prompt_front: You are given two reports by the government agency.



Question: Write a one-page summary of the report 1.

Report 1: Over the last 3 decades employers have shifted away from sponsoring defined benefit (DB) plans and toward DC plans  This shift also transfers certain types of risk—such as investment risk—from employers to employee participants  DB plans generally offer a fixed level of monthly annuitized retirement income based upon a formula specified in the plan, which usually takes into account factors such as a participant’s salary, years of service, and age at retirement, regardless of how the plan’s investments perform  In contrast, benefit levels in DC plans—such as 401(k) plans—depend on the contributions made to the plan and the performance of the investments in individual accounts, which may fluctuate in value  As we have previously reported, some experts have suggested that the portability of DC plans make them better-suited for a mobile workforce, and that such portability may lead to early withdrawals of retirement savings  DOL reported there were 656,241 DC and 46,300 DB plans in the United States in 2016  Tax incentives are in place to encourage employers to sponsor retirement plans and employees to participate in plans  Under the Employee Retirement Income Security Act of 1974 (ERISA), employers may sponsor DC retirement plans, including 401(k) plans—the predominant type of DC plan, in which benefits are based on contributions to and the performance of the investments in participants’ individual accounts  To save in 401(k) plans, participants contribute a portion of their income into an investment account, and in traditional 401(k) plans taxes are deferred on these contributions and associated earnings, which can be withdrawn without penalty after age 59½ (if permitted by plan terms)  As plan sponsors, employers may decide the amount of employer contributions (if any) and how long participants must work before having a non-forfeitable (i e , vested) interest in their plan benefit, within limits established by federal law  Plan sponsors often contract with service providers to administer their plans and provide services such as record keeping (e g , tracking and reporting individual account contributions); investment management (i e , selecting and managing the securities included in a mutual fund); and custodial or trustee services for plan assets (e g , holding the plan assets in a bank)  Individuals also receive tax incentives to save for retirement outside of an employer-sponsored plan  For example, traditional IRAs provide certain individuals with a way to save pre-tax money for retirement, with withdrawals made in retirement taxed as income  In addition, Roth IRAs allow certain individuals to save after-tax money for retirement with withdrawals in retirement generally tax-free  IRAs were established under ERISA, in part, to (1) provide a way for individuals not covered by a pension plan to save for retirement; and (2) give retiring workers or individuals changing jobs a way to preserve assets from 401(k) plans by transferring their plan balances into IRAs  The Investment Company Institute (ICI) reported that 34 8 percent of households in the United States owned an IRA in 2017, a percentage that has generally remained stable since 2000  In 2017, IRA assets accounted for almost 33 percent (estimated at $9 2 trillion) of total U S  retirement assets, followed by DC plans, which accounted for 27 percent ($7 7 trillion)  Further, according to ICI, over 94 percent of funds flowing into traditional IRAs from 2000 to 2015 came from rollovers—primarily from 401(k) plans  IRS, within the Department of the Treasury, is responsible for enforcing IRA tax laws, while IRS and DOL share responsibility for overseeing prohibited transactions relating to IRAs  IRS also works with DOL’s Employee Benefits Security Administration (EBSA) to enforce laws governing 401(k) plans  IRS is primarily responsible for interpreting and enforcing provisions of the Internal Revenue Code (IRC) that apply to tax- preferred retirement savings  EBSA enforces ERISA’s reporting and disclosure and fiduciary responsibility provisions, which, among other things, include requirements related to the type and extent of information that a plan sponsor must provide to plan participants  Employers sponsoring employee benefit plans subject to ERISA, such as a 401(k) plans, generally must file detailed information about their plan each year  The Form 5500 serves as the primary source of information collected by the federal government regarding the operation, funding, expenses, and investments of employee benefit plans  The Form 5500 includes information about the financial condition and operation of their plans, among other things  EBSA uses the Form 5500 to monitor and enforce plan administrators and other fiduciaries, and service providers’ responsibilities under Title I of ERISA  IRS uses the form to enforce standards that relate to, among other things, how employees become eligible to participate in benefit plans, and how they become eligible to earn rights to benefits  In certain instances, sponsors of 401(k) plans may allow participants to access their tax-preferred retirement savings prior to retirement  Plan sponsors have flexibility under federal law and regulations to choose whether to allow plan participants access to their retirement savings prior to retirement and what forms of access to allow  Typically, plans allow participants to access their savings in one or more of the following forms: Loans: Plans may allow participants to take loans and limit the number of loans allowed  If the plan provides for loans, the maximum amount that the plan can permit as a loan generally cannot exceed the lesser of (1) the greater of 50 percent of the vested account balance, or $10,000 or (2) $50,000 less the excess of the highest outstanding balance of loans during the 1-year period ending on the day before the day on which a new loan is made over the outstanding balance of loans on the day the new loan is made  Plan loans are generally not treated as early withdrawals unless they are not repaid within the terms specified under the plan  Hardship withdrawals: Plans may allow participants facing a hardship to take a withdrawal on account of an immediate and heavy financial need, and if the withdrawal is necessary to satisfy the financial need  Though plan sponsors can decide whether to offer hardship withdrawals and approve applications for hardship withdrawals, IRS regulations provide “safe harbor” criteria regarding circumstances when a withdrawal is deemed to be on account of an immediate heavy financial need  IRS regulations allow certain expenses to qualify under the safe harbor including: (1) certain medical expenses; (2) costs directly relating to the purchase of a principal residence; (3) tuition and related educational fees and expenses for the participant, and their spouse, children, dependents or beneficiary; (4) payments necessary to prevent eviction from, or foreclosure on, a principal residence; (5) certain burial or funeral expenses; and (6) certain expenses for the repair of damage to the employee’s principal residence  Plans that provide for hardship withdrawals generally specify what information participants must provide to the plan sponsor to demonstrate a hardship meets the definition of an immediate and heavy financial need  Early withdrawals of retirement savings may have short-term and long- term impacts on participants’ ability to accumulate retirement savings  In the short term, IRA owners and participants in 401(k) plans who received a withdrawal before reaching age 59½ generally pay an additional 10 percent tax for early distributions in addition to income taxes on the taxable portion of the distribution amount  The IRC exempts certain distributions from the additional tax, but the exceptions vary among 401(k) plans and IRAs  Early withdrawals of any type can result in the permanent removal of assets from retirement accounts thereby reducing the amounts participants can accumulate before retirement, including the loss of compounded interest or other earnings on the amounts over the participant’s career  According to DOL’s Bureau of Labor Statistics (BLS), U S  workers are likely to have multiple jobs in their careers as average employee tenure has decreased  In 2017, BLS reported that from 1978 to 2014, workers held an average of 12 jobs between the ages of 18 and 50  BLS also reported in 2016 that the median job tenure for a worker was just over 4 years  Employees who separate from a job bear responsibility for deciding what to do with their accumulated assets in their former employer’s plan  Recent research estimated that 10 million people with a retirement plan change jobs each year, many of whom faced a decision on how to treat their account balance at job separation  Plan administrators must provide a tax notice detailing participants’ options for handling the balance of their accounts  When plan participants separate from their employers, they generally have one of three options: 1  They may leave the balance in the plan, 2  They may ask their employer to roll the money directly into a new qualified employer plan or IRA (known as a direct rollover), or 3  They may request a distribution  Once the participant receives the distribution he or she can (1) within 60 days, roll the distribution into a new qualified employer plan or IRA (in which case the money would remain tax-preferred); or (2) keep the distributed amount, and pay any income taxes or additional taxes associated with the distribution (known as a cashout)  Sponsors of 401(k) plans may cash out or transfer separating participant accounts if an account balance falls below a certain threshold  The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) amended the IRC to provide certain protections for separating participants with account balances between $1,000 and $5,000 by requiring, in the absence of participant direction, plan sponsors to either keep the account in the plan or to transfer the account balance to an IRA to preserve its tax-preferred status  Plan sponsors may not distribute accounts with balances of more than $5,000 without participant direction, but have discretion to distribute account balances of $1,000 or less  The IRC imposes an additional 10 percent tax (in addition to ordinary income tax) on certain early withdrawals from qualified retirement plans, which includes IRAs and 401(k) plans in an effort to discourage the use of plan funds for purposes other than retirement and ensure the favorable tax treatment for plan funds is used to provide retirement income  Employers are required to withhold 20 percent of the amount cashed out to cover anticipated income taxes unless the participant pursues a direct rollover into another qualified plan or IRA  Research has found that many employees are concerned about their level of savings and ability to manage their retirement accounts, and some employers provide educational services to improve employees’ financial wellness and financial literacy and encourage them to save for retirement  A 2017 survey on employee financial wellness in the workplace found more than one-half of workers experienced financial stress and that insufficient emergency savings was a top concern for employees  Research has also found that limited financial literacy is widespread among Americans over age 50, and those who lack financial knowledge are less likely to successfully plan for retirement  In 2018, the Federal Reserve reported that three-fifths of non-retirees with participant-directed retirement accounts had little to no comfort managing their own investments  As we have previously reported, some employers have developed comprehensive programs aimed at overall improvement in employees’ financial health  These programs, often called financial wellness programs, may help employees with budgeting, emergency savings, and credit management, in addition to the traditional information and assistance provided for retirement and health benefits  In 2013, individuals ages 25 to 55 withdrew at least $68 7 billion early from their retirement accounts  Of this amount, IRA owners in this age group withdrew the largest share (about 57 percent) and 401(k) plan participants in this age group withdrew the rest (about 43 percent) However, a total amount withdrawn from 401(k) plans cannot be determined due to data limitations  IRA withdrawals were the largest source of early withdrawals of retirement savings, accounting for an estimated $39 5 billion of the total $68 7 billion in early withdrawals made by individuals ages 25 to 55 in 2013  According to IRS estimates, 12 percent of IRA owners in this age group withdrew money early that year from their IRAs in 2013  The amount they withdrew early comprised a small percentage of their total IRA assets  Specifically, in 2013, the amount of early withdrawals was equivalent to 3 percent of the cohort’s total IRA assets and, according to IRS estimates, the total amount withdrawn by this cohort exceeded their total contributions to IRAs in that year  At least $29 2 billion left 401(k) plans in 2013 in the form of hardship withdrawals, cashouts at job separation, and unrepaid plan loans, according to our analysis of 2013 SIPP data and data from DOL’s Form 5500  Specifically, we found that: Hardship withdrawals were the largest source of early withdrawals from 401(k) plans with an estimated 4 percent (+/- 0 25) of plan participants ages 25 to 55 withdrawing an aggregate $18 5 billion in 2013  The amount of hardship withdrawals was equivalent to 0 5 percent (+/- 0 06) of the cohort’s total plan assets and 8 percent (+/- 0 9) of the cohort’s plan contributions made in 2013  Cashouts of account balances of $1,000 or more at job separation were the second largest source of early withdrawals from 401(k) plans  In 2013, an estimated 1 1 percent (+/- 0 11) of plan participants ages 25 to 55 withdrew an aggregate $9 8 billion from their plans that they did not roll into another qualified plan or IRA  Additionally, 86 percent (+/- 2 9) of these participants taking a cashout of $1,000 or more did not roll over the amount in 2013  The amounts cashed out and not rolled over were equivalent to 0 3 percent (+/- 0 05) of the cohort’s total plan assets and 4 percent (+/- 0 75) of the cohort’s total contributions made in 2013  Loan defaults accounted for at least $800 million withdrawn from 401(k) plans in 2013; however, the amount of distributions of unpaid plan loans is likely larger as DOL data cannot be used to quantify plan loan offsets that are deducted from participants’ account balances after they leave a plan  As a result, the amount of loan offsets among terminating participants ages 25 to 55 cannot be determined with certainty  Specifically, DOL’s Form 5500 instructions require plan sponsors to report unpaid loan balances in two separate places on the Form 5500, depending on whether the loan holder is an active or a terminated participant  For active participants, plan sponsors report loan defaults as a single line item on the Form 5500 (i e , the $800 million in 2013 listed above)  For terminated participants, plan sponsors report unrepaid plan loan balances as benefits paid directly to participants—a category that also includes rollovers to employer plans and IRAs  According to a DOL official, as a result of this commingling of benefits on this line item, isolating the amount of loan offsets for terminated participants using the Form 5500 data is not possible  Without better data of the amount of unrepaid plan loans, the amount of loan offsets and the characteristics of plan participants who did not repay their plan loans at job separation cannot be determined  IRA owners and plan participants taking early withdrawals paid $6 2 billion as a result of the additional 10 percent tax for early distributions in 2013, according to IRS estimates  Although the taxes are generally treated separately from the amounts withdrawn, IRA owners and plan participants are expected to pay any applicable taxes resulting from the additional 10 percent tax when filing their income taxes for the tax year in which the withdrawal occurred  Individuals with certain demographic and economic characteristics that we analyzed had higher incidence of early withdrawals of retirement savings, according to our analysis of SIPP data  The characteristics described below reflect statistically significant differences between comparison groups (a full listing of all demographic groups can be found in appendix III)  Age  The incidence of IRA withdrawals was higher among individuals ages 45 to 54 (8 percent) than individuals ages 25 to 34 and 35 to 44  Education  Individuals with a high school education or less had higher incidence of cashouts (97 percent) and hardship withdrawals (7 percent) than individuals with some college or some graduate school education  Family size  Individuals in families of seven or more (8 percent) or in families of five to six (7 percent) had higher incidence of hardship withdrawals than individuals in smaller family groups we analyzed  Individuals living alone had higher incidence of IRA withdrawals than individuals living in the larger family groups  Marital status  Widowed, divorced, or separated individuals had higher incidence of IRA withdrawals (11 percent) and hardship withdrawals (7 percent) than married or never married individuals  Race  The incidence of hardship withdrawals among African American (10 percent) and Hispanic individuals (6 percent) was higher than among individuals who were White, Asian, or Other  Residence  The incidence of IRA withdrawals and hardship withdrawals was higher among individuals living in nonmetropolitan areas (7 percent and 6 percent, respectively) than among individuals living in metropolitan areas  Similarly, individuals with certain economic characteristics that we analyzed had higher incidence of early withdrawals of retirement savings, according to our analysis of SIPP data  The characteristics described below reflect statistically significant differences between comparison groups (a full listing of all demographic groups can be found in appendix III)  Employer size  Individuals working for employers with fewer than 25 employees had higher incidence of IRA withdrawals (9 percent) than individuals working for employers with higher number of employees  Employment  Individuals working fewer than 35 hours per week had higher incidence of IRA withdrawals (7 percent) than employees working 35 hours or more  Household debt  Individuals with household debt of $5,000 up to $20,000 had higher incidence of IRA withdrawals (14 percent) than individuals with other debt amounts  Household income  Individuals with household income of less than $25,000 or $25,000 up to $50,000 had higher incidence of IRA withdrawals (12 percent and 9 percent, respectively) and hardship withdrawals (9 percent and 7 percent, respectively) than individuals with higher income amounts  Personal cash reserves  Individuals with personal cash reserves of less than $1,000 had higher incidence of IRA withdrawals (10 percent) and hardship withdrawals (6 percent) than individuals with larger reserves  Retirement assets  Individuals with combined IRA and 401(k) plan assets valued at less than $5,000 had higher incidence of hardship withdrawals (7 percent) than individuals with higher valued assets  Tenure in retirement plan  Individuals with fewer than 3 years in their retirement plan had higher incidence of hardship withdrawals (6 percent) than individuals with longer tenures  Stakeholders we interviewed said that plan rules related to the disposition of account balances at job separation can lead participants to remove more than they need, up to and including their entire balance  We previously reported U S  workers are likely to change jobs multiple times in a career  Plan sponsors may cash out balances of $1,000 or less at job separation, although they are not required to do so  As a result, plan participants with such balances, including younger employees and others with short job tenures, risk having their account balances distributed in full each time they change jobs  As shown in table 1, a separating employee must take multiple steps to ensure that an account balance remains tax-preferred  Participants who take a distribution from a plan with the intent of rolling it into another qualified plan or IRA must acquire additional funds to complete the rollover and avoid adverse tax consequences  Plan sponsors are required to withhold 20 percent of the account balance to pay anticipated taxes on the distribution  As a result, the sponsor then sends 80 percent of the account balance to the participant, who must acquire outside funds to compensate for the 20 percent withheld or forgo the preferential tax treatment of that portion of their account balance  For example, a participant seeking to roll over a retirement account with a $10,000 balance would receive an $8,000 distribution after tax withholding, requiring them to locate an additional $2,000 to complete the rollover within the 60-day period to avoid a taxable distribution of the withheld amount  If participants can replace the 20 percent withheld and complete the rollover within the 60-day period, they do not owe taxes on the distribution  Stakeholders said that the complexity of rolling a 401(k) account balance from one employer to another may encourage participants to take the relatively simpler route of rolling their balance into an IRA or cashing out altogether  They noted that separating participants had many questions when evaluating their options and had difficulty understanding the notice provided  For example, participants may not fully understand how the decisions made at job separation can have a significant impact on their current tax situation and eventual retirement security  One plan sponsor, describing concerns about giving investment advice, said she watched participants make what she judged to be poor choices with their account balances and felt helpless to intervene  Stakeholders also noted that the lack of a standardized rollover process sometimes bred mistrust among employers and complicated separating participants’ ability to successfully facilitate a rollover between plans  For example, one stakeholder told us that some plans were hesitant to accept funds from other employer plans fearing that the funds might come from plans that have failed to comply with plan qualification requirements and could create problems for the receiving plan later on  Another stakeholder suggested that the requirement for plan sponsors to provide a notice to separating participants likely caused more participants to take the distribution  Stakeholders described loans as a useful source of funds in times of need and a way to avoid more expensive options, such as high-interest credit cards  They also noted that certain plan loan policies could lead to early withdrawals of retirement savings  (See fig  1 ) Loan repayment at job separation: Stakeholders said loan repayment policies can increase the incidence of defaults on outstanding loans  When participants do not repay their loan after separating from a job, the outstanding balance is treated as a distribution, which may subject it to income tax liability and, possibly, an additional 10 percent tax for early distributions  According to stakeholders, the process of changing jobs can inadvertently lead to a distribution of a participant’s outstanding loan balance, when the participant could have otherwise repaid the loan  Extended loan repayment periods: Some plan sponsors allow participants to take loans to purchase a home  Stakeholders told us that the amounts of these home loans tended to be larger than general purpose loans and had longer repayment periods that these extended from 15 to 30 years  A stakeholder further noted that these loans could make it more likely that participants would have larger balances to repay if they lost or changed jobs  Multiple loans: While some plan sponsors noted that their plans limited the number of loans participants can take from their retirement plan, others do not  Some plan sponsors limited participants to between one and three simultaneous loans, and one plan administrator indicated that 92 percent of their plan-sponsor clients allowed no more than two simultaneous loans  Other plan sponsors placed no limit on the number of participant loans or limited loans to one or two per calendar year, in which case a participant could take out a new loan at the start of a calendar year regardless of whether or not outstanding loans had been repaid  Stakeholders described some participants as “serial” borrowers, who take out multiple loans and have less disposable income as a result of ongoing loan payments  One plan administrator stated that repeat borrowing from 401(k) plans was common, and some participants took out new loans to pay off old loans  Other loan restrictions: Allowing no loans or one total outstanding loan can cause participants facing economic shocks to take a hardship withdrawal, resulting in the permanent removal of their savings and subjecting them to income tax liability and, possibly, an additional 10 percent tax for early distributions and a suspension on contributions  Minimum loan amounts: Minimum loan amounts may result in participants borrowing more than they need to cover planned expenses  For example, a participant may have a $500 expense for which they seek a loan, but may have to borrow $1,000 due to plan loan minimums  Stakeholders said that plan participants take plan loans and hardship withdrawals for pressing financial needs  Many plan sponsors we interviewed said they used the IRS safe harbor exclusively as criteria when reviewing a participant’s application for a hardship withdrawal  Stakeholders said the top two reasons participants took hardship withdrawals were to prevent imminent eviction or foreclosure and to cover out-of-pocket medical costs not covered by health insurance  Participants generally took loans to reduce debt, for emergencies, or to purchase a primary residence  Stakeholders also said that participants who experienced economic shocks stemming from job loss made early withdrawals  They said retirement plans often served as a form of insurance for those between jobs or facing a sudden economic shock and participants accessed their retirement accounts because, for many, they were the only source of savings  They cited personal debt, health care costs, and education as significant factors that affected employees across all income levels  Stakeholders said some participants also used their retirement savings to pay for anticipated expenses  Two plan administrators said education expenses were one of the reasons participants took hardship withdrawals  They said that participants accessed their retirement savings to address the cost of higher education, including paying off their own student loan debt or financing the college costs for family members  For example, plan administrators told us that some participants saved with the expectation of taking a hardship withdrawal to pay for college tuition  Other participants utilized hardship withdrawals to purchase a primary residence  IRA owners generally may take withdrawals at any time and IRS does not analyze the limited information it receives on the reasons for IRA withdrawals  IRA owners can withdraw any amount up to their entire account balance at any time  In addition, IRAs have certain exceptions from the additional 10 percent tax for early distributions  For example, IRA withdrawals taken for qualified higher education expenses, certain health insurance premiums, and qualified “first-time” home purchases (up to $10,000) are excepted from the additional 10 percent tax  IRA owners who make an IRA distribution receive a Form1099-R or similar statement from their provider  On the Form 1099-R, IRA providers generally identify whether the withdrawal, among other things, can be categorized as a normal distribution, an early distribution, or a direct distribution to a qualified plan or IRA  For an early distribution, the IRA provider may identify whether a known exception to the additional 10 percent tax applies  For their part, IRA owners are required to report early withdrawals on their income tax returns, as well as the reason for any exception from the additional 10 percent tax for a limited number of items  In written responses to questions, an IRS official indicated that IRS collected data on the exemption reason codes, but did not use them  Some plan sponsors we interviewed had policies in place that may reduce the long-term impact of early withdrawals of retirement savings taken at job separation  Policies suggested by plan sponsors included: Providing a periodic installment distribution option: Although some plan sponsors may require participants wanting a distribution to take their full account balance at job separation, other plan sponsors provided participants with an option of receiving their account balance in periodic installments  For example, one plan sponsor gives separating participants an option to receive periodic installment distributions at intervals determined by the participants  This plan sponsor said separating participants could select distributions on a monthly, quarterly, semi-annual or annual basis  These participants could also elect to stop distributions at any time, preserving the remaining balance in the employer’s plan  The plan sponsor said the plan adopted this option to help separating participants address any current financial needs, while preserving some of the account balance for retirement  Another plan sponsor adopted a similar policy to address the cyclical nature of the employer’s business, which can result in participants being terminated and rehired within one year  Offering partial distributions: One plan sponsor provided separated participants with the option of receiving a one-time, partial distribution  If a participant opted for partial distribution, the plan sponsor issued the distribution for the requested sum and preserved the remainder of the account balance in the plan  The plan sponsor adopted the partial distribution policy to provide separating participants with choices for preserving account balances, while simultaneously providing access to address any immediate financial needs  Providing plan loan repayment options for separated participants: Some plan sponsors allowed former participants to continue making loan repayments after job separation  Loan repayments after job separation reduce the loan default risk and associated tax implications for participants  Some plan sponsors said that separating participants who have the option to continue repaying an outstanding loan balance generally have three options: (1) to continue repaying the outstanding loan, (2) to repay the entire balance of the loan at separation within a set repayment period, or (3) not to repay the loan  Those participants who continue repaying their loans after separation generally have the option to set up automatic debit payments to facilitate the repayment  Those separated participants who do not set up loan repayment terms within established timeframes, or do not make a payment after the loan repayment plan has been established, default on their loan and face the associated tax consequences, including, possibly, an additional 10 percent tax for early distributions  Some plan sponsors we spoke with placed certain limits on participant loan activity, which may reduce the incidence of loan defaults (see fig  2)  Limiting loan amounts to participant contributions: Some plan sponsors said they limited plan loans to participant contributions and any investment earnings from those contributions to reduce early withdrawals of retirement savings  For example, one plan sponsor’s policy limited the amount a participant could borrow from their plan to 50 percent of participant contributions and earnings, compared to 50 percent of the total account balance  Implementing a waiting period after loan repayment before a participant can access a new loan: Some plan sponsors said they had implemented a waiting period between plan loans, in which a participant, having fully paid off the previous loan, was temporarily ineligible to apply for another  Among plan sponsors who implemented a waiting period, the length varied from 21 days to 30 days  Reducing the number of outstanding loans: Some plan sponsors we spoke with limited the number of outstanding plan loans to either one or two loans  One plan sponsor had previously allowed one new loan each calendar year, but subsequently revised plan policy to allow participants to have a total of two outstanding loans  The plan sponsor said the rationale was to balance limiting participant loan behavior with the ability of participants to access their account balance  Some plan sponsors said they had expanded the definition of immediate and heavy financial need beyond the IRS safe harbor to better align with the economic needs of their participants


Report 2:  For example, one plan sponsor approved a hardship withdrawal to help a participant pay expenses related to a divorce settlement  Another plan sponsor developed an expanded list of qualifying hardships, including past-due car, mortgage, or rent payments; and payday loan obligations  Some plan sponsors implemented loan programs outside their plan, contracting with third-party vendors to provide short-term loans to employees  For example, one plan sponsor instituted a loan program that allowed employees to borrow up to $5,000 from a third-party vendor that would be repaid through payroll deduction  This plan sponsor said the loan program featured an 8 to 12 percent interest rate, and approval was not based on a participant’s credit history  The plan sponsor also observed that they had fewer 401(k) loan applications since the third- party loan program was implemented  A second plan sponsor instituted a similar loan program that allowed employees to borrow up to $500 interest free from a third-party vendor  According to this sponsor, to qualify for a loan, an employee must demonstrate financial hardship and have no outstanding plan loans, and is required to attend a financial counseling course if their loans are approved  Some plan sponsors said they have provided workplace-based financial wellness resources for their participants to improve their financial literacy  Some implemented optional financial wellness programs that covered topics such as investment education, how plan loans work, and the importance of saving for emergencies  These plan sponsors told us they offered on-site financial counseling with representatives of the plan administrator to help provide guidance on financial decision-making; however, other plan sponsors said that—despite their investment in participant-specific financial education—participation in these programs was low  Stakeholders suggested strategies that they believed could help mitigate the long-term effects of early withdrawals of retirement savings on IRA owners and plan participants  They noted that any of these proposed strategies, if implemented, could (1) increase the costs of administering IRAs and plans, (2) require changes to federal law or regulations, and (3) involve tradeoffs between providing access to retirement savings and preserving savings for retirement  Stakeholders suggested several strategies that, if implemented, could help reduce early withdrawals from IRAs  These strategies centered on modifying existing rules to reduce early withdrawals from IRAs (and subsequently the amount paid as a result of the additional 10 percent tax for early distributions)  Specifically, stakeholders suggested: Raising the age at which the additional 10 percent tax applies: Some stakeholders noted that raising the age at which the additional 10 percent tax for early distributions applies from 59½ to 62 would align it with the earliest age of eligibility to claim Social Security and may encourage individuals to consider a more comprehensive retirement distribution strategy  However, other stakeholders cautioned that it could have drawbacks for employees in certain situations  For example, individuals who lose a job late in their careers could face additional tax consequences for accessing an IRA before reaching the age 62  In addition, one stakeholder said some individuals may shift to a part-time work schedule later in their careers as they transition to retirement and plan on taking IRA withdrawals to compensate for their lower wages  Allowing individuals to roll existing plan loans into an IRA: Some stakeholders said that allowing individuals to include an existing plan loan as part of a rollover into an IRA, although currently not allowed, would likely reduce plan loan defaults by giving individuals a way to continue repaying the loan balance  One stakeholder suggested that rolling an existing plan loan into an IRA could be administratively challenging for IRA providers, but doing so to repay the loan may ultimately preserve retirement savings  Allowing IRA loans: While currently a prohibited transaction that could lead to the cessation of an IRA, some stakeholders suggested that IRA loans could theoretically reduce the amounts being permanently removed from the retirement system through early IRA withdrawals  One stakeholder said an IRA loan would present a good alternative to an early withdrawal from an IRA account because it would give the account holder access to the balance, defer any tax implications, and improve the likelihood the loaned amount would ultimately be repaid  However, another stakeholder said that allowing IRA loans could increase early withdrawals, given the limited oversight of IRAs, as well as additional administrative costs and challenges for IRA providers  Stakeholders suggested several strategies that, if implemented, could reduce the effect of cashouts at job separation from 401(k) plans  Simplifying the rollover process: Stakeholders proposed two modifications to the current rollover process that they believe could make the process more seamless and reduce the incidence of cashouts  First, stakeholders suggested that a third-party entity tasked with facilitating rollovers between employer plans for a separating participant would likely reduce the incidence of cashouts at job separation  Such an entity could automatically route a participant’s account balance from the former plan to a new one  One stakeholder said having a third-party entity facilitate the rollover would eliminate the need for a plan participant to negotiate the process  Such a service, however, would likely come at cost that may likely be passed onto participants  Stakeholders also suggested direct rollovers of account balances between plans could further reduce the incidence of cashouts  One stakeholder, however, cautioned that direct rollovers could have downsides for some participants  For example, participants who prefer to keep their balance in their former employer’s plan but provide no direction to the plan sponsor may inadvertently find their account balance rolled into a new employer’s plan  Restricting cashouts to participant contributions only: Some stakeholders suggested limiting the assets a participant may access at job separation  For example, some stakeholders said that participants should not be allowed to cash out vested plan sponsor contributions, thus preserving those contributions and their earnings for retirement  However, this strategy could result in participants overseeing and monitoring several retirement accounts  Stakeholders suggested several strategies that, if implemented, could limit the adverse effect of hardship withdrawals on retirement savings  Narrowing the IRS safe harbor: Although some plan sponsors are expanding the reasons for a hardship to align with perceived employee needs, some stakeholders said narrowing the IRS safe harbor would likely reduce the incidence of early withdrawals  For example, some stakeholders suggested narrowing the definition of a hardship to exclude the purchase of a primary residence or for postsecondary education costs  In addition, one stakeholder said alternatives exist to finance home purchases (mortgages) and postsecondary education (student loans)  Stakeholders noted that eliminating the purchase of a primary residence and postsecondary education costs from the IRS safe harbor would make hardship withdrawals a tool more strictly used to avoid sudden and unforeseen economic shocks  In combination with the two exclusions, one stakeholder suggested consideration be given to either reducing or eliminating the additional 10 percent tax for early distributions that may apply to hardship withdrawals  Replacing hardship withdrawals with hardship loans: Stakeholders said replacing a hardship withdrawal, which permanently removes money from the retirement system, with a no-interest hardship loan, which would be repaid to the account, would reduce early withdrawals  Under this suggestion, if the loan were not repaid within this predetermined time frame, the remaining loan balance could be considered a deemed distribution and treated as income (similar to the way a hardship withdrawal is treated now)  Incorporating emergency savings features into 401(k) plans: Stakeholders said incorporating an emergency savings account into the 401(k) plan structure may help participants absorb economic shocks and better prepare for both short-term financial needs and long-term retirement planning  (See fig  3 ) In addition, stakeholders said participants with emergency savings accounts could be better prepared to avoid high interest rate credit options, such as credit cards or payday loans, in the event of an economic shock  Stakeholders had several ideas for implementing emergency savings accounts  For example, one stakeholder suggested that, were it allowed, plan sponsors could revise automatic account features to include automatic contributions to an emergency savings account  Some stakeholders also said emergency savings accounts could be funded with after-tax participant contributions to eliminate the tax implications when withdrawing money from the account  However, another stakeholder said emergency savings contributions could reduce contributions to a 401(k) plan  In the United States, the amount of aggregate savings in retirement accounts continues to grow, with nearly $17 trillion invested in 401(k) plans and IRAs  Early access to retirement savings in these plans may incentivize plan participation, increase participant contributions, and provide participants with a way to address their financial needs  However, billions of dollars continue to leave the retirement system early  Although these withdrawals represent a small percentage of overall assets in these accounts, they can erode or even deplete an individual’s retirement savings, especially if the retirement account represents their sole source of savings  Employers have implemented plan policies that seek to balance the short- term benefits of providing participants early access to their accounts with the long-term need to build retirement savings  However, the way plan sponsors treat outstanding loans after a participant separates from employment has the potential to adversely affect retirement savings  In the event of unexpected job loss or separation, plan loans can leave participants liable for additional taxes  Currently, the incidence and amount of loan offsets in 401(k) plans cannot be determined due to the way DOL collects data from plan sponsors  Additional information on loan offsets would provide insight into how plan loan features might affect long-term retirement savings  Without clear data on the incidence of these loan offsets, which plan sponsors are generally required to include, (but not itemize) on the Form 5500, the overall extent of unrepaid plan loans in 401(k) plans cannot be known  To better identify the incidence and amount of loan offsets in 401(k) plans nationwide, we recommend that the Secretary of Labor direct the Assistant Secretary for EBSA, in coordination with IRS, to revise the Form 5500 to require plan sponsors to report qualified plan loan offsets as a separate line item distinct from other types of distributions  (Recommendation 1) We provided a draft of this product to the Department of Labor, the Department of the Treasury, and the Internal Revenue Service for review and comment  In its written comments, reproduced in appendixes IV and V, respectively, DOL and IRS generally agreed with our findings, but neither agreed nor disagreed with our recommendation  DOL said it would consider our recommendation as part of its overall evaluation of the Form 5500, and IRS said it would work with DOL as it responds to our recommendation  The Department of Treasury provided no formal written comments  In addition, DOL, IRS, Treasury and two third-party subject matter experts provided technical comments, which we incorporated in the report, as appropriate As agreed with your staff, unless you publicly announce the contents of this report earlier, we plan no further distribution until 30 days from the report date  At that time, we will send copies to the Secretary of Labor, Secretary of the Treasury, Commissioner of Internal Revenue, and other interested parties  In addition, the report will be available at no charge on the GAO website at http://www gao gov  If you or your staff have any questions about this report, please contact me at (202) 512-7215 or jeszeckc@gao gov  Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report  GAO staff making key contributions to this report are listed in appendix VI  The objectives of this study were to determine: (1) what are the incidence and amount of retirement savings being withdrawn early; (2) what is known about the factors that might lead individuals to access their retirement savings early; and (3) what strategies or policies, if any, might reduce the incidence and amount of early withdrawals of retirement savings  To examine the incidence and amount of early withdrawals from individual retirement accounts (IRA) and 401(k) plans, we analyzed the most recent nationally representative data available in three relevant federal data sources, focusing our analysis on individuals in their prime working years (ages 25 to 55), when possible  For consistency, we analyzed data from 2013 from each data source because it was the most recent year that data were available for all types of early withdrawals we examined  We adjusted all dollar-value estimates derived from each data source for inflation and reported them in constant 2017 dollars  We determined that the data from these sources were sufficiently reliable for the purposes of our report  First, to examine recent incidence and amount of early withdrawals from IRAs and the associated tax consequences for individuals ages 25 to 55, we analyzed IRS estimates based on tax returns as filed by taxpayers before enforcement activity published by the Internal Revenue Service’s (IRS) Statistics of Income Division for tax year 2013  Specifically, we analyzed the number of taxpayers reporting early withdrawals from their IRAs in 2013 and the aggregate amount of these withdrawals  To provide additional context on the scope of these early withdrawals, we analyzed the age cohort’s total IRA contributions and the end-of-year fair market value of the IRAs, and compared these amounts to the aggregate amount withdrawn  To examine the incidence and amount of taxes paid as a result of the additional 10 percent tax for early distributions, we analyzed estimates on the additional 10 percent tax paid on qualified retirement plans in 2013  Although IRS did not delineate these data by age, we used these data as proxy because IRS assesses the additional 10 percent tax on distributions to taxpayers who have not reached age 59½  Given the delay between a withdrawal date and the date of the tax filing, it is possible that some of the taxes were paid in the year following the withdrawal  We reviewed technical documentation and developed the 95 percent confidence intervals that correspond to these estimates  Second, to examine the incidence and amount of early withdrawals from 401(k) plans, we analyzed data included in the 2014 panel of the U S  Census Bureau’s Survey of Income and Program Participation (SIPP)—a nationally representative survey of household income, finances, and use of federal social safety net programs—along with retirement account contribution and withdrawal data included in the SIPP’s Social Security Administration (SSA) Supplement on Retirement, Pensions, and Related Content  Specifically, we developed percentage and dollar-value estimates of the incidence and amount of lump sum payments received and hardship withdrawals taken by participants in 401(k) plans in 2013  Because the SIPP is based upon a complex probability sample, we used Balanced Repeated Replication methods with a Fay adjustment to derive all percentage, dollar-total, and dollar-ratio estimates and their 95 percent confidence intervals  To better understand the characteristics of individuals who received a lump sum and/or took a hardship withdrawal in 2013, we analyzed a range of selected individual and household demographic variables and identified characteristics associated with a higher incidence of withdrawals  We applied domain estimation methods to make estimates for these subpopulations  (For a list of variables used and the results of our analysis, please see appendix III ) We attempted to develop a multiple regression model to estimate the unique association between each characteristic and withdrawals, but determined that the SIPP did not measure key variables in enough detail to develop persuasive causal explanations  The sample size of respondents receiving lump sums was too small to precisely estimate the partial correlations of many demographic variables at once  Even with adequate sample sizes, associations between broad demographic variables, such as age and income, likely reflected underlying causes, such as retirement and financial planning strategies, which SIPP did not measure in detail  Third, to examine the incidence and amount of unrepaid plan loans from 401(k) plans, we analyzed the latest filing of annual plan data that plan sponsors reported on the Form 5500 to the Department of Labor (DOL) for the 2013 plan year  We looked at unrepaid plan loans reported by sponsors of large plans (Schedule H) and small plans (Schedule I)  For each schedule, we analyzed two variables related to unrepaid plan loans: (1) deemed distributions of participant loans (which captures the amount of loan defaults by active participants) and (2) benefits distributed directly to participants (which includes plan loan offsets for a variety of reasons, including plan loans that remain unpaid after a participant separates from a plan)  Because plan sponsors report data in aggregate and do not differentiate by participant age, we calculated and reported the aggregate of loan defaults identified as deemed distributions in both schedules  We could not determine the amount of plan loan offsets based on the way that plan sponsors are required to report them  Specifically, plan sponsors are required to treat unrepaid loans occurring after a participant separates from a plan as reductions or offsets in plan assets, and are required to report them as part of a larger commingled category of offsets that also includes large-dollar items like rollovers of account balances to another qualified plan or IRA  As a result, we were unable to isolate and report the amount of this category of unrepaid plan loans  To identify what is known about the factors that might lead individuals to access their 401(k) plans and IRAs and what strategies or policies might reduce the early withdrawal of retirement savings, we performed a literature search using multiple databases to locate documents regarding early withdrawals of retirement savings published since 2008 and to identify experts for interviews  The search yielded a wide variety of scholarly articles, published articles from various think tank organizations, congressional testimonies, and news reports  We reviewed these studies and identified factors that lead individuals to withdraw retirement savings early, as well as potential strategies or policies that might reduce this behavior  The search also helped us identify additional potential interviewees  To answer our second and third objectives, we visited four metropolitan areas and conducted 51 interviews with a wide range of stakeholders that we identified in the literature  In some cases, to accommodate stakeholder schedules, we conducted phone interviews or accepted written responses  Specifically, we interviewed human resource professionals from 22 private-sector companies (including 4 written responses), representatives from 8 plan administrators, 13 retirement research experts (including 1 written response), representatives from 4 industry associations, representatives from 2 participant advocacy organizations, and representatives from 2 financial technology companies  We conducted in-person interviews at four sites to collect information from three different groups: (1) human resource officials in private-sector companies, (2) top 20 plan administrators or recordkeepers, and (3) retirement research experts  We selected site visit locations in four metropolitan locations that were home to representatives of each group  To select companies for potential interviews, we reached out to a broad sample of Fortune 500 companies that offered a 401(k) plan to employees and varied by geographic location, industry, and number of employees  We selected plan administrators based on Pensions and Investments rankings for assets under management and number of individual accounts  We selected retirement research experts who had published research on early withdrawals from retirement savings, as well as experts that we had interviewed in our prior work  Based on these criteria, we conducted site visits in Boston, Massachusetts; Chicago, Illinois; the San Francisco Bay Area, California; and Seattle, Washington  We held interviews with parties in each category who responded affirmatively to our request  In each interview, we solicited names of additional stakeholders to interview  We also interviewed representatives of organizations, such as financial technology companies, participant advocacy organizations, industry associations, and plan administrators focused on small businesses, whose work we deemed relevant to our study  We developed a common question set for each stakeholder category that we interviewed  We based our interview questions on our literature review, research objectives, and the kind of information we were soliciting from each stakeholder category  In each interview, we asked follow-up questions based on the specific responses provided by interviewees  In our company interviews, we asked how companies administered retirement benefits for employees; company policies and procedures regarding separating employees and the disposition of their retirement accounts; company policies regarding plan loans, hardship withdrawals, and rollovers from other 401(k) plans; and company strategies to reduce early withdrawals from retirement savings  In our interviews with plan administrators, we asked about factors that led individuals to access their retirement savings early, how plan providers interacted with companies and separating employees, available data on loans and hardship withdrawals from client retirement plans, and potential strategies to reduce the incidence and amount of early withdrawals  In our interviews with retirement research experts, financial technology companies, participant advocacy organizations, and industry associations we asked about factors that led individuals to make early withdrawals from their retirement savings and any potential strategies that may reduce the incidence and amount of early withdrawals  In our interviews with plan administrators and retirement research experts, we also provided a supplementary table outlining 37 potential strategies to reduce early withdrawals from retirement savings  We asked interviewees to comment on the strengths and weaknesses of each strategy in terms of its potential to reduce early withdrawals, and gave them opportunity to provide other potential strategies not listed in the tables  We developed the list of strategies based on the results of our literature review  Some interviewees also provided us with additional data and documents to assist our research  For example, some companies and plan administrators we interviewed provided quantitative data on the number of plan participants, the average cashout or rollover amounts, the percentage of participants who took loans or hardship withdrawals from their retirement accounts, and known reasons for these withdrawals  Some research experts also provided us with documentation, including published articles and white papers that supplemented our interviews and literature review  All data collected through these methods are nongeneralizable and reflect the views and experiences of the respondents and not the entire population of their respective constituent groups  To answer our second and third objectives, we analyzed the content of our stakeholder interview responses and corroborated our analysis with information obtained from our literature review and quantitative information provided by our interviewees  To examine what is known about the factors leading individuals to access retirement savings early, we catalogued common factors that stakeholders identified as contributing to early withdrawals from retirement savings  We also collected information on plan rules governing early participant withdrawals of retirement savings  To identify potential strategies or policies that might reduce the incidence and amount of early withdrawals, we analyzed interview responses and catalogued (1) company practices that employers identified as having an effect in reducing early withdrawals and (2) strategies that stakeholders suggested that could achieve a similar outcome  GAO is not endorsing or recommending any strategy in this report, and has not evaluated these strategies for their behavioral or other effects on retirement savings or on tax revenues  Appendix II: Selected Provisions Related to Early Withdrawals from 401(k) Plans and Individual Retirement Accounts (IRAs) Requirements Provides an exception for distributions for qualified higher education expenses and for qualified “first-time” home purchases made before age 59½ from the additional 10 percent tax for early distributions Defines “qualified first-time homebuyer distribution” and “first-time homebuyer,” and prescribes the lifetime dollar limit on such distributions, among other things  Allows eligible individuals to make tax-deductible contributions to individual retirement accounts, subject to limits based, for example, on income and pension coverage  Provides for the loss of exemption for an IRA if the IRA owner engages in a prohibited transaction, which results in the IRA being treated as distributing all of its assets to the IRA owner at the fair market value on the first day of the year in which the transaction occurred  Defines a prohibited transaction to include the lending of money or other extension of credit between a plan and a disqualified person  Requirements Allows eligible individuals to make contributions to a Roth IRA that are not tax- deductible  Distributions from the account can generally be treated as a qualified distribution if a distribution is made on or after the Roth IRA owner reaches age 59½ and the distributions is made after the 5-taxable year period beginning when the account was initially opened  Defines a prohibited transaction to include the lending of money or other extension of credit between a plan and a disqualified person  Appendix III: Estimated Incidence of Certain Early Withdrawals of Retirement Savings 401(k) plans 401(k) plans ($1000 or more) 401(k) plans 401(k) plans ($1000 or more) 401(k) plans 401(k) plans ($1000 or more) Legend: * Sampling error was too large to report an estimate  In addition to the contact named above, Dave Lehrer (Assistant Director); Jonathan S  McMurray (Analyst-in-Charge); Gustavo O  Fernandez; Sean Miskell; Jeff Tessin; and Adam Wendel made key contributions to this report  James Bennett, Holly Dye, Sara Edmondson, Sarah Gilliland, Sheila R  McCoy, Ed Nannenhorn, Katya Rodriguez, MaryLynn Sergent, Linda Siegel, Rachel Stoiko, Frank Todisco, and Sonya Vartivarian also provided support  The Nation’s Fiscal Health: Action Is Needed to Address the Federal Government’s Future  GAO-18-299SP  Washington, D C : June 21, 2018  The Nation’s Retirement System: A Comprehensive Re-evaluation is Needed to Better Promote Future Retirement Security  GAO-18-111SP  Washington, D C : October 18, 2017  Retirement Security: Improved Guidance Could Help Account Owners Understand the Risks of Investing in Unconventional Assets  GAO-17-102  Washington, D C : December 8, 2016  401K Plans: Effects of Eligibility and Vesting Policies on Workers’ Retirement Savings  GAO-17-69  Washington, D C : October 21, 2016  Retirement Security: Low Defined Contribution Savings May Pose Challenges  GAO-16-408  Washington, D C : May 5, 2016  Retirement Security: Shorter Life Expectancy Reduces Projected Lifetime Benefits for Lower Earners  GAO-16-354  Washington, D C : March 25, 2016  Social Security’s Future: Answers to Key Questions  GAO-16-75SP  Washington, D C : October 27, 2015  Retirement Security: Federal Action Could Help State Efforts to Expand Private Sector Coverage  GAO-15-556  Washington, D C : September 10, 2015  Highlights of a Forum: Financial Literacy: The Role of the Workplace  GAO-15-639SP  Washington, D C : July 7, 2015  401(K) Plans: Greater Protections Needed for Forced Transfers and Inactive Accounts  GAO-15-73  Washington, D C : November 21, 2014  Older Americans: Inability to Repay Student Loans May Affect Financial Security of a Small Percentage of Retirees  GAO-14-866T  Washington, D C : September 10, 2014  Financial Literacy: Overview of Federal Activities, Programs, and Challenges  GAO-14-556T  Washington, D C : April 30, 2014  Retirement Security: Trends in Marriage and Work Patterns May Increase Economic Vulnerability for Some Retirees  GAO-14-33  Washington, D C : January 15, 2014  401(K) Plans: Labor and IRS Could Improve the Rollover Process for Participants  GAO-13-30  Washington, D C : March 7, 2013  Retirement Security: Women Still Face Challenges  GAO-12-699  Washington, D C : July 19, 2012  401(K) Plans: Policy Changes Could Reduce the Long-term Effects of Leakage on Workers’ Retirement Savings  GAO-09-715  Washington, D C: August 28, 2009 

ground_truth: Although congressional rules establish a general division of responsibility under which questions of policy are kept separate from questions of funding, House rules provide for exceptions in certain circumstances. One such circumstance allows for the inclusion of legislative language in general appropriations bills or amendments thereto for "germane provisions that retrench expenditures by the reduction of amounts of money covered by the bill." This exception appears in clause 2(b) of House Rule XXI and is known as the Holman rule, after Representative William Holman of Indiana, who first proposed the exception in 1876. Since the period immediately after its initial adoption, the House has interpreted the Holman rule through precedents that have tended to incrementally narrow its application. Under current precedents, for a legislative provision or amendment to be in order, the legislative language in question must be both germane to other provisions in the measure and must produce a clear reduction of appropriations in that bill. In addition, the House adopted a separate order during the 115th Congress that provided for retrenchments of expenditures by a reduction of amounts of money covered by the bill to be construed as applying to: any provision or amendment that retrenches expenditures by— (1) the reduction of amounts of money in the bill; (2) the reduction of the number and salary of the officers of the United States; or (3) the reduction of the compensation of any person paid out of the Treasury of the United States. This separate order was not readopted for the 116th Congress. This report provides a history of this provision in House rules and an analysis of precedents that are illustrative of its possible application.

prompt_front: You are given two reports by the government agency.



Question: Write a one-page summary of the report 2.

Report 1: Congressional rules establish a general division of responsibility under which questions of policy are kept separate from questions of funding  Broadly, the term authorization is used to describe legislation that establishes, continues, or modifies the organization or activities of a federal entity or program  By itself, such legislation does not provide funding for such purposes  Instead, the authority to obligate payments from the Treasury is left to separate appropriations measures  This distinction between appropriations and general legislation as two separate classes of measures, and their consideration in separate legislative vehicles, is a construct of congressional rules and practices  It has been developed and formalized by the House and Senate pursuant to the constitutional authority for each chamber to "determine the Rules of its Proceedings " This power permits each chamber of Congress to enforce, modify, waive, repeal, or ignore its rules as it sees fit  Because the two chambers exercise this rulemaking authority independently, they have developed differing (albeit generally similar) rules and practices  This report addresses solely developments in the House  According to Hinds' Precedents , the origin of a formal rule mandating the separation of general legislation from appropriations can be traced to 1835, when the House debated the increasing problem of delay in enacting appropriations due to the inclusion of "debatable matters of another character, new laws which created long debates in both Houses" and suggested that the Committee on Ways and Means should "strip the appropriation bills of every thing but were legitimate matters of appropriation " In the following Congress (25 th Congress, 1837-1839), language was added to House rules that stated: No appropriation shall be reported in such general appropriation bills, or be in order as an amendment thereto, for any expenditure not previously authorized by law  This rule was applied broadly on occasion to exclude legislative provisions authorizing new expenditures as well, such as a case in 1838 when it was used to exclude an amendment that included a provision for refurnishing the White House  Gradually, the rule "became construed through a long line of decisions to admit amendments increasing salaries but as excluding amendments providing for decreases " As a consequence of this, in 1876, the language was expanded (at the suggestion of Representative William Holman of Indiana) to further state: Nor shall any provision in any such bill or amendment thereto, changing existing law, be in order except such as, being germane to the subject matter of the bill, shall retrench expenditures  As described by one scholar, this provision effectively granted the Appropriations Committee authority to include virtually any legislative provision in an appropriations measure so long as it reduced the number and salary of federal officials, the compensation of any person paid out of the Treasury, or the amounts of money covered in an appropriation bill  According to one contemporary account, a broad initial construction of the rule by the House resulted in "putting a great mass of general legislation upon the appropriation bills " The rule was retained in this form until 1880 (46 th Congress), when it was modified to define retrenchments as the reduction of "the number and salary of officers of the United States, the reduction of compensation of any person paid out of the Treasury of the United States, or the reduction of the amounts of money covered by the bill " That form of the rule remained a part of House rules until the 49 th Congress eliminated it in 1885  It was reinserted in the rules for the 52 nd and 53 rd Congresses (1891-1895) but was again dropped for the 54 th through 61 st Congresses (1895-1911) before being readopted in the 62 nd Congress  Although the Holman rule has remained a part of House rules since that time, its language was amended at the start of the 98 th Congress (1983-1984)  At that time, it was restructured to narrow the exception to the general prohibition against legislation to allow only retrenchments reducing amounts of money covered by the bill  In addition, the House rules for the 98 th Congress changed when retrenchment amendments could be offered  Amendments that only alter the items or amounts in an appropriation bill are generally in order when the measure is read for amendment and must be offered as the relevant paragraph or section of the bill is read  The new version of the rule provided, however, that germane amendments to retrench expenditures (as well as limitation amendments) would be in order only after the reading of a general appropriation bill and if a preferential motion that the Committee of the Whole rise and report (essentially ending consideration of the bill) were rejected  Further stylistic changes were made when the House recodified its rules in the 106 th Congress (1999-2000) to make explicit that retrenchment amendments are in order if the motion to rise and report is not offered—as well as if the motion is rejected  It also clarified that the effect of a point of order against legislation in an appropriations bill (and, by extension, the application of the Holman rule exception) is surgical so that it lies against an offending provision in the text and not against consideration of the entire bill  The Holman rule currently states the following: A provision changing existing law may not be reported in a general appropriation bill, including a provision making the availability of funds contingent on the receipt or possession of information not required by existing law for the period of the appropriation, except germane provisions that retrench expenditures by the reduction of amounts of money covered by the bill [emphasis added]  The Holman rule, thus, does not circumscribe Congress's lawmaking authority but rather provides a limited exception to the general prohibition in House rules against legislation in appropriation measures  For the 115 th Congress, the House included a separate order as Section 3(a) of H Res  5 , adopting the rules of the House, that provides the following: During the first session of the One Hundred Fifteenth Congress, any reference in clause 2 of rule XXI to a provision or amendment that retrenches expenditures by a reduction of amounts of money covered by the bill shall be construed as applying to any provision or amendment (offered after the bill has been read for amendment) that retrenches expenditures by— (1) the reduction of amounts of money in the bill; (2) the reduction of the number and salary of the officers of the United States; or (3) the reduction of the compensation of any person paid out of the Treasury of the United States  As stated in a section-by section summary included in the Congressional Record by Representative Pete Sessions, the chairman of the House Rules Committee, the purpose of this provision is "to see if the reinstatement of the Holman rule will provide Members with additional tools to reduce spending during consideration of the regular general appropriation bill " The applicability of this separate order was extended under Section 5 of H Res  787 (115 th Congress) which provided that "Section 3(a) of House Resolution 5 is amended by striking 'the first session of '" This separate order was not adopted for the 116 th Congress, so the application of the rule reverts to being guided by prior precedents rather than this language  Since the period immediately after the initial adoption of the rule in the 19 th century, the House has interpreted it through precedents that have tended to incrementally narrow its application  For example, early precedents established that while it was not always necessary that a retrenchment specify the amount of a reduction of expenditures, it must appear as a necessary result of the legislation to be in order and that it is not sufficient that such reduction would probably (or would in the opinion of the chair) result therefrom  For example, legislation that would simply confer discretionary authority to terminate employment of federal employees is not in order under the Holman exception because any resulting savings would be speculative  The reduction also may not be contingent on an event  Furthermore, the rule is not applicable to funds other than those appropriated in the pending general appropriations bill  The Holman rule then is intended to apply only when an obvious reduction of funds in a general appropriations bill is achieved by the provision in question, such as the cessation of specific government activities, or through a specific reduction of total appropriations in the bill  In addition, the exception does not apply to limitations (on the grounds that such language is not legislative) or legislative language unaccompanied by a reduction of funds in the bill  Legislation that is too broad has also typically not been allowed under the Holman rule exception  The House has held, for example, that a provision that stated no part of an appropriation could be expended for a specific, designated purpose qualified as a retrenchment  However, a proposal that effectively repealed the law under which appropriations for that purpose were authorized was held not to come within the exception  In another case, the House held that even when a provision does reduce expenditures, it may not be accompanied by additional legislative provisions not directly contributing to the reduction  The separate order for the 115 th Congress effectively reinstated language that had been stricken from the rule in 1983  While the full scope of amendments might be in order as a consequence of this language, it is possible to analyze its potential impact based on past precedents and the limited experience of the 115 th Congress  The additional language opened the door to the consideration of retrenchments resulting from a reduction of the number and salary of the officers of the United States or the reduction of the compensation of any person paid out of the Treasury of the United States  There are precedents regarding provisions allowed under the older, pre-1983 form of the rule that may be illustrative for understanding what might be in order  For example, a proposal that pay for a class of employees be limited to a smaller number of employees than authorized by law was allowed, as were proposals that would reduce the number of officers  The Holman rule also allowed proposals that would consolidate or eliminate offices  On at least one occasion, the Holman rule was the basis for allowing a proposal to replace civilian employees with lower paid U S  Army enlisted personnel  In another case, the rule allowed for an amendment that capped the salaries of certain employees  In the 115 th Congress, one amendment was considered in order based on a plain reading of the text of the separate order to allow for "the reduction of the compensation of any person paid out of the Treasury of the United States " Although the amendment failed of passage, it would have provided that: The salary of Mark Gabriel, the Administrator of the Western Area Power Administration, shall be reduced to $1  As cited above, however, neither the rule nor the separate order allows for retrenchments that would be applicable to funds other than those appropriated in the pending general appropriations bill  In addition, the application of the broader exceptions in the separate order were still subject to the general requirement for germaneness  The Holman rule is not intended to open the door for legislative provisions that would expand the scope of the bill  As a consequence, even with the additional scope provided by the language of the separate order, it would likely not be in order to include broad legislative provisions in, or amendments to, a specific appropriation bill that would apply to the salary or number of federal employees funded through appropriations in other measures  Furthermore, House precedent establishes that simply providing for a reduction of the number and salaries of officers in a paragraph when it is complicated by other elements does not necessarily bring a proposition within the exception  The Holman rule was also cited as the basis for allowing the consideration of one additional amendment during the 115 th Congress  That amendment also failed to pass, but it would have abolished the Budget Analysis Division of the Congressional Budget Office, comprising 89 employees with annual salaries aggregating $15 million, transferring responsibility for any duties imposed by law and regulation to the Office of the Director of the Congressional Budget Office  When discussing the application of rules and precedents, it is important to note that the House Parliamentarian is the sole definitive authority on questions relating to the chamber's precedents and procedures and should be consulted if a formal opinion on any specific parliamentary question is desired 


Report 2: The Energy and Water Development appropriations bill includes funding for civil works projects of the U S  Army Corps of Engineers (USACE), the Department of the Interior's Central Utah Project (CUP) and Bureau of Reclamation (Reclamation), the Department of Energy (DOE), and a number of independent agencies, including the Nuclear Regulatory Commission (NRC) and the Appalachian Regional Commission (ARC)  Figure 1 compares the major components of the Energy and Water Development bill from FY2017 through the FY2020 request  President Trump submitted his FY2020 detailed budget proposal to Congress on March 18, 2019 (after submitting a general budget overview on March 11)  The budget requests for agencies included in the Energy and Water Development appropriations bill total $38 02 billion—$6 64 billion (15%) below the FY2019 appropriation  (See Table 3  ) A $1 309 billion increase (12%) is proposed for DOE nuclear weapons activities  For FY2019, the conference agreement on H R  5895 ( H Rept  115-929 ) provided total Energy and Water Development appropriations of $44 66 billion—3% above the FY2018 level and 23% above the FY2019 request  The bill was signed by the President on September 21, 2018 ( P L  115-244 )  Figures for FY2019 exclude emergency supplemental appropriations totaling $17 419 billion provided to USACE and DOE for natural disaster response by the Bipartisan Budget Act of 2018 ( P L  115-123 ), signed February 9, 2018  For more details, see CRS Report R45258, Energy and Water Development: FY2019 Appropriations , by Mark Holt and Corrie E  Clark, and CRS Report R45326, Army Corps of Engineers Annual and Supplemental Appropriations: Issues for Congress , by Nicole T  Carter  The FY2020 budget request proposes substantial reductions from the FY2019 enacted level for DOE energy research and development (R&D) programs, including a reduction of $178 million (-24%) in fossil fuels and $502 million (-38%) in nuclear energy  Energy efficiency and renewable energy R&D would decline by $1 724 billion (-83%)  DOE science programs would be reduced by $1 039 billion (-16%)  Programs targeted by the budget for elimination or phaseout include energy efficiency grants, the Advanced Research Projects Agency—Energy (ARPA-E), and loan guarantee programs  Funding would be reduced for USACE by $2 172 billion (-31%), and Reclamation and CUP by $462 million (-29%)  Congress did not enact similar reductions included in the FY2018 and FY2019 budget requests  Congressional consideration of the annual Energy and Water Development appropriations bill is affected by certain procedural and statutory budget enforcement measures  These consist primarily of limits associated with the budget resolution on total discretionary spending and allocations of this amount that apply to spending under the jurisdiction of each appropriations subcommittee  Statutory budget enforcement is derived from the Budget Control Act of 2011 (BCA; P L  112-25 )  The BCA established separate limits on defense and nondefense discretionary spending  These limits are in effect for each of the fiscal years from FY2012 through FY2021, and are primarily enforced by an automatic spending reduction process called sequestration, in which a breach of a spending limit would trigger across-the-board cuts within that spending category  The BCA's statutory discretionary spending limits were increased for FY2018 and FY2019 by the Bipartisan Budget Act of 2018 (BBA 2018; P L  115-123 ), enacted February 9, 2018  However, the BCA discretionary spending limits have not been increased for FY2020  As a result, the limits currently in place for FY2020 are substantially lower than the limits that were in place for FY2019  For discretionary defense spending, the FY2020 limit drops from $647 billion to $576 billion (-11%), while the nondefense limit drops from $597 billion to $542 billion (-9%)  A bill to raise the defense and nondefense spending limits for FY2020 and FY2021 was reported by the House Budget Committee April 5, 2019 ( H R  2021 , H Rept  116-35 )  (For more information, see CRS Report R44874, The Budget Control Act: Frequently Asked Questions , by Grant A  Driessen and Megan S  Lynch ) Several issues raised by the Administration's budget request could generate controversy during congressional consideration of Energy and Water Development appropriations for FY2020  The issues described in this section—listed approximately in the order the affected agencies appear in the Energy and Water Development bill—were selected based on the total funding involved, the percentage of proposed increases or decreases, and potential impact on broader public policy considerations  For USACE, the Trump Administration requested $4 827 billion for FY2020, which is $2 172 billion (-31%) below the FY2019 appropriation  The request includes no funding for initiating new studies and construction projects (referred to as new starts)  The FY2020 request seeks to limit funding for ongoing navigation and flood risk-reduction construction projects to those whose benefits are at least 2 5 times their costs, or projects that address safety concerns  Many congressionally authorized USACE projects would not meet that standard  The Administration also proposes to transfer the Formerly Utilized Sites Remedial Action Program from USACE to DOE  For Reclamation, FY2020 funding would be reduced by $461 6 million (29%) from the FY2019 level, to $1 11 billion  For more details, see CRS In Focus IF11137, Army Corps of Engineers: FY2020 Appropriations , by Nicole T  Carter and Anna E  Normand; CRS In Focus IF11158, Bureau of Reclamation: FY2020 Appropriations , by Charles V  Stern; and CRS Report R45326, Army Corps of Engineers Annual and Supplemental Appropriations: Issues for Congress , by Nicole T  Carter  DOE's FY2020 budget request includes three mandatory proposals related to the Power Marketing Administrations (PMAs)—Bonneville Power Administration (BPA), Southeastern Power Administration (SEPA), Southwestern Power Administration (SWPA), and Western Area Power Administration (WAPA)  PMAs sell the power generated by the dams operated by Reclamation and USACE  The Administration proposes to divest the assets of the three PMAs that own transmission infrastructure: BPA, SWPA, and WAPA  These assets consist of thousands of miles of high voltage transmission lines and hundreds of power substations  The budget request projects that mandatory savings from the sale of these assets would total approximately $5 8 billion over a 10-year period  The FY2020 budget request includes a proposal to repeal the borrowing authority for WAPA's Transmission Infrastructure Program, which facilitates the delivery of renewable energy resources  The FY2020 budget also proposes eliminating the statutory requirement that PMAs limit rates to amounts necessary to recover only construction, operations, and maintenance costs; the budget proposes that the PMAs instead transition to a market-based approach to setting rates  The Administration has estimated that this proposal would yield $1 9 billion in new revenues over 10 years  The budget also calls for repealing $3 25 billion in borrowing authority provided to WAPA for transmission projects enacted under the American Recovery and Reinvestment Act of 2009 ( P L  111-5 )  The proposal is estimated to save $640 million over 10 years  All of these proposals would need to be enacted in authorizing legislation, and no congressional action has been taken on them to date  The proposals have been opposed by groups such as the American Public Power Association and the National Rural Electrical Cooperative Association, and they have been the subject of opposition letters to the Administration from several regionally based bipartisan groups of Members of Congress  PMA reforms have been supported by some policy research institutes, such as the Heritage Foundation  For further information, see CRS Report R45548, The Power Marketing Administrations: Background and Current Issues , by Richard J  Campbell  The FY2020 budget request proposes to terminate both the DOE Weatherization Assistance Program and the State Energy Program (SEP)  The Weatherization Assistance Program provides formula grants to states to fund energy efficiency improvements for low-income housing units to reduce their energy costs and save energy  The SEP provides grants and technical assistance to states for planning and implementation of their energy programs  Both the weatherization and SEP programs are under DOE's Office of Energy Efficiency and Renewable Energy (EERE)  The weatherization program received $257 million and SEP $55 million for FY2019, after also having been proposed for elimination in that year's budget request, as well as in FY2018  According to DOE, the proposed elimination of the grant programs is "due to a departmental shift in focus away from deployment activities and towards early-stage R&D " Appropriations for DOE R&D on energy efficiency, renewable energy, nuclear energy, and fossil energy would be reduced from $4 133 billion in FY2019 to $1 729 billion (-58%) under the Administration's FY2020 budget request  Major proposed reductions include bioenergy technologies (-82%), vehicle technologies (-79%), natural gas technologies (-79%), advanced manufacturing (-75%), building technologies (-75%), wind energy (-74%), solar energy (-73%), geothermal technologies (-67%), and nuclear fuel cycle R&D (-66%)  DOE says the proposed reductions would primarily affect the later stages of energy research, which tend to be the most costly  "The Budget focuses DOE resources toward early-stage R&D, where the Federal role is strongest, and reflects an increased reliance on the private sector to fund later-stage research, development, and commercialization of energy technologies," according to the FY2020 DOE request  Similar reductions proposed by the Administration for FY2019 were not enacted  The Administration's FY2020 budget request, for the first time since FY2010, would provide new funding for a proposed nuclear waste repository at Yucca Mountain, NV; similar Administration requests for the repository project were not included in the enacted funding measures for FY2018 and FY2019  Under the FY2020 request, DOE would receive $116 million to seek an NRC license for the repository and to develop interim nuclear waste storage capacity  NRC would receive $38 5 million to consider DOE's application  DOE's total of $116 million in nuclear waste funding would come from two appropriations accounts: $90 million from Nuclear Waste Disposal and $26 million from Defense Nuclear Waste Disposal (to pay for defense-related nuclear waste that would be disposed of at Yucca Mountain)  DOE submitted a license application for the Yucca Mountain repository in 2008, but NRC suspended consideration in 2011 for lack of funding  The Obama Administration had declared the Yucca Mountain site "unworkable" because of opposition from the state of Nevada  The House voted to provide the Yucca Mountain funding requested for FY2018 and a $100 million increase for FY2019, but the Senate Appropriations Committee did not include it for FY2018, and it was not included in the Senate-passed bill for FY2019  Also as in FY2018, the FY2019 Senate bill included an authorization for a pilot program to develop an interim nuclear waste storage facility at a voluntary site (§304)  The enacted FY2019 appropriations measure did not include the House-passed funding for Yucca Mountain or the Senate's nuclear waste pilot program provisions  For more background, see CRS Report RL33461, Civilian Nuclear Waste Disposal , by Mark Holt  The FY2020 budget request would halt further loans and loan guarantees under DOE's Advanced Technology Vehicles Manufacturing Loan Program and the Title 17 Innovative Technology Loan Guarantee Program  Similar proposals to eliminate the programs in FY2018 and FY2019 were not enacted  The FY2020 budget request would also halt further loan guarantees under DOE's Tribal Energy Loan Guarantee Program  Under the FY2020 budget proposal, DOE would continue to administer its existing portfolio of loans and loan guarantees  Unused prior-year authority, or ceiling levels, for loan guarantee commitments would be rescinded, as well as $169 5 million in unspent appropriations to cover loan guarantee "subsidy costs" (which are primarily intended to cover potential losses)  On March 22, 2019, after the FY2020 budget request had been submitted, DOE provided $3 7 billion in additional Title 17 loan guarantees for two new reactors under construction at the Vogtle nuclear plant in Georgia  The Vogtle project had previously received $8 3 billion in loan guarantees under the DOE program  The Administration's request for DOE includes $107 million in FY2020 for the U S  contribution to the International Thermonuclear Experimental Reactor (ITER), which is under construction in France by a multinational consortium  "ITER will be the first fusion device to maintain fusion for long periods of time" and is to lay the technical foundation "for the commercial production of fusion-based electricity," according to the consortium's website  The FY2020 DOE appropriation request, 19% below the FY2020 level, would pay for components supplied by U S  companies for the project, such as central solenoid superconducting magnet modules  ITER has long attracted congressional concern about management, schedule, and cost  The United States is to pay 9% of the project's construction costs, including contributions of components, cash, and personnel  Other collaborators in the project include the European Union, Russia, Japan, India, South Korea, and China  The total U S  share of the cost was estimated in 2015 at between $4 0 billion and $6 5 billion, up from $1 45 billion to $2 2 billion in 2008  DOE funding for the project was $122 million in FY2018 and $132 million in FY2019  The Trump Administration's FY2020 budget would eliminate the Advanced Research Projects Agency—Energy (ARPA-E) and rescind $287 million of the agency's unobligated balances  ARPA-E funds research on technologies that are determined to have potential to transform energy production, storage, and use  "This elimination facilitates opportunities to integrate the positive aspects of ARPA-E into DOE's applied energy research programs," according to the DOE request  The Administration also proposed to terminate ARPA-E in its FY2018 and FY2019 budget requests, but Congress increased the program's funding in both years  Because ARPA-E provides advance funding for projects for up to three years, oversight and management of the program would still be required during a phaseout period  According to the Administration budget request, "ARPA-E will utilize the remainder of its unobligated balances to execute the multi-year termination of the program, with all operations ceasing by FY 2022 " The FY2020 budget request for DOE Weapons Activities is 12% greater than the FY2019 enacted level ($12 4 billion vs  $11 1 billion)  Weapons Activities programs are carried out by the National Nuclear Security Administration (NNSA), a semiautonomous agency within DOE  Under Weapons Activities, FY2020 funding for nuclear warhead life-extension programs (LEPs) would increase by 10% ($2 1 billion vs $1 9 billion)  The two most notable increases within that account are the funding request for W80-4 LEP, which increases by 37% ($898 6 million vs  $654 8 million) and the initiation of funding for the W87-1 LEP  The increase in the request for the W80-4 warhead, which is due to be carried on the new long-range standoff weapon (a new cruise missile), apparently is the result of a new budget estimate, as the Department of Defense is not accelerating development of the missile  The FY2020 request seeks $112 million for the W87-1 warhead (formerly the Interoperable Warhead 1, or IW-I), which received $53 million in FY2019  This warhead is to be carried by the Ground Based Strategic Deterrent, a new land-based missile that is scheduled to enter the force in the 2030s  The FY2020 budget request seeks $10 million for the W76-2 LEP, down from $65 million in FY2019  Work on this warhead is nearly complete  It is a low-yield modification of the current W76 warhead carried by U S  submarine-launched ballistic missiles  It remains controversial in Congress despite its relatively low price tag  In FY2020, NNSA is seeking $51 5 million, in the Stockpile Systems account, for surveillance efforts for the B83 gravity bomb, the most powerful bomb in the U S  inventory  This effort represents a 47% increase over the $35 million request in FY2019  The Obama Administration had planned to retire this bomb, but the Trump Administration reversed that decision in its 2018 Nuclear Posture Review  This decision may also prove controversial, as several Senators have been vocal supporters of the plan to retire the bomb  Within the Strategic Materials account in the NNSA budget, funding for Plutonium Sustainment would increase 97%, from $361 million enacted for FY2019 to $712 million requested for FY2020  This increase would support the Administration's plans to produce plutonium pits (or cores) for nuclear warheads at two facilities—Los Alamos National Laboratory in New Mexico and the Savannah River Site in South Carolina  The Administration is seeking $410 million to begin conceptual design and pre-Critical Decision (CD)-1 activities at Savannah River  For more information, see CRS Report R44442, Energy and Water Development Appropriations: Nuclear Weapons Activities , by Amy F  Woolf  DOE's Office of Environmental Management (EM) is responsible for environmental cleanup and waste management at the department's nuclear facilities  The total FY2020 appropriations request for EM activities of $6 469 billion would be a decrease of $706 million (-10%) from FY2019  The budgetary components of the EM program are Defense Environmental Cleanup (-9%), Non-Defense Environmental Cleanup (-20%), and the Uranium Enrichment Decontamination and Decommissioning Fund (-15%)  The FY2020 request includes a proposal to transfer management of the Formerly Utilized Sites Remedial Action Program (FUSRAP) from USACE to the Office of Legacy Management (LM), the DOE office responsible for long-term stewardship of remediated sites  The FY2020 LM budget request includes $141 million for FUSRAP, down from $150 million appropriated to USACE for the program in FY2019  According to the DOE budget justification, "USACE will continue to conduct cleanup of FUSRAP sites on a reimbursable basis " Table 1 indicates the steps during consideration of FY2020 Energy and Water Development appropriations  (For more details, see the CRS Appropriations Status Table at http://www crs gov/AppropriationsStatusTable/Index  ) As of the publication date of this report, no markups had been held  Table 2 includes budget totals for energy and water development appropriations enacted for FY2011 through FY2019, plus the FY2020 request  The annual Energy and Water Development appropriations bill includes four titles: Title I—Corps of Engineers—Civil; Title II—Department of the Interior (Central Utah Project and Bureau of Reclamation); Title III—Department of Energy; and Title IV—Independent Agencies, as shown in Table 3   Major programs in the bill are described in this section in the approximate order they appear in the bill  Previous appropriations and budget recommendations for FY2020 are shown in the accompanying tables, and additional details about many of these programs are provided in separate CRS reports as indicated  For a discussion of current funding issues related to these programs, see " Funding Issues and Initiatives ," above  Congressional clients may obtain more detailed information by contacting CRS analysts listed in CRS Report R42638, Appropriations: CRS Experts , by James M  Specht and Justin Murray  FY2020 budget justifications for the largest agencies funded by the annual Energy and Water Development appropriations bill can be found through the following links: Title I, U S  Army Corps of Engineers, Civil Works, http://www usace army mil/Missions/CivilWorks/Budget Title II Bureau of Reclamation, https://www usbr gov/budget/ Central Utah Project, https://www doi gov/sites/doi gov/files/uploads/fy2020_cupca_budget_justification pdf Title III, Department of Energy, https://www energy gov/cfo/downloads/fy-2020-budget-justification Title IV, Independent Agencies Appalachian Regional Commission, http://www arc gov/images/newsroom/publications/fy2020budget/FY2020PerformanceBudgetMar2019 pdf Nuclear Regulatory Commission, https://www nrc gov/docs/ML1906/ML19065A279 pdf Defense Nuclear Facilities Safety Board, https://www dnfsb gov/about/congressional-budget-requests Nuclear Waste Technical Review Board, http://www nwtrb gov/about-us/plans USACE is an agency in the Department of Defense with both military and civilian responsibilities  Under its civil works program, which is funded by the Energy and Water appropriations bill, USACE plans, builds, operates, and in some cases maintains water resources facilities for coastal and inland navigation, riverine and coastal flood risk reduction, and aquatic ecosystem restoration  In recent decades, Congress has generally authorized Corps studies, construction projects, and other activities in omnibus water authorization bills, typically titled Water Resources Development Acts (WRDA), prior to funding them through appropriations legislation  Recent Congresses enacted the following omnibus water resources authorization acts: in June 2014, the Water Resources Reform and Development Act of 2014 (WRRDA, P L  113-121 ); in December 2016, the Water Resources Development Act of 2016 (Title I of P L  114-322 , the Water Infrastructure Improvements for the Nation Act [WIIN]); and in October 2018, the Water Resources Development Act of 2018 (Title I of P L  115-270 , America's Water Infrastructure Act of 2018 [AWIA 2018])  These acts consisted largely of authorizations for new USACE projects, and they altered numerous USACE policies and procedures  Unlike in highways and municipal water infrastructure programs, federal funds for USACE are not distributed to states or projects based on formulas or delivered via competitive grants  Instead, USACE generally is directly involved in planning, designing, and managing the construction of projects that are cost-shared with nonfederal project sponsors  Prior to FY2010, in addition to site-specific project funding included in the President's annual budget request for USACE, Congress, during the discretionary appropriations process, had identified many additional USACE projects to receive funding or had adjusted the funding levels for the projects identified in the President's request  Starting in the 112 th Congress, site-specific project line items added or increased by Congress (i e , earmarks) became subject to House and Senate earmark moratorium policies  As a result, Congress generally has not added funding at the project level since FY2010  In lieu of the project-based increases, Congress has included "additional funding" for select categories of USACE projects and provided direction and limitations on the use of these funds  For more information, CRS In Focus IF11137, Army Corps of Engineers: FY2020 Appropriations , by Nicole T  Carter and Anna E  Normand  Previous appropriations and the President's request for FY2020 are shown in Table 4   Most of the large dams and water diversion structures in the West were built by, or with the assistance of, the Bureau of Reclamation  While the Corps of Engineers built hundreds of flood control and navigation projects, Reclamation's original mission was to develop water supplies, primarily for irrigation to reclaim arid lands in the West for farming and ranching  Reclamation has evolved into an agency that assists in meeting the water demands in the West while working to protect the environment and the public's investment in Reclamation infrastructure  The agency's municipal and industrial water deliveries have more than doubled since 1970  Today, Reclamation manages hundreds of dams and diversion projects, including more than 300 storage reservoirs, in 17 western states  These projects provide water to approximately 10 million acres of farmland and 31 million people  Reclamation is the largest wholesale supplier of water in the 17 western states and the second-largest hydroelectric power producer in the nation  Reclamation facilities also provide substantial flood control, recreation, and other benefits  Reclamation facility operations are often controversial, particularly for their effect on fish and wildlife species and because of conflicts among competing water users during drought conditions  As with the Corps of Engineers, the Reclamation budget is made up largely of individual project funding lines, rather than general programs that would not be covered by congressional earmark requirements  Therefore, as with USACE, these Reclamation projects have often been subject to earmark disclosure rules  The current moratorium on earmarks restricts congressional steering of money directly toward specific Reclamation projects  Reclamation's single largest account, Water and Related Resources, encompasses the agency's traditional programs and projects, including construction, operations and maintenance, dam safety, and ecosystem restoration, among others  Reclamation also typically requests funds in a number of smaller accounts, and has proposed additional accounts in recent years  Implementation and oversight of the Central Utah Project (CUP), also funded by Title II, is conducted by a separate office within the Department of the Interior  For more information, see CRS In Focus IF11158, Bureau of Reclamation: FY2020 Appropriations , by Charles V  Stern  Previous appropriations and recommendations for FY2020 are shown in Table 5   The Energy and Water Development bill has funded all DOE programs since FY2005  Major DOE activities include (1) research and development (R&D) on renewable energy, energy efficiency, nuclear power, fossil energy, and electricity; (2) the Strategic Petroleum Reserve; (3) energy statistics; (4) general science; (5) environmental cleanup; and (6) nuclear weapons and nonproliferation programs  Table 6 provides the recent funding history for DOE programs, which are briefly described further below  DOE's Office of Energy Efficiency and Renewable Energy (EERE) conducts research and development on transportation energy technology, energy efficiency in buildings and manufacturing processes, and the production of solar, wind, geothermal, and other renewable energy  EERE also administers formula grants to states for making energy efficiency improvements to low-income housing units and for state energy planning  The Sustainable Transportation program area includes electric vehicles, vehicle efficiency, and alternative fuels  DOE's electric vehicle program aims to "reduce the cost of electric vehicle batteries by more than half, to less than $100/kWh [kilowatt-hour] (ultimate goal is $80/kWh), increase range to 300 miles, and decrease charge time to 15 minutes or less " DOE's vehicle fuel cell program is focusing on the costs of fuel cells and their hydrogen fuel  According to the FY2020 budget request, "To be cost competitive with gasoline-powered internal combustion engines on a cents-per-mile driven basis, the cost of hydrogen delivered and dispensed needs to be less than $4/gge [gasoline gallon equivalent] (untaxed), and the cost of a durable fuel cell system to be less than $40/kW " Bioenergy goals include the development of "drop-in" fuels—fuels that would be largely compatible with existing energy infrastructure and vehicles, with a goal of $3/gge  Renewable power programs focus on electricity generation from solar, wind, water, and geothermal sources  The solar energy program has a goal of achieving, by 2030, costs of 3 cents per kWh for unsubsidized, utility-scale photovoltaics (PV)  Wind R&D is to focus on early-stage research and testing to reduce costs and improve performance and reliability  The geothermal program is to focus on developing "enhanced geothermal systems" with an electricity generation cost target of 20 8 cents/kWh by 2022  In the energy efficiency program area, the advanced manufacturing program focuses on improving the energy efficiency of manufacturing processes and on the manufacturing of energy-related products  The building technologies program includes R&D on lighting, space conditioning, windows, and control technologies to reduce building energy-use intensity  The energy efficiency program also provides weatherization grants to states for improving the energy efficiency of low-income housing units and state energy planning grants  For more details, see CRS Report R44980, DOE's Office of Energy Efficiency and Renewable Energy (EERE): Appropriations Status , by Corrie E  Clark  The Office of Cybersecurity, Energy Security, and Emergency Response (CESER) was created from programs that were previously part of the Office of Electricity Delivery and Energy Reliability  The programs that were not moved into CESER became part of the DOE Office of Electricity (OE)  OE's mission is to lead DOE efforts "to strengthen, transform, and improve energy infrastructure so that consumers have access to secure and resilient sources of energy " Major priorities of OE are developing a model of North American energy vulnerabilities, pursuing megawatt-scale electricity storage, integrating electric power system sensing technology, and analyzing electricity policy issues  The office also includes the DOE power marketing administrations, which are funded from separate appropriations accounts  CESER is the federal government's lead entity for energy sector-specific responses to energy security emergencies—whether caused by physical infrastructure problems or by cybersecurity issues  The office conducts R&D on energy infrastructure security technology; provides energy sector security guidelines, training, and technical assistance; and enhances energy sector emergency preparedness and response  DOE's Multiyear Plan for Energy Sector Cybersecurity describes the department's strategy to "strengthen today's energy delivery systems by working with our partners to address growing threats and promote continuous improvement, and develop game-changing solutions that will create inherently secure, resilient, and self-defending energy systems for tomorrow " The plan includes three goals that DOE has established for energy sector cybersecurity: strengthen energy sector cybersecurity preparedness; coordinate cyber incident response and recovery; and accelerate game-changing research, development, and demonstration (RD&D) of resilient energy delivery systems  DOE's Office of Nuclear Energy (NE) "focuses on three major mission areas: the nation's existing nuclear fleet, the development of advanced nuclear reactor concepts, and fuel cycle technologies," according to DOE's FY2020 budget justification  It calls nuclear energy "a key element of United States energy independence, energy dominance, electricity grid resiliency, national security, and clean baseload power " The Reactor Concepts program area includes research on advanced reactors, including advanced small modular reactors, and research to enhance the "sustainability" of existing commercial light water reactors  Advanced reactor research focuses on "Generation IV" reactors, as opposed to the existing fleet of commercial light water reactors, which are generally classified as generations II and III  R&D under this program focuses on advanced coolants, fuels, materials, and other technology areas that could apply to a variety of advanced reactors  To help develop those technologies, the Reactor Concepts program is developing a Versatile Test Reactor that would allow fuels and materials to be tested in a fast neutron environment (in which neutrons would not be slowed by water, graphite, or other "moderators")  Research on extending the life of existing commercial light water reactors beyond 60 years, the maximum operating period currently licensed by NRC, is being conducted by this program with industry cost-sharing  The Fuel Cycle Research and Development program includes generic research on nuclear waste management and disposal  One of the program's primary activities is the development of technologies to separate the radioactive constituents of spent fuel for reuse or solidifying into stable waste forms  Other major research areas in the Fuel Cycle R&D program include the development of accident-tolerant fuels for existing commercial reactors, evaluation of fuel cycle options, and development of improved technologies to prevent diversion of nuclear materials for weapons  The program is also developing sources of high-assay low enriched uranium (HALEU), in which uranium is enriched to between 5% and 20% in the fissile isotope U-235, for potential use in advanced reactors  For more information, see CRS Report R45706, Advanced Nuclear Reactors: Technology Overview and Current Issues , by Danielle A  Arostegui and Mark Holt  Much of DOE's Fossil Energy R&D Program focuses on carbon capture and storage for power plants fueled by coal and natural gas  Major activities include Advanced Coal Energy Systems and Carbon Capture, Utilization, and Storage (CCUS); Natural Gas Technologies; and Unconventional Fossil Energy Technologies from Petroleum—Oil Technologies  Advanced Coal Energy Systems includes R&D on modular coal-gasification systems, advanced turbines, solid oxide fuel cells, advanced sensors and controls, and power generation efficiency  Elements of the CCUS program include the following: Carbon Capture subprogram for separating CO 2 in both precombustion and postcombustion systems; Carbon Utilization subprogram for R&D on technologies to convert carbon to marketable products, such as chemicals and polymers; and Carbon Storage subprogram on long-term geologic storage of CO 2 , focusing on saline formations, oil and natural gas reservoirs, unmineable coal seams, basalts, and organic shales  For more information, see CRS In Focus IF10589, FY2019 Funding for CCS and Other DOE Fossil Energy R&D , by Peter Folger, and CRS Report R44472, Funding for Carbon Capture and Sequestration (CCS) at DOE: In Brief , by Peter Folger  The Strategic Petroleum Reserve (SPR), authorized by the Energy Policy and Conservation Act ( P L  94-163 ) in 1975, consists of caverns built within naturally occurring salt domes in Louisiana and Texas  The SPR provides strategic and economic security against foreign and domestic disruptions in U S  oil supplies via an emergency stockpile of crude oil  The program fulfills U S  obligations under the International Energy Program, which avails the United States of International Energy Agency (IEA) assistance through its coordinated energy emergency response plans, and provides a deterrent against energy supply disruptions  DOE has been conducting a major maintenance program to address aging infrastructure and a deferred maintenance backlog at SPR facilities  The federal government has not purchased oil for the SPR since 1994  Beginning in 2000, additions to the SPR were made with royalty-in-kind (RIK) oil acquired by DOE in lieu of cash royalties paid on production from federal offshore leases  In September 2009, the Secretary of the Interior announced a phaseout of the RIK Program  By early 2010, the SPR's capacity reached 727 million barrels  A series of oil sales and purchases since then have resulted in a net reduction of the SPR inventory  Currently, the SPR contains about 649 million barrels  Congress has enacted several laws since 2015 that mandate sales of SPR oil, including the Bipartisan Budget Act of 2015 ( P L  114-74 ), the Fixing America's Surface Transportation Act ( P L  114-94 ), the 21 st Century Cures Act of 2016 ( P L  114-255 ), the 2017 Tax Revision ( P L  115-97 ), the Bipartisan Budget Act of 2018 ( P L  115-123 ), and the Consolidated Appropriations Act, 2018  Broadly considered, this legislation requires oil to be sold from the reserve over the period FY2017 through FY2027, totaling 266 million barrels  For more information, see CRS Report R45577, Strategic Petroleum Reserve: Mandated Sales and Reform , by Robert Pirog, and CRS In Focus IF10869, Reconsidering the Strategic Petroleum Reserve , by Robert Pirog  The DOE Office of Science conducts basic research in six program areas: advanced scientific computing research, basic energy sciences, biological and environmental research, fusion energy sciences, high-energy physics, and nuclear physics  According to DOE's FY2020 budget justification, the Office of Science "is the Nation's largest Federal sponsor of basic research in the physical sciences and the lead Federal agency supporting fundamental scientific research for our Nation's energy future " DOE's Advanced Scientific Computing Research (ASCR) program focuses on developing and maintaining computing and networking capabilities for science and research in applied mathematics, computer science, and advanced networking  The program plays a key role in the DOE-wide effort to advance the development of exascale computing, which seeks to build a computer that can solve scientific problems 1,000 times faster than today's best machines  DOE has asserted that the department is on a path to have a capable exascale machine by the early 2020s  Basic Energy Sciences (BES), the largest program area in the Office of Science, focuses on understanding, predicting, and ultimately controlling matter and energy at the electronic, atomic, and molecular levels  The program supports research in disciplines such as condensed matter and materials physics, chemistry, and geosciences  BES also provides funding for scientific user facilities (e g , the National Synchrotron Light Source II, and the Linac Coherent Light Source-II), and certain DOE research centers and hubs (e g , Energy Frontier Research Centers, as well as the Batteries and Energy Storage and Fuels from Sunlight Energy Innovation Hubs)  Biological and Environmental Research (BER) seeks a predictive understanding of complex biological, climate, and environmental systems across a continuum from the small scale (e g , genomic research) to the large (e g , Earth systems and climate)  Within BER, Biological Systems Science focuses on plant and microbial systems, while Biological and Environmental Research supports climate-relevant atmospheric and ecosystem modeling and research  BER facilities and centers include four Bioenergy Research Centers and the Environmental Molecular Science Laboratory at Pacific Northwest National Laboratory  Fusion Energy Sciences (FES) seeks to increase understanding of the behavior of matter at very high temperatures and to establish the science needed to develop a fusion energy source  FES provides funding for the International Thermonuclear Experimental Reactor (ITER) project, a multinational effort to design and build an experimental fusion reactor  According to DOE, ITER "aims to provide fusion power output approaching reactor levels of hundreds of megawatts, for hundreds of seconds " However, many U S  analysts have expressed concern about ITER's cost, schedule, and management, as well as the budgetary impact on domestic fusion research  The High Energy Physics (HEP) program conducts research on the fundamental constituents of matter and energy, including studies of dark energy and the search for dark matter  Nuclear Physics supports research on the nature of matter, including its basic constituents and their interactions  A major project in the Nuclear Physics program is the construction of the Facility for Rare Isotope Beams at Michigan State University  A separate DOE office, the Advanced Research Projects Agency—Energy (ARPA-E), was authorized by the America COMPETES Act ( P L  110-69 ) to support transformational energy technology research projects  DOE budget documents describe ARPA-E's mission as overcoming long-term, high-risk technological barriers to the development of energy technologies  For more details, see CRS Report R45150, Federal Research and Development (R&D) Funding: FY2019 , coordinated by John F  Sargent Jr  DOE's Loan Programs Office provides loan guarantees for projects that deploy specified energy technologies, as authorized by Title 17 of the Energy Policy Act of 2005 (EPACT05, P L  109-58 ), direct loans for advanced vehicle manufacturing technologies, and loan guarantees for tribal energy projects  Section 1703 of the act authorizes loan guarantees for advanced energy technologies that reduce greenhouse gas emissions, and Section 1705 established a temporary program for renewable energy and energy efficiency projects  Title 17 allows DOE to provide loan guarantees for up to 80% of construction costs for eligible energy projects  Successful applicants must pay an up-front fee, or "subsidy cost," to cover potential losses under the loan guarantee program  Under the loan guarantee agreements, the federal government would repay all covered loans if the borrower defaulted  Such guarantees would reduce the risk to lenders and allow them to provide financing at below-market interest rates  The following is a summary of loan guarantee amounts that have been authorized (loan guarantee ceilings) for various technologies: $8 3 billion for nonnuclear technologies under Section 1703; $2 0 billion for unspecified projects from FY2007 under Section 1703; $18 5 billion for nuclear power plants ($12 0 billion committed); $4 billion for loan guarantees for uranium enrichment plants; $1 18 billion for renewable energy and energy efficiency projects under Section 1703, in addition to other loan guarantee ceilings, which can include applications that were pending under Section 1705 before it expired; and In addition to the loan guarantee ceilings above, an appropriation of $161 million was provided for subsidy costs for renewable energy and energy efficiency loan guarantees under Section 1703  If the subsidy costs averaged 10% of the loan guarantees, this funding could leverage loan guarantees totaling about $1 6 billion  The only loan guarantees under Section 1703 were $8 3 billion in guarantees provided to the consortium building two new reactors at the Vogtle plant in Georgia  DOE committed an additional $3 7 billion in loan guarantees for the Vogtle project on March 22, 2019  Another nuclear loan guarantee is being sought by NuScale Power to build a small modular reactor in Idaho  In the absence of explosive testing of nuclear weapons, the United States has adopted a science-based program to maintain and sustain confidence in the reliability of the U S  nuclear stockpile  Congress established the Stockpile Stewardship Program in the National Defense Authorization Act for Fiscal Year 1994 ( P L  103-160 )  The goal of the program, as amended by the National Defense Authorization Act for Fiscal Year 2010 ( P L  111-84 , §3111), is to ensure "that the nuclear weapons stockpile is safe, secure, and reliable without the use of underground nuclear weapons testing " The program is operated by NNSA, a semiautonomous agency within DOE established by the National Defense Authorization Act for Fiscal Year 2000 ( P L  106-65 , Title XXXII)  NNSA implements the Stockpile Stewardship Program through the activities funded by the Weapons Activities account in the NNSA budget  Most of NNSA's weapons activities take place at the nuclear weapons complex, which consists of three laboratories (Los Alamos National Laboratory, NM; Lawrence Livermore National Laboratory, CA; and Sandia National Laboratories, NM and CA); four production sites (Kansas City National Security Campus, MO; Pantex Plant, TX; Savannah River Site, SC; and Y-12 National Security Complex, TN); and the Nevada National Security Site (formerly the Nevada Test Site)  NNSA manages and sets policy for the weapons complex; contractors to NNSA operate the eight sites  Radiological activities at these sites are subject to oversight and recommendations by the independent Defense Nuclear Facilities Safety Board, funded by Title IV of the annual Energy and Water Development appropriations bill  There are three major program areas in the Weapons Activities account  Directed Stockpile Work includes the life extension programs (LEPs) on existing warheads and stockpile services programs that monitor their condition; and maintaining warheads through repairs, refurbishment, and modifications  It also includes funding for research and development in support of specific warheads, and dismantlement of warheads that have been removed from the stockpile  This last activity received more significant funding as the number of warheads in the U S  stockpile declined after the Cold War; it also provides a source for critical components for warheads remaining in the stockpile  Directed Stockpile Work also involves programs that work on the materials needed for nuclear warheads, including the plutonium pits that are the core of the weapons  Research, Development, Test, and Evaluation (RDT&E) includes five programs that focus on "efforts to develop and maintain critical capabilities, tools, and processes needed to support science based stockpile stewardship, refurbishment, and continued certification of the stockpile over the long-term in the absence of underground nuclear testing " This area includes operation of some large experimental facilities, such as the National Ignition Facility at Lawrence Livermore National Laboratory  Infrastructure and Operations has, as its main funding elements, material recycle and recovery, recapitalization of facilities, and construction of facilities  The latter include two major projects that have generated congressional controversy: the Uranium Processing Facility (UPF) at the Y-12 National Security Complex and the Chemistry and Metallurgy Research Replacement (CMRR) Project, which deals with plutonium, at Los Alamos National Laboratory  Nuclear Weapons Activities also has several smaller programs, including the following: Secure Transportation Asset, providing for safe and secure transport of nuclear weapons, components, and materials; Defense Nuclear Security, providing operations, maintenance, and construction funds for protective forces, physical security systems, personnel security, and related activities; and Information Technology and Cybersecurity, whose elements include cybersecurity, secure enterprise computing, and Federal Unclassified Information Technology  For more information, see CRS Report R44442, Energy and Water Development Appropriations: Nuclear Weapons Activities , by Amy F  Woolf, and CRS Report R45306, The U S  Nuclear Weapons Complex: Overview of Department of Energy Sites , by Amy F  Woolf and James D  Werner  DOE's nonproliferation and national security programs provide technical capabilities to support U S  efforts to prevent, detect, and counter the spread of nuclear weapons worldwide  These programs are administered by NNSA's Office of Defense Nuclear Nonproliferation  The Materials Management and Minimization program conducts activities to minimize and, where possible, eliminate stockpiles of weapons-useable material around the world  Major activities include conversion of reactors that use highly enriched uranium (useable for weapons) to low-enriched uranium, removal and consolidation of nuclear material stockpiles, and disposition of excess nuclear materials  Global Materials Security has three major program elements  International Nuclear Security focuses on increasing the security of vulnerable stockpiles of nuclear material in other countries  Radiological Security promotes the worldwide reduction and security of radioactive sources, including the removal of surplus sources and substitution of technologies that do not use radioactive materials  Nuclear Smuggling Detection and Deterrence works to improve the capability of other countries to halt illicit trafficking of nuclear materials  Nonproliferation and Arms Control works to "to support U S  nonproliferation and arms control objectives to prevent proliferation, ensure peaceful nuclear uses, and enable verifiable nuclear reductions," according to the FY2020 DOE justification  This program conducts reviews of nuclear export applications and technology transfer authorizations, implements treaty obligations, and analyzes nonproliferation policies and proposals  Other programs under Defense Nuclear Nonproliferation include research and development and construction, which advances nuclear detection and nuclear forensics technologies  Nuclear Counterterrorism and Incident Response provides "interagency policy, contingency planning, training, and capacity building" to counter nuclear terrorism and strengthen incident response capabilities, according to the FY2020 budget justification  The development and production of nuclear weapons during half a century since the beginning of the Manhattan Project resulted in a waste and contamination legacy managed by DOE that continues to present substantial challenges today  DOE also manages legacy environmental contamination at sites used for nondefense nuclear research  In 1989, DOE established the Office of Environmental Management primarily to consolidate its responsibilities for the cleanup of former nuclear weapons production sites that had been administered under multiple offices  DOE's nuclear cleanup efforts are broad in scope and include the disposal of large quantities of radioactive and other hazardous wastes generated over decades; management and disposal of surplus nuclear materials; remediation of extensive contamination in soil and groundwater; decontamination and decommissioning of excess buildings and facilities; and safeguarding, securing, and maintaining facilities while cleanup is underway  DOE's cleanup of nuclear research sites adds a nondefense component to the EM's mission, albeit smaller in terms of the scope of their cleanup and associated funding  DOE has identified more than 100 separate sites in over 30 states that historically were involved in the production of nuclear weapons and nuclear energy research for civilian purposes  The geographic scope of these sites is substantial, collectively encompassing a land area of approximately 2 million acres  Cleanup remedies are in place and operational at the majority of these sites  Responsibility for the long-term stewardship of them has been transferred to the Office of Legacy Management and other offices within DOE for the operation and maintenance of cleanup remedies and monitoring  Some of the smaller sites for which DOE initially was responsible were transferred to the Army Corps of Engineers in 1997 under the Formerly Utilized Sites Remedial Action Program (FUSRAP)  Once USACE completes the cleanup of a FUSRAP site, it is transferred back to DOE for long-term stewardship under the Office of Legacy Management, which is separate from EM and has its own funding account  Three appropriations accounts fund the Office of Environmental Management  The Defense Environmental Cleanup account is the largest in terms of funding, and it finances the cleanup of former nuclear weapons production sites  The Non-Defense Environmental Cleanup account funds the cleanup of federal nuclear energy research sites  Title XI of the Energy Policy Act of 1992 ( P L  102-486 ) established the Uranium Enrichment Decontamination and Decommissioning Fund to pay for the cleanup of three federal facilities that enriched uranium for national defense and civilian purposes  Those facilities are located near Paducah, KY; Piketon, OH (Portsmouth plant); and Oak Ridge, TN  Title X of P L  102-486 authorized the reimbursement of uranium and thorium producers for their costs of cleaning up contamination attributable to uranium and thorium sold to the federal government  The adequacy of funding for the Office of Environmental Management to attain cleanup milestones across the entire site inventory has been a recurring issue  Cleanup milestones are enforceable measures incorporated into compliance agreements negotiated among DOE, the Environmental Protection Agency, and the states  These milestones establish time frames for the completion of specific actions to satisfy applicable requirements at individual sites  DOE's four Power Marketing Administrations were established to sell the power generated by the dams operated by the Bureau of Reclamation and the Army Corps of Engineers  Preference in the sale of power is given to publicly owned and cooperatively owned utilities  The PMAs operate in 34 states; their assets consist primarily of transmission infrastructure in the form of more than 33,000 miles of high voltage transmission lines and 587 substations  PMA customers are responsible for repaying all power program expenses, plus the interest on capital projects  Since FY2011, power revenues associated with the PMAs have been classified as discretionary offsetting receipts (i e , receipts that are available for spending by the PMAs), thus the agencies are sometimes noted as having a "net-zero" spending authority  Only the capital expenses of WAPA and SWPA require appropriations from Congress  For more information, see CRS Report R45548, The Power Marketing Administrations: Background and Current Issues , by Richard J  Campbell  Independent agencies that receive funding in Title IV of the Energy and Water Development bill include the Nuclear Regulatory Commission (NRC), the Appalachian Regional Commission (ARC), and the Defense Nuclear Facilities Safety Board  NRC is by far the largest of the independent agencies, with a total budget of more than $900 million  However, as noted in the description of NRC below, about 90% of NRC's budget is offset by fees, so that the agency's net appropriation is less than half of the total funding in Title IV  The recent appropriations history for all the Title IV agencies is shown in Table 7   Established in 1965, the Appalachian Regional Commission (ARC) is a regional economic development agency  It awards grants and contracts to state and local governments and nonprofit organizations to foster economic opportunities, improve workforce skills, build critical infrastructure, strengthen natural and cultural assets, and improve leadership skills and capacity in the region  ARC's authorizing statute defines the Appalachian Region as including all of West Virginia and parts of Alabama, Georgia, Kentucky, Maryland, Mississippi, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, and Virginia  More than 25 million people currently live in the region as defined  ARC provides funding to several hundred projects each year, with particular focus on the region's most economically distressed counties  Major areas of infrastructure support broadband communication systems, transportation, and water and wastewater systems  ARC has supported development of the Appalachian Development Highway System (ADHS), a planned 3,000-mile system of highways that connect with the U S  Interstate Highway System  According to ARC, 90 5% of ADHS is currently "complete, open to traffic, or under construction " NRC is an independent agency that establishes and enforces safety and security standards for nuclear power plants and users of nuclear materials  Major appropriations categories for NRC are shown in Table 8   Nuclear Reactor Safety is NRC's largest program and is responsible for licensing and regulating the U S  fleet of 98 power reactors, plus two under construction  NRC is also responsible for licensing and regulating nuclear waste facilities, such as the proposed underground nuclear waste repository at Yucca Mountain, NV  NRC is required by law to offset about 90% of its total budget, excluding specified items, through fees charged to nuclear reactor owners and other holders of NRC licenses  As a result, NRC's net appropriation can be as low as 10% of its total funding level, depending on the activities that Congress excludes from fee recovery  For example, excluded items in NRC's FY2019 enacted appropriation are prior-year balances, development of advanced reactor regulations, and international activities  The following hearings have been held by the Energy and Water Development subcommittees of the House and Senate Appropriations Committees on the FY2020 budget request  Testimony and opening statements are posted on most of the web pages cited for each hearing, along with webcasts in many cases  Department of Energy , March 26, 2019, https://appropriations house gov/legislation/hearings/budget-department-of-energy   Corps of Engineers (Civil Works) and the Bureau of Reclamation , March 27, 2019, https://appropriations house gov/legislation/hearings/budget-us-army-corps-of-engineers-and-bureau-of-reclamation   National Nuclear Security Administration , April 2, 2019, https://appropriations house gov/legislation/hearings/budget-department-of-energy-national-nuclear-security-administration  DOE Science, Energy, and Environmental Management Programs , April 3, 2019, https://appropriations house gov/legislation/hearings/budget-science-energy-and-environmental-management-programs  Department of Energy , March 27, 2019, https://www appropriations senate gov/hearings/review-of-the-fy2020-budget-request-for-the-us-department-of-energy   National Nuclear Security Administration , April 3, 2019, https://www appropriations senate gov/hearings/review-of-the-fy2020-budget-request-for-the-national-nuclear-security-administration   U S  Army Corps of Engineers and the Bureau of Reclamation , April 10, 2019, https://www appropriations senate gov/hearings/review-of-the-fy2020-budget-requests-for-army-corps-of-engineers-and-bureau-of-reclamation  

ground_truth: The Energy and Water Development appropriations bill provides funding for civil works projects of the U.S. Army Corps of Engineers (USACE); the Department of the Interior's Bureau of Reclamation (Reclamation) and Central Utah Project (CUP); the Department of Energy (DOE); the Nuclear Regulatory Commission (NRC); and several other independent agencies. DOE typically accounts for about 80% of the bill's funding. President Trump submitted his FY2020 detailed budget proposal to Congress on March 18, 2019 (after submitting a general budget overview on March 11). The budget requests for agencies included in the Energy and Water Development appropriations bill total $38.02 billion—$6.64 billion (15%) below the FY2019 appropriation. The largest exception to the overall decrease proposed for energy and water programs is a $1.309 billion increase (12%) for DOE nuclear weapons activities. For FY2019, the conference agreement on H.R. 5895 (H.Rept. 115-929) provided total Energy and Water Development appropriations of $44.66 billion—3% above the FY2018 level, excluding supplemental funding, and 23% above the FY2019 request. It was signed by the President on September 21, 2018 (P.L. 115-244). Emergency supplemental appropriations totaling $17.419 billion were provided to USACE and DOE for hurricane response by the Bipartisan Budget Act of 2018 (P.L. 115-123), signed February 9, 2018. Major Energy and Water Development funding issues for FY2020 are listed below. They were selected based on the total funding involved, the percentage of proposed increases or decreases, and potential impact on broader public policy considerations. Water Agency Funding Reductions. The Trump Administration requested reductions of 31% for USACE and 29% for Reclamation for FY2020 from the FY2019 enacted levels. The largest reductions would be from USACE Operation and Maintenance (-48%) and Reclamation's Water and Related Resources account (-31%). Similar reductions proposed by the Administration for FY2019 were not enacted. Power Marketing Administration (PMA) Reforms. DOE's FY2020 budget request includes mandatory proposals to sell PMA electricity transmission lines and other assets, repeal certain PMA borrowing authority, and eliminate cost-based limits on the electricity rates charged by the PMAs. The proposals would need to be enacted in authorizing legislation. Termination of Energy Efficiency Grants. DOE's Weatherization Assistance Program and State Energy Program would be terminated under the FY2020 budget request. The Administration had proposed to eliminate the grants in FY2018 and FY2019, but Congress continued funding. Reductions in Energy Research and Development. Under the FY2020 budget request, DOE research and development appropriations would be reduced for energy efficiency and renewable energy (EERE) by 83%, nuclear energy by 38%, and fossil energy by 24%. Similar reductions proposed by the Administration for FY2019 were not enacted. Nuclear Waste Repository. The Administration's budget request would provide new funding for the first time since FY2010 for a proposed nuclear waste repository at Yucca Mountain, NV. DOE would receive $116 million to seek an NRC license for the repository and develop interim waste storage capacity. NRC would receive $38.5 million to consider DOE's repository license application. Similar Administration funding requests for FY2018 and FY2019 were not enacted. Elimination of Advanced Research Projects Agency—Energy (ARPA-E). The Trump Administration proposes no new appropriations for ARPA-E in FY2020 and to cancel $287 million in unobligated balances from previous appropriations. Similar proposals to terminate ARPA-E in FY2018 and FY2019 were not enacted. Loan Programs Termination. The FY2020 budget request would terminate DOE's Title 17 Innovative Technology Loan Guarantee Program, the Advanced Technology Vehicles Manufacturing Loan Program, and the Tribal Energy Loan Guarantee Program. Administration proposals to eliminate the programs were not included in the enacted appropriations measures for FY2018 and FY2019. Weapons Activities. The FY2020 budget request for DOE Weapons Activities is 12% greater than it was in FY2019 ($12.4 billion vs. $11.1 billion), in contrast to a proposed 10% reduction in DOE's total funding. Notable proposed increases would be used for warhead life extension programs and preparations for increase production of plutonium pits (warhead cores).