The government shutdown shows the need to reform how the federal government funds Native American Tribes and communities

While the effects of the federal government’s ongoing shutdown will be widespread, it will have a particularly damaging impact on Native American Tribes and people.

The federal government maintains trust and treaty obligations to Tribal Nations, citizens, and communities that are distinct from its relationships with other groups in the United States. In exchange for the lands and natural resources that now encompass the United States, the federal government entered into treaties and passed numerous laws, which court decisions have affirmed, that obligate it to provide certain funding and services to Tribal Nations, citizens, and communities. These obligations include supporting Native Americans’ health, education, land rights, natural resources, and economic well-being, among other areas.

However, while these obligations are the United States’ oldest continuous legal commitments, they continue to be chronically underfunded and uniquely vulnerable to government shutdowns compared to other federal funding to which communities are entitled by law.

This piece summarizes the challenges that the congressional funding process and government shutdowns present to Tribal Nations, citizens, and communities. It also offers proposals on how to ensure that obligations to Indian Country are more appropriately met and on how to strengthen funding to Tribal communities by shifting more funding for Indian Country to mandatory spending. Rather than returning to business as usual, legislators should use this moment to reevaluate and rework how the federal government meets its funding obligations to Tribes and Native American people.

(Liz Malerba, a co-author of this report, is the Director of Policy and Legislative Affairs for United Southern and Eastern Tribes Fund.)

How the federal government funds Tribes and Native American people

The FY2025 Native American Funding Crosscut, the U.S. government’s document aggregating all federal government spending on Tribes and Native American people each year, reported $37.5 billion in funding for Tribes and Native American–related programs in FY2024. (This document is subsequently called the Crosscut.) Of that total, just under $32 billion was appropriated or obligated in FY2024, while the remaining $5.6 billion was appropriated for use in future fiscal years.

However, estimates by Tribes and Native-serving organizations show that most federal programs serving Indian Country remain significantly underfunded. For example, the latest Indian Health Service (IHS) Tribal Budget Formulation Workgroup request places the agency’s total federal funding obligation at a minimum of $73 billion. These obligations are generated not only by treaties and court rulings, but also by specific statutory language in laws, such as the Indian Health Care Improvement Act. Despite this, Congress continues to appropriate far less—just over $7 billion in FY2025. Similarly, the FY2021 report from the Bureau of Indian Affairs (BIA) on the Tribal Law and Order Act cites a total funding obligation of $3.5 billion for public safety and justice alone, nearly $600,000 greater than the entire BIA budget in FY2025.

Compounding this chronic underfunding is the fact that most funding for Indian Country is based on discretionary spending, rather than mandatory spending (see Figure 1). When Native American programs are funded with discretionary spending, it means that Congress must affirmatively pass appropriations bills to fund them every year, despite the perpetual nature of these promises to Indian Country. If Congress does not pass a funding bill by the start of the government fiscal year on October 1, discretionary payments and services to Tribes and Native communities are halted, as is currently happening during this government shutdown. In contrast, mandatory spending programs, such as Social Security and Medicare, provide guaranteed benefits to recipients based on certain criteria. These permanently authorized programs are unaffected by government shutdowns or limited by annual appropriations.

In FY2024, according to the Office of Management and Budget (OMB), 69% of the funding that the federal government enacted for Indian Country was financed through discretionary spending, though (as discussed below) this figure may be an underestimate. This arrangement harms Tribal Nations in two ways. First, it restricts the amount of funding available to fulfill the United States’ trust and treaty obligations to Tribal Nations. Second, it makes the bulk of funding allocated to Indian Country subject to the unpredictability of the annual appropriations process, including the effects of government shutdowns.

Nearly 22% of discretionary spending amounts enacted for Native-related programs and services in FY2024 were advance appropriations, which is when Congress appropriates funding for future years to a program to allow it to keep operating in the event of a shutdown (as long as funding has not run out). The most notable Native-serving program that receives advance appropriations is IHS, an arrangement that allows IHS to continue offering medical services if a government shutdown occurs. These advance appropriations are noteworthy because, prior to 2023, IHS was the only major federal health agency funded through discretionary spending without advance appropriations, which left it severely affected by government shutdowns.

Prior to this change, IHS, Tribally operated healthcare programs, and urban Indian health programs were the only federally funded health systems without protections during a government shutdown. During the 2018–2019 government shutdown, Tribal and Urban health programs reported having to limit health services and facing instances of exhausted supplies like medications. According to the National Council of Urban Indian Health, “funding disruptions led to reduced services and facility closures, resulting in tragic consequences including loss of life due to opioid overdoses in some communities.” Additionally, during past government shutdowns, most IHS employees were required to work without pay, and a small number were furloughed, which disrupted services to patients and caused some facilities to lose critical healthcare providers when they could not maintain their salaries. Even without shutdowns, IHS facilities could not enter into long-term, potentially cost-saving contracts for supplies and services because they could only sign contracts for the length of time the government was funded. Advance appropriations helped solve these challenges.

A minority of spending enacted for Indian Country every year is funded through mandatory spending (just 31% in 2024). However, even those numbers may inflate the amount of support for Tribal communities that is provided as mandatory spending. This is because some of the largest sources of mandatory spending on Native people are from programs that are not specific to Tribes, such as Supplemental Nutrition Assistance Program (SNAP) benefits, also known as food stamps. In FY2024, SNAP benefits for Native households alone accounted for more than one-fifth (21%) of all mandatory federal spending on Native people and Tribes. As such, the share of mandatory spending designated specifically for Indian Country is far lower.

In addition, some of the largest mandatory programs serving Indian Country are what are known as appropriated entitlements. This means that—though their spending levels are determined by specific eligibility and benefit laws, not annual appropriations bills—their funding is still provided through annual appropriation acts, so these programs may be affected by government shutdowns. In FY2024, this included $2.2 billion in spending on Native American people through SNAP and nearly $169 million for the Food Distribution Program on Indian Reservations.

Meanwhile, well over half of federal funding for Indian Country must be legislated every year by Congress, and this funding may be subject to being halted in the event of a government shutdown. For example, the Crosscut shows that over 90% of the BIA’s FY2024 funding came from annual discretionary funds. This included nearly $1.9 billion in funding for Operation of Indian Programs, the BIA’s largest budget account, which funds many programs and activities for Tribal governments, such as infrastructure, natural resource management, human services, and economic development. FY2024-enacted funding also included $431 million in Contract Support Costs, which reimburse Tribes for expenses incurred while operating federal programs under the Indian Self-Determination and Education Assistance Act.

And while IHS itself received advance appropriations for medical services, some key medical and public health programs did not. For example, although IHS and Tribal health clinics are continuing to operate during the current shutdown, their ability to provide telehealth for many Medicare patients has lapsed. As another example, on October 9 the Inter-Tribal Council of Nevada was forced to suspend their Women, Infants, and Children (WIC) nutrition assistance program.

The Crosscut shows that the Bureau of Indian Education (BIE) is likewise funded entirely out of annual discretionary funding, including over $1.1 billion for Operation of Indian Education Programs and nearly $235 million in Education Construction. Other education funding—including $500 million for childcare programs from the Child Care and Development Fund, $352 million for Head Start, $3.3 billion for local education agencies that teach Native students, and almost $64 million for Tribal Colleges and Universities (TCUs) in FY2024—also came from annual discretionary appropriations.

The government shutdown leaves Tribes and Native American people at risk

Past government shutdowns have been especially hard on Indian Country, with compounding effects the longer a shutdown lasts. For this shutdown, Tribal advocates are once again anticipating these impacts for Tribal-serving programs and funding lines that rely on discretionary appropriations.

In some cases, discretionary programs can continue operating during a government shutdown. For example, BIE schools are able to continue operating for the remainder of the school year because funds for the 2025–2026 school year are supported by FY2025 appropriations. Unlike advance appropriations, these programs receive appropriations that do not expire at the end of the fiscal year, an arrangement known as forward funding. Meanwhile, about 63% of the BIA’s 3,126 staff members are continuing to work during the shutdown. Some of these workers may be paid with carryover funding, or funding left over from previous fiscal years that agencies are authorized to spend in FY2025. However, other employees may be working without pay in areas essential for the protection of life and property, such as Tribal law enforcement, child and adult protection, and emergency energy production.

Moreover, Tribes and Native people access funding at many other agencies across the federal government, so there are additional implications beyond those affecting IHS, BIA, and BIE. For instance, many federal agencies are charged with overseeing historic preservation and cultural protection during infrastructure deployment, construction, and other processes that disturb the ground or otherwise impact historic properties. The furloughs of federal personnel executing these responsibilities mean that projects may proceed without Tribal input or federal oversight, potentially causing irreparable harm to sacred places, items, and human burial sites.

As the shutdown continues, a growing number of federal workers may be furloughed or forced to work without pay as carryover funding runs out (see Figure 3). As that happens, more services may be unavailable for Tribes and Native people.

The government shutdown shows why spending for Indian Country must be reformed

These funding vulnerabilities make it clear why spending for Tribes and Native people needs to be reformed. The federal government cannot effectively meet its obligations to Tribes and Native people if some of the most significant funding and programs serving Indian Country are forced to halt, or if government staff are required to work without pay, every time there is a shutdown. On top of the problem of chronic underfunding, this state of affairs runs counter to the perpetual nature of these obligations for which Tribes prepaid with their lands, resources, and the lives of their ancestors.

In the short run, Congress could provide all programs that serve Native Americans, as accounted for in the Native American Funding Crosscut, with advance appropriations equal to their FY2025-enacted discretionary spending on Tribes and Native American people. The OMB has published the Crosscut every year since FY2004, and while it has shortcomings that leaders in Indian Country and others have highlighted, it is currently the most comprehensive source of available public data about federal spending in support of Indian Country. Providing a greater number of programs with advance appropriations would ensure that programs serving Tribes and Native people are able to operate in the event of a future shutdown as Congress works to transition more spending on Indian Country to mandatory spending. Legislation to provide advance appropriations to several agencies and funding lines beyond IHS, and to confirm IHS’s authority for advance appropriations, has been introduced over multiple Congresses on a bipartisan basis, though the scope of the bill has been limited to funding at IHS, BIA, and BIE.

Although advance appropriations would help mitigate issues related to government shutdowns, they would not solve every funding challenge. For example, despite receiving advance appropriations, the Corporation for Public Broadcasting was nonetheless a target of funding recissions that were passed in July 2025.

Given these shortcomings, the most effective solution would be to greatly increase the share of programs for Tribes and Native American people that are financed by direct mandatory spending. Indian Country and government agencies both have long voiced the need for more significant use of mandatory funding in supporting Tribes and Native people and the need to remove restrictions around the utilization of funding.¹ In 2018, the U.S. Commission on Civil Rights wrote, “Congress should provide direct, long-term funding to tribes, analogous to the mandatory funding Congress provides to support Medicare, Social Security, and Medicaid, avoiding pass-through of funds via states.”

And in 2022, one of the authors of this piece wrote in the United South and Eastern Tribes Sovereignty Protection Fund’s “Marshall Plan for Tribal Nations”:

How might Congress go about implementing this change? In response to advocacy from Indian Country, congressional appropriators have indicated a willingness to begin moving discretionary funding lines to mandatory spending, starting with two areas—Tribal administrative costs and facilities leases—that federal courts have affirmed across multiple cases must be paid in full, regardless of the appropriations process.

More broadly, all programs serving Native Americans through the Department of Health and Human Services, most notably those of IHS, and through the Department of the Interior, particularly those of BIA and BIE, should be converted into mandatory spending. Since 2021, IHS has been consulting with Tribes on how to shift its funding to mandatory spending, culminating with a not-yet-enacted proposal to begin this type of funding for the agency in FY2026.

Beyond these agencies, funding for education-related programs—including childcare programs funded by the Child Care and Development Fund, Head Start, funding to local education agencies to support Native students, and funding for TCUs and other Native-serving institutions of higher education—should be made mandatory given the centrality of education in trust and treaty obligations to Tribes.

From there, Congress should convert funding for other programs that currently use a mix of discretionary and mandatory funding, such as that of the Bureau of Reclamation, into purely mandatory funding.

Although some in Congress assert that the annual discretionary appropriations process provides the regular opportunity to assess and adjust funding to appropriate levels for Tribal and other programs, the actual congressional funding process has not reflected these aspirations. For one, funding for many Tribal programs funded through the discretionary process continues to be woefully insufficient despite the annual opportunity for Congress to reassess. In addition, the growing reliance on continuing resolutions by Congress means that funding is frequently simply held constant over time, a policy decision that the U.S. Commission on Civil Rights has shown leads to de facto funding cuts for Tribal communities. To ensure that funding for Tribes remains adequate after a shift to mandatory funding, Congress could include regular inflationary adjustments in many Tribal-serving programs. In addition, Congress could include opportunities for program reauthorization, which would allow Congress to examine factors like purchasing power or account for new authorities or circumstances in mandatory programs.

Finally, recognizing that total funding has consistently fallen short, Congress could also conduct a detailed assessment of what other federal funding is essential to meeting the federal government’s trust and treaty obligations to Tribes, though such an assessment should not be considered exhaustive or exclusive, as funding must necessarily change over time. As a guidepost, legislators should use the standard laid out in the U.S. Senate’s 1977 American Indian Policy Review Commission report:

Converting existing discretionary appropriations to mandatory spending would also have the benefit of growing the amount of funding available for some programs by allowing them to operate more like entitlement programs. This would allow any Tribe or eligible Native person that needs such programs to access them, rather than the current arrangement of resource-constrained or competitive programs, a change that would more appropriately reflect the nature of the trust and treaty obligations that the United States owes to Tribes.

For example, converting IHS to mandatory spending could allow it to function more like Medicare or Medicaid, whereby anyone who is eligible can receive a full suite of medical services covered at a prescribed rate. This would stand in contrast to the current operating model of IHS, where per-patient spending is largely bound to insufficient discretionary appropriations, resulting in just $4,078 being spent annually per IHS patient in FY2023, compared to $7,909 per patient through Medicaid, $13,938 per patient through the Department of Veterans Affairs’ healthcare system, and $16,826 per patient through Medicare.

Conclusion

The ongoing government shutdown is likely to have widespread negative effects for many communities in the United States. The impacts are likely to be particularly severe for many Tribes and Native communities, some of which are among the least-resourced places in the country, and many of whom are dependent upon federal funding to provide services to their people. When funding for the government is ultimately restored, it will be critical for Congress to avoid the same mistakes that occurred during past government shutdowns and instead to update how it funds Tribal Nations, citizens, and communities.