    [Senate Hearing 114-426]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 114-426

         ISSUES FACING U.S.-AFFILIATED ISLANDS AS REPORTED BY THE U.S.
      GOVERNMENT ACCOUNTABILITY OFFICE AND CONSIDERATION OF TWO MEASURES
     RELATED TO U.S.-AFFILIATED ISLANDS: S. 2360, THE OMNIBUS TERRITORIES
     ACT OF 2015, AND S. 2610, A BILL TO APPROVE AN AGREEMENT BETWEEN THE
                    UNITED STATES AND THE REPUBLIC OF PALAU

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

                                    HEARING

                                   BEFORE THE

                                  COMMITTEE ON
                          ENERGY AND NATURAL RESOURCES
                              UNITED STATES SENATE

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                 APRIL 5, 2016

                                   __________

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                           Printed for the use of the
                   Committee on Energy and Natural Resources

               Available via the World Wide Web: http://fdsys.gov

                                     ______

                             U.S. GOVERNMENT PUBLISHING OFFICE

    21-971                         WASHINGTON : 2017
    -----------------------------------------------------------------------
      For sale by the Superintendent of Documents, U.S. Government Publishing
      Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800;
             DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC,
                              Washington, DC 20402-0001

                   COMMITTEE ON ENERGY AND NATURAL RESOURCES

                        LISA MURKOWSKI, Alaska, Chairman
    JOHN BARRASSO, Wyoming               MARIA CANTWELL, Washington
    JAMES E. RISCH, Idaho                RON WYDEN, Oregon
    MIKE LEE, Utah                       BERNARD SANDERS, Vermont
    JEFF FLAKE, Arizona                  DEBBIE STABENOW, Michigan
    STEVE DAINES, Montana                AL FRANKEN, Minnesota
    BILL CASSIDY, Louisiana              JOE MANCHIN III, West Virginia
    CORY GARDNER, Colorado               MARTIN HEINRICH, New Mexico
    ROB PORTMAN, Ohio                    MAZIE K. HIRONO, Hawaii
    JOHN HOEVEN, North Dakota            ANGUS S. KING, JR., Maine
    LAMAR ALEXANDER, Tennessee           ELIZABETH WARREN, Massachusetts
    SHELLEY MOORE CAPITO, West Virginia

                          COLIN HAYES, Staff Director
                    PATRICK J. McCORMICK III, Chief Counsel
                         ISAAC EDWARDS, Senior Counsel
               ANGELA BECKER-DIPPMANN, Democratic Staff Director
                    SAM E. FOWLER, Democratic Chief Counsel
           ALLEN STAYMAN, Democratic Senior Professional Staff Member

                                C O N T E N T S

                                  ----------

                               OPENING STATEMENTS

                                                                       Page
    Gardner, Hon. Cory, a U.S. Senator from Colorado.................     1
    Cantwell, Hon. Maria, Ranking Member, and a U.S. Senator from
      Washington.....................................................     2

                                   WITNESSES

    Kia'aina, Hon. Esther, Assistant Secretary for Insular Areas,
      U.S. Department of the Interior................................     4
    Gootnick, David, Director, International Affairs and Trade, U.S.
      Government Accountability Office...............................    15

              ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED

    Bordallo, Hon. Madeleine:
        Statement for the Record.....................................    95
    Cantwell, Hon. Maria:
        Opening Statement............................................     2
    Gardner, Hon. Cory:
        Opening Statement............................................     1
    Gootnick, David:
        Opening Statement............................................    15
        Written Testimony............................................    17
        Response to Questions for the Record.........................    84
    Kia'aina, Hon. Esther:
        Opening Statement............................................     4
        Written Testimony............................................     6
        Responses to Questions for the Record........................    79
    Kyota, Hon. Hersey:
        Letter for the Record........................................   100
    People of Bikini:
        Statement for the Record.....................................   111
    Plaskett, Hon. Stacey:
        Statement for the Record.....................................    98
    S. 2360, the Omnibus Territories Act of 2015.....................    65
    S. 2610, a bill to approve an agreement between the United States
      and the Republic of Palau......................................    68
    Sablan, Hon. Gregorio Kilili Camacho:
        Letter for the Record........................................   103
    Silk, Hon. John:
        Statement for the Record.....................................   105

         ISSUES FACING U.S.-AFFILIATED ISLANDS AS REPORTED BY THE U.S.
      GOVERNMENT ACCOUNTABILITY OFFICE AND CONSIDERATION OF TWO MEASURES
     RELATED TO U.S.-AFFILIATED ISLANDS: S. 2360, THE OMNIBUS TERRITORIES
     ACT OF 2015, AND S. 2610, A BILL TO APPROVE AN AGREEMENT BETWEEN THE
                    UNITED STATES AND THE REPUBLIC OF PALAU

                                  ----------

                             TUESDAY, APRIL 5, 2016

                                   U.S. Senate,
                     Committee on Energy and Natural Resources,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 10:04 a.m. in
    Room SD-366, Dirksen Senate Office Building, Hon. Cory Gardner,
    presiding.

       OPENING STATEMENT OF HON. CORY GARDNER, U.S. SENATOR FROM
                                COLORADO

        Senator Gardner. Good morning and welcome to the Senate
    Energy and Natural Resources Committee's hearing on issues
    relating to the U.S. territories and the Freely Associated
    States.
        I call this Committee hearing to order.
        Specifically, we will be looking this morning at two bills:
    S. 2360, the Omnibus Territories Act of 2015, and S. 2610, a
    bill to approve the 2010 agreement between the United States
    and Palau.
        We will also review reports by the U.S. Government
    Accountability Office (GAO) relating to the agreement with
    Palau as well as a review of the compacts of free association
    with the Marshall Islands and Micronesia and the impact of
    compact migrants in our states and territories.
        Let me begin my remarks first on the legislation to approve
    the 2010 agreement.
        Palau has been one of the United States' most steadfast
    allies. They vote with the U.S. in the United Nations more than
    any other nation except for Israel. Out of a total population
    of around 21,000 approximately 500 of their men and women serve
    in the United States Armed Forces. We should be mindful of and
    grateful for their support.
        This Committee has held two hearings on this agreement in
    prior Congresses. To the best of my knowledge I am unaware of
    any policy objections to the agreement's plan of continued
    financial assistance through Fiscal Year 2024. The difficulty
    has always been finding an acceptable and viable offset to pay
    for that financial assistance.
        I would note that since the 2010 agreement was signed by
    this Administration, Congress has annually provided over $13
    million in discretionary funding for just over $90 million
    total so far, bringing the cost of the agreement to $150
    million over ten years, down from $240 million.
        Unfortunately however, the Administration has not been able
    to identify a politically viable option to cover the remaining
    amount. I am hopeful that the Administration's witness today
    will be able to provide an update on where things stand with
    finding that offset.
        The other piece of legislation that we will consider has
    three different parts to it relating to the people of Bikini
    Atoll's ability to resettle in a location outside of the
    Marshall Islands, the authority to permit a foreign carrier to
    operate between the American Samoa Islands of Tutuila and
    Manu'a without the need for an emergency service designation,
    and an amendment to the REAL ID Act so that the citizens of the
    Freely Associated States (FAS) would be eligible for driver's
    licenses or personal identification cards.
        The first two issues were introduced at the request of the
    Administration while the latter issue has previously been
    reported out of this Committee and passed by the Senate last
    Congress.
        With regard to GAO's report we certainly appreciate the
    expertise and institutional knowledge and memory that GAO's
    experts provide on topics like the Territories and Freely
    Associated States. With fewer and fewer Members of Congress in
    office who served in the Pacific theater of World War II and
    experienced how that period in history shaped the United States
    engagement with the Pacific Islands and particularly our
    relationship with the U.S.-affiliated islands, retaining that
    knowledge is very important for us to be able to put some of
    these legislative proposals into the proper context.
        Certainly the topic of compact impact is important to
    Hawaii and Guam and a growing importance to states like
    Arkansas, Missouri and Oregon, as citizens of the Freely
    Associated States migrate further into the United States.
        I look forward to hearing from our witnesses this morning
    on these topics, and I will turn to Senator Cantwell for any
    comments she may wish to provide.

     STATEMENT OF HON. MARIA CANTWELL, U.S. SENATOR FROM WASHINGTON

        Senator Cantwell. Thank you, Chairman Gardner. [Laughter.]
    For chairing the hearing and for this important subject this
    morning.
        As many of my colleagues know, this Committee was once
    named the Committee on Interior and Insular Affairs which has
    jurisdiction over numerous U.S.-affiliated islands including
    Hawaii and the Philippines. Today the scope of the hearing
    jurisdiction is narrower but still includes the five
    territories of Puerto Rico, the U.S. Virgin Islands, American
    Samoa, Guam, the Northern Mariana Islands and the U.S.
    assistance to Freely Associated States of Palau, Micronesia and
    the Marshall Islands.
        Each of these island governments has a separate and unique
    relationship with the United States that requires our oversight
    and from time to time changes in Federal law. Today the
    Committee will consider two bills and three GAO reports
    regarding the insular issues.
        But before I get to that, I would like to say a word about
    another territorial topic that is not on today's agenda, and
    that is Puerto Rico. For several months, bills have been
    introduced and hearings have been held on the financial crisis
    in our largest territory, a financial crisis that is quickly
    becoming a humanitarian crisis for 3.5 million U.S. citizens.
    The Senate has just gotten back from a two-week recess, but we
    have to get serious about passing legislation giving Puerto
    Rico the tools they need to restructure their debt and begin to
    rebuild their economy.
        Turning back to today's agenda, the first bill, S. 2360,
    the Omnibus Territories Acts of 2015, would make three changes
    to Federal law requested by the island governments. First, it
    would allow the use of the Bikini Resettlement Trust Fund for
    the people of Bikini to resettle outside the Marshall Islands.
    Second, it would allow foreign air carriers to provide service
    to American Samoa between the islands of Tutuila and Manua.
    Third, it would make a technical correction to the REAL ID bill
    by replacing the reference to the Trust Territory of the
    Pacific Islands with the names of three successor states. This
    would allow citizens who legally reside in the U.S. to get
    state identity documents.
        The second bill would approve the 2010 agreement between
    the U.S. and the Republic of Palau to update and extend
    provisions of the compact free association that governs
    relations between our nations.
        This bill is a national security priority because Palau is
    strategically located in the Western Pacific, a region of
    growing international tension. In its letter of transmittal of
    the legislation, the Administration concludes, ``Approving this
    agreement is important to the national security of the United
    States', stability in the Western Pacific region, our bilateral
    relationship with Palau and to the United States' broader
    strategic interest in the Asia-Pacific region.''
        Palau is arguably among the United States' closest allies,
    as my colleague was mentioning. Nonetheless, despite this
    national security imperative and broad bipartisan support, the
    Committee has been unable to move the bill forward for five
    years because of a failure to find a viable offset for the
    mandatory spending cost of $149 million over eight years. I
    hope that this is the year that we will do better here.
        I am looking forward to hearing about these bills from the
    Assistant Secretary of Insular Affairs, Esther Kia'aina, and
    hope that people remember her from her work with Senator Akaka,
    who is remembered as a champion of these island policies.
        I also want to welcome Dr. Gootnick, Director of
    International Affairs and Trade at the Government
    Accountability Office. I would like to thank him for his work
    over these many years in evaluating these Federal programs.
        Financial assistance under the three compacts of free
    association totals nearly $200 million a year and is vital to
    providing services to these Free Associated States. In
    addition, there is $30 million a year provided to Guam and
    Hawaii and the Commonwealth of the Northern Mariana Islands to
    help mitigate the impact of compact migrants on these
    communities and for services where they have settled.
        So as part of the Committee's oversight responsibilities
    for these GAO programs, we have the GAO presenting their
    reports which we will hear about this morning.
        So again, Mr. Chairman, I so appreciate having this
    hearing. I look forward to hearing about these issues and from
    the Administration. This will further assist in making sure we
    get these legislative issues resolved this year.
        Thank you.
        Senator Gardner. Thank you, Senator Cantwell.
        We are hearing this morning from two witnesses, David
    Gootnick from GAO as well as Esther Kia'aina, the Assistant
    Secretary for Insular Areas at Department of the Interior.
        Ms. Kia'aina, we will begin with your testimony.
        Thank you.

      STATEMENT OF HON. ESTHER KIA'AINA, ASSISTANT SECRETARY FOR
             INSULAR AREAS, U.S. DEPARTMENT OF THE INTERIOR

        Ms. Kia'aina. Thank you, Mr. Chairman and members of the
    Committee. I appreciate the opportunity to testify on S. 2360
    and 2610. Most of the provisions in both bills were requested
    by the Administration, and we are appreciative of Chair
    Murkowski's leadership to introduce the bills which we support.
        The Administration supports S. 2360, the Omnibus
    Territories Act of 2015, with its provisions for broadening
    Bikini resettlement options, promoting reliable air
    transportation services within American Samoa and amending the
    REAL ID Act to improve the availability of drivers licenses and
    personal identification cards for the citizens of the three
    Freely Associated States and Micronesia.
        The Administration also supports S. 2610 which would
    approve the 15-year review agreement with the Republic of Palau
    between the United States which called for a U.S. appropriation
    of $229 million through 2024. Instead, because the agreement
    has not yet been brought into force the United States, through
    the U.S. Department of the Interior, has made annual payments
    beginning with Fiscal Year 2010 of approximately $13.1 million
    a year for a total of $92 million in discretionary funds thus
    far. This bill would fund the remaining amount of $149 million
    which includes remaining moneys from the U.S. Postal Service.
        As was mentioned by Senator Cantwell, approving the
    agreement with Palau is important to the national security of
    the United States, our bilateral relationship with Palau and
    stability in the Western Pacific region.
        Besides the two bills today, I wanted to raise a few issues
    that are important to the insular areas.
        The first is the growing number of migrants under the
    compacts of free association in U.S. jurisdictions,
    particularly Guam and Hawaii, and its financial impacts on
    these jurisdictions. The Department believes the concerns of
    these jurisdictions deserve attention. The Department concurs
    that the current allocation of mandatory and discretionary
    funds of $33 million are insufficient to defray the costs and
    welcomes revisiting the exclusion of FAS citizens from Federal
    public benefits with Congress and other Federal departments.
        The second issue is the elimination of the Commonwealth of
    the Northern Mariana Islands (CNMI) only transitional worker
    visa classification in 2019, the recovery of the CNMI economy
    and efforts to train the CNMI work force continues to be an
    issue of utmost importance.
        Lastly, last fall the Administration forwarded a road map
    to the Congress to deal with the economic and fiscal crisis in
    Puerto Rico. The Department believes the other territories
    should be considered for inclusion in the health and tax
    provisions that may be extended to Puerto Rico, namely the
    Earned Income Tax Credit and the Medicaid provisions. This
    would equalize treatment among all of the territories and the
    states as well as take steps to prevent a crisis in the other
    smaller territories based on unequal treatment from development
    in these islands.
        Again, I appreciate the opportunity to testify and urge
    expeditious approval of S. 2360 and 2610.
        Thank you, Mr. Chairman.
        [The prepared statement of Ms. Kia'aina follows:]

      [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Gardner. Thank you for your testimony.
        David Gootnick, the Director of International Affairs and
    Trade, thank you very much. I look forward to hearing your
    testimony.

     STATEMENT OF DAVID GOOTNICK, DIRECTOR, INTERNATIONAL AFFAIRS
            AND TRADE, U.S. GOVERNMENT ACCOUNTABILITY OFFICE

        Mr. Gootnick. Thank you, Mr. Chairman.
        Mr. Chairman and members of the Committee, thank you for
    asking GAO to participate in this hearing. My statement today
    will touch on three key issues associated with the compacts of
    free association. First, an analysis of S. 2610. Second, key
    challenges under the amended compacts with Micronesia and the
    Marshall Islands. And third, compact migration and its effects
    on U.S. areas.
        First on Palau. As has been stated, S. 2610 would approve,
    fund and make modifications to the 2010 agreement. Over the
    past five years, in the absence of implementing legislation,
    the U.S. has provided $67 million less than the agreement had
    anticipated. S. 2610, in essence, establishes a new schedule of
    economic assistance that would erase this gap.
        In addition to the allocation funds to government
    operations, infrastructure, debt relief and Palau's trust fund,
    the agreement places some conditions on the economic package.
    I'll mention four. First, funding to government operations
    would be directed to specific purposes such as health and
    education. Second, an advisory group would be charged with
    overseeing the implementation of reforms such as those
    recommended by the IMF and the Asian Development Bank. Third,
    infrastructure funds would get additional scrutiny prior to
    funding. And fourth, infrastructure maintenance would
    prioritize the compact road and Palau's principle airport.
        The agreement would also markedly improve the outlook for
    Palau's trust fund. In fact, under the agreed upon schedule and
    at its historic rate of return, the fund would continue to grow
    through 2044.
        Importantly, the agreement extends authority to continue
    discretionary U.S. Federal programs such as Head Start,
    Community Health Centers, special education and PELL Grants.
    These programs have represented roughly one-third of all U.S.
    support since 1994 and projections of Palau's fiscal balance
    assume their continued presence.
        Next, regarding the compacts with Micronesia and the
    Marshall Islands. Now roughly two-thirds of the way through the
    amended compact period both economies remain largely dependent
    on compact grants and U.S. program support. Compact grants are
    decreasing and will end in 2023. Both country's plans for this
    decrement are on increasing tax revenue, distributions from
    their trust funds, reduced government spending and a growing
    private sector. However, neither country has made significant
    progress on tax reform. Private sector investment is limited.
    And both trust funds face obstacles. Private sector growth, in
    particular, faces significant constraints, specifically the
    Islands' geographic isolation and their lack of infrastructure.
        Both countries have had persistent problems with
    accountability for U.S. funds. In particular, their single
    audits show ongoing problems with procurement, cash management
    and managing government inventories, amongst other things.
        Now last, regarding compact migration. As you know FAS
    citizens can enter and reside in the U.S. and its territories.
    The 2011 census estimated that over 56,000 compact migrants,
    nearly one quarter of all FAS citizens were living in the U.S.
    with more than half residing in Hawaii and Guam.
        Under the amended compacts Hawaii, Guam and the Mariana
    Islands have received over $400 million in Federal support
    toward the cost of health, education and social services
    attributed to compact migrants. Yet, over this period these
    affected jurisdictions have estimated more than $2 billion in
    increased outlays for these services.
        Finally, as you mentioned, FAS citizens may serve in the
    military. They also often contribute by taking hard to fail,
    low-skill jobs. At the same time, many compact migrants
    struggle with language barriers, their kids face special
    challenges at school and many need access to health care not
    available to them back home.
        Since 1996 compact migrants have not had access to most
    Medicaid benefits and they are not eligible for many other
    Federal programs, Federal benefits.
        In sum, compact migration, a cornerstone of these three
    compacts, has emerged as a significant and growing challenge
    moving forward.
        Mr. Chairman, this completes my remarks and I'm happy to
    answer your questions.
        [The prepared statement of Mr. Gootnick follows:]

     [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Gardner. Thank you, Mr. Gootnick.
        Thank you both, again, for the time before this Committee
    this morning and your testimony.
        Ms. Kia'aina, I would just start with you in terms of the
    questions this morning.
        Former White House Advisor, Senior Advisor John Podesta,
    visited Palau in 2014 for the Pacific Islands Forum. After his
    trip, we were told that finding an offset for the Palau
    agreement was a priority for the Administration, yet it does
    not appear that there has been movement on the matter. I would
    just ask you what the current situation within the
    Administration for finding that offset is today?
        Ms. Kia'aina. Thank you, Mr. Chairman.
        That is correct. Mr. Podesta endeavored to find alternative
    mechanisms to fund the Palau compact agreement last year which
    have failed, and we continue to work with senior leadership of
    the Office of Management and Budget and the Department of State
    and the Department of Defense, given the urgency of the matter
    and the need to, once and for all, collectively find a viable
    offset. We admit that for the offsets provided by the
    Department we continue to work with the Committee, but we
    believe that it would have to take a collective approach by all
    three agencies, in concert with the Office of Management and
    Budget, to take care of the remaining $149 million.
        When Palau signed the compact agreement, they signed it
    with the United States of America, not the U.S. Department of
    the Interior or any individual agency.
        Senator Gardner. You mentioned the three other agencies or
    the three agencies working together, Defense, State, and
    Interior, is that correct, the three?
        Ms. Kia'aina. That's correct.
        Senator Gardner. The offset burden, it does not lie solely
    with Interior then. It lies with all three. Are they actively
    engaged in finding or is this simply----
        Ms. Kia'aina. That has been the challenge. At the moment
    the President's budget solely has it residing in the Department
    of the Interior. We have already provided $92 million in
    discretionary funds out of the Office of Insular Affairs, and
    we believe that given the magnitude of the amount of money and
    the continuing challenge for all offsets that we are working
    with the Office of Management and Budget and the other two
    Departments who clearly have a vested interest.
        Palau is an independent nation. The Department of Defense
    has control of helping to safeguard the national security, not
    only of the United States, but the Republic of Palau. And
    again, we believe that given the amount that it would be a
    prudent approach for the Office of Management and Budget to
    work with the Department of the Interior and the other two
    Departments to find viable offsets that would be satisfactory
    to the U.S. Congress.
        Senator Gardner. What is the reasoning behind the
    Administration submitting a budget that leaves it solely within
    Interior without reaching into the other Departments?
        Ms. Kia'aina. Mr. Chairman, historically during the first
    compact when Palau was a U.S. trust territory under the purview
    of the Department of Interior, we had funded the underlying
    compact agreement. And during the negotiations, I guess, of
    this recent review agreement, I just came on board in 2014, but
    that was the approach that was undertaken. And we are
    respectfully asking for reconsideration of the approach.
        Senator Gardner. Thank you.
        Have the people of Bikini Atoll identified any locations
    outside of the Marshall Islands where they would like to use
    their resettlement/relocation funds?
        Ms. Kia'aina. That's a good question, Mr. Chairman.
        I know that the previous mayor publicly has stated certain,
    has mentioned certain states, including Hawaii and Arkansas,
    where there are significant Marshallese populations including
    Bikinians. But to my knowledge, collectively, the Bikinian
    Council has not determined in concert with the people where
    they intend to reside.
        Senator Gardner. Thank you, and a final question.
        The 2010 agreement with Palau requires meaningful reforms
    by Palau in financial accountability and efficiency. What steps
    has your office taken to have an effective plan and process in
    place to review those reforms taken by Palau toward that end
    should this agreement be signed into law?
        Ms. Kia'aina. I'm going to have to get back to you on that,
    Mr. Chairman.
        I do know that out of all of the three Freely Associated
    States, Palau has been the model nation in the region for
    accountability.
        Senator Gardner. Well, if you could get back to us on that
    question, that would be fantastic for the record.
        Ms. Kia'aina. Thank you.
        [The information referred to was not provided as of the
    date of printing.]
        Senator Gardner. Thank you.
        Senator Cantwell?
        Senator Cantwell. Thank you, Mr. Chairman.
        Again I thank the witnesses for being here and covering
    these important responsibilities that are before our Committee.
        I am going to defer to Senator Hirono to ask questions.
        Senator Hirono. Thank you very much, Mr. Chairman, for this
    hearing.
        Hawaii is very well aware of the challenges facing our
    compact citizens and so clearly one topic of this hearing is
    where we need to meet our obligations to the Palauans. I met
    with their Ambassador and he is clearly frustrated with the
    fact that our country, having entered into this Agreement, has
    not lived up to its Agreement.
        I would like to follow up on the Chairman's questioning
    with regard to these agreements and with Palau because the
    State Department and DOD are very much involved and should be
    involved in coming up with a way that we can meet our
    obligations with regard to Palau, in particular.
        So, I would really like this Committee, Mr. Chairman, to
    focus very clearly on the obligations of these other
    Departments and not just Interior.
        With regard to the impact of the compact citizens on Guam
    and Hawaii, I have visited with the Governor of Guam and of
    course, I stay in touch with the Governor of Hawaii. In spite
    of the fact that there is $30 million appropriated annually for
    the compact impact, that is woefully short. I think it would be
    very helpful if there was a concerted effort to enable our
    compact citizens to be eligible, and this is also a question
    for the person from GAO, for Medicaid, for TANF, for SNAP. That
    would be helpful to our states and to Guam, would it not?
    Either one of you can respond. Perhaps Mr. Gootnick from GAO
    because I think you mentioned it?
        Mr. Gootnick. Well certainly there have been numerous
    proposals from the Governors and legislation introduced on that
    subject. It's important to recognize that the $30 million that
    you mentioned, the authorization for the $30 million a year, as
    well as the authorization for other funds, will expire in 2023.
    So, while compact migration is likely to continue to grow, that
    source of funding will also go away.
        Senator Hirono. That is why it is even more important that
    after the 1997 welfare reform law when suddenly our compact
    citizens no longer qualified for Medicaid, that that be
    restored. Those kinds of institutional changes need to occur
    because in 2023 when the impact funds end, that will leave
    places like Guam, Hawaii, and other states now, basically
    having to bear the full burden.
        Mr. Gootnick. Right. And you know, in addition to the
    fiscal issues I'm in close touch with some of the public health
    officials in Hawaii who have briefed me on the process of
    enrolling compact migrants.
        Senator Hirono. Yes.
        Mr. Gootnick. And now the Affordable Care Act.
        Senator Hirono. Yes.
        Mr. Gootnick. And there are, there's a significant
    administrative burden, as well as many compact migrants who are
    falling through the cracks who need health care attention. And
    that, I think the same could be said in the other sectors,
    education, social services.
        Senator Hirono. I think that we really need to push
    forward, not only, you know, I would love to see an increase in
    the $30 million but that all ends soon.
        So as I said, I would like to see a much more concerted
    effort on the part of the Administration to support efforts to
    enable the compact citizens to qualify for these Federal
    programs because granted, many of them do come for health care.
    They have huge educational needs. I am very familiar with the
    gap in enrolling our compact citizens into our Affordable Care
    Plan. In Hawaii there are language issues, all kinds of things.
        In fact, I had to step in and ask for an extension of time
    to enable our, especially our Marshall Island citizens in
    Hawaii, to be able to enroll for health care. So this is going
    to be an ongoing effort.
        But first and foremost regarding Palau, it just really
    bothers me that the State Department and the Defense Department
    are not stepping forward to help fulfill our country's
    obligations.
        Now the Governor of Hawaii, Madam Secretary, mentioned that
    maybe some of the money that goes directly to these Freely
    Associated States could be used by them to contract for various
    programs. What do you think of that idea?
        Ms. Kia'aina. Sure. Well thank you, Senator Hirono.
        Maybe, let me just step back here and give you an update on
    the Administration's approach on the overall issue of compact
    impact which will address your issue.
        The issue, clearly, is complicated. It deals with our
    nation's obligations to hold accountable the use of compact
    funds to the Freely Associated States. And to that end last
    year there was about $150 million backlog in infrastructure
    funds that were not spent by the Marshall Islands or to the
    Federated States of Micronesia. This impacts quality of life
    issues for health and education because a lot of the
    infrastructure funds were for that purpose. And the citizens
    migrate.
        So we worked feverishly with both governments, and I am
    pleased to report that we have set up mechanisms which would
    satisfy our concerns and have released all $150 million last
    year.
        Second, we believe that Federal authorities, current
    Federal authorities, should be exercised. Last year we
    established ``one-stop'' Micronesian service centers in both
    Guam and Hawaii. And in fact, the service center in Hawaii
    helped to enroll FAS citizens in health care.
        We've set up a Federal interagency approach to look at all
    of the statutory authorities including your proposal on
    Medicaid re-eligibility to determine what statutory changes
    would be needed. And also we, now that the infrastructure
    challenge is over, we intend at the next joint financial
    meetings, to agendize compact impact aid before the Marshall
    Islands and the Federated States of Micronesia to ensure that
    they know that this is a serious problem.
        We will consult with our attorneys but they provide
    scholarships to students who leave. At the moment we do not see
    anything that would preclude them of providing some of their
    funds to help their citizens in Guam and Hawaii.
        Senator Hirono. If I may, Mr. Chairman, the funding for the
    one stop center is only for one year, I believe. And I am glad
    that Interior stepped up and provided some of that funding. And
    this is a one stop center. I have worked very closely with
    those folks from the Marshall Islands, in particular.
        But as we go forward I think that we need to restore some
    of the eligibility of our compact citizens for particularly
    three programs, Medicare, TANF and SNAP. So that is where we
    are going, and it is not as though we do not have the language
    because the language to restore Medicaid eligibility was put
    into the immigration bill two years ago in the Senate.
        Ms. Kia'aina. Senator, if you don't mind I wanted to follow
    up.
        During the last year we have found that Federal agencies,
    including FEMA, are broadly interpreting the Welfare Reform
    Act. So in fact, it's not narrowly tailored to just those four
    programs. It is a broader approach.
        So the easiest fix would be to modify the Welfare Reform
    Act to make re-eligible FAS citizens for the term of public
    benefit----
        Senator Hirono. Yes.
        Ms. Kia'aina. Under the act.
        Senator Hirono. And quite possibly, looking at the existing
    legislation, there may be a way to more broadly interpret the
    existing legislation so that we do not have to pass another
    bill. I would like to have further discussions with you all on
    that.
        Ms. Kia'aina. Thank you.
        Senator Hirono. Thank you very much, Mr. Chairman.
        Senator Gardner. Thank you, Senator Hirono.
        Senator Warren?
        Senator Warren. Thank you, Mr. Chairman.
        So the five populated U.S. territories, Guam, Puerto Rico,
    the U.S. Virgin Islands, American Samoa and the Northern
    Mariana Islands, are part of America. And the 4,000,000 people
    who live on those islands are Americans. They are subject to
    Federal law. More than 150,000 people from these islands have
    served our country in the Armed Forces. Many have died in the
    service.
        It is a central principle of our American democracy that
    Americans, through their votes, can have a say in their own
    governments, and yet these 4,000,000 Americans have almost no
    say in Federal decision-making, even when it directly affects
    the islands they live on. They cannot vote in Presidential
    elections, they have no Senators, and each territory gets only
    one, non-voting representative in the House of Representatives.
        Assistant Secretary Kia'aina, your agency coordinates
    Federal policy for most of the territories so maybe you can
    help me understand exactly how this works. If a U.S. citizen is
    born in Guam, she can't vote for President as long as she lives
    on the island. Is that right?
        Ms. Kia'aina. That's correct.
        Senator Warren. But if she moves to a U.S. state, say
    California, can she vote there?
        Ms. Kia'aina. If she, her residence requirements and voter
    registration was in California and her permanent record was not
    in Guam, the answer is yes.
        Senator Warren. Okay, so she can register and vote in
    California, as long as she moves her paperwork.
        Ms. Kia'aina. And meets the requirements of the State of
    California.
        Senator Warren. Of whatever California has.
        Let's say she moves from California to a foreign country.
    For example, she goes from California to Italy. Can she vote
    for President from Italy?
        Ms. Kia'aina. It depends on her record of residency.
        Senator Warren. But if she moves from California?
        Ms. Kia'aina. Yes.
        Senator Warren. If she is registered to vote in California?
        Ms. Kia'aina. That's correct.
        Senator Warren. So this U.S. citizen from Guam can vote in
    California or can vote in Italy but if she moves from Italy
    back to Guam, she still cannot vote there. Is that right?
        Ms. Kia'aina. It depends on where her record of residency
    is. If it's still in California because it was, if it was
    California when she was in Italy and she still determined----
        Senator Warren. Well but that is my point. If she moves
    back. If her residency is now in Guam she loses her ability to
    vote.
        Ms. Kia'aina. That's correct.
        Senator Warren. You know, I just have to say this is
    absurd. Four million Americans live on American soil and can
    fully participate in our democracy, but only if they leave
    home. At their homes, on U.S. soil, all of their
    representational rights disappear.
        This kind of second class status is not how our government
    is supposed to work and it has real implications. Right now
    Puerto Rico is a $72 billion hole. Much of its debt is held by
    Wall Street vulture funds that have intimidated local
    government into slashing funding for schools, for hospitals,
    for first responders. There is broad agreement that the current
    situation is unsustainable, and there have been several
    congressional proposals to create an orderly process for Puerto
    Rico to restructure its debt. But powerful financial interests
    would prefer we do nothing, and so far Congress still has not
    acted. Congress should approve a plan to help Puerto Rico
    immediately. And that would be much more likely if the millions
    of Americans who live in Puerto Rico were allowed to
    participate fully in our democracy.
        The 4,000,000 people who live in the territories are not
    the subjects of a King. They are Americans. They live in
    America but their interests will never be fully represented
    within our government until they have full voting rights, just
    like every other American.
        Thank you, Mr. Chairman.
        Senator Flake. [presiding]: Thank you.
        Let me follow up with a couple of questions with regard to
    the first bill, finding authorization for use of established
    trust fund to resettle former residents of the Bikini Atoll
    outside of the Marshall Islands.
        Tell me, give examples of how this might be used, what
    problems are they facing now and how this would remedy it?
        Ms. Kia'aina. Well, thank you, Mr. Chairman.
        Under current Federal law the funds for the Bikini
    resettlement trust fund is limited to resettlement in the
    Marshall Islands, more specifically on the Islands of Kili and
    Ejit. We face dire circumstances at the moment on the Island of
    Kili where when the King Tides come in now it inundates almost
    half of the Island. The people, that number between 800 to
    1,000 people there, literally running for their lives to the
    other side of the Island. As a result their public safety is at
    risk and they have requested that they be given the opportunity
    to use their resettlement funds to resettle outside of the
    Marshall Islands, if that could be in the United States or
    anywhere else in the world.
        Senator Flake. How many, do we believe, would take
    advantage of this new provision to utilize those resources?
        Ms. Kia'aina. I don't have an answer to that question.
    There are over, I understand, over 5,000 Bikinians, both
    collectively in the Marshall Islands as well as in the United
    States.
        It's a very difficult issue for a lot of the elders who,
    many who don't want to leave. A lot are actually leaving for
    health purposes now to be with their families who live in
    Arkansas and other states.
        Senator Flake. Thank you.
        I have a bit of a soft spot for the Marshalls. I spent some
    time there, and I want to make sure that they can utilize these
    funds and we can address these problems that have festered for
    not just years, but decades and decades, as we know.
        Ms. Kia'aina. Sure.
        Senator Flake. With regard to the REAL ID Act, the
    government of the Marshall Islands has contacted our office
    with these issues. Will this provide the remedy, simply going
    back to the REAL ID Act and taking out the reference?
        Ms. Kia'aina. Yes.
        Senator Flake. To the trust territory of the Pacific? Do we
    think that will then?
        Ms. Kia'aina. Yeah.
        Senator Flake. Will that take care of it?
        Ms. Kia'aina. My understanding from the Department of
    Homeland Security is this would be a helpful fix because while
    they have provided guidance to the states, it has been very
    challenging. And so this would provide clarity across the
    nation to ensure the, or improve the availability of licenses
    and other official IDs for a longer period of time. At the
    moment it's being restricted to one year.
        Senator Flake. Okay.
        Ms. Kia'aina. Because of the REAL ID Act.
        So this would be a statutory fix to allow FAS citizens,
    regardless of where they live, to be able to get a license or
    other ID for a longer duration of time.
        Senator Flake. Alright.
        Well, thank you.
        Senator Wyden?
        Senator Wyden. Thank you very much, Mr. Chairman.
        I want to welcome our guests. I can tell you, those of us
    who have had the honor of chairing this Committee over the last
    few years have been wrestling with these issues for years and
    years. It is time, in my view, to actually get some resolution.
    These relationships are extraordinarily important.
        On the Omnibus Territories bill I want to note my support.
    This bill contains a number of common sense solutions, as I
    said, to issues that have gone on for, this feels like the
    longest running battle since the Trojan War. It just goes on
    and on and on.
        And there are problems from allowing compact migrants to
    get driver licenses in states like Oregon, give flexibility in
    terms of how resettlement funds are used.
        And so, I want to ask a question of the Assistant Secretary
    here in a moment.
        It is hard to place a dollar value on an unsinkable
    aircraft carrier in the Pacific, unchallenged, with the ability
    to defend a huge swath of ocean and a steadfast ally. But we do
    know the cost. The cost is $149 million, about the cost of one
    F35 fighter jet. So it is hard to overstate the value and the
    strategic necessity of approving the agreement.
        Obviously China has been interested in expanding its sphere
    of influence throughout that region, so a failure to get an
    agreement with Palau, to approve it, would give China, in my
    view, an opening in the Pacific and send a very bad signal to
    the allies in the region. So our country has made an agreement
    with the people of Palau, and the bill allows us to keep our
    word.
        I want to ask the Assistant Secretary, of the $92 million
    in stop gap funding already paid to Palau, how much has come
    from the Department of State or Defense?
        Ms. Kia'aina. Thank you, Senator.
        Those funds have come from the Department of the Interior.
        Senator Wyden. Okay.
        I would like the Administration to give to the Committee,
    the Chair and the Ranking Minority Member, I am just a member
    of the Committee, not Chair or the Ranking Minority Member, but
    I have been very involved in this issue. Chairman Bingaman
    tried to resolve it. I tried to resolve it. It has gone on and
    on, literally Democratic Chairs and Republican Chairs.
        So I would like the Administration to send the Committee
    what they would consider viable offsets for the Palau
    agreement. In other words, offsets that would be agreeable to
    the Administration so that we can actually get this done. I
    would like that within two weeks. Is that acceptable to you?
        Ms. Kia'aina. Yes, Senator. We've, in concert with the
    Assistant Secretary for Policy Management and Budget we've
    already put in a request with Senior Management at OMB to have
    a collective meeting with the Departments of State and Defense
    to talk about this matter.
        Senator Wyden. I think that is great. I think collective
    meetings are wonderful. We have lots of them in Washington. I
    wish I had a nickel for every time I went to a collective
    meeting.
        I would like you to say whether it is acceptable to you
    that we will get an answer to the question within two weeks.
    What would be offsets acceptable to the Administration within
    two weeks? Is that acceptable to you?
        Ms. Kia'aina. Senator, I can only speak for the Department
    of the Interior. I can't speak for OMB or the other
    Departments. So in the President's budget we do have offsets
    identified from the Department of Interior which clearly has
    not been viable. And so, again, I can only speak for our
    Department but I will work with the OMB and the other
    Departments to send you other viable offsets.
        Senator Wyden. I appreciate that.
        [The information referred to was not provided as of the
    date of printing.]
        Senator Wyden. I think this has been part of the problem.
    Everybody points at everybody else. In other words, Interior
    and State and Defense, and when we are done with all the
    pointing we are no further along in getting this resolved.
        So in effect what I am asking is that because your
    expertise is well known and you are well regarded by me and
    others, that you be the point person because you are in front
    of us and you are the person that we have. Can we ask you to
    take on that assignment? It is, sort of, status in lieu of
    salary, I guess. But we need somebody to be the point person to
    drive this.
        Ms. Kia'aina. I will try my best, Senator.
        Senator Wyden. I can't ask for more.
        Thank you very much. I look forward to following up.
        Mr. Chairman, the point of this is, I do not want us to be
    back here in another five, eight, ten years asking yet another
    dedicated public servant exactly the same question because we
    have been doing that year after year after year, and we
    obviously want to do this in a bipartisan way. Senator Flake
    and I work on forestry, all kinds of things, in a bipartisan
    way.
        I appreciate you are trying to step in and seeing if you
    can coordinate this. You are here with us today, you are well
    respected, and I appreciate your willingness to approach it
    that way.
        Thank you, Mr. Chairman.
        Senator Flake. Thank you, Senator Wyden.
        Let me just follow up with regard to the REAL ID issue with
    regard to Palau. Provisions in S. 2610 would require Palau to
    issue different passports for U.S. citizens in order for them
    to qualify for REAL ID. Instead of stipulating how Palau issues
    its own IDs, would it be sufficient to just require Palau
    citizens to have a qualifying passport to work or to travel/
    reside, the one that complies? Is there another way, an easier
    way, to go about this then simply strike the reference to the
    trust territories?
        Ms. Kia'aina. Mr. Chairman, I'm going to try to answer that
    question. I don't know if I have--I'm going to get this right.
    But I don't think the burden is on that part. The burden is on
    the part of the states, the various states, to issue IDs for a
    longer duration of time and it's become very challenging.
        The issue is that some states are only, because of the REAL
    ID Act, are only issuing it for one year. And it makes it very
    hard for FAS citizens, who are working in the United States, to
    have valid licenses.
        So I don't know if it is more an issue of what the FAS
    states provide to the states, it's rather that the states,
    because of the REAL ID Act, are not allowing, even if the
    Department of Homeland Security has directed them, to issue
    licenses to up to eight years. Maybe David has an answer as
    well?
        Mr. Gootnick. We've not actually looked at it, so I don't
    have anything to add.
        Senator Flake. Okay.
        Well I guess the concern that I think the states have, or
    some people have, is that allowing the residents of the Freely
    Associated States simply to prove legal status there by
    demonstrating citizenship that that potentially causes some
    national security concerns that we need to go beyond that.
        I know that it is an issue that is of great concern. I hope
    that we can come to some resolution that won't place an
    unnecessary burden on those traveling or working or residing
    here.
        I look forward to working with your offices on something
    that will work, not just for the short term, but for the longer
    term as well.
        Alright, well thank you for your testimony.
        This hearing is adjourned.
        [Whereupon, at 10:50 a.m. the hearing was adjourned.]

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