FOR IMMEDIATE RELEASE

WASHINGTON, D.C. ----

Congressman Faleomavaega announced today that the budget agreement between Congressional leaders and President Clinton contains several provisions which will have an impact on American Samoa. The agreement is expected to be approved by Congress this week and signed by the President shortly thereafter.

"Although everything didn't go our way, all in all we did quite well," said Faleomavaega. "Most importantly, no changes have been made to the general structure which funds the American Samoa Government. Since my last public report on the Interior Appropriations bill, the bill has passed the Senate Committee on Appropriations and is expected to be considered by the full Senate in September."

"The best news for Samoa in the budget package is an increase of $500,000 in medicaid funding for American Samoa in the next fiscal year. This amount will be adjusted in future years for inflation. The increase was provided in response to President Clinton's initiative to provide additional medicaid funding for all the U.S. insular areas," said the Congressman, "and is particularly significant because the medicaid program is being cut by $13 billion."

There is also considerable new funding to provide health care to children whose families cannot afford medical care. This should provide additional funding for our hospital," he continued.

"There are also some tax breaks for individuals contained in the legislation being considered this week," said Faleomavaega. "Unless the Fono acts to change our local income tax law, these changes will benefit taxpayers in American Samoa. The issue discussed most often is the $500 child tax credit. In general terms, this credit will be available to families with annual incomes between $18,000 and $110,000 and with children under age 17. The credit is phased out for the families with incomes on the high end of this scale," noted Faleomavaega.

The Congressman continued, "There are also tax credits for families with students in college, another priority of the President Clinton's, which can total $1,500 per year for the first two years of college, and another $1,000 per year for the second two years."

"Unfortunately, with the good, sometimes comes the bad," noted Faleomavaega. "For those who travel, the federal tax on a roundtrip air ticket to the United States will go from the current $6 to $24. While this is a substantial increase, at one point the House was pushing a proposal to increase the tax to $24 and add a 10% ticket tax as well. This would have been a very substantial increase, and it was only through the lobbying efforts of Members of Congress from the outlying areas and the airline lobbyists that we were able to get that proposal scaled back. The current $6 per ticket tax does not even make a dent in the cost to the federal government to construct, repair and maintain our airport and air traffic control system, and even at the higher tax rate, we still receive much more benefit than we pay for," said Faleomavaega.

The Congressman continued, "For those who smoke cigarettes, you can expect to pay more to continue that habit also. The current tax of 34 cents per pack will go up by an additional ten cents, and that money will be used to pay for the program for health care for uninsured children, which I described earlier."

"I have not seen the final language for the bill which will be considered, but I will carefully review the provisions which affect Samoa as they are made available to make sure the legislative language is consistent with the agreement," concluded Faleomavaega.