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



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

Report 1: This report provides background information and issues for Congress on multiyear procurement (MYP) and block buy contracting (BBC), which are special contracting mechanisms that Congress permits the Department of Defense (DOD) to use for a limited number of defense acquisition programs  Compared to the standard or default approach of annual contracting, MYP and BBC have the potential for reducing weapon procurement costs by a few or several percent  Potential issues for Congress concerning MYP and BBC include whether to use MYP and BBC in the future more frequently, less frequently, or about as frequently as they are currently used; whether to create a permanent statute to govern the use of BBC, analogous to the permanent statute that governs the use of MYP; and whether the Coast Guard should begin making use of MYP and BBC  Congress's decisions on these issues could affect defense acquisition practices, defense funding requirements, and the defense industrial base  A contract that the Air Force has for the procurement of Evolved Expendable Launch Vehicle (EELV) Launch Services (ELS) has sometimes been referred to as a block buy, but it is not an example of block buy contracting as discussed in this report  The Air Force in this instance is using the term block buy to mean something different  This report does not discuss the ELS contract  (For additional discussion, see " Terminology Alert: Block Buy Contracting vs  Block Buys " below ) In discussing MYP, BBC, and incremental funding, it can be helpful to distinguish contracting mechanisms from funding approaches  The two are often mixed together in discussions of DOD acquisition, sometimes leading to confusion  Stated briefly Funding approaches are ways that Congress can appropriate funding for weapon procurement programs, so that DOD can then put them under contract  Examples of funding approaches include traditional full funding (the standard or default approach), incremental funding, and advance appropriations  Any of these funding approaches might make use of advance procurement (AP) funding  Contracting mechanisms are ways for DOD to contract for the procurement of weapons systems, once funding for those systems has been appropriated by Congress  Examples of contracting mechanisms include annual contracting (the standard or default DOD approach), MYP, and BBC  Contracting mechanisms can materially change the total procurement cost of a ship  The use of a particular funding approach in a defense acquisition program does not dictate the use of a particular contracting mechanism  Defense acquisition programs consequently can be implemented using various combinations of funding approaches and contracting mechanisms  Most DOD weapon acquisition programs use a combination of traditional full funding and annual contracting  A few programs, particularly certain Navy shipbuilding programs, use incremental funding as their funding approach  A limited number of DOD programs use MYP as their contracting approach, and to date three Navy shipbuilding programs have used BBC as their contracting approach  The situation is summarized in Table 1   This report focuses on the contracting approaches of MYP and BBC and how they compare to annual contracting  Other CRS reports discuss the funding approaches of traditional full funding, incremental funding, and advance appropriations  What is MYP, and how does it differ from annual contracting? MYP, also known as multiyear contracting, is an alternative to the standard or default DOD approach of annual contracting  Under annual contracting, DOD uses one or more contracts for each year's worth of procurement of a given kind of item  Under MYP, DOD instead uses a single contract for two to five years' worth of procurement of a given kind of item, without having to exercise a contract option for each year after the first year  DOD needs congressional approval for each use of MYP  To illustrate the basic difference between MYP and annual contracting, consider a hypothetical DOD program to procure 20 single-engine aircraft of a certain kind over the 5-year period FY2018-FY2022, at a rate of 4 aircraft per year: Under annual contracting , DOD would issue one or more contracts for each year's procurement of four aircraft  After Congress funds the procurement of the first four aircraft in FY2018, DOD would issue one or more contracts (or exercise a contract option) for those four aircraft  The next year, after Congress funds the procurement of the next four aircraft in FY2019, DOD would issue one or more contracts (or exercise a contract option) for those four aircraft, and so on  Under MYP , DOD would issue one contract covering all 20 aircraft to be procured during the 5-year period FY2018-FY2022  DOD would award this contract in FY2018, at the beginning of the five-year period, following congressional approval to use MYP for the program, and congressional appropriation of the FY2018 funding for the program  To continue the implementation of the contract over the next four years, DOD would request the FY2019 funding for the program as part of DOD's proposed FY2019 budget, the FY2020 funding as part of DOD's proposed FY2020 budget, and so on  How much can MYP save? Compared with estimated costs under annual contracting, estimated savings for programs being proposed for MYP have ranged from less than 5% to more than 15%, depending on the particulars of the program in question, with many estimates falling in the range of 5% to 10%  In practice, actual savings from using MYP rather than annual contracting can be difficult to observe or verify because of cost growth during the execution of the contract that was caused by developments independent of the use of MYP rather than annual contracting  A February 2012 briefing by the Cost Assessment and Program Evaluation (CAPE) office within the Office of the Secretary of Defense (OSD) states that "MYP savings analysis is difficult due to the lack of actual costs on the alternative acquisition path, i e , the path not taken " The briefing states that CAPE up to that point had assessed MYP savings for four aircraft procurement programs—F/A-18E/F strike fighters, H-60 helicopters, V-22 tilt-rotor aircraft, and CH-47F helicopters—and that CAPE's assessed savings ranged from 2% to 8%  A 2008 Government Accountability Office (GAO) report stated that DOD does not have a formal mechanism for tracking multiyear results against original expectations and makes few efforts to validate whether actual savings were achieved by multiyear procurement  It does not maintain comprehensive central records and historical information that could be used to enhance oversight and knowledge about multiyear performance to inform and improve future multiyear procurement (MYP) candidates  DOD and defense research centers officials said it is difficult to assess results because of the lack of historical information on multiyear contracts, comparable annual costs, and the dynamic acquisition environment  How does MYP potentially save money? Compared to annual contracting, using MYP can in principle reduce the cost of the weapons being procured in two primary ways: Contractor optimization of workforce and production facilities   An MYP contract gives the contractor (e g , an airplane manufacturer or shipbuilder) confidence that a multiyear stream of business of a known volume will very likely materialize  This confidence can permit the contractor to make investments in the firm's workforce and production facilities that are intended to optimize the facility for the production of the items being procured under the contract  Such investments can include payments for retaining or training workers, or for building, expanding, or modernizing production facilities  Under annual contracting, the manufacturer might not have enough confidence about its future stream of business to make these kinds of investments, or might be unable to convince its parent firm to finance them  E conomic order quan tity (EOQ) purchases of selected long-leadtime components  Under an MYP contract, DOD is permitted to bring forward selected key components of the items to be procured under the contract and to purchase the components in batch form during the first year or two of the contract  In the hypothetical example introduced earlier, using MYP could permit DOD to purchase, say, the 20 engines for the 20 aircraft in the first year or two of the 5-year contract  Procuring selected components in this manner under an MYP contract is called an economic order quantity (EOQ) purchase  EOQ purchases can reduce the procurement cost of the weapons being procured under the MYP contract by allowing the manufacturers of components to take maximum advantage of production economies of scale that are possible with batch orders  What gives the contractor confidence that the multiyear stream of business will materialize? At least two things give the contractor confidence that DOD will not terminate an MYP contract and that the multiyear stream of business consequently will materialize: For a program to qualify for MYP, DOD must certify, among other things, that the minimum need for the items to be purchased is expected to remain substantially unchanged during the contract in terms of production rate, procurement rate, and total quantities  Perhaps more important to the contractor, MYP contracts include a cancellation penalty intended to reimburse a contractor for costs that the contractor has incurred (i e , investments the contractor has made) in anticipation of the work covered under the MYP contract  The undesirability of paying a cancellation penalty acts as a disincentive for the government against canceling the contract  (And if the contract is canceled, the cancellation penalty helps to make the contractor whole ) Is there a permanent statute governing MYP contracting? There is a permanent statute governing MYP contracting—10 U S C  2306b  The statute was created by Section 909 of the FY1982 Department of Defense Authorization Act ( S  815 / P L  97-86 of December 1, 1981), revised and reorganized by Section 1022 of the Federal Acquisition Streamlining Act of 1994 ( S  1587 / P L  103-355 of October 13, 1994), and further amended on several occasions since  For the text of 10 U S C  2306b, see Appendix A   DOD's use of MYP contracting is further governed by DOD acquisition regulations  Under this statute, what criteria must a program meet to qualify for MYP? 10 U S C  2306b(a) states that to qualify for MYP, a program must meet several criteria, including the following: Significant savings  DOD must estimate that using an MYP contract would result in "significant savings" compared with using annual contracting  Realistic cost estimates   DOD's estimates of the cost of the MYP contract and the anticipated savings must be realistic  Stable need for the items  DOD must expect that its minimum need for the items will remain substantially unchanged during the contract in terms of production rate, procurement rate, and total quantities  Stable design for the items   The design for the items to be acquired must be stable, and the technical risks associated with the items must not be excessive  10 U S C  includes provisions requiring the Secretary of Defense or certain other DOD officials to find, determine, or certify that these and other statutory requirements for using MYP contracts have been met, and provisions requiring the heads of DOD agencies to provide written notifications of certain things to the congressional defense committees 30 days before awarding or initiating an MYP contract, or 10 days before terminating one  10 U S C  2306b also requires DOD MYP contracts to be fixed-price type contracts  What is meant by " significant savings"? The amount of savings required under 10 U S C  2306b to qualify for using an MYP contract has changed over time; the requirement was changed from "substantial savings" to "significant savings" by Section 811 of the FY2016 National Defense Authorization Act ( S  1356 / P L  114-92 of November 25, 2015)  The joint explanatory statement for the FY2016 National Defense Authorization Act states the following regarding Section 811: Amendment relating to multiyear contract authority for acquisition of property (sec  811) The House bill contained a provision (sec  806) that would strike the existing requirement that the head of an agency must determine that substantial savings would be achieved before entering into a multiyear contract  The Senate amendment contained no similar provision  The Senate recedes with an amendment that would require that significant savings would be achieved before entering into a multiyear contract  The conferees agree that the government should seek to maximize savings whenever it pursues multiyear procurement  However, the conferees also agree that significant savings (estimated to be greater than $250 0 million), and other benefits, may be achieved even if it does not equate to a minimum of 10 percent savings over the cost of an annual contract  The conferees expect a request for authority to enter into a multiyear contract will include (1) the estimated cost savings, (2) the minimum quantity needed, (3) confirmation that the design is stable and the technical risks are not excessive, and (4) any other rationale for entering into such a contract  In addition, 10 U S C  2306b states the following: If for any fiscal year a multiyear contract to be entered into under this section is authorized by law for a particular procurement program and that authorization is subject to certain conditions established by law (including a condition as to cost savings to be achieved under the multiyear contract in comparison to specified other contracts) and if it appears (after negotiations with contractors) that such savings cannot be achieved, but that significant savings could nevertheless be achieved through the use of a multiyear contract rather than specified other contracts, the President may submit to Congress a request for relief from the specified cost savings that must be achieved through multiyear contracting for that program  Any such request by the President shall include details about the request for a multiyear contract, including details about the negotiated contract terms and conditions  What is meant by "stable design"? The term "stable design" is generally understood to mean that the design for the items to be procured is not expected to change substantially during the period of the contract  Having a stable design is generally demonstrated by having already built at least a few items to that design (or in the case of a shipbuilding program, at least one ship to that design) and concluding, through testing and operation of those items, that the design does not require any substantial changes during the period of the contract  What happens if Congress does not provide the annual funding requested by DOD to continue the implementation of the contract? If Congress does not provide the funding requested by DOD to continue the implementation of an MYP contract, DOD would be required to renegotiate, suspend, or terminate the contract  Terminating the contract could require the government to pay a cancellation penalty to the contractor  Renegotiating or suspending the contract could also have a financial impact  What effect does using MYP have on flexibility for making procurement changes? A principal potential disadvantage of using MYP is that it can reduce Congress's and DOD's flexibility for making changes (especially reductions) in procurement programs in future years in response to changing strategic or budgetary circumstances, at least without incurring cancellation penalties  In general, the greater the portion of DOD's procurement account that is executed under MYP contracts, the greater the potential loss of flexibility  The use of MYP for executing some portion of the DOD procurement account means that if policymakers in future years decide to reduce procurement spending below previously planned levels, the spending reduction might fall more heavily on procurement programs that do not use MYP, which in turn might result in a less-than-optimally balanced DOD procurement effort  How does Congress approve the use of MYP? Congress approves the use of MYP on a case-by-case basis, typically in response to requests by DOD  Congressional approval for DOD MYP contracts with a value of more than $500 million must occur in two places: an annual DOD appropriations act and an act other than the annual DOD appropriations act  In annual DOD appropriations acts, the provision permitting the use of MYP for one or more defense acquisition programs is typically included in the title containing general provisions, which typically is Title VIII  As shown in Table B-2 , since FY2011, it has been Section 8010  An annual national defense authorization act (NDAA) is usually the act other than an appropriations act in which provisions granting authority for using MYP contracting on individual defense acquisition programs are included  Such provisions typically occur in Title I of the NDAA, the title covering procurement programs  Provisions in which Congress approves the use of MYP for a particular defense acquisition program may include specific conditions for that program in addition to the requirements and conditions of 10 U S C  2306b  How often is MYP used? MYP is used for a limited number of DOD acquisition programs  As shown in the Appendix B , annual DOD appropriations acts since FY1990 typically have approved the use of MYP for zero to a few DOD programs each year  An August 28, 2017, press report states the following: The Pentagon's portfolio of active multiyear procurement contracts is on track to taper from $10 7 billion in fiscal year 2017—or more than 8 percent of DOD procurement spending—to $1 2 billion by FY-19, according to data recently compiled by the Pentagon comptroller for lawmakers  However, there are potential new block-buy deals in the works, including several large Navy deals  According to the Multiyear Procurement Contracts Report for FY-17, which includes data current as of June 27, seven major defense acquisition programs are being purchased through multiyear procurement contracts, collectively obligating the U S  government to spend $16 billion across the five-year spending plan with $14 5 billion of the commitments lashed to FY-17 and FY-18  In an interview published on January 13, 2014, Sean Stackley, the Assistant Secretary of the Navy for Research, Development, and Acquisition (i e , the Navy's acquisition executive), stated the following: What the industrial base clamors for is stability, so they can plan, invest, train their work force  It gives them the ability in working with say, the Street [Wall Street], to better predict their own performance, then meet expectations in the same fashion we try to meet our expectations with the Hill  It's emblematic of stability that we've got more multiyear programs in the Department of the Navy than the rest of the Department of Defense combined  We've been able to harvest from that significant savings, and that has been key to solving some of our budget problems  It's allowed us in certain cases to put the savings right back into other programs tied to requirements  A February 2012 briefing by the Cost Assessment and Program Evaluation (CAPE) office within the Office of the Secretary of Defense (OSD) shows that the total dollar value of DOD MYP contracts has remained more or less stable between FY2000 and FY2012 at roughly $7 billion to $13 billion per year  The briefing shows that since the total size of DOD's procurement budget has increased during this period, the portion of DOD's total procurement budget accounted for by programs using MYP contracts has declined from about 17% in FY2000 to less than 8% in FY2012  The briefing also shows that the Navy makes more use of MYP contracts than does the Army or Air Force, and that the Air Force made very little use of MYP in FY2010-FY2012  A 2008 Government Accountability Office (GAO) report stated the following: Although DOD had been entering into multiyear contracts on a limited basis prior to the 1980s, the Department of Defense Authorization Act, [for fiscal year] 1982, codified the authority for DOD to procure on a multiyear basis major weapon systems that meet certain criteria  Since that time, DOD has annually submitted various weapon systems as multiyear procurement candidates for congressional authorization  Over the past 25 years, Congress has authorized the use of multiyear procurement for approximately 140 acquisition programs, including some systems approved more than once  What is BBC, and how does it compare to MYP? BBC is similar to MYP in that it permits DOD to use a single contract for more than one year's worth of procurement of a given kind of item without having to exercise a contract option for each year after the first year  BBC is also similar to MYP in that DOD needs congressional approval for each use of BBC  BBC differs from MYP in the following ways: There is no permanent statute governing the use of BBC  There is no requirement that BBC be approved in both a DOD appropriations act and an act other than a DOD appropriations act  Programs being considered for BBC do not need to meet any legal criteria to qualify for BBC because there is no permanent statute governing the use of BBC that establishes such criteria  A BBC contract can cover more than five years of planned procurements  The BBC contracts that were used by the Navy for procuring Littoral Combat Ships (LCSs), for example, covered a period of seven years (FY2010-FY2016)  Economic order quantity (EOQ) authority does not come automatically as part of BBC authority because there is no permanent statute governing the use of BBC that includes EOQ authority as an automatic feature  To provide EOQ authority as part of a BBC contract, the provision granting authority for using BBC in a program may need to state explicitly that the authority to use BBC includes the authority to use EOQ  BBC contracts are less likely to include cancellation penalties  Given the one key similarity between BBC and MYP (the use of a single contract for more than one year's worth of procurement), and the various differences between BBC and MYP, BBC might be thought of as a less formal stepchild of MYP  When and why was BBC invented? BBC was invented by Section 121(b) of the FY1998 National Defense Authorization Act ( H R  1119 / P L  105-85 of November 18, 1997), which granted the Navy the authority to use a single contract for the procurement of the first four Virginia (SSN-774) class attack submarines  The 4 boats were scheduled to be procured during the 5-year period FY1998-FY2002 in annual quantities of 1-1-0-1-1  Congress provided the authority granted in Section 121(b) at least in part to reduce the combined procurement cost of the four submarines  Using MYP was not an option for the Virginia-class program at that time because the Navy had not even begun, let alone finished, construction of the first Virginia-class submarine, and consequently could not demonstrate that it had a stable design for the program  When Section 121(b) was enacted, there was no name for the contracting authority it provided  The term block buy contracting came into use later, when observers needed a term to refer to the kind of contracting authority that Congress authorized in Section 121(b)  As discussed in the next section, this can cause confusion, because the term block buy was already being used in discussions of DOD acquisition to refer to something else  What's the difference between block buy cont r acting and block buys? In discussions of defense procurement, the term "block buy" by itself (without "contracting" at the end) is sometimes used to refer to something quite different from block buy contracting—namely, the simple act of funding the procurement of more than one copy of an item in a single year, particularly when no more than one item of that kind might normally be funded in a single year  For example, when Congress funded the procurement of two aircraft carriers in FY1983, and another two in FY1988, these acts were each referred to as block buys, because aircraft carriers are normally procured one at a time, several years apart from one another  This alternate meaning of the term block buy predates by many years the emergence of the term block buy contracting  The term block buy is still used in this alternate manner, which can lead to confusion in discussions of defense procurement  For example, for FY2017, the Air Force requested funding for procuring five Evolved Expendable Launch Vehicles (EELVs) for its EELV Launch Services (ELS) program  At the same time, Navy officials sometimes refer to the use of block buy contracts for the first four Virginia-class submarines, and in the LCS program, as block buys, when they might be more specifically referred to as instances of block buy contract ing   How much can BBC save, compared with MYP? BBC can reduce the unit procurement costs of ships by amounts less than or perhaps comparable to those of MYP, if the authority granted for using BBC explicitly includes authority for making economic order quantity (EOQ) purchases of components  If the authority granted for using BBC does not explicitly include authority for making EOQ purchases, then the savings from BBC will be less  Potential savings under BBC might also be less than those under MYP if the BBC contract does not include a cancellation penalty, or includes one that is more limited than typically found in an MYP contract, because this might give the contractor less confidence than would be the case under an MYP contract that the future stream of business will materialize as planned, which in turn might reduce the amount of money the contractor invests to optimize its workforce and production facilities for producing the items to be procured under the contract  How frequently has BBC been used? Since its use at the start of the Virginia-class program, BBC has been used very rarely  The Navy did not use it again in a shipbuilding program until December 2010, when it awarded two block buy contracts, each covering 10 LCSs to be procured over the six-year period FY2010-FY2015, to the two LCS builders  (Each contract was later amended to include an 11 th ship in FY2016, making for a total of 22 ships under the two contracts ) A third example is the John Lewis (TAO-205) class oiler program, in which the Navy is using a block buy contract to procure the first six ships in the program  A fourth example, arguably, is the Air Force's KC-46 aerial refueling tanker program, which is employing a fixed price incentive fee (FPIF) development contract that includes a "back end" commitment to procure certain minimum numbers of KC-46s in certain fiscal years  When might BBC be suitable as an alternative to MYP? BBC might be particularly suitable as an alternative to MYP in cases where using a multiyear contract can reduce costs, but the program in question cannot meet all the statutory criteria needed to qualify for MYP  As shown in the case of the first four Virginia-class boats, this can occur at or near the start of a procurement program, when design stability has not been demonstrated through the production of at least a few of the items to be procured (or, for a shipbuilding program, at least one ship)  What i s the difference between an MYP or block buy contract and a contract with options? The military services sometimes use contracts with options to procure multiple copies of an item that are procured over a period of several years  The Navy, for example, used a contract with options to procure Lewis and Clark (TAKE-1) class dry cargo ships that were procured over a period of several years  A contract with options can be viewed as somewhat similar to an MYP or block buy contract in that a single contract is used to procure several years' worth of procurement of a given kind of item  There is, however, a key difference between an MYP or block buy contract and a contract with options: In a contract with options, the service is under no obligation to exercise any of the options, and a service can choose to not exercise an option without having to make a penalty payment to the contractor  In contrast, in an MYP or block buy contract, the service is under an obligation to continue implementing the contract beyond the first year, provided that Congress appropriates the necessary funds  If the service chooses to terminate an MYP or block buy contract, and does so as a termination for government convenience rather than as a termination for contractor default, then the contractor can, under the contract's termination for convenience clause, seek a payment from the government for cost incurred for work that is complete or in process at the time of termination, and may include the cost of some of the investments made in anticipation of the MYP or block buy contract being fully implemented  The contractor can do this even if the MYP or block buy contract does not elsewhere include a provision for a cancellation penalty  As a result of this key difference, although a contract with options looks like a multiyear contract, it operates more like a series of annual contracts, and it cannot achieve the kinds of savings that are possible under MYP and BBC  Potential issues for Congress concerning MYP and BBC include whether to use MYP and BBC in the future more frequently, less frequently, or about as frequently as they are currently used; and whether to create a permanent statute to govern the use of BBC, analogous to the permanent statute that governs the use of MYP  Should MYP and BBC in the future be used more frequently, less frequently, or about as frequently as they are currently used? Supporters of using MYP and BBC more frequently in the future might argue the following: Since MYP and BBC can reduce procurement costs, making greater use of MYP and BBC can help DOD get more value out of its available procurement funding  This can be particularly important if DOD's budget in real (i e , inflation-adjusted) terms remains flat or declines in coming years, as many observers anticipate  The risks of using MYP have been reduced by Section 811 of the FY2008 National Defense Authorization Act ( H R  4986 / P L  110-181 of January 28, 2008), which amended 10 U S C  2306b to strengthen the process for ensuring that programs proposed for MYP meet certain criteria (see " Permanent Statute Governing MYP ")  Since the value of MYP contracts equated to less than 8% of DOD's procurement budget in FY2012, compared to about 17% of DOD's procurement budget in FY2000, MYP likely could be used more frequently without exceeding past experience regarding the share of DOD's procurement budget accounted for by MYP contracts  Supporters of using MYP and BBC less frequently in the future, or at least no more frequently than now, might argue the following: Using MYP and BBC more frequently would further reduce Congress's and DOD's flexibility for making changes in DOD procurement programs in future years in response to changing strategic or budgetary circumstances  The risks of reducing flexibility in this regard are increased now because of uncertainties in the current strategic environment and because efforts to reduce federal budget deficits could include reducing DOD spending, which could lead to a reassessment of U S  defense strategy and associated DOD acquisition programs  Since actual savings from using MYP and BBC rather than annual contracting can be difficult to observe or verify, it is not clear that the financial benefits of using MYP or BBC more frequently in the future would be worth the resulting further reduction in Congress's and DOD's flexibility for making changes in procurement programs in future years in response to changing strategic or budgetary circumstances  Should Congress create a permanent statute to govern the use of BBC, analogous to the permanent statute (10 U S C  2306b) that governs the use of MYP? Supporters of creating a permanent statute to govern the use of BBC might argue the following: Such a statute could encourage greater use of BBC, and thereby increase savings in DOD procurement programs by giving BBC contracting a formal legal standing and by establishing a clear process for DOD program managers to use in assessing whether their programs might be considered suitable for BBC  Such a statute could make BBC more advantageous by including a provision that automatically grants EOQ authority to programs using BBC, as well as provisions establishing qualifying criteria and other conditions intended to reduce the risks of using BBC  Opponents of creating a permanent statute to govern the use of BBC might argue the following: A key advantage of BBC is that it is not governed by a permanent statute  The lack of such a statute gives DOD and Congress full flexibility in determining when and how to use BBC for programs that may not qualify for MYP, but for which a multiyear contract of some kind might produce substantial savings  Such a statute could encourage DOD program managers to pursue their programs using BBC rather than MYP  This could reduce discipline in DOD multiyear contracting if the qualifying criteria in the BBC statute are less demanding than the qualifying criteria in 10 U S C  2306b  Should the Coast Guard should begin making use of MYP and BBC? Although the Coast Guard is part of the Department of Homeland Security (DHS), the Coast Guard is a military service and a branch of the U S  Armed Forces at all times (14 U S C  1), and 10 U S C  2306b provides authority for using MYP not only to DOD, but also to the Coast Guard (and the National Aeronautics and Space Administration as well)  In addition, Section 311 of the Frank LoBiondo Coast Guard Authorization Act of 2018 ( S  140 / P L  115-282 of December 4, 2018) provides permanent authority for the Coast Guard to use block buy contracting with EOQ purchases of components in its major acquisition programs  The authority is now codified at 14 U S C  1137  As discussed earlier in this report, the Navy in recent years has made extensive use of MYP and BBC in its ship and aircraft acquisition programs, reducing the collective costs of those programs, the Navy estimates, by billions of dollars  The Coast Guard, like the Navy, procures ships and aircraft  In contrast to the Navy, however, the Coast Guard has never used MYP or BBC in its ship or aircraft acquisition programs  Instead, the Coast has tended to use contracts with options  As discussed earlier, although a contract with options looks like a multiyear contract, it operates more like a series of annual contracts, and it cannot achieve the kinds of savings that are possible under MYP and BBC  CRS in recent years has testified and reported on the possibility of using BBC or MYP in Coast Guard ship acquisition programs, particularly the Coast Guard's 25-ship Offshore Patrol Cutter (OPC) program and the Coast Guard's three-ship polar icebreaker program  CRS estimates that using multiyear contracting rather than contracts with options for the entire 25-ship OPC program could reduce the cost of the OPC program by about $1 billion  The OPC program is the Coast Guard's top-priority acquisition program, and it represents a once-in-a-generation opportunity to reduce the acquisition cost of a Coast Guard acquisition program by an estimated $1 billion  CRS also estimates that using BBC for a three-ship polar icebreaker program could reduce the cost of that program by upwards of $150 million  The Coast Guard has expressed some interest in using BBC in the polar icebreaker program, but its baseline acquisition strategy for that program, like its current acquisition strategy for the OPC program, is to use a contract with options  As part of its FY2020 budget submission, the Department of Defense is proposing continued funding for implementing several MYP contracts initiated in fiscal years prior to FY2020, but it has not highlighted any requests for authority for new MYP or block buy contracts for major acquisition programs that would begin in FY2020  Appendix A  Text of 10 U S C  2306b The text of 10 U S C  2306b as of April 29, 2019, is as follows: §2306b  Multiyear contracts: acquisition of property (a) In General -To the extent that funds are otherwise available for obligation, the head of an agency may enter into multiyear contracts for the purchase of property whenever the head of that agency finds each of the following: (1) That the use of such a contract will result in significant savings of the total anticipated costs of carrying out the program through annual contracts  (2) That the minimum need for the property to be purchased is expected to remain substantially unchanged during the contemplated contract period in terms of production rate, procurement rate, and total quantities  (3) That there is a reasonable expectation that throughout the contemplated contract period the head of the agency will request funding for the contract at the level required to avoid contract cancellation  (4) That there is a stable design for the property to be acquired and that the technical risks associated with such property are not excessive  (5) That the estimates of both the cost of the contract and the anticipated cost avoidance through the use of a multiyear contract are realistic  (6) In the case of a purchase by the Department of Defense, that the use of such a contract will promote the national security of the United States  (7) In the case of a contract in an amount equal to or greater than $500,000,000, that the conditions required by subparagraphs (C) through (F) of subsection (i)(3) will be met, in accordance with the Secretary's certification and determination under such subsection, by such contract  (b) Regulations -(1) Each official named in paragraph (2) shall prescribe acquisition regulations for the agency or agencies under the jurisdiction of such official to promote the use of multiyear contracting as authorized by subsection (a) in a manner that will allow the most efficient use of multiyear contracting  (2)(A) The Secretary of Defense shall prescribe the regulations applicable to the Department of Defense  (B) The Secretary of Homeland Security shall prescribe the regulations applicable to the Coast Guard, except that the regulations prescribed by the Secretary of Defense shall apply to the Coast Guard when it is operating as a service in the Navy  (C) The Administrator of the National Aeronautics and Space Administration shall prescribe the regulations applicable to the National Aeronautics and Space Administration  (c) Contract Cancellations -The regulations may provide for cancellation provisions in multiyear contracts to the extent that such provisions are necessary and in the best interests of the United States  The cancellation provisions may include consideration of both recurring and nonrecurring costs of the contractor associated with the production of the items to be delivered under the contract  (d) Participation by Subcontractors, Vendors, and Suppliers -In order to broaden the defense industrial base, the regulations shall provide that, to the extent practicable- (1) multiyear contracting under subsection (a) shall be used in such a manner as to seek, retain, and promote the use under such contracts of companies that are subcontractors, vendors, or suppliers; and (2) upon accrual of any payment or other benefit under such a multiyear contract to any subcontractor, vendor, or supplier company participating in such contract, such payment or benefit shall be delivered to such company in the most expeditious manner practicable  (e) Protection of Existing Authority -The regulations shall provide that, to the extent practicable, the administration of this section, and of the regulations prescribed under this section, shall not be carried out in a manner to preclude or curtail the existing ability of an agency- (1) to provide for competition in the production of items to be delivered under such a contract; or (2) to provide for termination of a prime contract the performance of which is deficient with respect to cost, quality, or schedule  (f) Cancellation or Termination for Insufficient Funding -In the event funds are not made available for the continuation of a contract made under this section into a subsequent fiscal year, the contract shall be canceled or terminated  The costs of cancellation or termination may be paid from- (1) appropriations originally available for the performance of the contract concerned; (2) appropriations currently available for procurement of the type of property concerned, and not otherwise obligated; or (3) funds appropriated for those payments  (g) Contract Cancellation Ceilings Exceeding $100,000,000 -(1) Before any contract described in subsection (a) that contains a clause setting forth a cancellation ceiling in excess of $100,000,000 may be awarded, the head of the agency concerned shall give written notification of the proposed contract and of the proposed cancellation ceiling for that contract to the congressional defense committees, and such contract may not then be awarded until the end of a period of 30 days beginning on the date of such notification  (2) In the case of a contract described in subsection (a) with a cancellation ceiling described in paragraph (1), if the budget for the contract does not include proposed funding for the costs of contract cancellation up to the cancellation ceiling established in the contract, the head of the agency concerned shall, as part of the certification required by subsection (i)(1)(A),1 give written notification to the congressional defense committees of- (A) the cancellation ceiling amounts planned for each program year in the proposed multiyear procurement contract, together with the reasons for the amounts planned; (B) the extent to which costs of contract cancellation are not included in the budget for the contract; and (C) a financial risk assessment of not including budgeting for costs of contract cancellation  (h) Defense Acquisitions of Weapon Systems -In the case of the Department of Defense, the authority under subsection (a) includes authority to enter into the following multiyear contracts in accordance with this section: (1) A multiyear contract for the purchase of a weapon system, items and services associated with a weapon system, and logistics support for a weapon system  (2) A multiyear contract for advance procurement of components, parts, and materials necessary to the manufacture of a weapon system, including a multiyear contract for such advance procurement that is entered into in order to achieve economic-lot purchases and more efficient production rates  (i) Defense Acquisitions Specifically Authorized by Law -(1) In the case of the Department of Defense, a multiyear contract in an amount equal to or greater than $500,000,000 may not be entered into under this section unless the contract is specifically authorized by law in an Act other than an appropriations Act  (2) In submitting a request for a specific authorization by law to carry out a defense acquisition program using multiyear contract authority under this section, the Secretary of Defense shall include in the request the following: (A) A report containing preliminary findings of the agency head required in paragraphs (1) through (6) of subsection (a), together with the basis for such findings  (B) Confirmation that the preliminary findings of the agency head under subparagraph (A) were supported by a preliminary cost analysis performed by the Director of Cost Assessment and Program Evaluation  (3) A multiyear contract may not be entered into under this section for a defense acquisition program that has been specifically authorized by law to be carried out using multiyear contract authority unless the Secretary of Defense certifies in writing, not later than 30 days before entry into the contract, that each of the following conditions is satisfied: (A) The Secretary has determined that each of the requirements in paragraphs (1) through (6) of subsection (a) will be met by such contract and has provided the basis for such determination to the congressional defense committees  (B) The Secretary's determination under subparagraph (A) was made after completion of a cost analysis conducted on the basis of section 2334(e)(2) 1 of this title, and the analysis supports the determination  (C) The system being acquired pursuant to such contract has not been determined to have experienced cost growth in excess of the critical cost growth threshold pursuant to section 2433(d) of this title within 5 years prior to the date the Secretary anticipates such contract (or a contract for advance procurement entered into consistent with the authorization for such contract) will be awarded  (D) A sufficient number of end items of the system being acquired under such contract have been delivered at or within the most current estimates of the program acquisition unit cost or procurement unit cost for such system to determine that current estimates of such unit costs are realistic  (E) During the fiscal year in which such contract is to be awarded, sufficient funds will be available to perform the contract in such fiscal year, and the future-years defense program for such fiscal year will include the funding required to execute the program without cancellation  (F) The contract is a fixed price type contract  (G) The proposed multiyear contract provides for production at not less than minimum economic rates given the existing tooling and facilities  (4) If for any fiscal year a multiyear contract to be entered into under this section is authorized by law for a particular procurement program and that authorization is subject to certain conditions established by law (including a condition as to cost savings to be achieved under the multiyear contract in comparison to specified other contracts) and if it appears (after negotiations with contractors) that such savings cannot be achieved, but that significant savings could nevertheless be achieved through the use of a multiyear contract rather than specified other contracts, the President may submit to Congress a request for relief from the specified cost savings that must be achieved through multiyear contracting for that program  Any such request by the President shall include details about the request for a multiyear contract, including details about the negotiated contract terms and conditions  (5)(A) The Secretary may obligate funds for procurement of an end item under a multiyear contract for the purchase of property only for procurement of a complete and usable end item  (B) The Secretary may obligate funds appropriated for any fiscal year for advance procurement under a contract for the purchase of property only for the procurement of those long-lead items necessary in order to meet a planned delivery schedule for complete major end items that are programmed under the contract to be acquired with funds appropriated for a subsequent fiscal year (including an economic order quantity of such long-lead items when authorized by law)  (6) The Secretary may make the certification under paragraph (3) notwithstanding the fact that one or more of the conditions of such certification are not met, if the Secretary determines that, due to exceptional circumstances, proceeding with a multiyear contract under this section is in the best interest of the Department of Defense and the Secretary provides the basis for such determination with the certification  (7) The Secretary may not delegate the authority to make the certification under paragraph (3) or the determination under paragraph (6) to an official below the level of Under Secretary of Defense for Acquisition, Technology, and Logistics  (j) Defense Contract Options for Varying Quantities -The Secretary of Defense may instruct the Secretary of the military department concerned to incorporate into a proposed multiyear contract negotiated priced options for varying the quantities of end items to be procured over the period of the contract  (k) Multiyear Contract Defined -For the purposes of this section, a multiyear contract is a contract for the purchase of property for more than one, but not more than five, program years  Such a contract may provide that performance under the contract during the second and subsequent years of the contract is contingent upon the appropriation of funds and (if it does so provide) may provide for a cancellation payment to be made to the contractor if such appropriations are not made  (l) Various Additional Requirements With Respect to Multiyear Defense Contracts -(1)(A) The head of an agency may not initiate a contract described in subparagraph (B) unless the congressional defense committees are notified of the proposed contract at least 30 days in advance of the award of the proposed contract  (B) Subparagraph (A) applies to the following contracts: (i) A multiyear contract- (I) that employs economic order quantity procurement in excess of $20,000,000 in any one year of the contract; or (II) that includes an unfunded contingent liability in excess of $20,000,000  (ii) Any contract for advance procurement leading to a multiyear contract that employs economic order quantity procurement in excess of $20,000,000 in any one year  (2) The head of an agency may not initiate a multiyear contract for which the economic order quantity advance procurement is not funded at least to the limits of the Government's liability  (3) The head of an agency may not initiate a multiyear procurement contract for any system (or component thereof) if the value of the multiyear contract would exceed $500,000,000 unless authority for the contract is specifically provided in an appropriations Act  (4) Each report required by paragraph (5) with respect to a contract (or contract extension) shall contain the following: (A) The amount of total obligational authority under the contract (or contract extension) and the percentage that such amount represents of- (i) the applicable procurement account; and (ii) the agency procurement total  (B) The amount of total obligational authority under all multiyear procurements of the agency concerned (determined without regard to the amount of the multiyear contract (or contract extension)) under multiyear contracts in effect at the time the report is submitted and the percentage that such amount represents of- (i) the applicable procurement account; and (ii) the agency procurement total  (C) The amount equal to the sum of the amounts under subparagraphs (A) and (B), and the percentage that such amount represents of- (i) the applicable procurement account; and (ii) the agency procurement total  (D) The amount of total obligational authority under all Department of Defense multiyear procurements (determined without regard to the amount of the multiyear contract (or contract extension)), including any multiyear contract (or contract extension) that has been authorized by the Congress but not yet entered into, and the percentage that such amount represents of the procurement accounts of the Department of Defense treated in the aggregate  (5) The head of an agency may not enter into a multiyear contract (or extend an existing multiyear contract), the value of which would exceed $500,000,000 (when entered into or when extended, as the case may be), until the Secretary of Defense submits to the congressional defense committees a report containing the information described in paragraph (4) with respect to the contract (or contract extension)  (6) The head of an agency may not terminate a multiyear procurement contract until 10 days after the date on which notice of the proposed termination is provided to the congressional defense committees  (7) The execution of multiyear contracting authority shall require the use of a present value analysis to determine lowest cost compared to an annual procurement  (8) This subsection does not apply to the National Aeronautics and Space Administration or to the Coast Guard  (9) In this subsection: (A) The term "applicable procurement account" means, with respect to a multiyear procurement contract (or contract extension), the appropriation account from which payments to execute the contract will be made  (B) The term "agency procurement total" means the procurement accounts of the agency entering into a multiyear procurement contract (or contract extension) treated in the aggregate  (m) Increased Funding and Reprogramming Requests -Any request for increased funding for the procurement of a major system under a multiyear contract authorized under this section shall be accompanied by an explanation of how the request for increased funding affects the determinations made by the Secretary under subsection (i)  Appendix B  Programs Approved for MYP in Annual DOD Appropriations Acts Since FY1990 This appendix presents, in two tables, programs approved for MYP in annual DOD appropriations acts since FY1990  Table B-1 covers FY2011 to the present, and Table B-2 covers FY1990 through FY2010 


Report 2: The 116 th Congress may consider a variety of housing-related issues  These may involve assisted housing programs, such as those administered by the Department of Housing and Urban Development (HUD), and issues related to housing finance, among other things  Specific topics of interest may include ongoing issues such as interest in reforming the nation's housing finance system, how to prioritize appropriations for federal housing programs in a limited funding environment, oversight of the implementation of changes to certain housing programs that were enacted in prior Congresses, and the possibility of extending certain temporary housing-related tax provisions  Additional issues may emerge as the Congress progresses  This report provides a high-level overview of the most prominent housing-related issues that may be of interest during the 116 th   It is meant to provide a broad overview of major issues and is not intended to provide detailed information or analysis  However, it includes references to more in-depth CRS reports on these issues where possible  This section provides background on housing and mortgage market conditions to provide context for the housing policy issues discussed in the remainder of the report  This discussion of market conditions is at the national level  However, it is important to be aware that local housing market conditions can vary dramatically, and national housing market trends may not reflect the conditions in a specific area  Nevertheless, national housing market indicators can provide an overall sense of general trends in housing  In general, rising home prices, relatively low interest rates, and rising rental costs have been prominent features of housing and mortgage markets in recent years  Although interest rates have remained low, rising house prices and rental costs that in many cases have outpaced income growth have led to increased concerns about housing affordability for both prospective homebuyers and renters  Most homebuyers take out a mortgage to purchase a home  Therefore, owner-occupied housing markets and the mortgage market are closely linked, although they are not the same  The ability of prospective homebuyers to obtain mortgages, and the costs of those mortgages, impact housing demand and affordability  The following subsections show current trends in selected owner-occupied housing and mortgage market indicators  As shown in Figure 1 , nationally, nominal house prices have been increasing on a year-over-year basis in each quarter since the beginning of 2012, with year-over-year increases exceeding 5% for much of that time period and exceeding 6% for most quarters since mid-2016  These increases follow almost five years of house price declines in the years during and surrounding the economic recession of 2007-2009 and associated housing market turmoil  House price increases slowed somewhat during 2018, but year-over-year house prices still increased by nearly 6% during the fourth quarter of 2018  House prices, and changes in house prices, vary greatly across local housing markets  Some areas of the country are experiencing rapid increases in house prices, while other areas are experiencing slower or stagnating house price growth  Similarly, prices have fully regained or even exceeded their pre-recession levels in nominal terms in many parts of the country, but in other areas prices remain below those levels  House price increases affect participants in the housing market differently  Rising prices reduce affordability for prospective homebuyers, but they are generally beneficial for current homeowners due to the increased home equity that accompanies them (although rising house prices also have the potential to negatively impact affordability for current homeowners through increased property taxes)  For several years, mortgage interest rates have been low by historical standards  Lower interest rates increase mortgage affordability and make it easier for some households to purchase homes or refinance their existing mortgages  As shown in Figure 2 , average mortgage interest rates have been consistently below 5% since May 2010 and have been below 4% for several stretches during that time  After starting to increase somewhat in late 2017 and much of 2018, mortgage interest rates showed declines at the end of 2018 into early 2019  The average mortgage interest rate for February 2019 was 4 37%, compared to 4 46% in the previous month and 4 33% a year earlier  House prices have been rising for several years on a national basis, and mortgage interest rates, while still low by historical standards, have also risen for certain stretches  While incomes have also been rising in recent years, helping to mitigate some affordability pressures, on the whole house price increases have outpaced income increases  These trends have led to increased concerns about the affordability of owner-occupied housing  Despite rising house prices, many metrics of housing affordability suggest that owner-occupied housing is currently relatively affordable  These metrics generally measure the share of income that a median-income family would need to qualify for a mortgage to purchase a median-priced home, subject to certain assumptions  Therefore, rising incomes and, especially, interest rates that are still low by historical standards contribute to monthly mortgage payments being considered affordable under these measures despite recent house price increases  However, some factors that affect housing affordability may not be captured by these metrics  For example, several of the metrics are based on certain assumptions (such as a borrower making a 20% down payment) that may not apply to many households  Furthermore, because they typically measure the affordability of monthly mortgage payments, they often do not take into account other affordability challenges that homebuyers may face, such as affording a down payment and other upfront costs of purchasing a home (costs that generally increase as home prices rise)  Other factors—such as the ability to qualify for a mortgage, the availability of homes on the market, and regional differences in house prices and income—may also make homeownership less attainable for some households   Some of these factors may have a bigger impact on affordability for specific demographic groups, as income trends and housing preferences are not uniform across all segments of the population  Given that house price increases are showing some signs of slowing and interest rates have remained low, the affordability of owner-occupied homes may hold steady or improve  Such trends could potentially impact housing market activity, including home sales  In general, annual home sales have been increasing since 2014 and have improved from their levels during the housing market turmoil of the late 2000s, although in 2018 the overall number of home sales declined from the previous year  While home sales have been improving somewhat in recent years (prior to falling in 2018), the supply of homes on the market has generally not been keeping pace with the demand for homes, thereby limiting home sales activity and contributing to house price increases  Home sales include sales of both existing and newly built homes  Existing home sales generally number in the millions each year, while new home sales are usually in the hundreds of thousands   Figure 3 shows the annual number of existing and new home sales for each year from 1995 through 2018  Existing home sales numbered about 5 3 million in 2018, a decline from 5 5 million in 2017 (existing home sales in 2017 were the highest level since 2006)  New home sales numbered about 622,000 in 2018, an increase from 614,000 in 2017 and the highest level since 2007  However, the number of new home sales remains appreciably lower than in the late 1990s and early 2000s, when they tended to be between 800,000 and 1 million per year  The number and types of homes on the market affect home sales and home prices  On a national basis, the supply of homes on the market has been relatively low in recent years, and in general new construction has not been creating enough new homes to meet demand  However, as noted previously, national housing market indicators are not necessarily indicative of local conditions  While many areas of the country are experiencing low levels of housing inventory that contribute to higher home prices, other areas, particularly those experiencing population declines, face a different set of housing challenges, including surplus housing inventory and higher levels of vacant homes  On a national basis, the inventory of homes on the market has been below historical averages in recent years, though the inventory, of new homes in particular, has begun to increase somewhat of late  Homes come onto the market through the construction of new homes and when current homeowners decide to sell their existing homes  Existing homeowners' decisions to sell their homes can be influenced by expectations about housing inventory and affordability  For example, current homeowners may choose not to sell if they are uncertain about finding new homes that meet their needs, or if their interest rates on new mortgages would be substantially higher than the interest rates on their current mortgages  New construction activity is influenced by a variety of factors including labor, materials, and other costs as well as the expected demand for new homes  One measure of the amount of new construction is housing starts  Housing starts are the number of new housing units on which construction is started in a given period and are typically reported monthly as a "seasonally adjusted annual rate " This means that the number of housing starts reported for a given month (1) has been adjusted to account for seasonal factors and (2) has been multiplied by 12 to reflect what the annual number of housing starts would be if the current month's pace continued for an entire year  Figure 4 shows the seasonally adjusted rate of starts on one-unit homes for each month from January 1995 through December 2018  Housing starts for single-family homes fell during the housing market turmoil, reflecting decreased home purchase demand  In recent years, levels of new construction have remained relatively low by historical standards, reflecting a variety of considerations including labor shortages and the cost of building  Housing starts have generally been increasing since about 2012, but remain well below their levels from the late 1990s through the mid-2000s  For 2018, the seasonally adjusted annual rate of housing starts averaged about 868,000  In comparison, the seasonally adjusted annual rate of housing starts exceeded 1 million from the late 1990s through the mid-2000s  Furthermore, high housing construction costs have led to a greater share of new housing being built at the more expensive end of the market  To the extent that new homes are concentrated at higher price points, supply and price pressures may be exacerbated for lower-priced homes  When a lender originates a mortgage, it can choose to hold that mortgage in its own portfolio, sell it to a private company, or sell it to Fannie Mae or Freddie Mac, two congressionally chartered government-sponsored enterprises (GSEs)  Fannie Mae and Freddie Mac bundle mortgages into securities and guarantee investors' payments on those securities  Furthermore, a mortgage might be insured by a federal government agency, such as the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA)  Most FHA-insured or VA-guaranteed mortgages are included in mortgage-backed securities that are guaranteed by Ginnie Mae, another government agency  The shares of mortgages that are provided through each of these channels may be relevant to policymakers because of their implications for mortgage access and affordability as well as the federal government's exposure to risk  As shown in Figure 5 , during the first three quarters of 2018, about two-thirds of the total dollar volume of mortgages originated was either backed by Fannie Mae or Freddie Mac (45%) or guaranteed by a federal agency such as FHA or VA (22%)  Nearly one-third of the dollar volume of mortgages originated was held in bank portfolios, while close to 2% was included in a private-label security without government backing  The shares of mortgage originations backed by Fannie Mae and Freddie Mac and held in bank portfolios are roughly similar to their respective shares in the early 2000s  The share of private-label securitization has been, and continues to be, very small since the housing market turmoil of the late 2000s, while the FHA/VA share is higher than it was in the early and mid-2000s  The share of mortgages insured by FHA or guaranteed by VA was low by historical standards during that time period as many households opted for other types of mortgages, including subprime mortgages  As has been the case in owner-occupied housing markets, affordability has been a prominent concern in rental markets in recent years  In the years since the housing market turmoil of the late 2000s, the number and share of renter households has increased, leading to lower rental vacancy rates and higher rents in many markets  The housing and mortgage market turmoil of the late 2000s led to a substantial decrease in the homeownership rate and a corresponding increase in the share of households who rent their homes  As shown in Figure 6 , the share of renters increased from about 31% in 2005 and 2006 to a high of about 36 6% in 2016, before decreasing slightly to 36 1% in 2017 and continuing to decline to 35 6% in 2018  The homeownership rate correspondingly fell from a high of 69% in the mid-2000s to 63 4% in 2016, before rising to 63 9% in 2017 and continuing to rise to 64 4% in 2018  The overall number of occupied housing units also increased over this time period, from nearly 110 million in 2006 to 121 million in 2018; most of this increase has been in renter-occupied units  The number of renter-occupied units increased from about 34 million in 2006 to about 43 million in 2018  The number of owner-occupied housing units fell from about 75 million units in 2006 to about 74 million in 2014, but has since increased to about 78 million units in 2018  The higher number and share of renter households has had implications for rental vacancy rates and rental housing costs  More renter households increases competition for rental housing, which may in turn drive up rents if there is not enough new rental housing created (whether through new construction or conversion of owner-occupied units to rental units) to meet the increased demand  As shown in Figure 7 , the rental vacancy rate has generally declined in recent years and was under 7% at the end of 2018  Rental housing affordability is impacted by a variety of factors, including the supply of rental housing units available, the characteristics of those units (e g , age and amenities), and the demand for available units  New housing units have been added to the rental stock in recent years through both construction of new rental units and conversions of existing owner-occupied units to rental housing  However, the supply of rental housing has not necessarily kept pace with the demand, particularly among lower-cost rental units, and low vacancy rates have been especially pronounced in less-expensive units  The increased demand for rental housing, as well as the concentration of new rental construction in higher-cost units, has led to increases in rents in recent years  Median renter incomes have also been increasing for the last several years, at times outpacing increases in rents  However, over the longer term, median rents have increased faster than renter incomes, reducing rental affordability  Rising rental costs and renter incomes that are not keeping up with rent increases over the long term can contribute to housing affordability problems, particularly for households with lower incomes  Under one common definition, housing is considered to be affordable if a household is paying no more than 30% of its income in housing costs  Under this definition, households that pay more than 30% are considered to be cost-burdened, and those that pay more than 50% are considered to be severely cost-burdened  The overall number of cost-burdened renter households has increased from 14 8 million in 2001 to 20 5 million in 2017, although the 20 5 million in 2017 represented a decrease from 20 8 million in 2016 and over 21 million in 2014 and 2015  (Over this time period, the overall number of renter households has increased as well ) While housing cost burdens can affect households of all income levels, they are most prevalent among the lowest-income households  In 2017, 83% of renter households with incomes below $15,000 experienced housing cost burdens, and 72% experienced severe cost burdens  A shortage of lower-cost rental units that are both available and affordable to extremely low-income renter households (households that earn no more than 30% of area median income), in particular, contributes to these cost burdens  A variety of housing-related issues may be of interest to the 116 th Congress, including housing finance, housing assistance programs, and housing-related tax provisions, among other things  Many of these are ongoing or perennial housing-related issues, though additional issues may emerge as the Congress progresses  Two major players in the U S  housing finance system are Fannie Mae and Freddie Mac, government-sponsored enterprises (GSEs) that were created by Congress to provide liquidity to the mortgage market  By law, Fannie Mae and Freddie Mac cannot make mortgages; rather, they are restricted to purchasing mortgages that meet certain requirements from lenders  Once the GSEs purchase a mortgage, they either package it with others into a mortgage-backed security (MBS), which they guarantee and sell to institutional investors (which can be the mortgage originator), or retain it as a portfolio investment  Fannie Mae and Freddie Mac are involved in both single-family and multifamily housing, though their single-family businesses are much larger  In 2008, in the midst of housing and mortgage market turmoil, Fannie Mae and Freddie Mac experienced financial trouble and entered voluntary conservatorship overseen by their regulator, the Federal Housing Finance Agency (FHFA)  As part of the legal arrangements of this conservatorship, the Department of the Treasury contracted to purchase a maximum of $200 billion of new senior preferred stock from each of the GSEs; in return for this support, Fannie Mae and Freddie Mac pay dividends on this stock to Treasury  These funds become general revenues  Several issues related to Fannie Mae and Freddie Mac could be of interest to the 116 th Congress  These include the potential for legislative housing finance reform, new leadership at FHFA and the potential for administrative changes to Fannie Mae and Freddie Mac, and certain issues that could affect Fannie Mae's and Freddie Mac's finances and mortgage standards, respectively  For more information on Fannie Mae and Freddie Mac, see CRS Report R44525, Fannie Mae and Freddie Mac in Conservatorship: Frequently Asked Questions   Since Fannie Mae and Freddie Mac entered conservatorship in 2008, policymakers have largely agreed on the need for comprehensive housing finance reform legislation that would resolve the conservatorships of these GSEs and address the underlying issues that are perceived to have led to their financial trouble and conservatorships  Such legislation could eliminate Fannie Mae and Freddie Mac, possibly replacing them with other entities; retain the companies but transform their role in the housing finance system; or return them to their previous status with certain changes  In addition to addressing the role of Fannie Mae and Freddie Mac, housing finance reform legislation could potentially involve changes to the Federal Housing Administration (FHA) or other federal programs that support the mortgage market  While there is generally broad agreement on certain principles of housing finance reform—such as increasing the private sector's role in the mortgage market, reducing government risk, and maintaining access to affordable mortgages for creditworthy households—there is disagreement over how best to achieve these objectives and over the technical details of how a restructured housing finance system should operate  Since 2008, a variety of housing finance reform proposals have been put forward by Members of Congress, think tanks, and industry groups  Proposals differ on structural questions as well as on specific implementation issues, such as whether, and how, certain affordable housing requirements that currently apply to Fannie Mae and Freddie Mac would be included in a new system  Previous Congresses have considered housing finance reform legislation in varying degrees  In the 113 th Congress, the House Committee on Financial Services and Senate Committee on Banking, Housing, and Urban Affairs considered different versions of comprehensive housing finance reform legislation, but none were ultimately enacted  The 114 th  Congress considered a number of more-targeted reforms to Fannie Mae and Freddie Mac, but did not actively consider comprehensive housing finance reform legislation  At the end of the 115 th Congress, the House Committee on Financial Services held a hearing on a draft housing finance reform bill released by then-Chairman Jeb Hensarling and then-Representative John Delaney, but no further action was taken on it  In the 116 th Congress, Senate Committee on Banking, Housing, and Urban Affairs Chairman Mike Crapo has released an outline for potential housing finance reform legislation  The committee held hearings on March 26 and March 27, 2019 on the outline  FHFA, an independent agency, is the regulator for Fannie Mae, Freddie Mac, and the Federal Home Loan Bank System as well as the conservator for Fannie Mae and Freddie Mac  The director of FHFA is appointed by the President, subject to Senate confirmation, for a five-year term  The term of FHFA Director Mel Watt expired in January 2019  President Trump nominated Mark Calabria to be the next FHFA director  The Senate confirmed the nomination on April 4, 2019, and Dr  Calabria was sworn in on April 15, 2019  FHFA has relatively wide latitude to make many changes to Fannie Mae's and Freddie Mac's operations without congressional approval, though it is subject to certain statutory constraints  In recent years, for example, FHFA has directed Fannie Mae and Freddie Mac to engage in risk-sharing transactions, develop a common securitization platform for issuing mortgage-backed securities, and undertake certain pilot programs  The prospect of new leadership at FHFA led many to speculate about possible administrative changes that FHFA could make to Fannie Mae and Freddie Mac going forward  Any such changes could potentially lead to congressional interest and oversight  FHFA could make many changes to Fannie Mae and Freddie Mac, including changes to the pricing of mortgages they purchase, to their underwriting standards, or to certain product offerings  It could also make changes to pilot programs, start laying the groundwork for a post-conservatorship housing finance system, or take a different implementation approach to certain affordable housing initiatives required by statute, such as Duty to Serve requirements  Because the new FHFA director has been critical of certain aspects of Fannie Mae and Freddie Mac in the past, some have expressed concerns that the new leadership could result in the agency taking steps to reduce Fannie Mae's and Freddie Mac's role in the mortgage market  In March 2019, nearly 30 industry groups sent a letter to Acting Director Otting urging that FHFA proceed cautiously with any administrative changes to ensure that they do not disrupt the mortgage market  That same month, President Trump issued a memorandum directing the Secretary of the Treasury to work with other executive branch agencies to develop a plan to end the GSEs' conservatorship, among other goals  Certain other issues related to Fannie Mae and Freddie Mac may be of interest during the 116 th Congress  A new accounting standard (current expected credit loss, or CECL) that could require the GSEs to increase their loan loss reserves goes into effect in 2020  CECL could result in Fannie Mae and Freddie Mac needing to draw on their support agreements with Treasury  The Dodd-Frank Wall Street Reform and Consumer Protection Act ( P L  111-203 ) requires mortgage lenders to document and verify a borrower's ability to repay (ATR)  If a mortgage lacks certain risky features and a lender complies with the ATR regulations, the mortgage is considered to be a qualified mortgage (QM), which provides the lender certain protections against lawsuits claiming that the ATR requirements were not met  Mortgages purchased by Fannie Mae or Freddie Mac currently have an exemption (known as the QM Patch) from the debt-to-income ratio ATR rule  This exemption expires in early 2021 (or earlier if Fannie Mae and Freddie Mac exit conservatorship before that date)  For several years, concern in Congress about federal budget deficits has led to increased interest in reducing the amount of discretionary funding provided each year through the annual appropriations process  This interest manifested most prominently in the enactment of the Budget Control Act of 2011( P L  112-25 ), which set enforceable limits for both mandatory and discretionary spending  The limits on discretionary spending, which have been amended and adjusted since they were first enacted, have implications for HUD's budget, the largest source of funding for direct housing assistance, because it is made up almost entirely of discretionary appropriations

ground_truth: Multiyear procurement (MYP) and block buy contracting (BBC) are special contracting mechanisms that Congress permits the Department of Defense (DOD) to use for a limited number of defense acquisition programs. Compared to the standard or default approach of annual contracting, MYP and BBC have the potential for reducing weapon procurement costs by a few or several percent. Under annual contracting, DOD uses one or more contracts for each year's worth of procurement of a given kind of item. Under MYP, DOD instead uses a single contract for two to five years' worth of procurement of a given kind of item without having to exercise a contract option for each year after the first year. DOD needs congressional approval for each use of MYP. There is a permanent statute governing MYP contracting—10 U.S.C. 2306b. Under this statute, a program must meet several criteria to qualify for MYP. Compared with estimated costs under annual contracting, estimated savings for programs being proposed for MYP have ranged from less than 5% to more than 15%, depending on the particulars of the program in question, with many estimates falling in the range of 5% to 10%. In practice, actual savings from using MYP rather than annual contracting can be difficult to observe or verify because of cost growth during the execution of the contract due to changes in the program independent of the use of MYP rather than annual contracting. BBC is similar to MYP in that it permits DOD to use a single contract for more than one year's worth of procurement of a given kind of item without having to exercise a contract option for each year after the first year. BBC is also similar to MYP in that DOD needs congressional approval for each use of BBC. BBC differs from MYP in the following ways: There is no permanent statute governing the use of BBC. There is no requirement that BBC be approved in both a DOD appropriations act and an act other than a DOD appropriations act. Programs being considered for BBC do not need to meet any legal criteria to qualify for BBC, because there is no permanent statute governing the use of BBC that establishes such criteria. A BBC contract can cover more than five years of planned procurements. Economic order quantity (EOQ) authority—the authority to bring forward selected key components of the items to be procured under the contract and purchase the components in batch form during the first year or two of the contract—does not come automatically as part of BBC authority because there is no permanent statute governing the use of BBC that includes EOQ authority as an automatic feature. BBC contracts are less likely to include cancellation penalties. Potential issues for Congress concerning MYP and BBC include whether to use MYP and BBC in the future more frequently, less frequently, or about as frequently as they are currently used; whether to create a permanent statute to govern the use of BBC, analogous to the permanent statute that governs the use of MYP; and whether the Coast Guard should begin making use of MYP and BBC.

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



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



Report 2:  In FY2020, the discretionary spending limits are slated to decrease, after having been increased in FY2018 and FY2019 by the Bipartisan Budget Act of FY2018 (BBA; P L  115-123 )  The nondefense discretionary cap (the one relevant for housing programs and activities) will decline by more than 9% in FY2020, absent any additional legislative changes  More than three-quarters of HUD's appropriations are devoted to three rental assistance programs serving more than 4 million families: the Section 8 Housing Choice Voucher (HCV) program, Section 8 project-based rental assistance, and the public housing program  Funding for the HCV program and project-based rental assistance has been increasing in recent years, largely because of the increased costs of maintaining assistance for households that are currently served by the programs  Public housing has, arguably, been underfunded (based on studies undertaken by HUD of what it should cost to operate and maintain it) for many years  Despite the large share of total HUD funding these rental assistance programs command, their combined funding levels only permit them to serve an estimated one in four eligible families, which creates long waiting lists for assistance in most communities  A similar dynamic plays out in the U S  Department of Agriculture's Rural Housing Service budget  Demand for housing assistance exceeds the supply of subsidies, yet the vast majority of the RHS budget is devoted to maintaining assistance for current residents  In a budget environment with limits on discretionary spending, the pressure to provide increased funding to maintain current services for existing rental assistance programs must be balanced against the pressure from states, localities, and advocates to maintain or increase funding for other popular programs, such as HUD's Community Development Block Grant (CDBG) program, grants for homelessness assistance, and funding for Native American housing  The Trump Administration's budget request for FY2020 proposes an 18% decrease in funding for HUD's programs and activities as compared to the prior year  It proposes to eliminate funding for several programs, including multiple HUD grant programs (CDBG, the HOME Investment Partnerships Program, and the Self-Help and Assisted Homeownership Opportunity Program (SHOP)), and to decrease funding for most other HUD programs  In proposing to eliminate the grant programs, the Administration cites budget constraints and proposes that state and local governments take on more of a role in the housing and community development activities funded by these programs  Additionally, the budget references policy changes designed to reduce the cost of federal rental assistance programs, including the Making Affordable Housing Work Act of 2018 (MAHWA) legislative proposal, released by HUD in April 2018  If enacted, the proposal would make a number of changes to the way tenant rents are calculated in HUD rental assistance programs, resulting in rent increases for assisted housing recipients, and corresponding decreases in the cost of federal subsidies  Further, it would permit local program administrators or property owners to institute work requirements for recipients  In announcing the proposal, HUD described it as setting the programs on "a more fiscally sustainable path," creating administrative efficiency, and promoting self-sufficiency  Low-income housing advocates have been critical of it, particularly the effect increased rent payments may have on families  Beyond HUD, the Administration's FY2020 budget request for USDA's Rural Housing Service would eliminate funding for most rural housing programs, except for several loan guarantee programs  It would continue to provide funding to renew existing rental assistance, but also proposes a new minimum rent policy for tenants designed to help reduce federal subsidy costs  For more on HUD appropriations trends in general, see CRS Report R42542, Department of Housing and Urban Development (HUD): Funding Trends Since FY2002   For more on the FY2020 budget environment, including discretionary spending caps, see CRS Report R44874, The Budget Control Act: Frequently Asked Questions   Several pieces of assisted housing legislation that were enacted in prior Congresses are expected to be implemented during the 116 th Congress  In the FY2016 HUD appropriations law, Congress mandated that HUD expand the Moving to Work (MTW) demonstration by 100 public housing authorities (PHAs)  MTW is a waiver program that allows a limited number of participating PHAs to receive exceptions from HUD for most of the rules and regulations governing the public housing and voucher programs  MTW has been controversial for many years, with PHAs supporting the flexibility it provides (e g , allowing PHAs to move funding between programs), and low-income housing advocates criticizing some of the policies being adopted by PHAs (e g , work requirements and time limits)  Most recently, GAO issued a report raising concerns about HUD's oversight of MTW, including the lack of monitoring of the effects of policy changes under MTW on tenants  HUD was required to phase in the FY2016 expansion and evaluate any new policies adopted by participating PHAs  Following a series of listening sessions and advisory committee meetings, and several solicitations for comment, HUD issued a solicitation of interest for the first two expansion cohorts in December 2018  As of the date of this report, no selections had yet been made for those cohorts  The Rental Assistance Demonstration (RAD) was an Obama Administration initiative initially designed to test the feasibility of addressing the estimated $25 6 billion backlog in unmet capital needs in the public housing program by allowing local PHAs to convert their public housing properties to either Section 8 Housing Choice Vouchers or Section 8 project-based rental assistance  PHAs are limited in their ability to mortgage, and thus raise private capital for, their public housing properties because of a federal deed restriction placed on the properties as a condition of federal assistance  When public housing properties are converted under RAD, that deed restriction is removed  As currently authorized, RAD conversions must be cost-neutral, meaning that the Section 8 rents the converted properties may receive must not result in higher subsidies than would have been received under the public housing program  Given this restriction, and without additional subsidy, not all public housing properties can use a conversion to raise private capital, potentially limiting the usefulness of a conversion for some properties  While RAD conversions have been popular with PHAs, and HUD's initial evaluations of the program have been favorable, a recent GAO study has raised questions about HUD's oversight of RAD, and about how much private funding is actually being raised for public housing through the conversions  RAD, as first authorized by Congress in the FY2012 HUD appropriations law, was originally limited to 60,000 units of public housing (out of roughly 1 million units)  However, Congress has since expanded the demonstration  Most recently, in FY2018, Congress raised the cap so that up to 455,000 units of public housing will be permitted to convert to Section 8 under RAD, and it further expanded the program so that Section 202 Housing for the Elderly units can also convert  Not only is HUD currently implementing the FY2018 expansion, but the President's FY2020 budget request to Congress requests that the cap on public housing RAD conversions be eliminated completely  Several major disasters that have recently affected the United States have led to congressional activity related to disaster response and recovery programs  When such incidents occur, the President may authorize an emergency or major disaster declaration under the Robert T  Stafford Disaster Relief and Emergency Assistance Act (Stafford Act; P L  93-288 , as amended), making various housing assistance programs, including programs provided by the Federal Emergency Management Agency (FEMA) , available to disaster survivors  FEMA-provided housing assistance may include short-term, emergency sheltering accommodations under Section 403—Essential Assistance—of the Stafford Act (e g , the Transitional Sheltering Assistance (TSA) program, which is intended to provide short-term hotel/motel accommodations)  Interim housing needs may be met through the Individuals and Households Program (IHP) under Section 408—Federal Assistance to Individuals and Households—of the Stafford Act  IHP assistance may include financial (e g , assistance to rent alternate housing accommodations ) and/or direct assistance (e g , multi family lease and repair , Transportable Temporary Housing Units , or direct lease ) to eligible individuals and households who, as a result of an emergency or disaster, have uninsured or under-insured necessary expenses and serious needs that cannot be met through other means or forms of assistance  IHP assistance is intended to be temporary and is generally limited to a period of 18 months following the date of the declaration , but it may be extended by FEMA  The Disaster Recovery Reform Act of 2018 (DRRA, Division D of P L  115-254 ), which became law on October 5, 2018, is the most comprehensive reform of FEMA's disaster assistance programs since the passage of the Sandy Recovery Improvement Act of 2013 (SRIA, Division B of P L  113-2 ) and, prior to that, the Post-Katrina Emergency Management Reform Act of 2006 (PKEMRA, P L  109-295 )  The DRRA legislation focuses on improving pre-disaster planning and mitigation, response, and recovery, and increasing FEMA accountability  As such, it amends many sections of the Stafford Act  In addition to those amendments, DRRA includes new standalone authorities and requires reports to Congress, rulemaking, and other actions  The 116 th Congress has expressed interest in the oversight of DRRA's implementation, including sections that amend FEMA's temporary housing assistance programs under the Stafford Act  These sections include the following: DRRA Section 1211—State Administration of Assistance for Direct Temporary Housing and Permanent Housing Construction—amends Stafford Act Section 408(f)—Federal Assistance to Individuals and Households, State Role—to allow state, territorial, or tribal governments to administer Direct Temporary Housing Assistance and Permanent Housing Construction, in addition to Other Needs Assistance (ONA)  It also provides a mechanism for state and local units of government to be reimbursed for locally implemented housing solutions  This provision may allow states to customize disaster housing solutions and expedite disaster recovery; however, FEMA may need to provide guidance to clarify the requirements of the application and approval process for the state, territorial, or tribal government that seeks to administer these programs  DRRA Section 1212—Assistance to Individuals and Households—amends Stafford Act Section 408(h)—Federal Assistance to Individuals and Households, Maximum Amount of Assistance—to separate the cap on the maximum amount of financial assistance eligible individuals and households may receive for housing assistance and ONA  The provision also removes financial assistance to rent alternate housing accommodations from the cap, and creates an exception for accessibility-related costs  This may better enable FEMA's disaster assistance programs to meet the recovery-related needs of individuals, including those with disabilities and others with access and functional needs, and households who experience significant damage to their primary residence and personal property as a result of an emergency or major disaster  However, there is also the potential that this change may disincentivize sufficient insurance coverage because of the new ability for eligible individuals and households to receive separate and increased housing and ONA awards that more comprehensively cover disaster-related real and personal property losses  DRRA Section 1213—Multifamily Lease and Repair Assistance—amends Stafford Act Section 408(c)(1)(B)—Federal Assistance to Individuals and Households, Direct Assistance—to expand the eligible areas for multifamily lease and repair, and remove the requirement that the value of the improvements or repairs not exceed the value of the lease agreement  This may increase housing options for disaster survivors  The Inspector General of the Department of Homeland Security must assess the use of FEMA's direct assistance authority to justify this alternative to other temporary housing options, and submit a report to Congress  For more information on DRRA, see CRS Insight IN11055, The Disaster Recovery Reform Act: Homeland Security Issues in the 116th Congress   Additionally, tables of deadlines associated with the implementation actions and requirements of DRRA are available upon request  Native Americans living in tribal areas experience a variety of housing challenges  Housing conditions in tribal areas are generally worse than those for the United States as a whole, and factors such as the legal status of trust lands present additional complications for housing  In light of these challenges, and the federal government's long-standing trust relationship with tribes, certain federal housing programs provide funding specifically for housing in tribal areas  The Tribal HUD-Veterans Affairs Supportive Housing (Tribal HUD-VASH) program provides rental assistance and supportive services to Native American veterans who are homeless or at risk of homelessness  Tribal HUD-VASH is modeled on the broader HUD-Veterans Affairs Supportive Housing (HUD-VASH) program, which provides rental assistance and supportive services for homeless veterans  Tribal HUD-VASH was initially created and funded through the FY2015 HUD appropriations act ( P L  113-235 ), and funds to renew rental assistance have been provided in subsequent appropriations acts  However, no separate authorizing legislation for Tribal HUD-VASH currently exists  In the 116 th Congress, a bill to codify the Tribal HUD-VASH program ( S  257 ) was ordered to be reported favorably by the Senate Committee on Indian Affairs in February 2019  A substantively identical bill passed the Senate during the 115 th Congress ( S  1333 ), but the House ultimately did not consider it  For more information on HUD-VASH and Tribal HUD-VASH, see CRS Report RL34024, Veterans and Homelessness   The main federal program that provides housing assistance to Native American tribes and Alaska Native villages is the Native American Housing Block Grant (NAHBG), which was authorized by the Native American Housing Assistance and Self-Determination Act of 1996 (NAHASDA,  P L  104-330 )  NAHASDA reorganized the federal system of housing assistance for tribes while recognizing the rights of tribal self-governance and self-determination  The NAHBG provides formula funding to tribes that can be used for a range of affordable housing activities that benefit primarily low-income Native Americans or Alaska Natives living in tribal areas  A separate block grant program authorized by NAHASDA, the Native Hawaiian Housing Block Grant (NHHBG), provides funding for affordable housing activities that benefit Native Hawaiians eligible to reside on the Hawaiian Home Lands  NAHASDA also authorizes a loan guarantee program, the Title VI Loan Guarantee, for tribes to carry out eligible affordable housing activities  The most recent authorization for most NAHASDA programs expired at the end of FY2013, although NAHASDA programs have generally continued to be funded in annual appropriations laws  (The NHHBG has not been reauthorized since its original authorization expired in FY2005, though it has continued to receive funding in most years  ) NAHASDA reauthorization legislation has been considered in varying degrees in the 113 th , 114 th , and 115 th Congresses but none was ultimately enacted  The 116 th Congress may again consider legislation to reauthorize NAHASDA  In general, tribes and Congress have been supportive of NAHASDA, though there has been some disagreement over specific provisions or policy proposals that have been included in reauthorization bills  Some of these disagreements involve debates over specific program changes that have been proposed  Others involve debate over broader issues, such as the appropriateness of providing federal funding for programs specifically for Native Hawaiians and whether such funding could be construed to provide benefits based on race  For more information on NAHASDA, see CRS Report R43307, The Native American Housing Assistance and Self-Determination Act of 1996 (NAHASDA): Background and Funding   In the past, Congress has regularly extended a number of temporary tax provisions that address a variety of policy issues, including certain provisions related to housing  This set of temporary provisions is commonly referred to as "tax extenders " Two housing-related provisions that have been included in tax extenders packages recently are (1) the exclusion for canceled mortgage debt, and (2) the deduction for mortgage insurance premiums, each of which is discussed further below  The most recently enacted tax extenders legislation was the Bipartisan Budget Act of 2018 ( P L  115-123 ) in the 115 th Congress  That law extended the exclusion for canceled mortgage debt and the ability to deduct mortgage insurance premiums through the end of 2017 (each had previously expired at the end of 2016)  As of the date of this report, these provisions had not been extended beyond 2017  In the 116 th Congress, S  617 , the Tax Extender and Disaster Relief Act of 2019, would extend each of these provisions through calendar year 2019  For more information on tax extenders in general, see CRS Report R45347, Tax Provisions That Expired in 2017 ("Tax Extenders")   Historically, when all or part of a taxpayer's mortgage debt has been forgiven, the forgiven amount has been included in the taxpayer's gross income for tax purposes  This income is typically referred to as canceled mortgage debt income  During the housing market turmoil of the late 2000s, some efforts to help troubled borrowers avoid foreclosure resulted in canceled mortgage debt  The Mortgage Forgiveness Debt Relief Act of 2007 ( P L  110-142 ), signed into law in December 2007, temporarily excluded qualified canceled mortgage debt income associated with a primary residence from taxation  The provision was originally effective for debt discharged before January 1, 2010, and was subsequently extended several times  Rationales put forth when the provision was originally enacted included minimizing hardship for distressed households, lessening the risk that nontax homeownership retention efforts would be thwarted by tax policy, and assisting in the recoveries of the housing market and overall economy  Arguments against the exclusion at the time included concerns that it makes debt forgiveness more attractive for homeowners, which could encourage homeowners to be less responsible about fulfilling debt obligations, and concerns about fairness given that the ability to realize the benefits depends on a variety of factors  More recently, because the economy, housing market, and foreclosure rates have improved significantly since the height of the housing and mortgage market turmoil, the exclusion may no longer be warranted  For more information on the exclusion for canceled mortgage debt, see CRS Report RL34212, Analysis of the Tax Exclusion for Canceled Mortgage Debt Income   Traditionally, homeowners have been able to deduct the interest paid on their mortgage, as well as property taxes they pay, as long as they itemize their tax deductions  Beginning in 2007, homeowners could also deduct qualifying mortgage insurance premiums as a result of the Tax Relief and Health Care Act of 2006 ( P L  109-432 )  Specifically, homeowners could effectively treat qualifying mortgage insurance premiums as mortgage interest, thus making the premiums deductible if homeowners itemized and their adjusted gross incomes were below a specified threshold ($55,000 for single, $110,000 for married filing jointly)  Originally, the deduction was to be available only for 2007, but it was subsequently extended several times  Two possible rationales for allowing the deduction of mortgage insurance premiums are that it assisted in the recovery of the housing market, and that it promotes homeownership  The housing market, however, has largely recovered from the market turmoil of the late 2000s, and it is not clear that the deduction has an effect on the homeownership rate  Furthermore, to the degree that owner-occupied housing is over subsidized, extending the deduction could lead to a greater misallocation of the resources that are directed toward the housing industry  In the past, Congress has regularly extended a number of temporary tax provisions that address a variety of policy issues, including certain provisions related to housing  This set of temporary provisions is commonly referred to as "tax extenders " Two housing-related provisions that have been included in tax extenders packages recently are (1) the exclusion for canceled mortgage debt, and (2) the deduction for mortgage insurance premiums, each of which is discussed further below  The most recently enacted tax extenders legislation was the Bipartisan Budget Act of 2018 ( P L  115-123 ) in the 115 th Congress  That law extended the exclusion for canceled mortgage debt and the ability to deduct mortgage insurance premiums through the end of 2017 (each had previously expired at the end of 2016)  As of the date of this report, these provisions had not been extended beyond 2017  In the 116 th Congress, S  617 , the Tax Extender and Disaster Relief Act of 2019, would extend each of these provisions through calendar year 2019  For more information on tax extenders in general, see CRS Report R45347, Tax Provisions That Expired in 2017 ("Tax Extenders")   Historically, when all or part of a taxpayer's mortgage debt has been forgiven, the forgiven amount has been included in the taxpayer's gross income for tax purposes  This income is typically referred to as canceled mortgage debt income  During the housing market turmoil of the late 2000s, some efforts to help troubled borrowers avoid foreclosure resulted in canceled mortgage debt  The Mortgage Forgiveness Debt Relief Act of 2007 ( P L  110-142 ), signed into law in December 2007, temporarily excluded qualified canceled mortgage debt income associated with a primary residence from taxation  The provision was originally effective for debt discharged before January 1, 2010, and was subsequently extended several times  Rationales put forth when the provision was originally enacted included minimizing hardship for distressed households, lessening the risk that nontax homeownership retention efforts would be thwarted by tax policy, and assisting in the recoveries of the housing market and overall economy  Arguments against the exclusion at the time included concerns that it makes debt forgiveness more attractive for homeowners, which could encourage homeowners to be less responsible about fulfilling debt obligations, and concerns about fairness given that the ability to realize the benefits depends on a variety of factors  More recently, because the economy, housing market, and foreclosure rates have improved significantly since the height of the housing and mortgage market turmoil, the exclusion may no longer be warranted  For more information on the exclusion for canceled mortgage debt, see CRS Report RL34212, Analysis of the Tax Exclusion for Canceled Mortgage Debt Income   Traditionally, homeowners have been able to deduct the interest paid on their mortgage, as well as property taxes they pay, as long as they itemize their tax deductions  Beginning in 2007, homeowners could also deduct qualifying mortgage insurance premiums as a result of the Tax Relief and Health Care Act of 2006 ( P L  109-432 )  Specifically, homeowners could effectively treat qualifying mortgage insurance premiums as mortgage interest, thus making the premiums deductible if homeowners itemized and their adjusted gross incomes were below a specified threshold ($55,000 for single, $110,000 for married filing jointly)  Originally, the deduction was to be available only for 2007, but it was subsequently extended several times  Two possible rationales for allowing the deduction of mortgage insurance premiums are that it assisted in the recovery of the housing market, and that it promotes homeownership  The housing market, however, has largely recovered from the market turmoil of the late 2000s, and it is not clear that the deduction has an effect on the homeownership rate  Furthermore, to the degree that owner-occupied housing is over subsidized, extending the deduction could lead to a greater misallocation of the resources that are directed toward the housing industry  
Report 2:  The minority party develops alternatives and agendas of its own and attempts to construct winning coalitions on their behalf  Partisan Opposition   The minority party offers strong opposition to majority party initiatives, but does not counter with policy alternatives of their own  Participation   The minority party is in the position of having to consider the views and proposals of a same-party President and to assess their majority-building role with respect to the President's priorities  A look at one minority leadership strategy—partisan opposition—may suggest why it might be employed in specific circumstances  The purposes of obstruction are several, such as frustrating the majority party's ability to govern or attracting media attention to the alleged ineffectiveness of the majority party  "We know how to delay," remarked Minority Leader Gephardt  Dilatory motions to adjourn, appeals of the presiding officer's ruling, or numerous requests for roll call votes, including on noncontroversial items like approving the House Jou rnal , are standard time-consuming parliamentary tactics  By stalling action on the majority party's agenda, the minority leader may be able to launch a campaign against a "do-nothing Congress" and convince enough voters to elevate the party to the House majority  To be sure, the minority leader recognizes that outright opposition carries risks  As a congressional scholar explains, "A program of consistent opposition to majority party proposals and a refusal to engage in compromise, while electorally valuable, means forsaking policy gains that may otherwise have been achieved " Another important aim of the minority leader is to develop an electorally attractive agenda of ideas and proposals that unites party members and appeals to core electoral supporters as well as independents and swing voters  Despite the minority leader's limited ability to set the House's agenda, there are still opportunities to raise minority priorities  For example, the minority leader may file discharge petitions in an effort to bring minority priorities to the floor  If the required 218 signatures on a discharge petition can be obtained—a number that demands at least some support from the majority—minority initiatives can be brought to the floor even despite opposition from the majority leadership or the committee(s) of jurisdiction (or both)  As a GOP minority leader explained, the challenge here is to "keep our people together, and to look for votes on the other side " Minority leaders may engage in a range of activities to publicize their party's priorities and to criticize those of the opposition  For instance, to keep their party colleagues "on message," they ensure that their party colleagues are sent packets of suggested press releases or "talking points" for constituent meetings in their districts; they help to organize "town hall meetings" in Members' districts around the country to publicize the party's agenda or a specific priority, such as health care or tax reform; they sponsor party "retreats" to discuss issues and assess the party's public image; they create "theme teams" to craft party messages that might be conveyed during the one-minute, morning hour, or special order period in the House; they conduct surveys of party colleagues to discern their policy preferences; they establish websites and Twitter feeds to highlight party priorities; they organize task forces or issue teams to formulate party programs and to develop strategies for communicating these programs to the public; and they appear on various media programs or write newspaper articles to win public support for the party's agenda  House minority leaders also hold joint news conferences with party colleagues and consult with their counterparts in the Senate  The overall objectives are to develop a coordinated communications strategy, to share ideas and information, and to present a united front on issues  Minority leaders also make floor speeches and may close debate for their side on major issues before the House  They must also be prepared "to debate on the floor, ad lib , no notes, on a moment's notice," remarked Minority Leader Michel  In brief, minority leaders are key strategists in developing and promoting the party's agenda and in outlining ways to respond to the opposition's arguments and proposals  A "Dear Colleague" letter delivered to House Democratic offices ahead of the August 2018 recess illustrates the point  In the letter, Minority Leader Pelosi outlined the party's agenda and provided this guidance to her Democratic colleagues: A key part of our For The People agenda is to clean up corruption to make Washington work for the American people     To honor the pledge of our For The People agenda, a Democratic majority will swiftly act to pass tougher ethics and campaign finance laws and crack down on the conduct that has poisoned the GOP Congress and the Trump Administration     In district events and on social media, we must drive home the clear contrast between the corruption of the GOP Congress and the better deal that Democrats are offering the American people  We will own August with strength, confidence and clarity, as we make our case to the American people  If his or her party controls the White House, the minority leader confers regularly with the President and his aides about issues before Congress, the Administration's agenda, and political events generally  Strategically, the role of the minority leader will vary depending on whether the President is of the same party or the other party  In general, minority leaders will work to advance the goals and aspirations of their party's President in Congress  When Robert Michel, R-IL, was minority leader (1981-1994), he typically functioned as the "point man" for Republican Presidents  President Ronald Reagan's 1981 policy successes in the Democratic-controlled House were due in no small measure to Minority Leader Michel's effectiveness in wooing so-called "Reagan Democrats" to support, for instance, the Administration's landmark budget reconciliation bill  There are occasions, of course, when minority leaders will fault the legislative initiatives of their President  On an Administration proposal that could adversely affect his district, Michel stated that he might "abdicate my leadership role [on this issue] since I can't harmonize my own views with the administration's " Minority Leader Gephardt publicly opposed a number of President Clinton's legislative initiatives, from "fast track" trade authority to various budget issues, and Minority Leader Pelosi came out against a multilateral trade agreement with Asian-Pacific countries negotiated by the Obama White House  When the President and House majority are of the same party, then the House minority leader assumes a larger role in formulating alternatives to executive branch initiatives and in acting as a national spokesperson for his or her party  "As Minority Leader during [President Lyndon Johnson's] Democratic administration, my responsibility has been to propose Republican alternatives," said Minority Leader Gerald Ford, R-MI  Greatly outnumbered in the House, Minority Leader Ford devised a political strategy that allowed Republicans to offer their alternatives in a manner that provided them political protection  As Ford explained, We used a technique of laying our program out in general debate  When we got to the amendment phase, we would offer our program as a substitute for the Johnson proposal  If we lost in the Committee of the Whole, then we would usually offer it as a motion to recommit and get a vote on that  And if we lost on the motion to recommit, our Republican members had a choice: They could vote against the Johnson program and say we did our best to come up with a better alternative  Or they could vote for it and make the same argument  Usually we lost; but when you're only 140 out of 435, you don't expect to win many  Ford also teamed with Senate Minority Leader Everett McKinley Dirksen, R-IL, to act as national spokesmen for their party  They held a press conference every Thursday following the weekly joint leadership meeting, a tradition that began with Ford's predecessor as minority leader, Charles Halleck, R-IN  When Minority Leaders Dirksen and Halleck appeared together they were dubbed the "Ev and Charlie Show" by the press, and the "Republican National Committee budgeted $30,000 annually to produce the weekly news conference " Minority status, by itself, is often an important inducement for minority party members to stay together, to accommodate different interests, and to submerge intraparty factional disagreements  To hold a diverse membership together often requires extensive consultations and discussions with rank-and-file Members and with different factional groupings  As Minority Leader Gephardt said, We have weekly caucus meetings  We have daily leadership meetings  We have weekly ranking Member meetings  We have party effectiveness meetings  There's a lot more communication  I believe leadership is bottom up, not top down  I think you have to build policy and strategy and vision from the bottom up, and involve people in figuring out what that is  Gephardt added that "inclusion and empowerment of the people on the line have to be done to get the best performance" from the minority party  Other techniques for fostering party harmony include the appointment of task forces composed of party colleagues with conflicting views to reach consensus on issues; daily meetings in the l eader's office (or at breakfast, lunch, or dinner) to lay out floor strategy or political objectives for the minority party; periodic retreats to allow party members to discuss issues and interact with one another outside the confines of Capitol Hill; and the creation of new leadership positions as a way to reach out and involve a greater diversity of party members in the leadership structure  Beyond the party responsibilities of the minority leader are a number of institutional obligations associated with their position as a top House official  Many of these assignments or roles are spelled out in the standing rules of the House, while others have devolved upon the position in other ways  To be sure, the minority leader is provided with extra staff resources—beyond those accorded him or her as a Representative—to assist in carrying out diverse leadership functions  There are limits on the institutional role of the minority leader, because the majority party exercises disproportionate influence over the legislative agenda, partisan ratios on committees, staff resources, administrative operations, and the day-to-day schedule and management of floor activities  Under the rules of the House, the minority leader has certain roles and responsibilities  They include, among others, the following: Under Rule XIII, clause 6(c), the Rules Committee may not issue a "rule" that prevents the minority leader or a designee from offering a motion to recommit with instructions during initial House consideration of a bill or joint resolution  This motion allows the minority leader (or a designee) to offer a policy alternative to what the majority is proposing and obtain a floor vote on the minority's preferred solution  Under Rule IX, clause 2, a resolution "offered as a question of privilege by the Majority Leader or the Minority Leader     shall have precedence of all other questions except motions to adjourn " This rule further references the minority leader with respect to the division of time for debate of these resolutions  If offered by the majority or minority leader, a valid question of privilege—one that involves "the rights of the House collectively, its safety, dignity and the integrity of its proceedings"—receives immediate consideration by the House  Rule II, clause 6, states that the "Inspector General shall be appointed for a Congress by the Speaker, the Majority Leader, and the Minority Leader, acting jointly " This rule further states that the minority leader and other specified House leaders shall be notified of any financial irregularity involving the House and receive audit reports of the inspector general  Under Rule X, clause 2, not later "than March 31 in the first session of a Congress, after consultation with the Speaker, the Majority Leader, and the Minority Leader, the Committee on Oversight and Government Reform shall report to the House the authorization and oversight plans" of the standing committees along with any recommendations it or the House leaders have proposed to ensure the effective coordination of committees' oversight plans  Rule X, clause 5, stipulates, "At the beginning of a Congress, the Speaker or a designee and the Minority Leader or a designee each shall name 10 Members, Delegates, or the Resident Commissioner from the respective party of such individual who are not members of the Committee on Ethics to be available to serve on investigative subcommittees of that committee during that Congress " Another institutional prerogative of the minority leader is attendance at meetings of the Intelligence Committee  Rule X, clause 11, provides, "The Speaker and the Minority Leader shall be ex officio members of the select committee but shall have no vote in the select committee and may not be counted for purposes of determining a quorum thereof " In addition, each leader "may designate a respective leadership staff member to assist in the capacity of the Speaker or Minority Leader as ex officio member " In addition, the minority leader has a number of other institutional functions  For instance, the minority leader is sometimes statutorily authorized to appoint individuals to certain federal entities  The minority leader also selects three Members to serve as Private Calendar objectors—the majority leader names the other three—and serves on various commissions and groups, including the House Office Building Commission, the United States Capitol Preservation Commission, and the Bipartisan Legal Advisory Group  After consultation with the Speaker the minority leader may convene an early organizational party caucus or conference  Informally, the minority leader maintains ties with majority party leaders to learn about the schedule and other House matters, consults with the majority with respect to reconvening the House per the usual formulation of conditional concurrent adjournment resolutions, and forges agreements or understandings with them insofar as feasible  By House tradition, time is not charged to their side when party leaders, including the minority leader, make extended remarks on the floor  Given the concentration of agenda control and other institutional resources in the majority leadership, the minority leader faces real challenges in promoting and publicizing the party's priorities, serving the interests of his rank-and-file Members, managing intraparty conflict, and forging party unity  The ultimate goal of the minority leader is to lead the party into majority status  Yet there is no set formula on how this is to be done  "If the history of elections is any guide," wrote a congressional scholar, "it seems apparent that the congressional record of the minority party is only one of many factors that may result in majority status  Most of the other factors cannot be controlled by the minority party and its leaders  " There is one central dilemma that confronts the minority leader: inferior numbers  This limitation can be overcome on occasion with the right strategic approach, but on many issues this might not be possible  One study of the House minority party summarizes the strategic challenge succinctly: The minority party in the House faces a strategic problem: how do you respond when given only a small slice of the legislative pie? Do you accept the slice you've been given, bargain for more, or use every means at your disposal to win the right to cut the pie yourself? It is this problem, and how the minority party chooses to solve it, that underlies the logic of minority party politics in the House of Representatives 

ground_truth: The 116th Congress may consider a variety of housing-related issues. These could include topics related to housing finance, federal housing assistance programs, and housing-related tax provisions, among other things. Particular issues that may be of interest during the Congress include the following: The status of Fannie Mae and Freddie Mac, two government-sponsored enterprises (GSEs) that have been in conservatorship since 2008. Congress might consider comprehensive housing finance reform legislation to resolve the status of Fannie Mae and Freddie Mac. Furthermore, a new director for the Federal Housing Finance Agency (FHFA), Fannie Mae's and Freddie Mac's regulator and conservator, was sworn in on April 15, 2019. Congress may take an interest in any administrative changes that FHFA might make to Fannie Mae and Freddie Mac under new leadership. Appropriations for federal housing programs, including programs at the Department of Housing and Urban Development (HUD) and rural housing programs administered by the U.S. Department of Agriculture (USDA), particularly in light of discretionary budget caps that are currently scheduled to decrease for FY2020. Oversight of the implementation of certain changes to federal assisted housing programs that were enacted in prior Congresses, such as expansions of HUD's Moving to Work (MTW) program and Rental Assistance Demonstration (RAD) program. Considerations related to housing and the federal response to major disasters, including oversight of the implementation of certain changes related to Federal Emergency Management Agency (FEMA) assistance that were enacted in the previous Congress. Consideration of legislation related to certain federal housing programs that provide assistance to Native Americans living in tribal areas. Consideration of legislation to extend certain temporary tax provisions that are currently expired, including housing-related provisions that provide a tax exclusion for canceled mortgage debt and allow for the deductibility of mortgage insurance premiums, respectively. Housing and mortgage market conditions provide context for these and other issues that Congress may consider, although housing markets are local in nature and national housing market indicators do not necessarily accurately reflect conditions in specific communities. On a national basis, some key characteristics of owner-occupied housing markets and the mortgage market in recent years include increasing housing prices, low mortgage interest rates, and home sales that have been increasing but constrained by a limited inventory of homes on the market. Key characteristics of rental housing markets include an increasing number of renters, low rental vacancy rates, and increasing rents. Rising home prices and rents that have outpaced income growth in recent years have led to policymakers and others increasingly raising concerns about the affordability of both owner-occupied and rental housing. Affordability challenges are most prominent among the lowest-income renter households, reflecting a shortage of rental housing units that are both affordable and available to this population.