In testimony before the Senate Committee on Indian Affairs (SCIA) last week, Tribal leaders and advocates detailed how the ongoing federal government shutdown and agency reductions in force (RIF) are impacting Native communities. Representatives from several Tribal organizations emphasized that these disruptions constitute direct violations of the federal government’s trust and treaty obligations to Tribal Nations—obligations that are not discretionary but legally mandated and prepaid through the cession of millions of acres of Tribal lands and resources.
In his opening statement, Vice Chair Schatz (D-HI) said of the shutdown, “When the government shuts down, the trust and treaty and legal obligations do not vanish, but they are put at risk. Promises to provide healthcare, housing, education, and public safety, among many other critical services, are all on the chopping block. Communities are scrambling to secure alternate or reserve funding just in case their federal funds fall through, and several tribes have declared states of emergency due to the funding and service shortfalls” (15:45).
Critical Service Disruptions
Witnesses at the hearing outlined the widespread impacts of the federal government shutdown on Native communities, affecting access to food and energy, essential health services, and educational programs.
Basic Needs: With SNAP benefits expiring, Low-Income Home Energy Assistance Program (LIHEAP) funding unavailable, and subsistence programs disrupted, families are forced to choose between food and heat.
Health Services: While advance appropriations have protected most Indian Health Service operations, significant gaps remain in contract support costs, Section 105(l) lease payments, facilities funding, and other essential health services. Programs like the Special Diabetes Program for Indians face uncertain futures despite their proven success.
Education: Educational programs serving Native students are experiencing unprecedented disruption, with the Office of Indian Education potentially facing functional elimination, Impact Aid payments frozen for 537 school districts serving Native children, and critical programs like Title VI, Johnson-O’Malley, and Head Start facing funding gaps or closure.
To document these real-world effects, the National Congress of American Indians (NCAI) is collecting Tribal feedback through a confidential survey to illustrate how the shutdown is disrupting essential programs and services in Indian Country. Take the Survey →
Federal Workforce Reductions
Reductions in force across federal agencies have severely weakened the government’s capacity to fulfill its trust obligations. As Chairman Murkowski (R-AK) explained, “When federal employees are furloughed, the people responsible for carrying out the government’s trust and treaty obligations are unable to do their jobs. This disrupts native communities’ access to essential federal resources and services. Tribes and native leaders are reaching out for help and are being told, ‘Well, can’t help you now, the government is not open’” (12:06).
Witnesses highlighted how key positions supporting Tribal consultation, grant administration, technical assistance, and program oversight have been eliminated across the Department of Education, Health and Human Services, Interior, and other agencies. This loss of personnel has created bottlenecks in funding distribution, halted consultation processes, and severed critical communication channels between federal agencies and Tribal Nations. Native communities testified that they are already experiencing delays in grant awards, an inability to access technical assistance, and uncertainty about program continuity, making long-term planning impossible.
Economic Development and Financial Infrastructure Impacts
The economic development infrastructure serving Native communities faces existential threats, particularly through the proposed elimination of the CDFI Fund and termination of all its staff. Native Community Development Financial Institutions are the only financial institutions in 46 percent of Tribal communities—areas designated as banking deserts at twelve times the national average. Without the CDFI Fund’s certification process and the Native American CDFI Assistance Program, these institutions will lose access to both federal seed capital and the private investment that CDFI certification attracts, effectively cutting off the flow of capital for housing, small business development, and community infrastructure in areas already experiencing severe economic disadvantage.
Cumulative Impacts and Long-term Consequences
Throughout the testimony, witnesses stressed that the cumulative effect of the shutdown and workforce reductions extends far beyond administrative inconvenience—it threatens lives and livelihoods in communities that already experience the worst health outcomes and highest poverty rates in the nation. The loss of experienced federal personnel results in reduced capacity and institutional knowledge about how to serve Tribal Nations. While Tribal organizations have diligently prepared for shutdowns and built financial reserves, witnesses stressed that no preparation can offset a prolonged shutdown approaching historic length, especially when compounded by simultaneous workforce eliminations and policy uncertainty.
Recommendations and Call to Action
Witnesses uniformly called for Congress and the Administration to recognize that trust and treaty obligations cannot be subjected to political gridlock or administrative reorganization. They urged immediate action to:
- End the shutdown;
- Restore eliminated positions serving Indian Country;
- Expand advance appropriations to all Tribal programs and agencies; and
- Move toward mandatory rather than discretionary funding mechanisms that better reflect the legally binding nature of federal obligations to Tribal Nations.
Native communities are not asking for special treatment but rather for the federal government to honor promises made in exchange for the lands and resources upon which the United States was built. The ongoing shutdown and workforce reductions further erode these commitments, putting essential services and economic development at risk. Congress and the Administration must act to end the shutdown and ensure funding mechanisms reflect the legally binding nature of federal obligations to Tribal Nations.
Join the NAFOA Community Forum: The NAFOA Community Forum is a secure space for Tribal leaders, finance professionals, and stakeholders to connect, share experiences, and collaborate on issues affecting Tribal operations. Use the forum to document federal funding interruptions, discuss impacts from the government shutdown, and exchange best practices. Request access or log in at forum.nafoa.org.
If you have any questions or need additional information, contact Nicholas Lovesee, Policy Director at nicholas@nafoa.org, or Marisa Joseph, Policy Specialist, at marisa@nafoa.org.
