, may I 
call upon the vice chairman?

 STATEMENT OF HON. BEN NIGHTHORSE CAMPBELL, U.S. SENATOR FROM 
      COLORADO, VICE CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS

    Senator Campbell. Thank you, Mr. Chairman. We will hear 
from a number of agencies today, as you mentioned. There are a 
number of important issues that we have to face up to on Indian 
reservations: Law enforcement, policing, education, drug 
treatment, elder care, and the Administration for Native 
Americans. They are all extremely important.
    Safe and stable communities provide safety for their 
members and also attract business activity, which is so 
important to native people nationwide. I might mention, I don't 
know if you saw the Wall Street Journal this morning, Mr. 
Chairman, but there was an article on the front page that 
indicated that one of the most successful forms of business on 
reservations now are funeral homes. To me that is a terrible, 
sad commentary about what is happening on Indian reservations. 
But if you are out there as much as I am, you know that the 
death rate is just incredible.
    Given the demands placed on the Department of Justice to 
fight terrorism, I have to tell you, I am generally encouraged 
by the request for Indian law enforcement with a few 
exceptions. One is the lack of tribal detention center funds. 
Another is the reduction in the COPS funding for tribes and the 
third is static funding for tribal courts.
    I think in the hearings we have done in the past we have 
stressed that strengthening tribal courts is really one of the 
pillars, one of the foundations, of making sure that homelands 
for Indian tribes are safe. I am hopeful that we can find the 
kind of resources that we need for those important services.
    I commend the President for his dramatic increase in funds 
for substance abuse and mental health treatment. We know that 
these problems continue to ravage Indian communities and I am 
certainly glad to see the increase. The problem is that even 
though we have an increase in the funds, the demand grows 
faster than the increase.
    We have some reservations, in fact, where 50 percent of the 
whole tribe is under 25 years old. So, clearly, we have not 
been keeping up with the demands.
    I have several questions I would like to ask this morning, 
but in the interest of time, let me just close by saying one 
agency I am particularly interested in and that is the ANA. The 
ANA, the Administration for Native Americans, provides seed 
capital for Indian businesses, language preservation and 
environmental protection and does it in a way that reduces 
dependence.
    I certainly urge the department to study the ANA and find 
out why it works so well when some other programs are not 
working so well.
    With that, Mr. Chairman, I would ask unanimous consent to 
introduce my complete statement in the record.
    The Chairman. Without objection, it is so ordered.
    [Prepared statement of Senator Campbell appears in 
appendix.]
    The Chairman. With that, may I recognize Mr. Dye.

    STATEMENT OF DAVID DYE, DEPUTY ASSISTANT SECRETARY FOR 
 EMPLOYMENT AND TRAINING, DEPARTMENT OF LABOR, ACCOMPANIED BY 
JAMES C. DeLUCA, CHIEF, DIVISION OF INDIAN AND NATIVE AMERICAN 
                            PROGRAMS

    Mr. Dye. Thank you, Mr. Chairman. Mr. Chairman and members 
of the committee, thank you for the opportunity to discuss the 
Department of Labor's Employment and Training Programs for 
Indian and Native Americans in Program Years 2002 and 2003.
    I am please to have with me today James C. DeLuca, who 
heads the Division of Indian and Native American Programs of 
the Department of Labor. ETA's primary strategy for Indian and 
Native American programs focuses on the continuation of our 
partnership initiatives and support for the President's 
commitment to work with tribal governments on a sovereign to 
sovereign basis to provide Native Americans with new economic 
and educational opportunities.
    The Department of Labor is a partner not only with other 
Federal agencies including the Department of the Interior, but 
also tribal governments and other Native American organizations 
that deliver job training services. Our partners include the 
186 Indian and Native American Workforce Investment Act section 
166 grantees. These partnerships are based on shared 
responsibility for program accountability and improved program 
outcomes along with a commitment to leverage resources outside 
of BIA.
    For its part, ETA has worked cooperatively with Indian 
grantees to improve the program and maximize the impact of 
these funds. The partnerships ensures that Native people and 
Native communities have the opportunity to be active 
participants in the American economy.
    Under WIA there are two distinct Indian programs. One is a 
year-round program for both youth and adults and the other is a 
supplemental summer youth program.
    The year-round program authorized under section 166 of the 
statute was designed to improve the economic well being of 
Native Americans. It provides training, work experience, and 
other employment-related services and opportunities. The 
program serves approximately 22,000 Native people annually in 
all areas of the United States, including those participating 
in the demonstration program under Public Law 102-477, the 
Indian Employment Training and Related Services Demonstration 
Act of 1992.
    This demonstration program allows the combining of funds 
for employment and training activities from several Federal 
departments to be administered under a single grant by the BIA 
and coordinated at the tribal level. Currently, 48 tribal and 
Alaska Native entities participate in the demonstration 
program, 44 of which receive WIA section 166 funds. These 48 
entities represent about 250 federally recognized tribes and 
Native Alaskan villages.
    Because of a reduced administrative workload and the 
flexibility the single grant provides, some of these grantees 
have more than doubled the number of participants they serve.
    The other main ETA program is the Supplemental Youth 
Services Employment and Training Program also authorized under 
section 166 of WIA. The law reserves funds specifically for 
services to Native American youth in reservation areas and in 
Alaska, Oklahoma and Hawaii. The program serves about 10,000 
Native American youth each year.
    These two programs represent the main source of support for 
employment and training services for Indians and Native 
Americans for which the President's fiscal year 2003 budget 
requests a total of $70 million. Of this, $55 million is for 
the WIA section 166 Indian and Native American Program. About 
$15 million is for the Native American Indian Supplemental 
Youth Services Program, which represents 1.5 percent of the 
total WIA youth formula-grant request as mandated by law.
    In addition, the Department of Labor supports a variety of 
other initiatives. ETA has awarded six competitive grants 
totally $29 million to American Indian and Alaska Native 
grantees for youth programs. These are the so-called Youth 
Opportunity Grants.
    Under the Senior Community Service Employment Program, the 
department provides over $6 million to subsidize part-time 
community service jobs for about 700 low-income Native 
Americans, aged 55 years and older, on reservations and other 
areas. Participants serve their communities in positions such 
as nurse's aids, teacher's aids, clerical workers, while 
gaining skills to move into unsubsidized employment.
    The department has also awarded National Meeting Grants to 
Native American entities to serve dislocated workers. For 
example, the Lummi Tribe of Washington State is receiving up to 
$1.5 million to assist dislocated fishermen and the Salish-
Kootenai Tribe in Montana has received about $2.8 million to 
assist workers dislocated during wild fires and now includes 
funding for the downturn in the timber industry.
    Although the authorization to make grants for Indian and 
Native American Welfare-to-Work programs has expired, the 
department has issued regulations and procedures that enable 
those tribal grantees with remaining Welfare-to-Work moneys to 
expend them within the recently extended time period on those 
participants who can best benefit from that effort.
    The funds requested in the President's budget will help 
greatly in assisting tribes and Indian organizations to meet 
the employment and training needs of their communities. 
However, we must also continue our partnership efforts to 
strengthen the program and involve other areas of society such 
as the private sector and community and faith-based 
organizations if the overall effort is to be successful.
    In concert with our partners, we have many significant 
accomplishments thus far in program year 2001, which ends July 
30 of this year. We have, among other things, streamlined 
regulations, increased the capacity of grantees to manage 
grants, implemented an information technology project that puts 
over 120 grantees on to the information super highway and 
enables them to report on line.
    We have increased peer-to-peer technical assistance and 
training and we have improved the hourly wage rate for 
participants placed in unsubsidized jobs. Now, the most recent 
Indian and Native American employment and training data 
available are for the program year that ended June 30, 2001. 
That was program year 2000. During that program year, the 
section 166 adult programs had an overall entered employment 
rate of 54.1 percent and a positive termination rate of 83.4 
percent.
    A positive termination occurs when a participant begins to 
work, earns a diploma or completes training. Participants 
placed in unsubsidized employment at an average hourly wage of 
$7.70 per hour, which was significantly higher than the average 
pre-program wage of $5.47 per hour.
    Mr. Chairman, before concluding, I wish to address two 
concerns that I know that you probably have. The first one 
relates to filling the vacancies on the Native American 
Employment and Training Council and the second one concerns the 
Solicitation for Grant Applications WIA section 166 program 
funds.
    The Native American Employment and Training Council 
currently has nine vacancies. I want to assure you that we are 
working to fill those vacancies as quickly as possible. I 
personally have been involved in that. We had some slippage in 
appointing members to all of our advisory councils at the 
department. I could give you a long litany of excuses; some of 
it has to do with the terrorist attacks that occured on 
September 11. But we are moving ahead now and we think we will 
accomplish that very soon.
    In addition, I would mention the Solicitation for Grant 
Applications. As you know, that is generally published in the 
fall. We are a little bit late on that, though that has not 
imperiled any grantees funding. It is always out with plenty of 
time to cover contingencies.
    I am happy to announce that it has been approved and likely 
to be published later this week.
    Mr. Chairman, our investment in Indian and Native American 
employment and training programs will allow many of the most 
disadvantaged Americans to acquire the skills they need for 
productive careers. It is our strong belief that this is a 
worthwhile investment.
    Mr. Chairman, this concludes my prepared statement. I would 
be happy to answer any questions that the committee has. Thank 
you.
    The Chairman. Thank you very much, Mr. Dye.
    According to the President's budget request, the Youth 
Opportunity Grant Program will be severely cut. As a result, 
six tribes, a tribal consortia, and Alaska Native organizations 
that are now providing comprehensive services to Native youth 
in very high poverty areas may have to terminate their 
activities. What will be the reduction in these grants?
    Mr. Dye. Well, unfortunately, Mr. Chairman, I think there 
has been some misinformation, particularly in the press. Under 
the Youth Opportunity Grant Program we funded 36 sites, six of 
which are Native American grants. There were plans, but not yet 
funded, to add additional sites.
    The President's budget this year did not include funding 
for additional grants, but it did continue the existing grants. 
From the beginning the existing grants were funded on a 
declining scale over a period of 5 years dropping to 75 
percent, in the third year to 50 percent of their original 
amount in year 5.
    We are still intending, and the President's budget 
contemplates, keeping that funding schedule although there 
might be a small shortfall. We are looking at ways we might 
reprogram money to meet any shortfall. At the very worst it 
would amount to a decrease of, I think, about at the most 
$200,000 for the largest grants.
    So, the good new is, Mr. Chairman, that those grants will 
continue for the five years as originally planned. They are 
demonstration grants, which means that they were not intended 
to run forever. They were seed money for a five-year period and 
it was intended that the funds should be picked up by other 
sources eventually.
    The Chairman. It will continue for five more years but with 
much less funding?
    Mr. Dye. Yes; at the rate originally contemplated in the 
grant, yes. The third year would go for another two beyond the 
current year.
    The Chairman. Twenty-five percent of the original grant?
    Mr. Dye. Well, eventually now it is 75 percent. It declines 
in the fifth year to 50 percent.
    The Chairman. Do you think you can carryout the purposes of 
this program with such reductions in funding?
    Mr. Dye. Well, yes. I think that was certainly the plan 
when the original grant was contemplated that they would 
operate on that funding schedule.
    The Chairman. Well, we will be monitoring this to see how 
it turns out.
    Mr. Dye. Yes, sir.
    The Chairman. The administration has requested the minimum 
amount authorized under the Workforce Investment Act for the 
Indian Comprehensive Service Program, which is $55 million. Has 
the department made any attempt to calculate the need of these 
services based on the size of the population, the employment 
barriers, et cetera?
    Mr. Dye. Well, the existing program is based on a formula 
that takes population into consideration. It is pretty much 
level funding. It has been over the past several years. So, 
with the funding available, we do, by formula, restrict it by 
population.
    The Chairman. Don't you believe that if you study the size 
of the population and the barriers to their employment, the 
minimum amount would not suffice?
    Mr. Dye. Well, we do the best we can with what we have, 
sir. I think we do look at the population statistics on a 
regular basis.
    Mr. DeLuca. We do, but we work basically on a formula that 
is census-based and that formula will not change until the 2000 
census figures are given to us in a usable fashion. The program 
has been essentially constant for a number of years at $55 
million. It has gone up and down a little bit.
    The Chairman. The procedure for designating tribes and 
organizations as grantees for the Indian Workforce Investment 
Act Program should have started last September, but I gather 
that you just began last week. Is this delay the events of 
September 11?
    Mr. Dye. Partially, yes.
    The Chairman. Do you mean 9/11 delayed it this long?
    Mr. Dye. No; I don't want to use that to explain away 
everything. But those events did put a lot of strain on the 
department in a variety of ways, though I won't offer that as a 
totally exculpatory excuse for everything.
    The Chairman. With this delay, can you assure that Section 
166 Supplemental funds will be available by April first?
    Mr. Dye. Yes; we are very confident of that.
    The Chairman. I presume they will be available to all 
grantees by that time?
    Mr. Dye. Yes.
    The Chairman. I have several other questions that we will 
be submitting to you for your consideration.
    Mr. Dye. We will be happy to answer them promptly, Mr. 
Chairman.
    The Chairman. Vice Chairman Campbell?
    Senator Campbell. Thank you, Mr. Chairman. Mr. Dye, it is 
nice to see you here. You had a long, extensive and very good 
career with the Senate Energy Committee and in the House before 
that. You bring an awful lot to this job and I am very happy 
top see you there.
    Mr. Dye. Thank you.
    Senator Campbell. I wanted to ask you several questions 
dealing with employment. You probably know as well as I do that 
much of the poverty on Indian reservations is related to the 
lack of jobs.
    I don't think it is out of the question to assume that any 
place, the inner cities, the barrios, whatever, when you have 
high unemployment you have some real social problems that go 
along with it. So, I have always tried to emphasize job 
creation and education.
    Let me ask you first of all, do you track unemployment 
training needs for individual Indians themselves, but also the 
needs of the employers that are looking for people to work in 
your department?
    Mr. Dye. Well, I don't think we have done as much of that 
as we probably ought to have. My boss, Assistant Secretary 
Emily de Rocco, is placing a very strong emphasis now on trying 
to forge better partnerships with business. After all, those 
are the entities, the engines of job creation. We want to move 
away from the past where we may have trained people sort of not 
completely cognizant of the real opportunities out there or 
worked with employers to create more opportunities.
    We need to train people for jobs, jobs that exist or jobs 
that are going to be created in time for people to get them. 
So, we have a lot stronger emphasis now on working with 
businesses.
    Senator Campbell. Well, I certainly would encourage you to 
do both of those kinds of tracking. It doesn't do any good to 
train somebody for a job if there is no job, especially when 
there are some industries in America that need people. I am a 
big supporter of any kind of education, but clearly a lot of 
the job sector is not in an academic education.
    If a young person wants to become a doctor or a can you 
professor, I certainly support that. Even if he wants to become 
an attorney I would probably support it, although we have 
nothing against your profession, we have so darn many of them 
now, that is probably a field that we don't need to put so much 
emphasis on.
    But, vocational training, I think we are really missing the 
boat somewhere with the Labor Department in trying to hook up 
opportunities with needy Indian people. Let me give you just 
one example, and I would hope that you would put it in your 
think cap.
    I have a bill in that will create Labor Department grants 
for training people who want to drive trucks. That sounds a 
little bit crazy, I guess, but if you track the needs of the 
trucking industry, last year they were short 200,000 drivers. 
In fact, they are talking about importing people from foreign 
countries just to teach them to drive because there is such a 
shortage of drivers.
    If a person gets out of college with a B.A. and goes into 
teaching, he can probably get $35,000 a year as a beginning 
teacher. But some of these truck drivers are making $50,000 to 
$60,000 a year. If they are what they call team drivers, 
husband and wife, some of them are doing over $100,000 a year. 
It is really a good paying profession. In a vocational sense, 
it is a lot of money.
    I know a number of Indian people in Montana, not a number, 
but a few that are working for one trucking company that I 
think is out of Billings called Dick Simon. I talked to them. 
They tell me it is great. They don't get home as often as they 
would like, but they are home almost every weekend for two 
days. But the pay really makes a difference because they can 
live on the reservation and still make a good income.
    Well, it would seem to me that we have to make some way to 
hook people up that need those jobs when we know the trucking 
industry needs those drivers. I noted some of the things that 
come across my desk, the Mid-America Truck Conference is in 
Louisville, Kentucky the week after next. They expect 75,000 
people to come to that thing. That is how big that industry is. 
In there there will be over two dozen recruiters, recruiters 
from every major trucking company in the United States, 
Mayflower, Werner and all these big guys. They have full-time 
people trying to recruit.
    If you go to a truck driving school, when you get out of 
that school you probably get ten calls from trucking companies 
around that will even reimburse the cost of going to the truck 
driving school if you will sign a contract to go to work for 
them.
    Somehow, we have got to find opportunities like that for 
Indian people. I know they are there. I just mentioned the 
truck industry because I am pretty close to it. But there are 
other industries that must have an equal amount of opportunity 
and we are going like this. The Indians need the job and we 
have the industry that needs the people and we can't seem to 
hook them up.
    Well, it seems to me that part of the Labor Department's 
obligation is to try to hook them up, particularly if they are 
as interested in job creation for Indian people as I am. Would 
you maybe look at that bill I introduced and give me some 
feedback on how we can do that, how we can create that, at 
least in that one industry where we know that there is that 
many jobs available?
    Mr. Dye. Yes, I would be happy to look at the bill, but I 
would like to say I couldn't agree with you more. We do need to 
look at a number of our vocational offerings. One thing, the 
President has stated a very clear preference to work more 
closely with community colleges, including tribal colleges and 
try to look at a number of these vocational offerings.
    I know there are plenty of truck driving jobs that go 
begging, not just in long haul jobs, but for instance I know in 
the oil and gas industry they are begging for people in some 
places. Also in the oil and gas industry, for instance, and 
this is something I happen to know a little bit about because 
of my former life, there is a real shortage of platform workers 
in exploration and work-over drilling. They can't find people 
to do that. Well, that is another job that would be real good 
for folks that are in Indian country because it is another kind 
of job where you can leave for a time and come back. It doesn't 
require permanent relocation.
    It is a decent paying job, hard outdoor work, but I think 
it is the kind of thing that people are willing to do. I know, 
for instance, we are looking at the Southwest. There is some 
work being done in that area. San Juan College in Farmington, 
New Mexico, for instance, is looking at jobs in the oil and gas 
industry. They have a couple of industry champions there and I 
have been told that the Navaho Nation, they have been so good 
at actually getting jobs, real jobs, for Native Americans that 
the Navaho Nation now has kicked in some money in this effort.
    Just last Friday I was talking to labor officials from New 
Mexico. We are interested in talking about that program and 
similar programs.
    Senator Campbell. Well, it has been my experience that 
Indian people are not afraid of hard work, not afraid of even 
dangerous work. What they want is an honest day's pay for an 
honest day's work. You will find in some places they are 
exceptional.
    Firefighters, more and more firefighters in the summer are 
coming from Indian Reservations, as you probably know, smoke 
jumpers and the people that really are in danger. They excel at 
that. They excel at high-rise steel working in New York City, 
as you probably know, too.
    There are a lot of jobs out there. We just are not making 
the connection. But it would seem to me the Labor Department's 
responsibility is to try to make that connection.
    Let me, before I run out of time here, I am encouraged by 
your participation in this tribal economic development forum. 
Let me ask you a couple of things. Has the forum resulted in 
regulatory changes to encourage businesses on reservations, do 
you know?
    Mr. Dye. Not yet, but we are working on it, I am told.
    Senator Campbell. Okay. Then you might have the same answer 
if I asked you if you identified opportunities on Indian lands?
    Mr. Dye. I will have to talk to somebody who has been a 
participant in that meeting.
    Senator Campbell. Well, it might be a little premature.
    Mr. Dye. The answer is we are working on it. But if you 
would like us to give a little better answer for the record, we 
will be glad to do that.
    Senator Campbell. I would. If you could give us at least a 
progress report on what you have done to encourage on- the-
reservation job creation, on the ground job creation. If you 
could provide that for the committee, yet, I would appreciate 
it.
    Mr. Dye. I do think, getting back to your earlier point, 
that is very, very important, because you can train people 
until the cows come home, but if there aren't jobs there, you 
are not really going to get very far.
    Senator Campbell. Give some thought to training drivers, 
too, and get back to me with that, too, would you?
    Mr. Dye. Yes.
    The Chairman. I just have one question, since you brought 
up the Native American Employment and Training Council, I 
gather there are nine council member vacancies?
    Mr. Dye. Yes, sir.
    The Chairman. What do you propose to do with these 
vacancies?
    Mr. Dye. We propose to fill them as soon as possible.
    The Chairman. How long will that be?
    Mr. Dye. Well, I would like to do it tomorrow but the 
Secretary has to do that and there is a certain amount of 
vetting that goes on. I am putting my personal attention to it, 
as is my boss. As soon as we can get that in front of the 
Secretary and do it, we will do it as quickly as we can, sir.
    The Chairman. In the selection process, do you consult with 
Indian Country?
    Mr. Dye. Yes, we do. In fact the nominations come from 
tribes and other Native American entities. So, they are 
involved and the council is involved. I would just say one 
thing about the council. It is down to about half strength but 
it continues to function. We have several working groups, in 
fact I met with one of them a week ago, just a week ago, and 
work is getting done.
    Obviously, with some people not appointed it is not 
represented quite as broadly as it is now, but we are still 
seeking its advice and it is a strong and functioning 
committee. Actually, they do work and I do rely on them 
heavily. Mr. DeLuca is in charge of those meetings. We are 
chugging along and we are talking to people in Indian Country.
    The Chairman. I thank you very much, Mr. Dye.
    Mr. Dye. You are welcome.
    The Chairman. Our next witness is the Director of the 
Office of Community Services, United States Department of 
Health and Human Services, Mr. Clarence Carter.
    Mr. Carter, welcome to the committee, sir, and you may 
begin.

  STATEMENT OF CLARENCE CARTER, DIRECTOR, OFFICE OF COMMUNITY 
       SERVICES, DEPARTMENT OF HEALTH AND HUMAN SERVICES

    Mr. Carter. Thank you, Mr. Chairman.
    Mr. Chairman, Mr. Vice Chairman, and members of the 
committee, thank you for providing me the opportunity to 
testify today. As director of the office that administers the 
Tribal Temporary Assistance for Needy Families Program, Tribal 
TANF, and the Native Employment Works Program, acronym NEW, I 
am pleased to discuss with you these important Native American 
programs as we look to reauthorization of welfare reform.
    While I do not administer the Administration for Native 
Americans, I know that the social and economic development 
strategies, environmental quality and National languages 
preservations program under the Native American Programs Act 
play a vital role in supporting Indian and Native American 
self-determination and the development of economic, social and 
governance capacities of Native American communities.
    My written testimony includes information on the important 
work of these programs. I would like to use my time this 
morning sharing information on the current status of the Tribal 
TANF and the Native Employment Works programs and then turn to 
what we see as the next steps, including aspects of TANF-free 
authorization that will impact tribal programs.
    The Tribal Temporary Assistance for Needy Families was part 
of welfare reform in 1996. Welfare reform gave tribes the 
opportunity to operate their own TANF programs in order to meet 
the unique needs of tribal families and move them toward self-
sufficiency.
    Tribes have the option to receive direct Federal funding to 
design and operate TANF programs or they may choose to rely 
upon States to provide TANF services to tribal families. 
Although States operated family assistance programs for 60 
years, operating TANF is a new responsibility for tribes. 
Tribal, Federal and State governments have worked in 
partnership as tribes have taken on this major new 
responsibility.
    HHS has provided assistance to tribes through conferences 
and meetings, technical assistance and information exchange as 
tribes consider whether to administer TANF programs themselves 
and as they operate their own tribal TANF programs. The number 
of tribal TANF programs continues to increase each year.
    The first two tribal TANF programs began in July 1997. 
Currently, there are 36 approved tribal TANF programs in 15 
States, encompassing 174 tribes and Alaska Native villages. 
These programs serve a combined caseload of approximately 
23,000 families with an estimated 65,000 individuals.
    An additional eight tribal TANF plans are currently pending 
involving 12 tribes with an estimated caseload of 6,000 
families and as many as 20,000 individuals.
    There is no separate funding source for tribal TANF 
programs. Each tribe's TANF funding is taken from the 
appropriate State's TANF block grant, based on fiscal year 1994 
AFDC caseloads for Indian families residing in the service area 
identified by the tribe.
    In addition, most of the 15 States in which tribes are 
administering their own TANF programs have chosen to provide 
funding and/or in kind supports to further tribal efforts.
    Thirteen of the States in which tribes are administering 
their own TANF programs including Alaska, Arizona, Minnesota, 
New Mexico, Oklahoma, Utah, Washington, and Wyoming are 
providing additional funding assistance to tribes and are 
claiming these expenditures to meet their TANF maintenance of 
effort requirements.
    Several of them also are providing additional resources 
such as computers, staff training, reporting support and access 
to the State's reporting systems. Many of them are working in 
collaboration with tribal TANF programs in referrals, 
information exchange, and eligibility assessment and 
determination for other programs such as Food Stamps and 
Medicaid.
    Some States collocate and out-station State employees with 
tribal programs to provide intake and assessments in a current 
one-stop operation. Tribes have broad flexibility in designing 
their programs and, like States, are making varied choices to 
meet their own unique circumstances.
    Time limits on receipt of benefits vary. Under the work 
requirements, participation rates and the number of hours of 
work required per week also vary from plan to plan. Like work 
activities and benefits, support services vary greatly from one 
tribe to another, with tribes tailoring them to fit the unique 
needs of their service populations.
    Also, I would like to talk for just 1 minute about the 
Native Employment Works Program. The NEW program replaced the 
Tribal Job Opportunities and Basic Skills Training Program and 
provides funding for tribes and inter-tribal consortia to 
design and provide work activities to meet the unique 
employment and training needs of their populations to help 
tribal service populations become self-sufficient.
    The statute restricts eligibility for the Native Employment 
Works Program to tribes and Alaska Native organizations that 
operated a JOBS Program in fiscal year 1995. Currently, all 79 
eligible tribes and organizations receive new program funding.
    Tribal TANF and Native Employment Works Programs are 
addressing the needs of tribal service populations and have 
enabled thousands of clients to move to unsubsidized 
employment. However, tribal members, especially those in rural 
areas, continue to face major barriers to self-sufficiency.
    Unemployment is high in most tribal communities and those 
employed often earn poverty level incomes. Tribal members often 
have low levels of education and job skills and lack 
transportation and child care. Helping these families leave 
welfare for work requires that special attention be given to 
providing effective job preparation and supportive services and 
realistically addressing the prospect for job opportunities on 
the reservation.
    As part of eight TANF reauthorization discussions held 
throughout the country, Health and Human Services held a tribal 
TANF listening session in San Francisco in October 2001 where 
tribes shared their experiences and perspectives on TANF 
programs.
    The tribal listening session and other tribal input showed 
that tribes see the tribal TANF and the Native Employment Works 
Programs as valuable resources to help meet tribal needs and 
support self-sufficiency for tribal families.
    Tribal TANF programs will benefit from the changes proposed 
in the administration's plan for reauthorizing the TANF 
program. For example, tribes would be the beneficiaries of 
technical assistance provided under proposed new research, 
demonstration and technical assistance funds.
    Additionally, tribes will benefit from the proposed 
demonstration research projects that are intended to promote 
family formation and healthy marriages and they also can 
benefit from the administration's matching grant program to 
promote healthy marriages and reduce out-of-wedlock births.
    Tribal TANF and Native Employment Works Programs also will 
have the added flexibility granted to States to use reserve 
funds for more basic assistance needs.
    Finally, tribes can take advantage of the administration's 
proposed approach for maximizing self-sufficiency through work 
and additional constructive activities. As you know, our 
proposal for TANF reauthorization includes the creation of a 
new universal engagement requirement that includes planning 
activities and services and monitoring participation and 
progress.
    We know that it is especially important to tribes with 
significant challenges to combine services with work programs 
in creative ways. Tribes will continue to have the flexibility 
to negotiate customized programs that are compatible with our 
proposals on case management, work and services to meet the 
needs and challenges of their communities and economic 
circumstances.
    We look forward to working with Congress in reauthorizing 
these programs. If you have any questions, I would be happy to 
try to answer them at this time.
    The Chairman. Well thank you very much, Mr. Carter. May I 
begin by asking, what is the unemployment figure for this 
Nation?
    Mr. Carter. I think the most recent figure is some place in 
the mid-4 percent. Did you say for the country?
    The Chairman. For the whole country.
    Mr. Carter. I think it is some place in the mid four 
percent, the unemployment rate, yes. You asked me what was the 
unemployment rate for the Nation, correct?
    The Chairman. What is the unemployment rate for the Nation, 
for all peoples?
    Mr. Carter. It is my guess, I think it is some place in 
about the mid 4-percent range.
    The Chairman. What is the unemployment rate in Indian 
country?
    Mr. Carter. We have looked at unemployment figures on 
reservations. In some instances those unemployment rates are as 
high as 50 percent.
    The Chairman. What is it for Indians residing outside the 
reservation in urban areas?
    Mr. Carter. I am sorry; I don't have that figure 
specifically.
    The Chairman. Are individual Indians eligible for State-
operated TANF Programs or is it just for non-Indian families?
    Mr. Carter. No, sir; individuals would also be eligible. 
Individuals who are parents of children in an eligible family 
may receive employment and training services.
    The Chairman. How many are served by State-operated 
programs? Do you have any idea?
    Mr. Carter. I don't have a direct figure for how many 
Native Americans are served specifically by State TANF 
programs, but I can attempt to find that information and 
provide it for you.
    The Chairman. I would appreciate that.
    Mr. Carter. Yes, sir.
    The Chairman. Under the welfare reform law, States are 
required to provide equitable access to Indians under the State 
TANF programs, but there is no enforcement mechanism. How will 
the administration use the fiscal year 2003 funds to ensure 
that Indians are provided equitable access?
    We have received complaints that Indians are being denied 
service.
    Mr. Carter. Mr. Chairman, I have not been privy to that 
information. I would like to be able to look into it and report 
back to you on it.
    The Chairman. I would appreciate that. If you feel that we 
should have some enforcement mechanism, I would be most pleased 
to receive your recommendation.
    Mr. Carter. We will look into it and share that information 
with you.
    The Chairman. Unlike States which have received Federal 
support for infrastructure building over 60 years, tribal TANF 
programs do not receive support costs or start-up money from 
the Federal Government. This, I believe, places tribes in 
financial risk as many lack the infrastructure needed to 
administer TANF programs.
    Is there any mechanism in existing law which would allow 
the department to provide infrastructure funds to tribal TANF 
programs?
    Mr. Carter. There is no mechanism in the existing TANF 
structure. There are some opportunities in the President's 
proposed 2003 budget that would provide for additional 
technical assistance for tribes and States as they put in place 
TANF programs, but there is no existing mechanism for 
infrastructure support specifically for tribes.
    The Chairman. Without that, can they be assured of equal 
access?
    Mr. Carter. I think in the first 6 years of experience that 
we have with tribal TANF we have seen a number of tribal 
organizations and consortia be able to put in place TANF 
structures that are, I would say in some instances, the rival 
of State organizations. So, there does exist the opportunity 
now to construct tribal TANF programs that work well with the 
current construction; that doesn't suggest that the issue of 
infrastructure should be ignored.
    The Chairman. The President's summary included numerous 
proposals for States including a contingency fund and 
supplemental grants.
    My question is: Will Indian tribes have access to the same 
kinds of moneys as States supplemental grants and contingency 
funds or will those funds be limited to States?
    Mr. Carter. In order to speak on that, I am going to need 
to get some clarification, it is my understanding that those 
are being made available to States, but I want to make sure.
    The Chairman. I would hope you would look into that because 
I gather that the policy is equal access. If that is the 
policy, then Indian country should have access to those 
resources as well.
    Does your department coordinate its Administration for 
Native American grants with other programs such as the TANF 
program or consult with other agencies such as the Commerce 
Department in order to assure the most efficient use of funds?
    Mr. Carter. Prior to my arrival, I would tell you that I 
don't believe that our coordination in our approach to 
providing services to Native Americans was as coordinated as it 
could be. We have aggressively, I mean during my short tenure, 
attempted to build some of those relationships, built some new 
relationships and repaired some existing ones.
    For instance, we are currently in conversation with the 
Administration for Native Americans to make available through 
Community Economic Development funds some projects on Indian 
reservations to deal with economic development on reservations.
    It is those kinds of new relationships which we think we 
can forge across department lines which will help us strengthen 
our approach to strengthen Indian country.
    The Chairman. I believe all witnesses will agree that there 
is a great need for employment and training opportunities. Yet, 
I know that this budget request reduces funding for the 
Administration for Native Americans, ANA given rates of 
inflation. This is the agency that provides seed money to bring 
about employment and training opportunities in Indian country.
    Would you object if we added a few dollars to this?
    Mr. Carter. Mr. Chairman, no, I don't think, on behalf of 
Indian country, I don't think Indian country would object at 
all: However, our budget proposes only a small reduction in ANA 
funding, of less than three-quarters of $1 million.
    The Chairman. I have many other questions. I will submit 
them to you for your consideration.
    But I have just one more question.
    Mr. Carter. Yes, sir.
    The Chairman. The authorization for ANA, the Administration 
for Native Americans, will expire on September 30 of this year. 
Although the president requests funding for the administration 
for fiscal year 2003, will the president request 
reauthorization of the Native American Programs Act?
    Mr. Carter. Mr. Chairman, it is not my position to be out 
in front of the President on his objectives. But my suspicion 
is that there is funding proposed for 2003. We have, in fact, 
requested a straight line reauthorization of this program.
    The Chairman. You are not in the loop on the authorization?
    Mr. Carter. No, sir; I am not.
    The Chairman. I thank you very much, Mr. Carter.
    Mr. Vice Chairman.
    Senator Campbell. Thank you, Mr. Chairman.
    Mr. Carter, you heard the chairman mention unemployment and 
you responded with what you thought the national unemployment 
rate was and the unemployment rate on Indian reservations. I 
have to tell you that there are many people in Indian 
reservations that are permanently unemployed and it has been so 
long since they have had a job, they gave up. This fact is 
hidden when we look at Indian unemployment rates. You find that 
in some inner cities, too, as you probably know. They don't 
reflect on the unemployment roles because they just gave up.
    But as I understand it, if you look at, say, inner city 
unemployment it hovers between 25 and 30 percent in the worst 
places. There are Indian reservations in the United States 
right now that have 80 percent, 80 percent, in North and South 
Dakota.
    I see the Senator from North Dakota is here and he can 
verify that. I don't know of any place in the world, other than 
Bangladesh and Afghanistan that have unemployment that high, 
very frankly. I think it is a national disgrace that we can't 
do better in providing jobs for Indian people in the richest 
nation in the whole darn world. We still have that kind of 
unemployment with all the social problems that go with us, 
whether it is suicide or alcohol abuse or all the stuff that 
seems to spawn from not having a productive job. That is what 
we face on Indian reservations.
    But let me talk to you a little bit about the ANA funding 
since the chairman focused on that, too. I think it is good, 
but what is the rationale for reducing the funds for ANA in 
2003 since we know that it has helped in language preservation, 
economic development, a number of other things.
    Mr. Carter. I'm sorry, Mr. Vice Chairman, that was a 
reduction in----
    Senator Campbell. Oh, excuse me. That is ANA.
    Mr. Carter. There is no reduction in tribal TANF.
    Senator Campbell. What was the rationale for reducing the 
funds in ANA, do you know?
    Mr. Carter. No, sir; I do not.
    Senator Campbell. Okay, let me get back to TANF funding if 
you don't know that. We are going to be dealing with the 
welfare reform bill, the reauthorization, very shortly. We are 
going to be reauthorizing that. You noted that there is no 
separate funding source for TANF and that it sometimes is taken 
from the State's allocation. I know how that works. That is, 
tribes don't get it or they are kind of on the back end. It is 
like getting water from an irrigation system where there are 10 
guys in front of you and you are the last one in the ditch. You 
kind of get what is left over.
    Unfortunately, Indian tribes, a lot of times, that is what 
they face when they have to go through the State bureaucracy to 
get money that is filtered to the State.
    My question is, wouldn't it be more efficient to provide 
TANF funds directly to the tribes?
    Mr. Carter. Mr. Vice Chairman, I understand your analogy, 
but I would tell you that the way that this works is that, by 
the 1994 caseload data that States provided to the Federal 
Government which sets the baseline for their funding, outlined 
in that data is the amount that the State expended for Indian 
country.
    So, as the service population has declined, those dollars 
are cut right out, at the Federal level, they are cut right out 
of the State's allocation. So, we do that carving at the 
Federal level and then subtract that from the State's 
allocation.
    Senator Campbell. Do you mean they don't go through the 
State at all; they go directly to the tribe from the Federal 
level?
    Mr. Carter. They do go directly to the tribe, if they are 
cut out from the State's overall allocation.
    Senator Campbell. Okay, maybe one last question. That is on 
the 477 program that authorizes integration and coordination of 
Job Programs. It is my understanding the department has been a 
little bit slow to implement the amendments that we passed in 
2000.
    Would you care to comment on that?
    Mr. Carter. Mr. Vice Chairman, when I arrived at the Office 
of Community Services there were some issues brought to my 
attention about the way that we operated Public Law 102-477 and 
we did not have in place an appropriate mechanism to ensure 
that we were properly protecting the responsibilities and the 
funding sources of the Department of Health and Human Services.
    We have entered into negotiation with the tribes and the 
Bureau of Indian Affairs and we have worked out all of the 
challenges that we had laid out for us, I think, in a very 
collaborative way. The funding never stopped during that time. 
It was simply rerouted. But I think that all parties would 
concede that we have worked all the difficulties out of it.
    Public Law 102-477 will work just as Congress intended it 
to work, as allowing tribes to take a very integrated approach 
to making themselves more healthy.
    Senator Campbell. You probably know that there are a few 
very successful tribes now. Some have done very well through 
gaming and natural resources. Most have not, but a few have. 
Some of the tribes that have had successes are using their own 
funds to either supplement or replace some of the Federal 
funds.
    They found that going through the bureaucracy is just too 
much trouble. It is easy for them to use their own money. Have 
you seen any reduction in the demand for Federal programs under 
TANF for services in the communities that have had, say, gaming 
interests?
    Mr. Carter. No, sir, Mr. Vice Chairman. In fact since 1996 
when welfare reform passed and we had the first two tribes to 
make application to run tribal TANF, we have actually increased 
over the intervening years to 36. We currently have eight 
applications pending.
    I will tell you that it is an arduous discussion among the 
tribes to determine whether or not operating the program is in 
their best interests. There are times when consortia are 
necessary because a tribe may be too small to operate the 
program on their own. But we see an increasing interest on the 
part of tribes to take this opportunity to help put this 
program in place that would benefit their health and welfare.
    We see it as our responsibility at the Department of Health 
and Human Services to provide all the information and technical 
assistance so a tribe can make a determination in their own 
best interest.
    Senator Campbell. I see. Thank you, Mr. Carter.
    Thank you, Mr. Chairman.
    The Chairman. I thank you very much.
    Mr. Carter. Thank you, Mr. Chairman.
    [Prepared statement of Mr. Carter appears in appendix.]
    The Chairman. Our next witness is the deputy assistant 
secretary, Office of Elementary and Secondary Education, 
Department of Education, Tom Corwin, accompanied by Cathie 
Martin, acting director, Office of Indian Education.
    Mr. Corwin.

  STATEMENT OF TOM CORWIN, ACTING DEPUTY ASSISTANT SECRETARY, 
  OFFICE OF ELEMENTARY AND SECONDARY EDUCATION, DEPARTMENT OF 
   EDUCATION, ACCOMPANIED BY CATHIE MARTIN, ACTING DIRECTOR, 
                   OFFICE OF INDIAN EDUCATION

    Mr. Corwin. Thank you, Mr. Chairman. I am accompanied this 
morning by Cathie Martin. Cathie is our acting director in the 
Office of Indian Education. I am actually an acting deputy 
assistant secretary. Cathie and I are pleased to appear before 
you this morning to discuss the fiscal year 2003 budget request 
for major Department of Education programs that serve American 
Indians, Alaskan Natives, and Native Hawaiians.
    With the chairman's permission, I would like to summarize 
the remainder of my testimony and ask that the full text be 
placed in the record.
    The Chairman. Without objection.
    Mr. Corwin. Mr. Chairman, the Bush administration is 
strongly committed to ensuring that American Indians, Alaska 
Natives, and Native Hawaiians receive every opportunity to 
achieve to high academic standards.
    The recently enacted ``No Child Left Behind'' Act focuses 
on improving academic achievement by ensuring that all children 
can read by the end of the third grade, improving teacher 
quantity through high-quality professional development and 
innovative teacher recruitment and retention practices, 
increasing accountability for student achievement and placing a 
stronger emphasis on teaching methods grounded in 
scientifically-based research.
    Native American students will benefit from these 
initiatives and many programs at the Department of Education 
help to ensure that Indian students have full access to these 
and other reforms to improve education.
    The 2003 budget request includes a number of programs and 
initiatives that focus specifically on helping Indian students 
achieve. In my remaining time I would like to highlight just a 
few of these programs.
    Our request for the department's Indian Education Programs 
is $122.4 million, an increase of $2 million over the 2002 
level. These programs include formula grants to school 
districts, competitive programs, and national activities to 
further research and evaluation on the educational needs and 
status of the Indian population.
    We are requesting $97.1 million for the Indian Education 
formula grants. This program is the Department's principal 
vehicle for addressing the unique educational and culturally 
related needs of Indian children.
    Grants supplement the regular school program, helping 
Indian children improve their academic skills, raise their 
self-confidence, and participate in enrichment programs and 
activities that would otherwise be unavailable.
    Our request for special programs for Indian children is $20 
million, the same as the 2000 level. These funds will be used 
for three activities. Approximately $12.3 million will support 
an estimated 43 demonstration grants that promote school 
readiness for Indian preschool and increase the potential for 
learning among American Indian and Alaska Native students.
    In addition, the 2003 request will provide approximately 
$7.2 million to continue the American Indian Teacher Corps 
initiative which trains Indian college students to become 
teachers, places them in schools with concentrations of Indian 
students, and provides professional development and in-service 
support as they begin teaching.
    We are also requesting funds to continue the companion 
American Indian Administrator Corps. Grantees funded under this 
activity recruit, train, and provide in-service professional 
development to American Indians to become effective school 
administrators in schools with high concentrations of Indian 
students.
    We are requesting $5.2 million for research, evaluation and 
data collection activities related to Indian education. This is 
a $2-million increase.
    The Department has used the National Activities 
appropriation to craft a comprehensive research agenda for 
Indian education. We completed and publicly released that 
agenda last November and would now use the 2003 funding for the 
first major initiatives in implementing that agenda.
    The agenda responds to the major national need for better 
information on the educational status and needs of Indian 
students and for scientifically based research on what works 
most effectively in meeting the educational needs of this 
population.
    In addition to our Indian Education programs, the 
Department also supports the education of Indians through many 
other, broader programs. I will just mention a few of those. 
The remainder are discussed in my written statement.
    Title I provides supplemental education funding to local 
educational agencies and schools, especially in high-poverty 
areas to help some 15 million students, including an estimated 
237,000 Indian children and youth, learn to high academic 
standards. With title I, these students have the benefit of, 
for example, extra instruction at all grade levels, extended-
day kindergarten programs, learning laboratories in math and 
science, and intensive summer programs.
    The Department has requested a $1-billion increase for 
title I in 2003 for a total of $11.4 billion. The BIA share of 
the appropriation would be approximately $76 million, a 10-
percent increase. These funds will serve more than 50,000 
Indian children in addition to those served in regular public 
schools.
    We have a new program called Reading First. Reading First 
is a comprehensive effort to implement the findings of high-
quality, scientifically based research on reading and reading 
instruction. It is one of the Administration's highest 
priorities for education. Providing consistent support for 
reading success from the earliest age has critically important 
benefits.
    Under this formula program the BIA will receive one-half of 
1 percent of the State grants appropriation. Our 2003 request 
of $1 billion would provide approximately $5 million to BIA 
schools for this important new program.
    The Strengthening Tribally-Controlled Colleges and 
Universities or TCCUs program authorizes 1-year planning and 5-
year development grants that enable these institutions to 
improve and expand their capacity to serve Indian students. 
Under the budget request, the Department would award $18.1 
million for activities to strengthen TCCU's, an increase of 3.6 
percent over the current level. In the past 2 years, a portion 
of funds has supported construction and renovation activities 
and the fiscal year 2003 request would provide funds for an 
estimated six construction projects.
    The companion Strengthening Alaska Native and Native 
Hawaiian-Serving Institutions program authorizes 1-year 
planning and 5-year development grants that enable these 
institutions to improve and expand their capacity to serve 
Alaska Native and Native Hawaiian students. The Department's 
budget includes $6.7 million, a 3.6-percent increase over the 
current level, for this program.
    Finally, a mention of Special Education. The Special 
Education Grants to States program provides formula grants to 
meet the excess costs of providing special education and 
related services to children with disabilities. From the total 
appropriation, a little more than one percent is allocated to 
the BIA.
    Under the budget request of $8.5 billion, a $1-billion 
increase, 13.3 percent, the Department would provide 
approximately $81.2 million to BIA to serve approximately 8,500 
Indian students.
    In conclusion, the 2003 budget request for Department of 
Education programs serving Indians supports the President's 
overall goal of ensuring educational opportunities for all 
students including American Indians, Alaska Natives and Native 
Hawaiians.
    My colleague and I would be happy to respond to any 
questions.
    The Chairman. I thank you very much, Mr. Corwin. The 
Department of the Interior has proposed privatizing the 
administration of schools operated by BIA if an Indian tribe 
does not elect to operate the school as a grant school. Does 
your department have any experience with private organizations 
that operate schools?
    Mr. Corwin. This is an issue that we are well aware of, but 
we don't have direct experience. Unlike the BIA, we don't 
operate schools ourselves, so we wouldn't have any opportunity 
to enter into that sort of privatization. It has become a 
serious option for some of the cities and some of the States 
across the country in the last few years, particularly those 
that are running out of patience and throwing up their hands at 
the failure of some of their schools to provide an adequate 
education.
    It is being debated actively right now in Philadelphia. It 
has been tested in Hartford. We have had some experience in 
Baltimore, San Francisco, and it is a live debate in a lot of 
places around the country. Some of the private firms frankly do 
offer some exciting ideas for revitalizing the schools, and 
State Governors, mayors, and schools boards are looking at that 
carefully. We are watching that, but, as I said, we don't have 
direct experience.
    The Chairman. Is there any system of reporting or rating 
these private organizations?
    Mr. Corwin. I am not aware of any sort of national rating 
system or of any national reports that really attempt to assess 
the extent to which they are working. I think the whole 
phenomenon may be a little too new to have that sort of 
national data at this point. It is possible there are some 
reports we could look for for the committee that look at the 
experience in some localities, but I think at this point it is 
fairly anecdotal.
    The Chairman. Don't you think that since we are dealing 
with the sensitive minds of young children that something like 
this should be done? I ask this in light of a most recent 
scandal--involving nursing homes. It appears that we have no 
system to monitor or to rate them. As a result, old folks who 
are helpless get beaten, sometimes to death.
    I would like to be certain that moneys we spend would 
provide a good and quality education for these young children.
    Mr. Corwin. I think this would be an important area we 
might want to invest some of our research funds on. I don't 
know if we could bring it to quite the stage of having a 
national or Federal rating. We don't, at the Federal level, 
certify or approve schools or school districts. But I think, 
yes, we could be helpful in providing better information in 
this area as it begins to develop.
    The Chairman. As you know, there is a 5-percent limitation 
on amounts that can be used for administrative purposes under 
the Elementary and Secondary Education Act. Now, we are having 
complaints that that is not enough. What is your solution?
    Mr. Corwin. Well, we are hearing those complaints as well. 
I might like to have Cathie speak about it a little. It is in 
the law, however. Our statutes allow for waivers of statutory 
requirements in cases where there is an impediment to operating 
a program or the statutory requirement presents a hardship.
    So, the sort of lead option we have come up with is to 
permit waivers of that requirement.
    Cathie, do you want to say a little more?
    Ms. Martin. We are currently providing or preparing 
guidance to go in the application packages to inform the 
potential grantees on how they can request that waiver. We will 
process it with their application.
    The Chairman. Will that be the rule instead of the 
exception once this waiver is granted?
    Ms. Martin. It would become a standard practice within the 
program to grant these waivers.
    The Chairman. Would there be another limit if there is a 
waiver? It is now 5 percent. If you grant a waiver, would you 
say another five percent or is it unlimited?
    Ms. Martin. They could ask for the entire 5-percent to be 
waived.
    Mr. Corwin. We would probably have to review the waiver 
requests to determine what is an appropriate amount of funding. 
Some of these grants are quite small, down to a few thousand 
dollars, and 5 percent basically doesn't allow for any 
administration. But, of course, you make a good point, you 
don't want the entire or the majority of the grant to be used 
just for administration rather than services.
    The Chairman. In the fiscal year 2003 budget Alaskan and 
Native Hawaiian programs were cut. Is there any justification 
for that?
    Mr. Corwin. Frankly, coming up with the budget that would 
fit within our ceilings was difficult for the Secretary and 
difficult for the Administration. We are supportive of those 
programs, but in order to fit within the ceiling we had to cut 
back to a point where we would be able to continue all the 
current grants including the new ones that will start in fiscal 
year 2002, but would not be able to make any new grants in 
2003.
    The Chairman. The so-called ``No Child Left Behind Act'' 
includes authorizations for funding for tribal education 
departments, adult education, Indian fellowships, gifted and 
talented programs, but there is no funding for these programs. 
Is there any reason for that?
    Mr. Corwin. Well, these are programs that have not been 
funded in several years, going back to about 1995 and in some 
cases have never been funded. As I said, in response to the 
last question, budget decisions are always very difficult.
    The Administration elected to put funding and serious 
funding increases behind the programs that were very central to 
the mission of the Department and that already were 
established, some that I mentioned in my testimony, title I, 
Special Education. One very important one that I didn't 
mention, Pell Grants, is recommended for a very sizeable 
increase, and our reading initiative.
    To at least some extent as well these unfunded authorities, 
and we have a lot of them on the books, not just in Indian 
education, to some extent they overlap with some of the broader 
programs in gifted and talented or adult education. We think 
the needs could be met by and large through those broader 
programs.
    The Chairman. Over the last 5 years the National Advisory 
Council on Indian Education has been funded at about $50,000. 
How much are you requesting for fiscal year 2003?
    Mr. Corwin. Mr. Chairman, I don't have a number for you. I 
can get you something for the record. The Advisory Council no 
longer receives a line item in the budget or in the 
appropriation. That change occurred four or five years ago when 
Indian education was transferred from the Interior 
Appropriation Subcommittees to Labor, HHS and Education. The 
funding for NACIE, that committee, was absorbed within our 
regular salaries and expenses.
    So, I assume somewhere back in the budget documents there 
is a number for NACIE. My expectation is that it is probably 
not too much higher than last year. But I will provide a 
precise number for the record.
    The Chairman. Your department is proposing funds for the 
Adult Education State Grant and there is a great need for adult 
education funds at the tribal colleges and universities. Are 
you going to make funds available to them?
    Mr. Corwin. The adult education State grants flow through 
the States and then at the States level there is--I am trying 
to think of the technical name for it--sort of equal 
opportunity for different types of entities to apply for sub-
grants from the States, be they school districts, community 
colleges or tribal colleges. The Administration is very 
supportive of the tribal colleges.
    I believe the President may reissue an executive order on 
tribal colleges to strengthen the Federal commitment and 
reenergize the Federal agencies in their support of the tribal 
colleges.
    I am not aware of a specific authorization in adult 
education. That is in a different office. To the best of my 
knowledge, no, we have not put in a specific budget item for 
tribal colleges and adult education. I say to the best of my 
awareness; if I go back and find that there is something, with 
your permission I will correct the record on that.
    The Chairman. Do you really believe that tribal colleges 
are getting equal access and a fair share of the resources
    Mr. Corwin. I don't know the specific situation in adult 
education. As I said, it is in a different office. There may be 
a tradition in the States where out of habit grants tend to go 
out to the secondary schools. But as I mentioned, the 
Administration is definitely committed to promoting those 
colleges and getting the word out and doing whatever we can, 
not just in the Department of Education, but in all the Federal 
agencies to ensure that they always get fair treatment and get 
a fair share of the funds.
    The Chairman. I thank you very much, sir.
    Mr. Vice Chairman.
    Senator Campbell. Thank you, Mr. Chairman.
    You just mentioned the possibility of private schools and 
reservations, first of all. I am really concerned about that. 
It might present some real possibilities, but I think that I 
share the chairman's concern. There are a lot of unanswered 
questions about the whole idea.
    First of all, as you probably know, there are only two 
educational systems in the United States where the Federal 
Government is totally responsible for students. One is the 
military and the other is with Native Americans. You probably 
know that. It is our responsibility.
    Those schools, they don't have a real mill-levy tax base. 
They can't pass it on to the taxpayers. They don't get ``ADA'' 
funds from the States in most cases, none, I don't think. The 
average daily attendance that the State pays all schools, the 
Indian schools don't get that. Their total lifeblood comes from 
this body here in Washington.
    When we talk about private corporations running the 
schools, I would say there might be some possibilities, but 
maybe some real dangers, too, because, first of all, I don't 
know if that option has ever been tried before. I don't know if 
they have done it with Department of Defense schools, for 
instance. I don't know what the track record is, what they 
would bring in terms of the systems reply about operators.
    All that really needs to be looked at, as well as, I think, 
the tribal concern about whether somehow it would erode the 
trust responsibility of the Federal Government. It is something 
that we probably really have to deal with, too, before we move 
along too far down that path.
    I didn't want to question you about that. I just wanted to 
pass that on to you.
    To hear your testimony, I think the casual observer would 
assume that there had been great strides in assuring 
educational opportunities to Native Americans. But I have to 
tell you, it is my understanding according to the National 
Education Assessment Study, only 17 percent of our Indian kids 
read proficiently. That means 83 percent couldn't have read the 
testimony that you read into the record. If they could have 
read it, they wouldn't have understood it. Functional 
illiteracy is a big problem. It is not just a matter of not 
being able to read the words, but not being able to understand 
what they say. You know as well as I do, illiteracy literally 
prevents them from filling out things like job applications, 
which is one of the big concerns of this committee.
    I don't know how we can frankly justify some of the cuts. 
Senator Inouye mentioned the $10-million decrease in funding 
for the Native Alaskans. That is roughly a 41-percent decrease 
just since 2002. What is going to be the practical effect of 
that cut?
    Mr. Corwin. As I mentioned to Senator Inouye, we will not 
be able to make new awards for the Alaska Natives Program, but 
we will be able to continue the current grants, including 
grants that we are going to make during fiscal 2002.
    I should mention though that that cut is dwarfed by the 
increases the President is proposing for the larger programs 
like title I and the new Reading First initiative. The 
President has strongly, in particular, embraced the notion that 
all children need to learn to read and has cited the kind of 
data you were talking about from the national assessment.
    Secretary Page believes that reading instruction doesn't 
always reflect what science has now shown works and that we 
have to do everything that we can to bring these reading 
programs along.
    Senator Campbell. I missed that again. You said reading 
does not reflect----
    Mr. Corwin. Reading instruction in too many schools is not 
effective. It is effective for some kids, but too many of them 
are being left behind, which is why you get these 17 percent 
statistics. So, rather than funding some of the smaller 
programs, the President is really focusing in on reading 
instruction and the title I program which has been 
comprehensively revised in the last Congress, or this Congress, 
I guess, to focus more on what works and to hold schools 
accountable for the achievement of all children.
    Senator Campbell. Well, I think his initiatives and 
certainly Mrs. Bush's interest and effort on the Reading First 
programs are commendable and great. I happen to think that 
libraries and schools, I mean they are inseparable. I don't 
know you can have one good program without having the other 
program, too.
    Maybe I have my numbers wrong, but as I understand it, 
there is only $62,000 provided through the Literacy Through 
School Libraries Program. Is there something wrong with the 
information I am getting or is that really the amount of money? 
It is like saying libraries don't count or you shouldn't have 
them at all if that is all the money that is in there.
    Mr. Corwin. That is a new program just put in in fiscal 
year 2002 by the Congress. The total appropriation is $12.5 
million. The amount going to the BIA is $62,500. That 
appropriation would be maintained in our budget.
    Senator Campbell. $62,000 for the BIA schools?
    Senator Campbell. You might as well not give them anything 
if we can't add more money to that program.
    I don't think I have any more questions, Mr. Chairman. 
Thank you.
    The Chairman. I have a question. I don't think that you are 
in a position to respond to this, but you maybe able to lead me 
to someone who can. We are presently involved in a conflict in 
Afghanistan. Everyone tells us that it will take much more than 
a war to resolve this matter; that a time will come when we 
will have to provide assistance in restoring their 
infrastructure, setting up their educational system, their 
health system, their communication system, et cetera, et 
cetera.
    Has your department been called upon to provide an input in 
planning for this future which is so important?
    Mr. Corwin. I am pretty certain that we have. I am not 
personally involved in it, but I think there are some people in 
the Secretary's office or elsewhere who have begun work on 
that. If it is okay, I can try and provide more for the record.
    The Chairman. If you could provide names for the record, I 
would appreciate that. I thank you very much.
    [Prepared statement of Mr. Corwin appears in appendix.]
    The Chairman. Our next witness is the Principal Deputy 
Assistant Attorney General, Office of Justice Programs, 
Department of Justice, Tracy A. Henke. Ms. Henke, welcome to 
the committee.

    STATEMENT OF TRACY A. HENKE, PRINCIPAL DEPUTY ASSISTANT 
  ATTORNEY GENERAL, OFFICE OF JUSTICE PROGRAMS, DEPARTMENT OF 
                            JUSTICE

    Ms. Henke. Thank you. First, I would like to ask that my 
formal written statement be submitted for the record.
    The Chairman. Without objection, it is so ordered.
    Ms. Henke. Chairman Inouye, Senator Campbell, I appreciate 
the opportunity to discuss the Justice Department's fiscal year 
2003 budget priorities for Indian country. As the committee is 
aware, for far too long, the needs of Indian tribal governments 
in combating crime and violence have been ignored.
    This administration is committed to addressing the most 
serious law enforcement problems in Indian country, including 
substance abuse, domestic violence, and other violent crimes 
and to ensuring that Indian tribes are full partners in this 
effort.
    Part of our effort toward meeting these goals is to ensure 
that the Justice Department's workforce reflects the rich 
diversity of our nation. We currently have over 900 Native 
American men and women serving in the department in many 
capacities. They include U.S. Attorneys, FBI agents, Victim-
Witness Coordinators, Federal Indian Law Specialists and others 
in virtually every Justice Department component.
    We also recognize the Federal Government's unique 
relationship with tribal governments and special obligations to 
Native Americans. At the beginning of our Nation's history, the 
founding fathers established a working principle for 
interacting with Indian tribes. Enacted in 1789, the Northwest 
Ordinance pledges:

    That the utmost good faith shall always be observed toward 
the Indians. Laws founded in justice and humanity shall from 
time to time be made for preventing wrongs to them.

    The Justice Department is committed to honoring that 
historical commitment by serving as the trustee for tribal 
resources and the protector of treaty rights and by preventing, 
investigating and prosecuting serious crimes in Indian country.
    As I am sure you are aware, Mr. Chairman, violent crime 
rates in Indian country are disproportionately high. A Bureau 
of Justice Statistics study found that American Indians are 
victims of violent crime at rates more than twice the national 
average, far exceeding any other ethnic group in the country. 
And a survey by our National Institute of Justice revealed that 
one in three Native American women reported being raped in her 
lifetime.
    Like all Americans, Native Americans deserve to live in 
safe communities and the Department of Justice is committed to 
sustained efforts to reach that goal. The Department's 
strategic plan calls for significant improvement in the crime 
fighting and criminal justice administration capabilities of 
tribal governments.
    As Attorney General Ashcroft has stated, we will accomplish 
this goal in several ways, including focusing our resources 
efficiently and comprehensively to improve criminal justice and 
public safety in Indian country.
    Our commitment to American Indian communities is reflected 
in the President's fiscal year 2003 budget request of $202 
million for Indian country related activities for the 
Department of Justice. This plan will allow us to continue most 
of our tribal programs at or near fiscal year 2002 levels.
    Our fiscal year 2003 request includes almost $20 million 
for programs to reduce violence against Native American women, 
$3 million for programs to improve the investigation, 
prosecution, and handling of child abuse cases in Indian 
country, $5 million for the Indian alcohol and substance abuse 
demonstration program, a new effort to improve the enforcement 
of alcohol and drug laws in tribal lands and provide treatments 
and other services.
    Almost $12.5 million for the tribal youth program which 
supports accountability based sanctions, training for juvenile 
court judges, strengthening family bonds, substance abuse 
counseling and other efforts to improve Justice operations in 
Indian country.
    Almost $8 million is requested for the Tribal Courts 
Assistance Program which assists tribes in the development and 
enhancement and continuing operation of tribal judicial systems 
and $2 million in the Bureau of Justice Statistics for the 
Tribal Justice Statistics Assistance Center and other 
activities to help tribes make better policy decisions, share 
information with the broader criminal justice community and 
participate in national criminal justice data-gathering 
efforts.
    In addition to these Office of Justice programs 
initiatives, the administration is also requesting $30 million 
for the Indian country programs administered by the Office of 
Community Oriented Policing Services or COPS.
    But sustained criminal justice improvements require much 
more than just additional resources. Perhaps the most important 
factor in combating crime is the will of the community. For 
this reason, a core principle of our tribal program is to 
empower the tribes themselves to implement and sustain 
successful crime fighting initiatives.
    One example is the Comprehensive Indian Resources for 
Community and Law Enforcement Projects otherwise known as 
CIRCLE. CIRCLE recognizes that the most effective solutions to 
the problems experienced by tribal communities come from the 
tribes themselves. The three tribes that participate in the 
CIRCLE pilot project are the Oglala Sioux, the Northern 
Cheyenne, and the Pueblo of Zuni. They have each undertaken 
comprehensive, coordinated, multidisciplinary efforts to combat 
crime and violence.
    These tribes design their own strategy while the department 
provides its support through direct funding, training and 
technical assistance. As a result of this tribal commitment, we 
have already seen some promising results from the three CIRCLE 
projects, in reducing gang-related crime, in reducing domestic 
violence, and improving tribal justice system operations.
    Throughout these and other initiatives, the Department of 
Justice will continue working with Native American tribes, 
government to government, to build safer communities in Indian 
country. I want to assure you that I and other members of the 
current Justice Department leadership stand ready to work with 
the Congress to meet this goal.
    Thank you for the opportunity to be here. I would be happy 
to respond to any questions you might have.
    The Chairman. I thank you very much, Ms. Henke.
    In its ``Jails in Indian Country 2000'' report, which was 
issued last July by the Bureau of Justice Statistics, it was 
reported that Indian detention facilities held 1,775 inmates in 
2000, a 6-percent increase. They also reported that they were 
operating at 118 percent capacity. Yes, in your written 
testimony it is indicated that there is no funding for 
facilities.
    Ms. Henke. Sir, the Tribal Prison Construction Program, I 
believe, is what is being referenced. The Department has not 
requested funding for fiscal year 2003 for this program. The 
reason is that the Department and the Administration believe 
that the program has been a success. Currently, according to 
the most recent statistics that we have, our tribal prison 
entities are currently operating at about 86 percent capacity.
    In addition to that, by July 2003, according to our 
estimates, another 1,000 beds will be made available. On top of 
that, for the current fiscal year, fiscal year 2002, the 
Department has $35 million that we will also be distributing 
which will further increase the capacity.
    The Chairman. So, you believe that it is adequate?
    Ms. Henke. According to the statistics that we have, yes.
    The Chairman. The numbers that we received indicated that 
they were 118 percent. Something is wrong here.
    Ms. Henke. One of the things that we are working on, sir, 
is improving the statistics that we are able to gather from 
Indian country. So, we will continue to do that.
    The Chairman. A few years ago the Department of Justice and 
the Department of the Interior estimated that 4,300 sworn law 
enforcement officers were needed in Indian country. At that 
time there were only 1,600. Yet we still have less than 2,500 
serving Indian country. Why aren't we doing much more in trying 
to get law enforcement officers when we know that the crime 
rate is high?
    Ms. Henke. Sir, the Department is working on that overall. 
As you know, our primary focus, of course, is law enforcement. 
That is one of the things that working with the CIRCLE project 
and others that we are trying to improve law enforcement 
services and the number of law enforcement officers in Indian 
country. Not only is money made available through the COPS 
program, but tribes are also eligible through the current Byrne 
Formula Program and discretionary program as well as the local 
law enforcement program.
    The Chairman. According to the BIA, there are 35 tribes 
with jurisdiction over lands adjacent to the Canadian or 
Mexican borders and jurisdiction over waters directly 
accessible by boat from Canada or Mexico. These lands comprise 
260 miles of the total of 7,400 miles of international borders. 
Does the Department propose to include Indian tribes in any of 
the border security initiatives?
    Ms. Henke. Sir, the jurisdiction for that falls under 
another component within the Justice Department. I am happy to 
get back to you with an answer for the record.
    The Chairman. I would appreciate that.
    Ms. Henke. I can assure you that the Department, though, is 
committed to our border and to protecting the border.
    The Chairman. I would appreciate this.
    Ms. Henke. Certainly, sir.
    The Chairman. The Indian Tribal Justice Act was enacted in 
1993 and authorizes base support funding for tribal justice 
systems, yet there is no funding requested for programs 
authorized in this act. Is there any reason for that?
    Ms. Henke. Sir, the program funding levels that we have 
asked for for fiscal year 2003 are consistent with those that 
were funded and supported in fiscal year 2002. We have a number 
of tribal courts and judicial assistance programs within the 
Office of Justice Programs, but I am happy to talk to you 
further about that specific program.
    There are, we believe, a number of programs that currently 
exist, have been funded in the past and that the President 
proposed for funding in fiscal year 2003 that will assist in 
those efforts.
    The Chairman. This is one of the sad and tragic areas of 
life. A few years ago I visited one of the little villages in 
northern Alaska to look over a brand new prison facility. It 
was brand new and they showed me the room where the intoxicated 
would cool off. They were piled body to body. Every square foot 
was filled. They were just dumped in there like animals. As a 
result, we had a beautiful building with almost no personnel. 
Is that the situation in Indian country?
    Ms. Henke. Sir, we know that there are serious problems in 
Indian country, especially as it relates to alcohol and 
substance abuse. We are working and using our CIRCLE tribes, 
the Oglala Sioux, the Northern Cheyenne, and the Pueblo of 
Zuni, as a pilot program to assist the Department in 
identifying strategic ways to address the problems in Indian 
country, but in partnership with the tribes themselves, not by 
a mandate from Washington.
    We believe that the CIRCLE project will result in success 
and will not only help the Department, but will also have the 
tribes participating sharing their information with the rest of 
the tribes in the country. That will help us address the issues 
that exist pertaining to overcrowding in jails, specific to 
areas related to substance abuse, alcohol abuse, et cetera.
    I have also had the fortune, sir, of visiting a number of 
small areas in the State of Alaska, as well as in the State of 
Hawaii and will soon be visiting, as I informed Senator 
Campbell earlier, the Northern Cheyenne.
    I believe it is important for us to see first hand what 
exists and to talk to the tribes themselves to figure out how 
we can work together to address the issues.
    The Chairman. I commend you on your CIRCLE program. It has 
great potential.
    Ms. Henke. Thank you.
    The Chairman. I just hope it works all over Indian country 
because you have the right solution. Oftentimes the best 
solutions come from Indian country. As you pointed out, it is 
not dictated from Washington.
    Ms. Henke. Yes, sir.
    The Chairman. With that I thank you very much.
    Mr. Vice Chairman.
    Senator Campbell. Thank you, Mr. Chairman. Tracy, I also 
commend you on the CIRCLE program. I am very familiar with the 
one in Northern Cheyenne because I am up there a lot. That is 
where my ancestral home is. I think it is doing a good job.
    You have been in your job about 2 or 3 months now?
    Ms. Henke. Actually, sir, almost 7 months.
    Senator Campbell. Almost 7 months? Time flies, right?
    Ms. Henke. It does fly, sir.
    Senator Campbell. Well, I commend you for going out there 
and trying to get first-hand information from the tribes 
because very often you might be aware that they come in here 
and say:

    Nobody asked us. These are implemented by the 
administration. They are passing things and nobody asked us.

    Senator Inouye and I have always tried to make sure that 
they are well informed and they are a party to it, there is 
some negotiated rule-making going on and so on. But you 
probably also recognize, at least on my part, a little bit of 
frustration because Senator Inouye and I have been here a long 
time.
    Year after year we face the same problems. In fact, I was 
teasing my staff a little while ago that there must be 
something in my coffee when I come in here because I am always 
in a fight it seems like and I don't mean to be. But we owe so 
much and we are paying so little on what we owe to Indian 
tribes and what we promised.
    I just want to ask you a couple of questions. Senator 
Inouye already dealt with the border issues for one. I am on 
the Treasury Appropriations Subcommittee. I was the chairman 
for a number of years. Now I am ranking on that. We have 
provided a great deal of money through law enforcement, as you 
know, to work with tribes that run from the northern border of 
North Dakota, to the O'odham in Arizona. How do we encourage 
more Federal-tribal cooperation because I know some of those 
tribal areas are just like sieves? There is a fence with a 
bunch of holes cut in it, basically.
    Ms. Henke. Sir, like you, I am a firm believer and luckily 
I work for both the Attorney General and the President who are 
firm believers in seeing the situation first-hand, in talking 
to the people on the ground.
    I am from a very small town in the State of Missouri, and I 
know often the perception of the people back home and if 
nothing else from my parents. What is the Federal Government 
doing now? So, it is important for us to go see first-hand. It 
is important for us to have programs like CIRCLE that encourage 
cooperation.
    It is important for us to work not just within the 
Department of Justice and across components within the 
Department of Justice, but for us to work across the Federal 
Government with the other Federal agencies to address issues 
comprehensively to ensure that the taxpayer resources are being 
utilized to meet the needs and not used to overlap or duplicate 
or at cross purposes.
    Those are all things that specifically the Office of 
Justice Programs, are working on at the direction of the 
Attorney General.
    As relates to the border, that is something that once again 
through funding provided through the Office of Justice Programs 
to the tribes through a variety of different mechanisms that we 
have, plus working with those entities within the department 
who are responsible for security along the border, that 
cooperation will exist and we will continue to improve upon it.
    Senator Campbell. Well, I admire you enough to tell you 
that you may have already found out, particularly on our 
southern border, those reservations that border Mexico, it is 
really complicated because there are relatives living on both 
sides of the line, on both sides of the fence, I mean cousins, 
brothers and sisters and so on. It really complicates our 
problem of trying to have secure borders at the same time when 
we know that there are people that are related living on both 
sides.
    Maybe just one last thing. That deals with substance abuse. 
I really appreciate your emphasis on that. It is a huge problem 
and I don't mean sophisticated drugs like cocaine and so on. I 
mean stuff like canned heat, huffing paint in paper bags. That 
is what we deal with much more on reservations when we talk 
about substance abuse. It is real, degrading, terrible stuff 
that just burns your brain out. The kids sniffing glue, that 
kind of thing is what we deal with on reservations.
    I introduced S. 210 which authorized the tribes to 
integrate programs for many agencies. Would you review that 
legislation? One of the problems we have now, I think, is that 
the Department of Justice and the Bureau of Indian Affairs, the 
Indian Health Service, they all have a vested interest in this 
kind of thing. They are all interested.
    But I think on many occasions they are duplicating or they 
are going by each other a little bit. Basically, what S. 210 
does is it tries to integrate some of those programs. Would you 
look at that and give the committee your views on it?
    Ms. Henke. Sir, we certainly will.
    Senator Campbell. I thank you.
    Thank you, Mr. Chairman. I have no further questions.
    Ms. Henke. Thank you.
    The Chairman. Our mission seems impossible.
    Ms. Henke. I hope not, Mr. Chairman.
    The Chairman. Our funds are never adequate. The problems 
are depressing, but we would like to work with you to resolve 
these matters. It may take eons, but we will do it.
    Ms. Henke. Sir, we hope it doesn't take eons, but we look 
forward to working with you.
    The Chairman. Thank you very much.
    Ms. Henke. Thank you.
    [Prepared statement of Ms. Henke appears in appendix.]
    The Chairman. With that, the hearing is adjourned.
    [Whereupon, at 11:52 a.m., the committee was adjourned, to 
reconvene at the call of the Chair.]
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                            A P P E N D I X

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              Additional Material Submitted for the Record

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 Prepared Statement of Hon. Ben Nighthorse Campbell, U.S. Senator from 
          Colorado, Vice Chairman, Committee on Indian Affairs

    Good morning, and thank you Mr. Chairman for holding this important 
hearing.
    In future hearings we will hear from the Indian Health Service 
[IHS] and the Bureau of Indian Affairs [BIA] on the request as it 
affects them.
    Today will we hear from other agencies that provide key services to 
tribes and Indians on a variety of important fronts such as:

            --Law enforcement and policing;
            --education;
            --drug treatment, elder care; and
            --the Administration for Native Americans.

    Safe and stable communities provide safety to their members and 
attract business activity which is so important to Native communities 
nationwide.
    Given the incredible demands placed on the Department of Justice to 
fight terrorism I am generally encouraged by the request for Indian law 
enforcement with a few exceptions:

            --The lack of tribal detention center funds;
            --the reduction in ``COPS'' funds for tribes; and
            --the static funding for tribal courts.

    Nevertheless, I am hopeful we will find the kind of resources we 
need for these important services.
    I commend the President for his dramatic proposal to increase funds 
for substance abuse and mental health treatment. We all know that these 
problems continue to ravage Indian communities and I am glad to see the 
increase.
    I will have several questions for our witnesses, Mr. Chairman, but 
I do want to take the opportunity to convey what I believe is one of 
the most successful Federal programs ever devised: the ``Administration 
for Native Americans'' or ``ANA'' as we know it.
    The ANA provides seed capital for Indian businesses, language 
preservation, and environmental protection . . . and does it in a way 
that reduces dependence. I urge the Department to study the ANA and 
find out why it works and replicate its success.
    Mr. Chairman, there are many other things I'd like to mention but I 
will reserve my time for the question and answer period.
    With that, I ask unanimous consent that my formal statement be 
included in the record.
    Thank you Mr. Chairman.
                                 ______
                                 

 Prepared Statement of Hon. Tim Johnson, U.S. Senator from South Dakota

    Chairman Inouye, Vice Chairman Campbell, members of the committee, 
I am pleased that the Senate Committee on Indian Affairs is holding a 
series of hearings on the President's Fiscal Year 2003 Budget on Indian 
Programs. All Federal agencies have a tie in some way to Native people, 
tribes, and villages. In this current national climate, I was pleased 
that Indian programs have not received too much of a decrease. However, 
I am concerned over the lack of prioritization this Administration is 
focusing on several programs.
    My main concerns are decreases for tribal colleges, and Indian 
health service facility construction. Both of these programs are 
vitally needed on South Dakota's nine Indian reservations.
    South Dakota is home to four tribal colleges, with one nearby in 
North Dakota serving South Dakota Native Americans. These colleges are 
Since Gleska, Si Tanka/Huron, Oglala Lakota, Sitting Bull, and 
Sisseton-Wahpeton Community College. All of these colleges have 
contributed to the overall health and welfare of the tribal college 
system. For numerous years, I have advocated increases of the meager 
funding they receive to provide for the education of our First 
Americans.
    This is not a luxury, this is a treaty responsibility. The Federal 
Government is obligated to provide educational opportunities for tribal 
members. Last year, I, along with a number of my colleagues, was 
successful at obtaining $41 million for core operating funding for the 
colleges. These schools do not posses large endowments or a significant 
donor base they can pull from. The over thirty colleges are forced to 
share just over $41 million for operations. I am hopeful that Congress 
will at least be able to restore the Colleges back to the appropriated 
level from fiscal year 2002.
    Additionally, the budget decreases also effect construction for our 
nation's Indian health service facilities. Health care is basic 
necessity for all Americans. In Indian country not only do we see a 
lack of physicians and nurses, but we find several outdated and 
overcrowded facilities. Many of these do not even meet safety code 
standards. At the Cheyenne River Indian Reservation, the health care 
facility cannot even support baby delivery. Mothers have to travel 
approximately 100 miles south to Pierre, SD to deliver their babies. 
This presents major health and safety concerns when there, 
unfortunately, are complications.
    At the Sisseton-Whapeton Indian Reservation, health care personnel 
are working in trailers that should have been torn down due to safety 
concerns. These are dilapidated trailers housed in the back of the 
facility which itself is over crowded with both patients and documents.
    There is no in-patient care at either of these facilities. We can 
and need to do better. It must no longer be the norm to treat our First 
Americans as third class citizens. I look forward to working with this 
committee, the Budget Committee and the Appropriations Committee to try 
to increase these inadequate funding levels. I thank the Senate 
Committee on Indian Affairs for holding this series of budget oversight 
hearings and I look forward to hearing the testimony today.
                                 ______
                                 

  Prepared Statement of Hon. Byron L. Dorgan, U.S. Senator from North 
                                 Dakota

    Mr. Chairman, I want to thank you for convening this hearing on the 
President's fiscal year 2003 budget request for certain Indian programs 
and services.
    The need for more funding for Indian health, education, housing, 
justice and other programs is well documented. Just this past Sunday, 
there was an article in the Salt Lake Tribune about a little boy named 
Tyler who has cereal palsy today because of inadequate care he received 
at an Indian Health Service hospital. Another baby boy was sent home 
from an IHS hospital emergency room after the nurse misdiagnosed him 
with chicken pox. Two days later he was dead. Now, I understand that 
the IHS is making due with inadequate funding and that is my point. The 
IHS currently has a health services budget of $3 billion, and needs 
about $12 billion more. That underfunding has life and death 
consequences for Native Americans every day. Unfortunately, the 
President's budget request for the IHS recommends only a $68-million, 
or 2.2 percent, increase for fiscal year 2003. Likewise, the budget for 
the Bureau of Indian Affairs receives only a 1-percent increase, 
despite the needs that exist with respect to housing, education, law 
enforcement, social services, and other areas.
    Regrettably, the President's budget comes nowhere close to meeting 
the need for funding that exists in Indian country, and the fiscal 
situation will make it very difficult for the Congress to make room for 
additional spending. I want to explain the difficult dilemma the 
President's budget creates for Indian programs, as well as for other 
domestic programs that Native Americans and other Americans depend 
upon.
    Quite frankly, the President's budget request simply does not add 
up. The President's budget talks about surpluses, but there are no 
budget surpluses without Social Security and Medicare funds. The 
President is proposing to use $2.2 trillion in Social Security and 
Medicare trust funds to pay for tax cuts and defense and domestic 
programs.
    Even using this much of the Social Security and Medicare trust 
funds, the budget outlook is bleak for programs other than defense and 
homeland security. The President's budget requests an increase of 6.8 
percent in discretionary programs--programs for which funding is 
allocated annually through the appropriations process. Factor in 
inflation and the increase is only 3.7 percent. Then consider that the 
President proposes substantial increases of 10 percent for defense and 
23 percent for homeland security, and I fully expect the Congress to 
support these increases. The result is that the real purchasing power 
for other domestic programs--including health care, education, the 
environment, and Indian services--is actually cut by an average of 6.2 
percent.
    I explain this not because I want to provide excuses for Congress 
but to challenge all of us to strive to do better when it comes to 
Indian programs that the Federal Government has a trust responsibility 
to provide.
    The cuts in the President's budget are not just theoretical ones--
they come at the expense of programs that are vitally important and 
needed. For instance, within the Department of Justice budget, the $35 
million in funding for construction of detention facilities is 
eliminated, and funding for the Community Oriented Policing Services 
[COPS] program is cut by $5 million. The other DOJ tribal justice 
programs are level funded, meaning that in real terms, the purchasing 
power of those programs will be eroded. Are these cuts because the need 
for these programs has been reduced? Absolutely not. While the violent 
crime rate nationally has been declining, Native Americans are still 
more than twice as likely to be the victims of violence than the 
general population. More than half of jails in Indian country are 
operating above capacity, and nearly a quarter are operating above 150 
percent capacity. To me, it just doesn't make sense to suggest cuts for 
detention facilities and law enforcement officers when they are so 
clearly necessary.
    I will give more examples at later budget hearings of cuts in the 
areas of education, housing and health care that are not warranted and 
will cause hardship for Native Americans. I hope the Congress can and 
will do better in meeting our obligations to Indian people than the 
President's budget does.
                                 ______
                                 
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                        FISCAL YEAR 2003 BUDGET

                              ----------                              


                        THURSDAY, MARCH 7, 2002


                                       U.S. Senate,
                               Committee on Indian Affairs,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:02 a.m. in 
room 485, Senate Russell Building, Hon. Daniel K. Inouye 
(chairman of the committee) presiding.
    Present: Senators Inouye, Campbell, and Domenici.

 STATEMENT OF HON. DANIEL K. INOUYE, U.S. SENATOR FROM HAWAII, 
             CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS

    The Chairman. The committee meets this morning to receive 
testimony on the President's budget request for fiscal year 
2003 for Indian programs administered by the Indian Health 
Service and the Department of Housing and Urban Development.
    The Bureau of Indian Affairs [BIA] reports that as of 1999, 
43 percent of all adults living on or near Indian reservations 
were unemployed, and 33 percent of those who are employed were 
still living in poverty.
    The Indian Health Service [IHS] data indicates that 
compared to the general U.S. population, American Indians and 
Alaskan Natives have a mortality rate that is six times higher 
for alcoholism; four times higher for tuberculosis; three times 
higher for diabetes, and twice as high for unintentional 
injuries.
    Most Indian Health Service hospitals are more than 32 years 
old, and in the area of housing, recent studies indicate that 
the highest rate of overcrowding and inadequate housing in the 
United States can be found in Indian country.
    These are just some of the statistics that we must keep in 
mind as we examine the President's budget for Indian programs, 
and as we call upon Federal agencies to help us understand 
whether we will be able to adequately address the overwhelming 
needs in Indian country with the funding that is proposed for 
fiscal year 2003.
    In exchange for the cession of more than 500 million acres 
of land by the Indian nations, the United States has assumed a 
trust responsibility for Indian lands and resources, as well 
for the provision of health care, education, and housing.
    These legal responsibilities have their origins in treaties 
and the United States' course of dealings with tribal 
governments and their citizens. So we must examine the 
initiatives outlined in the President's budget with these legal 
responsibilities in mind.
    Today, we will ask the agencies to advise us whether we are 
falling further behind in carrying out our responsibilities, 
and inquire what resources are needed to fulfill our 
commitments as a Nation to the sovereign governments of Indian 
country and the people they serve.
    With that, may I call upon my vice chairman.

 STATEMENT OF HON. BEN NIGHTHORSE CAMPBELL, U.S. SENATOR FROM 
      COLORADO, VICE CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS

    Senator Campbell. Thank you, Mr. Chairman.
    Twenty-six years after the Indian Health Care Improvement 
Act was enacted, the health of Indian people is still the worst 
in the Nation in many respects. Diabetes, amputations, 
tuberculosis, heart disease, substance abuse, and so on are 
many times the national average, and you have mentioned the 
figures.
    I can tell you that this is not an abstract number for most 
Indian people, because every Native American person I know has 
someone in his family who suffers one of those things that we 
have spoken about.
    Just last month, Secretary Thompson released a study by the 
CDC's National Center for Health Statistics, showing that in 
the categories such as breast cancer, stroke, lung cancer and 
suicide, Native Americans are also doing worse than most other 
Americans.
    Mr. Chairman, when we had our last hearing, I did reference 
a recent article that was in the ``Wall Street Journal,'' which 
referred to the funeral home business as the most successful 
business on the Oglala Sioux Reservation in Pine Ridge, SD.
    I think that is really an unacceptable commentary, when in 
a community where over 90 percent of the inhabitants are Indian 
people, that the most active enterprise is burying Indians. We 
have got to do a lot better than that.
    With your permission, I would like to introduce that 
article in the record.
    The Chairman. Without objection.
    [Referenced document appears in appendix.]
    Senator Campbell. I do commend the President for his 
request of some $2.514 billion, which is about a 2.6-percent 
increase over enacted levels, and a $72-million increase for 
health facilities; although it will still fall short of 
providing the Indian health care funds needed to bring Native 
American people in parity with non-Indians in the health 
sector.
    I am particularly interested in working to improve key 
areas of Indian health that I believe are disproportionately 
responsible, that bring misery and ruin to many Native American 
families: Diabetes prevention and care, alcohol and drug abuse, 
and mental health problems, as well as substance abuse.
    As the urban Indian population steadily but surely 
increases, we must do more to refocus attention on the needs of 
urban Indian people, too. For Indian housing and community 
development, the request includes some $650 million for NAHASDA 
block grants, and additional funds for the CDBG grants, as 
well.
    I look forward to hearing the testimony of our witnesses 
today, Mr. Chairman; thank you.
    The Chairman. I thank you very much.
    Our first witness is the director of the Indian Health 
Service, Department of Health and Human Services, Dr. Michael 
Trujillo.
    The Doctor will be accompanied by Michel Lincoln, deputy 
director, Indian Health; and Gary Hartz, acting director, 
Office of Public Health.
    Dr. Trujillo, it is always good to see you, sir.

STATEMENT OF MICHAEL TRUJILLO, DIRECTOR, INDIAN HEALTH SERVICE, 
DEPARTMENT OF HEALTH AND HUMAN SERVICES, ACCOMPANIED BY MICHEL 
LINCOLN, DEPUTY DIRECTOR, INDIAN HEALTH SERVICE AND GARY HARTZ, 
            ACTING DIRECTOR, OFFICE OF PUBLIC HEALTH

    Dr. Trujillo. Good morning, Senator, it is good to see you, 
too. I am very honored to be before you and Senator Campbell 
this morning in regards to the Indian Health Service budget and 
programs. To my right is Mike Lincoln, and to my left, Gary 
Hartz.
    We are honored to come here this morning and discuss with 
you the President's fiscal year 2003 budget for the Indian 
Health Service.
    For the 5th year now, the development of the health and 
budget priorities supporting the agency's request originated at 
the service delivery level, and with tribal leadership and 
urban program involvement. We participate in formulating the 
budget request and the annual performance plan of the agency.
    Further, I would like to add that the department held two 
tribal budget consultation sessions in June. One was hosted by 
the deputy secretary, and covered all HHS agencies. The other 
focused solely on the needs and programs of Indian health care 
systems. Both these sessions were detailed and were very 
productive, and a very constructive dialog with tribal 
leadership.
    These budget consultation sessions are only one effort of 
many that Secretary Thompson has made to consult with tribal 
leadership. He and Deputy Secretary Claude Allen have already 
visited Indian country, and have also planned additional 
visits.
    Secretary Thompson has spoken of his commitment to the 
Indian Health Service, and his support of our services and 
resources. He is committed to consultation and collaboration, 
and to continue to have American Indians and Alaska Native 
leadership involved in policy and have their input.
    I believe the Secretary's efforts of increasing the amount 
of collaboration across all agencies within the department, as 
well as the incentives and initiatives for the department will 
benefit all American Indians and Alaska Native health care and 
social service programs.
    All programs within the department will have an increasing 
role to assist American Indians and Alaska Natives in their 
programs, in their resources, and also program infrastructure 
development.
    As I enter my 8th year as director of the Indian Health 
Service, I have had the honor to work closely in a 
collaborative and open manner with tribal leadership and urban 
program directors from across the Nation. Together, we have 
overcome difficulties and impediments, and I truly believe we 
have made significant strides to improve the agency's 
effectiveness, efficiency, and responsiveness to those we all 
serve.
    Those very important improvements and positive changes, 
unfortunately, get lost in the negative events, sometimes the 
negative data, and the inaccurate stories that are sometimes 
portrayed.
    At this time, I do wish to thank tribal leadership and the 
urban program directors for their commitment, their dedication, 
and certainly their sincere professionalism and guidance. I 
believe together, Congress, the Administration, the Department, 
and tribes, will continue to make positive strides in health 
care for all American Indians and Alaska Natives.
    I also wish to thank this committee and staff for keeping 
in mind the long-term goals to improve American Indians and 
Alaska Native health care, and to strengthening the special 
government-to-government relationship.
    Tragically, on September 11, many things changed. The 
history of our country is being written on how the country has 
responded to the terrorist attacks, and the responses of many 
of us, directly or indirectly. Lives and priorities were 
changed. Now we must all play our part in those changed 
priorities of the Administration, of Congress, and of the 
Nation.
    We must assess our respective roles and responsibilities in 
light of the aftermath of September 11, and in the wider 
national priorities. In this it is our respective roles to 
improve health care services for American Indians and Alaska 
Natives across the country, and address the growing needs 
together.
    I want to thank you sincerely and personally for all that 
you have done and what the committee has done to improve that 
health care. Now I will discuss questions you may have 
regarding the President's budget of an overall increase of $6.1 
million, a 2-percent increase.
    The budget not only reflects needs increases for American 
Indians and Alaska Native health care, but also the 
Administration's and the Nation's emphasis on national 
security, the war on terrorism, and the management efficiency 
and effectiveness and accountability initiatives of the 
President.
    Thank you. We have submitted a written statement for the 
record.
    [Prepared statement of Dr. Trujillo appears in appendix.]
    The Chairman. I thank you very much, Dr. Trujillo. As you 
know, Doctor, there are three major Federal agencies that 
provide health care services. The largest is the Department of 
Defense, and then the Department of Veteran's Affairs, and the 
Indian Health Service. Doctors graduate from the same medical 
schools. They provide the same medical care.
    How does your doctor compare with the doctor at Walter 
Reed?
    Dr. Trujillo. In regards to the physicians that enter the 
Federal service, and more specifically the Indian Health 
Service, we have graduates from all universities, medical 
schools, and academic medical centers, from all categories from 
the United States.
    Physicians enter the Indian Health Service in two primary 
employment systems. One is a civil service clinician, or 
through the USPHS Commissioned Corps, such as myself.
    In both of those, in order to enter as a clinician to 
practice and provide clinical care, one has to go through the 
initial appointment process of review on the civil service 
employment system, or the Commissioned Corps.
    Secondarily, one has to also verify and have documentation 
for undergraduate and graduate work in medical education; must 
all have references and documentation from the appropriate 
residencies or internship that that individual has completed; 
and also have a full and unrestricted license from a State, if 
one is in the Commissioned Corps.
    If one is in the civil service, the individual has to have 
a license from the State that he she has duty in or has been 
assigned to for clinical care.
    All our hospitals and clinics, including tribal programs, 
also have to meet the JCHO, or the Ambulatory Care 
Accreditation Committee's program for verification, medical 
staff bylaws, privileging, and re-credentialling by the medical 
staff.
    Approximately 3 or 4 years ago, the Office of Inspector 
General also did a review of the agency's credentialling and 
medical staff bylaws and privileging. At that time, the review 
found that the policies and procedures were appropriate.
    There were some concerns in regards to some oversight and 
to strengthen our interaction with tribal programs, so that we 
all had and were working from the same database to verify 
individual past histories of individual clinicians.
    That has been incorporated and, in fact, just in recent 
discussions with the Office of Inspector General, we are also 
enlarging the other new databases that have also become 
available this recent year.
    The Chairman. What is the pay differential?
    Dr. Trujillo. The pay differential varies in localities. If 
one enters the Commissioned Corps, there is a specific pay 
scale.
    The Chairman. Well, let us just put it this way. A person 
of equal education, both of them thoracic surgeons, what is the 
difference in pay?
    Dr. Trujillo. I wish we had a thoracic surgeon in the 
service. Unfortunately, we do not. But let us say in 
orthopedics.
    The Chairman. An orthopedic surgeon.
    Dr. Trujillo. We do have those individuals. They can come 
in, in two ways: one, as a Commissioned Corps Officer, at the 
level of their full training, in which they have completed 
their residency and surgery residency, and placed in a hospital 
setting.
    The Chairman. What is the pay?
    Dr. Trujillo. They would be paid a Commissioned Corps 
salary and special pays, because of their specialty and 
locality. Because of that, they can most likely attain a salary 
of around $140,000/$120,000, plus special pays in their 
category in the Commissioned Corps.
    The Chairman. That is the highest you can get?
    Dr. Trujillo. In the civil service system, we also have 
availability of some additional special pay categories, such as 
Title 38, which is also available for the VA program.
    The Chairman. What I want to get, Doctor, is who gets 
better pay: VA, Defense, or Indian Health Service?
    Dr. Trujillo. In the initial phase of an individual coming 
into the program, with the special pays that are available to 
the civil service employee, a civil service new clinician, in a 
specialty area such as orthopedic surgeon, would receive the 
higher pay; versus the Commissioned Corps physician, with the 
same training, the same level, and the same location.
    We have to, however, compete with the private sector, in 
many metropolitan areas, where an orthopedic surgeon may be 
located. In that case, an individual coming out of training, 
residency, and then going into the private sector, may earn two 
to three times or four times more than in the IHS. This may 
also include bonuses to sign on for that particular health care 
organization.
    The Chairman. I just want a simple answer. On the whole, 
who gets better pay: Indian Health Service, VA Hospital, or 
Defense?
    Dr. Trujillo. The Department of Defense and the Indian 
Health Service Commissioned Corps officers receive the same 
respective pay. The VA has availability of the title 38 in 
their specialty care, as well as the Indian Health Service.
    However, I would have to look at this a little bit more 
closely. I would think the VA program may have more options for 
increased pay and benefits for the individual. We can also send 
you some written information regarding the pay scales on 
respective agencies and programs.
    The Chairman. Dr. Trujillo, you are well aware that the 
elderly population in Indian country is growing in size, and 
nursing homes are required to be licensed if they are to be 
eligible for reimbursement from Medicare and Medicaid programs. 
Tribal governments have repeatedly expressed frustration in 
securing adequate long-term care in their communities.
    Does the Indian Health Service currently provide health 
care to elderly Indians and Alaska Natives?
    Dr. Trujillo. Senator, yes, we do provide medical care and 
services, and contract health service to individuals who are 
eligible for services. Because we do not have funding nor 
authority to manage and administer skilled nursing home care 
facilities, we have to rely on outside sources. Tribes also 
have to rely on that availability. However, some tribes have 
built their own skilled nursing home care centers.
    The emphasis of the agency, as well as with tribes, has 
been, how do you keep an elderly individual at home? So a lot 
of our concentration is on the aspects of out-patient, out-
sourcing in regards to making sure that they have availability 
of resources, and the availability of support services, such as 
meals, so that the individual can be at home.
    The Chairman. Would it be feasible for your health service 
to maintain nursing home care facilities?
    Dr. Trujillo. We have discussed this at various periods of 
time within the agency and also with the involvement of tribes. 
The difficulty of instituting skilled nursing home care 
services, is that it is terribly expensive and labor intensive.
    The Chairman. How much?
    Dr. Trujillo. It is much more expensive than we would be 
able to run, let us say, in a locality such as Pine Ridge. Such 
a facility would require staffing and equipment that is quite 
enormous as well as the large amount of resources that are 
needed for skilled nursing home care.
    The Chairman. Can you share those numbers with us?
    Dr. Trujillo. We will be able to share those. We also have 
to work with State licensure and accreditation procedures and 
building capabilities for such nursing home care.
    One of the efforts of the department is looking at elderly 
care. In fact, in about 2 weeks, I have a meeting with the 
Director of the Office of Aging, so we can discuss some of the 
specifics of how we can better coordinate the department's 
effort on elderly health care programs.
    The Chairman. Can you provide for the record the size of 
the population you serve, and the number of physicians and 
staffers serving them, as compared to the population that is 
served by the Department of Denfense and their doctors and 
staffs; and the same thing with VA?
    Dr. Trujillo. Yes; we will.
    The Chairman. I have a few more questions; but Mr. Vice 
Chairman, please proceed.
    Senator Campbell. Thank you, Mr. Chairman, and let me ask a 
few, too, and then I will pass to Senator Domenici.
    First, Dr. Trujillo, you know, I understand you have really 
made a commitment to recruitment and retention for Indian 
people in the medical profession, and I certainly appreciate 
that.
    Can you tell the committee how many Indian doctors there 
are in the IHS, and perhaps how many Indian medical students 
there are in training?
    Dr. Trujillo. I do not know exactly how many Indian medical 
students are in training at the present time. I know there has 
been a tremendous increase in the number of Indian physicians 
over the past several years.
    Senator Campbell. Well, give me a ball park figure. Does 
``tremendous increase'' mean 2 or 10 or 100, or what?
    Dr. Trujillo. The figure I am more familiar with regarding 
Indian students and medical school approaches around about 200.
    Senator Campbell. Could you try to find out that number; 
not only of the doctors, but of the ones in training?
    Dr. Trujillo. Yes.
    Senator Campbell. I think the committee would be interested 
in knowing that.
    Dr. Trujillo. It changes up and down, but we have seen a 
trend across the Nation.
    Senator Campbell. I thank you.
    Let me ask you a couple of medical questions about dialysis 
machines. How many people can use a machine in a day? I do not 
know a single thing about them, other than they are mighty 
expensive and mighty necessary.
    Dr. Trujillo. The dialysis machines that corporations and 
health facilities now maintain have a little faster rate of 
dialysis than in the past. However, an individual still must be 
on the machine at least 2 to 4 hours, depending upon the blood 
chemistries that they have and the intensity of care. Most 
individuals are on, I would say, an average of 3 to 4 hours.
    Senator Campbell. If you ran that day and night, you would 
get maybe six people.
    Dr. Trujillo. Yes; on one machine.
    Senator Campbell. On one machine?
    Dr. Trujillo. And that individual also has to be dialyzed, 
on the average, three times a week.
    Senator Campbell. Yes, I knew that; thank you.
    A couple of years ago, the Northern Cheyenne built a new 
clinic.
    Dr. Trujillo. Right.
    Senator Campbell. It was opened, I think, about 1 year or 
1\1/2\ years ago. In fact, I went up and visited it. It was a 
very, very nice facility.
    At that time, I asked you if they could get a dialysis 
machine up there, and you will remember me asking that.
    The problem was, the machine stayed awhile, and then it was 
moved out, from what I understand, from the tribe, due to lack 
of operational funds. I tried to track that down a little bit, 
and found out they had the machine, but they did not have 
anybody that could run it, and so they moved the machine.
    Well, there are people up there, and I mean dozens, not one 
or two, but dozens have to make a 180-mile round trip, three 
times a week in the wintertime over black ice, and even in the 
summertime through often congested traffic, to get dialysis in 
Billings.
    It takes 8 or 10 hours to do that for them, or more. So 
staying alive has become a full-time job for the people that 
have to go all the way to Billings and back, three times a 
week.
    It just seems to me that it would have been a lot easier 
and maybe a lot less expensive to train somebody to run that 
machine, when you think in terms of manpower to drive people 
over there, the cost of gasoline and renting a van three times 
a week, or probably every day. The people have to go three 
times a week, so they probably do it every day.
    Why do we not put that machine back? In fact, that is what 
I want you to do. Get that machine back up there, and get 
somebody up here to train on it.
    The community colleges came in to see me, and I am sure 
they visited with other members on the committee, too, not long 
ago. Some of them feel that they could do some of the training 
for the people to operate the machines.
    So first, can I get your commitment to get that machine 
back up there, and get somebody to operate it? Second, would 
you give me your opinion on having community colleges train 
some of the dialysis operators?
    Dr. Trujillo. In regards to dialysis, the Indian Health 
Service does not maintain any dialysis programs. The tribes, or 
Indian Health Service, contracts with a dialysis program. In 
this particular case, I believe the dialysis program for Lame 
Deer was contracted from Deaconess Hospital out of Billings.
    The difficulty we had in regards to maintain dialysis, in 
this particular case, was having to have a nephrologist, having 
to have the certification for the program to maintain and run 
and administer the dialysis program, and also having to have 
trained nursing care and dialysis technicians, including the 
maintenance of the dialysis machines at that location.
    Senator Campbell. Let me see if I understand this then. IHS 
provides the machines, but you do not even provide the 
machines?
    Dr. Trujillo. We do not provide the machines. In fact, the 
corporations that tribes and Indian Health Service contract 
with provide all that, including the certification, the 
nephrologists, the technicians, the nursing care, and all the 
operational programs for the dialysis center.
    Perhaps, some tribal colleges may be able to train 
individuals as dialysis technicians; but the complexity and the 
technology is usually very specialized training program, after 
having some basic training at a medical center or in a dialysis 
program.
    One must have a certified nephrologist, who is trained in 
dialysis, to be the administrator and medical director, and 
must be able to have certification as a dialysis program; and, 
in that case, receive reimbursement from Medicare.
    Senator Campbell. This is getting too complicated for me. 
Give me a simple answer, if you can. What can you do to get a 
machine back up here, and to get somebody trained to operate it 
up here?
    Dr. Trujillo. We have been working with the Billings area 
office and Lame Deer, and well as with Crow, because Crow does 
have machines, and some patients from Lame Deer do go down to 
Crow, which is approximately halfway in between Billings and 
Lame Deer.
    We will commit to work with you and get you some respective 
answers of our plans, and also the followup and some options of 
how we might be able to provide services there. I would provide 
that to you within the next 2 weeks.
    Senator Campbell. Would you do that?
    Dr. Trujillo. Yes.
    Senator Campbell. Okay, thank you, I appreciate that.
    Maybe I have one other question, and then I will come back 
for another round, Mr. Chairman. That question concerns 
something that I think was really distressing. Perhaps you are 
not aware, or maybe you are, Doctor, but I would like your view 
on this.
    In December 2001, an incident occurred on the Cheyenne 
River Sioux Tribe, where an IHS doctor by the name of Reid 
apparently, because there are several stories, including the 
ambulance driver, but the doctor told the ambulance driver to 
deliver the body of a deceased Lakota man by the name of 
Leonard Fiddler, to the IHS Hospital.
    It is reported that Dr. Reid told the ambulance driver:

    Whatever you do, do not bring the body to the IHS. I do not 
care if you take it back or throw it on the side of the road; 
just do not bring it here.

    Are you familiar with that at all?
    Dr. Trujillo. Yes, I am, Senator, unfortunately.
    Senator Campbell. Could you tell the committee what you did 
about that, or what policies you have in place; or if it is 
true, if Dr. Reid is still working there?
    Dr. Trujillo. First of all, the incident occurred with Mr. 
Fiddler, who also was an elder tribal leader in the Cheyenne 
River Tribe.
    Senator Campbell. I know his family well, by the way.
    Dr. Trujillo. Yes; and he went to bed early in the evening. 
He was a diabetic. His wife was unable to wake him up several 
hours later. Because of the circumstances, the wife called the 
police and an ambulance service was requested from the 
locality.
    The ambulance arrived. The technicians detected no life 
signs, including pulse or responsiveness or eye reflexes, and 
then called the Indian Health Service local facility at Eagle 
Butte Hospital.
    The nurses responded and called the on-call physician, who 
was a contract temporary physician, not an Indian Health 
Service physician, who was contracted to work in the evenings 
and on weekends.
    Because of policy that was developed locally, in which 
deceased individuals were to be transported to the local 
mortuary or the morgue that the family designated, the 
clinicians said that that was supposed to be the route of the 
deceased individual on the ambulance.
    There was confusion as to why not just take the individual 
to the hospital, because the family had not made up their mind 
as to where to go. Because of the location of Eagle Butte, and 
having encountered the death very quickly and unexpectedly, 
they did not have that in place.
    Unfortunately, and this is very tragic, my understanding of 
the situation was, the clinician made some very uncalled for 
remarks.
    Senator Campbell. Where is he now?
    Dr. Trujillo. The physician was terminated, and we no 
longer have that individual on contract any place within Indian 
Health Service. We also contacted the organization that we work 
with to hire the temporary physicians in, and told them the 
circumstances, and the necessity not to have clinicians in our 
service such as this.
    When I found out about this, I also called on two of our 
clinical clinicians, who have expertise in emergency care, and 
one was a former medical examiner, and they had national 
experience. They did an immediate review of the situation.
    I also called the Office of Inspector General, so that we 
could have an independent review. They did an independent 
review of the situation and forwarded me the results.
    Just recently, I also met with Chairman Greg Borland and 
his health care committee. We went through the circumstances of 
the death policies, and how we will be working together, to not 
only overcome this particular situation, but also look at some 
of the other concerns that we both have regarding the delivery 
of services and the possibility of looking at and developing 
the plans for a future hospital at Eagle View.
    We have agreed and will work positively and constructively 
on this particular issue. In addition, because of the 
circumstances that I felt were unwarranted by this temporary 
clinician, I personally sent a letter of regrets and apology to 
the chairman and the tribal council.
    I also contacted the family, and also wrote a personal 
letter to them.
    Senator Campbell. Well, thank you for doing that. Any 
doctor that has that kind of a calloused attitude toward anyone 
that is deceased and their family I think needs to get a 
different profession. That is just my personal view. But I know 
the Fiddler family well. I know Greg Bourland well, as the 
Chairman does, and we do thank you for that.
    I will ask some further questions when it is my turn, 
again, Mr. Chairman.
    Dr. Trujillo. Thank you, very much.
    The Chairman. Senator Domenici.
    Senator Domenici. Mr. Chairman, let me just take a few 
minutes. Might I first ask, do we have on record how much the 
President's budget is for IHS? Has that already been inquired?
    Dr. Trujillo. Yes, Senator Domenici; I also submitted a 
written statement for the committee, as well as outlining in 
that discussion the budgets proposed for fiscal year 2003.
    Senator Domenici. Let me then move to some specifics within 
your operation. I understand that reports and analysis from you 
indicate that there is 13 percent vacancy rate among 
professionals in the Indian Health Service.
    I know there are vacancies in every health delivery service 
in the country, and their shortages of different professionals 
in different regions; nursing being one that is getting very 
close to being everywhere.
    But might I ask, are you doing something exceptional to try 
to fill these vacancies? It seems to me, you are going to have 
to work very hard, with some innovative ways, some ways of 
attracting people that are new and exciting or different. Are 
you doing those kinds of things in an effort to get some 
professionals to fill these vacancies?
    Dr. Trujillo. Yes, Senator; unfortunately, as you have 
mentioned, the health care systems across the country are 
facing some shortages, especially in some professions. We are 
seeing that happening in the Indian Health Care System and 
tribal programs.
    In nursing, for example, across the country, you have about 
an 11-percent vacancy rate. In our dental category, in regards 
to dentists, we see a high vacancy rate in tribal urban 
programs, and that is around about 20 or 22 percent, in all 
cases.
    In pharmacy, we also see this in and outside the Federal 
services and Federal programs. The pharmacy vacancy rates are 
running about 14 to 15 percent nationwide, within the Indian 
Health Service.
    In comparison to that, the physician vacancy rate is around 
about 8 or 9 percent. We are feeling the crunch in nursing, 
pharmacy, and dentists. Not only have we attempted at enhancing 
our program for recruitment and retention of individuals in 
those categories, we have also had recent authority for special 
pay in dentistry, and also special pay for oncoming 
pharmacists. We also have obtained some special pay for the 
nursing staff.
    Unfortunately, within the Indian Health Service, we are 
seeing a number of our nurses are eligible for retirement. So 
not only are we planning for new people coming in, but also for 
replacement, because we see that.
    We are also working in concert with the department, with 
some of the Secretary's initiatives on recruitment retention, 
so that we are going across the department as a whole, not only 
developing plans for recruitment and retention, but also seeing 
where we can strengthen each other.
    Since ours are very diverse localities in our situation, 
with tribes and urban programs and Indian Health Service, we 
are also getting assistance from the department as a whole.
    We have also received additional dollars in the budget to 
recruit individuals from the military and the VA, in which 
cases there has been some downsizing in their medical 
facilities. That will help in the recruitment, retention, loan 
repayment, and special pay category.
    Senator Domenici. Well, thank you very much, and I hope 
your efforts are successful.
    I have two parochial New Mexico questions. But let me first 
talk about two illnesses: Severe mental illnesses, 
schizophrenia, manic depression, and the like. Currently, the 
medical practice in the United States, are the beneficiaries of 
some new medicines that are stabilizing, or the first time, for 
schizophrenics and even manic depressants, and certainly those 
who have depression.
    I just want to ask whether or not, in your pharmacy 
delivery system for Indian Health, are you providing the most 
modern drugs and medications for the mentally ill; or are you 
unable to pay for some, thereby denying them the same good new 
kinds of drugs that they might get, if they were not at an 
Indian treatment facility?
    Dr. Trujillo. In regards to the medications that we have 
for mental health illnesses, and the new medications that you 
are referencing, a number of those, unfortunately, are very 
high cost drugs. We also see this in the medications that treat 
diabetes.
    We attempt, as well as the tribal programs attempt, to have 
appropriate pharmaceuticals and medications on board; or, if 
necessary, having to order them particularly for a particular 
patient.
    Unfortunately, as we look across the country, in tribal 
programs, Indian Health Services, as well as the urban 
programs, one of the highest rising cost areas in all of our 
budgets, delivery systems, have been the pharmaceuticals. In 
some cases, we have seen a 31-percent rise in the cost of 
providing the same medications.
    So when we take a look at how we provided the formularies 
that we can specify within our facilities, and ordering special 
medications, we also encounter the rising costs of drugs.
    We are working with the department at the present time on 
the overall cost of pharmaceuticals. We are also hopeful that 
we will be able to get some relief from other resources that 
will flow into the Indian Health Service, because of the 
overall department's plans.
    Senator Domenici. Mr. Chairman, what I would like to do, 
with your permission, I would like to submit, as part of this 
record, a list of the kind of medication that is currently 
being used to treat the severely mentally ill in the non-arena; 
and to ask them to inform us whether they are making that 
available to our Indian people or not.
    I do not have the names today, but frankly, there are some 
people whose family members are going from a catatonic state, 
with schizophrenia, to being an able-bodied citizen and a 
relative who has almost come back to life, so to speak. But you 
have to have medicines to do that.
    You and I had to intervene one time, because they were not 
giving the medicine to the young man who had been very sick for 
8 or 10 years. I think I told you, once they gave him the 
medicine, the young man was well.
    In fact, his mother greeted me at an event, and I did not 
even know why she was there to thank me. The medicine was too 
expensive for their pharmaceutical acquisition list. I think we 
ought to help the severely mentally ill in a very special way, 
and make sure they are getting as good a medicine as non-
Indians. That is why I want to do this exchange, if you would 
permit it.
    The Chairman. Most certainly, you may do that, sir.
    Without objection, so ordered.
    Senator Domenici. I have two New Mexico questions.
    Dr. Trujillo. Yes.
    Senator Domenici. I want to give them to you, and ask my 
staff to get answers for them. I have on the Hickory and one on 
the Albuquerque health care facility.
    Now I want to close by telling you that the Indian people 
are the beneficiaries of a very, very major effort in diabetes. 
We started this program when we put together the balanced 
budget of 1979, with $30 million for a special fund for 
diabetes among the Indian people. It is now $100 million per 
year.
    I think it is time that some results show from such a major 
effort. I wonder if you might supply us, for the record, with 
some kind of analysis of how far you have come with diabetes 
treatment, and where you plan to go, now that there is going to 
be $100 million a year.
    I think we do not need to burden this record with the 
facts, again. But if there is a population of Americans that 
are in serious jeopardy because of an illness, it is the Indian 
people and diabetes.
    Frankly, we had one expert tell us, if we did not rectify 
the situation, that there would be no Navajo Indians left, 
demographically speaking, in a period of 30 to 40 years, 
because diabetes is such a killer, in terms of Indian people.
    Are you satisfied with the way the program is being 
conducted, and could you supply us with information which might 
indicate to us whether the program is doing well or not, 
Doctor?
    Dr. Trujillo. Senator, I also want to personally thank you, 
and also for the agency, for your efforts in regards to 
obtaining and assisting with the special diabetes funding. That 
has been of great help, not only to the Indian Health Service, 
but tribal programs.
    Yes, we would be very willing and able to provide the 
committee and others with appropriate information, followup and 
also examples of what has been done with these special diabetes 
dollars, including a lot of concentration on the preventive 
aspect and the educational aspect.
    Unfortunately, for American Indian individuals, this is the 
scourge and the epidemic that we see before us, because it also 
goes into cardiovascular disease and, as you know, dialysis and 
problems down the road.
    We also are aware that the special diabetes funding, I 
believe, has one more year for the Indian Health Care Programs. 
The department, tribes, and Indian Health Service, will be 
working with the Congress on how we might be able to address 
the continuation of such funding, because it has been of such 
great help in Indian country.
    Senator Domenici. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much.
    The President's budget request has an increase of about $64 
million for fiscal year 2002. While at the same time, health 
care for the American citizen was about $3,800 per year. Indian 
Health Service will $1,300 per year for the patients they 
serve. Will the $64 million increase bring expenditures closer 
parity, with that expended an all other all other Americans?
    Dr. Trujillo. Senator, as you well know, the Indian Health 
Service, for many, many years, has had very challenging work 
always laid out before us. The issues of available resources, 
the increasing inflation for health care costs, the population 
growth of American Indian/Alaska Natives we see across the 
Nation, continues to be very challenging for us.
    I believe that our programs, tribal programs and urban 
programs, have been quite creative, and have created some 
programs that despite always the needed resources that we could 
use, have developed good programs.
    We have conducted work groups with tribal leadership to 
identify direct service costs for patients, in which we serve. 
It is called the level of need funding for direct services, 
where we compare programs and their respective costs, to that 
of the Federal employee benefits package. The cost that we have 
identified for direct services from that particular work group 
has been around about $4 billion or $5 billion.
    The direct services that we can identify with Indian health 
service amounts to about $2 billion. We are looking at the 
preventive, the public health, the facilities, what we call the 
wrap-around services. We are also identifying those costs, too.
    The budget, I believe, for this year, while it is 
constrained, will go toward some specific components of high 
need, in the services, as well as facilities, construction, and 
directly to tribes.
    Mr. Lincoln, would you like to expand a little bit on our 
level of need and our cost per patient?
    Mr. Lincoln. Mr. Chairman and members of the committee, the 
increase in this budget cannot make up the difference between 
what this Nation pays for in personal medical services, which 
is in excess of $3,000 per individual, and what the Indian 
Health Service has available to it for those same personal 
medical services, $1,300. This budget will not make up that 
difference.
    The Chairman. How much more would we need?
    Mr. Lincoln. Based upon this level of funded need study 
that Dr. Trujillo referred to, if you look at the number of 
users, Indian people that use the system, whether it is 
Federally operated, tribally operated programs, there are 
approximately 1.4 million to 1.5 million Indian people who use 
the system.
    If the average, just in terms of round numbers, is $3,000 
per individual, therefore, there would be a need of about $4.5 
billion, in order to meet this need.
    The Chairman. So the President's budget is short $4.5 
billion?
    Mr. Lincoln. We currently have approximately $2 billion for 
personal medical services. So if we were to meet the difference 
between $4.5 billion and $2 billion, there would be a need of 
$2.5 billion.
    The Chairman. The 2000 Census indicates that 57 percent of 
American Indians and Alaska Natives now reside in urban areas.
    However, the President's budget request includes only a 
$581,000 increase in funding for urban Indians. Is that amount 
proportionate to the increase in the urban Indian populations?
    Dr. Trujillo. There has and continues to be a shifting of 
the Native American population into more metropolitan areas. We 
have been working with the urban programs, as well as with 
tribes, to identify some of the high priority issues.
    Over the past several years, we have developed a program 
for epidemiology, to obtain statistics, resources, and health 
care data, so that we can verify and assist the tribal programs 
in resources.
    We have also attempted to build the infrastructure for 
administration training, as well as data programs, among all 
the urban programs over the past years, including this 
particular year.
    The other areas that we are working on, with the department 
as a whole, especially through SAMSA, HRSA, and CDC, are 
availability of funds from their particular programs, that can 
flow into local governments, city governments, community health 
centers, migrant health centers, the cooperation between those 
respective agencies, and working with them, with the urban 
health care programs.
    So what you see in the budget in the Indian Health Service 
is not all the dollars that go to urban programs. We also are 
able to hopefully access now, and in the future even more, 
resources from especially the community health center programs.
    We also have collaborative efforts in the increased amount 
of dollars that are going to build back the national health 
service core and the clinicians that come out of that. Those 
individuals will then also be coming not only to tribal 
programs, but also urban programs.
    We also have the diabetes funding, that has gone into urban 
programs and are part of the overall effort for education and 
direct services and prevention.
    The Chairman. These funds are available, but are they being 
used?
    Dr. Trujillo. Yes; they are being used. They are also being 
leveraged by many of the urban programs. The Indian Health 
Service, in some programs, is not the only source of dollars. 
They have also been very fruitful in their collaborative 
efforts, being able to obtain outside grants; being able to 
obtain programs that are available for them, either through 
Federal or State programs, university or other health care 
corporations. So our Indian Health Service dollars are also 
leveraged with that facility.
    The Chairman. The budget request submitted by the President 
involves a restructuring proposal.
    For example, it proposes a consolidation of public affairs, 
legislative, human resources, staff functions, and funding from 
the departmental agencies where they are currently located, to 
the Office of the Secretary.
    In addition, the budget request proposes further 
consolidation of facilities construction, and that is 
hospitals, management and maintenance staff, functions and 
funding, in fiscal year 2004, to the Secretary.
    Now with that type of consolidation, do you believe that 
the United States' trust responsibility for the health care of 
American Indians and Alaska Natives will be hurt? Put another 
way, in a much plainer way, if a hospital building in Indian 
country comes up in contest with a building in NIH, which will 
be accorded the higher priority?
    Dr. Trujillo. Senator, the question is very thoughtful, and 
I believe it is an issue that the department, the Secretary, 
and the agency, and tribes are now working on.
    I do believe that the initiatives of the Secretary and his 
efforts in a one department collaboration, with collaborative 
support, will bring about additional resources to Indian 
country from other agencies within the department. I believe 
they also will have an increased responsibility for delivery of 
that care, and that the Indian Health Service is not the sole 
responsible party; but other agencies are.
    At the present time, we are studying the efforts for 
consolidation, especially when you mentioned facilities. The 
department is now gathering information, the data specifics of 
how this consolidation might occur, if it were to occur in the 
future.
    I believe that if we have a priority system, and I would 
have to say here, the department continues to be very impressed 
with the priority system of the Indian Health Service, and have 
also us to explain that in more detail as we go through the 
consolidation.
    I believe, given the special relationship of the 
government-to-government belief in the Secretary and his 
concern of consultation and involvement, that certainly the 
highest need of Indian health care facilities will be right 
there on the desk for the priorities of the department.
    The Chairman. That is your personal view?
    Dr. Trujillo. That is my personal view.
    The Chairman. And your priorities will be consolidated or 
merged with those of the Department?
    Dr. Trujillo. I believe the Indian Health Service will also 
have a primary role to perhaps access additional dollars from 
other resources.
    This particular effort is now being steadied by the 
department right now. We have also involved tribal leadership 
in a restructuring committee, to look at the options and look 
at the recommendations that have come from the department, so 
that they too will have an input directly not only to the 
agency, but also to the department.
    In addition, the Office of General Counsel is also looking 
at some of the specifics, as it relates to the special 
relationship between tribes and the Federal Government, and the 
department, as well as the new legislation regarding title 5 
and title 6.
    The Chairman. My interpretation of history would suggest 
that whenever functions are consolidated, the priorities of 
Indian country always seems to fall to the bottom of the list. 
Otherwise, how can we continually have situations where the 
average American health care expenditure is $3,800, and the 
average Indian health care expenditure is $1,300 or less than a 
one-third of the average expenditure for all other Americans?
    I mean, this is not parity, and I am afraid that this 
consolidation will further exacerbate the situation. I know 
that you have great faith in the Secretary, but Secretaries 
come and go. We have no idea who the next Secretary will be, 
but we know what the law will be.
    The attitude of the people of the United States, history 
shows this. We have enacted all kinds of laws, hoping that we 
could correct this.
    The President's budget request, for example, has an 
increase of 83 full-time equivalents to staff new facilities, 
when you know that you need 183. Now how have they done this? 
They gave you 83 full-time, and they take away 100 Fte's from 
other areas. Is that not correct?
    Dr. Trujillo. When we construct new facilities, staffing is 
usually at the level of 80 percent, and we do not staff, 
unfortunately, facilities at the 100 percent level. The funding 
that we have in the budget at the present time is for the 
completion of hospitals that are now ongoing, that is, at 
Winnebego, NE, Parker, CO, and Fort Defiance, AZ.
    The initiatives, I believe, with the involvement of tribal 
leadership, and I believe the department and the Secretary, as 
well as this agency, certainly has brought tribal leadership in 
the consultation and the development of policy, and the options 
available.
    As long as I certainly am the Director, I will commit to 
the involvement of tribal leadership in the development of 
policy, changes, and structure for the agency, because I know 
it directly affects the patients we care for, and it affects 
the people that I will go home to.
    The Chairman. Well, I personally feel it is rather tragic, 
when you announce with great flair that we are going to have 83 
new full-time equivalent positions to staff facilities, and 
then in fine print elsewhere, you will find that we have 
reduced 100 in other areas.
    Dr. Trujillo. In regards to the reduction, there are 
efforts by the department, the agencies across the department, 
as well as the President's initiative, to assure that there is 
increased effectiveness and efficiency. We will not be 
decreasing service.
    The Chairman. I would like to see this efficiency exercise 
carried out in all other agencies. Apparently, the only one who 
gets the efficiency exercise is Indian Health Service. I am 
trying to defend you, you know. I am not fighting you. 
[Laughter.]
    Dr. Trujillo. In fact, we will become more efficient across 
all the agencies.
    The Chairman. So you will be much more efficient with less 
people?
    Dr. Trujillo. Senator, there are pluses and minuses in any 
restructuring effort. However, I do believe that changes are 
always necessary in a re-examination of any Federal agency or 
program, to make sure that the dollars are there, that the 
effectiveness is there, that the changing conditions that we 
deal with, including the changes in the needs of people that we 
serve are reflected in our we do business.
    I believe we can always do better. But it is also necessary 
to make sure that the people we serve and the communities we 
serve have input into that process.
    The Chairman. I have one final question, sir, and I would 
like to submit the rest to you. There seems to be a trend, if 
one looks at the budget request, where the Government of the 
United States is very deliberately transferring activities that 
they were responsible for, to private agencies such as 
education. It would appear that this may go into health care, 
also.
    Does this mean that the U.S. Government is slowly washing 
its hands of the United States' trust responsibility?
    Dr. Trujillo. Again, I believe that is a very thoughtful 
question, and a very excellent question. I do not believe, in 
this particular case, that we are devolving the Federal 
responsibility of health care programs.
    In fact, at the present time, we have many localities in 
particular situations, where we do outsource or contract with 
private programs to provide services, radiology, laboratory. It 
depends upon the circumstances.
    We also have divulged the Federal direct responsibilities 
in one respect, and transferred them to tribal nations, in 
which they now administer and manage Federal programs. Over 52 
percent of the Indian Health Service budget is now managed and 
administered by tribal programs. That also is reflective, in 
part, of the budget proposals, and we will continue to have 
emphasis upon that self-determination.
    There are some localities where tribes and Indian Health 
Service do not find it effective and cost effective to contract 
out particular services. However, there are some cases and some 
services where it may prove to be more cost effective and 
beneficial in particular localities.
    The Chairman. At this moment how many men and women are 
under your command?
    Dr. Trujillo. We have approximately 14,000, plus or minus.
    The Chairman. With the new President's budget, how many men 
and women will be under your command?
    Dr. Trujillo. It will remain approximately the same. The 
shift has been in our restructuring, a downsizing of our 
headquarters and area offices, to such an extent, when I first 
came in as the Director, there were headquarters personnel of 
over 900. We now have a little over 300. Those positions have 
shifted out to the field, especially to service units, to 
provide increased services.
    The Chairman. Thank you very much, Dr. Trujillo.
    Senator Campbell. I have maybe a couple more questions, Mr. 
Chairman, and thank you.
    I have been listening very intently. I think when you talk 
about reducing your FTEs, that causes some alarm; but on the 
other hand, I understand that some of it is because of the 
tribes picking up the responsibilities underIndian Self-
Determination Act agreements, and the manpower goes up there, 
as it goes down at the Federal level. I assume that is where 
the disparity comes in.
    Dr. Trujillo. Yes.
    Senator Campbell. My big concern is to obviously make sure 
that the services are provided, and that the Indian people are 
not being denied.
    Let me just reflect for a minute on the comments of Senator 
Domenici and Senator Inouye, too. When the question of the 
census came up, you know, I tell you, raw numbers are always 
kind of suspect to me.
    Because as I understand it, between 1990 and the year 2000, 
literally every American Indian woman in the country would have 
had to had about five children per year, to make up the 
difference in what the 2000 Census said of the number of Indian 
people in the country, over what 1990 said. Somehow, I do not 
think that happened.
    I think more likely, it was what I sometimes refer to as 
the ``Dances with Wolves Syndrome.'' It got awfully popular 
after Dances with Wolves to be an Indian. So a lot of people in 
the census, since they do not have to prove anything, they just 
can say they are. I think we get this hugely inflated number, 
but probably a lot of it is not really valid.
    Let me just maybe mention something along the lines of what 
Senator Domenici said. You know, I never heard Indian people 
who say, 200 year ago or 150 years ago, I never read of it in 
any historical documents, where they suffered high diabetes.
    Dr. Trujillo. That is right.
    Senator Campbell. They had a very simple food source. It 
was natural foods, right from the earth. Now they have probably 
the highest diabetes of any ethnic group in the Nation, or at 
least that is my understanding. That means it has got to be 
something to do with lifestyle and diet, that has changed over 
the last 100 to 150 years, or something of that nature.
    If you asked the average guy in the street if he knows what 
the word ``commodity'' means, they would go blank. But I see 
the expression on your face. You know what it means, and I know 
what it means, and every Indian person knows what it means. It 
means starchy processed foods that come often from Government 
surplus stores, in cans without labels or just white labels 
that say, ``beans,'' or something of that nature.
    So I am convinced, and I am sure medical science would 
testify to it, that it has to do with diet and lifestyle. It is 
not just genetic. It has to do with the changes.
    So I guess when I think of what we are trying to do to 
improve the health of Indian people, my gosh, there has got to 
be a limit of how many dialysis machines we can buy. It does 
not get to the root problem.
    I guess my question to you, Doctor, is what are we doing 
about the root problem? Are we trying, through the IHS, to I do 
not know, have seminars or something about better diets? I know 
some of that is our problem, too, as appropriators. Senator 
Inouye is aware of this, and I am too. I mean, sometimes we are 
not providing the amount of funds we need.
    But it seems to me we ought to be looking a lot more at 
prevention, rather than just more and more machines, and more 
and more doctors, and more and more hospitals and all that. It 
does not get to the root of what health is all about, to my way 
of thinking.
    Would you reflect on that, just for 1 moment?
    Dr. Trujillo. I fully agree with the emphasis on the 
commitment and the necessity of personal health care and 
responsibility.
    One of the areas that the special diabetes funds have been 
utilized in, is in that particular area of health education, 
early detection, and awareness. We have grants to communities, 
tribal programs, and urban centers, which a lot of those 
dollars have been utilized in that particular effort, 
especially working with the youth or those individuals who are 
high risk individuals, to make them aware of what their 
consequences and their choices may lead to.
    In addition, we have also been working with other outside 
agencies. For example, just recently, a contingent of teenage 
individuals came into Washington, DC from Ft. Peck. At the end 
of last year, they boycotted the school lunch program, because 
there were fats, there were sweets. Because of that, they were 
able to change the diet of that particular school.
    They met with the director of the Department of 
Agriculture, and we asked questions of how to do this, what 
they can do. We have also been working with youth in other 
areas.
    You mentioned that you and I are familiar with commodities. 
Unfortunately, I still have pangs for a craving for Spam, every 
once in awhile. [Laughter.]
    Senator Campbell. Yes; that is what happens when you are 
raised on it. I know.
    Dr. Trujillo. But on a recent occasion, I happened to visit 
a community in the Southwest. I will not mention where. A small 
school bus came up that had Headstart kids in it.
    They came into the restaurant, which was a fast food 
restaurant. Some of the children were overweight, and some of 
the sponsors were overweight. They lined up. They got large 
cokes. They got fatty foods with the Egg McMuffins, or other 
things similar to that. They got the fried potatoes, and all of 
them sat to eat that for their breakfast meal.
    When we do that, or our teachers do that, what types of 
messages are being sent to the children? That is where we are 
attempting to make the inroads, such as these kids that came 
from Ft. Peck.
    Senator Campbell. Oh, I understand that. I mean, I like 
fried bread probably as much as the next guy. It is probably 
the worst thing in the world you can eat, from the standpoint 
of health.
    May I recommend, when you have time, the next time you are 
in the Southwest, that you visit the Southern Ute facility that 
was just built. That happens to be my hometown, and that is why 
I know about it.
    They built a really marvelous kind of health complex. It 
has a gymnasium and it has a swimming pool. But in addition to 
that, they offer healthy living classes and even offer cooking 
classes. They just opened it a couple of months ago. One-third 
of the whole tribe has already signed up to use that facility.
    They have the same problems as every tribe, with diabetes, 
and being overweight, and so on. I think that things like that 
could be a role model of what we ought to be doing; not just 
from the standpoint of weights and cardiovascular machines and 
treadmills and all that; but with the emphasis put on healthy 
living and diet and cooking. So I would recommend you visit 
that, if you can.
    Just let me ask you one last little question, and that is 
this. I understand that when young Indian physicians graduate, 
that current policy prevents them from serving in their own 
tribal community.
    I find that kind of strange, because if there is anything 
that Indian kids need, it is role models of people that have 
been successful, that happen to be their uncles or their 
cousins, or somebody that they know.
    Do you know if that policy is in effect or not?
    Dr. Trujillo. No; I am not aware of that policy. In fact, 
when I finished my medical residency training, I went back home 
in the Public Health Service and the Indian Health Service.
    The Chairman. You did?
    Dr. Trujillo. I was expecting to stay 2 years for my 
commitment. However, I have now stayed over 20 years.
    No, if there are available positions; if a tribe or that 
clinic is available, and if they do have open vacancies, yes, 
they can be hired at that facilities.
    I also believe that strong role models are essential, and 
the necessity for young Indian physicians to be out in the 
field, to go to schools, to be there, and to live there, is 
critical.
    I just came from the University of Seattle, where I gave a 
lecture to young Indian clinicians, medical students. In the 
room were practicing clinicians in the Northwest, who are of 
Indian heritage.
    They had come to the University of Washington Indian 
Program early on. They went to the medical school. They went to 
the residency, and now they were sitting in the chairs on the 
other side, as practicing clinicians, and they were practicing 
in Tribal and Indian Health Service programs. What better model 
and mentoring can they do?
    Senator Campbell. Well, we are in agreement on that.
    Dr. Trujillo. And I hope we can provide that support.
    Senator Campbell. Thank you, Mr. Chairman. I would like to 
submit the rest of my questions in writing to Dr. Trujillo.
    The Chairman. Thank you very much, Dr. Trujillo. As 
indicated, we would like to submit to your office several 
questions to be answered.
    Dr. Trujillo. Yes; thank you, sir.
    Senator can I just interrupt? Senator Campbell asked a 
question about mentoring of Indian students. In fact, in the 
audience we have here a young Indian physician, who is a public 
health service co-step, Mike Bartholomew, who is in medical 
school at Dartmouth.
    Senator Campbell. He is in medical school now?
    Dr. Trujillo. In Dartmouth.
    Senator Campbell. And where is he?
    Dr. Trujillo. Stand up, Mike.
    Senator Campbell. Good, great, thank you.
    Dr. Trujillo. He is one of many.
    The Chairman. Thank you very much.
    Dr. Trujillo. Thank you.
    The Chairman. Our next witness is the assistant secretary 
of the Office of Public and Indian Housing, United States 
Department of Housing and Urban Development, Michael Liu.
    Secretary Liu, it is always good to have with us.

STATEMENT OF MICHAEL LIU, ASSISTANT SECRETARY, OFFICE OF PUBLIC 
AND INDIAN HOUSING, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

    Mr. Liu. Thank you, Mr. Chairman and members of the 
committee. Thank you for inviting me to provide comments on 
President Bush's budget for HUD's Indian Housing and Community 
Development programs for fiscal year 2003.
    My name is Michael Liu, and I am the Assistant Secretary 
for Public and Indian Housing. I am responsible for the 
management, operation, and oversight of HUD's Native American 
programs. These programs are available to over 550 federally-
recognized and a limited number of State-recognized Indian 
tribes.
    We serve these tribes directly, or through Tribally 
Designated Housing Entities, by providing grants and loan 
guarantees designed to support affordable housing and viable 
community and economic development.
    Our clientele in diverse. They are located on Indian 
reservations, in Alaska Native villages, and in other 
traditional Indian areas. More recently, this list has grown to 
include Native Hawaiians.
    It is a pleasure to again appear before you, and I would 
like to express my appreciation for your continuing efforts to 
improve the housing conditions of American Indian and Alaska 
Native peoples.
    As you have heard in the tribal testimony at the recently 
held NAHASDA hearing, much progress is being made, and tribes 
are taking advantage of the improvements to the law in housing 
conditions of the Native American families residing on Indian 
reservations, on trust or restricted Indian lands, and in 
Alaska Native villages, and are moving ahead in the right 
direction.
    This momentum needs to be sustained, as we continue to work 
together toward creating a better living environment across 
Indian country.
    At the outset, let me reaffirm the Department of Housing 
and Urban Development's support for the principle of 
government-to-government relations with Indian tribes. HUD is 
committed to honoring this fundamental precept in our work with 
American Indians and Alaska Natives.
    You may recall that when I testified before you last month, 
I confirmed that the department was searching for a deputy 
assistant secretary for Native American programs. Tribal 
representatives and members of this committee spoke in support 
of setting the level for that position to Senior Executive 
Service.
    In the spirit of cooperation, Secretary Martinez has agreed 
to re-advertise for the position as an SES. All approvals have 
been received and granted, and I am looking toward having that 
advertisement on the web toward the later part of next week, 
sir.
    For fiscal year 2003, the President's budget proposes a 
total of $740.5 million, specifically for Native Americans and 
Native Hawaiian housing, community and economic development, 
and education programs.
    Of that amount, approximately $639 million is for direct, 
formula allocations under the Native American Housing 
Assistance and Self-Determination Acts Indian Housing Block 
Grant Program; $71 million is for grants under the Indian 
Community Development Block Grant Program; and $7 million is 
for the Native American Section 184 and Title VI loan 
guarantees. That loan authority will leverage $214 million in 
loan guarantees.
    The Native Hawaiian community will receive, through the 
Department of Hawaiian Home Lands, $10 million for the Native 
Hawaiian Housing Block Grant Program, and $1 million for the 
Section 184A, Native Hawaiian Loan Guarantee Fund, which will 
leverage approximately $40 million in loan guarantees. There is 
$5.6 million available for training and technical assistance to 
support these programs.
    Finally, the department requests $5.4 million to support 
American Indian, Alaska Native, and Native Hawaiian-oriented 
higher education institutions.
    Next I will address the Indian Housing Block Grant Program. 
Adjustments to the IHBG program have been made to allow for 
more funds to be available for tribal use. The fiscal year 2003 
budget includes $646.6 million for the IHBG program. Although 
this is a decrease of $2 million from fiscal year 2002, by 
reducing set-asides, there will actually be allowed $6.4 
million more in grant dollars available to the tribes. The 
decreases in set-asides are from the training and technical 
assistance category, Title VI Program, and Working Capital 
Fund.
    The training and technical assistance component of this 
program has been reduced to $3 million, down from $5 million in 
the previous year. This action was taken in recognition that 
several years have passed since implementation of this program, 
and most tribes have been provided with the initial and in 
depth training and technical assistance necessary to implement 
most of the new and sweeping changes in the way in which we now 
do business.
    Training and technical assistance remains a critical 
component of the program, and we propose that a portion of it 
be accomplished in partnership with the National American 
Indian Housing Council. The President's budget includes a $2.2 
million set-aside from the IHBG program, to continue the same 
level of support as provided in last year's budget to the 
NAIHC.
    These funds, as in the past, will be made available under a 
contract to the organization, in return for their training and 
technical assistance services to NAHASDA grantees.
    I would encourage the HAIHC to work with the department to 
ensure that these funds are obligated expeditiously, and that 
the training and technical assistance occur as soon as is 
feasible.
    In fiscal year 2000, HUD executed a $2-million training and 
technical assistance contract with NAIHC. As of December 2001, 
less than $500,000 of those funds had been expended.
    The Title VI Loan Guarantee Fund is also a set-aside under 
the IHBG Program. This budget recognizes that until the program 
is more fully subscribed, it is more effective to use available 
funds in the IHBG program, and allocate it by formula directly 
to IHBG grantees.
    There is sufficient carryover of unused guarantee authority 
which, when combined with this year's budget request, will 
support anticipated future program needs. This allows $4 
million to be added back to the IHBG formula.
    As for the working capital fund in the department's fiscal 
year 2002 IHBG appropriation, not less than $3 million was 
allocated.
    In attempt to better prorate the amount required from each 
program, it was determined that the amount allocated from the 
fiscal year 2003 IHBG account could be reduced by $600,000. 
This $2.4 million reduction from the fiscal year 2002 
appropriation is included in a direct appropriation to the 
working capital fund.
    Last year, the Section 184 Indian Housing Loan Guarantee 
Fund received its first annual credit subsidy re-estimate, as 
required by the Credit Reform Act. The re-estimate resulted in 
a reduced subsidy rate, which tripled loan amounts available 
for guarantee when holding budget authority constant during 
fiscal year 2002.
    The subsidy rate declined due in part to the low number of 
defaults. The $1 million reduction in the fiscal year 2003 
budget request reflects the impact of that recalculation, 
adjusted by anticipated utilization, so that, in fact, the $5 
million in fiscal year 2003 will provide $197.24 million in 
loan guarantee authority.
    The President's fiscal year 2003 budget request for the 
Indian Community Development Block Grant Program is $72.5 
million. This budget will provide an increase of $2.5 million 
over the amount appropriated in fiscal year 2002, and $1.5 
million was allocated to the operation of the Native American 
Economic Development Access Center, Native Edge.
    Native Edge, which began as a pilot project within the 
department, is now an inter-agency initiative, linking 18 
Federal agencies, through a single economic development access 
center, so that tribes, Native Americans, lending institutions, 
non-profit foundations, and private businesses can collaborate 
to promote economic growth and find innovative solutions to 
chronic economic development problems in Indian country.
    The President's budget requests that $1.5 million be set 
aside from the ICDBG allocation to continue support of this 
award-winning and much needed initiative.
    For fiscal year 2003, the department is requesting $10 
million for the Native Hawaiian Housing Block Grant Program. 
This budget recognizes the unique housing needs of Native 
Hawaiian families, eligible to reside on Hawaiian homelands, 
and the department is now beginning to meet those needs.
    A further acknowledgment is the establishment of a separate 
program account for the Native Hawaiian Housing Block Grant 
Program. It is anticipated that an interim regulation 
implementing the new Native Hawaiian Housing Block Grant 
Program will be published in the Federal Register within the 
next 2 months.
    This action will facilitate immediate distribution of funds 
and implementation of the program, while public comments are 
being received toward publication of final regulations.
    The budget also requests that $1 million be allocated to 
the Section 184(a) Native Hawaiian Housing Loan Guarantee Fund. 
At that level of funding, this new loan guarantee program, 
modeled after the section 184 program, will provide up to $40 
million in loan guarantee authority, to guarantee market rate 
mortgage loans to income eligible Native Hawaiian families, who 
choose to reside on Hawaiian Homelands.
    The Department of Hawaiian Homelands, a State agency, is 
the programs partner. DHHL is the agency responsible for 
allocation of leasehold interests on the Hawaiian Homelands. 
Program procedures will mirror the section 184 program as 
closely as is appropriate.
    Until direct endorsement lenders are approved, ONAP will 
work closely with DHHL and individual borrowers to review, 
underwrite, and issue guarantee certificates for all loans.
    The President's budget also requests, under the Community 
Development Fund, $3 million for competitive grants to tribal 
colleges and universities, to provide resources to build, 
expand, renovate and equip their facilities; and $2.4 million 
to assist Alaska Native and Native Hawaiian-serving 
institutions, as they are defined under the Higher Education 
Act, as amended.
    In conclusion, let me state for the record that the 
President's budget request for HUD's Indian housing, community 
development, and education programs supports the progress being 
made by tribes in providing housing and housing-related 
endeavors in Indian country.
    This concludes my remarks, Mr. Chairman, and I would be 
happy to answer any questions you may have.
    [Prepared statement of Mr. Liu appears in appendix.]
    The Chairman. Thank you very much, Mr. Secretary.
    Mr. Liu. Thank you.
    The Chairman. First, I would like to commend you for 
responding to and resolving the so-called downgrading problem 
that we discussed 3 weeks ago.
    Mr. Liu. Yes, sir.
    The Chairman. I can assure you that the tribal leaders are 
most pleased with the responsiveness of your agency. I hope 
that this will be a hallmark for future consultation with 
tribes.
    I am certain you are aware that tribal leaders have 
requested the establishment of a 58 member negotiated 
rulemaking committee. What is the status of that now?
    Mr. Liu. We have had at least two meetings with tribal 
leaders to discuss the issue of consultation, negotiated 
rulemaking, Mr. Chairman.
    I believe that it will take a number of other meetings for 
us to define further the issues of concern, to look at the size 
of the committees that are being discussed, to consider what 
type of processes we have involved, as I mentioned last time, 
so that we can balance the need to respect the request for 
government-to-government relationships and consultation, as 
well as to be able to get the job done and making our programs 
workable.
    I think they have been very fruitful, and I am very hopeful 
that before the summer, we can get this issue resolved in a 
manner which is satisfactory, both to them and to us.
    The Chairman. I thank you very much, and I hope it will be 
settled.
    Mr. Liu. Yes, sir.
    The Chairman. The committee is advised that the level of 
need for Indian housing is $1,075,000. Does this estimate jive 
with yours?
    Mr. Liu. Well, we have some questions about the assumptions 
and the analysis involved in that report, Mr. Chairman. We do 
not argue with the fact that there is need. From that, we are 
all on the same page.
    Without getting into the specifics of where there may be 
some differences about the $1.75 billion, we believe that the 
$646 million or $647 million in our budget will adequately take 
care of the needs in fiscal year 2003.
    We look at the hold-over budget authority under the 184 
program and the Title 6 programs, both of which approximate 
about $246 million. We added that to the actual request within 
our budget.
    In addition, when you look at the resources being provided 
to the rural housing services and USDA, the new tax credit 
programs, the new market venture tax credits, renewal community 
tax credit programs, and new private sector endorsements and 
commitments from the GSEs to even do more on Indian lands, we 
think that for fiscal year 2003, that there are adequate 
resources to deal with the housing needs.
    The Chairman. Would the department support or oppose an 
attempt by the Congress to increase the $646 million?
    Mr. Liu. Mr. Chairman, the department will, of course, work 
with Congress in developing our budget as a whole, as well as 
it deals with Indian country. Whatever obviously is put into 
law by the end of this fall, we will work very closely with the 
committee and others to implement in the manner which, of 
course, would be intended.
    The Chairman. As you know, Indian country has been 
concerned about staffing of field offices. Are you satisfied 
that is moving along?
    Mr. Liu. I think I am satisfied. That is something that I 
am personally taking a very active role in, in making sure they 
are going forward as the department, as a whole, goes through 
some realignment, and that our Office of Native American 
Programs is a net gainer in that process. We are, so far, and I 
would like to see that occur even more.
    The Chairman. I am certain you are aware that Indian 
country is concerned about black mold in their housing. Is your 
organization doing anything about this?
    Mr. Liu. Well, as you know, sir, we have moved ahead to 
implement the set-aside, which was provided for last year. I 
also understand there has been some additional moneys accessed 
through our CDBG program, to work in that arena.
    This is to confirm this question, at the last hearing, in 
regards to the availability of our lead-based paint program, a 
healthy homes program, that might address some of the black 
mould issues, also. The answer is definitely, yes. There is the 
chance for tribes to access those funds through the grant 
process.
    The Chairman. Would your agency oppose an increase by line 
item for lead paint?
    Mr. Liu. Mr. Chairman, I think, again, as per the whole 
issue of increased allocations we, of course, will work with 
the tribes, with the agencies, to address the needs with 
resources available.
    I think one of the issues that would have to be looked at 
would be how targeted are the dollars; will it go to a wider 
array of tribes than was done last year? I think on those 
issues, certainly, we are open to discuss this with the 
Chairman.
    The Chairman. On Native Hawaiian housing, have you selected 
a staff to serve in Hawaii?
    Mr. Liu. We have started to jump start the process. Yes, I 
have selected an individual who would be there before the end 
of the month, who will start on an interim basis, at least up 
to 6 months, because then we are going to have to go through 
the advertisement process for a permanent person. So, yes, a 
person has been identified.
    The Chairman. When do you think the first block grant will 
be issued?
    Mr. Liu. Two months; but I am hoping we can shave a few 
weeks off of that. I have been personally involved in the 
finalization of the interim regulation, and I am hopeful that 
we can shorten up that timeframe a lot. But I think, at this 
point, 2 months is a safe guess.
    I have been in touch with the director of the Department of 
Hawaiian Homelands. I have met with him twice within the last 2 
weeks. I have been very pleased with the cooperation that we 
have had with the State.
    The Chairman. It is my understanding that when the Drug 
Elimination Program was discontinued from the department's 
budget in 2001, the public housing operating fund was increased 
by $150 million, to be used for anti-drug activities.
    But as you know, the tribes do not qualify for such public 
housing operating subsidies, so they have no replacement 
funding for their drug elimination activities.
    Is something going to be done about this?
    Mr. Liu. Well, Mr. Chairman, the position of the 
Administration in the elimination of the Drug Elimination 
Program was based on the premise that the program, as designed, 
had a lot of flaws. We saw an array of dollars being utilized 
for purposes that were tenuous, at best, in terms of their 
connection to drug elimination.
    Our increase in request for the operating subsidy was based 
on our continued concern for the need to deal with public 
safety issues as a whole. To the extent that the tribes can 
utilize their block grant dollars for public safety issues, we 
certainly will encourage that, if those public safety programs 
make sense.
    To the extent that we can bring to the table other Federal 
resources, and work with the Department of Justice in linking 
them with the tribes, we are working to do that.
    Finally, we will be aggressively working with local 
leaders, whose jurisdictions, counties, towns, cities, and 
villages, might incorporate at least part of the regions where 
Native Americans reside; if not on tribal lands themselves, but 
to emphasize that Native Americans are citizens of their 
communities also, and deserve the same type of public services 
that other residents do.
    The Chairman. As you know, in certain areas, the problem of 
drugs may be worse than in the city.
    Mr. Liu. Yes.
    The Chairman. I most respectfully suggest that your office 
sit down with tribal leaders to work out some sort of effective 
program to combat drugs, because it is a very, very serious 
problem.
    The President's budget cuts Rural Housing and Economic 
Development Programs. As you know, there were tribes who were 
using the Rural Housing and Economic Development Program funds 
for capacity building, which is essential for self-governance.
    Now the Administration has said that they support Indian 
self-determination and tribal self-governance. If that is the 
case, what is the justification for eliminating this program?
    Mr. Liu. The primary justification, sir, was that we 
thought that we saw duplication, with services being provided 
by the Department of Agriculture, through its rural development 
agency; specifically, its rural housing services, as well as 
its business and cooperative services arena.
    With the long history, and much of it is successful, under 
USDA, we felt that they would be the more effective entity to 
develop the type of capacity building, the type of housing 
assistance, which we were attempting to get involved in.
    So primarily, to avoid duplication and leave it to the 
agency which is doing an effective job, that was the motivation 
and the underlying policy reason for the elimination of the 
program here at HUD.
    The Chairman. Did you discuss this and explain it to the 
tribal leaders involved?
    Mr. Liu. The position and the policy decision was discussed 
at meetings, I understand, by staff, and not by myself, 
personally. To the extent, if there is need to do more and to 
better explain that issue, we can do that.
    I have been asked by the Secretary, as well as by Secretary 
Veneman, to act as the liaison between the two departments on 
housing issues, and I can certainly work in that role to do a 
better job.
    The Chairman. It is my understanding that the department 
maintains a Public Housing Disaster Fund to address unexpected 
emergencies. How much was allocated to this emergency fund in 
fiscal year 2002?
    Mr. Liu. There is, in Indian housing, apart from public 
housing, a $2-million set-aside, operationally, that we have 
had for a number of years that is available to tribes, at 
$350,000 maximum per incident, per application, that has been 
available.
    This is separate from what we do in public housing, where 
out of its capital fund program, there is a special set-aside 
for the public housing authorities.
    The Chairman. But it will not reduce the Block Grant 
Program?
    Mr. Liu. No.
    The Chairman. Well, Mr. Secretary, I thank you once again 
for your participation in this hearing. We appreciate your 
wisdom and your testimony, and we look forward to continue our 
working with you. Just keep up the consultation with the 
tribes. They appreciate it.
    Mr. Liu. Thank you very much, Mr. Chairman.
    The Chairman. Thank you very much.
    [Whereupon, at 11:45 a.m., the committee was adjourned, to 
reconvene at the call of the Chair.]
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                            A P P E N D I X

                              ----------                              


              Additional Material Submitted for the Record

=======================================================================


  Prepared Statement of Hon. Pete V. Domenici, U.S. Senator from New 
                                 Mexico

    Mr. Chairman, I would like to thank you for holding this hearing 
today with the Indian Health Service [IHS] and the Department of 
Housing and Urban Development [HUD], which provide key services to 
Indian Nations.
    I know that the Indian Health Care system continues to face 
competing priorities, escalating costs, and an increase in patient 
demand for not only more services in acute and urgent care treatment, 
but for better access to basic health services.
    We all know that the Nation is facing a nursing shortage. Well, IHS 
has an even greater burden of filling professional vacancies. In fact, 
IHS reports an overall vacancy rate for health professionals of 
approximately 13 percent. IHS is attempting to address this issue by 
recruiting former military health professionals to work for IHS. But 
more help in this area is needed. Not only for recruitment, but we must 
address how to retain the qualified personnel. Even qualified American 
Indians are leaving IHS facilities, because they are afforded better 
working conditions, the latest medical equipment and let's face it, 
higher salaries than what IHS has to offer.
    In my State of New Mexico there are numerous funding issues with 
tribal, Federal and urban Indian health care. In order for IHS to 
maximize their alternate resource dollars, estimated at $508.8 million 
dollars, there must be a commitment toward providing and improving 
information systems that will assist in efficient billing and 
collection.
    The age-adjusted death rates are alarming. American Indians and 
Alaska Natives score higher in almost all health categories: 
alcoholism, diabetes, tuberculosis, cancer, obesity and sadly, the 
number of young people impacted are escalating as well.
    I am proud to see a number of diabetes prevention activities and 
diabetes care programs now taking place within Indian Country. 
Hopefully, the prevention efforts will start revealing lower numbers in 
the cases of diabetes for the American Indian/ Alaska Native 
populations.
    The Department of Housing and Development administers important 
housing programs such as: The Indian Community Block Grant, The Native 
American Housing Block Grant, The Indian Housing Loan Guarantee Fund.
    Further, the Native American Housing and Self-Determination Act 
(NAHASDA) is scheduled to be re-authorized this year. NAHASDA is one of 
the more successful pieces of legislation in Indian Country. This 
legislation is very important to Indian country resulting in placing 
thousands of needy Indian families into new homes. Yet, there is more 
work to be done. I look forward to working with the Administration, 
other Members of Congress, and Indian Nations in getting NAHASDA re-
authorized.
    With regards to the fiscal year 2003 budget request, I commend the 
President for: The $3 million increase in the Indian Community Block 
Grant program. The $55 million for the Resident Opportunity and Self-
Sufficiency [ROSS] program. The $5.4 million for tribal colleges and 
Alaska Native and Native Hawaiian-oriented higher education 
institutions.
    With that, I do have several concerns regarding the budget request. 
Chief among my concerns is that there is no request for the Rural and 
Economic Development Grant program. The program provides much needed 
economic development assistance in Indian country.
    Mr. Chairman, I look forward to hearing from the witnesses today 
and I have several questions to submit.
                                 ______
                                 

   Prepared Statement of Michael Liu, Assistant Secretary Public and 
      Indian Housing, Department of Housing and Urban Development

    Mr. Chairman, Mr. Vice Chairman, and members of the committee, 
thank you for inviting me to provide comments on President Bush's 
budget for HUD's Indian Housing and Community Development programs for 
fiscal year 2003.
    My name is Michael Liu, and I am the Assistant Secretary for Public 
and Indian Housing. I am responsible for the management, operation and 
oversight of HUD's Native American programs. These programs are 
available to over 550 federally recognized and a limited number of 
state-recognized Indian tribes. We serve these tribes directly, or 
through tribally designated housing entities (TDHE), by providing 
grants and loan guarantees designed to support affordable housing 
activities and viable community and economic development. Our clientele 
is diverse; they are located on Indian reservations, in Alaska Native 
Villages, and in other traditional Indian areas.
    In addition to those duties, my jurisdiction encompasses the public 
housing program, which aids the nation's 3,000-plus public housing 
agencies in providing housing and housing-related assistance to low-
income families.
    It is a pleasure to again appear before you, and I would like to 
express my appreciation for your continuing efforts to improve the 
housing conditions of American Indian and Alaska Native peoples. As you 
have heard in the tribal testimony at the recent NAHASDA hearing, much 
progress is being made and tribes are taking advantage of new 
opportunities to improve the housing conditions of the Native American 
families residing on Indian reservations, on trust or restricted Indian 
lands and in Alaska Native Villages. This momentum needs to be 
sustained as we continue to work together toward creating a better 
living environment across Indian country.
    At the outset, let me reaffirm the Department of Housing and Urban 
Development's support for the principle of government-to-government 
relations with Indian tribes. HUD is committed to honoring this 
fundamental precept in our work with American Indians and Alaska 
Natives.
    You may recall that when I testified before you last month, I 
confirmed that the Department was searching for a Deputy Assistant 
Secretary for Native American Programs. Tribal representatives and 
Members of this Committee spoke in support of setting the level for 
that position to Senior Executive Service (SES). In the spirit of 
cooperation, Secretary Martinez has agreed to re-advertise for the 
position as an SES.
    For fiscal year 2003, the President's budget proposes a total of 
$740.5 million, specifically for Native American and Native Hawaiian 
housing, community and economic development, and education programs. Of 
that amount, approximately $639 million is for direct, formula 
allocations under the Native American Housing Assistance and Self-
Determination Act's (NAHASDA) Indian Housing Block Grant Program, $71 
million is for grants under the Indian Community Development Block 
Grant Program, and $7 million is for the Native American Section 184 
and Title VI loan guarantees. That loan authority will leverage $214 
million in loan guarantees.
    The Native Hawaiian community will receive, through the Department 
of Hawaiian Home Lands, $10 million for the Native Hawaiian Housing 
Block Grant Program and $1 million for the Section 184A Native Hawaiian 
Home Loan Guarantee Fund, which will leverage approximately $40 million 
in loan guarantees.
    There is $5.6 million available for training and technical 
assistance to support these programs.
    Finally, the Department requests $5.4 million to support American 
Indian, Alaska Native, and Native Hawaiian-oriented higher education 
institutions.
    Adjustments in the Indian Housing Block Grant (IHBG) program have 
been made to allow for more funds to be available for tribal use. The 
fiscal year 2003 budget includes $646.6 million for the IHBG program. 
Although this is a decrease of $2 million from fiscal year 2002, 
reducing set-asides will actually allow for a $6.4 million increase in 
grant dollars available to tribes.
    The decreases in set-asides are from the Training and Technical 
Assistance category, Title VI Program, and Working Capital Fund.
    The Training and Technical Assistance component of this program has 
been reduced to $3 million, down from $5 million the previous year. 
This action was taken in recognition that several years have passed 
since implementation of this program, and most tribes have been 
provided with the initial and in-depth training and technical 
assistance necessary to implement such a new and sweeping change in the 
way we do business. Training and Technical Assistance remains a 
critical component of the program, and we propose that a portion of it 
be accomplished in partnership with the National American Indian 
Housing Council.
    The President's Budget includes a $2.2-million set-aside from the 
IHBG Program to continue the same level of support as provided in last 
year's budget to the National American Indian Housing Council. These 
funds, as in the past, will be made available under a contract to the 
organization in return for their training and technical assistance 
services to NAHASDA grantees. I would encourage the NAIHC to work with 
the Department to ensure that these funds are obligated expeditiously, 
and that the training and technical assistance activities occur as soon 
as is feasible. In fiscal year 2000, HUD executed a $2-million training 
and technical assistance contract with NAIHC. As of December, 2001, 
less than $500,000 of those funds had been expended.
    The Title VI Tribal Housing Activities Loan Guarantee Fund (Title 
VI) is also a set-aside under the IHBG Program. This budget recognizes 
that until the program is more fully subscribed, it is more effective 
to use available funds in the IHBG Program and allocate it by formula 
directly to IHBG grantees. There is sufficient carry-over of unused 
guarantee authority which, when combined with this year's budget 
request, will support anticipated future program needs. This allows $4 
million to be added back into the IHBG formula.
    In the Department's fiscal year 2002 IHBG appropriation, not less 
than $3 million was allocated to the Working Capital Fund for internal 
information technology improvements. In an attempt to better prorate 
the amount required from each program it was determined that the amount 
allocated from the fiscal year 2003 IHBG account should be reduced to 
$600,000. This $2.4 million reduction from the fiscal year 2002 
appropriation is included in a direct appropriation to the Working 
Capital Fund.
    Last year, the Section 184 Indian Housing Loan Guarantee Fund 
received its first annual credit subsidy re-estimate, as required by 
the Credit Reform Act. The re-estimate resulted in a reduced subsidy 
rate, which tripled loan amounts available for guarantee when holding 
Budget Authority constant during fiscal year 2002. The subsidy rate 
declined due in part to the low number of defaults. The $1 million 
reduction in the fiscal year 2003 budget request reflects the impact of 
that recalculation adjusted by anticipated utilization. The $5 million 
in fiscal year 2003 provides to $197.24 million in loan guarantee 
authority.
    The President's fiscal year 2003 Budget request for the Indian 
Community Development Block Grant (ICDBG) Program is $72.5 million. 
This budget will provide an increase of $2.5 million over the amount 
appropriated in fiscal year 2002. $1.5 million is allocated to the 
operation of the Native American Economic Development Access Center 
(Native eDGE).
    Native eDGE, which began as a pilot project within the Department, 
is now an interagency initiative linking 18 Federal agencies through a 
single economic development access center so that tribes, Native 
Americans, lending institutions, non-profits, foundations and private 
businesses can collaborate to promote economic growth and find 
innovative solutions to chronic economic development problems in Indian 
country. The President's Budget requests that $1.5 million be set-aside 
from the ICDBG allocation to continue support of this award winning and 
much needed initiative.
    For fiscal year 2003, the Department is requesting $10 million. 
This budget recognizes the unique housing needs of Native Hawaiian 
families eligible to reside on the Hawaiian Home Lands, and the 
Department is now beginning to meet those needs. A further 
acknowledgement is the establishment of a separate program account for 
the Native Hawaiian Housing Block Grant Program. It is anticipated that 
an Interim Regulation implementing the new Native Hawaiian Housing 
Block Grant Program will be published in the Federal Register within 
the next 2 months. This action will facilitate immediate distribution 
of funds and implementation of the program while public comments are 
being received toward publication of final regulations.
    The Budget requests that $1 million be allocated to the Section 
184A Native Hawaiian Housing Loan Guarantee Fund. At that level of 
funding, this new loan guarantee program, modeled after the Section 184 
Program, will provide up to $40 million in loan guarantee authority to 
guarantee market-rate mortgage loans to income-eligible Native Hawaiian 
families who choose to reside on the Hawaiian Home Lands. The 
Department of Hawaiian Home Lands (DHHL), a State agency, is the 
primary program partner. DHHL is the agency responsible for allocation 
of leasehold interests on the Hawaiian Home Lands. Program procedures 
and activities will mirror the Section 184 Program as closely as is 
appropriate. Until direct-endorsement lenders are approved, the ONAP 
National Programs Office will work closely with DHHL and individual 
borrowers to review, underwrite and issue guarantee certificates for 
all loans.
    The President's budget request includes, under the Community 
Development Fund, $3 million for competitive grants to tribal colleges 
and universities to provide resources to build, expand, renovate and 
equip their facilities, and $2.4 million to assist Alaska Native and 
Native Hawaiian serving institutions, as they are defined under the 
Higher Education Act, as amended.
    Finally, let me state for the record that the President's budget 
request for HUD's Indian housing, community development and education 
programs supports the progress being made by tribes in providing 
housing and housing-related activities in Indian country.
    This concludes my prepared remarks. I would be happy to answer any 
questions you may have.
                                 ______
                                 

             Questions From Senator Ben Nighthorse Campbell

Title VI Tribal Housing Activities Loan Guarantee Fund
    ``The fiscal year 2003 budget request does not include funds for 
the title VI loan guarantee program, but I understand that the reason 
for this is that there is $15 million in unused funds from past years 
that have been carried over.''
    Question 1: There seems to be a lack of understanding by the tribes 
and the financial community on how to make the most of the guarantee. 
How can we increase the desire to use the loan guarantee?
    NOTE: The fiscal year 2003 budget request does contain a $2-million 
set-aside from the Indian Housing Block Grant allocation for the Title 
VI Loan Guarantee Fund. This amount, divided by the credit subsidy 
factor of 11.07 percent set by the Office of Management and Budget, 
will provide $18 million in loan guarantee authority in fiscal year 
2003. Cumulative unused set asides through fiscal year 2002 amount to 
$27.2 million, resulting in cumulative unused loan guarantee authority 
of $246 million. Thus, the $18 million in guarantee authority, when 
added to cumulative carryover guarantee authority, results in $264 
million of available Title VI loan guarantee authority.
    Answer 1: The staff of the Office of Native American Programs 
(ONAP), Office of Loan Guarantee is partnering with Federal Home Loan 
Banks, Federal Reserve Banks and State Housing Finance Agencies to 
increase awareness of the program among lenders. Presentations are also 
being made to tribal advocates at regional housing authority and other 
Native American informational meetings. Our website now features 
``success stories'' regarding affordable tribal housing projects 
assisted with title VI loan guarantees. As tribes become more familiar 
with the program, we expect to see increased usage. Currently, tribes 
have made HUD aware of potential loan guarantee transactions that would 
use $54 million in guarantee authority.

Training and Technical Assistance

    Question 2: The HUD training and technical assistance budget is 
proposed for a reduction to $3 million, and while I understand that 
many tribes have already received technical assistance, are we seeing 
an increase in tribal capacity that makes ``Training and Technical 
Assistance funding'' unnecessary?
    Answer 2: From the inception of the Indian Housing Block Grant 
(IHBG) program in fiscal year 1998 through fiscal year 2002, a total of 
$28 million in training and technical assistance funding has been as 
appropriated directly to HUD as follows: fiscal year 1998--$5 million, 
fiscal year 1999--$6 million, fiscal year 2000--$6 million, fiscal year 
2001--$6 million, fiscal year 2002--$5 million. In addition, the 
National American Indian Housing Council (NAIHC) has received, through 
either the Indian Housing Block Grant or the Community Development 
Fund, $14.9 million to provide training and technical assistance during 
that time period. The total amount of funding available for training 
and technical assistance through fiscal year 2002 is $42.9 million.
    In fiscal year 2000, HUD executed a $2 million training and 
technical assistance contract with NAIHC. As of December 2001, less 
than $500,000 of these funds had been expended by NAIHC. The Department 
has emphasized to NAIHC the need for timely performance under this 
contract.
    The President's fiscal year 2003 budget requests $7.4 million ($3 
million to HUD and $4.4 million to NAIHC) for these purposes. If 
enacted at the request level, total funding for training and technical 
assistance since the inception of the Indian Housing Block Grant 
Program will be $50.3 million.
    There is a significant, long-term commitment by the Congress, the 
Department and the National American Indian Housing Council to improve 
each grant recipient's technical capacity to operate its IHBG program. 
While many tribes have reached the point where they no longer need 
regular technical assistance, this is not universal.
    Regulatory Reform Commission ``In 2000 we enacted 'Regulatory 
Reform and Business Development on Indian Lands Authority' 
headquartered in the commerce department. I would very much like you to 
work with the Commerce Department and the Interior Department to see 
that this commission gets off the ground and can begin to study ways to 
peel back unproductive regulations.''

    Question 3: Will you work with us to make that happen?
    Answer 3: The Department will be pleased to work with the committee 
and other Federal agencies on this effort.

                Questions from Senator Pete V. Domenici

Rural Housing and Economic Development

    Question 1: There is no funding requested for the Rural Housing and 
Economic Development Grant program, which has previously been funded at 
$25 million per year. Why is the program not being funded this year?
    Answer 1: The President's budget request for Fiscal Year 2002, as 
well as for fiscal year 2003, did not contain funding for the Rural 
Housing and Economic Development Program. While there have been some 
beneficial initiatives funded with these grants, it is the 
Administration's position that this program duplicates numerous 
Department of Agriculture rural development programs that have been in 
existence for years covering housing, infrastructure and economic 
development.

Training and Technical Assistance

    Question 2: Under the Public and Indian Housing Technical 
Assistance program, there is a decrease of $2 million. Are there other 
opportunities in HUD that Indian Nations can take advantage of to 
offset this decrease in funding?
    Answer 2: In the 5 years that the Indian Housing Block Grant 
Program has been in effect, the Office of Native American Programs has 
used training and technical assistance funds to develop long-term 
solutions to the challenges of providing training and technical 
assistance to Indian tribes and their tribally designated housing 
entities. One example is the number of training courses that are 
regularly scheduled in locations throughout Indian country. These 
courses include NAHASDA Basics, Indian Housing Plan/Annual Performance 
Reports, Board and Tribal Roles and Responsibilities, Environmental 
Review, Self-Monitoring, Construction Contract Management, Financial 
Management, and Basic and Advanced Financial Leveraging. Course 
locations include Oklahoma City, Portland, OR, Phoenix, Seattle, Boise, 
ID, Minneapolis and Anchorage. The cost to repeat these courses, as 
necessary, is significantly lower after initial development.
    In addition, advanced technology now allows for the presentation of 
training without the burden of travel costs. Using pre-prepared and 
distributed slides and other visual aids at training sites with 
telephone connectivity, the trainer no longer has to be onsite to 
provide quality training. Conferencing allows multiple locations to 
receive training in this manner without incurring travel costs for 
either the trainer or the tribal housing staff.

T2Section 184 Program

    Question 3: Why is there a decrease of $1 million in the Indian 
Housing Loan Guarantee fund?
    Answer 3: There is a substantial amount of unused carryover 
appropriations from previous fiscal years. This results in cumulative 
current uncommitted loan guarantee authority of over $ 506 million. A 
decrease in the subsidy factor (which is set by OMB) in fiscal year 
2002 and again applicable in fiscal year 2003 tripled the dollar amount 
of loans that can be guaranteed in each of those years. A $5 million 
appropriation appears adequate for near-term budget cycles given the 
amount of carryover loan guarantee authority available.
    Question 4: Regarding the NATIVE eDGE initiative, how is the money 
spent? What are some of the successes of NATIVE eDGE?
    Answer 4:

How is the money spent?

    Native eDGE began as a Federal interagency initiative to develop a 
one-stop-shop for economic development assistance to American Indian 
and Alaska Native organizations and individuals. To date, Native eDGE 
has not received any funding from Congress or the other 17 Federal 
agency partners. The initiative was started as a pilot project with 
minimal use of HUD funds. Since launch, the cost of HUD staff has been 
HUD's contribution to the interagency partnership.
    Native eDGE can be a true catalyst for the creation of sustainable 
economic development in Indian country.
    Approximately $1 million of the fiscal year 2003 appropriation is 
needed for web site improvements so that clients can be served more 
efficiently and effectively. Approximately $500,000 of the fiscal year 
2003 appropriation is needed for training to provide regional workshops 
for tribes and individuals on how to create businesses; start tribal 
career, educational, and economic development programs; and create 
opportunities for youth using Native eDGE as a tool.

T2How successful is Native eDGE?

    Since Native eDGE began in April of 2000, over 40,000 individuals 
have visited the web site, over 7,000 publications have been ordered, 
and over 2,000 requests for assistance have come in through the 
Technical Assistance Call Center. Over 800 Indian economic development 
projects are registered in the Native eDGE eLab portion of the web 
site. These projects continue to receive ongoing technical assistance 
from the Native eDGE staff.

Institutional Successes

    Overall, Native eDGE improves the effective and efficient delivery 
of Federal services through coordination with 170 Federal program 
offices, approximately 60 educational organizations, and over 50 
grassroots entities. A major objective of Native eDGE is the promotion 
of collaborative efforts between Federal agencies, lenders, 
foundations, and the private sector. Through these collaborative 
approaches the limited resources of all Federal entities can be 
combined for maximum impact for Native Americans and Alaska Natives. 
This is a unique service provided by Native eDGE that is not available 
from any other Federal or non-governmental organization.
    Native eDGE improves the effectiveness of outreach to client 
populations through the provision of one-stop access to information on 
Federal, NGO, and private sector resources. Native eDGE provides 
efficient service to client populations through an electronic medium 24 
hours per day, 7 days per week. Finally, Native eDGE provides full 
customer service through regular follow-up and on-going technical 
assistance.

Individual Successes

    This program has enabled Native Americans to more efficiently 
navigate through the complexity of Federal Government programs by 
providing a single access point for economic development support. 
Instead of having to invest significant amounts of time searching 
through numerous agencies, Native eDGE provides a single access point 
to explore an extremely wide range of options and opportunities that 
cross multiple organizations. Native eDGE provides this access point 
through a call center, web site, and publications clearinghouse.
    Native eDGE provides Native American businesses with one-stop 
access to economic development resources, which saves search time and 
energy. It also enables businesses or individuals to collaborate with 
economic development experts in a virtual workspace environment. For 
example, Native eDGE's economic development specialists review and 
comment on the projects registered by Native Americans using a web-
based internet tool as a means of helping clients improve their 
projects.

Examples of how the project has benefited a specific individual, 
    enterprise or organization

    ``Personally I have recommended Native eDGE to others. If I did not 
have access to the Native eDGE program, I would have had to contact 
multiple resources for information, and would not have known about 
other possible funding sources.''--Larry Rodgers, Chairman, Four 
Corners Enterprise Community Board of Directors.
    ``I was interested in opening up a Subway sandwich shop--Native 
eDGE pointed me in the right direction for applying for small business 
loans for Native Americans. Although, in the end, I received funding 
from the private sector, rather than through a small business loan, 
Native eDGE was extremely helpful in providing information about 
different sources of funding. I'm glad that kind of resource for Native 
Americans exists. ``--Meredith Long, Subway Owner in Kansas City, 
Missouri.
    ``Through using the Native eDGE web site, I found out about 
resources for potential funding on business and economic development 
projects that I would not have thought of otherwise. What I liked best 
about Native eDGE was the ease of use, and not having to make time-
consuming phone calls or searches through pages of potential 
opportunities. The time saved in finding potential grants is 
invaluable. Even when some of the auto-generated responses were not 
directly relevant to my particular needs, they gave me ideas for other 
resources and options to explore.''--Kelly Lammon, Central Council of 
Tlingit and Haida Indian Tribes of Alaska
                                 ______
                                 

 Prepared Statement of Greg Sarris, Chairperson, Federated Indians of 
                            Graton Rancheria

    Chairman Inouye, Vice Chairman Campbell and members of the 
committee, my name is Greg Sarris, tribal chairperson of the Federated 
Indians of Graton Rancheria. Federal recognition was restored to Graton 
Rancheria by Title XIV of Public Law 106-568, the Omnibus Indian 
Advancement Act, an important piece of legislation enacted with your 
help on December 27, 2000. In fiscal year 2002, the Department of the 
Interior budget contained zero, I repeat zero, funds for Graton 
Rancheria under the New Tribes Program, despite repeated letters from 
Graton Rancheria to the Secretary of the Interior and Assistant 
Secretary-Indian Affairs sent before the fiscal year 2002 budget was 
enacted.
    While we have not yet seen the detailed line items for the fiscal 
year 2003 Indian Affairs budget, we are very concerned about the 
potential for the same thing to happen in this budget cycle and want to 
be proactive. The Tribe also received zero funds in response to its 
request for one-time capital startup costs (separate from New Tribes 
Program) and did not even receive a written reply to its formal 
resolution to the Bureau. The lack of funding is a major obstacle to 
developing effective governmental systems for the tribe. We have opened 
a tribal office primarily with non-Federal funds that come from other 
tribes in California and with donated, used furniture. We have no 
ability to hire an administrator and only limited ability to respond to 
the needs of tribal members. We cannot even plan basic next steps 
because of the uncertainty about future funding.
    The tribe is certainly grateful to have its Federal recognition 
back and wishes to warmly thank the committee members who made that 
possible. However, at the same time, we need to look forward and would 
appreciate the Committee's support in resolving this funding dilemma. 
If funding is provided in fiscal year 2003, it should be considered the 
Tribe's first year of the 3-year period for new tribes in the New 
Tribes Program. We will continue to monitor closely the situation and 
voice our concerns as necessary.
    A separate funding issue relates to Indian Health Service funding 
and preparation of the Tribe's base roll, as required under P.L. 106-
568. The Tribe to date has had to expend an enormous amount of time on 
enrollment issues because the Bureau denied 330 of 772 individual 
applicants for the base roll and would not accept the tribe's roll of 
documented members at the outset. Many persons have unfortunately not 
been able to file appeals and the Tribe has minimal resources to help. 
The number of members on the base roll is critical for Indian Health 
Service funding.
    While the tribe does not have the resources to personally attend 
the hearing, we would be happy to respond quickly to any questions or 
requests for additional information. Thank you for your consideration 
of this testimony. Any assistance you can provide would be greatly 
appreciated.
                                 ______
                                 

Prepared Statement of Michael H. Trujillo, M.D., Director of the Indian 
                             Health Service

    Mr. Chairman and members of the committee.
     Good morning. I am, Dr. Michael H. Trujillo, Director of the 
Indian Health Service [IHS]. Today I am accompanied by Michel E. 
Lincoln, deputy and Gary Hartz, acting director of Office of Public 
Health. We are pleased to have this opportunity to testify on the 
fiscal year 2003 President's budget request for the Indian Health 
Service.
    The IHS has the responsibility for the delivery of health services 
to federally recognized American Indians and Alaska Natives [AI/AN's] 
through a system of IHS, tribal, and urban [I/T/U] operated facilities 
and programs based on treaties, judicial determinations, and acts of 
Congress. In carrying out our statutory responsibility to provide 
health care services to Indian tribes in accordance with Federal 
statutes or treaties, we have taken it as our mission to raise the 
physical, mental, social, and spiritual health of American Indians and 
Alaska Natives to the highest level, in partnership with the population 
we serve. The agency goal is to assure that comprehensive, culturally 
acceptable personal and public health services are available and 
accessible to the service population. The mission and goal are 
addressed through four agency strategic objectives, which are to: No. 
1, improve health status; No. 2, provide health services; No. 3, assure 
partnerships and consultation with IHS, tribal, and urban programs; and 
No. 4, perform core functions and advocacy.
    For the 5th year now, development of the health and budget 
priorities supporting the IHS budget request originated at the health 
services delivery level and with tribal leadership. As partners with 
the IHS in delivering needed health care to AI/AN's, tribal and urban 
Indian health programs participate in formulating the budget request 
and annual performance plan. The combined expertise of the IHS, tribal, 
and urban Indian health program health providers, administrators, 
technicians, and elected officials, as well as the public health 
professionals at the area and headquarters offices, has defined health 
care funding needs for AI/AN people. Improving the health of the AI/AN 
population overall, and providing health care to individuals in that 
population, are important and challenging IHS goals. Comparing the 
1996-98 Indian [IHS Service Area] age adjusted death rates with the U.S 
All Races population in 1997, the death rates in the AI/AN population 
is 6 times greater for alcoholism, 4 times greater for tuberculosis, 
times greater for diabetes, and 2 times greater for unintentional 
injuries.
    3 The fiscal year 2003 President's Budget request and performance 
plan represents a critical investment in improving the delivery of 
health care to the American Indian and Alaska Native population.
    The President proposes an increase of $60.027 million to the IHS 
budget in fiscal year 2003 above the fiscal year 2002 appropriation. 
This request provides an additional $65.807 million for current service 
items including staffing for newly completed health care facilities, 
$16.351 million in program increases for Services, and $1 million in 
program increases for Facilities and Environmental Health. In addition, 
the increases include an offset of $23.131 million for administrative 
and management reforms and one-time facilities projects and 
construction funds. These proposals result in an overall net increase 
of $60.027 million.
    In support of the President's Management Agenda and the Secretary's 
Workforce Restructuring Plan, the IHS will streamline its general 
administrative and management staff at all organizational levels and 
institute cost controls on administrative support systems. Along with 
other DHHS agencies to increase administrative effectiveness, the IHS 
will transfer its public affairs, legislative, and human resources 
staff, functions, and funding to the Office of the Secretary in fiscal 
year 2003. During fiscal year 2003, the IHS will prepare to move 
facilities 4 construction, management and maintenance staff, functions, 
and funding to the Office of the Secretary in fiscal year 2004.
    Further, the President's fiscal year 2003 budget reflects the IHS's 
full share of the accruing cost of retirement benefits for current 
civil service and Public Health Service commissioned personnel. These 
cost amounts for fiscal year 2003 are shown as $60,671 million in 
services, $7.904 million in facilities, and $8.873 million in 
collections for a total accrual cost of $77.448 million. These costs 
are also shown comparably for fiscal year 2001 and fiscal year 2002.
    These investments will continue to improve the IHS, tribal, and 
Urban Indian Health Programs' capacity and infrastructure to provide 
access to high quality primary and secondary medical services, and 
begin to slow down recent declines in certain health status indicators.
    From a policy perspective, this budget is based on both new and 
longstanding Federal policy and commitment for improving health status 
by assuring the availability of basic health care services for members 
of federally recognized Indian tribes. The request supports the 
following three policy initiatives:

   \\\\\\HHS' effort to ensure the best health, and best health 
        care services possible, without regard to race, ethnicity or 
        other invidiously discriminatory criteria,

   \\\\\\proposed Healthy People 2010 and its goal of achieving 
        equivalent and improved health status for all Americans over 
        the next decade,

   \\\\\\DHHS Strategic Plan with goals to reduce major threats 
        to health and productivity of all Americans; improve the 
        economic and social well-being of individuals and families, and 
        communities in the United States; improve access to health 
        services and ensure the integrity of the Nation's health 
        entitlement and safety net program; improve the quality of 
        health care and human services; and improve public health 
        systems.

    The Indian Health Care Improvement Act and other Federal statutes 
make clear that the U.S. Government's obligation under Federal statutes 
and treaties includes providing health care services efficiently and 
effectively to Indians and Indian tribes.
    The primary policy basis for this budget request is to deliver 
efficiently and effectively health care services to the AI/AN 
population to substantially improve the health of members of that 
population. Consistent effort will be required over the long 6 term to 
improve the health of members of the AI/AN population, and such long-
term consistent effort should lead us to the day when the health 
statistics of the AI/AN population do not differ from those of the U.S. 
population as a whole. The Administration takes seriously and is fully 
committed to honoring its obligations to American Indians and Alaska 
Natives under statutes and treaties to provide effective health care 
services.
    A major priority in the budget proposal is to restore access to 
basic health services. The IHS has demonstrated the ability to maximize 
and utilize available resources to provide services to improve the 
health status of AI/AN people. However, the Indian Health Care system 
continues to face competing priorities, escalating costs, and an 
increase in patient demand for more acute and urgent care treatment. 
Thus, to address continuing access to essential individual and 
community health services, the Area IHS, Tribal, and urban Indian 
programs identified funding of personnel-related costs and increases 
associated with current services items as their first priority for 
budget increases for fiscal year 2003. In an effort to maintain the 
current level of services, the budget request includes $26.812 million 
for Federal pay cost increases and $19.758 million for tribal pay costs 
increases; $16.737 million to fund the staffing and operative costs of 
those facilities that will open in fiscal year 2003 or have recently 
opened; and $2.5 million increase for Contract Support Costs.
    The ongoing replacement of outdated clinics and hospitals is an 
essential component of supporting access to services and improving 
health status. In the long run, this assures there are functional 
facilities, medical equipment, and staff for the effective and 
efficient provision of health services. As you know, the average age of 
IHS facilities is 32 years. The fiscal year 2003 budget includes $72 
million for health care facility construction to be used for 
replacement of existing health care facilities. This amount will fully 
fund construction of the quarters at Fort Defiance, Arizona; the final 
phase construction of the hospital at Winnebago, Nebraska; and the 
final phase of the construction of health centers at Pawnee, Oklahoma, 
and St. Paul, Alaska; the continued construction of health centers at 
Pinon, Arizona, and Red Mesa, Arizona.
    Also critical is the provision of adequate contract support costs 
necessary to support the health services provided by tribal health 
programs. These requested funds are necessary for tribal communities to 
assure that there are utilities, training, clerical staff, 
administrative and financial services needed to operate health 
programs. Without this contract support funding, these support services 
are either not available or must be funded from resources that would 
otherwise fund health service activities.
    This investment is consistent with the Administration's commitment 
to expand tribal participation in the management of federally funded 
programs, and reinforces the principles of the Indian Self-
Determination Act.
    The fiscal year 2003 budget includes an increase of $2.5 million 
over the fiscal year 2002 enacted level for contract support costs 
(CSC). The increase is necessary to provide CSC funding for new and 
expanded tribal programs to be contracted in fiscal year 2003. The $2.5 
million increase will first be used to provide CSC for new assumptions 
of IHS programs under self-determination agreements. To the extent the 
$2.5 million is not needed for new assumptions, it will be used to 
increase contract support cost funding for existing contracts.
    The requests that I have just described provide a continued 
investment required to maintain and support the IHS, tribal, and urban 
Indian public health system to provide access to high quality medical 
and preventive services as a means of improving health status. The 
following proposals are intended to strengthen health improvements 
among the Indian health care components.
    Proposed increases of $7.351 million for contract health services, 
$1.5 million for the tribal epidemiology centers, $4.150 million for 
health care professions, $3.0 million for information technology, $1.0 
million for maintenance and improvement, and $850,000 for HIPAA privacy 
regulations are also included in the funding request.
    The health status that the I/T/Us must address is formidable, 
particularly in terms of death rates. Comparing the 1996-98 Indian age-
adjusted death rates with the U.S. all races population in 1997 reveals 
greater death rates in the AI/AN population for alcoholism, 
tuberculosis, diabetes, unintentional injuries, suicide, pneumonia and 
influenza, homicide, gastrointestinal disease, infant mortality, and 
heart disease. Even more alarming is recent data that indicates the 
mortality disparities for AI/AN people are actually worsening.
    Given these formidable challenges, the IHS is pleased to present 
this budget request for fiscal year 2003 as one that will improve 
access to basic health services and address the multiple health issues 
affecting AI/AN people. The request and associated performance plan 
represent a cost-effective public health approach to assure 
improvements in the health of AI/AN people. The request reflects the 
continued Federal commitment to enhance the IHS, tribal, and urban 
Indian health system so that we can continue to make significant 
improvements in the health status of American Indian and Alaska Native 
people.
    Thank you for this opportunity to discuss the fiscal year 2003 
President's budget request for the IHS. We are pleased to answer any 
questions that you may have.
                                 ______
                                 

    Prepared Statement of the National Congress of American Indians

    On behalf of NCAI's more than 200 member tribal nations, we are 
pleased to have the opportunity to present written testimony on the 
President's fiscal year 2003 budget request for Indian programs.
    The tragic events of September 11 brought forth the strength and 
the determination, of our Nation to survive in the face of adversity. 
It is this same spirit that has carried Indian country through years of 
annihilation and termination. It is this same spirit that has propelled 
Indian Nations forward into an era of self-determination. And it is in 
this same sprit of resolve that Indian Nations come before Congress to 
talk about honoring the Federal Government's treaty obligations and 
trust responsibilities throughout the fiscal year 2003 budget process.
    On February 4, President Bush proposed a $2.13-trillion budget for 
fiscal year 2003 that included largely level funding for Indian 
programs, continuing the trend of consistent declines in Federal per 
capita spending for Indians compared to per capita expenditures for the 
population at large. This trend demonstrates the abject failure of the 
Federal Government to commit the serious resources needed to fully 
honor its trust commitment to Indian tribes.
    As you know, the Federal trust responsibility represents the legal 
obligation made by the U.S. Government to Indian tribes when our lands 
were ceded to the United States. This obligation is codified in 
numerous treaties, statutes, presidential directives, judicial 
opinions, and international doctrines. It can be divided into three 
general areas protection of Indian trust lands; protection of tribal 
self-governance; and provision of basic social, medical, and 
educational services for tribal members.
    NCAI realizes Congress must make difficult budget choices this 
year. As elected officials, tribal leaders certainly understand the 
competing priorities that you must weigh over the coming months. 
However, the fact that the Federal Government has a solemn 
responsibility to address the serious needs facing Indian country 
remains unchanged, whatever the economic climate. We at NCAI urge you 
to make a strong, across-the-board commitment to meeting the Federal 
trust obligation by fully funding those programs that are vital to the 
creation of vibrant Indian Nations. Such a commitment, coupled with 
continued efforts to strengthen tribal governments and to clarify the 
government-to-government relationship, truly will make a difference in 
helping us to create stable, diversified, and healthy economies in 
Indian country.
    NCAI's written statement focuses on the key areas of concern 
surrounding the President's budget request of course, there are 
numerous other Federal programs and initiatives that are important to 
American Indians and Alaska Natives. Attached is an agency-by-agency 
breakdown and NCAI resolutions detailing key programs that benefit 
Indian Nations. NCAI urges Congress to support each of these programs 
at the highest possible funding level as the budget and appropriations 
process moves forward.

Bureau of Indian Affairs/Office of Special Trustee

    The President has requested a $22.9-million increase for the Bureau 
of Indian Affairs, from $2.25 billion to $2.27 billion. The funding 
increase is primarily dedicated to trust management activities. Other 
key areas of the BIA budget, such as Tribal Priority Allocations, 
public safety, and economic development, remain deeply under-funded.
    Tribal Priority Allocations provide tribes with the resources for 
governmental services at the local level. Because we are able to 
prioritize TPA funds according to our unique needs and circumstances, 
providing adequate TPA resources is one of the most important things 
the Federal Government can do to further the goals of tribal self-
governance in a practical way. Unfortunately, the budget requests only 
a $23.4-million increase to this account, with nearly $18 million of 
that going toward trust-related activities.
    The Census Bureau's Poverty in the United States for 2000 showed 
that American Indians and Alaska Natives remain at the bottom of the 
economic ladder--with 25.9 percent of our population falling below the 
poverty line. This compares to an 11.9-percent poverty rate for all 
races combined. Simply put, tribal governments simply cannot continue 
to provide essential government services to our growing--and 
disproportionately poor--population without a substantial increase in 
our TPA funds.
    As stated earlier, the budget request includes a significant 
initiative to increase funding for trust management within the BIA and 
the Office of Special Trustee. Within the BIA, $153 million--a $35-
million increase is included for trust operations and services at the 
headquarters, regional, and tribal levels. The Office of Special 
Trustee would receive a 44-percent increase--to $160.6 million--which 
is partially offset by a $3-million cut to the Indian Land 
Consolidation Account.
    NCAI is concerned that a large portion of the requested increase 
for trust management likely would go toward implementing the new Bureau 
of Indian Trust Assets Management that is strongly opposed by tribes. 
NCAI believes that a large funding increase is key to reversing the 
hundreds of years of gross mismanagement that continues to plague 
tribal and Indian trust accounts. As Secretary Norton herself has 
pointed out, it will cost ``hundreds of millions'' of dollars to remedy 
the problem. However, any such increases must be targeted Testimony of 
NCAI
    President's Budget Request for fiscal year 2002 March 7, 2002 Page 
4 of 8 for workable, well-planned reform initiatives developed in close 
consultation with tribes and individual beneficiaries.
    Finally, one other area of the BIA budget--education--deserves 
special mention. The budget request includes an extremely troublesome 
proposal that would authorize the privatization of the 64 schools 
directly operated by the Bureau of Indian Affairs, unless tribes decide 
to operate these schools under contracts or grants. Of course, tribal 
operation of schools is a fundamental principal of self-determination, 
and NCAI firmly supports the right of tribes to privatize schools if 
they so desire.
    However, the budget request fails to provide adequate funding to 
cover the costs of tribal administration of BIA-funded schools, 
especially for the lowest-performing ones slated for transfer. The 
small increase in funding proposed for Administrative Cost Grants does 
not come close to addressing the drastic shortfalls in this account, 
which is currently funded at less than 80 percent of the level required 
under Federal law. Additional school conversions to tribal operation 
would decrease the slice of the already too-small pie going to each 
school even more. Likewise, the $2 million increase proposed for 
student transportation is completely inadequate compared to the $21.5 
million needed just to bring tribally operated schools up to a funding 
level that equals the national average of 5 years ago.

Indian Health Service

    The budget request includes $2.9 billion for the Indian Health 
Service, a $60-million increase over the current funding level, but a 
de facto decrease given the absorption requirements proposed under the 
President's request. Of this total, $2.5 billion is proposed for Indian 
health services. For facilities, $370.5 million is proposed--an 
increase of less than $1 million.
    Because most of the increases are targeted for mandatory pay-cost 
adjustments and staffing at new facilities, the budget request falls 
short of allowing the IHS to break even with fiscal year 2002 funding 
levels once the new absorption requirements under the President's 
budget are accounted for. When measured in constant dollars, per capita 
spending for health care in the IHS service population is actually 
lower today than it was in 1977. Since 1993, funding has dropped below 
the rate of inflation and the 27 percent hike in the IHS service 
population in the 1990's.
    Indian country is all-too-familiar with the disproportionate impact 
that diseases such as diabetes, heart disease, and cancer have in 
American Indian and Alaska Native communities. In January, the Centers 
for Disease Control released a study\1\ that found that, between 1990 
and 1998, the lung cancer death rate for American Indians and Alaska 
Natives increased by 28 percent and the percent of low birthweight 
infants increased by 11 percent. The study also found that American 
Indians and Alaska Natives do not appear to have experienced the same 
improvements in the suicide, breast cancer, and stroke death rates as 
other racial/ethnic groups.
---------------------------------------------------------------------------
    \1\ Department of Health and Human Services, Centers for Disease 
Control, Trends in Racial and Ethnic-Specific Rates for the Health 
Status Indicators: United States, 1990-98, January, 2002.
---------------------------------------------------------------------------
    To help address these health disparities in a meaningful way, the 
IHS Level-of-Need Funding Workgroup has identified an $18-billion 
needs-based budget for the IHS, including a non-recurring $8.7 billion 
facilities request and $10 billion to fully fund the health needs of 
American Indians and Alaska Natives.
    A 10-year phase-in of the $18 billion needs-based budget can be 
achieved through a several years of appropriations increases. If a 
first year increase of $2.6 billion were appropriated [a 112-percent 
increase], the following years' increases would decline to 20 percent 
in year 5 and 10 percent in year 10. The first year increase would be 
substantially more to help offset the more than $2 billion lost to 
inflation over the past 8 years.
    This type of major investment would account for the real revenue 
losses due to inflation and population growth, create long-term savings 
to taxpayers, and eliminate the vast health disparities that exist 
between American Indians and Alaska Natives and the general U.S. 
population.

Other Key Issues

Public Safety

    More than 200 police departments, ranging from tiny departments 
with only two or three officers to those with more than 200 officers, 
help to maintain public safety in Indian Country. According to a recent 
Justice Department\2\ study, the typical Indian country police 
department has no more than three and as few as one officer patrolling 
an area the size of Delaware.
---------------------------------------------------------------------------
    \2\ U.S. Department of Justice, Office of Justice Programs, 
National Institute of Justice, Policing on American Indian 
Reservations, September 2001.
---------------------------------------------------------------------------
    The same study found that inadequate funding is ``an important 
obstacle to good policing in Indian country.'' According to DOJ, the 
appropriate police coverage comparison may be between tribal 
departments and communities with similar crime problems. Because the 
violent crime rate in Indian country is more than double the national 
average, we should compare our police coverage with large urban areas 
with high violent crime rates. According to the Bureau of Justice 
Statistics, cities like Baltimore, Detroit, and Washington have high 
police-to-citizen ratios of 3.9 to 6.6 officers per 1,000 residents. On 
the other hand, virtually no tribal police department has more than 2 
officers per 1,000 residents.
    Given that the Justice Department itself just published a study 
that justifies the need to increase resources for Indian country law 
enforcement, it is astounding to see that our law enforcement programs 
actually took a $40-million direct hit in the fiscal year 2003 budget 
request. The budget would eliminate all $35 million in tribal jail 
construction funding and would cut $5 million in tribal law enforcement 
personnel funds. We strongly oppose these cuts, and request an increase 
to the FY 2002 funding levels for Indian country law enforcement 
programs.

Housing

    According to statistics provided the by the National American 
Indian Housing Council, 40 percent of the homes in tribal communities 
are overcrowded and have serious physical deficiencies. The comparable 
national average is 5.9 percent, almost six times lower.
    These types of conditions have a very real and detrimental impact. 
Respiratory illness, skin conditions, head lice, sleep deprivation that 
affects schooling, and a lack of privacy that sometimes leads to child 
physical and sexual abuse can all be traced back to the housing crisis 
that plagues some of our reservations.
    In the face of the widely reported housing deficiencies in Indian 
country, I am sure that you were as surprised as us to see that the 
fiscal year 2003 budget request actually cuts several programs 
authorized under the Native American Housing Assistance and Self-
Determination Act [NAHASDA]. The President's proposal reduces the 
Indian Housing Block Grant Program by $2 million, to $647 million, and 
slashes the title VI loan guarantee program by two-thirds.
    The FY 2003 request is far below the $1.1 billion base funding 
determined by the National American Indian Housing Council [NAIHC] as a 
minimum to begin addressing the housing shortage in American Indian 
communities. NCAI supports the NAIHC-recommended funding level and 
calls upon Congress to reject the cuts proposed by the Administration.
    Transportation Indian Reservation Roads [IRR] make up 2.63 percent 
of all existing roads in the Federal-aid highway system, but 
historically they have received less than 1 percent of all Federal 
highway dollars. On average, only $500 per mile--and in some cases, as 
little as $80 per mile--is available for maintenance. In comparison, an 
average of $2,200 per mile is spent maintaining other Federal roads, 
and an average of $2,500 to $4,000 per mile is spent by States.
    Recognizing the urgent need to improve the road conditions in 
Indian country, Congress last year approved a fiscal year 2002 
Transportation Appropriations bill that provided funds to offset the 
obligation limitation on the IRR and thus resulted in a final funding 
level of approximately $275 million, the full authorization level.
    The budget request for the Department of Transportation eliminates 
the additional IRR funding contained in the fiscal year 2002 
appropriation, which means that we would see a funding level of 
approximately $240 million.
    Indian Reservation Roads are among the worst maintained in the 
United States and often must be shut down during the winter months or 
in rainy weather. This type of unreliable transportation infrastructure 
hurts our ability to attract businesses, provide emergency services, 
and bus our children safely to school. The IRR program needs an 
increase, not a decrease, and we urge you to support an appropriation 
to offset any negative effect of the obligation limitation on its 
authorized level of $275 million.
    Community and Economic Development Programs Members of the Senate 
Indian Affairs Committee know the critical need to promote community 
development and economic diversification in our tribal communities.
    Many economic development programs that assist tribes would be cut 
or eliminated in the budget. The request for the Small Business 
Administration would eliminate One Stop Capital Shops, Micro-Loan 
Technical Assistance, New Markets Venture Capital, and BusinessLINC. 
The Administration also failed to request any funding whatsoever to 
establish the Office of Native American Business Development, as 
authorized in the Native American Business Development, Trade 
Promotion, and Tourism Act of 2000.
    Furthermore, programs designed to help tribes close the ``dial-tone 
divide'' and improve the telecommunications infrastructures in their 
communities are eliminated outright or severely reduced in the 
President's budget. For example, the request for the Commerce 
Department would eliminate the Technology Opportunities Program--TOP--
which in fiscal year 2001 provided over $4 million in competitive 
grants to tribes and tribal organizations for the purpose of expanding 
technology in their communities.
    Reducing or eliminating economic development tools for Indian 
country is unthinkable in the face of the compelling needs that exist. 
NCAI has approved numerous resolutions calling for increased support of 
economic development programs within the Small Business Administration 
and Department of Commerce, and we urge that these programs and others 
that are designed to promote tribal community development be fully 
funded.

Conclusion
    Thank you for this opportunity to present written testimony 
regarding the President's fiscal year 2003 budget request for Indian 
programs. The National Congress of American Indians calls upon Congress 
to fulfill the Federal Government's fiduciary duty to American Indians 
and Alaska Native people. This responsibility should never be 
compromised or diminished because of any political agenda or budget cut 
scenario. Tribes throughout the Nation relinquished their lands and in 
return received a trust obligation, and we ask that the Congress to 
maintain this solemn obligation to Indian Country and continue to 
assist tribal governments as we build strong, diverse, and healthy 
nations for our people.
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                        FISCAL YEAR 2003 BUDGET

                              ----------                              


                        THURSDAY, MARCH 14, 2002


                                       U.S. Senate,
                               Committee on Indian Affairs,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10 a.m. in room 
485, Russell Senate Office Building, Hon. Daniel Inouye 
(chairman of the committee) presiding.
    Present: Senators Inouye, Campbell, Conrad, Dorgan, and 
Domenici.

 STATEMENT OF HON. DANIEL K. INOUYE, U.S. SENATOR FROM HAWAII, 
             CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS

    The Chairman. The committee meets this morning for the 
third in the series of hearings on the President's budget 
request for Indian programs for fiscal year 2003. Today, we 
will examine the budget requests for the Bureau of Indian 
Affairs and the Department of the Interior for the National 
Indian Gaming Commission and for the Environmental Protection 
Agency.
    One of the proposals set forth in the President's budget is 
for the privatization of schools that are currently 
administered by BIA. Under that proposal, the operation of BIA 
schools would be offered to the respective tribal governments; 
and if they opted not to assume the responsibility, the Bureau 
would enter into a contract with a private organization to run 
these schools.
    Naturally, when one considers the fact that we are talking 
about placing our most precious resource of all, our children, 
in the hands of private educational organizations for whom 
there is no rating system or accrediting body, there will be 
questions.
    There are some cost considerations driving this proposal; 
or put another way, will it cost the Government less to 
contract with private organizations, to operate Indian schools? 
Has there been such a comparative assessment of costs? Has 
there been any assessment of the performance of those schools 
that are now tribally operated, as compared to the schools 
administered by the Bureau?
    How can we assure parents that the quality of education 
that is provided by private organizations will be the same or 
better than that which currently exists? What role will parents 
and school boards play, and what relationship will they have 
with these private entities?
    What accountability will there be to parents and school 
boards, or will the private organizations only accountable to a 
contracting officer in Washington?
    We are told that these educational organizations expect 
performance bonuses and incentives. Are such bonuses or 
incentives going to be provided to tribal governments that 
elect to take over the operation of the schools?
    These are just a few of the questions that Indian country 
is asking about this proposal. So we welcome the witnesses 
today, and look forward to an ongoing dialog on these and other 
matters.
    Now it is my pleasure to call upon the vice chairman of the 
committee.

 STATEMENT OF HON. BEN NIGHTHORSE CAMPBELL, U.S. SENATOR FROM 
      COLORADO, VICE CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS

    Senator Campbell. Thank you, Mr. Chairman.
    Good morning and thank you for holding this hearing. It is 
nice to see our friends Neal McCaleb, Montie Deer, and Diane 
Regas from the EPA. I welcome you to the committee.
    It certainly must be noted that the fiscal year 2003 budget 
request must be viewed against the backdrop of the war on 
terror and homeland security. Clearly, that is where a lot of 
the focus of the Congress has been the last few months, as 
everyone knows. Nevertheless, the needs are great in Indian 
communities.
    The request includes a $20-million overall increase for BIA 
programs. I am very happy to see more attention on education 
and economic development for the bureau. Increases are proposed 
of $70 million for trust activities. We do not have the Task 
Force recommendations yet, so I am not quite sure how that 
amount of money is going to fit in with what we may have to do 
to help straighten out the Trust Fund problem.
    I know, in the past, we have put a lot of money in that, 
and I want to make sure that we are careful that we do not just 
throw more good money after bad.
    The TPA will see a $24-million increase, I think that we 
have to have an ongoing dialogue about that, because I know 
that some of tribes in real need do not get the amount that 
they would like. Meanwhile, some of the few very wealthy tribes 
that are out there seem to get a bigger percentage.
    There will be a $4-million increase for tribal courts. It 
is probably not enough, but certainly I approve of that. There 
is also $2.1 million for energy development. I think as we move 
our energy bill, and we are dealing with that now on the floor 
of the U.S. Senate, as we go into future years, the energy 
crunch is going to put more and more interest, I think, on 
developing energy on Indian lands. You mentioned the contract 
support costs increase of $3 million expansion, and I certainly 
support that, too.
    In January, the President signed the No Child Left Behind 
Act, which included the Native American Education Improvement 
Act that I and the Chairman had worked on. I certainly thank 
the President for his request of nearly $293 million for school 
construction, but note that it is probably still short of the 
needs.
    I believe there are other ways to help get more schools 
built, like school bonding, and I hope the Administration 
considers supporting that idea. I know I have talked to Neal 
McCaleb about it, and I know he thinks it has some real merit.
    On September 28, the GAO reported that in many categories, 
BIA schools failed to produce the kind of education that Indian 
children need so badly. Let me quote from that report.

    The academic performance of many BIA students, as measured 
by their performance on standardized tests and others measures, 
is far below the performance of students in public schools. BIA 
students also score considerably below the national average on 
college admission tests.

    We can do better than that.
    Of all the 185 BIA schools, Indian tribes already operate 
121 of them through grants. The Bureau operates the remaining 
64. The budget request includes a proposal to bring competition 
to these schools by way of a privatization initiative.
    I think this may have some merit because all these 
youngsters are going to have to go out to the big world and 
compete, and I do not think it is ever too early to start 
learning how do to that. I believe in competition, and I think 
we need to look at it very carefully.
    We also need to ask some questions. Can we provide 
incentives so that tribes assume control of the remaining 
schools at a more rapid rate? What role would tribal government 
play in a selection of private contractors? What experience do 
the current contractors have with Indian culture and 
traditional beliefs of Indian people?
    With that, Mr. Chairman, I would ask unanimous consent to 
put the rest of my statement in the record, because I know Neal 
McCaleb has a very tight schedule. He is going to be over on 
the House side very shortly, and thank you.
    The Chairman. Without objection, so ordered.
    [Prepared statement of Senator Campbell appears in 
appendix.]
    The Chairman. Our first witness is Neal A. McCaleb, 
Assistant Secretary, Bureau of Indian Affairs, Department of 
the Interior.
    Mr. Secretary, it is always good to have you here, sir.

 STATEMENT OF NEAL A. McCALEB, ASSISTANT SECRETARY, BUREAU OF 
           INDIAN AFFAIRS, DEPARTMENT OF THE INTERIOR

    Mr. McCaleb. Mr. Chairman, Mr. Vice Chairman, I am 
delighted to be here and have the opportunity to visit with you 
about our budget request for fiscal year 2003.
    You are very aware of the sphere of services of the Bureau 
of Indian Affairs, which services 1.4 million Native Americans 
in 31 different States, composing 559 tribes. We provide a wide 
range of Governmental services that are usually provided by 
local government such as education, law enforcement and 
detention, social services, roads; and peculiarly to the Bureau 
of Indian Affairs, but certainly in focus now, is the trust 
asset resource management activities.
    On the roads, I want to point out that that is an off-
budget item, funded through the Federal Highway Trust Funds, 
which total about $264 million in fiscal year 2002; but that we 
maintain 25,000 miles of BIA on-system roads, and an additional 
25,000 miles of Indian roads that constitute a total of a 
little over 50,000 in the Indian reservation road system.
    The allocation of our funds is, I think, noteworthy; 90-
percent of all the funds that are appropriated to the Bureau of 
Indian Affairs are directed to the local level, either for 
school operations, to the agencies, or the regional offices.
    Fifty-four percent of our entire budget is directed 
straight to the tribal organizations themselves, either through 
Public Law 93-638 or self-governance contracts and compacts, 
pursuant to the policy of self-determination contained in 
Public Law 93-638 and the subsequent titles for that. In terms 
of actual direct administration, about 8 percent bureau-wide 
goes for administrative dollars.
    The needs and the demand for services are well known to us 
all. With poverty in the 33 percent level and unemployment at 
40 percent, they engender a variety of social problems, 
including alcoholism and violent crime, and other behavioral 
health problems in the reservation environment.
    Our proposed budget for fiscal year 2003 is $2.3 billion, 
which is an incremental increase of approximately $46 million. 
Of that $46 million, $21.9 million is the congressionally-
mandated Civil Service Retirement System, that is applied 
directly now to the agency. There is about $23.1 million in 
actual accumulative programmatic increases.
    As I indicated, there are other off-budget items, such as 
the roads at $264 million; the Wildlands Fire Management 
System, which last year was about $20 million; and notably, the 
Office of Indian Education Programs, which last year was about 
$132 million.
    The emphasis, as has been indicated in this year's 2003 
proposed budget, is education, which is funded at $562 million. 
In addition, that is an incremental increase of about $18 
million. Of that, about $11.9 million is designated in the 
budget for the privatization initiative. There is an additional 
$3 million in new money to fund seven new FACE schools for 
early childhood education.
    Our construction budget remains high, at $292.7 million. I 
would point out that over the last 4 years, or if you go back 
to fiscal year 1999, the entire construction budget was only 
$64 million. In fiscal year 2000, it jumped to $130 million.
    For the last 2 fiscal years of 2001 and 2002, it has been 
in the $292 million range, and this year, the request is for 
$292 million, which is an increase of over 200 percent over the 
2000 budget. This budget remains committed to eliminating the 
backlog of school replacements that are necessary, and that 
includes both the school replacement and the facilities 
improvements that are necessary; about $125 million for school 
replacements, and $164 million for facility improvements and 
repairs.
    As indicated, the tribal priority allocations are 
emphasized. It is the next largest aspect of our budget, which 
is $523 million, or an incremental increase of about $17 
million.
    The Trust Enhancement Program has an incremental increase 
exclusively for the Bureau of Indian Affairs of about $34 
million. The other additional increase to bring it up to over 
$70 million is in the Office of the Special Trustee, but about 
$34 million is directly in the Bureau of Indian Affairs.
    For the first time, we are including an element 
specifically for energy development, a little over $2 million. 
This is the initial funding for this, and we are requesting it 
so that we can assist the tribes in developing their under-
developed and undeveloped energy resources.
    With that, Mr. Chairman and members, I think I will refer 
the rest of my written testimony to you for your perusal at 
your convenience, and answer any questions that you might have.
    [Prepared statement of Mr. McCaleb appears in appendix.]
    The Chairman. I thank you very much.
    Before I go to questions, Senator Conrad, do you have 
anything you would like to say?

 STATEMENT OF HON. KENT CONRAD, U.S. SENATOR FROM NORTH DAKOTA

    Senator Conrad. Thank you very much, Mr. Chairman.
    I have just a couple of brief comments.
    First of all, I was extraordinarily disappointed that the 
Administration has cut funding for the tribal colleges. In my 
experience, tribal colleges are one of the most positive 
institutions in Indian Country. I have seen them change 
people's lives.
    I do not know how the Administration justifies coming in 
and cutting tribal colleges by $2 million from what was 
provided last year. Now I know, as Budget Committee Chairman, 
we face tough choices. But honestly, I cannot think of a worse 
choice than deciding to cut tribal colleges.
    Perhaps even worse, the United Tribes Technical College in 
my own State, after being funded by every Administration for 
the last 20 years, had its funding completely eliminated in 
this budget. I really am amazed that the Administration would 
yank the rug out from under this school and the more than 500 
students that attend it.
    This school does not receive assistance under the tribally-
controlled college or the University Assistance Act. Therefore, 
it is dependent on these BIA funds.
    I would love to hear what the explanation is for 
eliminating the funding for this institution that is the only 
inter-tribally controlled, post-secondary vocational 
institution in the country. It is the only one, and you submit 
a budget that eliminates the funding for it entirely. I await, 
with great interest, the explanation.
    The Chairman. Senator Dorgan.

  STATEMENT OF HON. BYRON L. DORGAN, U.S. SENATOR FROM NORTH 
                             DAKOTA

    Senator Dorgan. Mr. Chairman, I cannot say it better, but I 
can say it again. My colleague has talked about the United 
Tribes Technical College. I was on the campus of the United 
Tribes Technical College about 2 weeks ago, following the 
Administration's recommendation that it not be funded. That is 
a huge mistake.
    As Senator Conrad indicated, Republican and Democratic 
Administrations for 2 decades have recommended funding for this 
unique institution. It is unique in the country in the way it 
serves Native Americans from virtually all over America.
    I cannot believe that anyone who went to United Tribes and 
looked at that curriculum and looked at the results and said, 
by the way, this is unworthy. I cannot believe anybody did 
that. I believe that someone who knew the cost of everything, 
but the value of nothing, as the old saying goes, decided just 
to zero this out.
    But I have asked the Administration to send someone there 
now, go to the campus, meet with the teachers, meet with the 
students, review the curriculum, review what that institution 
has done for Native Americans for many years, and then tell us 
that it is unworthy.
    I do not think that will be the case. I think that if 
someone takes a look at this and does due diligence, and does 
what should have been done before the budget came out, I 
believe that there will be a conclusion that this is a very 
important and worthy institution to fund.
    I am also concerned about the proposed decrease in tribal 
community colleges. This has been a ray of hope. It allows 
people with the connections to their home area for child care 
and other things, to be able to access college. Our per-student 
support is miserably low even now, but to propose a decrease is 
just wrong.
    If I might, Mr. Chairman, have 1 more minute. I spoke at a 
tribal college graduation ceremony 1 day. The person with the 
broadest smile that day was a woman named Velma, who was 
getting her degree.
    She had been a janitor, a single mother with four children, 
cleaning the hallways and cleaning the bathrooms of this 
college. She decided she wanted to do something more than that.
    The day I showed up, because of our investment and our 
support, and because of this tribal college, Velma was able to 
be a college graduate that day. That is something no one will 
ever take away from her. She did it herself with our help.
    It describes the value of tribal colleges, because she was 
able to do it in her community, with the support of family, for 
child care and other things.
    So I want to just implore the Administration to take a new 
look at the tribal college recommendation. Cutting that is 
wrong. It is just wrong, and especially with respect to United 
Tribes.
    It is inconceivable to me, and I will ask, Mr. Chairman, 
whether anyone from the Administration went to United Tribes, 
and took a look at that curriculum; and if so, did they find it 
wanting, and if so, where and how? My guess is that somebody 
just took a pencil and just zeroed it out, and I think that is 
unforgivable.
    The Chairman. Thank you very much.
    Senator Domenici.

   STATEMENT OF HON. PETE V. DOMENICI, U.S. SENATOR FROM NEW 
                             MEXICO

    Senator Domenici. Thank you very much, Mr. Chairman.
    I have a series of questions when it comes my turn, but I 
would like to make a couple of comments.
    Mr. Secretary, first, I want to commend the Administration 
for including in the budget this year $292,700,000 for the 
construction of new Indian schools.
    For years, instead of catching up, we were going backwards 
in terms of schools that needed replacement or significant 
rehabilitation. It was a rather deplorable situation, when the 
President arrived on the scene here in the White House, to find 
the condition of the BIA schools. He made a commitment, and I 
thank you very much for encouraging him to live up to it.
    This means eight Indian schools in the United States, three 
in Arizona, two in South Dakota; and South Dakota will have two 
schools, the total of which will be over $27 million; one 
Indian school in New Mexico, and one major Navajo school, a 
boarding school, which has a very, very expensive price tag, 
but it is going to be constructed also, at $33 million.
    Now all of us on this committee, including as I look 
around, every single one, has been on the Floor of the Senate 
from time to time, extremely critical of the deplorable 
condition, the physical plant-wise condition, of the Indian 
schools.
    I think we had something to do with making the change; but 
nonetheless, we have to give the President and you credit for 
living up to it. It will make a big difference, and we will 
soon catch up. It will take a few more years, but we will.
    There are many other things we could talk about that are 
positive in this budget, and some are negative. Some the 
President found that he could not fund, if he was going to live 
within the budget that he has come up with.
    We will have our turn at those in the processes up here. If 
we find them extremely wanting, his decisions, we will make up 
for it as we go through the appropriation process.
    So if I was the college that has been spoken about by our 
two distinguished Senators, I would not be too worried. The 
Senate has its opportunity to work its will. From what I can 
see, some of these issues will be taken care of, and it will 
not be terribly expensive.
    Thank you very much, Mr. Chairman.
    The Chairman. I thank you very much, Senator.
    Mr. Secretary, what is the Bureau's legal authority to 
privatize Bureau-operated schools?
    Mr. McCaleb. Well, I think the Bureau, as the trustee to 
Native Americans, has the authority and the obligation to seek 
the most effective ways to provide for quality education.
    As was pointed out earlier, the BIA has been criticized in 
the recent General Accounting Office report for the achievement 
and proficiency levels of BIA-educated students. So the 
motivation for exploring privatization is to try to expand the 
kinds of choices that are available to the local school boards 
for enhancing the quality of education and the proficiency of 
the students.
    Privatization has shown some demonstrable success in other 
areas that are characterized by poverty and high unemployment. 
The objective is to work with the students in the BIA-operated 
schools and use privatization on a demonstration project basis, 
to measure its effectiveness and success in some of our least 
high performing; or let me say it another way, our worst low 
performing schools, to see if we can, in fact, through their 
experience, effect meaningful change.
    The Chairman. The Indian Child Protection and Family 
Violence Prevention Act was enacted, as you know, to prevent 
child molesters and pedophiles from working in BIA schools; 
because it is common knowledge that these people seem to 
gravitate to places where they can have access to children 
without having to undergo background checks.
    This act only applies to tribal and Federal employees. 
Would it apply to private contractors?
    Mr. McCaleb. We are currently expanding our security 
measures in a variety of areas within the Bureau of Indian 
Affairs, to include not only BIA employees, but also tribal 
employees in any privatized contracts.
    The Chairman. Well, under the present law, BIA employees 
and tribal members must undergo a background check. My question 
is, would the employees of these private institutions be 
required to undergo background checks?
    Mr. McCaleb. Yes.
    The Chairman. That would be in the contract?
    Mr. McCaleb. Yes.
    The Chairman. This privatization, although it in one glance 
would appear to give the Indian tribe a choice, to me, it seems 
to present the tribe with an ultimatum. You either contract or 
grant the schools, or the Bureau will hire a private entity.
    Mr. McCaleb. I do not think, Mr. Chairman, that it is a 
mandate in any form or fashion. It does present an additional 
choice. I can assure you that no tribal school board will be 
forced to privatize, if they choose not to; certainly, until 
there is some demonstration over a period of some years.
    The Chairman. Can they choose to stay with the BIA-operated 
school?
    Mr. McCaleb. Yes.
    The Chairman. So you have that choice; it is either 
contract or tribe? I thought that was your proposal.
    Mr. McCaleb. Right now, we give the tribes the choices to 
contract the schools, either through Public Law 93-638 or a 
grant basis. That is their choice.
    The Chairman. Under your proposal, the tribe is given a 
choice. You either privatize or you do it yourself.
    Mr. McCaleb. Mr. Chairman, I do not think that decision has 
been made yet, because we have not gone through the 
consultation process with the tribes, which is supposed to 
begin this next month. Those are the kinds of things that will 
be sorted out in the consultation process with the tribes.
    The Chairman. I am glad you brought up consultation. Have 
you consulted the Indian tribes before making this proposal to 
this committee?
    Mr. McCaleb. Not in a formal way; no, sir.
    The Chairman. When do you intend to sit with tribal leaders 
on this matter?
    Mr. McCaleb. Beginning in the middle of this coming month; 
we have organized and scheduled about seven different regional 
consultation sessions.
    The Chairman. So when the President released his budget 
request, no Indian Nation had received some notification of 
consultation.
    Mr. McCaleb. No formal consultation; no, sir.
    The Chairman. Well, I would like to know what the Indian 
Nations have to say about this before this committee acts upon 
it. I think that is the proper way.
    In coming to your decision to privatize schools, was this 
based upon some recommendation made by a report, or by a panel 
of scholars or something like that; or was it a matter of the 
budget, the bottomline?
    Mr. McCaleb. I do not think that the bottomline objective, 
the driving objective, is to reduce the cost. We are, of 
course, hopeful that that will be a by-product. But the 
objective is to increase the proficiency and the performance of 
our Indian students academically.
    We have seen, in some demonstrations right here in 
Washington, DC, as an example, where some schools have been 
privatized, and had a marked enhancement in their achievement 
test scores.
    The Chairman. Do you have copies of those reports?
    Mr. McCaleb. I am sure Mr. Mehojah has those reports. Bill 
Mehojah, who is the Director of our Office of Indian Education 
Programs, is here with me today.
    The Chairman. Mr. Mehojah, can you tell us on what document 
the Department based its decision to privatize? Is it just the 
Washington, DC schools?
    Mr. Mehojah. No, sir; we took a look at the 1999 and 2000 
school achievement levels of our schools. There were 106 of 
those schools that were 50 percent or more partially 
proficient. That means that there are three levels. There is 
partially proficient, proficient, and advanced.
    The Chairman. There were BIA-operated schools?
    Mr. Mehojah. These were BIA-funded schools. In that, of 
course, were included the BIA-operated schools; the 64 BIA-
operated schools that we still have.
    To answer your question, yes, we do have documentation to 
show how some of these private companies are influencing the 
achievement levels of the schools that they have contracted 
with.
    The Chairman. And based upon that, you recommended this.
    Mr. Mehojah. Based on that, we decided that we needed to 
look at all options to improve achievement levels in our 
school.
    The Chairman. But in the process, you did not discuss this 
matter with the tribal school teachers or tribal parents?
    Mr. Mehojah. No; we did not discuss it with them.
    The Chairman. I have many other questions, but now may I 
call on the vice chairman.
    Senator Campbell. Thank you, Mr. Chairman.
    It sounds like kind of the same old deal. The decision is 
made in Washington, and then the tribes are brought in after 
the deal has already been made. To me, that is not 
consultation.
    I have got about 40 questions that I want to ask, too, but 
I want to also share the time we have with Senator Dorgan and 
Domenici. So let me ask you just a couple.
    First, let me say one thing about education and the 
President, and that is this. When Senator Domenici and I met 
with the President and 28, as I remember, tribal leaders in Las 
Cruces when he was a candidate, he made a commitment then to 
improve Indian education, and told us then of his commitment to 
put more money into school construction.
    I think he has kept his word; maybe not up to the level he 
would have wanted, or we would have wanted, but he was kept his 
word in that respect.
    I was rather surprised to hear Senator Conrad's statement 
about the United Tribes Technical College funding. I am 
concerned about that, too, because I do not think all young 
Indian people that go to school want to, or maybe are not meant 
to be white collar workers. We have got a need for vocational 
instruction, too.
    But as Senator Domenici alluded to, the budget request is 
just that--it is a request. Congress is a separate branch and 
we have some input on where we are going to put the money. I 
just wanted to make a commitment to Senators Dorgan and Conrad 
that I, for one, am going to do everything I can to make sure 
that there is money put back in the budget for that vocational 
school.
    Let me ask a couple of questions about the schools, since 
Senator Inouye talked about the demonstration project. As I 
understand the demonstration project, there are 121 schools 
already run by the tribes, either under contract or with a 
grant agreement with the Bureau, and that leaves 64. But if the 
tribe does not want to operate the school, it is automatically 
turned over to a private corporation.
    That is not a demonstration project. It sounds like some 
sort of a mandate, and I am not sure if we should not launch a 
pilot where we tried it with two or three schools before we 
just made kind of a blanket decision about it.
    But can you describe how a contractor is chosen to run a 
school; what degree of involvement do they have with the tribe 
before they get that contract?
    Mr. McCaleb. I think a number of those questions will be 
answered as a product of the planned consultation process.
    My opinion about how they would be chosen would be that the 
proposers would have their credentials evaluated based upon 
their achievements in other schools and what they have 
accomplished; and that the local school board, along with the 
BIA, would look at the similarities between the school service 
areas, to determine if their experience appeared useful in 
terms of the local school board's objectives.
    I think they would evaluate some things like their 
financial stability, because this demonstration is not going to 
be done in a year. I think they have proposed the five year 
contracts with walking privileges for either party.
    Senator Campbell. Well, I am concerned, not only as a 
member of this committee, but also as a person who taught 
public schools for a good number of years, about the 
comparative data between these contract groups and other 
schools, Bureau schools, educational private schools, and so 
on.
    Could you provide for the committee some kind of a report 
card on comparative data between the people that may be getting 
these contracts and the schools that are in place now?
    Mr. McCaleb. Yes; I think we can.
    Senator Campbell. Let me go on to another subject. The 
budget request proposes a reduction in land consolidation money 
of some $3 million, because there are unexpected amounts 
carried over from previous years.
    That is a concern, because we identified that problem some 
years ago, as you remember, Neal, and we provided the funds to 
fix it, to remedy it. But now how are we going to carry it out, 
if we are going to cut the funds to that program?
    Mr. McCaleb. That is a concern to me, as well, Senator. We 
should have fully utilized all the funds that were available in 
the fiscal years in which those funds were made available. It 
was a disappointment to me that that has not been done, as you 
indicated it is to you.
    However, the reality is that we do have some carry-over 
funds. Given the environment of the budget, we felt like we 
would utilize those carry-over funds, and demonstrate our 
ability to spend those funds now in the coming fiscal year, and 
hopefully come back and ask for additional funds for this 
purpose.
    In fact, when we started the process, I was asking why do 
we not ask for additional funds for land consolidation? It is 
one of the things that everybody agrees that we ought to be 
doing more of.
    The answer was, well, we have not spent the funds we have, 
which was a very unsatisfactory answer, but that is the reason 
why the funds were reduced in this fiscal year. I hope that we 
spend those funds down rapidly, and that we come back in the 
2004 budget, having demonstrated that ability, and ask for more 
money for that.
    Senator Campbell. This program has met with, I think, a 
great success for those tribes who have tribes who have tried 
it, and I would encourage you to expand the pilot.
    Mr. McCaleb. It is popular with everybody. It is popular 
with the Congress. It is popular with the Administration and, 
most importantly, it is popular with the service beneficiaries.
    Senator Campbell. I do not have to tell you the 
unemployment figures on reservations. I am sure you already 
know them. It seems that the success rate in employment 
training of the job placement program's success rate for 
Indians is rather good.
    But I would like to ask, what efforts is the Bureau taking 
to expand that program? How is the Bureau working to ensure 
that individual tribes can take advantage of that employment 
training program and job placement; or how do you bring the job 
placement program directly to the reservations?
    Mr. McCaleb. Senator Campbell, one of the things that we 
are proposing this calendar year, probably in the early Fall, 
is to have an economic development summit, in which we bring 
both tribal leadership, industry and investors to a common 
meeting in which we demonstrate not just the need, but the 
opportunities on reservation lands and in Indian country for an 
economically viable enterprise, and attract them to bring the 
jobs to the reservation areas.
    In other words, we want to try to focus on reservation-
based jobs. That is the general mechanism that we would 
propose.
    Senator Campbell. All right, I will submit the rest of my 
questions in writing. Just let me encourage you once more to 
consult with the tribes before you make the decisions, not 
after.
    Mr. McCaleb. Yes, sir.
    Senator Campbell. Thank you.
    The Chairman. Thank you very much.
    Senator Dorgan.
    Senator Dorgan. Thank you very much.
    I neglected to and should have thanked you for the budget 
submission on Indian school construction. Senator Domenici did 
that, and all of us who have been working on that see a ray of 
hope here. I think that is a very positive piece in the 
President's budget, so thank you for that.
    But let me go to the areas that are troublesome for me, as 
well. Let me talk about United Tribes Technical College, and 
ask you, how did it come about that the Administration's budget 
recommended zeroing out that college in the budget; do you 
know?
    Mr. McCaleb. I think the focus of this Administration's 
budget is in the primary and secondary school years. That has 
been historically the mission of the Bureau of Indian Affairs 
in education. It is clearly the area where our dollars would 
yield the highest rate of return, in terms of student 
proficiency.
    In fact, we are shifting some of our influence to preschool 
activities through the FACE Program, the Family and Child 
Education Program, to try to reduce our dropout rate, enhance 
our proficiency rate, and to graduate students from high school 
who are better prepared to go on to some post-secondary 
activity, whether it be a baccalaureate program or a technical 
training program.
    Senator Dorgan. But let me ask again, is there any 
particular reason that the Administration de-funded this? I 
mean, did someone visit the college, review the curriculum and 
find it wanting?
    Mr. McCaleb. I am not aware that that happened, Senator.
    Senator Dorgan. Can you tell me what you are aware of then, 
with respect to United Tribes?
    Mr. McCaleb. Well, I am aware that we reduced, as I 
indicated, a lot of our post-secondary funding, including some 
tribal colleges, a reduction of $2 million in tribal colleges, 
and the elimination, in some cases, of funding of the technical 
training.
    Senator Dorgan. So to your knowledge, no one visited United 
Tribes, or made an affirmative judgment that there is something 
wanting at that school.
    Mr. McCaleb. No; I do not think that happened.
    Senator Dorgan. All right, do you think it would be 
advisable to have someone visit that college, and evaluate that 
curriculum? As Senator Domenici indicated, we are going to 
consider this. I am on the Appropriations Committee.
    But if, in fact, the decision was made without visiting the 
college, would you be willing to send someone to that school, 
and give us an evaluation of what you think that school is 
contributing to those students?
    Mr. McCaleb. I will have that done, Senator.
    Senator Dorgan. Would you do that within the next 30 or 45 
days, so that we have that available, both to this committee 
and to the Appropriations Committee?
    Mr. McCaleb. Before the end of April, that will be done.
    Senator Dorgan. All right, that is very helpful, and I 
appreciate that.
    Let me just say, if I can, I think you will find what I 
have found and others have found. This is a unique, remarkable 
institution that contributes substantially to the lives of 
people who want to better themselves and, who in many cases, 
have a pretty tough road, but who have found the way and found 
this as an opportunity; and I look forward to that visit.
    Now let me ask about the Chairman's line of questioning, 
because I do not think I got the answer. If you would please 
ask your staff, and I regret that I have forgotten the 
gentleman's name.
    Mr. McCaleb. Mr. William Mehojah.
    Senator Dorgan. Thank you for being with us.
    The Chairman asked you if you had some evidence of the 
improvement in student's achievement with respect to 
privatizing schools. I think Mr. McCaleb indicated that some of 
that came from the District of Columbia.
    There have been experiments and actual programs to 
privatize certain kinds of public education throughout the 
country. Some of it has been successful; some has not been 
successful, as you know. Can you tell us more specifically on 
what basis you recommend privatization?
    Mr. Mehojah. I think the one thing that we took a look at, 
as Mr. McCaleb mentioned, was various options that we could 
provide to schools and to tribes.
    One of them, of course, like you mentioned, are the private 
companies, education management companies. There are 
approximately seven of those companies that are out there in 
the country, the largest of which is the Edison Schools, 
headquartered out of New York City. They have about 75,000 kids 
in their system.
    We have taken a look at their track record, to see how they 
performed over the years, in some of the many similar 
populations, with unemployment, poverty, under-education, those 
kinds of factors.
    We have also looked at a couple of the others, to see what 
they do, and we visited some of the schools, to take a look at 
how they operate, how they structure their days, et cetera.
    I think we have done a cursory review of them, and have 
collected some data, both from them, as well as from outside 
sources, to see how they have fared.
    Senator Dorgan. And I think the Chairman was asking the 
questions that would lead to our asking, could you provide that 
data to us then? If you have collected data sufficient so that 
you have made a judgment about privatization and the 
advantages, perhaps, of privatization, could you share with us 
the information that led you to that conclusion?
    Mr. Mehojah. Yes, sir; we sure could.
    Senator Dorgan. Do you agree that, in some cases, the 
privatization of schools has been a success; while in other 
cases, it has been a failure?
    Mr. Mehojah. Yes, sir; we have seen that. As an example, at 
the Edison Schools, we have seen some places where they have 
not succeeded. But their average success rate is fairly high.
    Senator Dorgan. Would privatization represent a case where 
you would choose the lowest bidder?
    Mr. Mehojah. No, sir; we would choose the best provider.
    Senator Dorgan. And what role would cost play in that?
    Mr. Mehojah. The role that cost would play is that we would 
show the private management company what resources currently go 
to our schools. That would be what would be available to 
provide an education program.
    Senator Dorgan. I think the BIA schools are found wanting. 
There is no question about. I disagree strongly with those who 
say that the system of public education in this country is 
somehow unworthy.
    We did not send people to the moon and cure polio and split 
the atom and splice genes, and clone animals, invent plastic, 
silicon, and radars. We did no do that because we do not have a 
wonderful system of public education; and because some of it is 
failing ought not persuade us to privatize what I think has 
been a remarkable success in this country.
    Having said all that, I think the BIA schools, in many 
cases, are wanting. But what I think the BIA schools represent 
is exactly what the schools in trouble in the inner cities 
represent. The schools inherit everything that comes from the 
home, the neighborhood, and the culture surrounding it. People 
who are having a tough time with 50 percent and 60 percent 
unemployment, and substance abuse, and a whole series of other 
things, import that to the daily school. That daily school 
struggles with that mightily.
    In most cases, with the teachers that I have visited on the 
reservations, in BIA schools and in virtually every other 
school, I come out of that classroom thinking, ``What a 
wonderful person. What a remarkable person to dedicate their 
lives to teaching children.''
    So I have great concern about people who very quickly and 
easily say, do you know what we should really do? Let us 
privatize America's schools.
    We have some private schools in this country that are 
wonderful. Every parent has the choice to access those schools. 
But this country takes a back seat to no place in the world for 
the system of public education it has created, that allows 
every child to rise to whatever level that child can rise to, 
in a public system of education.
    We do not separate them out. We do not move them through 
different chutes, based on our assessment of their ability. 
Every child, for two centuries in this country, has benefitted 
from universal education. And if that was the import of the 
Chairman's questions, then I certainly echo that.
    I do not want us to be flippant or quick suggesting, to do 
this; let us take public education apart; or let us take the 
BIA education system apart and just privatize it. I think that 
is headed toward very big trouble for our public system of 
education.
    So thank you for listening to me. But I think some of us, 
at least on this committee, will look very, very carefully at 
what you saw and what you evaluated, in terms of your 
recommendations.
    Mr. McCaleb, thank you for agreeing to send someone to 
United Tribes. I think it is very important you do that. Also, 
let me end on a positive note. Thank you again on the school 
construction issues.
    At the Ojibwe School on the Turtle Mountain Reservation, 
just last year we got that funding. With those little kids 
walking between mobile trailers in unsafe conditions in the 
middle of the howling wind in the bitter cold winter; what was 
going on out there was not right for those kids.
    We struggled and struggled. They are finally going to get 
their school. Because of the recommendations, a number of other 
schools are finally going to get built, as well. That is a 
bright spot. But do help us with the other areas.
    Tribal colleges should not be cut. Tribal colleges ought to 
be increased. The per pupil burden of tribal colleges that we 
provide is still too low. If you compare it to every other per 
pupil cost in the country, we are under-funding tribal 
colleges. So let us fix that, as well.
    Mr. McCaleb, thank you.
    Mr. McCaleb. Thank you, sir.
    The Chairman. Thank you, very much.
    Senator Domenici.
    Senator Domenici. Mr. Secretary, let me suggest to you that 
there is no orderliness about post-high school funding and 
which institutions the Government is going to help and which 
they are not.
    I would think that if some point, if you intend to make a 
difference, that you might have an analysis of the Indian 
colleges and the vocational schools, and try to figure out and 
make more sense out of what we are trying to do.
    I have an institute, too, Crownpoint Institute of 
Technology. It is zeroed out in the budget. It should get a 
little bit of money, and we get it every year in 
appropriations. But you would be amazed. You would not pick 
this up in a report.
    But sitting out in various places are these vocational 
institutions or vocational colleges. They are getting by on a 
shoestring, because sometimes the tribe funds them, in some 
cases; and in some cases, they do not.
    I think you would be surprised at the job training that is 
occurring on these kinds of facilities, including the one I 
have just mentioned. If you would take a look at it, while you 
are looking at the post-high school vocational type 
institutions, I would appreciate it.
    I will do everything I can to get some funding for it, 
because I think you would not like it closed, if you were able 
to analyze its role there in that part of New Mexico and 
Arizona.
    Mr. McCaleb. Senator, it happens that I am going to be in 
the Farmington area the first week in April, and I will make an 
effort to go by Crownpoint and view the school personally.
    Senator Domenici. You might not be able to. It is a pretty 
long distance out. But if you had time, it would probably be a 
joy for them to honor you. It is a very, very exciting thing to 
see what happens out there.
    Let me first ask you on the privatization, and give you the 
benefit of my experience, I think it is imperative that at the 
soonest and earliest opportunity, that you get the Indian 
leaders together and tell them that you are exploring this, 
that you are thinking about this.
    It will not happen if, in fact, the Indian leaders think 
that you have surprised them, and that they have not had an 
input. They will come out against it from the beginning, and we 
will never convert them to even give any of it a try, even if 
it is justified.
    So I think you should go slow, but you should make sure 
that the Indian leaders are in on it. Do not come to them with 
something all completed. Get a group of them interested now in 
bettering their schools, and make sure that they understand 
that maybe together you can be looking at this. If it is done 
unilaterally, we will prohibit you from doing it, and all your 
good thoughts will be for naught.
    I have two New Mexico issues. I just gave you one of them: 
Crownpoint Institute of Technology. We have Pueblos in New 
Mexico. As you know, we have many Indian Pueblos in New Mexico. 
We have 17.
    Those are generally small groupings, as you know, living on 
large, large land holdings, and they are pueblos because they 
were constructed that way during the Spanish era, and still 
have their own language, and are Indian people.
    Santa Domingo has a land claim settlement, and maybe this 
is part of what you were talking about under not getting the 
money disposed of. But Santa Domingo has a claim, and it seems 
like the Government is not paying it in an orderly manner.
    I would ask if you would take a look at that, and we will 
give you the details of what the authorization for payment was, 
and ask you to tell us when we could expect payment. If you 
would do that, I would greatly appreciate it.
    I have one last one, if you do not mind. The BIA is going 
to be replacing a dormitory in Pine Hill, serving the Navajo 
Nation with a 72 bed capacity. However, the Ramah Navajo Board 
has supportive evidence that a 100-bed facility is needed and 
justified.
    Does the department concur with this information and 
justification? If not, I ask if you would take a look at it. In 
other words, we are planning on 72, but the Board there is 
indicating that would be insufficient from the beginning, and 
that 100 beds are needed. So if you would look at that, I think 
it would be good for us and good for you to be right, rather 
than get it done and be wrong.
    Mr. McCaleb. We will make a thorough analysis of that, 
Senator, and we will include it in our report.
    Senator Domenici. Thank you very much.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much.
    Mr. Secretary, we are well aware of your time problems, and 
that you will have to go to the House now. Regretfully, we will 
have to submit our questions to you, sir, and I hope you will 
look them over and provide us with your responses.
    Mr. McCaleb. Thank you very much, Mr. Chairman. If I could 
have one concluding statement about post-secondary education 
and the need for it.
    The Chairman. Yes, sir.
    Mr. McCaleb. I am very sensitive and aware, and made a 
personal decision early in my life, relative to post-secondary 
education. I wanted to get a degree as a civil engineer, and I 
ran out of money. I was married and had my first child on the 
way.
    I sold the legacy from my mother of her Chickasaw allotment 
in order to finance the balance of my education, and it stood 
me well. I think as much as I hated to part with that land, 
that education has been very beneficial to me, and stood me in 
good stead. It was the right decision, as difficult as it was.
    I hope I have not left the impression with anybody that I 
depreciate or do not hold in high value the importance of post-
secondary education, whether it be a baccalaureate degree or 
technical training. In fact, I have some initiatives on 
technical training, relative to surveyors, that we will be 
submitting and discussing with you.
    The Chairman. I thank you very much, Mr. Secretary.
    Our next witness is the Acting Assistant Administrator, 
Office of Water, Environmental Protection Agency, Diane C. 
Regas. Madam Administrator, welcome.

 STATEMENT OF DIANE C. REGAS, ACTING ASSISTANT ADMINISTRATOR, 
        OFFICE OF WATER, ENVIRONMENTAL PROTECTION AGENCY

    Ms. Regas. Thank you, Mr. Chairman.
    Good morning, Mr. Chairman and members of the committee. I 
am Diane Regas, the Acting Assistant Administrator for Water 
and the National Program Manager for Tribal Programs at the 
Environmental Protection Agency. I very much appreciate the 
opportunity to be here today to speak with you about the 
President's 2003 budget for EPA's tribal programs.
    The President's budget requests for EPA reflects the 
agency's strong commitment to cleaner air, purer water, and 
land that is better protected. This commitment is especially 
challenging with respect to Indian country and tribal programs.
    At the outset, I would like to stress that the tribal needs 
are significant. Tribes are disproportionately at risk by 
nearly every yardstick we use to measure the quality of life. 
Poverty and unemployment are high. Their education, economic 
development, and physical well being lag well behind those of 
the general population.
    With respect to cleaner air, purer water, and better 
protected land, tribal needs are truly challenging. For tribes, 
clean water often means providing the basic sanitation that the 
rest of us take for granted. In some instances, our funds are 
providing indoor plumbing for the first time. In other cases, 
our funds bring modern drinking water systems to two tribes.
    For tribes, cleaner air means ensuring compliance with 
Federal, State, and tribal standards. Eighty-three tribes are 
located in non-attainment areas for one or more air pollutants 
and suffer the consequences of this pollution.
    For tribes, better protected land means their homelands are 
places where modern life thrives as do ancient traditions and 
ceremoneys. Today, there are 1,110 open dumps in Indian 
Country, yet only about 12 percent of tribes have solid waste 
management programs.
    These are just a few of the daunting challenges that EPA 
and tribes face in their efforts to reduce risks to human 
health and the environment in Indian Country.
    EPA's 2003 budget requests for tribal programs is $232 
million, an increase of $3.6 million this year, and a six-fold 
increase since 1994, when EPA created its American Indian 
Environmental Office. Tribes and EPA continue to work closely 
to protect public health and the environment in Indian country.
    Our budget request reflects our ongoing commitment to 
working with tribes as they build their capacity to develop and 
manage their environmental programs.
    For example, the General Assistance Program, often called 
the GAP Program, frequently provides the tribe with its first 
environmental grant, which allows the tribe to hire and train 
its own staff to assess the environmental conditions on the 
reservation and develop its own administrative, legal, and 
technical approaches to solving its problems.
    Currently, about 400 tribes receive General Assistance 
Program or GAP funding, and I am very pleased to tell you that 
the 2003 budget request would allow EPA to fund an additional 
45 tribes.
    In addition to capacity building, our 2003 budget request 
will support our continued efforts to help tribes meet their 
basic health and sanitation needs. It includes approximately 
$18.2 million in clean water set-aside funding to help meet the 
very significant tribal needs for waste water infrastructure.
    I would like to note that our two statutes that provide 
infrastructure funding, the Safe Drinking Water Act and the 
Clean Water Act, are inherently different.
    Under the Clean Water Act, funding for tribal waste water 
infrastructure is limited to one-half of one percent of the 
total appropriation, while the drinking water set-aside is set 
at 1\1/2\ percent.
    The President's budget proposes that the Clean Water Act 
ceiling again be increased to one and one half percent, so that 
tribes receive the funding they need to support their 
significant drinking water and waste water infrastructure 
needs.
    I would also like to note that Alaska Native villages 
represent the bulk of needs for both waste water treatment, 
where they represent 75 percent of the total needs, and 
drinking water infrastructure, where they represent about 50 
percent of total needs.
    I have personally visited Alaska Native villages and have 
seen firsthand the consequences of the lack of basic sanitation 
and potable drinking water in some of these areas.
    To help meet these staggering needs, EPA is proposing an 
additional $40 million over and above the Clean Water and Safe 
Drinking Water Act funding for infrastructure improvements in 
Alaska. This is an amount equal to that provided by Congress 
last year.
    As part of EPA's budget, the Administration is requesting 
that Congress eliminate the statutory cap on funding of 
implementation of tribal non-point source management programs. 
Removing this cap would allow us to help 70 tribes educate and 
train people on reducing polluted runoff and implementing on-
the-ground watershed protection projects.
    EPA's budget also proposes extending our authority to enter 
into cooperative agreements with tribes. These agreements are 
instrumental in our efforts to actively engage tribes in day-
to-day environmental management at the same time they develop 
their own managerial capacity.
    The Administration's budget request would allow EPA to 
continue working with tribes to improve their environment 
through numerous grant programs, training opportunities, data 
exchange, and technical assistance. My written testimony 
provides more detail on EPA's 2003 budget request to support 
cleaner air, purer water, and better protection of tribal 
lands.
    Again, I thank you for the opportunity to appear before 
you, and would be pleased to answer any questions.
    [Prepared statement of Ms. Regas appears in appendix.]
    The Chairman. Thank you very much, Madam Administrator.
    Over the past 10 years, tribal interest in participating in 
EPA programs and developing broad-based tribal environmental 
programs has grown dramatically. Has the EPA responded, and if 
so, to what extent, to these growing tribal environmental 
needs?
    For example, they have suggested that there be direct 
funding to tribes to build tribal environmental capacity and 
implement tribal environmental programs through either the 
treatment as a State designation, or direct implementation 
through tribal cooperative agreements. Have we done anything 
like that to recognize tribes as States?
    Ms. Regas. Yes, Mr. Chairman; we do. Over the last few 
years, since 1994, EPA has increased its GAP funding, the 
General Assistance Program Funding from $8.5 million that year 
to $57 million. That is in the President's request for 2003. 
This represents a six-fold increase.
    In addition, the EPA has approved a number of tribes for 
treatment as a State, under our statutes. At this time, we have 
23 tribes who are approved for treatment as States under 
Section 303 of the Clean Water Act, which covers establishment 
of basic standards, and two additional tribes who are approved 
for treatment as a State for other programs; specifically, the 
Public Water Systems Supply Program, that is operated under the 
Safe Drinking Water Act.
    The Chairman. Are you satisfied that the tribes are 
receiving about what the States are receiving?
    Ms. Regas. We continue to invest in growth in our tribal 
programs. This year's budget is no exception. Our long-term 
goal would be to be able to provide all tribes with a GAP level 
of funding at about $110,000, which would allow the tribe to 
develop its own capacity to manage programs.
    Our rate of growth in that program needs to be commensurate 
with our ability to adequately manage it. This year's increased 
investment will allow us to take the next steps and fund 45 
additional tribes, which we think is a very positive step.
    The Chairman. We provide generous non-competitive grants to 
cities and States. Do we provide the same for Indians?
    Ms. Regas. The EPA's funding to States develop their 
ability and capacity to manage environmental programs was 
generally provided first in the early 1970s. We were much later 
to come to the realization of the need to provide similar 
funding for tribes, but we do currently provide non-competitive 
funding to tribes for basic management.
    In addition, there are several different funds that we 
provide to tribes. Our total investment in tribal programs in 
2003 is proposed to be approximately $232 million. The vast 
majority of that is in grant programs to tribes.
    The Chairman. I wish to congratulate you on taking the 
initiative to visit these far-away places, such as the villages 
above the Arctic Circle.
    After your visitations in Alaska and in the Lower 48, have 
you come to any sort of broad conclusion as to how much would 
be needed to bring Indian country to the same level that other 
Americans enjoy so that they may have running water and maybe 
even toilets. Because on some reservations, less than one-half 
the homes have running water, less than one-half have toilets. 
In Alaska, as you know, they have honey buckets rather than 
toilets.
    Ms. Regas. Yes, Mr. Chairman; we do have an estimate of the 
need to provide basic sanitation and drinking water on tribal 
lands. Our current estimate of the known needs is $650 million 
for needs in waste water, and 42 billion for needs in drinking 
water. We continue to chip away at those needs through our 
programs, and other agencies provide funds for those, as well.
    The Chairman. At the rate of funding at the present time, 
will we be able to resolve this matter, or will it just 
continue. What we have learned through our programs throughout 
the country is that investment in waste water infrastructure 
and drinking water infrastructure will be an ongoing need for 
the country, far into the future.
    These are not problems that are ever solved once and then 
we can walk away. We see a need for continued investment in 
these programs, as far as we can predict.
    The Chairman. I have so many questions that I would like to 
submit, if I may, for your study and response to us.
    May I now recognize our vice chairman.
    Senator Campbell. Thank you, Mr. Chairman.
    Ms. Regas, I commend you on your travels. Just for my own 
information, have you visited Pine Ridge, SD or Lame Deer, MT; 
but particularly Pine Ridge?
    Ms. Regas. No, sir; I have not visited Pine Ridge, although 
a number of EPA staff have been to Pine Ridge, and we are very 
well aware of the pressing drinking water needs in Pine Ridge. 
We are continuing to work with the tribe to invest in improving 
the level of particularly drinking water services that are 
provided there.
    Senator Campbell. I thank you for doing that.
    Any caring person that would visit those two reservations, 
or many more of them in what we call Indian country, they would 
know that we can do better than we have.
    In my State of Colorado, we only have two land-based 
tribes, the Southern Ute and the Ute Mountain Utes. The Ute 
Mountain Utes have been on the same piece of land for 130 
years, and did not get fresh water until about 6 years ago, 
when we passed the legislation to build a pipeline. The State 
helped, and we got it done.
    But up until that time, the only water on the reservation 
was an open ditch and a gravel back-flow filter that would not 
even screen out some of the bigger bugs, let alone anything 
else that might be in that water.
    So I think if you applied that problem to most communities, 
non-Indian communities in the United States, there would be a 
public uprising or some kind of an outcry. So thank you for 
being sensitive to that.
    But since I mentioned the Southern Ute, let me ask you 
something. I know it is very difficult when you are talking 
about improving environmental conditions, when you have to work 
with the tribes and non-Indian communities right next to the 
tribes.
    How do you reconcile those interests? How do you regulate 
air quality over Indian and non-Indian lands, when they are 
next to each other, and what kind of expertise do you have 
working with the tribes and communities that are non-Indians, 
when they are literally right next to each other?
    Ms. Regas. The issues of jurisdiction and working with 
communities to provide adequate and equal levels of protection, 
both on and off tribes, is one of the most difficult issues we 
face in implementation of our environmental programs.
    In the Southern Ute Tribe specifically, there has been 
legislation, as I understand, passed by the State of Colorado, 
and signed by the tribal chairman, and we are continuing to 
work with the tribe and the State to resolve these issues of 
jurisdiction, so that both the State and the tribe will 
continue to have a role in protecting air quality.
    What we have learned in our management, whether it is air 
programs or water programs, is that the environment does not 
respect these boundaries.
    Senator Campbell. That is right.
    Ms. Regas. We really need, in addition to being cautious 
and careful, to respect the jurisdiction of the various 
entities, and to work on a government-to-government basis with 
tribes. We do try to bring together the interested parties, so 
that we can help resolve these issues as they come up and 
provide protection to the people on these lands.
    Senator Campbell. Well, thank you for your sensitivity to 
that.
    Using the Southern Utes as an example, there are nine law 
enforcement jurisdictions on that reservation, because it is 
checkerboarded, and I am sure others are the same. When you try 
to resolve a problem, boy, you have to deal with an awful lot 
of entities at different government levels.
    But thank you for that. I will submit further questions in 
writing.
    Ms. Regas. We would be happy to answer any questions.
    Senator Campbell. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Ms. Regas, I thank you on behalf of the 
committee.
    Ms. Regas. Thank you, Mr. Chairman.
    The Chairman. Our final witness this morning is the 
Chairman of the National Indian Gaming Commission, the 
Honorable Montie Deer. Judge Deer, it is always good to have 
you.

  STATEMENT OF MONTIE DEER, CHAIRMAN, NATIONAL INDIAN GAMING 
                           COMMISSION

    Mr. Deer. Good, good; thank you, Mr. Chairman. As you all 
know, I am Montie Deer. I am Chairman of the National Indian 
Gaming Commission. I do want to thank you for allowing me this 
opportunity to report to you on the work of our Commission.
    As you are no doubt aware, the other Commission members and 
I are approaching the end of our terms. We appreciate the 
interest and the support that this Commission has received to 
us and from us. In other words, I think we have worked together 
for the 3 years I have been here.
    My remarks can be summarized by simply saying that the 
tremendous growth in the Indian gaming industry, particularly 
in light of the recent dynamic changes in California, have 
really strained our ability to keep pace.
    In 1988, when the Commission was created, Indian gaming was 
Indian bingo. Today, it is a major industry, producing revenues 
on a par with Las Vegas and Atlantic City, combined.
    While the Indian gaming industry has increased more than 
100-fold, the Commission, in contrast, has little more than 
doubled its capacity since start-up. It is becoming 
increasingly difficult for the Commission to carry out our 
statutory functions effectively under the Indian Gaming 
Regulatory Act.
    We come today to ask this committee's support for the 
President's request for the $2 million appropriation for fiscal 
year 2003. To be completely candid, we view this request as an 
interim measure, while we work with you, your staff members, 
and the Indian gaming industry and community, to secure 
legislation needed to allow flexibility in our fee collection 
structure.
    The Administration supports this one-time budget request, 
and our goal of statutory adjustments to the current 
limitations in our permanent financing.
    The upcoming fiscal year marks the fifth consecutive 
funding cycle during which the Commission has operated under a 
flat budget. However, by contrast, the industry now generates 
approximately $11 billion per year, an increase of nearly 50 
percent since our last fee cap adjustment.
    If you will look at the bar graph, and I think you have 
copies in your papers, this graph shows the industry's growth 
through the year 2000. We do not yet have the numbers for 2001, 
but we will have them in a couple of months, and we will amend 
this so that you will have that.
    At the same time, the Indian gaming boom in California 
continues to put a severe strain on our resources. Prior to the 
passage of proposition 1-A in March 2000, there were 39 gaming 
operations in California. Today, there are 46. The nature of 
gaming in California has changed, as well, with the involvement 
of major commercial players, such as Harrah Entertainment, 
Anchor Gaming, Stations Casino, and Donald Trump.
    The Commission is, nevertheless, solvent. But we remain 
solvent only by allowing vacant positions to remain unfilled 
and reducing our presence in Indian country.
    This oversight responsibility given to the Commission by 
Congress requires professional employees. We must have field 
investigators, auditors, and lawyers, and we simply do not have 
enough. But we do not have the money to hire more of these 
employees and fund the travel overhead and operational expenses 
associated with a larger staff.
    I now refer you to the pie chart. As you can see, 84 
percent of our costs are fixed. Let me illustrate this 
situation by describing our Audit Division. We began fiscal 
year 2002 with six auditors. Through attrition, we have lost 
two. These positions, although critical, have not been filled 
because of our need to impose a hiring freeze.
    Because gaming is a cash-intensive industry, it poses 
special concerns. For many years, the gaming industry has 
recognized that strong internal controls were essential to 
effectively identify and deter irregularities in the handling 
of large volumes of cash. Like other regulatory jurisdictions, 
the National Indian Gaming Commission promulgated its own 
minimum internal control standards or MICS with the great 
assistance and consultation of the tribes.
    It has been said that we can measure compliance with our 
MICS with an appropriate level of sampling, and in doing so, 
make a meaningful contribution to ensuring the overall 
integrity of Indian gaming.
    Unfortunately, at current staffing levels of the Audit 
Division, it would take us 20 to 30 years to evaluate the over 
300 existing gaming operations in Indian country.
    Beyond the personnel shortages, the flat budget is 
beginning to impact the quality and quantity of our 
consultations with Indian tribes. We, at the Commission, 
believe that it is imperative for us to consult regularly with 
the tribes, both in the context of specific rulemakings and 
more generally, so that we can ensure that we are meeting the 
precise needs of the industry.
    As our budget has grown tighter, we have worked hard to 
continue our consultations in the context of specific 
rulemaking; but this has cost us our quarterly regional 
consultations, where we provide extensive training and meet 
one-on-one with the tribes to evaluate the needs of their 
industry.
    This will ultimately pose a cost to the quality of our 
regulatory program and the productivity of our relationship 
with the tribes.
    In addition to these issues, we have other needs, as well. 
The Commission would like to complete several projects that 
will pay future dividends in terms of overall efficiency and 
effectiveness.
    As I mentioned at the beginning of my remarks, the terms of 
the current Commission members are drawing to a close. Our 
successors will have some significant challenges. We hope that 
by my remarks today, we will help pave their way as they guide 
the new Commission.
    Let me say that for myself, Vice Chairman Homer, and 
Commissioner Poust that we each appreciate the support and many 
courtesies that you have extended to us. Thank you, and I would 
be happy to answer any questions.
    [Prepared statement of Mr. Deer appears in appendix.]
    The Chairman. I thank you very much, Mr. Chairman.
    When one considers the gross income of the operations, $2 
million seems to be so small, it is almost embarrassing. 
However, do you intend to hire more staff?
    Mr. Deer. To answer your question, Mr. Chairman, the first 
thing we will do, if we get $2 million, is to fill the two 
auditor positions that have been left vacant, and also 
additional lower individuals to assist them.
    We want to provide the field with the funding and the 
ability to go to Indian country and do the consultations they 
do and do the training that they do on site.
    Then we have some technological improvements that we would 
like to do. We would like to complete a financial component to 
the database, so that we can track receipts and expenditures. 
We would like to do an electric accounts receivable, so that 
the tribes can pay their fees on line. We would like to do an 
electronic records management.
    Finally, an area that we have a big issue with is that old 
thing called Freedom of Information Act. We have a lot of work 
there, and we spend a lot of time there. So we would like to 
dedicate some software in that area, if we could.
    The Chairman. Will you continue your consultation process?
    Mr. Deer. Certainly, as long as we can.
    The Chairman. Just for the record, can you just provide us 
with a list of what you just told us, about how the funds will 
be used?
    Mr. Deer. Yes; we will give you that.
    The Chairman. Now you spoke about legislation to allow 
flexibility in your fee structure. Has the Commission developed 
such a proposal?
    Mr. Deer. We are ready to prepare a rough draft and consult 
with not only your staff, but with the tribal individuals and 
leaders on that issue. What we are looking at now is a floating 
fee that we think will work.
    The Chairman. I would suggest that you do this as soon as 
possible, because this is a rather busy session with elections, 
terrorism, et cetera. So we would like to be of help.
    A few years ago, Senator McCain and I introduced a measure 
which would provide for a licensing fee mechanism that placed 
the burden of funding for the Commission on those wishing to do 
business with Indian casinos by requiring them to pay a 
licensing fee. Have you considered this type of proposal?
    Mr. Deer. What you are getting at is what is sometimes 
referred to as licensing vendors, et cetera. To do that and do 
the backgrounds, you would need to increase this Commission 
several fold, as far as employees. That would be large amounts 
of dollars.
    Again, you have a sovereignty issue. Do the tribes want to 
do their own licensing, or do they want the Federal Government 
to do that for them?
    The Chairman. Well, this would not be a Federal 
appropriation. We are requiring vendors to pay a fee to you.
    Mr. Deer. That is correct, but then we make the decision. 
The tribe does not make the decision on who gets a license.
    The Chairman. But is it not your responsibility to make 
certain that scam artists do not get involved in doing business 
with Indian country?
    Mr. Deer. I would say that is in the preamble of the act, 
and I would agree with you; yes, Senator.
    The Chairman. In this business, it would appear commonplace 
to have people who would go out of their way to con Native 
people.
    Mr. Deer. Any time you have cash-intensive business, I 
think that is correct.
    The Chairman. I hope the Commission will consider this 
proposal.
    Mr. Deer. We will certainly be more than happy to have the 
staff work with your staff on that issue.
    The Chairman. Thank you, sir.
    Well, I have other questions and I will be submitting them 
to you. But before I do, I would like to thank you for your 
service, not only to Indian country, but to our Nation. I wish 
you the best, Judge, in future endeavors.
    Mr. Deer. Thank you very much.
    The Chairman. Mr. Vice Chairman.
    Senator Campbell. Judge Deer, I would like to also join 
Senator Inouye in wishing you well in your future. We have not 
always agreed, but I have always appreciated your friendship 
and your openness before the committee.
    I was interested, I have to tell you, about your comments 
about who is moving into Indian gaming, the big corporations. 
You mentioned Harrah and Trump Casinos.
    Well, I can remember 10 years ago, when Donald Trump, 
himself, testified against Indian gaming over on the House side 
before the committee, when George Miller was the chairman. He 
testified against it by saying, ``they do not look like 
Indians.'' I guess with a certain amount of money, he can 
become colorblind. I think they are looking more like Indians 
to him now. [Laughter.]
    But I guess that just tells you how things change when 
there is a lot of money on the table.
    I wanted to ask you a couple of questions on your charts 
here. This chart refers to the Federal oversight. Is that 
correct?
    Mr. Deer. That is correct.
    Senator Campbell. But there are three layers of oversight. 
One is tribal oversight of their gaming. The other two are 
State oversight and Federal oversight.
    How does this chart compare and do you know if there has 
been an increase in State and tribal oversight of their gaming 
operations?
    Mr. Deer. I do not have the facts before me, but I would be 
more than happy to try to supply you with what we have. But I 
would say that it has remained constant, as far as States go. 
You have some States, as you know, Senator, that are quite 
involved, and you have some States that will not do anything.
    Senator Campbell. Yes; well, if you can find that 
information, I would be interested in knowing if the activities 
at the State and tribal level have increased to keep up with 
the growth in Indian gaming.
    You requested a $2-million increase in Federal funds, which 
I do not think is exorbitant by itself. That is in addition to 
the $8 million in fee assessments, for a total of $10 million.
    A few years ago in 1998, I worked and helped to get that 
celing raised to $8 million, as you remember, Judge Deer. Since 
then, I have been resistent about raising it more, because I 
was not convinced of the consultation or the need for it; but I 
know that the amount of work is going up.
    At the time, we were getting some letters here at the 
committee from tribes who felt that the Gaming Commission was 
being punitive, and we had talked about that, or maybe a little 
invasive into the tribes' operations.
    I would just encourage you to make sure you have a lot of 
consultation with the tribes before you bring any legislation 
before the committee, so we do not have some kind of a 
backlash, as we often do here, when tribes feel they were not 
asked.
    But maybe it is time to raise the ceiling a little bit, or 
maybe more than a little bit; I do not know. But I do know the 
growth has been huge since California has kind of come on line 
with gaming.
    In the original budget, when we first started out, the 
ceiling was $2.5 million. Is that not correct, when the 
Commission was first formed?
    Mr. Deer. I believe that is correct.
    Senator Campbell. I think that was it.
    How long did it take to reach the $8 million ceiling that 
we increased in 1982?
    Mr. Deer. Well, I know you remember Tony Hope was the first 
chairman, and I think he had three or four employees. 
Basically, for the first 3, 4, or 5 years, I think that all 
they did was draw up the regulations and do the legal work, you 
might say.
    It was not until they started having, as you recall, the 
field investigators living out of their suitcases. There were 
seven of them, if you recall.
    Senator Campbell. Yes; I remember that.
    Mr. Deer. Then Phil Hogen, commissioner, vice chairman, 
came up with the plan of, I would say, the regional offices. I 
remember you wanted to know if there was going to be one in 
Denver.
    Senator Campbell. Yes.
    Mr. Deer. So I would say that it took 4 or 5 years before 
we got up to the $8 million.
    Senator Campbell. How many regional offices are there now?
    Mr. Deer. We have five.
    Senator Campbell. You have five, and you have increased the 
field staff in each one of those offices, too, I assume?
    Mr. Deer. Well, we have lost some auditors. That is where 
we are hurting.
    Senator Campbell. I see.
    Okay, I really do not have any further questions, Mr. 
Chairman. But I would be interested, as we go along, in talking 
more about this increase; thank you.
    Mr. Deer. It was been my pleasure. Again, may I say to at 
least the two of you, you have always been here and that means 
a lot; thank you.
    The Chairman. I thank you very much, Judge.
    The record of this hearing will be kept open for another 
two weeks, just in case you have addendums to make or 
corrections. In light of the fact that we will be submitting 
questions, I believe it will take two weeks to respond to them.
    Thank you very much.
    [Whereupon, at 11:26 a.m., the committee was adjourned, to 
reconvene at the call of the Chair.]
=======================================================================


                            A P P E N D I X

                              ----------                              


              Additional Material Submitted for the Record

=======================================================================


 Prepared Statement of Hon. Ben Nighthorse Campbell, U.S. Senator from 
      Colorado, Vice Chairman, Senate Committee on Indian Affairs

    Good morning, and thank you Chairman Inouye for holding the 
Committee's last hearing on the President's fiscal year 2003 budget 
request.
    Today we welcome old friends Neal McCaleb from the BIA, Montie Deer 
from the Indian Gaming Commission and a new friend, Diane Regas, from 
the EPA. I welcome you all to the committee.
    It may be obvious to some, but I think we need to be reminded that 
this budget request must be viewed against the backdrop of the war on 
terror and homeland security. Clearly, that is where our Nation's focus 
is at the present time.
    Nonetheless, there are great needs in our Native communities.
    The President's request includes a $20-million overall increase for 
BIA programs and I am happy to see more attention on Indian education 
and economic development for the BIA.
    Increases are proposed for:

   \\\\\\Indian trust activities--+ $70 million.
   \\\\\\TPA--+ $24 million.
   \\\\\\Indian tribal courts--+ $4 million.
   \\\\\\Indian energy development--+ $2.1 million.
   \\\\\\Contract support costs--+ $3 million.

    In January 2002, President Bush signed the ``No Child Left Behind 
Act'' which included the ``Native American Education Improvement Act'' 
that I am proud to have introduced along with the Chairman.
    I commend the President for his request of nearly $293 million in 
new funds for Indian school construction.
    I believe that there are other ways to help get more Indian schools 
built, such as school bonding, and I hope the Administration considers 
supporting that idea. I know that our Assistant Secretary has supported 
the idea in the past.
    On September 28, 2001, the GAO reported that in many categories, 
BIA schools fail to produce the kind of education Indian children need 
so badly. I quote from that report: ``The academic performance of many 
BIA students, as measured by their performance on standardized tests 
and other measures is far below the performance of students in public 
schools. BIA students also score considerably below national averages 
on college admission tests.''
    Of all 185 BIA schools, Indian tribes already operate 121 of them 
through grants or under Indian Self-Determination Act contracts. The 
BIA continues to operate the remaining 64 schools.
    The President's request includes a proposal to bring competition to 
these schools by way of a ``privatization initiative''.
    I believe in competition but I think we need to look at it 
carefully and ask probing questions such as:
    No. 1. Can we provide incentives so that the tribes would want to 
assume control of the schools?
    No. 2. What role would tribal governments and local school boards 
play in the selection of a private contractor?
    No. 3. What experience do the current contractors have with Indian 
culture and people?
    I will reserve the balance of my time for questions for all of our 
witnesses Mr. Chairman but would ask unanimous consent that my formal 
statement be included in the record.
    Thank you Mr. Chairman.
                                 ______
                                 

Prepared Statement of Hon. Frank H. Murkowski, U.S. Senator from Alaska

    Chairman Inouye, thank you for holding this series of hearings on 
the President's budget request as it relates to Indians, Alaska 
Natives, and Native Hawaiians. It is important to have these 
opportunities to receive the views of the various department heads and 
others who are charged with carrying out these programs, which are so 
important to my constituents in Alaska.
    There is no doubt about it, Mr. Chairman, there is not enough 
funding for many of the fundamental programs designed to benefit 
America's indigenous people. We need to do more in order to keep our 
commitments to our native brothers and sisters.
    We know we need more funding if we plan to address the needs of 
Alaska's Native population and Indian country. The concern I have is 
weather all the funding that we do have being administered fairly? Do 
formulas take into consideration the various circumstances that make 
each region of the country unique from the rest. I bring this up 
because of the extraordinary circumstances of many of Alaska's Native 
population; the weather, the isolation, the lack of roads, the 
transportation expense, the vast distances, housing costs, the cost of 
food, et cetera. Some of these circumstances are shared with other 
regions of the country. Some are not. I think for the most part BIA 
programs are fair and are administered with a willingness to 
acknowledge and account for these differences.
    The one program I have concerns with, however, is the Indian 
Reservation Roads program. I have several pages of questions that 
address what my constituents and I believe is unfair treatment of my 
region in the Indian Reservation Roads funding distribution. I look 
forward to working with Assistant Secretary McCaleb on correcting these 
inequities and have confidence that when he analyzes the program he 
will see that adjustments do in fact need to be made.
                                 ______
                                 

Prepared Statement of William H. Kindle, President, Rosebud Sioux Tribe

    Good Morning Chairman Inouye, Vice Chairman Campbell and 
distinguished members of the Senate Committee on Indian Affairs. I am 
William H. Kindle, president of the Rosebud Sioux Tribe representative 
of 24,086 Sicangu Lakota living on the Rosebud Sioux Indian 
Reservation, in Rosebud, SD. We are a federally recognized Indian 
tribe. On behalf of the Sicangu Lakota, I want to take this opportunity 
to thank you for allowing us to present our concerns to you on the 
President's Fiscal Year 2003 Budget Request for American Indian 
Programs. The President's stroke of the pen has far reaching impact 
upon our tribes, his budget request will directly affect our Sicangu 
Lakota Oyate. It is important for you to picture behind me, our 
children, people and elders. It is them in mind that I speak before you 
today.
    As you may well know, any discussions that surface regarding 
American Indian tribes and the Federal Government is based on the many 
treaties signed by both Nations on the fundamental inherent rights of 
all Indian people on this continent as it pertains to the many treaties 
signed by our people and the U.S. Government. We stand firmly by those 
agreements made to us in those treaties signed by our forefathers. I 
will reiterate here again, what so many tribal leaders have said in 
regards to sovereignty and the obligations of the U.S. Government to 
American Indian tribes. Today we are asserting those treaty agreements 
made with us, and the sovereignty that is part of those treaties.
    On November 19, 2001 in President Bush's proclamation of the 
National American Indian Heritage Month the President stated that our 
governments must cooperate with each other on a sovereign to sovereign 
basis to provide Native Americans with new economic and educational 
opportunities. And that Indian education programs will remain a 
priority, so that no American child, including no Native American 
child, is left behind. President Bush further stated that ``we will 
protect and honor tribal sovereignty and help to stimulate economic 
development in reservation communities, he also stated we will work 
with the American Indians and Alaska Natives to preserve their 
freedoms, as they practice their religion and culture.
    In 1997 President Clinton signed an Executive Order 13175, which 
establishes a government to government consultation policy with the 
purpose of strengthening relationships between the United States and 
American Indian tribes and ensure that all executive departments and 
agencies consult with tribes as they develop policy on issues impacting 
Indian communities, the President's Budget Request to Congress is 
ultimately a policy.
    Mr. Chairman, We are requesting that the Federal Government, honor 
our sovereignty and to remind all of the Federal programs of their 
responsibilities concerning American Indian tribes. We as tribal 
nations reaffirm those treaties made with us as perpetual and binding 
documents solidified by a term used in the treaties ``As long as the 
grass grows and the waters flows, this land shall be yours'' meaning 
those lands contained in our 1851 and 1868 peace treaties belong to us 
the Eceti Sakowin (the Seven Council Fires of the Lakota, Nakota, and 
Dakota Nations).
    Our tribe provides services to approximately 24,086 tribal members 
with some very key and vital programs. I want to inform you that the 
President's request in fiscal year 2003 falls short of what we need to 
effectively carryout services for our communities.
    On the Rosebud Sioux Indian Reservation, continuous efforts are 
being developed to empower our youth through collaboration of our 
communities, the youth themselves and all of our tribally and federally 
funded programs. I want to talk about what our needs are:
    No. 1. New Tribal Building: One of our biggest need is for 
development of a new comprehensive, culturally appropriate and 
centrally located tribal building for our people. As it is our programs 
operate out of makeshift offices inside renovated houses. Some of our 
programs are forced to purchase mobile homes for office space. We need 
to centralize our Federal and tribal programs into one facility to 
include the Bureau of Indian Affairs services and all of our tribal 
programs. We are requesting $15 million dollars to build the center of 
our nation.
    No. 2. Wanbli Wiconi Tipi: The Wanbli Wiconi Tipe is a project on 
the Rosebud Sioux Indian Reservation to build a comprehensive Youth 
Rehabilitation Center funded under the Department of Justice, our 
elders have named this facility the ``Wanbli Wiconi Tipi (the Eagle 
Nations Center of Renewal). This is a facility designed to address the 
problems with youth violence, alcohol and drug abuse, school drop outs, 
juvenile delinquency and attempted suicides. To some people this 
project was thought to be a maximum security, lock down facility where 
you put our youth in and throw away the key, this is not the case. 
Instead we want to help our youth by providing them with better 
opportunities for leadership, life skills development, cultural 
enrichment, mentoring, and excellence in education. The Justice 
Department approved funding at approximately $8.5 million for 
construction but we have fallen short of our construction goals. We 
have been forced to cut corners and downsize the project to fit our 
budget because the final appropriation for this project is not enough. 
Our construction cost will be short approximately $3 million. We are in 
need of funding at $1.9 million for facility maintenance and 
operational costs. Once this facility is completed we anticipate the 
need for funding of approximately 65 key salaried personnel at a cost 
of $3 million annually. We have a total need of $7.9 million dollars in 
this area alone for fiscal year 2003. We will have an annual need of $5 
million for our Wanbli Wiconi Tipi.
    No. 3. The Rosebud Sioux Tribe-Youth Advocacy Center/Transitional 
Living Center (YAC/TLC) is yet another project our tribe is also 
working on. The YAC/TLC Center is being developed with seed funds from 
the U.S. Housing and Urban Development Drug Elimination Program, as you 
may know, the funding for this program was eliminated in the 
President's fiscal year 2002 budget request. The YAC/TLC project will 
be providing shelter care for approximately 100 at risk youth from ages 
13 to 17 years of age. We will be providing out-patient treatment, 
individual coping skills, counseling, foster home care, a home for the 
homeless youth, educational services, transitional living for youth 
returning from rehabilitation or treatment centers, mentoring, 
recreational activities, adventure field trips, and cultural enrichment 
programs for trouble youth coming from broken homes, most importantly 
we are trying to stop the State social services from placing our 
children in out of state foster homes or institutions. This project 
will also be providing outreach services to an additional 1000 youth of 
all ages. We are in need of $1.5 million dollars annually for operation 
and services for troubled youth.
    No. 4. Child and Family Services: The Rosebud Sioux Tribe Child and 
Family Services Program provides services to families in dysfunctional 
homes, where the court has intervened and is forced to remove children 
from homes due to alcohol and drug related crime and addictions. This 
program was funded at $181,797 to provide services to some 300 to 600 
hundred clients. The tribe wants to help families to become self-
sufficient and healthy, the program also wants to develop innovative 
programs to reunite families that have been separated. The Rosebud 
Sioux Tribe is requesting $700,000 to provide services to those 
children and families.
    No. 5. Indian Child Welfare Act: The Rosebud Sioux Tribe Indian 
Child Welfare Act Office is responsible for enforcement and 
administration of this act. The office currently has over 355 children 
in need of services. These are Lakota children that have been removed 
from their homes and are placed in non-Indian foster homes or 
facilities throughout the United States. They are tribal members and 
need to come home and be placed with their own people. There are costs 
associated with this act to including the cost of bringing children 
home, the cost of placing them in homes, attorney fees for case by case 
management, and at times there will be litigation and court costs. We 
are also in need of more staff to include social workers, case 
managers, Advocates and administrative staff. We are requesting 
$350,000 for this program.
    No. 6. Economic Development: On the Rosebud Sioux Indian 
Reservation we have an unemployment rate of 88.5 percent, we will need 
to create 500 jobs to make a dent in the unemployment rate. The tribe 
has submitted our application for the Empowerment Zone Funding under 
the U.S. Department of Agriculture and developed a Comprehensive 
Economic Development Strategy so that we might develop opportunities 
for industry or commerce to come to our area to assist us to become a 
viable location to develop economically. There is not enough businesses 
located within our reservation to turn our dollar around, there is no 
mechanism in place to retain the dollar in our local economy. Most 
places in America have industrial parks and zones we do not. The 
biggest problem for our area is that we have no capital. We have some 
50-100 individuals who want to start small businesses but we just do 
not have the funding to assist them. We feel any funding for Economic 
Development will help but we are requesting $10 million to assist us to 
develop our economic development projects and to build capital so that 
we may start building businesses that will retain our dollar.
    No. 7. In Education: President Bush has released his ``leave no 
child behind'' sweeping reforms, but has sweeping cuts for Indian 
Education Programs. In the President's fiscal year 2003 budget request 
he has with a stroke of his pen zeroed out the United Tribes Technical 
College in Bismarck, ND, and has cut Tribally Controlled Community 
Colleges which affects our Sinte Gleska University which is on the 
verge of expanding degree areas. The St. Francis Indian School was 
recently approved for expansion funding for its new school at around 
$14 million when based on its student population increase of 7 percent 
per year, has an actual need of $34 million to complete its 
construction. The St. Francis Indian School was built a new school in 
1996, but by the time it was built, student enrollment increases by 150 
percent, they are now in already overcrowded classrooms, the how can 
you let the President say ``leave no child behind'' and then cut key 
education programs. If the U.S. Government wishes not to leave any 
child behind then they will fund the Johnson-O'Malley at $200 per 
student, restore funding to the United Tribes Technical College, 
increase funding for Tribally Controlled Community Colleges. We are in 
need of $34 million to complete the construction at the St. Francis 
Indian School.
    No. 8. Contract Support Funds: As you may know Contract Support 
Funds continue to be in a constant shortfall and in dire need of 100 
percent funding, If you send us a dollar by the time we receive our 
contract support funds we end up with 65 cents , this has a lot to do 
with the trickling effect tribes have talked about for decades. With 
the historic under-funding adding up over the years then we are 
constantly operating inadequately. We can only stretch the dollar so 
far before it breaks. We are in need of $1.8 million dollars for 
contract support.
    No. 9. Our Roads Department is responsible for maintaining, 
servicing and repairing 200 miles of paved, gravel, earth improved and 
improved roads and bridges that are a part of the Federal Aid Indian 
Road System. Funds are used to cover salaries and equipment. However, 
we are now in need of new and updated equipment and machinery and more 
staff to man an effective roads department. We are also in need 
developing streets in many of our communities and the University. Are 
need is for $1.5 million for roads.
    No. 10. In Law Enforcement Services our tribe employs 20 police 
officer which translates into one police officer per 1,204 tribal 
members. In fiscal year 2001, our Law Enforcement Services received 
over 28,000 calls for assistance. We have 20 police officers that are 
already overworked and burn out is commonplace. Our tribe would like to 
employ an additional 20 officers to alleviate the burden of already 
overworked police force, to include equipment, vehicles, training and 
salaries. Our tribe will be working with schools and community members 
to prevent crime. We have a need of $1 million to address our Law 
Enforcement Needs.
    No. 11. Our Rosebud Agency Bureau of Indian Affairs programs are 
also experiencing shortfalls with the Tribal Priority Allocations 
Administrative Services with an unmet need of $100,000, the Social 
Services Program is in need of $571,000 for its assistance of indigent 
tribal members, The Real Estate Services service's a five county area 
consisting of 3.2 million acres and is understaffed with a need of $1.7 
million for more staff and real estate services to deal with the tribal 
lands being fractionated. The Agriculture program receives $1 per acre 
to manage public lands while other Federal programs receive $3 per 
acre, with a tribal. This program maintains 880,000 acres and is in 
need of $1.8 million to manage those tribal lands. The Forestry Program 
has a need to of $100,000 to manage 7,261 acres of ponderosa pines and 
18,614 acres of other various hardwoods which qualifies as a Category 1 
reservation according to 25 CFR, Part 163.36. The Community Fire 
Protection line item in the TPA system has never been funded but we are 
requesting $100,000 permanent funding to help us with our fire 
departments to facilitate quick responses for local fires. Our fire 
department has responded to 25 structure fires in fiscal year 2001.
    In Conclusion. Chairman Inouye, Vice Chairman Campbell, and the 
distinguished members of the Senate Committee on Indian Affairs, our 
tribe will hope that what we have testified here today will be heard 
back home in the services we provide. Once again I want to thank you 
for allowing us to present our concerns. I would hope that you take our 
concerns and assist our tribe with our request.
                                 ______
                                 

Response to Questions Submitted by Hon. Daniel K. Inouye, U.S. Senator 
    from Hawaii, Chairman of the Senate Committee on Indian Affairs

Department of the Interior Privatization Proposal

    Question: The Department of Interior has proposed privatizing the 
administration of schools operated by the Bureau of Indian Affairs, if 
an Indian tribe does not elect to operate the school as a grant school. 
Does the Department of Education have any experience with private 
organizations that operate schools? Are there any reports or ratings on 
these private organizations available?
    Answer: Because, unlike the Bureau of Indian Affairs, the 
Department of Education does not operate schools, we do not have direct 
experience privatizing the administration of schools. We are aware 
that, in a number of school districts across the country, contracting 
with private companies is an actively discussed option, particularly in 
situations where the schools are consistently low performing. Some 
districts are, in fact, experimenting with this approach.
    The Center for Education Reform, an independent, non-profit 
advocacy organization and clearinghouse for information on education 
reforms, recently published a catalog of major companies operating 
public schools in Public-Private Partnerships: A Consumer's Guide. The 
catalog, designed as a resource for parents and educators, identifies 
19 education management companies, both for-profit and not-for-profit, 
that operate about 350 schools. Many of these schools are charter 
schools; others are non-charter public schools.

Office of Indian Education

    Question: It is the committee's understanding that the Office of 
Indian Education Director's position is unfilled. When do you expect 
this position to be filled? If regulations are developed for title VII, 
how do you propose to ensure that the needs of American Indian students 
are met if the Director's position is not occupied?
    Answer: We expect to complete the process of interviewing 
candidates for the position of Director within the next few weeks, and 
then to make a selection. Because this is a Senior Executive Service 
position, our selection will then have to go to the Office of Personnel 
Management (unless a current SES member is selected.) Once the 
submission reaches OPM, our selection will be reviewed by a 
Qualifications Review Board. This final step in the process typically 
takes a few more weeks to complete. Thus, we hope to have a new 
Director selected and on board by June.
    The Office of Indian Education is currently under the leadership of 
an Acting Director who has many years of experience with the program. 
She is overseeing implementation of the new Act, including the very 
minor changes we will make in the regulations for Indian Education.

National Advisory Council on Indian Education

    Question: Over the last 5 years, the budget for the National 
Advisory Council on Indian Education has been $50,000. How much is the 
Department requesting for the Council for Fiscal Year 2003? How much 
does the Department estimate that the Council needs to establish its 
office within the Department of Education and be staffed adequately?
    Answer: Since 1996, the Department has not requested specific 
amounts for the National Advisory Council on Indian Education in annual 
budget requests. Instead, funds are allocated from the Office of 
Elementary and Secondary Education's administrative funds to cover 
Council expenses.
    The Department supports Council activities without creating 
separate office space and a full-time staff. We believe this 
arrangement has been more cost effective, and that it effectively meets 
the Council's needs. The Department's administrative funds support 
Council meetings and other activities. In addition, staff from the 
Office of Indian Education provide assistance to help the Council 
fulfill its duties.

Tribal Colleges

    Question: The Department is proposing funds for the Adult Education 
State Grant under Title II of the Workforce Investment Act (Adult 
Education and Family Literacy). Because there is a critical need for 
basic adult education in Indian country, does the Department support 
reserving $5 million of the funds for the Adult Education State Grant 
for Tribal Colleges and Universities?
    Answer: Under the current authorization, eligible entities for 
Adult Education State grants include the States, the District of 
Columbia, Puerto Rico, and the Outlying Areas (Virgin Islands, Guam, 
American Samoa, Northern Mariana Islands, Marshall Islands, Micronesia, 
and Palau). In addition, the statute specifies set-asides for national 
leadership activities, the National Institute for Literacy, and 
incentive grants. The statute does not currently contain any provision 
for reserving funds for tribal colleges and universities and our budget 
request does not call for creation of such a set-aside.

Research Activities

    Question: In your testimony, you indicated that the Department has 
established a comprehensive research agenda for Indian education and 
that fiscal year 2003 funds will be used to implement that agenda. What 
type of assurances are in place to ensure that researchers comply with 
the research agenda--that is tribal consultation of research designs 
and instruments--when implementing the Agenda?
    Answer: The Department plans to ensure that there is tribal 
consultation and involvement in the various stages of implementing the 
research agenda and the National Study of Indian Education. The 
development of the research agenda itself entailed extensive Native 
consultation through panels, a 2-day conference, and focus groups in 
tribal areas. In the near future, we plan to implement a first-stage 
feasibility and design study that will include the public presentation 
of progress reports in geographical areas that will facilitate American 
Indian and Alaska Native input. Native American researchers will serve 
on the technical advisory panels for the major studies being planned.
    Question: The research agenda acknowledges that most research is 
done by non-natives. What type of procedures will the Department use to 
ensure that the Department works with tribal colleges and Native 
researchers? What are the parameters of the first issue to be 
researched? How will the additional funds for fiscal year 2003 be used 
to implement the Agenda?
    Answer: For all contracts for research supported under the American 
Indian and Alaska Native Education Research Agenda, the Department will 
give preference to Indian tribes, organizations, and institutions, 
consistent with Section 7143 of the reauthorized ESEA.
    Currently, American Indian researchers are principal investigators 
on two of the initial contracts supported under this agenda. One study 
is an analysis of 2000 Census data that focuses on the educational 
status of American Indians and Alaska Natives. Another project is 
looking at factors in achievement for Indian students. A third study, 
still in the planning stage, will use NAEP data to establish baseline 
data on the academic achievement of American Indian and Alaska Native 
students. The increase for fiscal year 2003 will be used for the 
studies mentioned above.

Education Planning in Afghanistan

    Question: During your testimony before the committee on March 5, 
2002, you indicated that you would provide the names of the individuals 
who have participated in education planning activities in Afghanistan.
    Answer: In January 2002, Secretary Paige met with Afghan Minister 
of Education Rasool Amin and Minister of Higher Education Sharif Faiz 
at the Department of Education in Washington, DC as part of the visit 
to the United States by Chairman Hamid Karzai of the Afghanistan 
Interim Authority and other high-ranking Afghan officials. Secretary 
Paige noted that the United States intends to be a supportive partner 
to Afghanistan for the long term. He offered to work with the 
Department of State, the United States Agency for International 
Development, and the Government of Afghanistan to identify concrete 
ways in which the United States can assist in addressing the country's 
educational needs.
    Education planning activities in Afghanistan are still in the very 
early stages of development. The Department will participate in an 
informal interagency working group on Afghanistan led by the State 
Department.
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