King-Hinds to ask for $400M bailout

U.S. Congresswoman Kimberlyn King-Hinds said she will introduce a bill for a $400 million federal bailout as requested by Gov. Arnold I. Palacios.

But in a press conference on Thursday, the governor said he was not asking for a bailout, but for “repurposing” a total of $414 million in Pandemic Unemployment Assistance and Federal Pandemic Unemployment Compensation funds allocated for the CNMI but were unused.

“I think our congresswoman misspoke and used a word that does not necessarily portray what we are trying to do,” Palacios said.

According to an online dictionary, a bailout is “an act of giving financial assistance to a failing business or economy to save it from collapse.”

King-Hinds last week told her fellow U.S. lawmakers that she would, “in short order, be introducing a bill asking U.S., Congress for a $400 million bailout as requested by my governor because the CNMI is on the cusp of an economic collapse.”

She said she has submitted the governor’s letter “requesting bailout legislation,” and that she has also been writing letters to every federal agency, requesting them “to spare the CNMI from any cuts to grants or federally funded personnel because our economy is dependent on these funds and positions for survival.”

“We may all be from the territories and share similar challenges, but our economic challenges are very different and unique to each of us,” King-Hinds said.

The governor provided reporters a copy of his letter to King-Hinds.

“Let me be clear,” Palacios said on Thursday. “I met with her, I talked to her over the phone about what we did in the past, and that was a recommendation that I submitted to the previous secretary of [U.S.] Labor during the Biden administration. It wasn't a bailout. It is to repurpose the funding towards economic recovery,” he added.

In his letter to King-Hinds on Feb. 14, 2025, the governor informed her about his request to the Biden administration to repurpose the unused $231 million in PUA funds and $183 million in FPUC monies, for a total amount of $414 million.

He said this will enable the Commonwealth “to stimulate economic recovery, strengthen critical public services and support the transition to a more resilient economy by aiding businesses and workers in both traditional and emerging sectors.”

The governor wrote King-Hinds a follow-up letter on March 4, 2025, providing her a breakdown of the critical priorities that the repurposing of PUA and FPUC funds will address:

• Economic recovery — $231 million.

• Strengthen economic services — $120 million.

• Public health priorities — $55 million.

• Community enhancement — $8 million.

The governor said the Commonwealth Economic Development Authority would “play a major role in this whole initiative.”

“We will be rolling out a directive or executive order to establish an economic recovery team that will execute some of these plans already submitted by economic planners,” he said.

Very frustrating

King-Hinds told her colleagues that the CNMI government’s fiscal year budget does not fully fund government operations. The police department on Rota, for example, does not have money for gas because the budget doesn’t fund operation for gas, “so the cops can't patrol there,” she said.

Legacy businesses such as Hyatt Regency Saipan have shut down, and DFS has also announced that it, too, will be closing shop, she added.

Every day, when she leaves the Capitol at 5:30 p.m., the Marianas day begins, she said. “I field phone calls, and I go home at night. I field phone calls from more legacy businesses who are talking about shutting their doors because we don't have enough tourists to keep their doors open,” she added.

She said the CNMI economy is primarily driven by tourists. “The Commonwealth Ports Authority is begging for relief because with the current rate of tourist arrivals, it cannot sustain operations. There are Department of Defense activities on Tinian that rely on the ports being fully operational for the ongoing training and construction activities critical to the national security,” she added.

“This is why sometimes, having these conversations are very frustrating because too often, conversations about the CNMI and the territories happen above us instead of with us, from individuals who never experienced life there. And too often, discussions about national security treat our people as a liability rather than an asset," King-Hinds said.

“We as Americans can never be expected to stand strong if the CNMI is economically starved to collapse, which is what is happening now. When people are going hungry, they are going to do stupid things,” she said.

She noted that the U.S. House was conducting a hearing about prosperity in the Pacific and acknowledging that prosperity does not exist there.

But she said all she has heard since coming to the U.S. Congress are proposals for more restrictions because of geopolitical tensions with China, including restrictions to tourism that will only make things worse in the CNMI.

On X (formerly Twitter), King-Hinds posted the following:

“The tourists aren’t coming. Legacy businesses are leaving. The CNMI is on the cusp of economic collapse….

“[W]e are being strangled by one-size-fits-all policies crafted by those who have no understanding of life on the ground in our community. For far too long there have been conversations ABOUT the CNMI but not WITH the CNMI. These conversations often miss the point — our biggest threat is not tourists. Although birth tourism is a problem, we are combatting it like never before, and the CNMI has urged Congress to amend birthright citizenship in the Covenant. Our real threat right now happens to be economic collapse which would make us vulnerable to foreign adversaries and, in turn, put the nation at risk.

“We have ONE industry in the Commonwealth and voices in DC are trying to take that away without supplying a viable alternative. I am urging [Secretary of State Marco Rubio] to work with embassies in Japan, Australia, the Philippines, etc., to help us expand our tourism market. Additionally, we need fewer regulations on the CNMI, expanded labor access and more economic relief.”