‘A wake-up call:’ When sweeping federal cuts hit Guam

From the Publisher's Desk By Mar-Vic Cagurangan

The late American humorist P.J. O'Rourke once said,

“Giving money and power to government is like giving whiskey and car keys to teenage boys.”

Just ask Guam Public Auditor Benjamin Cruz. Uncovering anomalies in government of Guam audits is a run-of-the-mill exercise for the Office of Public Accountability. Conducting questionable transactions seems habitual for GovGuam.

The OPA recently flagged $241.1 million in dubious Medicaid payments made by the Guam Department of

 Public Health and Social Services to questionable health care providers, including inactive or ineligible facilities and physicians with expired medical licenses.

The questioned costs, according to the Office of Public Accountability, accounted for over 60 percent of the department’s $399.6 million Medicaid disbursements for fiscal years 2020 through 2022.

On the day the Medicaid audit report was released, the Office of the Governor of Guam issued a press release announcing the list of demands approved by the National Governors Association during the 2025 Winter Meeting in Washington, D.C.

The governors want to “advocate for flexibility and support for a robust health and human services system, including safety net programs, such as Medicaid and SNAP.” They “oppose shifting essential federal funding obligations to states and territories without adequate planning.”

It's almost comedic—especially when it is being pushed at such an evil hour.

Despite his earlier promise to spare Medicaid from the axe, President Donald Trump has endorsed a Republican plan to gut the federal health insurance program. A House Republican budget resolution seeks at least $880 billion worth of spending cuts expected to be extracted from Medicaid.

The looming reform of Medicaid is one of the countless initiatives undertaken by the Trump administration to take back the whisky and car keys from teenage boys.

Amid Trump’s mega house-sweeping and spending realignment, Guam leaders urged

the U.S. government to spare the territory from funding cuts, attempting to make a case with oxymoronic arguments.

“Federal assistance is an investment into the social and economic development of our Pacific islanders that leads to self-sustainment, economic growth and financial stability,” Gov. Lou Leon Guerrero said.

Guam Del. James Moylan argued, “The funding for these food, education, or housing programs is not ‘handouts’ but a ‘hand-up,’ intending to provide economic opportunities and self-reliance in the respective islands.”

No matter how you phrase it, you weaken your rationalization when you attempt to equate “assistance” with “self-reliance” or “self-sustainability”— like a teenager declaring independence while demanding allowance from their parents.

Certainly, Trump’s swinging axe is a shocking aberration from what we have gotten accustomed to throughout the Covid years when seemingly endless streams of federal dollars flooded the island. Guam became complacent. Covid assistance became a multibillion-dollar industry that substituted for the dormant tourism sector.

Local economists have estimated that Guam received a total of $8 billion in Covid funds in 2021 and 2022—with nothing to show for it. They were lost to fiscal profligacy, if not invested in short-term initiatives aimed at pleasing voters.

No investments were made toward self-sufficiency. No new industry has been created. The much-ballyhooed aquaculture industry—promised by the governor when she was a candidate— remains an urban legend and “economic diversification,” a myth. 

Federal spending had been the life vest for Guam’s economy until Trump came back to the Oval Office to puncture it.

Sulking over federal funding cuts is an anticipated reaction, but CNMI Gov. Arnold Palacios viewed it with introspection. A pause on all federal assistance programs, he said, served as a “wake-up call" for all states and territories.

Guam has lessons to learn from Trump’s radical funding turnaround — none more significant than self-examination, leveraging the island’s strengths, regaining our dignity and planning a future that is not reliant on Washington.

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