Overview:
Palau lawmakers once again turned to a last-minute continuing budget authority to keep the national government operating, raising renewed concerns about a budget process that repeatedly reaches the brink before a full national budget is approved.
By: Eoghan Olkeriil Ngirudelsang
NGERULMUD, Palau (Oct. 1, 2026)— “I believe we have to look carefully again at the budget process so that we don’t always hustle in the last hour to push for a continuing budget just so that the government will not shut down,” Sen. Secilil Eldebechel said as lawmakers approved another temporary budget measure to keep the Palau government operating.
The Olbiil er a Kelulau reached a last-minute compromise Tuesday on a continuing budget authority, or CBA, allowing the national government to continue operating through Dec. 31 while lawmakers work toward a full national budget.
The episode again raised concerns about the recurring practice of reaching the final days of the fiscal year without an agreed national budget, leaving lawmakers to scramble for a temporary measure to prevent a government shutdown.
President Surangel Whipps submitted his proposed unified budget to the OEK on July 14, the same month the budget was submitted to Congress last year.
Under the traditional practice of alternating which chamber takes the lead on budget work, the Senate was responsible for this year’s budget process. After receiving the president’s proposal, the Senate held budget hearings for government ministries and agencies throughout August.
The Senate made numerous changes to the proposed unified budget and sent its version to the House of Delegates on Aug. 21.
Three weeks later, the House instead proposed a continuing budget authority through House Bill 12-52-7S, introduced by House Ways and Means Chairman Mengkur Rechelulk and Vice Chairwoman Stephanie Ngirchoimei.
The House deliberated on the proposal and sent it to the Senate on Sept. 15, four days later.
The Senate rejected the House’s CBA proposal on first reading, preventing it from advancing to committee.
Senators then proposed a six-month continuing budget with funding for Palau Public Utilities Corp. to offset fuel costs, drought preparedness, audit fees, transition efforts for the Belau National Hospital Authority, and festivities associated with the Olechotel Belau Fair and Independence Day.
The Senate attached those provisions as amendments to an existing House bill already on the Senate floor for third reading. The bill concerned an extension of the Palau livestock fund.
The House responded with its own CBA proposal. Speaker Sabino Kanai proposed a three-month continuing budget at 25% of the previous funding level, along with additional funding for the Council of Chiefs.
The House attached the proposal as a rider to an existing Senate bill already before the House for third reading. That bill would expand the definition of fraud as a criminal offense.
The back-and-forth continued until both chambers reached a compromise Tuesday.
The Senate recalled the House livestock bill containing the Senate’s CBA provisions. The final amendment provided for a three-month continuing budget, additional funding for the Council of Chiefs, drought preparedness funding, and funding for Independence Day and Olechotel Belau Fair festivities.
The compromise removed proposed funding for audits, PPUC fuel costs and the Belau National Hospital Authority transition. Senators said those issues would be addressed in the unified budget.
During Senate deliberations, Eldebechel abstained from the vote and called for a closer examination of the budget process.
“When we make it a practice of not doing our due diligence and wait until the last minute — then rush the budget, we come to this point where we have to entertain a continuing budget authority,” Eldebechel said.
Sen. Siegfried Nakamura offered a different explanation for the impasse, saying the timing resulted from decisions made by the OEK.
“The reason why we come to an impasse at the 11th hour is because the Olbiil er a Kelulau chose that route,” Nakamura said.
Nakamura pointed to the president’s July 14 submission, the Senate’s August public hearings and the Senate’s Aug. 21 passage of its version of the unified budget. He said the House then chose to pursue a CBA rather than continue work on the unified budget.
When the House met later Tuesday to consider the compromise, Kanai acknowledged the need for both chambers to work more closely and move more quickly.
“We must now start working very closely to expedite our works,” Kanai said. “Looking at our history, two years had passed, and it seems that our work compared to last Olbiil is not on par.”
Delegate Umetaro described the CBA as a temporary measure designed to prevent disruption of government services.
“This continuing budget authority is just a temporary stopgap to maintain continued government operations so that it can continue providing essential services,” Umetaro said.
The measure was signed into law by Whipps on Wednesday.
In his transmittal letter accompanying the legislation, Whipps said the House and Senate could not agree on a full budget before the end of the fiscal year.
“Continuing budget authority is better than a shutdown but it is not good government,” Whipps wrote. “A continuing budget freezes the Republic in place. It funds the national government at last year’s levels and according to last year’s priorities, as if nothing has changed in 12 months.”
The CBA will remain in effect through Dec. 31, giving lawmakers another three months to reach agreement on a unified national budget.
Whipps reduces drought allocation
Before signing the CBA, Whipps also exercised his authority to reduce an allocation for drought preparedness.
Congress had allocated $1.56 million from the Climate Resiliency Reserve Fund for drought preparations. The proposal called for $1 million to go to the National Emergency Management Office, with the remaining $560,000 distributed among the 16 states at $35,000 each.
Whipps said drought preparedness was a responsible and proactive goal but questioned whether the proposed spending was necessary.
“On its face, drought preparedness seems like a responsible and proactive idea,” Whipps wrote.
He said the proposed approach duplicates existing or planned financial tools, including the Climate Resilience Reserve Fund, the Cyclical Reserve Fund and upcoming catastrophe-risk coverage through the Pacific Catastrophic Risk Insurance Company.
Whipps also questioned whether NEMO could responsibly spend or obligate the $1 million by the end of the calendar year.
“I am concerned that the $1,000,000 granted to the National Emergency Management Office must be expended or obligated by the end of this calendar year, a timeline of roughly three months that invites rushed spending rather than careful investment,” he wrote.
Funding approved for the Council of Chiefs and Independence Day celebrations remains in the CBA.
The temporary budget expires Dec. 31. By then, the OEK must reach agreement on a unified national budget if it is to avoid another end-of-year scramble over government funding.