[Senate Hearing 109-9]
[From the U.S. Government Publishing Office]



                                                          S. Hrg. 109-9

                        FISCAL YEAR 2006 BUDGET

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

                                HEARING

                               BEFORE THE

                      COMMITTEE ON INDIAN AFFAIRS
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                                   ON

 OVERSIGHT HEARING ON THE PRESIDENT'S FISCAL YEAR 2006 BUDGET REQUEST 
                          FOR INDIAN PROGRAMS

                               __________

                           FEBRUARY 16, 2005
                             WASHINGTON, DC


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                      COMMITTEE ON INDIAN AFFAIRS

                     JOHN McCAIN, Arizona, Chairman

              BYRON L. DORGAN, North Dakota, Vice Chairman

PETE V. DOMENICI, New Mexico         DANIEL K. INOUYE, Hawaii
CRAIG THOMAS, Wyoming                KENT CONRAD, North Dakota
GORDON SMITH, Oregon                 DANIEL K. AKAKA, Hawaii
LISA MURKOWSKI, Alaska               TIM JOHNSON, South Dakota
MICHAEL D. CRAPO, Idaho              MARIA CANTWELL, Washington
RICHARD BURR, North Carolina
TOM COBURN, M.D., Oklahoma

                 Jeanne Bumpus, Majority Staff Director

        Patricia M. Zell, Minority Staff Director/Chief Counsel

                                  (ii)

  
                            C O N T E N T S

                              ----------                              
                                                                   Page
Statements:
    Beaulieu, David, president, National Indian Education 
      Association................................................    25
    Boyd, Roger, deputy assistant secretary, Office of Native 
      American Programs, Department of Housing and Urban 
      Development................................................     9
    Carl, Chester, chairman, National American Indian Housing 
      Council....................................................    20
    Cason, Jim, acting assistant secretary, Indian Affairs, 
      Department of the Interior.................................     7
    Coburn, M.D., Hon. Tom, U.S. Senator from Oklahoma...........     5
    Conrad, Hon. Kent, U.S. Senator from North Dakota............     6
    Corwin, Thomas, director, Division of Elementary, Secondary 
      and Vocational Analsis, Budget Service, Department of 
      Education..................................................    11
    Dorgan, Hon. Byron L., U.S. Senator from North Dakota, vice 
      chairman, Committee on Indian Affairs......................     3
    Grim, Charles W., director, Indian Health Service, Department 
      of Health and Human Services...............................     8
    Hall, Tex, president, National Congress of American Indians..    18
    Hartz, Gary, acting deputy director, Indian Health Service, 
      Department of Health and Human Services....................     8
    Johnson, Hon. Tim, U.S. Senator from South Dakota............     4
    Liu, Michael, assistant secretary, Office of Public and 
      Indian Housing, Department of Housing and Urban Development     9
    Martin, Cathie, deputy director, Office of Indian Education, 
      Department of Education....................................    11
    McCain, Hon. John, U.S. Senator from Arizona, chairman, 
      Committee on Indian Affairs................................     1
    Petherick, John Thomas, executive director, National Indian 
      Health Board...............................................    22
    Thomas, Hon. Craig, U.S. Senator from Wyoming................     4
    Swimmer, Ross, special trustee for American Indians, 
      Department of the Interior.................................     7
    Vasques, Victoria, assistant deputy secretary and director, 
      Office of Indian Education, Department of Education........    11
    Wright, Tom, director, Office of Native American Programs, 
      Office of Loan Guarantee, Department of Housing and Urban 
      Development................................................     9

                                Appendix

Prepared statements:
    Beaulieu, David (with attachment)............................   117
    Carl, Chester (with attachment)..............................   108
    Cason, Jim (with attachment).................................    35
    Grim, Charles W..............................................    33
    Hall, Tex (with attachment)..................................    86
    Liu, Michael (with attachment)...............................    71
    MacDonald-Lonetree, Hope, delegate, Navajo Nation Council....   130
    Smith, Sally, chairman, National Indian Health Board.........   136
    Swimmer, Ross (with attachment)..............................    35
    Vasques, Victoria (with attachment)..........................    51

 
                        FISCAL YEAR 2006 BUDGET

                              ----------                              


                      WEDNESDAY, FEBRUARY 16, 2005


                                       U.S. Senate,
                               Committee on Indian Affairs,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:34 a.m. in room 
485, Senate Russell Building, Hon. John McCain (chairman of the 
committee) presiding.
    Present: Senators McCain, Coburn, Conrad, Dorgan, Johnson, 
Murkowski, and Thomas.

   STATEMENT OF HON. JOHN McCAIN, U.S. SENATOR FROM ARIZONA, 
             CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS

    The Chairman. The committee will come to order.
    I recognize the need to balance the Federal budget and 
agree that cuts in discretionary spending programs are 
warranted. As a fiscal conservative, I expect to support a 
budget resolution that keeps discretionary spending down. That 
said, I object to many of the decreases in funding that are 
proposed in the President's fiscal year 2006 budget for Indian 
programs.
    The Federal Government has continually reneged on its 
trusts and moral obligations to meet the educational, health 
care and housing needs of Indians. These needs far outweigh the 
imperceptible contribution that the proposed cuts will make to 
reducing the deficit.
    Some of the proposed reductions that are ill-advised are to 
those programs such as BIA's Tribal Priority Allocation Program 
and HUD's Native American Housing Block Grant Program that are 
managed and administered by the tribes themselves.
    A recently released study by the Harvard Project on Indian 
Economic Development examined 10 years of socio-economic change 
experienced by Indians living on Indian lands. It concluded 
that Indians' economic growth and improvements in social well 
being far exceed progress being made by the overall population. 
The study attributes this progress to the policies of self-
governance.
    Despite this improvement, however, the report notes that 
tremendous disparities continue to exist between our country's 
Indian populations, both gaming and non-gaming tribes, and all 
other people. These findings support the need for consistent 
Federal funding for programs that help Indian tribes achieve 
self-determination and that allow local decision makers, not 
Federal administrators, determine how best to address local 
needs.
    While the proposed budget cuts many Indian programs, a 
notable exception to this is in the Office of the Special 
Trustee, within which the budget for historical accounting is 
slated to grow by $77.8 million or 40 percent, while all around 
it programs such as those funding education and substance abuse 
prevention have been drastically cut or eliminated. It is 
lamentable that we are in a situation that the funding for an 
accounting appears to have come directly from programs that 
affect the daily lives of Indians. No doubt this request for 
funds to conduct a historical accounting is a result of the 
Cobell v. Norton litigation.
    By proposing only $34.5 million for land consolidation, 
however, the Administration seems to have under-valued another 
means of addressing its trust administration problems. The BIA 
currently administers hundreds of thousands of individual 
Indian money accounts, many of which cost more to maintain than 
the value of the funds moving through them. Last year, Congress 
amended the Indian Lands Consolidation Act to permit the 
Department of the Interior to buy up highly fractionated land 
interests in order to reduce BIA's administrative burden and 
increase the size of tribal land holdings. Those amendments 
authorized $95 million for land consolidation in fiscal year 
2006, and $145 million a year for several fiscal years 
thereafter. The primary reason for these funding authorizations 
was to eliminate the very conditions that gave rise to the 
Cobell litigation.
    I understand that the Administration's rationale for some 
of the program cuts is they did not perform well in the OMB's 
program assessment rating tool, or PART, evaluations. I would 
like to examine this. The accountability problems at the BIA, 
however, are not helped by the sweeping prohibition on the 
department's use of the internet that remains in effect by 
court order in the Cobell case. The BIA has always been a 
troubled agency, but it is unreasonable to expect it to 
overcome this with one hand tied behind its back.
    While I appreciate the need to provide security for 
computerized Indian trusts, and support the efforts of both the 
plaintiffs and the Department to improve IT security, I cannot 
help but wonder whether confining the Bureau and much of the 
rest of the Department of the Interior to paper transactions in 
this electronic age is doing more harm than good to the Indian 
people, and the rest of the public that the Department is 
supposed to be serving.
    Unfortunately, the Budget Committee has given us only until 
Friday to submit our views and estimates letter on the proposed 
budget. Senator Dorgan and I intend to circulate a draft letter 
to all offices by noon tomorrow. We ask that all comments on 
this draft be submitted by 5 p.m. tomorrow so we can submit the 
letter, at least this first one, to the Budget Committee on 
Friday.
    I look forward to hearing from the witnesses. I hope that 
is the longest opening statement that I will ever make as 
chairman of this committee. [Laughter.]
    The Chairman. But I would like to reemphasize to my 
colleagues that the Cobell issue impacts everything else that 
we do in our programs concerning Native Americans. We have to 
get this resolved or say that we will leave this to the courts 
in the years and perhaps decades to come for them to settle. It 
is an issue that impacts everything else that we do, and one 
that I think therefore has to have a very high priority.
    Senator Dorgan.

  STATEMENT OF HON. BYRON L. DORGAN, U.S. SENATOR FROM NORTH 
       DAKOTA, VICE CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS

    Senator Dorgan. Mr. Chairman, thank you very much. Let me 
just say that I agree with much of what you have said this 
morning, especially on the issue of the trust situation. It 
threatens to overwhelm all of these other issues. We must find 
a way to use some commonsense to address it and deal with it 
because otherwise we will grapple with that for a long, long 
time and it will affect all the other things that all of us 
believe we ought to do.
    Let me also say I agree with you that much in this budget 
is not adequate, and that is not a very good description, to 
say not adequate. We have many in this country living on 
reservations that live in third world conditions. We do not 
want to talk about it very much, but let me just in a few 
seconds tell you that Avis Little Wind, who hung herself at age 
14 recently on a reservation, did so in a circumstance where 
there was no mental health capability available to her. She 
laid in bed in a fetal position for 90 days missing school. 
Everyone should have been alerted to it, and yet she died.
    Sarah Swift Hawk died in bed. She was a grandmother. She 
laid down and froze to death. Yes, she froze to death in this 
country on the Pine Ridge Reservation in South Dakota. Rosie 
Two Bear is in a school with 150 kids, two toilets and one 
water fountain; 30 kids in a room; desks one inch apart. Rosie 
says, Mr. Senator, can you build us a new school?
    The fact is, we have circumstances on the reservations in 
this country that are desperate. We have bona fide emergencies 
in housing, health care and education, and we must get about 
the business of addressing them. You go to a reservation and 
find one dentist working out of a trailer house, serving 5,000 
people, and you ask yourself, is this what we hoped to have 
happen or can we do better?
    My fervent hope is that on this committee working with the 
Chairman and so many other members of the committee, that we 
can do much, much better. For years, Administrations have not 
provided the budgets that we need in order to address these 
issues. It is a matter of resources when you deal with these 
issues of housing, health care and education.
    Finally, in the education area, I would say this budget 
says once again that the two colleges that I think are standout 
colleges, the United Tribes Technical College, and the 
Crownpoint Institute of Technology are not worthy and really 
should be de-funded. What on earth are these priorities about? 
I mean, who decides these priorities? Why should the tribal 
colleges, which represent the step ladder up and out of poverty 
for so many people have their budgets cut substantially at a 
time when we already provide only about 50 percent of the 
support for those Indian students than we do for community 
college students.
    So we have so much to do. We can do much, much better. I 
hope that this committee is a source of hope and inspiration to 
deal with these issues.
    Mr. Chairman, I look forward to working with you and my 
colleagues on the committee.
    The Chairman. Thank you.
    Senator Thomas.

   STATEMENT OF HON. CRAIG THOMAS, U.S. SENATOR FROM WYOMING

    Senator Thomas. Thank you, Mr. Chairman. I certainly agree 
with you that we have to hold down the budget. On the other 
hand, we have to look at these issues. I also agree with you on 
the length of opening statements. I am glad to see that this 
budget does deal with health care. It does deal with secondary 
and elementary schools. It does deal with vocational things. 
But we need to really overlook this and see what we can do.
    Unfortunately, I have to go the Floor, but I appreciate 
your holding this hearing.
    The Chairman. Thank you, Senator Thomas.
    Senator Johnson.

 STATEMENT OF HON. TIM JOHNSON, U.S. SENATOR FROM SOUTH DAKOTA

    Senator Johnson. Chairman McCain and Vice Chairman Dorgan, 
thank you for holding this hearing on the vital issue of 
funding for Indian programs.
    The President's budget proposals almost universally 
throughout every agency that affects Indians are an 
abomination. This budget proposal is out of sync with values 
shared by Americans who care about children, education, strong 
communities, adequate law enforcement and the opportunities to 
share in America's blessings. This budget especially hurts 
those with the greatest needs, those in the poorest communities 
served by the weakest infrastructures, with the least access to 
economic opportunity and basic government services.
    Just this past weekend, I took a dirt road from Red Shirt, 
SD, a tiny community located on the Pine Ridge Indian 
Reservation. The folks of Red Shirt do incredibly well 
considering the lack of Federal contributions. They do the best 
they can, but this community struggles, and sadly there are 
hundreds of these communities like Red Shirt that exist in 
Indian country that need basic essential services and 
opportunity.
    Despite the Federal treaty and trust responsibilities owed 
to Indians, the President has proposed that Indians make 
enormous sacrifices to help provide the tax breaks the 
President is so passionately committed to give to the 
wealthiest Americans. Indians are happy to do their part to 
help their Nation with its essential needs, such as fighting 
the war on terror and keeping our Nation safe. As we all know, 
Native Americans serve in the armed forces at a higher rate 
than any other group. But this budget tries to scrape pennies 
from the programs that serve the poorest Americans, while it 
fails to ask the wealthiest Americans to make similar 
sacrifices.
    Needless to say, I am profoundly disappointed with the 
President's priorities. As an example, the BIA Indian school 
facilities budget, despite the fact that we have condemned 
facilities, as is the case at the Crow Creek Sioux Tribe in 
South Dakota, the President is proposing a reduction of $89.5 
million, more than 33 percent from fiscal year 2005, for school 
construction. The President zeroed out the entire Community 
Development Funding Initiative Program, a portion of which was 
targeted to Indian country.
    He proposes a decrease in funding for Indian housing 
through the block grant program by over $100 million. How can 
tribes develop their economies without economic development 
programs? Important to my South Dakota tribes is the 
President's request pertaining to the tribal priority 
allocation funding. TPA funds are used for various programs 
such as Johnson O'Malley, the Tribal Work Experience Program 
and others.
    I am also concerned about the budget pertaining to the 
Office of Special Trustee. OST's budget is growing and while I 
understand the need to fund historical accounting and the 
Indian Land Consolidation Program, I am concerned that OST's 
budget is hemorrhaging at the cost of Indian program funding. 
To add insult to injury, the Department of the Interior's 
across-the-board rescission that occurs every year takes off 
the top cut of all our program funding.
    As testimony today will reflect, every aspect of Indian 
funding is hurting. I am concerned in particular about the 
school construction and again an enormous cut in tribal college 
and university funding being proposed by the President. At a 
time when we ought to be trying to find ways to empower Native 
Americans to succeed economically in a competitive world, the 
very means, the very ladder that needs to be there to allow 
that to happen is being destroyed by this Administration's 
priorities. We need to do better and I look forward to working 
in a bipartisan fashion on this committee and on the 
Appropriations Committee and on the Budget Committee to do 
better.
    Thank you, Mr. Chairman.
    The Chairman. Senator Coburn.

 STATEMENT OF HON. TOM COBURN, M.D., U.S. SENATOR FROM OKLAHOMA

    Senator Coburn. Mr. Chairman and Mr. Vice Chairman, I 
appreciate the opportunity to be here. I do not have an opening 
statement other than to say it is an obligation to us to make 
sure the money that is spent is spent efficiently. I will work 
to help you put that forward.
    I will be leaving for another committee meeting, and I 
would ask that I have some written questions that I would like 
to be submitted to the witnesses and answered by letter.
    The Chairman. Without objection, they will be made and 
entered.
    Senator Conrad.

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

    Senator Conrad. Thank you, Mr. Chairman. I especially want 
to welcome you and our new Ranking Member, my excellent 
colleague, Senator Dorgan, to these new responsibilities.
    The Chairman. Thank you.
    Senator Conrad. I am very much looking forward to working 
with the two of you. I think this is going to be excellent for 
the committee.
    Let me just say with respect to the budget, about 1 year 
ago I went to Standing Rock Sioux Tribe in North Dakota and 
went to the high school. In the high school, which was designed 
by an architect from the southwestern part of the United 
States, Mr. Chairman, I love the Southwest, but this particular 
architect did not understand North Dakota winters. In one part 
of that building in February, it was 75 degrees; in another 
part of that building, it was 50 degrees. This was in a 
February winter. It was about 10 below outside.
    It really made it very, very hard to have an environment 
for learning. To add to the difficulty, the school was built on 
an open classroom concept, so there were no walls separating 
the classrooms. Mr. Chairman, Senator Dorgan knows this story 
well, you could not hear yourself think there, much less listen 
to a teacher to learn.
    When I look at this budget and I see school construction 
cut 57 percent, and I see tribal colleges cut nearly 20 
percent, I see United Tribes Technical College have its funding 
eliminated, which is really one of the bright spots in our 
State in Indian country. This college is reaching out to young 
people and giving them a chance. The best thing that I see 
happening in Indian country are in these tribal colleges, in 
these institutions of learning. It is the one bright spot. It 
is the one place I go where you can see people having a sense 
of achievement and a sense that they can make a difference.
    I remember attending the graduation of a number of the 
tribal colleges, and for the first time in my own career 
feeling a sense of hope about what could occur. I look at this 
budget and it is not building on hope; it is destroying hope. 
That should not be what we are about.
    Goodness knows, nobody has given more speeches about the 
need to reduce deficits than I have. I do not think that 
anybody feels it any more passionately than I do. I believe we 
are on the wrong course. But a budget is also about priorities. 
This budget for Indian country really must be fixed. We are 
talking about a modest amount of money and the needs are great.
    I thank the Chair. I thank the Ranking Member.
    The Chairman. I thank my friend from North Dakota. I know 
that we will have ample opportunity to engage in discussions of 
priorities. I think we are in agreement that these budget cuts 
are probably really both unfair and unsustainable, but I would 
also hope that we would realize over the years that we have 
enormous waste and mismanagement. You just described it. That 
is why this Harvard study on self-governance is an important 
document. If the tribe had been governing itself, I doubt if 
they would have built that school like you just described. The 
more self-governance that the tribes will adopt, and I think 
Mr. Swimmer here, who has been involved in this for many years 
would agree with it, the more efficiently they will conduct 
themselves and the more progress they will achieve. It is the 
old welfare dependency situation, and I hope that working 
together we could make that a priority since it seems to be the 
only way the tribes have been able to improve, or the most 
significant way that tribes can improve is through self-
governance. I think we will have plenty of time for hearings 
and discussion on that.
    I thank my colleague from North Dakota. Please, go ahead.
    Senator Conrad. Mr. Chairman, if I could just comment. The 
Budget Committee is set to meet in just a few minutes, so I 
would like to excuse myself and ask that my full statement be 
made part of the record.
    The Chairman. Without objection. I think our Native 
American friends think they need you more there than here. 
Thank you.
    Our first panel is Jim Cason, acting assistant secretary 
for Indian affairs of the Department of the Interior, 
accompanied by Ross Swimmer, special trustee for American 
Indians; Charles W. Grim, director of Indian Health Service, 
Department of Health and Human Services, accompanied by Gary 
Hartz, the acting deputy director of Indian Health Service; 
Michael Liu, assistant secretary of the Office of Public and 
Indian Housing, Department of Housing and Urban Development, 
accompanied by Roger Boyd, the deputy assistant secretary, 
Office of Native American Programs [ONAP's], and Tom Wright, 
the director of ONAP's Office of Loan Guarantees, Department of 
Housing and Urban Development; and Victoria Vasques, assistant 
deputy secretary and director of the Office of Indian 
Education, Department of Education, accompanied by Cathie 
Martin, deputy director, Office of Indian Education, and Thomas 
Corwin, director, Division of Elementary, Secondary and 
Vocational Analysis of the Budget Service of the Department of 
Education.
    Welcome to all. Mr. Cason, we will begin with you, sir.

 STATEMENT OF JIM CASON, ACTING ASSISTANT SECRETARY FOR INDIAN 
   AFFAIRS, DEPARTMENT OF THE INTERIOR, ACCOMPANIED BY ROSS 
         SWIMMER, SPECIAL TRUSTEE FOR AMERICAN INDIANS

    Mr. Cason. Thank you, Mr. Chairman, for the opportunity to 
discuss the Administration's fiscal year 2006 budget for Indian 
programs in the Department of the Interior. Ross and I are 
providing a joint statement to reflect our joint approach to 
managing Indian programs within the Department of the Interior.
    The Administration's fiscal year 2006 budget reflects 
historical commitments and reflects the dialog regarding 
current priorities for Indian tribes, Interior and OMB. Some of 
the noteworthy elements of our budget are the impacts of the 
Cobell litigation that you mentioned already, which shifts 
significant resources to trust programs, historical accounting, 
and litigation support. It reflects the recognition of work 
completed and settlements that have been implemented, a 
continued strong commitment to the construction of Indian 
schools, but a recognition of the increased balance of 
unobligated funds in that program. When combined, the Indian 
affairs and OST's budgets reflect about the same level of 
funding that Congress provided in fiscal year 2005.
    Ross and I have been working closely together during the 
past 3 years on improving the performance and results 
associated with our Indian trust programs. I am looking forward 
to the opportunity to work on other important Indian affairs 
programs.
    Mr. Chairman, let me apologize in advance for the need to 
leave about 1 hour from now. I have been requested to testify 
in the House Resources Committee on the Cobell litigation and 
the prospects for fashioning a full and fair settlement of the 
issues there. I know that that is of great interest to this 
committee as well, and Ross and I are committed to working with 
this committee to explore that issue further.
    Thank you.
    [The prepared statement of Mr. Cason follows:]
    The Chairman. Dr. Grim, welcome.

   STATEMENT OF DR. CHARLES W. GRIM, DIRECTOR, INDIAN HEALTH 
 SERVICE, DEPARTMENT OF HEALTH AND HUMAN SERVICES, ACCOMPANIED 
             BY GARY HARTZ, ACTING DEPUTY DIRECTOR

    Mr. Grim. Good morning. Thank you, Mr. Chairman and members 
of the committee. I would like to add my congratulations to 
Senators McCain and Dorgan for assuming these leadership roles, 
and I look forward to working with you on Indian health issues.
    We are pleased to have the opportunity to present the 
President's fiscal year 2006 budget request for Indian Health 
Service. I will summarize my written statement and ask that it 
be entered into the record please.
    The Chairman. Without objection.
    Mr. Grim. As part of the Federal Government's special 
relationship with tribes based on treaties, executive orders, 
judicial determinations and statutes, the IHS delivers health 
services to more than 1.8 million American Indians and Alaska 
Natives. Care is provided in more than 600 health care 
facilities throughout the country. We also fund Indian health 
organizations in 34 sites in urban areas across the country.
    The budget before you today is a result of tribal and urban 
Indian consultation during the past year. In fact, the 
Department has been consulting with tribes and urban Indian 
organizations for 8 years no on budget formulation and we have 
found the process quite useful not only to the tribes and urban 
Indian organizations, but for the Department as well.
    The Department has a better understanding of the health 
needs of Indian country based on the input provided by tribes 
and urban Indian health organizations through this process. The 
President's budget request for the IHS totals $3.8 billion, a 
net increase of $72.1 million above the fiscal year 2005 
enacted level. The request will allow the IHS, tribal and urban 
Indian health organizations to maintain access to health care 
by providing $31.8 million to fund pay raises for Federal 
tribal and urban employees; $79.6 million to cover inflationary 
cost increases that are experienced by the health delivery 
systems; and to address the growing American Indian and Alaska 
Native population.
    We will also be staffing and operating costs within this 
budget for six newly constructed health centers in the amount 
of $34.8 million. Once these health centers are fully 
operational, primary care provider visits will increase by 75 
percent over what they were prior to the construction. In 
addition, we will be able to provide more comprehensive health 
services in those locations.
    Additional tribal contracting under the Indian Self-
Determination Act is supported by an increase of $5 million for 
contract support costs for new contracts estimated to be 
received in fiscal year 2006.
    Consistent with HHS-wide policy, the IHS fiscal year 2006 
request for facilities focuses on maintenance of existing 
facilities, and no funding is requested to initiate new 
construction projects. A total of $3.3 million is included to 
complete the construction of staff quarters at Fort Belknap 
service unit in the Billings area. Upon its completion, the 
project will provide 29 units of staff quarters for Harlem and 
Hayes outpatient facilities in Montana.
    American Indian and Alaska Natives will also benefit from 
several provisions in the Medicare Prescription Drug 
Improvement and Modernization Act that was enacted in 2003. The 
Medicare Part D prescription drug coverage program when 
implemented in January 2006 will extend outpatient prescription 
drug coverage to American Indian and Alaska Native Medicare 
beneficiaries and increase Medicare revenues at our ITU 
facilities.
    Other sections of the Act expand benefits covered under 
Medicare Part B and allow the IHS and tribal health programs to 
pay for additional medical care by increasing its bargaining 
power when buying services from non-IHS Medicare hospitals.
    The proposed budget reflects the Federal commitment to 
providing high-quality medical and preventive services as a 
means of improving the health status of American Indians and 
Alaska Natives.
    Thank you and I will be pleased to answer any questions 
that the committee might have.
    [Prepared statement of Mr. Grim appears in appendix.]
    The Chairman. Thank you very much.
    Mr. Liu.

STATEMENT OF MICHAEL LIU, ASSISTANT SECRETARY. OFFICE OF PUBLIC 
      AND INDIAN HOUSING, DEPARTMENT OF HOUSING AND URBAN 
   DEVELOPMENT, ACCOMPANIED BY ROGER BOYD, DEPUTY ASSISTANT 
SECRETARY, OFFICE OF NATIVE AMERICAN PROGRAMS; AND TOM WRIGHT, 
DIRECTOR OF OFFICE OF NATIVE AMERICAN PROGRAMS, OFFICE OF LOAN 
                           GUARANTEE

    Mr. Liu. Thank you, Mr. Chairman, Mr. Vice Chairman and 
members of the committee. I want to thank you for inviting me 
to provide comments on the fiscal year 2006 Administration 
budget for HUD's Indian housing and community development 
programs.
    Let me say that progress in the area of housing in Indian 
country is being made through HUD programs. For example, during 
fiscal year 2004, tribes and their TDHEs used their IHBG grants 
to build 2,115 new housing units. Each new housing unit gave 
shelter to a family. If all of this building were used to 
relieve overcrowding, then it would have reduced the incidence 
of overcrowding in Indian country by 4.5 percent. This is based 
on the 2000 census showing over 47,000 Indian families living 
in overcrowded conditions.
    The Department is working on a measure to precisely track 
reduction in overcrowding, and we are committed to working with 
Indian housing block grantees to establish a set of measures 
that illustrate the program's outcomes. While there is still a 
long way to go, we expect to see overcrowding reduced by at 
least one additional percentage point in the coming year, 
allowing approximately 450 additional Indian families to have 
decent housing. We need to sustain this momentum and we believe 
that the 2006 budget helps us do that.
    For several years now, I have updated you on the progress 
tribes and tribally designated housing entities, or TDHEs, have 
made toward the obligation and expenditure of funding. For 
fiscal year 2005, the Office of Native American Programs has 
enhanced its performance measures and continues its expansion 
of the access information system to ensure we are able to 
accurately report on the rate of fund obligations and 
expenditures. The Department is consulting with tribally 
elected leaders and TDHEs for their input so we may improve and 
streamline the data collection through the required Indian 
housing plan, the annual performance report, and the annual 
status and evaluation report for the ICDBG program.
    I am now more confident than ever that the majority of 
tribes and their TDHEs are obligating and spending their grants 
in an expeditious manner. The Department's electronic line of 
credit control system shows that more than 82 percent of all 
grant funds appropriated between 1998 and 2004 have been 
expended by grantees.
    Now, as for an overview of the budget request for 2006, the 
President proposes a total of $594.9 million specifically for 
HUD programs that serve Native Americans, including American 
Indians, Alaska Natives, and Native Hawaiians. Of this total, 
$582.6 million is authorized under the Native American Housing 
Assistance and Self-Determination Act. Of the NAHASDA funds, 
approximately $517.7 million is for direct formula allocations 
through the Indian Housing Block Grant Program; $4.8 million is 
proposed for NAHASDA's Title VI Tribal Housing Loan Guarantee 
Fund for credit subsidy and administrative expenses. This will 
leverage in one fiscal year $37.9 million in loan guarantee 
authority. The NAHASDA allocation also includes $57.8 million 
for the Native American Housing and Community Development Block 
Grant Program. Finally, there is $2.458 million available under 
NAHASDA for training and technical assistance to support these 
programs.
    There is also $2.65 million in credit subsidy for the 
section 184 Indian Housing Loan Guarantee Fund, which will 
provide $99 million in that one fiscal year in loan guarantee 
authority. The Native Hawaiian community will receive through 
the Department of Hawaiian Homelands $8.8 million for the 
Native Hawaiian Housing Block Grant Program and $882,000 for 
the section 184(a) Native Hawaiian Home Loan Guarantee Fund, 
which will leverage approximately $35 million in new loan 
guarantees.
    As for technical assistance and training, there is a set-
aside of $2.7 million which will provide the initial training 
and technical assistance to most grantees, enabling them to 
function effectively under NAHASDA. The President's request 
also includes $353,000 to provide the management and oversight 
of the Native Hawaiian Housing Block Grant Program. 
Specifically, on the issue of the National American Indian 
Housing Council training and technical assistance, tough 
decisions had to be made, priorities had to be made. No funds 
were requested under the Indian Housing Block Grant training 
and technical assistance set-aside for the NAIHC, as the 
Department believes they have sufficient funding. The NAIHC's 
current balance from the Indian housing block grant set-aside 
is $5.35 million. In addition, the NAIHC has a $4.56 million 
balance from prior budget set asides for technical assistance 
and training. We are working closely with the NAIHC to put 
these resources to work in a more expeditious manner.
    We have a very positive story to tell about our loan 
guarantee programs, especially for the section 184. The in 
effect carryover and combined amounts for fiscal year 2006 will 
provide for over $250 million in loan authority for that 
program, more than sufficient for the volume that we 
anticipate. In fiscal year 2004, we in fact increased the 
number of mortgage loan guarantees to 622, up from 271 in 
fiscal year 2003. The loan volume also increased at a similar 
rate from $27 million to $67 million, all in 1 year. In total, 
we have done over 2,000 section 184 loan guarantee mortgages, 
over $212 million to provide homeownership for Native American 
families throughout the country. We believe the section 184 
program will continue to play a vital role in keeping the 
President's commitment to create 5.5 million new minority 
homeowners by the end of 2010.
    To assist us in this process we have been working very 
closely with the Bureau of Indian Affairs and the Department of 
Agriculture's Rural Development Office to formulate new 
agreements and partnerships to facilitate the title processing 
of required documents in Indian country.
    With that, Mr. Chairman, I will conclude. I am available to 
answer any questions. Thank you very much.
    [Prepared statement of Mr. Liu appears in appendix.]
    The Chairman. Thank you.
    Ms. Vasques, welcome.

 STATEMENT OF VICTORIA VASQUES, ASSISTANT DEPUTY SECRETARY AND 
   DIRECTOR OF THE OFFICE OF INDIAN EDUCATION, DEPARTMENT OF 
   EDUCATION, ACCOMPANIED BY CATHIE MARTIN, DEPUTY DIRECTOR, 
   OFFICE OF INDIAN EDUCATION; AND THOMAS CORWIN, DIRECTOR, 
  DIVISION OF ELEMENTARY, SECONDARY AND VOCATIONAL ANALYSIS, 
                         BUDGET SERVICE

    Ms. Vasques. Thank you, Mr. Chairman and Mr. Vice Chairman 
and members of the committee. On behalf of Secretary Spellings, 
thank you for this opportunity to appear before you to discuss 
our fiscal year 2006 budget request for Department of Education 
programs that serve our American Indian and Alaska Native 
students.
    I also request that my written statement be entered for the 
record.
    The Chairman. Without objection.
    Ms. Vasques. I am Vickie Vasques, the assistant deputy 
secretary and director of the Office of Indian Education. As 
you stated earlier, I am accompanied by my colleagues Tom 
Corwin and Cathie Martin.
    I am proud to say that my passion and personal commitment 
to education began with my father, former tribal chairman of 
the San Pasqual Band of Mission Indians.
    In April of last year, the President signed an Executive 
order to assist American Indian and Alaska Native students in 
meeting the challenging student academic achievement standards 
of the No Child Left Behind Act in a manner that is consistent 
with our tribal traditions, languages, and cultures. The 
Department's work on implementing this Executive order will be 
highlighted at a national conference this coming April 6 and 7 
at Santa Ana Pueblo in New Mexico. This conference will focus 
on issues affecting the implementation of NCLB within Indian 
country. I would also like to invite the members and the staff 
of this committee to please join us at this national 
conference.
    As you know, 3 years ago the President launched the most 
important reform of public education by signing into law the No 
Child Left Behind Act. This law is based on stronger 
accountability, more choices for parents and students, greater 
flexibility for States and school districts, and the use of 
research-based instructional methods. The overall goal is to 
ensure by the year 2013-14 school year every student, including 
our American Indian and Alaska Native students, will be 
proficient in reading and math.
    States, school districts and schools are working hard to 
implement NCLB, and the early returns are promising. A study 
from the Education Trust showed that in States with 3 years of 
comparable data, 23 of the 24 States increased student 
achievements in reading. We are also moving in the right 
direction for our Indian students. The gap between Indian 
students and white students in reading achievement grew smaller 
in 13 States and remained the same in 2. In math, that gap 
narrowed in 14 States, widened in 2, and remained the same in 
2.
    The President's fiscal year 2006 budget builds on the NCLB 
Act by extending its principles and reforms to the high school 
level. In too many schools across the Nation, the longer 
students stay in school, the more they fall behind, with far 
too many students dropping out. The 2006 budget request 
includes almost $1.5 billion for a new high school initiative 
which will help to ensure that every student, including our 
Indian students, not only graduates from high school, but 
graduates prepared to enter college or the workforce with the 
skills he or she needs to succeed.
    This is especially important for Indian students who 
continue to be disproportionately affected by poverty, low 
educational attainment, and fewer educational opportunities 
than our other students. The 2006 budget request for the 
Department supports the President's commitment to provide 
resources to help improve educational opportunities for all 
students.
    Indian students will continue to benefit from the 
implementation of NCLB, as well as new initiatives to improve 
the quality of secondary education. Overall, our estimates show 
that the Department programs would under this fiscal year 
proposed budget in 2006 provide approximately $1 billion in 
direct support specifically for American Indian and Alaska 
Native students.
    In addition, significant funds are provided to Indian 
students who receive services through our broader Federal 
programs such as ESEA Title I grants to LEAs and our IDEA state 
grants. The Department recognizes the implementation challenges 
facing some of our Indian students in our rural communities and 
is committed to working with our local, state and tribal 
governments to resolve these issues and has provided 
flexibility to rural districts in implementing the provisions 
of the law.
    The President's budget request for the Department's Office 
of Indian Education programs is $119.9 million. These programs 
include formula grants to school districts, competitive grants, 
and national activities for research and evaluation on the 
education needs of our Indian students.
    I thank you for the opportunity to appear before this 
committee, and my colleagues and I will be happy to respond to 
any questions you may have.
    [Prepared statement of Ms. Vasques appears in appendix.]
    The Chairman. Thank you very much.
    Mr. Cason, why are you proposing to take a pause in Indian 
school construction?
    Mr. Cason. Mr. Chairman, it is a reflection of the 
escalating of unobligated funds in the school construction 
program. Over the last 4 or 5 years, counting the 2005 budget, 
Congress has been very gracious to provide about $1.5 billion 
of additional funds to the Department of the Interior for the 
purpose of school construction. At the pace that the Department 
of the Interior has actually constructed schools has left us 
with an unobligated balance just under $200 million. So the 
thought on the part of the Department was to basically continue 
our commitment, but at a lower level while we worked our way 
out of the unobligated balance problem.
    The Chairman. There is a cut in Indian water settlements 
despite the fact that there have been several of them that have 
been made, agreements.
    Mr. Cason. It is my understanding, Mr. Chairman, that in 
the cut on the water settlements, that was a reflection of 
settlements that had actually been implemented. We are in 
continuing discussions with a variety of Indian tribes about 
other claims for water settlements. Once we reach a position 
where a settlement is agreed to, we will have to ask for 
appropriations for those.
    The Chairman. Mr. Swimmer, in the case of the $135 million 
for historical accounting activities, about $95 million will be 
expended on individual Indian money accounts that are involved 
in the Cobell lawsuit. Is that correct?
    Mr. Swimmmer. Yes.
    The Chairman. What will Indian country get for the $95 
million?
    Mr. Swimmer. The continuation of the historical accounting, 
according to the plan that the Department submitted to the 
court in January 2003. This plan which is a comprehensive 
accounting is we believe the statute-required. It is an 
accounting for individual account holders that had accounts 
with the Department with the Indian Affairs, that went back to 
the time of the 1994 Reform Act, and from the time that those 
accounts were set up. The money is used for a transaction-by-
transaction accounting, to develop an account statement for 
each individual Indian account holder, and then at a certain 
level of accounting, that accounting would be we would use a 
statistical sampling to get there. But we had estimated that 
the cost of that accounting would be approximately $335 
million. The money that we are asking for is simply to go to 
the next phase of the accounting and complete certain 
accounting that we are engaged in now.
    The Chairman. Do you agree with me about self-governance?
    Mr. Swimmer. Absolutely, Senator. As you may recall in my 
previous period at the Department, I was one of the proponents 
of the Self-Governance Act itself, and strongly support self-
governance, as does the current Secretary.
    The Chairman. Thank you.
    Dr. Grim, as you know, this committee expended a lot of 
effort last year to reauthorize the Indian Health Care 
Improvement Act and we intend to pick up that again this year. 
I would like you, if you would, for the record to provide me 
with the recommendations that you think need to be made in the 
legislation so we can get full Administration support.
    Mr. Grim. Yes, sir; okay, we will do that.
    The Chairman. Thank you.
    Ms. Vasques, the budget proposes a reduction in the 
Department of Education of about 2.9 percent from 2005. How 
will the tribal and BIA schools be affected by this cut in 
light of the requirements of the No Child Left Behind Act?
    Ms. Vasques. Sir, most of our Indian students that are in 
our BIA schools are being served by our title I and our Special 
Education Program. Those two particular programs have received 
an increase of about a total of $1 billion that goes directly 
to the BIA to serve those students.
    The Chairman. So they will have no trouble having 
sufficient funding to comply with the No Child Left Behind Act?
    Ms. Vasques. Yes, sir; I feel it is sufficient.
    The Chairman. Mr. Liu, you want to move the CDBG from HUD 
to Commerce. That is the Administration's proposal. Under the 
law, 1 percent of CDBG moneys are reserved for Indians. Does 
the Administration propose to continue the 1 percent set-aside?
    Mr. Liu. We are planning to continue approximately $58 
million as part of the Indian housing block grant set-aside, as 
part of HUD's budget. Because of the nature of the change, I do 
not think the percentage still would hold, but the 
administration of the program would stay within HUD within the 
Office of Native American Programs as it is currently being 
managed right now.
    The Chairman. Senator Dorgan.
    Senator Dorgan. Mr. Chairman, thank you very much.
    I also thank the witnesses for appearing. Let me ask a 
series of questions of the witnesses. The testimony, Mr. Cason, 
that you offered indicated that the Administration has a 
continued commitment to Indian schools. Let me ask a question 
first, I guess, about something I mentioned in my opening 
statement, the recommendation that we abandon the funding for 
the Crownpoint Institute of technology and the United Tribes 
Technical College [UTTC]. As you know, the Interior Secretary 
has visited UTTC at my request and found it to be a wonderful 
institution, but each year the budget that is sent to us, or 
the appropriation request that is sent to us from the 
President, eliminates the funding for United Tribes Technical 
College. Can you tell us why?
    Mr. Cason. Yes, Mr. Vice Chairman; UTTC and Crownpoint are 
schools that receive funding from other sources, the Department 
of Education. When we take a look at our budget and the 
priorities that we have, the Department of the Interior takes a 
look at the 27 tribal colleges and universities that are funded 
through our programs. We also take a look at Crownpoint and 
UTTC. They end up having funding from other sources, the 
Department of Education.
    When we take a look at the comparable funding between what 
the tribal colleges and universities get under our lines 
authorities and what UTTC and Crownpoint get under theirs, it 
is our sense that we need to prioritize the funds that come 
through our appropriations for the tribal colleges and 
universities.
    Senator Dorgan. But you have also requested a decrease in 
funding for tribal colleges. Is that not correct?
    Mr. Cason. I am not positive, Mr. Vice Chairman. It is my 
understanding that the amount of funding that we are looking 
for is about stable. I am not sure if there is a small change 
in one direction or the other.
    Senator Dorgan. Mr. Cason, I am positive.
    Mr. Cason. Okay.
    Senator Dorgan. You are requesting a cut in funding for 
tribal colleges. The reason I mention that is you describe the 
commitment to tribal colleges as a basis for suggesting you 
perhaps do not have the money for UTTC and Crownpoint. I must 
say that the evidence is that we are, I believe, only at about 
50 to 60 percent of that which we commit in support for people 
that are attending community college, versus those who are 
attending tribal colleges.
    I would agree with my colleague Senator Conrad that it is a 
wonderful investment, the tribal college investment. Senator 
Burns and I have pushed very hard on the Interior Subcommittee 
to increase some funding requests in recent years for tribal 
colleges. It is a fact that the tribal college funding request 
is down.
    Let me just say again that I think from a priority 
standpoint, I think that the investment in tribal colleges is 
proving to pay dividends. I think Senator Domenici would say, 
and I would certainly say, that UTTC and Crownpoint are 
evidence of those great successes as well. While I believe we 
will be able to put the funding in for those two institutions, 
I hope that at some point in the future the Administration will 
see fit to include funding requests in their budget.
    Let me ask Dr. Grim, let me say that I deeply appreciate 
the commitment of so many people working at the Indian Health 
Service. I go around to these clinics and facilities and you 
have some very committed people. I understand why all of you 
are here, and that your job is to support the President's 
budget request. That is why you are here.
    Yet, I know from my observations, and I know from evidence, 
that we are required to provide funding for health care for two 
groups of populations. One is our trust responsibility for 
American Indians, and the other responsibility is for Federal 
prisoners. I also know that we spending about twice as much on 
a per capita basis for health care for Federal prisoners as we 
are for meeting our trust responsibility for American Indians. 
I think you see that when you go around and take a look at the 
IHS and tribal clinics and the conditions, despite the valiant 
effort of some wonderful professional people out there.
    So I look at that, and I say we are really underfunded with 
respect to health care. I mentioned Avis Little Wind, who hung 
herself, a poor child that really lost hope and had serious 
emotional problems, but there was not enough mental health 
capability available. There were not the skilled people 
available to be able to provide services to her, so a young 
girl dies.
    How do we deal with that? You are obviously, you cannot be 
satisfied that we are meeting the needs with this funding, are 
you?
    Mr. Grim. I actually am very pleased with the 2006 budget 
request that came forward for the Indian Health Service. As I 
said earlier in my oral remarks that it really represents I 
think the requests of tribal leadership across the Nation. We 
consulted with them and have for some years. One of the things 
that they have told us is that the population growth in the 
Indian communities, as well as the inflation that each of our 
budget sub-line items has had to absorb over the years, is 
something that they felt was higher priority, as well as making 
sure that the pay increases for all the employees were in 
there.
    I think if you take a look at the 2006 budget for the 
Indian Health Service and you look at it line item by line 
item, you will see some fairly significant increases for 
programs that in past years have had relatively flat budgets. 
So I think it is a good budget this year. Many programs are 
going to have increased capabilities because of it.
    Senator Dorgan. So you are well satisfied that we are 
meeting those needs. I talked to the chairman some while ago. 
We are going to do some work I hope especially on the issue of 
teen suicide. A reservation not far from my home had three teen 
suicides recently. I mentioned Avis Little Wind. As I went up 
and met on that reservation where Avis Little Wind lived, I 
discovered that there just were not the resources available, 
the psychologists, the psychiatrists, not available. They had 
to beg and borrow a car to take somebody to a clinic someplace 
because there was no vehicle available, let alone a health care 
professional.
    I am a little surprised that you are well satisfied with 
the request level of funding because I deeply admire your work 
and the work of the service, but, I am not satisfied that the 
resources are available to deal with the issues. I hope we can 
talk about that at some point later.
    Mr. Liu, on the housing issues, the chairman asked the 
question about the block grants. When all is said and done, 
where are we with respect to housing, this budget versus 
previous budgets, in terms of housing on Indian reservations?
    Mr. Liu. For the Native American Housing Block Grant 
Program, relative to the intense competition within HUD for the 
housing dollar, the Native American Housing Block Grant Program 
was not at the bottom rung. There was a cut, no doubt about 
that.
    Senator Dorgan. How big is the cut?
    Mr. Liu. It is about 6.3 percent, but if you compare it to 
another program I manage within HUD, the Public Housing 
Program, the capital fund for public housing took almost an 11 
percent hit. Some of the context of this has to do with our 
section 8 tenant-based program within the Department, which has 
escalated at such a pace that frankly it has eaten into every 
other program area of HUD. Congress recognized this at the end 
of 2005. It had to cut every program at HUD except for section 
8 by over 4 percent. We hope to get reform this year so that we 
can alleviate to some extent the pressure within our housing 
area.
    Senator Dorgan. But there is a cut in housing of 6 percent?
    Mr. Liu. Yes; 6.3 percent in the block grant.
    Senator Dorgan. I mention it again, I really think again 
from my tours of reservations, we have a real serious problem 
with respect to Indian housing. I think it is almost a crisis. 
I have toured housing units again that are third world 
condition. When we look at this, the priorities that I see are 
comparing needs here to needs elsewhere.
    I will finish up, Mr. Chairman, by telling you that this 
morning I was looking at a little project in the budget that 
was recommended to have double funding. It is called Television 
Marti to broadcast television signals into Cuba. They want to 
double the funding for it now. We have spent close to $200 
million on it, and we send television signals to Cuba to tell 
the Cuban people how wonderful things are in America, and 
Castro jams all the signals. So we send signals no one can 
receive. We have done it for about 15 years and we are going to 
double the funding for it.
    When you look at that sort of thing, and then you say, 
okay, they want double the funding to send television signals 
no one can receive in Cuba, and you want to cut funding for 
housing on Indian reservations, I say, well, there is something 
really screwy about this, to use a term of art.
    So look, all of you are here representing a budget. I 
understand that. There are some things in this budget that I 
think make sense; some that I think are vastly shorted in terms 
of the priorities. Mr. Swimmer, I am with the chairman. We 
really need to find a way to get our arms around this issue and 
find a way to put it behind us in a way that is fair to 
everybody so that we can get on with some of these other 
significant priorities. I hope that we can make progress. I 
know the chairman is very committed to that, as am I, but you 
have to have all the stakeholders involved and find a way to 
negotiate and reach a consensus.
    So let me thank the panel. Mr. Chairman, thank you for the 
opportunity.
    The Chairman. Thank you. Let me just say again that we 
intend to give this Cobell issue a shot. If it does not work, 
we are going to move on. We are not going to have it drag out. 
I am serving notice to all parties and participants if they 
want to go 10, 15, 20 years in court, that is fine with me, but 
we are going to give them a one shot opportunity because I am 
not going to let it tie up this committee the way it has in 
years past. I have great confidence in Mr. Swimmer and others 
who are involved in this issue.
    Mr. Cason, I think we are about 2 minutes from your hour. 
So I thank the panel and I thank you, and I am confident we 
will be seeing you a number of times in the future as we 
address these issues. Thank you for appearing here today.
    Our second panel is Tex Hall, president of the National 
Congress of American Indians; Chester Carl, chairman of the 
National American Indian Housing Council; John Thomas 
Petherick, executive director of the National Indian Health 
Board; and David Beaulieu, president of the National Indian 
Education Association.
    Let us begin with an old friend of the committee's, Tex 
Hall, the president of the National Congress of American 
Indians. Welcome back.

STATEMENT OF TEX HALL, PRESIDENT, NATIONAL CONGRESS OF AMERICAN 
                            INDIANS

    Mr. Hall. Mr. Chairman, Mr. Vice Chairman and members of 
the committee, thank you for the opportunity to appear to 
testify before the Senate Committee on Indian Affairs and 
present the views of the National Congress of American Indians 
on the Administration's fiscal year 2006 budget request for 
Indian programs.
    This is my first opportunity to speak publicly with the new 
leadership of this committee. I would like to say publicly how 
much all of the member tribes of the National Congress 
appreciate both of your service. Chairman McCain, it is an 
incredible honor for Indian Country to once again have your 
leadership on this very important committee to us. Vice 
Chairman Dorgan is from my home State of North Dakota, and I 
cannot tell you how proud all of us in North Dakota that you 
are on this committee and this leadership position, and 
representing not only us, but Indian country as well.
    We are very glad you are having a hearing on this topic, 
Mr. Chairman, and look forward to working with you and Vice 
Chairman Dorgan to ensure that the critical programs and 
initiatives authorized and supported by Indian country and this 
committee are funded at levels which will ensure their 
effectiveness.
    As we know, on February 7, President Bush submitted a 
budget to Congress that included numerous proposed cuts for 
Indian programs. The budget would continue to trend of 
consistent declines in Federal per capita spending for Indians 
compared to per capita expenditures for the population at 
large. This year's budget request reduces effective funding for 
tribal governments and instead funds a trust reorganization 
that tribes have opposed, with proposed reductions for programs 
such as TPA, which is tribal priority allocations; education; 
contract support for self-governance; housing; infrastructure; 
land consolidation; and the elimination of funding for tribal 
colleges such as what you mentioned, Senator Dorgan, United 
Tribes College of Bismarck and Crownpoint Institute in New 
Mexico.
    The President's proposed budget is $108 million below the 
fiscal year 2005 budget for BIA programs. The request cuts 
$86.9 million from BIA construction. Overall, the Indian 
programs targeted for reduction include Indian housing would 
receive the largest cut of $105 million in Indian housing. 
Native American housing block grants would be cut overall by 
$44 million and section 184 home loans cut by more than 50 
percent. And the request cuts $85 million from Indian health 
service facilities construction budget.
    While Congress has authorized important projects such as 
the Dakota Water Resources Act, Mni Wiconi. These projects have 
been underfunded or not funded at all. My friend from North 
Dakota, Congressman Earl Pomeroy put it like this: Indian 
nations are the last to get funded and the first to get cut.
    Mr. Chairman and Mr. Vice Chairman, on behalf of Indian 
country, I am asking for your leadership to put an end to this 
practice of cutting and this Federal trend of reducing Indian 
budgets. At NCAI, we are all too aware that discretionary 
domestic programs such as ours are often seen as the easiest to 
cut, but when these cuts are made, they are made with our 
money, and that is wrong.
    The United States, as we all know, has a solemn and moral 
duty to honor its treaties and fulfill the trust responsibility 
from the United States. The tribes of NCAI are deeply 
disappointed this budget does not support strong self-
government and self-determination. As you know, many tribal 
governments are exactly like State and municipal governments, 
providing critical services, shaping values, and promoting jobs 
and growth in Indian country. Though Federal spending for 
Indians has lost ground compared to the U.S. population at 
large, tribal self-governance has proven that the Federal 
Government that invests with the tribes pays off.
    As Senator McCain mentioned, the Harvard Project on 
American Indian Economic Development, this study shows that 
reservation communities have made remarkable gains in the last 
decade, and these gains are attributed to self-determination. 
However, substantial gaps remain per capita on income of 
Indians living on reservations, is still less than half of the 
national average. Indian unemployment is still double the rest 
of the country, and there is a lot of work that self-
determination, which has made progress, has still yet to do.
    In short, tribes have prove success in addressing the long 
enduring social and economic disparities on Indian 
reservations. This warrants continued investment into our self-
determination.
    Health care and housing services, like law enforcement, 
were guarantee to us by a treaty. We already paid for that, as 
we know, with the 3 billion acres of ceding of land. As 
Congress reshapes its 2006 budget, NCAI continues to urge its 
commitment. We have recently launched a National Center for 
American Indian Research and Policy to deal with the part of 
the program assessment rating tool that OMB is requiring.
    I do want to conclude with three key areas in the budget 
that the tribes have targeted. First, tribal leaders have 
identified law enforcement, justice and homeland security as 
key concerns in the 2006 budget. As DOJ implements drastic 
programmatic changes, NCAI calls on Congress to ensure law 
enforcement activities in Indian country are supported through 
sufficient funding essential for full realization of the 
tribes' government.
    Second, tribal resources continue to be diverted to the 
Department of the Interior's reorganization which tribes have 
opposed and which fail to take into account the need for local 
flexibility and the results of the 2(b) study which was 
recently completed by the Department of the Interior. Until a 
better plan which reflects true consultation with tribes who 
know best what works with trust management at the local level, 
a moratorium must be placed on funding further reorganizations.
    A much more effective use of funds would be focused on 
funding of ILCA, the Indian Land Consolidation Act. No 
increases were requested for the ILCA fund from the 2005 
enacted level, which would be about one-third of the authorized 
2006 level. The investment in land consolidation would do more 
to save on future trust administration costs than any other 
item in the trust budget.
    Finally, self-determination programs throughout the budget, 
initiatives that Congress and the Administration have expressed 
consistent support for, have not only failed to receive needed 
funding increase, but face cuts which will deeply hurt tribes' 
ability to effectively assume local control and the shrinking 
TPA, tribal priority allocation, budgets; inadequate 638 pay 
cost increase; insufficient contract support funding; and 
grossly underfunded administrative cost grants.
    I look forward to answering any questions you may have at 
the conclusion.
    [Prepared statement of Mr. Hall appears in appendix.]
    The Chairman. Thank you very much.
    Mr. Carl, welcome.

 STATEMENT OF CHESTER CARL, CHAIRMAN, NATIONAL AMERICAN INDIAN 
                        HOUSING COUNCIL

    Mr. Carl. Thank you very much, Mr. Chairman, Chairman 
McCain and Vice Chairman Dorgan and other distinguished members 
of this committee. My name, as noted, is Chester Carl. I am 
happy to be back before this committee once again as chairman 
of the National American Indian Housing Council.
    On behalf of the members of National American Indian 
Housing Council and its board of directors, I would like to 
thank you for this opportunity to address you today on the 
President's proposed budget for fiscal year 2006.
    There is not much I can say that has not already been said, 
or anything I could present that would better illustrate the 
need of Indian country. Everyone here knows the crisis that we 
as Native Americans face and Native Americans are three times 
more likely to live in overcrowded conditions than any other 
Americans in the United States.
    Native Americans are more likely to lack sewage, water 
systems; more like to lack telephone lines and electricity than 
other Americans. We have pleaded our case over and over with 
statistics and heartrending stories. Today, what has it come 
to? The last time I testified at an Indian Affairs budget 
hearing was 2002. That was the first year we began to see a 
decline in the Indian housing budget after several year of 
surplus and growth.
    Today, it is much different. The President's fiscal year 
2006 budget proposes the smallest amount of funding for Indian 
housing programs since the implementation of NAHASDA.
    The tribes' access to funding for basic housing would be 
reduced by more than $100 million. I heard the assistant 
secretary say the budget will be cut by 6 percent, but in doing 
my simple math, I am coming up with $108 million that would be 
reduced from the NAHASDA allocation.
    John F. Kennedy once said, man holds in his mortal hands 
the power to abolish all forms of human poverty, and to the 
third world nations, developing nations struggling to break the 
bonds of misery, JFK pledged our best efforts to help 
themselves. The world has not changed in the last 40 years, as 
we see in the current efforts in Iraq. But how disturbing that 
the Federal Government had to look outside its own borders to 
identify human need, to justify continued dedication of 
billions and billions in funding to improve living conditions 
of the Iraqi people, when so many of our American Indian and 
Alaska Natives daily endure the same third world conditions.
    Where are the best efforts to help Native Americans help 
themselves? Certainly not in this budget. We understand the 
need to protect our borders. Native Americans have made 
significant patriotic commitments to ensuring the freedom of 
all people as Native Americans have the highest percentage of 
military service of any ethnic group in the Nation. Our 
proposed initiative today will seek to honor the dedication of 
our Native American veterans. But I believe I speak for all 
members of the National American Indian Housing Council when I 
express my frustration and anger at the national priority shift 
to aid people 8,000 miles away, being paid for by those 
Americans who least can afford it.
    While assistance to the Middle East is admirable, America 
seems to never have understood the urgency of the need to lift 
people from poverty and ignorance and despair here at home in 
order to strengthen this country. The poverty rate for Native 
Americans continues to hover at 26 percent, over 50 percent in 
my own Indian nation, is more than double the poverty rate for 
the general American population.
    We understand that fiscal year 2006 will be the tightest 
budget in history, but we also understand that in making these 
decisions, Congress has to keep in mind that inflation has 
steadily risen over the last 4 years. For the Native American 
housing block grant, the President has proposed $582.6 million 
for fiscal year 2006. This is a devastating blow, particularly 
in light that the proposed set-aside for Indian community 
development block grant is now identified as a set-aside of the 
NAHASDA block grant.
    In enactment of NAHASDA, I do not believe there was ever 
other authorization by Congress to have a set-aside authorized 
in the community block grant. I believe also that, Mr. 
Chairman, you thought in the enactment of NAHASDA that 
negotiated rulemaking be part of that legislation. I believe 
that you stood behind the tribes to recognize the government-
to-government relationship. Not only is the Indian community 
block grant not authorized under NAHASDA, the Federal agency 
failed to even consult the tribe on making that move. From day 
one on the enactment of NAHASDA, we have yet to consult with 
HUD on how the Act could be implemented.
    I stand by Tex Hall in modeling NAHASDA after Indian Self-
Determination Act for this very simple reason. Yesterday, we 
met with OMB and HUD officials. They basically said, in order 
for you to succeed, you have to measure social changes; how 
NAHASDA has made social changes. But we are faced, Mr. Chairman 
and honorable committee, many of the housing authorities will 
be facing shutdowns of their doors if there is not increased 
funding.
    So what we are asking is that we model NAHASDA on the Self-
Determination Act, and I suggest to you today that housing 
funds be restructured similar to in the Indian Housing Self-
Determination Act, Education Assistance Act, Public Law 93-638, 
which would streamline the funding and the tribes can identify 
how they make those social changes, rather than having to 
comply with the strict requirements of the HUD paternalistic-
type program.
    Also, Mr. Chairman, I would also like to offer as a 
recommendation on behalf of the Native American veteran a new 
opportunity called the Native American Veteran Housing 
Opportunity Initiative. Indian tribes take great price in the 
role that Indian men and women play in the United States armed 
forces, particularly those serving in this time of war. I ask 
you to keep in mind the families they leave behind and the 
millions of dollars the President has proposed to cut from 
Indian housing programs that directly affect those families.
    The funding helps provide basic infrastructure in housing 
to some of the most remote, isolated areas of our Nation. We 
are deeply concerned that our warriors are returning home from 
Iraq to housing conditions that are as bad or worse than they 
left in Iraq. They also face chronic unemployment and lack of 
meaningful economic opportunities.
    So thus, Mr. Chairman and honorable committee, I ask for a 
set-aside of $150 million to be distributed in allocation 
formula out of the Defense budget to help, as a small price to 
pay to honor the sacrifice of these brave men and women. The 
President on Monday proposed $82 billion to help the 
commitment, not only to the Iraq conflict, but replacement of 
the equipment for the war, the Tsunami, the Palestine, 
different types of initiatives. For what we ask today is a 
very, very small price.
    Mr. Chairman, I call on you as the commander to the chief 
commander of the United States, and the people of this country 
to join in a vast cooperative effort to satisfy the basic needs 
of not only the Iraq people, but also the Native American 
people.
    Thank you very much.
    [Prepared statement of Mr. Carl appears in appendix.]
    The Chairman. Thank you very much.
    Mr. Petherick.

    STATEMENT OF JOHN THOMAS PETHERICK, EXECUTIVE DIRECTOR, 
                  NATIONAL INDIAN HEALTH BOARD

    Mr. Petherick. Good morning, Chairman McCain, Vice Chairman 
Dorgan and distinguished members of the Indian Affairs 
Committee. On behalf of Chairman Sally Smith of the National 
Indian Health Board, who could not be here this morning because 
she was unable to travel from Dillingham, AK, I will present on 
behalf of the National Indian Health Board.
    Before I begin, my remarks are going to be brief this 
morning. I ask, Senator, that Sally's full written statement be 
entered in the record.
    The Chairman. Without objection.
    Mr. Petherick. Senator Dorgan, thinking about one of the 
first issues that you brought up, as far as the Federal per 
capita expenditures for prisoners as opposed to American 
Indians and Alaska Natives, I think that is something that 
Indian country has heard about for a long time, but I do not 
think that message really resonates to the general population.
    When we start looking at it in real terms, when we start 
thinking about, I am from Oklahoma and the thought of Terry 
Nichols, who is serving a life sentence in Federal prison 
receives twice as much health care expenditures as my 
grandmother or various other American Indians or Alaska Natives 
across this country, that is incomprehensible.
    Also, when we think about over in Northern Virginia, we 
have Zacarias Moussaoui, who is in Federal custody. He also has 
those same opportunities where our elders and children do not. 
And even an example of Martha Stewart, who is a multi-
millionaire or billionaire even, and has the opportunity for 
guaranteed health care that the American Indians and Alaska 
Natives do not necessarily get, that is a trust responsibility 
of the Federal Government. I think that that is something that 
we want to work toward changing and make sure that that message 
resonates beyond this committee to other members of Congress 
and the Administration.
    But going into the 109th Congress, we knew that things were 
going to be tough, given the fiscal situation the country is 
facing. Kind of going back to the tribal consultation sessions 
that the Department of Health and Human Services and Indian 
Health Service conducted, especially the Indian Health Service, 
and now the Department has a tribal consultation policy, it is 
a very valuable process and they really do work with tribes to 
develop priorities.
    But we knew it was going to be tough, and once the 
President's request came out, it was not really a surprise. But 
we realized that there were some tough decisions to make and 
the Department and OMB and the Administration and IHS did try 
to make an effort to make sure that population increases, as 
well as inflation, were taken care of.
    In saying that, though, and they did make a substantial 
effort to do that, we have to really look at the trends. Even 
though they made an effort to make sure that inflation and 
population increases were at least looked at and at least tried 
to address them, given the limited funding, it really cannot be 
done with just a 1-year increase. You have to look at the 
trends over the last several years of how we have gotten here, 
and we are in a hole. There are programs such as Medicare and 
Medicaid which have fixed increases every year based on 
population growth, based on several other factors. Indian 
country does not get that, and that continues to be an issue, 
like I said, with the trends over time and those kind of 
continually being underfunded.
    Also on top of that, we also want to think about the fact 
of a few of the highlights of the President's budget request. 
Again, with the fact that we are looking at limited funding and 
only a $63-million increase, which is about 2.1 percent over 
fiscal year 2005 enacted, even though we have fared much better 
than several other agencies who are facing substantial cuts 
this Congress, it is really not enough to serve our population. 
So what is going to happen is we are going to have diminished 
services and people are not going to be getting the care that 
they desperately need.
    In looking at those tough decisions that were made, and in 
looking at the President's budget request, a few things did 
stick out that I would like to address this morning. The first, 
obviously, is the health care facilities construction line 
item, which took a substantial hit. I believe it was in the 
neighborhood of about $85 million, leaving a little over $3 
million for that line item. One of the things as we were 
discussing and preparing for this testimony, it became clear 
that the rationale for this was the 1-year pause or moratorium 
or building new facilities.
    Health care in Indian country, diseases and illnesses, do 
not take a 1-year pause. If indeed this is only a one-year 
pause, it is going to take another decade at least for us to 
try to get out of the effect of this 1-year pause. Honestly, 
once facilities are built in Indian Country, they are already 
too small. They are already outdated. That would be a 
substantial blow to Indian country if those funds were not 
restored. So Indian country feels very strongly that those 
funds are indeed restored.
    Also looking at one other item that I wanted to bring up as 
well is the issue of rescissions. We feel that Indian Health 
Service should be exempt from any rescissions. We foresee that 
they will be coming this year, as they have over the last 
several years. Because of the fact that looking at the Indian 
Health Service, along with the Department of Defense, along 
with the Veterans Health Administration, the Indian Health 
Service is a direct service provider. They provide health care 
directly to American Indians and Alaska Natives. By virtue of 
that, they should be exempt from any rescissions. We would ask 
that you as members of this committee support that effort.
    Again, if I could just make one more point about health 
facilities construction line items. I think one of the other 
issues that Indian Country has concern is looking at the PART 
scores that President Hall had mentioned. When looking at the 
PART scores and looking at health facilities construction for 
the IHS, which they were measured for fiscal year 2006, they 
scored very well. They scored an effective rating. It really 
kind of goes against our thoughts of effectiveness and 
efficiency to cut a program that has been deemed effective.
    So we feel that should be rewarded, rather than punished, 
and we would hope that you all would work with IHS.
    The Chairman. If they are not efficient or effective, we 
should increase funding?
    Mr. Petherick. Well, honestly, that is how I think that, in 
looking at----
    The Chairman. So we reward inefficiency and 
ineffectiveness?
    Mr. Petherick. I think that partially some of the efforts 
have been, well, I guess from a tribal perspective, the fact 
that a program is deemed effective, they have not really gotten 
any sort of reward or anything for that.
    The Chairman. I have to tell you, it argues for me to 
change the program or eliminate it. I do not think the taxpayer 
should increase funding for programs that are both inefficient 
and ineffective.
    Mr. Petherick. And I think this is something that Indian 
country has grappled with. Indian country has done a tremendous 
job, especially within the Indian Health Service to make sure 
that they are utilizing dollars in the most efficient way.
    The Chairman. So you disagree with the rating process then?
    Mr. Petherick. I think not necessarily the rating process, 
but I think Indian country views that there should be some sort 
of, I do not know if you want to call it an incentive system or 
something, but there needs to be some protections built in 
place if we are indeed showing that we are effective, then it 
is contrary to just commonsense to cut programs that are 
efficient.
    The Chairman. Again, in all due respect, the supposedly 
objective rating system rates some of these programs as 
ineffective and inefficient. So I am sure if I was running a 
program, I would never view them that way. That is why we have 
objective assessments of programs. And there comes your 
assistant to give you a very effective rebuttal to that 
statement. [Laughter.]
    Mr. Petherick. Pardon us.
    The Chairman. Go ahead if you would like to say more. 
Seriously.
    Mr. Petherick. I think what we were mentioning is the fact 
that the health care facilities construction program within IHS 
has been deemed effective, according to the PART assessment. 
But at the same time while they are being judged effective, 
they are being cut by $83 million.
    The Chairman. That is a point well made. Thank you.
    [Prepared statement of Sally Smith appears in appendix.]
    The Chairman. Mr. Beaulieu.

    STATEMENT OF DAVID BEAULIEU, PRESIDENT, NATIONAL INDIAN 
                     EDUCATION ASSOCIATION

    Mr. Beaulieu. Chairman McCain and Vice Chairman Dorgan, my 
name is David Beaulieu. I am president of the National Indian 
Education Association and a member of the Minnesota Chippewa 
Tribe from the White Earth Reservation in Minnesota. And also, 
I have recently joined the faculty at Arizona State University 
this July. It is a pleasure to be there and to be working in 
Indian education at ASU.
    It is my pleasure to be able to offer the ideas and 
opinions of the National Indian Education Association before 
this committee on the fiscal year 2006 President's budget 
request. Founded in 1969, the National Indian Education 
Association is the largest organization in the Nation dedicated 
to Indian education advocacy. It embraces the membership of 
over 3,000 American Indian, Alaska Native, and Native Hawaiian 
educators, tribal leaders, school administrators, teachers, 
parents and students.
    NIEA makes every effort to advocate for the unique 
educational and culturally related academic needs of Native 
students, and to ensure the Federal Government upholds its 
immense responsibility for the education of American Indian and 
Alaska Natives through the provision of direct educational 
services incumbent in the trust relationship of the U.S. 
Government, including the responsibility of ensuring 
educational quality and access.
    Although National Indian Education Association supports the 
broad-based principles of No Child Left Behind, there is 
widespread concern about the many obstacles that the NCLB 
presents to Indian communities, who often live in remote, 
isolated, and economically disadvantaged communities, 
particularly in rural areas. There is no one more concerned 
about accountability and documented results than our 
membership. But the challenges many of our students and 
educators face on a daily basis make it difficult to show 
adequate yearly progress and to ensure teachers are the most 
highly qualified.
    We support generally looking into the specifics of the 
statute and looking for flexibility that makes sense to Indian 
education and to meeting the goals of this statute, and to 
funding it so that we can indeed accomplish those objectives.
    President Bush's budget proposes $529 million, or a .9-
percent decrease in education, equaling $69.4 billion in total 
budget authority for the Department of Education. The request 
for Alaska Native Education Equity and Education for Native 
Hawaiians is reduced by 5 percent and 8 percent, and Indian 
education program funding remains at the same level as fiscal 
year 2005 at $119.9 million, and down from fiscal year 2004 and 
fiscal year 2003 levels. Inadequately funding Indian education 
programs will diminish, if not undo, any progress we have made.
    Within the No Child Left Behind Act is the Indian Education 
Act, Title VII. That particular section requires unique 
purposes which speak to meeting the language and culture needs 
of American Indians and Alaska Natives, and also using 
culturally based education approaches to accomplish 
achievement. Also within title III there are provisions that 
allow for Native language teachers to be trained and for Native 
language programs. We believe the broad implementation of this 
statute is threatening language and culture programs, and the 
broad intention of making sure that our students' unique 
educational needs regarding language and cultures are being 
eliminated from our schools.
    Increasing the Department of Education budget for Native 
education programs by 5 percent would provide a step forward in 
helping Native students to achieve the same high standards as 
other students nationwide, while at the same time preserving 
and protecting the integrity and continuity of our cultural 
traditions. We realize that 5 percent will not address all of 
the needs, but we find the request to be reasonable and 
sensitive to the current budget environment.
    Proposed programs for elimination have a direct impact or 
effect upon Native students, including TRIO Talent Search, TRIO 
Upward Bound, Even Start, Perkins Loans, and Student Dropout 
Prevention, to name a few. While these programs may have not 
had the desired results across the board, they have provided 
enormous benefit to Native students and served their intended 
purposes in Indian communities. To eliminate these programs 
would cause a desperate impact upon Native students and upon 
our progress as those programs have assisted them.
    Nearly 90 percent of approximately 500,000 Indian children 
attend public schools throughout the Nation. Indian students 
who attend these schools often reside in economically deprived 
areas and our impacted by programs for disadvantaged students. 
The President's fiscal year 2006 budget fails to fully fund the 
Title I Low Income School Grants Program critical to closing 
the achievement gap. A modest increase of $602.7 million for 
this program still leaves more than $7 billion below the 
authorized levels for NCLB. If the fiscal year 2006 budget is 
enacted, this will be the first cut in education in a decade, 
and would completely disregard Native students' critical needs.
    Within the Department of Education budget, tribally 
controlled post-secondary vocational and technical institutions 
and strengthening tribally controlled colleges and 
universities' request remain level with the fiscal year 2005 
levels at $23.8 million. While the strengthening of Alaska 
Native and Native Hawaiian institutions receive a 45-percent 
decrease from 2005 levels at $26.5 million. Tribally controlled 
colleges and universities receive just under $3,000 annually 
per student, less than one-half the amount annually provided 
for students in other community colleges, and do not have 
access to other state or local dollars, increasing or 
exacerbating this situation of underfunding. NIEA requests a 
10-percent increase in funding to tribal colleges to meet core 
operational needs.
    BIA's budget has historically been inadequate to meet the 
needs of Native Americans, and consequently our needs have 
multiplied over the years. The fiscal year 2006 BIA budget 
fails to fund tribes at a rate of inflation, increasing the 
hardships faced by Native students. Perhaps the clearest 
example of unmet needs among Native Americans is the disparity 
between the amounts spent per student in BIA schools as 
compared with public schools. BIA schools will spend less than 
half the amount that public schools nationally will spend. The 
amount currently spent per student at BIA schools is the 
equivalent to public school per student expenditures during the 
1983-84 school year. BIA schools will spent an amount per 
student the public schools were spending 20 years ago, while 
expecting our students to perform at levels in 2006.
    The Chairman. I would ask you to summarize, Mr. Beaulieu.
    Mr. Beaulieu. Okay. Many of the other cuts mentioned have 
been mentioned by witnesses. In summary, the overall education 
funding is receiving a 10-percent decrease, $114 million, while 
overall discretionary spending within the budget is receiving a 
2-percent increase. This is a direct violation, we believe, of 
the trust responsibility for Indian education.
    We respectfully urge this committee to truly make Indian 
education a priority and to work with congressional 
appropriators and the Administration to ensure that Indian 
education programs are fully funded.
    Thank you very much.
    [Prepared statement of Mr. Beaulieu appears in appendix.]
    The Chairman. Thank you, Mr. Beaulieu.
    The cut is about 10 percent, right?
    Mr. Beaulieu. Total.
    The Chairman. Yes; and what is the population growth, 
percentage-wise?
    Mr. Beaulieu. I do not know the exact number, Senator.
    The Chairman. Do you know, Tex? I think it is about 2 or 3 
percent.
    Mr. Hall. I think it is close to 3 percent, Mr. Chairman.
    The Chairman. So we are really looking at 13 percent, 
roughly.
    Mr. Hall. Right. Exactly.
    The Chairman. I thank the witnesses for being here. Thank 
you for your testimony. Your testimony acknowledges the need 
for Federal spending and program accountability. For years, I 
have heard that tribes are reluctant or refuse to share 
specific data with Federal agencies.
    Currently, how do tribes measure the impact or success of 
federally funded programs administered by self-determination 
contracts or self-governance compacts, and how do you propose 
overcoming this problem?
    Mr. Hall. Mr. Chairman, clearly the Federal agencies like 
BIA for example require quarterly reports or SF269s required 
under your 638 contract. Really, you have to report how you are 
doing in your scope of work and so on and so forth. Tribes have 
been doing that for a long time.
    I do have a concern with the school construction and Indian 
Health Services my friend J.D. was talking about. You get a 
good score, but you lose $85 million in health construction 
dollars. It just does not make sense. So at the end of the day, 
the NCAI, as I presented in my testimony, has created a 
national data center. We really need to get that funded to 
really look at data, because a lot of times we ask a Federal 
agency on law enforcement on how do you reduce crime. Well, we 
get different messages on what the statistics are. So we really 
need our own center, and that is why NCAI has proposed a 
national Indian data center to really take charge of our own 
data because it is our data that is getting cut, Mr. Chairman.
    The Chairman. And share that information with the Federal 
Government?
    Mr. Hall. Yes; we have.
    The Chairman. I mean, this center would do that?
    Mr. Hall. Oh, excellent, excellent. Yes, it would.
    The Chairman. Back to you, Mr. Beaulieu. Do you have an 
estimate yet on the impact that the No Child Left Behind Act 
has on tribal schools?
    Mr. Beaulieu. An estimate on the impact it has? We believe 
that the implementation of the Act is not working, that many of 
the impacts that exist there in terms of the ways in which the 
annual yearly progress is occurring, the fact that we have 
schools being measured year to year on a single test without 
documenting the actual progress being made. We think we are 
making incredible progress actually, but it is not being 
accounted for in many ways.
    The Chairman. So what do we need to do?
    Mr. Beaulieu. We need to create greater flexibility to 
recognize unique circumstances of those schools within the 
statute to allow for indicators of progress, to allow for 
improving the definition of ``highly qualified.'' Rural areas, 
you know, having a subject matter specialist in every single 
subject often does not work. We realize that we also need 
teachers that are competent and qualified to teach, improving 
professional development so that they are better able to teach 
would be a great assistance, and improving the funding level to 
accomplish that as well would be important.
    There is so much focus on testing that the heart and soul 
of the programs are often being eliminated. We think that is 
damaging to the quality of our educational programs at the same 
time.
    The Chairman. Mr. Carl, sort of along the lines of what I 
was talking with Mr. Petherick about, how did the Native 
American Block Grant Program fare under the program assessment 
rating tool evaluation, PART evaluation?
    Mr. Carl. Mr. Chairman, I am very glad to answer that 
question. A couple of years ago, HUD gave a report to the 
committee that tribes were not expending their money. Indian 
tribes became very alarmed and came back with its own report 
that there was really no money tied up in the pipeline. The 
tribes were expending their money.
    The tribes are very diligent in not only performing an 
Indian housing plan that shows in detail how the money is being 
expended, but also the scope of work. At the end of each year 
we are required to do an annual performance report. The annual 
performance report that tribes diligently and work very hard to 
submit as part of the program requirement unfortunately we 
found does not make its way to OMB. The performance measures 
that are set out for this particular grant year, OMB and the 
tribes do not connect.
    In this case, the performance measure that it set out now 
by OMB and further by HUD requires that the NAHASDA grants 
bring out social changes of what the NAHASDA grant has 
provided. But that is like trying to put a square bolt in a 
round hole because the requirement of NAHASDA as administered 
by HUD does not have the same criteria.
    So I believe in our own research, we have been able to 
measure not only building homes, but changes in the lives of 
Native Americans.
    The Chairman. Would you provide that information to the 
committee, please?
    Mr. Carl. Yes; I can.
    The Chairman. Thank you.
    I thank the witnesses.
    Senator Dorgan.
    Senator Dorgan. Mr. Chairman, thank you very much.
    Dr. Beaulieu, you heard Mr. Cason say that this budget is a 
continued commitment to Indian schools. That statement seems to 
be at odds with your statement. Give me your assessment of 
that.
    Mr. Beaulieu. Did I write that it was a continuing 
commitment?
    Senator Dorgan. No; I am saying that Mr. Cason when he 
testified said that the President's budget is a continued 
commitment to Indian schools. That is vastly at odds with your 
testimony.
    Mr. Beaulieu. It certainly is, Senator. We do not believe 
it is a commitment to Indian schools. The reduction in 
construction, I mean, one has to have a place to learn. The 
schools often do not meet safety and health standards. The 
quality of going to school in places that currently exist are 
disastrous. That is a major issue. It has long been a major 
issue, as has been the need for repairs in schools. There is a 
continuing increase in the amount of improvements that have not 
been met in the existing schools.
    Senator Dorgan. That is the point that has not been made. 
We talk about construction for new schools that are necessary 
and need to be built, but there is a massive amount of deferred 
maintenance that is necessary on schools that already exist. 
That is not a luxury. That is a necessity. You have to do this 
maintenance to keep those facilities up to date.
    Mr. Chairman, we in North Dakota are very proud of the 
leadership of Tex Hall, who is serving as you know in his 
second term as president of the National Congress of American 
Indians, and he has provided some very effective leadership. We 
are all very proud of the work you have done, Tex, and are 
pleased that you are here with us once again.
    Let me ask, if I might, what kind of consultation does the 
BIA undertake, when they begin to put together a budget and 
evaluate an assessment of the needs in a budget. What kind of 
consultation has existed there?
    Mr. Hall. There is a difference in opinion on what that 
word means for tribes and for the Administration and the Bureau 
officials. Each region probably has a budget consultation 
meeting. Nationally, we have formed a tribal BIA Budget 
Advisory Council which is meeting in Phoenix Thursday and 
Friday at the San Marco Resort or something. It is a real nice 
place. I look forward to going there, Mr. Chairman.
    The Chairman. Very nice. [Laughter.]
    Mr. Hall. But on the other hand, getting back to education 
for example, one of our items is we believe in self-
determination and yet the Administration has put a moratorium 
on any tribes that want to contract their schools. That is 
against what the consultation with the tribes. On 
reorganization, the tribes are against reorganization, yet we 
see hundreds of millions of dollars that are taken from our 
school construction budgets, put into the Office of Historical 
Accounting, and we all know, and the Cobell plaintiffs know, 
the records are not there.
    So why are we putting it there? Again, that is an example 
of there is just a complete difference on what consultation 
means. So it seems like we talk about it, but we just go in 
different worlds.
    Senator Dorgan. Chairman Hall, you heard the statement by 
Chairman McCain this morning. I feel as he does about the trust 
issue. We really need to get this addressed and then move on, 
but it needs to be addressed in a fair and thoughtful way. But 
if we spend the next 10 years spending billions of dollars 
doing historical accounting, it is going to detract from needed 
investments in health care, education, housing, that we just 
have to find a way to invest in. Tell me your assessment of 
Chairman McCain's comments this morning. As the Chairman of the 
National Congress of American Indians, do you feel there is a 
way for all the stakeholders to understand the urgency of 
finding a commonsense approach to solve this?
    Mr. Hall. I do. I must be a perennial optimist, I guess, 
but I am encouraged. I have talked with many of the 
stakeholders, including, I believe Chief Jim Gray is in the 
audience today. He is the chairman of the Intertribal 
Monitoring Association, 50 tribes that have large trust 
accounts. Of course, I am from the Great Plains, Senator 
Dorgan, from Mandan Hidatsa Arikara. Great Plains has 33 
percent of all the accounts.
    I have talked to members of the Montana-Wyoming, and they 
are about 20 percent of the accounts. I have talked to the 
Navajo Nation and with ITMA and the Cobell plaintiffs. I 
believe all these folks that I mentioned have a big dog in the 
fight, and they want to resolve it. So we are actually going to 
be meeting and discussing this tomorrow night at that nice 
resort at 7 o'clock, talking about this very important issue.
    Senator Dorgan. There may be cases where not every 
stakeholder has a feeling that this needs to be solved now, or 
that there is any urgency. Some feel that perhaps some years 
can go by and you exhaust all the last options for them. This, 
I think, and I would guess the chairman would agree, this is 
going to take some real leadership in Indian country as well. I 
think that in order to have a consensus emerge and develop, it 
cannot be imposed, it has to be a developed consensus that 
comes from Indian leadership across the country.
    So I am pleased to hear your response to the chairman's 
discussion this morning, because that is the only way this is 
going to get solved.
    Mr. Hall. Senator Dorgan, I am reminded of a lady that has 
passed on. Her name is Carol Young Bear. I am glad both you and 
the chairman are concerned about teen suicides. She had 
diabetes and she had her legs amputated. She was waiting for 
her IM account check. This is a couple of years ago. Because of 
the suit and all the litigations, all she wanted was the $1,200 
that was in her IM account.
    Because she had her legs amputated, she wanted to go to 
town. She wanted to visit her relatives, and she probably 
wanted to play bingo. Well, she did not get that check and she 
passed on. So all she wanted was a used van with a lift to get 
her to be able to go into her wheelchair and get into that van.
    Those are the stories that remind me that with the 
continued delays, there will be many other Carol Young Bears 
out there that are not able to live their full quality of life, 
especially when they are senior citizens. These are their 
moneys. So it reminds and I think it reminds all of us in this 
room that this very important issue must be addressed sooner 
than later.
    Senator Dorgan. I think that is an approach that makes a 
lot of sense. A person that was a member of your tribe, the 
late Rose Crows Flies High, used to, when she would hear 
something good from someone in an audience, she would make a 
unique sound. You might have a name for the sound that Rose 
Crows Flies used to make.
    Mr. Hall. Rattling her tongue.
    Senator Dorgan. She would rattle her tongue. She did it 
very well. I loved Rose Crows Flies High. But if she were here 
this morning, she would have rattled her tongue when the 
chairman made his comments, and I think when you just made your 
comments, because we need to get to the end of this in a way 
that makes sense.
    Mr. Chairman, let me thank those who testified with respect 
to housing and health care as well. I appreciate the testimony 
of all four witnesses. I think they contribute to a better 
understanding of these issues today.
    Thank you very much.
    The Chairman. Thank you for being here, witnesses. I am 
sure we will be seeing you often. Thank you very much.
    This hearing is adjourned.
    [Whereupon, at 11:15 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 Charles W. Grim, D.D.S, M.H.S.A., Assistant 
            Surgeon General, Director, Indian Health Service

    Mr. Chairman and members of the committee:
    Good morning. I am Dr. Charles W. Grim, Director of the Indian 
Health Service. Today I am accompanied by Gary J. Hartz, Acting Deputy 
Director of the IHS. We are pleased to have the opportunity to testify 
on the President's fiscal year 2006 budget request for the Indian 
Health Service.
    As part of the Federal Government's special relationship with 
tribes, the IHS delivers health services to more than 1.8 million 
American Indians and Alaska Natives (AI/ANs). Care is provided in more 
than 600 health care facilities throughout the country. For all of the 
AI/ANs served by these programs, the IHS is committed to its mission to 
raise their physical, mental, social, and spiritual health to the 
highest level, in partnership with them.
    This mission is supported by the Department of Health and Human 
Services (DHHS); and, to better understand the conditions in Indian 
country, senior Department and IHS officials have visited tribal 
leaders and Indian reservations in all 12 IHS areas. And, the 
Administration takes seriously its commitment to honor the unique legal 
relationship with, and responsibility to, eligible AI/ANs served by 
providing effective health care services.
    It is Department policy that consultation with Indian tribes occur 
before any action is taken that significantly affects them. I have the 
pleasure of serving as the vice chair of the Intra-departmental Council 
on Native American Affairs (ICNAA) which plays a critical role in the 
execution of this policy. Budget is an important area of consultation. 
The Department holds an annual budget consultation session to give 
Indian tribes the opportunity to present their budget priorities and 
recommendations to the Department. This year, during the budget 
consultation process, tribal leaders provide us with their top 
priorities--inflation and population growth. We heard them and I am 
proud to say that this budget reflects these clear priorities.
    Through the government's longstanding support of Indian health 
care, the IHS, tribal, and Urban Indian health programs have 
demonstrated the ability to effectively utilize available resources to 
improve the health status of AI/ANs. The clearest example of this is 
the drop in mortality rates over the past few decades. More recently, 
this effectiveness has been demonstrated by the programs' success in 
achieving their annual performance targets as well as by the 
intermediate outcomes of the Special Diabetes Program for Indians. The 
agencys management of the wide array of IHS programs has also been 
found to be effective through evaluations using the Office of 
Management and Budget's Program Assessment Rating Tool (PART). The IHS 
PART scores have been some of the highest in the Federal Government.
    Although we are very pleased with these achievements, we recognize 
that there is still progress to be made. American Indians and Alaska 
Natives mortality rates for alcoholism, tuberculosis, motor vehicle 
crashes, diabetes, unintentional injuries, homicide, and suicide are 
higher than the mortality rates for other Americans. Many of the health 
problems contributing to these higher mortality rates are behavioral. 
For example, the rate of violence for AI/ANs youth aged 12-17 is 65 
percent greater than the national rate for youth.
    In trying to account for the disparities, health care experts, 
policymakers, and tribal leaders are addressing many factors that 
impact the health of Indian people by increasing preventive services 
and health screening throughout the Indian health care delivery system. 
To support this effort, the President has requested an 8 percent 
increase in funding for preventive health services.
    As partners with the IHS in delivering needed health care to AI/
ANs, Tribal and Urban Indian health programs participate in formulating 
the budget request and annual performance plan. The I/T/U Indian health 
program providers, administrators, technicians, and elected tribal 
officials, as well as the public health professionals at the IHS Area 
and Headquarters offices, combine their expertise and work 
collaboratively to identify the most critical health care funding needs 
for AI/ANs people. Currant services funding, especially funding for 
inflation and population growth, has been their highest priority for 
several years. The budget request for the IHS is responsive to those 
priorities by including the increases necessary to assure that the 
current level of services for AI/ANs is maintained in fiscal year 2006, 
including an increase in services for a growing population.
    The President's budget request for the IHS totals $3.8 billion, a 
net increase of $72.1 million above the fiscal year 2005 enacted level. 
The request will allow I/T/U Indian health programs to maintain access 
to health care by providing $31.8 million to fund pay raises for 
Federal and tribal employees, and $79.6 million to cover the 
inflationary cost increases experienced by health delivery systems and 
to address the growing AI/ANs population. Staffing and operating costs 
for six newly constructed health centers are also included in the 
amount of $34.8 million. Once they are fully operational, these 
facilities will increase the number of primary care provider visits at 
can be provided at these sites by nearly 75 percent, in addition to 
providing more comprehensive health care services. Additional tribal 
contracting is supported by an increase of $5 million for contract 
support costs. This increase will cover the contract support costs of 
new contracts estimated to be received in fiscal year 2006. The budget 
proposes savings of $3.1 million from increased efficiencies in 
implementing information technology and reducing administrative costs. 
Similar savings are included in the budget requests of the other HHS 
Agencies.
    Consistent throughout HHS, fiscal year 2006 requests for facilities 
funding focus on maintenance of existing facilities. A total of $3.3 
million is included for IHS facility construction, sufficient to fully 
fund the Fort Belknap staff quarters project which will provide 29 
units of new and replacement staff quarters for the Harlem and Hayes 
outpatient facilities in Montana. Available decent local housing makes 
it easier to recruit and retain health professionals at remote sites.
    American Indians and Alaska Natives will also benefit from several 
provisions in the recently enacted Medicare Prescription Drug, 
Improvement, and Modernization Act. The transitional assistance credit 
of $600 per year for low-income Medicare beneficiaries, including AI/
ANs could provide additional Medicare revenue for prescription drugs 
dispensed at IHS facilities in fiscal year 2005. The Medicare part D 
prescription drug benefit program, when implemented in January 2006, 
will extend outpatient prescription drug coverage to AVAN Medicare 
beneficiaries and increase Medicare revenues at I/T/U facilities. Other 
sections of the act expand the benefits covered under Medicare part B 
for AI/AN beneficiaries and allow the IHS and Tribal Health Programs to 
pay for additional medical care by increasing its bargaining power when 
buying services from non-IHS Medicare-participating hospitals.
    The proposed budget that I have just described provides a continued 
investment in the maintenance and support of the I/T/U Indian public 
health system to provide access to high quality medical and preventive 
services as a means of improving health status. It reflects a continued 
Federal commitment to AI/ANs.
    Thank you for this opportunity to present the President's fiscal 
year 2006 budget request for the IHS. We are pleased to answer any 
questions that you may have.

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