[Congressional Record (Bound Edition), Volume 149 (2003), Part 15]
[Senate]
[Pages 20822-20825]
[From the U.S. Government Publishing Office, www.gpo.gov]




COMPACT OF FREE ASSOCIATION WITH THE FEDERATED STATES OF MICRONESIA AND 
                  THE REPUBLIC OF THE MARSHALL ISLANDS

  Mr. AKAKA. Mr. President, I rise today to speak about S.J. Res. 16, 
the Compact of Free Association Amendments Act of 2003, which was 
introduced by myself, Senators Bingaman, Domenici, and Craig on July 
14, 2003. S.J. Res. 16 is the Bush administration's legislative 
proposal codifying 3 years of negotiations on title II of the Compact 
of Free Association between the United States and the Republic of the 
Marshall Islands (RMI) and the Federated States of Micronesia, FSM. I 
have been monitoring this process very closely since negotiations began 
in 1999.
  When the Senate returns after Labor Day, we have a very short window 
to enact this legislation, which is critical to the success of the U.S. 
political relationship with these two Pacific Island nations. I want to 
take some time to share with my colleagues the amendments that I intend 
to offer to ensure that the negotiated provisions remain consistent 
with the intent of the Compact of Free Association since its enactment 
in 1986 and address specific issues as they relate to the costs borne 
by the State of Hawaii over the past 17 years.
  My interest in these islands first began when I was stationed there 
in World War II, as a soldier in the United States Army. The first 
island that I landed on was Enewetak, an atoll in what is now the RMI. 
I ended up on Saipan and Tinian where I watched the Enola Gay take off 
for Hiroshima. I then returned to the islands that are now the FSM and 
RMI as a first mate on a missionary ship and spent six months in the 
islands. After being elected to Congress, I continued to closely follow 
events in the Pacific islands and continued my relationships with many 
of the families in the RMI and FSM.
  As a member of the Senate, I have been privileged to serve on the 
Senate Energy Committee which has jurisdiction over insular areas. I 
have returned to the islands on trips, often with my friend and former 
colleague, the former Chairman of the Energy Committee, Governor Frank 
Murkowski, and I have continued to meet with Pacific island government 
leaders.
  I have been very interested in the negotiations which have been 
ongoing since 1999, not only because of the impact of the Compact of 
Free Association on the State of Hawaii, but because of my interest in 
ensuring that the United States preserves its commitment first under 
the U.N. Trusteeship agreement and then under the Compact to establish 
sovereign governments and to promote economic development and self-
sufficiency.
  I commend the chairman and ranking member of the Energy Committee, 
Senator Domenici and Senator Bingaman, for their efforts to expedite 
consideration of this legislation in the Senate, and their appreciation 
of what needs to be done to fulfill our responsibilities to our allies 
in the Freely Associated States, or FAS.
  The Federated States of Micronesia is a group of 607 small islands in 
the Western Pacific about 2,500 miles southwest of Hawaii. While it has 
a total land area of about 270.8 square miles, the FSM occupies more 
than one million square miles of the Pacific Ocean. It is composed of 
four island states, formerly known as the Caroline Islands--Kosrae, 
Pohnpei, Chuuk, and Yap. Today, the FSM Constitution provides for three 
branches of government--the executive, judicial and legislative 
branches. The President is the head of state of the national government 
and there are elected Governors for each of the four states. The 
estimated population of the FSM is 105,500.
  The Republic of the Marshall Islands is located about 2,136 miles 
southwest of Hawaii and is made up of five islands and 29 atolls. While 
the RMI's total land area is only about 70 square miles, the RMI covers 
about 750,000 square miles of sea area. There are three branches of 
government in the RMI--the legislative, executive and judicial 
branches. The head of state is the President, who is elected by the 
legislature from its membership. The population of the RMI is 
approximately 56,000.

[[Page 20823]]

  The Compact of Free Association may be new to some of my colleagues, 
particularly those who were not in Congress in 1986. The United States 
has a very unique relationship with the FSM, RMI, and Palau, whose 
Compact is not being considered for negotiation. It is unfortunate that 
there is some misunderstanding about the purpose and intent of the 
Compact of Free Association. The compact established the RMI and FSM as 
sovereign states that conduct their own foreign policies. Both 
countries were admitted to the United Nations in 1991. However, the 
Freely Associated States remain dependent upon the United States for 
military protection and economic assistance. The compact provides that 
the United States has the prerogative to reject the strategic use of, 
or military access to, the FAS by other countries, which is often 
referred to as the ``right of strategic denial.'' The compact also 
provides that the U.S. may block FAS government policies that it deems 
inconsistent with its duty to defend the FAS, which is referred to as 
the ``defense veto.'' Under the compact, the United States also has the 
exclusive military base rights in the FAS. In exchange, the U.S. is 
required to support the FAS economically, with the goal of producing 
self-sufficiency and FAS citizens are allowed entry into the United 
States as nonimmigrants for the purposes of education, medical 
treatment and employment.
  As we consider S.J. Res. 16, I will be offering a number of 
amendments to address the sufficiency of the negotiated provisions to 
fulfill the U.S. commitment to assist the FSM and RMI with economic 
development opportunities, with the goal of self-sufficiency in 20 
years. I am also working on amendments to address issues specific to 
the costs incurred by Hawaii during the first 17 years of the Compact 
of Free Association.
  I have a tiered approach to meet these objectives. My long-term 
intent is to improve the education and medical infrastructure in the 
RMI and FSM. Economic development and self- sufficiency cannot occur 
without the proper tools of education and health care. These 
improvements will take substantial investment over time. My short-term 
goal is to reimburse the State of Hawaii for the costs incurred by the 
compact. I will discuss those amendments in a few minutes.
  Title II of the compact, Economic Relations, expired on September 30, 
2001. The compact provided, however, a two-year extension if 
negotiations were underway. Title II expires on September 30, 2003. 
Title II is critical to the success of the compact as it includes all 
of the Federal funding for the RMI and FSM. It is my understanding that 
the legislative proposal contains some unilateral changes that were 
made to the compact without the consent of the RMI and FSM 
governments--we will need to examine those provisions closely. In 
addition, I believe we need to examine some of the immigration 
provisions which are included in S.J. Res. 16 to ensure that they do 
not circumvent the purpose of the Compact of Free Association.
  I would now like to turn to the issue of disaster assistance. Under 
the current compact, the Federal Emergency Management Agency, FEMA, 
provided disaster relief to the communities in the FSM and RMI. In 
addition, FEMA provides essential services after natural disasters such 
as typhoons or tsunamis. Disaster assistance includes both individual 
grants and low-interest loans. Most, but not all, Federal assistance is 
in the form of low-interest loans to cover expenses not covered by 
State or local programs, or private insurance. Individuals who do not 
qualify for loans may be able to apply for a cash grant. Cash grants 
are also available for home repair, rental, and funeral services.
  The public assistance grants for community infrastructure allow 
territorial, local, or even village-level organizations to respond to 
disasters, to recover from their impact, and to mitigate impact from 
future disasters. While these grants are aimed at governments and 
organizations, their final goal is to help a community and all its 
citizens recover from devastating natural disasters. The grant 
assistance, provided on a matching basis, helps toward the repair, 
replacement, or restoration of disaster-damaged, publicly-owned 
facilities. FEMA assistance is critical. In 2002, Typhoon Cha'atan hit 
the FSM and caused 50 deaths, injured hundreds of people, and resulted 
in $6 million in property damage.
  S.J. Res. 16 removes FEMA's role in providing disaster relief, and 
replaces it with the U.S. Agency for International Development, Office 
of Foreign Disaster Assistance, OFDA. This doesn't make sense. OFDA 
assistance is for humanitarian relief of disasters in foreign nations, 
with direct provision of food and shelter, and assistance in protecting 
health and rebuilding water supplies. FEMA's disaster assistance, 
through its individual and public assistance grants, provides U.S. 
communities with the ability to rebuild and reinvest in their 
infrastructure. We have invested millions in FSM and RMI to build and 
protect infrastructure. These investments need to be protected to 
ensure that these Pacific island communities will be able to recover 
from natural disasters.
  We cannot terminate FEMA's disaster assistance. We must replace 
USAID's OFDA with FEMA's disaster assistance programs for the amended 
compact, maintaining the strong and reliable service that the islands 
need when peoples' lives are destroyed by natural disasters. I look 
forward to working with my colleagues to rectify this situation.
  As we continue assisting the FAS in building up physical 
infrastructure and achieving long-term self-sufficiency under a new 
funding mechanism, I cannot emphasize enough the urgent need to 
continue FAS eligibility for federal programs. It is important for us 
to maintain the view that such programs are complementary to the 
economic assistance under the compact and must continue to be open to 
FAS citizens if we are to succeed in allowing the FSM and RMI to fully 
develop.
  Federal programs in education have been a cornerstone for FAS 
communities, particularly in the later years of the original compact. 
This was when schooling evolved away from--as noted in 1994 by an Asian 
Development Bank study--its use as a tool to advance the interests and 
objectives of colonial powers. Rather, educational content has become 
more appropriate to traditional education and changed the lives of many 
FAS citizens for the better, strongly encouraging them to actually 
enroll in school.
  It is remarkable, for example, that the proportion of those who 
completed secondary education in the FSM almost doubled from 25 to 47 
percent between 1980 and 1994. Today, the FSM Government reports that 
the literacy rate is quite high and all children are required to attend 
school at least through the eighth grade. In the RMI, elementary school 
enrollment increased from almost 7,400 in the late, seventies to more 
than 11,700 in 2000, while secondary school enrollment went from 1,430 
to 2,586 in the same period.
  It is imperative that we help to educate young generations in the FAS 
because those ages 15 years or younger make up nearly half of the FSM 
and RIM populations and will eventually become parents, workers, and 
government, business, and community leaders. Education is the key to a 
strong future for these island communities and will ensure that the 
U.S. investments in these populations will reap positive returns.
  However, despite the great progress that has been made, the FAS 
clearly have a long way to go in improving their educational systems. 
This is evidenced by FAS citizens' continued migration to Hawaii and 
other parts of the U.S. for educational opportunity. Even so, the 
Micronesians and Marshallese have taken education into their own hands 
and are striving mightily to attune it to the needs of their people. In 
this vein, Federal programs such as Head Start, title I for 
disadvantaged populations, the Individuals with Disabilites Education 
Act, IDEA, and Pell Grants have tremendously helped by empowering the 
FAS and providing vital resources to help them create sound education 
systems

[[Page 20824]]

that serve the needs of their people. Indeed, I have been assured that 
without Pell Grant assistance, higher education institutions such as 
the College of Micronesia would be unable to continue operating.
  Given the importance of such programs to the FAS, I am concerned 
about recent and ongoing efforts in the other body to limit or 
eliminate FAS eligibility for various education and other domestic 
Federal programs. I am not alone in this concern. I was pleased to join 
Senators Domenici, Bingaman, and Craig in writing on May 20 to the 
leaders on the HELP Committee, asking that they maintain support for 
the FAS through eligibility for various education programs. As we state 
in the letter, ``the loss of such funding could very well mean the end 
of education services at all age levels in the FAS.'' When we return in 
September, I intend to pursue this matter with my colleagues.
  I would now like to address some compact issues specific to the State 
of Hawaii. Section 104(e)(1) of the Compact (Public Law 99-239) states, 
``it is not the intent of the Congress to cause any adverse 
consequences for the United States territories and commonwealths or the 
State of Hawaii.'' The compact further authorizes appropriations for 
such sums as may be necessary to cover the costs, if any, incurred by 
the State of Hawaii, the territories of Guam and American Samoa, and 
the Commonwealth of the Northern Mariana Islands, CNMI.
  As FAS citizens are allowed free entry into the United States as part 
of the compact, many FAS citizens reside in the State of Hawaii. Since 
1997, when Hawaii began reporting its impact costs, the State has 
identified over $140 million in costs associated with FAS citizens. In 
2002, the State of Hawaii expended over $32 million in assistance to 
FAS citizens, with the highest costs reported in education. The State 
of Hawaii has received a total of $6 million in compact impact aid, 
largely due to our efforts in the Senate and the leadership of the 
senior Senator from Hawaii, Mr. Dan Inouye. This modest amount of 
funding, however, does not adequately reimburse the State of Hawaii for 
its costs over the past 17 years.
  S.J. Res. 16 includes $15 million in mandatory funds to be 
distributed annually between the State of Hawaii, Guam and the CNMI for 
compact impact aid. While it is an improvement to have mandatory 
funding earmarked for compact impact aid, the amount is not based on 
the actual costs to the affected areas over the past 17 years. As I 
have just said, for 2002 alone, the State of Hawaii spent over $32 
million on services for FAS citizens. I plan on offering an amendment 
to increase the amount of annual compact impact aid to the State of 
Hawaii and other affected areas. I am also drafting an amendment which 
would authorize reimbursement for the funds expended by the governments 
of the affected areas between 1986 and 2003.
  Hawaii's medical providers have also suffered because they are owed 
thousands of dollars in unpaid medical bills. Some of the debt has been 
incurred by individuals, FAS citizens lacking financial resources--who 
present themselves to medical providers for treatment. Other debt, 
however, is a result of the medical referral program, and is to be paid 
by the FSM and RMI governments. The medical referral program allows FAS 
citizens to travel to Hawaii for medical treatment to be paid by the 
FSM or RMI because such treatment is not available in their country.
  During its consideration of the original compact, Congress recognized 
this problem and authorized funding for unpaid debts related to the 
medical referral program which were incurred prior to 1985. 
Unfortunately, the problem has continued. Hawaii's medical providers, 
who are already having difficulties meeting the health care needs of 
their communities, are unfairly penalized because of the inability of 
the island governments to pay the medical bills associated with the 
medical referral program. I will introduce an amendment that would 
extend the authorization for funding for the medical referral program 
debts to 2003.
  I also plan to offer amendments which would alleviate the compact's 
cost to the State of Hawaii by restoring and establishing the 
eligibility of FAS citizens for programs such as Medicaid, Food Stamps, 
and Temporary Assistance to Needy Families, TANF.
  It is imperative that we restore eligibility of FAS citizens for non-
emergency Medicaid. FAS citizens lost many of their public benefits as 
a result of the Personal Responsibility and Work Opportunity, PRWORA, 
Act of 1996, including Medicaid coverage. FAS citizens were previously 
eligible for Medicaid as aliens permanently residing under color of law 
in the United States.
  After the enactment of welfare reform, the State of Hawaii could no 
longer claim Federal matching funds for services rendered to FAS 
citizens. Since then, the State of Hawaii, Guam, American Samoa, and 
the Commonwealth of the Northern Mariana Islands have continued to meet 
the health care needs of FAS citizens. The State of Hawaii has used 
state resources to provide Medicaid services to FAS citizens. In 2002 
alone, the State spent approximately $6.75 million to provide Medicaid 
services without receiving any federal matching funds.
  There has been an increasing trend in the need for health care 
services among FAS citizens. During the current fiscal year, the number 
of individuals served in the State of Hawaii's Medicaid program has 
grown from 3,291 to 4,818 people based on the average monthly 
enrollment. This is an increase of 46 percent. For only the first half 
of the fiscal year, the State of Hawaii has spent $4.66 million for the 
Medicaid costs incurred for FAS citizens. These Medicaid costs do not 
reflect additional State expenditures on medical care contracts to care 
for the uninsured, community health care services, and for the 
activities of the Department of Health's Communicable Disease Branch.
  The Federal Government must provide appropriate resources to help 
states meet the healthcare needs of the FAS citizens--an obligation 
based on a federal commitment. It is unconscionable for a state or 
territory to shoulder the entire financial burden of providing 
necessary education, medical, and social services to individuals who 
are residing in that state or territory when the obligation is that of 
the Federal Government. For that reason, I am seeking to provide 
reimbursement of these costs. It is time for the Federal Government to 
take up some of the financial responsibility that until now has been 
carried by the State of Hawaii, CNMI, and Guam, by restoring public 
benefits to FAS citizens.
  Eligibility of FAS citizens for nonemergency Medicaid must be 
restored. In addition, the State of Hawaii, Guam, American Samoa, and 
the CNMI should be reimbursed for the Medicaid expenses of FAS citizens 
incurred since 1996. It is the right thing to do.
  Continuing along the lines of assisting FAS citizens towards long-
term self-sufficiency, I would now like to turn to the issue of social 
services. The need for support provided by a safety net of social 
services becomes apparent when we take a look at the economic 
conditions FAS citizens face at home. In 2001, per capita income, as 
measured by purchasing power parity, was $1,600 in the RMI and $2,000 
in the FSM. This amounts to almost $8,000 below the poverty threshold 
per capita in the U.S. for that same year. Furthermore, many FAS 
families are single-parent households and face many barriers to 
employment, including low or no-job skills, low levels of education, 
and disabilities.
  This is why it is important to provide Federal support through social 
service programs while continuing to develop new economic opportunities 
for FAS citizens. Otherwise, the impact of serving FAS citizens will 
continue to be felt outside of the FAS. For instance, in Hawaii, 
according to the state's Attorney General, financial assistance in the 
form of the Temporary Assistance to Other Needy Families, TAONF, 
program, a State program, provided $4.5 million to FAS citizens in 
State Fiscal year 2002. This amount is secondary only to the amount 
spent to provide educational services to the FAS. Of

[[Page 20825]]

this total, $390,000 went to the General Assistance program, which 
supports individuals and couples with little or no income and who have 
a temporary, incapacitating medical condition; $532,000 supported aged, 
blind, and disabled FAS citizens with little or no income who are not 
eligible for federally-funded Supplemental Security Income SSI; and 
$3.6 million went to the State's TAONF program that assists other needy 
families who are not eligible for federal-funding under the Temporary 
Assistance to Needy Families, TANF, program.
  The number of FAS citizens served by the Hawaii Department of Human 
Services has increased by almost 20 percent in the span of one year 
alone. The financial assistance that the State of Hawaii provides to 
FAS citizens in the form of TAONF is a great support to those families 
attempting to achieve economic stability.
  I am also planning on offering an amendment to make FAS citizens 
eligible for the Food Stamp Program. The Food Stamp Program serves as 
the first line of defense against hunger. It is the cornerstone of the 
federal food assistance program and provides crucial support to needy 
households and those making the transition from welfare to work. We 
have partially addressed the complicated issue of alien eligibility for 
public benefits such as Food Stamps, but again, I must say it is just 
partial. Not only should all legal immigrants receive these benefits, 
but so too citizens of the FAS. Exclusion of FAS citizens from federal, 
state, or local public benefits or programs is an unintended and 
misguided consequence of the welfare reform law.
  We allow certain legal immigrants eligibility in the program. Yet FAS 
citizens, who are not considered immigrants, but who are required to 
sign up for the Selective Service if they are residing in the United 
States, are ineligible to receive food stamps. We must correct this 
inequity. I will work on clarifying current law regarding FAS citizens' 
eligibility for various federal assistance programs, including TANF and 
Food Stamps.
  In addition, I ask my colleagues to support efforts to extend current 
TANF state waivers and reinstate recently expired state waivers. Hawaii 
has been operating under a waiver approved by the U.S. Department of 
Health and Human Services since 1996. To date, Hawaii has met all of 
its employment goals, despite experiencing difficult economic times in 
the 90s and into the current decade. This waiver maintains protections 
for disabled individuals, including FAS citizens, which were reported 
in the State Fiscal Year 2002 as numbering over 200. I am concerned 
that proposals that would limit various support services to this 
disabled population to three months would guarantee failure for many 
Hawaii families, including FAS citizens, should Hawaii's waiver be 
allowed to expire. I look forward to working with my colleagues on the 
Finance Committee on this separate TANF reauthorization issue.
  I cannot stress the importance of the Compact of Free Association to 
the Pacific islands, the State of Hawaii, Guam, the Commonwealth of the 
Northern Mariana Islands, and American Samoa. The United States made a 
commitment to help these countries attain self-sufficiency through 
economic development and Federal programs based on a political 
relationship unique to this situation. We must honor this commitment by 
ensuring adequate resources to meet our obligations. We cannot treat 
the FSM and RMI as mere allies and foreign nations--the political 
relationship of free association calls for more than that. We must 
provide Federal benefits such as Food Stamps, TANF, and Medicaid to FAS 
citizens residing in the U.S. We must ensure that the trust funds for 
each country have sufficient funding to ensure that in 20 years, the 
RMI and FSM will be able to function as economically independent 
nations. We must improve the infrastructure of the education and 
medical systems in the RMI and FSM to alleviate the long-term impact of 
the Compact on the State of Hawaii and Pacific territories. We must 
continue eligibility in federal education programs such as Head Start, 
the Individuals with Disabilities Act, Pell Grants, title I, and the No 
Child Left Behind Act to ensure that we equip future generations of 
Micronesians and Marshallese with the educational tools necessary to 
succeed in the 21st century. We must do all of this in a culturally 
sensitive manner.
  We have a big challenge ahead of us, to keep the commitment we made 
in 1986. I look forward to working with all of my colleagues on this 
important endeavor.
  Mr. CORNYN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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