Gains for Indian country in compromised stimulus bill

Update on final bill at end of story.

WASHINGTON – Indian programs fared well in the final version of the economic stimulus plan brokered by the Senate and House. They would have fared even better had a compromise not occurred, but without a deal not enough Republicans would have supported the bill to prevent a filibuster in the Senate.

The $787 billion bill was expected to be signed by President Obama within days. It includes approximately $507 billion in spending programs and $282 billion in tax relief.

The new president said he expects the plan to save or create 3.6 million jobs nationwide.

Keith Harper, a Native affairs lawyer with Kilpatrick Stockton and former member of Obama’s transition team, said important tribal provisions were included in the final legislation. He estimated that Indian country would receive about $3 billion overall as a result of the measure in areas including infrastructure, health and education.

“Would I have wanted to see the amount higher? Yes,” Harper said. “Is it a whole lot better than we did under the Bush administration? Absolutely.”

Officials with the National Congress of American Indians had previously asked Congress to provide $6.14 billion to Indian country as part of the stimulus package.

Some lawmakers, including Senate Indian Affairs Committee Chairman Byron Dorgan, D-N.D., worked hard as the compromise progressed to keep as much tribal money in the final bill as possible.

Barry Piatt, a spokesman for Dorgan, said that much of the money senators had been advocating for Indian country made it through the negotiations.

After the legislation was brokered Feb. 11, some Indian country officials said increased money to a variety of bond programs could prove especially advantageous to tribes. The legislation calls for billions of dollars worth of tribal tax-exempt bonds, tax credit bonds, renewable energy bonds and school construction bonds.

Chris Stearns, a Navajo lawyer who used to work on Capitol Hill, said the greatest long-term impact of the stimulus for tribes will lie in the billions of dollars in new bonds available for roads, construction, schools, energy projects and Internet access.

The bill also wipes out most of the current IRS restrictions on the ability of tribes to issue tax-exempt bonds, Stearns noted.

In the specific area of Tribal Economic Development Bonds, the Senate and House both provided $2 billion for tax-exempt TEBDs issued by the Treasury Department. Revenue generated by tribes through the sale of TEBDs may be used to provide capital for tribal infrastructure projects, but not for Class II or Class III gaming facilities or any off-reservation facility.

A preliminary analysis from the Hobbs, Straus, Dean & Walker tribal affairs law firm placed significant emphasis on the legislation’s removal of what the firm called the “onerous” essential government function restriction. The elimination of that requirement is expected to provide tribes with far more flexibility to issue bonds for a wider variety of projects.

In terms of Indian school construction bonds, the Senate and House both allocated $400 million for tax credit bonds for the construction, rehabilitation and repair of BIA-funded schools.

As the deal progressed, Indian country did take some hits. For instance, an amendment filed by Sen. Tom Udall, D-N.M., would have added funding to a number of tribal programs, but it was ultimately not offered on the Senate floor.

Overall, the legislation cut back Democrats’ proposed spending on some Indian education and Head Start programs that help Native youth in favor of tax cuts that were necessary to win Republican Senate support.

During the National Indian Education Association annual legislative summit in February, some Native education experts expressed displeasure that Senate compromises ended up providing less money to Indian education than the initial House version of the bill.

“We are disappointed,” said Lillian Sparks, executive director of the organization, Feb. 9 after the State of Native Education address by NIEA President Robert B. Cook at the National Press Club.

Before the deal-making occurred, there would have been almost double the amount of funding available to Head Start and early Head Start for Indian children, said Gregory A. Smith, a lawyer with Smith & Brown-Yazzie.

Smith believes that increased funding for Head Start can help stimulate the economy by helping more parents become able to work and to help poorer families that would not otherwise benefit from tax cuts.

The compromise ultimately eliminated a total of $16 billion in aid for school construction and cut health care subsidies for the unemployed. Some of that money would have gone to Indian country.

Update: Upon further analysis of the final stimulus bill passed by Congress, Indian country will be eligible for $4.2 billion, according to lawmakers. Analysts had been estimating $3 billion before the bill actually passed, but the final numbers indicate Indian country will receive $2 billion in direct funding and $2.2 billion in bonding authority. More to come.