Budget Conference Committee reaches Budget Deal for Fiscal Years 2014-15

Budget Conference Committee reaches Budget Deal for Fiscal Years 2014-15

This week, the Budget Conference Committee struck a deal to fund the federal government through the fall of 2015, which—if approved by the House and Senate—would go far towards avoiding a repeat of October’s Government shutdown. The House announced that it will vote on this deal on Thursday, December 12th before adjourning for the remainder of the year on Friday, December 13th. If the deal passes the House, the Senate will vote on the deal next week.

If the Budget deal can pass these hurdles, it would be a rare if not historic display of bi-partisanship in these contentious times. For Indian Country, the agreement will help at least partially avoid the second round of sequester cuts (7.2%) that are scheduled to go into effect on January 15, 2014, when the current FY14 continuing resolution is set to expire. This deal amounts to a modest increase in spending levels over FY13 and, again, would replace the second round of across-the-board sequester cuts mandated by the 2011 Budget Control Act (BCA). The first round of cuts in FY13 (5%) have already had a dramatic and adverse impact on tribal programs such as law enforcement, education, health care and other tribal services that faced cuts of over $500 million in the second half of FY13 alone.

The Terms of the Deal

The Budget deal would increase discretionary spending level for FY14 at $1.012 trillion, which is $45 billion higher than would be mandated under the House passed Budget. The new spending level for FY15 would be $1.014 trillion. This agreement provides a total of $85 billion in savings that will be covered by a mix of targeted spending cuts and non-tax revenues over the next several years. These efforts will result in $63 billion in sequester relief over the two fiscal years (FY14 and FY15), which will be split evenly between defense and domestic discretionary programs, and over $20 billion in deficit reduction.

Responding to criticism by some members of the Republican conference that this deal will weaken sequestration, House Budget Committee Chairman Paul Ryan (R-WI) called the agreement “a step in the right direction,” which protects the Pentagon from sharp cuts and reduces the deficit by more than $20 billion. Chairman Ryan expressed confidence that the deal will pass the House.

To help cover the cost of this agreement, the deal includes $12.6 billion in higher security fees for airline passengers, $8 billion in higher premiums for federal pension benefits, $6 billion in reduced payments for student loan debt collectors, $3 billion by not completely refilling the Nation’s petroleum reserves, $12 billion in savings come from reduced federal contributions to federal worker pensions, and the final $21.5 billion would come from a mix of fees and spending cuts—including smaller annual cost-of-living increases for military early retirees under the age of 62, a cap on government contractor salaries, and blocking federal prisoners from receiving unemployment benefits, among other items.

Senate Budget Committee Chairwoman Patty Murray (D-WA) said, “this agreement breaks through the recent dysfunction to prevent another government shutdown and roll back sequestration’s cuts to defense and domestic investments in a balanced way…that can hopefully rebuild some trust and serve as a foundation for continued bipartisan work.”

Absent from the deal are any reforms of entitlement programs, extension of unemployment insurance, and a tax deal. In addition, the agreement does not address the debt ceiling, which was extended through February 7, 2014. The Budget Conference Committee focused on a narrow deal that would not get mired down in partisan disagreements. These outstanding issues will emerge in the New Year when Congress reconvenes in January.

Next Steps

The deal will not increase the spending levels enough to avoid cuts altogether but does soften the blow by raising the spending levels for FY14 and 15. The increase in spending levels for discretionary programs will pave the way for Congress to return to “regular order” in January 2014 when congressional appropriators will consider FY14 funding bills to focus on domestic priorities.

Of the 12 different appropriations bills, the one most critical to tribal governments is the Interior, Environment and Related Agencies Appropriations bill (Interior Appropriations), which funds the BIA, the IHS, and programs they administer. In March of this year, the House and Senate set budget allocations for each of the 12 appropriations bills. The House allocated $24.3 billion for FY14 Interior Appropriations, which is 18.6% below the FY13 enacted level and 14% below the post-sequestration level. The Senate allocated $30.1 billion for FY14, a slight increase over FY13 for all Interior, EPA, and related agencies programs. Under the new budget deal, which is a midway compromise between the House and Senate, the budget allocations for these appropriations measures will increase, which will ultimately benefit tribal programs.

For the past three fiscal years, members of the House Interior Appropriations Subcommittee (Subcommittee) have worked together to protect tribal programs to the greatest extent possible from drastic cuts. These members include former Subcommittee Chairman Mike Simpson (R-ID), Ranking Member Rep. Jim Moran (D-VA), Rep. Tom Cole (R-OK), Rep. Betty McCollum (D-MN), and Rep. Chellie Pingree (D-ME). Reps Cole and McCollum also serve as Co-Chairs of the House Native American Caucus. The new Chairman Ken Calvert (R-CA) and Indian country allies serving on the Subcommittee have signaled a strong desire to fulfill the U.S.’s legal treaty and trust obligations and protect tribal programs.

Supreme Court Hears Arguments in Tribal Immunity Case

Supreme Court Hears Michigan v. Bay Mills – Tribal Sovereign Immunity Case

On Monday, December 2, 2013, the U.S. Supreme Court heard oral arguments in Michigan v. Bay Mills Indian Community, a case involving questions of Indian gaming, jurisdiction, and tribal sovereign immunity.

The questioning was tough for both sides of this argument. Justices that seemed to side with the Tribe questioned the motives of the State of Michigan in bringing the suit in federal court. They acknowledged that the State has state law remedies to resolve their concerns, and noted that the Tribe’s casino is closed. In addition, they noted that if the State of Michigan finds this remedy inadequate, it could ask Congress to fix the perceived problem.

Justices that seemed to side with the State took the view that the state’s arrest power remedy is inadequate and the federal government is doing nothing to deter tribes from opening off-reservation gaming operations on non-Indian lands. These justices also noted that Congress has not addressed tribal sovereign immunity in 15 years since the last Supreme Court case on tribal sovereign immunity (Kiowa).

All of Indian Country takes great pause any time the current U.S. Supreme Court weighs the issue of tribal sovereignty. The Court is expected to issue its decision in February or March of 2014. You can view the transcript of the oral argument by clicking here.