Overview:
Palau has avoided a second government shutdown after the Olbiil Era Kelulau voted to approve a revised FY 2026 budget, removing a grant-approval clause President Surangel Whipps Jr. called a “red line.” The new version now heads to the president’s desk for signature today.
By: Eoghan Olkeriil Ngirudelsang
NGERULMUD, Palau — The Olbiil Era Kelulau on Wednesday passed a revised FY 2026 national budget and sent it to President Surangel Whipps Jr., who is expected to sign it today, averting a second potential government shutdown and the imposition of a 72-hour pay period for civil servants.
The move follows days of tense negotiations after Whipps rejected the legislature’s earlier version of the budget over a grant-authorization clause he called a “red line” that he refused to sign. The disputed provision, found in Section 20(b), would have required all government grants received after Oct. 31, 2025, to undergo a separate approval process by the OEK through law or joint resolution — a requirement the president warned could delay programs and “cause Palau to lose opportunities.”
House weighs practicality, constitutional oversight
The House of Delegates moved first, voting 13–2 with one abstention to adopt the president’s request and remove the grant-approval requirement.
HOD Ways and Means Vice Chair Stephanie Ngirchoimei, presenting the committee’s report, urged delegates to address the president’s “sole request,” saying the chamber should avoid delaying the budget and risk reductions to working hours. Ngatpang Delegate expressed concern that the original clause could jeopardize health ministry grants if approval timelines lagged, while Ngiwal Delegate Ngirameketii questioned the practicality of requiring the OEK to reauthorize “countless grants” already approved at the federal level.
Others defended the legislature’s constitutional authority. Ngchesar Delegate Ngirmechaet argued the OEK should not assume it cannot meet grant timelines. Kayangel Delegate Kemesong raised constitutional issues, questioning whether all outside funding — including Taiwan stimulus grants — should undergo legislative appropriation.
Ngerchelong Delegate Sinsak countered that subjecting hospital-related grants to lengthy debate could violate donor requirements. Despite supporting the separation of grants from legislative processing, he voted against the president’s version. Delegates from Angaur, Hatohobei, Peleliu, Aimeliik and others supported the amendment.
Senate faces deeper division
The Senate vote proved more contentious. Senators raised broader questions of transparency, fairness in grant distribution, and the long-term role of the OEK in overseeing external funds.
Sen. Mark Rudimch criticized the president for tying the 72-hour pay directive to the budget impasse, saying it was “not fair and not right to exploit people’s salaries … to force such questionable policies that are anti-transparency.” Sen. Melairei argued the disputed clause was designed to address inequities in Taiwan’s Economic Stimulus grant distributions, citing millions allocated to Ngatpang and Oikull over four years without clear explanation.
Other senators pointed to past statements by Whipps — including a 2020 campaign video — in which he emphasized that all funds should enter the national treasury and be appropriated by the OEK. Sen. Nakamura said the president’s insistence on removing the clause amounted to “wanting congress power.”
Sen. Eldebechel, however, warned that continued delay would disrupt government operations and exceed funding levels intended for three months of spending. Several senators echoed the need to avoid interruptions to government services.
The Senate ultimately passed the president’s version 7–5 with one abstention. Voting in support were Sens. Basilius, Eldebechel, Inabo, Sungino, Tellames, Tabelual and Senate President Hokkons Baules. Opposing were Sens. Rudimch, Melairei, Nakamura, Remengesau and Mariur. Sen. Pedro abstained.
Averted shutdown and next steps
Whipps had earlier said he hoped lawmakers would act quickly to restore the original language, which authorized and appropriated all incoming grants for their awarded purposes without additional OEK action. With the legislature now aligned, the president will sign the budget today, ending weeks of uncertainty ahead of the next pay period.
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