1. Update
  2. Native Americans

Tribal Sovereignty and Governance

A Budget Short Story

June 12, 2017


Among the many twists and turns in federal policy toward Indian nations, the federal government turned away from its termination and relocation policies and, in the 1970s, began taking steps to strengthen and respect tribal self-governance. Now the U.S. needs to commit to the budget implications of that policy.

In the late 1960s and early 1970s under President Nixon’s leadership, the federal government began to turn away from its termination and relocation policy, and to embrace policies that would support and strengthen tribal self-governance. President Nixon address the Congress on July 8, 1970, saying:

“The special relationship between Indians and the federal government is the result of solemn obligations that have been entered into by the United States government. Down through the years, through written treaties and formal and informal agreements, our government has made specific commitments to the Indian people. For their part, the Indians have often surrendered claims to vast tracts of land and have accepted life on government reservations. In exchange, the government has agreed to provide community services such as health, education and public safety—services that would presumably allow Indian communities to enjoy a standard of living comparable to that of other Americans. This goal, of course, has never been achieved. But the special relationship between the Indian tribes and the federal government that arises from these agreements continues to carry immense moral and legal force.”

Under the laws that implement the self governance policy, an increasing number of tribes have entered into contracts with the federal government to manage federal programs directly.

As part of the contracts, tribes are to be reimbursed for the cost of administering programs – infrastructure, health, education, and others – that would otherwise be administered directly by federal employees. These contractual reimbursements are called “contract support costs.”

For years, the federal government failed to meet its reimbursement obligations; Congress argued that other federal priorities (such as the military budget or tax cuts) had to come first. Tribes turned to the courts to protest the government’s failure to pay, and ultimately won three Supreme Court cases that affirmed the contractual obligations undertaken by various federal agencies. Under the Obama administration, the federal government caught up with past due payments, and proposed to Congress that “such sums as are necessary” be permanently authorized and appropriated to cover these obligations.

The President’s budget proposal would short-fund its $1 billion federal obligation to cover contract support costs by more than $118 million. ($82 million would be cut from Indian Health Services contract support costs, and another $36.4 million from Bureau of Indian Affairs contracts.) The justification offered is that reduced funding for programs means that the cost of administering the programs is reduced. Aside from common sense and experience, the Supreme Court has officially rejected that logic in the 2012 case, Salazar v. Ramah Navajo Chapter.

The Appropriations Subcommittees on Interior and Environment will consider contract support costs for BIA programs and the Subcommittee on Labor, Health and Human Services, and Education will consider contract support costs for Indian Health Services. See the members here.