Northwest Indian Law & Business Advisor : Northwest Indian & Tribal Lawyer & Attorney : Williams Kastner Law Firm : Tacoma, Seattle, Portland

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Creating jobs was the overriding subject of Wednesday’s State of the Union Address. The President acknowledged that job creating and growth will be the primary focus of his administration in 2010, in order to restore prosperity to America’s middle class. While the President acknowledged that the national unemployment rate of ten perecent was unusually high, he did not mention that in some areas of Indian Country, the unemployment rate has consistenly hovered at 50 to 70 percent for many years. Senator Dorgan and fellow members of the Senate Committee on Indian Affairs conducted a hearing Thursday that launched a dialogue addressing the high unemployment in Indian Country. The panel of witnesses at this hearing included key leaders in the federal government, tribal government, and several corporations based in Alaska, but did not include business owners from privately-held tribal member-owned entities. As many economists have detailed in reports and the President stated Wednesday night, government programs designed to bolster the nation’s small businesses will help set the country on a speedier path to an economic recovery. Nationwide, small businesses compose about 50 percent of the country’s total number of business enterprises.

Small businesses deserve a place at the table both in the nation’s dialogue on economic recovery and in the dialogue addressing Indian Country’s battle with high unemployment. Williams Kastner represents one such company—Sister Sky—which took the initiative to draft and send its comments to Capitol Hill for inclusion in a discussion on how to build commerce within Indian Country. Sister Sky is a Native women-owned company with headquarters on the Spokane Indian Reservation. They provide high-quality natural bath products and employ a workforce largely composed of Native Americans in a community where jobs are scarce. The company owners believe that its business success can be useful to fostering job creation within tribal communities. Sister Sky executives crafted their comments to lawmakers in D.C.with the desire to participate in a dialogue that will be both good for businesses nationwide and good for their local tribal community. Following Sister Sky’s lead, tribal entrepreneurs and tribal-owned entities should direct their comments on building sustained tribal economies to members of Congress and the Senate Committee on Indian Affairs so that their insights may be included in this important economic policy discussion.

In addition to Sister Sky’s participation in plans for economic revitalization, the Pathways to Prosperity Program, operated by the United Indians of All Tribes Foundation, is sponsoring a career fair on February 4, 2010, in order to connect employers with job seekers. The career fair is scheduled to be held at the Daybreak Star Indian Center located in Discovery Park, Seattle. There will be state, county, and tribal governments present to recruit potential applicants. This event has, in the past, also attracted the likes of non-tribal businesses such as REI and Starbucks so it should prove useful for all types of applicants seeking work.
 

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On Wednesday evening, the President is scheduled to deliver his annual State of the Union Address before a joint session of Congress as the nation watches live on TV. The President delivers his address amidst an economic crisis which is compelling Americans to look to the President to provide specific and directed policy initiatives that will help create more jobs and bolster the country’s economy. After a severe and protracted defeat of the health care reform legislation, combined with the retirements of several key Democrats who were up for reelection in 2010, the nation is poised to hear solutions to real problems facing America’s families. In response, the President has announced that he will seek an immediate freeze on the federal budget as it relates to discretionary spending programs. The President will likely go into detail about this new initiative during his address as well as announce how he intends to pursue policies designed to spark the nation’s stalled economic engine.

As the President’s budget proposal currently stands, the federal budget would amount to $1.3 trillion for Fiscal Year 2010. At the end of 2009, the public-held debt stood at $7.5 trillion, and it is projected to double by 2020 if all laws and policies remain intact. The most recent report issued by the Congressional Budget Office indicates that the American economy will continue its slow climb out of the recession, with low job growth, stagnant growth in the financial markets, and elevated home foreclosures lingering. Federal sources of revenue are expected to increase slightly as several tax provisions expire in 2010, including the Economic Growth and Tax Relief Reconciliation Act of 2001, the Jobs and Growth Tax Relief Reconciliation Act of 2003, and the Making Work Pay tax credit. The $1.3 trillion budget that will be at the center of the President’s address includes $687 billion for national defense ($130 billion in 2010 and another $50 billion a year from 2011 to 2019 for the military operations in Iraq and Afghanistan) and $562 billion for non-defense programs.

The reductions recommended in the President’s budget include discretionary spending in energy (48.8% reduction); education, training, employment, and social services (14.8% reduction); and natural resources and the environment (7.4% reduction). Many federal programs supporting American Indians are discretionary spending measures and would likely be reduced per Obama’s new budget. Some programs which are completely eliminated or reduced under the President’s budget, as well as a list of government departments that will face steep budget reductions, include: public broadcasting grants, the Department of Agriculture, public telecom facilities, the Department of Commerce, rural community facilities, the Department of Health and Human Services, state grants given to establish safe and drug-free schools and communities, the Department of Education, water infrastructure earmarks, the Environmental Protection Agency, work incentive grants, the Department of Labor, and targeted funding for Alaska Native Village infrastructure, ($9 million reduction).

Ultimately, Congress must take into consideration the current economic situation when debating the proposals set forth in the President’s address. Lawmakers will enter the appropriations process with some sobering facts and a policy proposal which will likely force them to play with the hand they have been dealt.

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Health care, in this session of Congress, is not likely to fare well. Speaker Pelosi has stated that there is virtually no way to gather enough votes for the House to pass the Senate version of the health care reform bill before the mid-term elections. This essentially means that the health care reform initiative as it currently stands is likely to be dead before arrival. However, it appears that after the election of Senator Brown in Massachusetts, the President is seeking to seize upon voter frustration with in the typical standoff between Democrats and Republicans which results in lack of progress in our nation’s capital. The President announced that he would seek further regulation of Wall Street financial institutions in the form of imposing new restrictions upon banks engaging in proprietary trading. Congress will likely have to review and amend legislative initiatives currently being deliberated in order to accomplish the President’s new focus upon strengthening regulatory mechanisms over Wall Street’s financial institutions.

On January 28, 2010, the Senate Committee on Indian Affairs will conduct a hearing on proposing solutions to the high unemployment rates on Indian reservations. Yesterday, the House approved three water rights bills: H.R. 1065, H.R. 3254, and H.R. 3342. The direction of Indian country priorities will likely face shifting political emphasis after the State of the Union address and submission of the President’s budget.

Washington Legislature

The Washington Legislature continues to face mounting challenges in order to balance the state’s $31 billion budget. The source of state revenue continues its decline as the economy suffers through job losses in 2009 that reached 106,000. The forecast for the state’s economy shows that there will continue to be slow recovery, stagnant job growth, high unemployment, and less revenue collected. The state will be reliant upon Federal sources of funding and will be forced to implement policies that expand job opportunities and investment in state business development. Some notable bills to monitor include the following:
HB 2411: A bill to address subarea plan proposals as part of comprehensive land use planning.
HB 2493: A bill to address the taxation of cigarettes and other tobacco products.
HB 2749: A bill to address local government taxation. HB 2650: A bill to address utility taxes.
HB 1191: Incentives to support renewable solar energy. HB 1610: Incentives for use of biomass in renewable energy production. HB 1658: Incentives for utilities to promote renewable energy.
HB 1699: Implementing a high-speed internet deployment and adoption strategy for the state. HB 1249: Concerning internet and mail order sales of tobacco products.
 

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The next ten months will be very interesting as Congress deliberates after the President’s State of the Union Address. The balance of power has been impacted in the Senate as the Democrats hang on to a 59-seat majority with a Republican margin of 41 seats. The mid-term elections for Congress are scheduled for November 2010 and in the meantime Congress will address the federal budget, debate any jobs related policiesand determine the future of the health care reform bill. The position and the discussion that will ensue during the next ten legislative months will likely set the tone and agenda for issues which will be used by voters in determining their elected officials. The following information is a brief synopsis of a few of the key gubernatorial and congressional races in the western United States.

Washington

There is no scheduled gubernatorial race for Washington state in 2010 as current Governor Christine Gregoire’s term does not expireuntil 2012. In the Senate race, Senator Patty Murray is seeking reelection in 2010 and has enjoyed broad support from Democratic voters in the state. Sean Salazar, a chiropractor, and Wayne Glover, a trucker, have announced that they will challenge Senator Murray in the upcoming election on the Republican ticket. Some Republicans areintending to mount a serious challenge to Senator Murray by mobilizing voter turn-out and by encouraging high profile candidates such as Attorney General Rob McKenna or 8th Congressional District Representative Dave Reichert to enter the race.

Idaho

The Republican incumbent Governor C.L. “Butch” Otter is set to mount a reelection campaign in 2010 on favorable polling numbers. The challenger, Keith Allred, is a political novice when it comes to electoral politics and will face an electorate that is known for supporting conservative, Republican candidates. In the Senate, Senator Mike Crapo is seeking reelection in 2010 and has yet to see a serious challenge from the Democrats in Idaho.

Oregon

Former Governor John Kitzhaber is a favored candidate on the Democratic side of the ticket and he faces a challenge in the primary by former Secretary of State Bill Bradbury. The Republicans have several candidates which include Allen Alley, Bill Sizemore, and former State Senator John Lim. In Oregon’s Senate race, Senator Ron Wyden is seeking reelection in a heavily leaning Democratic state. Some Republican pundits have suggested that former Senator Gordon Smith would be a strong candidate to challenge Senator Wyden.

California

Jerry Brown has re-surfaced, again, as the Democratic candidate for Governor in the nation’s most populous state. The Republicans have some serious challengers among their candidates which include former eBay CEO Meg Ryan and State Insurance Commissioner Steve Poizner. Senator Barbara Boxer is seeking reelection for the U.S. Senate and faces a challenge from several high profile Republicans. Carly Fiorina, former CEO of Hewlett Packard; State Assemblyman Chuck DeVore; and former U.S. Representative Tom Campbell have all surfaced seeking the U.S. Senate seat for the Republicans.
 

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On January 19, 2010, there was a special election held in Massachusetts for the U.S. Senate seat vacated by the death of former Senator Edward M. Kennedy. The campaign for the vacant seat was marked by fierce political fighting within the Democratic party in order to craft a message which resonated with voters who are currently facing huge economic challenges, a burgeoning federal deficit, and widespread disagreement over the Obama Administration’s strategy to enact health care reform. The Republican party focused upon a candidate and a campaign which leveraged on voter anger at large Wall Street bail outs, high rates of unemployment, and potentially large deficit spending to accomplish health care reforms. Senator-elect Brown gathered 51.9% of the vote compared with the 47.1% accumulated by the Democratic challenger Martha Coakley. The election attracted voter turnout to the tune of 2.25 million people, which was about 73% of the total voters who turned out in the 2008 presidential election. The consequences of this election are significant, as the Democratic Party has lost its supermajority of 60 seats in the U.S. Senate, an advantage that allowed votes to be conducted on a party line basis and limited Republican filibusters.

The legislative agenda adopted by the Democratic leaders in Congress and the President is now largely at risk of being irrelevant in the remainder of the Congressional session leading up to mid-term elections in November 2010. The Administration and Democratic members of Congress will now likely be forced to appeal to moderate Republicans in the hopes of passing any legislation designed to address a wide range of issues including job creation, financial industry regulations and health care. For the time being, Democratic leaders have insisted that it is their intent to move the health care reform measure through Congress quickly. Some members of the House have indicated that they will adopt the Senate version of the bill and attempt to gather the 218 votes needed to clear the House. In order to move the House-passed bill, the Obama Administration and Senate Majority Leader Reid (D-NV) would have to pass a corrections bill through Congress by using budget reconciliation procedures. Budget reconciliation procedures only require 51 votes to pass a bill.

The health care reform debate may begin anew if the House cannot agree to adopt and pass the Senate version of the bill. The focus of the Administration and Congress may subtly shift to engaging on public policy debates to shore up an ailing economy and provide a responsive set of policy initiatives designed to increase jobs. The economic downturn which has resulted in sustained unemployment at levels not seen since the Great Depression is only adding to the desire of many politicians seeking reelection in 2010 to address employment and job issues. The upcoming State of the Union Address by the President will likely be the Democrats first opportunity to unveil any new economic and legislative initiatives. The Republican Party may be poised to gather more seats in Congress in the 2010 elections by focusing upon progressive policies tailored to improve the economy and spearheading efforts to ensure that Americans return to the workplace at a higher pace.
 

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On January 12, 2010, Governor Christine Gregoire delivered the State of the State address to the 61st Washington State legislative session. This year’s legislative session is slated to be a 60-day session that will likely be marked with frenzied activity and decision making that will provide deep cuts to an already deficit laden budget. The supplemental budget proposed by Governor Gregoire in December 2009 requested reductions in government services or programs to patch an expected $2.6 billion gap in funding. At the opening of her address, the Governor acknowledged all of Washington’s tribal leaders and recognized those in attendance including: Carol Hatch, Chairperson of the Quileute Tribe; Charlotte Williams, Chairperson of the Muckleshoot Tribe; and Mel Sheldon, Chairman of the Tulalip Tribes. Chairman Brian Cladoosby, Swinomish Tribe, gave the opening prayer to the address where he emphasized a humble and gentle approach to governing during this session of the legislature since many of Washington’s families are struggling to survive in the state’s depressed economy.

The Governor’s address focused upon the challenging economy and the difficult decisions ahead while asking for the legislature to have compassion when adopting legislative policy to implement cuts requested in the budget. The Governor sharpened her pledge to have a leaner and efficient government bureaucracy where she would reduce the size of the state government agencies by one-third and eliminate an additional 78 boards and commissions. In addition to bureaucratic reductions and eliminations, the Governor stated that it was the creation of jobs which would bring the state out of the current recession. Governor Gregoire suggestedthat adopting public policy in renewable energy, health care, technology, biotechnology, education, and public safety showed promise in developing jobs and securing the future economy of the state. Although the specifics of each public policy area were not detailed in her address, the Governor indicated that she would support a tax credit for small businesses that hire new employees, spur business development in renewable energy industries through infrastructure investment in the smart electrical gridand the streamlining of government permitting programs. Collectively, it is hoped that these measures will result in the creation of 40,000 new jobs with a commitment of $2 billion in capital investment from non-state government sources. Tribal businesses, tribal entrepreneurs, and other businesses wishing to do business in Washington should be formulating a position on these economic policies.

The Senate Ways and Means Committee began receiving testimony today on the proposed supplemental budget and will likely move the measure forward in an expeditious manner in the shortened time frame provided by this legislative session. The state budget along with the other measures introduced in this legislative session will set the tone and pace for Washington’s programs and policies for many years to come. The state’s economic and natural resources are facing a tough financial reality for the immediate future. Now is the time for state policy to incorporate tribal economies into the equation of developing and expanding opportunities to generate revenue and jobs in the state. The advantages of doing business with Washington’s tribes should be a factor when the state legislature is looking to offer incentives when attracting capital investment and business activity.