February 20, 2004
Federal Indian law and policy has changed gears so many times Indian people have "policy whiplash." It has been 33 years since President Richard Nixon issued his "Special Message to Congress on Indian Affairs" proposing what was then considered a revolutionary federal Indian policy based on the core principles of economic self-sufficiency and local decision-making.
The policy - Indian self-determination - is now accepted by most policymakers in Washington and around the nation because it has begun to reinvigorate tribal governments and lift the standard of living of Indian people nationwide.
Nixonís policy shift ultimately led to Congressional action and the passage of the Menominee Restoration Act, the return of the sacred Blue Lake lands to the Taos Pueblo, the Indian Self-Determination and Education Assistance Act, the Indian Financing Act, the Tribal Self-Governance Act, and other initiatives that continue to assist tribes in their drive to achieve greater autonomy.
The new policy resulted in the federal government redirecting funding and program responsibility directly to the tribes so they could reassume control over their own lives.
In the process of implementing their contracts and compacts with the federal government, the tribes have improved service delivery to their members and honed their skills that can be used in other areas, like business development.
As we look to the future, we should encourage other tribes to emulate those successful contracting tribes through proper incentives - like full funding for contract support costs - and to expand tribal contracting into other areas such as managing federal lands containing sacred places, and federal programs like Head Start and others.
As successful as contracting and compacting is, we need to recognize it for what it is - an interim phase in which tribes manage federal programs and federal funding. In the long run, federal policy ought to focus on encouraging tribes to expand their economies and generate and manage tribal revenues.
If you believe as I do that this is the primary challenge facing tribal governments, the question we need to address is how can Indian self-determination be taken to the next stage?
I think we should look first at the scope of the problem. Current statistics suggest that the jobless rate in Native communities is somewhere between 45 percent and 80 percent - an unacceptably high level of unemployment and especially so when compared to the U.S. national rate of 5.6 percent. The earning capacity of Native people also lags behind that of other Americans. For every $100 earned by the average non-Indian family, an Indian family earns $62. The average annual per capita income for Indians is $8,284, far less than $14,420 for Americans as a whole.
Anyone who has lived or visited an Indian reservation has seen the effect of these numbers on the faces of Indian children.
Indian communities were not always so poor and the Indian tradition did not always have multi-generational poverty and dependence on government assistance. How did this happen?
The cultivated dependence of the past 200 years has stymied Indian economies and crushed the Indian spirit. To break this cycle, I believe that Indian America cannot and should not depend on the kindness of Congressional appropriators or federal officials.
I do not believe that the "federal option" of relying solely on federally-funded programs will ever be the answer to the economic problems facing Native people and hereís why.
It is the private sector - not the government - that creates jobs, produces wealth and investment, and it is the private sector that we see alive and well today on a handful of Indian reservations in the form of successful gaming operations, telecommunication projects, energy ventures, tourism and hospitality efforts, and manufacturing activities.
As we look ahead, we should realize that we are not starting with a blank slate here: we have an idea of what works and what does not when it comes to economic development.
The experience of the tribes over the last three decades provides insight into what a successful policy looks like. I believe a more rational and productive development policy rests on expanding the ideas of the Nixon policy and making the tribes the central decision-makers in the economic realm.
In order to give an idea of such a policy, I offer five pillars of a new Indian economic strategy.
1. Discipline the beast. Every year billions of federal dollars are appropriated to address aspects of Indian development including job training, physical infrastructure, feasibility studies, project finance, and many others.
With many tens of billions appropriated in just the last ten years, and given the economic situation in Indian communities, can anyone seriously argue that these dollars are having their desired impact? Can anyone really maintain that what passes as "Indian development policy" is nothing more than an uncoordinated, undisciplined and, ultimately, ineffective, sham?
The answer to me is plainly in the negative.
Federal funds would be more disciplined, better managed, and would have greater impact if the tribes - not the federal agencies - had authority to tailor the programs to their needs as they do in self-determination contracting and self-governance compacting.
When contracting and compacting were first proposed, the agencies were hardcore opponents of those programs and they will undoubtedly oppose any effort to give the tribes expanded authority over federal economic development resources and decisions.
But agency objections cannot change the unalterable fact that contracting and compacting are universally successful. We should take the principles that underlie these models and apply them to the many economic and business development programs offered by the federal government to benefit Indian communities.
One way to do this is to pass the "Indian Tribal Development Consolidated Funding Act of 2003" (S.1528), a bill that I introduced to encourage the integration and consolidation of existing programs and services aimed at Indian communities.
2. Free tribes to raise money in the private markets. Indian communities are in need of capital for physical infrastructure as well as development projects and for those who fear these needs will cost more than the federal budget can bear I have two words: tribal bonding.
Last year I introduced the "Tribal Government Tax Exempt Bond Fairness Act of 2003" (S.1526) to help Indian tribes raise capital in the private markets for purposes of job creation and economic development.
By making modest adjustments in current law, S.1526 will have far-reaching and positive effects for tribal governments and their members across the country and will achieve these goals without having to dip into the federal treasury.
The fact is that tribes, like state governments, are responsible for a host of services not only to their members but to non-members who live on or near their lands. These services include fire, police and ambulance service, road and bridge maintenance, and a host of others.
Unlike the states, however, tribal governments face severe restrictions in their ability to finance development by issuing debt: the law forbids tribes from issuing tax-exempt bonds for any project unless it can meet the so-called "essential government function" test.
So for the holder of a tribal bond to receive income from that bond exempt from federal tax, it must be issued for activities that are "governmental" in nature. Examples of the kinds of projects that have been ruled by the Internal Revenue Service as falling outside this test are tribal convention centers, hotels, and golf courses.
State governments are not limited by the "essential government function" test when they issue tax-exempt debt and S. 1526 will not only eliminate the disparate treatment to which tribes are now subject.
Armed with this bonding authority, tribes will strengthen their economies, provide for their members and others, and lessen their reliance on federal programs and services.
3. Pooling capital makes sense. Discipline in how federal funding is spent can also be encouraged if the tribes were to create, fund, and operate a tribal development corporation that would use a blend of federal and tribal resources and expertise for economic development purposes.
Such a development corporation would increase access to capital investment and greater coordination among and between the tribes and the federal government when it comes to project lending in Native communities.
Last year I introduced legislation - "The Native American Capital Formation and Economic Development Act of 2003" (S.519) - to provide a means for all the tribes to coordinate and pool resources to help the needier tribes with capital and to provide access to technical resources and analyses of the structural problems in Indian economies.
The concept of S.519 is similar to that of the World Bank and other development banks such as the Inter-American Development Bank, the Asian Development Bank and the East European Development bank. The core idea is that the shareholders of the banks are the countries themselves and the pooled capital resources are directed to those member countries which have a need for development assistance.
These development banks are regional or global in scope and have helped their member nations rebuild after war or other debilitating events and strengthen their struggling economies.
The reality is that the problems faced by most developing countries - lack of infrastructure, capital flight, and political risk - are often the same ones facing Indian tribes here in America.
I believe there is much to be learned from the international development models and the lessons of the last 60 years and apply that knowledge to the tribes in their own effort to strengthen their economies.
I recognize that some gaming tribes are undertaking the kind of activities called for by S.519 and are lending millions of dollars to other not-so-fortunate tribes to meet their needs.
I also believe that a more formal network of tribal efforts is warranted for a number of reasons. A collective effort by tribes - in the form of a tribal development corporation - can offer many different kinds of assistance and loans to struggling tribes, identify business opportunities in Indian country, bring "simultaneity" to economic efforts, and in the process make the corporation a profitable, long-term proposition.
4. Building business-friendly environments. For any economy to experience sustained growth over time, it must be aided by the kind of economic environment that is friendly to risk-taking, entrepreneurship, and the private-sector. Creating such an environment involves many efforts such as commercial codes and land use ordinances, transparent judicial systems, a healthy and educated workforce, and a physical infrastructure to sustain long-term economic growth.
One way to analyze inhibitors to investment and growth in Indian economies has already been enacted into law. In 2000, I authored legislation that was signed into law to create the "Regulatory Reform and Business Development on Indian Lands Authority" to identify anachronistic and uneconomic regulations, laws, and policies and make recommendations to Congress on how those regulations, laws and policies ought to be changed.
The Authority would be made up of tribal leaders, federal officials, and members of the business sector. If our own U.S. Commerce Department would see fit to fund and breathe life into the Authority, it could provide a valuable service to all tribes interested in economic reforms and growth.
5. Putting Indian tribes in the driverís seat. As the work of Dr. Joe Kalt and the Harvard Project on Indian Economic Development has shown, the hallmark of successful development strategy is tribal decision-making - rather than federal decision-making - when it comes to economic activities.
Kalt has demonstrated that it is tribal decision-making - which he calls "de facto sovereignty" - that strengthens tribal governing capacity and leads to better resource allocations and economic decisions.
Future Indian economic policy ought to be guided in part by increasing tribal authority and control over tribal resources and decisions that are properly their decisions and not the decisions of faceless, unaccountable bureaucrats in Washington.
For instance, one of the provisions in the Native American Energy Development and Self-Determination Act of 2003 would unshackle Indian leasing decisions from the time-consuming and paternalistic requirements where the Secretary of the Interior reviews and approves every single lease of Indian land for energy purposes.
Incredible as it sounds in this era of self-determination, this is what the law now requires.
The Indian energy bill, included as Title V in the comprehensive energy legislation (H.R.6) pending before the Senate, would provide authority to willing tribes to assume greater control and responsibility over energy leasing decisions and their own resources. This type of authority will ultimately encourage tribes to develop such resources more effectively and efficiently, and in turn result in greater levels of employment and income to tribal members.
At the start of this new millennium, we have a great opportunity to increase tribal control, reduce bureaucracy, and come together in a collective effort to decrease our dependence on federal funding, reinvigorate Indian economies, and create more opportunities for Indian people.
If we seek a policy built on the status quo, then there is no need to do anything differently. But who, in Indian country or in the halls of Congress, can say that the status quo is working and that it is acceptable? I canít.
Coloradoís senior U.S. Senator Ben Nighthorse Campbell was the first American Indian to chair the Indian Affairs Committee. Sen. Campbell, a Republican, is a member of three other key Senate committees: Appropriations Committee; Energy and Natural Resources Committee; and VeteransĀEAffairs Committee. In addition Senator Campbell chairs the prestigious Helsinki Commission.
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