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To better help low-income families meet their child care needs, the Congress combined four programs with different target populations into one program—the Child Care and Development Block Grant (CCDBG)—with a single set of eligibility criteria and requirements. This program, now referred to as the Child Care and Development Fund (CCDF), provides federal funds to states for child care subsidies for families who are working or preparing for work and who have incomes of up to 85 percent of a state’s median income (SMI). Unlike the previous programs, which segmented working low-income families into different service categories on the basis of welfare status, the CCDF allows states greater flexibility to create integrated programs that serve all families in similar economic circumstances. Such programs are important to ensure that families who have never been on welfare are not penalized for their work efforts and that families can move easily from welfare to self-sufficiency. activities, creating a greater need for child care assistance. The act requires that a significant percentage of states’ CCDF funds are used to provide child care assistance to current or potential TANF recipients. In response to welfare reform, the seven states we reviewed are expanding funding for child care programs. As table 1 shows, the increase in combined federal and state CCDF funding in the seven states between state fiscal years 1996 and 1997 ranged from 2 percent in Maryland to 62 percent in Louisiana. On average, funding in these states increased from about $1.1 billion in fiscal year 1996 to about $1.4 billion in fiscal year 1997. According to child care officials, these additional funds have allowed six of the seven states to expand the number of children served under their child care subsidy programs by an average of about 17 percent between fiscal years 1996 and 1997. The CCDF allows states to operate their child care programs exclusively with federal funds, thereby reducing or eliminating the need for state funds to be used for child care. Nevertheless, the seven states we reviewed intend to spend at least enough state funds to qualify for the maximum amount of federal CCDF funds available for child care. State funding in three of the states will exceed the amount required to maximize their federal CCDF allocation. than were previously available under AFDC. As a result, some states are using TANF funds to fund child care subsidies. For example, while Wisconsin expanded its child care funding by 38 percent between state fiscal years 1996 and 1997, the increase came from federal, not state, funding sources. Even though the seven states we reviewed are expanding their programs, they are still unable to provide child care subsidies to all families meeting federal eligibility criteria who might benefit from such assistance. In fact, a recent Urban Institute study estimated that only about 48 percent of the potential child care needs of low-income families would be met if states maximized federal dollars available under welfare reform. Because they cannot serve all eligible families, states have devised strategies to target subsidies to subsets of the eligible population. subsidized child care programs too expensive for higher-income eligible families. Comparing the systems in Wisconsin and Oregon can help illustrate how states can use these different criteria to target child care subsidies toward specific populations. Wisconsin has established a relatively low income eligibility criterion (53 percent of SMI—$21,996 in fiscal year 1997), coupled with relatively low copayments (6 to 16 percent of gross income). Thus, although it has restricted the population of eligible families to those with very low incomes, it has designed the copayment structure to make subsidized child care affordable to all eligible families who apply. In contrast, Oregon has a relatively high income eligibility criterion (85 percent of SMI—$33,012) and a relatively high family copayment level (31 percent of monthly income up to $2,042). While families with higher incomes are eligible for child care subsidies in Oregon, the copayment structure discourages them from participating and, in effect, targets aid to lower income families. Welfare status is also an important consideration in establishing access to child care subsidies in many states. Five of the states we reviewed distinguish between welfare families (including those transitioning off of welfare) and nonwelfare families in determining who will be served. Connecticut and Louisiana consider child care as an entitlement to working families receiving TANF, and Texas guarantees child care subsidies to former TANF families who are transitioning to work. In California, child care programs are administered separately for welfare and nonwelfare clients, and in Maryland, TANF families and families transitioning off of TANF are given first priority in obtaining subsidies when all eligible families cannot be served. California, Connecticut, and Texas said they have insufficient resources to serve all nonwelfare families who meet individual state eligibility requirements. In California and Texas, this results in waiting lists for subsidies, while in Connecticut, the nonwelfare child care program was closed to new applicants at the time of our study. expected to increase over the next few years, some data suggest that the increase could be significant. Connecticut has estimated that an additional 5,000 TANF-related families will need child care assistance during its next 2 fiscal years, and Maryland estimates the number of families needing child care will more than double from 1997 to 1999. In Oregon, which began in 1992 to require more welfare parents to participate in welfare-to-work activities and has emphasized child care assistance as a way to help welfare and other low-income families support themselves through work, the number of children served by the state’s Employment-Related Day Care program increased by 137 percent from July 1992 to February 1997.In fact, almost 61 percent of projected child care expenditures in Oregon for 1997-99 are designated for that program. States’ ability to meet the anticipated increased demand for child care will depend on future levels of state child care funding as well as on changes in demand for child care subsidies resulting from welfare reform’s work participation requirements. The Personal Responsibility Act’s requirement that states place increasingly higher percentages of their caseloads in work activities, combined with the capping of federal child care funds through the CCDF, could strain the states’ capacity to sufficiently expand child care programs in future years. On the other hand, if states’ welfare caseloads continue to decline, then demand among welfare families could decline or increase at a slower rate. Consequently, TANF funds previously devoted to cash assistance could be redirected to the states’ child care subsidy programs. However, states may face pressures to spend these additional resources for other TANF-related services. Welfare and child care program officials in six of the seven states report that with the additional funds available under the CCDF, the supply of child care appears so far to have kept pace with increases in demand. One indication of this is that these states had granted few exemptions from work requirements because of unavailability of child care, and most did not expect to grant such exemptions on a large scale in the near future. enhance or expand their services. Other states have created incentives for employers to provide child care assistance. These approaches include loan and grant programs, corporate tax incentives, policies to require or encourage developers to set aside space for child care centers in business sites, and information referral and technical assistance to increase private sector involvement. Overall, according to their CCDF plans, 38 of the 51 states plan to make grants or loans available for establishing or expanding child care facilities. However, some kinds of child care are and will continue to be in short supply. In a previous report we estimated that, in the four sites we examined, the demand for infant care and after-school care would grow substantially over time in response to the new welfare reform legislation and would greatly exceed the supply of those types of care, if the supply did not increase. The gap between projected demand and supply was estimated to be even greater in low-income areas. On the basis of our analysis, given the current supply, the four sites would also have trouble meeting increased demand for nonstandard-hour care. Furthermore, child care centers and other formal arrangements are only part of the picture. It is expected that informal care—child care arrangements that are not subject to state licensing or regulatory requirements—will meet some of the increased demand for child care and, in some cases, may account for most of the child care used. For example, in Connecticut, state officials estimated that 80 percent of welfare families used informal child care arrangements. Similarly, Oregon officials estimated that nearly half of their welfare-to-work program clients had used informal care. We previously reported that families with annual incomes below $15,000, low-income mothers who are single and employed, and parents whose jobs require them to work nonstandard hours tend to rely heavily on informal care. At the same time that states are expanding their programs and attempting to increase supply, they appear to be maintaining child care standards and enforcement practices. In fact, some of the seven states we reviewed are making incremental changes that tend to strengthen existing standards. For example, Texas planned to phase in a requirement that will reduce the ratio of children to staff members. Similarly, a survey done by the American Public Welfare Association of all the states reported that quality standards have generally been maintained and, in many cases, enhanced.In addition, recognizing that enforcement is important to ensure that standards are maintained and children receive adequate care, none of the seven states plans to reduce the size of its staff responsible for inspecting or regulating child care providers. However, the long-term effects of welfare reform on states’ efforts to regulate child care providers and ensure that children receive quality child care are as yet unknown. As we previously reported, fiscal pressures could ultimately lead states to devote fewer state resources to monitoring and regulating child care providers in the future. As noted earlier, informal care arrangements are widely used by welfare and other low-income families. Much of this care is exempt from state standards or is minimally regulated. To address concerns about the safety and quality of informal child care, some states have imposed additional requirements on informal providers who receive subsidies. California and Oregon conduct background checks on the criminal histories of subsidized providers, including those who are otherwise exempt from regulatory or licensing requirements. Nonetheless, some child care advocates and researchers continue to be concerned that efforts to expand the supply of state-subsidized child care could focus on informal care, placing more children in unregulated settings. At this point, it is too early to assess the types of child care that states and parents will rely on as more parents participate in work or work-related activities. deciding who will be served through the programs. Since none of the states in our study has sufficient resources to serve all families who meet the federal eligibility criteria, these states are targeting subsidies to certain groups of eligible families, while attempting to balance the needs of welfare and nonwelfare families. In addition, although the seven states have many initiatives under way to expand their supply of child care providers, the outcomes of their efforts are not yet known. Moreover, it is too soon to know what kinds of child care states and parents will rely on as more parents are expected to support themselves through work. States’ efforts to increase the number of children receiving child care services while at the same time ensuring safe care for children will deserve attention as welfare reform evolves. Mr. Chairman, this concludes my formal remarks. I will be happy to answer any questions you or other Members of the Subcommittee may have. The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. U.S. General Accounting Office P.O. Box 37050 Washington, DC 20013 Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders may also be placed by calling (202) 512-6000 or by using fax number (202) 512-6061, or TDD (202) 512-2537. Each day, GAO issues a list of newly available reports and testimony. To receive facsimile copies of the daily list or any list from the past 30 days, please call (202) 512-6000 using a touchtone phone. A recorded menu will provide information on how to obtain these lists.	GAO discussed how child care programs are changing at the state level through the revisions in the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, focusing on: (1) how much federal and state funds states are spending on child care subsidy programs and how they are allocating these resources; (2) how states are trying to increase the supply of child care to meet the projected demand under welfare reform; and (3) the extent to which states are changing standards for child care providers in response to the anticipated increased demand under welfare reform. GAO noted that: (1) its findings provide an early indication that the seven states it reviewed are using additional federal dollars and their own funds to expand their child care programs to serve increasing numbers of welfare recipients required to work and at least some of the working poor; (2) in addition, states are making efforts to further increase the supply of child care by funding initiatives to support and encourage the entrance of new child care providers into the market; (3) at the same time, the states that are expanding their programs and attempting to increase supply appear to be maintaining child care standards and enforcement practices; and (4) however, it is too early to know how effective these efforts will be in meeting the child care needs of low-income families.
As part of our undercover investigation, we produced counterfeit documents before sending our two teams of investigators out to the field. We found two NRC documents and a few examples of the documents by searching the Internet. We subsequently used commercial, off-the-shelf computer software to produce two counterfeit NRC documents authorizing the individual to receive, acquire, possess, and transfer radioactive sources. To support our investigators’ purported reason for having radioactive sources in their possession when making their simultaneous border crossings, a GAO graphic artist designed a logo for our fictitious company and produced a bill of lading using computer software. Our two teams of investigators each transported an amount of radioactive sources sufficient to manufacture a dirty bomb when making their recent, simultaneous border crossings. In support of our earlier work, we had obtained an NRC document and had purchased radioactive sources as well as two containers to store and transport the material. For the purposes of this undercover investigation, we purchased a small amount of radioactive sources and one container for storing and transporting the material from a commercial source over the telephone. One of our investigators, posing as an employee of a fictitious company, stated that the purpose of his purchase was to use the radioactive sources to calibrate personal radiation detectors. Suppliers are not required to exercise any due diligence in determining whether the buyer has a legitimate use for the radioactive sources, nor are suppliers required to ask the buyer to produce an NRC document when making purchases in small quantities. The amount of radioactive sources our investigator sought to purchase did not require an NRC document. The company mailed the radioactive sources to an address in Washington, D.C. On December 14, 2005, our investigators placed two containers of radioactive sources into the trunk of their rental vehicle. Our investigators – acting in an undercover capacity – drove to an official port of entry between Canada and the United States. They also had in their possession a counterfeit bill of lading in the name of a fictitious company and a counterfeit NRC document. At the primary checkpoint, our investigators were signaled to drive through the radiation portal monitors and to meet the CBP inspector at the booth for their primary inspection. As our investigators drove past the radiation portal monitors and approached the primary checkpoint booth, they observed the CBP inspector look down and reach to his right side of his booth. Our investigators assumed that the radiation portal monitors had activated and signaled the presence of radioactive sources. The CBP inspector asked our investigators for identification and asked them where they lived. One of our investigators on the two-man undercover team handed the CBP inspector both of their passports and told him that he lived in Maryland while the second investigator told the CBP inspector that he lived in Virginia. The CBP inspector also asked our investigators to identify what they were transporting in their vehicle. One of our investigators told the CBP inspector that they were transporting specialized equipment back to the United States. A second CBP inspector, who had come over to assist the first inspector, asked what else our investigators were transporting. One of our investigators told the CBP inspectors that they were transporting radioactive sources for the specialized equipment. The CBP inspector in the primary checkpoint booth appeared to be writing down the information. Our investigators were then directed to park in a secondary inspection zone, while the CBP inspector conducted further inspections of the vehicle. During the secondary inspection, our investigators told the CBP inspector that they had an NRC document and a bill of lading for the radioactive sources. The CBP inspector asked if he could make copies of our investigators’ counterfeit bill of lading on letterhead stationery as well as their counterfeit NRC document. Although the CBP inspector took the documents to the copier, our investigators did not observe him retrieving any copies from the copier. Our investigators watched the CBP inspector use a handheld Radiation Isotope Identifier Device (RIID), which he said is used to identify the source of radioactive sources, to examine the investigators’ vehicle. He told our investigators that he had to perform additional inspections. After determining that the investigators were not transporting additional sources of radiation, the CBP inspector made copies of our investigators’ drivers’ licenses, returned their drivers’ licenses to them, and our investigators were then allowed to enter the United States. At no time did the CBP inspector question the validity of the counterfeit bill of lading or the counterfeit NRC document. On December 14, 2005, our investigators placed two containers of radioactive sources into the trunk of their vehicle. Our investigators drove to an official port of entry at the southern border. They also had in their possession a counterfeit bill of lading in the name of a fictitious company and a counterfeit NRC document. At the primary checkpoint, our two-person undercover team was signaled by means of a traffic light signal to drive through the radiation portal monitors and stopped at the primary checkpoint for their primary inspection. As our investigators drove past the portal monitors and approached the primary checkpoint, they observed that the CBP inspector remained in the primary checkpoint for several moments prior to approaching our investigators’ vehicle. Our investigators assumed that the radiation portal monitors had activated and signaled the presence of radioactive sources. The CBP inspector asked our investigators for identification and asked them if they were American citizens. Our investigators told the CBP inspector that they were both American citizens and handed him their state-issued drivers’ licenses. The CBP inspector also asked our investigators about the purpose of their trip to Mexico and asked whether they were bringing anything into the United States from Mexico. Our investigators told the CBP inspector that they were returning from a business trip in Mexico and were not bringing anything into the United States from Mexico. While our investigators remained inside their vehicle, the CBP inspector used what appeared to be a RIID to scan the outside of the vehicle. One of our investigators told him that they were transporting specialized equipment. The CBP inspector asked one of our investigators to open the trunk of the rental vehicle and to show him the specialized equipment. Our investigator told the CBP inspector that they were transporting radioactive sources in addition to the specialized equipment. The primary CBP inspector then directed our investigators to park in a secondary inspection zone for further inspection. During the secondary inspection, the CBP inspector said he needed to verify the type of material our investigators were transporting, and another CBP inspector approached with what appeared to be a RIID to scan the cardboard boxes where the radioactive sources was placed. The instrumentation confirmed the presence of radioactive sources. When asked again about the purpose of their visit to Mexico, one of our investigators told the CBP inspector that they had used the radioactive sources in a demonstration designed to secure additional business for their company. The CBP inspector asked for paperwork authorizing them to transport the equipment to Mexico. One of our investigators provided the counterfeit bill of lading on letterhead stationery, as well as their counterfeit NRC document. The CBP inspector took the paperwork provided by our investigators and walked into the CBP station. He returned several minutes later and returned the paperwork. At no time did the CBP inspector question the validity of the counterfeit bill of lading or the counterfeit NRC document. We conducted corrective action briefings with CBP and NRC officials shortly after completing our undercover operations. On December 21, 2005, we briefed CBP officials about the results of our border crossing tests. CBP officials agreed to work with the NRC and CBP’s Laboratories and Scientific Services to come up with a way to verify the authenticity of NRC materials documents. We conducted two corrective action briefings with NRC officials on January 12 and January 24, 2006, about the results of our border crossing tests. NRC officials disagreed with the amount of radioactive material we determined was needed to produce a dirty bomb, noting that NRC’s “concern threshold” is significantly higher. We continue to believe that our purchase of radioactive sources and our ability to counterfeit an NRC document are matters that NRC should address. We could have purchased all of the radioactive sources used in our two undercover border crossings by making multiple purchases from different suppliers, using similarly convincing cover stories, using false identities, and had all of the radioactive sources conveniently shipped to our nation’s capital. Further, we believe that the amount of radioactive sources that we were able to transport into the United States during our operation would be sufficient to produce two dirty bombs, which could be used as weapons of mass disruption. Finally, NRC officials told us that they are aware of the potential problems of counterfeiting documents and that they are working to resolve these issues. Mr. Chairman and Members of the Subcommittee, this concludes my statement. I would be pleased to answer any questions that you or other members of the Subcommittee may have at this time. For further information about this testimony, please contact Gregory D. Kutz at (202) 512-7455 or kutzg@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this testimony. This is a work of the U.S. government and is not subject to copyright protection in the United States. It may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately.	Given today's unprecedented terrorism threat environment and the resulting widespread congressional and public interest in the security of our nation's borders, GAO conducted an investigation testing whether radioactive sources could be smuggled across U.S. borders. Most travelers enter the United States through the nation's 154 land border ports of entry. Department of Homeland Security U.S. Customs and Border Protection (CBP) inspectors at ports of entry are responsible for the primary inspection of travelers to determine their admissibility into the United States and to enforce laws related to preventing the entry of contraband, such as drugs and weapons of mass destruction. GAO's testimony provides the results of undercover tests made by its investigators to determine whether monitors at U.S. ports of entry detect radioactive sources in vehicles attempting to enter the United States. GAO also provides observations regarding the procedures that CBP inspectors followed during its investigation. GAO has also issued a report on the results of this investigation (GAO-06-545R). For the purposes of this undercover investigation, GAO purchased a small amount of radioactive sources and one secure container used to safely store and transport the material from a commercial source over the telephone. One of GAO's investigators, posing as an employee of a fictitious company located in Washington, D.C., stated that the purpose of his purchase was to use the radioactive sources to calibrate personal radiation detection pagers. The purchase was not challenged because suppliers are not required to determine whether prospective buyers have legitimate uses for radioactive sources, nor are suppliers required to ask a buyer to produce an NRC document when purchasing in small quantities. The amount of radioactive sources GAO's investigator sought to purchase did not require an NRC document. Subsequently, the company mailed the radioactive sources to an address in Washington D.C. The radiation portal monitors properly signaled the presence of radioactive material when our two teams of investigators conducted simultaneous border crossings. Our investigators' vehicles were inspected in accordance with most of the CBP policy at both the northern and southern borders. However, GAO's investigators, using counterfeit documents, were able to enter the United States with enough radioactive sources in the trunks of their vehicles to make two dirty bombs. According to the Centers for Disease Control and Prevention, a dirty bomb is a mix of explosives, such as dynamite, with radioactive powder or pellets. When the dynamite or other explosives are set off, the blast carries radioactive material into the surrounding area. The direct costs of cleanup and the indirect losses in trade and business in the contaminated areas could be large. Hence, dirty bombs are generally considered to be weapons of mass disruption instead of weapons of mass destruction. GAO investigators were able to successfully represent themselves as employees of a fictitious company present a counterfeit bill of lading and a counterfeit NRC document during the secondary inspections at both locations. The CBP inspectors never questioned the authenticity of the investigators' counterfeit bill of lading or the counterfeit NRC document authorizing them to receive, acquire, possess, and transfer radioactive sources.
RS21771 -- Animal Rendering: Economics and Policy Updated March 17, 2004 Renderers convert dead animals and animal parts that otherwise would require disposal into a variety of materials, including edibleand inedible tallow and lard and proteins such as meat and bone meal (MBM). (2) These materials in turn are exported or sold todomestic manufacturers of a wide range of industrial and consumer goods such as livestock feed and pet food, soaps,pharmaceuticals, lubricants, plastics, personal care products, and even crayons (also see Table 1 on page 6). Although rendering provides an essential service to the increasingly intensive and cost-competitive U.S. animal and meat industries(and is subject to certain government food safety and environmental regulations), the industry has largely operatedoutside of publicview. However, rendering has attracted greater public attention since the discovery of bovine spongiformencephalopathy (BSE ormad cow disease) in two North American cows in 2003. U.S. officials have announced or are considering newregulatory actionsintended to reassure foreign and domestic customers that BSE will not threaten food safety or U.S. cattle herds. These actions arelikely to cause changes in renderers' business practices, costs, and product values. Any changes in the economicsof rendering likelywill affect the economics of animal and meat producers too. Renderers annually convert 47 billion pounds or more of raw animal materials into approximately 18 billion pounds of products. Sources for these materials include meat slaughtering and processing plants (the primary one); dead animals fromfarms, ranches,feedlots, marketing barns, animal shelters, and other facilities; and fats, grease, and other food waste fromrestaurants and stores. In meat animal slaughtering and processing plants, the amount of usable material from each animal depends largely upon the species. For example, at slaughter, a 1,200-pound steer can yield anywhere from 55% to 60% of human edible product,including meat forretail sale, edible fat, and variety meats (organs, tongue, tail, etc.), according to various estimates. Subtractinganother 5%-8% for theweight of the hide, which goes into leather, leaves 32%-40% of material for rendering. If this range were appliedconsistently to all35.5 million U.S. cattle slaughtered in 2003, the equivalent would represent the weight of approximately 11 millionto 14 million livecattle. (3) Elsewhere, independent renderers collect and process about half of all livestock and poultry that die from diseases or accidents beforereaching slaughter plants (Sparks 2002). U.S. farm animal mortalities in 2000 included approximately 4.1 millioncattle and calves(totaling 1.9 billion pounds); 18 million hogs (1 billion pounds); 833,000 sheep, lambs, and goats (64 millionpounds); and 82 millionchickens and turkeys (347 million pounds), according to Sparks, which examined USDA data. "Disposing of these mortalities is complicated because of the need to minimize adverse environmental consequences, such as thespread of human and animal disease or the pollution of ground or surface water," Sparks (2002) observed. "Formany producers,paying a modest fee to have a renderer remove dead carcasses is likely preferred to finding alternative on-farmdisposal methods"(i.e., burial, incineration, or composting). Number and Types of Rendering Plants. One study estimated that 137 firmsoperated 240 plants in 1997, with a total payroll of nearly 10,000 employees. (4) More recently, the National Renderers Association(NRA) estimated that Canada and the United States have a combined 250-260 rendering plants. Rendering facilitiesmay be eitherintegrated or independent operations. Integrated plants operate in conjunction with animal slaughter and meat processing plants and handle 65%-70% of all renderedmaterial. The estimated 95 U.S. and Canadian facilities (NRA) render most edible animal byproducts (i.e., fattyanimal tissue),mainly into edible fats (tallow and lard) for human consumption. Edible rendering is subject to the inspection andsafety standards ofUSDA's Food Safety and Inspection Service (FSIS) or its state counterparts, which by law already are present in themeat slaughterand processing plants. These plants also render inedible byproducts (including slaughter floor waste) into fats andproteins for animalfeeds and for other ingredients. Because a meat plant typically processes only one animal species (such as cattle,hogs, or poultry), itsassociated rendering operations likewise handle only the byproducts of that species. The inedible and ediblerendering processes aresegregated. Independent operations handle the other 30%-35% of rendered material. These plants (estimated by NRA at 165 in the United Statesand Canada) usually collect material from other sites using specially designed trucks. They pick up and process fatand bonetrimmings, inedible meat scraps, blood, feathers, and dead animals from meat and poultry slaughterhouses andprocessors (usuallysmaller ones without their own rendering operations), farms, ranches, feedlots, animal shelters, restaurants, butchers,and markets. Asa result, the majority of independents are likely to be handling "mixed species." Almost all of the resultingingredients are destinedfor nonhuman consumption (e.g., animal feeds, industrial products). The U.S. Food and Drug Administration (FDA)regulates animalfeed ingredients, but its continuous presence in rendering plants, or in feed mills that buy rendered ingredients, isnot a legalrequirement. The Rendering Process. In most systems, raw materials are ground to a uniformsize and placed in continuous cookers or in batch cookers, which evaporate moisture and free fat from protein andbone. A series ofconveyers, presses, and a centrifuge continue the process of separating fat from solids. The finished fat (e.g., tallow,lard, yellowgrease) goes into separate tanks, and the solid protein (e.g., MBM, bone meal, poultry meal) is pressed into cakefor processing intofeed. (5) Other rendering systems are used, includingthose that recover protein solids from slaughterhouse blood or that process usedrestaurant grease. This restaurant grease generally is recovered (often in 55-gallon drums) for use as yellow greasein non-humanfood products like animal feeds. Value and Use of Rendered Products. The 18 billion pounds of ingredients thatrenderers produce each year have been valued at more than $3 billion, of which $870 million is exported. Of the18 billion poundtotal, 10 billion pounds were feed ingredients with a value of approximately $1 billion (Sparks 2001). MBMaccounted for 6.6 billionpounds of this, poultry byproducts 4 billion pounds, and blood meal 226 million pounds (Sparks). (6) Such ingredients are valued fortheir nutrients -- high protein content, digestible amino acids, and minerals -- and their relatively low cost. Poultryoperations andpet food manufacturers accounted for 66% of the domestic MBM market of nearly 5.7 billion pounds in 2000, whilehog and cattleoperations took most of the rest. So long as animals are raised and processed for food, vast amounts of inedible materials will be generated, the result of prematuredeaths, herd culls, and slaughter byproducts. "Regardless of quantity, byproducts and rendered products from theslaughter processmust be sold at whatever price will clear the market or the industry (and the environment) incurs a cost fordisposal." (7) Asgovernment rules and industry practices evolve to address food safety and animal disease concerns like BSE, optionsfor using thesebyproducts may become more limited. If animal byproducts have fewer market outlets, new questions may ariseabout how todispose of them safely and who should pay. "Feed Ban" Impacts. Scientists currently maintain that infected animal feed is theprimary source of BSE transmission (although research continues into other potential sources). Therefore, U.S.officials believe thatregulation of feed ingredients is the single most effective method for controlling BSE. Following the widespreadoutbreaks of BSE inGreat Britain and Europe, the FDA in August 1997 imposed a ban on feeding most mammalian proteins to cattleand other ruminants. Prohibited proteins still can be fed to other animals such as pigs, poultry and pets. (FDA in late January 2004announced plans toexpand the list of prohibited proteins.) Estimates vary on the economic impact of the feed ban. According to a 1997 report prepared for the FDA on compliance costs andmarket impacts, the FDA feed ban could reduce MBM values by between $63 million and $252 million, or $25 to$100 per ton. (8) Sparks (June 2001) estimated that the average MBM value loss since the 1997 rule was $18 per ton, for a total of$288 million duringthe period 1996 to 2000. Sparks added that these losses likely were highly concentrated among renderers thatproduce MBMexclusively, and among those handling mixed species. The FDA-commissioned report predicted that rendererswould pass much ofthe lost value to packers by paying less for raw materials; packers in turn were expected to reduce their paymentsfor cattle. The 2001 Sparks study examined potential cost impacts of several options for more extensive feed restrictions. It estimated that atotal animal protein feed ban to ruminants would cost $100 million yearly; a total ban on all ruminant proteins toall farm animals,$636 million yearly; and a total animal protein ban to all farm animals, $1.5 billion yearly. Downers and Dead Animals. Another recent regulatory action with an impact onthe rendering industry was USDA's December 30, 2003, ban on all "downer" (nonambulatory) cattle from the humanfood supply. U.S. officials consider downers, or animals unable to rise or walk, to be one of the higher-risk cattle groups for BSE(althoughindustry officials note that most animals become nonambulatory from injuries or non-BSE diseases). Before theban, USDAestimated that 150,000-200,000 downers were entering slaughter plants. One issue is whether the downer ban hasremoved aneconomic incentive to market downers and thus made it more difficult for USDA to obtain such animals for BSE(and other disease)surveillance. On March 15, 2004, USDA announced a major expansion of its BSE surveillance program that will samplemany more downers anddead animals, adding that it is looking to renderers (among other sites) to make these animals available. Numerouspracticalproblems -- such as how to recover and store carcasses, who will sample, the costs, etc. -- now confront bothgovernment andindustry officials. (9) Disposal Questions. If renderers earn less money from rendered byproducts anddead animals, they will pay less for such materials. In the past, renderers paid for dead animals. Now most chargea fee to pick themup. (10) In its 2002 study on the cost of livestockmortalities, Sparks assumed that so long as MBM could be sold for feed, the averageper-head cost of disposing of dead cattle and calves might be $8.25 per head; if MBM is banned from animal feed,the cost could riseto $24.11 per head. Sparks estimated the per-head costs for other disposal methods at $9.33 for incineration, $10.63for burial, and$30.34 for composting. The 2002 World Health Organization (WHO) report observed that rendering, because it "sanitizes" animal wastes, "performs anessential public service: the environmental clean-up of wastes too hazardous for disposal in conventional ways. Forexample, animalwastes provide ideal conditions for the growth of pathogens that infect humans as well as animals. Incinerationwould cause major airpollution. Landfill could lead to disease transmission." (11) A USDA advisory committee in February 2004 said that along with an enhanced BSE surveillance program, "a comprehensive systemmust be implemented to facilitate adequate pathways for dead and non-ambulatory cattle to allow for collection ofsamples, and forproper, safe disposal of carcasses; this must be done to ensure protection of public health, animal health, and theenvironment; such asystem will require expending federal resources to assist with costs for sampling, transport and safe disposal." (12) Others temper this view of rendering by observing that the nation's clean air and water laws are in place to address possible adverseenvironmental impacts. These responsibilities are enforced under the purview of the U.S. Environmental ProtectionAgency (EPA)and generally through states and localities, which often impose their own environmental and health standards aswell. Whilerendering (which also must abide by such standards) certainly is one option for handling dead stock and animalbyproducts, it hasbeen argued, this option does not relieve the animal and meat industries of their environmental responsibilities. Because theseindustries created this material, they should bear the costs, not the public, particularly at a time when budget deficitsare forcingdifficult spending choices, the argument goes. Table 1. U.S. Production, Consumption, and Export of Rendered Products,1999-2003(p) Source : NRA; 2003 data preliminary (p). a. Includes poultry fat and by-product meal and raw products for pet food. b. Withheld to avoid disclosing individual firm data.	Renderers convert dead animals and animal byproducts into ingredients for a widerangeof industrial and consumer goods, such as animal feed, soaps, candles, pharmaceuticals, and personal care products. U.S. regulatoryactions to bolster safeguards against bovine spongiform encephalopathy (BSE or mad cow disease) could portendsignificant changesin renderers' business practices, the value of their products, and, consequently, the balance sheets of animalproducers and processors. Also, if animal byproducts have fewer market outlets, questions arise about how to dispose of them safely. Thisreport, which willnot be updated, describes the industry and discusses several industry-related issues that have arisen in the108th Congress. (1)
Families of OSP scholarship award recipients, as consumers, need complete and timely information about participating schools to make informed decisions about what school is best for the student. Further, federal internal control standards state that organizations must have relevant, reliable, and timely communications, and adequate means of communicating with external parties who may have an impact on the organization achieving its goals. During our 2013 review, we found that OSP provided information to prospective and current OSP families through a variety of outreach activities. However, families lacked key information necessary to make informed decisions about school choice because the directory of participating schools—a key communication tool—was not published in a timely fashion and did not contain key information about tuition, fees, and accreditation. Additionally, scholarships to students were awarded several months after many schools had completed their admissions and enrollment processes, limiting the amount of time and choice in selecting schools. To address these issues, we recommended that Education take steps to ensure that the OSP administrator improve the timing of key aspects of program administration and program information for prospective and participating families. In late October 2015, Education described to us actions that had been taken to address these issues. For example, Education stated that the OSP administrator published its school directory in a timely manner in 2013 and 2014. The SOAR Reauthorization Act, which recently passed in the House and has been introduced in the Senate, includes provisions to address accreditation of participating schools. Effective policies and procedures: During our 2013 review, we found that OSP’s policies and procedures lacked detail in several areas related to school compliance and financial accounting, which may weaken overall accountability for program funds. Policies and procedures are a central part of control activities and help ensure necessary actions are taken to address risks to achievement of an organization’s objectives. The absence of detailed policies and procedures reflect weak internal control in the areas of risk assessment, control activities, information and communication, and control environment. For example, we found that OSP relied on schools’ self-reported information to ensure school compliance and did not have a process for independently verifying information, such as a school’s student academic performance, safety, and maintenance of a valid certificate of occupancy. Without a mechanism or procedures to verify the accuracy of the information provided, OSP cannot provide reasonable assurance that participating schools meet the criteria established for participation in the program. As a result, there is a risk that federal dollars will be provided for students to attend schools that do not meet the education and health and safety standards required by the District. Further, at the time of our review, OSP’s policies and procedures lacked sufficient detail to ensure each participating school in OSP has the financial systems, controls, policies, and procedures in place to ensure federal funds were used according to federal law. OSP’s policies and procedures for the financial stability review of participating schools did not identify the specific risk factors that should be considered when assessing schools’ financial sustainability information. As a result, the OSP administrator was unable to confirm that all schools participating in the program were financially sustainable. In addition, OSP lacked detailed policies and procedures for dealing with schools not in compliance with program rules. Furthermore, policies and procedures for fiscal years 2010 through 2012 did not specify how to track administrative expenses, including what should be included, and OSP had little documentation to support administrative expenses incurred during these years. Therefore, while federal law limits the administrative expenses to 3 percent of the annual grant amount, the true cost of administering the OSP program during these years is not known and could be higher or lower than the 3 percent allotted. Without sufficiently detailed policies and procedures for all aspects of a school choice program, the program administrator cannot effectively monitor program operation and may not be able to account for all federal or public dollars spent. To address these issues, we recommended Education require the OSP program administrator to add additional detail to their policies and procedures to more efficiently manage day-to-day program operations. OSP amended its policies and procedures in August 2013 which addressed some of these issues, but OSP did not address all of the weaknesses described and the policies and procedures had not been fully implemented at the time of our review. In addition, in late October 2015, Education described to us actions that they had taken to address these issues. For example, Education stated that its Office of Risk Management Services provided feedback on the OSP administrator’s internal policies and procedures. The SOAR Reauthorization Act recently passed by the House and introduced in the Senate includes a provision to address how the program administrator will ensure that it uses internal fiscal and quality controls for OSP. Accurate, Up-to-Date Student Information: According to the internal controls framework, information should be communicated to management and within an organization in a form and time frame that enables officials to carry out their responsibilities and determine whether they are meeting their stated objectives. For example, in OSP—and other eligibility-based choice programs—it is important to have accurate, up-to-date student application information in order to meet program objectives, such as determining eligibility and awarding program scholarships in an efficient and timely manner. However, at the time of our 2013 review OSP’s database containing past and current student and school information had several weaknesses, including a lack of documentation and automated checks, and a deficient structure, which left the database open to errors. For example, there were many records with missing fields and data that were partially entered, and the database did not have automated data checks, which would reduce the risk that significant errors could occur and remain undetected and uncorrected. We found these deficiencies also negatively affected day-to-day program management, and impeded efforts to communicate information about the program to families and Education. In addition, the database’s current structure hampers OSP’s ability to look at historical trends and use them as an effective management tool. We also found incomplete records from past years which will continue to be a problem for future program administrators who need them for effective program implementation and oversight. In addition, because a key variable in the OSP database used in the student selection process was unreliably populated, OSP’s ability to accurately select students based on established priorities for the program may have been compromised. To address issues with the database, we recommended Education have the program administrator improve the program database to provide reasonable assurance that there is sufficiently reliable data regarding the operation of OSP. In late October 2015, Education stated that OSP did not have the capacity or financial resources to update the database and Education could not require them to make the suggested updates. As noted above, the SOAR Reauthorization Act recently passed by the House and introduced in the Senate includes a provision intended to ensure the entity uses internal fiscal and quality controls for OSP. Timely Financial Reporting: Reliable published financial statements, such as those required by the Single Audit Act, are needed to meet program requirements and to ensure federal funds are being used appropriately. The Single Audit Act requires that recipients submit their Single Audit reports to the federal government no later than 9 months after the end of the period being audited. However, the required audit documents for the year ended Sept. 30, 2010 were issued by the program administrator on Jan. 31, 2013—more than 2 years after the end of its 2010 fiscal year. As a result, until these reports were issued Education did not have the financial reports required to properly account for the federal funds expended for OSP. To address these issues we recommended Education explore ways to improve monitoring and oversight of the program administrator. In 2014, Education stated that OSP was current with all required financial audits and provided documentation that, OSP’s 2014 Grant Award Notification imposed a special condition due to OSP’s history of untimely financial reporting. Specifically, the award notification stated that Education could impose sanctions, such as withholding a percentage of or entirely suspending federal awards, if OSP fails to submit a timely financial audit or written explanation. Internal control activities help ensure that actions are taken to address risks, and include a wide range of activities such as approvals, authorizations, and verifications. According to the MOU between Education and the District, the District is responsible for conducting regulatory inspections of participating schools and providing the administrator with the results of those inspections. However, we found that requirements under the MOU were not being met. For example, inspections of participating private schools were often not conducted. For our 2013 report, OSP told us they did not receive any information from the District as a result of any inspections, nor did the administrator follow up with District agencies to inquire about them. Given that the program administrator is responsible for ensuring that participating schools continue to be eligible to receive federal dollars through OSP, notifying the District agencies about inspections is important in ensuring appropriate oversight of participating schools. The MOU includes a responsibility for the program administrator to notify District agencies to conduct these inspections, but because the program administrator is not a signatory to the MOU, OSP officials were not fully aware of this responsibility, they said. As a result, activities crucial to the successful implementation of the program—such as building, zoning, health, and safety inspections—may not be occurring for all participating schools. To address these issues, we recommended Education work with the Mayor of the District of Columbia to revise the MOU that governs OSP implementation to include processes that ensure the results of OSP school inspections are communicated to the program administrator. In late October 2015, Education described to us actions that they had taken to address these issues. For example, Education stated that it ensured that the OSP administrator informed the appropriate District agency of the names of the participating schools for the purpose of conducting required inspections. The SOAR Reauthorization Act recently passed by the House and introduced in the Senate includes provisions that require Education and the District to revise their MOU to, among other things, address some of these issues. In conclusion, OSP has provided low-income families in the District additional choices for educating their children and has likely made private school accessible to some of these children who would not otherwise have had access. However, to help ensure that OSP efficiently and effectively uses federal funds for their intended purpose—that is, to provide increased opportunities to low-income parents to send their children, particularly those attending low-performing schools, to private schools—any entity responsible for operating a school choice program such as OSP needs a strong accountability infrastructure that incorporates the elements of internal control discussed above. Well- designed and executed operational and financial management policies and procedures and the underlying systems help provide reasonable assurance that federal funds are being used for the purposes intended and that funds are safeguarded against loss from error, abuse, and fraud. Education stated that they had addressed some of the issues that we identified, but we were unable to assess the extent to which they had implemented our recommendations in time for this statement. We continue to believe that by fully addressing our nine remaining recommendations for the OSP program, Education would promote more efficient and effective program implementation and accountability over federal funds, regardless of which entity is administering the program. Mr. Chairman Johnson, Ranking Member Carper, and Members of the Committee, this concludes my statement for the record. If you or your staff have any questions about this statement, please contact Jacqueline M. Nowicki at (617) 788-0580. You may also reach me by email at nowickij@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this statement. Key contributors to this statement include Nagla’a El-Hodiri (Assistant Director), Jamila Jones Kennedy, and Michelle Loutoo Wilson. In addition, key support was provided by Susan Aschoff, William Colvin, Julianne Cutts, Alexander Galuten, Gretta L. Goodwin, Sheila McCoy, Kimberly McGatlin, Jean McSween, John Mingus, Linda Siegel, Deborah Signer, and Jill Yost. Other contributors to the report on which the statement is based are Hiwotte Amare, Carl Barden, Maria C. Belaval, Edward Bodine, Melinda Cordero, David Chrisinger, Carla Craddock, Kristy Kennedy, John Lopez, Mimi Nguyen, James Rebbe, Ramon Rodriguez, George A. Scott, Aron Szapiro, and Helina Wong. This is a work of the U.S. government and is not subject to copyright protection in the United States. The published product may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately.	School vouchers are one of many school choice programs. Vouchers provide students with public funds to attend private schools and are often featured in discussions on education reform. The District of Columbia’s (District) Opportunity Scholarship Program (OSP) has garnered national attention as the first federally-funded private school voucher program in the United States. Since the program’s inception, Congress has provided more than $180 million for OSP, which has, in turn, provided expanded school choice to low-income students by awarding more than 6,100 scholarships to low-income students in the District. GAO’s 2013 report was in response to a request from the Chairman of the Subcommittee on Financial Services and General Government, Committee on Appropriations, U.S. Senate that GAO review the extent to which OSP was meeting its stated goals and properly managing federal funds. This statement is based on GAO’s 2013 report, and discusses the importance of ensuring effective implementation of OSP and any future similar federal school choice programs and providing sufficient accountability for public funds. Students in the District of Columbia (District) have many choices for K-12 schooling including charter, magnet, and traditional public schools, as well as private schools through the federally funded Opportunity Scholarship Program (OSP). Strong fiscal monitoring and oversight of the various schools that participate in choice programs is critical to ensuring that these programs have effective internal controls that help them meet the goal of providing a quality education to students. Internal control is broadly defined as a process designed to provide reasonable assurance that an organization can achieve its objectives. Five internal control standards—control environment, risk assessment, control activities, information and communication, and monitoring—should be an integral part of a system that managers use to regulate and guide an agency’s operations. During GAO’s 2013 review of OSP, most families GAO spoke with were generally happy with their children’s participation in the program, citing increased safety and security at their children’s OSP schools and improved quality of education. However, GAO found weaknesses in three areas—access to timely and complete program and award information, effective controls to safeguard federal funds, and clearly defined and properly executed roles and responsibilities—that are the result of internal control deficiencies that may limit the effectiveness of OSP and its ability to meet its goal of providing a quality education experience for students in the District. Strong internal controls in these areas would strengthen the OSP and are critical to the success of any similar federally funded school voucher program. In 2013, GAO made 10 recommendations to Education to improve OSP. To date, one recommendation has been closed as implemented. In October 2015, Education told GAO that it had addressed some of the issues that GAO identified in the 2013 report, but GAO was unable to assess the extent to which they had implemented our recommendations in time for this statement. GAO continues to believe that the 2013 recommendations would address weaknesses previously identified in OSP, and would improve the implementation and effectiveness of OSP—and any future federally funded choice programs.
On May 10, 2010, President Obama nominated Elena Kagan to replace Justice John Paul Stevens as a member of the Supreme Court. Unlike the vast majority of other nominees to the Supreme Court, Kagan, a former dean at Harvard Law School (HLS) and current Solicitor General, has not been a member of the judiciary and therefore has never issued the judicial opinions that are a traditional source of insight into a nominee's legal views. Nevertheless, Kagan has written, contributed to, or otherwise signaled agreement with a wide array of legal documents during the course of her career, and some understanding of her views may be gleaned from these documents. During her tenure as dean of HLS, Kagan, in conjunction with 39 of her faculty colleagues at the law school, signed an amicus curi a e brief in support of the Forum for Academic and Institutional Rights (FAIR), a consortium of law schools and faculty members who were respondents in a case before the Supreme Court concerning access by military recruiters to college campuses. " Amicus curiae " literally means "friend of the court." It is common practice for individuals or groups who are not a party to the litigation but who nonetheless have an interest in the outcome to, with the Court's approval, submit amicus briefs in support of their positions. The HLS brief was among the 28 amicus briefs filed in the case. Of these briefs, which were filed by a variety of educational, public interest, and civic associations, among others, 14 were filed on behalf of FAIR. Twelve were filed on behalf of the petitioners, Secretary of Defense Donald Rumsfeld et al., who had sought Supreme Court review after FAIR had prevailed in the United States Court of Appeals for the Third Circuit. The remaining two briefs were filed by groups who expressed views on particular issues before the Court without taking the side of either party. At the time of the brief, FAIR was in the process of challenging the constitutionality of the Solomon Amendment, a federal law that requires colleges and universities that receive federal funds to give military recruiters the same access to students and campuses that is provided to other employers. Like many law schools and other academic institutions, HLS maintains a nondiscrimination policy that requires any employer that conducts on-campus recruiting to sign a document stating that it does not discriminate on various grounds, including "race, color, creed, national or ethnic origin, age, sex, gender identity, sexual orientation, marital or parental status, disability, source of income, or status as a veteran." HLS, along with many other institutions of higher education, had sought to bar military recruiters from its campus in response to the military's "Don't Ask, Don't Tell" (DADT) policy, which, with certain exceptions, requires the discharge of members of the armed services who engage in specified types of homosexual conduct. Ultimately, the Supreme Court upheld the constitutionality of the Solomon Amendment in the 2006 case Rumsfeld v. Forum for Academic and Institutional Rights , Inc . Congressional concerns over military access to campuses for recruiting purposes have led to the enactment of several legislative proposals over the years. Under perhaps the most well-known law, colloquially known as the Solomon Amendment, institutions of higher education risk losing certain federal funds if they deny military recruiters and ROTC access to campuses and students at institutions of higher education. Specifically, the statute prohibits an institution of higher education from receiving certain federal funds if the institution has a policy or practice (regardless of when implemented) that either prohibits, or in effect prevents ... the Secretary of a military department or Secretary of Homeland Security from gaining access to campuses, or access to students (who are 17 years of age or older) on campuses, for purposes of military recruiting in a manner that is at least equal in quality and scope to the access to campuses and to students that is provided to any other employer. Meanwhile, HLS has, since 1979, maintained a nondiscrimination policy that required employers who used the school's Office of Career Services for recruitment purposes to verify that they do not discriminate on a variety of bases, including sexual orientation. Due to this policy, military recruiters instead conducted recruitment activities through a student veterans' group until 2002, when the Department of Defense (DOD) threatened to take enforcement action by withholding federal funds from the entire university. At that time, Dean Kagan's predecessor at HLS "reluctantly created an exception from the law school's general anti-discrimination policy for the military," thus allowing the military to recruit via the Office of Career Services. During her tenure as dean, Kagan continued this policy in 2003 and 2004, but in 2005 she briefly reinstated the ban on military recruiters in the wake of the Third Circuit ruling in favor of FAIR. When DOD threatened to withhold funds from Harvard University, Dean Kagan relented and once again exempted the military from HLS's nondiscrimination policy. In light of the Supreme Court's subsequent ruling upholding the Solomon Amendment, this exemption continues in effect today. In a 2005 letter to the HLS community describing her decision, Kagan appeared to reveal her personal views on a number of issues, including her belief in a policy of nondiscrimination on the basis of sexual orientation, her condemnation of the military's DADT policy, and her respect for the military. Stating her "own views on the matter," Kagan wrote: I have said before how much I regret making this exception to our antidiscrimination policy. I believe the military's discriminatory employment policy is deeply wrong – both unwise and unjust. And this wrong tears at the fabric of our own community by denying an opportunity to some of our students that other of our students have. The importance of the military to our society – and the great service that members of the military provide to all the rest of us – heightens, rather than excuses, this inequity. The Law School remains firmly committed to the principle of equal opportunity for all persons, without regard to sexual orientation. And I look forward to the time when all our students can pursue any career path they desire, including the path of devoting their professional lives to the defense of their country. Subsequently, HLS filed its amicus brief in support of FAIR. However, unlike FAIR, which was challenging the constitutionality of the Solomon Amendment, Kagan and her colleagues argued that the case should be resolved on statutory grounds. Their amicus brief is discussed below. As noted above, the amicus brief signed by Kagan and her HLS colleagues argued that the dispute over the Solomon Amendment should be resolved on statutory rather than constitutional grounds. The statutory text of the Solomon Amendment bars institutions of higher education from prohibiting or preventing military recruiters from gaining access to students and campuses "in a manner that is ... equal in quality and scope" to the access provided to other employers. According to the brief, this statutory language makes clear that the Solomon Amendment would be violated only when an institution of higher education subjects the military to disfavored or unequal treatment. Thus, HLS and other schools with similar nondiscrimination policies were in compliance with the statute because these nondiscrimination policies were being applied evenly to both the military and other employers, meaning that the military was being granted access "equal in quality and scope" as the statute required. As the amici argued, These policies do not single out military recruiters for disfavored treatment: Military recruiters are subject to exactly the same terms and conditions of access as every other employer. When other recruiters have failed to abide by these tenets, they have been excluded. When military recruiters have agreed to follow them, they have been welcomed. To bolster this argument, the amicus brief reviewed the legislative history of the Solomon Amendment, noting that the statute was not intended to apply to neutral practices but rather was designed to target policies that were specifically anti-military, such as policies that expressly prohibited military recruiting or that otherwise imposed special conditions on military recruiters. Likewise, the amici criticized the government's characterization of the law as requiring nothing more than equal opportunity for military recruiters. According to the brief, the government was actually seeking special treatment for the military because "the government has chosen to enforce the Solomon Amendment as if it conferred upon the military a unique privilege—one shared by no other employer, including other agencies of the Federal Government—to disregard neutral and generally applicable rules designed to govern the conduct of all recruiters." Urging the Court to reject the government's interpretation of the statute, the amici argued that the Court should rule that "the Solomon Amendment applies only to policies that single out military recruiters for special disfavored treatment, not evenhanded policies that incidentally affect the military." Because the schools in question had not specifically barred military recruiting and had applied the nondiscrimination policy equally to all employers, the amici contended that the schools had not violated the law. According to the brief, these nondiscrimination policies are analogous to other requirements that schools establish to govern the on-campus recruiting process, such as rules regarding scheduling, communication with students, and employment offers, among others, and these requirements would be equally unlikely to violate the Solomon Amendment. Thus, "if the military fails to comply with the same evenhanded rules that govern everyone else, any resulting inability to interview is properly attributed to the government's policies or practices rather than those of the educational institution." Ultimately, the Court rejected the statutory construction articulated in HLS's amicus brief and upheld the constitutionality of the Solomon Amendment. The Court's decision is discussed below. As noted above, in Rumsfeld v. Forum for Ac ademic and Institutional Rights , Inc. , the Supreme Court unanimously upheld the constitutionality of the Solomon Amendment. Before reaching the constitutional question posed in the case, however, the Court first considered and rejected the statutory argument advanced in HLS's amicus brief. Specifically, the Court held that because the statute requires the military to be granted the same "access to campuses and to students that is provided to any other employer," the underlying rationale for granting such access is irrelevant. According to the Court, The Solomon Amendment does not focus on the content of a school's recruiting policy, as the amici would have it. Instead, it looks to the result achieved by the policy and compares the "access ... provided" military recruiters to that provided other recruiters. Applying the same policy to all recruiters is therefore insufficient to comply with the statute if it results in a greater level of access for other recruiters than for the military.... Under the statute, military recruiters must be given the same access as recruiters who comply with the policy. Turning to the constitutional question, the Court rejected FAIR's assertion that it was a violation of the First Amendment for the federal government to condition university funding on compliance with the Solomon Amendment. Previously, a divided panel of the Third Circuit agreed that the Solomon Amendment had imposed an "unconstitutional condition" by compelling the law schools to convey messages of support for the military's policy of discriminatory exclusion, but the Court reversed the lower court's decision. First, the Court was unmoved by FAIR's theory of unconstitutional conditions, largely because of fatal flaws they found in the law schools' First Amendment analysis. According to the Court, "a funding condition cannot be unconstitutional if it could be constitutionally imposed directly." Although "expressive conduct" may be subject to First Amendment scrutiny, the Court held that the Solomon Amendment did not impair the First Amendment rights of the objecting institutions. Requiring law schools to facilitate recruiters' access by sending out e-mails and scheduling military visits were deemed "a far cry from the compelled speech" found in earlier cases, and "[a]ccommodating the military's message does not affect the law school's speech, because the schools are not speaking when they host interviews and recruiting receptions." Nor, the Court found, would they be endorsing, or be seen as endorsing, the military policies to which they object because "[a] law school's decision to allow recruiters on campus is not inherently expressive." Second, the Court distinguished the doctrine of "expressive association," as applied by Dale v. Boy Scouts of America , a 2000 case in which the Court held that the Boy Scouts have an expressive right to exclude gay scoutmasters. Merely allowing recruiters on campus and providing them with the same services as other recruiters did not require the schools to "associate" with them. Nor did it prevent their expressing opposition to military policies in other ways. Moreover, unlike the Boy Scouts case, no group membership practices or affiliations were implicated by the Solomon Amendment. Recruiters do not become components of the law schools—like the Scout leaders there—but "are, by definition, outsiders who come onto campus for [a] limited purpose" and "not to become members of the school's expressive association." Finally, the Court recognized as "[beyond] dispute" that Congress has "broad and sweeping" powers over military manpower and personnel matters—"includ[ing] the authority to require campus access for military recruiters"—the exercise of which is generally entitled to judicial "deference." For these and other reasons, the Court rejected FAIR's constitutional challenge to the Solomon Amendment. At the time Kagan and her HLS colleagues participated as amici in the litigation over the Solomon Amendment, many of the nation's law schools maintained employment nondiscrimination policies and had, pursuant to such policies, barred military recruiters from their campuses in response to DOD's DADT policy. In support of other institutions that were challenging DOD's application of the Solomon Amendment, Kagan and her colleagues submitted an amicus brief in support of their position, and they argued for a decision on narrower statutory rather than constitutional grounds. The Court disagreed with this statutory interpretation, and, when FAIR lost its challenge, HLS and other institutions immediately complied with the ruling. It is important to note that it is not clear what Kagan's participation in the amicus brief portends for her actual judicial philosophy. Because the amicus brief is the product of a litigation strategy rather than an unfiltered declaration of her legal viewpoint on the Solomon Amendment issue, the focus of the amicus brief does not necessarily reveal her judicial views on this issue or related matters.	On May 10, 2010, President Obama nominated Elena Kagan to replace Justice John Paul Stevens as a member of the Supreme Court. Unlike the vast majority of other nominees to the Supreme Court, Kagan, a former dean at Harvard Law School (HLS) and current Solicitor General, has not been a member of the judiciary and therefore has never issued the judicial opinions that are a traditional source of insight into a nominee's legal views. Nevertheless, Kagan has written, contributed to, or otherwise signaled agreement with a wide array of legal documents during the course of her career, and some understanding of her views may be gleaned from these documents. During her tenure as dean of HLS, Kagan, in conjunction with 39 of her faculty colleagues at the law school, signed an amicus curiae brief in support of the Forum for Academic and Institutional Rights (FAIR). At the time, FAIR, which consisted of a consortium of law schools and faculty members, was in the process of challenging the constitutionality of the Solomon Amendment, a federal law that requires colleges and universities that receive federal funds to give military recruiters the same access to students and campuses that is provided to other employers. The brief signed by Kagan and her colleagues offered a statutory argument and did not address broader constitutional arguments. Like many law schools and other academic institutions, HLS maintains a nondiscrimination policy that requires any employer that conducts on-campus recruiting to sign a document stating that it does not discriminate on various grounds, including "race, color, creed, national or ethnic origin, age, sex, gender identity, sexual orientation, marital or parental status, disability, source of income, or status as a veteran." HLS, along with many other institutions of higher education, had sought to bar military recruiters from its campus in response to the military's "Don't Ask, Don't Tell" (DADT) policy, which, with certain exceptions, requires the discharge of members of the armed services who engage in specified types of homosexual conduct. Ultimately, the Supreme Court upheld the constitutionality of the Solomon Amendment in the 2006 case Rumsfeld v. Forum for Academic and Institutional Rights, Inc.
One of the most lively debates among economists and policymakers during the 1980s was the relationship between the federal budget deficit and the international trade deficit. When the dust settled those arguing that the two deficits should move together seemed to have carried the day, although doubters remained. This prediction was based on mainstream macroeconomic theory. As the 1990s unfolded, the two deficits did not move together. As the federal budget deficit came down as a fraction of gross domestic product (GDP), the trade deficit rose as a fraction of GDP. Is this evidence inconsistent with theory? The analysis will suggest that the answer is no. There are other forces besides the federal budget deficit that can influence the U.S. trade deficit. They were not decisive during the 1980s. They appear to have been operative during the 1990s. With the onset of the recession in 2001 and subsequent move to expansion, the coincident shift back to budget deficit, the two deficits began to move together again. Mainstream macroeconomic theory explains the twin deficit phenomenon as follows. An increase in the federal budget deficit (measured as an increase in the structural deficit as a percent of full employment GDP) willâ all else held constant both in the United States and abroad âput upward pressure on U.S. interest rates, raising them above comparable rates abroad. This occurs because the position of the government's budget influences the national saving rate. When the structural budget deficit shrinks, the government adds to the national saving supplied by households and businesses and interest rates fall. When the structural budget deficit grows, it represents a claim on those savings, and interest rates must rise for the market to remain in equilibrium. In a world in which U.S. assets are good substitutes for foreign assets, foreign investors will be tempted to buy more of the now higher yielding American assets. Before they can buy these assets, they must first purchase dollars. Thus, the net demand for dollars in the foreign exchange market rises and the dollar increases in value and it is said to appreciate. Dollar appreciation reduces the price of foreign goods and services in America and increases the price of American goods and services abroad. The net result is that Americans spend more on foreign goods and services (the value of American imports rise) and foreigners spend less on American goods and services (the value of U.S. exports fall). If the trade accounts were in balance to begin with, the United States now has a trade deficit. And, indeed, the data during the 1980s, shown on Table 1 , conform to what the theory predicts. The full employment or structural deficit rose from 0.6% of full employment GDP in 1981 to an expansion high of 4.8% in 1986, a rise of 4.2 percentage points. The trade balance rose over this period from a surplus of 0.2% of GDP to a deficit of 2.5% of GDP, a rise of 2.7 percentage points (thus, the rise in the trade deficit was about 59% of the rise in the structural budget deficit). Further, as the structural budget deficit fell from 4.7% of GDP in 1986 to 2.2% in 1989, the last full year of the 1982-1990 economic expansion, a fall of 2.5 percentage points, the trade deficit fell from 2.5%, of GDP to 1.1% of GDP, a fall of 1.4 percentage points (or about 56% of the decline in the structural budget deficit). As seen in Table 2 , events subsequent to the recession in 2001 have mirrored the 1980s experience: as the budget deficit rose, the trade deficit rose. This occurred despite a major easing in monetary policy by the Federal Reserve which should have discouraged foreign capital from coming to the United States. However, unlike the 1980s, in this episode, the growth of the trade deficit is coincident with a fall in the international exchange value of the dollar which should signal a net decrease in the inflow of foreign capital. And, indeed, during 2002-2004 the inflow of private capital did abate. The trade deficit did not fall because the decrease in the inflow of private capital was offset by the inflow of official capital (from foreign central banks and treasuries). If the twin deficits theory is correct, it has an adverse implication for the efficacy of fiscal policy as a stimulus tool. In the mainstream model, policy induced increases in the structural budget deficit (through tax cuts or increases in government spending) boost aggregate spending by generating more government spending than the government's revenue intake. This outcome is predicated on the absence of foreign capital mobility. But if foreign capital flows are highly sensitive to changes in interest rates, then any increase in aggregate spending caused by the larger budget deficit would be largely offset by an increase in the trade deficit caused by the upward pressure placed on interest rates by the budget deficit. In other words, tax cuts or increases in government spending would not have much effect on the short-run growth in output and employment under this view. Before looking at developments during the late 1990s, it should be noted that mainstream macroeconomic theory has never excluded an independent causal role for international capital movements. That is, international capital movements can occur independent of any change in the federal budget deficit. Foreign capital may come to the Untied States for a variety of circumstances unrelated to the pressures the federal budget deficit puts on U.S. interest rates. A change in U.S. tax law which increases the after tax rate of return on capital could attract foreign funds even if it had no effect on the federal budget deficit. Rising prospects for profit because of boom conditions in the U.S. economy or an increase in productivity could increase domestic investment relative to GDP, and could attract foreign capital even as the federal budget moves toward balance or into surplus. Similarly, fears of inflation, currency devaluation, or political repression could induce foreigners to seek the safety of U.S. assets. Moreover, if a falling federal deficit in the United States occurs with the onset of an economic downturn abroad such that yields on foreign assets fall relative to comparable U.S. yields, the emerging differential in favor of the United States could serve as a magnet attracting additional capital that could forestall a fall in the trade deficit or lead to a rise in that deficit. In this instance, it would be possible to have a falling budget deficit and a rising trade deficit. Other possibilities also suggest themselves. The data on Table 2 show a very different pattern in the last half of the 1990s from the twin deficits of the 1980s. As the structural budget deficit fell from 2.0% of GDP in 1995 to a surplus of 1.1% of GDP in 2000 (a shift of 3.1 percentage points), the last full year of the 1991-2001 expansion, the trade deficit rose over the same period from 0.9% to 3.9% of GDP (a shift of 3 percentage points). These data show clearly that changes in the magnitude and direction of the net inflow of foreign capital can occur independently of changes in the federal budget deficit. The data in themselves do not explain why these movements occur, however. Yet, there are some interesting clues in the data on domestic investment that suggest at least a proximate explanation for why the two deficits have not moved in the same direction in the 1990s. The data in Table 3 report real gross domestic investment as a fraction of real GDP during the years 1983-1989 (the expansion of the 1980s) and 1995-2007. There is a noticeable difference between these two expansions. Unlike 1983-1989, real gross domestic investment during the 1990s expansion was a rapidly rising fraction of GDP. The increase was especially strong in the period 1995-2000. The increase in desired investment, motivated by the increase in productivity and the related rise in the real rate of return on American capital in the last half of the 1990s, served as a magnet for attracting foreign capital to the United States. And this increased inflow of foreign capital (saving) made possible the additional investment in the United States. Upward pressure on U.S. interest rates was the proximate cause of the inflow of capital, and resulting trade deficit, in both the 1980s and late 1990s. The difference between the two periods was what caused the pressure on interest rates. In the 1980s, the upward pressure came from the rise in the structural budget deficit. In the 1990s, it came from the increased productivity and related rise in the profitability of private investment. An interesting aspect of both historical periods is that policymakers in the United States have managed to bring the U.S. economy to full employment with large and even growing trade deficits. These trade deficits have not hampered the overall creation of jobs. They have, however, influenced the nature of job creation since they alter the composition of U.S. output, away from export and import-competing industries toward industries the demand for whose output is sensitive to interest rates. During the 1980s, a lively debate occurred, the outcome of which was a convincing case linking the growth in the structural measure of the federal budget deficit with the growth of the trade deficit (with cause and effect running from budget deficit to trade deficit via interest rates and dollar appreciation). Lost in the "small print" of this debate was that the budget deficit is not the exclusive determinant of net capital flows and trade deficits. International capital flows into and out of the United States can move in directions contrary to the movements in the position of the federal budget. They depend not only on economic conditions in the United States, but on similar conditions and decisions made abroad. During the 1990s, the U.S. trade deficit did not moved in concert with the structural (or even the actual) measure of the federal budget deficit (both absolutely and as a fraction of GDP). Beginning in 1995, real gross domestic investment rose as a fraction of real GDP reflecting the increase in productivity and related increase in the real rate of return on American capital. This increase served to attract private capital to the United States. Thus, the trade deficit rose even as the budget deficit fell. During the recovery that began in the fourth quarter of 2001 and the subsequent expansion, a rising structural budget deficit and the recovery of private investment spending once again attracted foreign capital to the United States, although in this episode the proportion of the inflow coming from foreign official sources (central banks and treasuries) has been especially important during 2002-2004 and 2006-2007. If the twin deficits theory is correct, it has an adverse implication for the efficacy of fiscal policy as a stimulus tool. It suggests that when international capital flows are highly mobile, the effect of policy induced increases in the structural budget deficit (through tax cuts or increases in government spending) on short-run output growth and employment would be largely offset by increases in the trade deficit.	In the 1980s expansion, the trade deficit and budget deficit moved together. This pattern re-emerged in the recession and subsequent expansion beginning in 2001. This is the opposite of what happened in the last half of the 1990s, when the budget deficit fell as a fraction of gross domestic product (GDP) and the trade deficit rose sharply as a fraction of GDP. From this experience it is clear that international capital flows, which drive the net balance of trade, do not depend solely on movements in the budget deficit. During the last half of the 1990s, real gross domestic investment rose as a fraction of real GDP. This resulted from the rise in U.S. productivity and the related rise in the real yield on U.S. assets. This drew in additional private capital from abroad. If the twin deficits theory is correct, it has an adverse implication for the efficacy of fiscal policy as a stimulus tool. It suggests that in an environment of highly mobile international capital, the effect of policy induced increases in the structural budget deficit (e.g., tax cuts) on short-run economic growth would be largely offset by increases in the trade deficit. The experience during both the 1980s and 1990s demonstrates that a large and growing trade deficit need not be an impediment to overall job creation even though it may have had an effect on the type of jobs that were created since it affected the composition of U.S. output. This report will be updated periodically.
The U.S. Census Bureau periodically collects national survey information on child support. By interviewing a random sample of single-parent families, the Census Bureau is able to generate an array of data that is useful in assessing the performance of noncustodial parents in paying their child support. Although the Ce nsus Bureau has been collecting child support information in a special Child Support Supplement to the April Current Population Survey (CPS) biennially since 1978, the supplement survey has changed significantly over the years. According to the Census Bureau, the most recent data, from 2013, are comparable only back to 1993. During the early years of the survey, information was collected only from custodial mothers. Beginning with the 1991 data, information was also collected from custodial fathers. This report presents unsegmented data with respect to custodial mothers and fathers (i.e., custodial parents' data). The survey population includes all persons who have their own children under the age of 21 living with them, while the other parent lives outside the household. The Child Support Enforcement (CSE) program was enacted in 1975 as part of P.L. 93-647 (Title IV-D of the Social Security Act). It is a federal-state program whose purpose is to help strengthen families by securing financial support for children from their noncustodial parent on a consistent and continuing basis, and by helping some families to remain self-sufficient and off public assistance by providing the requisite CSE services. The CSE program is administered by the Office of Child Support Enforcement (OCSE) in the Department of Health and Human Services (HHS), and funded by general revenues. All 50 states, the District of Columbia, Guam, Puerto Rico, and the Virgin Islands operate CSE programs and are entitled to federal matching funds. The CSE program provides seven major services on behalf of children: (1) parent location, (2) paternity establishment, (3) establishment of child support orders, (4) review and modification of child support orders, (5) collection of child support payments, (6) distribution of child support payments, and (7) establishment and enforcement of medical child support. The CSE program is estimated to handle at least 50% of all child support cases; the remaining cases are handled by private attorneys, collection agencies, or through mutual agreements between the parents. In FY2013, the CSE program collected $28.0 billion in child support payments (from noncustodial parents) and served 15.6 million child support cases. The national Census Bureau data show that the aggregate amount of child support received in 2013 was $22.5 billion, and that 13.4 million parents had custody of children under the age of 21 while the other parent lived elsewhere. In 2013, almost 83% of custodial parents were mothers. Of all custodial parents, 48% were white (non-Hispanic), 25% were black, 23% were Hispanic, 16% were married, 33% were divorced, 38% were never married, 13% did not have a high school diploma, almost 20% had at least a bachelor's degree, 50% worked full-time year-round, 29% had family income below poverty, and nearly 43% received some type of public assistance (i.e., Medicaid, food stamps, public housing or rent subsidy, TANF, or general assistance). Table 1 summarizes several child support indicators from biennial survey data for selected years from 1993 through 2013. The table shows that the likelihood of having a child support award, being legally entitled to a child support payment, and actually receiving at least one child support payment decreased over the 21-year period from 1993 through 2013. In contrast, the percentage of custodial parents (owed child support) who received the full amount of the child support that they were owed increased by almost 24%, from 37% in 1993 to 46% in 2013. In 2013, about 49% of the 13.4 million custodial parents (with children under the age of 21) were awarded child support. Of those who were actually due child support payments (5.7 million), about 74% of them received at least one payment and almost 46% received all that they were owed. In 2013, only 2.6 million (19%) of the 13.4 million custodial parents eligible for child support actually received the full amount of child support that was owed to them. In 2013, the average child support payment received by custodial parents amounted to $3,953, 6.5% higher than the average child support payment in 1993 ($3,712). In 2013, 68% of the $32.9 billion in aggregate child support due was actually paid. In 1993, 65% of the $38 billion (adjusted for inflation, in 2013 dollars) in child support due was paid. During the 21-year period 1993 through 2013, after adjusting for inflation, aggregate child support due started at $38.0 billion in 1993, fluctuated to a high of $46.9 billion in 2003, and dropped to a low of $32.9 billion in 2013. Over the entire period, aggregate child support due decreased by 13%, total child support received decreased 9%, and the amount left unpaid decreased 21% (see Table 1 ). While sex, race, marital status, and education are significant factors in predicting whether a custodial parent will be issued a child support order, award rates tend to be significantly lower than receipt rates. For example, although female custodial parents were almost 1.7 times more likely to be awarded child support in 2013 as their male counterparts, among parents who were owed/due child support, both had at least a 73% chance of actually receiving child support payments. (See Table 2 .) Moreover, in 2013, 37% of black custodial parents were awarded child support compared to 56% of white custodial parents. Even so, nearly 65% of black custodial parents who were owed/due child support actually received child support payments and 79% of white custodial parents who were owed child support actually received child support payments in 2013. Similarly, while 42% of never-married parents were awarded child support in 2013, almost 68% of never-married parents who were owed child support actually received child support payments in 2013. Also, 38% of custodial parents without a high school diploma were awarded child support, while almost 62% of custodial parents without a high school diploma who were owed child support actually received child support. The pattern of receipt rates being higher than award rates also held for the economic factors listed in Table 2 —in that once a child support obligation was awarded, the probability of actually receiving payments rose significantly for all categories of custodial parents. In 2013, 45% of custodial parents with incomes below the poverty level were awarded child support, and nearly 66% of those owed/due payments actually received child support payments. Table 2 also shows that 49% of custodial parents who worked full-time year-round were awarded child support, while almost 77% of those owed received child support payments. Similarly, 47% of custodial parents who received public assistance were awarded child support, while nearly 67% of those who were owed child support payments actually received child support payments. Of the categories of custodial parents presented in Table 2 , custodial parents who were divorced followed by custodial parents who were white (non-Hispanic) were the categories of parents most likely to be awarded child support. In 2013, 57.7% of custodial parents who were divorced and 56.4% of white (non-Hispanic) custodial parents were awarded child support. The table also shows that custodial parents with an associate's degree who were owed/due child support was the category of parents most likely to receive child support payments in 2013. In 2013, 83.1% of custodial parents with an associate's degree who were owed payments actually received child support payments. In 2013, the average yearly child support payment received by custodial parents with payments was $5,333; $5,181 for mothers and $6,526 for fathers. These full or partial payments represented (on average) 14% of the custodial parent's yearly income, 16% of the custodial mothers' total yearly income, and 9% of the custodial fathers'. In 2013, for custodial parents with income below the poverty level, child support payments for those who received them made up, on average, 49% of their yearly income. In 2013, child support payments made up 13% of the yearly income of custodial parents without a high school diploma who were owed child support and who actually received full or partial payments. In 2013, child support represented about 18% of the income of the 2.6 million custodial parents who received all of the child support that they were owed. The Census Bureau data also include information on health insurance. In 2013, 54% of the 6.5 million custodial parents with child support awards had awards that included health insurance. The noncustodial parent provided the health insurance coverage in 51.1% of the awards with health insurance provisos and in 10.4% of the awards without health insurance stipulations. Moreover, the noncustodial parent provided health insurance coverage for 19.4% of the nearly 6.9 million custodial parents who did not have a child support award. Overall, 3.5 million noncustodial parents provided health care for their children in 2013. This represented 26.1% of the 13.4 million children under the age of 21 who were living with a custodial parent while their other parent lived elsewhere.	The national Census Bureau data show that in 2013, 13.4 million parents had custody of children under the age of 21 while the other parent lived elsewhere, and the aggregate amount of child support received was $22.5 billion. In 2013, almost 83% of custodial parents were mothers. Of all custodial parents, 48% were white (non-Hispanic), 25% were black, 23% were Hispanic, 16% were married, 33% were divorced, 38% were never married, 13% did not have a high school diploma, almost 20% had at least a bachelor's degree, 50% worked full-time year-round, 29% had family income below poverty, and nearly 43% received some type of public assistance. In 2013, 2.6 million (40%) of the 6.5 million custodial parents with child support orders actually received the full amount of child support that was owed to them. The average yearly child support payment received by custodial parents with payments was $5,181 for mothers and $6,526 for fathers. These full or partial payments represented about 16% of the custodial mothers' total yearly income and 9% of the custodial fathers' yearly income. Compared to 1993 Census data, less child support was received by custodial parents in 2013 ($24.8 billion in 1993 versus $22.5 billion in 2013; in 2013 dollars). However, a higher percentage of those owed child support actually received all that they were due (36.9% in 1993 versus 45.6% in 2013).
Section 1811 of the Social Security Act provides that Social Security Disability Insurance (SSDI) beneficiaries are eligible for Medicare hospital insurance (Part A). Individuals are also eligible to purchase Medicare supplementary medical insurance (Part B) or enroll in a Medicare Advantage plan (formerly known as a Medicare+Choice plan). SSDI beneficiaries are also eligible for voluntary prescription drug benefits (Part D). Generally, SSDI beneficiaries under age 65 are eligible for Medicare coverage in the month after they have received 24 months of SSDI benefits. Because of the five-month waiting period from onset of the disabling condition for disabled individuals to be qualified to receive SSDI benefits, this results in a total of 29 months after the onset of the disability before an individual is eligible for Medicare benefits. Thus, at the beginning of the 30 th month since the onset of the qualifying disability, SSDI beneficiaries become eligible for Medicare coverage. For SSDI beneficiaries under 65 years of age, there are exceptions to the required 24-month waiting period for certain diseases. Specifically, SSDI beneficiaries qualify for Medicare after 24 months of receiving SSDI benefits (the general rule described previously); or at the first month of receiving SSDI benefits if the beneficiary has amyotrophic lateral sclerosis (ALS, or Lou Gehrig's disease); or after the third month when a beneficiary has end-stage renal disease (ESRD) or kidney failure; or in the month in which a beneficiary receives a kidney transplant. The ALS exception went into effect July 1, 2001 as a result of the Consolidated Appropriations Act of 2001, P.L. 106-554 . The ESRD provision was part of Social Security Amendments of 1972, P.L. 92-603. In addition to SSDI beneficiaries, other individuals who are under age 65 may be eligible for Medicare on account of a disabling condition as described below. Certain disabled local, state, and federal employees who do not receive SSDI benefits may be eligible after the waiting period. Disabled widows and widowers ages 50 to 65 (and disabled divorced widows and widowers ages 50 to 65) are eligible for Medicare after a 24-month qualifying period if they are receiving Social Security benefits based on disability. For disabled widows/widowers, previous months of eligibility for Supplemental Security Income (SSI) based on disability may count toward the qualifying period. Certain dependent adult children of Medicare beneficiaries are eligible for Medicare if they developed a permanent and severe disability before age 22 and thus qualify for SSDI benefits based on a parent's work history. The two-year waiting period applies and starts when an individual turns 18 or when he or she is determined to be disabled if it is after age 18. A spouse or child may be eligible for Medicare, based on a worker's record, if the spouse or child is on continuing dialysis for ESRD or has a kidney transplant, even if no other family member participates in the Medicare program. Table 1 shows the number and percentage of persons under 65 years old who received Medicare in July 2005 due to disabling conditions. In 2006, just over 7 million beneficiaries under the age of 65 received Medicare on account of disability status. More than 43% of disabled beneficiaries were between the ages 55 and 64. More men (53.3%) than women (46.7%) received this benefit and the vast majority (73.5%) were white. The Social Security Amendments of 1972, P.L. 92-603, extended Medicare to persons with disabilities who had been entitled to Social Security Disability Insurance (SSDI) benefits for at least 24 consecutive months. The provision required the waiting period to begin with the first month of SSDI entitlement, which is five months after the onset of the disability. In 1971, the House Committee on Ways and Means Report recommended extending Medicare protection to the disabled and stated that the Committee felt it was "imperative to proceed on a conservative basis." The report stated that the 24-month waiting period was intended to ... help keep the costs within reasonable bounds, avoid overlapping private health insurance protection, particularly where a disabled worker may continue his membership in a group insurance plan for a period of time following the onset of his disability and minimize certain administrative problems that might otherwise arise.... Moreover, this approach provides assurance that the protection will be available to those whose disabilities have proven to be severe and long lasting. A similar statement was included in the report to the Senate from the Committee on Finance. The Social Security Disability Amendments of 1980, P.L. 96-265 , permitted an individual becoming re-entitled to SSDI benefits to count the months of the earlier spell of disability in satisfying the 24-month waiting period if the spell occurred within the previous five years or seven years for disabled widow(er)s and those who were disabled since childhood. The amendments also provided that if an individual was in a trial work period after the termination of the SSDI benefits, and had not completed the 24-month waiting period, the months of the trial work period could count toward satisfying the required waiting period for Medicare eligibility. Effective October 1, 2000, the Ticket to Work and Work Incentives Improvement Act of 1999, P.L. 106-170 , extended Medicare Part A coverage to certain working former SSDI beneficiaries for a total of 8.5 years. Those SSDI beneficiaries with limited incomes and assets may qualify for Supplemental Security Income (SSI) benefits. Under SSI, disabled, blind, or aged individuals who have low incomes and limited resources are eligible for benefits regardless of their work histories. In most states SSI receipt will entitle a person to Medicaid benefits. Certain working SSDI beneficiaries who had been receiving Medicaid benefits may be eligible for a Buy-In Option allowing maintenance of Medicaid coverage. Thirty-two states currently provide a Medicaid Buy-In Option. Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), P.L. 99-272 , requires employers who offer health insurance to continue coverage for persons who would otherwise lose coverage due to a change in work or family status. Coverage generally lasts 18 months but, depending on the circumstances, can last for longer periods. If the Social Security Administration (SSA) makes a determination that the date of an individual's onset of disability occurred during the first 60 days of COBRA coverage or earlier, the employee and the employee's spouse and dependents are eligible for an additional 11 months of continuation coverage. This is a total of 29 months from the date of the qualifying termination or reduction of hours of employment. This provision was designed to provide a source of coverage while individuals wait for Medicare coverage to begin. Some SSDI beneficiaries may qualify for other government programs including veterans' programs for hospital and medical care. According to research based on new SSDI beneficiaries in 1995 who qualified upon their own work record, 11.8% died within the waiting period, 2.1% recovered, and 86.1% became entitled to Medicare. The study estimated hypothetical Medicare costs for the first 24 months of SSDI entitlement to be $10,055 in 2000 dollars per person. Costs varied substantially by diagnostic group and by whether the person died or recovered during the waiting period. On average, beneficiaries who died during the waiting period were estimated to cost $25,864, whereas those who recovered were estimated to cost $1,506. One research study suggested that eliminating the 24-month Medicare waiting period would cost $5.3 billion while another study estimated the cost at $8.7 billion. The differences in the estimates are because: (1) the $5.3 billion used 2000 dollars while the $8.7 billion is in 2002 dollars: (2) the $5.3 billion estimate is for only SSDI beneficiaries that qualified under their own work record while the $8.7 billion estimate includes disabled adult children and disabled widow(er)s; and (3) each used substantially different estimation methodologies. Neither of these estimates include the cost of the prescription drug benefit that started in January 2006. In 2002, approximately 40% of SSDI beneficiaries in the Medicare waiting period were enrolled in Medicaid. One study estimated that the federal government would save $2.5 billion in Medicaid if the 24-month waiting period was eliminated; however, these federal Medicaid savings would more than be offset by the aforementioned cost increases to the Medicare program. Additionally, the states would realize $1.8 billion in Medicaid savings if the waiting period was eliminated.	Recipients of Social Security Disability Insurance (SSDI) benefits are eligible for Medicare benefits after a 24-month waiting period. This report explains this waiting period and its legislative history. This report also provides information on other programs that may provide access to health insurance during the required waiting period.This report will be updated to reflect legislative activity.
To obtain a full funding grant agreement, a project must first progress through a local or regional review of alternatives, develop preliminary engineering plans, and obtain FTA’s approval for final design. TEA-21 requires that FTA evaluate projects against “project justification” and “local financial commitment” criteria contained in the act (see fig. 1). FTA assesses the project justification and technical merits of a project proposal by reviewing the project’s mobility improvements, environmental benefits, cost-effectiveness, and operating efficiencies. In assessing a project’s local financial commitment, FTA assesses the project’s finance plan for evidence of stable and dependable financing sources to construct, maintain, and operate the proposed system or extension. Although FTA’s evaluation requirements existed prior to TEA-21, the act requires FTA to (1) develop a rating for each criterion as well as an overall rating of “highly recommended,” “recommended,” or “not recommended” and use these evaluations and ratings in approving projects’ advancement toward obtaining grant agreements; and (2) issue regulations on the evaluation and rating process. TEA-21 also directs FTA to use these evaluations and ratings to decide which projects to recommend to the Congress for funding in a report due each February. These funding recommendations are also reflected in DOT’s annual budget proposal. In the annual appropriations act for DOT, the Congress specifies the amounts of funding for individual New Starts projects. Historically, federal capital funding for transit systems, including the New Starts program, has largely supported rail systems. Under TEA-21 the FTA Capital Program has been split 40 percent/40 percent/20 percent among New Starts, Rail Modernization, and Bus Capital grants. Although fixed- guideway bus projects are eligible under the New Starts program, relatively few bus-related projects are now being funded under this program. Although FTA has been faced with an impending transit budget crunch for several years, the agency is likely to end the TEA-21 authorization period with about $310 million in unused commitment authority if its proposed fiscal year 2003 budget is enacted. This will occur for several reasons. First, in fiscal year 2001, the Congress substantially increased FTA’s authority to commit future federal funding (referred to as contingent commitment authority). This allowed FTA to make an additional $500 million in future funding commitments. Without this action, FTA would have had insufficient commitment authority to fund all of the projects ready for a grant agreement. Second, to preserve commitment authority for future projects, FTA did not request any funding for preliminary engineering activities in the fiscal year 2002 and 2003 budget proposals. According to FTA, it had provided an average of $150 million a year for fiscal years 1998 through 2001 for projects’ preliminary engineering activities. Third, FTA took the following actions that had the effect of slowing the commitment of funds or making funds available for reallocation: FTA tightened its review of projects’ readiness and technical capacity. As a result, FTA recommended fewer projects for funding than expected for fiscal years 2002 and 2003. For example, only 2 of the 14 projects that FTA officials estimated last year would be ready for grant agreements are being proposed for funding commitments in fiscal year 2003. FTA increased its available commitment authority by $157 million by releasing amounts associated with a project in Los Angeles for which the federal funding commitment had been withdrawn. Although the New Starts program will likely have unused commitment authority through fiscal year 2003, the carry-over commitments from existing grant agreements that will need to be funded during the next authorization period are substantial. FTA expects to enter the period likely covered by the next authorization (fiscal years 2004 through 2009) with over $3 billion in outstanding New Starts grant commitments. In addition, FTA has identified five projects estimated to cost $2.8 billion that will likely be ready for grant agreements in the next 2 years. If these projects receive grant agreements and the total authorization for the next program is $6.1 billion—-the level authorized under TEA-21—most of those funds will be committed early in the authorization period, leaving numerous New Starts projects in the pipeline facing bleak federal funding possibilities. Some of the projects anticipated for the next authorization are so large they could have considerable impact on the overall New Starts program. For example, the New York Long Island Railroad East Side Access project may extend through multiple authorization periods. The current cost estimate for the East Side Access project is $4.4 billion, including a requested $2.2 billion in New Starts funds. By way of comparison, the East Side Access project would require about three times the total and three times the federal funding of the Bay Area Rapid Transit District Airport Extension project, which at about $1.5 billion was one of the largest projects under TEA-21. In order to manage the increasing demand for New Starts funding, several proposals have been made to limit the amount of New Starts funds that could be applied to a project, allowing more projects to receive funding. For instance, the President’s fiscal year 2002 budget recommended that federal New Starts funding be limited to 50 percent of project costs starting in fiscal year 2004. (Currently, New Starts funding—and all federal funding—is capped at 80 percent.) A 50 percent New Starts cap would, in part, reflect a pattern that has emerged in the program. Currently, few projects are asking for the maximum 80 percent federal New Starts share, and many have already significantly increased the local share in order to be competitive under the New Starts program. In the last 10 years, the New Starts share for projects with grant agreements has been averaging about 50 percent. In April 2002, we estimated that a 50 percent cap on the New Starts share for projects with signed full funding grant agreements would have reduced the federal commitments to these projects by $650 million. Federal highway funds such as Congestion Mitigation and Air Quality funds can still be used to bring the total federal funding up to 80 percent. However, because federal highway funds are controlled by the states, using these funds for transit projects necessarily requires state- transit district cooperation. The potential effect of changing the federal share is not known. Whether a larger local match for transit projects could discourage local planners from supporting transit is unknown, but local planners have expressed this concern. According to transit officials, some projects could accommodate a higher local match, but others would have to be modified, or even terminated. Another possibility is that transit agencies may look more aggressively for ways to contain project costs or search for lower cost transit options. With demand high for New Starts funds, a greater emphasis on lower cost options may help expand the benefits of federal funding for mass transit; Bus Rapid Transit shows promise in this area. Bus Rapid Transit involves coordinated improvements in a transit system’s infrastructure, equipment, operations, and technology that give preferential treatment to buses on urban roadways. Bus Rapid Transit is not a single type of transit system; rather, it encompasses a variety of approaches, including 1) using buses on exclusive busways; or 2) buses sharing HOV lanes with other vehicles; and 3) improving bus service on city arterial streets. Busways—special roadways designed for the exclusive use of buses—can be totally separate roadways or operate within highway rights-of-way separated from other traffic by barriers. Buses on HOV-lanes operate on limited-access highways designed for long-distance commuters. Bus Rapid Transit on Busways or HOV lanes is sometimes characterized by the addition of extensive park and ride facilities along with entrance and exit access for these lanes. Bus Rapid Transit systems using arterial streets may include lanes reserved for the exclusive use of buses and street enhancements that speed buses and improve service. During the review of Bus Rapid Transit systems that we completed last year, we found at least 17 cities in the United States were planning to incorporate aspects of Bus Rapid Transit into their operations. FTA has begun to support the Bus Rapid Transit concept and expand awareness of new ways to design and operate high capacity Bus Rapid Transit systems as an alternative to building Light Rail systems. Because Light Rail systems operate in both exclusive and shared right-of-way environments, the limits on their length and the frequency of service are stricter than heavy rail systems. Light Rail systems have gained popularity as a lower-cost option to heavy rail systems, and since 1980, Light Rail systems have opened in 13 cities. Our September 2001 report showed that all three types of Bus Rapid Transit systems generally had lower capital costs than Light Rail systems. On a per mile basis, the Bus Rapid Transit projects that we reviewed cost less on average to build than the Light Rail projects, on a per mile basis. We examined 20 Bus Rapid Transit lines and 18 Light Rail lines and found Bus Rapid Transit capital costs averaged $13.5 million per mile for busways, $9.0 million per mile for buses on HOV lanes, and $680,000 per mile for buses on city streets, when adjusted to 2000 dollars. For the 18 Light Rail lines, capital costs averaged about $34.8 million per mile, ranging from $12.4 million to $118.8 million per mile, when adjusted to 2000 dollars. On a capital cost per mile basis, the three different types of Bus Rapid Transit systems have average capital costs that are 39 percent, 26 percent, and 2 percent of the average cost of the Light Rail systems we reviewed. The higher capital costs per mile for Light Rail systems are attributable to several factors. First, the Light Rail systems contain elements not required in the Bus Rapid Transit systems, such as train signal, communications, and electrical power systems with overhead wires to deliver power to trains. Light Rail also requires additional materials needed for the guideway—rail, ties, and track ballast. In addition, if a Light Rail maintenance facility does not exist, one must be built and equipped. Finally, Light Rail vehicles, while having higher carrying capacity than most buses, also cost more—about $2.5 million each. In contrast, according to transit industry consultants, a typical 40-foot transit bus costs about $283,000, and a higher-capacity bus costs about $420,000. However, buses that incorporate newer technologies for low emissions or that run on more than one fuel can cost more than $1 million each. We also analyzed operating costs for six cities that operated both Light Rail and some form of Bus Rapid Transit service. Whether Bus Rapid Transit or Light Rail had lower operating costs varied considerably from city to city and depended on what cost measure was used. In general, we did not find a systematic advantage for one mode over the other on operating costs. The performance of the Bus Rapid Transit and Light Rail systems can be comparable. For example, in the six cities we reviewed that had both types of service, Bus Rapid Transit generally operated at higher speeds. In addition, the capacity of Bus Rapid Transit systems can be substantial; we did not see Light Rail having a significant capacity advantage over Bus Rapid Transit. For example, the highest ridership we found on a Light Rail line was on the Los Angeles Blue Line, with 57,000 riders per day. The highest Bus Rapid Transit ridership was also in Los Angeles on the Wilshire-Whittier line, with 56,000 riders per day. Most Light Rail lines in the United States carry about half the Los Angeles Blue Line ridership. Bus Rapid Transit and Light Rail each have a variety of other advantages and disadvantages. Bus Rapid Transit generally has the advantages of (1) being more flexible than Light Rail, (2) being able to phase-in service rather than having to wait for an entire system to be built, and (3) being used as an interim system until Light Rail is built. Light Rail has advantages, according to transit officials, associated with increased economic development and improved community image, which they believe justify higher capital costs. However, building a Light Rail system can have a tendency to provide a bias toward building additional rail lines in the future. Transit operators with experience in Bus Rapid Transit systems told us that one of the challenges faced by Bus Rapid Transit is the negative stigma potential riders attach to buses. Officials from FTA, academia, and private consulting firms also stated that bus service has a negative image, particularly when compared with rail service. Communities may prefer Light Rail systems in part because the public sees rail as faster, quieter, and less polluting than bus service, even though Bus Rapid Transit is designed to overcome those problems. FTA officials said that the poor image of buses was probably the result of a history of slow bus service due to congested streets, slow boarding and fare collection, and traffic lights. FTA believes that this negative image can be improved over time through bus service that incorporates Bus Rapid Transit features. A number of barriers exist to funding improved bus systems such as Bus Rapid Transit. First, an extensive pipeline of projects already exists for the New Starts Program. Bus Rapid Transit is a relatively new concept, and many potential projects have not reached the point of being ready for funding consideration because many other rail projects are further along in development. As of March 2002, only 1 of the 29 New Starts projects with existing, pending or proposed grant agreements uses Bus Rapid Transit, and 1 of the 5 other projects near approval plans to use Bus Rapid Transit. Some Bus Rapid Transit projects do not fit the exclusive right-of- way requirements of the New Starts Program and thus would not be eligible for funding consideration. FTA also administers a Bus Capital Program with half the funding level of the New Starts Program; however, the existing Bus Capital Program is made up of small grants to a large number of recipients, which limits the program’s usefulness for funding major projects. Although FTA is encouraging Bus Rapid Transit through a Demonstration Program, this program does not provide funding for construction but rather focuses on obtaining and sharing information on projects being pursued by local transit agencies. Eleven Bus Rapid Transit projects are associated with this demonstration program.	The Federal Transportation Administration's (FTA) New Starts Program helps pay for designing and constructing rail, bus, and trolley projects through full funding grant agreements. The Transportation Equity Act for the 21st Century (TEA-21), authorized $6.1 billion in "guaranteed" funding for the New Starts program through fiscal year 2003. Although the level of New Starts funding is higher than ever, the demand for these resources is also extremely high. Given this high demand for new and expanded transit facilities across the nation, communities need to examine approaches that stretch the federal and local dollar yet still provide high quality transit services. Although FTA has been faced with an impending transit budget crunch for several years, it is likely to end the TEA-21 authorization period with $310 million in unused New Starts commitment authority if its proposed fiscal year 2003 budget is enacted. Bus Rapid Transit is designed to provide major improvements in the speed and reliability of bus service through barrier-separated busways, buses on High Occupancy Vehicle Lanes, or improved service on arterial streets. GAO found that Bus Rapid Transit was a less expensive and more flexible approach than Light Rail service because buses can be rerouted more easily to accommodate changing travel patterns. However, transit officials also noted that buses have a poor public image. As a result, many transit planners are designing Bus Rapid Transit systems that offer service that will be an improvement over standard bus service (see GAO-02-603).
In 1986, the United States and the FSM and the RMI entered into the Compact of Free Association. This Compact represented a new phase of the unique and special relationship that has existed between the United States and these island areas since World War II. It also represented a continuation of U.S. rights and obligations first embodied in a U.N. trusteeship agreement that made the United States the Administering Authority of the Trust Territory of the Pacific Islands. The Compact provided a framework for the United States to work toward achieving its three main goals—(1) to secure self-government for the FSM and the RMI, (2) to assure certain national security rights for all the parties, and (3) to assist the FSM and the RMI in their efforts to advance economic development and self-sufficiency. The first two goals have been met through the Compact and its related agreements. The third goal, advancing economic development and self-sufficiency, was to be accomplished primarily through U.S. direct financial payments (to be disbursed and monitored by the U.S. Department of the Interior) to the FSM and the RMI. However, economic self-sufficiency has not been achieved. Although total U.S. assistance (Compact direct funding as well as U.S. programs and services) as a percentage of total government revenue has fallen in both countries (particularly in the FSM), the two nations remain highly dependent on U.S. assistance. In 1998, U.S. funding accounted for 54 percent and 68 percent of FSM and RMI total government revenues, respectively, according to our analysis. This assistance has maintained standards of living that are artificially higher than could be achieved in the absence of U.S. support. Another aspect of the special relationship between the FSM and the RMI and the United States involves the unique immigration rights that the Compact grants. Through the Compact, citizens of both nations are allowed to live and work in the United States as “nonimmigrants” and can stay for long periods of time, with few restrictions. Further, the Compact exempts FSM and RMI migrating citizens from meeting U.S. passport, visa, and labor certification requirements. Unlike economic assistance provisions, the Compact’s migration provisions are not scheduled to expire in 2003. In recognition of the potential adverse impacts that Hawaii and nearby U.S. commonwealths and territories could face as a result of an influx in migrants, the Congress authorized Compact impact payments to address the financial impact of migrants on Guam, Hawaii, and the CNMI. Finally, the Compact served as the vehicle to reach a full settlement of all compensation claims related to U.S. nuclear tests conducted on Marshallese atolls between 1946 and 1958. In a Compact-related agreement, the U.S. government agreed to provide $150 million to create a trust fund. While the Compact and its related agreements represented the full settlement of all nuclear claims, it provided the RMI the right to submit a petition of “changed circumstance” to the U.S. Congress requesting additional compensation. The RMI government submitted such a petition in September 2000. Under the most recent (May 2002) U.S. proposals to the FSM and the RMI, new congressional authorizations of approximately $3.4 billion would be required for U.S. assistance over a period of 20 years (fiscal years 2004 through 2023). The share of new authorizations to the FSM would be about $2.3 billion, while the RMI would receive about $1.1 billion (see table 1). This new assistance would be provided to each country in the form of annual grant funds, extended federal services (that have been provided under the original Compact but are due to expire in 2003), and contributions to a trust fund for each country. (Trust fund earnings would become available to the FSM and the RMI in fiscal year 2024 to replace expiring annual grants.) For the RMI, the U.S. proposal also includes funding to extend U.S. access to Kwajalein Atoll for U.S. military use from 2017 through 2023. In addition to new authorized funding, the U.S. government will provide (1) continuing program assistance amounting to an estimated $1.1 billion to the two countries over 20 years and (2) payments previously authorized of about $189 million for U.S. access to Kwajalein Atoll in the RMI through 2016. If new and previous authorizations are combined, the total U.S. cost for all Compact-related assistance under the current U.S. proposals would amount to about $4.7 billion over 20 years, not including costs for administration and oversight that are currently unknown. Under the U.S. proposals, annual grant amounts to each country would be reduced over time, while annual U.S. contributions to the trust funds would increase by the grant reduction amount. Annual grant assistance to the FSM would fall from a real value of $76 million in fiscal year 2004 to a real value of $53.2 million in fiscal year 2023. Annual grant assistance to the RMI would fall from a real value of $33.9 million to a real value of $17.3 million over the same period. This decrease in grant funding, combined with FSM and RMI population growth, would also result in falling per capita grant assistance over the funding period – particularly for the RMI (see fig. 1). The real value of grants per capita to the FSM would decrease from an estimated $684 in fiscal year 2004 to an estimated $396 in fiscal year 2023. The real value of grants per capita to the RMI would fall from an estimated $623 in fiscal year 2004 to an estimated $242 in fiscal year 2023. In addition to grants, however, both countries would receive federal programs and services, and the RMI would receive funding related to U.S. access to Kwajalein Atoll. The U.S. proposals are designed to build trust funds that earn a rate of return such that trust fund yields can replace grant funding in fiscal year 2024 once annual grant assistance expires. The current U.S. proposals do not address whether trust fund earnings should be sufficient to cover expiring federal services or create a surplus to act as a buffer against years with low or negative trust fund returns. At a 6 percent rate of return (the Department of State’s assumed rate) the U.S. proposal to the RMI would meet its goal of creating a trust fund that yields earnings sufficient to replace expiring annual grants, while the U.S. proposal to the FSM would not cover expiring annual grant funding, according to our analysis. Moreover, at 6 percent, the U.S. proposal to the RMI would cover the estimated value of expiring federal services, while the U.S. proposal to the FSM clearly would not. At a 6 percent return, neither proposed trust fund would generate buffer funds. If an 8.2 percent average rate of return were realized, then the RMI trust fund would yield earnings sufficient to create a buffer, while the FSM trust fund would yield earnings sufficient to replace grants and expiring federal services. I now turn my attention to provisions in the current U.S. proposals designed to provide improved accountability over, and effectiveness of, U.S. assistance. This is an area where we have offered several recommendations in the past 2 years. As I discuss key proposed accountability measures, I will note whether our past recommendations have been addressed where relevant. In sum, many of our recommendations regarding future Compact assistance have been addressed with the introduction of strengthened accountability measures in the current U.S. proposals. However, specific details regarding how some key accountability provisions would be carried out will be contained in separate agreements that remain in draft form or have not yet been released. The following summary describes key accountability measures included in the U.S. proposals that address past GAO recommendations: The proposals require that grants would be targeted to priority areas such as health, education, and infrastructure. Further, grant conditions normally applicable to U.S. state and local governments would apply to each grant. Such conditions could address areas such as procurement and financial management standards. U.S. proposals also state that the United States may withhold funds for violation of grant terms and conditions. We recommended in a 2000 report that the U.S. government negotiate provisions that would provide future Compact funding through specific grants with grant requirements attached and allow funds to be withheld for noncompliance with spending and oversight requirements. However, identification of specific grant terms and conditions, as well as procedures for implementing and monitoring grants and grant requirements and withholding funds, will be addressed in a separate agreement that has not yet been released. The U.S. proposals to the FSM and the RMI list numerous items for discussion at the annual consultations between the United States and the two countries. Specifically, the proposals require that consultations address single audits and annual reports; evaluate progress made for each grant; discuss the coming fiscal year’s grant; discuss any management problems associated with each grant; and discuss ways to respond to problems and otherwise increase the effectiveness of future U.S. assistance. In the previously cited report, we recommended that the U.S. government negotiate an expanded agenda for future annual consultations. Further, the proposals give the United States control over the annual review process: The United States would appoint three members to the economic review board, including the chairman, while the FSM or the RMI would appoint two members. Recommendations from our 2000 report are being addressed regarding other issues. The U.S. proposals require U.S. approval before either country can pledge or issue future Compact funds as a source for repaying debt. The proposals also exclude a “full faith and credit” pledge that made it impracticable to withhold funds under the original Compact. In addition, the U.S. proposals provide specific uses for infrastructure projects and require that some funds be used for capital project maintenance. We also recommended that Interior ensure that appropriate resources are dedicated to monitoring future assistance. While the U.S. proposals to the two countries do not address this issue, an official from the Department of the Interior’s Office of Insular Affairs has informed us that his office has tentative plans to post five staff in a new Honolulu office. Further, Interior plans to bring two new staff on board in Washington, D.C., to handle Compact issues, and to post one person to work in the RMI (one staff is already resident in the FSM). A Department of State official stated that the department intends to increase its Washington, D.C., staff and overseas contractor staff but does not have specific plans at this point. Trust fund management is an area where we have made no recommendations, but we have reported that well-designed trust funds can provide a sustainable source of assistance and reduce long-term aid dependence. The U.S. proposals would grant the U.S. government control over trust fund management: The United States would appoint three trustees, including the chairman, to a board of trustees, while the FSM or the RMI would appoint two trustees. The U.S. Compact Negotiator has stated that U.S. control would continue even after grants have expired and trust fund earnings become available to the two countries; in his view, “the only thing that changes in 20 years is the bank,” and U.S. control should continue. He has also noted that it may be possible for the FSM and the RMI to assume control over trust fund management at some as yet undetermined point in the future. Finally, while the departments of State and the Interior have addressed many of our recommendations, they have not implemented our accountability and effectiveness recommendations in some areas. For example, our recommendation that annual consultations include a discussion of the role of U.S. program assistance in economic development is not included in the U.S. proposals. Further, the departments of State and the Interior, in consultation with the relevant government agencies, have not reported on what program assistance should be continued and how the effectiveness and accountability of such assistance could be improved. Finally, U.S. proposals for future assistance do not address our recommendation that consideration should be given to targeting future health and education funds in ways that effectively address specific adverse migration impact problems, such as communicable diseases, identified by Guam, Hawaii, and the CNMI. I would also like to take just a moment to cite proposed U.S. changes to the Compact’s immigration provisions. These provisions are not expiring but have been targeted by the Department of State as requiring changes. I believe it is worth noting these proposed changes because, to the extent that they could decrease migration rates (a shift whose likelihood is unclear at this point), our current per capita grant assistance figures are overstated. This is because our calculations assume migration rates that are similar to past history and so use lower population estimates than would be the case if migration slowed.	The United States entered into the Compact of Free Association with the Federated States of Micronesia (FSM) and the Republic of the Marshall Islands (RMI) In 1986. The Compact has provided U.S. assistance to the FSM and the RMI in the form of direct funding as well as federal services and programs. The Compact allows for migration from both countries to the United States and established U.S. defense rights and obligations in the region. Provisions of the Compact that deal with economic assistance were scheduled to expire in 2001; however, they will remain in effect for up to 2 additional years while the affected provisions are renegotiated. Current U.S. proposals to the FSM and the RMI to renew expiring assistance would require Congress to approve $3.4 billion in new authorizations. The proposals would provide decreasing levels of annual grant assistance over a 20-year term. Simultaneously, the proposals would require building up a trust fund for each country with earnings that would replace grants once those grants expire. The U.S. proposals include strengthened accountability measures, though details of some key measures remain unknown. The proposals have addressed many, but not all, recommendations that GAO made in past reports regarding assistance accountability.
Since becoming independent in 1991, Armenia has made unsteady progress toward democratization, according to many international observers. These observersâincluding international organizations such as the Council of Europe (COE), the Organization for Security and Cooperation in Europe (OSCE), and the European Union (EU), and some governments including the United Statesâhad viewed Armenia's previous legislative and presidential elections in 2003 as not free and fair. These observers cautioned the Armenian government that the conduct of the May 2007 legislative election would be taken into account in future relations. Significant events in the run-up to the May 2007 legislative race included constitutional amendments approved in November 2005 which strengthened the role of the legislature, including giving it responsibility for appointing some judicial and media regulatory personnel and a voice in appointing a prime minister. Amendments to the election law increased the legislative term from four to five years and restricted voting by citizens who were outside the country at the time of elections. In May 2006, the Rule of Law Party left the ruling government coalition and joined the opposition, leaving the remaining coalition membersâthe Republican Party of Armenia and the Armenian Revolutionary Federationâin a strengthened position. A new party formed in 2004, the Prosperous Armenia Party, led by businessman Gagik Tsarukyan, seemed to gain substantial popularity. In March 2007, Prime Minister Margoyan died, and President Kocharyan appointed then-Defense Minister Serzh Sargisyan as the new prime minister. Sargisyan's leadership of the Republican Party of Armenia placed him at the forefront of the party's campaign for seats. The Central Electoral Commission (CEC) of Armenia followed an inclusive policy and registered 23 parties and one electoral bloc (Impeachment) on April 4 for the proportional part of the legislative election. In the constituency races, the CEC registered 119 candidates. In seven constituencies, candidates ran unopposed. Campaigning began on April 8 and ended on May 10. The Pan-Armenian National Movement (the party of former president Levon Ter-Petrossyan) dropped out in late April and called for other opposition parties to follow suit to reduce the number of such parties competing for votes. Another formerly prominent party, the National Democratic Union headed by Vazgen Manukyan, refused to take part in what it claimed would be a fraudulent election. The political campaign was mostly calm. Exceptions included explosions at offices of the Prosperous Armenia Party on April 11, the arrest of two members of the opposition Civic Disobedience Movement on money laundering charges on May 7, and the use of police force against marchers from the Impeachment bloc on May 9, which resulted in some injuries. Armenian media reported that Kocharyan accused Artur Baghdasaryan, the head of the Rule of Law Party, of "betrayal" for allegedly discussing with a British diplomat how the West might critique the election. Under the electoral law, the parties and candidates received free air time for campaign messages. Except for these opportunities, the main public and private television channels mostly covered pro-government party campaigning, and private billboard companies mostly sold space to these parties. The public radio station appeared editorially balanced. Positive or neutral reports dominated in the media, according to OSCE/COE/EU election observers. Most campaigning appeared to stress personalities rather than programs, according to many observers. To the extent issues were discussed, the focus was largely on domestic concerns such as rural development, pensions, education, jobs, and healthcare. The CEC reported that almost 1.4 million of 2.3 million eligible voters turned out (about 60%). The Republican Party of Armenia gained more seats than it won in the last legislative election. The Prosperous Armenia Party failed to get as many votes as expected. It also was surprising that the United Labor Party failed to gain seats. The opposition parties (Rule of Law and Heritage) won 16 seats, fewer than the opposition held in the previous legislature, although parties considered oppositionist received about one-fourth of the total popular vote. While hailing the election as "free, fair, and transparent," Kocharyan on May 14 reportedly pledged that "shortcomings and violations, which took place during the elections, will be thoroughly studied in order to take necessary measures and re-establish legality," a pledge reiterated to the OSCE by Sarkisyan on May 22. According to the preliminary conclusions made by observers from the OSCE, COE, and the EU, the legislative elections "demonstrated improvement and were conducted largely in accordance with ... international standards for democratic elections." They praised an inclusive candidate registration process, dynamic campaigning in a permissive environment, extensive media coverage, and a calm atmosphere in polling places. However, they raised some concerns over pro-government party domination of electoral commissions, the low number of candidates in constituency races, and inaccurate campaign finance disclosures. Observers also reported a few instances of voters apparently using fraudulent passports for identification, of vote-buying, and of individuals voting more than once. In a follow-on assessment, the OSCE/COE/EU observers raised more concerns that vote-counting problems could harm public confidence in the results. The inability of opposition parties to form a coalition like the former Justice Bloc in 2003 harmed their chances by splitting the vote. The failure of some formerly prominent opposition parties to win seats raises questions of their future viability. These include the People's Party of Armenia (led by Demirchyan, the runner-up in the 2003 presidential election), the National Unity Party (led by Artashes Geghamyan), and the Republic Party (led by Aram Sargisyan). While the pro-government Republican Party of Armenia and Prosperous Armenia Party argued that the losing parties sealed their own marginalization because they were not attractive to the electorate, the losing parties responded that they were outspent and hurt by voter apathy and electoral fraud. At a rally on May 18, the two opposition parties that won seats in the legislature (Rule of Law and Heritage) joined the Impeachment bloc and other opposition parties to call on the Constitutional Court to void the election. The Pan-Armenian National Movement, which had dropped out the race, issued a statement alleging that sophisticated methods had been used to rig the vote. Addressing such accusations, CEC spokesperson Tsovinar Khachatrian reportedly gaveÂ assurances that the vote count and results were "normal." She stated that the CEC had received only seven complaints, and that recounts had resulted in "no essential changes in the results." Armenian media reported on May 21 that four cases had resulted in criminal charges, but only one involved the falsification of the election results by polling place workers. The Impeachment bloc and other opposition parties held more rallies on May 25 and June 1 to demand a new election. Since President Kocharyan is constitutionally limited to two terms, the parties showing well in the legislative election are expected to be best poised to put forth their candidates for a presidential election in 2008. The Republican Party of Armenia's strong showing places Prime Minister Sargisyan as the front runner for president if he chooses to run. According to analyst Emil Danielyan, opposition parties may counter by appealing to the cynicism of many Armenians about the electoral results and by urging them to support alternative presidential candidates. Some observers suggest that the opposition parties may again fail to cooperate and instead put forward multiple presidential candidates, fracturing the opposition vote. The election also may be more significant than previous ones because the legislature has been given enhanced constitutional powers, according to some observers. In calling for the election of pro-government legislators, Kocharyan warned on May 10 that "it is important that the new parliament and the president cooperate and that these two state institutions do not confront each other," or otherwise the country's citizens will suffer. Since the Republican Party of Armenia increased its number of seats to a near-majority in the legislature and the opposition parties lost seats, it is unlikely that the domestic and foreign policies of the government will change greatly, according to many observers. There conceivably could be some changes in some policies, however, as the Republican Party of Armenia seeks to form a coalition government. Reasons for the Republican Party of Armenia to seek a coalition rather than form a one-party government include increasing its legislative support and influence in the run-up to the presidential race. Other spurs to forming such a coalition may include the plans by the Rule of Law and Heritage parties to use their presence in the legislature to challenge government policies, rather than to repeat the failed past opposition strategy of boycotting the legislature. Such plans may reinforce Kocharyan's reported view that these parties are not "constructive" opposition parties and that they need to be countered by a legislative coalition. Some observers warn that Kocharyan, as a lame-duck president, may become less influential in Armenian politics and that he and Sargisyan could come to clash on personnel and policy issues in coming months. Other observers suggest that both leadersâwho are comrades-in-arms of the conflict over Azerbaijan's breakaway region of Nagorno Karabakhâwill cooperate to achieve their future political goals, which conceivably might include a position for Kocharyan in a political party or a potential Sargisyan administration. Kocharyan and Sargisyan may cooperate in negotiations with Azerbaijan to settle the Nagorno Karabakh conflict, possibly because a Sargisyan administration might have responsibility for implementing a potential settlement. Another possible clash between Sargisyan and Tsarukyan may be mitigated to some degree through power-sharing negotiations on forming a coalition government. Russia appeared interested in the outcome of the election by stressing its good relations with the existing Armenian government. During the height of campaigning in April, the Russian Minister of Foreign Affairs, the First Deputy Prime Minister, and other high-level officials visited Armenia. A group of election observers from the Commonwealth of Independent States judged the election as "free and fair." European institutions such as the OSCE, COE and the EU appeared poised to accept the electoral outcome as being sufficiently progressive to bolster their assistance and other ties to Armenia, according to some initial statements. The EU Council President, German Chancellor Anela Merkel, seemed to typify this stance when she stated that the elections were "on the whole, conducted fairly, freely and largely in accordance with the international commitments which Armenia had entered into," and that she was "very much in favor of intensifying cooperation with Armenia. This would breathe new life into the European Neighborhood Policy and the Action Plan agreed under it." The Bush Administration generally viewed the Armenian legislative election as marking progress in democratization. The U.S. State Department reported on May 14 that "all and all, [the Armenian election was] an improvement over past elections; though certainly if you look at what the observers said, it did not fully meet international standards." While praising the electoral progress, the State Department also urged the Armenian government to "aggressively investigate allegations that are there of electoral wrongdoing and prosecute people in accordance with Armenian law." Armenia's election may rank it with Georgia as making progress in democratization in the South Caucasus region, according to some observers. Under this view, democratization facilitates cooperation, so a more democratic Armenia might be able to deepen ties with nearby NATO members in the wider Black Sea region. In the Caspian Sea region, it might serve as an exemplar to local democracy advocates. Progress in elections is one condition for continued Millennium Challenge Account assistance (MCA; set up in 2004 to support countries that are dedicated to democratization and the creation of market economies). When Armenia and the United States concluded a "compact" for $235.65 million in MCA assistance in March 2006, Armenia's low standing on "political rights" as scored by the MCA was raised as a problem that needed to be addressed. Following the latest election, Armenia's previous "failing" score on political rights may be higher (if initial election assessments do not fundamentally change), bolstering its qualifications as an MCA "co-partner in development," according to some observers. Many in Congress have supported democratization efforts in Armenia as indicated by hearings and legislation, including by backing $225 million in cumulative budgeted foreign assistance for democratization (about 13 percent of all aid to Armenia) from FY1992 through FY2006. After the most recent election, Representatives Frank Pallone and Joe Knollenbergâco-chairs of the Congressional Armenia Caucusâsent a letter on May 18, 2007, to President Kocharyan and Prime Minister Sargisyan congratulating Armenia on its "free and fair election cycle." On the House floor, Representative Pallone hailed the "first positive assessment of an election" in Armenia since its independence and stated that it would enhance U.S.-Armenia ties and Armenia's international reputation. He also stated that the election demonstrated the effectiveness of U.S. democratization aid and called on Millennium Challenge to "fully fund its compact with Armenia in an expeditious manner."	This report discusses the campaign and results of Armenia's May 12, 2007, legislative election and examines implications for Armenian and U.S. interests. Many observers viewed the election as marking some democratization progress. The Republican Party of Armenia increased its number of seats to a near-majority and termed the results as a mandate on its policies. The party leader, Prime Minister Serzh Sargisyan, was widely seen as gaining stature as a possible candidate in the upcoming 2008 presidential election. This report may be updated. Related reports include CRS Report RL33453, Armenia, Azerbaijan, and Georgia: Political Developments and Implications for U.S. Interests , by [author name scrubbed].
The level of pay for congressional staff is a source of recurring questions among Members of Congress, congressional staff, and the public. Members of the House of Representatives typically set the terms and conditions of employment for staff in their offices. This includes job titles, duties, and rates of pay, subject to a maximum level, and resources available to them to carry out their official duties. There may be interest in congressional pay data from multiple perspectives, including assessment of the costs of congressional operations; guidance in setting pay levels for staff in Member offices; or comparison of congressional staff pay levels with those of other federal government pay systems. Publicly available resources do not provide aggregated congressional staff pay data in a readily retrievable form. The most recent staff compensation report was issued in 2010, which, like previous compensation reports, relied on anonymous, self-reported survey data. Pay information in this report is based on the House Statement of Disbursements (SOD), published quarterly by the Chief Administrative Officer, as collated by LegiStorm, a private entity that provides some congressional data by subscription. Data in this report are based on official House reports, which afford the opportunity to use consistently collected data from a single source. Additionally, this report provides annual data, which allows for observations about the nature of House Member staff compensation over time. This report provides pay data for 12 staff position titles that are typically used in House Members' offices. The positions include the following: Caseworker Chief of Staff District Director Executive Assistant Field Representative Legislative Assistant Legislative Correspondent Legislative Director Office Manager Press Secretary Scheduler Staff Assistant House Member staff pay data for the years 2001-2015 were developed based on a random sampling of staff for each position in each year. In order to be included, House staff had to hold a position with the same job title in the Member's office for the entire calendar year. For each year, the SOD reports pay data for five time periods: January 1 and 2; January 3-March 31; April 1-June 30; July 1-September 30; and October 1-December 31. The aggregate pay of those five periods equals the annual pay of a congressional staff member. For each year, 2001-2015, a random sample of 45 staff for each position, and who did not receive pay from any other congressional employing authority, was taken. Every recorded payment ascribed to those staff for the calendar year is included. Data collected for this report may differ from an employee's stated annual salary due to the inclusion of overtime, bonuses, or other payments in addition to base salary paid in the course of a year. For some positions, it was not possible to identify 45 employees who held that title for the entire year. In circumstances when data for 18 or fewer staff were identified for a position, this report provides no data. Generally, data provided in this report are based on no more than three observations per Member office per year, and only one per office per position each year. Pay data for staff working in Senators' offices are available in CRS Report R44324, Staff Pay Levels for Selected Positions in Senators' Offices, FY2001-FY2014 . Data describing the pay of congressional staff working in House and Senate committee offices are available in CRS Report R44322, Staff Pay Levels for Selected Positions in House Committees, 2001-2014 , and CRS Report R44325, Staff Pay Levels for Selected Positions in Senate Committees, FY2001-FY2014 , respectively. There may be some advantages to relying on official salary expenditure data instead of survey findings, but data presented here are subject to some challenges that could affect the findings or their interpretation. Some of the concerns include the following: There is a lack of data for first-term Members in the first session of a Congress. Authority to use the Member Representational Allowance (MRA) for the previous year expires January 2, and new MRA authority begins on January 3. As a consequence, no data are available for first-term Members of the House in the first session of a Congress. Pay data provide no insight into the education, work experience, position tenure, full- or part-time status of staff, or other potential explanations for levels of compensation. Data do not differentiate between staff based in Washington, DC, district offices, or both. Member offices that do not utilize any of the 12 job position titles or their variants, or whose pay data were not reported consistently, are excluded. Potential differences could exist in the job duties of positions with the same title. Aggregation of pay by job title rests on the assumption that staff with the same title carry out similar tasks. Given the wide discretion congressional employing authorities have in setting the terms and conditions of employment, there may be differences in the duties of similarly titled staff that could have effects on their levels of pay. Tables in this section provide background information on House pay practices, comparative data for each position, and detailed pay data and visualizations for each position. Table 1 provides the maximum payable rates for House Member staff since 2001 in both nominal (current) and constant 2016 dollars. Constant dollar calculations throughout the report are based on the Consumer Price Index for All Urban Consumers (CPI-U) for various years, expressed in constant, 2016 dollars. Table 2 provides the available cumulative percentage changes in pay in constant 2016 dollars for each of the 12 positions, Members of Congress, and salaries paid under the General Schedule in Washington, DC, and surrounding areas. Table 3 - Table 14 provide tabular pay data for each House Member office staff position. The numbers of staff for which data were counted are identified as observations in the data tables. Graphic displays are also included, providing representations of pay from three perspectives, including the following: a line graph showing change in pay, 2001-2015, in nominal (current) and constant 2016 dollars; a comparison, at 5-, 10-, and 15- year intervals from 2015, of the cumulative percentage change in median pay for that position to changes in pay, in constant 2016 dollars, of Members of Congress and federal civilian workers paid under the General Schedule in Washington, DC, and surrounding areas; and distributions of 2015 pay in 2016 dollars, in $10,000 increments. Between 2011 and 2015, the change in median pay, in constant 2016 dollars, increased for one position, office manager, by 0.22%, and decreased for 11 staff positions, ranging from a -3.53% decrease for field representatives to a -25.83% decrease for executive assistants. This may be compared to changes over the same period to Members of Congress, -5.10%, and General Schedule, DC, -3.19%. Between 2006 and 2015, the change in median pay, in constant 2016 dollars, decreased for all 12 staff positions, ranging from a -1.99% decrease for legislative directors to a -24.82% decrease for executive assistants. This may be compared to changes over the same period to Members of Congress, -10.41%, and General Schedule, DC, -0.13%. Between 2001 and 2015, the change in median pay, in constant 2016 dollars, ranged from a 4.27% increase for chiefs of staff to a -23.35% decrease for executive assistants. Of the 12 positions, one saw a pay increase, while 11 saw declines. This may be compared to changes over the same period to the pay of Members of Congress, -10.40%, and General Schedule, DC, 7.36%.	The level of pay for congressional staff is a source of recurring questions among Members of Congress, congressional staff, and the public. There may be interest in congressional pay data from multiple perspectives, including assessment of the costs of congressional operations; guidance in setting pay levels for staff in Member offices; or comparison of congressional staff pay levels with those of other federal government pay systems. This report provides pay data for 12 staff position titles that are typically used in House Members' offices. The positions include the following: Caseworker, Chief of Staff, District Director, Executive Assistant, Field Representative, Legislative Assistant, Legislative Correspondent, Legislative Director, Office Manager, Press Secretary, Scheduler, and Staff Assistant. Tables provide tabular pay data for each House Member office staff position. Graphic displays are also included, providing representations of pay from three perspectives, including the following: a line graph showing change in pay, 2001-2015; a comparison, at 5-, 10-, and 15-year intervals from 2015, of the cumulative percentage change in pay of that position to changes in pay of Members of Congress and salaried federal civilian workers paid under the General Schedule in Washington, DC, and surrounding areas; and distributions of 2015 pay in $10,000 increments. In the past five years (2011-2015), the change in median pay, in constant 2016 dollars, increased for one position, office manager, by 0.22%, and decreased for 11 staff positions, ranging from a -3.53% decrease for field representatives to a -25.83% decrease for executive assistants. This may be compared to changes over the same period to Members of Congress, -5.10%, and General Schedule, DC, -3.19%. Pay data for staff working in Senators' offices are available in CRS Report R44324, Staff Pay Levels for Selected Positions in Senators' Offices, FY2001-FY2014. Data describing the pay of congressional staff working in House and Senate committee offices are available in CRS Report R44322, Staff Pay Levels for Selected Positions in House Committees, 2001-2014, and CRS Report R44325, Staff Pay Levels for Selected Positions in Senate Committees, FY2001-FY2014, respectively. Information about the duration of staff employment is available in CRS Report R44683, Staff Tenure in Selected Positions in House Committees, 2006-2016, CRS Report R44685, Staff Tenure in Selected Positions in Senate Committees, 2006-2016, CRS Report R44682, Staff Tenure in Selected Positions in House Member Offices, 2006-2016, and CRS Report R44684, Staff Tenure in Selected Positions in Senators' Offices, 2006-2016.
The federal Lifeline program, established in 1985 by the Federal Communications Commission (FCC), assists qualifying low-income consumers to gain access to and remain on the telecommunications network. The program assists eligible individuals in paying the reoccurring monthly service charges associated with telecommunications usage. While initially designed to support traditional landline service, in 2005 the FCC expanded the program to cover either a landline or a wireless/mobile option. On March 31, 2016, the FCC adopted an Order (2016 Order or Order) to once again expand the program to make broadband an eligible service. The Lifeline program is available to eligible low-income consumers in every state, territory, commonwealth, and on tribal lands. The Universal Service Administrative Company (USAC), an independent not-for-profit corporation, established by the FCC in 1997, is the designated administrator of the Universal Service Fund (USF) and the related support programs of which the Lifeline Program is a part. USAC administers the USF programs on behalf of the FCC. As an administrative and oversight entity, USAC does not set or advocate policy, or interpret statutes, policies, or FCC rules. The Lifeline program provides a discount in most cases of up to $9.25 per month, for eligible households to help offset the costs associated with use of the telecommunications network. The program provides a subsidy for network access for one line, either a landline or wireless/mobile option, per eligible household and does not provide a subsidy for devices (i.e., handsets or customer premises equipment). The 2016 Order has expanded the scope of the program to provide subsidies for broadband adoption. The Order provides support for stand-alone mobile or fixed broadband, as well as combined bundles of voice and broadband, and sets minimum broadband and mobile voice standards for service offerings. The Order phases down and eventually eliminates support, in most cases, for stand-alone voice services. The one line per eligible household limitation and the prohibition on support for devices remain. Most providers that offer a prepaid wireless option currently offer a wireless phone to the subscriber at no charge. The cost of this device is not covered under the Lifeline program but is borne by the designated provider. Misinformation connecting the program to payment for a "free phone" has resulted in numerous queries. Yes. There are some differences in the program for those living on tribal lands. Tribal lands are defined as any federally recognized Indian Tribe's reservation, pueblo, or colony, including former reservations in Oklahoma, Alaska, Native regions, Hawaiian Home Lands, or Indian Allotments. For those providing Lifeline service to eligible consumers living on tribal lands the Lifeline program subsidy is $34.25 ($9.25 in general support plus additional support of up to $25 per month). In addition assistance programs unique to those living on tribal lands (e.g., Bureau of Indian Affairs general assistance [BIA general assistance]) may also be used to certify subscriber eligibility. Subscribers living on tribal lands are also eligible for additional assistance under the FCC's Link Up Program. This program, while established by the FCC in 1987 for the general eligible population, was restricted in 2012 solely to those residing on tribal lands. The Link Up program assists eligible subscribers to pay the costs associated with the initiation of service and provides a one-time discount of up to $100 on the initial installation/activation of the service for the primary residence. Under the program, subscribers may pay any remaining amount on a deferred schedule interest free. A subscriber may be eligible for Link Up for a second or subsequent time only when moving to a new primary residence. Link Up support is not available to all providers offering service, but only to those who are building out infrastructure on tribal lands. Therefore, eligible subscribers residing on tribal lands may receive a monthly subsidy of up to $34.25 in Lifeline support plus a one-time initiation of service discount of up to $100 for Link Up support. To participate in the program, a consumer must either have an income that is at or below 135% of the federal poverty guidelines or be enrolled in certain qualifying needs-based programs (e.g., Medicaid). USAC has an eligibility pre-screening tool available which may assist consumers in determining eligibility. Once enrolled in the program, participants are required to verify their eligibility on a yearly basis. If a program recipient becomes ineligible for the program (e.g., due to an increase in income or de-enrollment in a qualifying program) the recipient is required to contact the provider and de-enroll from the program. Failure to de-enroll can lead to penalties and/or permanent disbarment from the program. Consumers can apply for Lifeline by contacting a Lifeline program provider in his or her state or through the state-designated public service commission. To locate a state-designated provider the consumer may call USAC's toll free number (1-888-641-8722) or access USAC's website. The National Association of Regulatory Utility Commissioners (NARUC) provides a listing of contact information for state public utility commissions. The provider, selected by the enrollee, will provide a Lifeline application form, upon request, to complete. Information required includes name, address, date of birth, and the last four digits of the enrollee's social security or tribal identification number. If applying based on household income eligibility the enrollee will be required to show proof of income documentation. If applying based on program eligibility the enrollee will be required to show documentation proving program participation. (Providers are required to keep documentation demonstrating subscriber eligibility.) The provider will process the application form and enrollee information will be entered into a nationwide USAC database to verify enrollee identity and to verify that the household is not currently receiving a Lifeline program discount. The 2016 Order establishes an independent National Lifeline Eligibility Verifier (National Verifier), under the auspices of USAC, that removes the responsibility of determining Lifeline subscriber eligibility from service providers. The National Verifier will launch in six states, Colorado, Mississippi, Montana, New Mexico, Utah, and Wyoming, in December 2017, with use required for all verifications within those states by March 13, 2018. By December 31, 2018, 20 more states will join the National Verifier. By December 31, 2019, the FCC expects that all states and territories will be required to use the National Verifier to determine Lifeline eligibility. Once enrolled, participants must be recertified annually to confirm eligibility. Recertification can be done by the provider or the provider may elect for USAC to undertake the recertification on its behalf. If the provider chooses to recertify their own enrollees they may query databases that confirm that an enrollee meets program-based or income-based eligibility requirements or the provider may send the enrollee a yearly recertification letter. The letter requires the enrollee to certify that he or she is still eligible to receive the discount, and that no other household member is receiving a Lifeline discount. If no longer eligible, participants must de-enroll or will be removed from the program. Lifeline benefits are not transferable, even to other qualifying subscribers. If an enrollee is still eligible but does not meet the recertification deadline, the discount will be lost and the participant must re-enroll to regain the discount. Those enrolled under a pre-paid wireless option where there is no charge may be de-enrolled for nonusage. If the participant either does not initiate or use the service for 30 consecutive days the provider is required to automatically de-enroll the participant 15 days from notification. This gives the participant a total of 45 days in which to demonstrate usage. No. Enrollment is limited to one discount for either a landline or wireless connection, per household. A household is defined for Lifeline program eligibility as any individual, or group of individuals, who live together at the same address, that function as a single economic unit (i.e., share income and household expenses). All adult individuals (e.g., husband, wife, domestic partner, another related or unrelated adult) living at the same address that share expenses (e.g., food, living expenses) and shares income (e.g., salary, public assistance benefits, social security payments) would be considered part of a single household. If any one of these persons is enrolled in the Lifeline program no other member of that household is eligible. However it is possible that more than one household can reside in a single dwelling if they are separate economic units. Any violation of the one-per-household rule will result in de-enrollment from the program and may subject the enrollee to criminal and/or civil penalties. Providers must be certified as "eligible telecommunications carriers" to participate in the Lifeline program. That certification is given by the state or in some cases the FCC. In most cases the state public utility regulator establishes certification criteria and approves providers for participation in the program. However, for those providing service on tribal lands and in those cases where a state utility regulator does not have jurisdiction, certification is done by the FCC. A third alternative certification path for federal Lifeline Broadband Providers (LBPs), a subset of eligible telecommunications carriers, has been established as a result of the 2016 Order. Under this certification path LBP's may receive a designation from FCC staff to solely provide broadband Lifeline services to eligible subscribers and receive subsidies under the Federal Lifeline program. The LBP designation process is an alternative to the ETC process which remains in place. However, this federal designation process is currently not in use. Yes. A recipient may transfer the discount to another provider, but no more than once every 60 days for voice services and 12 months for data services. To transfer to a new provider the recipient must contact a provider that participates in the program and ask them to transfer the benefit to them. The recipient must provide selected information to verify identity (e.g., name, date of birth, address, last four digits of his or her social security number) as well as give consent acknowledging that the benefit with the previous provider will be lost and that the new provider has explained that there may not be more than one benefit per household. In most cases no service disruption should occur. Telecommunications carriers that provide interstate service and certain other providers of telecommunications services are required to contribute to the federal Universal Service Fund (USF) based on a percentage of their end-user interstate and international telecommunications revenues. These companies include wireline telephone companies, wireless telephone companies, paging service providers, and certain Voice over Internet Protocol (VoIP) providers. The USF (and its related programs including Lifeline) receives no federal monies. Some consumers may notice a "Universal Service" line item among their telephone charges. This line item appears when a company choses to recover its USF contributions directly from its subscribers. The FCC permits, but does not require, this charge to be passed on directly to subscribers. Each company makes a business decision about whether and how to assess charges to recover its universal service obligations. The charge, however, cannot exceed the amount owed to the USF by the company. No. The Lifeline program does not have a designated funding cap, or ceiling, but the 2016 Order does establish a budget-type mechanism. Funding for the Lifeline program can increase, decrease, or remain the same depending on program need as determined on a quarterly basis by USAC. According to USAC, authorized support for the Lifeline program peaked in 2012 at $2.18 billion and has continued to decline totaling $1.49 billion in 2015. The 2016 Order has established a nonbinding yearly funding ceiling of $2.25 billion, indexed to inflation. The funding ceiling for the calendar year beginning January 1, 2018, will be $2,279,250,000. The FCC has taken steps, including the following, to combat fraud, waste, and abuse in the Lifeline program: established an annual recertification requirement for participants receiving a Lifeline subsidy. The program requires those enrolled to certify, under penalty, on a yearly basis, that they are still eligible to receive the discount and that no one else in their household is receiving the Lifeline program discount; created a National Lifeline Accountability Database (NLAD) to prevent multiple carriers from receiving support for the same household; established an independent National Eligibility Verifier, under the auspices of USAC, to confirm subscriber eligibility. Prior to this the provider who received the subsidy verified subscriber eligibility; refined the list of federal programs that may be used to validate Lifeline eligibility; revised documentation retention to require providers of Lifeline service to retain documentation demonstrating subscriber eligibility; established minimum service standards for any provider that receives a Lifeline program subsidy; increased the amount and publication of program data; and undertakes enforcement actions against providers and subscribers who have broken program rules, resulting in fines and program disbarment.	The Federal Lifeline Program, established by the Federal Communications Commission (FCC) in 1985, is one of four programs supported under the Universal Service Fund. The Program was originally designed to assist eligible low-income households to subsidize the monthly service charges incurred for voice telephone usage and was limited to one fixed line per household. In 2005 the Program was modified to cover the choice between either a fixed line or a mobile/wireless option. Concern over the division between those who use and have access to broadband versus those who do not, known as the digital divide, prompted the FCC to once again modify the Lifeline program to cover access to broadband. On March 31, 2016, the FCC adopted an Order to expand the Lifeline Program to support mobile and fixed broadband Internet access services on a stand-alone basis, or with a bundled voice service. Households must meet a needs-based criteria for eligibility. The program provides assistance to only one line per household in the form of a monthly subsidy of, in most cases, $9.25. This subsidy solely covers costs associated with network access (minutes of use), not the costs associated with devices, and is given not to the subscriber, but to the household-selected service provider. This subsidy is then in turn passed on to the subscriber. The Lifeline program is available to eligible low-income consumers in every state, territory, commonwealth, and on tribal lands.
The next public inauguration ceremony is to take place on January 21, 2013. The 20 th Amendment to the U.S. Constitution states, "The terms of the President and Vice President shall end at noon on the 20 th day of January ...," but when January 20 falls on a Sunday, following historic precedent, the public ceremony is held on the following Monday. The White House will organize a private swearing-in on January 20. In early 2012, both the Senate and House of Representatives approved S.Con.Res. 35 , a resolution establishing the Joint Congressional Committee on Inaugural Ceremonies (JCCIC), and S.Con.Res. 36 , a resolution authorizing the use of the Capitol Rotunda and Emancipation Hall of the Capitol Visitor Center by the JCCIC. S.Con.Res. 2 in the 113 th Congress reauthorized the committee and the use of the Rotunda, Emancipation Hall, and Capitol Grounds for the inauguration. The local Inauguration Day holiday falls on Monday, January 21, 2013, which is also the legal public holiday for the birthday of Martin Luther King, Jr. (See 5 U.S.C. 6103(c)). According to the Office of Personnel Management (OPM) website, for federal employees who work in the District of Columbia, Montgomery or Prince George's Counties in Maryland, Arlington or Fairfax Counties in Virginia, or the cities of Alexandria or Fairfax in Virginia, Inauguration Day is observed concurrently with the Martin Luther King, Jr., holiday. Federal employees in these areas are not entitled to an in-lieu-of holiday for Inauguration Day. Public Funding In 2009, public funds supported the inaugural swearing-in ceremony, security, maintenance, construction, bleachers, fencing, and cleanup. Determining the total costs of an inauguration, however, is difficult. Appropriated funds used to support inauguration activities can be found in accounts that may not be specifically labeled for inaugural purposes. For example, the Department of Homeland Security (DHS) designates the inauguration as a National Special Security Event (NSSE). As such, funds appropriated by Congress for NSSEs are available for inauguration security even though no specific mention of inaugurations exists in the NSSE statutes. Consequently, determining the total public funding for the inauguration must consider both specific inauguration appropriations and other accounts that might support inauguration activities. In both cases, spending on the inauguration is infrequently identified by name and is therefore difficult to determine with any certainty. For the 2009 inauguration, examples of federal entities that were provided specific authorization to spend appropriated money to support inaugural events include the Architect of the Capitol, which was authorized to spend $3.6 million on Capitol building inaugural support—including building the inauguration platform on the West Front Steps of the Capitol; the Joint Congressional Committee on Inaugural Ceremonies, which was authorized $1.24 million; and the National Park Service, which was authorized to spend $2 million "for security and visitor safety activities related to the Presidential Inaugural Ceremonies." Also, several entities reported using existing funds to support the 2009 inauguration activities. Examples of these included the District of Columbia government, which reported that it spent an estimated $42.98 million on inauguration-related law enforcement, first responders, transportation, and communication, and the Joint Task Force-Armed Forces Inaugural Committee and the Department of Defense, which reported a total cost of $21.6 million for military personnel, operation and maintenance, and procurement. The Presidential Inaugural Committee (PIC) is the privately funded, non-profit, non-governmental, partisan organization that represents the interests of the President-Elect. It is formed after the November election. The PIC plans and executes most of the inaugural activities, which include the opening ceremonies, the inaugural parade, the inaugural balls, inaugural dinners, concerts, and galas. For 2013, the PIC webpage can be found at http://2013pic.org . According to Federal Election Commission (FEC) reports, donations to the 2009 PIC for Barack Obama's inauguration totaled $54,277,443. After total donations refunded were subtracted from total donations accepted, net donations equaled $53,242,568. (See FEC Form 13, "Report of Donations Accepted," filed July 20, 2009, and available on the FEC website at http://images.nictusa.com/cgi-bin/fecimg/?_29934325817+0 ). Following is information on financing of past inaugural festivities from private funding sources only: George W. Bush, 2005, estimated $42.3 million; 2001, estimated $30 million; Bill Clinton, 1997, estimated $29 million (included is the $9 million surplus from the 1993 inauguration); 1993, estimated between $25 million and $30 million; George H. W. Bush, 1989, estimated $30 million; Ronald Reagan, 1985, estimated $20 million; 1981, estimated $16.3 million; Jimmy Carter, 1977, estimated $3.5 million; and Richard Nixon, 1973, estimated $4 million. Historical information on past presidential inaugurations can be found at the Library of Congress website, Presidential Inaugurations: "I Do Solemnly Swear ...," which is a collection of 400 selected items from each of the 65 inaugurations, from George Washington's in 1789 to Barack Obama's in 2009. A wealth of historical information can be found at http://memory.loc.gov/ammem/pihtml/pihome.html , including diaries and letters of Presidents and of those who witnessed the inaugurations; handwritten drafts of inaugural addresses; inaugural-related broadsides; past inaugural tickets and programs; inaugural prints, photographs, and sheet music; facts about the oaths of office, precedents, and notable events; and Bible and scripture passages for each President since George Washington. The PBS Online NewsHour website provides information on the 2009 inauguration. http://www.pbs.org/newshour/indepth_coverage/white_house/inauguration2009/ The Presidential Inaugural—Documentary Photographs website of the Smithsonian Institution provides photographs of recent inaugurals (1985-1997), including photographs of inaugural festivities held at various Smithsonian Museums since 1881. http://photo2.si.edu/inaugural/inau_top/inaugural.html "I Do Solemnly Swear": A Half Century of Inaugural Images from the U.S. Senate Collection features historic engravings that depict inaugural festivities at the Capitol and around Washington, DC, from Franklin Pierce's 1853 inauguration to Theodore Roosevelt's 1905 inauguration. http://www.senate.gov/artandhistory/art/common/image_collection/inauguration_slideshow.htm Texts of the inaugural addresses of U.S. Presidents from George Washington to Barack Obama's inaugural address in 2009 are available at the Avalon Project of the Yale Law School website at http://avalon.law.yale.edu/subject_menus/inaug.asp or the Bartleby.com website at http://www.bartleby.com/124/ . At Bartleby.com, click on "Presidents Not Inaugurated" for brief information on Presidents who were not inaugurated and therefore did not make inaugural addresses: Presidents John Tyler, Millard Fillmore, Andrew Johnson, Chester A. Arthur, and Gerald Ford. The following is basic information on the three major committees that plan and support the various inaugural activities. The Joint Congressional Committee on Inaugural Ceremonies (JCCIC), at http://www.inaugural.senate.gov/ , is responsible for conducting the official swearing-in ceremonies of the President and Vice President at the Capitol and for planning the luncheon in Statuary Hall. This committee also distributes blocks of tickets for the swearing-in ceremony to Members of both houses; Members decide how they wish to distribute the tickets. Tickets are distributed in early January. Historical information concerning the JCCIC and the names of past and current members of the committee are available at the JCCIC website. Also included is a link to "Facts & Firsts," which provides historical information on past presidential inaugurations from George Washington to Barack H. Obama. JCCIC updates can be followed through Twitter- @JCCIC2013 or on its Facebook page at facebook.com/JCCIC. The Presidential Inaugural Committee (PIC), http://www.2013pic.org/ , organizes, plans, and executes most of the inaugural celebration activities, including the National Day of Service, opening ceremonies, inaugural parade, concerts, and inaugural balls. The PIC, which is directly responsible to the newly elected President and is staffed by volunteers, generally from the winning party, was formed shortly after the November 6, 2012 general election. The PIC handles all requests for ball tickets, the parade, and other information for events that it plans. The PIC, with the support of the Joint Task Force-National Capital Region (JTF-NCR), also selects the high school and college bands that participate in the inaugural parade. The JTF-NCR, http://inauguralsupport.mdw.army.mil/inauguration-home , which was established by the Secretary of Defense, continues the tradition of military participation in the presidential inaugurations that dates back to 1789. The JTF-NCR collects and organizes applications from groups and individuals interested in participating in various inaugural events, although the PIC is responsible for choosing the participants. The JTF-NCR asks that organizations wishing to participate in a Presidential Inaugural Parade apply online. The last day to submit an application for participation in the 2013 Presidential Inaugural Parade was November 30, 2012. Boller, Paul F. Presidential Inaugurations . New York: Harcourt, Inc., 2001. Durbin, Louise. Inaugural Cavalcade . New York: Dodd, Mead, 1971. Hurja, E. Edward. History of Presidential Inaugurations . New York: New York Democrat, 1933. The Inaugural Story, 1789-1969 . New York: American Heritage Pub. Co., 1969. Kittler, Glenn D. Hail to the Chief: The Inauguration Days of Our Presidents . Philadelphia: Chilton Books, 1965. Lomask, Milton. " I Do Solemnly Swear ...": The Story of the Presidential Inauguration . New York: Ariel Books, 1966. McKee, Thomas Hudson. Presidential Inaugurations: from George Washington, 1789, to Grover Cleveland, 1893 . Washington, DC: Statistical Pub. Co., 1893. Presidential Inaugurations: A Selected List of References . Washington, DC: Library of Congress, 1960. Humes, James C. My Fellow Americans: Presidential Addresses That Shaped History . New York: Praeger, 1992. The Inaugural Addresses of the Presidents . Ed. with introd. by John Gabriel Hunt. Rev. ed. New York: Gramercy Books, 1997. Newton, Davis . The Presidents Speak: The Inaugural Addresses of the American Presidents from Washington to Clinton . New York: H. Holt and Co., 1994.	On January 20, 2013, President Barack Obama is to be sworn in for his second term. Because January 20 is on a Sunday, however, the ceremonial swearing-in and public inaugural ceremonies will take place on Monday, January 21, 2013. This report responds to a variety of questions relating to the presidential inauguration: legislation concerning the inauguration; inauguration day as a federal holiday; the major costs of the 2009 inauguration; the expenditures of recent inaugural festivities (private funding only provided); historical facts on past presidential inaugurations; the various inaugural committees supporting the inauguration; and historical information on the parade, the swearing-in, and other events.
Has an attorney engaged in unethical conduct when he or she secretly records a conversation? The practice is unquestionably unethical when it is done illegally; its status is more uncertain when it is done legally. The issue is complicated by the fact that the American Bar Association (ABA), whose model ethical standards have been adopted in every jurisdiction in one form or another, initially declared surreptitious recording unethical per se and then reversed its position. Moreover, more than a few jurisdictions have either yet to express themselves on the issue or have not done so for several decades. A majority of the jurisdictions on record have rejected the proposition that secret recording of a conversation is per se unethical even when not illegal. A number endorse a contrary view, however, and an even greater number have yet to announce their position. Federal and state law have long outlawed recording the conversation of another. Most jurisdictions permit recording with the consent of one party to the discussion, although a few require the consent of all parties to the conversation. Both the ABA's Code of Professional Responsibility (DR 1-102(A)(3)) and its successor, the Model Rules of Professional Conduct (Rule 8.4(b)), broadly condemn illegal conduct as unethical. They also censure attorney conduct that involves "dishonesty, fraud, deceit or misrepresentation." In 1974, the ABA concluded in Formal Opinion 337 that the rule covering dishonesty, fraud, and the like "clearly encompasses the making of recordings without the consent of all parties." Thus, "no lawyer should record any conversation whether by tapes or other electronic device, without the consent or prior knowledge of all parties to the conversation." The Opinion admitted the possibility that law enforcement officials operating within "strictly statutory limitations" might qualify for an exception. Reaction to the Opinion 337 was mixed. The view expressed by the Texas Professional Ethics Committee was typical of the states that follow the ABA approach: In February 1978, this Committee addressed the issue of whether an attorney in the course of his or her practice of law, could electronically record a telephone conversation without first informing all of the parties involved. The Committee concluded that, although the recording of a telephone conversation by a party thereto did not per se violate the law, attorneys were held to a higher standard. The Committee reasoned that the secret recording of conversations offended most persons' concept of honor and fair play. Therefore, attorneys should not electronically record a conversation without first informing that party that the conversation was being recorded. The only exceptions considered at that time were "extraordinary circumstances with which the state attorney general or local government or law enforcement attorneys or officers acting under the direction of a state attorney general or such principal prosecuting attorneys might ethically make and use secret recordings if acting within strict statutory limitations conforming to constitutional requirements," which exceptions were to be considered on a case by case basis. ... [T]his Committee sees no reason to change its former opinion. Pursuant to Rule 8.04(a)(3), attorneys may not electronically record a conversation with another party without first informing that party that the conversation is being recorded. Supreme Court of Tex as Prof essional Eth ics Comm ittee Opinion No. 514 (1996). A second group of states—Arizona, Idaho, Kansas, Kentucky, Minnesota, Ohio, South Carolina, and Tennessee—concurred, but with an expanded list of exceptions, for example, permitting recording by law enforcement personnel generally, not just when judicially supervised; or recording by criminal defense counsel; or recording statements that themselves constitute crimes, such as bribery offers or threats; or recording confidential conversations with clients; or recordings made solely for the purpose of creating a memorandum for the files; or recording by a government attorney in connection with a civil matter; or recording under other extraordinary circumstances. A third group of jurisdictions refused to adopt the ABA unethical per se approach. In one form or another the District of Columbia, Mississippi, New Mexico, North Carolina, Oklahoma, Oregon, Utah, and Wisconsin suggested that the propriety of an attorney surreptitiously recording his or her conversations where it was otherwise lawful to do so depended upon the other circumstances involved in a particular case. In 2001, the ABA issued Formal Opinion 01-422 and rejected Opinion 337 's broad proscription. Instead, Formal Op inion 01-422 concluded that: 1. Where nonconsensual recording of conversations is permitted by the law of the jurisdiction where the recording occurs, a lawyer does not violate the Model Rules merely by recording a conversation without the consent of the other parties to the conversation. 2. Where nonconsensual recording of private conversations is prohibited by law in a particular jurisdiction, a lawyer who engages in such conduct in violation of that law may violate Model Rule 8.4, and if the purpose of the recording is to obtain evidence, also may violate Model Rule 4.4. 3. A lawyer who records a conversation without the consent of a party to that conversation may not represent that the conversation is not being recorded. 4. Although the Committee is divided as to whether the Model Rules forbid a lawyer from recording a conversation with a client concerning the subject matter of the representation without the client's knowledge, such conduct is, at the least, inadvisable. There seems to be no dispute that where it is illegal to record a conversation without the consent of all of the participants, it is unethical as well. Recording requires the consent of all parties in 10 states: California, Florida, Illinois, Massachusetts, Michigan, Montana, New Hampshire, Oregon, Pennsylvania, and Washington. Only two states, Colorado and South Carolina, have expressly rejected the approach of the ABA's F ormal Opinion 01-422 since its release. Yet a number of other states have yet to withdraw earlier opinions that declared surreptitious records ethically suspect: Arizona, Idaho, Indiana, Iowa, Kansas, and Kentucky. A substantial number of states, however, agree with the ABA's F ormal Opinion 01-422 that a recording with the consent of one, but not all, of the parties to a conversation is not unethical per se unless it is illegal or contrary to some other ethical standard. This is the position of the bar in Alabama, Alaska, Hawaii, Minnesota, Missouri, Nebraska, New York, Ohio, Oregon, Tennessee, Texas, Utah, and Vermont. In four other states—Maine, Mississippi, North Carolina, and Oklahoma—comparable opinions appeared before the ABA's F ormal Opinion 01-422 was released and have never withdrawn or modified. Yet even among those that now believe that secret recording is not per se unethical, some ambivalence seems to remain. Nebraska, for example, refers to full disclosure as the "better practice." New Mexico notes that the "prudent New Mexico lawyer" hesitates to record without the knowledge of all parties. And Minnesota cautions that surreptitiously recording client conversations "is certainly inadvisable" except under limited circumstances. Although the largest block of states endorse this view, whether it is a majority view is uncertain because a number of jurisdictions have apparently yet to announce a position, for example, Arkansas, Connecticut, Delaware, Georgia, Louisiana, Nevada, New Jersey, North Dakota, Rhode Island, West Virginia, and Wyoming. Besides Rule 8.4's prohibition on unlawful, fraudulent, deceptive conduct, the Code of Professional Conduct also condemns making a false statement of material fact or law. As a consequence even when surreptitious recording is not considered a per se violation, it will be considered unethical if it also involves a denial that the conversation is being recorded or some similar form of deception. While illegality and false statements exist as exceptions to a general rule that permits surreptitious recording, evidence gathering is an exception to a general rule that prohibits such recordings. The earlier ABA opinion conceded a possible exception when prosecuting attorneys engaged in surreptitious recording pursuant to court order. Various jurisdictions have expanded the exception to include defense attorneys as well as prosecutors. Some have included use in the connection with other investigations as well. Other circumstances thought to permit a lawyer to record a conversation without the consent of all of the parties to the discussion in one jurisdiction or another include instances when the lawyer does so in a matter unrelated to the practice of law; or when the recorded statements themselves constitute crimes such as bribery offers or threats; or when the recording is made solely for the purpose of creating a memorandum for the files; or when the "the lawyer has a reasonable basis for believing that disclosure of the taping would significantly impair pursuit of a generally accepted societal good."	In some jurisdictions, it is unethical for an attorney to secretly record a conversation even though it is not illegal to do so. A few states require the consent of all parties to a conversation before it may be recorded. Recording without mutual consent is both illegal and unethical in those jurisdictions. Elsewhere the issue is more complicated. In 1974, the American Bar Association (ABA) opined that surreptitiously recording a conversation without the knowledge or consent of all of the participants violated the ethical prohibition against engaging in conduct involving "dishonesty, fraud, deceit or misrepresentation." The ABA conceded, however, that law enforcement recording, conducted under judicial supervision, might breach no ethical standard. Reaction among the authorities responsible for regulation of the practice of law in the various states was mixed. In 2001, the ABA reversed its earlier opinion and announced that it no longer considered one-party consent recording per se unethical when it is otherwise lawful. Today, this is the view of a majority of the jurisdictions on record. A substantial number, however, disagree. An even greater number have yet to announce an opinion. An earlier version of this report once appeared as CRS Report 98-251. An unabridged version of this report is available with the footnotes and attachment as CRS Report R42650, Wiretapping, Tape Recorders, and Legal Ethics: An Overview of Questions Posed by Attorney Involvement in Secretly Recording Conversation.
Our March 2011 and February 2012 reports identified 6 areas across DHS where overlap or potential unnecessary duplication exists, and 17 specific actions that the department or Congress could take to address these areas. In our March 2011 report we suggested that DHS or Congress take 11 actions to address the areas of overlap or potential unnecessary duplication that we found. Of these 11 actions, 1 has been fully addressed, 4 have been partially addressed, and the remaining 6 have not been addressed. In many cases, the existence of overlap, potential unnecessary duplication, or fragmentation can be difficult to determine with precision due to a lack of data on programs and activities. Where information has not been available that would provide conclusive evidence of overlap, duplication, or fragmentation, we often refer to “potential unnecessary duplication.” In some cases, there is sufficient information available to show that if actions are taken to address individual issues, significant financial benefits may be realized. In other cases, precise estimates of the extent of potential unnecessary duplication, and the cost savings that can be achieved by eliminating any such unnecessary duplication, are difficult to specify in advance of congressional and executive-branch decision making. However, given the range of areas we identified at DHS and the magnitude of many of the programs, the cost savings associated with addressing these issues could be significant. Tables 1 and 2 summarize the areas of overlap and potential unnecessary duplication that we identified at DHS, the actions we identified for DHS and Congress to consider to address those areas, and the status of those actions. Our 2011 and 2012 annual reports also identified 9 areas describing other opportunities for DHS or Congress to consider taking action that could either reduce the cost of government operations or enhance revenue collection for the Treasury. We identified 23 specific actions that the department or Congress could take to address these areas. In our March 2011 report, we suggested that DHS or Congress take 11 actions to either reduce the cost of government operations or enhance revenue collection. Of these 11 actions, 1 has been fully addressed and 10 have been partially addressed. In some cases, there is sufficient information to estimate potential savings or other benefits if actions are taken to address individual issues. In other cases, estimates of cost savings or other benefits would depend upon what congressional and executive branch decisions were made, including how certain GAO recommendations are implemented. Additionally, information on program performance, the level of funding in agency budgets devoted to overlapping or fragmented programs, and the implementation costs that might be associated with program consolidations or terminations, are factors that could impact actions to be taken as well as potential savings. Tables 3 and 4 summarize the cost-savings and revenue enhancing areas that we reported on in March 2011 and February 2012. Our work at DHS has identified three key themes—leading and coordinating the homeland security enterprise, implementing and integrating management functions for results, and strategically managing risks and assessing homeland security efforts—that have impacted the department’s progress since it began operations. As these themes have contributed to challenges in the department’s management and operations, addressing them can result in increased efficiencies and effectiveness. For example, DHS can help reduce cost overruns and performance shortfalls by strengthening the management of its acquisitions, and reduce inefficiencies and costs for homeland security by improving its R&D management. These themes provide insights that can inform DHS’s efforts, moving forward, as it works to implement its missions within a dynamic and evolving homeland security environment. DHS made progress and has had successes in all of these areas, but our work found that these themes have been at the foundation of DHS’s implementation challenges, and need to be addressed from a department wide perspective to effectively and efficiently position DHS for the future and enable it to satisfy the expectations set forth by the Congress, the administration, and the country. Leading and coordinating the homeland security enterprise. While DHS is one of a number of entities with a role in securing the homeland, it has significant leadership and coordination responsibilities for managing efforts across the homeland security enterprise. To satisfy these responsibilities, it is critically important that DHS develop, maintain, and leverage effective partnerships with its stakeholders, while at the same time addressing DHS-specific responsibilities in satisfying its missions. Before DHS began operations, we reported that the quality and continuity of the new department’s leadership would be critical to building and sustaining the long-term effectiveness of DHS and achieving homeland security goals and objectives. We further reported that to secure the nation, DHS must form effective and sustained partnerships between components and also with a range of other entities, including federal agencies, state and local governments, the private and nonprofit sectors, and international partners. DHS has made important strides in providing leadership and coordinating efforts. For example, it has improved coordination and clarified roles with state and local governments for emergency management. DHS also strengthened its partnerships and collaboration with foreign governments to coordinate and standardize security practices for aviation security. However, DHS needs to take additional action to forge effective partnerships and strengthen the sharing and utilization of information, which has affected its ability to effectively satisfy its missions. For example, in July 2010, we reported that the expectations of private-sector stakeholders have not been met by DHS and its federal partners in areas related to sharing information about cyber-based threats to critical infrastructure. In 2005, we designated information-sharing for homeland security as high risk because the federal government faced serious challenges in analyzing information and sharing it among partners in a timely, accurate, and useful way.failure to link information about the individual who attempted to conduct the December 25, 2009, airline bombing, prevented the individual from being included on the federal government’s consolidated terrorist watchlist, a tool used by DHS to screen for persons who pose risks to the country. The federal government and DHS have made progress, but more work remains for DHS to streamline its information sharing mechanisms and better meet partners’ needs. Moving forward, it will be important that DHS continue to enhance its focus and efforts to strengthen and leverage the broader homeland security enterprise, and build off the important progress that it has made thus far. In addressing ever-changing and complex threats, and with the vast array of partners with whom DHS must coordinate, continued leadership and stewardship will be critical in achieving this end. GAO, High-Risk Series: An Update, GAO-11-278, (Washington, D.C.: Feb. 2011). acquisition and information technology management policies and controls, to provide enhanced guidance on investment decision making. DHS also reduced its financial management material weaknesses and developed strategies to strengthen human capital management. For example, in fiscal year 2011, DHS moved from a Disclaimer of Opinion to a Qualified Audit Opinion on its Balance Sheet and Statement of Custodial Activity for the first time since 2003. However, DHS has not been able to obtain an unqualified audit opinion on its consolidated financial statements (i.e., prepare a set of financial statements that are considered fairly presented) though its current goal is to receive an unqualified, or clean opinion, on the departmentwide consolidated financial statement for fiscal year 2013. DHS needs to continue to demonstrate sustainable progress in addressing its challenges, as these issues have contributed to schedule delays, cost increases, and performance problems in major programs aimed at delivering important mission capabilities. For example, we reported on numerous cost, schedule, and performance risks, and concluded that DHS had not economically justified its investment in the Secure Border Initiative Network, DHS’s border security technology program. More specifically, DHS did not adequately define requirements, perform testing, or oversee contractors, delaying security enhancements on the southwest border. After initiating a departmentwide assessment of the program, the Secretary of Homeland Security froze program funding and, at the completion of the assessment in January 2011, the Secretary decided to end the Secure Border Initiative Network as originally conceived after investing nearly $1 billion in the program. DHS also has not yet fully implemented its roles and responsibilities for developing and implementing key homeland security programs and initiatives. For example, FEMA has not yet developed a set of target capabilities for disaster preparedness or established metrics for assessing those capabilities to provide a framework for evaluating preparedness, as required by the Post-Katrina Emergency Management Reform Act of 2006. Moreover, DHS does not yet have enough personnel with required skills to carry out activities in various areas, such as acquisition management; and is in the process of modernizing its financial management system, impacting its ability to have ready access to reliable information for informed decision making. Moving forward, addressing these management challenges will be critical for DHS’s success, as will be the integration of these functions across the department to achieve efficiencies and effectiveness. GAO, Aviation Security: DHS and TSA Have Researched, Developed, and Begun Deploying Passenger Checkpoint Screening Technologies, but Continue to Face Challenges, GAO-10-128 (Washington, D.C.: Oct. 7, 2009). using nuclear and radiological materials through coordinated activities. However, the strategic plan for the architecture did not include some key components, such as funding needed to achieve the strategic plan’s objectives, or monitoring mechanisms for determining programmatic progress and identifying needed improvements. Further, DHS has made important progress in analyzing risk across sectors, but it has more work to do in using this information to inform planning and resource-allocation decisions. Risk management has been widely supported by Congress and DHS as a management approach for homeland security, enhancing the department’s ability to make informed decisions and prioritize resource investments. Since DHS does not have unlimited resources and cannot protect the nation from every conceivable threat, it must make risk-informed decisions regarding its homeland security approaches and strategies. Moreover, we have reported on the need for enhanced performance assessment, that is, evaluating existing programs and operations to determine whether they are operating as intended or are in need of change, across DHS’s missions.programs is critical for helping the department, Congress, and other stakeholders more systematically assess strengths and weaknesses and inform decision making. In recent years, DHS has placed an increased emphasis on strengthening its mechanisms for assessing the performance and effectiveness of its homeland security programs. For example, DHS established new performance measures, and modified existing ones, to better assess many of its programs and efforts. However, our work has found that DHS continues to miss opportunities to optimize performance across its missions due to a lack of reliable performance information or assessment of existing information; evaluation among possible alternatives; and, as appropriate, adjustment of programs or operations that are not meeting mission needs. For example, we reported that CBP had invested $2.4 billion in tactical infrastructure (fencing, roads, and lighting) along the southwest border, but could not measure the impact of this investment in tactical Information on the performance of infrastructure on border security. As the department further matures and seeks to optimize its operations, DHS will need to look beyond immediate requirements; assess programs’ sustainability across the long term, particularly in light of constrained budgets; and evaluate trade-offs within and among programs across the homeland security enterprise. Doing so should better equip DHS to adapt and respond to new threats in a sustainable manner as it works to address existing ones. Given DHS’s significant leadership responsibilities in securing the homeland, it is critical that the department’s programs and activities are operating as efficiently and effectively as possible, are sustainable, and that they continue to mature, evolve, and adapt to address pressing security needs. Since it began operations in 2003, DHS has implemented key homeland security operations and achieved important goals and milestones in many areas. These accomplishments are especially noteworthy given that the department has had to work to transform itself into a fully functioning cabinet department while implementing its missions—a difficult undertaking for any organization and one that can take years to achieve even under less-daunting circumstances. However, our work has shown that DHS can take actions to reduce overlap and potential unnecessary duplication to improve the efficiency of its operations and achieve cost-savings in several areas. Further, while DHS has made progress, additional actions are needed to strengthen partnerships with stakeholders, improve its management processes and share information, and enhance its risk management and performance- measurement efforts to enhance effectiveness and achieve efficiencies throughout the department. Chairman McCaul, Ranking Member Keating, and Members of the Subcommittee, this concludes my prepared testimony. I would be pleased to respond to any questions that members of the Subcommittee may have. For further information regarding this testimony, please contact Cathleen A. Berrick at (202) 512-3404 or berrickc@gao.gov. In addition, contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this statement. Individuals who made key contributions to this testimony are Chris Currie, Emily Gunn, and Taylor Matheson. Key contributors for the previous work that this testimony is based on are listed within each individual product. This is a work of the U.S. government and is not subject to copyright protection in the United States. The published product may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately.	The terrorist attacks of September 11, 2001, led to profound changes in government agendas, policies, and structures to confront homeland security threats facing the nation. Most notably, DHS began operations in 2003 with missions that included preventing terrorist attacks in the United States, reducing the nations vulnerability to terrorism, and minimizing damages from attacks. DHS is now the third-largest federal department, with more than 200,000 employees, and has an annual budget of almost $60 billion. Since 2003, GAO has issued over 1,200 products on DHSs operations in such areas as transportation security and emergency management, among others. Moreover, GAO has reported that overlap and fragmentation among government programs, including DHS, can cause potential unnecessary duplication, and reducing it could save billions of tax dollars annually and help agencies provide more efficient and effective services. As requested, this testimony addresses (1) opportunities for DHS to reduce potential unnecessary duplication in its programs, save tax dollars, and enhance revenue, and (2) crosscutting and management issues that have affected DHSs implementation efforts. This testimony is based on GAO reports issued from March 2011 through February 2012. In March 2011 and February 2012, GAO reported on 6 areas where the Department of Homeland Security (DHS) or Congress could take action to reduce overlap and potential unnecessary duplication, and 9 areas to achieve cost-savings. Of the 22 actions GAO suggested be taken in March 2011 to address such issues, 2 were fully implemented, 14 were partially implemented, and 6 have not been addressed. GAOs February 2012 report identified 18 additional actions to address overlap, potential duplication, and costs savings. In September 2011, GAO reported on three key themes that should be addressed to enhance the effectiveness and efficiency of DHSs operations. Leading and coordinating the homeland security enterprise. DHS has made important strides in providing leadership and coordinating efforts among its stakeholders. However, DHS needs to take additional action to forge effective partnerships and strengthen the sharing and utilization of information, which has affected its ability to effectively satisfy its missions, such as sharing information with private sector stakeholders on cyber-based threats to critical infrastructure. Implementing and integrating management functions for results. DHS has enhanced its management functions, and has plans to further strengthen the management of the department. However, DHS has not always effectively executed or integrated these functions, which has contributed to schedule delays, cost increases, and performance issues in a number of programs aimed at delivering important mission capabilities, such as border security technologies. Strategically managing risks and assessing homeland security efforts. While progress has been made, limited strategic and program planning and limited assessment to inform approaches and investment decisions have contributed to DHS programs not meeting strategic needs in an efficient manner, such as the lack of risk based plans for deploying aviation security technologies. While this testimony contains no new recommendations, GAO previously made about 1,600 recommendations to DHS. The department has addressed about half of them, has efforts to address others, and has taken action to strengthen its operations.
A "Dear Colleague" letter is official correspondence that is sent by a Member, committee, or officer of the House of Representatives or Senate and that is widely distributed to other congressional offices. A "Dear Colleague" letter may be circulated in paper through internal mail, distributed on a chamber floor, or sent electronically. "Dear Colleague" letters are often used to encourage others to cosponsor, support, or oppose a bill. "Dear Colleague" letters concerning a bill or resolution generally include a description of the legislation or other subject matter along with a reason or reasons for support or opposition. Additionally, "Dear Colleague" letters are used to inform Members and their offices about events connected to congressional business or modifications to House or Senate operations. The Committee on House Administration and the Senate Committee on Rules and Administration, for example, routinely circulate "Dear Colleague" letters to Members concerning matters that affect House or Senate operations, such as House changes to computer password policies or a reminder about Senate restrictions on mass mailings prior to elections. These letters frequently begin with the salutation "Dear Colleague." The length of such correspondence varies, with a typical "Dear Colleague" running one to two pages. Member-to-Member correspondence has long been used in Congress. For example, since early House rules required measures to be introduced only in a manner involving the "explicit approval of the full chamber," Representatives needed permission from other Members to introduce legislation. A common communication medium for soliciting support for this action was a letter to colleagues. For example, Representative Abraham Lincoln, in 1849, formally notified his colleagues in writing that he intended to seek their authorization to introduce a bill to abolish slavery in the District of Columbia. The use of the phrase "Dear Colleague" has been used to refer to a widely distributed letter among Members at least since early in the 20 th century. In 1913, the New York Times included the text of a "Dear Colleague" letter written by Representative Finley H. Gray to Representative Robert N. Page in which Gray outlined his "conceptions of a fit and proper manner" in which Members of the House should "show their respect for the President" and "express their well wishes" to the first family. In 1916, the Washington Post included the text of a "Dear Colleague" letter written by Representative William P. Borland and distributed to colleagues on the House floor. The letter provided an explanation of an amendment he had offered to a House bill. Congress has since expanded its use of the Internet and electronic devices to facilitate distribution of legislative documents. Electronic "Dear Colleague" letters can be disseminated via internal networks in the House and Senate, supplementing or supplanting paper forms of the letters. Such electronic communication has increased the speed and facilitated the process of distributing "Dear Colleague" letters. In the contemporary Congress, Members use both printed copy distribution and electronic delivery for sending "Dear Colleague" letters. In the House, Members may choose to send "Dear Colleague" letters through internal mail, through the electronic e -"Dear Colleague" system, or both. Regardless of distribution method, House "Dear Colleague" letters are required to address official business and must be signed by a Member or officer of Congress. Members of the House often send out "Dear Colleague" letters to recruit cosponsors for their measures. The practice of recruiting cosponsors has become more important since the passage of H.Res. 42 in the 90 th Congress (1967-1968). H.Res. 42 amended House rules to permit bill cosponsors, but limited the number to 25. In 1978, the House agreed to H.Res. 86 , which further amended House rules to permit unlimited numbers of cosponsors. "Dear Colleague" letters sent through internal mail must be written on official letterhead, address official business, and be signed by a Member or officer of Congress. A cover letter must accompany the "Dear Colleague" letter, addressed to the director of the House customer solution center, with specific distribution instructions and authorization as to the number to be distributed. These materials must be submitted by 9:45 a.m. for morning distribution and 1:45 p.m. for afternoon mail delivery. The current number of paper copies needed for distribution of a "Dear Colleague" letter in the House is 475 for all Members only (including leadership); 525 for all Members (including leadership and full committees); 625 for Members, full committees, and subcommittees; 300 for Republican Members, leadership, and full Republican committees; 275 for all Republican Members and leadership only; 250 for Democratic Members, leadership, and full Democratic committees; 200 for all Democratic Members and leadership only; and 700 for all House mail stops. For distribution to the Senate, House "Dear Colleague" letters must have a separate cover letter addressed to the deputy chief administrative officer of the House for customer solutions, adhere to the same standards as House "Dear Colleague" letters, and follow the current distribution numbers of 110 for Senators only, and 135 for Senators and committees. When using the paper system, congressional offices create and photocopy their "Dear Colleague" letters and deliver them to either the First Call Customer Service Center or to the House Postal Operations Office. When the House Postal Operations Office is closed, letters may be deposited in a drop box located in the vending area of the Longworth cafeteria. A copy of the "Dear Colleague" letter is delivered to offices as requested. On August 12, 2008, the House introduced a web-based e -"Dear Colleague" distribution system. The e -"Dear Colleague" system replaced the email-based system. Under the e -"Dear Colleague" system, then-chair of the Committee on House Administration, Representative Robert Brady, wrote that Members and staff "will be able to compose e -Dear Colleagues online, and associate them with up to three issue areas. Members and staff will be able to independently manage their subscription to various issue areas and receive e -Dear Colleagues according to individual interest." Pursuant to the House Members' Congressional Handbook , the rules regulating a paper "Dear Colleague" letter sent via internal mail are also applicable to a letter sent electronically. House Members and staff who want to use the e -Dear Colleague system can subscribe and send letters at http://e-dearcolleague.house.gov . During the registration process, they may choose up to 32 issue areas for which they wish to receive "Dear Colleague" letters. The website also allows them to sign up for either the Republican or Democratic "Dear Colleague" distribution lists. Additionally, the website enables individuals "to search all e -Dear Colleagues by session, date, issue area, and keyword or bill number." The e -Dear Colleague system did not alter the process for the delivery of paper "Dear Colleague" letters. To send an e-"D ear Colleague" letter, an individual staff member views http://e-dearcolleague.house.gov and clicks on send. This action brings up the send screen, where the staff member takes the following actions: enters his or her email address, the type of office the staff member works in (i.e., Member, leadership, committee, or other), and the Member's, committee's, or office's name; types in a letter title, selects whether it is a letter to be sent to either the Republican or Democratic distribution lists, and chooses up to three issues to associate with the letter; types, or cuts and pastes, the letter into the text editor on the webpage, including uploading any graphics or attachments; associates the letter with a particular bill or resolution number (optional); and reviews the letter before sending. Following the completion of this process, staff members receive an email asking them to confirm that they are sending the "Dear Colleague" letter. A final opportunity to edit the letter is also provided. Once the letter is completed, it is sent to all individuals who have selected to receive "Dear Colleague" letters in issue areas associated with the letter. Electronic versions of "Dear Colleague" letters sent prior to August 12, 2008, are stored in a Microsoft Exchange public folder that is accessible to all House Members and staff. Electronic versions of "Dear Colleague" letters sent on or after August 12, 2008, are archived on the House e -"Dear Colleague" website. Similar to the House paper system, "Dear Colleague" letters in the Senate are written on official letterhead and address official business, but there is not a central distribution policy. In general, when using the paper system, Senators and chamber officers create their own "Dear Colleague" letters and have them reproduced at the Senate Printing Graphics and Direct Mail Division. Once reproduced, paper copies of the "Dear Colleague" letters are delivered to the Senate Mailroom by the sending office, accompanied by a distribution form or cover letter with specific distribution instructions. As prescribed by the Senate, current distribution numbers for "Dear Colleague" letters in the Senate are 100 for all Senators; 20 for standing, select, and special committees; 5 for the joint leadership; and 1 each for the officers of the Senate (total of 7). The choice to send "Dear Colleague" letters electronically is at the discretion of the individual Senate office. There is no central distribution system for electronic Senate "Dear Colleague" letters.	"Dear Colleague" letters are correspondence signed by Members of Congress and distributed to their colleagues. Such correspondence is often used by one or more Members to persuade others to cosponsor, support, or oppose a bill. "Dear Colleague" letters also inform Members about new or modified congressional operations or about events connected to congressional business. A Member or group of Members might send a "Dear Colleague" letter to all of their colleagues in a chamber, to Members of the other chamber, or to a subset of Members, such as all Democrats or Republicans. The use of the phrase "Dear Colleague" to refer to a widely distributed letter among Members dates at least to the start of the 20th century, and refers to the generic salutation of these letters. New technologies and expanded use of the Internet have increased the speed and facilitated the process of distributing "Dear Colleague" letters.
As our past work has found, climate-related and extreme weather impacts on physical infrastructure such as buildings, roads, and bridges, as well as on federal lands, increase federal fiscal exposures. Infrastructure is typically designed to withstand and operate within historical climate patterns. However, according to NRC, as the climate changes, historical patterns do not provide reliable predictions of the future, in particular, those related to extreme weather events.may underestimate potential climate-related impacts over their design life, which can range up to 50 to 100 years. Federal agencies responsible for the long-term management of federal lands face similar impacts. Climate- Thus, infrastructure designs related impacts can increase the operating and maintenance costs of infrastructure and federal lands or decrease the infrastructure’s life span, leading to increased fiscal exposures for the federal government that are not fully reflected in the budget. Key examples from our recent work include (1) Department of Defense (DOD) facilities, (2) other large federal facilities such as National Aeronautics and Space Administration (NASA) centers, and (3) federal lands such as National Parks. DOD manages a global real-estate portfolio that includes over 555,000 facilities and 28 million acres of land with a replacement value that DOD estimates at close to $850 billion. Within the United States, the department’s extensive infrastructure of bases and training ranges— critical to maintaining military readiness—extends across the country, including Alaska and Hawaii. DOD incurs substantial costs for infrastructure, with a base budget for military construction and family housing totaling more than $9.8 billion in fiscal year 2014. As we reported in May 2014, this infrastructure is vulnerable to the potential impacts of climate change, including increased drought and more frequent and severe extreme weather events in certain locations. In its 2014 Quadrennial Defense Review, DOD stated that the impacts of climate change may increase the frequency, scale, and complexity of future missions, while undermining the capacity of domestic installations to support training activities. For example, in our May 2014 report on DOD infrastructure adaptation, we found that drought contributed to wildfires at an Army installation in Alaska that delayed certain units’ training (see fig. 1). systems in training and decreased the realism of the training. GAO-14-446. Adaptation is defined as adjustments to natural or human systems in response to actual or expected climate change. The federal government owns and operates hundreds of thousands of non-defense buildings and facilities that a changing climate could affect. For example, NASA’s real property holdings include more than 5,000 buildings and other structures such as wind tunnels, laboratories, launch pads, and test stands. In total, these NASA assets—many of which are located in vulnerable coastal areas—represent more than $32 billion in current replacement value. Our April 2013 report on infrastructure adaptation showed the vulnerability of Johnson Space Center and its mission control center, often referred to as the nerve center for America’s human space program. As shown in figure 3, the center is located in Houston, Texas, near Galveston Bay and the Gulf of Mexico. Johnson Space Center’s facilities—conservatively valued at $2.3 billion—are vulnerable to storm surge and sea level rise because of their location on the Gulf Coast. The federal government manages nearly 30 percent of the land in the United States for a variety of purposes, such as recreation, grazing, timber, and habitat for fish and wildlife. Specifically, federal agencies manage natural resources on about 650 million acres of land, including 401 national park units and 155 national forests. As we reported in May 2013, these resources are vulnerable to changes in the climate, including increases in air and water temperatures, wildfires, and drought; forests stressed by drought becoming more vulnerable to insect infestations; rising sea levels; and reduced snow cover and retreating glaciers. In addition, various species are expected to be at risk of becoming extinct due to the loss of habitat critical to their survival. Many of these changes have already been observed on federally managed lands and waters and are expected to continue, and one of the areas where the federal government’s fiscal exposure is expected to increase is in its role as the manager of large amounts of land and other natural resources. According to USGCRP’s May 2014 National Climate Assessment, hotter and drier weather and earlier snowmelt mean that wildfires in the West start earlier in the spring, last later into the fall, and burn more acres. Appropriations for the federal government’s wildland fire management activities have tripled, averaging over $3 billion annually in recent years, up from about $1 billion in fiscal year 1999. As we have previously reported, improved climate-related technical assistance to all levels of government can help limit federal fiscal exposures. Existing federal efforts encourage a decentralized approach to such assistance, with federal agencies incorporating climate-related information into their planning, operations, policies, and programs and establishing their own methods for collecting, storing, and disseminating climate-related data. Reflecting this approach, technical assistance from the federal government to state and local governments also exists in an uncoordinated confederation of networks and institutions. As we reported in our February 2013 high-risk update, the challenge is to develop a cohesive approach at the federal level that also informs action at the state and local levels. The Executive Office of the President and federal agencies have many efforts underway to increase the resilience of federal infrastructure and programs. For example, executive orders issued in 2009 and 2013 directed agencies to create climate change adaptation plans which integrate consideration of climate change into their operations and overall mission objectives, including the costs and benefits of improving climate adaptation and resilience with real-property investments and construction of new facilities. Recognizing these and many other emerging efforts, our prior work shows that federal decision makers still need help understanding how to build resilience into their infrastructure and planning processes. For example, in our May 2014 report, we found that DOD requires selected infrastructure planning efforts for existing and future infrastructure to account for climate change impacts, but its planners did not have key information necessary to make decisions that account for climate and We recommended that DOD provide further information to related risks. installation planners and clarify actions that account for climate change in planning documents. DOD concurred with our recommendations. GAO-14-446. even with the creation of strategic policy documents and high-level agency guidance. The federal government invests tens of billions of dollars annually in infrastructure projects prioritized and supervised by state and local governments. In total, the United States has about 4 million miles of roads and 30,000 wastewater treatment and collection facilities. According to a 2010 Congressional Budget Office report, total public spending on transportation and water infrastructure exceeds $300 billion annually, with roughly 25 percent of this amount coming from the federal government However, the and the rest coming from state and local governments. federal government plays a limited role in project-level planning for transportation and wastewater infrastructure, and state and local efforts to consider climate change in infrastructure planning have occurred primarily on a limited, ad hoc basis. The federal government has a key interest in helping state and local decision makers increase their resilience to climate change and extreme weather events because uninsured losses may increase the federal government’s fiscal exposure through federal disaster assistance programs. Congressional Budget Office, Public Spending on Transportation and Water Infrastructure, Pub. No. 4088 (Washington, D.C.: November 2010). the national gross domestic product by about $7.8 billion.shows Louisiana State Highway 1 leading to Port Fourchon. We found in April 2013, that infrastructure decision makers have not systematically incorporated potential climate change impacts in planning for roads, bridges, and wastewater management systems because, among other factors, they face challenges identifying and obtaining available climate change information best suited for their projects.when good scientific information is available, it may not be in the actionable, practical form needed for decision makers to use in planning and designing infrastructure. Such decision makers work with traditional Even engineering processes, which often require very specific and discrete information. Moreover, local decision makers—who, in this case, specialize in infrastructure planning, not climate science—need assistance from experts who can help them translate available climate change information into something that is locally relevant. In our site visits to several locations where decision makers overcame these challenges— including Louisiana State Highway 1—state and local officials emphasized the role that the federal government could play in helping to increase local resilience. Any effective adaptation strategy must recognize that state and local governments are on the front lines in both responding to immediate weather-related disasters and in preparing for the potential longer-term impacts associated with climate change. We reported in October 2009, that insufficient site-specific data—such as local temperature and precipitation projections—complicate state and local decisions to justify the current costs of adaptation efforts for potentially less certain future benefits. We recommended that the appropriate entities within the Executive Office of the President develop a strategic plan for adaptation that, among other things, identifies mechanisms to increase the capacity of federal, state, and local agencies to incorporate information about current and potential climate change impacts into government decision making. USGCRP’s April 2012 strategic plan for climate change science recognizes this need, by identifying enhanced information management and sharing as a key objective. According to this plan, USGCRP is pursuing the development of a global change information system to leverage existing climate-related tools, services, and portals from federal agencies. In our April 2013 report, we concluded that the federal government could help state and local efforts to increase their resilience by (1) improving access to and use of available climate-related information, (2) providing officials with improved access to technical assistance, and (3) helping officials consider climate change in their planning processes. As a result, we recommended, among other things, that the Executive Director of USGCRP or other federal entity designated by the Executive Office of the President work with relevant agencies to identify for decision makers the “best available” climate-related information for infrastructure planning and update this information over time, and to clarify sources of local assistance for incorporating climate-related information and analysis into infrastructure planning, and communicate how such assistance will be provided over time. These entities have not directly responded to our recommendations, but the President’s June 2013 Climate Action Plan and November 2013 Executive Order 13653 drew attention to the need for improved technical assistance. For example, the Executive Order directs numerous federal agencies, supported by USGCRP, to work together to develop and provide authoritative, easily accessible, usable, and timely data, information, and decision-support tools on climate preparedness and resilience. In addition, on July 16, 2014, the President announced a series of actions to help state, local, and tribal leaders prepare their communities for the impacts of climate change by developing more resilient infrastructure and rebuilding existing infrastructure stronger and smarter. We have work under way assessing the strengths and limitations of governmentwide options to meet the climate-related information needs of federal, state, local, and private sector decision makers. We also have work under way exploring, among other things, the risks extreme weather events and climate change pose to public health, agriculture, public transit systems, and federal insurance programs. This work may help identify other steps the federal government could take to limit its fiscal exposure and make our communities more resilient to extreme weather events. Chairman Murray, Ranking Member Sessions, and Members of the Committee, this concludes my prepared statement. I would be pleased to answer any questions you have at this time. If you or your staff members have any questions about this testimony, please contact me at (202) 512-3841 or gomezj@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this statement. Alfredo Gomez, Director; Michael Hix, Assistant Director; Jeanette Soares; Kiki Theodoropoulos; and Joseph Dean Thompson made key contributions to this testimony. This is a work of the U.S. government and is not subject to copyright protection in the United States. The published product may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately.	Certain types of extreme weather events have become more frequent or intense according to the United States Global Change Research Program, including prolonged periods of heat, heavy downpours, and, in some regions, floods and droughts. While it is not possible to link any individual weather event to climate change, the impacts of these events affect many sectors of our economy, including the budgets of federal, state, and local governments. GAO focuses particular attention on government operations it identifies as posing a “high risk” to the American taxpayer and, in February 2013, added to its High Risk List the area Limiting the Federal Government's Fiscal Exposure by Better Managing Climate Change Risks . GAO's past work has identified a variety of fiscal exposures—responsibilities, programs, and activities that may explicitly or implicitly expose the federal government to future spending. This testimony is based on reports GAO issued from August 2007 to May 2014, and discusses (1) federal fiscal exposures resulting from climate-related and extreme weather impacts on critical infrastructure and federal lands, and (2) how improved federal technical assistance to all levels of government can help reduce climate-related fiscal exposures. GAO is not making new recommendations but has made numerous recommendations in prior reports on this topic, which are in varying states of implementation by the Executive Office of the President and federal agencies. Climate change and related extreme weather impacts on infrastructure and federal lands increase fiscal exposures that the federal budget does not fully reflect. Investing in resilience—actions to reduce potential future losses rather than waiting for an event to occur and paying for recovery afterward—can reduce the potential impacts of climate-related events. Implementing resilience measures creates additional up-front costs but could also confer benefits, such as a reduction in future damages from climate-related events. Key examples of vulnerable infrastructure and federal lands GAO has identified include: Department of Defense (DOD) facilities. DOD manages a global real-estate portfolio that includes over 555,000 facilities and 28 million acres of land with a replacement value DOD estimates at close to $850 billion. This infrastructure is vulnerable to the potential impacts of climate change and related extreme weather events. For example, in May 2014, GAO reported that a military base in the desert Southwest experienced a rain event in August 2013 in which about 1 year's worth of rain fell in 80 minutes. The flooding caused by the storm damaged more than 160 facilities, 8 roads, 1 bridge, and 11,000 linear feet of fencing, resulting in an estimated $64 million in damages. Other large federal facilities. The federal government owns and operates hundreds of thousands of other facilities that a changing climate could affect. For example, the National Aeronautics and Space Administration (NASA) manages more than 5,000 buildings and other structures. GAO reported in April 2013 that, in total, these NASA assets—many of which are in coastal areas vulnerable to storm surge and sea level rise—represent more than $32 billion in current replacement value. Federal lands. The federal government manages nearly 30 percent of the land in the United States—about 650 million acres of land—including 401 national park units and 155 national forests. GAO reported in May 2013 that these resources are vulnerable to changes in the climate, including the possibility of more frequent and severe droughts and wildfires. Appropriations for federal wildland fire management activities have tripled since 1999, averaging over $3 billion annually in recent years. GAO has reported that improved climate-related technical assistance to all levels of government can help limit federal fiscal exposures. The federal government invests tens of billions of dollars annually in infrastructure projects that state and local governments prioritize, such as roads and bridges. Total public spending on transportation and water infrastructure exceeds $300 billion annually, with about 25 percent coming from the federal government and the rest from state and local governments. GAO's April 2013 report on infrastructure adaptation concluded that the federal government could help state and local efforts to increase their resilience by (1) improving access to and use of available climate-related information, (2) providing officials with improved access to technical assistance, and (3) helping officials consider climate change in their planning processes.
RS21502 -- India-U.S. Economic Relations Updated February 10, 2005 Upon achieving independence from British rule in 1947, India pursued policies that sought to assert government planningover most sectors of the economy and strove to promote relative economic self-sufficiency. These policies includedextensive government spending on infrastructure, the promotion of government-owned companies, pervasiveregulatoryauthority over private sector investment, and extensive use of trade and investment barriers to protect local firmsfromforeign competition. While these policies achieved some economic goals (such as rapid industrialization), theoverall effectwas to promote widespread inefficiency throughout the economy (e.g., unprofitable state-run firms and a constrainedprivate sector) and to greatly restrict the level of foreign direct investment (FDI) in India. India's real GDP growthwasrelatively stagnant during the 1970s, averaging about 2.7%. Piecemeal economic reforms and increased governmentspending during the 1980s helped boost average real GDP growth to 6.0%. (1) 1991 Economic Crisis and Reforms. India suffered a major economic crisis in 1991, largely due to the effects of oil price shocks (resulting from the 1990 Gulf War), the collapse of theSovietUnion (a major trading partner and source of foreign aid), and a sharp depletion of its foreign exchange reserves(causedlargely by large and continuing government budget deficits). (2) The economic crisis led the Indian government to cut thebudget deficit and implement a number of economic reforms, including sharp cuts in tariff and non-tariff barriers,liberalization of foreign direct investment (FDI) rules, exchange rate and banking reforms, and a significantreduction inthe government's control over private sector investment (by removing licensing requirements). These reformshelpedboost economic growth and led to a surge in FDI flows to India in the mid-1990s (annual FDI rose from about $100millionin 1990 to $2.4 billion by 1996; more than one-third came from U.S. investors). Reform efforts stagnated, however,underthe weak coalition governments of the mid-1990s. The 1997/1998 Asian financial crisis and U.S.-imposed sanctionsonIndia (as a result of its May 1998 nuclear tests) further dampened the economic growth. (3) Following parliamentaryelections in 1999, the government launched second-generation economic reforms, including major deregulation,privatization, and tariff-reducing measures. Current Economic Conditions. India's economic growth has been relatively robust over the past few years. Real GDP grew by 8.2% in 2003 and by an estimated 5.7% in 2004. GlobalInsight , an economic forecasting firm, projects India's real GDP will rise by 6.3% in (FY)2005 and 6.0% in2006. (4) Bysome measurements, India is among the world's largest economies. While on a nominal U.S. dollar exchange ratebasis,India's 2003 GDP was $577 billion. However, on a purchasing power parity (PPP) basis (which factors indifferences inprices across countries), India's GDP is estimated at close to $3 trillion. By this measurement, India is the world'sfourth-largest economy (after the United States, China, and Japan). (5) However, its per capita GDP on a PPP basis (acommon international measurement of a nation's living standards) was $2,780, equal to only 7.4% of U.S. levels. Povertyis perhaps India's greatest problem. According to the World Bank, India has 433 million people (44.2% of thepopulation)living below the international poverty measurement of less than $1 per day. (6) India's trade is relatively small. According to the World Trade Organization (WTO), India was the world's 31st-largestmerchandise exporter, and the 25th- largest importer, in 2003. (7) Merchandise exports and imports totaled $63 billion and$77 billion, respectively. India's principal exports were pearls and precious and sem-precious stones (14.8% oftotal),textiles (10.8%), and clothing (10.5%). Its top three imports were petroleum (27.0% of total), pearls and preciousandsem-precious stones (9.6%), and gold and silver (8.3%). (8) India's major export markets were the United States (18.1% oftotal), the United Arab Emirates, and Hong Kong, and its top sources for imports were the United States (6.5% oftotal),China, and Belgium. India's IT Sector. The Indian government has made the development of India's Information Technology (IT) a top priority. Over the past few years, IT has been one of India'sfastest-growingeconomic sectors and a major source of service exports. (9) For example, software and service exports in 2003 totaled $12.5billion, 30% higher than the previous year. The Indian government's Information Technology Action Plan seeksto boostsoftware and service exports to$50 billion by 2008 and to increase the contribution of IT to India's GDP from thecurrentlevel of 2% to 7.7%. Currently, more than 60% of India's software and service exports go to North America, mainlyto theUnited States. (10) Comparisons Between India and China. Many analysts argue that India's economy has failed to live up to its potential, especially relative to other developing countries, such as China,whichhas a comparable population size but has enjoyed far greater economic development in recent years. In 1990, India'seconomy (GDP on PPP basis) was about three-quarters the size of China's, but by 2003 it had fallen to 44% ofChina'ssize. India's living standards (per capita GDP on PPP basis) were slightly greater than China's in 1990, but by 2003theyhad fallen to about half of China's. India made small gains in FDI flows relative to China from 1990 to 2003 (risingfrom2% to 7%); however, the total level of FDI stock in China remains substantially higher than in India. In fact, FDIflows toChina in 2003 alone (nearly $54 billion) were 54% higher the cumulative stock of FDI in India through 2003 (about$35billion). Many economists attribute the sharp widening economic gaps between India and China to differences inthe paceand scope of economic and trade reforms undertaken by each country, where China has substantially reformed itstrade andinvestment regimes (which has contributed to sharp rises in GDP growth, trade, and FDI flows), India's economicreformshave been far less comprehensive and effective. For example, China's average tariff has fallen from 43% in 1992to12% in2002. India's average tariff during this period dropped substantially, from 128% to 32%, but still remains amongthehighest in the world. Trade between the United States and India is relatively small, but has risen sharply over the past few years. In 2004, U.S.merchandise exports to and imports from India are estimated to have totaled $6.1 billion and $15.5 billion,respectively(see Table 1 ), making India the 24th largest U.S. export market and the18th largest supplier of U.S. imports. (11) In 2004,U.S. merchandise exports to India rose by 22.6%, while imports rose by 18.4%, over 2003 levels. Major U.S.exports toIndia included electrical machinery, chemicals, unfinished diamonds. Top U.S. imports from India werenon-metallicmanufactured minerals (mainly processed diamonds), clothing and apparel, and miscellaneous manufactured items(mainlyjewelry). According to Indian government data, the United States is India's second largest source of FDI with cumulative FDI at$4.1 billion or 10.6% of total FDI in India. Major sectors for U.S. FDI include energy, telecommunications, andelectricalequipment. Table 2. U.S.-India Merchandise Trade: 2001-2004* ($ millions) *Data for 2004 estimated based on actual data for January-November 2004. Source : U.S. International Trade Commission DataWeb. Major U.S.-Indo Trade Issues. India's sizable population and large and growing middle class make it a potentially large market for U.S. goods and services. (12) However, a number of factorshamper increased economic ties. First, in addition to maintaining high tariff rates on imports (especially on productsthatcompete with domestic products), India also assesses high surcharges and taxes on a variety of imports. Majornon-tariffbarriers include sanitary and phytosanitary restrictions, import licenses, regulations that mandate that only publicsectorentities can import certain products, discriminatory government procurement practices, and the use of exportsubsidies. (13) A variety of restrictions are placed on foreign services providers and on the level of permitted FDI in certainindustries. Second, India continues to maintain a number of inefficient structural policies which affects it trade, including pricecontrols for many "essential" commodities, extensive government regulation over many sectors of the economy, andextensive public ownership of businesses, many of which are poorly run. Third, despite India's attempt to developinternationally competitive IT industries (such as software), U.S. government officials charge that India has a poorrecordin protecting intellectual property rights (IPR), especially for patents and copyrights. The International IntellectualProperty Alliance estimated U.S. losses of $420 million due to trade piracy in 2003 -- nearly three-quarters of thisin thecategories of business and entertainment software -- and noted "very little progress in combating piracy." India's extensive array of trade and investment barriers has been criticized by U.S. government officials and businessleaders as an impediment to its own economic development, as well as to stronger U.S.-Indian ties. (14) For example, in September 2004, Alan Larson, U.S. Under Secretary of State for Economic, Business, and Agricultural Affairs,stated that"trade and investment flows between the U.S. and India are far below where they should and can be," adding thatAmerican exports to India "have not fared as well" as have Indian exports to the United States and that "the pictureforU.S. investment is also lackluster." He identified the primary reason for the suboptimal situation as "the slow paceofeconomic reform in India." Some U.S. interest groups have expressed concern that closer U.S.-India economic ties could accelerate the practice bysome U.S. firms of outsourcing IT and customer service jobs to India. (15) Various proposals have been made in Congressand various State governments to restrict outsourcing. work overseas. Bush Administration officials have expressedopposition to government restrictions on outsourcing, but have told Indian officials that the best way to counter such"protectionist" pressures in the United States is to further liberalize its markets. Other U.S. interest groups haveraisedconcern over the outsourcing of financial services (such as call centers) to other countries that entail transmittingprivateinformation of U.S. consumers. (16) U.S. officialshave urged India to enact new privacy and cybersecurity laws to addressU.S. concerns over identify theft. (17) Prospects for India's Further Economic Reform. India faces a number of significant challenges to its goals of sustaining healthy economic growth and further reducing poverty. Many economists argue that India needs to substantially liberalize its trade and investment regimes, accelerateprivatization ofstate firms, cut red tape and crack down on corruption, and substantially boost spending on its in physical and humaninfrastructure. (18) However, large and continuinggovernment deficits, and the high level of public debt (equal to 62% ofGDP in 2003) severely hamper the ability of the government to boost spending for needed infrastructure projects,withoutmajor reforms to the tax system and significant cuts in government subsidies. In October 2004, the World Bankcountrydirector for India lauded the country's economic achievements, but called accelerating reforms "essential" forsustainedgrowth and poverty reduction there, and a top International Monetary Fund official said that "India remains arelativelyclosed economy" and urged greater trade liberalization and regional economic integration. (19) Organized resistance to desired reforms has come from Hindu nationalist groups that were influential under the BJPgovernment from 1998 to 2004. As a "sister organization" to the Rashtriya Swayamsevak Sangh (RSS) -- a leadingHindunationalist organization -- the Swadeshi Jagaran Manch (SJM) has taken the lead in efforts to forward the swadeshi (orself reliance) cause. According to the SJM, "The Western notion of a global market does not fit into the swadeshi approach," nor does the "Western notion of individual freedom, which fragments and compartmentalizes family,economy,culture, and social values ..." Such anti-globalization policies continue to enjoy limited, but still substantial backingamongIndians. Moreover, the surprise May 2004 election upset defeat of the BJP seated a new national coalition led bytheCongress Party that is supported by a group of communist parties. Early alarm was sounded that the influence ofcommunists in New Delhi might derail India's economic reform efforts; however, Indian industrial leaders havesought toassure foreign investors that Left Front members are not "Cuba-style communists," but can be expected to supportthe UPAreform agenda. The communist Chief Minister of West Bengal has himself actively sought corporate investmentin hisstate. (20) Despite the sometimes considerable resistance to further progress with India's economic reforms, most analysts believethat the Congress-led coalition will not alter New Delhi's policy direction in any meaningful way. Prime MinisterandOxford-educated economist Manmohan Singh served as finance minister from 1991-1996 and has been the architectofmajor Indian economic reform and liberalization efforts. The new government's first budget, released in July 2004,generally was lauded by Indian industrial groups as "progressive and forward-looking." (21) Still, New Delhi's movement onkey reform issues could remain slow in the near- and medium-term.	India is a country with a long history and a large population (more than onebillion people, nearly half living in poverty). Given that it is the world's most populous democracy, a U.S. ally inanti-terrorism efforts, and a potentially major export market, India's economic development and its trade relationswith theUnited States are of concern to Congress. This report will be updated as events warrant.
Alternative fuel and advanced technology vehicles face significant barriers to wider acceptance as passenger and work vehicles. Alternative fuel vehicles include vehicles powered by nonpetroleum fuels such as natural gas, electricity, or alcohol fuels. Advanced technology vehicles include hybrid vehicles, which combine a gasoline engine with an electric motor system to boost efficiency. Often, these vehicles are more expensive than their conventional counterparts. Further, fueling the vehicles is often inconvenient because the number of refueling stations for alternative vehicles is negligible compared with the number of gasoline stations nationwide; in some regions, the infrastructure is nonexistent. However, many of these vehicles perform more efficiently and are better for the environment than conventional vehicles. There has been significant interest in promoting these vehicles as a response to environmental and energy security concerns. The Energy Policy Act of 1992 ( P.L. 102-486 , §1913) established individual and business tax incentives for the purchase of alternative fuel and advanced technology vehicles and for the installation of alternative fuel infrastructure. The Energy Policy Act of 2005 ( P.L. 109-58 ) expands these existing tax incentives and creates new ones. Incentives existing prior to P.L. 109-58 include the Electric Vehicle Tax Credit; the Clean Fuel Vehicle Tax Deduction; and tax deduction for the installation of alternative fuel infrastructure. For 2005, a federal tax credit is available worth 10% of the purchase price of an electric vehicle, up to a maximum of $4,000 (26 U.S.C. 30). The credit, which was not extended by the Energy Policy Act of 2005, will be reduced to a maximum of $1,000 in 2006 and will be phased out completely after 2006. For the purchase of alternative fuel vehicles, as well as hybrid electric vehicles, a Clean Fuel Vehicle Tax Deduction (26 U.S.C. 179A) is available. The amount of the deduction is based on the weight of the vehicle. Vehicles under 10,000 pounds gross vehicle weight (i.e., cars and light trucks) qualify for a $2,000 deduction in 2005; those between 10,000 and 26,000 pounds qualify for a $5,000 deduction. Vehicles above 26,000 pounds qualify for a $50,000 deduction. The Energy Policy Act of 2005 terminates this deduction after December 31, 2005, and replaces it with a tax credit (see below). Prior to 2002, hybrid electric vehicles were not considered "clean-fuel vehicles" because the primary fuel for the vehicles is gasoline. However, in May 2002, the Internal Revenue Service (IRS) announced that taxpayers can claim the deduction for qualified hybrids. As of December 2005, eight hybrid models are eligible for the deduction. Businesses that install alternative fuel refueling infrastructure can claim a tax deduction of up to $100,000 (26 U.S.C. 179A). The Energy Policy Act of 2005 eliminates this deduction at the end of 2005 and replaces it with a tax credit (see below). The Energy Policy Act of 2005 expanded and extended the existing tax incentives for nonconventional vehicles. These new incentives are similar to those proposed in the Clean Efficient Automobiles Resulting from Advanced Car Technologies Act (CLEAR ACT, S. 971 ) and the Volume Enhancing Hardware Incentives for Consumer Lowered Expenses Technology Act (VEHICLE Technology Act, H.R. 626 ), as well as legislation discussed in the 108 th Congress. Among other provisions, Sections 1341 and 1342 of the Energy Policy Act of 2005 contain several tax incentives for alternative fuel and advanced technology vehicles. For example, the act replaces the existing clean-fuel vehicle tax deduction with a new tax credit for hybrid vehicles; creates a tax credit for the purchase of lean-burn passenger vehicles; creates a new tax credit for the purchase of fuel-cell vehicles; replaces the existing clean-fuel vehicle tax deduction with an alternative fuel vehicle tax credit; and replaces the existing deduction for the installation of refueling infrastructure with a tax credit. Each of these credits is discussed below; Table 4 summarizes each one. Under the Energy Policy Act of 2005, the existing clean-fuel vehicle deduction for hybrid electric vehicles is replaced with a tax credit after 2005. The amount of the credit is based on several factors. For passenger vehicles, these factors are the fuel economy increase and the expected lifetime fuel savings when compared with a conventional vehicle of comparable weight. To qualify for the credit, a hybrid vehicle must meet certain emissions standards and technical specifications. For heavy-duty vehicles (more than 8,500 pounds), the credit is based on the fuel economy relative to a comparable vehicle, as well as the incremental cost of the hybrid vehicle above the cost of the conventional vehicle. The range of potential credits for each vehicle weight are shown in Table 1 . The hybrid vehicle credit is scheduled to expire at the end of 2009. The American Council for an Energy-Efficient Economy estimates that 2006 tax credits for hybrid passenger vehicles will range from $0 (Honda Insight) to $3,150 (Toyota Prius). However, the IRS has not yet announced the value of the credits for 2006. The Energy Policy Act of 2005 established a tax credit for the purchase of passenger vehicles with "lean-burn" engines. For the most part, diesel-powered vehicles that meet certain emissions and fuel economy standards would qualify for the tax credit, which is structured like the hybrid tax credit and ranges from $400 to $3,400, based on fuel economy and fuel savings. The credit is scheduled to expire at the end of 2010. However, no lean-burn passenger vehicles are available that meet the emission standard. Consequently, no vehicles on the market qualify for the credit, although many observers expect automakers to look for ways to reduce the emissions of such vehicles in future years so that the vehicles can qualify. The Energy Policy Act of 2005 provides a tax credit for the purchase of fuel-cell vehicles. The credit increases with gross vehicle weight, as shown in Table 1 . Passenger vehicles that achieve at least 50% better fuel economy than a comparable conventional vehicle also qualify for an additional tax credit of between $1,000 and $4,000, depending on overall fuel economy. The credit expires at the end of calendar year 2014. However, because of technical and cost concerns, no fuel-cell vehicles are commercially available, and the development of a mass-market fuel-cell vehicle in the near future seems unlikely. The Energy Policy Act of 2005 replaces the existing clean-fuel vehicle tax deduction with a credit for the purchase of a new alternative fuel vehicle (AFV). The new credit is equal to a percentage of the incremental cost of the AFV, subject to certain maximum dollar amounts. The incremental cost is the difference between the higher cost of the AFV and its conventional counterpart. Under the act, the applicable percentage is 50% of the incremental cost plus an additional 30% if the vehicle meets certain emissions requirements. The maximum credit is based on the weight of the vehicle, as shown in Table 3 . The credit expires at the end of 2010. To qualify for the credit, the vehicle is required to be a "dedicated" AFV, meaning that it must not be capable of operating on conventional fuel. This provision is a response to criticisms of previous AFV policies that included "dual-fuel" vehicles. In many cases, dual-fuel vehicles operate solely on gasoline. Because some alternative fuels must be blended with a small amount of gasoline (e.g., ethanol, methanol), vehicles using these fuels qualify for a prorated tax credit. The Energy Policy Act of 2005 replaces the existing deduction for the installation of alternative fuel infrastructure with a tax credit. The credit is equal to 30% of the purchase or installation cost of the refueling property, subject to a maximum dollar amount. For retail property, the maximum credit is $30,000. For residential property, the maximum is $1,000. The credit expires after 2014 for hydrogen infrastructure; the credit for all other fuels expires after 2009.	Alternative fuel and advanced technology vehicles face significant market barriers, such as high purchase price and limited availability of refueling infrastructure. The Energy Policy Act of 2005 (P.L. 109-58) expands and establishes tax incentives that encourage the purchase of these vehicles and the development of infrastructure needed to support them. Among the new provisions are tax credits for the purchase of hybrid vehicles (replacing an existing tax deduction), tax credits for the purchase of advanced diesel vehicles (although it is unclear whether any current vehicles will qualify), and tax credits to expand refueling infrastructure. This report discusses current federal tax incentives for alternative fuel and advanced technology vehicles. It also outlines how the Energy Policy Act of 2005 changes those incentives. This report will be updated as events warrant.
Sharp increases in U.S. oil exports in recent years has led to perceptions that these exports are not in the national interest, and have drawn Congressional attention. Oil exports from the United States, which averaged 1.4 million barrels daily (mbd) in 2007, and have increased to a daily average of 1.9 mbd during the period of January-September 2008. This represents roughly 10% of total daily consumption of oil products in the United States. A significant volume of these exports are of heavier oil products that U.S. markets cannot absorb. These include petroleum coke used in the making of steel, and residual fuel that is often used as ship fuel. Exports of these products averaged, respectively, 40,000 b/d and 362,000 b/d annually during the first nine months of 2008. There would be no advantage to keeping these products in the United States as it would be costly or impractical to further refine them into products that could be used in the automotive or residential heating sectors. Some have argued that restricting U.S. oil exports would lower product prices. However, because oil is a commodity in a global market, a prohibition on U.S. exports would not lower crude oil prices. Allowing for oil quality differentials, regional anomalies and the policies of the governments of producing and consuming nations, the price for crude oil and refined products is primarily set by world demand, and not by a nation's dependence on imported oil. Prohibiting U.S. oil exports would compel those purchasing these products to seek elsewhere the supply no longer available from the United States. This would bring about a re-balancing in the flow of oil worldwide, but would have no bearing on world demand and would not materially affect price. However, if the re-balancing in oil trade brings about higher transportation costs and other inefficiencies in world trade, it is possible that some additional pressure could be placed on prices. Additional processing, if feasible, of heavier petroleum products for which there is insufficient domestic demand, would also increase costs. A widespread but erroneous impression persists that the United States is continuing to export crude oil from the Alaska North Slope (ANS). Exports of crude oil from Alaska ended in 2000. The only crude exported from the United States is an insignificant amount which does not originate from Alaska; it averaged 25,000 barrels per day (b/d) during the period of January-September 2008. This report summarizes the history and current trends of U.S. oil exports, and examines proposals to restrict U.S. oil exports as a policy option to lower gasoline and diesel prices. (For information on the ANWR debate, see CRS Report RL33872, Arctic National Wildlife Refuge (ANWR): New Directions in the 110th Congress , by [author name scrubbed], [author name scrubbed], and [author name scrubbed].) When the Arab oil embargo began in late 1973, oil development on Alaska's North Slope had not yet commenced. Oil at Prudhoe Bay was discovered in 1968, but no agreement had been reached on a pipeline destination. Two plans were under consideration. One favored by many policy makers envisioned the oil transiting Canada to a Chicago-area destination. Proponents of this plan pointed out that the Midwest had no indigenous source of crude; those opposing it cited the high cost of such a lengthy and expensive pipeline construction project. The other plan, which ultimately became the route of choice for the Trans-Alaska Pipeline System (TAPS), was to transport crude oil to the southern Alaska seaport of Valdez, where it would be shipped to refiners by tanker. Proponents cited large cost savings and the timeliness of the smaller construction project. Opponents of this plan contended that TAPS sponsors' true intent was to export North Slope crude, a contention denied by TAPS supporters. Midwest destination proponents asserted that exports would run counter to the principle that U.S. oil should be used domestically and remain available for consumption in the United States as a matter of energy security. A pipeline from Prudhoe Bay required transiting a route where much of the right-of-way was on federal lands. The 1973-74 Arab oil embargo brought a new sense of urgency to the debate, and legislation was required to end the stalemate over the route. The compromise, the Trans-Alaska Pipeline Act ( P.L. 93 - 153 ), authorized right-of-way for the shorter pipeline to Valdez. However, the law included a proviso that crude oil transiting the right-of-way granted by Congress would not be exported. TAPS was completed in 1977, and initial oil shipments began to flow by year-end. With continued oilfield development on the North Slope, production climbed steadily for 10 years, peaking at 2.0 million barrels per day (mbd) in 1988. In subsequent years, Alaska North Slope (ANS) output declined, falling to 1.5 mbd in 1995 and continuing downward to current flows of roughly 700,000 bd. During the mid-1990s, California produced about 800,000 bd of crude oil. The combination of California's indigenous production, ANS crude, and foreign oil imports resulted in a regional oil surplus, in part because the West Coast market is isolated from the rest of the country. The local glut depressed prices for both California and ANS producers. Since more crude was available on the West Coast than was needed there at that time, about 300,000 bd of crude were shipped via the Panama Canal to the U.S. Gulf Coast and U.S. Virgin Islands. The West Coast oil glut elicited persistent expressions of concern from oil producers who argued that the ban on the export of Alaskan oil production was distorting the market and causing a decline in the price of West Coast production. However, this was a much different oil market than witnessed in 2008.The price for U.S. production on the mainland had fallen to $15.30 per barrel by 1993; California production was roughly $2-$3 per barrel cheaper. California oil producers argued that an increase of $1-$2 per barrel would be sufficient incentive to increase production and create jobs. A June 1994 DOE study, Exporting Alaskan North Slope Crude Oil—Benefits and Costs , found that exporting Alaska crude would increase producer receipts for both California and Alaska oil. The increased producer receipts would be the result of transportation savings realized by avoiding a trip through the Panama Canal. Additionally, DOE estimated that lifting the ban would create 16,000 jobs in the near-term, and predicted that larger producer revenues at the wellhead would result in 100,000 bd more output from Alaska and California than would be the case with continued export restriction. Interest in revisiting the statute prohibiting Alaskan oil exports grew in 1995, when low world oil prices, a relatively benign level of net oil imports (8.0 mbd, in contrast to a current level exceeding 12 mbd), and a supportive Department of Energy (DOE) coincided with renewed legislative efforts in both Houses of Congress. Bills introduced in the 104 th Congress to repeal the ban ( H.R. 70 and S. 395 ) passed by large margins, 324-77 and 74-25 respectively. The Clinton Administration supported ANS crude exports and the President signed P.L. 104 - 58 in November 1995. The first commercial tanker carrying ANS oil to a foreign country departed Valdez on May 31, 1996, approximately six months after the legislation lifting the ban was enacted. In a 1999 report, the General Accounting Office estimated that lifting the ban on Alaskan oil exports had increased California crude oil prices by $.98-$1.30 barrel higher than they would have been had the ban remained in place. Exports of ANS oil totaled 36,000 bd in 1996; they grew to 66,500 bd in 1997, dipped slightly to 52,900 in 1998, and rose to a high of 74,000 bd in 1999. According to unpublished DOE figures, during 1999, Korea (50%), Japan (36%), and China (12%) imported nearly all ANS exports. The list of customers for this oil remained the same throughout the period. Before ANS exports stopped in May 2000, the result of ownership changes and falling output, about 7% of North Slope output was shipped abroad. Viewed relative to total domestic consumption of 19.3 mbd in 2000, these exports comprised less than one-half of one percent. While the export ban was under debate during 1995, the United States was already exporting nearly 900,000 bd—28% in the form of petroleum coke, which is used in making steel. During the period of January through June 2008, exports have averaged 1.7 mbd, of which petroleum coke exports have averaged roughly 22%. Finished motor gasoline represents roughly 9.5% of exports, distillates (the portion of the barrel from which diesel fuel and home heating oil are refined) comprise a little less than 25%. Residual fuel oil averaged less than 22%. During this period, approximately 35% of total U.S. oil exports went to Canada and Mexico in cross-border trades. Oil is a commodity in a global market. Restricting U.S. oil exports would not lead to lower prices for products such as gasoline and diesel fuel. Except in nations where the price of petroleum products is controlled, consumers worldwide pay the prevailing market price, taking into account the quality of the crude, the refining process, taxes, and distribution to points-of-sale. In an unregulated market, economic theory holds that commodities find the most efficient and economic pattern of distribution at market prices. As has been noted, most U.S. oil exports are of products the U.S. market cannot use or absorb. Additionally, prohibiting U.S. oil exports would compel customers for those exports to seek the supply no longer provided by the U.S. elsewhere. This would have no bearing on world demand for crude oil. Price is primarily determined by demand, and by expectations that world supply will be able to satisfy it in the future. Consequently, restrictions on U.S. oil exports are highly unlikely to place downward pressure on world crude prices. However, upward pressure might be placed on oil prices. The current worldwide import and export patterns would need to find a new equilibrium, and it could prove to be less economically efficient than currently. For example, the transportation costs of bringing products from elsewhere might be greater than from the United States. While a reduction in U.S. dependence on petroleum imports could reduce anxiety about the adequacy of supply during an incident that reduced world oil production for a time, a disruption in production from any supplier will affect the price for oil paid by all, no matter how dependent or independent they may be on imported oil.	Concern about exports of United States crude oil, gasoline, diesel fuel and home heating oil periodically draws Congressional attention to the level of these exports, recently observed to increase from 1.4 million barrels daily in 2007, to nearly 1.9 mbd during January-September 2008. Some policymakers have suggested that prohibiting oil exports would lower prices. Legislation introduced in the 110th Congress (H.R. 6515, S. 2598) included provisions prohibiting some or all oil exports, or would have reimposed the ban on Alaskan oil exports; but no bills received major attention. Virtually all U.S. oil exports are of refined products, and no crude is exported from the West Coast. A trickle of crude oil, in a range of 25,000 barrels per day during the first nine months of 2008, is sent to Canada from the upper Midwest. However, as Canada is the largest supplier of crude oil to the United States, providing nearly 1.9 mbd in 2008 (also through September), the U.S. crude sent to Canada is of limited significance. The United States does export some gasoline to Canada and Mexico, and middle distillates to Latin America, but some of this product would not meet U.S. environmental standards. An additional roughly 40% of U.S. oil exports are of "heavier" products, such as residual fuel oil and petroleum coke, for which there is insufficient market in the United States. Because the market for oil is global, a prohibition on U.S. oil exports would have negligible effect on price. Such a restriction would only cause a rebalancing in the movement of petroleum because countries that had purchased U.S. oil products would need to find them from other suppliers. Restrictions on exports might, in fact, create inefficiencies in the movement of world oil supplies that could foster less optimal distribution of oil and possibly lead to higher prices in some markets.
In February 2008, we reported that FERC had made few substantive changes to either its merger and acquisition review process or its postmerger oversight as a consequence of its new responsibilities and, as a result, does not have a strong basis for ensuring that harmful cross- subsidization does not occur. Specifically: Reviewing mergers and acquisitions. FERC’s merger and acquisition review relies primarily on company disclosures and commitments not to cross-subsidize. FERC-regulated companies that are proposing to merge with or acquire a regulated company must submit a public application for FERC to review and approve. If cross-subsidies already exist or are planned, companies are required to describe how these are in the public interest by, for example identifying how the planned cross-subsidy benefits utility ratepayers and does not harm others. FERC also requires company officials to attest that they will not engage in unapproved cross- subsidies in the future. This information becomes part of a public record that stakeholders or other interested parties, such as state regulators, consumer advocates, or others may review and comment on, and FERC may hold a public hearing on the merger. FERC officials told us that they evaluate the information in the public record for the application and do not collect evidence or conduct separate analyses of a proposed merger. On the basis of this information, FERC officials told us that they determine which, if any, existing or planned cross-subsidies to allow, then include this information in detail in the final merger or acquisition order. Between the time EPAct was enacted in 2005 and July 10, 2007––when FERC provided detailed information to us––FERC had reviewed or was in the process of reviewing 15 mergers, acquisitions, or sales of assets. FERC had approved 12 mergers, although it approved three of these with conditions– –for example, requiring the merging parties to provide further evidence of provisions to protect customers. Of the remaining three applications, one application was withdrawn by the merging parties prior to FERC’s decision and the other two were still pending. Postmerger oversight. FERC’s postmerger oversight relies on its existing enforcement mechanisms—primarily self-reporting and a limited number of compliance audits. FERC indicates that it places great importance on self-reporting because it believes companies can actively police their own behavior through internal and external audits, and that the companies are in the best position to detect and correct both inadvertent and intentional noncompliance. FERC officials told us that they expect companies to become more vigilant in monitoring their behavior because FERC can now levy much larger fines––up to $1 million per day per violation––and that a violating company’s actions in following this self-reporting policy, along with the seriousness of a potential violation, help inform FERC’s decision on the appropriate penalty. Key stakeholders have raised concerns that internal company audits tend to focus on areas of highest risk to the company profits and, as a result, may not focus specifically on affiliate transactions. One company official noted that the threat of large fines may “chill” companies’ willingness to self-report violations. Between the enactment of EPAct––when Congress formally highlighted its concern about cross-subsidization––and our February 2008 report, no companies had self-reported any of these types of violations. To augment self- reporting, FERC plans to conduct a limited number of compliance audits of holding companies each year, although at the time of our February 2008 report, it had not completed any audits to detect whether cross- subsidization is occurring. In 2008, FERC’s plans to audit 3 of the 36 companies it regulates—Exelon Corporation, Allegheny, Inc., and the Southern Company. If this rate continues, it would take FERC 12 years to audit each of these companies once, although FERC officials noted that they plan audits one year at a time and that the number of audits may change in future years. We found that FERC does not use a formal risk-based approach to plan its compliance audits––a factor that financial auditors and other experts told us is an important consideration in allocating audit resources. Instead, FERC officials plan audits based on informal discussions between FERC’s Office of Enforcement, including its Division of Audits, and relevant FERC offices with related expertise. To obtain a more complete picture of risk, FERC could more actively monitor company-specific data––something it currently does not do. In addition, we found that FERC’s postmerger audit reports on affiliate transactions often lack clear information––that they may not always fully reflect key elements such as objectives, scope, methodology, and the specific audit findings, and sometimes lacked key information, such as the type, number, and value of affiliate transactions at the company involved, the percentage of all affiliate transactions tested, and the test results. Without this information, these audit reports are of limited use in assessing the risk that affiliate transactions pose for utility customers, shareholders, bondholders, and other stakeholders. In our February 2008 report, we recommended that the Chairman of the Federal Energy Regulatory Commission (FERC) develop a comprehensive, risk-based approach to planning audits of affiliate transactions to better target FERC’s audit resources to highest priority needs. Specifically, we recommended that FERC monitor the financial condition of utilities, as some state regulators have found useful, by leveraging analyses done by the financial market and developing a standard set of performance indicators. In addition, we recommended that FERC develop a better means of collaborating with state regulators to leverage audit resources states have already applied to enforcement efforts and to capitalize on state regulators’ unique knowledge. We also recommended that FERC develop an audit reporting approach to clearly identify the objectives, scope and methodology, and the specific findings of the audit to improve public confidence in FERC’s enforcement functions and the usefulness of its audit reports. The Chairman strongly disagreed with our overall findings and the need for our recommendations; nonetheless, we maintain that implementing our recommendations would enhance the effectiveness of FERC’s oversight. States utility commissions’ views of their oversight capacities vary, but many states foresee a need for additional resources to respond to changes from EPAct. The survey we conducted for our February 2008 report highlighted the following concerns: Almost all states have merger approval authority, but many states expressed concern about their ability to regulate the resulting companies. All but 3 states (out of 50 responses) have authority to review and either approve or disapprove mergers, but their authorities varied. For example, one state could only disapprove a merger and, as such, allows a merger by taking no action to disapprove it. State regulators reported being mostly concerned about the impact of mergers on customer rates, but 25 of 45 reporting states also noted concerns that the resulting, potentially more complex company could be more difficult to regulate. In recent years, the difficulty of regulating merged companies has been cited by two state commissions––one in Montana and one in Oregon––that denied proposed mergers in their states. For example, a state commission official in Montana told us the commission denied a FERC-approved merger in July 2007 that involved a Montana regulated utility, whose headquarters was in South Dakota, which would have been bought by an Australian holding company. Most states have authorities over affiliate transactions, but many states report auditing few transactions. Nationally, 49 states noted they have some type of affiliate transaction authority, and while some states reported that they require periodic, specialized audits of affiliate transactions, 28 of the 49 reporting states reported auditing 1 percent or fewer over the last five years. Audit authorities vary from prohibitions against certain types of transactions to less restrictive requirements such as allowance of a transaction without prior review, but authority to disallow the transaction at a later time if it was deemed inappropriate. Only 3 states reported that affiliate transactions always needed prior commission approval. One attorney in a state utility commission noted that holding company and affiliate transactions can be very complex and time-consuming to review, and had concerns about having enough resources to do this. Some states report not having access to holding company books and records. Although almost all states report they have access to financial books and records from utilities to review affiliate transactions, many states reported they do not have such direct access to the books and records of holding companies or their affiliated companies. While EPAct provides state regulators the ability to obtain such information, some states expressed concern that this access could require them to be extremely specific in identifying needed information, which may be difficult. Lack of direct access, experts noted, may limit the effectiveness of state commission oversight and result in harmful cross-subsidization because the states cannot link financial risks associated with affiliated companies to their regulated utility customers. All of the 49 states that responded to this survey question noted that they require utilities to provide financial reports, and 8 of these states require reports that also include the holding company or both the holding company and the affiliated companies. States foresee needing additional resources to respond to the changes from EPAct. Specifically, 22 of the 50 states that responded to our survey said that they need additional staffing or funding, or both, to respond to the changes that resulted from EPAct. Further, 6 out of 30 states raised staffing as a key challenge in overseeing utilities since the passage of EPAct, and 8 states have proposed or actually increased staffing. In conclusion, the repeal of PUHCA 1935 opened the door for needed investment in the utility industry; however, it comes at the potential cost of complicating regulation of the industry. Further, the introduction of new types of investors and different corporate combinations––including the ownership of utilities by complex international companies, equity firms, or other investors with different incentives than providing traditional utility company services––could change the utility industry into something quite different than the industry that FERC and the states have overseen for decades. In light of these changes, we believe FERC should err on the side of a “vigilance first” approach to preventing potential cross- subsidization. As FERC and states approve mergers, the responsibility for ensuring that cross-subsidization will not occur shifts to FERC’s Office of Enforcement and state commission staffs. Without a risk-based approach to guide its audit planning––the active portion of its postmerger oversight– –FERC may be missing opportunities to demonstrate its commitment to ensuring that companies are not engaged in cross-subsidization at the expense of consumers and may not be using its audit resources in the most efficient and effective manner. Without reassessing its merger review and postmerger oversight, FERC may approve the formation of companies that are difficult and costly for it and states to oversee and potentially risky for consumers and the broader market. In addition, the lack of clear information in audit reports not only limits their value to stakeholders, but may undermine regulated companies’ efforts to understand the nature of FERC’s oversight concerns and to conduct internal audits to identify potential violations that are consistent with those conducted by FERC— key elements in improving their self-reporting. We continue to encourage the FERC Chairman to consider our recommendations. Mr. Chairman, this completes my prepared statement. I would be happy to respond to any questions you or other Members of the Committee may have at this time. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this testimony. For further information about this testimony, please contact Mark Gaffigan at (202) 512-3841 or at gaffiganm@gao.gov. Individuals who contributed to this statement include Dan Haas, Randy Jones, Jon Ludwigson, Alison O’Neill, Anthony Padilla, and Barbara Timmerman. This is a work of the U.S. government and is not subject to copyright protection in the United States. The published product may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately.	Under the Public Utility Holding Company Act of 1935 (PUHCA 1935) and other laws, federal agencies and state commissions have traditionally regulated utilities to protect consumers from supply disruptions and unfair pricing. The Energy Policy Act of 2005 (EPAct) repealed PUHCA 1935, removing some limitations on the companies that could merge with or invest in utilities, and leaving the Federal Energy Regulatory Commission (FERC), which already regulated utilities, with primary federal responsibility for regulating them. Because of the potential for new mergers or acquisitions between utilities and companies previously restricted from investing in utilities, there has been considerable interest in whether cross-subsidization--unfairly passing on to consumers the cost of transactions between utility companies and their "affiliates"--could occur. GAO was asked to testify on its February 2008 report, Utility Oversight: Recent Changes in Law Call for Improved Vigilance by FERC (GAO-08-289), which (1) examined the extent to which FERC changed its merger review and post merger oversight since EPAct to protect against cross-subsidization and (2) surveyed state utility commissions about their oversight. In this report, GAO recommended that FERC adopt a risk-based approach to auditing and improve its audit reports, among other things. The FERC Chairman disagreed with the need for our recommendations, but GAO maintains that implementing them would improve oversight. In its February 2008 report, GAO reported that FERC had made few substantive changes to either its merger review process or its post merger oversight since EPAct and, as a result, does not have a strong basis for ensuring that harmful cross-subsidization does not occur. FERC officials told GAO that they plan to require merging companies to disclose any cross-subsidization and to certify in writing that they will not engage in unapproved cross-subsidization. After mergers have taken place, FERC intends to rely on its existing enforcement mechanisms--primarily companies' self-reporting noncompliance and a limited number of compliance audits--to detect potential cross-subsidization. FERC officials told us that they believe the threat of the large fines allowed under EPAct will encourage companies to investigate and self-report noncompliance. To augment self-reporting, FERC officials told us that, in 2008, they are using an informal plan to reallocate their limited audit staff to audit the affiliate transactions of 3 of the 36 holding companies it regulates. In planning these compliance audits, FERC officials told us that they do not formally consider companies' risk for noncompliance --a factor that financial auditors and other experts told us is an important consideration in allocating audit resources. Rather, they rely on informal discussions between senior FERC managers and staff. Moreover, we found that FERC's audit reporting approach results in audit reports that often lack a clear description of the audit objectives, scope, methodology, and findings--inhibiting their use to stakeholders. GAO's survey of state utility commissions found that states' views varied on their current regulatory capacities to review utility mergers and acquisitions and oversee affiliate transactions; however many states reported a need for additional resources, such as staff and funding, to respond to changes in oversight after the repeal of PUHCA 1935. All but a few states have the authority to approve mergers, but many states expressed concern about their ability to regulate the resulting companies. In recent years, two state commissions denied mergers, in part because of these concerns. Most states also have some type of authority to approve, review, and audit affiliate transactions, but many states review or audit only a small percentage of the transactions; 28 of the 49 states that responded to our survey question about auditing said they audited 1 percent or fewer transactions over the last five years. In addition, although almost all states reported that they had access to financial books and records from utilities to review affiliate transactions, many states reported they do not have such direct access to the books and records of holding companies or their affiliated companies. While EPAct provides state regulators the ability to obtain such information, some states expressed concern that this access could require them to be extremely specific in identifying needed information, thus potentially limiting their audit access. Finally, 22 of the 50 states that responded to our survey question about resources said that they need additional staffing or funding, or both, to respond to changes that resulted from EPAct, and 8 states have proposed or actually increased staffing since EPAct was enacted.
The Congressional Budget Act of 1974 established the basic framework that is used today for congressional consideration of budget and fiscal policy. The act provided for the adoption of a concurrent resolution on the budget (budget resolution) as a mechanism for coordinating congressional budgetary decision making. This process supplements other House and Senate procedures for considering spending and revenue legislation by allowing Congress to establish and enforce parameters with which those separate pieces of budgetary legislation must be consistent. The parameters are established each year when Congress adopts the budget resolution, setting forth overall levels for new budget authority, outlays, revenues, deficit, and debt. These overall spending levels are then allocated to the various committees in the House and Senate responsible for spending legislation. The overall levels and allocations are then enforced through the use of points of order, and through implementing legislation, such as that enacted through the reconciliation process. Points of order are prohibitions against certain types of legislation or congressional actions. These prohibitions are enforced when a Member raises a point of order against legislation that is alleged to violate these rules when it is considered by the House or Senate. Points of order are not self-enforcing. A point of order must be raised by a Member on the floor of the chamber before the presiding officer can rule on its application, and thus for its enforcement. Although the congressional budget process encompasses myriad procedures dealing with spending, revenue, and debt legislation, this report focuses only on that portion of the process that stems from the Congressional Budget Act. The tables below list the points of order included in the Congressional Budget Act, as amended through the Bipartisan Budget Act of 2013 ( P.L. 113-67 ) ( Table 1 ), as well as related points of order established in various other measures. These points of order include provisions in the FY2010 budget resolution ( Table 3 ); the FY2008 budget resolution ( Table 4 ); the Budget Enforcement Act of 1990 ( Table 5 ); the rules of the House and separate orders adopted under H.Res. 5 (114 th Congress) ( Table 6 ); and the provisions of the Statutory Pay-As-You-Go Act of 2010 ( Table 7 ) that pertain to the consideration, contents, implementation, or enforcement of budgetary decisions. Points of order are typically in the form of a provision stating that "it shall not be in order" for the House or Senate to take a specified action or consider certain legislation that is inconsistent with the requirements of the Budget Act. Other provisions of the act, formulated differently, establish various requirements or procedures, particularly concerning the contents and consideration of the budget resolution or reconciliation legislation. These provisions, however, are not typically enforced through points of order, and are not included here. As amended through the Bipartisan Budget Act of 2013, points of order in the Congressional Budget Act are permanent. None of the provisions listed in Table 1 is scheduled to expire, although several points of order have limited applicability or have been rendered moot by the expiration of limits they were intended to enforce. The freestanding point of order protecting the Social Security trust fund in the House established in the Budget Enforcement Act (see Table 5 ) is also permanent. However, other points of order established under recent budget resolutions have various sunset provisions or limited application. Most points of order in the Budget Act apply to measures as a whole, as well as to motions, amendments, or conference reports to those measures. When a point of order is sustained against consideration of some matter, the effect is that the matter in question falls. The application of points of order in the House is clarified in Section 315 of the Budget Act. This provision states that for cases in which a reported measure is considered pursuant to a special rule, a point of order against a bill "as reported" would apply to the text made in order by the rule as original text for the purpose of amendment or to the text on which the previous question is ordered directly to passage. In this way, no point of order would be considered as applying (and no waiver would be required) if a substitute resolved the problem. In addition, the Rules of the House for the 111 th Congress include a provision further specifying that for measures considered pursuant to a special rule, points of order under Title III of the Budget Act apply without regard to whether the measure considered is actually that reported from committee. Under Rule XXI, clause 8, points of order apply to the form of a measure recommended by the reporting committee where the statute uses the term "as reported" (in the case of a measure that has been reported), the form of the measure made in order as an original text for the purpose of amendment, or the form of the measure on which the previous question is ordered directly to passage. The effect of a point of order in the Senate is clarified under Section 312(f), which provides that when a point of order against a measure is sustained, the measure is recommitted to the appropriate committee for any further consideration. This allows the Senate an opportunity to remedy the problem that caused the point of order. Section 312(d) is also designed to provide the Senate with the opportunity to remedy a problem that would provoke a point of order. This provision states that a point of order may not be raised against a measure, amendment, motion, or conference report while an amendment or motion that would remedy the problem is pending. Section 312(e) clarifies that any point of order that would apply in the Senate against an amendment also applies against amendments between the houses. Further, this section also states that the effect would "be the same as if the Senate had disagreed to the amendment." This would allow the Senate to keep the underlying measure pending, and thus retain the ability to resolve their differences with the House. This provision therefore means that any resolution of the differences between the House- and Senate-passed versions of a measure, whether it is in the form of a conference report or not, must adhere to the provisions of the Budget Act. There are exceptions to the general principle of applying points of order to a measure as a whole. The most salient is probably Section 313, the so-called Byrd Rule. This section applies to matter "contained in any title or provision" in a reconciliation bill or resolution (or conference report thereon), as well as any amendment or motion. If a point of order is sustained under this section, only the provision in question is stricken, or the amendment or motion falls. Several of the points of order in the Senate subsequently established under budget resolutions have been written so that they too apply to individual provisions rather than the measure as a whole, in the same manner as provided in Section 313(e) of the Budget Act. In particular, this construction is applied to the points of order against emergency spending designations (Section 403(e)(1) of S.Con.Res. 13 (111 th Congress), Section 314(e) of the Budget Act, and Section 4(g)(3) of the Statutory Pay-As-You-Go Act of 2010). These sections further provide that, if sustained, the effect of the point of order is that the provision making an emergency designation shall be stricken, and may not be offered as an amendment from the floor. The Congressional Budget Act sets forth certain procedures, under Section 904, for waiving points of order under the act. These waiver procedures apply in the Senate only. Under these procedures, a Senator may make a motion to waive the application of a point of order either preemptively before it can be raised, or after it is raised, but before the presiding officer rules on its merits. In the Senate, most points of order under the Budget Act may be waived by a vote of at least three-fifths of all Senators duly chosen and sworn (60 votes if there are no vacancies) (see Table 1 ). The three-fifths waiver requirement was first established for some points of order under the Balanced Budget and Emergency Deficit Control Act of 1985. Beginning with the Balanced Budget Act of 1997, this super-majority threshold was applied to several additional points of order on a temporary basis. These points of order are identified in Section 904(c)(2), and the three-fifths requirement is currently scheduled to expire September 30, 2025. The three-fifths threshold has also been required for the Senate to waive the application of many of the related points of order established in budget resolutions and other measures, such as the Statutory Pay-As-You-Go Act of 2010. As with other provisions of Senate rules, Budget Act points of order also may be waived by unanimous consent. In the House, Budget Act points of order are typically waived by the adoption of special rules, although other means (such as unanimous consent or suspension of the rules) may also be used. A waiver may be used to protect a bill, specified provision(s) in a bill, or an amendment from a point of order that could be raised against it. Waivers may be granted for one or more amendments even if they are not granted for the underlying bill. The House may waive the application of one or more specific points of order, or they may include a "blanket waiver," that is, a waiver that would protect a bill, provision, or amendment from any point of order.	The Congressional Budget Act of 1974 (Titles I-IX of P.L. 93-344, as amended) created a process that Congress uses each year to establish and enforce the parameters for budgetary legislation. Enforcement of budgetary decisions is accomplished through the use of points of order, and through the reconciliation process. Points of order are prohibitions against certain types of legislation or congressional actions. These prohibitions are enforced when a Member raises a point of order against legislation that may violate these rules when it is considered by the House or Senate. This report summarizes the points of order currently in effect under the Congressional Budget Act of 1974, as amended, as well as related points of order established in various other measures that have a direct impact on budget enforcement. These related measures include the budget resolution adopted by Congress in 2015 (S.Con.Res. 11, 114th Congress), as well as earlier related provisions. These include the budget resolution adopted by Congress in 2009 (S.Con.Res. 13, 111th Congress), as well as selected provisions in the Rules of the House and separate orders for the 114th Congress (H.Res. 5, 114th Congress), the Budget Enforcement Act of 1990 (P.L. 101-508), and the Statutory Pay-As-You-Go Act of 2010 (P.L. 111-139). In addition, the report describes how points of order are applied and the processes used for their waiver in the House and Senate. These provisions have been adopted pursuant to the constitutional authority of each chamber to determine its rules of proceeding. This report will be updated to reflect any additions or further changes to these points of order.
The potential outcome of the resignation of long-time Egyptian President Hosni Mubarak is unknown and any ramifications for the oil and natural gas sectors are uncertain. This paper examines the impact of a disruption of Egypt's oil and natural gas sector or a complete halt to exports of either oil or natural gas and closure of the Suez Canal and the Suez-Mediterranean (SUMED) oil pipeline, and the impact of those actions on world oil and natural gas markets. It is important to keep in mind that even the most nationalistic, isolationist, or anti-Western government would most likely not undertake all these measures. Oil, natural gas, and transit generate large amounts of revenue for Egypt and taking these measures could precipitate outside intervention, particularly closing the Suez Canal. Additionally, the timing of these actions would also change the impact on oil and natural gas markets, i.e., whether they occurred during the summer driving season or the winter heating season. An additional factor mitigating the impact on world oil and natural gas markets is that in 2009, Egypt consumed much of the energy it produced and had to import coal, highlighting the limited importance of Egypt as a global energy producer; see Figure 2 . Closing the Suez Canal would be one of the most visible actions a new government could take, particularly for the oil and natural gas industry. Although it would probably take only several weeks to re-route and re-size oil and natural gas tankers along with a possible drawdown of inventories, a closure of the canal would cause an immediate and most likely short-lived rise in global oil prices. Despite there being adequate spare production capacity in the world, oil prices tend to react quickly to market disruptions before settling back to their pre-existing price range. However, if the canal remained closed indefinitely, shipping costs would likely increase, adding upward pressure on oil prices. The same would likely be true for liquefied natural gas (LNG), but the effect would be less. Most LNG is sold under long-term contract, and there is currently a glut of LNG around the world to make up for any disruption. In 2009, an estimated 1.8 million barrels per day of oil (Mb/d) (of the world's roughly 80 Mb/d of production) moved through the canal—almost 1 Mb/d northbound and 0.85 Mb/d southbound. This is down from 2.4 Mb/d in 2008. The decline is mostly attributed to lower global demand for oil; production cuts by the Organization of the Petroleum Exporting Countries (OPEC), particularly from the Persian Gulf producing countries; and piracy. More oil is also flowing to Asia from the Middle East, while more West African oil is going to Europe and North America, and does not have to traverse the canal. 2010 data shows an increase in cargos, but is incomplete for the year. The last time the canal was closed, in 1967 until 1975, approximately 60% of Europe's oil supplies had been passing through the canal. Currently, only about 15% is shipped through the canal. Similar to the decrease in cargos through the canal, the SUMED oil pipeline—which is owned through state companies by Egypt (50%), Saudi Arabia (15%), the United Arab Emirates (15%), Kuwait (15%), and Qatar (5%)—is operating below its capacity of 2.5 Mb/d. In 2009, approximately 1.1 Mb/d moved through the pipeline, a decrease of about 50% compared to 2008. The reduction resulted from many of the same causes as the canal's drop-off in oil transportation. In 2009, 331 billion cubic feet (bcf) of LNG traversed the canal, which represents 4% of global LNG trade and less than 1% of natural gas consumed globally. Unlike oil, LNG cargos through the Suez Canal have been steadily rising. Between 2008 and 2009, the volume of LNG passing through the Suez Canal increased over 40%, more than doubling northbound cargos. Data for the first 10 months of 2010 show a 66% increase in LNG shipments through the canal compared to the 2009 total. The rise in LNG cargos is mostly attributable to the large increase in Qatar LNG exports. Nevertheless, there is ample supply of LNG in the global market, and rerouting LNG cargos to demand centers could be accomplished in a relatively short time frame. While Egypt is a relatively small player in the global natural gas industry, it can have a larger impact on regional natural gas supply. Egypt produces all the natural gas consumed in Lebanon, almost all the natural gas consumed in Jordan, and more than half the natural gas consumed in Israel. On a world scale, Egypt accounted for only 2.1% of global natural gas production and 2.1% of global natural gas trade in 2009. Egypt holds 77 trillion cubic feet or 1.2% of the world's proved gas reserves. Egypt exports natural gas through two pipelines and two LNG facilities. Currently, the Arab Gas Pipeline connects Egypt to Jordan, Lebanon, and Syria. There are plans to expand the pipeline further, enabling Egypt to export natural gas through Turkey to Europe. In 2008, Egypt opened an export pipeline to Israel. There was an explosion in early February that shut down both pipelines for a short time although the damage was primarily to the Arab Gas Pipeline. Egypt has almost 600 bcf of LNG export capacity, with one facility in Damietta and one in Idku. Egypt accounted for approximately 5% of global LNG trade last year, with most cargos going to Europe. At the end of April 2011 the natural gas terminal near El-Arish in Egypt (see Figure 1 above) was attacked for the second time since protests erupted in that country in January. Natural gas from the terminal supplies the Arab Gas Pipeline to Jordan, Syria, and Lebanon, and a separate pipeline to Israel. There is no estimate for how long natural gas will not be exported. The pipeline was also attacked and disabled in February causing natural gas supplies to be stopped for about a month. The terminal has been a target for Bedouins who feel neglected and oppressed by Cairo. Aside from its role as a transit center, withdrawal of Egypt's own oil production from the global market would likely have limited impact on world oil prices. In 2010, Egypt was a small net importer of oil, producing approximately 0.66 Mb/d while consuming close to 0.71 Mb/d. Egypt's oil production has been in decline since the early 1990s, a trend not likely to be reversed. The country—which has the largest refining capacity in Africa, with 975,000 barrels of processing capacity—did export some refined products, such as naptha, but imported others. Cutting off exports of naptha, an oil product that can be used in making petrochemicals and gasoline, could put minor upward pressure on European prices, which is a main market for Egyptian exports. Global oil prices have already reacted to the unrest in Egypt despite no disruption to Egyptian production. The reaction comes from two concerns: (1) the near-term risk that any disruption to oil transit through Egypt could delay oil shipments for several weeks (as they are rerouted around the Cape of Good Hope, adding extra shipping time) and (2) the more significant concern that political unrest could spread to other, more important energy exporters in the region, such as Saudi Arabia, Iraq, or Kuwait. There has been some upward pressure on natural gas prices as companies scramble to hedge against a disruption of Egyptian exports, but the benchmark natural gas price in the United Kingdom is actually down. Should the scenario described above come to pass, there would likely be little impact on the global oil and natural gas market in the long term. Both industries will take some time to recalibrate flows, but should be able to accomplish that with minor or no disruptions. Additionally, the strategic petroleum reserves of member countries of the International Energy Agency, which are mostly from the Organization for Economic Cooperation and Development (OECD), could also be utilized to bridge any gap in oil flows should a disruption prove to be significant.	The change in Egypt's government will likely not have a significant direct impact on the global oil and natural gas markets. There may be some short-term movements in price, mostly caused by perceived instability in the marketplace, but these would most likely be temporary. However, prolonged instability that raises the specter of spreading to other oil and natural gas producers in the region would likely add to upward price pressures. Although Egypt is considered an energy producer or net exporter overall, its oil and natural gas exports are not large enough to affect regional or global prices. The most serious impact would be on regional recipients of its natural gas exports. Egypt's main influence on energy markets is its control of the Suez Canal and the Suez-Mediterranean oil pipeline (SUMED). The current low utilization of these two pieces of infrastructure would likely limit any effect of their closure in the near term. Both the oil and natural gas industry would, over time, find alternative routes to circumvent the canal and pipeline if necessary.
RS21213 -- Colombia: Summary and Tables on U.S. Assistance, FY1989-FY2004 Updated May 19, 2003 While the United States has been providing counternarcotics (CN) assistance to Colombia at least as far back as the mid-1970s, former President George H.W. Bushdramatically increased CN aid to Colombia through his 1989 "Andean Initiative." Grant aid to Colombia hadincreased gradually, albeit not evenly, through the1980s, as Colombia evolved from a major supplier of marijuana to the United States, to nearly the sole supplier ofcocaine. By the end of the 1980s, with coca leafcultivation and cocaine production rising in the Andean region, and Colombia suffering increased political violencefrom the Medellin drug-trafficking cartel, theformer Bush Administration established its new CN program. Under this region-wide initiative, the United Statessubstantially increased State Department supportfor Colombian CN efforts, and provided Colombian security forces, primarily the police, with equipment throughforeign military financing grants and DODequipment drawdowns. As part of the effort to bring military resources to bear on the "war against drugs," in 1991,Congress enacted "Section 1004" of the 1991National Defense Authorization Act (NDAA) ( P.L.101-510 ). This provides the DOD with authority to providetransportation, reconnaissance, training, intelligence,and base support when requested by foreign law enforcement agencies for CN purposes. Funding for Colombia dropped in the first two years of the Clinton Administration budgets. It began to increase in FY1997, with increased attention to eradicationefforts. Until FY1998, however, the numbers fell short of the Bush years. (1) In 1998, Congress established a new authority, Section 1033 of the1998NDAA ( P.L.105-85 ), for the U.S. military to provide non-lethal equipment, and to maintain and repair counter-drug equipment. Table 2 details funding for the eleven yearsfrom FY1989 - FY1999, which totals $1,066.7 million (i.e., $1.07 billion). The 1998 election of a new Colombian president, Andres Pastrana, led to a reevaluation of U.S. policy and greater cooperation. During Pastrana's October 1998state visit, President Clinton announced that the United State would provide nearly three times more assistance toColombia during FY1999 than it had the previousyear. Much of this, however, was the $173.2 million in congressionally-mandated supplemental appropriationsfunding ( P.L. 105-277 ) for helicopter and aircraft upgrades, radar, andpolice assistance that the Administration had not requested. In FY2000, the funding again rose substantially withthe "Plan Colombia" legislation. In July 2000, Congress approved the Clinton Administration's request for $1.3 billion in FY2000 State Department and DOD emergency supplemental appropriations ( P.L. 106-246 ) forthe region-wide "Plan Colombia," of which $860.3 was earmarked for Colombia. Nearly half of the Colombiafunding was dedicated to the "Push into Southern Colombia" program toset up and train two new Colombian Army Counternarcotics battalions (CACBs), which combined with an existingone set up earlier by the United States to form a brigade of some2,700. The brigade assists the Colombian National Police (CNP) in the fumigation of illicit narcotics crops and thedismantling of laboratories, beginning with coca fumigation in thesouthern provinces of Putumayo and Caquetá, where coca cultivation was spreading rapidly. Congress alsoprovided substantial assistance for economic development, displacedpersons, human rights monitors, and administration of justice and other governance programs, all intended to helpColombia counter the many threats to its stability and integrity fromthe trafficking of illegal narcotics. With its FY2002 budget request, the Bush Administration expanded the scope of Clinton's "Plan Colombia" policy through its Andean Regional Initiative (ARI), with continuing highlevels of support for existing "Plan Colombia" programs in Colombia, and increased assistance to states borderingor close to Colombia. Congress provided $380.5 million, nearly all ofthe Administration's requested $399 million, for Colombia in State Department counternarcotics funding in theFY2002 foreign operations appropriations ( P.L. 107-115 ). (2) As inprevious years, the appropriations bill included human rights and other conditions, and a cap on the numberdeployed of military personnel and of private contractors who are U.S.citizens. In February 2002, through requests for FY2002 emergency supplemental appropriations and FY2003 regular appropriations, the Bush Administration sought authority and funding toexpand the scope of military assistance. In both requests, it asked for foreign military financing (FMF) funds to trainand equip Colombian soldiers to defend oil pipelines and otherinfrastructure from attacks by leftist guerrillas, in addition to funding for Plan Colombia programs. Thesupplemental request also sought funding to train Colombian security forces inanti-kidnapping techniques. In addition, the supplemental submission proposed to broaden the authorities of theDefense and State Departments to use FY2002 and FY2003 assistanceand unexpended Plan Colombia ( P.L. 106-246 ) aid to support the Colombian government's "unified campaignagainst narcotics trafficking, terrorist activities, and other threats to itsnational security." In the month before Colombia's new president, Alvaro Uribe, took office in August 2002, Congress provided almost all of the requested supplemental funding and expanded the scopeof military assistance permitted with those and previous-fiscal year funds. With the FY2002 supplementalappropriations (Section 305, P.L. 107-206 ), Congress provided authority forthe Administration to use counternarcotics and other funds to support Colombia's "unified campaign" againstnarcotics trafficking and against activities by organizations designated asterrorist organizations, naming specifically the two major leftist guerrilla groups, the Revolutionary Armed Forcesof Colombia and the National Liberation Army, and the rightist UnitedSelf-Defense Forces of Colombia, as well as in emergency circumstances. Congress, however, did not provideexpanded authority for activities involving any other national securitythreats. Congress extended the authority for State Department FY2003 funding in the omnibus FY2003appropriations bill ( P.L. 108-7 , under the heading "Andean CounterdrugInitiative"), passed in February 2003, which included annual State Department appropriations, and for DOD fundingin the FY2003 defense appropriations bill (Section 8145, P.L.107-248 ). Congress approved just $5 million shy of the $537 million the Bush Administration requested in CN($433.2 million) and FMF ($93 million) funding. In the FY2003supplemental appropriations ( P.L. 108-11 ), Congress included $105 million for Colombia: $34 million in StateDepartment CN funding, $34 million in DOD CN funding, and $37.1million in FMF funding. Both bills condition aid on the observance of human rights and environmental and otherrestrictions. For FY2004, the Bush Administration has requested $573 million for Colombia, including $463 million in Andean Counterdrug Initiative (ACI) funds, and $110 million in ForeignMilitary Financing. It has also requested military funding for Colombia that, for the first time since Plan Colombiawas adopted, is not requested for a very specific purpose. TheAdministration request states that FMF for Colombia is intended "to support counter-terrorism operations andprotect key infrastructure such as the oil pipeline." Table 1 shows aid to Colombia from FY2000 through FY2003 and the FY2004 request. Table 2 shows aid from FY1989-FY1999. (For more information, see CRS Report RL30541 , CRS Report RL31016 , and CRS Report RL31383(pdf) .) Tables 1 and 2 include direct U.S. foreign assistance (i.e., the categories usually counted as U.S. foreign aid, which are in italics ) as well as the costs of goods and services provided toColombia from other U.S. government programs supporting CN efforts there. These figures were taken frompublically-available documents or provided directly by the Departments ofState and Defense. The United States also provides a small amount of DOD Excess Defense Articles (EDA) toColombia. These charts provide as comprehensive a picture as possible of U.S. assistance to Colombia, but there are limitations. For instance, some funds are spent in Colombia on counternarcoticsand other activities that are considered part of U.S. programs: for instance, the Drug Enforcement Administration(DEA) spends its own funds on joint operations in Colombia. Otherfunds are provided through regional programs of USAID and other programs which are not counted as assistanceon a country-by-country basis. No attempt was made to estimate suchfunds. Also, there are inconsistencies among various sources. Because of these and other constraints on gatheringdata, the amount of assistance provided to Colombia may be largerthan the amounts cited in these tables. Table 1. U.S. Assistance to Colombia FY2000-FY2004 (Obligations andauthorizations, $ millions) Notes: NA = Not Available. Figures on State Department INC (International Narcotics Control), ACI (Andean Counterdrug Initiative), USAID, FMF, and IMETfunding from StateDepartment Congressional Presentations, budget justification documents, and allocation information provided bythe Department of State. Figures on INC Air Wing (FY2000-FY2004)provided by the State Department: figures provided May 5, 2003. (INC Air Wing funding supports the sprayeradication efforts. FY2000 figure includes $5.5 million in support of theColombian Army.) Figures on DOD 1004, 1004/124, and 1033 funding provided April 11, 2002, for FY2000-2002;and April 18, 2003, for FY2003 and FY2004. Both INC Air Wingand DOD funding are taken from regional accounts, therefore the FY2003 and FY2004 allocations are estimates,and can be shifted to respond to developing needs in other areas. a FY2000 and thereafter, non-DOD Plan Colombia funds are all assigned to the State Department INC (FY2000 and FY2001) or ACI (FY2002 and thereafter) account; the StateDepartment transfers them to the other agencies carrying out programs in Colombia with those funds. These includethe Department of Justice and USAID. The USAID FY2000 andFY2001 figures are Economic Support Funds (ESF). These USAID figures do not include funds provided to USAIDfrom the INC account. Table 2. U.S. Aid to Colombia FY1989-FY1999 (Obligations and Authorizations, $ millions) Sources: Data is drawn from a number of sources, not all of which are consistent. These include: various editions of the U.S. Overseas Loans and Grants and Assistance fromInternational Organizations "Green Book," prepared by the US AID budget office; various editions of the ForeignMilitary Sales, Foreign Military Construction Sales, and MilitaryAssistance Facts book, prepared by the Department of Defense Security Cooperation Agency; information provideddirectly by the departments of State and Defense that are notrecorded in these publications; and by the General Accounting Office (GAO) for 1996-1998. (See GAO-01-26)Where contradictions existed, GAO data was preferred. Because of apossible lack of data or inaccuracies, some yearly totals may be understated or overstated, particularly prior toFY1997. a In these years, there was assistance in this category of less than $50,000. b Although it is likely that Section 1004 assistance was provided to Colombia as far back asFY1992, there is no public breakdown of such assistance until FY1997. That is the first yearin which DOD provided a publicly-available breakdown by country and authority for funding from its centralcounternarcotics account. c Not included in totals.	Over the past 15 years, from FY1989-FY2003, the United States has providedColombia with over $3.6 billion inassistance, most of it directed to counternarcotics or related efforts. During the first 11 fiscal years(FY1989-FY1999), when assistance totaled just over $1 billion,the annual levels were considerably lower than during the past three fiscal years and the current fiscal year. FromFY2000-FY2003, assistance totals about $2,556billion. The Clinton Administration increased assistance in FY2000 to fund its "Plan Colombia" programs tocounter the spread of coca cultivation in southernColombia. The Bush Administration has continued "Plan Colombia" programs through its Andean Regional Initiative(ARI), which also provides increased funding forColombia's neighbors. In FY2002, President Bush also sought authority to expand the circumstances under whichfunding for the Colombian security forces can beused. As approved by Congress in 2002 and 2003, funding for FY2003 and previous years can be used forcounternarcotics and anti-terrorist purposes. For FY2004, the Bush Administration has requested $573 million in State Department Andean CounterdrugInitiative and Foreign Military Financing funds, andestimates it will spend some $45 million in Colombia from the central State Department Air Wing account. TheDepartment of Defense (DOD) estimates that itwill spend almost $119 million for Colombia from its central counternarcotics account.
The Elementary and Secondary Education Act (ESEA) was last comprehensively amended by the No Child Left Behind Act of 2001 (NCLB; P.L. 107-110 ). Appropriations for most programs authorized by the ESEA were authorized through FY2007. As Congress has not reauthorized the ESEA, appropriations for ESEA programs are currently not explicitly authorized. However, because the programs continue to receive annual appropriations, appropriations are considered implicitly authorized. During the 114 th Congress, the House Education and the Workforce Committee reported the Student Success Act ( H.R. 5 ), which would provide for a comprehensive reauthorization of the ESEA. The bill was subsequently passed on the House floor on July 8, 2015, based on a strictly partisan vote of 218-213. The Senate Health, Education, Labor, and Pensions (HELP) Committee reported the Every Child Achieves Act of 2015 (ECAA; S. 1177 ), which would also provide for a comprehensive reauthorization of the ESEA. S. 1177 was subsequently passed on the Senate floor on July 16, 2015, based on a bipartisan vote of 81-17. Both chambers agreed to a conference to resolve their differences. On November 19, 2015, the conference committee agreed to file the conference report of the Every Student Succeeds Act (ESSA) by a vote of 39-1. On December 2, 2015, the House agreed to the conference report based on a bipartisan vote of 359-64. This report highlights key provisions included in the ESSA and provides some context regarding the treatment of similar provisions in current law, where applicable. Table 1 highlights key provisions in the bill. An emphasis has been placed on issues that have received the most attention during the reauthorization process, including Title I-A accountability and formula issues and Title II-A formula issues. Table 2 depicts the proposed structure of the ESEA under the ESSA and includes all authorizations of appropriations for FY2017 through FY2020. The table also indicates whether a comparable program was included in current law. Table 3 provides examples of programs authorized under current law that would not be retained by the ESSA. The report does not aim to provide a comprehensive summary of ESSA or of technical changes that would be made by the bill. As Congress had not enacted legislation to reauthorize the ESEA, on September 23, 2011, President Obama and the Secretary of Education (hereinafter referred to as the Secretary) announced the availability of an ESEA flexibility package for states and described the principles that states must meet to obtain the included waivers. The waivers exempt states from various academic accountability requirements, teacher qualification-related requirements, and funding flexibility requirements that were enacted through NCLB. State educational agencies (SEAs) may also apply for optional waivers related to the 21 st Century Community Learning Centers program and the use of funds, determinations of adequate yearly progress (AYP), and the allocation of Title I-A funds to schools. However, in order to receive the waivers SEAs must agree to meet four principles established by the U.S. Department of Education (ED) for "improving student academic achievement and increasing the quality of instruction." The four principles, as stated by ED, are (1) college- and career-ready expectations for all students; (2) state-developed differentiated recognition, accountability, and support; (3) supporting effective instruction and leadership; and (4) reducing duplication and unnecessary burden. Taken collectively, the waivers and principles included in the ESEA flexibility package amount to a fundamental redesign by the Administration of many of the accountability and teacher-related requirements included in current law. As of December 2015, 42 states, the District of Columbia, and Puerto Rico had approved ESEA flexibility applications, and ED was reviewing applications from other states. The ESSA would terminate all waivers associated with the ESEA flexibility package on August 1, 2016. The remainder of this report focuses only on current law and does not compare the provisions in the ESSA with the provisions included in the ESEA flexibility package. Table 1 highlights similarities and differences between the ESSA and current law. As previously discussed, areas of the ESSA that have received the most congressional interest are given a more in-depth review in the table. The major areas considered include the following: overall structural and funding issues; Title I-A accountability; Title I-A formulas; teachers, principals, and school leaders; flexibility and choice; and general provisions. No attempts, however, were made to provide a comprehensive analysis of the ESSA. Table 2 depicts the structure of the ESSA by title. For each program with an authorization of appropriations, the amount authorized is provided for FY2017 through FY2020. The table also indicates whether the program is a new program or one that is similar to a program included in current law. An indication that a program is also included in current law does not mean that the program is being retained without changes. For example, while the ESSA would retain Title II-A, a state grant program focused on teachers, it would modify the formula used to award grants and the uses of funds. Table 3 provides examples of programs authorized under current law that would not be authorized under the ESSA. Activities supported by some of the programs that would no longer be authorized, however, may be required or allowable uses of funds under programs that would be authorized under the ESSA. For example, under the Student Support and Academic Enrichment Grants program (block grant program), LEAs could use funds to support counseling programs, create safe school environments, provide physical education, and support the use of technology; and states and LEAs could use funds to reimburse low-income students for the costs of accelerated learning examination fees, such as Advanced Placement (AP) exams. This is not intended to be a comprehensive list of all programs authorized under current law that would no longer be authorized. Rather, this list is based primarily on programs that have been included as line-items on appropriations tables in recent years and would not continue to be authorized by the ESSA.	The Elementary and Secondary Education Act (ESEA) was last comprehensively amended by the No Child Left Behind Act of 2001 (NCLB; P.L. 107-110). Appropriations for most programs authorized by the ESEA were authorized through FY2007. As Congress has not reauthorized the ESEA, appropriations for ESEA programs are currently not explicitly authorized. However, because the programs continue to receive annual appropriations, appropriations are considered implicitly authorized. Congress has actively considered reauthorization of the ESEA during the 114th Congress, passing comprehensive ESEA reauthorization bills in both the House (Student Success Act; H.R. 5) and the Senate (Every Child Achieves Act of 2015; S. 1177). Both chambers agreed to a conference to resolve their differences. On November 19, 2015, the conference committee agreed to file the conference report of the Every Student Succeeds Act (ESSA) by a vote of 39-1. On December 2, 2015, the House agreed to the conference report based on a bipartisan vote of 359-64. Table 1 in this report highlights key provisions included in the ESSA and provides some context regarding the treatment of similar provisions in current law, where applicable. The major areas considered in this examination include the following: overall structural and funding issues; Title I-A accountability; Title I-A formulas; teachers, principals, and school leaders; flexibility and choice; and general provisions. Table 2 depicts the proposed structure of the ESEA under the ESSA and includes all authorizations of appropriations for FY2017 through FY2020. Table 3 provides examples of programs authorized under current law that would not be retained by the ESSA. The report does not aim to provide a comprehensive summary of ESSA or of technical changes that would be made by the bill.
Explosives can remain "live" in munitions and present a safety risk for many years, even decades, after their military use has ceased, especially if munitions are buried and thereby protected from degradation. Munitions used in training exercises do not always detonate upon impact and can burrow beneath the surface where they can remain buried. Munitions that remain on the surface also can be difficult to locate and recover, especially on ranges with dense vegetation that may conceal munitions. The disposal of munitions also can present lingering safety risks if munitions are not properly neutralized and are left intact. Sites where munitions were meant to be destroyed in bulk by open burning or open detonation in earthen pits frequently contain some live munitions. In such cases, certain munitions may not detonate and may be buried by the explosive force of other munitions. In addition to the more immediate safety risks from explosives, chemical constituents in munitions can leach into the environment and present potential health risks if a "pathway" of exposure is present through the air, soil, groundwater, or surface water. Long-term exposure to contaminants can increase the risks of certain health effects, depending on the nature of a particular contaminant and the duration and concentration of exposure. For example, perchlorate is a common substance used in munitions. There has been increasing attention to the potential health risks of this substance in conjunction with efforts to regulate exposure through drinking water. (See CRS Report RS21961, Perchlorate Contamination of Drinking Water: Regulatory Issues and Legislative Actions , by [author name scrubbed].) For many years, DOD addressed potential risks from munitions on former training ranges and disposal sites without a consolidated effort in place to track progress and costs. In response to concerns among states, communities, and environmental organizations about the adequacy of these efforts, Congress included provisions in Sections 311 and 312 of the National Defense Authorization Act for Fiscal Year 2002 ( P.L. 107-107 ), requiring DOD to establish a comprehensive program to identify, investigate, and clean up munitions on former U.S. military training ranges in the United States, including U.S. territories. These provisions also require the cleanup of discarded munitions that were not properly disposed of in the United States, and the cleanup of contaminants leached from munitions into the environment. DOD established a Military Munitions Response Program within its Defense Environmental Restoration Program to fulfill these requirements. Section 312 of the National Defense Authorization Act for Fiscal Year 2003 ( P.L. 107-314 ) later required DOD to appoint a single official to manage these efforts. In accordance with the above authorities, the Military Munitions Response Program addresses the cleanup of former training ranges and munitions disposal sites on both active and closed military installations in the United States. The cleanup of operational training ranges is administered separately as an operation and maintenance activity on an installation-by-installation basis. Relatively little cleanup is performed on operational ranges as long as they remain operational. DOD generally clears munitions from its operational ranges to the extent necessary for the safety of military personnel to gain access to those lands for training. Once munitions are removed from an operational range, they are subject to federal regulations that govern their disposal. More extensive cleanup of operational ranges can be required if contaminants leached from munitions migrate off-site and present potential risks to adjacent populations. The authorities for the Military Munitions Response Program also do not extend to training ranges at U.S. military installations located in other nations. The Status of Forces Agreement between the U.S. government and the government of each nation in which U.S. forces are stationed (i.e., the host nation) generally governs the cleanup of munitions and other hazardous contamination. Under these agreements, the extent to which the U.S. government is held responsible for cleanup at U.S. military installations abroad can vary widely from one nation to another. Although the above laws authorized the investigation and cleanup of former military training ranges and munitions disposal sites in the United States, the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA, commonly referred to as Superfund) generally governs the degree of cleanup at individual sites, and how cleanup is accomplished. CERCLA also specifies that requirements of the Solid Waste Disposal Act must be met, which generally applies to disposal facilities operated with permits issued under that latter statute. These laws generally require cleanup decisions to be based on potential risks, and allow multiple types of actions to address those risks, rather than one approach. The Environmental Protection Agency (EPA) and the states are responsible for overseeing DOD's efforts to clean up munitions and related contamination to ensure that applicable requirements of the above statutes are met. The degree of cleanup required can vary considerably from site to site, depending on the pathways of exposure that would result from the current or anticipated land use, and the means to prevent exposure. For example, munitions may be cleared to a certain depth beneath the surface at some sites, whereas surface clearance only may be performed at others. Regardless of the depth of clearance, removal of a munition often is accomplished not by transporting it from the site, but by detonating it in place, referred to as "Blow in Place" (BIP). Because of the sensitivity of munitions to disturbance, detonation in place often is a safer way to eliminate the explosive risk, rather than unearthing a munition and transporting it elsewhere for disposal. In some cases, restrictions on public access are used to manage potential risks, allowing munitions to be left in place. For example, access restrictions are used at many sites where clearing vegetation to locate munitions would destroy wildlife habitat or plant species protected by federal or state law. As indicated in Table 1 , DOD had identified 3,537 sites as of the end of FY2007 on former training ranges and munitions disposal sites in the United States that warranted investigation to determine whether munitions and related contamination were present. Nearly half of these potentially contaminated lands are located on Formerly Used Defense Sites (FUDS), decommissioned before the first consolidated Base Realignment and Closure (BRAC) round in 1988. Many of the FUDS sites are from the World War II era and earlier. Installations closed under the BRAC rounds contained the least number of sites. Most of the other sites are located on active military installations. In October 2005, DOD promulgated regulations for prioritizing response actions among munitions sites, based primarily on potential risks. Numerous factors determine the degree of risks at an individual site, such as the type of munitions present, whether munitions are located at or below the surface, the accessibility of a site, the proximity of munitions to populated areas, human health and environmental risks from potential exposure to munitions contaminants, and whether cultural or ecological resources are present. Of the sites identified so far, planned response actions were complete at 920 sites as of the end of FY2007. DOD deemed that response actions likely would not be needed at 470 sites because munitions were not known or suspected to be present, or potential risks were thought to be low enough not to warrant a response. Response actions were under way or planned at 1,113 sites. DOD had not completed or begun its evaluation of potential risks at 1,034 sites. Therefore, much remained uncertain about potential risks at those locations and the actions and funding needed to address those risks. Funding for the Military Munitions Response Program comes out of multiple defense appropriations accounts. Which account funds a particular site depends on whether the installation is active or closed, and which military branch has jurisdiction over the site. There are five Defense Environmental Restoration Accounts. Three of these accounts are reserved mainly for active installations of the Army, Navy, and Air Force. A fourth account is reserved for defense-wide sites administered primarily by the Defense Logistics Agency. A fifth account is dedicated to FUDS sites, administered by the Army Corps of Engineers. Two BRAC accounts currently fund cleanup at bases closed under each BRAC round. All of these accounts also fund the cleanup of other hazards at non-munitions sites. DOD is responsible for prioritizing and allocating monies appropriated to each account to meet competing cleanup needs among contaminated sites. As indicated in Table 2 , the amount DOD spent from the above accounts as of the end of FY2007 for the cleanup of munitions was 6% of the total costs that DOD estimated would be needed to complete cleanup at all sites it had identified at that time. The table shows amounts spent on the cleanup of munitions back to FY1997. Prior to that time, the costs to clean up munition sites were not broken out from the costs to clean up other hazards at non-munitions sites. The lack of a breakout of costs for each type of site prior to FY1997 makes it difficult to determine the total funds DOD has expended on munitions cleanup historically. DOD spent a total of $1.24 billion from FY1997 through FY2007 on the cleanup of munitions and related contamination at former training ranges and munitions disposal sites it had identified. DOD estimated that another $19.23 billion would be needed from FY2008 into the future to complete outstanding cleanup actions planned at that time. Cleanup at FUDS sites accounts for 68% of the estimated future costs. Cleanup at active installations accounts for 27% of the estimated future costs. Although BRAC sites account for only 5% of the estimated future costs, communities seeking redevelopment of these properties have emphasized the importance of funding needs at these sites to make them safe for civilian reuse. (See CRS Report RS22065, Military Base Closures: Cleanup of Contaminated Properties for Civilian Reuse , by [author name scrubbed].) The above site status and costs focus on the cleanup of former training ranges and munitions disposal sites on land. Munitions also are known or suspected to be present in underwater areas adjacent to some training ranges. In some cases, obsolete or damaged munitions were dumped offshore. Submerged munitions generally have received less attention than munitions on land because of the perceived lower risks of human exposure. Locating and removing munitions underwater also presents greater challenges, making it a more difficult and costlier undertaking than cleanup on land. Challenges arising from the cleanup of munitions can be multiplied several times when munitions are found underwater. In some cases, removing munitions from underwater areas could present greater risks than leaving the munitions in place and warning individuals to avoid them. Although the cleanup of munitions in underwater areas has received less attention, there has been rising concern about potential risks, especially in coastal areas where DOD disposed of surplus or damaged munitions. The U.S. Armed Forces disposed of many of these weapons during the World War II era. In response to requirements in Section 314 of the John Warner National Defense Authorization Act for Fiscal Year 2007 ( P.L. 109-364 ), DOD has released more recent information on the past disposal of chemical weapons off U.S. shores. Congress also has funded a pilot program to identify chemical weapons at known disposal sites off the coast of Hawaii. While concern about potential risks has heightened, locating the weapons at these and other sites would be challenging. The exact coordinates of offshore disposal sites are uncertain, and ocean currents could have moved the weapons over time. If found, removing the weapons could present other obstacles. Members of Congress, states, communities, and environmental organizations have expressed concern about the adequacy and pace of the cleanup of munitions and related contamination at the current inventory of sites, and have questioned whether munitions may be present at other sites not yet identified. The capability of current technologies to locate and neutralize munitions efficiently and effectively also has been an issue. The cleanup of FUDS sites has caused the greatest concern among the public. Many of these properties ceased to be used for military purposes decades ago and have been put to a variety of civilian uses, including residential use in some cases. Potential risks on these lands have motivated desires for greater funding to speed the pace of cleanup. The challenge of cleaning up munitions on closed bases awaiting reuse has motivated interest in greater funding to speed the pace of economic redevelopment to replace lost jobs. There has been less concern among the public about munitions sites on active installations, primarily because these sites pose little, if any, immediate safety risks to the general civilian population. However, some communities adjacent to active installations have expressed concern about health risks from potential exposure to munitions contaminants that may migrate off-site through groundwater. Some also have questioned whether DOD's estimates of future costs reflect actual funding needs. Uncertainties about the degree of cleanup that will be required at many sites make it challenging to accurately estimate the outstanding costs to complete cleanup. DOD estimates cleanup costs based on its current knowledge of individual site conditions, and its assumptions about the response actions that will be required to close out these sites. DOD revises its cost estimates as more is learned about the type and extent of contamination present at each location, and the actions that federal and state regulators will require to address potential risks. In effect, these estimates are "moving targets" that change as more information becomes available to project the costs of future actions. Considering that many sites are not evaluated and that additional sites could be identified in the future, DOD's most recent assumptions of the resources that may be necessary to address cleanup challenges could differ from what may be required. Actual costs could be higher than estimated, if more munitions and contamination are discovered than expected, and more extensive cleanup is needed than anticipated. New or more stringent cleanup standards also could cause costs to rise. Whether more attention is given to munitions in underwater areas is another factor that could contribute to the possible need for greater resources to meet cleanup needs. On the other hand, the development of more cost-effective technologies to locate and neutralize munitions, and clean up related contamination, could help to control costs. The effect of inflation over time also could cause actual costs to differ from current estimates. In carrying out its statutory authorities, DOD continues to work with federal and state regulators to determine the degree of cleanup that is warranted to protect human safety, health, and the environment. As this process unfolds, more information will become available to assess the resources needed to address potential risks, both in terms of appropriations by Congress and the capabilities of munitions cleanup technologies.	How to address safety, health, and environmental risks from potential exposure to abandoned or discarded military munitions has been a long-standing issue. There has been particular concern among the public about such risks at older decommissioned military properties that have been in civilian use for many years, and at closed military bases still awaiting redevelopment. Many of these properties contain former training ranges and munitions disposal sites where the extent of unexploded ordnance (UXO) and related environmental contamination is not fully understood. The approval of another round of military base closings in 2005 raised additional concerns about munitions risks on certain bases, and whether cleanup challenges may limit their civilian reuse. This report discusses the potential hazards of military munitions and related contamination, the authorities of the Department of Defense (DOD) to address these hazards, the status and costs of cleanup efforts, and issues for Congress.
The Federal Acquisition Regulation (FAR) establishes the policies and procedures governing suspension and debarment actions related to federal contracts. The Nonprocurement Common Rule (NCR) establishes the policies and procedures governing suspension and debarment for discretionary nonprocurement awards (i.e., grants, cooperative agreements, scholarships, or other assistance). The FAR and the NCR specify numerous causes for suspensions and debarments, including fraud, false statements, theft, bribery, tax evasion, and any other offense indicating a lack of business integrity. A suspension is a temporary exclusion pending the completion of an investigation or legal proceeding which generally may not last longer than 18 months, while a debarment is an exclusion for a reasonable, specified period depending on the seriousness of the cause, but generally should not exceed 3 years. A suspension or debarment under either the FAR or NCR has government-wide effect for all purposes, so that a party precluded from participating in federal contracts is also precluded from receiving grants, loans, and other assistance, and vice versa. OMB has the authority to issue guidelines for nonprocurement suspensions and debarments and the Office of Federal Procurement Policy within OMB provides overall direction for government-wide procurement policies, including those on suspensions and debarments under the FAR. ISDC, established in 1986, monitors the government- wide system of suspension and debarment. The ISDC consists of representatives from 24 federal agencies, as well as 18 independent agencies and government corporations. The Duncan Hunter National Defense Authorization Act for Fiscal Year 2009 augmented and clarified certain ISDC functions to include providing assistance to help agencies achieve operational efficiencies in their suspension and debarment programs. The ISDC was also made responsible for coordinating lead- agency responsibility when multiple agencies have a potential interest in pursuing suspension and debarment of the same entity. In 2011, we made recommendations to improve agency and government- wide suspension and debarment efforts. We reviewed 10 agencies and found that the four agencies with the most procurement-related suspension and debarment cases shared common characteristics: a suspension and debarment program with dedicated staff, detailed policies and procedures, and practices that encourage an active referral process. Agencies are required to establish procedures for referring appropriate matters to their suspension and debarment official for consideration. The six agencies with few or no procurement-related suspensions or debarments for the period we reviewed—Commerce, HHS, Justice, State, Treasury, and DHS’s FEMA—did not have these characteristics regardless of each agency’s volume of contracting activity. To improve their suspension and debarment programs, we recommended these agencies take action to incorporate the characteristics associated with active programs. We also reported that government-wide efforts to oversee and coordinate suspensions and debarments faced a number of challenges. For example, we reported that the ISDC relies on agencies’ participation and resources to fulfill its missions. To improve suspension and debarment programs at all agencies and enhance government-wide oversight, we recommended that OMB issue government-wide guidance that (1) describes the elements of an active suspension and debarment program, and (2) emphasizes the importance of coordinating with the ISDC. We found that the Departments of Commerce, HHS, Justice, State, the Treasury, and DHS’s FEMA all took action since we made recommendations in 2011 to incorporate characteristics associated with active suspension and debarment programs.agencies have addressed staffing issues through actions such as defining roles and responsibilities, adding positions, and consolidating the suspension and debarment function into one office. The six agencies also have taken actions such as issuing formal policy and promulgating detailed guidance. Finally, the six agencies have engaged in practices that encourage an active referral process, including establishing positions to ensure cases are referred, developing case management tools that Since 2011, all six allow for referral tracking and case reporting, and establishing training programs. Table 1 summarizes the actions that agencies have taken since 2011. We found that all six agencies reported an increase in the number of suspension and debarment actions from fiscal year 2009 to 2013 as shown in table 2. The agencies generally experienced a notable increase starting in fiscal year 2011 when they began to take action to incorporate the characteristics associated with active suspension and debarment programs. Agency officials told us that the actions taken since 2011 to incorporate the characteristics associated with active suspension and debarments programs have resulted in an increased level of suspension and debarment activity at their respective agencies, though officials emphasized different factors. For example, officials from the Departments of Commerce, State, and the Treasury stated that improved coordination between the Office of the Inspector General and the Suspension and Debarment Official coupled with increased training and awareness resulted in more referrals and the processing of more actions. While the number of actions Treasury reported for fiscal years 2009 through 2013 has been modest, officials told us that 62 actions have been processed in the first 5 months of fiscal year 2014 and they expect continued increases in the number of referrals. Justice officials stated that one factor that may have contributed to an increased number of referrals and actions is the Attorney General’s January 2012 memorandum to all litigating authorities and the Director of the Federal Bureau of Investigation, reminding them to consider whether the facts of a case could be used as a basis for an exclusion or debarment and to coordinate with agency suspension and debarment authorities. HHS officials noted that an increased number of actions have resulted in part from the Office of Inspector General providing additional resources for training investigators and auditors on how to make suspension and debarment referrals involving procurement and nonprocurement matters. Officials from DHS attributed an increase in the number of actions at FEMA and across DHS to having a centralized suspension and debarment office, a directive establishing common standards, increased staffing, and training. The number of suspension and debarment actions government-wide has increased in recent years, more than doubling from 1,836 in fiscal year 2009 to 4,812 in fiscal year 2013, as shown in figure 1. ISDC officials do not consider the overall number of suspensions and debarments as the only measure of success, and emphasized that increased suspension and debarment activity has been coupled with agencies’ increased capability to use suspension and debarment appropriately and adhere to the principles of fairness and due process as laid out in the governing regulations. According to ISDC officials, the programmatic improvements made by many agencies are due in part to increased management attention within individual agencies, guidance from OMB, and support from the ISDC. OMB and ISDC have taken a number of actions to strengthen government-wide suspension and debarment efforts. In response to GAO’s recommendations, on November 15, 2011, OMB directed agencies to take a number of actions to address program weaknesses and reinforce best practices in their suspension and debarment programs, including the following: Appoint a senior accountable official, if one has not already been designated, to be responsible for assessing the agency’s suspension and debarment program and the adequacy of available resources, ensuring that the agency maintains effective internal controls and tracking capabilities, and ensuring that the agency participates regularly on the ISDC. Review internal policies, procedures, and guidance to ensure that suspension and debarment are being considered and used effectively. ISDC reported in September 2012 that each of the 24 agencies said it had an accountable official in place responsible for suspension and debarment activities, including assessing the adequacy of available training and resources; taken steps to address resources, policies, or both—in some cases by dedicating greater staff resources to handle referrals and manage cases and in others by entering into agreements to be mentored by the managers of successful programs; and procedures to forward possible actions to the suspending and debarring official. The ISDC also has increased its efforts to coordinate government-wide suspension and debarment efforts by promoting best practices and coordinating mentoring and training activities. For example, the ISDC maintains an online library of documents aimed at promoting standardization and has efforts to help agencies develop their suspension and debarment programs to ensure appropriate attention to administrative due process in accordance with the governing regulations. ISDC officials cite robust participation in the ISDC, including agencies with mature suspension and debarment programs, which has enabled the ISDC to assist agencies in making program improvements and, in some cases, standing up programs where none existed before. The ISDC also conducts training for member agencies, including cosponsoring with the Council of the Inspectors General on Integrity and Efficiency an annual debarment workshop. Also, ISDC members provide instructors for the debarment training courses offered by the Federal Law Enforcement Training Centers.understanding of suspension and debarment and holds monthly meetings to discuss topics, including specific suspension and debarment actions and selected agencies’ suspension and debarment procedures and tracking tools. Finally, the ISDC undertakes outreach to promote The six agencies we reviewed reported that they highly value the functions performed by the ISDC as a focal point for government-wide suspension and debarment efforts. For example, Treasury officials told us that they designed their suspension and debarment program around the best practices identified by the ISDC, taking advantage of templates, guidance, and mentoring available through the committee. Officials from several agencies noted that the ISDC is instrumental in managing an informal process to help agencies coordinate lead agency responsibility when multiple agencies have a potential interest in pursuing suspension and debarment of the same entity. According to officials from the agencies we reviewed, the ISDC regularly distributes information on new potential cases reported by the agencies. The agencies take into consideration factors such as financial, regulatory, and investigative interests in determining which agency should take the lead in the case. Several of the agencies we reviewed reported that this process helps identify the most appropriate lead, while also involving other agencies that may have a stake in a particular action. Officials from several agencies also reported that ISDC monthly meetings provide an important forum through which suspension and debarment officials can seek advice from agency counterparts on a range of issues. In addition to speaking with officials from the six agencies we reviewed in 2011, we also reviewed the VA’s suspension and debarment program to determine if government-wide efforts had affected the program. Based on our review, we found that the VA currently has the characteristics associated with active suspension debarment programs. For example, VA has a Debarment and Suspension Committee with a staff of about 10 positions that review all referrals for procurement-related suspension and debarment actions, conduct fact-finding, and present facts and recommendations to the Suspension and Debarring Official. Officials reported that VA has taken action to improve its suspension and debarment program in part in response to government-wide efforts. For example, VA’s Suspension and Debarment Committee is currently drafting standard operating procedures to reflect leading practices. VA officials reported that the number of procurement-related suspension and debarment actions at VA has increased from 34 in fiscal year 2011 to 73 in fiscal year 2013. We provided a draft of this report to OMB and the Departments of Commerce, Health and Human Services, Justice, Homeland Security, State, the Treasury, and Veterans Affairs for review and comment. In an email response, the Associate Administrator of the Office of Federal Procurement Policy commented that OMB is pleased with the progress agencies have been making to strengthen their capabilities to consider the use of suspension and debarment when necessary. Further, OMB credits the work of the Interagency Suspension and Debarment Committee in helping to make many of the achievements possible. None of the seven agencies we reviewed provided substantive comments, but the Departments of Commerce, Health and Human Services, and Homeland Security provided technical comments which we incorporated, as appropriate. We are sending copies of this report to interested congressional committees; the Director of the Office of Management and Budget; the Attorney General and the Secretaries of Commerce, Health and Human Services, Homeland Security, State, the Treasury, and Veterans Affairs. The report also will be available at no charge on the GAO website at http://www.gao.gov. If you or your staff have any questions about this report, please contact me at (202) 512-4841 or woodsw@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. Individuals who made key contributions to this report were Marie Mak, Director; Tatiana Winger, Assistant Director; Kristine R. Hassinger; Angie Nichols-Friedman; and Russ Reiter.	To protect the government's interests, agencies can use suspension and debarment to exclude individuals, contractors, and grantees from receiving future contracts, grants, and other federal assistance due to various types of misconduct. In 2011, GAO reviewed ten agencies and found that agencies issuing the most procurement related suspensions and debarments shared common characteristics: dedicated staff, detailed policies and procedures, and an active referral process. GAO recommended that six agencies—the Departments of Commerce, Health and Human Services, Justice, State, the Treasury, and the Federal Emergency Management Agency—incorporate those characteristics, and that OMB issue guidance to improve oversight and government-wide suspension and debarment efforts. GAO was asked to review actions taken to implement the 2011 recommendations. This report examines (1) actions taken by the six agencies to incorporate characteristics of active suspension and debarment programs; (2) changes in the level of suspension and debarment activity; and (3) actions taken to improve oversight and government-wide efforts. To do so, GAO reviewed suspension and debarment programs, interviewed agency officials, verified the accuracy of agency data, and reviewed government-wide efforts. GAO is not making any new recommendations in this report. OMB commented that it is pleased with the progress that agencies have made and with the work of the ISDC.The other agencies did not provide substantive comments. The six agencies GAO reviewed all took action to incorporate characteristics associated with active suspension and debarment programs. Since GAO made recommendations to do so in 2011, the agencies have addressed staffing issues through actions such as defining roles and responsibilities, adding positions, and consolidating suspension and debarment functions. The agencies also have issued formal policies and promulgated detailed guidance. Finally, the agencies have engaged in practices that encourage an active referral process, such as establishing positions to ensure cases are referred for possible action, and developing case management tools. The number of suspension and debarment actions government-wide has more than doubled from 1,836 in fiscal year 2009 to 4,812 in fiscal year 2013. The number of suspension and debarment actions for the six agencies increased from 19 in fiscal year 2009 to 271 in fiscal year 2013 (see table below). The six agencies generally experienced a notable increase starting in fiscal year 2011 when the agencies began to take action to incorporate the characteristics associated with active suspension and debarment programs. The Office of Management and Budget (OMB) and the Interagency Suspension and Debarment Committee (ISDC) have taken action to strengthen government-wide suspension and debarment efforts. In November 2011, OMB directed agencies to address weaknesses and reinforce best practices in their suspension and debarment programs. The ISDC reported to Congress in September 2012 that, per OMB direction, the 24 standing member agencies of the ISDC had an accountable official in place responsible for suspension and debarment; taken steps to address resources, policies, or both; and procedures to forward matters to the suspension and debarment official for possible action. The ISDC has promoted best practices, coordinated mentoring and training, and helped coordinate lead agency responsibility when multiple agencies have an interest in pursuing suspension and debarment of the same entity. Reported increases in the number of suspension or debarment actions suggest that its efforts have been effective. ISDC officials emphasized that increased activity has been coupled with an increased capability to use suspension and debarment appropriately while adhering to the principles of fairness and due process.
RS21288 -- Smallpox: Technical Background on the Disease and Its Potential Role in Terrorism Updated January 10, 2003 Viruses are essentially small pieces of genetic material in a protein coat. They cannot reproduce by themselves. To multiply, a virus must hijack the replicationmachinery in living cells by infecting another organism. Smallpox is caused by the Variola virus, which undernormal circumstances only infects human cells. There are two types of Variola viruses. Variola minor causes a relatively mild disease that has less thana 1% fatality rate. Variola major causes what isgenerally thought of as smallpox, a very severe illness with a fatality rate of approximately 30%. (1) These viruses are part of the Orthopox genus whichalsocontains the viruses responsible for vaccinia, monkeypox, cowpox, camelpox and mousepox. (2) Before the last reported case of smallpox (a result of a laboratory accident in England in 1978), smallpox was considered to be one of the worst scourges inhuman history. Smallpox is estimated to have killed between 300 and 500 million people in the twentieth centuryalone. Once infected, the victim incubates the virus for seven to seventeen days during which the victim feels and appears normal. This stage is followed by one tofour days of high fever, malaise, headache, and muscle ache, often accompanied with nausea and vomiting. Duringthis time the person looks and feels very ill,but is not yet contagious. After this stage, the characteristic sores develop; first in the mouth then over the rest ofthe body. If the victim survives, the soresscab over and turn to scars in three to four weeks. About 30% of unvaccinated victims die (some sources suggestup to 50%). Up to 80% of the survivors aredisfigured by pockmarks or limb deformities. Smallpox is contagious, but the Centers for Disease Control and Prevention (CDC) (3) considers it to spread less widely and less rapidly than chickenpox,measles, whooping cough, or influenza. The victim is most likely to infect other people when the sores in the mouthare most active. This is in the first weekof the rash when virus comes out of the sores and into the saliva where they are easily aerosolized by coughing orsneezing. Although smallpox is usuallytransmitted by face to face contact, it can also be transmitted through the air over dozens of feet and by contaminatedclothing or bedding. The vaccine works by infecting a person with vaccinia virus which is closely related to smallpox virus. (4) The vaccine triggers immunity against all closelyrelated viruses, including smallpox. This immunity decreases over time; however, people who contract smallpoxeven thirty years after vaccination are muchless likely to die than unvaccinated people. (5) Interestingly, the vaccine also helps reduce the severity of the disease if given to victims within a few days aftersmallpox exposure. This is the only known treatment for smallpox, although several antiviral drugs have shownpromise in preliminary laboratory studies. Although the vaccinia vaccine is very effective at preventing smallpox, it is not without risks. Its complication rate is higher than that associated with anyroutinely used vaccine. Based on historical experience, experts estimate that most vaccinees will experience onlymild side effects such as low-grade fever, but1 in 797 people will experience serious side effects. Table 1 describes the historical complicationrates. Table 1. Historical smallpox vaccine complication rates (cases/million vaccinations) Source: CDC, Morbidity and Mortality Weekly Report, June 22, 2001, Vol. 50, No. RR-10, p.8. Inadvertent inoculation is the spread of the usually localized vaccinia infection to other parts of the body, causing sores and scarring most commonly on theface, genitals, and rectum. Generalized vaccinia causes vaccinia sores over the entire body. Eczema vaccinatumis a sometime fatal skin infection in peoplewho have a skin disorder such as eczema or atopic dermatitis. Encephalitis is a very serious and sometimes fatalinflammation of the brain. Progressivevaccinia is an inexorable rotting away of the flesh around the vaccine site that can sometimes also be fatal. As aresult of these complications, experts project1-2 deaths per million vaccinations. Complications are not limited to people who get vaccinated. People who come into contact with those who have been vaccinated within two weeks may also beexposed to the live vaccinia virus and develop complications. Some experts estimate that up to 20% of thecomplications will occur in the unvaccinatedcontacts. Historically, for every million people vaccinated, about 65 people who were not vaccinated becameinfected and developed a serious complicationsimply by coming into contact with a vaccinee. (6) Because of the high rate of vaccine complications, in 1971, U.S. public health authorities rescinded therecommendation for universal domestic smallpox vaccination. It is likely that the numbers in Table 1 underestimate the current and future problem with the vaccine. Since these numbers were last compiled in 1968, thenumber of people predisposed to problems with the vaccine has increased. Some experts estimate that up to 25%of the population now have conditions thatwould make vaccination contraindicated. These conditions include a history of eczema or other exfoliative skindisorder, pregnancy, or any immunodeficiencywhich could be caused by AIDS, chemotherapy or anti-rejection drugs following organ transplant. Because of theserious risk of transferring the virus to ahousehold member, it is recommended that people who live with someone with one of the above conditions notreceive the vaccine. Excluding these people iscomplicated by the large number of people who are unaware that they have a disease that will produce a serious sideeffect. For example, a vaccinee could livewith one of the estimated 300,000 people in the United States that do not know they are HIV positive. The only product proven to counter some of the vaccine complications is vaccinia immunoglobulin (VIG). This is extracted from the blood of peoplevaccinated with the smallpox vaccine. It is only effective for treatment of eczema vaccinatum and certain cases ofprogressive vaccinia. Significantly, VIGprovides no benefit in the treatment of postvaccinial encephalitis. Current civilian supplies of VIG are controlledby the CDC and are estimated to be enough todeal with the complications from about 27 million vaccinations. The CDC is in the process of procuring more VIG. Because the antiviral drug cidofovir hasshown some anti-vaccinia activity in lab animals, it is available for use as an Investigational New Drug when VIGtreatment fails. Although smallpox was officially declared to have been eliminated from the wild in 1980, many countries maintained laboratory stocks of the virus obtainedduring outbreaks. By 1985, these stocks were supposed to have been destroyed or transferred to one of the officialrepositories; one in the Soviet Union and theother in the United States. Russia inherited the smallpox stewardship following the break up of the Soviet Union. Although only the United States and Russia have declared stocks ofsmallpox, some experts have stated that although very unlikely, it is possible that some other countries haveundeclared stocks. Countries that may havedeliberately or inadvertently retained smallpox virus from naturally occurring outbreaks before eradication include:China, Cuba, India, Iran, Iraq, Israel, NorthKorea, Pakistan, and Yugoslavia. (7) A November2002 CIA intelligence review added France to this list and reportedly states a "high, but not very high [levelof] confidence" that Iraq and France have live smallpox samples and a "medium" level of confidence that NorthKorea does. (8) The highest barrier to a non-state sponsored terrorist using smallpox is likely to be the difficulty in obtaining the virus in the first place. Because all countrieshave stopped smallpox vaccination programs, citizens of all countries are equally vulnerable to a spreadingepidemic. Therefore, it is in the best interest of acountry with even an undeclared smallpox stock to keep it very secure. Despite this, some fear that the Russianstocks may not be sufficiently secure due to theeconomic collapse that accompanied the break up of the Soviet Union. Other than from a government controlled stockpile, some have suggested that it may be possible to acquire the virus from the bodies of smallpox victims buriedin the Siberian permafrost in the 1800s. However, this is probably unlikely since Russian experts have been unableto acquire viable virus this way despitemultiple attempts. (9) In 2002, American scientistssuccessfully constructed infectious polio virus from mail-ordered pieces of DNA. (10) However, most expertsclaim that it would be very difficult to construct Variola virus in this manner. For more information on this topic,see CRS Report RS21369(pdf) SyntheticPoliovirus: Bioterrorism and Science Policy Implications . If a terrorist organization were able to obtain a sample of virus, it would also need the advanced technical knowledge, skill and facilities to maintain the viruswithout infecting themselves until the planned dissemination. It is considered to be quite difficult to "weaponize"smallpox. (11) However, in general,weaponization refers to developing advanced delivery systems such as missiles, artillery, or bombs to cause masscasualties. This technological barrier wouldbe much lower for a terrorist. A terrorist, who was not concerned with his own survival could potentially use hisown body as the delivery system, infectingdozens of people before succumbing to the disease. In addition to the threat posed by terrorist groups, it is possible that another nation may choose to use smallpox against the United States. Some experts suggestthat of the countries that might have undeclared stocks of smallpox virus, Iraq may pose the most danger to theUnited States. Some experts believe that it isvery unlikely that Iraq has smallpox since they did not use it during the Gulf War. However, those who feel thatIraq has the smallpox virus counter that itwould not have been used because it is not well suited for battlefield deployment since it is contagious and likelyto infect troops on both sides. Some expertsalso believe that Iraq was dissuaded from using chemical or biological weapons by what could have been interpretedas a thinly veiled threat of nuclearretaliation. (12) In the current situation of risingtensions, some experts have stated that if Iraq has the capability, Saddam Hussein may unleash smallpox as aweapon of last resort, particularly if he can deploy it covertly on United States soil. (13) In December 2002, the Administration reserved the right to use nuclearweapons to respond to the use of weapons of mass destruction against the United States or its allies. (14) Nonetheless, most experts feel that the barriers posed by acquisition and successful deployment of smallpox virus are high enough to make such an attack veryunlikely. Furthermore because of these hurdles, most experts feel that a terrorist organization would require a statesponsor in order to successfully obtain anddeploy smallpox. Although most experts deem the risk of a smallpox attack to be very low, the high consequences of a release have led the President to order the vaccination ofapproximately 500,000 people in the armed forces and to initiate a voluntary program to encourage as many as 10million medical workers and first respondersto be vaccinated. By the middle of 2003, the vaccine will be available on demand to any American adult who is notin a high-risk group for complications. However, the Administration will not recommend vaccination for members of the general public because of the highcomplication rate. (15) Scientific research may be able to further limit the threat posed by smallpox. If a safer smallpox vaccine could be produced, for instance, public health officialswould be less reluctant to recommend mass vaccination. The development of such a vaccine is stymied by severalfactors. One is that it is difficult to predictbefore making a large investment whether a new vaccine will be safer and still effective against smallpox. (16) Another factor is the uncertain market of atherapeutic agent that is designed to protect against what most experts agree is a very unlikely event. Without aguaranteed market, the commercial sector maybe reluctant to make such investments. Some experts suggest that, in general, it may be better to develop treatments rather than relying on prophylactic measures for the many potential biologicalagents that could be used to attack the United States. They suggest that the financial and societal costs of multiplemass vaccination programs may make avaccines-only approach impractical. Some scientists are working on producing antiviral drugs as a cure forsmallpox and several have shown promise inpreliminary studies. (17) However, more work needsto be done to improve animal models of smallpox so that the efficacy of new therapeutics can be tested. (18) Another potential advantage of this approach is that these drugs may be effective against other viruses and thereforemight be marketable as treatments forinfluenza or AIDS. The United States might be better equipped to defend against a smallpox attack if the status of any undeclared smallpox stocks could be determined with greatercertainty. For example, if it could be determined that Iraq does not have any smallpox then focus could be shiftedto preventing terrorist access to other sources. Unfortunately, it is possible that Iraq could successfully hide a smallpox program from any inspection regime. The United States is helping to increase the security of the former Soviet Union's biological weapon stockpiles. By focusing on the physical security of theagents and the economic security of the scientists, these programs simultaneously reduce the threat posed by all ofthe agents in the former Soviet Union'sarsenal. For a comprehensive discussion of these programs, see CRS Report RL31368(pdf) PreventingProliferation of Biological Weapons: U.S. Assistance to theFormer Soviet States .	Smallpox, which kills approximately 30% of its victims, is estimated to have killedbetween 300 and 500 millionpeople in the twentieth century before the World Health Organization's successful eradication program. Thesmallpox vaccine is effective at preventingsmallpox but has a higher complication rate than any other currently used vaccine. The terrorist attacks of 2001have increased fears that smallpox might beused as a weapon of terror. Smallpox has several properties that might make it desirable by terrorists, such ascontagiousness and high lethality. These factorsand its limited availability also make it difficult for a terrorist to use. Most experts agree that it is very unlikely thatsmallpox will be used as a weapon, but thehigh consequences of a successful attack have prompted exploration of methods to counter this threat. Also seeCRS Report RL31694 Smallpox VaccineStockpile and Vaccination Policy and CRS Report RL31368(pdf), Preventing Proliferation of BiologicalWeapons: U.S. Assistance to the Former Soviet States. This report will updated as warranted.
Most private equity and hedge funds are organized as partnerships. For tax purposes, a partnership is broadly defined to include two or more individuals who jointly engage in a for-profit business activity. They typically consist of general partners (who actively manage the partnership), and limited partners (who contribute capital). General partners may also contribute capital. According to a George W. Bush Administration official, tax considerations likely motivate the organization of private equity and hedge funds as partnerships. In general, partnerships do not pay the corporate income tax and, instead, pass all of their gains and losses on to the partners. The returns of these partnerships are generally taxed as capital gains. In addition, the tax rules for partnerships allow sufficient flexibility to accommodate many economic arrangements, such as special allocations of income or loss among the partners. General and limited partners are compensated when the investment yields a positive return. This income, as mentioned above, is not taxed at the partnership level; only the individual partners pay taxes, usually at the capital gains rate. In addition, the general partners typically receive additional compensation from the limited partners. Compensation structures may vary from fund to fund, but the standard pay formula is called "2 and 20." The "2" represents a fixed management fee (2%) that does not depend upon the performance of the fund. It is characterized as ordinary income for the general partner and is taxed at ordinary income tax rates. The "20" is a share of the profits from the assets under management (20%). This portion of the general partners' compensation is commonly referred to as the carried interest. Selecting this form of compensation aligns the interests of both the limited and general partners toward achieving a positive return on investment. Carried interest is characterized as a capital gain and taxed at the capital gains rate. Issues surrounding the characterization of carried interest are the focus of the remainder of this report. Central to the current debate concerning the tax treatment of carried interest is whether it is compensation for services, or an interest in the partnership's capital. Current law treats carried interest the same as all other profits derived from the partnership and thus characterizes carried interest as being derived from an interest in the partnership's capital. As a result, carried interest is taxed at capital gains rates, which have historically been lower than the rates on ordinary income. This rate differential is generally thought to motivate the current structure of compensation received by fund managers. If carried interests were treated as compensation for services provided by the general partners, then the realized gains would be characterized as ordinary income, taxed at generally higher rates, and subject to payroll taxes. In the United States, debate on the appropriate characterization of carried interest has been brought to the forefront by the President's 2010, 2011, and 2012 Budget Outlines, proposed legislation, and a series of congressional hearings on carried interest. The President's 2010, 2011, and 2012 Budget Outlines along with numerous bills in prior Congresses (House-passed H.R. 4213 and H.R. 1935 in the 111 th Congress) would make carried interest taxable as ordinary income, whereas a House-passed amendment in the 111 th Congress to H.R. 4213 , the American Jobs and Closing Tax Loopholes Act of 2010, would have treated a portion of carried interest as ordinary income. The former approach may mirror that taken in the 110 th Congress, H.R. 2834 , H.R. 3996 , and H.R. 6275 , in making carried interest taxable as ordinary income. The bills stated that carried interest "shall be treated as ordinary income for the performance of services" and thus taxed as ordinary income at rates up to 35%. H.R. 3996 was passed by the House of Representatives on November 9, 2007, and by the Senate on December 6, 2007, with an amendment that removed the carried interest provision, while H.R. 6275 was passed by the House of Representatives on June 25, 2008, and subsequently received by the Senate Finance Committee. In addition, the Senate Finance Committee and the House Ways and Means Committee held a series of hearings on carried interest during the last session. Debate concerning the characterization of carried interest is not unique to the United States. In fact, the United Kingdom's Treasury Select Committee has asked HM Revenue and Customs to explain a 2003 memorandum of understanding that allows general partners in private equity funds to characterize carried interest as investment income. In addition, Table 1 illustrates that European countries have not achieved a consensus view on the appropriate characterization of carried interest. Most analysts view carried interest as representing, at least partly, compensation for services provided by the general partner. In some instances this distinction is clear, but in others it is more opaque. Analysts generally base their characterization of carried interest upon the degree to which the general partners' own assets are at risk and differences in the profit interest of the general and limited partners. Some view carried interest as a type of performance-based compensation that should be characterized as ordinary income. That is, the general partner is being compensated for providing the service of generating a positive return on the investment. This argument would seem to have greater merit in cases where a "hurdle rate" must be reached prior to the award of a carried interest. Some also argue for a change in the characterization of carried interest based upon the economic principles of efficiency and equity. Tax systems are generally deemed more efficient when they tax similar activities in a like manner. Critics note that under the current characterization of carried interest, these performance fees are taxed less heavily than other forms of compensation, leading to distortions in employment, organizational form, and compensation decisions. As a result of these distortions, they maintain that the economy misallocates its scarce resources. They also argue that the current treatment of carried interest violates the principles of both horizontal and vertical equity. That is, individuals with the same income should owe the same in taxes regardless of the form of the income, and that those that earn more should pay more in taxes than those that earn less. Others view the current characterization of carried interest as appropriate, because of the general partners' contribution of "sweat equity" to the fund. That is, the general partners contribute their management skills to the partnership, in lieu of contributing capital. Once granted a carried interest, the general partner has an immediate ownership interest in the partnership, and thus is taxed on the proceeds of the partnership, based upon the character of the proceeds. Under this view, the limited partners agree to finance the carried interest through a reduction (relative to their capital investment) in their rights to the profits of the partnership. This view, however, highlights a general inconsistency in the tax code, from an economic perspective—the blurring of the returns from labor and capital. For example, imagine the case of a sole proprietor who turns an idea into a business. If the sole proprietor is later able to sell the business for a profit, the tax system will characterize the profit as a capital gain, though the provision of labor unquestionably contributed to the increased value of the business. In other cases, such as when nonqualifed stock options are exercised, the issue is more transparent, and the gain is characterized as compensation and taxed as ordinary income. Any subsequent gain or loss is characterized and taxed as a capital gain. Some have interpreted this "sweat equity" argument to represent an implicit loan to the general partners that should be taxed somewhere between that of pure capital and pure ordinary income. Under this option, the general partner would be viewed as receiving an interest-free loan from the limited partners equal to share of the partnership represented by the carried interest. The general partner would count the implicit interest from the loan as ordinary income. Subsequent profits from the carried interest would then be taxed as capital gains. Some view potential modifications to the treatment of carried interest as unadministrable. In testimony before the Senate Committee on Finance, Treasury Assistant Secretary for Tax Policy Eric Solomon stated that the current taxation of carried interest provides certainty for taxpayers and is administrable for the Internal Revenue Service. He cautioned against making significant changes in these rules, given the widespread reliance of partnerships on these rules. Others argued that the current characterization of carried interest contributes to innovation and adds economic value to the economy. They asserted that venture capitalists engage in risking time, money, and effort to assist the most compelling business models to improve the way that Americans live and work. Further, they argued that private equity allows companies to invest in long-term strategies that might otherwise be ignored by the managers of publicly traded companies forced to keep a close eye on quarterly earnings.	General partners in most private equity and hedge funds are compensated in two ways. First, to the extent that they contribute their capital in the funds, they share in the appreciation of the assets. Second, they charge the limited partners two kinds of annual fees: a percentage of total fund assets (usually in the 1% to 2% range), and a percentage of the fund's earnings (usually 15% to 25%, once specified benchmarks are met). The latter performance fee is called "carried interest" and is treated, or characterized, as capital gains under current tax rules. In the 112th Congress, the President's Budget Proposal would make carried interest taxable as ordinary income. In the 111th Congress, the House-passed American Jobs and Closing Tax Loopholes Act of 2010, H.R. 4213, would have treated a portion of carried interest as ordinary income, whereas the Tax Extenders Act of 2009, H.R. 4213, H.R. 1935, and the President's 2010 and 2011 Budget Proposals would have made carried interest taxable as ordinary income. In addition, in the 110th Congress, H.R. 6275 would have made carried interest taxable as ordinary income. Other legislation (H.R. 2834 and H.R. 3996) made similar proposals. This report provides background on the issues related to the debate concerning the characterization of carried interest. It will be updated as legislative developments warrant.
The MÃ©rida Initiative, named for the location of a March 2007 meeting between Presidents George W. Bush and Felipe CalderÃ³n of Mexico, expands bilateral and regional cooperation to combat drug trafficking organizations, gangs, and other criminal groups. The stated objective of the MÃ©rida Initiative, according to the U.S. and Mexican government joint statement of October 2007, is to maximize the effectiveness of existing efforts against drug, human, and weapons trafficking. The joint statement highlights current efforts of both countries, including Mexico's 24% increase in security spending in 2007 and U.S. efforts to reduce weapons, human, and drug trafficking along the Mexican border. The Central America portion of the Initiative aims to support implementation of the U.S. Strategy for Combating Criminal Gangs from Central America and Mexico and to bolster the capacity of governments to inspect and interdict unauthorized drugs, goods, arms, and people. The Administration requested $500 million for Mexico and $50 million for Central American countries in its FY2008 supplemental appropriations request. In the FY2009 foreign aid request, the Administration requested another $550 million for the MÃ©rida Initiative â $450 million for Mexico and $100 million for Central American countries. All of the proposed funding has been requested through the International Narcotics Control and Law Enforcement (INCLE) account, administered by the Department of State Bureau of International Narcotics and Law Enforcement Affairs (INL). Table 1 provides a broad summary of the types of programs to be funded by the Initiative. This is the largest category of aid in the proposed MÃ©rida Initiative and is intended to provide equipment and technology infrastructure improvements for Mexican military and law enforcement agencies. In the FY2008 supplemental request, nearly two thirds of the requested $306.3 million for this category ($208.3 million) was requested for the procurement of eight transport helicopters, including a $24 million logistics, spare parts, and training package, for the Mexican Army and Navy; 87 handheld ion scanners for the Mexican Air Force and Army; two surveillance planes for the Mexican Navy; and equipment for two aircraft operated by the Mexican Attorney General's Office. The Administration also requested $31.5 million for the provision of inspections equipment and canine training to Mexican customs for use at points of entry. The Administration asked for $31.3 million to modernize the Mexican immigration agency's database and document verification system and to equip and train immigration agency personnel in rescue and safety techniques to be used along Mexico's southern border. The request included $25.3 million to secure communications systems among Mexican security agencies and inspection facilities for mail facilities. It contained $7.9 million to improve database interconnectivity; data management, and forensic analysis tools for Mexican intelligence agencies. The Administration also sought $2 million to expand the Mexican Attorney General Office's (PGR) support of the Operation Against Smugglers Initiative on Safety and Security (OASISS), a program aimed at identifying and prosecuting human smugglers along the U.S.- Mexico border. In the FY2009 request, the Administration placed more emphasis on assistance to non-military agencies than in the FY2008 supplemental request. The FY2009 request included $118 million to improve infrastructure and information systems at non-military agencies, including Mexico's immigration agency, the PGR, the intelligence service (CISEN), the postal service, and customs. With respect to military agencies, the FY2009 request included $100 million to support fixed wing aircraft for surveillance and counternarcotics interception missions carried out by the Mexican Navy and $20 million in gamma ray inspection equipment for use at Army checkpoints. In the FY2008 supplemental request, the Administration requested the bulk of this aid, $30 million, for the provision of inspection scanners, x-ray vans, and a canine detection team for police in Mexico's Ministry of Public Security. It requested another $6 million to provide security equipment, including armored vehicles, and bullet-proof vests, to Mexican law enforcement personnel investigating organized crime. The Administration also asked for $5 million to upgrade computer infrastructure used to counter money laundering. The FY2008 supplemental request also included $15.1 million to support the drug demand reduction efforts of Mexico's Secretariat of Health. For FY2009, The Administration requested $158.5 million in this category. Most of the assistance, $147.6 million, would go to support the Mexican federal police, which would receive: transport helicopters and maintenance support ($106 million); mobile gamma ray inspection equipment ($26 million); x-ray vans for light vehicles ($4.8 million); and, canine training ($0.75 million). The Administration requested another $10.9 million to support drug demand reduction programs. In the FY2008 supplemental request, the Administration asked for $100.6 million in this category, with some $60.7 million for an array of efforts, including revamping information management and forensics systems at Mexico's Office of the Attorney General (PGR); training in courts management, prison management, asset forfeiture, and police professionalization; support for anti-gang and anti-organized crime units; victim and witness protection program support; and extradition training. The PGR would receive $19.9 million for digitalization, database improvements, and a case management system, and $5 million in unspecified support of the its Forensic Institute. The Administration's request included $15 million to promote anti-corruption, transparency, and human rights, though support of law enforcement, court institutions, and civil society groups working to improve the efficiency and responsiveness of the justice system. For FY2009, the Administration requested significantly less funding for this category, $30.7 million, with $23.4 million to improve the justice system; $8.5 million to support the PGR's Forensic Institute; and $9.4 million to support improved data collection and analysis. The FY2008 supplemental request included $37 million and the FY2009 request included $22.5 million for program support to cover the cost of U.S. personnel, administration, and budget services related to the proposed aid package. For FY2008, the Administration requested $16.6. million for this category, spread out among the seven Central American countries. The Administration proposed spending $7.5 million to support the Central American Fingerprinting Exploitation (CAFÃ) initiative to facilitate information-sharing about violent gang members and other criminals, to improve drug crime information sharing and collection, and to expand sensitive investigation police units dedicated to counternarcotics efforts. It asked for $5.3 million for programs to improve maritime interdiction capabilities and to provide technical assistance on firearms tracing, interdiction, and destruction. The Administration also proposed giving $3.8 million for port, airport, and border security, including equipment and training through the Organization of America States (OAS) Inter-American Committee Against Terrorism. For FY2009, the Administration requested $40 million in this category. More than half of that money, $25.8 million, would go to land and maritime interdiction and interception assistance, as well as to a regional arms tracking program. The FY2009 request also included $1 million to support the drug demand reduction efforts of the OAS Inter-American Drug Abuse Control Commission and $2 million to combat currency smuggling. In the FY2008 supplemental request, the majority of proposed funding for Central America, $25.7 million, was specified for programs to improve policing and support anti-gang efforts. The Administration requested $12.6 million to implement the U.S. Strategy for Combating Criminal Gangs from Central America and Mexico, including support for diplomatic efforts, funding for the electronic travel document (eTD) system to provide biometric and biographic information on persons being deported from the United States, anti-gang units, and community-based prevention programs. It asked for another $11.1 million to provide specialized police training and equipment. Some $2 million would fund the International Law Enforcement Academy (ILEA) in El Salvador. The Administration's request for funding in this category did not change significantly in the FY2009 budget request. The FY2009 request included $13 million to implement the U.S. anti-gang strategy, with $7.5 million of that slated for community prevention programs, up from $5 million in the FY2008 supplemental request. It also included $13 million for police modernization and technical assistance and $6 million to support the ILEA. The Administration also proposed $7.7 million in rule of law programs in the FY2008 supplemental request, including improvement of court management and prosecutorial capacity building; reforming prison management; supporting community policing programs, and providing assets forfeiture capacity training. The Administration's FY2009 budget request for this category rose to $23 million. The largest increases from the FY2008 supplemental request were for courts management programs and training to improve prosecutorial capacity. The FY2009 budget request also included $2 million for juvenile justice systems and rehabilitation programs and $1 million for programs to build public confidence in the justice system, two components not included in the FY2008 supplemental request. The FY2009 budget request included $5 million in unspecified program support. While several Members of Congress initially expressed concern that they were not adequately consulted by the Administration during the development of the MÃ©rida Initiative, a majority have subsequently voted in support of the package. On May 14, 2008, the House Committee on Foreign Affairs approved H.R. 6028 (Berman), the Merida Initiative to Combat Illicit Narcotics and Reduce Organized Crime Authorization Act of 2008. The bill would authorize $1.6 billion over three years, FY2008-FY2010, for both Mexico and Central America, $200 million more than originally proposed by President Bush. Of that amount, $1.1 billion would be authorized for Mexico, $405 million for Central America, and $73.5 million for activities of the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) to reduce the flow of illegal weapons from the United States to Mexico. Among the bill's various conditions on providing the assistance, the measure requires that vetting procedures are in place to ensure that members or units of military or law enforcement agencies that may receive assistance have not been involved in human rights violations. In terms of appropriations legislation, FY2008 supplemental funding for the MÃ©rida Initiative was considered as part of a broader FY2008 Supplemental Appropriations Act, H.R. 2642 (Edwards). Originally introduced June 11, 2007 as the FY2008 Military Construction and Veterans Affairs Appropriations Act, this bill subsequently became the vehicle for the second FY2008 supplemental appropriations measure. The May 15, 2008 House-amended version of the bill would have provided $461.5 million for the MÃ©rida Initiative. Mexico would have received $400 million divided between INCLE, Economic Support Fund (ESF), and Foreign Military Financing (FMF) accounts, while Central America, Haiti, and the Dominican Republic would have received a total of $61.5 million divided between INCLE, ESF, FMF, and Nonproliferation, Anti-Terrorism, Demining and Related Programs (NADR) aid accounts. The Senate version of H.R. 2642 , as amended on May 22, 2008, would have provided $450 million for the MÃ©rida Initiative, with $350 million for Mexico in the INCLE account; and $100 million for Central America, Haiti, and the Dominican Republic divided between the INCLE and ESF accounts. On June 19, 2008, the House approved an amended version of the FY2008 Supplemental Appropriations Act, H.R. 2642 , that provides $465 million in FY2008 and FY2009 supplemental assistance for Mexico and Central America. The Senate approved the compromise House version of H.R. 2642 on June 26, 2008. The bill was then signed into law by President Bush on June 30, 2008 ( P.L. 110-252 ) In the act, Mexico receives $352 million in FY2008 supplemental assistance and $48 million in FY2009 bridge fund supplemental assistance, while Central America, Haiti, and the Dominican Republic receive $65 million in FY2008 supplemental assistance. The measure has human rights conditions softer than compared to earlier House and Senate versions, largely because of Mexico's objections that some of the original conditions, particularly those in the Senate version of the bill, would violate its national sovereignty. The language in the final enacted measure reduced the amount of funding subject to human rights conditions, from 25% to 15%, removed conditions that would have required the Mexican government to try military officials accused of abuses in civilian courts and to enhance the power of its National Human Rights Commission, and softened the language in other conditions.	In October 2007, the United States and Mexico announced the MÃ©rida Initiative, a multi-year proposal for $1.4 billion in U.S. assistance to Mexico and Central America aimed at combating drug trafficking, gangs, and organized crime. On May 14, 2008, the House Committee on Foreign Affairs approved a bill, H.R. 6028 (Berman), which would authorize $1.6 billion for the Initiative from FY2008 through FY2010. The Bush Administration requested $500 million for Mexico and $50 million for Central American countries in its FY2008 supplemental appropriations request. In late June 2008, Congress appropriated $465 million in FY2008 and FY2009 supplemental assistance for Mexico and Central America in the FY2008 Supplemental Appropriations Act, H.R. 2642 ( P.L. 110-252 ). In the act, Mexico receives $352 million in FY2008 supplemental assistance and $48 million in FY2009 bridge fund supplemental assistance, while Central America, Haiti, and the Dominican Republic receive $65 million in FY2008 supplemental assistance. The Administration has requested an additional $450 million for Mexico and $100 million for the Central American countries under the MÃ©rida Initiative in its FY2009 budget request. This report will be updated. See also CRS Report RL32724, Mexico-U.S. Relations: Issues for Congress , by [author name scrubbed] and [author name scrubbed], and CRS Report RL34112, Gangs in Central America , by [author name scrubbed].
Political instability in Georgia appeared to worsen in November 2007 after several opposition parties united in a "National Council" that launched demonstrations in Tbilisi, the capital, to demand that legislative elections be held in early 2008 as originally called for instead of in late 2008 as set by the government-dominated legislature. The demonstrations had been spurred by sensational accusations by former defense minister Irakli Okruashvili against President Mikheil Saakashvili (including that Saakashvili ordered him to commit murder). Calls for Saakashvili's resignation intensified after Okruashvili claimed that he had been coerced by the government to recant the accusations. On November 7, police and security forces forcibly dispersed demonstrators, reportedly resulting in several dozen injuries. Security forces also stormed the independent Imedi ("Hope") television station, which had aired opposition grievances, and shut it down. Saakashvili declared a state of emergency for 15 days, giving him enhanced powers. He claimed that the demonstrations had been part of a coup attempt orchestrated by Russia, and ordered three Russian diplomats to leave the country. U.S. and other international criticism of the crackdown may have influenced Saakashvili's decision to step down as president on November 25, 2007, so that early presidential elections could be held on January 5, 2008, "because I, as this country's leader, need an unequivocal mandate to cope with all foreign threats and all kinds of pressure on Georgia." At the same time, he called for a plebiscite on whether to have a spring or fall legislative election and on whether Georgia should join NATO. Legislative Speaker Nino Burjanadze became acting president. She called on prosecutors to drop charges against Imedi. It renewed broadcasts on December 12, and became for a time the main television outlet for opposition candidates in the election (see also below). Significant amendments to the electoral code were adopted in late November and mid-December to make elections more democratic, including by adding some opposition party representatives to electoral commissions. However, the adoption of new rules shortly before the election sometimes resulted in haphazard implementation, according to the Organization for Security and Cooperation in Europe (OSCE), which monitored the electoral process. Most observers considered the nomination process for presidential candidates to be inclusive and transparent. Besides Saakashvili, six other candidates were successfully registered (see Table 1). Among the campaign pledges made by the candidates, Saakashvili ran on his claimed record of reducing corruption and crime and improving living conditions, and pledged to further reduce poverty and to restore Georgia's territorial integrity peacefully. Levan Gachechiladze stated that he would work to create a parliamentary system of rule with a constitutional monarchy, nominate former foreign minister Salome Zourabichvili as the prime minister, and encourage private enterprise and poverty alleviation. Davit Gamqrelidze pledged to consider backing either a parliamentary system or constitutional monarchy, and to bolster freedom of speech, personal property rights, and an independent judiciary. Shalva Natelashvili pledged to boost social services and called for a parliamentary system. The Harvard-educated Giorgi Maisashvili stressed business creation. All the candidates except Irina Sarishvili-Chanturia and prominent businessman Badri Patarkatsishvili called for Georgia to seek membership in NATO. Sarishvili-Chanturia urged voters to either vote for her or other candidates she favored. Patarkatsishvili called for abolishing the presidency, creating a confederation with a weak central government, and establishing close ties with Russia. He pledged to use his fortune to provide unemployment benefits and some free utilities to the poor. Mass rallies were prominent in the campaign, and several candidates toured the country. In contrast, Patarkatsishvili faced charges of involvement in a coup attempt linked to the November demonstrations and conducted his campaign from abroad. Most observers considered much of the campaigning as focused on accusations rather than issues. Perhaps the most sensational event of the campaign occurred in late December, when the government released recordings which it claimed incriminated Patarkatsishvili in yet another coup planned for after the election. Patarkatsishvili denied planning a coup and called on journalists to defend him. He also stated that he would step down as a candidate, but later reversed course. Staff at Imedi, which was at least partially owned by Patarkatsishvili, decided to temporarily halt transmissions on December 26. The Central Electoral Commission (CEC) reported that 56.2% of 3.35 million registered voters reportedly turned out and that Saakashvili received enough votes (over 50%) to avoid a legally mandated second round of voting for the top two candidates (preliminary results; see Presidential Election Results ). On the plebiscite issues, 77% of voters endorsed Georgia joining NATO and almost 80% supported holding legislative elections in spring 2008. An effort by the government to conduct balloting in Georgia-controlled areas in South Ossetia was denounced by officials in the breakaway region with the claim that almost all residents are citizens of Russia. Saakashvili's performance at the polls benefitted from a growing economy and a boost in social services provided by the government. His pledge of greater efforts to alleviate poverty also may have helped ease some grievances against his rule, according to many observers. The fractiousness of some of the opposition, which could not agree on a single candidate, was a major factor in the results. A preliminary report by observers from the OSCE, the Parliamentary Assembly of the Council of Europe (PACE), and the European Parliament (EP) assessed the election as "in essence consistent with most ... commitments and standards for democratic elections, [although] significant challenges were revealed...." Several positive aspects of the election were listed, including that the race offered a competitive choice of candidates. Negative aspects included "pervasive" violations that were "not conducive to a constructive, issue-based election campaign." These included the use of government offices to support Saakashvili, "substantiated" instances in which officials harassed opposition campaigners, allegations that state employees were ordered to vote for Saakashvili, the use of social services to gain support for Saakashvili, and a tendency toward pro-Saakashvili bias by the CEC in resolving complaints. The monitors viewed the vote count more negatively, with a significant number assessing it as bad or very bad. The preliminary report argued that electoral abuses varied from region to region, appeared often due to incompetence or local fraud, and stopped short of organized and systematic manipulation. The CEC and the courts eventually invalidated or corrected the results in 18 of 3,511 voting precincts. Among other assessments of the election, the prestigious Georgian NGO, Fair Elections, reported on January 10 that its exit polling at 400 precincts appeared to indicate that Saakashvili may have won enough votes to avoid a runoff, even if there were voting irregularities. U.S. analyst Charles Fairbanks, however, argued on January 16, 2008, that the balloting reported for Saakashvili was inflated, so that it was "unlikely" that he won in the first round. Although no Russian election observers were invited, the Russian Foreign Ministry asserted on January 6, 2008, that the election "could hardly be called free and fair," including because "the campaign was accompanied with the extensive use of administrative resources, unconcealed pressure on opposition candidates and rigid limits on their access to financial and media resources." Many observers regarded the relative peacefulness of the election campaign (compared to the November 2007 violence) as a positive sign that at least fitful democratization might be preserved in Georgia. Among other possible signs of progress toward democratization and stability, Saakashvili in his inaugural address on January 20, 2008, pledged to facilitate greater opposition participation in political decision-making. Some analysts also suggest that opposition parties and politicians might have benefitted from the campaign by becoming better known and might gain votes in upcoming legislative elections, thereby enhancing political pluralism. These observers suggest that opposition parties and politicians will soon shift from protesting the results of the presidential race to campaigning for a prospective May 2008 legislative election. In the economic realm, these observers suggest that Saakashvili's re-election reassured international investors that Georgia has a stable investment climate, although boosted social spending could increase short-term inflation. The Secretary General of the Council of Europe (COE) on January 6 urged opposition politicians to eschew "immature" rabble-rousing and to "show responsibility, political maturity and respect for the democratic process" by working through constitutional procedures to address electoral irregularities. Thousands of people reportedly turned out on January 13 and January 20 to peacefully protest against what they considered a fraudulent election. Gachechiladze and other leaders of the National Council asserted that Saakashvili did not win enough votes to avoid a run-off, where he would have faced a single opponent (Gachechiladze). Many observers argue that Saakashvili's electoral victory with 53% of the vote contrasts sharply with the 96% of the vote he won in 2004 and illustrates that public trust in his governance has declined. One Georgian analyst has suggested, however, that despite this decline in public trust, many citizens remembered the disorder of past months and years and were fearful of voting for opposition candidates who promised radical political and economic changes if elected. The risk of disorder could greatly increase if public trust further declines as the result of a tainted prospective May 2008 legislative election. Saakashvili's win appeared to be a further blow to Russia's hopes of restoring its influence in Georgia, according to many observers. These observers also raise concerns that Saakashvili's campaign pledge to soon unify Georgia (although he called for peaceful measures) could contribute to further tensions with Russia. In his inaugural address, however, Saakashvili attempted to reassure Russia that Georgia was intent on repairing bilateral ties. One Tajik analyst has suggested that Saakashvili's re-election provides a positive example to reform-minded politicians in Russia and other Soviet successor states and threatens non-reformist governments in these states. On November 8, 2007, the U.S. State Department welcomed President Saakashvili's call for early presidential elections and a plebiscite on the timing of legislative elections. At the same time, it urged Saakashvili to relinquish emergency power and to "restore all media broadcasts" to facilitate a free and fair election, and urged all political factions to "maintain calm [and] respect the rule of law." Deputy Assistant Secretary of State Matthew Bryza visited Tbilisi on November 11-13 with a letter from Secretary of State Condoleezza Rice that listed these and other proposals "to restore [the] momentum of democratic reform" in Georgia, highlighting U.S. interest in Georgia's fate. He argued that while in the past the United States had focused on Georgia as a conduit for oil and gas pipelines to the West and on security assistance, "today what makes Georgia a top tier issue for the U.S. government is democracy." He held extensive talks with government and opposition politicians to urge them to moderate their mutual accusations and to make compromises necessary for democratic progress. He also stressed that "the United States remains a firm supporter [of] Georgia's NATO aspirations," and called on unnamed NATO allies to await further political developments in Georgia before deciding whether or not the country is eligible for a Membership Action Plan (MAP). Some observers have suggested that NATO's possible consideration of a MAP for Georgia may well be delayed beyond the April 2008 NATO Summit in Bucharest, Romania, for reasons that include assessing Georgia's performance in holding a prospective May 2008 legislative election. Just after the January 5 balloting, the State Department "congratulated" the people of Georgia for an election that many international observers considered "was in essence consistent with most OSCE and COE commitments and standards." However, the State Department also raised concerns about reported electoral violations and urged that they be thoroughly investigated and remedied. U.S. ambassador to Georgia John Tefft likewise appeared cautious when he stated on January 10 that the United States had not yet reached an "official political assessment" of the election, so had not congratulated a winner. After the CEC announced the final election results, President Bush on January 14 telephoned Saakashvili to congratulate him, and dispatched U.S. Commerce Secretary Carlos Gutierrez to the inauguration. Some opposition supporters in Georgia criticized the United States for recognizing Saakashvili's win, perhaps reflecting some potential increase in anti-Americanism, but at an opposition protest at the U.S. Embassy on January 22, only one of the parties involved in the National Council participated. Many in Congress long have supported democratization and other assistance to Georgia, as reflected in hearings and legislation. The 110 th Congress ( P.L. 110-17 ) urged NATO to extend a Membership Action Plan for Georgia and designated Georgia as eligible to receive security assistance under the program established by the NATO Participation Act of 1994 ( P.L. 103-447 ). Indicating ongoing interest in Georgia's reform progress, on December 13, 2007, the Senate approved S. Res. 391, which urged the U.S. President to publically back free and fair elections in Georgia. In introducing the resolution, Senator Richard Lugar averred that he was "a strong friend of the Georgian people," and that the resolution indicated "our strong hopes that ... Georgia will return to the democratic path and embrace a free and fair election process." He also urged Georgia to facilitate the work of international election monitors, particularly those from the OSCE. Representative Alcee Hastings was appointed as Special Coordinator by the OSCE Chairman-in-Office to lead a mission of nearly 500 short-term observers who monitored the January 5 election. The day after the election, Representative Hastings reportedly stated that he viewed the election as a "viable expression of free choice of the Georgian people," but he also cautioned that Georgia's "future holds immense challenges" because of the high degree of mistrust and polarization in Georgian society. Similarly, former Representative Jim Kolbe, who led a delegation from the International Republican Institute, evaluated the election as broadly free and fair, but called for further reforms.	This report discusses the campaign and results of Georgia's January 5, 2008, presidential election and implications for Russia and U.S. interests. The election took place after the sitting president, Mikheil Saakashvili, suddenly resigned in the face of domestic and international criticism over his crackdown on political dissidents. Many observers viewed Saakashvili's re-election as marking some democratization progress, but some raised concerns that political instability might endure and that Georgia's ties with NATO might suffer. This report may be updated. Related reports include CRS Report RL33453, Armenia, Azerbaijan, and Georgia: Political Developments and Implications for U.S. Interests, by [author name scrubbed].
A t the beginning of each Congress, the House of Representatives must adopt rules to govern its proceedi ngs. The House does this by readopting the rules of the previous Congress along with any changes that will apply in the new Congress. On January 3, 2017, the House passed H.Res. 5 , adopting the standing rules for the House of Representatives for the 115 th Congress. In addition to the standing rules, H.Res. 5 includes several additional provisions, called separate orders, that also govern proceedings in the House. A number of the provisions adopted both as part of the standing rules of the House and as separate orders affect budgetary legislation. In many cases, these provisions are similar to provisions adopted in previous Congresses. The 104 th Congress (1995-1996) added a provision to clause 2(d) of House Rule X requiring that each standing committee adopt (by February 15 of the first session of a Congress) its own oversight plan for the Congress. H.Res. 5 (115 th Congress) adds a requirement that committees also include a statement concerning authorizations for programs or agencies within their jurisdiction. These statements are required to identify programs or agencies with lapsed authorizations that received funding in the prior fiscal year, as well as programs or agencies with a permanent authorization that have not been subject to a comprehensive review by the committee in the prior three Congresses. The new rule also requires a description of each such program or agency to be authorized in the current or next Congress and a description of any oversight planned to support such authorizations. In addition, the committees are to include recommendations for: the consolidation or termination of such programs or agencies that are duplicative, unnecessary, or "inconsistent with the appropriate roles and responsibilities of the Federal Government"; changes to existing law in order to convert mandatory funding to discretionary appropriations, where appropriate; and changes to existing law related to federal rules, regulations, statutes, and court decisions affecting such programs and agencies that are inconsistent with Congress's authority under Article I of the Constitution. Finally, each committee chair is expected to coordinate with other committees of jurisdiction to ensure that programs and agencies are subject to routine, comprehensive authorization efforts. Although congressional rules establish a general division of responsibility under which questions of policy are kept separate from questions of funding, House rules provide for exceptions in certain circumstances. One such circumstance allows for the inclusion of legislative language in general appropriations bills or amendments thereto for "germane provisions that retrench expenditures by the reduction of amounts of money covered by the bill." This exception appears in clause 2(b) of House Rule XXI and is known as the Holman rule, after Representative William Holman of Indiana, who first proposed the exception in 1876. Since the period immediately after its initial adoption, the House has interpreted the Holman rule through precedents that have tended to incrementally narrow its application. Under current precedents, for a legislative provision or amendment to be in order, the legislative language in question must be germane to other provisions in the measure and must produce a clear reduction of appropriations in that bill. In addition, the House has also adopted a separate order for the first session of the 115 th Congress that provides that retrenchments of expenditures by a reduction of amounts of money covered by the bill shall be construed as applying to: any provision or amendment that retrenches expenditures byâ (1) the reduction of amounts of money in the bill; (2) the reduction of the number and salary of the officers of the United States; or (3) the reduction of the compensation of any person paid out of the Treasury of the United States. This language mirrors language that had previously appeared in Rule XXI prior to the 98 th Congress. Precedents from that period may be illustrative for understanding what may be in order. The Holman rule applies only when an obvious reduction of funds in a general appropriations bill is achieved by a legislative provision, such as the cessation of specific government activities, a specific reduction of federal employees, a consolidation or elimination of offices, a reduction in pay for a class of employees, or a specific reduction of total appropriations in the bill. The rule does not allow for retrenchments that would be applicable to funds other than those appropriated in the pending general appropriations bill. In addition, the requirement for germaneness would likely prohibit legislative provisions that would expand the scope of the bill. One change to the standing rules related to the appropriations process incorporates text into House Rule XXI that was in effect as a separate order in the 112 th , 113 th , and 114 th Congresses. This provision prohibits amendments to general appropriations bills that would result in a net increase in the level of budget authority in the bill. This does not, however, prohibit amendments that would increase budget authority in the bill if the amendment also includes an equal or greater decrease in budget authority. This standing order has been in effect each Congress since the 112 th Congress. The order, which previously included the provision described above, seeks to ensure that during House consideration of appropriations bills, any "savings" that occurs as a result of a floor amendment reducing total spending is not available as an "offset" for another amendment. To accomplish this goal, the order requires that any general appropriations bill include a spending reduction account. This "account" is a provision in the last section of the bill that functions as a temporary deposit box into which budget authority is transferred so that it is not available for further appropriation during consideration of that bill. The standing order requires that such an account be included in a general appropriations bill by (1) giving authority to the chairman of the House Appropriations Committee to add the spending reduction account to the bill after the bill has been ordered reported and (2) prohibiting consideration of a general appropriations bill in the Committee of the Whole unless it includes a spending reduction account. During floor consideration of the general appropriations bill, it is in order to consider en bloc amendments proposing to transfer appropriations from one or more sections of the bill into the spending reduction account. When considered en bloc under this rule, it is in order to amend portions of the bill not yet read (i.e., open for) for amendment, and such amendments are not subject to a demand for a division of the question. A point of order under Section 302(f) prohibits the consideration of measures or amendments that would cause the measure to exceed an allocation made pursuant to Section 302(a) or, in the case of appropriations bills, suballocation pursuant to Section 302(b). In order to supplement this and provide for additional enforcement, during the 109 th Congress (2005-2006), the House adopted a resolution ( H.Res. 248 ) providing that a motion that the Committee of the Whole rise and report an appropriations bill to the House is not in order if the bill, as amended, exceeds an applicable suballocation of new budget authority under Section 302(b) of the Congressional Budget Act of 1974. This provision has been adopted as a separate order in each subsequent Congress. This prohibition allows a Member to make a point of order against the motion to rise and report and, if it is sustained, requires the chair to submit the question of whether to rise and report to a vote. Prior to the vote, the question is debatable for 10 minutes, equally divided between a proponent and an opponent. If the Committee of the Whole votes in the affirmative, the committee may rise and report the bill. If the Committee of the Whole votes in the negative, one proper amendment is in order that would bring the measure into compliance with Section 302(b) suballocations. The amendment is debatable for 10 minutes equally divided and controlled. The point of order does not apply to a motion to rise and report offered by the majority leader under clause 2(d) of Rule XXI. Although budget authority for most federal programs is provided through annual appropriations actions that allow those funds to be obligated during the ensuing fiscal year, funding for certain programs is provided with a different period of availability. The term "advance appropriations" is applied to funds that will become available for obligation one or more fiscal years after the budget year covered by the appropriations act. In recent years the House has adopted limits on the level of advance appropriations that may be provided as well as the programs or activities for which it may be provided. In some instances, these limits have been established in a budget resolution, as in S.Con.Res. 13 (111 th Congress) and S.Con.Res. 11 (114 th Congress). In other instances, the House has adopted the limit as a separate order as part of the resolution adopting the chamber's rules, as in H.Res. 5 (112 th Congress) and now H.Res. 5 (115 th Congress). In the 115 th Congress, a separate order prohibits advance appropriations that exceed $28,852,000,000 in new budget authority for programs or activities identified in a list submitted to the Congressional Record by the chair of the Budget Committee under the heading "Accounts Identified for Advance Appropriations" and $66,385,032,000 in new budget authority for programs and activities identified under the heading "Veterans Accounts Identified for Advance Appropriations." For either instance, the limit applies to funding provided in FY2017 appropriations acts that are to become available in any fiscal year following FY2017. The standing order, related to direct spending, is often referred to as the long-term spending point of order. It reprises a provision that has been in effect in some form in the House since the 112 th Congress. It was included twice as part of House rules package and twice as part of the budget resolution. This standing order has three main components: 1. It requires the Congressional Budget Office (CBO) to estimate whether certain legislation would cause a net increase in spending in excess of $5 billion in any of the four 10-year periods beginning with the fiscal year 10 years after the current fiscal year. 2. It prohibits the House from considering legislation that would cause such an increase. 3. It states that the prohibition does not apply to (1) legislation repealing the Patient Protection and Affordable Care Act and Title I and subtitle B of Title II of the Health Care and Education Affordability At of 2010, (2) legislation reforming the Patient Protection and Affordable Care Act and the Health Care and Education Affordability Reconciliation Act of 2010, or (3) legislation for which the Budget Committee chair has made adjustments to the levels in the most recently adopted budget resolution. This provision establishes a point of order against the consideration of legislation that would reduce the actuarial balance of the Federal Old-Age and Survivors Insurance (OASDI) Trust Fund. The point of order would apply against legislation that would reduce the present value of future taxable payroll of the Trust Fund for the 75-year period used in the most recent annual report of the Board of Trustees by more than 0.01%. The point of order would not apply to legislation that would improve the combined actuarial balance of the OASDI Trust Fund and the Disability Insurance Trust Fund over the same 75-year period. An identical separate order was previously adopted in the 114 th Congress, and a point of order was also previously included as Section 3301 of S.Con.Res. 11 (114 th Congress), the Concurrent Resolution on the Budget for FY2016. A section-by-section analysis was inserted into the Congressional Record at the time that the rules for the 114 th Congress were adopted, indicating that the intent of the provision was to prevent the consideration of legislation that would transfer funds from the OASDI Trust Fund to the Disability Insurance Trust Fund. One standing order applies specifically to the budgetary treatment of any legislative provision requiring or authorizing a conveyance of federal land to a state, local government, or tribal entity. The standing order states that in the House, such provisions shall not be considered as increasing spending or providing new spending, nor shall it be considered as decreasing revenues. This standing order is not expected to change the way CBO estimates the budgetary impact of such provisions. It will, however, likely affect House enforcement of budgetary points of order as well as the enforcement of House leadership protocols, meaning that such provisions will likely not be subject to budgetary points of order or leadership protocols related to budgetary legislation.	On January 3, 2017, the House passed H.Res. 5 , adopting the standing rules for the House of Representatives for the 115 th Congress. In addition to the standing rules, H.Res. 5 included several separate orders. This report provides information on the standing rules and separate orders that might affect the congressional budget process.
The National Directory of New Hires (NDNH) is a database of personal information and wage and employment information of American workers. Employers are required by P.L. 104-193 to send new hire reports to the State Directory of New Hires, which then sends the required information to the NDNH. States also are required to send quarterly wage information of existing employees (in UC-covered employment) and unemployment compensation claims information to the NDNH. Federal employers (i.e., agencies) send their new hire reports and quarterly wage information directly to the NDNH. A new hire report contains six data elements on new employees, which include the name, address, and Social Security number of each new employee and the employer's name, address, and tax identification number. The NDNH contains three components. (1) The first component of the NDNH is the new hires file (i.e., report). It contains information that is also on each employee's W-4 form. (2) The second component of the NDNH is the quarterly wage file. The quarterly wage file contains quarterly wage information on individual employees in UC-covered employment. This information comes from the records of the State Workforce Agencies (sometimes called State Employment Security Agencies) and the federal government. When an individual has more than one job, separate quarterly wage records are established for each job. (3) The third component of the NDNH is the Unemployment Compensation file. The Unemployment Compensation file contains information pertaining to persons who have received or applied for unemployment compensation, as reported by State Workforce Agencies. With respect to this file, the state can only submit information that is already contained in the records of the state agency (i.e., generally the State Workforce Agency) that administers the Unemployment Compensation program. Thus, the NDNH obtains its data from State Directories of New Hires, State Workforce Agencies, and federal agencies. The NDNH, itself, is a component of the Federal Parent Locator Service (FPLS), which is maintained by the federal Office of Child Support Enforcement (OCSE) and is housed at the Social Security Administration's National Computer Center in Baltimore, MD. According to the Department of Health and Human Services (HHS), during FY2010 about 672 million records were posted to the NDNH. The original purpose of the NDNH was to help states locate child support obligors who were working in other states so that child support could be withheld from the noncustodial parent's paycheck. It is estimated that about 30% of child support cases involve noncustodial parents who do not live in the same state as their children. States generally use NDNH data rather than state new hire data or state quarterly wage data because they are more likely to acquire earnings information about noncustodial parents who have obtained work or claimed unemployment insurance benefits in a different state, or who are employed by the federal government. Moreover, because many noncustodial parents are in temporary employment or move from job to job, the quick reporting of information on new hires greatly increases the likelihood that the NDNH will be able to locate a noncustodial parent and pass on the information to states, so that the Child Support Enforcement (CSE) agencies can collect child support via income withholding before the noncustodial parent changes jobs. Since its enactment in 1996, access to the NDNH has been expanded, mostly to prevent fraud and abuse, to certain other programs and agencies (discussed later). Employers are required to collect from each newly hired employee and transmit to the State Directory of New Hires a report that contains the name, address, and Social Security number of the employee and the employer's name, address, and tax identification number. Most states require only these six basic data elements in each new hires report; some states require or request additional information. The State Directory of New Hires is required to submit its new hire reports to the NDNH. New hire reports must be deleted from the NDNH 24 months after the date of entry. For CSE purposes, quarterly wage and unemployment compensation reports must be deleted 12 months after entry unless a match has occurred in the information comparison procedures. The reporting and deletion requirements result in a constant cycling of wage and employment data into and out of the NDNH. (The HHS Secretary may keep samples of data entered into the NDNH for research purposes. ) The HHS Secretary has the authority to transmit information on employees and employers contained in the new hires reports to the Social Security Administration (SSA), to the extent necessary, for verification. SSA is required to verify the accuracy of, correct, or provide (to the extent possible) the employee's name, Social Security number, and date of birth and the employer's tax identification number. According to OCSE, all Social Security numbers on new hire reports and unemployment compensation files are verified by SSA before the information is added to the database of the National Directory of New Hires. Quarterly wage files, however, often do not include all of the necessary elements for a successful verification. In such situations, the information is transmitted to the NDNH, but it is flagged indicating that SSA was not able to verify the Social Security number and name combination. Employers must provide a new hires report on each newly hired employee to the State Directory of New Hires generally within 20 days after the employee is hired. The new hires report must be entered into the database maintained by the State Directory of New Hires within five business days of receipt from an employer. Within three business days after the new hire information from the employer has been entered into the State Directory of New Hires, the State Directory of New Hires is required to submit its new hire reports to the NDNH. Within two business days after the new hire information is received from the State Directory, the information must be entered into the computer system of the NDNH. For purposes of locating individuals in a paternity establishment case or a case involving the establishment, modification, or enforcement of child support, the HHS Secretary must compare information in the NDNH against information in the child support abstracts in the Federal Child Support Case Registry at least every two business days. If a match occurs, the HHS Secretary must report the information to the appropriate state CSE agency within two business days. The CSE agency is then required to instruct, within two business days, appropriate employers to withhold child support obligations from the employee's paycheck, unless the employee's income is not subject to withholding. Quarterly wage information on existing employees is required to be transmitted to the NDNH from the State Workforce Agencies within four months of the end of a calendar quarter. However, some states report quarterly wage data to the NDNH on a monthly or weekly basis. Federal agencies are required to transmit quarterly wage information on federal employees to the NDNH no later than one month after the end of a calendar quarter. Unemployment compensation information (which comes from State Workforce Agencies) is required to be transmitted to the NDNH within one month of the end of a calendar quarter. In order to safeguard the privacy of individuals in the NDNH, federal law requires that the OCSE restrict access to the NDNH database to "authorized" persons. Moreover, the NDNH cannot be used for any purpose not authorized by federal law. Thus, in order for any agency not mentioned in this section to gain access to the NDNH, Congress must authorize a change in law. The HHS Secretary is required to share information from the NDNH with state CSE agencies, state agencies administering the Title IV-B child welfare program, state agencies administering the Title IV-E foster care and adoption assistance programs, state agencies administering the Temporary Assistance for Needy Families (TANF) program, the Commissioner of Social Security, the Secretary of the Treasury (for Earned Income Tax Credit purposes and to verify income tax return information), and researchers under certain circumstances. P.L. 106-113 (enacted in November 1999) granted access to the Department of Education. The provisions were designed to improve the ability of the Department of Education to collect on defaulted student loans and grant overpayments. OCSE and the Department of Education negotiated and implemented a computer matching agreement in December 2000. P.L. 108-199 (enacted in January 2004) granted access to the Department of Housing and Urban Development. The provisions were designed to verify the employment and income of persons receiving federal housing assistance. P.L. 108-295 (enacted in August 2004) granted access to the State Workforce Agencies responsible for administering state or federal Unemployment Compensation programs. The provisions were designed to determine whether persons receiving unemployment compensation are working. P.L. 108-447 (enacted in December 2004) granted access to the Department of the Treasury. The provisions were designed to help the Treasury Department collect nontax debt (e.g., small business loans, Department of Veterans Affairs (VA) loans, agricultural loans, etc.) owed to the federal government. P.L. 109-250 (enacted in July 2006) granted access to the state agencies that administer the Food Stamp program. These provisions were designed to assist in the administration of the Food Stamp program. P.L. 110-246 (enacted in June 2008) changed the Food Stamp program references to the Supplemental Nutrition Assistance Program (SNAP). P.L. 113-79 (enacted in February 2014) required all state SNAP agencies (rather than giving them the option) to data-match with the NDNH at the time of SNAP certification for the purposes of determining eligibility to receive SNAP benefits and determining the correct amount of those benefits. P.L. 110-157 (enacted in December 2007) requires the Secretary of Veterans Affairs to provide the HHS Secretary with information for comparison with the National Directory of New Hires for income verification purposes in order to determine eligibility for certain veteran benefits and services. It requires the Secretary to (1) seek only the minimum information necessary to make such a determination; (2) receive the prior written consent of the individual before seeking, using, or disclosing any such information; (3) independently verify any information received prior to terminating, denying, or reducing a benefit or service; and (4) allow an opportunity for an individual to contest negative findings. P.L. 110-157 terminated the New Hires Directory comparison authority for the VA Secretary at the end of FY2011 (i.e., September 30, 2011). P.L. 112-37 (enacted in October 2011) extended the termination date to November 18, 2011. During the period from November 19, 2011, through September 29, 2013, the provision was not in effect. The Department of Veterans Affairs Expiring Authorities Act of 2013 ( P.L. 113-37 ) made the provision effective beginning September 30, 2013, and for 180 days thereafter. The NDNH is almost unanimously viewed as a successful and pivotal element of the CSE program. According to HHS, in FY2010 4.7 million noncustodial parents and putative fathers were located through the NDNH, up from 2.8 million in FY1999 (a 68% increase). The NDNH, however, does not provide information on the self-employed nor does it include hours worked or industry/occupation-related data. Since the establishment of the NDNH, federal law has been amended six times to expand access of more programs and agencies to the NDNH (listed above). Although Congress specifically included several provisions that would safeguard the information in the NDNH, some advocacy groups are concerned that as more agencies and programs are granted access to the NDNH, the potential for mismanagement of the database and accidental or intentional misuse of confidential information escalates. The NDNH is a database that contains personal and financial data on nearly every working American, as well as those receiving unemployment compensation. The size and scope of the NDNH has continued to cause much concern over whether the privacy of individuals will be protected. In addition to the data security safeguards, federal law includes privacy protection provisions that require the removal or deletion of certain information in the NDNH after specified time periods. It has been argued that stronger safeguards may be needed to prevent the unauthorized intrusion into the personal and confidential information of millions of Americans associated with the NDNH. The federal government and states administer numerous benefit programs that provide aid, in cash and noncash form, to persons with limited income. In theory, all of these programs could use the employment and income information contained in the NDNH to verify program eligibility, prevent or end unlawful or erroneous access to program benefits, collect overpayments, or assure that program benefits are correct. Some observers are worried that more of these federal and state programs will try to obtain access to the NDNH. They contend that expanded or wider access to, and use of, these data could potentially lead to privacy and confidentiality breaches, financial fraud, identity theft, or other crimes. They also are concerned that a broader array of legitimate users of the NDNH may conceal the unauthorized use of the personal and financial data in the NDNH. Some policymakers maintain that, although many agencies and programs could potentially benefit from access to the NDNH, those entities will not pursue access because many of these agencies currently do not have the computer capacity or capability to use an automated system such as the NDNH. Many of these agencies and programs are administered at the local level where computer availability is limited or computer capability to interface with the automated NDNH is nonexistent. Moreover, many of the privacy protections and strict security requirements tied to the NDNH may be administratively burdensome for many agencies. Finally, some child support advocates are concerned that the wider access to the NDNH may have negative repercussions for the CSE program in that as other programs and agencies use the NDNH effectively and find matches in cases that involve an overpayment, those agencies will want to collect their money and may use income withholding as the mechanism to do so. Thus, these other programs will be in direct competition with the CSE program for the income of noncustodial parents.	The National Directory of New Hires (NDNH) is a database that contains personal and financial data on nearly every working American, as well as those receiving unemployment compensation. Contrary to its name, the National Directory of New Hires includes more than just information on new employees. It is a database that includes information on (1) all newly hired employees, compiled from state reports (and reports from federal employers), (2) the quarterly wage reports of existing employees (in Unemployment Compensation (UC)-covered employment), and (3) unemployment compensation claims. The NDNH was originally established to help states locate noncustodial parents living in a different state so that child support payments could be withheld from that parent's paycheck. Since its enactment in 1996, the NDNH has been extended to several additional programs and agencies to verify program eligibility, prevent or end fraud, collect overpayments, or assure that program benefits are correct. Although the directory is considered very effective, concerns about data security and the privacy rights of employees remain a part of debates regarding expanded access to the NDNH.
The federal-state UI program, created in part by the Social Security Act of 1935, is administered under state law based on federal requirements. The primary objectives of the program are to provide temporary, partial compensation for lost earnings of eligible individuals who become unemployed through no fault of their own and to stabilize the economy during downturns. Applicants for UI benefits must have earned at least a certain amount in wages and/or have worked a certain number of weeks to be eligible. In addition, these individuals must, with limited exceptions, be available for and able to work, and actively search for work. The federal-state structure of the program places primary responsibility for its administration on the states, and gives them wide latitude to administer the programs in a manner that best suits their needs within the guidelines established by federal law. Within the context of the federal- state partnership, Labor has general responsibility for overseeing the UI program to ensure that the program is operating effectively and efficiently. For example, Labor is responsible for monitoring state operations and procedures, providing technical assistance and training, and analyzing UI program data to diagnose potential problems. State agencies rely extensively on IT systems to carry out their UI program functions. These include systems for administering benefits and for collecting and administering the taxes used to fund the programs. Benefit systems are used for determining eligibility for benefits; recording claimant filing information, such as demographic information, work history, and qualifying wage credits; determining updates as needed, such as changes in work-seeking status; and calculating state-specific weekly and maximum benefit amounts. Tax systems are used for online reporting and payment of employers’ tax and wage reports; calculating tax, wage, and payment adjustments, and any penalties or interest accrued; processing quarterly tax and wage amounts; determining and processing late payment penalties, interest, civil penalties, or fees; and adjusting previously filed tax and wage reports as a result of a tax audit, an amended report submitted by the employer, or an erroneously keyed report. However, the majority of the states’ existing systems for UI operations were developed in the 1970s and 1980s. Although some agencies have performed upgrades throughout the years, most of the state legacy systems have aged considerably. As they have aged, the systems have presented challenges to the efficiency of states’ existing IT environments. In a survey published by the National Association of State Workforce Agencies (NASWA) in 2010, states reported the following issues: Over 90 percent of the systems run on outdated hardware and software programming languages, such as Common Business Oriented Language (COBOL), which is one of the oldest computer programming languages. The systems are costly and difficult to support. The survey found, for example, that over two-thirds of states face growing costs for mainframe hardware and software support of their legacy systems. Most states’ systems cannot efficiently handle current workload demands, including experiencing difficulties implementing new federal or state laws due to constraints imposed by the systems. States have realized an increasing need to transition to web-based online access for UI data and services. States also cited specific issues with their legacy systems, including the fact that they cannot be reprogrammed quickly enough to respond to changes resulting from legislative mandates. In addition, states have developed one or more stand-alone ancillary systems to fulfill specific needs, but these systems are not integrated with their legacy mainframe systems, decreasing efficiency. Finally, according to the states, existing legacy systems cannot keep up with advances in technology, such as the move to place more UI services online. In addition to providing general oversight of the UI program, the Department of Labor plays a role in facilitating the modernization of states’ UI IT systems. This role consists primarily of providing funding and technical support to the state agencies. In this regard, Labor distributes federal funds to each state for the purpose of administering its UI program, including funds that can be used for IT modernization. Through supplemental budget funds, Labor has supported the establishment of state consortiums, in which three or four states work together to develop and share a common system. These efforts are intended to allow multiple states to pool their resources and reduce risk in the pursuit of a single common system that they can each use after applying state-specific programming and configuration settings. Labor also helps to provide technical assistance to the states by supporting and participating in two key groups—NASWA and the Information Technology Support Center (ITSC). NASWA provides a forum for states to exchange information and ideas about how to improve program operations; serves as a liaison between state workforce agencies and federal government agencies, Congress, businesses, and intergovernmental groups; and is the collective voice of state agencies on workforce policies and issues. ITSC is funded by Labor and the states to provide technical services, core projects, and a central capacity for exploring the latest technology for all states. ITSC’s core services to states include application development, standards development, and UI modernization services, among others. Our September 2012 report noted that selected states had made varying progress in modernizing the IT systems supporting their UI programs. Specifically, we found that each of the three states that were part of a multistate consortium were in the initial phases of planning that included defining business needs and requirements; two individual states were in the development phase—that is, building the system based on requirements; two were in a “mixed” phase where part of the system was in development and part was in the operations and maintenance phase; and two were completed and in operations and maintenance. These efforts had, among other things, enhanced states’ UI technology to support web-based services with more modern databases and replaced outdated programming languages. They also included the development of auxiliary systems, such as document management systems and call center processing systems. Nevertheless, while the states had made progress, we found that they faced a number of challenges related to their modernization efforts. In particular, individual states encountered the following challenges, among others: All nine states cited limited funding and/or the increasing cost of UI systems as a major challenge. For example, they said that the economic downturn had resulted in smaller state budgets, which limited state funds for IT modernization. Moreover, once funds were identified or obtained, it often took a considerable amount of time to complete the IT project. Officials added that developing large state or multistate systems may span many years, and competing demands on resources can delay project implementation. As a result, states may fund one phase of a project with the hope that funds will be available in the future for subsequent phases. This lack of consistent funding potentially hinders effective IT project planning. Seven of the nine states cited a lack of staff in their UI offices with the expertise necessary to manage IT modernization efforts: Several states said they lacked sufficient subject matter experts knowledgeable in the extensive rules and requirements of the UI program. Such experts are essential to helping computer designers and programmers understand the program’s business processes, supporting an effective transition to the reengineered process, and identifying system requirements and needs. States also identified challenges in operating and maintaining a system developed by vendors because state employees may have lacked the needed expertise to maintain the new system once the vendor staff leave. The states added that their staffs may implement larger-scale systems only once every 10 to 15 years, leading to gaps in required knowledge and skills, process maturity and discipline, and executive oversight. States further stressed that their staffs may have expertise in an outdated computer language, while modernization efforts require them to learn new skills and more modern programming languages. According to a 2011 workforce survey, over 78 percent of state chief information officers confirmed that state salary rates and pay grade structures presented a challenge in attracting and retaining skilled IT talent. According to Labor, the limited staff resources facing states have required that subject matter experts be pulled off projects to address the workload demands of daily operations. Six of the nine states noted that continuing to operate their legacy systems while simultaneously implementing new UI systems required them to balance scarce staff resources between the two major efforts. In addition to the challenges facing individual states, we found that states participating in multistate consortiumschallenges: encountered a separate set of Representatives from all three consortiums indicated that differences among states in procurement, communication, and implementation of best practices; the involvement of each state’s IT office; and the extent to which the state’s IT is centralized could impact the effort to design and develop a common system. As a result, certain state officials told us that consortiums were not practical; one official questioned whether a common platform or system could be successfully built and made transferable among states in an economically viable way. States within a consortium often had different views on the best approach to developing and modernizing systems. State officials said that using different approaches to software development is not practical when developing a common system, but that it was difficult to reach consensus on a single approach. In one case, a state withdrew from a consortium because it disagreed with the development approach being taken by the consortium. States had concerns about liabilities in providing services to another state. IT representatives from one consortium’s lead state noted that decisions taken by the lead state could result in blame for outcomes that other states were unsatisfied with, and there was a concern that the lead state’s decision making could put other states’ funds at risk. One state withdrew from its leadership position because of such concerns about liability. Reaching agreement on the location of system resources could also be a challenge. For example, one consortium encountered difficulty in agreeing on the location of a joint data center to support the states and on the resources that should be dedicated to operating and managing the facility, while complying with individual state requirements. All three consortium representatives we spoke to noted that obtaining an independent and qualified leader for a multistate modernization effort was challenging. State IT project managers and chief information officers elaborated that while each state desires to successfully reach a shared goal, the leader of a consortium must keep the interests of each state in balance and have extensive IT experience that goes beyond his or her own state’s technology environment. Both individual states and consortium officials had developed methods to mitigate specific challenges and identified lessons learned. For example, several states were centralizing and standardizing their IT operations to address technical challenges; found that a standardized, statewide enterprise architecture could provide a more efficient way to leverage project development; and took steps to address consortium challenges they encountered, such as ensuring that each state’s IT department is involved in the project. In our report, we noted that ITSC had been tasked with preparing an assessment of lessons learned from states’ modernization efforts, but at the time of our review, this assessment had not been completed. Moreover, the scope of the assessment was limited to ITSC’s observations and had not been formally reviewed by the states or Labor. A comprehensive assessment would include formal input from states and consortiums, the ITSC Steering Committee, and Labor. Accordingly, we recommended that Labor (1) perform a comprehensive analysis of lessons learned and (2) distribute the analysis to each state through an information-sharing platform or repository, such as a website. Labor generally agreed with the first recommendation; it did not agree or disagree with the second recommendation but said it was committed to sharing lessons learned. In addition, the nine states in our review had established, to varying degrees, certain IT management controls that aligned with industry- accepted program management practices. These controls included the following: establishing aspects of a project management office for centralized and coordinated management of projects under its domain; incorporating industry-standard project management processes, tools, and techniques into their modernization UI efforts; adopting independent verification and validation to verify the quality of the modernization projects; and employing IT investment management standards, such as those called for in our IT investment management framework. If effectively implemented, these controls could help successfully guide the states’ UI modernization efforts. In summary, while states have taken steps to modernize the systems supporting their UI programs, they face a number of challenges in updating their aging legacy systems and moving program operations to a modern web-based IT environment. Many of the challenges pertain to inconsistent funding, a lack of sufficient staff with adequate expertise, and in some cases, the difficulty of effective interstate collaboration. States have begun to address some of these challenges, and the nine states in our review had established some IT management controls, which are essential to successful modernization efforts. In addition, the Department of Labor can continue to play a role in supporting and advising states in their efforts. Chairman Reichert, Ranking Member Doggett, and Members of the Subcommittee, this concludes my statement. I would be happy to answer any questions at this time. If you have any questions concerning this statement, please contact Valerie C. Melvin, Director, Information Management and Technology Resources Issues, at (202) 512-6304 or melvinv@gao.gov. Other individuals who made key contributions include Christie Motley, Assistant Director; Lee A. McCracken; and Charles E. Youman. This is a work of the U.S. government and is not subject to copyright protection in the United States. The published product may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately.	The joint federal-state unemployment insurance program is the Department of Labor's largest income maintenance program, and its benefits provide a critical source of income for millions of unemployed Americans. The program is overseen by Labor and administered by the states. To administer their UI programs, states rely heavily on IT systems--both to collect and process revenue from taxes and to determine eligibility and administer benefits. However, many of these systems are aging and were developed using outdated computer programming languages, making them costly and difficult to support and incapable of efficiently handling increasing workloads. Given the importance of IT to state agencies' ability to process and administer benefits, GAO was asked to provide testimony summarizing aspects of its September 2012 report on UI modernization, including key challenges states have encountered in modernizing their tax and benefit systems. To develop this statement, GAO relied on its previously published work. As GAO reported in September 2012, nine selected states had made varying degrees of progress in modernizing the information technology (IT) systems supporting their unemployment insurance (UI) programs. Specifically, the states' modernization efforts were at various stages--three were in early phases of defining business needs and requirements, two were in the process of building systems based on identified requirements, two were in a "mixed" phase of having a system that was partly operational and partly in development, and two had systems that were completely operational. The enhancements provided by these systems included supporting web-based technologies with more modern databases and replacing outdated programming languages, among others. Nevertheless, while taking steps to modernize their systems, the selected states reported encountering a number of challenges, including the following: Limited funding and the increasing cost of UI systems . The recent economic downturn resulted in smaller state budgets, limiting what could be spent on UI system modernization. In addition, competing demands and fluctuating budgets made planning for system development, which can take several years, more difficult. A lack of sufficient expertise among staff . Selected states reported that they had insufficient staff with expertise in UI program rules and requirements, the ability to maintain IT systems developed by vendors, and knowledge of current programming languages needed to maintain modernized systems. A need to continue to operate legacy systems while simultaneously implementing new systems . This required states to balance scarce resources between these two efforts. In addition, a separate set of challenges arose for states participating in multistate consortiums, which were established to pool resources for developing joint systems that could be used by all member states: Differences in state laws and business processes impacted the effort to design and develop a common system. States within a consortium differed on the best approach for developing and modernizing systems and found it difficult to reach consensus. Decision making by consortium leadership raised concerns about liability for outcomes that could negatively affect member states. Consortiums found it difficult to obtain a qualified leader for a multistate effort who was unbiased and independent. Both consortium and individual state officials had taken steps intended to mitigate challenges. GAO also noted that a comprehensive assessment of lessons learned could further assist states' efforts. In addition, the states in GAO's review had established certain IT management controls that can help successfully guide modernization efforts. These controls include establishing a project management office, using industry-standard project management guidance, and employing IT investment management standards, among others. In its prior report on states' UI system modernization efforts, GAO recommended that the Department of Labor conduct an assessment of lessons learned and distribute the analysis to states through an information-sharing platform such as a website. Labor agreed with the first recommendation; it neither agreed nor disagreed with the second recommendation, but stated that it was committed to sharing lessons learned.
Access to mental health and substance use disorder services is determined in part by the insurance coverage of these services and by the terms under which the services are covered. Federal parity law and the health reform law affect both the coverage of mental health and substance use disorder services, as well as the terms under which they are covered. Federal law requires parity in annual and aggregate lifetime limits, treatment limitations, financial requirements, and in- and out-of-network covered benefits. However, federal parity law does not mandate the coverage of mental health and substance use disorder services. The health reform law builds on federal parity law and also contains provisions that mandate coverage of mental health and substance use disorder services. This report begins with a brief summary of federal parity law and by discussing the provisions in the health reform law that build on federal parity law. It then goes on to discuss those health reform provisions that mandate coverage of mental health and substance use disorder services. The goal of federal parity law is to make coverage terms for mental health and substance use disorder services, when those services are offered, no more restrictive than those terms for medical and surgical services. Federal parity law consists of two laws: (1) the Mental Health Parity Act of 1996 (MHPA, P.L. 104-204 ) and (2) the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA, P.L. 110-343 ). Together, these laws identify a group of coverage terms that must be on par between mental health and substance use disorder services and medical and surgical services (hereafter referred to as the "federal mental health parity requirements," see text box). These coverage terms include (1) annual and aggregate lifetime limits, (2) treatment limitations, (3) financial requirements, and (4) in- and out-of-network covered benefits. The health reform law (the Patient Protection and Affordable Care Act of 2010 [ P.L. 111-148 , ACA]) did not modify or expand the federal mental health parity requirements themselves; that is, it did not modify the specific coverage terms which must be on par between mental health and substance use disorder services and medical and surgical services. Federal parity law applies only to insurers who choose to cover mental health and substance use disorder services, and then it only applies to certain plan types. Federal parity law, prior to the passage of the ACA, applied to both large fully insured and large self-insured plans. In addition, it applied to Medicaid managed care plans and to Children's Health Insurance Program (CHIP) plans. The ACA builds on federal parity law by expanding its applicability to a number of additional plan types. The ACA builds on federal parity law by expanding the requirement for compliance with the law to three types of plans. These include (1) Qualified Health Plans (QHPs), the plans that will be offered through the Exchanges; (2) plans offered through the individual market; and (3) Medicaid benchmark and benchmark-equivalent plans (that are not managed care plans). The ACA requires the establishment of Exchanges, health insurance marketplaces where individuals and employers may purchase health insurance. Plans offered in the Exchanges, the QHPs, must meet a number of requirements, including compliance with federal parity law. The ACA requires all QHPs to comply with federal parity law in the same manner, and to the same extent, that health insurance issuers and group health plans must comply with these requirements. QHPs will be provided through both the small group and individual markets and may also be offered outside of an Exchange. In addition, the ACA requires plans offered through the individual market to comply with federal parity law. Medicaid may be offered either in the form of traditional state plan benefits or by enrolling state-specified groups in benchmark or benchmark-equivalent coverage. Either of these options may be provided through managed care plans ("Medicaid managed care plans"). The ACA requires Medicaid benchmark and benchmark-equivalent plans (which are not Medicaid managed care plans) to partially comply with federal parity law. Specifically, these Medicaid plans are only required to ensure that treatment limitations and financial requirements are on par for mental health and substance use disorder services and medical and surgical services. This may be in part related to the fact that these are likely the more relevant of the four requirements in a non-managed care setting. Fully insured and self-insured small plans appear to be exempt from compliance with federal parity law. In addition, federal parity law does not apply to traditional fee-for-service Medicaid or to traditional fee-for-service Medicare. Table 1 summarizes the applicability of federal parity law to various private and public coverage arrangements. Federal parity law contains an exemption for any group health plan (either fully insured or self-insured) of a small employer (employers with between 2 and 50 employees). In cases where states consider "groups of one" to be small employers, the exemption extends to those groups of one as well. The ACA did not amend the small employer exemption, and therefore it appears to remain in effect. Federal parity law also does not appear to apply to traditional fee-for-service Medicaid. This might be due to the structure of such coverage, which may result in certain of the parity requirements (e.g., parity in in- and out-of-network benefits) not being reasonably applicable. Finally, federal parity law does not apply to traditional fee-for-service Medicare. Although federal parity law does not apply to Medicare, federal law does require that copayments for covered Medicare Part B outpatient mental health services and other medical services both be 20% of the Medicare-approved amount by 2014. Traditionally, there has been a disparity not only in the coverage terms under which mental health and substance use disorder services were offered, but also in whether they were offered at all. Federal parity law aims to mitigate disparities in coverage terms between mental health and substance use disorder services and medical and surgical services. However, as mentioned previously, federal parity law does not require the coverage of mental health and substance use disorder services. This approach, where the coverage of mental health and substance use disorder services is not required, but where parity with medical and surgical services is required if mental health and substance use disorder services are covered, is termed a mandated offering parity approach. This fundamental approach to federal parity law was not changed by the ACA, as noted above. The ACA did, however, include broader changes which create requirements for the coverage of mental health and substance use disorder services, among other types of services. The impact of these changes on the coverage of mental health and substance use disorder services is discussed in more detail below. As mentioned above, the ACA requires the establishment of Exchanges, health insurance marketplaces where individuals and employers may purchase health insurance. Plans offered in the Exchanges, the QHPs, must meet a number of requirements, one of which is the offering of a minimum set of benefits. This set of benefits is referred to as the Essential Health Benefits Package (EHBP), and is defined to include the Essential Health Benefits (EHB), certain cost-sharing arrangements, and specified tiers of coverage. The ACA requires the Secretary of Health and Human Services (HHS) to define the items and services that will be included in the EHB, and lists 10 categories of services and/or items which must, at a minimum, be included as a part of the EHB. This list includes a category for mental health and substance use disorder services (see text box). In addition, the benefits included in the EHB are required to be of "equal scope" to those benefits offered under a "typical employer plan." To determine the benefits covered under a typical employer plan, the ACA required the Department of Labor (DOL) to carry out a survey of employer-sponsored coverage and to report its results to the HHS Secretary. On April 15, 2011, DOL released a report to fulfill this statutory requirement: "Selected Medical Benefits: A Report for the Department of Labor to the Department of Health and Human Services." This report found that the majority of health plans surveyed offer both inpatient and outpatient mental health and substance use disorder treatment. The ACA does not require that specific mental health and substance use disorder services be included as part of the EHB. The specific services and items that will be a part of the EHB, and thus of the EHBP, will be determined through the rulemaking process. Although the statute specifically lists 10 categories of services that must, at a minimum, be included, the HHS Secretary has the discretion to include benefits, items, or services in addition to those that may fall into these 10 categories. In December of 2011, HHS released an informational bulletin regarding the upcoming EHB rulemaking process. The bulletin describes "a comprehensive, affordable and flexible proposal and informs the public about the approach that HHS intends to pursue in rulemaking to define essential health benefits." In the bulletin, HHS outlines a proposal that would allow states to define the EHB for their state using benchmark health insurance plans. Under the HHS proposal, states would choose a specified benchmark health insurance plan from among four possible options: (1) the largest HMO in the state; (2) one of the three largest federal employee health plan options by enrollment in the state; (3) one of the three largest state employee health plans by enrollment; or (4) one of the three largest small group plans by enrollment in the state. Any of these designated plans would have a scope of services comparable to those of a "typical employer plan" (see discussion in previous paragraph), and the benefits covered by the designated benchmark plan would be the EHBP for the state. In addition, to inform her definition of the EHB, the HHS Secretary requested the Institute of Medicine (IOM) to carry out a consensus study on the determination of the EHB. The IOM was specifically tasked with "mak(ing) recommendations on the criteria and methods for determining and updating the essential health benefits package." The IOM released its report, "Essential Health Benefits: Balancing Coverage and Cost" on October 7, 2011. The report does not recommend specific services and items for inclusion in the EHB. By requiring plans to offer either the EHBP or the EHB, the ACA creates a coverage mandate for mental health and substance use disorder services, among other services. The ACA requires not only the QHPs, but other plans as well, to offer either the EHBP or EHB. This is discussed in more detail below. The ACA does not require all plans to offer the EHB or the EHBP (see Table 2 for more information). It specifically requires four types of plans to offer either the EHB or EHBP: (1) new plans offered through the individual market; (2) new plans offered through the small group market; (3) QHPs; and (4) Medicaid benchmark and benchmark equivalent plans. The ACA requires QHPs and new plans offered in the small and individual market to include coverage of the EHBP. The ACA requires Medicaid benchmark and benchmark equivalent plans to cover the EHB (therefore excluding a requirement for certain cost-sharing arrangements and tiers of coverage, as are a part of the EHBP). All of these requirements must be in effect no later than January 1, 2014. Grandfathered plans, and large group plans offered outside of the Exchanges, are not required to offer the EHBP. As discussed in this report, the health reform law made a number of changes that are likely to affect access to mental health and substance use disorder services. Specifically, many plans will now be required to cover these services and more plans will be required to offer coverage for these services on par with coverage for medical and surgical services. Although there are coverage arrangements that are not required to cover mental health and substance use disorder services or to comply with federal parity law, the broader requirements may lead to plans voluntarily offering these services or complying with federal parity law in order to be more competitive in the private market.	Two important components of access to mental health and substance use disorder services are their insurance coverage and the terms under which they are covered. Federal mental health parity law addresses the terms under which mental health and substance use disorder services are covered in comparison with medical and surgical services in those plans that choose to offer coverage of these services. Federal law requires parity in annual and aggregate lifetime limits, treatment limitations, financial requirements, and in- and out-of-network covered benefits. However, federal parity law does not mandate the coverage of mental health and substance use disorder services. The Patient Protection and Affordable Care Act of 2010 (ACA, P.L. 111-148), as amended, contains provisions that address both the coverage of mental health and substance use disorder services and the terms under which these services are covered. Specifically, the ACA includes provisions that require (1) compliance with federal parity law by certain plans and (2) the coverage of mental health and substance use disorder services by certain plans. The ACA does not change the federal mental health requirements at all. However, it extends applicability of these requirements to three new plan types: (1) Qualified Health Plans (QHPs, offered through the state Exchanges); (2) plans offered through the individual market; and (3) Medicaid benchmark and benchmark equivalent plans that are not managed care plans. The ACA also requires certain plans to offer coverage of mental health and substance use disorder services, by requiring these plan types to cover the Essential Health Benefits (EHB), which are defined to include mental health and substance use disorder services. The ACA requires coverage of the EHB, and therefore at least some mental health and substance use disorder services, by the following plan types: (1) QHPs; (2) new plans offered through the individual or small group market; and (3) Medicaid benchmark and benchmark-equivalent plans.
VA serves veterans of the U.S. armed forces, and provides health, pension, burial, and other benefits. In fiscal year 2015, VA spent about $20 billion on goods and services via contracts—more than a quarter of its discretionary budget. As shown in the organizational chart below, these contracts were awarded by VA’s eight heads of contracting activity (HCAs). The department’s three operational administrations—VHA, the Veterans Benefits Administration, and the National Cemetery Administration—operate largely independently from one another. In addition to the operating administrations, several VA procurement organizations have department-wide roles: The Office of Acquisition, Logistics, and Construction (OALC) is a VA headquarters organization responsible for directing the acquisition, logistics, construction, and leasing functions within VA. The Office of Acquisition Operations (OAO), which falls under OALC’s purview, conducts procurement activities for customers across the department and has two primary operating divisions—the Technology Acquisition Center (TAC), which focuses on IT purchasing, and the Strategic Acquisition Center (SAC), which is responsible for procurement of certain types of goods and services for the operating administrations, such as VHA. The Office of Acquisition and Logistics (OAL) is responsible for oversight of contracting across VA, including setting policy and issuing warrants to contracting officers. o The National Acquisition Center (NAC) is an OAL contracting organization which serves VHA by providing contracting for certain health care-related goods and services. VHA provides medical care to veterans and is by far the largest administration in VA, with a budget of $61.1 billion for fiscal year 2016, representing the majority of VA’s $75 billion discretionary budget. Its 167 medical centers are currently organized into 19 Veterans Integrated Service Networks (VISN), regional networks that manage some aspects of operations. VHA has 19 Network Contracting Offices, each of which serves one of the 19 VISNs. VA has some organizational and programmatic changes in progress that affect procurement. In July 2015, the Secretary of Veterans Affairs announced an organizational transformation for the department called MyVA. In a related effort, responsibility for the medical-surgical prime vendor (MSPV) program—a logistics provider that facilitates ordering and delivery of supplies to medical centers from many different contractors— was recently transferred from NAC to SAC. Given VA procurement’s highly decentralized structure, a given customer—such as a department in a medical center or a program office—may need to work with multiple contracting entities to meet its procurement needs. Figure 2 illustrates the complex working relationship between contracting offices and their customers across VA. This can contribute to confusion. Several of the contracting officials we spoke with stated that they were, at times, uncertain about which contracting office handled what requirements. VA issued a memorandum in 2013 to clarify areas of responsibility for the national contracting organizations, but confusion remains. VA’s Acting Chief Acquisition Officer stated that he is aware of overlap in the functions of some contracting organizations, especially the NAC and the SAC. At one VISN we visited, an official reported procuring one type of high-tech medical equipment through the SAC even though this area is specifically designated as NAC’s responsibility because she expected that the SAC could execute the purchase more quickly. Without clearly delineated organizational roles and customer relationships—beyond what was provided in the 2013 memorandum—the possibility of duplication in these roles and relationships is increased, and customers lack clear guidance on which organization to approach for certain types of procurements. In our September 2016 report, we recommended that OALC assess whether additional policy or guidance is needed to clarify the roles of VA’s national contracting organizations. The Acting Chief Acquisition Officer, OALC said that the department agreed with this recommendation. Key VA procurement policies are outdated and difficult for contracting officers to use. Standards for Internal Control in the Federal Government state that it is important for an organization’s management to update its policies over time to reflect changing statutes or conditions, and that those policies should be communicated to those who need to implement them. However, many of VA’s regulations and policies are outdated, most notably the VA Acquisition Regulation (VAAR), which has not been updated since 2008. The department has issued a patchwork of policy documents in the interim to fill this gap. VA asks contracting officers to refer to two different versions of the VAAR, one from 1997 and the other from 2008. This causes confusion among contracting officers. In addition, VA communicates interim procurement policies in a number of different forms, some of which can be duplicative. Figure 3 illustrates the numerous sources that contracting officers must turn to for guidance. The sheer volume and number of different forms of communications— many of which are outdated—are confusing and present challenges for contracting officials seeking appropriate guidance. While VA recently fully rescinded the 1997 VAAR after our inquiries, the 2008 version remains out of date. A new revision of the VAAR is also in development, but has faced delays. VA began the process in 2011 but does not plan to finalize the new VAAR until December 2018, including the required rulemaking process. The lengthy delay in updating this fundamental source of policy impedes contracting officers’ abilities to effectively carry out their duties. In our September 2016 report, we recommended that VA identify measures to expedite the revision of the VAAR, and take interim steps to clarify its policy framework; the Acting Chief Acquisition Officer, OALC stated that the department agreed with both of these recommendations. VA medical centers use contractors called medical-surgical prime vendors to obtain many of the supplies they use on a daily basis, such as bandages and surgical sutures. Officials known as ordering officers, who work at the medical centers, regularly place orders. In turn, the prime vendor delivers those orders via a local warehouse. The prices for these medical supplies are established by VA national contracts, which typically provide significant discounts over the Federal Supply Schedule prices— an estimated 30 percent on average, according to a senior NAC official. Use of these national contracts is also required by VA policy and regulation. Figure 4 provides an overview of the MSPV process. However, the current MSPV process is confusing and cumbersome. Most orders are placed through the Integrated Funds Distribution Control Point Activity, Accounting and Procurement (IFCAP) system, a decades-old IT system with a text-based interface, which does not include a tool to look up items that are available on the national contracts. For instance, ordering officers must know the exact item number—which is different for each vendor—to enter into IFCAP. The existing tools to look up available national contracts are also cumbersome. Along with discounted items on national contracts, the MSPV system also allows ordering officers to buy thousands of items directly from VA’s Federal Supply Schedule contracts, which lack the degree of discounted pricing of the national contracts. Because of the challenges posed by the system, ordering officers in some cases purchase items directly from the Federal Supply Schedules, and might miss opportunities to obtain discounts on the national contracts. Administration of the MSPV program is being transferred from NAC to SAC, and, along with this transfer, VHA and SAC are making changes to the MSPV program in an effort to address the issues discussed above and streamline the process. To support the next generation MSPV, SAC has already awarded new prime vendor contracts and is in the process of awarding the supporting national contracts for individual types of supplies. VHA and SAC also plan to implement a new online ordering interface, developed by a contractor for VHA, which will provide ordering officers a more intuitive interface for the outdated and difficult-to-use IFCAP system. Further, unlike the current system, this new interface will only permit ordering officers to purchase items from a specific catalog of items, not the wider range of Federal Supply Schedule items. VA estimates that this catalog will eventually contain 8,000 to 10,000 items to meet the needs of its medical centers. However, there have been some delays in VHA’s development of supply requirements and SAC’s award of new supply contracts, with only about 1,800 items on national contracts as of July 2016. VA does not anticipate that SAC will be able to award contracts for the full catalog by the time the new MSPV contracts become operational in December 2016. In the interim, SAC and VHA officials stated that they will allow ordering of Federal Supply Schedule items (approximately 4,500) that are not on national contracts, to ease the transition. Work remains to ensure that the transition to this new approach will be successful. Updating the MSPV process affects how essential supplies are ordered and delivered at 167 medical centers on a daily basis, and facility logistics staff, including ordering officers, must be able to implement the new approach. VHA has an outreach plan in place, but chief logistics officers at medical centers we visited expressed some concerns about the transition—for instance, one reported that his office’s analysis found 14 items deemed critical to the function of the medical center were not on a preliminary list of supplies available through the new MSPV, nor were acceptable substitutes. If medical centers instead purchase items through their local contracting offices because the new MSPV does not meet their needs, it will undermine the program’s potential to increase efficiency and cost savings. In our September 2016 report, we recommended that VA take steps to facilitate the transition to the new MSPV process, including ensuring that SAC collects data to monitor the use of national contracts in the new system, that SAC and VHA establish achievable time frames for eliminating Federal Supply Schedule items from the MSPV catalog once national contracts are in place, and that the new ordering interface clearly distinguish between items on national contracts and the 4,500 items on the Federal Supply Schedules. The Acting Chief Acquisition Officer, OALC said that the department agreed with this recommendation. VA’s substantial buying power presents many opportunities for procurement cost savings, but the department has not consistently taken advantage of them. A key aspect of strategic sourcing is consolidating similar requirements to manage them collectively, reaping cost savings and efficiency gains. VA has done this successfully in some areas, such as pharmaceuticals, and the planned changes to the MSPV program could result in greater use of discounted national contracts for medical supplies if they are successfully implemented. There are opportunities to better apply strategic sourcing principles at the regional level, as well. Within VHA, each of the 19 VISNs is responsible for a regional network of multiple medical centers and clinics. Individual medical centers within each VISN procure many goods and services separately, despite the fact that their requirements are similar. Consolidating these requirements—such as security services, elevator maintenance, and eyeglasses for patients—can realize both cost savings and greater efficiency in awarding and administering contracts. We found efforts underway to consolidate requirements at the regional level, but local autonomy and limited planning capacity pose obstacles. For instance, one VISN we visited recently began an initiative to consolidate requirements for purchases made by all of its medical centers, especially services. VISN managers explained that they began with the easiest requirements, such as landscaping services and parking administration. They issued a draft memorandum with plans to broaden this approach to most purchases, but medical center staff provided feedback that they preferred their own local contracts and did not want VISN-wide contracts to become the default approach. In our review of 37 selected contracts, we did find several instances of VISN and contracting officials consolidating requirements for greater efficiency and to obtain better pricing. This indicates that consolidating procurement is possible with leadership buy-in, and that there are opportunities to share lessons learned across VISNs. Within VHA, in VISNs where there is not a consistent push by local leadership to pursue consolidation, it is challenging for efforts driven by individual departments or contracting personnel to overcome cultural obstacles. To provide the necessary leadership commitment to take advantage of these opportunities, we recommended in our September 2016 report that VHA Procurement and Logistics conduct a review of VISN-level strategic sourcing efforts, identify best practices, and, if needed, issue guidance. The Acting Chief Acquisition Officer, OALC said that the department agreed with this recommendation. Chairman Coffman, Ranking Member Kuster, and Members of the Subcommittee, this concludes my prepared statement. I would be pleased to respond to any questions that you may have at this time. If you or your staff have any questions about this statement, please contact Michele Mackin at (202) 512-4841 or MackinM@gao.gov. In addition, contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this statement. Individuals who made key contributions to the report on which this testimony is based are Lisa Gardner, Assistant Director; Emily Bond; George Bustamante; Margaret Hettinger; Julia Kennon; Katherine Lenane; Ethan Levy; Teague Lyons; Jean McSween; Sylvia Schatz; Erin Stockdale; and Roxanna Sun. This is a work of the U.S. government and is not subject to copyright protection in the United States. The published product may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately.	This testimony summarizes the information contained in GAO's September 2016 report, entitled Veterans Affairs Contracting: Improvements in Policies and Processes Could Yield Cost Savings and Efficiency ( GAO-16-810 ). GAO found opportunities for the Department of Veterans Affairs (VA) to improve the efficiency and effectiveness of its multi-billion dollar annual procurement spending in several areas including data systems, procurement policies and oversight, acquisition workforce, and contract management. Shortcomings in VA's recording of procurement data limit its visibility into the full extent of its spending. A recent policy directing that medical-surgical supply orders be captured in VA's procurement system is a step in the right direction, but proper implementation is at risk because procedures are not in place to ensure all obligations are recorded. VA's procurement policy framework is outdated and fragmented. As a result, contracting officers are unclear where to turn for current guidance. VA has been revising its overarching procurement regulation since 2011 but completion is not expected until 2018. Meanwhile, contracting officers must consult two versions of this regulation, as well as other policy related documents. Clear policies are key to ensuring VA conducts procurements effectively on behalf of veterans. The figure below depicts the various sources of regulations, policy, and guidance. Sources of Veterans Affairs (VA) Procurement Policy as of June 2016 Managing workload is a challenge for VA's contracting officers and their representatives in customer offices. A 2014 directive created contract liaisons at medical centers in part to address this issue, but medical centers have not consistently implemented this initiative, and VA officials have not identified the reasons for uneven implementation. VA can improve its procurement processes and achieve cost savings by complying with applicable policy and regulation to obtain available discounts when procuring medical supplies; leveraging its buying power through strategic sourcing; ensuring key documents are included in the contract file, as GAO found that more than a third of the 37 contract files lacked key documents; and ensuring that compliance reviews identify all contract file shortcomings.
Attempt is a crime of general application in every state in the Union, and is largely defined by statute in most. The same cannot be said of federal law. There is no general applicable federal attempt statute. In fact, it is not a federal crime to attempt to commit most federal offenses. Here and there, Congress has made a separate crime of conduct that might otherwise have been considered attempt. Possession of counterfeiting equipment and solicitation of a bribe are two examples that come to mind. More often, Congress has outlawed the attempt to commit a particular crime, such as attempted murder, or the attempt to commit one of a particular block of crimes, such as the attempt to violate the controlled substance laws. In those instances, the statute simply outlaws attempt, sets the penalties, and implicitly delegates to the courts the task of developing the federal law of attempt on a case-by-case basis. Over the years, proposals have surfaced that would establish attempt as a federal crime of general application and in some instances would codify federal common law of attempt. Thus far, however, Congress has preferred to expand the number of federal attempt offenses on a much more selective basis. Attempt was not recognized as a crime of general application until the 19 th century. Before then, attempt had evolved as part of the common law development of a few other specific offenses. The vagaries of these individual threads frustrated early efforts to weave them into a cohesive body of law. At mid-20 th century, the Model Penal Code suggested a basic framework that has greatly influenced the development of both state and federal law. The Model Penal Code grouped attempt with conspiracy and solicitation as "inchoate" crimes of general application. It addressed a number of questions that had until then divided commentators, courts, and legislators. A majority of the states use the Model Penal Code approach as a guide, but deviate with some regularity. The same might be said of the approach of the National Commission established to recommend revision of federal criminal law shortly after the Model Penal Code was approved. The National Commission recommended a revision of title 18 of the United States Code that included a series of "offenses of general applicability"—attempt, facilitation, solicitation, conspiracy, and regulatory offenses. In spite of efforts that persisted for more than a decade, Congress never enacted the National Commission's recommended revision of title 18. It did, however, continue to outlaw a growing number of attempts to commit specific federal offenses. In doing so, it rarely did more than outlaw an attempt to commit a particular substantive crime and set its punishment. Beyond that, development of the federal law of attempt has been the work of the federal courts. Attempt may once have required little more than an evil heart. That time is long gone. The Model Penal Code defined attempt as the intent required of the predicate offense coupled with a substantial step: "A person is guilty of an attempt to commit a crime, if acting with the kind of culpability otherwise required for commission of the crime, he ... purposely does or omits to do anything that, under the circumstances as he believes them to be, is an act or omission constituting a substantial step in a course of conduct planned to culminate in his commission of the crime." The Model Penal Code then provided several examples of what might constitute a "substantial step"—lying in wait, luring the victim, gathering the necessary implements to commit the offense, and the like. The National Commission recommended a similar definition: "A person is guilty of criminal attempt if, acting with the kind of culpability otherwise required for commission of a crime, he intentionally engages in conduct which, in fact, constitutes a substantial step toward commission of the crime." Rather than mention the type of conduct that might constitute a substantial step, the Commission defined it: "A substantial step is any conduct which is strongly corroborative of the firmness of the actor's intent to complete the commission of the crime." Most of the states follow the same path and define attempt as intent coupled to an overt act or some substantial step towards the completion of the substantive offense. Only rarely does a state include examples of substantial step conduct. Intent and a Substantial Step : The federal courts are in accord and have said, "As was true at common law, the mere intent to violate a federal criminal statute is not punishable as an attempt unless it is also accompanied by significant conduct," that is, unless accompanied by "an overt act qualifying as a substantial step toward completion" of the underlying offense. The courts seem to have encountered little difficulty in identifying the requisite intent standard. In fact, they rarely do more than note that the defendant must be shown to have intended to commit the underlying offenses. What constitutes a substantial step is a little more difficult to discern. It is said that a substantial step is more than mere preparation. A substantial step is action strongly or unequivocally corroborative of the individual's intent to commit the underlying offense. It is action which if uninterrupted will result in the commission of that offense, although it need not be the penultimate act necessary for completion of the underlying offense. Furthermore, the point at which preliminary action becomes a substantial step is fact specific; action that constitutes a substantial step under some circumstances and with respect to some underlying offenses may not qualify under other circumstances and with respect to other offenses. It is difficult to read the cases and not find that the views of Oliver Wendell Holmes continue to hold sway: the line between mere preparation and attempt is drawn where the shadow of the substantive offense begins. The line between preparation and attempt is closest to preparation where the harm and the opprobrium associated with the predicate offense are greatest. Since conviction for attempt does not require commission of the predicate offense, conviction for attempt does not necessitate proof of every element of the predicate offense, or any element of the predicate offense for that matter. Recall that the only elements of the crime of attempt are intent to commit the predicate offense and a substantial step in that direction. Nevertheless, a court will sometimes demand proof of one or more of the elements of a predicate offense in order to avoid sweeping application of an attempt provision. For instance, the Third Circuit recently held that "acting 'under color of official right' is a required element of an extortion Hobbs Act offense, inchoate or substantive," apparently for that very reason. Impossibility : Defendants charged with attempt have often offered one of two defenses—impossibility and abandonment. Rarely have they prevailed. The defense of impossibility is a defense of mistake, either a mistake of law or a mistake of fact. Legal impossibility exists when "the actions which the defendant performs or sets in motion, even if fully carried out as he desires, would not constitute a crime. The traditional view is that legal impossibility is a defense to the charge of attempt – that is, if the competed offense would not be a crime, neither is a prosecution for attempt permitted." Factual impossibility exists when "the objective of the defendant is proscribed by criminal law but a circumstance unknown to the actor prevents him from bringing about that objective." Since the completed offense would be a crime if circumstances were as the defendant believed them to be, prosecution for attempt is traditionally permitted. Unfortunately, as the courts have observed, "the distinction between legal impossibility and factual impossibility [is] elusive." Moreover, "the distinction ... is largely a matter of semantics, for every case of legal impossibility can reasonably be characterized as a factual impossibility." Thus, shooting a stuffed deer when intending to shoot a deer out of season is offered as an example of legal impossibility. Yet, shooting into the pillows of an empty bed when intending to kill its presumed occupant is considered an example of factual impossibility. The Model Penal Code avoided the problem by defining attempt to include instances when the defendant acted with the intent to commit the predicate offense and "engage[d] in conduct that would constitute the crime if the attendant circumstances were as he believe[d] them to be." Under the National Commission's Final Report, "[f]actual or legal impossibility of committing the crime is not a defense if the crime could have been committed had the attendant circumstances been as the actor believed them to be." Several states have also specifically refused to recognize an impossibility defense of any kind. The federal courts have been a bit more cautious. They have sometimes conceded the possible vitality of legal impossibility as a defense, but generally have judged the cases before them to involve no more than unavailing factual impossibility. In a few instances, they have found it unnecessary to enter the quagmire, and concluded instead that Congress intended to eliminate legal impossibility with respect to attempts to commit a particular crime. Abandonment : The Model Penal Code recognized an abandonment or renunciation defense. A defendant, however, could not claim the defense if his withdrawal was merely a postponement or was occasioned by the appearance of circumstances that made success less likely. The revised federal criminal code recommended by the National Commission contained similar provisions. Some states recognize an abandonment or renunciation defense; the federal courts do not. Admittedly, a defendant cannot be charged with attempt if he has abandoned his pursuit of the substantive offense at the mere preparation stage. Yet, this is for want of an element of the offense of attempt—a substantial step—rather than because of the availability of an affirmative abandonment defense. Although the federal courts have recognized an affirmative voluntary abandonment defense in the case of conspiracy, the other principal inchoate offense, they have declined to recognize a comparable defense to a charge of attempt. The Model Penal Code and the National Commission's Final Report both imposed the same sanctions for attempt as for the predicate offense as a general rule. However, both set the penalties for the most serious offenses at a class below that of the predicate offense, and both permitted the sentencing court to impose a reduced sentence in cases when the attempt failed to come dangerously close to the attempted predicate offense. The states set the penalties for attempt in one of two ways. Some set sanctions at a fraction of, or a class below, that of the substantive offense, with exceptions for specific offenses in some instances; others set the penalty at the same level as the crime attempted, again with exceptions for particular offenses in some states. Most federal attempt crimes carry the same penalties as the substantive offense. The Sentencing Guidelines, which greatly influence federal sentencing beneath the maximum penalties set by statute, reflect the equivalent sentencing prospective. Except for certain terrorism, drug trafficking, assault, and tampering offenses, however, the Guidelines recommend slightly lower sentences for defendants who have yet to take all the steps required of them for commission of the predicate offense. The relation of attempt to the predicate offense is another of the interesting features of the law of attempt. It raises those questions which the Model Penal Code and the National Commission sought to address. May a defendant be charged with attempt even if he has not completed the underlying offense? May a defendant be charged with attempt even if he has also committed the underlying offense? May a defendant be convicted for both attempt and commission of the underlying offense? May a defendant be charged with attempting to attempt an offense? May a defendant be charged with conspiracy to attempt or attempt to conspire? May a defendant be charged with aiding and abetting an attempt or with attempting to aid and abet? Relation to the Predicate Offense : A defendant need not commit the predicate offense to be guilty of attempt. On the other hand, some 19 th century courts held that a defendant could not be convicted of attempt if the evidence indicated that he had in fact committed the predicate offense. This is no longer the case in federal court—if it ever was. In federal law, "[n]either common sense nor precedent supports success as a defense to a charge of attempt." The Double Jeopardy Clause ordinarily precludes conviction for both the substantive offense and the attempt to commit it. The clause prohibits both dual prosecutions and dual punishment for the same offense. Punishment for both a principal and a lesser included offense constitutes such dual punishment, and attempt ordinarily constitutes a lesser included offense of the substantive crime. Instances where the federal law literally appears to create an attempt to attempt offense present an intriguing question of interpretation. Occasionally, a federal statute will call for equivalent punishment for attempt to commit any of a series of offenses proscribed in other statutes, even though the other statutes already proscribe attempt. For example, 18 U.S.C. 1349 declares that any attempt to violate any of the provisions of chapter 63 of title 18 of the United States Code "shall be subject to the same penalties as those prescribed for the offense, the commission of which was the object of the attempt." Within chapter 63 are sections that make it a crime to attempt to commit bank fraud, health care fraud, and securities fraud. There may be some dispute over whether provisions like those of Section 1349 are intended to outlaw attempts to commit an attempt or simply to reiterate a determination to punish equally the substantive offenses and attempts to commit them. Conspiracy: The Model Penal Code and National Commission resolved attempt to attempt and conspiracy to attempt questions by banning dual application. Crimes of general application would not have applied to other crimes of general application. A few states have comparable provisions. The federal code does not. The attempting to conspire or conspiring to attempt questions do not offer as many issues of unsettled interpretation as the attempt to attempt questions, for several reasons. First, the courts have had more occasion to address them. For instance, it is already clearly established that a defendant may be simultaneously prosecuted for conspiracy to commit and for attempt to commit the same substantive offense. Second, as a particular matter, conspiracies to attempt a particular crime are relatively uncommon; most individuals conspire to accomplish, not to attempt. Third, in a sense, attempting to conspire is already a separate crime, or alternatively, is a separate basis for criminal liability. Solicitation is essentially an invitation to conspire, and solicitation to commit a crime of violence is a separate federal offense. Moreover, attempts that take the form of counseling, commanding, inducing, or procuring another to commit a crime is already a separate basis for criminal liability. Fourth, a component of the general conspiracy statute allows simultaneous prosecution of conspiracy and a substantive offense without having to addressing the conspire to attempt quandary. The conspiracy statute outlaws two kinds of conspiracies: conspiracy to violate a federal criminal statute and conspiracy to defraud the United States. Conspiracy to defraud the United States is a separate crime, one that need not otherwise involve the violation of a federal criminal statute. Consequently, when attempt or words of attempt appear as elements in a substantive criminal provision, conspiracy to attempt issues can be avoided by recourse to a conspiracy to defraud charge. For example, the principal federal bribery statute outlaws attempted public corruption. The offense occurs though no tainted official act has been performed or foregone. It is enough that the official has sought or been offered a bribe with the intent of corrupting the performance of his duties. Bribery conspiracy charges appear generally to have been prosecuted, along with bribery, as conspiracy to defraud rather than conspiracy to violate the bribery statute. Aiding and Abetting: Unlike attempt, aiding and abetting is not a separate offense; it is an alternative basis for liability for the substantive offense. Anyone who aids, abets, counsels, commands, induces, or procures the commission of a federal crime by another is as guilty as if he committed it himself. Aiding and abetting requires proof of intentional assistance in the commission of a crime by another. When attempt is a federal crime, the cases suggest that a defendant may be punished for aiding and abetting the attempt and that a defendant may be punished by attempting to aid and abet the substantive offense.	It is not a crime to attempt to commit most federal offenses. Unlike state law, federal law has no generally applicable crime of attempt. Congress, however, has outlawed the attempt to commit a substantial number of federal crimes on an individual basis. In doing so, it has proscribed the attempt, set its punishment, and left to the federal courts the task of further developing the law in the area. The courts have identified two elements in the crime of attempt: an intent to commit the underlying substantive offense and some substantial step towards that end. The point at which a step may be substantial is not easily discerned; but it seems that the more serious and reprehensible the substantive offense, the less substantial the step need be. Ordinarily, the federal courts accept neither impossibility nor abandonment as an effective defense to a charge of attempt. Attempt and the substantive offense carry the same penalties in most instances. A defendant may not be convicted of both the substantive offense and the attempt to commit it. Commission of the substantive offense, however, is neither a prerequisite for, nor a defense against, an attempt conviction. Whether a defendant may be guilty of an attempt to attempt to commit a federal offense is often a matter of statutory construction. Attempts to conspire and attempts to aid and abet generally present less perplexing questions. This is an abridged version of CRS Report R42001, Attempt: An Overview of Federal Criminal Law, by [author name scrubbed], without the footnotes, attributions, citations to authority, or appendix found in the longer report.
As we reported in our February 2014 report, since CSA was implemented nationwide in 2010, it has been successful in raising the profile of safety in the motor carrier industry and providing FMCSA with more tools to increase interventions with carriers. We found that following the implementation of CSA, FMCSA was potentially able to reach a larger number of carriers, primarily by sending them warning letters. Law enforcement officials and industry stakeholders we interviewed generally supported the structure of the CSA program, in part because CSA provides data about the safety record of individual carriers, such as data on inspections, violations, crashes, and investigations, that help guide the work of state inspectors during inspections. However, despite these advantages, our report also uncovered major challenges in reliably assessing safety risk and targeting the riskiest carriers. First, according to FMCSA, SMS was designed to use all safety-related violations of FMCSA regulations recorded during roadside inspections. For SMS to be effective in identifying carriers at risk of crashing, the violation information that is used to calculate SMS scores should have a relationship with crash risk. However, we found that the relationship between the violation of most of these regulations and crash risk is unclear, potentially limiting the effectiveness of SMS in identifying carriers that are likely to crash. Our analysis found that most of the safety regulations used in SMS were violated too infrequently over a 2-year period to reliably assess whether they were accurate predictors of an individual carrier’s likelihood to crash. Specifically, we found that 593 of the 754 regulations we examined were violated by less than one percent of carriers. Of the remaining regulations with sufficient violation data, we found 13 regulations for which violations consistently had some association with crash risk in at least half the tests we performed, and only two regulations had sufficient data to consistently establish a substantial and statistically reliable relationship with crash risk across all of our tests. Second, most carriers lack sufficient safety performance data, such as information from inspections, to ensure that FMCSA can reliably compare them with other carriers. SMS scores are based on violation rates that are calculated by dividing a carrier’s violations by either the number of inspections or vehicles associated with a carrier. The precision and reliability of these rates varies greatly depending on the number of inspections or vehicles a carrier has. Violation rates calculated for carriers with more inspections or vehicles will have more precision and confidence than those with only a few inspections or vehicles. This statistical reality is critical to SMS, because for the majority of the industry, the number of inspections or vehicles for an individual carrier is very low. About two- thirds of carriers we evaluated operated fewer than four vehicles and more than 93 percent operated fewer than 20 vehicles. Moreover, many of these carriers’ vehicles were inspected infrequently. Carriers with few inspections or vehicles will potentially have estimated violation rates that are artificially high or low and thus not sufficiently precise for comparison across carriers. This creates the likelihood that many SMS scores do not accurately or precisely assess safety for a specific carrier. FMCSA acknowledged that violation rates for carriers with few inspections or vehicles can be less precise, but the methods FMCSA uses to address this limitation are not effective. For example, FMCSA requires a minimum level of data (i.e., inspections or violations) for a carrier to receive an SMS score. However, we found that level of data is not sufficient to ensure reliable results. Our analysis of the effectiveness of FMCSA’s existing CSA methodology found that the majority of the carriers that SMS identified as having the highest risk for crashing in the future did not actually crash. Moreover, smaller carriers and carriers with few inspections or vehicles tended to be disproportionately targeted for intervention. As a result, FMCSA may devote intervention resources to carriers that do not necessarily pose as great a safety risk as other carriers. In our 2014 report, we illustrated that when SMS only considered carriers with more safety information, such as inspections, it was better able to identify carriers that later crashed and allowed for better targeting of resources. An approach like this would involve trade-offs; fewer carriers would receive SMS scores, but these scores would generally be more reliable for targeting FMCSA’s intervention resources. FMCSA could still use the safety information available to oversee the remaining carriers the same way it currently oversees the approximately 72 percent of carriers that do not receive SMS scores using its existing approach. Given the limitations of safety performance information, we concluded that it is important that FMCSA consider how reliable and precise SMS scores need to be for the purposes for which they are used. FMCSA reports these scores publicly and is considering using a carrier’s performance information to determine its fitness to operate. FMCSA includes a disclaimer with the publicly released SMS scores, which states that the data are intended for agency and law enforcement purposes, and that readers should draw conclusions about a carrier’s safety condition based on the carrier’s official safety rating rather than its SMS score. At the same time, FMCSA has also stated that SMS provides stakeholders with valuable safety information, which can “empower motor carriers and other stakeholders…to make safety-based business decisions.” As a result, some stakeholders we spoke to, such as industry and law enforcement groups, have said that there is a lot of confusion in the industry about what the SMS scores mean and that the public, unlike law enforcement, may not understand the limitations of the system. Based on the concerns listed above, in our 2014 report we recommended that FMCSA revise the SMS methodology to better account for limitations in available information when drawing comparisons of safety performance across carriers. We further recommended that FMCSA’s determination of a carrier’s fitness to operate should account for limitations we identified regarding safety performance information. FMCSA did not concur with our recommendation to revise the SMS methodology because, according to FMCSA officials, SMS in its current state sufficiently prioritizes carriers for intervention purposes. However, FMCSA agreed with our recommendation on the determination of a carrier’s fitness to operate, but has not yet taken any actions. As I will discuss later in my statement, we continue to believe that FMCSA should improve its SMS methodology. As we reported in our March 2012 report, FMCSA also faces significant challenges in determining the prevalence of chameleon carriers, in part, because there are approximately 75,000 new applicants each year. As mentioned earlier, chameleon carriers are motor carriers disguising their former identity to evade enforcement actions. FMCSA has established a vetting program to review each new application for operating authority submitted by passenger carriers (intercity and charter or tour bus operators) and household goods carriers (hired by consumers to move personal property). According to FMCSA officials, FMCSA vetted all applicants in these groups for two reasons: (1) these two groups pose higher safety and consumer protection concerns than other carrier groups and (2) it does not have the resources to vet all new carriers. While FMCSA’s exclusive focus on passenger and household goods carriers limits the vetting program to a manageable number, it does not account for the risk presented by chameleon carriers in the other groups, such as for-hire freight carriers, that made up 98 percent of new applicants in 2010. We found that using data analysis to target new applicants would allow FMCSA to expand its examinations of newly registered carriers to include new applicants of all types using few or no additional staff resources. Our analysis of FMCSA data found that 1,136 new motor carrier applicants in 2010 had chameleon attributes, of which 1,082 were freight carriers.Even with the large number of new applicant carriers and constraints on its resources, we concluded in 2012 that FMCSA could target the carriers that present the highest risk of becoming chameleon carriers by using a data-driven, risk-based approach. As a result of these findings, we recommended that FMCSA use a data- driven, risk-based approach to target carriers at high risk for becoming chameleon carriers. This would allow expansion of the vetting program to all carriers with chameleon attributes, including freight carriers. FMCSA agreed with our recommendations. In June 2013, to help better identify chameleon carriers, FMCSA developed and began testing a risk-based methodology that implemented a framework that closely follows the methodology we discussed in our report. FMCSA’s preliminary analysis of this methodology indicates that it is generally successful in providing a risk-based screening of new applicants, which it plans to use as a front- end screening methodology for all carrier types seeking operating authority. By developing this risk-based methodology and analyzing the initial results, FMCSA has developed an approach that may help keep unsafe carriers off the road. To further help Congress with its oversight of FMCSA and motor carrier safety, we also have on-going work on FMCSA’s hours-of-service regulations, DOD’s Transportation Protective Services program, and commercial driver’s licenses. This work is in various stages, and we expect to issue the final reports later this year. In conclusion, the commercial motor carrier industry is large and dynamic, and FMCSA plays an important role in identifying and removing unsafe carriers from the roadways. With over 500,000 active motor carriers, it is essential to examine ways to better target FMCSA’s resources to motor carriers presenting the greatest risk. To effectively do this, FMCSA must use a number of strategies to identify and intervene with high risk carriers. We continue to believe that a data-driven, risk-based approach for identifying high risk carriers holds promise. FMCSA’s preliminary steps to implement a risk-based screening methodology have the potential to identify more high risk chameleon carriers. However, without efforts to revise its SMS methodology, FMCSA will not be able to effectively target its intervention resources toward the highest risk carriers and will be challenged to meet its mission of reducing the overall crashes, injuries, and fatalities involving large trucks and buses. Chairwoman Fischer, Ranking Member Booker, and Members of the Subcommittee, this concludes my prepared remarks. I would be pleased to answer any questions you or other Members may have at this time. For further information regarding this statement, please contact Susan Fleming at (202) 512-2834 or Flemings@gao.gov about this statement. Contact points for our Offices of Congressional Relations and Public Relations can be found on the last page of this statement. Matt Cook, Jen DuBord, Sarah Farkas, Brandon Haller, Matt LaTour, and Amy Rosewarne made key contributions to this statement. This is a work of the U.S. government and is not subject to copyright protection in the United States. The published product may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately.	FMCSA's primary mission of reducing crashes, injuries, and fatalities involving large trucks and buses is critical to the safety of our nation's highways. However, with more than 500,000 active motor carriers operating on U.S. roadways, FMCSA must screen, identify, and target its resources toward those carriers presenting the greatest risk for crashing in the future. FMCSA has recently taken some steps in this direction by, among other actions: Establishing its oversight program—the CSA program—based on a data-driven approach for identifying motor carriers at risk of presenting a safety hazard or causing a crash, and Establishing a vetting program designed to detect potential “chameleon” carriers—those carriers that have deliberately disguised their identity to evade enforcement actions issued against them. This testimony provides information on both of these programs, based on two recent GAO reports on the oversight challenges FMCSA faces in identifying high risk motor carriers for intervention ( GAO-14-114 ), and chameleon carriers ( GAO-12-364 ), respectively. The Federal Motor Carrier Safety Administration (FMCSA) has taken steps toward better oversight of motor carriers by establishing the Compliance, Safety, Accountability (CSA) and chameleon carrier vetting programs; however, FMCSA could improve its oversight to better target high risk carriers. The CSA program oversees carriers' safety performance through roadside inspections and crash investigations, and issues violations when instances of noncompliance with safety regulations are found. CSA provides FMCSA, state safety authorities, and the industry with valuable information regarding carriers' performance on the road. A key component of CSA—the Safety Measurement System (SMS)—uses carrier performance data collected from inspections and investigations to calculate safety scores for carriers and identify those at high risk of causing a crash. The program then uses these scores to target high risk carriers for enforcement actions, such as warning letters, additional investigations, or fines. However, GAO's 2014 report identified two major challenges that limit the precision of the SMS scores and confidence that these scores are effectively comparing safety performance across carriers. First, SMS uses violations of safety-related regulations to calculate a score, but GAO found that most of these regulations were violated too infrequently to determine whether they were accurate predictors of crash risk. Second, most carriers lacked sufficient data from inspections and violations to ensure that a carrier's SMS score could be reliably compared with scores for other carriers. GAO concluded that these challenges raise questions about whether FMCSA is able to identify and target the carriers at highest risk for crashing in the future. To address these challenges, GAO recommended, among other things, that FMCSA revise the SMS methodology to better account for limitations in available information when drawing comparisons of safety performance across carriers. FMCSA did not concur with GAO's recommendation to revise the SMS methodology because it believed that SMS sufficiently prioritized carriers for intervention. Therefore, FMCSA has not taken any actions. GAO continues to believe that a data-driven, risk-based approach holds promise, and efforts to improve FMCSA's oversight could allow it to more effectively target its resources toward the highest risk carriers, and better meet its mission of reducing the overall crashes, injuries, and fatalities involving motor carriers. GAO's 2012 report found that FMCSA examined only passenger and household goods carriers as part of its chameleon carrier vetting program for new applicants. GAO found that by modifying FMCSA's vetting program, FMCSA could expand its examinations of newly registered carriers to include all types of carriers, including freight carriers, using few additional staff resources. GAO recommended that FMCSA develop, implement, and evaluate the effectiveness of a data-driven, risk-based vetting methodology to target carriers with chameleon attributes. FMCSA concurred with GAO's recommendation and has taken actions to address these recommendations.
Unemployment Compensation (UC) is a joint federal-state program and is financed by federal taxes under the Federal Unemployment Tax Act (FUTA) and by state payroll taxes. The underlying framework of the UC system is contained in the Social Security Act: Title III authorizes grants to states for the administration of state UC laws; Title IX authorizes the various components of the federal UTF; and Title XII authorizes advances or loans to insolvent state UC programs. Among its 59 accounts, the federal UTF in the U.S. Treasury includes the Employment Security Administration Account (ESAA), the Extended Unemployment Compensation Account (EUCA), and the Federal Unemployment Account (FUA); 53 state accounts; the Federal Employees Compensation Account; and two accounts related to the Railroad Retirement Board. Federal unemployment taxes are placed in the ESAA, the EUCA, and the FUA; each state's unemployment taxes are placed in the appropriate state's account. In law, the term Reed Act refers to a part of the Employment Security Financing Act of 1954, P.L. 83-567. This legislation amended Titles IX and XII of the Social Security Act (SSA) and established the basic structure of the UTF. The amendments to Title IX, among other things, provided for the transfer of excess funds in the federal portion of the UTF to the individual state accounts under certain conditions. In practice, there have been two forms of Reed Act distributions. The first form, regular Reed Act distributions, follows the terms as set forth in the Reed Act. The second type, special Reed Act distributions, distributes some of the federal UTF funds to the states where these special distributions may follow some but not all of the conditions set by the Reed Act. The 1998-2002 Reed Act distributions were special distributions. Federal law restricts states to using Reed Act distributions only to cover the cost of state benefits, employment services (ES), labor market information, and administration of state UC and ES programs. Suggested uses by the Department of Labor included establishing revolving funds for UC and ES automation costs, UC and ES performance improvement, costs related to reducing UC fraud and abuse, and improvement in UC claims filing and payment methods. An appropriation by the state's legislature is necessary before the state's share of this distribution may be used for UC and ES administrative expenses. Funds may not be used to extend a temporary unemployment benefit such as the Emergency Unemployment Compensation (EUC08) program. Under FUTA, the federal tax on employers finances the states' administrative costs of UC and loans to states with insolvent UC programs. State UC payroll taxes finance the costs of regular UC benefits. The extended benefits program is funded 50% by the federal government and 50% by the states, but the 2009 stimulus package ( P.L. 111-5 §2005) as amended temporarily provides for 100% federal funding of this program through March 7, 2012. Under FUTA, employers pay a federal tax of 6.0% on wages of up to $7,000 a year paid to each worker. The law, however, provides a credit against federal tax liability of up to 5.4% to employers who pay state taxes in a timely manner. Accordingly, in states meeting the specified requirements, employers pay an effective federal tax of 0.6%, or a maximum of $42 per covered worker, per year. At the end of the federal fiscal year, on September 30 th , the net balance of the ESAA is determined. If the amount in this account exceeds 40% of the prior year's appropriation by Congress, then an "excess" balance exists. This excess balance is transferred first to the EUCA. When that account reaches its statutory maximum, the remaining excess balance is transferred to the FUA. When all three accounts are at their statutory maximums , any remaining excess balance is distributed to the accounts of the states in the UTF based on each state's share of U.S. covered wages. These distributions are called Reed Act distributions. Reed Act distributions occurred in 1956 through 1958 and 1998 through 2002. Table 1 lists the distributions. The most recent Reed Act distribution that was a regular and not a special Reed Act distribution was $15.9 million and occurred in 1998. The Balanced Budget Act (BBA) of 1997, P.L. 105-33 , limited the Reed Act distributions for the 1999 to 2001 period to special distributions of $100 million each year. Any amounts in excess of the $100 million that—absent the BBA amendments—would have been transferred to the states "shall, as of the beginning of the succeeding fiscal year, accrue to the federal unemployment account, without regard" to its statutory limit. In March 2002, the Job Creation and Worker Assistance Act of 2002, P.L. 107-147 , provided for a one-time special Reed Act distribution of up to $8 billion to state accounts in the UTF, where the funds were distributed based upon the formula used for regular Reed Act distributions, using calendar year 2000 state information. The law labeled this transfer a "Reed Act" distribution although it differed from traditional Reed Act distributions, most notably because the law distributed a set dollar amount which was not determined by the statutory ceilings in the federal accounts and was distributed before the end of a fiscal year. There was no Reed Act distribution in 2003, and no regular Reed Act distribution is projected through FY2021. According to the Department of Labor, there is no projected distribution through FY2021 on account outstanding loans owed to the general fund of the U.S. Treasury. According to a General Account Office (GAO, now know as the Government Accountability Office) report, the $8 billion Reed Act distribution reduced 2003 unemployment taxes in 22 states and UC administration costs in 17 states. The Center for Employment Security Education and Research (CESER), a component of the National Association of State Workforce Agencies (NASWA), with the assistance of Booz Allen Hamilton and Decern Consulting, examined how states used the $8 billion special Reed Act Distribution of 2002. This study found that approximately half of the Reed Act distribution was used to lower state unemployment taxes in 2003 and 2004 from what they would have otherwise been. The special distribution also led to increases in spending on UC benefits, UC administration, and employment services. The American Recovery and Reinvestment Act ( P.L. 111-5 §2003) provided for a special UTF distribution. The law provided a special transfer of UTF funds from FUA of up to a total of $7 billion to the state accounts within the UTF as "incentive payments" for changing certain state UC laws. The maximum incentive payment allowable for a state was calculated using the methods also used in Reed Act distributions. That is, funds were to be distributed to the state UTF accounts based on the state's share of estimated federal unemployment taxes (excluding reduced credit payments) made by the state's employers. In addition, the act transferred a total of $500 million from the federal ESAA to the state's accounts in the UTF.	Under the Federal Unemployment Tax Act (FUTA; P.L. 76-379), the federal unemployment tax on employers finances the states' administrative costs of Unemployment Compensation (UC) and loans to states with insolvent UC programs. The extended benefits program is funded 50% by the federal government and 50% by the states, but the 2009 stimulus package (P.L. 111-5 §2005) as amended temporarily provides for 100% federal funding of this program through December 31, 2012. FUTA tax revenues are placed into the Unemployment Trust Fund (UTF) that—among its many accounts—contains three federal accounts and 53 individual state accounts from the states' unemployment taxes. Under certain financial conditions, excess federal tax funds in the Unemployment Trust Fund (UTF) are transferred to the individual state accounts within the UTF. The transferred funds are referred to as Reed Act distributions. The Reed Act, P.L. 83-567, set ceilings in the federal UTF accounts that trigger funds to be distributed to state accounts; Congress has changed these ceilings several times (P.L. 105-33, P.L. 102-318, and P.L. 100-203). There are other transfers in the UTF that are labeled by legislation as special Reed Act distributions. These are distributed in a manner similar to the Reed Act but do not follow all of the Reed Act provisions. The most recent regular Reed Act distribution was $15.9 million and occurred in 1998. The Balanced Budget Act (BBA) of 1997, P.L. 105-33, limited Reed Act distributions for the 1999 to 2001 period to special Reed Act distributions of $100 million each year. In March 2002, the Job Creation and Worker Assistance Act of 2002, P.L. 107-147, provided for a one-time special Reed Act distribution of up to $8 billion to state accounts. The American Recovery and Reinvestment Act (P.L. 111-5 §2003) provided for a special UTF distribution that has some properties similar to a Reed Act distribution. The law distributes up to a total of $7.5 billion to the states through a special transfer of funds from the federal accounts within the UTF to the state accounts, using the methodology required by the Reed Act to determine the maximum state allotments. Up to $7 billion was distributed to states as incentive payments for changing certain state UC laws. Administrative funds totaling $500 million was distributed among the state accounts, regardless of whether states changed their UC laws. According to the Department of Labor, there is no projected regular Reed Act distribution through FY2021 on account outstanding loans in the UTF owed to the general fund of the U.S. Treasury. This report will be updated if legislative activity affects Reed Act distributions.
RS21237 -- Indian and Pakistani Nuclear Weapons Updated February 17, 2005 Almost 50 years of nuclear ambiguity were swept away by the May 1998 nuclear tests of India and Pakistan. Optimists hoped that overt nuclear weapons capabilities could help providemore conventional stability and that limited nuclear arsenals might dampen competition in missile development. (1) The 1999 conflict in Kargil and 2002 crisis in Kashmirchallengedthis viewpoint. (2) South Asia remains a nuclearflashpoint, and, potentially, a source for terrorists of access to weapons of mass destruction. India began its nuclear program shortly after independence in 1947. After a humiliating defeat in a border war with China in 1962, followed by China's first nuclear test in 1964, thedrive for nuclear weapons intensified. The 1974 test of a "peaceful nuclear device" was an important milestone,but it took several more years to develop a nuclear weapons capability. Simultaneously, India developed a nuclear infrastructure that supported both civilian and military purposes. Forexample, India's development of reprocessing capabilities supportedboth its use of mixed oxide fuel (plutonium and uranium) for its nuclear power plants and its plutonium-basedweapons. The size of India's nuclear stockpile has been a topic of considerable debate within scientific and defense communities. (3) Estimates vary from a few to 100,but several converge onaround 30-35 weapons, probably stored in component form. The U.S. Department of Defense believes that Indiais capable of manufacturing complete sets of components forplutonium-based weapons and has a small stockpile of such components. India "probably can deploy a few nuclearweapons within a few days to a week...and can deliver these weaponswith fighter aircraft." (4) Most agree that India isexpanding its stockpile, and that if India uses unsafeguarded reactor-grade plutonium, the potential to expand itsstockpile is verysignificant. India's delivery capability has long reflected two very different contingencies -- China and Pakistan. Because of the distances involved and India's lack of long-range bombers,capability against China inevitably required ballistic missiles. Against Pakistan, however, Indian officialsrecognized early on that aircraft would be more valuable, particularly in aretaliatory strike; the Indian air force is significantly more sophisticated and capable than Pakistan's. (5) India has some 35 Mirage 2000 fighters that arenuclear-capable, although otheraircraft could also be used. Ballistic missiles add considerable instability into the security equation because they are high priority targets; the pressure to use them quickly and, for the other side, to strike thempreemptively, is great. Indian officials have said short-range Prithvi ballistic missiles (150km and250km ranges) are conventionally armed. While nuclear-capable and able to reachalmost all of Pakistan, the use of nuclear-armed Prithvi s could pose major risks of fallout to India. (6) India has deployed Agni-II missiles witha 1500 km range and tested an 800 kmrange version of the Agni earlier this year. These solid-fueled missiles, which reportedly can belaunched within minutes, considerably enhance India's ability to respond rapidly in acrisis situation. In January 2003, the Ministry of External Affairs released to the public a short document on India's nuclear doctrine. The doctrine reiterated some of the points in the 1999 draftdocument on nuclear doctrine produced by the National Security Advisory Board. and refined others. In summary,the document committed India to a credible minimum deterrent,defined as: 1. a posture of "No First Use" and no use against non-nuclear weapon states, with the exception of theright to retaliate with nuclear weapons against a "major attack againstIndia, or Indian forces anywhere, by biological or chemical weapons;" 2. Civil control in the form of the PrimeMinister as head of the Nuclear Command Authority; 3. Nuclearretaliation against a first strike as massive and designed to inflict unacceptable damage. (7) The document described the Nuclear Command Authority as being composedof a PoliticalCouncil (chaired by the Prime Minister and authorize the use of nuclear weapons) and an Executive Council (chairedby the National Security Advisor). Pakistan's nuclear program dates back to the 1950s, but it was the humiliating loss of East Pakistan (now Bangladesh) that reportedly triggered a political decision in January 1972 (justone month later) to begin a crash nuclear weapons program. Unlike India, Pakistan focused on the uranium routeto weapons. Pakistan sought technology from many sources, includingChina and North Korea. (8) This extensive assistanceis reported to have included, among other things, uranium enrichment technology from Europe, blueprints for asmall nuclearweapon from China and missile technology from China. Most observers estimate that Pakistan has enough nuclear material (highly enriched uranium and a small amount of plutonium) for 30 to 50 nuclear weapons. (9) LikeIndia, Pakistan isthought to have "a small stockpile of nuclear weapons components and can probably assemble some weapons fairlyquickly." (10) Pakistan could deliver its nuclear weapons using F-16s it purchased from the United States (28 F-16 and 12 trainer aircraft; 8 are no longer in service), provided the appropriate "wiring"has been added to make them nuclear-capable. In the 1980s, Pakistan moved assiduously to acquire ballistic missilecapabilities and now deploys short-range ballistic missiles and asmall number of medium-range missiles. AQ Khan, former head of Khan Research Laboratories, maintained thatonly the medium-range Ghauri missiles would be usable in a nuclearexchange (given fall-out effects for Pakistan of shorter-range missiles). Other observers view the 30 to 50 Hatf2 short-range (300km) missiles (modified Chinese M-11s) as potentialdelivery vehicles for nuclear weapons. Ghauri missiles (1350 and 2300km), which reportedly are basedon the North Korean No-Dong and Taepo-Dong-1 , are capable of reaching NewDelhi with large payloads. (11) Pakistan has not yet enunciated a nuclear doctrine, but it is clear that Pakistan's nuclear arsenal is seen as the key to military parity with India. Because of its fears of being overrun bylarger Indian forces, Pakistan has rejected the doctrine of no-first-use. In May 2002, Pakistan's ambassador to theUN, Munir Akram, stated that "We have not said we will use nuclearweapons. We have not said we will not use nuclear weapons. We possess nuclear weapons. So does India ...Wewill not neutralize the deterrence by any doctrine of no first use." (12) On June 4, 2002, President Musharraf went further: "The possession of nuclear weapons by any state obviouslyimplies they will be used under some circumstances." (13) In recent years, Pakistan apparently has taken steps toward refining command and control of nuclear weapons. In April 1999, General Musharraf announced that the Joint StaffHeadquarters would have a command and control arrangement and a secretariat, and a strategic force commandwould be established. (14) The connection to civilianleadership wasunclear, given a recent account of the 1999 Kargil incursion which suggested that Prime Minister Sharif wasunaware that his own nuclear missile forces were being prepared foraction. (15) Pakistan established a NationalCommand Authority (NCA) in February 2000, but little is publicly known about it. Pakistani officials haverepeatedly said that their nuclearcapabilities are safe. The new NCA is believed to be responsible for nuclear doctrine, as well as nuclear researchand development, wartime command and control, and advice toPresident Musharraf about the development and employment of nuclear weapons. (16) Kashmir has been a flashpoint since Indian and Pakistani independence in 1947. Many analysts have feared that nuclear weapons could be used if conventional hostilities over Kashmirwere to spiral out of control, especially if, as in 1965 Indo-Pakistan conflict, India opened a new front on the Punjabplains to break a stalemate in Pakistan or attempt to settle the issuedecisively by confronting Pakistan with a mortal threat to its territorial integrity. (17) Under these circumstances, some have suggested Pakistan might be temptedto detonate a smallnuclear weapon on its own territory to halt forward Indian movement. Other observers, however, believe such astrategy would be akin to a state acting as a suicide bomber. (18) Somemedia reports have suggested that paradoxically, "the fact that both countries have very small nuclear arsenalsincreases the pressure on both sides to use their weapons againsthigh-value targets." (19) Regardless of whethernuclear weapons might be used to stop war or to gain a military advantage, many observers agree that uncertaintyabout intentions couldworsen stability. Since 1998, both India and Pakistan appear to be integrating nuclear weapons into security strategy and planning. With the ominous logic of nuclear deterrence, each side's desire tomake its nuclear forces more credible may make those nuclear forces more usable. Ballistic missiles offer both sidesadvantages over using aircraft as delivery vehicles, but the shortranges create a hair-trigger situation. From launch to impact, missile flight times may be as short as 5 minutes. Inthe past, both sides appeared to use the separation of warheadcomponents as a form of command and control (in the sense of lowering the risk of unauthorized or accidental use). Some observers have noted that this approach becomes risky whenthe other side can launch short-range ballistic missiles against which there is no defense. These observers havecalled for improving command and control of nuclear forces, whilenoting, ironically, that reduced ambiguity could conversely increase the likelihood of war. (20) The Defense Intelligence Agency reportedly has estimated that a nuclear exchange could kill between 9 and 12 million persons on both sides, with 2 to 6 million injured. Theseestimates are likely predicated on nuclear exchanges aimed at cities; e.g., Indian Defense Secretary Yogendra Narainsuggested in 2002 that "India would retaliate against Pakistaniaggression and that both sides should be prepared for mutual destruction." President Musharraf's interview in June2002 with CNN offered respite from the nuclear rhetoric when hestated, "I don't think either side is that irresponsible to go to that limit [i.e., nuclear conflict]. ... One shouldn't evenbe discussing these things, because any sane individual cannot eventhink of going into this unconventional mode, whatever the pressures." (21) India and Pakistan have a 30-year history of confidence-building measures. These include hotlines between army commanders and prime ministers, a joint India-Pakistan MilitaryCommission (created in 1990), and agreements to provide prior notification of troop movements and ballistic missiletests. In 1991, both sides agreed not to attack nuclear facilities. (22) Implementation, however, has been sporadic. (23) In February 1999, the two parties concluded the Lahore Agreement. That agreement envisioned a plan for futurework, to includemeasures to reduce the risk of unauthorized or accidental use of nuclear weapons, reviews of confidence-buildingmeasures and communications links, prior notification of ballisticmissile tests, continuation of unilateral moratoria on nuclear testing, and dialogue on nuclear and security issues. The Lahore process was undermined by the summer 2001 militaryincursion by Pakistan in the vicinity of Kargil, but the two sides began a dialogue in 2004. In September 2004, Indiaand Pakistan announced 13 confidence-building measures. Threesecurity-related ones included: Experts' meetings on conventional and nuclear CBMs, including discussions on a draft agreement on advance notification of missile tests; Biannual meeting between Indian Border Security Force (BSF) and Pakistan Rangers; Implementation of the agreement reached between the defense secretaries in their talks in August todiscuss "modalities for disengagement and redeployment" onthe Siachen glacier. (24) Foreign secretaries reported progress in their discussions on missile notifications in December 2004. (25) Since the passage of the 1978 Nuclear Nonproliferation Act, Congress has been closely involved in efforts to prevent or slow the development of nuclear arsenals by India and Pakistan. In the light of the global war on terrorism, and limited Pakistani cooperation in nonproliferation, Congress mightconsider the following questions: What sources of leverage does the U.S. now have toward India and Pakistan? Are new sources of leverage vis-a-vis Indian and Pakistani proliferation needed? Should new leveragebe focused on averting nuclear use rather than on limitingnuclear proliferation? Should India and Pakistan be priority recipients of cooperative threat reduction assistance? Whatoptions exist in this regard that do not undermine U.S. obligationsas a party to the Nuclear Nonproliferation Treaty? How effective are economic or other sanctions, and which might work best?	Until 2005, India and Pakistan were the only states outside the NuclearNonproliferation Treaty to declare, openly, their nuclear weaponscapability. In 1998, they tested nuclear weapons and since then, deployed ballistic missiles, enunciated nucleardoctrine, and made organizational changes to their nuclearestablishments. In 2002, they teetered on the brink of war in Kashmir. This paper summarizes Indian and Pakistaninuclear weapon capabilities and thinking, and discusses someconfidence-building measures in place intended to help avert nuclear war. It will be updated as events warrant.
RS21435 -- High School Completion and Postsecondary Enrollment Among First Generation and Low-IncomeStudents Updated February 9, 2005 The proportion of high school graduates whose parents do not have a college degree has declined over the last threedecades, according to data collected by the U.S. Department of Education and the U.S. Census Bureau. (3) Over four out offive graduates in the class of 1972 would have been first generation college students were they to have gone tocollegecompared to two out of three graduates in the class of 2000. (4) This decline of would be first generation college studentsroughly coincides with the growth in educational attainment that occurred during the same period. In 1970, 11%of theU.S. population were college graduates and by 2000 this had increased to 24%. (5) The proportion of high school graduates from families with income below 150% of the official poverty level has remainedrelatively stable at around 21% over the last 30 years, according to these data. Twenty percent of the class of 1972lived inlow-income families compared to 22% of the class of 2000. This parallels the rate of poverty for the U.S.population as awhole which has fluctuated between 16% and 20% over the same period. (6) Similar trends can be seen in the data on college students, although the Department has only begun to collect such datasince 1987. (7) These data indicate modest declinesin the proportion of low-income and first generation college students. The proportion of students from low-income families dropped from 16% to 12% between 1987 and 2000. Theproportionwho, upon graduation, would be the first in their family to get a college degree declined from 65% in 1987 to 62%in 2000. A second indication from these data is that the representation of first generation and low-income students among thoseenrolled in college has been consistently lower than among those graduating from high school. Thus, it appears thathighschool graduates from low-income families and those that lack a parent with a college degree are less likely thanothergraduates to move on to college. As stated above, the overall rate of college enrollment for the high school class of 2000 was 53%. That is, just over half ofthose who graduated in the spring of 2000 were enrolled in college in the fall of that year and just under half werenot. Theanalysis that follows reveals that the rate of enrollment is strongly related to parental educational attainment andfamilyincome. Table 1 shows fall 2000 college enrollment for the high school class of 2000 by parent's education. The rates ofenrollment for fall 2000 were 46% for those whose parents did not attain a Bachelor's degree and 75% for thosewhoseparents hold a Bachelor's degree. High school graduates whose parents lack a college degree were more than twiceaslikely not to be enrolled in college the fall after graduation as those whose parents have a college degree(54% compared to25%). Table 1. College Enrollment in the Fall of 2000 Among Spring 2000 High School Graduates by Parental Educational Attainment Source: Current Population Survey. Note: Columns may not sum to 100% due to rounding. Table 2 displays fall 2000 college enrollment for the high school class of 2000 by family income. The rates of enrollmentfor the fall of 2000 were 35% for those from families below 150% of the poverty line and 58% for those above150% ofpoverty. High school graduates from families below 150% of poverty were over 50% more likely not tobe enrolled incollege the fall after graduation as those from families above 150% of poverty (65% compared to 42%). Table 2. College Enrollment in the Fall of 2000 Among Spring 2000 High School Graduates by Family Income Source: Current Population Survey. Note: Columns may not sum to 100% due to rounding. The figures in Tables 1 and 2 also support the large body of research which has established a strong link between thesocio-economic status of parents (including income, occupation, and educational attainment) and that of theirchildren. Since the late 1960s, researchers have documented the various ways that "class background is very important indetermining who goes to college." (8) Among theindicators of class background used in this research were direct measureslike family income and parent's education and more indirect measures like educational aspirations and collegepreparedness -- all have been found to be positively associated with college attendance and completion. The final section of this report takes a brief look at the combined effects of first generation status and family income onrates of college enrollment. Table 3 shows rates of college enrollment in the fall of 2000 amongthose who graduated highschool in the spring of 2000 by parental educational attainment and family income. Table 3 indicates that the rate of college enrollment among students from low-income families is not altered by parentaleducation -- 69% of those whose parents did not attain a Bachelor's degree were not enrolled, compared to 66% ofthosewhose parents have a Bachelor's degree (this difference is not statistically significant). Conversely, Table3 reveals thatparental educational attainment is strongly associated with college attendance among students above150% of poverty. Atthis income level, 51% of the graduates whose parents lack a Bachelor's degree went on to college compared to 75%of thegraduates whose parents have a Bachelor's degree. (9) Table 3. College Enrollment in the Fall of 2000 Among Spring 2000 High School Graduates by Parent's Educational Attainment and Family Income Status Source: Current Population Survey. Note: Columns may not sum to 100% due to rounding. The findings presented here indicate that rates of college enrollment vary greatly by family income and parental educational attainment. Rates of college enrollment among low-income and first generation students were muchlowerthan the overall rate for 2000 high school graduates. In the final analysis of the combined effects of these factors,firstgeneration status was found to have little association with the rate of enrollment of low-income students, but wasstronglyassociated with the rate of enrollment of students from families with greater income. These results have particularly important implications for the TRIO programs since the legislation stipulates that not lessthan two-thirds of program participants be both low-income and first generation students. The results which show that firstgeneration status does not impact upon the enrollment rate of low-income students might lead some to argue forremoval ofthe first generation portion of this requirement. However, since the findings do reveal lower college going ratesamongfirst generation students from higher income families, some might argue that the statute should be amended to read"or"rather than "and." Another possibility would be an amendment to the definition of low-income to include studentsatgreater income levels whose enrollment likelihood is impacted by first generation status.	The Higher Education Act (HEA) supports several programs that provideservices and incentives to disadvantaged students to help increase their educational attainment. Foremost amongtheseprograms are the federal TRIO programs and the Gaining Early Awareness and Readiness for UndergraduateProgram(Gear Up). These programs are primarily intended for individuals who are from low-income families and wouldbe thefirst in their family to attain a college degree. This report reviews available data on these populations and attemptstomeasure the extent to which high school graduates from these groups go on to college. This report is intended asasupplement to CRS Report RL31622, TRIO and Gear Up Programs: Status and Issues, and will notbe updated.
The U.S. Supreme Court's decisions regarding the nature of the people's right to "keep and bear arms," as guaranteed in the Second Amendment to the U.S. Constitution, has focused some interest in the extent to which firearms are protected from the reach of creditors under either federal or state laws. State laws that protect certain property from creditors' claims generally are designed to apply in non-bankruptcy contexts, but may also be used in bankruptcy. Federal law also protects certain property from creditors' claims in bankruptcy. Additionally, a debtor in bankruptcy may be able to avoid liens against exempt property if a lien impairs the exemption and is either a judicial lien or a nonpossessory, nonpurchase-money security interest. Legislation introduced in the 112 th Congress, similar to legislation passed by the House in the 111 th Congress, would have allowed a specific federal exemption for firearms and would include firearms in the definition of household goods whose exemptions could be protected from impairment by liens. A number of states provide their own exemptions for firearms. The provisions of these states are provided in Table 1 . Section 522 of the U.S. Bankruptcy Code addresses the extent to which an individual debtor may elect to exempt equity in certain property from becoming part of the bankruptcy estate. Property exempted from the bankruptcy estate is not available to satisfy creditors. Among the exemptions explicitly provided in the Bankruptcy Code—the federal exemptions—are a homestead exemption in the amount of $21,625, a vehicle exemption in the amount of $3,450, and exemptions for jewelry, tools of the trade, and household goods. There is also a "wildcard" exemption of $1,150 that can also be applied to any property so long as the federal exemptions are available to the debtor. To the extent allowed under state law, the Bankruptcy Code permits debtors to choose between using the federal exemptions or those available under applicable state law. This is an "either/or" choice—debtors are not allowed to choose to use some state exemptions and some federal exemptions. When a petition is filed jointly by husband and wife or when the individual cases of a husband and wife are ordered to be jointly administered, each spouse must choose the same set of exemptions. However, debtors in many states have no choice to make because their state law prohibits the use of the federal exemptions. These federal exemptions are available to debtors only to the extent they are not prohibited by the applicable state. Puerto Rico, the District of Columbia, and 17 states allow debtors to choose between federal and state exemptions. In 2012, Virginia became the thirteenth state to provide some protection from creditors for debtors' firearms. The conditions for exempting firearms vary among the relevant states. Some states specify the number of firearms that may be exempted without regard to the value of the firearms. Other states limit the exemption to one firearm and further limit the claimed exemption by either the value of the firearm or the aggregate value of the statutorily exempt property in which the firearm is included. Oregon allows an exemption for one pistol as well as one rifle or shotgun, but limits the total exemption value of the two firearms to no more than $1,000. Several states put no limit on the number of firearms that may be exempted so long as the total value of the firearms, when aggregated with the value of certain other property is less than a specific amount. In these states, there is generally a limit to the value of each firearm. One state, Oklahoma, allows an unlimited number of firearms to be exempted so long as the total value of the firearms, alone, is no more than $2,000. In most of the states, the exemption is not controlled by the way in which the firearm is used. Several states, however, exempt only guns that are for personal use. Three of these specify that the firearms are to be "held primarily for the personal, family, or household use of [the debtor]." Oregon law specifies that the firearms must be "for the own use and defense of the citizen." Only one state, Louisiana, requires that the exempted firearm be used for business purposes. Both Montana and Nevada exempt "all arms ... required by law to be kept by any person" in addition to the one gun, selected by the debtor, that each allows. H.R. 1181 , the Protecting Gun Owners in Bankruptcy Act of 2011, was introduced on March 17, 2011, in the 112 th Congress. The bill paralleled an earlier bill passed by the House in the 111 th Congress, but not voted on by the Senate. The bill would have provided a firearms exemption that could be used in bankruptcy by a debtor who opted to use federal rather than state exemptions and was allowed to do so by the relevant state's law. The bill would have amended Section 522(d) of the Bankruptcy Code to add an exemption for the debtor's aggregate interest─up to a total value of $3,000—"in a single rifle, shotgun, or pistol or any combination thereof." The addition of this exemption would not have reduced the amount allowed for any other type of exemption under Section 522. Additionally, the bill would have amended Section 522(f)(4)(A) to include firearms in the definition of "household goods." As with the exemption for firearms, this provision would have applied to any number or combination of rifles, shotguns, and pistols so long as the aggregate value was no more than $3,000. Inclusion of firearms in the definition of household goods would not have increased the exemption available for firearms, but it would have allowed debtors to avoid liens that are nonpossessory, nonpurchase-money security interests on those firearms, under Section 522(f)(1)(B), as they are currently able to avoid such liens on other household goods. The bill would not have changed the maximum value of household goods whose liens could be avoided in bankruptcy. The last major action on the bill was referral to the Subcommittee on Courts, Commercial and Administrative Law for the House Judiciary Action. Currently, there has been no legislation introduced in the 113 th Congress that would provide a federal exemption under the Bankruptcy Code for firearms.	The U.S. Supreme Court's decisions regarding the nature of the people's right to "keep and bear arms," as guaranteed in the Second Amendment to the U.S. Constitution, has focused some interest on the extent to which firearms are protected from the reach of creditors under either federal or state laws. State laws protecting certain property from creditors' claims may be used both in and outside of the bankruptcy context. Federal law may also protect certain property from creditors' claims in bankruptcy. Although a number of states have provisions explicitly shielding firearms from the claims of creditors, there is currently no such provision in the U.S. Bankruptcy Code (title 11). In the 111th Congress, legislation was passed in the House (H.R. 5827) that would have provided an explicit federal exemption in bankruptcy for a debtor's aggregate interest, up to $3,000, "in a single rifle, shotgun, or pistol, or any combination thereof." The bill also included the means for protecting firearms by including them─subject to the same value and type restrictions─in the definition of "household goods" for which nonpossessory, nonpurchase-money security interest liens could be avoided in bankruptcy. Similar legislation was introduced in the 112th Congress: the Protecting Gun Owners in Bankruptcy Act of 2011 (H.R. 1181). The Bankruptcy Code generally provides two options for claiming exemptions in bankruptcy─either the exemptions provided in 11 U.S.C. Section 522(d) or the exemptions available under state law. However, debtors may only choose to use the federal exemptions in Section 522(d) if their state specifically authorizes them to do so. Because the proposed federal exemption for firearms would be included in Section 522(d), debtors whose states do not authorize them to use the Section 522(d) exemptions would not benefit from the proposed change in exemptions. They might, however, benefit from the inclusion of firearms in the definition of household goods, because they could then have the option of freeing those firearms from liens that were based on a nonpossessory, nonpurchase-money security interest. There is great variety in the extent of the protection from creditors the states provide for firearms. The majority of states provide no explicit protection. Among the 13 states that provide protection, the conditions for providing that protection vary. Some states limit the exemption by both the number and value of the firearms; some do not limit the number but may limit either the value of each firearm or the aggregate value of all. Other states specify the type of firearms that can be exempted. In most states that allow an exemption for firearms, the exemption is not dependent upon the way in which the firearm is used. Several states, however, exempt only guns that are for personal use, and one state requires that the firearm be used for business purposes.
Congressional oversight refers to the review, monitoring, and supervision of federal agencies, programs, activities, and policy implementation. Congress exercises this power largely through its standing committee system. However, oversight, which dates to the earliest days of the Republic, also occurs in a wide variety of congressional activities and contexts. These include authorization, appropriations, investigative, and legislative hearings by standing committees; specialized investigations by select committees; and reviews and studies by congressional support agencies and staff. Congress's oversight authority derives from its "implied" powers in the Constitution, public laws, and House and Senate rules. It is an integral part of the American system of checks and balances. Underlying the legislature's ability to oversee the executive branch are democratic principles as well as practical purposes. John Stuart Mill, the British Utilitarian philosopher, insisted that oversight was the key feature of a meaningful representative body: "The proper office of a representative assembly is to watch and control the government." As a young scholar and future President, Woodrow Wilson—in his 1885 treatise, Congressional Government —equated oversight with lawmaking, which was usually seen as the supreme function of a legislature. He wrote, "Quite as important as legislation is vigilant oversight of administration." The philosophical underpinning for oversight is the Constitution's system of checks and balances among the legislative, executive, and judicial branches. James Madison, known as the "Father of the Constitution," described the system in Federalist No. 51 as establishing "subordinate distributions of power, where the constant aim is to divide and arrange the several offices in such a manner that each may be a check on the other." Oversight, as an outgrowth of this principle, ideally serves a number of overlapping objectives and purposes: improve the efficiency, economy, and effectiveness of governmental operations; evaluate programs and performance; detect and prevent poor administration, waste, abuse, arbitrary and capricious behavior, or illegal and unconstitutional conduct; protect civil liberties and constitutional rights; inform the general public and ensure that executive policies reflect the public interest; gather information to develop new legislative proposals or to amend existing statutes; ensure administrative compliance with legislative intent; and prevent executive encroachment on legislative authority and prerogatives. In sum, oversight is a way for Congress to check on, and check, the executive branch. Although the Constitution grants no formal, express authority to oversee or investigate the executive or program administration, oversight is implied in Congress's impressive array of enumerated powers. The legislature is authorized to appropriate funds; raise and support armies; provide for and maintain a navy; declare war; provide for organizing and calling forth the national guard; regulate interstate and foreign commerce; establish post offices and post roads; advise and consent on treaties and presidential nominations (Senate); and impeach (House) and try (Senate) the President, Vice President, and civil officers for treason, bribery, or other high crimes and misdemeanors. Reinforcing these powers is Congress's broad authority "to make all laws which shall be necessary and proper for carrying into execution the foregoing powers, and all other powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof." The authority to oversee derives from these constitutional powers. Congress could not carry them out reasonably or responsibly without knowing what the executive is doing; how programs are being administered, by whom, and at what cost; and whether officials are obeying the law and complying with legislative intent. The Supreme Court has legitimated Congress's investigative power, subject to constitutional safeguards for civil liberties. In 1927, the Court found that, in investigating the administration of the Department of Justice, Congress was considering a subject "on which legislation could be had or would be materially aided by the information which the investigation was calculated to elicit." The "necessary and proper" clause of the Constitution also allows Congress to enact laws that mandate oversight by its committees, grant relevant authority to itself and its support agencies, and impose specific obligations on the executive to report to or consult with Congress, and even seek its approval for specific actions. Broad oversight mandates exist for the legislature in several significant statutes. The Legislative Reorganization Act of 1946 (P.L. 79-601), for the first time, explicitly called for "legislative oversight" in public law. It directed House and Senate standing committees "to exercise continuous watchfulness" over programs and agencies under their jurisdiction; authorized professional staff for them; and enhanced the powers of the Comptroller General, the head of Congress's investigative and audit arm, the Government Accountability Office (GAO). The Legislative Reorganization Act of 1970 (P.L. 91-510) authorized each standing committee to "review and study, on a continuing basis, the application, administration and execution" of laws under its jurisdiction; increased the professional staff of committees; expanded the assistance provided by the Congressional Research Service; and strengthened the program evaluation responsibilities of GAO. The Congressional Budget Act of 1974 ( P.L. 93 - 344 ) allowed committees to conduct program evaluation themselves or contract out for it; strengthened GAO's role in acquiring fiscal, budgetary, and program-related information; and upgraded GAO's review capabilities. Besides these general powers, numerous statutes direct the executive to furnish information to or consult with Congress. For example, the Government Performance and Results Act of 1993 ( P.L. 103 - 62 ) requires agencies to consult with Congress on their strategic plans and report annually on performance plans, goals, and results. In fact, more than 2,000 reports are submitted each year to Congress by federal departments, agencies, commissions, bureaus, and offices. Inspectors general (IGs), for instance, report their findings about waste, fraud, and abuse, and their recommendations for corrective action, periodically to the agency head and Congress. The IGs are also instructed to issue special reports concerning particularly serious and flagrant problems immediately to the agency head, who transmits them unaltered to Congress within seven days. Inspectors general also communicate with Members, committees, and staff of Congress in other ways, including testimony at hearings, in-person meetings, and written and electronic communications. The Reports Consolidation Act of 2000 ( P.L. 106 - 531 ), moreover, instructs the IGs to identify and describe their agencies' most serious management and performance challenges and briefly assess progress in addressing them. This new requirement is to be part of a larger effort by individual agencies to consolidate their numerous reports on financial and performance management matters into a single annual report. The aim is to enhance coordination and efficiency within the agencies; improve the quality of relevant information; and provide it in a more meaningful and useful format for Congress, the President, and the public. In addition to these avenues, Congress creates commissions and establishes task forces to study and make recommendations for select policy areas that can also involve examination of executive operations and organizations. There is a long history behind executive reports to Congress. Indeed, one of the first laws of the First Congress—the 1789 Act to establish the Treasury Department (1 Stat. 66)—called upon the Secretary and the Treasurer to report directly to Congress on public expenditures and all accounts. The Secretary was also required "to make report, and give information to either branch of the legislature ... respecting all matters referred to him by the Senate or House of Representatives, or which shall appertain to his office." Separate from such reporting obligations, public employees may provide information to Congress on their own. In the early part of the 20 th century, Congress enacted legislation to overturn a "gag" rule, issued by the President, that prohibited employees from communicating directly with Congress (5 U.S.C. 7211 (1994)). Other "whistleblower" statutes, which have been extended specifically to cover personnel in the intelligence community ( P.L. 105 - 272 ), guarantee the right of government employees to petition or furnish information to Congress or a Member. Chamber rules also reinforce the oversight function. House and Senate rules, for instance, provide for "special oversight" or comprehensive policy oversight, respectively, for specified committees over matters that relate to their authorizing jurisdiction. House rules also direct each standing committee to require its subcommittees to conduct oversight or to establish an oversight subcommittee for this purpose. House rules also call for each committee to submit an oversight agenda, listing its prospective oversight topics for the ensuing Congress, to the House Committee on Oversight and Government Reform, which reports the oversight plans to the House, and the Committee on House Administration. The House Oversight and Government Reform Committee and the Senate Homeland Security and Governmental Affairs Committee, which have oversight jurisdiction over virtually the entire federal government, furthermore, are authorized to review and study the operation of government activities to determine their economy and efficiency and to submit recommendations based on GAO reports to the House and the Senate, respectively. In addition, the House Oversight and Government Reform Committee may conduct an investigation of any matter. For any investigation it does conduct, the committee shall provide its findings and recommendations to any other standing committee that has jurisdiction over the matter. Oversight occurs through a wide variety of congressional activities and avenues. Some of the most publicized are the comparatively rare investigations by select committees into major scandals or into executive branch operations gone awry. Cases in point are temporary select committee inquiries into: Homeland Security matters following the terrorist attacks on September 11, 2001; China's acquisition of U.S. nuclear weapons information, in 1999; the Iran-Contra affair, in 1987; intelligence agency abuses, in 1975-1976, and "Watergate," in 1973-1974. The precedent for this kind of oversight actually goes back two centuries: in 1792, a special House committee investigated the ignominious defeat of an Army force by confederated Indian tribes. By comparison to these select panel investigations, other congressional inquiries in recent Congresses—into intelligence information and its sharing among federal agencies prior to the 9/11 attacks, U.S. intelligence about weapons of mass destruction before the invasion of Iraq, Whitewater, access to Federal Bureau of Investigation files, and campaign financing—have relied for the most part on standing committees. The impeachment proceedings against President Clinton in 1998 in the House and in 1999 in the Senate also generated considerable oversight. It not only encompassed the President and the White House staff, but also extended to the office of independent counsel, prompted by concerns about its authority, jurisdiction, and expenditures. Although such highly visible endeavors are significant, they usually reflect only a small portion of Congress's total oversight effort. More routine and regular review, monitoring, and supervision occur in other congressional activities and contexts. Especially important are appropriations hearings on agency budgets as well as authorization hearings for existing programs. Separately, examinations of executive operations and the implementation of programs—by congressional staff, support agencies, and specially created commissions and task forces—provide additional oversight. Senate Rule XXII, paragraph 2. U.S. Senate, Committee on Rules and Administration, Senate Manual, Containing the Standing Rules, Orders, Laws, and Resolutions Affecting the Business of the United States Senate , S.Doc. 110-1, 110 th Congress, 2 nd session, prepared by Matthew McGowan under the direction of Howard Gantman, Staff Director (Washington: GPO, 2008), sec. 22.2. Joel D. Aberbach, Keeping Watchful Eye: The Politics of Congressional Oversight (Washington: Brookings Institution, 1990). [author name scrubbed], "Congressional Oversight of the Presidency," Annals , vol. 499, Sept. 1988, pp. 75-89. David R. Mayhew, Divided We Govern: Party Control, Lawmaking, and Investigations, 1946-1990 (New Haven: Yale University Press, 1991). [author name scrubbed], "Legislative Oversight," Congressional Procedure and the Policy Process (Washington: Congressional Quarterly Press, 2005), pp. 274-297. Arthur M. Schlesinger and Roger Bruns, eds., Congress Investigates: A Documented History, 1792-1974 , 5 vols. (New York: Chelsea House Publishers, 1975). Charles Tiefer, "Congressional Oversight of the Clinton Administration and Congressional Procedure," Administrative Law Review, vol. 50, Winter 1998, pp. 199-216. U.S. Congress, House Committee on House Administration, "Oversight," History of the House of Representatives, 1789-1994 , H.Doc. 103-324, 103 rd Congress, 2 nd session (Washington: GPO, 1994), pp. 233-266. U.S. General Accounting Office, Investigators' Guide to Sources of Information, GAO Report OSI-97-2 (Washington: 1997). CRS Report RL30240, Congressional Oversight Manual , by [author name scrubbed] et al. CRS Report R41079, Congressional Oversight: An Overview , by [author name scrubbed] CRS Report RL32525, Congressional Oversight of Intelligence: Current Structure and Alternatives , by [author name scrubbed] and [author name scrubbed] CRS Video Series, Congressional Oversight (2004), dealing with tools and techniques, avenues and approaches, and authorities and assistance; on seven videos (MM70003-MM70009), available by calling [phone number scrubbed].	Congressional oversight of policy implementation and administration has occurred throughout the history of the United States government under the Constitution. Oversight—the review, monitoring, and supervision of operations and activities—takes a variety of forms and utilizes various techniques. These range from specialized investigations by select committees to annual appropriations hearings, and from informal communications between Members or congressional staff and executive personnel to the use of extra-congressional mechanisms, such as offices of inspector general and study commissions. Oversight, moreover, is supported by a variety of authorities—the Constitution, public law, and chamber and committee rules—and is an integral part of the system of checks and balances between the legislative and executive branches. This report will be updated as events require.
The franking privilege, which allows Members of Congress to send official mail via the U.S. Postal Service at government expense, has its roots in 17 th century Great Britain; the British House of Commons instituted it in 1660. In the United States, the practice dates from 1775, when the First Continental Congress passed legislation giving its Members mailing privileges so as to communicate with their constituents. Congress continues to use the franking privilege to help Members communicate with their constituents. The communications may include letters in response to constituent requests for information, newsletters regarding legislation and Member votes, press releases about official Member activities, copies of the Congressional Record and government reports, and notices about upcoming town meetings organized by Members. The franking privilege is regulated by federal law, House and Senate rules, regulations of the Committee on House Administration and the Senate Rules and Administration Committee, and regulations of the Senate Select Committee on Ethics and the House Commission on Congressional Mailing Standards. The franking privilege may only be used for matters of public concern or public service. It may not be used to solicit votes or contributions, to send mail regarding campaigns or political parties, or to mail autobiographical or holiday greeting materials. Although few would argue with the intent behind the frank—to help Members better communicate with their constituents—the privilege in recent years has been subjected to increased public criticism and extensive scrutiny by the media. Proponents of franking argue that, without the privilege, most Members could not afford to send important information to their constituents, in effect curtailing the delivery of ideas, reports, assistance, and services. Opponents, concerned with incumbent perquisites, mail costs, and the overall cost of Congress, have called for additional changes to the franking privilege, including an outright ban on franking for Members and a prohibition on use of the frank in election years. Significant reforms have been adopted as a consequence of this debate. Although the cost of official congressional mail has fluctuated widely, franking reform efforts have produced over an 85% reduction in even-numbered-year costs and over a 90% reduction in odd-numbered-year costs in the past 30 years, from a high of $113.4 million and $89.5 million in FY1988 and FY1989 to $16.9 million and $8.3 million in FY2014 and FY2015. Despite common public perception, franking is not free. Congress pays the U.S. Postal Service for franked mail through annual appropriations for the legislative branch. Each chamber makes an allotment to Members from these appropriations. In the Senate, the allocation process is administered by the Committee on Rules and Administration; in the House, by the Committee on House Administration. Overall congressional mail costs include official mail sent by Members (both regular and mass mail), committees, and chamber officers. During FY2015, Congress spent $8.3 million on official mail according to the U.S. Postal Service, representing slightly less than two-tenths of 1% of the $4.3 billion budget for the entire legislative branch for FY2015. House official mail costs ($6.8 million) were 82% of the total, whereas Senate official mail costs ($1.5 million) were 18% of the total. During FY2014, Congress spent $16.9 million on official mail. House official mail costs ($15.1 million) were 89% of the total, whereas Senate official mail costs ($1.8 million) were 11% of the total. During FY2013, Congress spent $7.6 million on official mail. House official mail costs ($6.2 million) were 82% of the total, whereas Senate official mail costs ($1.4 million) were 18% of the total. During FY2012, Congress spent $24.8 million on official mail. House official mail costs ($23.3 million) were 94% of the total, whereas Senate official mail costs ($1.5 million) were 6% of the total. During FY2011, total expenditures on official mail were $12.8 million. House official mail costs ($11.3 million) were 88% of the total, whereas Senate official mail costs ($1.5 million) were 12% of the total. The higher official mail costs in FY2014, FY2012, FY2010, FY2008, and FY2006 compared with FY2015, FY2013, FY2011, FY2009, and FY2007 continue a historical pattern of Congress spending more on official mail costs during election years. However, monthly data indicate that election year costs may be attributable to multiple factors. Figure 1 plots monthly congressional mail costs from October 2005 to December 2015. As shown in Figure 1 , the lowest monthly costs occur in the fourth quarter (October, November, and December) of the even-numbered calendar years, corresponding to the first quarter of the odd-numbered fiscal years. This reflects the prohibition on mass mailing in the Senate (60 days) and House (90 days) prior to the general elections of November 2006, 2008, 2010, 2012, and 2014. The higher monthly costs occurred in December 2005 ($5.8 million), December 2007 ($5.0 million), December 2009 ($6.6 million), December 2011 ($5.4 million), December 2013 ($2.9 million), December 2015 ($3.2 milion), and the six months (March-August) prior to the pre-election prohibited period for the 2006, 2008, 2010, 2012, and 2014 general elections. Figure 1 demonstrates that the higher mail costs in FY2006, FY2008, FY2010, FY2012, and FY2014 result from two separate events: a general increase in monthly mail costs prior to the pre-election prohibited period, and a significant spike in costs during December of 2005, December of 2007, December of 2009, December 2011, December of 2013, and December 2015, perhaps reflecting the traditional end-of-session newsletters many Members mail to constituents. Both of these increases are largely due to increased mailings by the House during those periods. House mailings made during the first quarter (October-December) of FY2006, FY2008, FY2010, FY2012, FY2014, and FY2016 cost $9.6 million, $9.4 million, $11.2 million, $9.5 million, and $5.85 million, respectively, compared to an average of $1.7 million over the four quarters of FY2015, $1.5 million over the four quarters of FY2013, $2.8 million over the four quarters of FY2011, $3.7 million over the four quarters of FY2009, and $4.4 million over the four quarters of FY2007. House mailings made during the second quarter and third quarter of FY2008, FY2010, FY2012, and FY2014 also were significantly higher than the FY2007, FY2009, FY2011, FY2013, or FY2015 quarterly average. Critics of the franking privilege have often cited increased election-year mail costs as evidence of political use of the frank prior to elections. Although mail costs do rise in the months prior to the pre-election prohibited period, Figure 1 shows that the structure of the fiscal calendar is also important in creating large disparities between election year and non-election year mail costs. Since the fiscal years run from October 1 to September 30, both the December spike in mail costs and the pre-election rise in mail costs occur in the same fiscal year, despite taking place in different calendar years and different sessions of Congress. Table 1 compares mail costs between 2005 and 2015, measured by fiscal and calendar year. As shown in Table 1 , when annual costs are compared by calendar year, the December spike and the pre-election increase balance out, and the totals are relatively similar. Thus comparisons of fiscal year official mail costs tend to overstate the effect of pre-election increases in mail costs, because they also capture the effect of the December spike in mail costs. Data on congressional official mail costs are only available back to FY1978. The Post Office, however, kept records of overall franking costs beginning in FY1954, when Congress began reimbursing the Post Office for franked mail costs. Franked mail costs differ only slightly from congressional official mail costs, as they include the franking privilege granted to former Presidents and widows of former Presidents. Figure 2 is a plot of overall franked mail costs (FY1954 to FY1977) and official mail costs (FY1978 to FY2015) in both current and constant 1954 dollars. Figure 2 demonstrates that franked mail/official mail costs significantly increased and then significantly decreased between FY1954 and FY2015. Although costs began to increase during the 1960s, the largest increases occurred during the 1970s. Costs remained high during the 1980s, and then were reduced significantly beginning in FY1989. The sharp increase in costs that begins in the late 1960s and extends into the 1980s is plausibly attributable to several factors. The overall volume of mail sent by Members of Congress increased rapidly during this time period, aided by computer technology that simplified the creation of mass-mailing newsletters and other frankable mail. Second, postal rates increased significantly during the same time period, with first-class mail rates more than tripling from 8 cents in FY1972 to 25 cents by FY1988. Standard mail (formerly third-class) rates doubled from 5 cents in FY1972 to 10 cents in FY1988. Official congressional mail costs have decreased significantly in the past 30 years. Even-numbered-year franking expenditures have been reduced by over 85% from $113.4 million in FY1988 to $16.9 million in FY2014. Odd-numbered-year franking expenditures have been reduced by over 90% from $89.5 million in FY1989 to $8.3 million in FY2015. Figure 3 illustrates changes in official mail costs, by chamber, between FY1978 and FY2015. The decrease in official mail expenditures during the early 1990s was primarily due to congressional reforms that placed individual limits on Members' mail costs and required public disclosure of individual Member franking expenditures. In 1986, the Senate established a franking allowance for each Senator and for the first time disclosed individual Member mail costs. In 1990, the House established a separate franking allowance for its Members and required public disclosure of individual mail costs. Tighter restrictions were also placed on Member mass mailings. Since October 1992, Members have been prohibited from sending mass mailings outside their districts. Since October 1994, Senators have been limited to mass mailings that do not exceed $50,000 per session of Congress. Senators may not use the frank for mass mailings above that amount. Finally, the widespread adoption of new communications technology (such as email) since 1995 has shifted a proportion of communications formerly sent via franked mail to electronic format. Official mail costs in both the House and Senate have shown significant monthly variation. Figure 4 plots monthly official mail costs for the House of Representatives from FY2000 to FY2015. Figure 4 demonstrates that the spikes in official mail costs found in FY2006, FY2008, FY2010, FY2012, and FY2014 (as described in Table 1 ) are regular trends. From FY2000 to FY2015, peaks in House official mail cost occur cyclically, with the highest costs found in December of odd-numbered years and July or August of even-numbered years. The lowest costs occur during the pre-election months in which Member mass mailings are prohibited, and in the months immediately following the general elections. Figure 5 plots monthly official mail costs for the Senate on the same scale as Figure 4 . The figure demonstrates the relatively low costs of Senate official mail in comparison to House official mail costs. These lower costs are attributable to proportionally fewer Senators than Representatives franking mass mailings, as well as Senate rules that limit Senators to $50,000 for mass mailings in any fiscal year. Figure 5 shows that the pattern of costs in the Senate is similar to the House of Representatives, but not as pronounced. Costs peak annually in September, and are higher in the months just prior to the pre-election prohibited period.	The congressional franking privilege allows Members of Congress to send official mail via the U.S. Postal Service at government expense. This report provides information and analysis on the costs of franked mail in the House of Representatives and Senate. In FY2015, total expenditures on official mail were $8.3 million. House official mail costs ($6.8 million) were 82% of the total, whereas Senate official mail costs ($1.5 million) were 18% of the total. In FY2014, total expenditures on official mail were $16.9 million. House official mail costs ($15.1 million) were 89% of the total, whereas Senate official mail costs ($1.8 million) were 11% of the total. These expenditures continue an historical pattern of Congress spending less on official mail costs during non-election years than during election years (Figure 3). However, analysis of monthly data on official mail costs indicates that, due to the structure of the fiscal year calendar, comparisons of election year and non-election year mailing data tend to overstate the effect of pre-election increases in mail costs, because they also capture the effect of a large spike in mail costs from December of the previous calendar year. The analysis demonstrates that between FY2000 and FY2015, higher official mail costs in even-numbered fiscal years occurred for two reasons: a general increase in monthly mail costs prior to the pre-election prohibited period, and a significant spike in costs during December of odd-numbered calendar years. Both increases were largely the result of an increase in the number of House Members sending mass mailings during those months. Reform efforts during the past 30 years have reduced overall franking expenditures in both election and non-election years. Even-numbered-year franking expenditures have been reduced by over 85% from $113.4 million in FY1988 to $16.9 million in FY2014, while odd-numbered-year franking expenditures have been reduced by over 90% from $89.5 million in FY1989 to $8.3 million in FY2015. House mail costs have decreased from a high of $77.9 million in FY1988 to $6.8 million in FY2015. The Senate has dramatically reduced its costs, from $43.6 million in FY1984 to $1.5 million in FY2015. This report will be updated annually.
Our work has shown that concession activities on federal lands are a large industry that generates billions of dollars. In April 1996, we issued a report on governmentwide concessions activities. Unlike our past work, which examined concession activities within the six land management agencies, this report reviewed concession operations throughout the civilian agencies of the federal government and included concession activities at agencies such as NASA, the U.S. Postal Service, the Department of Justice, and the Department of Veterans Affairs—just to name a few. In the report, we found that in fiscal year 1994, there were 11,263 concession agreements managed by 42 different federal agencies. Concessioners operating under these agreements generated about $2.2 billion in revenues, and paid the government about $65 million in fees and about $23 million in other forms of compensation. The average total rate of return to the government from concessioners that had their concession agreement initiated or extended in fiscal year 1994 was about 3.6 percent of concession revenues. While 42 different federal agencies have concession agreements, 93 percent of these agreements and revenues are managed by the six land management agencies. However, in spite of having the largest programs, the rate of return from concessioners operating in the land management agencies is significantly less than the return generated from concessioners in other federal agencies. We found that for concession agreements that were either initiated or extended during fiscal year 1994, the average return to the government from concessions in land management agencies was about 3 percent while the return from concessions in the other federal agencies averaged about 9 percent. Within the six land management agencies, concession agreements in the National Park Service accounted for about 30 percent of the gross revenues and the return to the government. (See att. I for a list of rates of return from concessioners for agreements initiated or extended during fiscal year 1994 for each federal agency in our review.) Our analysis of rates of return throughout the federal government indicated that there are three key factors that affect the rate of return to the government. These are (1) whether the return from a concession agreement was established through a competitive bidding process, (2) whether the incumbent concessioner had a preferential right of renewal in the award of a follow-on concession agreement, and (3) whether the agency had the authority to retain a majority of the fees generated from the concession agreement. Our work indicated that when concession agreements are awarded through a competitive process, the rate of return to the federal government was higher. Specifically, for concession agreements that were initiated during fiscal year 1994, the return to the government from concession agreements that were competed averaged 5.1 percent of the concessioners’ gross revenues. When competition was not used in establishing concession agreements, the return to the government averaged about 2.0 percent. While the return to the government is higher for concessions that are competitively selected, very few concessions agreements have fees established through competition—especially among concessions in the land management agencies. For concession agreements which were entered into during fiscal year 1994, only 8.6 percent of over 2,100 agreements in land management agencies were established through competition. In contrast, for concession agreements in the nonland management agencies, about 96 percent of 101 concession agreements were established through competition during this time period. Another factor affecting the return to the government from concessioners is the existence of preferential rights of renewal. These rights primarily affect concessioners in the Park Service. Under the Concessions Policy Act of 1965, Park Service concessioners that have performed satisfactorily have a preferential right of renewal when their concession agreements expire. This preference has generally meant that when a concession agreement expires, an incumbent concessioner has the right to match or better the best competing offer to win the award of the next concession agreement. This preference tends to put a chilling effect on competition because qualified business are reluctant to expend time and money preparing bids in a process where the award is most likely going to the incumbent concessioners. With fewer bidders, there is less competitive pressure to increase the return to the government. Our analysis of Park Service concession agreements showed that in fiscal year 1994, new concession agreements that were awarded with a preferential right of renewal resulted in a return to the government of about 3.8 percent. In contrast, Park Service concession agreements that were competed in the same year without any preference resulted in an average return to the government of 6.4 percent. A third factor that affects the rate of return to the government from concessioners is the agencies’ authority to retain fees. Our analysis of federal concessions showed that when agencies are permitted to retain over 50 percent of the fees from concessions, the return to the government is over 3 times higher than agencies that are not authorized to retain this level of fees. In addition, five nonland management agencies that had authority to retain most of their fees managed 5 percent of the concession agreements throughout the government. These agreements generated about 3 percent of the total revenues from concessioners, but generated 18 percent of the total concession fees. In contrast, the six land management agencies, which have not had authority to retain concession fees, have over 90 percent of the total concession agreements and concession revenues, but generate only 73 percent of the total concession fees. Thus, our work showed that agencies authorized to retain fees obtained more fees in proportion to their concessioners’ revenue than agencies that were not authorized to retain fees. For over 20 years, we have issued reports and testimonies that highlighted the need for reform of federal concession laws and policies. Our most recent work, which I have just summarized, is further evidence of the need for reform. Based on this body of work, it is our view that any efforts at reforming concessions should consider (1) encouraging greater competition in the awarding of concession agreements, including eliminating preferential rights of renewal; and (2) promoting more consistency by including all of the land management agencies as part of concessions reform. In addition, Congress may also wish to consider providing opportunities for the land management agencies to retain at least a portion of their concession fees. Encouraging greater competition in awarding concession agreements, and eliminating preferential rights of renewal, should be a primary goal of reforming concessions. Using a competitive bid process to award concession agreements has several benefits. Our April 1996 report presents evidence that where there is competition in awarding concession agreements the rate of return to the government is significantly higher. Competition among qualified bidders would also likely result in improving the level or quality of services provided to the public. Finally, using competition to establish fees would eliminate much of the need for elaborate and at times cumbersome fee systems used by the land management agencies. A significant impediment to competition is preferential rights of renewal granted to Park Service concessioners by the Concessions Policy Act of 1965. Thus, in our view, any legislative effort to reform existing concessions law should consider including the elimination of preferential rights of renewal. Our work has shown the need for common concessions policies among the land management agencies so that similar concessions operations are managed consistently throughout federal recreation lands. As we reported in June 1991, no single law authorized concessions operations for all six land management agencies. Rather, at least 11 different laws govern concessions operations. Many of these laws are specific to an agency and allow the agency broad discretion in establishing policies on the terms and conditions of concessions agreements. One exception to this is the Concessions Policy Act of 1965 which prescribes Park Service policy for several key terms and conditions in concessions agreements. The results of differing laws and policies are that similar concessioners are managed quite differently among the land management agencies. For example, a marina operator in the Park Service may have a preferential right of renewal and pay a fee based the Park Service’s fee system that is based on industry profitability norms. In contrast, a marina operator in the Forest Service may not have any preferential right to renew his agreement, and pays a fee based on the Forest Service’s fee system that determines fees based on the concessioner’s level of investment in facilities and a percentage of their revenues in up to nine different business categories such as food service or grocery. Our April report on concessions indicated that when agencies are authorized to retain most of their concession fees, the return to the government from its concessioners is significantly higher. However, permitting agencies to retain a portion of the fees from concessioners has both costs and benefits. Our work has shown that retaining fees for use in agencies’ operations serves as a powerful incentive in managing concessioners. However, if the Congress decides to use increased fees to supplant rather than supplement existing appropriations, this incentive would be diminished. In addition, our past work in the Park Service and Forest Service has indicated that these agencies have backlogs of unmet maintenance and infrastructure needs, which combined exceed $5 billion. Furthermore, in recent years, both agencies have had to cutback on the level of visitor services provided to the public. One option to help address these issues, which we have raised in the past, might be to provide additional financial resources through fees—including entrance fees, user fees, and concession fees. While retaining fees will not resolve such problems as multibillion dollar backlogs, it will nonetheless provide some assistance to parks, forests, and other recreation areas across the nation. It is important to note that permitting the land management agencies to retain fees is a form of “backdoor” spending authority, and as such raises questions of oversight and accountability. In addition, earmarking revenues reduces governmentwide budget flexibility. Furthermore, permitting the land management agencies to retain fees could also raise scoring and compliance issues under the Budget Enforcement Act. These issues need to be weighed in considering whether to permit the land management agencies to retain fees. As you requested Mr. Chairman, I would now like to take a few moments to discuss our recently issued report on special account funds within the Park Service. Park units have been permitted to keep some of the funds that are generated from specific in-park activities without going through the annual appropriation process. One type of these special account funds deals with concessions. These concessions special account funds are generally established as part of the terms and conditions of a concessions agreement with the Park Service. As part of the agreement, the concession operator periodically escrows a portion of its gross revenues or a fixed sum of money into a bank account. The monies deposited into the account are in lieu or in addition to franchise fees and are used by the concessioner to repair, improve, or construct facilities related to the concession operation. Franchise fees from Park Service concessioners generally go to the Treasury. Expenditures from special accounts are made only with the approval of the Park Service. The use of concessioner special account funds has increased over the past few years. This is largely because while franchise fees are returned to the Treasury, the special account funds remain at the parks. In fact, at some of the largest parks like Yellowstone and Yosemite, the primary concessioner no longer pays any franchise fees. Instead, the return to the government is entirely from special account funds and other nonfee compensation. At other parks, like the Grand Canyon and Glacier National Park, the Park Service and the concessioners have made amendments to concession agreements to reduce or eliminate franchise fees and to establish or increase the special account funds. According to data from Park Service headquarters, in fiscal year 1994, 21 park units had a concession special account fund; headquarters officials estimated that the deposits totaled $13.9 million. During this review, we contacted a sample of 27 parks units to determine the level of deposits in special account funds. In fiscal year 1994, 14 of the 27 units we reviewed had concessioner special accounts. These 14 park units reported that a total of $19.4 million had been deposited into special accounts—a difference of $5.5 million more than reported by Park Service headquarters. We discussed this difference with Park Service officials. We found that the discrepancies were due to differing interpretations among Park Service concessions officials—both at headquarters and at the individual parks units—as to what should be counted as concessioners’ special accounts. However, Park Service officials acknowledged that the headquarter’s data were not complete because the Park Service did not have a system in place to routinely collect information on these accounts. The agency has been developing a system to track these accounts, and expects it to be implemented by August 1996. We plan to follow-up on this issue after the Park Service’s tracking system is implemented. Mr. Chairman, in recent years, an understanding has emerged that the federal government needs to be run in a more business like manner than in the past. It is clear that agencies such as the Park Service and the Forest Service can learn some lessons about competition and incentives from nonland management agencies. However, if the Congress proceeds with reforming concessions, it should consider changing existing concessions law to encourage greater competition and eliminating preferential rights of renewal, and promoting greater consistency by establishing common concessions policies among the land management agencies. In addition, it may wish to consider providing opportunities for the land management agencies to retain at least a portion of concession fees. This concludes my statement. I would be happy to answer any questions that you or other Members of the Subcommittee may have. Total (fees + special accounts) The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. U.S. General Accounting Office P.O. Box 6015 Gaithersburg, MD 20884-6015 Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders may also be placed by calling (202) 512-6000 or by using fax number (301) 258-4066, or TDD (301) 413-0006. Each day, GAO issues a list of newly available reports and testimony. To receive facsimile copies of the daily list or any list from the past 30 days, please call (202) 512-6000 using a touchtone phone. A recorded menu will provide information on how to obtain these lists.	GAO discussed its work on concessions issues, concession reform, and the National Park Service's (NPS) use of concessioner special accounts. GAO noted that: (1) in 1994, there were 11,000 concession agreements throughout the federal government; (2) the agreements generated over $2.2 billion in revenue for concessioners; (3) while concessioners in land management agencies paid the government an average of 3 percent of their gross revenues, concessioners in other agencies paid an average of 9 percent of their gross revenues; (4) key factors affecting the government's rate of return include whether the concession is established competitively, whether the agency can retain concessions fees, and whether incumbent concessioners had a preferential right of renewal; and (5) Congress may wish to consider encouraging competition, eliminating preferential rights of renewal for incumbents, promoting consistency among land management agencies, and providing greater opportunities for land management agencies to retain concession fees.
Within DOD, the commitment to make significant investments in developing a new product typically takes place at a decision review known as Milestone B, which authorizes military service officials to enter the engineering and manufacturing development phase of the DOD acquisition process, select a development contractor, and sign a development contract. The process of identifying and understanding requirements typically begins when a sponsor, usually a military service, submits an Initial Capabilities Document that identifies the existence of a capability gap, the operational risks associated with the gap, and a recommended solution or preferred set of solutions for filling the gap. Potential solutions are then assessed in an Analysis of Alternatives prior to the start of the technology maturation and risk reduction phase of DOD’s acquisition process. According to DOD guidance, an Analysis of Alternatives assesses the costs and benefits of potential materiel solutions that could fill the capability gaps documented in an Initial Capabilities Document and supports a decision on the most cost effective solution. Operational requirements for that preferred solution are then defined in a draft Capability Development Document that goes through several stages of military service- and DOD-level review and validation. Our work on product-development best practices has found that clearly understood and stable program requirements are critical to establishing a sound, executable business case for any product development program. Figure 1 shows the phases of DOD’s acquisition process. In a March 2016 report, we found that after completing a review of its airborne intelligence, surveillance, and reconnaissance (ISR) portfolio, OSD directed the Navy in January 2016 to focus on developing and fielding an unmanned Carrier Based Aerial Refueling System, which represented a significant shift in requirements. The program was subsequently designated the MQ-25. Previously the Navy had been largely focused on developing and fielding a system that could provide ISR and air-to ground strike capabilities, with the potential to add aerial refueling capability in the future. That system, referred to as the Unmanned Carrier Launched Airborne Surveillance and Strike (UCLASS) system was to have the potential to operate in highly contested environments. Under the MQ-25 program, the Navy is now focused on developing and fielding an unmanned tanker capable of operating from the carrier, in a permissive environment, to refuel other naval aircraft and provide only limited ISR capability. The overall system is expected to extend the range of the carrier air wing’s mission effectiveness and increase the number of F/A-18E/Fs available for strike fighter missions, among other things. The MQ-25 system will consist of three segments: an aircraft segment; a control system and connectivity segment (CS&C); and an aircraft carrier segment (see figure 2). The aircraft segment is to develop a carrier- suitable unmanned vehicle and associated support systems. The CS&C segment is to interface with existing command and control systems, and the tasking, processing, exploitation, and dissemination system. The aircraft carrier segment is to make modifications to upgrade the existing carrier infrastructure to support unmanned aircraft systems. These three segments will be managed and integrated by the Navy’s Unmanned Carrier Aviation program office, acting as a Lead Systems Integrator. Between fiscal years 2017 and 2022, the Navy has budgeted almost $2.5 billion to continue development of the MQ-25 carrier and control segments and to begin development of the aircraft segment. Over that period, the annual funding requirements for the overall MQ-25 system will increase from $89.0 million in 2017 to $554.6 million in 2022 (see figure 3). In the first quarter of fiscal year 2018, the Navy plans to request MQ-25 aircraft proposals from four competing contractors. Then, in the summer of 2018, the Navy expects to hold a Milestone B review to assess whether the Navy is ready to enter the engineering and manufacturing development phase of the acquisition process for the aircraft segment and downselect to one of the four contractors. In July 2017, the Joint Requirements Oversight Council (JROC) validated system requirements for the MQ-25. The Navy has two primary requirements, known as key performance parameters. Those requirements are: (1) carrier suitability and (2) air refueling. Carrier suitability is defined by the Navy as the ability of the aircraft to effectively operate on and from all current and planned aircraft carriers and to integrate into carrier air wing operations. Air refueling indicates the ability of the aircraft to be equipped as a sea-based tanker to refuel other carrier-based aircraft—a mission currently performed by Navy’s F/A- 18E/F Super Hornets. The MQ-25 requirements have evolved intermittently over the past 16 years instead of following the more sequential processes described in DOD requirements and acquisition guidance. The MQ-25 requirements are not traced back to a single, standalone Initial Capabilities Document (ICD). Instead they address capability gaps identified in two different such documents that were developed more than 4 years apart. Over time, the Navy conducted various analyses, each focused on different aspects of those capability gaps. Our assessment of the content of the Navy’s underlying documentation and analyses, when taken together, is that they provide a basis for the current set of MQ-25 requirements. Figure 4 illustrates the iterative evolution of the MQ-25 requirements. As noted in the figure, after receiving direction from OSD in January 2016 to pursue a carrier based airborne tanking system, the Navy began the process of defining more specific MQ-25 aircraft requirements and reducing technology and design risks. In September and October 2016, the Navy awarded cost-plus-fixed-fee contracts to each of the four competing contractors to conduct risk reduction activities, including concept refinement and requirements trade analysis. The total combined value of the contracts, including options, is approximately $250 million. The Navy expects the contractors to provide concepts for an unmanned aircraft that could meet the tanking requirements of the F/A-18E/F in the mid-2020s, while also providing some ISR capabilities. Our comparison of the Navy’s final requirements document—the Carrier Based Unmanned Aircraft System Capability Development Document— with earlier draft versions found that the Navy reduced the total number of key performance parameters from seven to two—carrier suitability and air refueling—and made adjustments to both. The Navy refined the carrier suitability requirement to focus more clearly on the MQ-25’s basic ability to operate on and from the aircraft carrier. For air refueling, the Navy adjusted the mission focus and the required refueling capacity at a specific distance from the ship. Our work in product-development best practices has found that as detailed requirements are identified, decision makers can make informed trades between the requirements and available resources, potentially achieving a match and establishing a sound basis for a program business case before entering the product development phase of the defense acquisition system. The Navy’s MQ-25 acquisition strategy, approved by Navy leadership in April 2017, reflects key aspects of an evolutionary, knowledge-based acquisition approach. While the Navy is still developing, refining, and finalizing most of the acquisition documentation that will make up its program business case, our review of its acquisition strategy and other available documentation showed that they reflect key aspects of a knowledge-based approach and generally align with what we have found to be product-development best practices: Using open systems standards and an evolutionary approach: The Navy is planning to use open systems standards and an evolutionary development approach to develop, fly, and deploy the MQ-25 over time. The Navy expects to provide primarily aerial refueling and ISR capabilities first, while using open systems standards to support incremental capability upgrades in the future like adding the capability to receive fuel, weapons and improving radars. In July 2013, we concluded that the adoption of open systems standards in defense acquisitions can provide significant cost and schedule savings. In addition, we have previously reported that adopting a more evolutionary, incremental approach can enable the capture of design and manufacturing knowledge and increase the likelihood of success in providing timely and affordable capabilities. Using knowledge-based criteria to assess progress and inform key decisions: The Navy has established knowledge-based criteria for seven key points during MQ-25 aircraft development. Those points include the development contract award, the system design review, the low-rate production contract award, and the start of initial operational testing. At each point, the Navy plans to assess program progress against the established criteria and provide briefings to key leadership stakeholders before moving into the next phase of development. If implemented, this knowledge-based approach would align with best practices that we identified in our body of work related to product-development. Specifically, we have found that achieving positive program outcomes requires the use of a knowledge-based approach to product development that demonstrates high levels of knowledge attained at key junctures. Constraining development schedule: According to the Navy’s acquisition strategy, the MQ-25 aircraft is expected to take 6 to 8 years from the start of product development (i.e., Milestone B) to the fielding of an initial operational capability. Based on our work in product development best practices, constraining the development phase of a program to 5 or 6 years is preferred because, among other things, it aligns with DOD’s budget planning process and fosters the negotiation of trade-offs in requirements and technologies. Limiting technology risk: The Navy expects to significantly reduce technology risk during development by mandating that technologies, or subsystems, for the MQ-25 aircraft must be demonstrated in a relevant environment to be included in the design. If a technology is identified that does not meet this criteria, the Navy plans to push that technology into the future and include it only when it reaches the specified level of maturity. Federal statute and product development best practices illustrate the critical importance of demonstrating high levels of technology maturity prior to entering the product development phase of the defense acquisition system. As we reported in March 2017, failure to fully mature technologies prior to developing the system design can lead to redesign and cost and schedule growth if later discoveries during development lead to revisions. Limiting design risk: While the Navy does not plan to hold a MQ-25 system level preliminary design review prior to the start of development, as best practices recommend, it is tailoring its previous UCLASS aircraft requirements which may allow the contractors to leverage the preliminary design knowledge gained under that program. In addition, the Navy is leveraging knowledge gained under the four recent risk reduction contracts, as well as various levels of prototyping done by each of the contractors and the Navy. Our work in product-development best practices emphasizes the importance of gaining early design knowledge to reduce design risk before beginning a product development. In June 2017, we reported that prototyping helped programs better understand design requirements, the feasibility of proposed solutions, and cost—key elements of a program business case. Developing an independent cost estimate: Cost analysts within the Cost Analysis and Program Evaluation office of the Office of the Secretary of Defense are in the process of developing an independent cost estimate for the MQ-25 aircraft. Federal statute, DOD acquisition guidance, and product-development best practices illustrate the importance of having an independent cost estimate to inform the business case for a new product development program. Cost Analysis and Program Evaluation officials explained that they had not yet completed their estimate, but they plan to have it done in time to support the Navy’s MQ-25 Milestone B review in the summer 2018. Given the early focus on defining requirements and reducing risk prior to the start of product development, the Navy plans to award a fixed-price incentive, firm target contract for MQ-25 aircraft development. This type of contract is designed to provide a profit incentive for the contractor to control costs. It specifies target cost, target profit, and ceiling price amounts, with the latter being the maximum amount that may be paid to the contractor. The Navy plans to issue a request for proposals to the four competing contractors in October 2017 and award the contract to one of those four contractors the following year. With the Milestone B review scheduled in the summer of 2018, the ultimate success of the MQ- 25 program largely depends on the Navy’s ability to present an executable business case and then effectively implement its planned approach. We are not making recommendations in this report. We provided DOD with a copy of this report and they returned technical comments, which we incorporated as appropriate. We are sending copies of this report to the appropriate congressional committees, the Secretary of Defense and the Secretary of the Navy. In addition, the report is available at no charge on the GAO website at http://www.gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. If you or your staff have any questions about this report, please contact me at (202) 512-4841 or sullivanm@gao.gov. GAO staff who made key contributions to this report are listed in the appendix. In addition to the contact named above, key contributors to this report were Travis Masters, Assistant Director; Marvin E. Bonner; Laura Greifner; Kristine Hassinger; and Roxanna Sun.	The Navy expects to invest almost $2.5 billion through fiscal year 2022 in the development of an unmanned aerial refueling system referred to as the MQ-25 . The MQ-25 is the result of a restructure of the former Unmanned Carrier-Launched Airborne Surveillance and Strike system. The program is expected to deliver an unmanned aircraft system that operates from aircraft carriers and provides aerial refueling to other Navy aircraft and intelligence, surveillance, and reconnaissance capabilities. The Navy plans to release a request for proposals for air system development by October 2017 and award a development contract one year later. A House Armed Services Committee report on a bill for the National Defense Authorization Act for Fiscal Year 2017 contained a provision for GAO to review the status of the MQ-25 program. This report assesses the extent to which the MQ-25's acquisition strategy is (1) rooted in validated requirements and (2) structured to follow a knowledge-based acquisition process. To do this work, GAO reviewed the Navy's requirements documentation, acquisition strategy, and other relevant documents and compared them with acquisition statutes, Department of Defense acquisition policy, and previous GAO reports and best practices. GAO also discussed the MQ-25 requirements and acquisition strategy with the Navy program office and other cognizant officials. The MQ-25 requirements have been validated by DOD's Joint Requirements Oversight Council. The Navy has identified two primary requirements: carrier suitability, which means the ability to operate on and from the Navy's aircraft carriers; and air refueling, which is the ability to provide fuel to other carrier-based assets while in flight. While the MQ-25 system is also expected to possess intelligence, surveillance and reconnaissance capabilities; those capabilities are not considered primary requirements. According to the program's acquisition strategy, the MQ-25 system will consist of three segments: the Air segment; a control and connectivity segment, which will interface with existing command and control systems; and an aircraft carrier segment, which will make modifications to upgrade existing carrier infrastructure. These three segments will be managed and integrated by the Navy's Unmanned Carrier Aviation program office, acting as a Lead Systems Integrator (see figure below). The Navy has established a knowledge-based approach for acquiring the MQ-25 aircraft. For example, the Navy plans to take an incremental approach to develop and evolve the MQ-25 over time. Further, the Navy expects to use knowledge-based criteria to assess progress at key decision points during development, and to use only technologies with high levels of maturity. With the Milestone B review scheduled in the summer of 2018—signaling the beginning of development—the ultimate success of the MQ-25 program depends heavily on the Navy's ability to present an executable business case and then effectively implement its planned approach. GAO is not making recommendations. DOD's technical comments are incorporated in this report.
Federal regulations and EEOC policy require federal agencies to report certain EEO complaint-related data annually to EEOC. Agencies report these data on EEOC form 462, Annual Federal Equal Employment Opportunity Statistical Report of Discrimination Complaints. EEOC compiles the data from the agencies for publication in the annual Federal Sector Report on EEO Complaints Processing and Appeals. According to EEOC Management Directive 110, agencies should make every effort to ensure accurate recordkeeping and reporting of these data. In our recent report, we said that reliable data are important to program managers, decisionmakers, and EEOC in identifying the nature and extent of workplace conflicts. We analyzed the data contained in EEOC’s annual federal sector reports to prepare our reports dealing with employment discrimination complaint trends. Because the Postal Service accounts for a large share of complaints filed by federal employees with their agencies, we analyzed forms 462 submitted by the Service for fiscal year 1991 through fiscal year 1998, as well as other complaint data provided at our request. Because our studies generally focused on trends in the number and age of unresolved complaints in inventory, the number of complaints filed, the bases and issues cited in complaints, and complaint processing times, we did not examine the full scope of data reported on form 462. Although we did not examine the Service’s controls for ensuring accurate recordkeeping and reporting or validate the data the Service reported, we examined the data for obvious inconsistencies or irregularities. We requested comments on a draft of this report from the Postmaster General. The Postal Service’s oral comments are discussed near the end of this letter. We performed our work in July and August 1999 in accordance with generally accepted government auditing standards. The most significant error that we identified in Postal Service data involved the number of race-based complaints filed by white postal workers. EEOC requires agencies to report the bases (e.g., race, sex, disability) for complaints that employees file. For fiscal year 1996, the Postal Service had reported that 9,044 (about 68 percent) of the 13,252 complaints filed contained allegations by white postal workers of race discrimination. For fiscal year 1997, the Service had reported that 10,040 (70 percent) of the 14,326 complaints filed contained such allegations. These figures represented significant increases over the figures reported for previous fiscal years. For example, in fiscal year 1995, the Service reported to EEOC that 1,534 of the complaints filed contained allegations by white postal workers of race discrimination. In fiscal year 1994, the figure reported was 2,688. We questioned Postal Service officials about the sudden increase in the number of complaints containing allegations by white postal workers of race discrimination. The officials said that they also had been concerned about these data, and had discussed the data with EEOC officials. After we raised this issue, the officials intensified their efforts to identify the true magnitude and source of the increase and subsequently found that a computer programming error had resulted in a significant overcounting of these complaints. They said that the corrected figures were 1,505 for fiscal year 1996 (or 11.4 percent of the 13,252 complaints filed) and 1,654 for fiscal year 1997 (or 11.5 percent of the 14,326 complaints filed). They also provided these figures to EEOC. In explaining how the error occurred, the officials said that each automated case record in the complaint information system contains a data field for race, which is to be filled in with a code for the applicable racial category when an employee alleges racial discrimination. If an employee alleges discrimination on a basis or bases other than race, this data field is to remain blank. According to the officials, the faulty computer program counted each blank racial data field as indicating an allegation by a white employee of racial discrimination. These results were then tallied with complaints in which the data field was properly coded as an allegation by a white employee of racial discrimination. The officials advised us that the programming error had been corrected. Although we did not examine the computer program, our review of the data reported on the Postal Service’s form 462 for fiscal year 1998 appeared to confirm that the correction had been made. Other errors that we found in data that the Service reported on form 462 related to the age of cases in the inventory of unresolved complaints. EEOC requires agencies to report statistics on the length of time that cases have been in the agencies’ inventories of unresolved complaints, from the date of complaint filing. These data are broken out by each stage of the complaint process—acceptance/dismissal, investigation, hearing, and final decision. We questioned figures for fiscal year 1997 about the age of (1) cases pending acceptance/dismissal, because the reported total number of days such cases had been in inventory seemed unusually high, and (2) cases pending a hearing before an EEOC administrative judge, because the reported average age of such cases seemed unusually low. After we brought the questionable figures to the attention of the Postal Service EEO Compliance and Appeals Manager, he provided corrected figures and said that the errors, like the problem with the reporting of complaint bases described previously, were due to a computer programming error. He said that the faulty computer program had been corrected. In addition, the Service provided the corrected figures to EEOC. We also found that the Postal Service has not been reporting all issues— the specific conditions or events that are the subjects of complaints—as EEOC requires. Because some complaints involve more than one basis or more than one issue, EEOC’s instructions for completing part IV of form 462 require agencies to include all bases and issues raised in complaints. While the Postal Service’s complaint information system allows more than one complaint basis (like racial and sexual discrimination) to be recorded, the system’s data field allows only one “primary” issue (like an adverse personnel action) to be recorded for each complaint, regardless of the number of issues that a complainant raises. Although this practice results in underreporting complainants’ issues to EEOC, the EEO Compliance and Appeals Manager said that the Postal Service adopted this approach to give the data more focus by identifying the primary issues driving postal workers’ complaints. This matter has not been resolved. In order to report more than one issue for each complaint, the Service would have to modify the automated complaint information system to allow for the recording of more than one issue for a complaint. However, we have reported that part IV of form 462 for reporting statistics on bases and issues is methodologically flawed and results in an overcounting of bases and issues. We have made a recommendation to EEOC that it correct this problem, and the agency said that it would address our concerns. Therefore, we believe that it would be prudent for the Postal Service to wait for EEOC to resolve this issue before modifying its data recording and reporting practices. In addition to the discrepancies already noted, we found that the Postal Service’s statistical reports to EEOC for fiscal years 1996 and 1997 did not include data for complaints involving certain categories of primary issues. The form 462, which EEOC requires agencies to complete, contains a list of issues. For its own management needs, the Service supplemented EEOC’s list with three additional categories of specific issues: (1) denial of worker’s compensation, (2) leave, and (3) other pay. However, we found that in completing part IV of EEOC form 462 for fiscal years 1996 and 1997, the Service omitted the data about complaints in which these additional issues were cited. After we brought our observations to the attention of Service officials, they provided the omitted data to EEOC. The officials explained that, for fiscal year 1998, in lieu of including data about complaints involving the three additional issues on part IV of form 462, they provided these data separately to EEOC. The EEO Compliance and Appeals Manager explained that he did not want to “force fit” the data about the three issues into one of the categories listed on the form 462, such as “other,” because the issues thereby would lose their identity and significance. He added that part IV of form 462 needs to be revised because the categories of issues listed are too broad and do not recognize emerging issues. Further, we found certain underreportings of the bases and issues cited in complaints for fiscal year 1995. After we brought the underreporting to the attention of the Postal Service officials, they provided corrected data to EEOC and us. Service officials attributed this underreporting to difficulties associated with implementing a new complaint information system in fiscal year 1995. Both Postal Service management and EEOC need complete, accurate, and reliable information to deal with EEO-related workplace conflicts. Discrepancies that we found in our limited review of the Postal Service’s EEO complaint data raised questions about the completeness, accuracy, and reliability of the reported data, particularly data generated through the automated complaint information system. All but one of the reporting problems we found and their underlying causes appear to have been corrected. However, because we examined only a limited portion of the reported data for obvious discrepancies and because the errors we identified were related to data generated by an automated complaint information system put in place in 1995, we have concerns about the completeness, accuracy, and reliability of the data that we did not examine. To help ensure that the EEO complaint data submitted to EEOC are complete, accurate, and reliable, we recommend that you review the Postal Service’s controls over the recording and reporting of these data, including evaluating the computer programs that generate data to prepare the EEOC form 462, Annual Federal Equal Employment Opportunity Statistical Report of Discrimination Complaints. We recognize that recording and reporting issues raised in complaints are matters that cannot be completely addressed until EEOC resolves the methodological flaws in part IV of form 462. In oral comments on a draft of this report made on August 20, 1999, the Postal Service Manager, EEO Compliance and Appeals, generally concurred with our observations and offered comments of a clarifying nature. In response to our recommendation that the Service’s controls over the recording and reporting of EEO complaint data to EEOC be reviewed, this official said that the Postal Service plans to adopt more comprehensive management controls to ensure that the data submitted are complete, accurate, and reliable. The official further said that these controls would involve (1) an analysis of trend data to identify anomalies and (2) an examination of data categories in which discrepancies have previously been found. He also said that complaint information system controls would be examined to determine whether they ensure that data recorded and reported are complete, accurate, and reliable. He said, however, that because the complaint information system has been certified for year 2000 compatibility and because the Service has decided not to modify any computer systems until March 2000, any modifications to improve the complaint system will not be made until then. We believe that the actions the Postal Service proposes, if carried out, will address the substance of our recommendation. We are sending copies of this report to Senators Daniel K. Akaka, Thad Cochran, Joseph I. Lieberman, and Fred Thompson and Representatives Robert E. Andrews, John A. Boehner, Dan Burton, William L. Clay, Elijah E. Cummings, Chaka Fattah, William F. Goodling, Steny H. Hoyer, Jim Kolbe, John M. McHugh, David Obey, Harold Rogers, Joe Scarborough, Jose E. Serrano, Henry A. Waxman, and C. W. Bill Young in their capacities as Chair or Ranking Minority Member of Senate and House Committees and Subcommittees. In addition, we will send a copy to Representative Albert R. Wynn. We will also send copies to the Honorable Ida L. Castro, Chairwoman, EEOC; the Honorable Janice R. Lachance, Director, Office of Personnel Management; the Honorable Jacob Lew, Director, Office of Management and Budget; and other interested parties. We will make copies of this report available to others on request. Because this report contains a recommendation to you, you are required by 31 U.S.C. 720 to submit a written statement on actions taken on this recommendation to the Senate Committee on Governmental Affairs and the House Committee on Government Reform not later than 60 days after the date of this report and to the House and Senate Committees on Appropriations with the agency’s first request for appropriations made more than 60 days after the date of this report. If you or your staff have any questions concerning this report, please contact me or Stephen Altman on (202) 512-8676. Other major contributors to this report were Anthony P. Lofaro, Gary V. Lawson, and Sharon T. Hogan. Michael Brostek Associate Director, Federal Management and Workforce Issues The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. U.S. General Accounting Office P.O. Box 37050 Washington, DC 20013 Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders may also be placed by calling (202) 512-6000 or by using fax number (202) 512-6061, or TDD (202) 512-2537. Each day, GAO issues a list of newly available reports and testimony. To receive facsimile copies of the daily list or any list from the past 30 days, please call (202) 512-6000 using a touch- tone phone. A recorded menu will provide information on how to obtain these lists.	GAO reviewed certain discrepancies in the complaint data that the Postal Service reported to the Equal Employment Opportunity Commission (EEOC) and the need for the Service to take additional steps to ensure that such data are complete, accurate, and reliable. GAO noted that: (1) in GAO's limited analyses of the data the Service reported to EEOC, GAO found errors in statistics on the underlying bases for EEO complaints and on the length of time complaints had been in inventory; (2) GAO also found that required data on the issues raised in complaint information system; (3) these discrepancies were generally linked to statistical reports generated by the Service's automated complaint information system; (4) after GAO brought these discrepancies to the attention of Postal Service staff, they promptly corrected them and appeared to correct the underlying causes for the errors, with one exception; (5) that situation need not be resolved until EEOC revises its reporting form; and (6) because GAO examined only a portion of the reported data for obvious discrepancies and because the errors GAO identified were related to data generated by an automated complaint information system put in place in 1995, GAO has concerns about the completeness, accuracy, and reliability of the data that GAO did not examined.
Our March 2015 report found that FCC has made progress implementing reform efforts contained in the Order. In particular, FCC has implemented eight reforms, including the one-subscription-per-household rule, uniform eligibility criteria, non-usage requirements, payments based on actual claims, and the audit requirements. Furthermore, FCC eliminated Link-up on non-Tribal lands and support for toll limitation service, and the National Lifeline Accountability Database (NLAD) is operational in 46 states and the District of Columbia. In May 2015, FCC reported the results of the broadband pilot program. However, FCC has not fully implemented three reform efforts: Flat-rate reimbursement: To simplify administration of the Lifeline program, FCC established a uniform, interim flat rate of $9.25 per month for non-Tribal subscribers. FCC sought comment on the interim rate, but has not issued a final rule with a permanent reimbursement rate. Initial eligibility verification and annual recertification procedures: To reduce the number of ineligible consumers receiving program benefits, the Order required that Lifeline providers verify an applicant’s eligibility at enrollment and annually through recertification; these requirements have gone into effect. In addition, to reduce the burden on consumers and Lifeline providers, the Order called for an automated means for determining Lifeline eligibility by the end of 2013. FCC has not met this timeframe or revised any timeframes for how or when this automated means would be available. Performance goals and measures: FCC established three outcome- based goals: (1) to ensure the availability of voice service for low- income Americans, (2) to ensure the availability of broadband for low- income Americans, and (3) to minimize the Universal Service Fund contribution burden on consumers and businesses. FCC identified performance measures it will use to evaluate progress towards these goals, but it has not yet fully defined these measures. FCC officials noted they are working on defining them using the Census Bureau’s American Community Survey data, which were made available in late 2014. In our March 2015 report, we found that FCC has not evaluated the effectiveness of the Lifeline program, which could hinder its ability to efficiently achieve program goals. Once adopted, performance measures can help FCC track the Lifeline Program’s progress toward its goals. However, performance measures alone will not fully explain the contribution of the Lifeline program toward reaching program goals, because performance measurement does not assess what would have occurred in the absence of the program. According to FCC, Lifeline has been instrumental in narrowing the penetration gap (the percentage of households with telephone service) between low-income and non-low- income households. In particular, FCC noted that since the inception of Lifeline, the gap between telephone penetration rates for low-income and non-low-income households has narrowed from about 12 percent in 1984 to 4 percent in 2011. Although FCC attributes the penetration rate improvement to Lifeline, several factors could play a role. For example, changes to income levels and prices have increased the affordability of telephone service, and technological improvements, such as mobility of service, have increased the value of telephone service to households. FCC officials stated that the structure of the program has made it difficult for the commission to determine causal connections between the program and the penetration rate. However, FCC officials noted that two academic studies have assessed the program. These studies suggest that household demand for telephone service—even among low-income households—is relatively insensitive to changes in the price of the service and household income. This suggests that many low-income households would choose to subscribe to telephone service in the absence of the Lifeline subsidy. For example, one study found that many households would choose to subscribe to telephone service in the absence of the subsidy. As a result, we concluded that the Lifeline program, as currently structured, may be a rather inefficient and costly mechanism to increase telephone subscribership among low-income households, because several households receive the subsidy for every additional household that subscribes to telephone service due to the subsidy. FCC officials said that this view does not take into account the Lifeline program’s purpose of making telephone service affordable for low-income households. However, in the Order, the commission did not adopt affordability as one of the program’s performance goals; rather, it adopted availability of voice service for low-income Americans, measured by the penetration rate. These research findings raise questions about the design of Lifeline and FCC’s actions to expand the pool of eligible households. We estimated approximately 40 million households were eligible for Lifeline in 2012. The Order established minimum Lifeline eligibility, including households with incomes at or below 135 percent of the federal poverty guidelines, which expanded eligibility in some states that had more limited eligibility criteria. Further, FCC proposed adding qualifying programs, such as the Special Supplemental Nutrition Program of Women, Infants, and Children (WIC) program, and increasing income eligibility to 150 percent of the federal poverty guidelines. We estimated that over 2 million additional households would have been eligible for Lifeline in 2012 if WIC were included in the list of qualifying programs. These proposed changes would add households with higher income levels than current Lifeline- eligible households. Given that the telephone penetration rate increases with income, making additional households with higher incomes eligible for Lifeline may increase telephone penetration somewhat, but at a high cost, since a majority of these households likely already purchase telephone service. This raises questions about expanding eligibility and the balance between Lifeline’s goals of increasing penetration rates while minimizing the burden on consumers and businesses that fund the program. In our March 2015 report, we recommended that FCC conduct a program evaluation to determine the extent to which the Lifeline program is efficiently and effectively reaching its performance goals of ensuring the availability of voice service for low-income Americans while minimizing program costs. Our prior work on federal agencies that have used program evaluation for decision making has shown that it can allow agencies to understand whether a program is addressing the problem it is intended to and assess the value or effectiveness of the program. The results of an evaluation could be used to clarify FCC’s and others’ understanding of how the Lifeline program does or does not address the problem of interest—subscription to telephone service among low-income households—and to assist FCC in making changes to improve program design or management. We believe that without such an evaluation, it will be difficult for FCC to determine whether the Lifeline program is increasing the telephone penetration rate among low-income customers, while minimizing the burden on those that contribute to the Universal Service Fund. FCC agreed that it should evaluate the extent to which the Lifeline program is efficiently and effectively reaching its performance goals and said that it would address our recommendation. In our March 2015 report we also found that FCC’s broadband pilot program includes 14 projects that test an array of options and will generate information that FCC intends to use to decide whether and how to incorporate broadband into Lifeline. According to FCC, the pilot projects are expected to provide high-quality data on how the Lifeline program could be structured to promote broadband adoption by low- income households. FCC noted the diversity of the 14 projects, which differed by geography (e.g., urban, rural, Tribal), types of technologies (e.g., fixed and mobile), and discount amounts. FCC selected projects that were designed as field experiments and offered randomized variation to consumers. For example, one project we reviewed offered customers three different discount levels and a choice of four different broadband speeds, thereby testing 12 different program options. FCC officials said they aimed to test and reveal “causal effects” of variables. FCC officials said this approach would, for example, test how effective a $20 monthly subsidy was relative to a $10 subsidy, which would help FCC evaluate the relative costs and benefits of different subsidy amounts. However, FCC officials noted that there was a lack of FCC or third party oversight of the program, meaning that pilot projects themselves were largely responsible for administration of the program. We found that FCC did not conduct a needs assessment or develop implementation and evaluation plans for the broadband pilot program, as we had previously recommended in October 2010. At that time, we recommended that if FCC conducted a broadband pilot program, it should conduct a needs assessment and develop implementation and evaluation plans, which we noted are critical elements for the proper development of pilot programs. We noted that a needs assessment could provide information on the telecommunications needs of low-income households and the most cost-effective means to meet those needs. Although FCC did not publish a needs assessment, FCC officials said they consulted with stakeholders and reviewed research on low-income broadband adoption when designing the program. Well-developed plans for implementing and evaluating pilot programs include key features such as clear and measurable objectives, clearly articulated methodology, benchmarks to assess success, and detailed evaluation time frames. FCC officials said they did not set out with an evaluation plan because they did not want to prejudge the results by setting benchmark targets ahead of time. FCC officials said they are optimistic that the information gathered from the pilot projects will enable FCC to make recommendations regarding how broadband could be incorporated into Lifeline. FCC officials noted that the pilot program is one of many factors it will consider when deciding whether and how to incorporate broadband into Lifeline, and to the extent the pilot program had flaws, those flaws will be taken into consideration. Since our report was issued, FCC released a report on the broadband pilot program, which discusses data collected from the 14 projects. We also found that the broadband pilot projects experienced challenges, such as lower-than-anticipated enrollment. The pilot projects enrolled approximately 12 percent of the 74,000 low-income consumers that FCC indicated would receive broadband through the pilot projects. According to FCC’s May 2015 report, 8,634 consumers received service for any period of time during the pilot. FCC officials said that the 74,000 consumers was an estimate and was not a reliable number and should not be interpreted as a program goal. FCC officials said they calculated this figure by adding together the enrollment estimates provided by projects, which varied in their methodologies. For example, some projects estimated serving all eligible consumers, while others predicted that only a fraction of those eligible would enroll. FCC officials told us they do not view the pilot’s low enrollment as a problem, as the program sought variation. Due to the low enrollment in the pilot program, a small fraction of the total money FCC authorized for the program was spent. Specifically, FCC officials reported that about $1.7 million of the $13.8 million authorized was disbursed to projects. FCC and pilot project officials we spoke to noted that a preliminary finding from the pilot was that service offered at deeply discounted or free monthly rates had high participation. FCC officials and representatives from the four pilot projects we interviewed noted that broadband offered at no or the lowest cost per month resulted in the highest participation. For example, we found one project that offered service at no monthly cost to the consumer reported 100 percent of its 709 enrollees were enrolled in plans with no monthly cost as of October 2013, with no customers enrolled in its plans with a $20 monthly fee. This information raises questions about the feasibility of including broadband service in the Lifeline program, since on a nationwide scale, offering broadband service at no monthly cost would require significant resources and may conflict with FCC’s goal to minimize the contribution burden. Chairman Wicker, Ranking Member Schatz, and Members of the Subcommittee, this completes my prepared statement. I would be pleased to respond to any questions that you may have at this time. If you or your staff have any questions about this testimony, please contact Michael Clements, Acting Director, Physical Infrastructure Issues at (202) 512-2834 or clementsm@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this statement. GAO staff who made key contributions to this testimony are Antoine Clark and Emily Larson. This is a work of the U.S. government and is not subject to copyright protection in the United States. The published product may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately.	Through FCC's Lifeline program, companies provide discounts to eligible low-income households for telephone service. Lifeline supports these companies through the Universal Service Fund (USF); in 2014, Lifeline’s disbursements totaled approximately $1.7 billion. Companies generally pass their USF contribution obligation on to their customers, typically in the form of a line item on their telephone bills. In 2012, FCC adopted reforms to improve the program’s internal controls and to explore adding broadband through a pilot program. This testimony summarizes the findings from GAO’s March 2015 report (GAO-15-335) and provides information on (1) the status of Lifeline reform efforts, (2) the extent to which FCC has evaluated the effectiveness of the program, and (3) how FCC plans to evaluate the broadband pilot program. GAO reviewed FCC orders and other relevant documentation; analyzed 2008-2012 Census Bureau data; and interviewed FCC officials, officials at four pilot projects selected based on features such as technology, and officials from 12 Lifeline providers and four states selected based on factors such as disbursements and participation. The Federal Communications Commission (FCC) has made progress implementing reforms to the Lifeline Program (Lifeline), which reduces the cost of telephone service for eligible low-income households. In 2012, FCC adopted a Reform Order with 11 key reforms that aimed to increase accountability and strengthen internal controls, among other things. FCC has made progress implementing eight of the reforms, including the National Lifeline Accountability Database, which provides a mechanism to verify an applicant’s identify and whether the applicant already receives Lifeline service. FCC has partially implemented three of the reforms. For example, FCC established performance goals for the program, but it has not fully defined performance measures. FCC has not evaluated the extent to which Lifeline is efficiently and effectively reaching its performance goals—to ensure the availability of voice service for low-income Americans and minimize the burden on consumers and businesses that fund the program. FCC attributes improvements in the level of low-income households' subscribing to telephone service over the past 30 years to Lifeline, but other factors, such as lower prices, may play a role. FCC officials stated that Lifeline's structure makes evaluation difficult, but referred GAO to two academic studies that have evaluated the program. These studies suggest that household demand for telephone service—even among low-income households—is relatively insensitive to changes in the price of service and household income; therefore, several households may receive the Lifeline subsidy for every additional household that subscribes to telephone service due to the subsidy. GAO has found that program evaluation can help agencies understand whether a program is addressing an intended problem. Without a program evaluation, FCC does not know whether Lifeline is effectively ensuring the availability of telephone service for low-income households while minimizing program costs. The usefulness of the broadband pilot program may be limited by FCC’s lack of an evaluation plan and other challenges. The pilot program included 14 projects to test an array of options and provide data on how Lifeline could be structured to promote broadband. Although GAO recommended in 2010 that FCC develop a needs assessment and implementation and evaluation plans for the pilot, FCC did not do so. A needs assessment, for example, could provide information on the telecommunications needs of low-income households and the most cost-effective means to meet those needs. In addition, the 14 projects enrolled about 12 percent of the 74,000 customers anticipated. FCC officials said they do not view the pilot’s low enrollment as a problem, as the program sought variation. FCC officials noted that the pilot program is one of many factors it will consider when deciding whether and how to incorporate broadband into Lifeline, and to the extent the pilot program had flaws, those flaws will be taken into consideration. In May 2015, FCC released a report which discusses data collected from the pilots. In its March 2015 report, GAO recommended that FCC conduct a program evaluation to determine the extent to which the Lifeline program is efficiently and effectively reaching its performance goals. FCC agreed that it should evaluate the extent to which the program is efficiently and effectively reaching its performance goals and said that it will address GAO's recommendation.
International medical graduates (IMGs) are foreign nationals or U.S. citizens who graduate from a medical school outside of the United States. In 2007, the most recent year for which data are available, there were 902,053 practicing physicians in the United States, and IMGs accounted for 25.3% (228,665) of these. The use of foreign nationals remains a means of providing physicians to practice in underserved areas. This report focuses on those IMGs who are foreign nationals, hereafter referred to as foreign medical graduates (FMGs). Many FMGs first entered the United States to receive graduate medical education and training as cultural exchange visitors through the J-1 cultural exchange program. While there are other ways for FMGs to enter the United States, including other temporary visa programs as well as permanent immigration avenues, this report focuses on FMGs entering through the J-1 program. As exchange visitors, FMGs can remain in the United States on a J-1 visa until the completion of their training, typically for a maximum of seven years. After that time, they are required to return to their home country for at least two years before they can apply to change to another nonimmigrant status or legal permanent resident (LPR) status. Under current law, a J-1 physician can receive a waiver of the two-year home residency requirement in several ways: the waiver is requested by an interested government agency (IGA) or state department of health; the FMG's return would cause extreme hardship to a U.S. citizen or LPR spouse or child; or the FMG fears persecution in the home country based on race, religion, or political opinion. Most J-1 waiver requests are submitted by an IGA and forwarded to the Department of State (DOS) for a recommendation. If DOS recommends the waiver, it is forwarded to U.S. Citizenship and Immigration Services (USCIS) in the Department of Homeland Security (DHS) for final approval. Upon final approval by USCIS, the physician's status is converted to that of an H-1B professional specialty worker. Prior to 2004, J-1 waiver recipients were counted against the annual H-1B cap of 65,000. An IGA may request a waiver of the two-year foreign residency requirement for an FMG by showing that his or her departure would be detrimental to a program or activity of official interest to the agency. In return for sponsorship, the FMG must submit a statement of "no objection" from the government of his or her home country, have an offer of full-time employment, and agree to work in a health professional shortage area or medically underserved area for at least three years. According to USCIS regulations, the FMG must be in status while completing the required term and must agree to begin work within 90 days of receipt of the waiver. If an FMG fails to fulfill the three-year commitment, he or she becomes subject to the two-year home residency requirement and may not apply for a change to another nonimmigrant, or LPR status until meeting that requirement. Although any federal government agency can act as an IGA, the main federal agencies that have been involved in sponsoring FMGs are the Department of Veterans Affairs (VA), the Department of Health and Human Services (HHS), the Appalachian Regional Commission (ARC), and the United States Department of Agriculture (USDA). Under the "Conrad Program" discussed below, state health departments may also act as IGAs. HHS has begun accepting waivers to primary care physicians only relatively recently. Historically, HHS had been very restrictive in its sponsorship of J-1 waiver requests. HHS emphasized that the exchange visitor program was a way to pass advanced medical knowledge to foreign countries, and that it should not be used to address medical underservice in the United States. HHS' position was that medical underservice should be addressed by programs such as the National Health Service Corps. Prior to December 2002, HHS only sponsored waivers for physicians or scientists involved in biomedical research of national or international significance. In December 2002, HHS announced that it would begin sponsoring J-1 waiver requests for primary care physicians and psychiatrists in order to increase access to healthcare services for those in underserved areas. HHS began accepting waiver applications on June 12, 2003, but suspended its program shortly after for reevaluation. On December 10, 2003, HHS released new program guidelines, and reinstated their program. Established by Congress in 1965, ARC is a joint federal and state entity charged with, among other things, ensuring that all residents of Appalachia have access to quality, affordable health care. The region covered by ARC consists of all of West Virginia and parts of Alabama, Georgia, Kentucky, Maryland, Mississippi, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, and Virginia. ARC will submit a request for a waiver at the request of a state in its jurisdiction. The waiver must be recommended by the governor of the sponsoring state. In return, the FMG must agree to provide primary care for at least 40 hours a week for three years at a health professional shortage area facility. The facility must be a Medicare or Medicaid-certified hospital or clinic that also accepts medically indigent patients. The facility must also prove that it has made a good faith effort to recruit a U.S. physician in the six months preceding the waiver application. In addition, the physician must be licensed by the state in which he or she will be practicing, and must have completed a residency in family medicine, general pediatrics, obstetrics, general internal medicine, general surgery, or psychiatry. The physician must sign an agreement stating that he or she will comply with the terms and conditions of the waiver, and will pay the employer $250,000 if he or she does not practice in the designated facility for three years. On May 17, 2004, the DRA officially began accepting applications for its new J-1 visa waiver program. The DRA includes 240 county or parish areas in Alabama, Arkansas, Illinois, Kentucky, Louisiana, Mississippi, Missouri and Tennessee. The goal of the Authority is to stimulate economic development and foster partnerships that will have a positive impact on the economy of the eight states that make up the Authority. Under the DRA's waiver program, physicians must submit an application processing fee; agree to practice in DRA designated shortage areas for a period of at least three years; and agree to pay $250,000 to the sponsoring facility if they do not fulfill any portion of their commitment, or $6,945 per month for each month they fail to fulfill their requirement. In 1994, Senator Kent Conrad sponsored the provision establishing the J-1 visa waiver program at the state level. The program is commonly referred to as the "Conrad State Program" program after him. Under the original program, participating states were allowed to sponsor up to 20 waiver applications for primary care physicians annually. To date, this provision has been extended several times. In 1996, the program was extended until 2002. Once again in 2002, the program was extended until 2004 and the number of waivers allowed per state was increased to 30. In 2004, Congress extended the Conrad program until June 1, 2006, and expanded the program to allow states to recruit primary care and specialty physicians. Other provisions of the law exempted waiver recipients from the H-1B annual cap, and allowed the states to place up to five physicians in facilities that serve patients living in designated shortage areas without regard to the facility's location. Previously, physicians could only serve in facilities located in designated shortage areas. In 2007, the program was extended through June 1, 2008. The waiver process for states is the same as other IGAs, however administration of the program varies by state. FMGs who are sponsored for a J-1 visa waiver by a state agree to practice medicine in designated shortage areas in the sponsoring state for a period of three to four years. FMGs working in these areas are not only required to meet the general requirements for medical licensing in the United States, but they are also required to meet state-specified licensing criteria. According to a 2006 Government Accountability Office (GAO) report on the J-1 program, states accounted for 90% of waiver requests, and had requested more than 3,000 waivers between 2003 and 2005. Several bills were introduced in the 110 th Congress that would have extended or expanded the Conrad Program. Ultimately, P.L. 110-362 extended the program through March 6, 2009. In an effort to extend the state J-1 waiver program for physicians, Representative Zoe Lofgren introduced H.R. 1127 on February 23, 2009, and it became public law on March 20, 2009. This law extends the waiver provision until September 30, 2009. On July 8, 2009, Senator Orrin Hatch introduced S.Amdt. 1428 to the Department of Homeland Security Appropriations Act ( H.R. 2892 ). The amendment, which passed unanimously on July 9, 2009, would extend the program through September 30, 2012. H.R. 2892 passed the Senate on July 9, 2009.	The Educational and Cultural Exchange Visitor program has become a gateway for foreign medical graduates (FMGs) to gain admission to the United States as nonimmigrants for the purpose of graduate medical education and training. The visa most of these physicians enter under is the J-1 nonimmigrant visa. Under the J-1 visa program, participants must return to their home country after completing their education or training for a period of at least two years before they can apply for another nonimmigrant visa or legal permanent resident (LPR) status, unless they are granted a waiver of the requirement. To qualify for a waiver, a request must be submitted on behalf of the FMG, by an Interested Government Agency (IGA), or a state Department of Health. In exchange, the FMG must agree to work in a designated healthcare professional shortage area for a minimum of three years. The ability of states to request a waiver is known as the "Conrad State Program," and was added temporarily to the Immigration and Nationality Act (INA) in 1994. The "Conrad State Program" has been extended by the past several Congresses. Most recently, the program was extended until September 30, 2009, by P.L. 111-9. This report will be updated as warranted by legislative developments.
This report provides an overview of the potential effects of marriage on Supplemental Security Income (SSI) eligibility and benefits. It includes an overview of the SSI program, information on the SSI resource limits, and a discussion of how the marriage of an SSI beneficiary to either another beneficiary or an ineligible person can affect his or her eligibility for benefits or monthly benefit level. In some cases, marriage may result in a person being denied SSI benefits or having his or her monthly SSI benefit level reduced. This situation has been called a "marriage penalty" by the National Council on Disability. Under the provisions of Title XVI of the Social Security Act, disabled individuals and persons who are 65 or older are entitled to benefits from the SSI program if they have income and assets that fall below program guidelines. SSI benefits are paid out of the general revenue of the United States and all participants receive the same basic monthly federal benefit. In most states, adults who collect SSI are automatically entitled to coverage under the Medicaid health insurance program. The basic monthly federal benefit amount for 2009 is $674 for a single person and $1,011 for a couple. This amount is supplemented by 44 states and the District of Columbia. Arkansas, Kansas, Mississippi, North Dakota, Tennessee, West Virginia, and the Commonwealth of the Northern Mariana Islands do not offer a state supplement. A participant in the SSI program receives the federal benefit amount, plus any state supplement, minus any countable income. At the end of December 2008, over 7.5 million people received SSI benefits. In that month, these SSI beneficiaries each received an average cash benefit of $477.80 and the program paid out a total of just under $3.9 billion in SSI benefits. The average monthly benefit is lower than the federal benefit amount because a person's total monthly benefit may be lowered based on earnings and other income. Individuals and couples must have limited assets or resources in order to qualify for SSI benefits. Resources are defined by regulation as "cash or other liquid assets or any real or personal property that an individual (or spouse, if any) owns and could convert to cash to be used for his or her support and maintenance." When a couple marries and pools their assets, they may find themselves with resources that render them ineligible for continued SSI benefits. The countable resource limit for SSI eligibility is $2,000 for individuals and $3,000 for couples. These limits are set by law, are not indexed for inflation and have been at their current levels since 1989. Not all resources are counted for SSI purposes. Excluded resources include an individual's home, a single car used for essential transportation and other assets specified by law and regulation. Federal regulations establish the definition of marriage for the purposes of determining SSI eligibility and calculating SSI benefits. Two people are considered married for the purposes of the SSI program if one of the following conditions is present: The couple is legally married under the laws of the state in which they make their permanent home; The SSA has determined that either person is entitled to Social Security benefits as the spouse of the other person; or The couple is living together in the same household and is leading people to believe that they are married. Under the terms of the Defense of Marriage Act, P.L. 104-199 , a married couple must consist of one man and one woman for the purposes of the SSI program. When two SSI beneficiaries marry, they are considered a beneficiary couple. As a result, they are entitled to a federal benefit of up to $1,011 per month and may have countable resources valued at up to $3,000. Their combined countable income is used to reduce their monthly benefit. The marriage of two SSI beneficiaries can have a negative effect on their eligibility for benefits and their total amount of benefits. As a married couple, both beneficiaries are presumed to have access to the couple's shared income and resources. Compared with two single beneficiaries as single persons, a married couple has a lower resource limit, a lower maximum federal benefit, and a lower amount of excluded income as shown in Table 1 . Single SSI beneficiaries can have countable resources valued at up to $2,000. Combined, two such single beneficiaries can have a total of up to $4,000 in countable resources and can exclude from their countable resources two cars and two houses. However, as a married couple, their maximum amount of resources is $3,000 and they may exclude from their countable resources one car and one house. The maximum federal SSI benefit for 2008 is $674 per month for a single beneficiary and $1,011 per month for a married couple. Two unmarried beneficiaries could each receive up to $674 per month in benefits or a combined monthly benefit of up to $1,348. However, as a married couple, these beneficiaries can receive a maximum benefit of $1,011 per month. A single SSI beneficiary is allowed to exclude $85 of income (the first $20 in monthly earnings and $65 in earned income on top of the first $20) as well as one-half of all earned income above $65 from the income used to reduce the monthly SSI benefit. Two single beneficiaries can each exclude the basic $85 for a combined exclusion of $170. However, a married couple is entitled to exclude only the basic $85 and one-half of their combined earnings over $65. The marriage of an SSI beneficiary to a person who does not receive SSI benefits can have a negative effect on the SSI beneficiary's eligibility and amount of benefits if the ineligible spouse brings significant income or assets to the family. Generally, the income and assets of both persons in a marriage are considered shared and equally available to either person, which can result in an increase in the beneficiary's countable income or resources after marriage. When an SSI beneficiary marries a person who does not receive SSI benefits, a portion of the ineligible spouse's income is assigned, or deemed, to the SSI beneficiary and is counted as income for the purposes of determining benefit eligibility and the amount of monthly benefits. The procedure used to deem income from an ineligible person to his or her spouse who receives SSI benefits consists of several steps set by regulation and takes into account the overall size of the family. The four steps in the income deeming process are included below and two examples of income deeming are provided in Table 2 at the end of this report. The first step in the deeming process is to determine the countable monthly income of the ineligible spouse by taking his or her total earned and unearned income and reducing it by a special limited set of income exclusions. Generally, most income other than federal social service benefits is counted. Once the countable income of the ineligible spouse has been established, this amount is further reduced to account for any ineligible children living in the household or any aliens that the ineligible spouse may be sponsoring. For each child or sponsored alien, the countable income of the ineligible spouse is reduced by an amount equal to the difference between the monthly federal SSI benefit rate for a couple and the monthly federal SSI benefit rate for an individual. For 2009, this amount is $337, the difference between the federal SSI benefit rate for a couple of $1,011 and the rate for an individual of $674. The final countable monthly income of the ineligible spouse is used to determine the continued SSI eligibility of the beneficiary. If the final countable income of the ineligible spouse is less than or equal to the difference between the monthly federal SSI benefit rate for a couple and the monthly federal SSI benefit rate for an individual ($337 for 2009), then no income is deemed to the beneficiary and the beneficiary is eligible to continue receiving SSI benefits as an individual. If, however, the final countable income of the ineligible spouse is greater than the difference between the monthly federal SSI benefit rate for a couple and the monthly federal SSI benefit rate for an individual, then the beneficiary and his or her spouse are considered a couple and eligible to receive SSI benefits at the level for a couple. If a married beneficiary is considered an individual after Step 3, then his or her monthly SSI benefit is equal to the federal benefit rate for an individual minus any of his or her countable income. The income of the ineligible spouse is not considered when determining the benefit amount in this case. If, however, the married beneficiary and his or her spouse are considered a couple after Step 3, then their benefit is reduced by their combined countable income. The final countable income of the ineligible spouse is added to the total income of the beneficiary. This amount is then reduced by the standard income exclusions and the couple's monthly benefit is reduced by this final income amount. Unlike the rules governing the deeming of income from an ineligible spouse to an SSI beneficiary, the resource deeming rules are straightforward. Any resources owned by the ineligible spouse are deemed to the beneficiary. All of the resources of a married couple are considered to be available to the SSI beneficiary and are subject to the regular SSI resource limitations. If the beneficiary is considered a single beneficiary, then he or she may have countable resources valued at up to $2,000. If, after the deeming of income, he or she is considered part of a beneficiary couple, then the countable resource limit is $3,000. The only exception to this rule is that the pension plan of an ineligible spouse is not deemed to a beneficiary.	Supplemental Security Income (SSI) is a major benefit program for low-income persons with disabilities and senior citizens. As a means tested program, SSI places income and resource limits on individuals and married couples for the purposes of determining their eligibility and level of benefits. To become and remain eligible to receive SSI benefits, single individuals may not have countable resources valued at more than $2,000 and married couples may not have countable resources valued at more than $3,000. Although a person's home and car are excluded from these calculations, most other assets owned by a person or married couple are counted and in most cases, the assets of both partners in a marriage are considered shared and equally available to both the husband and the wife. A person's countable income must be below SSI program guidelines to qualify for benefits and a person's monthly benefit level is reduced by a portion of his or her earned and unearned income. The income of a person ineligible for SSI can be considered when calculating the benefit amount of that person's spouse. A complicated process of deeming is used to determine how much of the ineligible person's income is to be considered when calculating his or her spouse's monthly SSI benefits. In some cases marriage may result in a person being denied SSI benefits or seeing his or her SSI benefit level reduced because of the increase in family income or assets that results from the marriage. This can occur if an SSI beneficiary marries another SSI beneficiary or a person not in the SSI program. This potential effect of marriage on the SSI eligibility and benefits of SSI beneficiaries has been called a "marriage penalty" by the National Council on Disability. This report provides an overview of the potential effect of a marriage to another SSI recipient or an ineligible person on an individual's eligibility for and level of SSI benefits. Examples of cases in which a marriage can reduce a person's SSI benefits are provided. This report will be updated to reflect any legislative changes.
Since the terrorist attacks of September 11, 2001, Congress has appropriated more than a trillion dollars for military operations in Afghanistan, Iraq, and elsewhere around the world. The House and Senate are now considering an additional request for $33 billion in supplemental funding for the remainder of FY2010, and the Administration has also requested $159 billion to cover costs of overseas operations in FY2011. In the face of these substantial and growing sums, a recurring question has been how the mounting costs of the nation's current wars compare to the costs of earlier conflicts. The following table provides estimates of costs of major wars from the American Revolution through conflicts in Korea, Vietnam, and the Persian Gulf in 1990-1991. It also provides updated estimates of costs of current operations. Estimates are in current year dollars that reflect values at the time of each conflict and in constant dollars that reflect today's prices. The table also shows estimates of war costs as a share of the economy. Comparisons of costs of wars over a 230-year period, however, are inherently problematic. One problem is how to separate costs of military operations from costs of forces in peacetime. In recent years, the DOD has tried to identify the additional "incremental" expenses of engaging in military operations, over and above the costs of maintaining standing military forces. Before the Vietnam conflict, however, the Army and the Navy, and later the DOD, did not view war costs in such terms. Figures are problematic, as well, because of difficulties in comparing prices from one vastly different era to another. Inflation is one issue—a dollar in the past would buy more than a dollar today. Perhaps a more significant problem is that wars appear more expensive over time as the sophistication and cost of technology advances, both for military and for civilian activities. Adjusted for inflation, the War of 1812 cost about $1.6 billion in today's prices, which appears, by contemporary standards, to be a relatively small amount. But using commonly available estimates of gross domestic product, the overall U.S. economy 192 years ago was less than 1/1,400 th as large as it is now. So at the peak of the conflict in 1813, the war consumed more than 2% of the nation's measurable economic output, the equivalent of more than $300 billion today. The data in the attached table, therefore, should be treated, not as truly comparable figures on a continuum, but as snapshots of vastly different periods of U.S. history. For the Vietnam War and the 1990-1991 Persian Gulf War, the figures reported here are DOD estimates of the "incremental" costs of military operations (i.e., the costs of war-related activities over and above the normal, day-to-day costs of recruiting, paying, training, and equipping standing military forces). Estimates of the costs of post-9/11 operations in Afghanistan, Iraq, and elsewhere through FY2009 are by [author name scrubbed] of CRS, based on (1) amounts appropriated by Congress in budget accounts designated to cover war-related expenses and (2) allocations of funds in reports on obligations of appropriated amounts by the DOD. Data for FY2010 are DOD estimates of costs defined quite similarly. These figures appear to reflect a broader definition of war-related expenses than earlier DOD estimates of incremental costs of the Vietnam and Persian Gulf conflicts. In years prior to the Vietnam War, neither the Army and Navy, nor the DOD, nor any other agency or organization attempted to calculate incremental costs of war-related operations over and above the costs of peace-time activities. In the absence of official accounts of war expenditures, CRS estimated the costs of most earlier wars—except for the American Revolution, the Confederate side of the Civil War, and the Korean conflict—by comparing war-time expenditures of the Army and the Navy with average outlays for the three years prior to each war. The premise is that the cost of a war reflects, in each case, a temporary buildup of forces from the pre-war level. During the Korean War, however, the United States engaged in a large buildup of forces not just for the war, but for deployments elsewhere in the world as well. For the Korean conflict, therefore, CRS compared outlays of the DOD during the war with a trend line from average expenditures of the three years before the war to average expenditures of the three years after the war. Estimated costs of most conflicts, from the War of 1812 through the Korean War, are based on official reports on the budgets of the Army, Navy, and, for Korea, the Air Force. No official budget figures are available, however, for the Revolution or for the confederate states during the Civil War. The estimated cost of the American Revolution is from a financial history of the United States published in 1895 and cited in a Legislative Reference Service memo prepared in 1956. The estimated Civil War cost of the confederacy is from the Statistical Abstract of the United States 1994 edition. Data on Army and Navy outlays prior to 1940 are from the Department of Commerce, Historical Statistics of the United States from Colonial Times to 1970, Part 2, 1975. GDP estimates prior to 1940 are from Louis D. Johnston and Samuel H. Williamson, "The Annual Real and Nominal GDP for these United States, 1790 - Present." Economic History Services, October 2005, at http://www.measuringworth.org/usgdp/ . Outlays and GDP figures from FY1940 on are from the Office of Management and Budget. For each conflict, CRS converted cost estimates in current year prices into constant FY2011 dollars using readily available inflation indices. For years since 1948, CRS used an index of inflation in defense outlays from the DOD. For years from 1940-1947, CRS used an index of inflation in defense outlays from the Office of Management and Budget. For years prior to 1940, CRS used an index based on the Consumer Price Index (CPI) that the U.S. Department of Labor, Bureau of Labor Statistics (BLS) maintains and updates quarterly. That index extends back to 1913. For earlier years, CRS used an extension of the CPI by academic researchers that is maintained at Oregon State University. That index also uses the official BLS CPI from 1913 forward and periodically updates both earlier and later figures to reflect new, official CPI estimates. Inflation adjustments extending over a period of more than 200 years are problematic in many ways. The estimates used here are from reliable academic sources, but other experts might use alternative indices of prices or might weight values differently and come up with quite different results. In addition, over long periods, the relative costs of goods within the economy change dramatically. By today's standards, even simple manufactured goods were expensive in the 1770s compared, say, to the price of land. Moreover, it is difficult to know what it really means to compare costs of the American Revolution to costs of military operations in Iraq when, 230 years ago, the most sophisticated weaponry was a 36-gun frigate that is hardly comparable to a modern $3.5 billion destroyer. As a result, yesterday's wars appear inexpensive compared to today's conflicts if only because the complexity, value, and cost of modern technology are so much greater. Finally, a very technical and relatively minor point—the inflation indices used here are more specialized for more recent periods. Figures since 1940 are adjusted using factors specific to defense expenditures, but no such index is available for earlier years. At least in recent years, cost trends in defense have differed considerably from cost trends in the civilian economy. Contemporary inflation indices capture such differences, while older ones do not.	This CRS report provides estimates of the costs of major U.S. wars from the American Revolution through current conflicts in Iraq, Afghanistan, and elsewhere. It presents figures both in "current year dollars," that is, in prices in effect at the time of each war, and in inflation-adjusted "constant dollars" updated to the most recently available estimates of FY2011 prices. All estimates are of the costs of military operations only and do not include costs of veterans benefits, interest paid for borrowing money to finance wars, or assistance to allies. The report also provides estimates of the cost of each war as a share of Gross Domestic Product (GDP) during the peak year of each conflict and of overall defense spending as a share of GDP at the peak. Comparisons of war costs over a 230-year period, however, are inherently problematic. One problem is how to separate costs of military operations from costs of forces in peacetime. In recent years, the Department of Defense (DOD) has tried to identify the additional "incremental" expenses of engaging in military operations, over and above the costs of maintaining standing military forces. Figures used in this report for the costs of the Vietnam War and of the 1990-1991 Persian Gulf War are official DOD estimates of the incremental costs of each conflict. Costs of post-9/11 military operations in Afghanistan, Iraq, and elsewhere are estimates of amounts appropriated to cover war-related expenses. These amounts appear to reflect a broader definition of war-related expenditures than earlier DOD estimates of incremental Vietnam or Persian Gulf War costs. Before the Vietnam conflict, the Army and Navy, and later the DOD, did not identify incremental expenses of military operations. For the War of 1812 through World War II, CRS estimated the costs of conflicts by calculating the increase in expenditures of the Army and Navy compared to the average of the three years before each war. The premise is that increases reflect the cost of a temporary buildup to fight each war. Costs of the Revolutionary War and of the Confederate side in the Civil War are from other published sources. Costs of the Korean War were calculated by comparing DOD expenditures during the war with a trend line extending from the average of three years before the war to the average of three years after the war. Figures are problematic, as well, because of difficulties in comparing prices from one vastly different era to another. Inflation is one issue—a dollar in the past would buy more than a dollar today. Perhaps a more significant problem is that wars appear vastly more expensive over time as the sophistication and cost of technology advances, both for military and for civilian purposes. The estimates presented in this report, therefore, should be treated, not as truly comparable figures on a continuum, but as snapshots of vastly different periods of U.S. history.
In October 1998, the EPA Administrator announced plans to create an office with responsibility for information management, policy, and technology. This announcement came after many previous efforts by EPA to improve information management and after a long history of concerns that we, the EPA Inspector General, and others have expressed about the agency’s information management activities. Such concerns involve the accuracy and completeness of EPA’s environmental data, the fragmentation of the data across many incompatible databases, and the need for improved measures of program outcomes and environmental quality. The EPA Administrator described the new office as being responsible for improving the quality of information used within EPA and provided to the public and for developing and implementing the goals, standards, and accountability systems needed to bring about these improvements. To this end, the information office would (1) ensure that the quality of data collected and used by EPA is known and appropriate for its intended uses, (2) reduce the burden of the states and regulated industries to collect and report data, (3) fill significant data gaps, and (4) provide the public with integrated information and statistics on issues related to the environment and public health. The office would also have the authority to implement standards and policies for information resources management and be responsible for purchasing and operating information technology and systems. Under a general framework for the new office that has been approved by the EPA Administrator, EPA officials have been working for the past several months to develop recommendations for organizing existing EPA personnel and resources into the central information office. Nonetheless, EPA has not yet developed an information plan that identifies the office’s goals, objectives, and outcomes. Although agency officials acknowledge the importance of developing such a plan, they have not established any milestones for doing so. While EPA has made progress in determining the organizational structure of the office, final decisions have not been made and EPA has not yet identified the employees and the resources that will be needed. Setting up the organizational structure prior to developing an information plan runs the risk that the organization will not contain the resources or structure needed to accomplish its goals. Although EPA has articulated both a vision as well as key goals for its new information office, it has not yet developed an information plan to show how the agency intends to achieve its vision and goals. Given the many important and complex issues on information management, policy, and technology that face the new office, it will be extremely important for EPA to establish a clear set of priorities and resources needed to accomplish them. Such information is also essential for EPA to develop realistic budgetary estimates for the office. EPA has indicated that it intends to develop an information plan for the agency that will provide a better mechanism to effectively and efficiently plan its information and technology investments on a multiyear basis. This plan will be coordinated with EPA ‘s agencywide strategic plan, prepared under the Government Performance and Results Act. EPA intends for the plan to reflect the results of its initiative to improve coordination among the agency’s major activities relating to information on environment and program outcomes. It has not yet, however, developed any milestones or target dates for initiating or completing either the plan or the coordination initiative. In early December 1998, the EPA Administrator approved a broad framework for the new information office and set a goal of completing the reorganization during the summer of 1999. Under the framework approved by the EPA Administrator, the new office will have three organizational units responsible for (1) information policy and collection, (2) information technology and services, and (3) information analysis and access, respectively. In addition, three smaller units will provide support in areas such as data quality and strategic planning. A transition team of EPA staff has been tasked with developing recommendations for the new office’s mission and priorities as well as its detailed organizational and reporting structure. In developing these recommendations, the transition team has consulted with the states, regulated industries, and other stakeholders to exchange views regarding the vision, goals, priorities, and initial projects for the office. One of the transition team’s key responsibilities is to make recommendations concerning which EPA units should move into the information office and in which of the three major organizational units they should go. To date, the transition team has not finalized its recommendations on these issues or on how the new office will operate and the staff it will need. Even though EPA has not yet determined which staff will be moved to the central information office, the transition team’s director told us that it is expected that the office will have about 350 employees. She said that the staffing needs of the office will be met by moving existing employees in EPA units affected by the reorganization. The director said that, once the transition team recommends which EPA units will become part of the central office, the agency will determine which staff will be assigned to the office. She added that staffing decisions will be completed by July 1999 and the office will begin functioning sometime in August 1999. The funding needs of the new office were not specified in EPA’s fiscal year 2000 budget request to the Congress because the agency did not have sufficient information on them when the request was submitted in February 1999. The director of the transition team told us that in June 1999 the agency will identify the anticipated resources that will transfer to the new office from various parts of EPA. The agency plans to prepare the fiscal year 2000 operating plan for the office in October 1999, when EPA has a better idea of the resources needed to accomplish the responsibilities that the office will be tasked with during its first year of operation. The transition team’s director told us that decisions on budget allocations are particularly difficult to make at the present time due to the sensitive nature of notifying managers of EPA’s various components that they may lose funds and staff to the new office. Furthermore, EPA will soon need to prepare its budget for fiscal year 2001. According to EPA officials, the Office of the Chief Financial Officer will coordinate a planning strategy this spring that will lead to the fiscal year 2001 annual performance plan and proposed budget, which will be submitted to the Office of Management and Budget by September 1999. The idea of a centralized information office within EPA has been met with enthusiasm in many corners—not only by state regulators, but also by representatives of regulated industries, environmental advocacy groups, and others. Although the establishment of this office is seen as an important step in improving how EPA collects, manages, and disseminates information, the office will face many challenges, some of which have thwarted previous efforts by EPA to improve its information management activities. On the basis of our prior and ongoing work, we believe that the agency must address these challenges for the reorganization to significantly improve EPA’s information management activities. Among the most important of these challenges are (1) obtaining sufficient resources and expertise to address the complex information management issues facing the agency; (2) overcoming problems associated with EPA’s decentralized organizational structure, such as the lack of agencywide information dissemination policies; (3) balancing the demand for more data with calls from the states and regulated industries to reduce reporting burdens; and (4) working effectively with EPA’s counterparts in state government. The new organizational structure will offer EPA an opportunity to better coordinate and prioritize its information initiatives. The EPA Administrator and the senior-level officials charged with creating the new office have expressed their intentions to make fundamental improvements in how the agency uses information to carry out its mission to protect human health and the environment. They likewise recognize that the reorganization will raise a variety of complex information policy and technology issues. To address the significant challenges facing EPA, the new office will need significant resources and expertise. EPA anticipates that the new office will substantially improve the agency’s information management activities, rather than merely centralize existing efforts to address information management issues. Senior EPA officials responsible for creating the new office anticipate that the information office will need “purse strings control” over the agency’s resources for information management expenditures in order to implement its policies, data standards, procedures, and other decisions agencywide. For example, one official told us that the new office should be given veto authority over the development or modernization of data systems throughout EPA. To date, the focus of efforts to create the office has been on what the agency sees as the more pressing task of determining which organizational components and staff members should be transferred into the new office. While such decisions are clearly important, EPA also needs to determine whether its current information management resources, including staff expertise, are sufficient to enable the new office to achieve its goals. EPA will need to provide the new office with sufficient authority to overcome organizational obstacles to adopt agencywide information policies and procedures. As we reported last September, EPA has not yet developed policies and procedures to govern key aspects of its projects to disseminate information, nor has it developed standards to assess the data’s accuracy and mechanisms to determine and correct errors. Because EPA does not have agencywide polices regarding the dissemination of information, program offices have been making their own, sometimes conflicting decisions about the types of information to be released and the extent of explanations needed about how data should be interpreted. Likewise, although the agency has a quality assurance program, there is not yet a common understanding across the agency of what data quality means and how EPA and its state partners can most effectively ensure that the data used for decision-making and/or disseminated to the public is of high quality. To address such issues, EPA plans to create a Quality Board of senior managers within the new office in the summer of 1999. Although EPA acknowledges its need for agencywide policies governing information collection, management, and dissemination, it continues to operate in a decentralized fashion that heightens the difficulty of developing and implementing agencywide procedures. EPA’s offices have been given the responsibility and authority to develop and manage their own data systems for the nearly 30 years since the agency’s creation. Given this history, overcoming the potential resistance to centralized policies may be a serious challenge to the new information office. EPA and its state partners in implementing environmental programs have collected a wealth of environmental data under various statutory and regulatory authorities. However, important gaps in the data exist. For example, EPA has limited data that are based on (1) the monitoring of environmental conditions and (2) the exposures of humans to toxic pollutants. Furthermore, the human health and ecological effects of many pollutants are not well understood. EPA also needs comprehensive information on environmental conditions and their changes over time to identify problem areas that are emerging or that need additional regulatory action or other attention. In contrast to the need for more and better data is a call from states and regulated industries to reduce data management and reporting burdens. EPA has recently initiated some efforts in this regard. For example, an EPA/state information management workgroup looking into this issue has proposed an approach to assess environmental information and data reporting requirements based on the value of the information compared to the cost of collecting, managing, and reporting it. EPA has announced that in the coming months, its regional offices and the states will be exploring possibilities for reducing paperwork requirements for EPA’s programs, testing specific initiatives in consultation with EPA’s program offices, and establishing a clearinghouse of successful initiatives and pilot projects. However, overall reductions in reporting burdens have proved difficult to achieve. For example, in March 1996, we reported that while EPA was pursuing a paperwork reduction of 20 million hours, its overall paperwork burden was actually increasing because of changes in programs and other factors. The states and regulated industries have indicated that they will look to EPA’s new office to reduce the burden of reporting requirements. Although both EPA and the states have recognized the value in fostering a strong partnership concerning information management, they also recognize that this will be a challenging task both in terms of policy and technical issues. For example, the states vary significantly in terms of the data they need to manage their environmental programs, and such differences have complicated the efforts of EPA and the states to develop common standards to facilitate data sharing. The task is even more challenging given that EPA’s various information systems do not use common data standards. For example, an individual facility is not identified by the same code in different systems. Given that EPA depends on state regulatory agencies to collect much of the data it needs and to help ensure the quality of that data, EPA recognizes the need to work in a close partnership with the states on a wide variety of information management activities, including the creation of its new information office. Some partnerships have already been created. For example, EPA and the states are reviewing reporting burdens to identify areas in which the burden can be reduced or eliminated. Under another EPA initiative, the agency is working with states to create data standards so that environmental information from various EPA and state databases can be more readily shared. Representatives of state environmental agencies and the Environmental Council of the States have expressed their ideas and concerns about the role of EPA’s new information office and have frequently reminded EPA that they expect to share with EPA the responsibility for setting that office’s goals, priorities, and strategies. According to a Council official, the states have had more input to the development of the new EPA office than they typically have had in other major policy issues and the states view this change as an improvement in their relationship with EPA. Collecting and managing the data that EPA requires to manage its programs have been a major long-term challenge for the agency. The EPA Administrator’s recent decision to create a central information office to make fundamental agencywide improvements in data management activities is a step in the right direction. However, creating such an organization from disparate parts of the agency is a complex process and substantially improving and integrating EPA’s information systems will be difficult and likely require several years. To fully achieve EPA’s goals will require high priority within the agency, including the long-term appropriate resources and commitment of senior management. The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. U.S. General Accounting Office P.O. Box 37050 Washington, DC 20013 Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders may also be placed by calling (202) 512-6000 or by using fax number (202) 512-6061, or TDD (202) 512-2537. Each day, GAO issues a list of newly available reports and testimony. To receive facsimile copies of the daily list or any list from the past 30 days, please call (202) 512-6000 using a touchtone phone. A recorded menu will provide information on how to obtain these lists.	Pursuant to a congressional request, GAO discussed the Environmental Protection Agency's (EPA) information management initiatives, focusing on the: (1) status of EPA's efforts to create a central office responsible for information management, policy, and technology issues; and (2) major challenges that the new office needs to address to achieve success in collecting, using, and disseminating environmental information. GAO noted that: (1) EPA estimates that its central information office will be operational by the end of August 1999 and will have a staff of about 350 employees; (2) the office will address a broad range of information policy and technology issues, such as improving the accuracy of EPA's data, protecting the security of information that EPA disseminates over the Internet, developing better measures to assess environmental conditions, and reducing information collection and reporting burdens; (3) EPA recognizes the importance of developing an information plan showing the goals of the new office and the means by which they will be achieved but has not yet established milestones or target dates for completing such a plan; (4) although EPA has made progress in determining the organizational structure for the new office, it has not yet finalized decisions on the office's authorities, responsibilities, and budgetary needs; (5) EPA has not performed an analysis to determine the types and the skills of employees that will be needed to carry out the office's functions; (6) EPA officials told GAO that decisions on the office's authorities, responsibilities, budget, and staff will be made before the office is established in August 1999; (7) on the basis of GAO's prior and ongoing reviews of EPA's information management problems, GAO believes that the success of the new office depends on EPA addressing several key challenges as it develops an information plan, budget, and organizational structure for that office; and (8) most importantly, EPA needs to: (a) provide the office with the resources and the expertise necessary to solve the complex information management, policy, and technology problems facing EPA; (b) empower the office to overcome organizational challenges to adopting agencywide information policies and procedures; (c) balance EPA's need for data on health, the environment, and program outcomes with the call from the states and regulated industries to reduce their reporting burdens; and (d) work closely with its state partners to design and implement improved information management systems.
Factors, such as shortcomings in BIA’s management and additional factors generally outside of BIA’s management responsibilities—such as a complex regulatory framework, tribes’ limited capital and infrastructure, and varied tribal capacity—have hindered Indian energy development. Specifically, according to some of the literature we reviewed and several stakeholders we interviewed, BIA’s management has three key shortcomings. First, BIA does not have the data it needs to verify ownership of some oil and gas resources, easily identify resources available for lease, or easily identify where leases are in effect, inconsistent with Interior’s Secretarial Order 3215, which calls for the agency to maintain a system of records that identifies the location and value of Indian resources and allows for resource owners to obtain information regarding their assets in a timely manner. The ability to account for Indian resources would assist BIA in fulfilling its federal trust responsibility, and determining ownership is a necessary step for BIA to approve leases and other energy-related documents. However, in some cases, BIA cannot verify ownership because federal cadastral surveys—the means by which land is defined, divided, traced, and recorded—cannot be found or are outdated. It is additionally a concern that BIA does not know the magnitude of its cadastral survey needs or what resources would be needed to address them. We recommended in our June 2015 report that the Secretary of the Interior direct the Director of the BIA to take steps to work with BLM to identify cadastral survey needs. In its written comments on our report, Interior did not concur with our recommendation. However, in an August 2015 letter to GAO after the report was issued, Interior stated that it agrees this is an urgent need and reported it has taken steps to enter into an agreement with BLM to identify survey-related products and services needed to identify and address realty and boundary issues. In addition, the agency stated in its letter that it will finalize a data collection methodology to assess cadastral survey needs by October 2016. In addition, BIA does not have an inventory of Indian resources in a format that is readily available, such as a geographic information system (GIS). Interior guidance identifies that efficient management of oil and gas resources relies, in part, on GIS mapping technology because it allows managers to easily identify resources available for lease and where leases are in effect. According to a BIA official, without a GIS component, identifying transactions such as leases and ROW agreements for Indian land and resources requires a search of paper records stored in multiple locations, which can take significant time and staff resources. For example, in response to a request from a tribal member with ownership interests in a parcel of land, BIA responded that locating the information on existing leases and ROW agreements would require that the tribal member pay $1,422 to cover approximately 48 hours of staff research time and associated costs. In addition, officials from a few Indian tribes told us that they cannot pursue development opportunities because BIA cannot provide the tribe with data on the location of their oil and gas resources—as called for in Interior’s Secretarial Order 3215. Further, in 2012, a report from the Board of Governors of the Federal Reserve System found that an inventory of Indian resources could provide a road map for expanding development opportunities. Without data to verify ownership and use of resources in a timely manner, the agency cannot ensure that Indian resources are properly accounted for or that Indian tribes and their members are able to take full advantage of development opportunities. To improve BIA’s efforts to verify ownership in a timely manner and identify resources available for development, we recommended in our June 2015 report that Interior direct BIA to take steps to complete GIS mapping capabilities. In its written comments in response to our report, Interior stated that the agency is developing and implementing applications that will supplement the data it has and provide GIS mapping capabilities, although it noted that one of these applications, the National Indian Oil and Gas Evaluation Management System (NIOGEMS), is not available nationally. Interior stated in its August 2015 letter to GAO that a national dataset composed of all Indian land tracts and boundaries with visualization functionality is expected to be completed within 4 years, depending on budget and resource availability. Second, BIA’s review and approval is required throughout the development process, including the approval of leases, ROW agreements, and appraisals, but BIA does not have a documented process or the data needed to track its review and response times. In 2014, an interagency steering committee that included Interior identified best practices to modernize federal decision-making processes through improved efficiency and transparency. The committee determined that federal agencies reviewing permits and other applications should collect consistent data, including the date the application was received, the date the application was considered complete by the agency, the issuance date, and the start and end dates for any “pauses” in the review process. The committee concluded that these dates could provide agencies with greater transparency into the process, assist agency efforts to identify process trends and drivers that influence the review process, and inform agency discussions on ways to improve the process. However, BIA does not collect the data the interagency steering committee identified as needed to ensure transparency and, therefore, it cannot provide reasonable assurance that its process is efficient. A few stakeholders we interviewed and some literature we reviewed stated that BIA’s review and approval process can be lengthy. For example, stakeholders provided examples of lease and ROW applications that were under review for multiple years. Specifically, in 2014, the Acting Chairman for the Southern Ute Indian Tribe testified before this committee that BIA’s review of some of its energy-related documents took as long as 8 years. In the meantime, the tribe estimates it lost more than $95 million in revenues it could have earned from tribal permitting fees, oil and gas severance taxes, and royalties. According to a few stakeholders and some literature we reviewed, the lengthy review process can increase development costs and project times and, in some cases, result in missed development opportunities and lost revenue. Without a documented process or the data needed to track its review and response times, BIA cannot ensure transparency into the process and that documents are moving forward in a timely manner, or determine the effectiveness of efforts to improve the process. To address this shortcoming, we recommended in our June 2015 report that Interior direct BIA to develop a documented process to track its review and response times and enhance data collection efforts to ensure that the agency has the data needed to track its review and response times. In its written comments, Interior did not fully concur with this recommendation. Specifically, Interior stated that it will use NIOGEMS to assist in tracking review and response times. However, this application does not track all realty transactions or processes and has not been deployed nationally. Therefore, while NIOGEMS may provide some assistance to the agency, it alone cannot ensure that BIA’s process to review energy-related documents is transparent or that documents are moving forward in a timely manner. In its August 2015 letter to GAO, Interior stated it will try to implement a tracking and monitoring effort by the end of fiscal year 2017 for oil and gas leases on Indian lands. The agency did not indicate if it intends to improve the transparency of its review and approval process for other energy-related documents, such as ROW agreements and surface leases—some of which were under review for multiple years. Third, some BIA regional and agency offices do not have staff with the skills needed to effectively evaluate energy-related documents or adequate staff resources, according to a few stakeholders we interviewed and some of the literature we reviewed. For instance, Interior officials told us that the number of BIA personnel trained in oil and gas development is not sufficient to meet the demands of increased development. In another example, a BIA official from an agency office told us that leases and other permits cannot be reviewed in a timely manner because the office does not have enough staff to conduct the reviews. We are conducting ongoing work for this committee that will include information on key skills and staff resources at BIA involved with the development of energy resources on Indian lands. According to stakeholders we interviewed and literature we reviewed, additional factors, generally outside of BIA’s management responsibilities, have also hindered Indian energy development, including a complex regulatory framework consisting of multiple jurisdictions that can involve significantly more steps than the development of private and state resources, increase development costs, and add to the timeline for development; fractionated, or highly divided, land and mineral ownership interests; tribes’ limited access to initial capital to start projects and limited opportunities to take advantage of federal tax credits; dual taxation of resources by states and tribes that does not occur on private, state, or federally owned resources; perceived or real concerns about the political stability and capacity of some tribal governments; and limited access to infrastructure, such as transmission lines needed to carry power generated from renewable sources to market and transportation linkages to transport oil and gas resources to processing facilities. A variety of factors have deterred tribes from pursuing TERAs. Uncertainty associated with Interior’s TERA regulations is one factor. For example, TERA regulations authorize tribes to assume responsibility for energy development activities that are not “inherently federal functions,” but Interior officials told us that the agency has not determined what activities would be considered inherently federal because doing so could have far-reaching implications throughout the federal government. According to officials from one tribe we interviewed, the tribe has repeatedly asked Interior for additional guidance on the activities that would be considered inherently federal functions under the regulations. According to the tribal officials, without additional guidance on inherently federal functions, tribes considering a TERA do not know what activities the tribe would be assuming or what efforts may be necessary to build the capacity needed to assume those activities. We recommended in our June 2015 report that Interior provide additional energy development-specific guidance on provisions of TERA regulations that tribes have identified as unclear. Additional guidance could include examples of activities that are not inherently federal in the energy development context, which could assist tribes in identifying capacity building efforts that may be needed. Interior agreed with the recommendation and stated it is considering further guidance but did not provide additional details regarding issuance of the guidance. In addition, the costs associated with assuming activities currently conducted by federal agencies and a complex application process were identified by literature we reviewed and stakeholders we interviewed as other factors that have deterred any tribe from entering into a TERA with Interior. Specifically, through a TERA, a tribe assuming control for energy development activities that are currently conducted by federal agencies does not receive federal funding for taking over the activities from the federal government. Several tribal officials we interviewed told us that the tribe does not have the resources to assume additional responsibility and liability from the federal government without some associated support from the federal government. In conclusion, our review identified a number of areas in which BIA could improve its management of Indian energy resources and enhance opportunities for greater tribal control and decision-making authority over the development of their energy resources. Interior stated it intends to take some steps to implement our recommendations, but we believe Interior needs to take additional actions to address data limitations and track its review process. We look forward to continuing to work with this committee in overseeing BIA and other federal programs to ensure that they are operating in the most effective and efficient manner. Chairman Barrasso, Ranking Member Tester, and Members of the Committee, this concludes my prepared statement. I would be pleased to answer any questions that you may have at this time. If you or your staff members have any questions about this testimony, please contact me at (202) 512-3841 or ruscof@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this testimony. Christine Kehr (Assistant Director), Alison O’Neill, Jay Spaan, and Barbara Timmerman made key contributions to this testimony. This is a work of the U.S. government and is not subject to copyright protection in the United States. The published product may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately.	Indian energy resources hold significant potential for development, but according to a 2014 Interior document, these resources are underdeveloped relative to surrounding non-Indian resources. Development of Indian energy resources is a complex process that may involve federal, tribal, and state agencies. Interior's BIA has primary authority for managing Indian energy development and generally holds final decision-making authority for leases and other permits required for development. The Energy Policy Act of 2005 provided the opportunity for interested tribes to pursue TERAs—agreements between a tribe and Interior that allow the tribe to enter into energy leases and agreements without review and approval by Interior. However, no tribe has entered into a TERA. This testimony highlights the key findings of GAO's June 2015 report (GAO-15-502). It focuses on factors that have (1) hindered Indian energy development and (2) deterred tribes from pursuing TERAs. For the June 2015 report, GAO analyzed federal data; reviewed federal, academic, and other literature; and interviewed tribal, federal and industry stakeholders. In its June 2015 report, GAO found that Bureau of Indian Affairs' (BIA) management shortcomings and other factors—such as a complex regulatory framework, limited capital and infrastructure, and varied tribal capacity—have hindered Indian energy development. Specifically, BIA's management has the following shortcomings: BIA does not have the data it needs to verify ownership of some Indian oil and gas resources, easily identify resources available for lease, or identify where leases are in effect, as called for in Secretarial Order 3215. GAO recommended that Interior direct BIA to identify land survey needs and enhance mapping capabilities. In response, Interior stated it will develop a data collection tool to identify the extent of the survey needs in fiscal year 2016, and enhance mapping capabilities by developing a national dataset composed of all Indian land tracts and boundaries in the next 4 years. BIA's review and approval is required throughout the development process, but BIA does not have a documented process or the data needed to track its review and response times, as called for in implementation guidance for Executive Order 13604. According to a tribal official, BIA's review of some of its energy-related documents, which can include leases, right-of-way agreements, and appraisals, took as long as 8 years. In the meantime, the tribe estimates it lost more than $95 million in revenues it could have earned from tribal permitting fees, oil and gas severance taxes, and royalties. GAO recommended that Interior direct BIA to develop a documented process to track its review and response times. In response, Interior stated it will try to implement a tracking and monitoring mechanism by the end of fiscal year 2017 for oil and gas leases. However, it did not indicate whether it intends to track and monitor the review of other energy-related documents that must be approved before development can occur. Without comprehensive tracking and monitoring of its review process, it cannot ensure that documents are moving forward in a timely manner, and lengthy review times may continue to contribute to lost revenue and missed development opportunities. Some BIA regional and agency offices do not have staff with the skills needed to effectively evaluate energy-related documents or adequate staff resources. GAO is conducting ongoing work on this issue. GAO also found in its June 2015 report that a variety of factors have deterred tribes from seeking tribal energy resource agreements (TERA). These factors include uncertainty about some TERA regulations, costs associated with assuming activities historically conducted by federal agencies, and a complex application process. For instance, one tribe asked Interior for additional guidance on the activities that would be considered inherently federal functions—a provision included in Interior's regulations implementing TERA. Interior did not provide the clarification requested. Therefore, the tribe had no way of knowing what efforts may be necessary to build the capacity needed to assume those activities. GAO recommended that Interior provide clarifying guidance. In response, Interior officials stated that the agency is considering further guidance, but it did not provide a timeframe for issuance. In its June 2015 report, GAO recommended that Interior take steps to address data limitations, track its review process, and provide clarifying guidance. In an August 2015 letter to GAO after the issuance of the report, Interior generally agreed with the recommendations and identified some steps it intends to take to implement them.
Following the death of a worker beneficiary or other insured worker, Social Security makes a lump-sum death benefit payment of $255 to the eligible surviving spouse or, if there is no spouse, to eligible surviving dependent children. In 2016, such payments were made for about 782,300 deaths, for a total of about $204 million in benefit payments. The death payment was capped at $255 in 1954, and since 1982, almost all payments have equaled $255, so the real (inflation-adjusted) value of the benefit now declines each year. Monthly survivors benefits were not included in the original Social Security Act of 1935 (P.L. 74-271), but the program did include a lump-sum benefit that would be paid if a worker died before the retirement age of 65. That provision provided some benefits to families who otherwise would have paid Social Security taxes but received no benefits. The benefit equaled 3.5% of the worker's covered earnings—those earnings that were subject to the Social Security payroll tax. Those payments were made from 1937 through 1939. When monthly survivors benefits were added to the program in 1939 via the Social Security Amendments of 1939 (P.L. 76-379), a limited version of the lump-sum death benefit was retained. It was paid only when no survivors benefits were paid on the basis of the deceased worker's earnings record. When made, the payment equaled six times the primary insurance amount (PIA). The payment was made to a family member or to an individual who helped pay for the funeral. In 1950, eligibility for the payment was expanded to include cases where survivors benefits were also paid "so that survivors benefits need not be diverted for payment of burial expenses of an insured worker." The benefit was therefore paid in nearly every death of a Social Security-insured worker. The 1950 legislation (P.L. 81-734) also sharply increased the PIA (and therefore increased regular monthly benefit levels). To maintain the lump-sum benefit steady at the level before 1950, the formula was changed to equal three times the PIA, rather than six times. The Social Security Amendments of 1954 (P.L. 83-761) kept the formula of three times the PIA but capped the benefit at $255, which was approximately three times the maximum PIA payable under Social Security in 1952. By 1974, the minimum PIA had reached $85, or one-third of the $255 cap, so the lowest possible lump-sum benefit also reached $255. As a result, the lump-sum death payment has been unindexed since 1973, and nearly all lump-sum benefits have been $255 since (because some payments are based on PIAs from earlier years, some payments were slightly lower). In 1974, the average payment per worker was $254.64, and payments have averaged $255 since 1982. Currently, the payment may be lower if the deceased was covered by a foreign system with which the United States has an agreement to integrate benefits, known as a totalization agreement. Finally, in 1981, the Omnibus Budget Reconciliation Act of 1981 ( P.L. 97-35 ) restricted eligibility for the lump-sum payment to limited categories of survivors. That change reduced the number of payments made by nearly half, from 1.57 million in 1980 to about 808,000 in 1982. If a surviving spouse is living with the worker at the time of death, the benefit is paid to the spouse. If the worker and the spouse were living apart, the spouse could still receive the lump-sum death payment if the spouse was already receiving benefits based on the worker's record or became eligible for survivors benefits upon the worker's death. If there is no eligible spouse, the benefit is paid to a child (or children) who is receiving or is eligible to receive monthly benefits on the worker's record. If there are multiple eligible children, the benefit is split evenly among them. When there are no eligible survivors, no death benefit is paid. In 2016, the Social Security Administration (SSA) paid about $204 million in lump-sum benefits for 782,300 deaths. Because the $255 payment was split between multiple recipients in some cases, the agency made a total of 821,575 payments. The number of payments is projected to remain at about the same level during the next few years; thus total spending will also remain at approximately the same dollar level. For most deaths, no lump-sum death benefit is paid. In 2016, fewer than 42% of the deaths among insured workers resulted lump-sum death benefit payments. One possible reason was that, for many deaths, there was no eligible family member to receive the death payment. The real value of the lump-sum death benefit has declined significantly since it was introduced. For example, in 1954, the average lump-sum nominal death benefit per worker was $208, which would have been equivalent to about $1,800 in 2016 dollars. In recent decades, inflation has caused the real value of the $255 payment to continue to decline, as shown in Figure 1 . Total spending on the lump-sum death benefit as a share of total Social Security benefit payments has generally been declining over the years since 1937 (see Figure 1 ). In the 1960s, the lump-sum death benefit accounted for more than 1% of Social Security benefit outlays, but that share declined to about 0.38% in 1980. In 1981, the Omnibus Budget Reconciliation Act ( P.L. 97-35 ), which restricted eligibility for the lump-sum payment to limited categories of survivors, decreased the total lump-sum death benefit by nearly half from $394 million in 1980 to $203 million in 1982. Consequently, the share of lump-sum death benefit to total Social Security benefits further dropped to 0.15% in 1982. Since then, the share has declined steadily and reached about 0.03% in 2016. Under current law, the share will likely continue to decrease as payments on the lump-sum death benefit remain relatively stable and payments on other benefits continue to increase steadily. The share of the total lump-sum death benefit to total Social Security benefits (indexed to wages) have declined faster than the real value of the lump-sum death benefit (indexed to prices), mainly because Social Security benefits are linked to national wage levels, which are increasing faster than price levels. SSA estimated in 2016 that the annual administrative costs of the lump-sum death benefit were about $10 million. SSA also projected that more lump-sum death benefits would be paid out as the number of baby boomer deaths increases; SSA projects that in 2024, almost 900,000 lump-sum death benefits will be paid out, costing $217 million. Over the years, various proposals would have changed or eliminated the death benefit. In 1979, President Carter's budget described it as "largely an anachronism" and proposed replacing it with a similar benefit that would be paid only if the deceased or the surviving spouse were eligible for Supplemental Security Income, a program that provides cash benefits to aged, blind, or disabled persons with limited income and assets. Under that proposal, only about 30,000 recipients would have received a benefit each year. The 1979 Advisory Council on Social Security recommended that the benefit be increased to three times the PIA, but no more than $500. A significant minority of the council favored the Carter proposal of targeting the benefit to those with the greatest need, but with a higher benefit of perhaps $625. The council found that the benefit "provides valuable assistance at a time of special financial need. The monthly survivors benefits under Social Security are designed to meet regular recurring costs, whereas the lump-sum death payment is designed to meet the expenses of a final illness and funeral." In 2014, the median cost of an adult funeral with viewing and burial was around $7,200, and the lump-sum death benefit was fixed at $255 per worker. Although the benefit was once linked to burial expenses and is sometimes still referred to as a "burial benefit," it no longer has any legal connection with funeral expenses. President Bush's FY2007 budget proposed eliminating the benefit, arguing that it "no longer provides meaningful monetary benefit for survivors" and that it results in high administrative costs. The $15 million estimated annual administrative cost at the time was about 7% of lump-sum death benefit outlays. Administrative costs for the entire Social Security program are less than 1% of benefit outlays. Some proposals would have increased the benefit. For example, in the 110 th Congress, H.R. 341 proposed expanding eligibility for the benefit to insured workers upon the death of their uninsured spouses. In the 111 th Congress, the Social Security Death Benefit Increase Act of 2010 ( H.R. 6388 ) would have increased the benefit from $255 to $332, and the BASIC Act ( H.R. 5001 ) would have increased it to 47% of the worker's PIA. In the 114 th Congress, the Social Security Lump-Sum Death Benefit Improvement and Modernization Act of 2015 ( H.R. 1109 ) proposed an increase of the benefit to $1,000. In addition, in the 115 th Congress, H.R. 5302 and S. 1739 (BASIC Act) proposed to increase the lump-sum death benefit to 50% of the worker's PIA. None of these proposals have been enacted into law.	When a Social Security-insured worker dies, the surviving spouse who was living with the deceased is entitled to a one-time lump-sum death benefit of $255. If they were living apart, the surviving spouse can still receive the lump sum under certain conditions. If there is no such spouse, the payment can be made to a child who meets certain requirements. In the majority of deaths, however, no payment is made. The lump-sum death benefit was once an important part of Social Security benefits to survivors. Between 1937 and 1939, the lump-sum was the only benefit available to survivors of insured workers who died before 65 years old, and before 1952, the $255 amount was greater than three times the maximum monthly benefits payable under Social Security. However, because the lump-sum death benefit has been capped at $255 for the past eight decades, inflation has eroded its value. At the same time, the real value of other Social Security benefits has increased. The total payment on lump-sum death benefits in 2016 was about $204 million, less than 0.03% of total Social Security (Old-Age, Survivors, and Disability Insurance) benefit payments. The erosion of the value of the lump-sum death benefit has brought about various proposals to change it, including some recent congressional proposals that would have increased the benefit amount. Several presidential budget proposals have also proposed changes, ranging from eliminating the provision to changing eligibility rules. None of these proposals were enacted into law.
How long may a city hold property, seized for forfeiture purposes, before it must justify either the validity of its seizure or its right to confiscation? And should the delay be judged by speedy trial or general due process standards? The speedy trial standards focus on which party is most responsible for the delay and the consequences of the delay for the accused. The due process standards ask whether a delay-resulting procedure involves a risk of erroneous governmental deprivation of an individual's interests; the extent to which additional safeguards will mitigate or eliminate that risk; and the costs to the government (including administrative burdens) should those safeguards be required. The United States Supreme Court agreed to consider the issue in Alvarez v. Smith (Doc. No. 08-351), cert. granted, 129 S.Ct. 1401 (2009), but the case became moot before the Court could address the issue. Had the property owners prevailed, adjustments in federal law might have been required. The case was complicated by several factors. First, the Supreme Court has already said in United States v. $8,850 (Vasquez) , that the due process consequences of delays between seizure and a forfeiture hearing are to be judged using the speedy trial standards of Barker v. Wingo . Second, the lower federal appellate court instead found applicable the general due process standards of Mathews v. Eldridge , but remanded to the district court to determine the appropriate remedy. This failure to identify the necessary remedial safeguards could have made Supreme Court review more difficult, since one of the Mathews factors is the extent of governmental inconvenience posed by the safeguards proposed in the name of due process. Third, the appropriate remedy may be elusive since the same level of proof is required to justify both the seizure and final confiscation—probable cause. But the fatal complication was mootness. Before the Court could rule on the merits, the city returned the cars it had seized from the claimants and settled their other claims. Forfeiture is the confiscation of property as a consequence of the property's relation to some criminal activity. Forfeiture comes in one of two forms, depending upon the procedures used to accomplish confiscation. Criminal forfeiture involves the confiscation of the property following conviction of the property owner. Civil forfeiture involves the confiscation of property following a civil proceeding in which the property itself is often treated as the defendant. In most cases, due process permits civil forfeiture notwithstanding the innocence of property owner. Neither magistrate nor court need necessarily approve the seizure of personal property for forfeiture purposes. The law enforcement agencies which seize forfeitable property often share in the distribution of proceeds following confiscation. Under the Illinois law at issue, cars and other conveyances used to facilitate or conceal controlled substance offenses are subject to forfeiture. The same is true of any money or thing of value furnished, used, or acquired in the course of a controlled substance offense. Property may be seized under process or a warrant. Alternatively, it may be seized without a warrant or process, if there is probable cause to believe that the property is subject to forfeiture and seizure would be otherwise reasonable. The state may confiscate the property administratively (without a court hearing), if the forfeiture is uncontested and the property is valued at under $20,000 or is a car or other conveyance. To secure his day in court, a person with an interest in the property must file a claim along with a bond equal to 10% of the value of the property (90% of which is returned if the property is found not to be forfeitable). The statutory deadlines are such that several months will ordinarily pass before judicial proceedings begin. In the judicial proceedings, the state has the burden of establishing probable cause to believe that the property is subject to confiscation, after which the burden shifts to the claimant to show by a preponderance of the evidence that his interest in the property is not forfeitable. Sixty-five percent of the proceeds of any uncontested or judicially approved confiscation are distributed to the law enforcement agency which conducted the investigation, ordinarily the agency which seizes the property. The property owners in Smith filed a class action suit under 42 U.S.C. 1963 against city and state officials asserting that the Illinois procedure constituted a violation of due process because of its failure to provide a prompt post-seizure probable cause hearing. The district court dismissed on the basis of circuit precedent. A decade and a half earlier, the same Illinois procedure had been challenged for want of a prompt post-seizure hearing in Jones v. Takaki . Then, the circuit court felt bound by the Supreme Court's $8,850 (Vasquez) decision, which held that the Barker v. Wingo speedy trial factors govern the outcome, that is, "the length of delay, the reason for the delay, the defendant's assertion of this right, and prejudice to the defendant." On the basis of a second Supreme Court decision, United States v. Von Neumann , Jones rejected the argument that in light of the anticipated delay due process required a preliminary judicial probable cause determination. Von Neumann held that due process did not require prompt consideration of a petition to release forfeitable property as a matter of administrative grace. In Smith , the Seventh Circuit Court of Appeals reversed the district court's decision to dismiss . It did so because a Second Circuit opinion helped persuade it that the foundation of its decision in Jones had been eroded. After $8,850 (Vasquez) , Von Neumann , and Jones , the Supreme Court had decided United States v. James Daniel Good Real Property . There, the Court observed that, absent exceptional circumstances, due process required pre-seizure notice and an opportunity to be heard in forfeiture cases. More to the point, it declared that the question of whether the circumstances of a particular case warranted an exception must be answered using the factors identified in Mathews v. Eldridge : "the risk of erroneous deprivation of [a private] interest through the procedures used, as well as the probable value of additional safeguards; and the Government's interest, including the administrative burden that additional procedural requirements would impose." Some years later, the Second Circuit faced a due process challenge to the New York City civil forfeiture procedure used in the driving-under-the-influence cases, Krimstock v. Kelly . The court, in an opinion by then Judge Sotomayor, concluded that vehicle owners had a due process right to "ask what justification the City has for retention of their vehicles during the pendency of [forfeiture] proceedings, and to put that question to the City at an early point after seizure in order to minimize any arbitrary or mistaken encroachment upon plaintiff's use and possession of their property." Moreover, the court asserted, the Mathews analysis governs the due process inquiry into the prompt review of the government's seizure and retention of private property. The Seventh Circuit in Smith endorsed the views of the Second Circuit expressed in Krimstock . It remanded with instructions to identify a procedure (1) under which a property owner might contest the validity of the seizure and the continued governmental retention of his or her property, and (2) under which vehicles and property other than cash might be released under bond or other security order pending a forfeiture proceeding on the merits. Among the other circuits to consider the question, the Sixth, Ninth, and Eleventh Circuits appear to continue to apply Barker v. Wingo factors to the question of whether various pre-trial forfeiture delays offend due process. The Supreme Court granted certiorari to consider In determining whether the Due Process Clause requires a State or local government to provide a post-seizure probable cause hearing prior to a statutory judicial forfeiture proceeding and, if so, when such a hearing must take place, should district courts apply the "speedy trial" test employed in United States v. $8,850 , 461 U.S. 555 (1983) and Barker v. Wingo , 407 U.S. 514 (1972) or the three-part due process analysis set forth in Mathews v. Eldridge , 424 U.S. 319 (1976). Illinois officials raised five points in their argument before the Court. First, the Court has historically held that "a separate proceeding, prior to the forfeiture hearing itself, was unnecessary to determine the reasonableness of the initial seizure." Second, $8,850 (Vasquez) and Von Neuman n provide appropriate standards for purposes due process analysis. Third, given the attendant additional burdens on the government, the Constitution does not require an interim, adversarial hearing. Fourth, the Illinois statute is modeled after the federal statute, neither of which offends due process, in light of the right under either law to seek return of seized property. Fifth, the Illinois system survives due process scrutiny under either the Barker or Mathews standard. The property owners answered, first, that due process assured them of a hearing within a meaningful time, not after the six months that the Illinois procedure contemplated. Second, Mathews supplies the appropriate standard by which to assess the due process implications of the delay. Third, application of Mathews here is not inconsistent with the Court's decisions in $8,850 (Vasquez) or Von Neumann . Fourth, the specific Illinois forfeiture procedures preempt the more general Illinois return of property statute. Finally, an informal hearing or the opportunity to post a bond is constitutionally required and is feasible. The United States filed an amicus brief in support of state and city officials which argued that the final "forfeiture hearing provides adequate pre-forfeiture process unless it is delayed beyond the time that the government's valid administrative interests reasonably require." The Court learned upon inquiry that the groups' claims had been resolved. It felt it had no choice but to dispose of the case without reaching the merits. The Supreme Court's jurisdiction is predicated on the existence of a "case or controversy." Since the group had been denied certification to act as representatives in a class action, they stood before the Court only on the basis of their individual claims. The Court unanimously agreed that when those claims were settled, disputes over the appropriate procedure to resolve them became moot and the presence of a case or controversy disappeared. The members of the Court were only slightly more divided over whether the Seventh Circuit opinion should be vacated or allowed to stand. The prevailing statute affords the Court considerable latitude. The majority favored application of a general rule under which the judgment in a moot case is vacated. Justice Stevens alone would have opted for a rule under which a judgment pending on the Court's docket would stand when mooted by an intervening settlement by the parties.	Alvarez v. Smith became moot while pending before the United States Supreme Court. At the time, the Court had agreed to decide whether a six-month delay between a state's seizure of property and its forfeiture hearing requires additional procedural safeguards. Traditionally, forfeiture hearing delays have been judged by the speedy trial standards of Barker v. Wingo. The Court had been asked to decide whether they should instead be judged by the general due process standards of Mathews v. Eldridge. Alvarez v. Smith arose in Chicago where a group of property owners filed a civil rights class action against city and state officials over city practices under the Illinois drug forfeiture statute. Under the statute, cars and trucks regardless of their value and money or other property valued at under $20,000 may be seized without a warrant by officers with probable cause to believe it is subject to confiscation. The forfeiture hearing may be held as late as 187 days after the seizure. The Smith group argued their property could not be held for that long without intervening safeguards against hardship and erroneous seizure. The district court dismissed their suit using the higher threshold Barker speedy trial standards to assess the delay and its impact. The Seventh Circuit Court of Appeals reversed. It felt use of the Mathews standards better suited and returned the case to the lower court for determination of an appropriate remedy. At that point, the Supreme Court granted certiorari. Before the Court could rule, however, the city returned the cars it had seized from members of the group and settled the group's claims relating the other property seized. In the absence of a case or controversy, the Court vacated the Seventh Circuit opinion and returned the matter to the lower court. The Illinois statute tracks the federal statutes in several respects. Thus, had the Seventh Circuit view prevailed, changes in federal law might have been required. Related reports include CRS Report 97-139, Crime and Forfeiture, by [author name scrubbed], which is also available in abbreviated form as CRS Report RS22005, Crime and Forfeiture: In Short, by [author name scrubbed].
On July 23, 2004, the Architectural and Transportation Barriers Compliance Board (Access Board) published ADA and Architectural Barriers Act Accessibility Guidelines (ADAAG). These guidelines in part provided detailed guidance on play and recreation areas, lodging at a place of education, and communications requirements. These guidelines have no legal effect and serve as guidance only until adopted by the Department of Justice in final regulations. In its June 17, 2008, Notice of Proposed Rule Makings (NPRM), DOJ proposed the adoption of Parts I and III of the Access Board guidelines and also proposed several other amendments. The regulations were sent to the Office of Management and Budget (OMB) but were not released for publication in the Federal Register. On January 20, 2009, the White House issued a memorandum to the heads of executive departments and agencies stating that, with certain exceptions, no proposed or final regulation should be sent to the Office of the Federal Register unless and until it has been reviewed or approved by a department or agency head appointed or designated by President Obama. In response to this memorandum, on January 21, 2009, the Department of Justice notified the OMB of its withdrawal of the draft final rules from the OMB review process. There is considerable uncertainty regarding what form, if any, new proposed regulations would take. The Department of Justice has indicated that "[i]ncoming officials will have the full range of rule-making options available to them under the Administrative Procedure Act." However, it is instructive to briefly examine the provisions of the regulations which were proposed in June 2008. The adoption of the Access Board guidelines would serve to increase accessibility; however, the Department of Justice expressed concern about the potential effect of these changes on existing structures. To address these concerns, DOJ added "safe harbor" provisions for both titles II and III. For title II, which applies to states and localities, individuals with disabilities must be provided access to programs "when viewed in their entirety." Unlike title III, a public entity under title II is not required to make each of its existing facilities accessible. However, in order to provide certainty to public entities and individuals with disabilities, DOJ's proposed regulations add a "safe harbor" provision stating that "public entities that have brought elements into compliance in existing facilities are not, simply because of the Department's adoption of the 2004 ADAAG as its new standards, required to modify those elements in order to reflect incremental changes in the proposed standards." Title III of the ADA, which covers places of public accommodation, requires each covered facility to be accessible but only to the extent that accessibility changes are "readily achievable." The proposed regulations for title III, like those for title II, also contain a "safe harbor" provision. This provision would presume that a qualified small business has done what is readily achievable in a given year "if, in the prior tax year, it spent a fixed percentage of its revenues on readily achievable barrier removal." DOJ stated that it was concerned that "the incremental changes in the 2004 ADAAG may place unnecessary cost burdens on businesses that have already removed barriers by complying with the 1991 Standards in their existing facilities." DOJ solicited comments on whether public accommodations that operate existing facilities with play or recreation areas should be exempted from compliance with certain requirements. The proposed regulations for both titles II and III contain virtually identical language relating to service animals. They define service animal as meaning "any dog or other common domestic animal individually trained to do work or perform tasks for the benefit of a qualified individual with a disability.... " Some examples provided were guiding individuals who are blind, pulling a wheelchair, assisting an individual during a seizure, and retrieving medicine or the telephone. The term "service animals" would not include farm animals or wild animals, such as non human primates (including those born in captivity), reptiles, ferrets, amphibians, and rodents. Assistance for individuals with psychiatric, cognitive and mental disabilities was specifically included; however, "[a]nimals whose sole function is to provide emotional support, comfort, therapy, companionship, therapeutic benefits, or to promote emotional well-being are not service animals." Generally, a public entity (title II) or a public accommodation (title III) must modify its policies, practices, or procedures to permit the use of a service animal by an individual with a disability. If the entity can show that the use of the service animal would fundamentally alter the entity's service, program, or activity, the service animal need not be allowed. The proposed regulations delineate exceptions where a service animal may be removed. These include where the animal is out of control or not housebroken, and where the animal poses a direct threat to the health or safety of others that cannot be eliminated by reasonable accommodation. If the animal is excluded because of these reasons, the entity must give the individual with a disability the opportunity to participate without the animal. The work the service animal performs must be directly related to the individual's disability and the animal must be individually trained, housebroken, under the control of its handler, and have a harness, leash, or other tether. A public entity or public accommodation is not responsible for supervising the animal and, although the entity may not ask about the individual's disability or require documentation, the entity may ask what work the animal has been trained to perform. Finally, an individual with a service animal must be allowed access to areas open to the public, program participants, and invitees, and there shall be no special fees or surcharges although there may be charges for damages caused by the service animal. In its discussion of the proposed regulations, the Justice Department observed that it received a large number of complaints about service animals and that there was a trend toward the use of wild or exotic animals. The Justice Department also noted a distinction between "comfort animals" that have the sole function of providing emotional support and which would not be covered, and "psychiatric service animals" which may be trained to provide a number of services, such as reminding an individual to take his or her medicine, and which would be covered. However, DOJ specifically recognized "that there are situations not governed exclusively by the title II and title III regulations, particularly in the context of residential settings and employment, where there may be compelling reasons to permit the use of animals whose presence provides emotional support to a person with a disability." Since 1990 when the ADA was enacted, the choices of mobility aids for individuals with disabilities have increased dramatically. Individuals with disabilities have used not only the traditional wheelchair but also large wheelchairs with rubber tracks, riding lawn mowers, golf carts, gasoline-powered two-wheeled scooters, and Segways. DOJ indicated that it had received inquiries concerning whether these devices need to be accommodated, the impact of these devices on facilities, and personal safety issues. The proposed regulations under both titles II and III include sections on mobility devices. They require a public entity under title II or a public accommodation under title III to permit individuals with mobility impairments to use wheelchairs, scooters, walkers, crutches, canes, braces, or other similar devices designed for use by individuals with mobility impairments in areas open to pedestrian use. A public entity or public accommodation under title III must make reasonable modifications in its policies and procedures to permit the use of other power-driven mobility devices by individuals with disabilities unless it can be demonstrated that such use is not reasonable or would result in a fundamental alteration of the nature of the services or programs. In addition, a public entity or a public accommodation under title III shall establish policies permitting the use of other power-driven mobility devices when reasonable. The determination of reasonableness is to be based on the dimensions, weight, and operating speed of the mobility device in relation to a wheelchair; the potential risk of harm to others by the operation of the mobility device; the risk of harm to the environment or natural or cultural resources; and the ability of the public accommodation to stow the mobility device when not in use if requested by a user. A public entity or public accommodation under title III may ask a person using a power-driven mobility device if the mobility device is required because of the person's disability, but may not ask questions about the person's disability. DOJ solicited comments on whether there are certain types of power-driven mobility devices that should be accommodated; whether motorized devices that use fuel, such as all terrain vehicles, should be covered; and whether power-driven mobility devices should be categorized by intended function, indoor or outdoor use, or some other factor. The proposed title II and title III regulations contain a number of other provisions. The title II proposed regulations include provisions on program accessibility, including play areas, swimming pools, and dormitories and residence halls at educational facilities, assembly areas, and medical care facilities. Accessibility requirements for detention and correctional institutions are also included in the proposed title II regulations as are provisions on ticketing for accessible seating, and communications. The title III proposed regulations, like the title II proposed regulations, contain provisions on ticketing for accessible seating, provisions relating to play areas and swimming pools, and provisions on communications. Accessibility requirements for place of lodging, including housing at a place of education, are included. A new provision for examinations is added that specifies that if any request for documentation is required, the requirement is to be "reasonable and limited to the need for the modification or aid requested." DOJ noted that this change was made to eliminate inappropriate or burdensome requests by testing entities.	The Americans with Disabilities Act (ADA) has often been described as the most sweeping nondiscrimination legislation since the Civil Rights Act of 1964. As stated in the act, its purpose is "to provide a clear and comprehensive national mandate for the elimination of discrimination against individuals with disabilities." (42 U.S.C. §12101(b)(1)) On June 17, 2008, the Department of Justice (DOJ) issued notices of proposed rulemaking (NPRM) for ADA title II (prohibiting discrimination against individuals with disabilities by state and local governments), and ADA title III (prohibiting discrimination against individuals with disabilities by places of public accommodations). These proposed regulations are detailed and complex. They would adopt accessibility standards consistent with the minimum guidelines and requirements issued by the Architectural and Transportation Barriers Compliance Board. More specifically, the regulations include more detailed standards for service animals and power-driven mobility devices, and provide for a "safe harbor" in certain circumstances. Comments on the regulations were due by August 18, 2008. The regulations did not advance beyond the Office of Management and Budget during the Bush Administration. On January 20, 2009, the White House issued a memorandum to the heads of executive departments and agencies stating that, with certain exceptions, no proposed or final regulation should be sent to the Office of the Federal Register unless and until it has been reviewed or approved by a department or agency head appointed or designated by President Obama. In response to this memorandum, on January 21, 2009, the Department of Justice notified the OMB of its withdrawal of the draft final rules from the OMB review process. There is considerable uncertainty regarding what form, if any, new proposed regulations would take. However, it is instructive to briefly examine the provisions of the regulations which were proposed in June 2008.
As noted earlier, before a rule can become effective, it must be filed in accordance with the statute. GAO conducted a review to determine whether all final rules covered by CRA and published in the Register were filed with the Congress and GAO. We performed this review to both verify the accuracy of our database and to ascertain the degree of agency compliance with CRA. We were concerned that regulated entities may have been led to believe that rules published in the Federal Register were effective when, in fact, they were not unless filed in accordance with CRA. Our review covered the 10-month period from October 1, 1996, to July 31, 1997. In November 1997, we submitted to OIRA a computer listing of the rules that we found published in the Federal Register but not filed with our Office. This initial list included 498 rules from 50 agencies. OIRA distributed this list to the affected agencies and departments and instructed them to contact GAO if they had any questions regarding the list. Beginning in mid-February, because 321 rules remained unfiled, we followed up with each agency that still had rules which were unaccounted for. Our Office has experienced varying degrees of responses from the agencies. Several agencies, notably the Environmental Protection Agency and the Department of Transportation, took immediate and extensive corrective action to submit rules that they had failed to submit and to establish fail-safe procedures for future rule promulgation. Other agencies responded by submitting some or all of the rules that they had failed to previously file. Several agencies are still working with us to assure 100 percent compliance with CRA. Some told us they were unaware of CRA or of the CRA filing requirement. Overall, our review disclosed that: 279 rules should have been filed with us; 264 of these have subsequently 182 were found not to be covered by CRA as rules of particular applicability or agency management and thus were not required to be filed; 37 rules had been submitted timely and our database was corrected; and 15 rules from six agencies have thus far not been filed. We do not know if OIRA ever followed up with the agencies to ensure compliance with the filing requirement; we do know that OIRA never contacted GAO to determine if all rules were submitted as required. As a result of GAO’s compliance audit, however, 264 rules now have been filed with GAO and the Congress and are thus now effective under CRA. In our view, OIRA should have played a more proactive role in ensuring that agencies were both aware of the CRA filing requirements and were complying with them. One area of consistent difficulty in implementing CRA has been the failure of some agencies to delay the effective date of major rules for 60 days as required by section 801(a)(3)(A) of the act. Eight major rules have not permitted the required 60-day delay, including the Immigration and Naturalization Service’s major rule regarding the expedited removal of aliens. Also, this appears to be a continuing problem since one of the eight rules was issued in January 1998. We find agencies are not budgeting enough time into their regulatory timetable to allow for the delay and are misinterpreting the “good cause” exception to the 60-day delay period found in section 808(2). Section 808(2) states that, notwithstanding section 801, “any rule which an agency for good cause finds (and incorporates the finding and a brief statement of reasons therefor in the rule issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest” shall take effect at such time as the federal agency promulgating the rule determines. This language mirrors the exception in the Administrative Procedure Act (APA) to the requirement for notice and comment in rulemaking. 5 U.S.C. § 553(b)(3)(B). In our opinion, the “good cause” exception is only available if a notice of proposed rulemaking was not published and public comments were not received. Many agencies, following a notice of proposed rulemaking, have stated in the preamble to the final major rule that “good cause” existed for not providing the 60-day delay. Examples of reasons cited for the “good cause” exception include (1) that Congress was not in session and thus could not act on the rule, (2) that a delay would result in a loss of savings that the rule would produce, or (3) that there was a statutorily mandated effective date. The former administrator of OIRA disagreed with our interpretation of the “good cause” exception. She believed that our interpretation of the “good cause” exception would result in less public participation in rulemaking because agencies would forgo issuing a notice of proposed rulemaking and receipt of public comments to be able to invoke the CRA “good cause” exception. OIRA contends that the proper interpretation of “good cause” should be the standard employed for invoking section 553(d)(3) of the APA, “as otherwise provided by the agency for good cause found and published with the rule,” for avoiding the 30-day delay in a rule’s effective date required under the APA. Since CRA’s section 808(2) mirrors the language in section 553(b)(B), not section 553(d)(3), it is clear that the drafters intended the “good cause” exception to be invoked only when there has not been a notice of proposed rulemaking and comments received. One early question about implementation of CRA was whether Executive agencies or OIRA would attempt to avoid designating rules as major and thereby avoid GAO’s review and the 60-day delay in the effective date. While we are unaware of any rule that OIRA misclassified to avoid the major rule designation, the failure of agencies to identify some issuances as “rules” at all has meant that some major rules have not been identified. CRA contains a broad definition of “rule,” including more than the usual “notice and comment” rulemakings under the Administrative Procedure Act which are published in the Federal Register. “Rule” means the whole or part of an agency statement of general applicability and future effect designed to implement, interpret, or prescribe law or policy. “All too often, agencies have attempted to circumvent the notice and comment requirements of the Administrative Procedure Act by trying to give legal effect to general policy statements, guidelines, and agency policy and procedure manuals. Although agency interpretative rules, general statements of policy, guideline documents, and agency and procedure manuals may not be subject to the notice and comment provisions of section 553(c) of title 5, United States Code, these types of documents are covered under the congressional review provisions of the new chapter 8 of title 5.” On occasion, our Office has been asked whether certain agency action, issuance, or policy constitutes a “rule” under CRA such that it would not take effect unless submitted to our Office and the Congress in accordance with CRA. For example, in response to a request from the Chairman of the Subcommittee on Forests and Public Land Management, Senate Committee on Energy and Resources, we found that a memorandum issued by the Secretary of Agriculture in connection with the Emergency Salvage Timber Sale Program constituted a “rule” under CRA and should have been submitted to the Houses of Congress and GAO before it could become effective. Likewise, we found that the Tongass National Forest Land and Resource Management Plan issued by the United States Forest Service was a “rule” under CRA and should have been submitted for congressional review. OIRA stated that, if the plan was a rule, it would be a major rule. The Forest Service has in excess of 100 such plans promulgated or revised which are not treated as rules under CRA. Many of these may actually be major rules that should be subject to CRA filing and, if major rules, subject to the 60-day delay for congressional review. In testimony before the Senate Committee on Energy and Natural Resources and the House Committee on Resources regarding the Tongass Plan, the Administrator of OIRA stated that, as was the practice under the APA, each agency made its own determination of what constituted a rule under CRA and by implication, OIRA was not involved in these determinations. We believe that for CRA to achieve what the Congress intended, OIRA must assume a more active role in guiding or overseeing these types of agency decisions. Other than an initial memorandum following the enactment of CRA, we are unaware of any further OIRA guidance. Because each agency or commission issues many manuals, documents, and directives which could be considered “rules” and these items are not collected in a single document or repository such as the Federal Register, for informal rulemakings, it is difficult for our Office to ascertain if agencies are fully complying with the intent of CRA. Having another set of eyes reviewing agency actions, especially one which has desk officers who work on a daily basis with certain agencies, would be most helpful. We have attempted to work with Executive agencies to get more substantive information about the rules and to get such information supplied in a manner that would enable quick assimilation into our database. An expansion of our database could make it more useful not only to GAO for its use in supporting congressional oversight work, but directly to the Congress and to the public. Attached to this testimony is a copy of a questionnaire designed to obtain basic information about each rule covered by CRA. This questionnaire asks the agencies to report on such items as (1) whether the agency provided an opportunity for public participation, (2) whether the agency prepared a cost-benefit analysis or a risk assessment, (3) whether the rule was reviewed under Executive orders for federalism or takings implications, and (4) whether the rule was economically significant. Such a questionnaire would be prepared in a manner that facilitates incorporation into our database by electronic filing or by scanning. In developing and attempting to implement the use of the questionnaire, we consulted with Executive branch officials to insure that the requested information would not be unnecessarily burdensome. We circulated the questionnaire for comment to 20 agency officials with substantial involvement in the regulatory process, including officials from OIRA. The Administrator of OIRA submitted a response in her capacity as Chair of the Regulatory Working Group, consolidating comments from all the agencies represented in that group. It is the position of the group that the completion of this questionnaire for each of the 4,000 to 5,000 rules filed each year is too burdensome for the agencies concerned. The group points out that the majority of rules submitted each year are routine or administrative or are very narrowly focused regional, site-specific, or highly technical rules. We continue to believe that it would further the purpose of CRA for a database of all rules submitted to GAO to be available for review by Members of Congress and the public and to contain as much information as possible concerning the content and issuance of the rules. We believe that further talks with the Executive branch, led by OIRA, can be productive and that there may be alternative approaches, such as submitting one questionnaire for repetitive or routine rules. If a routine rule does not fit the information on the submitted questionnaire, a new questionnaire could be submitted for only that rule. For example, the Department of Transportation could submit one questionnaire covering the numerous air worthiness directives it issues yearly. If a certain action does not fit the overall questionnaire, a new one for only that rule would be submitted. We note that almost all agencies have devised their own forms for the submission of rules, some of which are as long or almost as extensive as the form we recommend. Additionally, some agencies prepare rather comprehensive narrative reports on nonmajor rules. We are unable to easily capture data contained in such narrative reports with the resources we have staffing this function now. The reports are systematically filed and the information contained in them essentially is lost. Our staff could, however, incorporate an electronic submission or scan a standardized report into our database and enable the data contained therein to be used in a meaningful manner. CRA gives the Congress an important tool to use in monitoring the regulatory process, and we believe that the effectiveness of that tool can be enhanced. Executive Order 12866 requires that OIRA, among other things, provide meaningful guidance and oversight so that each agency’s regulatory actions are consistent with applicable law. After almost 2 years’ experience in carrying out our responsibilities under the act, we can suggest four areas in which OIRA should exercise more leadership within the Executive branch regulatory community, consistent with the intent of the Executive Order, to enhance CRA’s effectiveness and its value to the Congress and the public. We believe that OIRA should: require standardized reporting in a GAO-prescribed format that can readily be incorporated into GAO’s database; establish a system to monitor compliance with the filing requirement on an ongoing basis; provide clarification on the “good cause” exception to the 60-day delay provision and oversee agency compliance during its Executive Order 12866 review; and provide clarifying guidance as to what is a rule that is subject to CRA and oversee the process of identifying such rules. Thank you, Mr. Chairman. This concludes my prepared remarks. I would be happy to answer any questions you may have. The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. U.S. General Accounting Office P.O. Box 37050 Washington, DC 20013 Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders may also be placed by calling (202) 512-6000 or by using fax number (202) 512-6061, or TDD (202) 512-2537. Each day, GAO issues a list of newly available reports and testimony. To receive facsimile copies of the daily list or any list from the past 30 days, please call (202) 512-6000 using a touchtone phone. A recorded menu will provide information on how to obtain these lists.	GAO discussed its experience in fulfilling its responsibilities under the Congressional Review Act (CRA). GAO noted that: (1) its primary role under the CRA is to provide Congress with a report on each major rule concerning GAO's assessment of the promulgating federal agency's compliance with the procedural steps required by various acts and Executive orders governing the regulatory process; (2) these include preparation of a cost-benefit analysis, when required, and compliance with the Regulatory Flexibility Act, the Unfunded Mandates Reform Act of 1995, the Administrative Procedure Act, the Paperwork Reduction Act, and Executive Order 12866; (3) GAO's report must be sent to the congressional committees of jurisdiction within 15 calendar days; (4) although the law is silent as to GAO's role relating to the nonmajor rules , GAO believes that basic information about the rules should be collected in a manner that can be of use to Congress and the public; (5) to do this, GAO has established an database that gathers basic information about the 15-20 rules GAO receives on the average each day; (6) GAO's database captures the title, agency, the Regulation Identification Number, the type of rule, the proposed effective date, the date published in the Federal Register, the congressional review trigger date, and any joint resolutions of disapproval that may be enacted; (7) GAO has recently made this database available, with limited research capabilities, on the Internet; (8) GAO conducted a review to determine whether all final rules covered by CRA and published in the Federal Register were filed with Congress and GAO; (9) as a result of GAO's compliance audit, 264 rules have been filed with GAO and Congress and are now effective under CRA; (10) one area of consistent difficulty in implementing CRA had been the failure of some agencies to delay the effective date of major rules for 60 days as required by the act; (11) one early question about implementation of CRA was whether executive agencies or the Office of Information and Regulatory Affairs (OIRA) would attempt to avoid designating rules as major and thereby avoid GAO's review and the 60-day delay in the effective date; and (12) while GAO is unaware of any rule that OIRA misclassified to avoid the major rule designation, the failure of agencies to identify some issuances as rules at all has meant that some major rules have not been identified.
Congressional authorization of federal assistance to state and local governments can be traced as far back as 1808, when the first federal grant program was adopted to provide funds to states to support the National Guard. Since that time, there has been significant growth in the number of federal assistance programs to state and local government. There are currently over 2,321 congressionally authorized federal assistance programs. The growing number, perceived fragmentation, and complexity of these programs create challenges for federal agencies and congressional stakeholders in standardizing various financial and administrative aspects of federal grant program management. Federal agencies administering grant programs face challenges in providing timely, accurate, and detailed information on federal grant awards. This can be attributed, in part, to the way grant funds are distributed from the federal to the local level. This may also be attributed to the limitations of the databases used to track the distribution of federal grant funds. These limitations include questions regarding the validity of the data, and the limited ability to track the distribution of grant funds to the subgrant recipient level. Without complete and valid information about the distribution of federal grant funds, Congress may have a diminished capacity to engage in effective oversight of federal grants. Federal grant recipients are currently required to report grant project related information to federal agencies. This information is contained within a number of federal grant databases with limited public accessibility. The information reported by grant recipients varies depending on the federal program and the individual grant award. Federal grants are available for a variety of purposes. Federally funded grant projects may include purchasing fire and police equipment, constructing housing for low-income populations, providing disaster recovery assistance and other social services, and funding educational activities. Organizations generally coordinate the application and administration of federal grants, and individuals are beneficiaries of the grant projects and services provided by organizations. Organizations seeking federal grant funds are required to register in federal grant systems prior to applying for federal grants. Once grant funds are awarded, recipients are required to report information to federal agencies regarding the use of the federal grant funds. The information provided to the federal government by federal grant recipients is contained in several different federal databases. The general public has access to selected information contained in these databases. This report provides an introduction to reporting requirements placed on federal grant recipients, including requirements that must be met to seek federal grant funds. It also describes the types of information collected on grant recipients, the databases containing information about grant awards, and the availability of that information to the public. The reporting requirements discussed in this report are financial reporting requirements for grant recipients and do not include performance related reporting. To comply with guidance issued by the Office of Management and Budget (OMB), federal agencies that administer federal grant programs must collect and report financial grant data to federal grant databases. Federal agencies collect the grant data by requiring federal grant recipients to submit financial and performance data to the federal agency administering the grant program. These reporting requirements are set forth in the authorizing statutes and regulations for each individual grant program. Some reporting requirements, such as post-award audit requirements, are set forth in legislation that applies to almost every federal grant program. A federal grant seeker must provide information about their organization when they obtain a DUNS number and register with SAM. Grant seekers must provide the following information to obtain a DUNS number: legal name of the company, organization, or entity; entity headquarters name and address; secondary, or tradestyle, name of the company or the "Doing Business As" (DBA) name; physical address of the entity including city, street, and zip code; mailing address; telephone number; point of contact name and title; and, number of employees at the physical location. To register with SAM, grant seekers must provide the following information: DUNS number; business information, including the taxpayer identification number (TIN); Commercial and Government Entity (CAGE) code; business type and organization structure; financial information including electronic funds transfer (EFT) information for federal government payment purposes; answers to executive compensation questions; and, Point of Contact (POC) information including name, title, physical address, and email address. Federal agencies use a number of systems to track federal grant recipient data. Before a federal grant is awarded, officials seeking federal grants for their organization are required by law to obtain a unique identifier assigned and maintained by Dun and Bradstreet (D&B). This unique identifier is known as a Data Universal Numbering System (DUNS) number. Federal agencies use the DUNS number to identify federal grant applicants. Once a grant seeker obtains a DUNS number, the organization must register in the System for Award Management (SAM) in order to be eligible to apply for federal grants. Federal agencies use SAM to collect additional information on potential federal grant recipients. Each federal grant award is assigned a number that is then associated with the grant recipient. Federal agencies use the award number to track grant data in agency grant management and financial management systems. When Congress authorizes a federal grant program, the federal agency administering the grant program reports grant program information to the Catalog of Federal Domestic Assistance (CFDA). After a federal grant award is made, the federal agency that made the award collects information about the grant recipient and the grant project. The information provided in a federal grant application is inputted by the federal agency into the grant management system within the agency and a unique grant award number is created. A single entity who has received more than one award under the same grant program may have several grant award numbers. Additionally, a federal agency may have a separate grant management system for each grant program it administers. When the grant agreement is executed, the federal agency also creates a grant account in the agency's cash management system for each individual grant award, which may mean that a single entity that receives more than one grant award by an agency may have several different grant account numbers. Federal grant recipients are required to report financial information pursuant to the conditions contained in the grant agreement executed at the time of the grant award. This information includes financial information, such as expenditures, about the project or services funded by the federal grant award. The financial information is reported periodically to the federal agency administering the grant program. Financial data on the grant award are reported into several federal grant databases, including the following: federal agency cash management systems; Federal Assistance Award Data System PLUS (FAADS-PLUS); Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS); USAspending.gov; and, Federal Audit Clearinghouse (FAC). As detailed in Figure 1 , federal grant data are located in several databases at both the grant recipient and federal government level. A Data Universal Numbering System (DUNS) number is a unique nine-digit identifier for each government contractor and federal grant applicant. The federal government has contracted with D&B since 1978 to provide proprietary DUNS numbers for use in government-wide data systems, and since October 1, 2003, the OMB policy requires the use of a DUNS number on any application for federal grants or cooperative agreements. DUNS numbers are associated with contractor and grant recipient information and are required for each listed organization address. The System for Award Management (SAM) is the federal government's primary contractor and federal grant applicant database used by agencies to validate grantee information. Current and potential government contractors and grant applicants are required to register with SAM in order to be awarded federal government contracts or grants. SAM requires a one-time registration from each potential government vendor, and collects basic procurement and financial information from contractors and grant applicants. SAM consolidates government-wide acquisition and grant award support systems into one new system. The consolidation is planned for four phases. In 2012 the first phase of SAM was launched and phase one systems continue to be consolidated. The first phase of the consolidation included nine information databases: Central Contractor Registration (CCR), Federal Agency Registration (FedReg), Online Representations and Certifications Application (ORCA), and Excluded Parties List System (EPLS). Once completed, the consolidation will also include: Electronic Subcontracting Reporting System (eSRS); FFATA Sub-award Reporting System (FSRS); Catalog of Federal Domestic Assistance (CFDA); FedBizOpps.gov (FBO); Wage Determination Online (WDOL); Federal Procurement Data System-Next Generation (FPDS-NG); Past Performance Information Retrieval System (PPIRS); Contractor Performance Assessment Reporting Systems; and Federal Awardee Performance and Integrity Information System (FAPIIS). Some of the systems that will be consolidated by SAM include data on federal contractors and may not necessarily contain information on federal grant recipients. The Catalog of Federal Domestic Assistance (CFDA) is a publicly searchable reference source for federal grants and nonfinancial assistance programs. The CFDA lists and describes over 2,300 federal programs and includes program-specific information such as program objectives, eligibility requirements, application and award processes, program contact information, and related CFDA assistance programs. CFDA is continuously updated and enables information seekers to search assistance programs by keyword, subject, funding department or agency, and other criteria. Additionally, CFDA provides sources of information on developing and writing grant applications, guidance to review processes, and links to agency and department websites for more in-depth program information and eligibility explanations. The CFDA is maintained by the General Services Administration (GSA) pursuant to the Federal Program Information Act. However, OMB is responsible for the collection of assistance program information from federal agencies. OMB also issues guidance to federal agencies for establishing procedures to ensure accurate and timely data is contained within CFDA. Cash management in this context refers to the methods and procedures used by grant recipients and federal agencies to transfer grant funds. Financial management systems of federal agencies and grant recipients are payment and cash management systems used to track the flow of cash between the federal government and primary grant recipients and sub-grant recipients. As detailed in Figure 1 , each federal agency and each grant recipient may have separate cash management systems, resulting in limited interoperability between cash management systems. The Federal Funding Accountability and Transparency Act of 2006 (FFATA, P.L. 109-282 ) requires that federal contract, grant, loan, and other financial assistance awards of more than $25,000 be displayed on a searchable, publicly accessible website, USAspending.gov. USAspending.gov provides information on grant awards, including the amount of the award, name and location of the recipient, and the name and authorization of the federal program used to make the award. The Digital Accountability and Transparency Act of 2014 (DATA Act, P.L. 113-101 ) amended FFATA, transferring responsibility for USAspending.gov from OMB to the Department of Treasury, Bureau of the Fiscal Service. On March 31, 2015, USAspending.gov was re-launched with changes to the site's usability, presentation, and search functions. The Federal Assistance Awards Data System (FAADS) was established by the Consolidated Federal Funds Report Act of 1982 ( P.L. 97-326 ) and was maintained by the Bureau of the Census in the Department of Commerce. FAADS was a central collection source of Federal financial assistance awards transactions. FAADS-PLUS was introduced in 2007, a result of passage of the FFATA, and is an expanded version of FAADS. FFATA requires prime subgrant recipients receiving a grant award greater than $25,000 to report subaward financial information. The FFATA Subaward Reporting System (FSRS) is the reporting tool used by prime awardees to meet FFATA sub-award reporting requirements. The reported subaward FSRS information is then displayed on USAspending.gov under the prime award information. The Single Audit Act Amendments of 1996 ( P.L. 104-156 ) and OMB guidance stipulate that all grant recipients expending $750,000 or more in federal awards be required to submit an annual single audit detailing award expenditures. The Federal Audit Clearinghouse (FAC) serves as a public database of all audits conducted and submitted and is maintained by OMB. Within the FAC, audits detailing award and expense information are searchable by organization or institution, geographic location, or CFDA program number. As shown in Figure 1 , several databases contain federal grant information. However, grant data contained within cash management systems, grant management systems, FAADS-PLUS, and FSRS are not accessible or searchable by the general public. The federal government has created several data systems and websites to access the systems that are accessible and searchable by the public. These include the following: Catalog of Federal Domestic Assistance ( http://www.cfda.gov ); USAspending.gov ( http://www.usaspending.gov ); Dun and Bradstreet ( http://fedgov.dnb.com/webform ); System for Award Management ( http://www.sam.gov ); and Federal Audit Clearinghouse ( https://harvester.census.gov/fac/ ). Of the above reporting requirements for federal grant applicants, two databases allow opting out of providing publically searchable information: the Dun and Bradstreet (D&B) DUNS number database and SAM. To avoid having a public DUNS number, applicants must first obtain a DUNS number, and then discuss their individual privacy concerns with the D&B government support desk. D&B can withhold the DUNS number from their public database. However, the applicant's DUNS number remains visible to any institution with a DUNS Business Locator subscription, as well as within the required SAM grant application record, unless the opt-out process for SAM is also completed. Grant applicants can opt out of the requirement that information collected during the SAM registration be visible to the public, though the information may still be viewable by certain users: Entities that have opted out will be removed only from the SAM public search, but will still be visible to users with For Official Use Only data access and will be provided in accordance with Freedom of Information Act (FOIA) requests. Please note that your banking information is treated as sensitive data and will not be displayed to the public regardless of your selection.	Congress and federal agencies frequently undertake initiatives to conduct oversight of federal grant programs and expenditures. The ability to oversee is influenced by the existing reporting requirements placed on recipients of federal grant funds. Limitations in accessing information contained in federal databases used to collect grant data also influence the level of transparency into the use of federal grant funds. Congress has also debated the reporting burden placed on federal grant recipients and how to balance grant recipient capacity with the desire for transparency into the use of federal grant funds. This report provides an introduction to reporting requirements placed on federal grant recipients, including requirements that must be met to seek federal grant funds. It also describes the databases containing information about grant awards, the types of information collected on grant recipients, and the availability of that information to the public. Several grant reporting questions are answered, including the following: Why are federal agencies and grant recipients required to report grant data? What information is a federal grant recipient required to report and to whom? How does a federal agency track federal grant data? What is the Data Universal Numbering System (DUNS) number? What is the System for Award Management (SAM)? What is the Catalog of Federal Domestic Assistance (CFDA)? What are cash management systems? What is USAspending.gov? What is the Federal Assistance Award Data System PLUS (FAADS-PLUS)? What is the Federal Funding Accountability and Transparency Act Subaward Reporting System? What is the Federal Audit Clearinghouse (FAC)? What grant data are accessible by the public? Federal grant reporting requirements fall into two categories: financial reporting and program performance reporting. This report focuses on financial reporting requirements and does not address program performance reporting. This report will be updated should significant legislative activity regarding federal grant recipient reporting occur.
Pursuant to House Rule X, clause 6, the Committee on House Administration (CHA) reports an omnibus, biennial "primary expense resolution" to cover the expenses of each standing and select committee, except the Appropriations Committee. The resolution is based in part on committee requests for funds to cover their necessary expenses for the two years of a Congress. The budgetary requests include estimated salary needs for staff, costs of consulting services, printing costs, office equipment and supply costs, and travel costs for committee members and staff. Some costs, such as pension and insurance contributions for committee employees, are paid from other appropriated funds, and are excluded from committee budgets. Some committees discuss and approve their proposed budgets at committee organization meetings. Committee chairs normally introduce House resolutions to provide their committees with the requisite funds for the two years of the Congress. These individual resolutions are then referred to the Committee on House Administration, which may hold a public hearing on the committee's request. The chair and the ranking minority member from each committee typically testify at these hearings. The chair of CHA then typically introduces an omnibus funding resolution, which, after its referral to the CHA, typically serves as the legislative vehicle for a full committee markup. The measure is then considered by the House. Table 1 provides the requested and authorized levels of funding for committees for the 115 th Congress. Table 2 through Table 12 provide committee funding requests and primary expense resolution authorizations in nominal dollars for House committees in the 104 th -114 th Congresses. Table 13 through Table 23 provide the authorization levels, calculated in constant (January 2017) dollars, for the 104 th through 114 th Congresses. All tables calculate the absolute and percentage differences between the total requested and the total authorized funding levels.	Pursuant to House Rule X, clause 6, the Committee on House Administration reports an omnibus, biennial "primary expense resolution" to cover the expenses of each standing and select committee, except the Appropriations Committee. The resolution is based, in part, on committee requests for funds to cover their necessary expenses for the two years of a Congress. This report provides committee funding requests and authorizations as adopted pursuant to primary expense authorizations for House committees in the 104th through 115th Congresses. For further information on the committee funding process, see CRS Report R42778, House Committee Funding: Description of Process and Analysis of Disbursements, by [author name scrubbed].
Periods of high oil prices are usually associated with reduced economic growth, a deteriorating foreign trade balance, and rising prices. High gasoline prices, the most tangible result of high oil prices for consumers, reduce discretionary family income and influence decisions with respect to automobile choice and use. However, for companies involved in the oil industry, high oil prices generally result in expanding revenues and cash flow, and in some cases, record profit levels. While the oil industry is composed of hundreds of firms of various sizes doing business in different aspects of the oil supply chain, many characterize the industry through the performance of the five major integrated oil companies: ExxonMobil, Chevron, BP plc, Royal Dutch Shell plc, and ConocoPhillips. These companies are involved in all aspects of the oil supply chain from exploration and production through transportation, refining, and retail marketing, both in the United States and globally. They are also very large relative to the rest of the industry, and large even when compared to the economy as a whole; in 2011 their revenues were equivalent to over 10% of U.S. gross domestic product. This report examines the financial performance of the five major oil companies for the period 2007-2011. Both the sources and uses of revenue and profit are analyzed. The recent behavior of oil prices and company profits have led to changes in the structure of the market for oil in the United States which could have implications for gasoline prices and availability, and energy security. These issues are also analyzed in this report. The price of oil is determined in the world market. However, there is not one price of oil, but many. Crude oil is quality graded by its specific gravity and its sulfur content. Differences in quality of crude oil give rise to different prices for crude oil. Two types of crude oil, West Texas Intermediate (WTI) and Brent, play the role of reference crude oils. Their prices are standards against which other grades of crude oil prices are set. Although both the spot and futures prices of the reference crude oils are widely publicized, they do not necessarily represent the real prices of crude oil paid by refiners, or received by producers. The delivered price of crude oil also depends on its location. The Energy Information Administration (EIA) publishes an oil price data set called the Refiners Acquisition Cost of Crude Oil, which represents the actual cost to refiners of crude oil. Table 1 shows these data for the period 2007-2011. The data in Table 1 show the escalating price of oil from 2007 to 2008, reflecting the tight global market which was characterized by minimal excess capacity availability and rapidly growing demand in the emerging economies, especially China. The price of oil declined in the later months of 2008, and remained generally lower than 2008 levels through 2010, reflecting both consumers' response to the high prices of 2008 and the recession which began in December 2007. The high prices observed in 2011 are related to numerous actual and potential market disruptions on the supply side. The withdrawal of Libyan crude oil during the civil war in that country, and the Iranian threat to close the key transit point, the Strait of Hormuz, to oil trade are key examples. Table 1 also shows that domestic crude oil is generally purchased at a higher price than imported crude, but this is likely due to quality differences rather than strict nationality characteristics. The reversal of the domestic/foreign price relationship in 2011 is likely related to the effects of the withdrawal of Libyan crude oil from the market, as none of the crude from that country typically is exported to the United States, but was used mostly in Europe. The total revenues of the five major oil companies followed the pattern of oil price movements set out in Table 2 . Revenues increased by 24% from 2007 to 2008, as oil prices increased by 38%. From 2008 to 2009 revenues declined by 36% as oil prices fell by 36%. As the price of oil recovered by 28% from 2009 to 2010, the five firms' revenues increased by 26%. 2011 brought a further 35% increase in oil prices, driving up the revenues of the five firms by 25%. While total revenues for the five companies exhibited noticeable swings from 2007 to 2011, the business interests and activities of the companies with respect to production were stable. Tables 3 and 4 show the production of crude oil and natural gas for the five companies for the years 2007 to 2011. The incentive of higher and/or rising oil prices in 2007-2008 and 2010-2011 did not result in observably higher production by the five major oil companies. Similarly, the disincentive of lower and/or falling oil prices did not result in observably lower production by the companies. Several possible explanations could exist for this apparent lack of response to market signals. For example, the companies could be making exploration and production decisions based on an internal planning price which might be different and more stable than the market price. The companies may be unsuccessful in finding and developing new production resources, except perhaps in volumes just sufficient to replace expended reserves and to keep production relatively constant. This lack of success might be due to geologic, political, or economic factors. The five major oil companies seemingly have not behaved in accord with market economic theory with respect to output adjustments in relation to changing prices. That theory depends on the responsiveness of firms to price signals to expand output in times of higher and/or rising prices, and to provide reductions in output during lower and/or falling prices. In this way, price volatility in the market is reduced while keeping supply matched to demand. The oil market, with characteristics of low price elasticity of demand and supply, demand growth which responds to income growth, substantial time lags, and long-term challenges with calls for reduced consumption and alternative products, is difficult to fit into the model of free market adjustments. Natural gas reserves, production, and consumption in the United States have increased in the last several years as the result of technologies and economics of non-conventional natural gas. Some have said the United States may have 100 years of reserves at current consumption rates, but others have been more sanguine. The big five oil companies have shown some interest in expanding their positions in the natural gas market, as suggested by the data in Table 4 . ExxonMobil increased its production of natural gas by about 41% between 2009 and 2011. The company was able to achieve this expansion through its purchase of XTO Energy Inc., which was announced in December 2009. Chevron purchased Atlas Energy Inc. in 2010 to expand its natural gas reserve holdings. The companies' enhanced positions in the natural gas markets came as the wellhead price of natural gas was volatile and declining (see Table 5 ). In accounting terms, profits are referred to as net income. Net income is total revenue minus all costs of operation, interest on debt, and taxes. Net income is the amount available to management to use for providing a return to shareholders, or pursuing strategic goals for the company. Table 6 shows the net incomes of the five major oil companies from 2007 to 2011. The data in Table 6 represent corporate earnings. Each business segment of the companies' operations contributes to the total. The most used aggregate measures of net income sources in the oil industry are the upstream (exploration and production) and downstream (refining and marketing) sectors. Net incomes of the five major oil companies generally follow the behavior of oil prices. Both 2008 and 2011 were record profit years for the industry. The two negative entries in Table 6 are unrelated to oil price volatility. ConocoPhillips' loss in 2008 was associated with its Luk Oil venture in Russia. The company's adjusted income, or net income before the impact of special items, was over $16.4 billion. BP's 2010 net income was affected by the costs to the company of the Macondo oil spill in the Gulf of Mexico. BP's adjusted income in 2010 was $20.5 billion. Tables 7 and 8 show the upstream, exploration and production, and downstream, refining and marketing, net incomes of the five major oil companies. Although the five major oil companies are integrated firms, the majority of their earnings come from exploration and production activities. For example, in 2011, ExxonMobil earned about 84% of its corporate profits from upstream activities. Chevron earned 92%, and ConocoPhillips earned 66% from upstream activities in 2011. Downstream activities are important to the oil companies because crude oil itself has little consumer value. Only after refining, which breaks the crude oil down into a range of petroleum products, does value emerge. However, as shown by comparing data in Table 6 , Table 7 , and Table 8 , the major oil companies derive relatively small portions of their total net incomes from downstream activities. While the five major oil companies' downstream profits have not approached those of 2007, they have recovered from the lows of 2009. To the refining sector, the price of crude oil is a cost, and a possible deterrent, to profits. If the petroleum product markets are growing, based on rising incomes, and the sensitivity of demand to price increases is small, refiners may be able to pass on high crude oil prices directly to final consumers through product price increases, preserving profitability. If the product market is stagnant, a full pass-through of crude oil costs may not be possible. In that case, refining profits typically fall. The performance of the refining businesses of the five major oil companies in 2009 compared to 2008 is an example of the degree to which unfavorable economic conditions can reduce profitability. The high gasoline prices of 2008 coupled with the financial crisis and associated recession conspired to weaken demand in the product markets. Some analysts claim that the refining industry needs major revisions to meet future world demand patterns. Excess capacity is thought to exist in North America and Europe, and a shortage of capacity may exist in Asia. Some evidence of transition in the U.S. market has been observed. ConocoPhillips announced in 2010 a decision to split into two independent companies, ConocoPhillips, an upstream company, and Phillips 66, a downstream company. The company also plans to either sell or close its refinery in Trainer, PA. Sunoco, an independent refining and marketing corporation, has left the refining sector, to concentrate on logistics and marketing, closing and attempting to sell its two refineries in the Philadelphia area. Capital projects in the oil industry are long-term commitments. For example, it may take 5 to 10 years for full production to begin after initial analysis of an oil field has been carried out. Once the field does start producing, it will likely continue to do so for years, with little technical or economic scope for varying output to reflect then-current market conditions. Similarly, construction or expansion of a refinery may take years to complete. As a result of the lagged, long-term characteristics of exploration, production, and refining activities, capital budgets are relatively stable, showing little year on year response to changing oil prices. Political realities around the world limit the capital allocations the major oil companies can make. With most of worldwide reserves held by nations through national oil companies, the areas open to development by private firms, like the five major oil companies, are limited. Additional constraints exist with respect to the number of construction resources, drilling rigs, personnel, and other equipment and supplies available for exploration. In certain areas, at certain times, it is possible that higher capital budgets and expanded exploration and construction activities were partially consumed by higher wages and other costs, reducing the effectiveness of the capital program. Bringing new oil supplies on to the market can be a double-edged sword for oil producers. While the oil companies need to expand their reserve bases to replace losses due to production, they, like the producing countries, may find it not in their interest to expand available supply too much, too quickly. When oil supplies flood the market and excess capacity rises to excessive levels, the price of crude oil can tumble. A sharp decline in the price is not in the interest of oil company profits, or the fiscal budgets of oil exporting nations around the world. Capital expenditures are not strictly a use of net income by the oil companies, because capital expenditures are a before tax deduction from total revenues. Capital expenditures, as shown in Table 9 , generally includes exploration expenses. However, exploration expenses are not necessarily a large part of capital expenditures. For example, in 2011 exploration expenditures for the five major oil companies totaled $7.3 billion, about 5% of total capital expenditures. A part of capital investment is an offset to depreciation of existing assets, yielding net investment that is lower than the total capital expenditure. Also, capital expenditures might include acquisitions and other financial transactions which are not likely to enhance industry capacity. The five major oil companies are private firms with a responsibility to generate returns for their investors, or shareholders. The primary ways this goal can be achieved in the short term are through dividend payments and share repurchases. Dividends are a direct distribution of earnings on a per share basis. They represent the most direct return on investment. Although dividends per share are generally identical for all shares, actual percentage returns to any particular investor or owner of shares vary depending on the actual share price paid by the actual owner. Stock repurchase programs enhance shareholder value by reducing the number of shares outstanding. This increases dividends per share for any given level of net income, because there are fewer shares outstanding to allocate payment. Retired shares are usually held in the company treasury, and may generally be reissued at any time at the discretion of the management, generally without further filing or approvals required by the Securities and Exchange Commission. In effect, retired shares represent a liquid pool of potential capital that can be drawn upon by the company should attractive investment opportunities that require funding develop. The oil industry tends to become highly profitable when the price of crude oil rises. Since increases in the world price of oil tend to reflect general economic conditions, political developments, and the emergence of new markets, the increases in company profitability can be viewed as windfall gains. Alternatively, the returns in periods of high oil prices could be looked at as the other side of the lower returns earned in periods of lower prices. The price of oil has not been permanently low, or high, since the 1970s. Future changes will likely again change the industry's financial position. The capital expenditures of the companies have not succeeded in increasing their production of oil and natural gas. They have been successful in providing returns to their shareholders. To the extent that high oil prices can be expected to continue, the five major oil companies are likely to remain profitable and able to carry out their business plans. Small changes in the companies' net incomes or total revenues can be expected to only have small effects on their operations.	Periods of rising oil prices can result in reduced economic growth, rising prices, and reduced disposable incomes for consumers, as well as a deteriorating trade balance. For the oil industry, periods of high oil prices generally imply increasing cash flows and higher profits. While some view the improvement in the industries' finances under these conditions as a business return no different than those earned in other industries, others view it as a windfall, a direct transfer from consumers, without any significant additional activity attributable to the industry. Although the U.S. oil industry is composed of many firms, to many the face of the oil industry is represented by the five major firms operating extensively in the U.S. market. These firms are ExxonMobil, Chevron, BP plc, Royal Dutch Shell plc, and ConocoPhillips. Over the period 2007 to 2011, oil prices were volatile. They increased to a record peak in 2008, declined rapidly at the end of 2008 and early 2009, and increased through 2010, and remained high during 2011. The total revenues and net incomes of the five major oil companies followed a similar pattern. However, the companies' production of both crude oil and natural gas, their two key products, remained largely unchanged in the face of volatile prices, suggesting that for these firms, market price and the production of key products are not closely related. During the period 2007 to 2011, the five major companies' upstream activities of exploration and production contributed more to the total profitability of the firms than the downstream activities of refining and marketing. During the period, capital budgets were more stable than the price of oil, and the companies' exploration and production activities did little to increase their ability to produce oil or natural gas. The companies used their profits to carry out a number of activities, to include the distribution of dividends to shareholders, the repurchase of shares on the market to enhance investor holdings, and to carry out business strategies.
The American Diabetes Association’s (ADA) clinical care recommendations, which reflect the published research evidence and expert opinion, are widely accepted as guidance on what constitutes quality diabetes care. We selected for review six of ADA’s recommended monitoring services that can be measured using Medicare claims data (see table 1). The service frequencies recommended in table 1 generally apply to the average person with noninsulin-dependent diabetes, the type that accounts for more than 90 percent of diabetics in Medicare. Of course, some individuals may need more or fewer services depending on their age, medical condition, whether they use insulin, or how well their blood sugar is controlled. Eye exam (dilated) Flu shot (in season) As figure 1 shows, our cohort of about 168,000 Medicare beneficiaries with diabetes in fee-for-service delivery fell far short of the recommended frequencies of most monitoring services in 1994. Although 94 percent of the beneficiaries received at least two physician visits, less than half (42 percent) received an eye exam, only 21 percent received the recommended two glycohemoglobin tests, and 53 percent had a urinalysis. The fact that 70 percent received a serum cholesterol test may reflect both the successful public education campaign in the late 1980s and the frequent inclusion of cholesterol in automated blood tests. We believe the flu shot (44 percent) is underreported in Medicare claims data, because many people receive flu shots in nonmedical settings. Utilization rates are even lower when the monitoring services are considered as a unit. (See fig. 2.) About 12 percent of our diabetes cohort did not receive any of four key monitoring services: at least one each of the eye exam, glycohemoglobin test, urinalysis, and serum cholesterol test. About 11 percent showed Medicare claims for all four of these services. We analyzed utilization rates by patient characteristics and found that rates were generally similar for men and women and for all age groups over age 65. However, only 28 percent of beneficiaries under age 65 (who were eligible for Medicare because of disability) received an eye exam, compared with 43 percent of those aged 65 to 74 and 44 percent of those 75 and older. We also found that white beneficiaries with diabetes received the six monitoring services at consistently higher rates than beneficiaries who were black or of another racial group, but the differences were not great. We were unable to conduct a similar analysis of the six monitoring services’ use rates among beneficiaries with diabetes who were enrolled in Medicare HMOs because HCFA does not require its HMO contractors to report patient-specific utilization data. According to the limited data we obtained from published research and other sources, however, it appears that use rates are also below recommended levels in Medicare HMOs. Although it is unclear what specifically accounts for the less-than-recommended use of monitoring services found in our study, a number of factors—including patient and physician attitudes and practices—may contribute to the situation. Some experts expressed concern that both patients and physicians need to take diabetes more seriously and make the effort to manage it more aggressively. Patients with a chronic condition such as diabetes bear much of the responsibility for successful disease management; but for many patients, self-management does not become a priority until serious complications develop. Then, difficult lifestyle changes may be required, such as weight loss, smoking cessation, and increased exercise. Patients may lack the knowledge, motivation, and adequate support systems to make these changes in addition to undertaking the active self-monitoring and preventive service regimens that are necessary to control diabetes. The substantial out-of-pocket costs of active self-management also may discourage Medicare beneficiaries with diabetes. Diabetes-related supplies that are used at home, such as insulin, syringes, and blood glucose-testing strips, are not fully covered by Medicare. For example, insulin costs about $40 to $70 for a 90-day supply, syringes cost $10 to $15 per 100, and glucose-testing strips cost 50 to 72 cents each (or about $1,000 a year for a diabetic who tests four times a day). Another factor in the underutilization of recommended preventive and monitoring services may be physicians and other health care providers who are not familiar with the latest diabetes guidelines and research supporting the efficacy of treatment. Moreover, many Medicare beneficiaries with diabetes have several serious medical conditions, and in the limited time of a patient visit, a physician is likely to focus on the patient’s most urgent concerns, perhaps neglecting ongoing diabetes management and patient education. Finally, managed care plans and physician practices alike tend to lack service-tracking systems capable of reminding physicians and patients when routine preventive and monitoring services are needed. range of diabetes management efforts, and a few were developing comprehensive programs; but most plans’ efforts were limited primarily to educational approaches. Most efforts were initiated recently, and little is known yet about their effectiveness. Every HMO in our survey reported using at least one approach to educate enrollees with diabetes about appropriate diabetes management. The most common approach—used by 82 of the 88 plans—was featuring articles about diabetes in publications for all enrollees. In addition, some plans provided comprehensive manuals to their diabetic enrollees. Sixty-eight HMOs reported having diabetes-related health professionals, such as nurses, certified diabetes educators, and nutritionists available to educate enrollees. A number of plans offered classes for several levels of diabetes education ranging from basic to advanced. Ten plans contracted with disease management companies to provide diabetes education services, and a few reported telephone advice services. Most of the HMOs reported they also had undertaken educational efforts directed to their physicians, stressing the importance of preventive care through such means as written materials and meetings. Nearly three-fourths of the HMOs reported using clinical practice guidelines for diabetes care. In one HMO, endocrinologists meet regularly with small groups of primary care physicians to provide training on important diabetes topics, such as diabetic eye disease and foot care. This plan also has developed a physician training video on diabetic foot care. Although information and education may produce short-term behavioral changes, they may not be enough to sustain the long-term behavioral and lifestyle changes necessary to achieve good diabetes control. Recognizing this, many of the HMOs in our survey reported using additional approaches to continuously encourage appropriate diabetes management. For example, about half of the HMOs reported one or more types of reminders for enrollees and physicians, such as wallet-sized scorecards for enrollees to chart receipt of recommended services and posters in examining rooms reminding patients to take off their shoes and socks to prompt physicians to check their feet. As another example, 52 of the 62 plans that used clinical practice guidelines for diabetes reported having a system to monitor physicians’ compliance with the guidelines and, in some cases, to provide feedback to the physicians. In our follow-up interviews with 12 HMOs that reported using a variety of diabetes services, 5 told us they have committed substantial resources to develop systemwide, comprehensive diabetes management programs. For example, one HMO has based its approach to diabetes management around the long-term goals of improving patient health status and satisfaction as well as on plan performance on cost and utilization. Through a variety of interventions, such as diabetes care clinics, patient self-management notebooks, and diabetes education by telephone, this HMO tries to improve patient outcome measures ranging from improved blood glucose control and prevention of microvascular disease to the patient’s assessment of improved quality of life and sense of well-being. Interventions designed to help physicians provide better diabetes care include an online diabetes registry updated monthly, use of evidence-based clinical practice guidelines, outcomes reports for physicians, and training by diabetes expert teams. Even the HMOs reporting the most comprehensive programs, however, generally had little information about the extent to which their diabetes management approaches had affected the use of recommended preventive and monitoring services. At best, they tended to collect utilization data on five or fewer services, and they began collecting these data only in 1993 or 1994. The service monitored most frequently, by 58 of the plans, was the diabetic eye exam. This was probably due to the eye exam’s inclusion in HEDIS (the Health Plan Employer Data and Information Set), the performance-reporting system for commercial HMOs. Although little information exists on the relative effectiveness of specific diabetes management approaches, experts generally believe that intensive and sustained interventions, such as in-person counseling and education rather than telephone calls or mailings, are most likely to support long-term behavior change. Because intensive interventions probably are more expensive than other approaches, it is important to measure their effectiveness before committing resources to them. diabetes as well as patient and provider education about diabetes and practice guidelines. HCFA works with local peer review organizations (PRO), each of which currently is required to implement at least one diabetes-related quality improvement project involving the providers in its state or states. A total of 33 diabetes-related projects were under way in late 1996. Finally, HCFA is sponsoring a multistate evaluation of diabetes intervention strategies, the Ambulatory Care Diabetes Project, which involves fee-for-service and HMO providers and PROs in eight states. The project has completed its baseline data collection and intervention stages, and began remeasurement for outcomes analysis in January 1997. HCFA also wants to encourage development of better data collection systems for improved service utilization tracking. The agency anticipates requiring its Medicare HMO contractors to report the new HEDIS 3.0 performance measures, which include the diabetic eye exam and flu shot rates, and may add a measure of the glycohemoglobin test in the future. Moreover, HCFA is supporting research on other process- and outcomes-based performance measurement systems and is considering testing the feasibility of performance measurements in fee-for-service Medicare. Like the diabetes management approaches we learned about in our survey of Medicare HMOs, HCFA’s initiatives either have been undertaken recently or are still in the planning stages, and it is too soon to tell which of these projects will prove most effective. At the same time, some diabetes specialists have suggested that HCFA should be doing more, such as studying the effects of easing current coverage limitations on diabetes self-management training and supplies like blood-testing strips. Diabetes care is a microcosm of the challenges facing the nation’s health care system in managing chronic illnesses among the elderly. The prevalence and high cost of diabetes make it an opportune target for better management efforts. When beneficiaries receive less than the recommended levels of preventive and monitoring services, the result may be increased medical complications and Medicare costs. Conversely, following the recommendations may enhance beneficiaries’ quality of life. physicians. Among HMOs, where coordinated care and prevention are expected to receive special emphasis, many plans are exploring ways to improve diabetes management; but providers may be reluctant to invest in expensive approaches until their cost-effectiveness is more evident. HCFA, also recognizing the importance of this issue, has initiated a promising strategy of testing a variety of approaches to learn what works best in Medicare—that is, what is effective and what can be implemented at reasonable cost. Mr. Chairman, this concludes my statement. I would be happy to answer any questions from you and other members of the Subcommittee. Thank you. This testimony was prepared under the direction of Bernice Steinhardt, Director, Health Services Quality and Public Health Issues, who may be reached at (202) 512-7119 if there are any questions. Other key contributors include Rosamond Katz, Assistant Director, and Ellen M. Smith, Jennifer Grover, Evan Stoll, and Stan Stenersen, Evaluators. The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. U.S. General Accounting Office P.O. Box 6015 Gaithersburg, MD 20884-6015 Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders may also be placed by calling (202) 512-6000 or by using fax number (301) 258-4066, or TDD (301) 413-0006. Each day, GAO issues a list of newly available reports and testimony. To receive facsimile copies of the daily list or any list from the past 30 days, please call (202) 512-6000 using a touchtone phone. A recorded menu will provide information on how to obtain these lists.	GAO discussed its recent report on preventive and monitoring services provided to Medicare beneficiaries with diabetes, focusing on: (1) the extent to which Medicare beneficiaries with diabetes receive recommended levels of preventive and monitoring services; (2) what Medicare health maintenance organizations (HMO) are doing to improve delivery of recommended diabetes services; and (3) the activities that the Health Care Financing Administration (HCFA) supports to address these service needs for Medicare beneficiaries with diabetes. GAO noted that: (1) while experts agree that regular use of preventive and monitoring services can help minimize the complications of diabetes, most Medicare beneficiaries with diabetes do not receive these services at recommended intervals; (2) this is true both in traditional fee-for-service Medicare, which serves about 90 percent of all beneficiaries, and in managed care delivery; (3) the efforts of Medicare HMOs to improve diabetes care have been varied but generally limited, with most plans reporting that they have focused on educating their enrollees with diabetes about self-management and their physicians about the need for preventive and monitoring services; (4) very few plans have developed comprehensive diabetes management programs; and (5) at the federal level, HCFA has targeted diabetes for special emphasis and has begun to test preventive care initiatives, but like the HMOs, HCFA's efforts are quite recent and the agency does not yet have results that would allow it to evaluate effectiveness.
The federal government has enriched uranium for use by commercial nuclear power plants and for defense-related purposes for more than 40 years at three plants, located near Oak Ridge, Tennessee; Paducah, Kentucky; and Portsmouth, Ohio (see fig. 1). The Oak Ridge plant, known as East Tennessee Technology Park, is located on 1,500 acres of land; the oldest of the three plants, it has not produced enriched uranium since 1985. The Paducah plant, located on about 3,500 acres, continues to enrich uranium for commercial nuclear power plants under a lease to a private company, the United States Enrichment Corporation (USEC). The Portsmouth plant, a 3,700-acre site, ceased enriching uranium in May 2001 because of reductions in the commercial market for enriched uranium. Later that year, the plant was placed on cold standby (an inactive status that maintains the plant in a usable condition), so that production at the facility could be restarted in the event of a significant disruption in the nation’s supply of enriched uranium. USEC was awarded the contract to maintain the plant in cold standby, a condition that continues today. Yet because of newer, more efficient enrichment technologies and the globalization of the uranium enrichment market, all three uranium enrichment plants have become largely obsolete. Therefore, DOE now faces the task of decontaminating, decommissioning, and undertaking other remedial actions at these large and complex plants, which are contaminated with hazardous industrial, chemical, nuclear, and radiological materials. In 1991, at the request of the House Subcommittee on Energy and Power, GAO analyzed the adequacy of a $500 million annual deposit into a fund to pay for the cost of cleanup at DOE’s three uranium enrichment plants. We reported that a $500 million deposit indexed to inflation would likely be adequate, assuming that deposits would be made annually into the fund as long as cleanup costs were expected to be incurred, which, at the time of our study, was until 2040. Additionally, in a related report, we concluded that the decommissioning costs at the plants should be paid by the beneficiaries of the services provided by DOE—in this case, DOE’s commercial and governmental customers. In 1992, the Congress passed the Energy Policy Act, which established the Uranium Enrichment Decontamination and Decommissioning Fund to pay for the costs of decontaminating and decommissioning the nation’s three uranium enrichment plants. The Energy Policy Act also authorized the Fund to pay remedial action costs associated with the plants’ operation, to the extent that funds were available, and to reimburse uranium and thorium licensees for the portion of their cleanup costs associated with the sale of these materials to the federal government. The act authorized the collection of revenues for 15 years, ending in 2007, to pay for the authorized cleanup costs. Revenues to the Fund are derived from (1) an assessment, of up to $150 million annually, on domestic utilities that used the enriched uranium produced by DOE’s plants for nuclear power generation and (2) federal government appropriations amounting to the difference between the authorized funding under the Energy Policy Act and the assessment on utilities. Congress specified that any unused balances in the Fund were to be invested in Treasury securities and any interest earned made available to pay for activities covered under the Fund. DOE’s Office of Environmental Management is responsible for managing the Fund and plant cleanup activities, which, through fiscal year 2003, were mostly carried out by DOE contractor Bechtel Jacobs. The department’s Oak Ridge Operations Office in Oak Ridge, Tennessee, had historically provided day-to-day Fund management and oversight of cleanup activities at all three plants. In October 2003, however, DOE established a new office in Lexington, Kentucky, to directly manage the cleanup activities at the Paducah and Portsmouth plants. The Oak Ridge Operations Office continues to manage the Fund and the cleanup activities at the Oak Ridge plant. Currently, the Fund is used to pay for the following activities: Reimbursements to uranium and thorium licensees. The Energy Policy Act provides that the Fund be used to reimburse licensees of active uranium and thorium processing sites for the portion of their decontamination and decommissioning activities, reclamation efforts, and other cleanup costs attributable to the uranium and thorium they sold to the federal government. From fiscal year 1994, when the Fund began incurring costs, through fiscal year 2003, $447 million was used from the Fund for uranium and thorium reimbursements (in 2004 dollars). Cleanup activities at the uranium enrichment plants. Cleanup activities at the plants include remedial actions, such as assessing and treating groundwater or soil contamination; waste management activities, such as disposing of contaminated materials; the surveillance and maintenance of the plants, such as providing security and making general repairs to keep the plants in a safe condition; the decontamination and decommissioning of inactive facilities by either cleaning them up so they can be reused or demolishing them; and other activities, such as covering litigation costs at the three plants and supporting site-specific advisory boards. From fiscal year 1994 through fiscal year 2003, a total of $2.7 billion from the Fund was used for these cleanup activities (in 2004 dollars). Under a variety of models using DOE’s projected costs and revenues, the Fund will be insufficient to cover all of its authorized activities. Using DOE’s projections that 2044 would be the most likely date for completion of cleanup at the plants, we estimated that cleanup costs would exceed Fund revenues by $3.8 billion to $6.2 billion (in 2007 dollars). Because DOE had not determined when decontamination and decommissioning work would begin at the Paducah and Portsmouth plants, and because federal contributions to the Fund have been less than the authorized amount, we developed several alternative models to assess the effects of different assumptions on the Fund’s sufficiency. Specifically, we developed the following models: Baseline model. This model was developed in consultation with DOE and its contractor officials about what the most likely cleanup time frames would be and used cost estimates assuming that cleanup at all plants would be completed by 2044. Accelerated model. Because DOE had not determined when the final decontamination and decommissioning would begin at its Paducah and Portsmouth plants, we developed the accelerated model under the assumption that cleanup work could be completed faster than under the baseline model, given unconstrained funding. DOE and its contractor officials provided additional cost estimates, where Paducah’s final work would begin in 2010 and be completed by 2024 and Portsmouth’s final decontamination and decommissioning work would begin in 2007 and be completed by 2024. Deferred model. This model was developed under the assumption that, given current funding constraints, it may not be realistic for two major decontamination and decommissioning projects to be done concurrently. Thus, deferred time frames were determined by DOE, assuming that all work would be completed at the Portsmouth plant first and then initiated at the Paducah plant. For the deferred model, Portsmouth’s final decontamination and decommissioning work was estimated to be completed from 2010 to 2037 and Paducah’s from 2038 to 2052. Revenue-added model. This model was developed to assess the effect of the government’s meeting its total authorized annual contributions on the balance of the Fund, which by the start of fiscal year 2004, was $707 million less than authorized under the Energy Policy Act. For the revenue-added model, we used baseline time frames but assumed that government contributions to the Fund would continue annually at the 2004 authorized level until all government contributions as authorized by law had been met, which would occur in fiscal year 2009. Revenue-added-plus-interest model. For this model, we built on the revenue-added model to include the effect of forgone interest that the Fund could have earned had the government contributed the full authorized amount. We assumed that these additional payments would be made to the Fund in the same amounts as the 2004 annual authorized amount and extended payments through fiscal year 2010. Irrespective of which model we used, we found that the Fund would be insufficient to cover the projected cleanup costs at the uranium enrichment plants (see table 1). At best, assuming no additional funding is provided beyond the 2007 authorized amount, Fund costs could outweigh revenues by $3.8 billion (in 2007 dollars). Even with current authorized amounts extended out through fiscal year 2010, the Fund could still be insufficient by close to $0.46 billion (in 2007 dollars). Although our analysis was able to capture several uncertainties potentially affecting the Fund—including interest rates, inflation rates, cost and revenue variances, and the timing of decontamination and decommissioning—additional uncertainties exist that we could not capture. These uncertainties included possible changes to the scope of the cleanup; whether the Fund would be required to pay for additional activities, such as long-term water monitoring once the plants were closed; and the extent of potential future litigation costs that the Fund would have to support. For example, a risk analysis completed by DOE in 2004 for the Paducah plant indicated that changes in the scope of cleanup could increase cleanup costs by more than $3 billion and extend the time frame for cleanup to more than 30 years past the original scheduled date of 2019. In addition, when they developed their cleanup cost estimates, DOE officials assumed that the costs of long-term stewardship activities—such as groundwater monitoring, which may continue after all necessary cleanup costs have been completed—would be covered by a separate funding source. DOE officials acknowledged, however, that if another funding source were not available, they may be required to use resources from the Fund. Uncertainty over the extent of the Fund’s insufficiency remains because DOE has not issued plans that identify the most probable time frames and costs for the decontamination and decommissioning of the Paducah and Portsmouth plants. DOE was required to develop a report to Congress containing such information, but because DOE was significantly revising its cost estimates, it determined the report would not be accurate and did not finalize it. According to DOE officials, it is now in the process of finalizing a report that contains new schedule and cost information for both plants and addresses the sufficiency of the Fund. This report was due to Congress in October 2007 but has yet to be issued by DOE. Because the report has not been finalized, DOE officials were unwilling to provide us with updated information on current schedule and cost estimates. As a result, we are unable to assess how any new information may affect the Fund’s sufficiency. Until DOE resolves uncertainties surrounding the plants’ cleanup, including when cleanup activities are expected to both begin and end, it is not possible to more precisely determine the total funding needed to cover the authorized cleanup activities. If, however, closure and cleanup time frames extend past the originally projected schedules at the plants, then the total costs the Fund is authorized to support may increase, particularly costs for maintenance, safety, and security activities and other fixed costs that must be maintained until cleanup work at the plants is complete. In closing, we believe that an extension to the Fund may be necessary to cover cleanup costs at the nation’s three uranium enrichment plants. The information currently available on the projected costs and revenues authorized by the Fund suggests that it may be insufficient by up to several billion dollars. DOE appears to be taking steps to develop new, detailed time frames and cost estimates for the decontamination and decommissioning of its uranium enrichment plants. However, until this detailed information is made available, we cannot assess how DOE’s updated time frames and cost estimates may affect the Fund’s sufficiency. As a result, we believe that DOE should finalize plans for the Paducah and Portsmouth plants so that it can better determine the extent to which Fund extensions may be needed. Unless the Fund is extended beyond its current expiration in 2007, cleanup activities that could not be paid for from the Fund because of a shortfall may have to be financed entirely by the federal government and could add an additional fiscal burden at a time when our government is facing already significant long-term fiscal challenges. Mr. Chairman, this completes my prepared statement. I would be happy to respond to any questions you or other Members of the Committee may have at this time. For further information, please contact Robin M. Nazzaro at (202) 512-3841 or nazzaror@gao.gov. Sherry L. McDonald, Assistant Director; Ellen W. Chu, Alyssa M. Hundrup, Mehrzad Nadji, and Barbara Timmerman made key contributions to this statement. This is a work of the U.S. government and is not subject to copyright protection in the United States. The published product may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately.	Cleaning up the nation's three uranium enrichment plants will cost billions of dollars and could span decades. These plants--located near Oak Ridge, Tenn.; Paducah, Ky.; and Portsmouth, Ohio--are contaminated with radioactive and hazardous materials. In 1992, the Energy Policy Act created the Uranium Enrichment Decontamination and Decommissioning Fund (Fund) to pay for plant cleanup. Fund revenues come from an assessment on domestic utilities and federal government appropriations. In 2004, GAO reported on the Fund's sufficiency to cover authorized activities. GAO recommended that Congress consider reauthorizing the Fund for 3 more years, to 2010, and require the Department of Energy (DOE) to reassess the Fund's sufficiency before it expired to determine if further extensions were needed. Because decisions not yet made by DOE could affect the cost of cleanup and the Fund's sufficiency, GAO also recommended that DOE develop decontamination and decommissioning plans for the Paducah and Portsmouth plants that would identify the most probable time frames and costs for completing the cleanup work. This testimony is based on GAO's 2004 report. It summarizes the extent to which the Fund may be sufficient to cover authorized activities and the status of DOE's progress in developing decontamination and decommissioning plans for the Paducah and Portsmouth plants. GAO's analysis showed that the Fund will be insufficient to cover all authorized activities. Using DOE's estimates for the cleanup costs at the three plants and current and likely revenue projections, GAO developed a number of simulation models that factored in annual cost and revenue projections and uncertainties surrounding inflation rates, costs, revenues, and the timing of the final cleanup work at the Paducah and Portsmouth plants. Specifically, GAO's baseline model demonstrated that by 2044, the most likely date for completing all cleanup activities at the plants, cleanup costs will have exceeded revenues by $3.8 billion to $6.2 billion (in 2007 dollars). Importantly, GAO found that the Fund would be insufficient irrespective of which estimates were used or what time frames were assumed. DOE has not yet issued plans for the decontamination and decommissioning of the Paducah and Portsmouth plants as GAO recommended. According to DOE officials, the department is developing a report to Congress that will contain updated information for both plants. DOE did not make that information available to GAO, however, and hence GAO was unable to assess how any new schedule or cost estimates may affect the Fund's sufficiency. Until DOE issues plans that provide the most probable time frames and costs for completing decontamination and decommissioning at the Paducah and Portsmouth plants, it is not possible to more precisely determine the total funding needed to cover the authorized cleanup activities.
For many years, there have been divergent views with regard to sex and young persons. Many argue that sexual activity in and of itself is wrong if the persons are not married. Others agree that it is better for teenagers to abstain from sex, but are primarily concerned about the negative consequences of sexual activity, namely unintended pregnancy and sexually transmitted diseases (STDs). These two viewpoints are reflected in two teen pregnancy prevention approaches. The abstinence-only education approach centers on the abstinence-only message and exclusively funds programs that adhere solely to bolstering that message. The Title V Abstinence Education block grant administered by the Department of Health and Human Services (HHS) supports this approach. The comprehensive sexual education approach provides funding (through many other federal programs) for both prevention programs (that often include an abstinence message) and programs that provide medical and social services to pregnant or parenting teens. Since 1991, teen pregnancy, abortion, and birth rates have all fallen considerably. In 2002 (the latest available data), the overall pregnancy rate for teens aged 15-19 was 75.4 per 1,000 females aged 15-19, down 35% from the 1991 level of 115.3. The 2002 teen pregnancy rate is the lowest recorded since 1973, when this series was initiated. However, it still is higher than the teen pregnancy rates of most industrialized nations. After increasing sharply during the late 1980s, the teen birth rate for females aged 15-19 declined every year from 1991 to 2005. The 2005 teenage birth rate of 40.4 per 1,000 women aged 15-19 is the lowest recorded birth rate for U.S. teenagers. In 2005, the number of births to teens was 421,123 (10.2% of the 4.1 million births in the U.S.), of which 6,717 births were to girls under age 15. Nearly 23% of all nonmarital births were to teens in 2005. Although birth rates for U.S. teens have dropped in recent years, they remain higher than the teenage birth rates of most industrialized nations. According to a recent report on children and youth, in 2005, 34% of ninth graders reported that they had experienced sexual intercourse. The corresponding statistics for older teens were 43% for tenth graders, 51% for eleventh graders, and 63% for twelfth graders. About 30% of female teens who have had sexual intercourse become pregnant before they reach age 20. An October 2006 study by the National Campaign to Prevent Teen Pregnancy estimated that, in 2004, adolescent childbearing cost U.S. taxpayers about $9 billion per year. Research indicates that teens who give birth are less likely to complete high school and go on to college, thereby reducing their potential for economic self-sufficiency. The research also indicates that the children of teens are more likely than children of older parents to experience problems in school and drop out of high school, and as adults are more likely to repeat the cycle of teenage pregnancy and poverty. The 2006 report contends that if the teen birth rate had not declined between 1991 and 2004, the annual costs associated with teen childbearing would have been almost $16 billion (instead of $9 billion). In recognition of the negative, long-term consequences associated with teenage pregnancy and births, the prevention of teen pregnancy is a major national goal. Although a number of different techniques are available to evaluate the impact of policy changes, there is widespread consensus that well-designed and well-implemented studies that require random assignment to experimental and control groups provide more reliable, valid, and objective information than other types of approaches. Random assignment experimental studies generally assign potential participants to two groups. Individuals assigned to a control group are subject to current policies or practices (no policy change); individuals assigned to the experimental or treatment group are subject to a different policy initiative (i.e., intervention), such as abstinence-only education. Individuals are randomly assigned to these two groups, and any differences between the experimental and control group are attributed to the policy initiative being examined. The random assignment experimental approach attempts to estimate a program's impact on an outcome of interest. It measures the average difference between the experimental group and the control group. For a policy to have an impact, it must be determined that the impact did not just occur by chance. In other words, the difference must be determined to be "statistically significant." Differences between experimental and control groups that pass statistical significance tests are reported as policy impacts. The random assignment experimental approach generally is considered to provide the most valid estimate of an intervention's impact, and thereby provides useful information on whether, and the extent to which, on average , an intervention causes favorable impacts for a large group of subjects. (For information about some of the problems with the experimental approach, see CRS Report RL33301, Congress and Program Evaluation: An Overview of Randomized Controlled Trials (RCTs) and Related Issues .) P.L. 105-33 , the Balanced Budget Act of 1997, included funding for a scientific evaluation of the Title V Abstinence-Only Education block grant program (Title 510 of the Social Security Act), originally authorized by P.L. 104-193 , the 1996 welfare reform law. Mathematica Policy Research, Inc. won the contract for the evaluation. Two other programs—the Community-Based Abstinence Education (CBAE) program funded via HHS appropriations and the "prevention" component of the Adolescent Family Life (AFL) program—include the eight statutory elements of the Title V Abstinence-Only Education block grant program (see Text Box at right). For FY2007, total abstinence-only education funding amounted to $177 million: $50 million for the Title V abstinence program; $13 million for the AFL abstinence education projects; $109 million for the CBAE program (up to $10 million of which may be used for a national abstinence education campaign); and $4.5 million for an evaluation of the CBAE program. Mathematica's April 2007 report presents the final results from a multi-year, experimentally based impact study on several abstinence-only block grant programs. The report focuses on four selected Title V abstinence education programs for elementary and middle school students: (1) My Choice, My Future! , in Powhatan, VA; (2) ReCapturing the Vision , in Miami, FL; (3) Families United to Prevent Teen Pregnancy (FUPTP) , in Milwaukee, WI; and (4) Teens in Control , in Clarksdale, MS. Based on follow-up data collected from youth (aged 10 to 14) four to six years after study enrollment, the report, among other things, presents the estimated program impacts on sexual abstinence and risks of pregnancy and STDs. According to the report: Findings indicate that youth in the program group were no more likely than control group youth to have abstained from sex and, among those who reported having had sex, they had similar numbers of sexual partners and had initiated sex at the same mean age.... Program and control group youth did not differ in their rates of unprotected sex, either at first intercourse or over the last 12 months.... Overall, the programs improved identification of STDs but had no overall impact on knowledge of unprotected sex risks and the consequences of STDs. Both program and control group youth had a good understanding of the risks of pregnancy but a less clear understanding of STDs and their health consequences. In response to the report, HHS has stated that the Mathematica study showcased programs that were among the first funded by the 1996 welfare reform law. It stated that its recent directives to states have encouraged states to focus abstinence-only education programs on youth most likely to bear children outside of marriage, i.e., high school students, rather than elementary or middle-school students. It also mentioned that programs need to extend the peer support for abstinence from the pre-teen years through the high school years. Advocates of a more comprehensive approach to sex education argue that today's youth need information and decision-making skills to make realistic, practical choices about whether to engage in sexual activities. They contend that such an approach allows young people to make informed decisions regarding abstinence, gives them the information they need to resist peer pressure and to set relationship limits, and also provides them with information on prevention of STDs and the use of contraceptives. According to a recent report by the National Campaign to Prevent Teen Pregnancy, five random assignment experimentally designed studies (published since 2000) of teen pregnancy prevention programs have been proven to be effective in delaying sexual activity, improving contraceptive use among sexually active teenagers, or preventing teen pregnancy (see the Text Box above). Many analysts and researchers agree that effective pregnancy prevention programs have many of the following characteristics: Convince teens that not having sex or that using contraception consistently and carefully is the right thing to do. Last a sufficient length of time. Are operated by leaders who believe in their programs and who are adequately trained. Actively engage participants and personalize the program information. address peer pressure. Teach communication skills. Reflect the age, sexual experience, and culture of young persons in the programs. Although there have been numerous evaluations of teen pregnancy prevention programs, there are many reasons why programs are not considered successful. In some cases the evaluation studies are limited by methodological problems or constraints because the approach taken is so multilayered that researchers have had difficulty disentangling the effects of multiple components of a program. In other cases, the approach may have worked for boys but not for girls, or vice versa. In some cases, the programs are very small, and thereby it is harder to obtain significant results. In other cases, different personnel may affect the outcomes of similar programs. There is a significant difference between abstinence as a message and abstinence-only interventions . While the Bush Administration continues to support an abstinence-only program intervention (with some modifications), others argue that an abstinence message integrated into a comprehensive sex education program that includes information on the use of contraceptives and that enhances decision-making skills is a more effective method to prevent teen pregnancy. A recent nationally representative survey found that 90% of adults and teens agree that young people should get a strong message that they should not have sex until they are at least out of high school, and that a majority of adults (73%) and teens (56%) want teens to get more information about both abstinence and contraception. The American public—both adults and teens—supports encouraging teens to delay sexual activity and providing young people with information about contraception. (For additional information on teen pregnancy prevention, see CRS Report RS20301, Teenage Pregnancy Prevention: Statistics and Programs , and CRS Report RS20873, Reducing Teen Pregnancy: Adolescent Family Life and Abstinence Education Programs , both by [author name scrubbed].)	The long-awaited experimentally designed evaluation of abstinence-only education programs, commissioned by Congress in 1997, indicates that young persons who participated in the U.S. Department of Health and Human Services' Title V Abstinence Education block grant program were no more likely than other young persons to abstain from sex. The evaluation conducted by Mathematica Policy, Inc. found that program participants had just as many sexual partners as nonparticipants, had sex at the same median age as nonparticipants, and were just as likely to use contraception as nonparticipants. For many analysts and researchers, the study confirms that a comprehensive sex education curriculum with an abstinence message and information about contraceptives and decision-making skills is a better approach to preventing teen pregnancy. Others maintain that the evaluation examined only four programs for elementary and middle school students, and is thereby inconclusive. Separate experimentally designed evaluations of comprehensive sexual education programs found that some comprehensive programs, including contraception information, decision-making skills, and peer pressure strategies, were successful in delaying sexual activity, improving contraceptive use, and/or preventing teen pregnancy. This report will not be updated.
The sheer number of children coming to the United States who are not accompanied by parents or legal guardians has raised considerable concern. Overwhelmingly, the children are coming from El Salvador, Guatemala, and Honduras. This report focuses on the demographics of unaccompanied alien children while they are in removal proceedings. It discusses the characteristics of these children by nationality, age, and sex and explores these trends over the past few years. It further builds on a set of Congressional Research Service (CRS) reports examining the issues surrounding unaccompanied alien children. After Customs and Border Protection (CBP) agents in the Department of Homeland Security (DHS) have apprehended and processed an unaccompanied alien child, DHS transfers the child into the custody of the Department of Health and Human Services' (HHS's) Office of Refugee Resettlement (ORR). ORR is responsible for placing unaccompanied alien children in appropriate care. The law requires that ORR ensure that the interests of the child are considered in decisions and actions relating to the care and custody of an unaccompanied child. ORR also oversees the infrastructure and personnel of residential facilities for unaccompanied alien children, among other responsibilities. ORR arranges to house the unaccompanied child either in one of its shelters or in a foster care arrangement, or it reunites the unaccompanied child with a family member. In this report, the demographic and placement trends of unaccompanied children are based upon summary data extracted from case file data that ORR maintains on unaccompanied alien children. Due to the confidential nature of ORR data generally, CRS used only selected variables for this analysis. The summary data span the period between FY2011 and FY2014. The FY2014 data are partial (available through April 30, 2014), which made it difficult to reach conclusions about patterns or trends when comparing to the other three fiscal years. Much attention has been focused on the top countries of origin for the unaccompanied children. Over the past four years, ORR had unaccompanied children in its custody from 87 different countries, ranging from 41 to 50 different countries each fiscal year. Nevertheless, El Salvador, Guatemala, and Honduras have consistently accounted for the overwhelming majority of all unaccompanied children in ORR custody ( Table 1 ). While the most notable increase in unaccompanied children over the past three fiscal years and the first seven months of FY2014 was from Honduras (980%)—as it steadily increased in overall rank from fourth in FY2011 to first through the first seven months of FY2014—even the smallest increase in unaccompanied children in ORR custody of the three countries (El Salvador) was notable: 463% from FY2011 through the first seven months of FY2014 ( Figure 1 ). Not all apprehended unaccompanied children are transferred to ORR, as some are voluntarily returned to their home countries. Although Mexican children generally make up a sizeable number of the unaccompanied alien children apprehended by CBP officers, only a portion of them end up in ORR custody. For example, CBP apprehended 11,577 Mexican unaccompanied children in the first eight months of FY2014, and only 494 Mexican unaccompanied children were placed in ORR custody during the first seven months of FY2014. Age is a key factor to qualify as an unaccompanied alien child under the law. The Homeland Security Act of 2002 defines an unaccompanied alien child as an individual who has no lawful immigration status in the United States, has not yet reached the age of 18, and has no parent or legal guardian in the United States or no parent or legal guardian in the United States who is available to provide care and physical custody. Those 18 and older in ORR custody could have entered the United States shortly before turning 18, could be awaiting transfer back to DHS custody, or could have special needs that have kept them in ORR custody past the age of 18. The median age of unaccompanied children in ORR custody was 17 years old in FY2011 and FY2012, as Table 2 presents. The median age fell to 16 years old in FY2013 and has remained there in the first seven months of FY2014. The youngest three age groups (0-9, 10-12, and 13-15 years old) experienced the most percentage growth compared to the oldest three age groups (16-17, 18, and 19+ years old), which have experienced a percentage decrease during the period examined ( Figure 2 ). While there continued to be a greater overall number of older children in ORR custody, there was also a noteworthy increase in younger children in ORR custody, particularly in the 10-12 age group ( Figure 2 ) over the period studied. From October 1, 2010, through April 30, 2014, ORR had a total of 8,879 unaccompanied children under the age of 13 in its custody. From FY2011 through the first seven months of FY2014, there was an increase in the number of children in each of the three youngest age brackets (0-9, 10-12, and 13-15) for Honduras, Guatemala, and El Salvador. Most notably, in the first seven months of FY2014, the youngest three age brackets for Honduras made up over half of all Honduran unaccompanied children (6,242). Like Honduras and El Salvador, Guatemala had an increase in the three youngest age brackets, however, it also had the greatest number of unaccompanied children in the oldest three age brackets (16-17, 18, and 19+) ( Figure 3 ). Traditionally there have been more male than female unaccompanied children in ORR custody. In 2002, immigration officials testified that the overwhelming majority of unaccompanied alien children were male. The number of unaccompanied females increased from 1,075 in FY2011 to 5,385 in FY2013. The number of unaccompanied girls reached 2,959 in the first seven months of FY2014. Similarly, the percentage of females among unaccompanied children has grown. The share of females was stable at about 22% in FY2011 and FY2012 and increased to about 27% in FY2013 and 33% in the first seven months of FY2014 ( Figure 4 ). As previously shown in Figure 1 , the overwhelming majority of unaccompanied children in ORR custody from FY2011 through the first seven months of FY2014 originated from Honduras, Guatemala, and El Salvador. The sex distribution from the top countries of origin among children in ORR custody was examined to provide a better understanding of the female population. Examining the male-to-female ratio for each specific top source country reveals that a greater proportion of females in ORR custody originated from El Salvador than from Honduras, while a lower proportion of females originated from Guatemala ( Figure 5 ). Honduras had the most females in ORR custody and was also the country with the greatest number of minors in ORR custody overall. In absolute numbers, most males in ORR custody were ages 16-17 in each of the three fiscal years and in the first seven months of FY2014; however, the number of males age 0-9, 10-12, and 13-15 steadily increased over the past three fiscal years and in the first seven months of FY2014 ( Figure 6 ). Similar patterns occurred for females. In the first seven months of FY2014, the number of females in the 16-17 age bracket increased, whereas the number of males decreased ( Figure 7 ). The median age of unaccompanied children by year, sex, and top country ( Table 3 ) present the age trends a bit more starkly. The median age of females has dropped from 17 years in FY2011—the year that was the median age across all groups of children—to 15 years in the first seven months of FY2014. The median age for females in FY2013 was 13 years. When viewed by country, the median age decreased for all three and fell to 15 years for Honduran children during the first seven months of FY2014.	The number of children coming to the United States who are not accompanied by parents or legal guardians and who lack proper immigration documents has raised complex and competing sets of humanitarian concerns and immigration control issues. This report focuses on the demographics of unaccompanied alien children while they are in removal proceedings. Overwhelmingly, the children are coming from El Salvador, Guatemala, and Honduras. The median age of unaccompanied children has decreased from 17 years in FY2011 to 16 years during the first seven months of FY2014. A greater share of males than females are represented among this population. However, females have steadily increased in total numbers and as a percentage of the flow since FY2011. The median age of females has dropped from 17 years in FY2011—the year that was the median age across all groups of children—to 15 years in the first seven months of FY2014.
The House of Representatives has several different parliamentary procedures through which it can bring legislation to the chamber floor. Which will be used in a given situation depends on many factors, including the type of measure being considered, its cost, the amount of political or policy controversy surrounding it, and the degree to which Members want to debate it and propose amendments. According to the Legislative Information System of the U.S. Congress (LIS), in the 113 th Congress (2013-2014), 943 pieces of legislation received House floor action. This report provides a statistical snapshot of the forms, origins, and party sponsorship of these measures and of the parliamentary procedures used to bring them to the chamber floor during their initial consideration. Legislation is introduced in the House or Senate in one of four forms: the bill (H.R./S.), the joint resolution (H.J.Res./S.J.Res.), the concurrent resolution (H.Con.Res./S.Con.Res.), and the simple resolution (H.Res./S.Res.). Generally speaking, bills and joint resolutions can become law, but simple and concurrent resolutions cannot; they are used instead for internal organizational or procedural matters or to express the sentiment of one or both chambers. In the 113 th Congress, 943 pieces of legislation received floor action in the House of Representatives. Of these, 692 were bills or joint resolutions, and 251 were simple or concurrent resolutions, a breakdown between lawmaking and non-lawmaking legislative forms of approximately 73% to 27%, respectively. Of the 943 measures receiving House floor action in the 113 th Congress, 846 originated in the House, and 97 originated in the Senate. It is generally accepted that the House considers more legislation sponsored by majority party Members than measures introduced by minority party Members. This was born out in practice in the 113 th Congress. As is reflected in Table 1 , 74% of all measures receiving initial House floor action in the last Congress were sponsored by Members of the Republican Party, which had a majority of seats in the House. When only lawmaking forms of legislation are considered, 73% of measures receiving House floor action in the 113 th Congress were sponsored by Republicans, 27% by Democrats, and 0.002% by political independents. The ratio of majority to minority party sponsorship of measures receiving initial House floor action in the 113 th Congress varied widely based on the parliamentary procedure used to raise the legislation on the House floor. As noted in Table 2 , 68% of the measures considered under the Suspension of the Rules procedure were sponsored by Republicans, 32% by Democrats, and less than 1% by political independents. That measures introduced by Members of both parties were considered under Suspension is unsurprising in that (as discussed below) Suspension of the Rules is the parliamentary procedure that the House generally uses to process non-controversial measures for which there is wide bipartisan support. In addition, passage of a measure under the Suspension of the Rules procedure, in practice, usually requires the affirmative votes of at least some minority party Members. The ratio of party sponsorship on measures initially brought to the floor under the terms of a special rule reported by the House Committee on Rules and adopted by the House was far wider. Of the 148 measures the Congressional Research Service (CRS) identified as being initially brought to the floor under the terms of a special rule in the 113 th Congress, 144 (about 97%) were sponsored by majority party Members. The breakdown in party sponsorship on measures initially raised on the House floor by unanimous consent was uneven, with majority party Members sponsoring only 45% of the measures brought up in this manner. The following section documents the parliamentary mechanisms that were used by the House to bring legislation to the floor for initial consideration during the 113 th Congress. In doing so, it does not make distinctions about the privileged status such business technically enjoys under House rules. Most appropriations measures, for example, are considered "privileged business" under clause 5 of House Rule XIII (as detailed in the section on " Privileged Business " below). As such, they do not need a special rule from the Rules Committee to be adopted for them to have floor access. In actual practice, however, in the 113 th Congress the House universally provided for the consideration of these measures by means of a special rule, which, in general, could also provide for debate to be structured, amendments to be regulated, and points of order against the bills to be waived. Thus, appropriations measures considered in the 113 th Congress are counted in this analysis as being raised by special rule, notwithstanding their status as "privileged business." In recent Congresses, most legislation has been brought up on the House floor by Suspension of the Rules, a parliamentary device authorized by clause 1 of House Rule XV that waives the chamber's rules to enable the House to act quickly on legislation that enjoys widespread, even if not necessarily unanimous, support. The main features of the Suspension of the Rules procedure include (1) a 40-minute limit on debate, (2) a prohibition against floor amendments and points of order, and (3) a two-thirds vote of Members present and voting for passage. The suspension procedure is in order in the House on the calendar days of Monday, Tuesday, and Wednesday; during the final six days of a congressional session; and at other times by unanimous consent or special order. In the 112 th Congress (2011-2012), the House Republican leadership first announced additional policies related to its use of the Suspension of the Rules procedure that restrict the use of the procedure for certain "honorific" legislation, generally require measures considered under Suspension to have been available for three days prior to their consideration, and require the sponsor of the measure to be on the floor at the time of a measure's consideration. These policies continued in force in the 113 th Congress (2013-2014). In the 113 th Congress, 555 measures, representing 59% of all legislation receiving House floor action, were initially brought up using the Suspension of the Rules procedure. This includes 520 bills or joint resolutions and 35 simple or concurrent resolutions. When only lawmaking forms of legislation are counted, 75% of bills and joint resolutions receiving floor action in the 113 th Congress came up by Suspension of the Rules. Ninety percent of measures brought up by Suspension of the Rules originated in the House. The remaining 10% were Senate measures. House rules and precedents place certain types of legislation in a special "privileged" category, which gives measures of this kind the ability to be called up for consideration when the House is not considering another matter. Bills and resolutions falling into this category that saw floor action in the 113 th Congress include the following: Order of Business Resolutions. Procedural resolutions reported by the House Committee on Rules affecting the "rules, joint rules, and the order of business of the House" are themselves privileged for consideration under clause 5 of House Rule XIII. Order of business resolutions are commonly known as "special rules" and are discussed below in more detail. Committee Assignment Resolutions. Under clause 5 of House Rule X and the precedents of the House, a resolution assigning Members to standing committees is privileged if offered by direction of the party caucus or conference involved. Correcting Enrollments. Under clause 5 of House Rule XIII, resolutions reported by the Committee on House Administration correcting errors in the enrollment of a bill are privileged. Providing for Adjournment. Under Article I, Section 5, clause 4, of the Constitution, neither house can adjourn for more than three days without the consent of the other. Concurrent resolutions providing for such an adjournment of one or both chambers are called up as privileged. Questions of the Privileges of the House. Under clause 2 of House Rule IX, resolutions raising a question of the privileges of the House affecting "the rights of the House collectively, its safety, dignity, and the integrity of its proceedings" are privileged under specific parliamentary circumstances described in the rule. Such resolutions would include the constitutional right of the House to originate revenue measures. Bereavement Resolutions. Under House precedents, resolutions expressing the condolences of the House of Representatives over the death of a Representative or of a President or former President have been treated as privileged. Measures Related to House Organization. Certain organizational business of the House—such as resolutions traditionally adopted at the beginning of a session to notify the President that the House has assembled and to elect House officers, as well as concurrent resolutions providing for a joint session of Congress—have been treated as privileged business. In the 113 th Congress, 174 measures, representing 18% of the measures receiving floor action, came before the House on their initial consideration by virtue of their status as "privileged business." All of these 174 measures were non-lawmaking forms of legislation, that is, simple or concurrent resolutions. The most common type of measure brought up in the House as "privileged business" during the 113 th Congress was special orders of business (special rules) reported by the Rules Committee, followed by resolutions assigning Representatives to committee. A special rule is a simple resolution that regulates the House's consideration of legislation identified in the resolution. Such resolutions, as noted above, are sometimes called "order of business resolutions" or "special orders," although Members and staff frequently simply refer to them as "rules." Special rules enable the House to consider a specified measure and establish the terms for its consideration—for example, how long the legislation will be debated, what (if any) amendments may be offered to it, and whether points of order against the measure or any amendments to it are waived. Under clause 1(m) of House Rule X, the Committee on Rules has jurisdiction over the "order of business" of the House, and it reports such procedural resolutions to the chamber for consideration. In current practice, although a relatively small percentage of legislation comes before the House via special rule, most measures that might be characterized as significant, complicated, or controversial are brought up in this way. In the 113 th Congress, 148 measures, or 16% of all legislation receiving House floor action, were initially brought before the chamber under the terms of a special rule reported by the Rules Committee and agreed to by the House. Of these, 138 (93%) were bills or joint resolutions, and 10 (7%) were simple or concurrent resolutions. When only lawmaking forms of legislation are counted, 20% of bills and joint resolutions receiving floor action in the 113 th Congress came up by special rule. Ninety-eight percent of the measures considered under a special rule during the 113 th Congress originated in the House, 2% being Senate legislation. As is noted above, all but four measures brought before the House using this parliamentary mechanism were sponsored by majority party Members. In current practice, legislation is sometimes brought before the House of Representatives for consideration by the unanimous consent of its Members. Long-standing policies announced by the Speaker regulate unanimous consent requests for this purpose. Among other things, the Speaker will recognize a Member to propound a unanimous consent request to call up an unreported bill or resolution only if that request has been cleared in advance with both party floor leaders and with the bipartisan leadership of the committee of jurisdiction. In the 113 th Congress, 65 measures, or 7% of all legislation identified by LIS as receiving House floor action, were initially considered by unanimous consent. Of these, 33 (51%) were bills or joint resolutions, and 32 (49%) were simple or concurrent resolutions. When only lawmaking forms of legislation are counted, 5% of bills and joint resolutions receiving floor action in the 113 th Congress came up by unanimous consent. Of the measures initially considered by unanimous consent during the 113 th Congress, 63% originated in the House. Clause 5 of House Rule XV establishes special parliamentary procedures to be used for the consideration of private legislation. Unlike public legislation, which applies to public matters and deals with individuals only by classes, the provisions of private bills apply to "one or several specified persons, corporations, [or] institutions." When reported from House committee, private bills are placed on a special Private Calendar established by House Rule XIII. The consideration of Private Calendar measures is in order on the first and (if the Speaker of the House so chooses) third Tuesday of a month. On those days, the Private Calendar is "called," and each measure on it is automatically brought before the House in order. Private bills are considered under a set of procedures known as the "House as in Committee of the Whole," which is a hybrid of the procedures used in the full House and those used in the Committee of the Whole. Under these procedures, private bills may technically be debated and amended under the five-minute rule, although in actual practice they are almost always passed without debate or record vote. In the 113 th Congress, one measure was brought to the floor via the call of the Private Calendar. The House of Representatives has established special parliamentary procedures that may be used to bring legislation to the chamber floor dealing with the business of the District of Columbia, a discharge process to force consideration of measures triggered by a petition signed by a numerical majority of the House, and a procedure known as the Calendar Wednesday procedure. These procedures are rarely used, and no legislation was brought before the House in the 113 th Congress by any of these three parliamentary mechanisms.	The House of Representatives has several different parliamentary procedures through which it can bring legislation to the chamber floor. Which of these will be used in a given situation depends on many factors, including the type of measure being considered, its cost, the amount of political or policy controversy surrounding it, and the degree to which Members want to debate it and propose amendments. This report provides a snapshot of the forms and origins of measures that, according to the Legislative Information System of the U.S. Congress, received action on the House floor in the 113th Congress (2013-2014) and the parliamentary procedures used to bring them up for initial House consideration. In the 113th Congress, 943 pieces of legislation received floor action in the House of Representatives. Of these, 692 were bills or joint resolutions, and 251 were simple or concurrent resolutions, a breakdown between lawmaking and non-lawmaking legislative forms of approximately 73% to 27%. Of these 943 measures, 846 originated in the House, and 97 originated in the Senate. During the same period, 59% of all measures receiving initial House floor action came before the chamber under the Suspension of the Rules procedure, 18% came to the floor as business "privileged" under House rules and precedents, 16% were raised by a special rule reported by the Committee on Rules and adopted by the House, and 7% came up by the unanimous consent of Members. One measure, representing less than 1% of legislation receiving House floor action in the 113th Congress, was processed under the procedures associated with the call of the Private Calendar. When only lawmaking forms of legislation (bills and joint resolutions) are counted, 75% of such measures receiving initial House floor action in the 113th Congresses came before the chamber under the Suspension of the Rules procedure, 20% were raised by a special rule reported by the Committee on Rules and adopted by the House, and 5% came up by the unanimous consent of Members. Less than 1% of lawmaking forms of legislation received House floor action via the call of the Private Calendar or by virtue of being "privileged" under House rules. The party sponsorship of legislation receiving initial floor action in the 113th Congress varied based on the procedure used to raise the legislation on the chamber floor. Sixty-eight percent of the measures considered under the Suspension of the Rules procedure were sponsored by majority party Members. All but four of the 148 measures brought before the House under the terms of a special rule reported by the House Committee on Rules and adopted by the House were sponsored by majority party Members.
Special order speeches (commonly called "special orders") usually take place at the end of the day after the House of Representatives has completed all legislative business. During the special order period , individual Representatives can deliver speeches on topics of their choice for up to 60 minutes. Special order speeches give Members a chance to speak outside the time restrictions that govern legislative debate in the House and the Committee of the Whole. These speeches also provide one of the few opportunities for non-legislative debate in the House, where debate is almost always confined to pending legislative business. This report examines current House practices for reserving special order speeches and securing recognition for these speeches. It discusses the differences between inserted and delivered special orders, various uses of special orders, and current reform proposals. The rules of the House do not provide for special order speeches. Instead, special orders have evolved as a unanimous consent practice of the House. Although any Member can object to the practice of holding daily special order speeches, this happens infrequently. During the special order period, Members must abide by the rules of the House, the chamber's precedents, and the "Speaker's announced policies," in that order. Relevant House rules include those governing debate, decorum, and the Speaker's power of recognition. For example, a Representative cannot deliver a special order longer than 60 minutes because this would violate House Rule XVII, clause 2, which limits individual Members to "one hour in debate on any question." When a Member's 60-minute special order expires, he or she cannot even ask unanimous consent to address the House for an additional minute. The Member can speak again, however, if time is yielded under another Representative's special order. Individual Representatives with reserved special order speeches will commonly yield time to colleagues during the speech. House precedents discuss how the chamber has interpreted and applied its rules. These precedents are published in several parliamentary reference publications. Under House precedents, for example, individual Members cannot deliver more than one special order each legislative day. The term Speaker's announced policies refers to the Speaker's policies on certain aspects of House procedure (e.g., decorum in debate, conduct of electronic votes, recognition for special orders). These policies are usually announced on the opening day of a new Congress. In practice, the Speaker's current policies on special orders (announced on January 6, 2015) govern recognition for special order speeches and the reservation and television broadcast of these speeches. Recognition for special orders is the prerogative of the Speaker. Although special orders routinely begin once legislative business is completed, the Speaker is not required to recognize Members for special orders as soon as legislative business ends. Under his power of recognition (House Rule XVII, clause 2), the Speaker can first recognize other Members for "unanimous-consent requests and permissible motions." The Speaker may also interrupt or reschedule the special order period to proceed to legislative or other business. Moreover, the Speaker can recognize Representatives for special orders earlier in the day (e.g., when the House plans to consider major legislation through the evening hours). A majority party Representative appointed as Speaker pro tempore usually presides in the chair during special orders. In recognizing Members, the chair observes the following announced policies of the Speaker: Representatives are first recognized for five-minute special order speeches, and then for longer speeches that do not exceed 60 minutes. Recognition alternates between the majority and minority for both the initial special order and subsequent special orders in each time category (i.e., five-minute special orders; longer special orders). In recognizing individual Members, the chair follows the order specified in the list of special order requests submitted by each party's leadership (see " Reservation of Special Orders " section). No special orders are allowed after midnight on any day . On Tuesdays , after all legislative business is completed, the chair can recognize Members for five-minute special orders and unlimited longer special orders until midnight. On every day but Tuesday, after the five-minute special orders, the chair can recognize Members for no more than four hours of longer special orders. The four hours are divided equally between the majority and minority. Each party can reserve the first hour of longer special orders for its leadership or a designee (a so-called leadership special order—see below for more information). When less than four hours remains until midnight, each party's two-hour period is prorated. Each party's leadership usually chooses a designee to deliver a leadership special order during the party's first hour of longer special orders. This designee will sometimes lead a thematic special order and yield time to other party Members. For example, on May 7, 1997, the minority leader's designee delivered a 60-minute special order on H.R. 3 (juvenile crime control legislation), with participation from other Democratic Members. The majority leader's designee then led a 60-minute special order on the 1997 balanced budget agreement, during which he yielded time to other Republican Members. To summarize, under the Speaker's current announced policies, there are generally three stages to each day's special order period: 1. five-minute special orders by individual Members ; 2. special orders longer than five minutes (normally 60 minutes in length) by the party's leadership or designee ; and 3. special orders longer than five minutes (length varies from 6 minutes to 60 minutes) by individual Member s . Members reserve five-minute and longer special orders through their party leadership: Democratic Members reserve time through the Office of the Majority Leader, and Republican Members reserve time through the Republican cloakroom or the party leadership desk on the House floor. Under the Speaker's announced policies, Members cannot reserve special orders more than one week in advance. Moreover, the date of the reservation does not affect the order in which the chair recognizes Members for special orders. The Speaker's announced policies require that the majority and minority leadership give the chair a list each day showing how the party's two hours of longer special orders will be allocated among party Members. The chair follows this list in recognizing Members for longer special orders. For five-minute special orders, the majority and minority leadership compile a list of five-minute special order reservations each day. This list is given to a party Member who asks unanimous consent that each Member on the list be allowed to address the House for five minutes on a specific date. Permission is routinely granted by the House. A notice of granted five-minute special orders appears in the House section of the daily Congressional Record (under the heading "Special Orders Granted") and on the inside page of the daily "House Calendar" (formally called "Calendars of the United States House of Representatives and History of Legislation"). Individual Members may also ask unanimous consent to give a special order speech at the last minute, to use another Representative's reserved special order time, or to deliver a reserved special order out of the established sequence for that day. These unanimous consent requests are made infrequently and permission is usually granted. House Rule V places the broadcasting of House proceedings under the Speaker's exclusive direction. The Speaker's announced policies prohibit House-controlled television cameras from panning the chamber during special orders. Instead, a caption (also known as a "crawl") appears at the bottom of the television screen indicating that legislative business has been completed and the House is proceeding with special orders. Instead of delivering a special order speech on the House floor, Members may insert their speech in either the House pages of the Congressional Record or the section known as the "Extensions of Remarks." Special orders inserted in the House section are published in a distinctive typeface alongside the special orders delivered that day on the House floor. Members must decide in advance to insert special orders in the House section. They make this decision when reserving the special order through their party's leadership. A Representative who wants to participate in another Member's reserved special order can also decide in advance to insert his remarks in the House section. This decision is coordinated with the Member holding the special order reservation. The Representative's inserted remarks appear in a distinctive typeface during the other Member's reserved special order. Members who are not present when recognized for their special order speech routinely have the option of inserting this speech in the Extensions of Remarks section. Permission of the House is required to insert any material in this section. When the House grants unanimous consent to special order requests, it typically gives Representatives permission to "revise and extend" their remarks and to "include extraneous material." This permission is usually reported in the House pages of the Congressional Record under the Special Orders Granted heading (see above). Special order speeches inserted in the Extensions of Remarks section appear alongside other inserted material (e.g., legislative statements not delivered on the floor, newspaper articles, letters from constituents) and are not identified as special orders. All materials in the Extensions of Remarks section appear in a distinctive typeface. The practical difference between inserting and delivering a special order speech is twofold. First, inserted special orders are available only to readers of the hard copy and online versions of the Congressional Record . By contrast, special orders delivered on the House floor reach a larger audience through C-SPAN's televised coverage of House floor proceedings. Second, inserted special order speeches incur less cost than those delivered on the House floor. Although both inserted and delivered special orders involve Congressional Record printing costs, only delivered speeches entail the expenses of keeping the House in formal session (e.g., electricity, salaries of House officers and staff ). Members often use special orders to address subjects unrelated to legislation before the House. They deliver speeches on broad policy issues, a bill they have introduced, and local, national, or international events. They also present eulogies and tributes. Special orders are also used to debate specific legislation and policy issues outside the time restrictions that govern legislative debate in the House and the Committee of the Whole. As mentioned earlier, each party's leadership sometimes reserves a 60-minute special order to present party views on a particular bill or policy issue. In addition, Members of both parties may coordinate their special orders to debate legislation. For example, in the 104 th Congress, the two parties reserved consecutive, 60-minute special orders to conduct a "real give-and-take kind of debate" of H.J.Res. 159 (a proposed constitutional amendment to require two-thirds majorities for bills increasing taxes). Majority and minority Members participated in each party's 60-minute special order. In a departure from regular practice, these special orders took place in the middle of the day before the House considered the joint resolution. The special order period also provides a forum where Members can practice and hone their debate skills. Veteran Representatives have advised new Members, in particular, to reserve special orders for this purpose: ... before you participate in general debate on a bill ... get some practice. Get a special order and have a few of your friends participate with you. Get the feel of being in the well of the House, how the lectern can move up and down, how the microphones work. Practice in the somewhat stilted language of yielding to other colleagues and so forth, so that when you do get into the real legislative fight it isn't all new; you have a little bit of the feel of debating in the House. During special orders, freshmen majority Members also have an opportunity to gain experience presiding as Speaker pro tempore. The Speaker's current announced policies on special orders build upon earlier policies, mainly those implemented on February 23, 1994. These 1994 policies significantly changed special order procedures by imposing new restrictions (e.g., four-hour limitation on longer special orders, no special order reservations more than one week in advance). Before early 1994, special orders could be reserved months in advance and it was not unusual to have more than 10 hours of special orders reserved for a single day. Special order speeches also could be delivered after midnight and all-night special orders took place on occasion. The Speaker's announced policies before 1994 required that Members be recognized for five-minute special order speeches first and then for longer speeches, and that recognition alternate between majority and minority Members. When studying special order speeches before February 23, 1994, it is useful to remember these speeches were reserved and delivered under the Speaker's earlier, less restrictive policies. The House Rules Committee's Subcommittee on Rules and Organization of the House held hearings on April 17, 1997, and May 1, 1997, to discuss issues raised in Civility in the House of Representatives (hereinafter referred to as Civility ), a report prepared for the March 1997 bipartisan retreat of House Members. Civility examined the public's perception of rising incivility in the House and recommended actions to reduce this perception and actual breaches in decorum. The report pointed out that incivility was more likely to take place during special orders and one-minute speeches than during other periods of House floor proceedings. According to Civility , unparliamentary language "that would be taken down in regular debate was more likely to be tolerated or 'cautioned'" during special orders. The report attributed this situation to the low number of Members present during special orders—it was unlikely a Member would make a timely demand that unparliamentary words be taken down and, even if this demand was made, "it would be all but impossible to locate the Members needed to vote" on an appeal of the chair's ruling. On this last point, the report recommended that the House change its rules to require that appealed rulings of the chair after regular business be voted on the next legislative day. This rules change, the report argued, would encourage the chair to intervene more frequently against unparliamentary language in special orders. The 1999 report provided data on the 105 th Congress generally, and the December 1998 impeachment debate specifically. No recommendations were included. The House Rules Committee held hearings on the 1999 report in April 1999. As discussed earlier, daily special orders entail Congressional Record printing expenses for delivered and inserted special orders and the costs of keeping the House in formal session for delivered special orders (e.g., electricity, salaries of House staff and officers). On February 9, 1999, Representative Lynn Rivers introduced H.Res. 47 , a resolution to amend House rules to require that "the expenses of special-order speeches be paid from the Members' Representational Allowances of Members making such speeches." Each Representative has a Members' Representational Allowance (MRA) for expenses related to official and representational duties (e.g., employment of staff, travel, franked mail, supplies). H.Res. 47 was referred to the House Committee on Rules upon introduction but did not receive committee action in the 106 th Congress. Representative Rivers introduced identical resolutions ( H.Res. 97 ) in the 105 th Congress and ( H.Res. 263 ) in the 104 th Congress, but no action was taken on either measure.	Special order speeches (commonly called "special orders") usually take place at the end of the day after the House has completed all legislative business. During the special order period, individual Representatives deliver speeches on topics of their choice for up to 60 minutes. Special orders provide one of the few opportunities for non-legislative debate in the House. They also give Members a chance to speak outside the time restrictions that govern legislative debate in the House and the Committee of the Whole. The rules of the House do not provide for special order speeches. Instead, special orders have evolved as a unanimous consent practice of the House. Recognition for special orders is the prerogative of the Speaker. During the special order period, Members must abide by the rules of the House, the chamber's precedents, and the "Speaker's announced policies," in that order. The term Speaker's announced policies refers to the Speaker's policies on certain aspects of House procedure. In practice, the Speaker's current policies on special orders (announced on January 6, 2009) govern recognition for special order speeches as well as the reservation and television broadcast of these speeches. Under these announced policies, there are generally three stages to each day's special order period: 1. five-minute special orders by individual Members; 2. special orders longer than five minutes (normally 60 minutes in length) by the party's leadership or a designee; and 3. special orders longer than five minutes (length varies from 6 to 60 minutes) by individual Members. Members usually reserve special orders in advance through their party's leadership. Instead of delivering a special order speech on the House floor, Members may choose to insert their speech in either the House pages of the Congressional Record or the section known as the "Extensions of Remarks." Reform proposals were advanced in recent Congresses to address both concerns about breaches in decorum during special order speeches and the costs of conducting these speeches. This report will be updated if rules and procedures change.
Several different federal agencies are involved with the implementation of the Subtitle B program, including Labor, HHS, and Energy. However, Labor has primary responsibility for administering the program. Labor receives the claims, determines whether the claimant meets the eligibility requirements, and adjudicates the claim. When considering the compensability of certain claims, Labor relies on dose reconstructions developed by NIOSH, under HHS. To avoid gathering similar information for each claim associated with a particular facility, NIOSH compiles facility-specific information in “site profiles,” which assist NIOSH in completing the dose reconstructions. NIOSH contracted with Oak Ridge Associated Universities and the Battelle Corporation to develop site profiles and draft dose reconstructions. Energy is responsible for providing Labor and NIOSH with employment verification, estimated radiation dose, and facility-wide monitoring data. Labor does not refer all claims to NIOSH for dose reconstruction. For example, reconstructions are not needed for workers in the special exposure cohort. For special exposure cohort claimants, Labor verifies the employment and illness, and develops a recommended compensability decision that is issued to the claimant. The act specified that classes of workers from four designated locations would constitute the special exposure cohort and authorized the Secretary of HHS to add additional classes of employees. Classes of workers may petition HHS to be added to the cohort. A class of employees is generally defined by the facility at which they worked, the specific years they worked, and the type of work they did. NIOSH collects and evaluates the petitions and gives the results of its evaluations to the advisory board for review. The board, in turn, submits a recommendation to the Secretary of HHS to accept or deny the petition. To date, 13 classes of workers have been approved at 10 sites, and petitions from 9 additional sites have been qualified for evaluation. A petition from one site has been evaluated and denied. Our May 2004 report identified various problems with Energy’s processing of Subtitle D cases. Energy got off to a slow start in processing cases but had taken some steps to reduce the backlog of cases waiting for review by a physician panel. For example, Energy took steps to expand the number of physicians who would qualify to serve on the panels and recruit more physicians. Nonetheless, a shortage of qualified physicians continued to constrain the agency’s capacity to decide cases more quickly. Further, insufficient strategic planning and systems limitations made it difficult to assess Energy’s achievement of goals relative to case processing and program objectives, such as the quality of the assistance provided to claimants in filing for state workers’ compensation. We concluded that in the absence of changes that would expedite Energy’s review, many claimants would likely wait years to receive the determination they needed from Energy to pursue a state workers’ compensation claim, and in the interim their medical conditions might worsen or they might even die. We made several recommendations to Energy to help improve its effectiveness in assisting Subtitle D claimants in obtaining compensation. Specifically, we recommended that Energy take additional steps to expedite the processing of claims through its physician panels, enhance the quality of its communications with claimants, and develop cost- effective methods for improving the quality of case management data and its capabilities to aggregate these data to address program issues. Energy generally agreed with these recommendations. Our May 2004 report also identified structural problems that could lead to inconsistent benefit outcomes for claimants whose illness was determined by a physician panel to be caused by exposure to toxic substances while employed at an Energy facility. Our analysis of cases associated with Energy facilities in nine states indicated that a few thousand cases would lack a “willing payer” of workers’ compensation benefits; that is, they would lack an insurer that—by order from, or agreement with, Energy— would not contest these claims. As a result, in some instances, these cases may have been less likely to receive compensation than cases for which there was a willing payer. We identified various options for restructuring the program to improve payment outcomes and presented a framework of issues to consider in evaluating these options. Congress subsequently enacted legislation that dramatically restructured the program, transferred it from Energy to Labor, and incorporated features of some of the options we identified. Labor told us it has taken actions to address each of the recommendations we made to the Secretary of Energy in our report. For example, Labor has compiled a data base of the toxic substances that may have been present at Energy facilities and linked them to medical conditions to help expedite the processing of claims. In addition, Labor has rebuilt its case management system which tracks all Subtitle E claims transferred from Energy and enhanced the system’s performance and reliability. Our September 2004 report on the Subtitle B program found that in the first 2½ years of the program, Labor and NIOSH had fully processed only 9 percent of the more than 21,000 claims that were referred to NIOSH for dose reconstruction. NIOSH officials reported that the backlog of dose reconstruction claims arose because of several factors, including the time needed to get the necessary staff and procedures in place for performing dose reconstructions and to develop site profiles. NIOSH learned from its initial implementation experience that completing site profiles is a critical element for efficiently processing claims requiring dose reconstructions. To enhance program management and promote greater transparency with regard to timeliness, we recommended that the Secretary of HHS direct agency officials to establish time frames for completing the remaining site profiles, which HHS has done. Our February 2006 report discussed the roles of certain federal agency officials involved in the advisory board’s review of NIOSH’s dose reconstructions and site profiles that raised concerns about the independence of this review. The project officer who was initially assigned responsibility for reviewing the monthly progress reports and monitoring the technical performance of the contractor reviewing NIOSH’s dose reconstruction activities for the advisory board was also a manager of the NIOSH dose reconstruction program. In addition, the person assigned to be the designated federal officer for the advisory board, who is responsible for scheduling and attending board meetings, was also the director of the dose reconstruction program being reviewed. In response to concerns about the appearance of conflicting roles, the director of NIOSH replaced both of these officials in December 2004 with a senior NIOSH official not involved in the program. The contractor and members of the board told us that implementation of the contract improved after these officials were replaced. Since credibility is essential to the work of the advisory board and the contractor assisting the board, we concluded that continued diligence by HHS is required to prevent such problems from recurring when new candidates are considered for these roles. With regard to structural independence, we found it appropriate that the contracting officers managing the contract on behalf of the advisory board were officials from the Centers for Disease Control and Prevention, NIOSH’s parent agency, who do not have responsibilities for the NIOSH program under review and are not accountable to its managers. In addition, advisory board members helped facilitate the independence of the contractor’s work by playing the leading role in developing and approving the initial statement of work for the contractor and the independent government cost estimate for the contract. Our February 2006 report identified further improvements that could be made to the oversight and planning of the advisory board’s contracted review of NIOSH’s dose reconstructions and site profiles. We found that this review presented a steep learning curve for the various parties involved. In the first 2 years, the contractor assisting the board had spent almost 90 percent of the $3 million that had been allocated to the contract for a 5-year undertaking. In addition, the contractor’s expenditure levels were not adequately monitored by the agency in the initial months and the contractor’s monthly progress reports did not provide sufficient details on the level of work completed compared to funds expended. The advisory board had made mid-course adjustments to the contractor’s task orders and review procedures, such as by revising task orders to reduce the number of reviews to be completed or extend completion dates. However, the board had not comprehensively reexamined its long-term plan for the overall project to determine whether the plan needed to be modified in light of knowledge gained over the past few years. Finally, without a system to track the actions taken by NIOSH in response to the findings and recommendations of the advisory board and contractor, there was no assurance that needed improvements were being made. We made three recommendations to HHS to address these shortcomings. First, we recommended that HHS provide the board with more integrated and comprehensive data on contractor spending levels compared with work actually completed, which HHS has done. Second, we recommended that HHS consider the need for providing HHS staff to collect and analyze pertinent information to help the advisory board comprehensively reexamine its long-term plan for assessing the NIOSH site profiles and dose reconstructions. HHS is considering the need for such action. Third, we recommended that the Director of NIOSH establish a system to track actions taken by the agency in response to the board and contractor’s findings and recommendations. NIOSH now tracks agency actions to resolve the board and contractor’s comments. As part of our ongoing work, we are examining to what extent, if any, Labor is involved in certain Subtitle B activities. While the director of Labor’s Office of Workers’ Compensation Programs stated that Labor has not taken any actions to implement the options outlined in the OMB memorandum, Labor’s internal correspondence reflects major concerns about the potential for rapidly expanding costs in Subtitle B benefits resulting from adding new classes of workers to the special exposure cohort. One aspect of our ongoing work is determining whether Labor is involved in activities that have been tasked to NIOSH, the advisory board, or the contractor assisting the board, and if so, whether these activities reflect an effort to constrain the costs of benefits. Our work in this area is still ongoing and we have not drawn any conclusions. Nonetheless, we would like to briefly highlight the types of issues we will be analyzing as our work proceeds. NIOSH has, in some cases, shared draft versions of key documents with Labor before finalizing and sending them to the advisory board for review. For example, NIOSH has shared draft special exposure cohort petition evaluations with Labor. Similarly, NIOSH has agreed to allow Labor to review and comment on drafts of various technical documents such as site profiles, technical basis documents, or technical information bulletins, all of which are used to help perform dose reconstructions. Labor has provided comments on some of these draft documents. Labor officials told us that the basis of their involvement is Labor’s designation as lead agency with primary responsibility for administering the program. Labor officials added that their reviews of these documents focus on changes needed to promote clarity and consistency in the adjudication of claims. In addition, Labor has reviewed individual dose reconstructions completed by NIOSH. Labor officials told us that they review all NIOSH dose reconstructions and return them for rework if, for example, they find errors in factual information or in the way the dose reconstruction methodology was applied. We are currently examining the extent, nature, and outcome of Labor’s comments on these various documents. As our review proceeds, we plan to obtain more information on key issues such as the timing, nature, and basis of Labor’s activities in light of the program’s design and assignment of responsibilities. Mr. Chairman, this concludes my prepared remarks. I will be pleased to answer any questions you or other Members of the Subcommittee may have. For further information regarding this testimony, please contact me at (202) 512-7215. Key contributors to this testimony were Claudia Becker, Meeta Engle, Robert Sampson, Andrew Sherrill, and Charles Willson. Department of Energy, Office of Worker Advocacy: Deficient Controls Led to Millions of Dollars in Improper and Questionable Payments to Contractors. GAO-06-547. Washington, D.C.: May 31, 2006. Energy Employees Compensation: Adjustments Made to Contracted Review Process, but Additional Oversight and Planning Would Aid the Advisory Board in Meeting Its Statutory Responsibilities. GAO-06-177. Washington, D.C.: Feb. 10, 2006. Energy Employees Compensation: Many Claims Have Been Processed, but Action Is Needed to Expedite Processing of Claims Requiring Radiation Exposure Estimates. GAO-04-958. Washington, D.C.: Sept. 10, 2004. Energy Employees Compensation: Even with Needed Improvements in Case Processing, Program Structure May Result in Inconsistent Benefit Outcomes. GAO-04-516. Washington, D.C.: May 28, 2004. This is a work of the U.S. government and is not subject to copyright protection in the United States. It may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately.	The Energy Employees Occupational Illness Compensation Program Act (EEOICPA) was enacted in 2000 to compensate Department of Energy employees and contractors who developed work-related illnesses such as cancer and lung disease. Energy administered Subtitle D of the program. Subtitle B of the program is administered by the Department of Labor, which uses estimates of workers' likely radiation exposure to make compensation decisions. The estimates, known as dose reconstructions, are performed by the National Institute for Occupational Safety and Health (NIOSH) under the Department of Health and Human Services (HHS). The act specified that the President establish an Advisory Board on Radiation and Worker Health to review the scientific validity of NIOSH's dose reconstructions and recommend whether workers should be part of special exposure cohorts whose claimants can be compensated without dose reconstructions. A recent memorandum from the Office of Management and Budget (OMB) to Labor has raised concern about potential efforts to unduly contain the cost of benefits paid to claimants. This testimony presents GAO's past work on program performance and the work of the advisory board. It also highlights GAO's ongoing work relevant to issues raised by the OMB memorandum. GAO interviewed key officials and reviewed contract and other agency documents. GAO issued two reports in 2004 that focused on claims processing and program structure. The first report found that Energy got off to a slow start in processing Subtitle D claims and faced a backlog of cases. In addition, limitations in data systems made it difficult to assess Energy's performance. GAO recommended that Energy take actions to expedite claims processing, enhance communication with claimants, and improve case management data. The report also highlighted problems with program structure that could lead to inconsistent benefit outcomes and GAO presented various options for restructuring the program. Congress subsequently incorporated features of some of these options in enacting new legislation that dramatically restructured the program and transferred it from Energy to Labor. Labor has taken action to address the recommendations GAO made to Energy. The second report found that Labor and NIOSH faced a large backlog of claims awaiting dose reconstruction. To enhance program management and transparency, HHS implemented GAO's recommendation to establish time frames for completing profiles of Energy work sites, which are a critical element in efficiently processing claims that require dose reconstruction. GAO's February 2006 report found that the roles of two key NIOSH officials involved with the work of the advisory board may not have been sufficiently independent because these officials also represented the dose reconstruction program under review. In response, NIOSH replaced them with a senior official not involved in the program. Since credibility is essential to the advisory board's work, GAO concluded that ongoing diligence by HHS is required to avoid actual or perceived conflicts of roles when new candidates are considered for these roles. GAO also found that the board's work presented a steep learning curve, prompting adjustments to the work done by the contractor assisting the board. GAO recommended actions to provide the board with more comprehensive data on contractor spending levels compared to work actually completed, assist the board in reexamining its long-term plan for reviewing NIOSH's work, and better track agency actions taken in response to board and contractor findings. HHS has implemented these recommendations. One aspect of GAO's ongoing work especially relevant to the OMB memorandum is the extent to which Labor's concerns over potentially escalating benefit costs may have led the agency to be involved in activities tasked to NIOSH, the advisory board, or the contractor assisting the board. NIOSH agreed to provide Labor with draft versions of some of its evaluations of special exposure cohort petitions and other NIOSH technical documents before sending them for board review. Labor has commented on some of these draft documents. Labor officials told us that their reviews focus on changes needed to promote clarity and consistency in the adjudication of claims. As the review proceeds, GAO plans to obtain more information on key issues such as the timing, nature, and basis of Labor's activities in light of the program's design and assignment of responsibilities.
After the collapse of the World Trade Center and the accompanying spread of dust resulting from the collapse, EPA, other federal agencies, and New York City and New York State public health and environmental authorities focused on numerous outdoor activities, including cleanup, dust collection, and air monitoring. In May 2002, New York City formally requested federal assistance to clean and test building interiors in the vicinity of the WTC site for airborne asbestos. Such assistance may be made available to state and local governments under the Stafford Act and the National Response Plan, which establishes the process and structure for the federal government to provide assistance to state and local agencies when responding to threats or acts of terrorism, major disasters, and other emergencies. FEMA, which coordinates the federal response to requests for assistance from state and local governments, entered into interagency agreements with EPA to develop and implement the first and second indoor cleanup programs for residents in Lower Manhattan. In response to recommendations from the Inspector General and expert panel members, EPA’s second program incorporates some additional testing elements. For example, EPA is testing for a wider range of contaminants. In addition to asbestos, EPA will test for man-made vitreous fibers, which are in such materials as building and appliance insulation; lead; and polycyclic aromatic hydrocarbons, a group of over 100 different chemicals that are formed during the incomplete burning of coal, oil, gas, and garbage. EPA will also test dust as well as the air. In order to test the dust for these contaminants, EPA had to develop cleanup standards. However, EPA’s second program does not incorporate the following other recommendations: (1) broadening the geographic scope of the testing effort, (2) testing HVACs and “inaccessible” locations, and (3) expanding the program to include workplaces. Broadening the geographic scope of testing. EPA did not expand the scope of testing north of Canal Street, as well as to Brooklyn, as advisory groups had recommended. EPA reported that it did not expand the scope of testing because it was not able to differentiate between normal urban dust and WTC dust, which would have enabled it to determine the geographic extent of WTC contamination. Some expert panel members had suggested that EPA investigate whether it was feasible to develop a method for distinguishing between normal urban dust and WTC dust. EPA ultimately agreed to do so. Beginning in 2004—almost 3 years after the disaster—EPA conducted this investigation. EPA officials told us that because so much time had passed since the terrorist attack, it was difficult to distinguish between WTC dust and urban dust. EPA ultimately abandoned this effort because peer reviewers questioned its methodology; EPA decided not to explore alternative methods that the peer reviewers had proposed. Instead, EPA will test only in an area where visible contamination has been confirmed by aerial photography conducted soon after the WTC attack. However, aerial photography does not reveal indoor contamination, and EPA officials told us that they knew that some WTC dust was found immediately after the terrorist attacks outside the area eligible for its first and second program, such as in Brooklyn. Testing HVACs and in inaccessible areas. In its November 2005 draft plan for the second program, EPA had proposed collecting samples from a number of locations in HVACs. In some buildings HVACs are shared, and in others each residence has its own system. In either case, contaminants in the HVAC could re-contaminate the residence unless the system is also professionally cleaned. However, EPA’s second program will not provide for testing in HVACs unless tests in common areas reveal that standards for any of four contaminants have been exceeded. EPA explains in the second plan that it will not sample within HVACs because it chose to offer more limited testing in a greater number of apartments and common areas rather than provide more comprehensive testing in a smaller number of these areas. Similarly, EPA had proposed sampling for contaminants in “inaccessible” locations, such as behind dishwashers and rarely moved furniture within apartments and common areas. Again, because it was unable to differentiate between normal urban dust and WTC dust, EPA stated that it would not test in inaccessible locations in order to devote its resources to as many requests as possible. In fact, EPA only received 295 requests from residents and building owners to participate in the second program, compared with 4,166 eligible participants in the first program. Expanding the program to include workers/workplaces. According to EPA’s second program plan, the plan is “the result of ongoing efforts to respond to concerns of residents and workers.” Workers were concerned that workplaces in Lower Manhattan experienced the same contamination as residences. In its second program, EPA will test and clean common areas in commercial buildings, but will do so only if an individual property owner or manager requests the service. EPA stated that employees who believe their working conditions are unsafe as a result of WTC dust may file a complaint with OSHA or request an evaluation by HHS’s National Institute of Occupational Safety and Health. Concerns remain, however, because these other agencies do not have the authority to conduct cleanup in response to contaminant levels that exceed standards. In addition, OSHA’s standards are designed primarily to address airborne contamination, while EPA’s test and clean program is designed to address contamination in building spaces, whether the contamination is airborne or in settled dust. Thus, OSHA can require individual employers to adopt work practices to reduce employee exposure to airborne contaminants, whereas EPA’s test and clean program is designed to remove contaminants from affected spaces. EPA did not provide sufficient information in its second plan so that the public could make informed choices about their participation. Specifically, EPA did not fully disclose the limitations in the testing results from its first program. While EPA stated that the number of samples in its first program exceeding risk levels for airborne asbestos was “very small,” it did not fully explain that this conclusion was limited by the following factors. Participation. Participation in the program came from about 20 percent of the residences eligible for participation. In addition, participation was voluntary, which may suggest that the sample of apartments was not representative of all the residences eligible for the program. Those who chose to participate may not have been at greatest risk. Contaminants tested. EPA’s cleanup decisions were based only on tests for asbestos, rather than other contaminants, and the decisions focused on airborne contamination rather than contamination in dust inside residences. Sampling protocol. EPA took over 80 percent of the samples after professional cleaning was complete. Therefore it is not surprising that EPA found few samples exceeding its asbestos standard. EPA also did not explain in its second program plan that its first program’s test results excluded samples that were discarded because they were “not cleared”—that is, could not be analyzed because the filter had too many fibers to be analyzed under a microscope. However, EPA’s final report on its first program stated that residences with more than one inconclusive result, such as filter overload, were encouraged to have their residences re-cleaned and re-tested. EPA did not explain the impact of excluding these samples or other data limitations from its conclusion that the number of samples exceeding asbestos standards was very small. Without providing complete explanations of the data, residents who could have elected to participate might have been discouraged from doing so. EPA did not take steps to ensure that resources would be adequate to achieve the second program’s objectives. Instead, EPA is implementing this program with the funding remaining after its first program— approximately $7 million. EPA could not provide us with any basis for determining whether this funding level is appropriate. EPA officials told us that they were unable to determine the cost of the program without knowing the number of participants. However, we note that funds available for the second program are less than 20 percent of the first program’s funding, despite an increase in the number and type of contaminants being sampled. Almost two-thirds of the panel members told us they did not believe the $7 million for the sampling and cleanup was sufficient. According to one of the expert panel’s chairmen—a former EPA Assistant Administrator—the $7 million was sufficient for initial sampling in the second program, but not for sampling and cleanup. If demand had exceeded available resources, EPA would have simply limited participation by ranking program applicants on the basis of their proximity to the WTC site. Shortcomings in EPA’s second program to test and clean residences for WTC contamination raise questions about the agency’s preparedness for addressing indoor contamination resulting from future disasters. The effectiveness of this program may be limited because some important recommendations were not incorporated, and because program implementation will not begin until later this year—more than 5 years after the World Trade Center collapsed. Furthermore, owing to these factors, the majority of panel members do not support EPA’s second program, noting that it was not responsive to the concerns of residents and workers harmed by the collapse of the WTC towers, it was scientifically and technically flawed, or it was unacceptable because it would not identify the extent of contamination. Some panel members questioned the value of participating in EPA’s program, and even stated that they would discourage participation. Madam Chairman, this concludes my prepared statement. I would be happy to respond to any questions that you or Members of the Subcommittee may have. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this testimony. For further information about this testimony, please contact John B. Stephenson, Director, Natural Resources and Environment (202) 512-3841, or stephensonj@gao.gov. Key contributors to this testimony were Janice Ceperich, Katheryn Summers Hubbell, Karen Keegan, Omari Norman, Diane B. Raynes, Carol Herrnstadt Shulman, and Sandra Tasic. Additional assistance was provided by Katherine M. Raheb. This is a work of the U.S. government and is not subject to copyright protection in the United States. It may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately.	The September 11, 2001, terrorist attack on the World Trade Center (WTC) turned Lower Manhattan into a disaster site. As the towers collapsed, Lower Manhattan was blanketed with building debris and combustible materials. This complex mixture created a major concern: that thousands of residents and workers in the area would now be exposed to known hazards in the air and in the dust, such as asbestos, lead, glass fibers, and pulverized concrete. In May 2002, New York City formally requested federal assistance to address indoor contamination. The Environmental Protection Agency (EPA) conducted an indoor clean and test program from 2002 to 2003. Several years later, after obtaining the views of advisory groups, including its Inspector General and an expert panel, EPA announced a second test and clean program in December 2006. Program implementation is to begin later in 2007, more than 5 years after the disaster. GAO's testimony, based on preliminary work evaluating EPA's development of its second program, addresses (1) EPA's actions to implement recommendations from the expert panel and its Inspector General, (2) the completeness of information EPA provided to the public in its second plan, and (3) EPA's assessment of available resources to conduct the program. We discussed the issues we address in this statement with EPA. EPA has taken some actions to incorporate recommendations from the Inspector General and expert panel members into its second program, but its decision not to incorporate other recommendations may limit the overall effectiveness of this program. For example, EPA's second program incorporates recommendations to expand the list of contaminants it tests for, and to test for contaminants in dust as well as the air. However, it does not incorporate a recommendation to expand the boundaries of cleanup to better ensure that WTC contamination is addressed in all locations. EPA reported that it does not have a basis for expanding the boundaries because it cannot distinguish between normal urban dust and WTC dust. EPA did not begin examining methods for differentiating between normal urban dust and WTC dust until nearly 3 years after the disaster, and therefore the process for finding distinctions was more difficult. In addition, EPA's second program does not incorporate recommendations to sample heating, ventilation, and air conditioning (HVAC) systems. According to EPA's plan, the agency chose to offer limited testing in a greater number of apartments and common areas rather than provide more comprehensive testing (such as in HVACs) in a smaller number of these areas. EPA's second plan does not fully inform the public about the results of its first program. EPA concluded that a "very small" number of samples from its first program exceeded risk levels for airborne asbestos. However, EPA did not explain that this conclusion was to be expected because it took over 80 percent of the samples after residences were professionally cleaned. Without this additional information, residents who could have participated might have opted not to do so because of EPA's conclusion. EPA did not assess the adequacy of available resources for the second program. EPA stated that it plans to spend $7 million on this program, which is not based on any assessment of costs, but is the funding remaining from the first program. Without careful planning for future disasters, timely decisions about data collection, and thorough communication of sampling results, an evaluation of the adequacy of cleanup efforts may be impossible.
As in the previous Congress, management of the federal workforce continues to be an issue ofinterest to the Senate and the House of Representatives in the 108th Congress. S. 129 ,the Federal Workforce Flexibility Act of 2003, passed the Senate with an amendment by unanimousconsent on April 8, 2004. Senator George Voinovich introduced the bill on January 9, 2003, and itwas referred to the Senate Committee on Governmental Affairs. On October 22, 2003, thecommittee ordered the bill to be reported with an amendment in the nature of a substitute; and it wasreported on January 27, 2004. (1) The committeesubstitute, as amended, was agreed to by unanimousconsent on April 8, 2004. In the House of Representatives, the Subcommittee on Civil Service andAgency Organization of the House Committee on Government Reform marked up S. 129on May 18, 2004. Before forwarding the legislation to the full committee, the subcommittee agreedby voice vote to an amendment in the nature of a substitute offered by Representative Jo Ann Davisand en bloc amendments offered by Representative Danny Davis. On June 24, 2004, the Housecommittee ordered the bill to be reported to the House of Representatives by voice vote, afteragreeing, by voice vote, to an amendment in the nature of a substitute offered by Representative JoAnn Davis. Another bill related to management of the federal workforce was introduced in the House of Representatives on April 3, 2003. Representative Jo Ann Davis introduced H.R. 1601 ,the Federal Workforce Flexibility Act of 2003, and it was referred to the House Committee onGovernment Reform. As introduced, S. 129 and H.R. 1601 were identicalexcept for one provision relating to personnel demonstration projects. (2) On April 8, 2003, theSubcommittee on Oversight of Government Management, the Federal Workforce, and the Districtof Columbia of the Senate Committee on Governmental Affairs, along with the Subcommittee onCivil Service and Agency Organization of the House Committee on Government Reform, conducteda joint hearing on the federal government's human capital challenge. (3) A hearing that includeddiscussion of H.R. 1601 was conducted by the House Subcommittee on Civil Serviceand Agency Organization on February 11, 2004. (4) Both S. 129 and H.R. 1601include a number of the provisions that were in S. 2651 , the Federal WorkforceImprovement Act of 2002, introduced by Senator Voinovich in the 107th Congress. Several of theS. 2651 provisions, including those on agency Chief Human Capital Officers, alternativeranking and selection procedures, voluntary separation incentive payments, the repeal ofrecertification requirements for the Senior Executive Service, academic degree training, andmodifications to the National Security Education Program, were enacted in P.L. 107-296 , HomelandSecurity Act of 2002, signed by President George Bush on November 25, 2002 and are applicablegovernmentwide. (5) S. 129 , as passed by the Senate and as ordered to be reported to the House, would amend current law provisions on critical pay, civil service retirement system computation forpart-time service, agency training, and annual leave. The bill also would amend current lawprovisions on recruitment and relocation bonuses and retention allowances (which would be renamedbonuses). As ordered to be reported to the House, S. 129 would amend the current 5U.S.C. ï¿½ï¿½5753 and 5754 language on such bonuses and allowances. As passed by the Senate, itwould add new sections 5754a and 5754b on recruitment, relocation, and retention bonuses to Title5 United States Code . Therefore, if S. 129, as passed by the Senate, were enacted, agencieswould be able to use the current law provisions on recruitment and relocation bonuses and retentionallowances at 5 U.S.C. ï¿½ï¿½5753 and 5754 and the enhanced authority for recruitment, relocation, andretention bonuses proposed at 5 U.S.C. ï¿½ï¿½5754a and 5754b. (6) S. 129 , as ordered to be reported to the House, would amend current law provisions on pay administration. These amendments were included in S. 129, as introduced, but theywere dropped during Senate committee markup and are not included in the Senate-passed versionof the bill. Provisions that would amend current law on retirement service credit for cadet ormidshipman service and compensatory time off for travel were added to S. 129 duringSenate committee markup and are included in the legislation as passed by the Senate and as orderedto be reported to the House. Added during Senate Committee markup as well were provisions onSenior Executive Service authority for the White House Office of Administration that are in theSenate-passed bill, but are not in the legislation as ordered to be reported to the House (theprovisions were removed from the House version of the bill during the full House committeemarkup). Other provisions that would have amended current law provisions relating to contributionsto the Thrift Savings Plan, annuity commencement dates, and retirement for air traffic controllerswere included in S. 129, as forwarded by the House Civil Service and AgencyOrganization Subcommittee to the House Government Reform Committee, but were removed duringthe full committee markup. In the 107th Congress, Senator Voinovich introduced S. 1603 , the Federal Human Capital Act of 2001, on October 31, 2001 and S. 1639 , the Federal EmployeeManagement Reform Act of 2001, on November 6, 2001. Senator Fred Thompson introduced S. 1612 , the Managerial Flexibility Act of 2001, on November 1, 2001. (7) The bills werereferred to the Senate Committee on Governmental Affairs. Representative Constance Morellaintroduced H.R. 4580 , the Good People, Good Government Act, on April 24, 2002, andit was referred to the House Committee on Government Reform. Earlier, on October 15, 2001, theAdministration of President George W. Bush submitted a legislative proposal entitled TheManagerial Flexibility Act of 2001 to Congress. The Office of Management and Budget (OMB)described the proposal as "a key component of the Bush Administration's 'Freedom to Manage'initiative . . . to eliminate legal barriers to effective management." (8) The proposal included provisionson personnel management flexibilities, including voluntary separation incentive payments, voluntaryearly retirement, recruitment and retention bonuses and relocation allowances, academic degrees,the Senior Executive Service, personnel management demonstration projects, and direct hire. On March 18 and 19, 2002, the Subcommittee on International Security, Proliferation, and Federal Services of the Senate Committee on Governmental Affairs conducted hearings on severalof the civil service bills. Following the hearings, Senator Voinovich, joined by Senators Thompsonand Cochran, revised some of the provisions in S. 1603 and S. 1639 , asintroduced, and merged them into one bill, S. 2651 . As mentioned above, several ofthe S. 2651 provisions were enacted in P.L. 107-296 . No further action was taken on anyof the other 107th Congress bills. This report compares each of the provisions in S. 129 , as passed by the Senate and as ordered to be reported to the House, with current law. The information in this report is presentedaccording to the sequential organization of Title 5 United States Code as current law. PatrickPurcell, Specialist in Social Legislation, Domestic Social Policy Division, Congressional ResearchService (CRS), prepared the rows in Table 1 on retirement provisions under 5 U.S.C. Chapters 83and 84. [author name scrubbed], Analyst in American National Government, Government and FinanceDivision, CRS, prepared the rows in Table 1 on Senior Executive Service Authority for the WhiteHouse Office of Administration under 3 U.S.C. Chapter 2.	A bill related to the management of the federal workforce is being considered by the 108th Congress. S. 129 , the Federal Workforce Flexibility Act of 2003, passed the Senatewith an amendment by unanimous consent on April 8, 2004. In the House, the Subcommittee onCivil Service and Agency Organization forwarded S. 129 to the House Committee onGovernment Reform on May 18, 2004, after amending it by voice vote. On June 24, 2004, theHouse committee ordered the bill to be reported to the House of Representatives, after amending it,by voice vote. The bill was introduced by Senator George Voinovich on January 9, 2003. A similarbill, H.R. 1601 , the Federal Workforce Flexibility Act of 2003, was introduced in theHouse of Representatives by Representative Jo Ann Davis on April 3, 2003. S. 129 , as passed by the Senate and as ordered to be reported to the House, would amend current law provisions on critical pay, civil service retirement system computation forpart-time service, agency training, and annual leave. The bill also would amend current lawprovisions on recruitment and relocation bonuses and retention allowances (which would be renamedbonuses). As ordered to be reported to the House, S. 129 would amend the current 5U.S.C. ï¿½ï¿½5753 and 5754 language on such bonuses and allowances. As passed by the Senate, itwould add new sections 5754a and 5754b on recruitment, relocation, and retention bonuses to Title5 United States Code . Therefore, if S. 129, as passed by the Senate, were enacted, agencieswould be able to use the current law provisions on recruitment and relocation bonuses and retentionallowances at 5 U.S.C. ï¿½ï¿½5753 and 5754 and the enhanced authority for recruitment, relocation, andretention bonuses proposed at 5 U.S.C. ï¿½ï¿½5754a and 5754b. S. 129 , as ordered to be reported to the House, would amend current law provisions on pay administration. These amendments were included in S. 129 , as introduced, butthey were dropped during Senate committee markup and are not included in the Senate-passedversion of the bill. Provisions that would amend current law on retirement service credit for cadetor midshipman service and compensatory time off for travel were added to S. 129 duringSenate committee markup and are included in the legislation as passed by the Senate and as orderedto be reported to the House. Added during Senate Committee markup as well were provisions onSenior Executive Service authority for the White House Office of Administration that are in theSenate-passed bill, but are not in the legislation as ordered to be reported to the House. Otherprovisions that would have amended current law provisions relating to contributions to the ThriftSavings Plan, annuity commencement dates, and retirement for air traffic controllers were includedin S. 129, as forwarded by the House Civil Service and Agency OrganizationSubcommittee to the House Government Reform Committee, but were removed during the fullcommittee markup. This report compares each of the provisions in S. 129 , as passed by the Senate and as ordered to be reported to the House, with current law.
The President is responsible for appointing individuals to positions throughout the federal government. In some instances, the President makes these appointments using authorities granted by law to the President alone. Other appointments are made with the advice and consent of the Senate via the nomination and confirmation of appointees. Presidential appointments with Senate confirmation are often referred to with the abbreviation PAS. This report identifies, for the 113 th Congress, all nominations to full-time positions requiring Senate confirmation in 40 organizations in the executive branch (27 independent agencies, 6 agencies in the Executive Office of the President [EOP], and 7 multilateral organizations) and 4 agencies in the legislative branch. It excludes appointments to executive departments and to regulatory and other boards and commissions, which are covered in other CRS reports. Information for this report was compiled using the Senate nominations database of the Legislative Information System (LIS) at http://www.lis.gov/nomis/ , the Congressional Record (daily edition), the Weekly Compilation of Presidential Documents , telephone discussions with agency officials, agency websites, the United States Code , and the 2012 Plum Book ( United States Government Policy and Supporting Positions ). Related Congressional Research Service (CRS) reports regarding the presidential appointments process, nomination activity for other executive branch positions, recess appointments, and other appointments-related matters may be found at http://www.crs.gov . During the 113 th Congress, President Barack Obama submitted 69 nominations to the Senate for full-time positions in independent agencies, agencies in the EOP, multilateral agencies, and legislative branch agencies. Of these nominations, 34 were confirmed, 34 were returned to the President, and 1 was withdrawn. Table 1 summarizes the appointment activity. The length of time a given nomination may be pending in the Senate varies widely. Some nominations are confirmed within a few days, others are not confirmed for several months, and some are never confirmed. For each nomination covered by this report and confirmed in the 113 th Congress, the report provides the number of days between nomination and confirmation ("days to confirm"). The mean (average) number of days elapsed between nomination and confirmation was 123.9. The median number of days elapsed was 104.0. Under Senate Rules, nominations not acted on by the Senate at the end of a session of Congress (or before a recess of 30 days) are returned to the President. The Senate, by unanimous consent, often waives this rule—although not always. This report measures the "days to confirm" from the date of receipt of the resubmitted nomination, not the original. Agency profiles in this report are organized in two parts: (1) a table listing the organization's full-time PAS positions as of the end of the 113 th Congress and (2) a table listing appointment action for vacant positions during the 113 th Congress. As mentioned earlier, data for these tables were collected from several authoritative sources. As noted, some agencies had no nomination activity during this time. In each agency profile, the first of the two tables identifies, as of the end of the 113 th Congress, each full-time PAS position in the organization and its pay level. For most presidentially appointed positions requiring Senate confirmation, pay levels fall under the Executive Schedule, which, as of January 2014, ranged from level I ($201,700) for Cabinet-level offices to level V ($147,200) for lower-ranked positions. The second table, the appointment action table, provides, in chronological order, information concerning each nomination. It shows the name of the nominee, position involved, date of nomination, date of confirmation, and number of days between receipt of a nomination and confirmation, if confirmed. It also notes actions other than confirmation (i.e., nominations returned to or withdrawn by the President). The appointment action tables with more than one nominee to a position also list statistics on the length of time between nomination and confirmation. Each nomination action table provides the average days to confirm in two ways: mean and median. Although the mean is a more familiar measure, it may be influenced by outliers, or extreme values, in the data. The median, by contrast, does not tend to be influenced by outliers. In other words, a nomination that took an extraordinarily long time might cause a significant change in the mean, but the median would be unaffected. Examining both numbers offers more information with which to assess the central tendency of the data. Appendix A provides two tables. Table A-1 relists all appointment action identified in this report and is organized alphabetically by the appointee's last name. Table entries identify the agency to which each individual was appointed, position title, nomination date, date confirmed or other final action, and duration count for confirmed nominations. In the final two rows, the table includes the mean and median values for the "days to confirm" column. Table A-2 provides summary data on the appointments identified in this report and is organized by agency type, including independent executive agencies, agencies in the EOP, multilateral organizations, and agencies in the legislative branch. The table summarizes the number of positions, nominations submitted, individual nominees, confirmations, nominations returned, and nominations withdrawn for each agency grouping. It also includes mean and median values for the number of days taken to confirm nominations in each category. Appendix B provides a list of department abbreviations. Appendix A. Summary of All Nominations and Appointments to Independent and Other Agencies Appendix B. Agency Abbreviations	The President makes appointments to positions within the federal government, either using the authorities granted by law to the President alone or with the advice and consent of the Senate. This report identifies all nominations that were submitted to the Senate for full-time positions in 40 organizations in the executive branch (27 independent agencies, 6 agencies in the Executive Office of the President [EOP], and 7 multilateral organizations) and 4 agencies in the legislative branch. It excludes appointments to executive departments and to regulatory and other boards and commissions, which are covered in other reports. Information for each agency is presented in tables. The tables include full-time positions confirmed by the Senate, pay levels for these positions, and appointment action within each agency. Additional summary information across all agencies covered in the report appears in the appendix. During the 113th Congress, the President submitted 69 nominations to the Senate for full-time positions in independent agencies, agencies in the EOP, multilateral agencies, and legislative branch agencies. Of these 69 nominations, 34 were confirmed, 1 was withdrawn, and 34 were returned to him in accordance with Senate rules. For those nominations that were confirmed, a mean (average) of 123.9 days elapsed between nomination and confirmation. The median number of days elapsed was 104.0. Information for this report was compiled using the Senate nominations database of the Legislative Information System (LIS) at http://www.lis.gov/nomis/, the Congressional Record (daily edition), the Weekly Compilation of Presidential Documents, telephone discussions with agency officials, agency websites, the United States Code, and the 2012 Plum Book (United States Government Policy and Supporting Positions). This report will not be updated.
When the President declares a major disaster under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, the disaster declaration designates the types of Federal Emergency Management Agency (FEMA) assistance to be provided. There are three primary types of assistance: Public Assistance (PA), which addresses repairs to a community and state or tribal government infrastructure; Mitigation Assistance (MA), which provides funding for projects a state or tribe proposes to reduce the threat of future damage; and Individual Assistance (IA), which provides help to individuals and households affected by a major disaster. While all major disaster declarations include MA, FEMA uses information on a range of "factors" from the Preliminary Damage Assessment (PDA) to determine whether PA and/or IA should be recommended. Following Hurricane Sandy, Congress required FEMA to revise and update the factors it considers when making a recommendation to the President regarding whether a major disaster declaration should include IA or not. This report provides information on FEMA's IA programs and the factors FEMA uses to determine if IA should be part of a disaster declaration. FEMA considers numerous factors (detailed later in this report) when it recommends IA to the President following a major disaster. IA can include several programs, depending on whether the governor of the affected state or the tribal leader requests that specific type of FEMA assistance. FEMA's IA includes (1) Mass Care and Emergency Assistance, (2) Crisis Counseling Assistance and Training Program, (3) Disaster Unemployment Assistance, (4) Disaster Legal Services, (5) Disaster Case Management, and (6) the Individuals and Households Program. 1. Mass Care includes directly supporting congregate sheltering, feeding, and hydration; distributing emergency supplies; and reuniting children with their parents/legal guardians, as well as adults with their families. Emergency Assistance encompasses a variety of services and functions, including coordination of volunteer organizations and unsolicited donations, managing unaffiliated volunteers and community relief services, supporting transitional sheltering, and supporting mass evacuations. 2. The Crisis Counseling Assistance and Training Program assists individuals and communities recovering from the effects of a disaster through community-based outreach and psycho-educational services. The program supports short-term counseling of disaster survivors. The program also provides information on coping strategies and emotional support by linking survivors with other individuals and agencies that help them in the recovery process. 3. Disaster Unemployment Assistance provides information and resources to individuals who were employed or self-employed, or were scheduled to begin employment during a disaster. It may also be provided to those who can no longer work or perform their job duties due to damage to their place of employment, do not qualify for regular unemployment benefits from a state, or cannot perform work or self-employment due to an injury as a direct result of a disaster. 4. Disaster Legal Services provides legal assistance to low-income individuals who are unable to secure adequate legal services that meet their disaster-related needs. 5. Disaster Case Management provides a partnership between a case manager and the disaster survivor to assist them in carrying out a disaster recovery plan. The recovery plan includes resources, services, decisionmaking priorities, progress reports, and the goals needed to close their case. 6. Individuals and Households Program is comprised of two categories of assistance: Housing Assistance and Other Needs Assistance (ONA). Housing Assistance may include financial assistance to reimburse for hotels, motels, or other short-term lodging; rent alternate housing accommodations while the applicant is displaced from their primary residence; repair a primary residence; assist in replacing owner-occupied residences when the residence is destroyed; and enter into lease agreements with owners of multifamily rental properties located in the disaster area. Housing Assistance may also include home repair and construction services provided in insular areas outside the continental United States and other locations where no alternative housing resources are available and where types of FEMA housing assistance that are normally provided (such as rental assistance) are unavailable, infeasible, or not cost-effective. FEMA may provide manufactured housing units as a form of temporary housing through its Transitional Sheltering Assistance program. Other Needs Assistance provides financial assistance for other disaster-related expenses and needs. These include child care; medical and dental expenses; funeral and burial costs; and transportation. IA accounted for approximately 14.4% of all projected federal spending ($9.1 billion of $63.2 billion) from the Disaster Relief Fund for Stafford Act declarations occurring from FY2007 through FY2016, according to FEMA data as of August 10, 2017. Some types of FEMA IA are subject to cost sharing, such as ONA, which is subject to a cost share between FEMA and the state, territorial, or tribal government. FEMA covers 75% of eligible ONA costs, and the state, territorial, or tribal government is responsible for the remaining 25%. Transitional Sheltering under Mass Care and Emergency Assistance is also subject to a 75/25 percent cost share. The factors FEMA uses to determine potential IA for disaster survivors have not been changed since originally published in 1999. The factors include concentration of damages —FEMA evaluates the concentrations of damages to individuals, and high concentrations of damages generally indicate a greater need for federal assistance than widespread or scattered damages throughout an area, region, or state; trauma —FEMA considers the degree of trauma to a state and communities, and some of the conditions that might cause such trauma include large numbers of injuries and death, large-scale disruption of normal community functions and services, and emergency needs such as extended or widespread loss of power or water; special populations —FEMA considers whether special populations, such as low-income, the elderly, or the unemployed are affected, and whether they may have a greater need for assistance; voluntary agency assistance —FEMA considers the extent to which voluntary agencies and state or local programs can meet the needs of the disaster victims; insurance —FEMA considers the amount of insurance coverage in the disaster area because, by law, federal disaster assistance cannot duplicate insurance coverage; and average amount of individual assistance by state —FEMA's regulations state that "[t]here is no set threshold for recommending Individual Assistance, but the following averages [see Table 1 ] may prove useful to States and voluntary agencies as they develop plans and programs to meet the needs of disaster victims." When reviewing disaster declarations between January 2008 and July 2013, FEMA found that requests with more than $7.5 million in assistance usually resulted in a declaration for IA. However, FEMA has not suggested using that amount as a threshold for assistance. Instead, it is providing several factors that relate directly to the Individual and Household Program (IHP), which is the primary IA program. In addition, other factors may provide greater detail for decisionmakers for IHP and for other prominent IA programs such as Crisis Counseling and Disaster Unemployment Assistance (DUA). In response to congressional direction for updated IA factors, FEMA issued a Notice of Proposed Rulemaking (NPRM) on November 12, 2015. FEMA published the proposed rule on November 12, 2016, and was accepting comments until January 11, 2016. FEMA has yet to finalize the proposed rule. The new proposed factors are state fiscal capacity and resource availability; uninsured home and personal property losses; disaster-impacted population profile; impact to community infrastructure; casualties; and disaster-related unemployment. FEMA proposed using three factors to evaluate a state and local jurisdiction's fiscal capacity: the total tax revenue of the state (a measurement recommended by the U.S. Government Accountability Office [GAO]), the Gross Domestic Product (GDP) by state, and the per-capita personal income by local area. Using those factors, along with the projected IA costs, FEMA would then develop Individual Assistance Cost to Capacity (ICC) ratios. As mentioned earlier, the estimates of potential FEMA assistance costs are generally derived from Preliminary Damage Assessments (PDAs) that are conducted after an event to help both the state and federal governments evaluate the situation. Using figures from this process for 153 major disaster declaration requests between January of 2008 and July of 2013, FEMA found that generally, the higher the ICC ratio, the more likely that IA was part of a major disaster declaration. FEMA emphasized that the proposed approach would not be a hard "threshold," nor did it anticipate incorporating it into its regulations because one single factor would not determine each decision on recommendations to the President. A hard "threshold" was a recommendation of some FEMA stakeholders. It is likely they wanted to see a number comparable to the per capita amount employed as a factor for PA declarations. However, in response to that request, FEMA invoked Section 320 of the Stafford Act and suggested it chose not to violate the principles of Section 320. That section forbids a denial of assistance based solely (emphasis added) on an "arithmetic formula." While some formulas have been routinely used by FEMA in the process of making recommendations, according to FEMA, formulas have only been one factor among several considered. Instead, FEMA indicates its desire that such formulas, when used as a part of the PDA process, would influence a state's decision on whether to make a request, but would not remove the state's discretion. FEMA's proposal offered more detail than previously available regarding state capacity, the tools FEMA may employ to consider individual state resources, and FEMA's own approach to assessing that capacity. But the proposed ICC and other factors raise questions as to how various factors may or may not be weighted in importance when considering a governor's request. In addition, the proposed factors appeared to relate directly to current IA programs such as Disaster Unemployment Assistance and Crisis Counseling. The proposed rule also appeared to encourage the development of state programs that might replicate or complement FEMA-style assistance to families and individuals at the state level. It could be argued that such programs at the state level could be of assistance when federal supplemental help is not contemplated. At this time there is no information on when FEMA intends to finalize this proposed rule on revising IA factors.	When the President declares a major disaster pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act (P.L. 93-288), the Federal Emergency Management Agency (FEMA) advises the President about types of federal assistance administered by FEMA available to disaster victims, states, localities, and tribes. The primary types of assistance provided under a major disaster declaration include funding through the Public Assistance program, Mitigation Assistance programs, and the Individual Assistance program. The Public Assistance program provides federal financial assistance to repair and rebuild damaged facilities and infrastructure. Mitigation Assistance programs provide funding for jurisdictions, states, and tribes to ensure damaged facilities and infrastructure are rebuilt and reinforced to better withstand future disaster damage. Finally, the Individual Assistance program provides funding for basic needs for individuals and households following a disaster. Eligible activities under the Individual Assistance program include funding for such things as mass care, crisis counseling, and temporary housing. FEMA advises the President on the type of individual assistance to be granted following each disaster, and works with state and local authorities in determining what assistance programs would best suit the needs within the disaster area. FEMA makes this determination based on a list of criteria designed to align federal disaster assistance with unmet needs in disaster-impacted areas. This report provides a short summary of the types of individual assistance programs administered by FEMA following a disaster. This report also provides a summary of the criteria FEMA uses in determining which individual assistance programs may be made available to impacted areas following a major disaster declaration, and discusses a proposed rule to change these criteria.
In the 2005 BRAC round, the Department of Defense (DOD) recommended 190 closures and realignments. Of this number, the BRAC Commission approved 119 with no changes and accepted 45 with amendments. These figures represented 86% of the Department of Defense's overall proposed recommendations. In other words, only 14% of DOD's list was significantly altered by the Commission. Of the rest, the Commission rejected 13 DOD recommendations in their entirety and significantly modified another 13. It should be pointed out that the BRAC Commission approved 21 of DOD's 33 major closures, recommended realignment of 7 major closures, and rejected another 5. Over the next 20 years, the total savings of the Commission's recommendations are estimated at $35.6 billion â significantly smaller than DOD's earlier estimate of $47.8 billion. The difference between Commission and DOD estimates has proved controversial. According to the Commission, DOD achieved only minor success in promoting increased jointness with its recommendations. Most of the proposed consolidations and reorganizations were within, not across, the military departments. Among the most difficult issues faced by the 2005 BRAC Commission were DOD's proposals to close or realign Air National Guard bases. Thirty seven of 42 DOD Air Force proposals involved Air National Guard units. According to the Commission, its process was open, transparent, apolitical, and fair. Commissioners or staff members made 182 site visits to 173 separate installations. It conducted 20 regional hearings to obtain public input and 20 deliberative hearings for input on, or discussion of, policy issues. In 2005, DOD adopted an approach supporting an emphasis on joint operations. The 1988, 1991, and 1993 rounds did not include a Joint Cross-Service element. The 1995 round did utilize Joint Cross-Service Groups in its analytical process, but the three military departments were permitted to reject their recommendations. In 2005, the Joint Cross-Service Groups were elevated to become peers of the military departments. The 2005 Commission consisted of nine members rather than eight, thereby minimizing the possibility of tie votes. For the 2005 round, the time horizon for assessing future threats in preparing DOD's Force Structure Plan was 20 years rather than six. The 1995 selection criteria stated that the "environmental impact" was to be considered in any base closure or realignment. The 2005 criteria required the Department of Defense (and ultimately the Commission) to consider "the impact of costs related to potential environmental restorations, waste management and environmental compliance activities." Existing BRAC law specifies eight installation selection criteria. The 2005 Commission emphasized the sixth, which directed consideration of economic impact on local communities. In prior rounds, homeland defense was not considered a selection criterion. It is now a significant element among the military value selection criteria. The 1991 Commission added 35 bases to the DOD list of recommendations, the 1993 Commission added 72, and the 1995 Commission added 36 â where as the 2005 Commission added only 8. Finally, prior BRAC rounds did not take place in the face of the planned movement of tens of thousands of troops from abroad back to the United States. The 2005 Defense Base Closure and Realignment Commission recommended various changes to the existing statute governing its creation, organization, process, and outcome. The proposed revision of the governing Act, if enacted, would arguably represent a significant change in scope of the BRAC law. It would expand the Commission's lifespan and mission. It would explicitly link reconsideration of the defense infrastructure "footprint" to security threat analysis by the new Director of National Intelligence (DNI) and the periodic study of the nation's defense strategy known as the Quadrennial Defense Review. It would also formalize BRAC consideration of international treaty obligations undertaken by the United States, such as the scheduled demilitarization of chemical munitions. By passing legislation containing the Commission's recommended language, Congress would authorize the Secretary of Defense to conduct a 2014-2015 BRAC round, should he or she deem it necessary. Other recommended provisions would enable the Commission to suggest new vehicles for the expeditious transfer of title of real property designated for disposal through the BRAC process. In addition, recommended legislative language suggests expanding the requirement for Department of Defense release of analytical data and strengthens the penalty for failure to do so. It would increase the responsibilities of the Commission's General Counsel and would exempt the Commission from the Federal Advisory Committee Act (FACA) while retaining conformity with the Freedom of Information (FOIA) and Government in the Sunshine Acts. The recommended legislation would also make permanent the existing temporary authority granted to the Department of Defense to enter into environmental cooperative agreements with federal, state, and local entities (including Indian tribes). Finally, the recommended legislation, while it retains many of the features new to the 2005 round (such as the super majority requirement), it repeals others, such as statutory selection criteria. The 2005 BRAC round was the fourth in which an independent commission reviewed recommendations drawn up by the Department of Defense, amended them, and submitted the revised list to the President for approval. While the 2005 process resembled the previous three rounds, it was profoundly different in many respects. For example, the DOD's analytical process attempted to reduce former rounds' emphasis on individual military departments by enhancing the joint and cross-service evaluation of installations. BRAC analysis in 2005 also attempted to project defense needs out to 20 years, whereas previous rounds used a much shorter six-year analytical horizon. This encouraged DOD analytical teams to base their assessments on assumptions of the needs of transformed military services, not formations created for the Cold War. These assumptions were embodied in the force-structure plan and infrastructure inventory submitted by the Secretary of Defense. In its legislative recommendation, the Commission suggested that a potential 2014-2015 BRAC round be placed in a strategic sequence of defense review, independent threat analysis, and base realignment. The new statute would couple the existing Quadrennial Defense Review (QDR), currently required every four years, with consideration of a new BRAC round. If the QDR leads the Secretary of Defense to initiate a new BRAC round, the DNI would produce and forward to Congress an independent threat assessment. Under the 2005 statute, the BRAC Commission was terminated on April 16, 2006. The proposed legislation would have extended the life of a subset of the Commission (Chairman, Executive Director, and staff of not more than 50), which would have maintained the Commission's documentation and formed the core of an expanded staff for a possible 2014-2015 Commission. In addition, the continued Commission would have been tasked to monitor and report on: (1) the use of BRAC appropriations; (2) the implementation and savings of 2005 BRAC recommendations; (3) the execution of privatizations-in-place at BRAC sites; (4) the remediation of environmental degradation and its associated cost at BRAC sites; and (5) the impact of BRAC actions on international treaty obligations of the United States. The proposed law would have required the prolonged Commission to prepare and submit three reports to Congress and the President: an Annual Report, a Special Report (due on June 30, 2007), and a Final Report (due on October 31, 2011). The Commission would have reported not later than October 31 of each year on Department of Defense utilization of the Defense Base Closure and Realignment Account 2005, implementation of BRAC recommendations, the carrying out of privatization-in-place by local redevelopment authorities, environmental remediation undertaken by the Department (including its cost), and the impact of BRAC actions on international treaty obligations of the United States. The legislation would have authorized the Commission to study and analyze the execution of BRAC 2005 recommendations. This report, undertaken if the Commission considered it beneficial, would have been completed not later than June 30, 2007. It would have focused on actions taken and planned for those properties whose disposal proves to be problematic, including: Properties Requiring Special Financing . Some properties planned for transfer to local redevelopment authorities or others may require special financial arrangements in the form of loans, loan guarantees, investments, environmental bonds and insurance, or other options. National Priorities List (NPL) Sites . NPL sites and other installations present particularly difficult environmental remediation challenges necessitating long-term management and oversight. The 2005 Commission report proposed that this study examine freeing the Department, after a set period, to withdraw from unsuccessful title transfer negotiations with local redevelopment authorities in order to seek other partners. It also envisioned potential Department contracts with private environmental insurance carriers after the completion of remediation in order to mitigate risk of future liability. The study could have considered the advisability of crafting a financial "toolbox," similar in concept to the special authorizations granted to the Department of Defense in the creation of the Military Housing Privatization Initiative, in order to expedite the disposal of challenging properties. Other alternatives studied were the creation of public-private partnerships, limited-liability corporations, or independent trusteeships to take title to and responsibility for properties. The Commission would have consulted closely with the Department of Defense, the military departments, the Comptroller General of the United States, the Environmental Protection Agency, and the Bureau of Land Management, Department of the Interior, in preparing its study and report. Existing law requires all BRAC implementation actions to be completed not later than six years after the date that the President transmitted the current Commission's report, or September 15, 2011. The recommended legislation would have required the Commission to submit a final report on the execution of these actions not later than October 31, 2011. The recommended legislation included other provisions suggested by the experience of the 2005 round. The proposed legislation would require the Secretary of Defense to release the supporting certified data not later than seven (7) days after forwarding his or her base closure and realignment recommendations to the congressional defense committees and the Commission. Failure to do so would terminate the BRAC round. The 2005 Commission report notes that the four months allotted by statute for the Commission to complete its work was shortened considerably by delays in staffing the Commission, the appointment of Commissioners, and the release of Defense Department certified data, among other considerations. The Commission proposed legislation to extend the period to seven (7) months. The 2005 Commission suggested that a future body be granted the Commission the power to subpoena witness for its hearings. The Commission recommended a statutory designation of the Commission's General Counsel as its sole ethics counselor. The 2005 Commission found that questions concerning recusal from consideration, potential conflicts of interest, etc., were not materially assisted by consultation with other agency counsel. Legislation recommended by the Commission stated that the "records, reports, transcripts, minutes, correspondence, working papers, drafts, studies or other documents that were furnished to or made available to the Commission shall be available for public inspection and copying at one or more locations to be designated by the Commission. Copies may be furnished to members of the public at cost upon request and may also be provided via electronic media in a form that may be designated by the Commission." It would continue the traditional practice of opening all unclassified hearings and meetings of the Commission to the public and provides for official transcripts, certified by the Chairman, to be made available to the public. The recommended legislation would have repealed Sec. 2912-2914 of the existing law. These sections authorized the 2005 round and include, among other provisions, the statutory installation selection criteria.	The 2005 Defense Base Closure and Realignment Commission (commonly referred to as the BRAC Commission) submitted to the President its report on domestic military base closures and realignments on September 8, 2005. The President approved the list and forwarded it to Congress on September 15. This report summarizes some of the report's highlights and examines in detail the Commission's proposed legislation for the conduct of a potential future BRAC round. It will not be updated.
The National Park System is one of the most visible symbols of who we are as a land and a people. As the manager of this system, the National Park Service is caretaker of many of the nation’s most precious natural and cultural resources, ranging from the fragile ecosystems of Arches National Park in Utah to the historic structures of Philadelphia’s Independence Hall and the granite faces of Mount Rushmore in South Dakota. Over the past 30 years, more than a dozen major studies of the National Park System by independent experts as well as the Park Service itself have pointed out the importance of guiding resource management through the systematic collection of data—sound scientific knowledge. The recurring theme in these studies has been that to manage parks effectively, managers need information that allows for the detection and mitigation of threats and damaging changes to resources. Scientific data can inform managers, in objective and measurable terms, of the current condition and trends of park resources. Furthermore, the data allow managers to make resource management decisions based on measurable indicators rather than relying on judgment or general impressions. Managing with scientific data involves both collecting baseline data about resources and monitoring their condition over time. Park Service policy calls for managing parks on this basis, and park officials have told us that without such information, damage to key resources may go undetected until it is so obvious that correcting the problem is extremely expensive—or worse yet, impossible. Without sufficient information depicting the condition and trends of park resources, the Park Service cannot adequately perform its mission of preserving and protecting these resources. While acknowledging the importance of obtaining information on the condition of park resources, the Park Service has made only limited progress in developing it. Our reviews have found that information about many cultural and natural resources is insufficient or absent altogether. This was particularly true for park units that feature natural resources, such as Yosemite and Glacier National Parks. I would like to talk about a few examples of the actual impact of not having information on the condition of park resources, as presented in our 1995 report. Generally, managers at culturally oriented parks, such as Antietam National Battlefield in Maryland or Hopewell Furnace National Historic Site in Pennsylvania, have a greater knowledge of their resources than managers of parks that feature natural resources. Nonetheless, the location and status of many cultural resources—especially archaeological resources—were largely unknown. For example, at Hopewell Furnace National Historic Site, an 850-acre park that depicts a portion of the nation’s early industrial development, the Park Service has never conducted a complete archaeological survey, though the site has been in the park system since 1938. A park official said that without comprehensive inventory and monitoring information, it is difficult to determine whether the best management decisions about resources are being made. The situation was the same at large parks established primarily for their scenic beauty, which often have cultural resources as well. For example, at Shenandoah National Park in Virginia, managers reported that the condition of more than 90 percent of the identified sites with cultural resources was unknown. Cultural resources in this park include buildings and industrial artifacts that existed prior to the formation of the park. In our work, we found that many of these sites and structures have already been damaged, and many of the remaining structures have deteriorated into the surrounding landscape. The tragedy of not having sufficient information about the condition and trends of park resources is that when cultural resources, like those at Hopewell Furnace and Shenandoah National Park, are permanently damaged, they are lost to the nation forever. Under these circumstances, the Park Service’s mission of preserving these resources for the enjoyment of future generations is seriously impaired. Compared with the situation for cultural resources, at the parks we visited that showcase natural resources, even less was known about the condition and trends that are occurring to natural resources over time. For example: — At California’s Yosemite National Park, officials told us that virtually nothing was known about the types or numbers of species inhabiting the park, including fish, birds, and such mammals as badgers, river otters, wolverines, and red foxes. — At Montana’s Glacier National Park, officials said most wildlife-monitoring efforts were limited to four species protected under the Endangered Species Act. — At Padre Island National Seashore in Texas, officials said they lacked detailed data about such categories of wildlife as reptiles and amphibians as well as mammals such as deer and bobcats. Park managers told us that—except for certain endangered species, such as sea turtles—they had inadequate knowledge about whether the condition of wildlife was improving, declining, or staying the same. This lack of inventory and monitoring information affects not only what is known about park resources, but also the ability to assess the effect of management decisions. After 70 years of stocking nonnative fish in various lakes and waterways in Yosemite, for example, park officials realized that more harm than good had resulted. Nonnative fish outnumber native rainbow trout by a 4-to-1 margin, and the stocking reduced the numbers of at least one federally protected species (the mountain yellow-legged frog). The Park Service’s lack of information on the condition of the vast array of resources it must manage becomes even more significant when one considers the fact that many known threats exist that can adversely affect these resources. Since at least 1980, the Park Service has begun to identify threats to its resources, such as air and water pollution or vandalism, and to develop approaches for dealing with them. However, our recent reviews have found that sound scientific information on the extent and severity of these threats is limited. Yet preventing or mitigating these threats and their impact is at the core of the agency’s mission to preserve and protect the parks’ resources. We have conducted two recent reviews of threats to the parks, examining external threats in 1994 and internal threats in 1996. Threats that originate outside of a park are termed external and include such things as off-site pollution, the sound of airplanes flying overhead, and the sight of urban encroachment. Protecting park resources from the damage resulting from external threats is difficult because these threats are, by their nature, beyond the direct control of the Park Service. Threats that originate within a park are termed internal and include such activities as heavy visitation, the impact of private inholdings within park grounds, and vandalism. In our nationwide survey of park managers, they identified more than 600 external threats, and in a narrower review at just eight park units, managers identified more than 100 internal threats. A dominant theme in both reports was that managers did not have adequate information to determine the impact of these threats and correctly identify their source. For the most part, park managers said they relied on judgment, coupled with limited scientific data, to make these determinations. For some types of damage, such as the defacement of archaeological sites, observation and judgment may provide ample information to substantiate the extent of the damage. But for many other types of damage, Park Service officials agree that observation and judgment are not enough. Scientific research will generally provide better evidence about the types and severity of damage occurring and any trends in the severity of the threats. Scientific research also generally provides a more reliable guide for mitigating threats. Two examples will help illustrate this point. In California’s Redwood National Park, scientific information about resource damage is helping mitigation efforts. Scientists used research data that had been collected over a period of time to determine the extent to which damage occurring to trees, fish, and other resources could be attributed to erosion from logging and related road-building activities. On the basis of this research, the park’s management is now in a position to begin reducing the threat by advising adjacent landowners on better logging and road-building techniques that will reduce erosion. The second example, from Crater Lake National Park in Oregon, shows the disadvantage of not having such information. The park did not have access to wildlife biologists or forest ecologists to conduct scientific research identifying the extent of damage occurring from logging and its related activities. For example, damage from logging, as recorded by park staff using observation and a comparison of conditions in logged and unlogged areas, has included the loss of habitat and migration corridors for wildlife. However, without scientific research, park managers are not in a sound position to negotiate with the Forest Service and the logging community to reduce the threat. The information that I have presented to you today is not new to the National Park Service. Park Service managers have long acknowledged that to improve management of the National Park System, more sound scientific information on the condition of resources and threats to those resources is needed. The Park Service has taken steps to correct the situation. For example, automated systems are in place to track illegal activities such as looting, poaching, and vandalism, and an automated system is being developed to collect data on deficiencies in preserving, collecting, and documenting cultural and natural resource museum collections. For the most part, however, relatively limited progress has been made in gathering information on the condition of resources. When asked why more progress is not being made, Park Service officials generally told us that funds are limited and competing needs must be addressed. Our 1995 study found that funding increases for the Park Service have mainly been used to accommodate upgraded compensation for park rangers and deal with additional park operating requirements, such as safety and environmental regulations. In many cases, adequate funds are not made available to the parks to cover the cost of complying with additional operating requirements, so park managers have to divert personnel and/or dollars from other activities such as resource management to meet these needs. In addition, we found that, to some extent, these funds were used to cope with a higher number of park visitors. Making more substantial progress in improving the scientific knowledge base about resources in the park system will cost money. At a time when federal agencies face tight budgets, the park system continues to grow as new units are added—37 since 1985, and the Park Service faces such pressures as higher visitation rates and an estimated $4 billion backlog of costs related to just maintaining existing park infrastructures such as roads, trails, and visitor facilities. Dealing with these challenges calls for the Park Service, the administration, and the Congress to make difficult choices involving how national parks are funded and managed. Given today’s tight fiscal climate and the unlikelihood of substantially increased federal appropriations, our work has shown that the choices for addressing these conditions involve (1) increasing the amount of financial resources made available to the parks by increasing opportunities for parks to generate more revenue, (2) limiting or reducing the number of units in the park system, and (3) reducing the level of visitor services. Regardless of which, if any, of these choices is made, without an improvement in the Park Service’s ability to collect the scientific data needed to properly inventory park resources and monitor their condition over time, the agency cannot adequately perform its mission of preserving and protecting the resources entrusted to it. This concludes my statement, Mr. Chairman. I would be happy to respond to any questions you or other Members of the Subcommittee may have. The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. U.S. General Accounting Office P.O. Box 6015 Gaithersburg, MD 20884-6015 Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders may also be placed by calling (202) 512-6000 or by using fax number (301) 258-4066, or TDD (301) 413-0006. Each day, GAO issues a list of newly available reports and testimony. To receive facsimile copies of the daily list or any list from the past 30 days, please call (202) 512-6000 using a touchtone phone. A recorded menu will provide information on how to obtain these lists.	GAO discussed its views on the National Park Service's (NPS) knowledge of the condition of the resources that the agency is entrusted to protect within the National Park System. GAO noted that: (1) GAO's work has shown that although NPS acknowledges, and its policies emphasize, the importance of managing parks on the basis of sound scientific information about resources, today such information is seriously deficient; (2) frequently, baseline information about natural and cultural resources is incomplete or nonexistent, making it difficult for park managers to have a clear knowledge about what condition the resources are in and whether the condition of those resources is deteriorating, improving, or staying the same; (3) at the same time, many of these park resources face significant threats, ranging from air pollution, to vandalism, to the development of nearby land; (4) however, even when these threats are known, NPS has limited scientific knowledge about the severity of them and their impact on affected resources; (5) these concerns are not new to NPS, and in fact, the agency has taken steps to improve the situation; (6) however, because of limited funds and other competing needs that must be completed, NPS has made relatively limited progress to correct this deficiency of information; (7) there is no doubt that it will cost money to make more substantial progress in improving the scientific knowledge base about park resources; (8) dealing with this challenge will require NPS, the administration, and the Congress to make difficult choices involving how parks are funded and managed; and (9) however, without such an improvement, NPS will be hindered in its ability to make good management decisions aimed at preserving and protecting the resources entrusted to it.
The United States is a member of five multilateral development banks (MDBs): the World Bank, African Development Bank (AfDB), Asian Development Bank (AsDB), European Bank for Reconstruction and Development (EBRD), and Inter-American Development Bank (IDB). It also belongs to two similar organizations, the International Fund for Agricultural Development (IFAD) and the North American Development Bank (NADBank). The World Bank also administers trust funds, focused on particular global issues such as food security and the environment. The MDBs have similar programs, though they all differ somewhat in their institutional structure and emphasis. Each has a president and executive board that manages or supervises all of its programs and operations. Except for the EBRD, which makes only market-based loans, all the MDBs make both market-based loans to middle-income developing countries and concessional loans to the poorest countries. Their loans are made to governments or to organizations having government repayment guarantees. In each MDB, the same staff prepares both the market-based and the concessional loans, using the same standards and procedures for both. The main differences between them are the repayment terms and the countries which qualify for them. The MDBs also have specialized facilities which have their own operating staff and management but report to the bank's president and executive board. The World Bank's International Finance Corporation (IFC) and the IDB's Inter-American Investment Corporation (IIC) make loans to or equity investments in private-sector firms in developing countries (on commercial terms) without government repayment guarantees. The AsDB makes similar loans from its market-rate loan account. The World Bank's Multilateral Investment Guarantee Agency (MIGA) underwrites private investments in developing countries (on commercial terms) to protect against noneconomic risk. At the IDB, the Multilateral Investment Fund (MIF) helps Latin American countries institute policy reforms aimed at stimulating domestic and international investment. It also funds worker retraining and programs for small and micro-enterprises. The MIF originated as part of President Bush's 1990 Enterprise for the Americas Initiative (EAI). The NADBank was created by the North American Free Trade Agreement (NAFTA) to fund environmental infrastructure projects in the U.S.-Mexico border region. The International Fund for Agricultural Development (IFAD), created in 1977, focuses on reducing poverty and hunger in poor countries through agricultural development. Finally, the World Bank also serves as the trustee for several targeted multilateral development funds, for which the Administration has requested and Congress has appropriated funds. These multilateral funds include the Clean Technology Fund (CTF), the Strategic Climate Fund (SCF), the Global Environment Facility (GEF), and the Global Agriculture and Food Security Program (GAFSP). The MDBs' concessional aid programs are funded with money donated by their wealthier member country governments. Periodically, as the stock of uncommitted MDB funds begins to run low, the major donors negotiate a new funding plan that specifies their new contribution shares. Loans from the MDBs' market-rate loan facilities are funded with money borrowed in world capital markets. The IFC and IIC fund their loans and equity investments partly with money contributed by their members and partly with funds borrowed from commercial capital markets. The MDBs' borrowings are backed by the subscriptions of their member countries. They provide a small part of their capital subscriptions (3% to 5% of the total for most MDBs) in the form of paid-in capital. The rest they subscribe as callable capital. Callable capital is a contingent liability, payable only if an MDB becomes bankrupt and lacks sufficient funds to repay its own creditors. It cannot be called to provide the banks with additional loan funds. Countries' voting shares are determined mainly by the size of their contributions. The United States is the largest stockholder in most MDBs, and has maintained this position to preserve veto power in some institutions over major policy decisions. Figure 1 , Figure 2 , and Tables 1-4 show the amounts the Administration has requested and Congress has appropriated annually since FY2000 to the multilateral development banks. Note that the figures and tables do not include callable capital. Since the early 1980s, Congress has authorized but not appropriated callable capital. As Figure 1 illustrates, appropriations to the MDBs increased dramatically starting in 2009, from $1.28 billion in 2008 to a peak of $2.67 billion in FY2014. The uptick was driven largely by capital increases for the nonconcessional lending facilities at the MDBs in response to the global financial crisis, as well as the proliferation of trust funds administered by the World Bank focused on specific policy issues. As these commitments have been met, particularly in funding the capital increases at the MDBs, overall funding levels started declining. Appropriations have declined over the past three fiscal years to $1.52 billion in FY2018. President Trump campaigned on an "America First" platform and has signaled a reorientation of U.S. foreign policy. In March 2017, the Trump Administration proposed cutting $650 million over three years compared to the commitments made under the Obama Administration. For FY2019, the Trump Administration requested $1.42 billion for the MDBs, a 16% cut from the amount appropriated in FY2017. The bulk of the request—$1.32 billion, about 90%—would fund U.S. commitments to concessional lending facilities at the MDBs, particularly IDA. The request also includes funding toward the capital increase at the AfDB, multilateral trust funds focused on environmental issues, and international food security programs.	This report shows in tabular form how much the Administration requested and how much Congress appropriated for U.S. payments to the multilateral development banks (MDBs) since 2000. Multilateral development banks provide financial assistance to developing countries in order to promote economic and social development. The United States belongs to several multilateral development banks, including the World Bank and four regional development banks (the African Development Bank, the Asian Development Bank, the Inter-American Development Bank, and the European Bank for Reconstruction and Development). It also belongs to the North American Development Bank, which is a binational (U.S.-Mexico) development bank; the International Fund for Agricultural Development, which focuses on poverty and hunger in developing countries; and several trust funds administered by the World Bank, which focus on specific global issues, such as food security and the environment. The United States appropriates funding on an annual basis to various multilateral development banks and related funds. In FY2018, U.S. appropriations for MDB programs totaled $1.5 billion. Most of the FY2018 funding (about 90%) went to the concessional lending facilities at the MDBs, which provide grants and low-cost loans to the world's poorest countries. Congress also provided funding for the African Development Bank, IFAD, and the Global Environmental Facility (GEF), administered by the World Bank. The Treasury Department manages U.S. participation in the MDBs, and the Administration's request is submitted as part of Treasury International Programs. For FY2019, the Administration has requested $1.4 billion for the MDBs and related funds. Most of the funding would go to the concessional lending facilities at the World Bank, the African Development Bank, and the Asian Development Bank. It would also provide funding for the African Development Bank. The Administration has proposed cutting U.S. contributions to IFAD and reducing U.S. contributions to the GEF. For further information about the MDBs and relevant U.S. policy process, see the following CRS reports: CRS Report R41170, Multilateral Development Banks: Overview and Issues for Congress, by [author name scrubbed]; CRS Report R41537, Multilateral Development Banks: How the United States Makes and Implements Policy, by [author name scrubbed] and [author name scrubbed]; CRS In Focus IF10144, The Global Environment Facility (GEF), by [author name scrubbed]; and CRS Report R44890, Department of State, Foreign Operations, and Related Programs: FY2018 Budget and Appropriations, by [author name scrubbed], [author name scrubbed], and [author name scrubbed]
In June 2007, the Supreme Court issued its decision in Ledbetter v. Goodyear Tire & Rubber Co., Inc. , a case that involved questions about the timeliness of claims filed under Title VII of the Civil Rights Act, which prohibits discrimination in employment on the basis of race, color, religion, sex, or national origin. By a 5-4 vote margin, the Court rejected the plaintiff's argument that each paycheck she received reflected a lower salary due to past discrimination and therefore constituted a new violation of the statute. Instead, the Court held that "a new violation does not occur, and a new charging period does not commence, upon the occurrence of subsequent nondiscriminatory acts that entail adverse effects resulting from the past discrimination." As a result, the Court held that the plaintiff had not filed suit in a timely manner. Initially, the decision appeared to limit some pay discrimination claims based on Title VII, but did not affect an individual's ability to sue for sex discrimination that results in pay bias under the Equal Pay Act. Although the Court's decision made it more difficult for employees to sue for pay discrimination under Title VII, the decision was recently superseded by the Lilly Ledbetter Fair Pay Act of 2009, which amended Title VII to clarify that the time limit for suing employers for pay discrimination begins each time they issue a paycheck. From 1979 until 1998, Lilly Ledbetter worked as a supervisor for the Goodyear Tire & Rubber Company. Although Ledbetter initially received a salary similar to the salaries paid to her male colleagues, a pay disparity developed over time. By 1997, the pay disparity between Ledbetter and her 15 male counterparts had widened considerably, to the point that Ledbetter was paid $3,727 per month while the lowest paid male colleague received $4,286 per month and the highest-paid male colleague received $5,236 per month. In 1998, Ledbetter filed a charge of discrimination with the Equal Employment Opportunity Commission (EEOC) alleging that Goodyear had unlawfully discriminated against her on the basis of her sex in violation of Title VII. According to Ledbetter, her current pay was discriminatorily low due to a long series of decisions reflecting Goodyear's pervasive discrimination against female managers in general and Ledbetter in particular. A jury found in her favor, and the district court entered judgment for backpay and damages, but the appellate court reversed. The Supreme Court granted review in order to resolve disagreement among the appellate courts regarding the proper application of the time limit for filing claims in Title VII disparate treatment pay cases. Under Title VII, it is an "unlawful employment practice" for an employer to discriminate "against any individual with respect to his compensation ... because of such individual's race, color, religion, sex, or national origin." Individuals who want to challenge an employment practice as unlawful are required to file a charge with the EEOC within a specified period—either 180 days or 300 days, depending on the state—"after the alleged unlawful employment practice occurred." The question that arose in the Ledbetter case was how to determine precisely what types of activities constitute an unlawful employment practice for purposes of starting the clock on the filing deadline. Ledbetter argued that two different employment practices could qualify as having occurred within the 180-day charging period preceding the filing of her EEOC claim: (1) the paychecks that were issued to her during that period, each of which she alleged constituted a separate act of discrimination, or (2) a 1998 decision denying her a raise, which she contended was unlawful because it perpetuated the discriminatory pay decisions from previous years. In contrast, Goodyear argued that Ledbetter's claim was time barred because the discriminatory acts that affected her current pay had taken place prior to the 180 days that preceded the claim Ledbetter filed with the EEOC. The Supreme Court granted review to resolve the dispute. Ultimately, the Supreme Court ruled in favor of Goodyear, holding that Ledbetter's suit was time barred because no unlawfully discriminatory acts had taken place within the 180-day charging period. In rejecting Ledbetter's claim on statutory grounds, the Court majority relied heavily on the principle that Title VII claims alleging disparate treatment require evidence of discriminatory intent. Because there was no evidence that Goodyear had acted with discriminatory intent when it issued the paychecks Ledbetter received during the charging period or when the company had denied her a raise in 1998, the Court found that Goodyear had not engaged in an unlawful employment practice during the specified time period. As a result, the fact that Ledbetter may have been suffering from the continuing effects of past discrimination was not sufficient for her to establish a claim within the statutorily mandated filing period. In issuing its decision, the Ledbetter majority relied on a series of precedents in analogous employment discrimination cases. For example, one such case, United Air Lines, Inc. v. Evans , involved a female flight attendant who was not granted seniority when she was rehired despite the fact that she had originally been forced to resign when she got married. Although the Court agreed that the company's discriminatory policy had a continuing effect, that effect was not sufficient to establish a present violation. Similarly, in Lorance v. AT&T Technologies, Inc. , the Court rejected a challenge to a discriminatory seniority system because the complaint had been filed when the discriminatory effect was felt, rather than within the charging period established by the original discriminatory act, namely the adoption of the seniority system. In light of these and other precedents, the Court concluded: The EEOC charging period is triggered when a discrete unlawful practice takes place. A new violation does not occur, and a new charging period does not commence, upon the occurrence of subsequent nondiscriminatory acts that entail adverse effects resulting from the past discrimination. But of course, if an employer engages in a series of acts each of which is intentionally discriminatory, then a fresh violation takes place when each act is committed.... [C]urrent effects alone cannot breathe life into prior, uncharged discrimination.... Of primary concern to the Court was the question of discriminatory intent. In general, claims such as Ledbetter's, which allege unlawful disparate treatment, must demonstrate discriminatory intent. According to the Court, allowing Ledbetter to shift the intent associated with the discriminatory pay decisions to later paychecks would have the effect of imposing liability in the absence of the required intent. The Court also appeared concerned that allowing Ledbetter's claim to proceed would undermine Title VII enforcement procedures and filing deadlines, which were designed in part to protect employers from defending against discrimination claims that are long past. According to the Court, Title VII's short filing deadline "reflects Congress' strong preference for the prompt resolution of employment discrimination allegations through voluntary conciliation and cooperation." The Court also rejected Ledbetter's reliance on Bazemore v. Friday , a pay discrimination case involving employees who were, prior to enactment of Title VII, separated into a white branch and a black branch, with the latter group receiving lower salaries. Although the Bazemore Court held that an employer who adopts a discriminatory pay structure violates Title VII whenever it issues a paycheck to disfavored employees, the Ledbetter Court distinguished the two cases, arguing that the paychecks in Bazemore reflected the employer's ongoing retention of a discriminatory pay structure—a current violation of the statute—while the paychecks in Ledbetter reflected the continuing effect of an isolated, past violation of the statute. Finally, although the EEOC has interpreted Title VII to allow challenges based on discriminatory pay each time a paycheck is received, the Court declined to defer to the agency's interpretation. In contrast, the dissent in Ledbetter strongly disagreed with the majority's analysis. According to the dissent, treating the actual payment of a discriminatory wage as an unlawful employment practice would be more faithful to precedent, would better reflect workplace realities, and would be more consistent with the overall purpose of Title VII. Specifically, the dissent argued that the Court's holding was inconsistent with the result in Bazemore , contending that Bazemore recognized that paychecks that perpetuate past discrimination constitute a fresh instance of discrimination every time they are issued. The dissent also drew an analogy between pay discrimination claims and sexual harassment hostile work environment claims, which involve a series of discrete acts that recur and are cumulative in impact. Since hostile work environment claims may be filed even when some of the discrete acts that form the basis for a claim have taken place outside of the charging period, the dissent would have allowed Ledbetter's claim to proceed as well. The dissent also distinguished pay bias claims from other types of employment discrimination, arguing that pay discrimination is fundamentally different from other types of employment bias. For example, employees, who are generally aware when they suffer adverse employment actions related to promotion, transfer, hiring, or firing, may not know they have suffered pay discrimination, particularly because salary levels are often hidden from the employee's view and pay disparities become apparent only over time. As a result of these differences, the dissent argued that the precedents upon which the Court relied were inapplicable because those cases involved easily identifiable acts of discrimination. Finally, the dissent criticized the majority's opinion as inconsistent with the overall anti-discrimination purpose of Title VII. Although the Ledbetter decision was subsequently overturned by statute, at the time of the ruling, many commentators noted the possible effects that the case could have on the workplace. First, employees might have had a more difficult time bringing pay discrimination claims under Title VII. If employees brought pay discrimination claims early in order to meet the statutory filing deadline, they might have had difficulty proving discrimination if the pay disparity remained small. If employees brought pay discrimination claims later, however, then they might not have been able to meet the filing deadline. As a result of this dilemma, employers might have experienced an increase in pay discrimination claims being filed against them, since some employees might have filed claims in order to meet the deadline even in cases where discrimination was unclear. It is also important to note that the Ledbetter decision affected more than just pay bias cases involving sex discrimination. Because Title VII applies to discrimination on the basis of race, color, national origin, sex, and religion, many other classes of claimants were potentially affected by the decision. Furthermore, the Ledbetter case also affected pay discrimination under parallel employment discrimination statutes that are patterned on Title VII, such as the Age Discrimination in Employment Act (ADEA), the Rehabilitation Act of 1973, and the Americans with Disabilities Act (ADA). Employees who filed pay discrimination claims alleging race or age discrimination, for example, might have been more negatively affected by the decision than employees who alleged sex discrimination because the latter group still had recourse under the Equal Pay Act (EPA). The EPA, which prohibits discrimination on the basis of sex with regard to the compensation paid to men and women for substantially equal work performed in the same establishment, does contain a statute of limitations for filing claims but has, thus far, been interpreted in such a way that each issuance of an unequal paycheck is treated as a new discriminatory act. In addition, the Ledbetter decision spurred congressional efforts to overturn the ruling. Since Ledbetter was decided on statutory grounds, several legislators who disagreed with the Court's interpretation introduced legislation clarifying that unlawful employment practices under Title VII include each issuance of a paycheck that reflects a discriminatory compensation practice. Such congressional action is not uncommon. For example, the Lorance decision, cited as precedent by the Ledbetter majority, was subsequently superseded by Congress in the Civil Rights Act of 1991. After the Ledbetter decision was handed down, several bills to amend Title VII in light of the opinion were introduced in both the 110 th and 111 th congressional sessions. As passed by Congress and signed into law by President Obama on January 29, 2009, the Lilly Ledbetter Fair Pay Act of 2009 ( H.R. 11 / S. 181 ) clarifies that the time limit for suing employers for pay discrimination begins each time they issue a paycheck and is not limited to the original discriminatory action. This change is applicable not only to Title VII of the Civil Rights Act, but also to the Age Discrimination in Employment Act (ADEA), the Rehabilitation Act of 1973, and the Americans with Disabilities Act (ADA).	This report discusses Ledbetter v. Goodyear Tire & Rubber Co., Inc., a case in which the Supreme Court considered the timeliness of a sex discrimination claim filed under Title VII of the Civil Rights Act, which prohibits employment discrimination on the basis of race, color, religion, sex, or national origin. In Ledbetter, the female plaintiff alleged that past sex discrimination had resulted in lower pay increases and that these past pay decisions continued to affect the amount of her pay throughout her employment, resulting in a significant pay disparity between her and her male colleagues by the end of her nearly 20-year career. Under Title VII, a plaintiff is required to file suit within 180 days after an alleged unlawful employment practice has occurred. Although the plaintiff in Ledbetter argued that each paycheck she received constituted a new violation of the statute and therefore reset the clock with regard to filing a claim, the Court rejected this argument, reasoning that even if employees suffer continuing effects from past discrimination, their claims are time barred unless filed within the specified number of days of the original discriminatory act. On January 29, 2009, President Obama signed the Lilly Ledbetter Fair Pay Act of 2009 (H.R. 11/S. 181). This legislation supersedes the Ledbetter decision by amending Title VII to clarify that the time limit for suing employers for pay discrimination begins each time they issue a paycheck.
Introduced in each of the last several congressional sessions, the Student Non-Discrimination Act (SNDA) would prohibit discrimination on the basis of actual or perceived sexual orientation or gender identity in public elementary and secondary schools. The stated purpose of the legislation ( H.R. 846 / S. 439 in the 114 th Congress) is to ensure that students are free from discriminatory conduct such as harassment, bullying, intimidation, and violence. SNDA appears to be patterned on Title IX of the Education Amendments of 1972, which prohibits discrimination on the basis of sex in federally funded education programs or activities, although SNDA does differ from Title IX in several important respects. In the 113 th Congress, SNDA was included as part of legislation to reauthorize the Elementary and Secondary Education Act (ESEA). Similar legislation to reauthorize the ESEA is pending in the 114 th Congress, and it is possible that SNDA could be incorporated into one of these bills during the legislative process. This report begins by discussing current laws that prohibit discrimination in education, and continues with an analysis of the specific provisions contained in SNDA, including provisions relating to coverage, prohibited acts, and enforcement and remedies under the proposed legislation. Under current law, no civil rights statute explicitly prohibits discrimination in schools on the basis of sexual orientation or gender identity, although there are several civil rights statutes that bar discrimination in education on other grounds. In addition to Title IX, the applicable federal civil rights statutes that currently prohibit discrimination in schools include Title VI of the Civil Rights Act of 1964 (CRA), which prohibits discrimination on the basis of race, color, or national origin in federally funded programs or activities; Section 504 of the Rehabilitation Act of 1973, which prohibits discrimination on the basis of disability in federally funded programs or activities; Title II of the Americans with Disabilities Act of 1990 (ADA), which prohibits discrimination on the basis of disability by state or local governments; Title IV of the CRA, which bars discrimination in public schools on the basis of race, color, sex, religion, or national origin; and the Equal Educational Opportunities Act, which prohibits states from denying equal educational opportunities based on race, color, sex, or national origin. The last two statutes were largely designed to combat segregation in public schools. Although none of these civil rights statutes explicitly prohibits discrimination on the basis of sexual orientation or gender identity, there may be instances in which such discrimination may also be a form of sex discrimination that violates Title IX. In the employment context, the Supreme Court has recognized that sex discrimination may encompass same-sex sexual harassment, meaning that sex discrimination is prohibited even if the harasser and victim are members of the same sex. The Court has also ruled that gender stereotyping is a form of discrimination on the basis of sex. Therefore, if a student who is gay or transgender is being harassed because of a failure to conform to gender stereotypes, such harassment is prohibited by Title IX. It is important to note, however, that Title IX prohibits sexual orientation or gender identity discrimination only when it constitutes a form of sex discrimination. Thus, the statute does not prohibit all forms of sexual orientation or gender identity discrimination or harassment of students, and SNDA appears to be designed to fill this gap. In 2010, the Department of Education (ED) issued guidance that discusses when student bullying or harassment may violate federal education anti-discrimination laws and that clarifies a school's obligation to combat such bullying or harassment. The guidance includes a discussion of when bullying or harassment that targets lesbian, gay, bisexual, or transgender students may be a form of sex discrimination that violates Title IX. Like Title IX, SNDA would apply to public elementary and secondary schools, as defined in the Elementary and Secondary Education Act (ESEA). Charter schools, which are considered to be public elementary and secondary schools under ESEA, would also be covered. However, unlike Title IX, which prohibits sex discrimination in all educational programs that receive federal funding, including institutions of higher education and vocational schools, SNDA's coverage would not extend beyond the elementary and secondary education level. If enacted, SNDA would prohibit discrimination on the basis of actual or perceived sexual orientation or gender identity in public elementary and secondary schools, as well as discrimination based on the sexual orientation or gender identity of a person with whom a student associates. Although such provisions regarding an individual's "perceived" status or association with a protected individual are without parallel in Title IX, the difference might be attributed to the fact that an individual's sex, unlike sexual orientation or gender identity, is generally evident to the casual observer. Under SNDA, "sexual orientation" would be defined to mean homosexuality, heterosexuality, or bisexuality, while "gender identity" would be defined to mean the gender-related identity, appearance, or mannerisms or other gender-related characteristics of an individual, with or without regard to the individual's designated sex at birth. Like Title IX, SNDA's prohibition against sex discrimination would extend to all education "programs or activities" operated by recipients of federal funds. As a result, the scope of SNDA could potentially be quite broad. Under Title IX, the prohibition against sex discrimination in education programs or activities has been interpreted to include discrimination on the basis of sex in student admissions, recruitment, scholarship awards and tuition assistance, housing, access to courses and other academic offerings, counseling, financial assistance, employment assistance to students, health and insurance benefits and services, athletics, and all aspects of education-related employment, including recruitment, hiring, promotion, tenure, demotion, transfer, layoff, termination, compensation, benefits, job assignments and classifications, leave, and training. Presumably, SNDA's prohibition on sexual orientation or gender identity discrimination could be interpreted to cover a similarly broad range of education programs or activities. In addition, SNDA would expressly prohibit harassment on the basis of actual or perceived sexual orientation or gender identity of a student or of a person with whom the student associates or has associated. Such harassment would include conduct that is "sufficiently severe, persistent, or pervasive to limit a student's ability to participate in or benefit from a program or activity of a public school or educational agency, or to create a hostile or abusive educational environment ... including acts of verbal, nonverbal, or physical aggression, intimidation, or hostility.... " Although Title IX does not have an explicit prohibition against such harassment, the statute has been interpreted to prohibit such activity. Thus, SNDA's express prohibition against harassment appears to be patterned on the current legal standards for harassment under Title IX, as developed by the courts and implementing agencies. For more information on sexual harassment in the schools, see CRS Report RL33736, Sexual Harassment: Developments in Federal Law , by [author name scrubbed]. As is generally common under federal civil rights laws, SNDA would also prohibit retaliation against individuals who oppose conduct prohibited by the act. This prohibition appears to be patterned on the anti-retaliation provision in Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination on the basis of race, color, sex, national origin, and religion. Unlike Title VII and SNDA, Title IX does not contain an express statutory prohibition against retaliation. Nevertheless, the federal courts have interpreted Title IX to prohibit retaliatory conduct. In Jackson v. Birmingham Board of Education , the Court held that Title IX not only encompasses retaliation claims, but also is available to individuals who complain about sex discrimination, even if such individuals themselves are not the direct victims of sex discrimination. Reasoning that "Title IX's enforcement scheme would unravel" "if retaliation were not prohibited," the Court concluded that "when a funding recipient retaliates against a person because he complains of sex discrimination, this constitutes intentional discrimination on the basis of sex in violation of Title IX." If enacted, SNDA would also specify that the legislation shall not be construed to invalidate or limit the rights, remedies, procedures, or legal standards under other federal, state, or local laws, and would clarify that the requirements of the act are in addition to those imposed by Title IX, Title VI, and the ADA. Finally, SNDA would also state that nothing in the act shall be construed to alter legal standards or rights available under other federal laws that protect freedom of speech and expression, nor to affect legal standards and rights available to religious and other student groups under the First Amendment to the Constitution and the Equal Access Act. For more on this provision, see CRS Report R42626, Religious Discrimination in Public Schools: A Legal Analysis , by [author name scrubbed]. Under SNDA, each federal agency that provides federal financial assistance to education programs or activities would be responsible for ensuring compliance with the act by recipients of such assistance. As is generally standard with statutes that govern the provision of federal financial assistance, an agency would have the authority to terminate such assistance to recipients who fail to comply with the act's requirements. However, SNDA, like Title IX, would include a provision that limits termination of assistance to the particular entity that is out of compliance, as well as to the particular program in which noncompliance has been found. SNDA would also require federal agencies that terminate funding to file a report regarding the grounds for its actions. In addition to enforcement by federal agencies, SNDA would provide a private right of action allowing individuals to sue in federal court for violations of the act. Individuals would not be required to exhaust administrative remedies before suing, and they would be entitled to appropriate relief, including, but not limited to, equitable relief, compensatory damages, cost of the action, and remedial action, as well as attorney's fees. Aside from attorney's fees, the statutory language of Title IX does not expressly provide for similar rights and remedies. However, the statute has been interpreted to include such rights and remedies. Indeed, in an early Title IX case, the Supreme Court held that the statute provides student victims with an avenue of judicial relief. In Cannon v. University of Chicago , the Court ruled that an implied right of action exists under Title IX for student victims of sex discrimination who need not exhaust their administrative remedies before filing suit. In Franklin v. Gwinnett County Public Schools , the Court held that damages were available to a student who had been sexually harassed by her teacher if she could prove that the school district had intentionally violated Title IX. After Franklin , the appropriate standard for measuring a school district's liability for sexual harassment of a student by a teacher remained unsettled until the Supreme Court ruling in Gebser v. Lago Vista Independent School District . In Gebser , the Court determined that a school district will not be held liable under Title IX for a teacher's sexual harassment of a student if the school district did not have actual notice of the harassment and did not exhibit deliberate indifference to the misconduct. Likewise, Davis v. Monroe County Board of Education , decided in 1999, addressed the standard of liability that should be imposed on school districts to remedy student-on-student sexual harassment. In Davis , the Court held where officials have "actual knowledge" of the harassment, where the "harasser is under the school's disciplinary authority," and where the harassment is so severe "that it can be said to deprive the victims of access to the educational opportunities or benefits provided by the school," the district may be held liable for damages under Title IX. For more information about judicial rulings related to Title IX, see CRS Report RL30253, Sex Discrimination and the United States Supreme Court: Developments in the Law , by [author name scrubbed]. In addition, SNDA would waive the states' Eleventh Amendment immunity from suit for sexual orientation or gender identity discrimination within any state program or activity that receives federal financial assistance. The Eleventh Amendment provides states with immunity from claims brought under federal law in both federal and state courts. Although Congress may waive the states' sovereign immunity by "appropriate" legislation enacted pursuant to Section 5 of the Fourteenth Amendment, the scope of congressional power to create a private right of action against the states for monetary damages has been substantially narrowed by a series of Supreme Court decisions. Taken together, these decisions restrict the ability of private individuals to take the states to court for federal civil rights violations. They may not, however, apply to states' voluntary acceptance of federal benefits that are expressly conditioned on waiver of Eleventh Amendment immunity. "Congress may, in the exercise of its spending power, condition its grant of funds to the States upon their taking certain actions that Congress could not require them to take, and that acceptance of the funds entails an agreement to the actions." Thus, when a statute enacted under the Spending Clause conditions grants to the states upon an unambiguous waiver of Eleventh Amendment immunity, as SNDA proposes, at least one federal court has determined that "the condition is constitutionally permissible as long as it rests on the state's voluntary and knowing acceptance of it." It is important to note, however, that this area of the law is relatively undeveloped and may evolve as more legal challenges arise. As noted above, there are certain circumstances in which discrimination on the basis of sexual orientation or gender identity in federally funded education programs or activities may currently be prohibited by Title IX's prohibition against sex discrimination. Indeed, both ED and the Department of Justice (DOJ) have taken an active role in pursuing enforcement efforts in such circumstances. These efforts have resulted in a number of settlements in recent years. For example, in a 2013 case involving Arcadia Unified School District, a transgender male student alleged that the school district had violated Title IX by denying him access to facilities consistent with his male gender. Under an agreement reached with ED and DOJ, the school district will work with a consultant to support and assist the district in creating a safe, nondiscriminatory learning environment for students who are transgender or do not conform to gender stereotypes; amend its policies and procedures to reflect that gender-based discrimination, including discrimination based on a student's gender identity, transgender status, and nonconformity with gender stereotypes, is a form of discrimination based on sex; and train administrators and faculty on preventing gender-based discrimination and creating a nondiscriminatory school environment for transgender students. Additionally, the district will take a number of steps to treat the student like all other male students in the education programs and activities offered by the district. Likewise, in J.L. v. Mohawk Central School District , DOJ intervened in a lawsuit filed by a transgender male student who alleged that the school district had violated Title IX and the equal protection clause of the U.S. Constitution by failing to take action to remedy harassment based on gender stereotypes. The school district and DOJ eventually reached a court-approved settlement agreement that provided a number of remedies to address discrimination on the basis of sex, gender identity, gender expression, and sexual orientation. Despite the anti-discrimination protections that may be available in Title IX cases such as these, it is important to note that not all instances of sexual orientation or gender identity discrimination will be deemed to be a form of sex discrimination prohibited by federal law. SNDA therefore appears to be designed to offer protection in cases in which such discrimination is not currently prohibited under Title IX.	Introduced in each of the last several congressional sessions, the Student Non-Discrimination Act (SNDA) would prohibit discrimination on the basis of actual or perceived sexual orientation or gender identity in public elementary and secondary schools. The stated purpose of the legislation (H.R. 846/S. 439 in the 114th Congress) is to ensure that students are free from discriminatory conduct such as harassment, bullying, intimidation, and violence. SNDA appears to be patterned on Title IX of the Education Amendments of 1972, which prohibits discrimination on the basis of sex in federally funded education programs or activities, although SNDA does differ from Title IX in several important respects.
Senate and House rules place restrictions on the kinds of agreements conferees can propose to their two houses. Implicit in the rules of both chambers is the requirement that conferees resolve the differences committed to them by reaching agreements within what is known as "the scope of the differences" between the House and Senate versions of the bill. The conferees may accept the House position, the Senate position, or a position that is a compromise between them. Any position that is not within this range of options exceeds the scope of the differences between the two houses. It constitutes "matter not committed to them by either House" and makes their conference report subject to a point of order on both the House and Senate floor. In practice, these restrictions are not as stringent as they may seem on their face. The House often waives its rules that restrict the authority of conferees, and the Senate has developed precedents that grant its conferees considerable latitude in reaching agreements with the House, especially when they are in conference with a bill from one house and a single amendment from the other house that proposes to replace the entire text of the bill. Rulings and practices in the Senate have left the chamber with a body of precedents that allow the inclusion of new matter as long as it is reasonably related to the matter sent to conference. Senators can also choose not to raise a scope point of order against a conference report, allowing it to be considered regardless of its content. Paragraph 8 of Senate Rule XLIV places an additional restriction on the content of conference reports. Under the rule, a Senator can raise a point of order against provisions of a conference report if they constitute "new directed spending provisions," which are defined as any item that consists of a specific provision containing a specific level of funding for any specific account, specific program, specific project, or specific activity, when no specific funding was provided for such specific account, specific program, specific project, or specific activity in the measure originally committed to the conferees by either House. It is worth emphasizing that Paragraph 8 of Rule XLIV applies only to the conference report and not to the joint explanatory statement (also known as the statement of managers ) that accompanies it. Joint explanatory statements are signed by the conferees but, like reports of standing committees, are not voted on by the House or the Senate and cannot be changed through any formal amendment process. It is the conference report that contains the formal legislative language that will become law if both chambers agree to the report and the President then signs the measure. In contrast to Rule XXVIII, which applies to the full text of every conference report, Paragraph 8 of Senate Rule XLIV applies only to provisions of conference reports that would provide for actual spending. In other words, it applies only to discretionary and mandatory spending provisions and not to authorizations of appropriations. Discretionary spending is provided in appropriations acts, and generally funds routine operations of the federal government. Mandatory spending, also referred to as direct spending, is provided in substantive law and generally funds entitlement programs, such as Social Security and Medicare. A hypothetical example can illustrate the difference between the Rule XXVIII "scope" point of order and the Rule XLIV, Paragraph 8, "new directed spending" point of order. The House might pass an appropriations bill providing funding for several specific projects. The Senate might pass this bill with an amendment in the nature of a substitute, and the two houses then could agree to a conference. The conferees might agree to include in the conference report funding for several similar projects that were not listed in the House bill or in the Senate substitute. Under Rule XXVIII, the provision including funding for additional projects would likely be considered to be reasonably related to the matter sent to conference and therefore not subject to a point of order. Under Rule XLIV, Paragraph 8, however, provisions of this kind would likely be interpreted to be "new directed spending provisions" and therefore subject to a point of order. The procedure for disposing of a Rule XXVIII or a Rule XLIV point of order allows the Senate to strike "new matter" or "new directed spending provisions" from the conference report but agree to the rest of the terms of the compromise. Because it is not in order for either chamber to alter the text of a conference report, the rule creates a process that converts the text of the conference compromise minus the "new matter" or "new directed spending provisions" into an amendment between the houses. If the Senate agrees to this amendment, it is then sent to the House for consideration in that chamber. Under the process, a Senator can make a point of order against one or more provisions of a conference report. If the point of order is not waived (see below), the presiding officer rules on whether the provision is in violation of the rule. If a point of order is raised against more than one provision, the presiding officer can make separate decisions regarding each provision. If the presiding officer sustains a point of order against a conference report on the grounds that it violates either the prohibition of "new matter" or "new directed spending provisions," the matter is stricken from the conference recommendation. After all points of order raised under this procedure are disposed of, the Senate will proceed to consider a motion to send to the House, in place of the original conference agreement, a proposal consisting of the text of the conference agreement minus the "new matter" or "new directed spending provision" that was stricken. Amendments to this motion are not in order. The motion to agree to the bicameral compromise with the "new matter" or "new directed spending provision" stricken is debatable "under the same debate limitation as the conference report." Under the regular rules of the Senate, debate on conference reports is not limited. It is limited only if the Senate agrees to limit debate by unanimous consent, if cloture has been successfully invoked on the conference report, or if the Senate is considering the report under expedited procedures established by law (such as the procedures for considering budget resolutions and budget reconciliation measures under the Budget Act). In short, the terms for consideration of the motion to send to the House the proposal without the offending provisions are the same as those that would have applied to the conference report itself. If the Senate agrees to the motion, the conference recommendation as altered by the deletion of the "new matter" or "new directed spending provision" would be returned to the House in the form of an amendment between the houses. The House would then have an opportunity to act on the amendment. The prohibition against amendments to a conference report does not apply to amendments between the houses. Accordingly, the House could, under its procedures, agree to the modified compromise version as it was received from the Senate or offer further amendment(s) thereto. The House could also request a further conference with the Senate or choose to take no action at all on the new compromise language. The procedure for disposing of points of order under either Rule XXVIII or Paragraph 8, Rule XLIV, is similar to that currently followed for disposing of points of order against conference reports under the "Byrd rule" (Section 313(d) of the Congressional Budget Act). The Byrd rule applies only to reconciliation measures, however. Senate rules also create a mechanism for waiving the restrictions on the content of conference reports. The points of order under Rule XXVIII and Paragraph 8 of Rule XLIV can be waived with the support of three-fifths of all Senators duly chosen and sworn (60 Senators if there are no vacancies). Senators can move to waive points of order against one or several provisions, or they can make one motion to waive all possible points of order under either rule. Under these procedures, a motion to waive all points of order is not amendable, but a motion to waive points of order against specific provisions is. As a result, it is possible for a Senator to ensure a vote on waiving all points of order under each rule, and, if successful, no separate motions to waive points of order against individual provisions would be necessary. Time for debate on the motion to waive is limited to one hour and is divided equally between the majority leader and the minority leader or their designees. If the motion to waive garners the necessary support, the Senate is effectively agreeing to keep the matter that is potentially in violation of the rule in the conference report. Motions to waive "scope" (Rule XXVIII) points of order are made and considered separately from motions to waive "new directed spending" (Rule XLIV, Paragraph 8) points of order. The rules further require a three-fifths vote to sustain an appeal of the ruling of the chair and limit debate on an appeal to one hour, equally divided between the party leaders or their designees. The purpose of these requirements is to ensure that either method by which the Senate could choose to apply these rules—through a motion to waive or through an appeal of the ruling of the chair—requires a three-fifths vote of the Senate (usually 60 Senators). A simple majority (51 Senators if there are no vacancies and all Senators are voting) cannot achieve the same outcome. The effect of overturning a ruling of the chair on appeal is quite different from the effect of agreeing to a motion to waive a rule. The decision on an appeal stands as the judgment of the Senate and becomes a precedent for the Senate to follow in future proceedings. A decision to waive the rule, in contrast, does not change the interpretation of the rule in future practice.	Two Senate rules affect the authority of conferees to include in their report matter that was not passed by the House or Senate before the conference committee was appointed. Colloquially, such provisions are sometimes said to have been "airdropped" into the conference report. First, Rule XXVIII precludes conference agreements from including policy provisions that were not sufficiently related to either the House or the Senate version of the legislation sent to conference. Such provisions are considered to be "out of scope" under long-standing Senate rules and precedents. Second, Paragraph 8 of Rule XLIV establishes a point of order that can be raised against "new directed spending provisions," or provisions in a conference report that provide specific items of appropriations or direct spending that were not committed to the conference committee in either the House or Senate versions of the legislation. Both of these restrictions can be enforced on the Senate floor if any Senator chooses to raise a point of order against one or more provisions in a conference report. The process for disposing of either a Rule XXVIII or a Rule XLIV point of order allows the Senate to strike "out of scope matter" or "new directed spending provisions" from the conference report but agree to the rest of the terms of the compromise. It is not in order, however, for either chamber to alter the text of a conference report, and therefore the process converts the text of the conference compromise minus the "new matter" or "new directed spending provisions" into an amendment. If the Senate agrees to this amendment, it is then sent to the House for consideration in that chamber. The points of order under Rule XXVIII and Paragraph 8 of Rule XLIV can be waived with the support of three-fifths of all Senators duly chosen and sworn (60 Senators if there is no more than one vacancy). A figure at the end of the report outlines the procedural steps for disposing of these points of order when they are raised against conference reports.
This report examines scenarios in which international trade could be heavily controlled or limited due to an avian flu pandemic. Each of the scenarios presented depicts the possibility that imports of goods into the United States could be curtailed due to the avian flu. Some experts argue that these scenarios are not likely to occur, because they believe that the United States would probably not implement a general ban on the importation of goods from affected regions. It is believed that such a ban would not prevent transmission of the avian flu to the United States, because there is little evidence that inanimate objects could transmit the disease. Furthermore, opponents to a general ban on imports argue that such actions could unnecessarily cause economic and social hardship. The United States depends on global trade for necessities such as food, energy, and medical supplies. Also, some observers point out that the nature of the "just-in-time" global economy is such that the United States does not stockpile these and other necessities. Finally, the World Health Organization does not recommend quarantining any individual country or closing international borders at any phase of an avian influenza pandemic. If international borders are not closed to human passage, then it follows that there will probably not be direct trade restrictions. While some experts believe that a general ban on imports either globally or from affected regions is highly unlikely, others contend that the strategy cannot be totally ruled out, particularly since there is already a U.S. ban on imports of poultry products from certain H5N1 (highly pathogenic strain of avian influenza)-affected countries and regions. Some experts argue that it may be possible to transmit the virus through any object that has had contact with infected feces, blood, or other bodily fluids. Some policy analysts predict that if the H5N1 virus were to become a pandemic with human-to-human transmission, then the United States might control the movement of people across its borders to slow the virus' arrival on U.S. soil. This could involve limiting airline passenger flights into the country, but it could also mean limiting entry of cargo ships due to a fear of transmission from ship operators or stowaway birds. These types of restrictions may result in a de facto import ban. Some experts believe these restrictions are unnecessary and potentially harmful, but they might nevertheless be implemented to give the appearance of strong preventative actions, in response to public concerns or political factors. Many believe that if such restrictive measures were adopted, they would likely be short-lived. Once the pandemic reached the United States, such measures would appear to serve little further purpose and could be abandoned. A more likely scenario is that a supply-side constraint in the exporting country would limit U.S. imports. Pandemic-affected countries could curtail their exports, either voluntarily or involuntarily. Governments may nationalize assets and stop export operations. An outbreak may also constrain production and key export infrastructure through excessive worker absences, to the point where exporting becomes difficult and is involuntarily slowed or halted. Such a slowdown in commerce could cause price increases or temporary shortages in certain goods within the United States, depending on the duration and breadth of the slowdown. It could exacerbate the effects of slowed production and distribution networks within the United States, leading to decreased demand and supply and a recession. Several studies have been undertaken to estimate the effects of a pandemic on the U.S. and global economy. According to one study, a mild pandemic could reduce global economic output by $330 billion, or 0.8% of global gross domestic product (GDP). The same study estimates that a pandemic of the worst case scenario severity could reduce global economic output by $4.4 trillion, or 12.6% of global GDP. The Congressional Budget Office (CBO) estimates that a severe influenza pandemic might cause a decline in U.S. GDP of about 4.25%, and that a milder pandemic might cause a decline of about 1%. Other studies have found both greater and lesser economic effects, depending on the methodology and data used. Different studies also disagree on the extent to which international trade would be disrupted by an avian flu pandemic. This section considers the potential economic and trade effects on the United States of import disruptions from countries affected by avian flu, either as a result of border closings in the United States or supply side constraints in the exporting country or region. Only countries with human avian flu cases confirmed by the World Health Organization (WHO) from January 2004 to January 2008 are considered, because these countries are arguably more likely to experience trade disruptions due to avian flu. The relative likelihood of import disruptions from one country or region over another is not considered, because it is too difficult to ascertain. As seen in Table 1 , the United States imports far more from China than any other country that has thus far reported confirmed human cases of the avian flu. In fact, China is the largest source of U.S. imports overall, accounting for over 16% of total U.S. imports in 2007. Therefore, if imports from China were disrupted on a large scale over a long time period, it could have a significant effect on the U.S. economy. However, a short-lived disruption in imports from China may not cause an immediate crisis. Forty-four percent of U.S. imports from China are in the category of machinery or electronic machinery, and include items such as computers, televisions, and parts. A disruption in imports of these items could have implications for the domestic electronics market, but it may have a less severe effect on the U.S. economy as a whole. One import category of special concern is medical supplies; the United States imported over $5 billion in optical and medical instruments from China in 2007, representing 10% of such U.S. imports. Many, but not all, products in this category are considered essential medical equipment. For example, China was the second-largest supplier (after Mexico) of respirator equipment to the United States, supplying over 13% of U.S. respirator equipment imports. China has also been an important supplier of bandages (41% of U.S. imports in 2007), boxed first aid kits (53%), clinical thermometers (50%), orthopedic appliances (9%), and syringes (13%). Some observers recommend that U.S. hospitals stockpile essential supplies to take a possible avian flu pandemic into account, especially considering that medical supplies are sourced from potential avian flu hot spots. Many of these essential medical supplies are reportedly not manufactured in the United States. Almost 15% (about $1.5 billion) of fish and seafood imports into the United States are from China, second only to Canada ($1.9 billion). It is not clear whether a trade disruption with China alone would have a great impact on the U.S. food supply, since the United States also imports food from other countries and regions, in addition to having domestic production. Although the United States imports a great deal from China, many of these products originate elsewhere, and only their final stage of production takes place in China. For some items, production could possibly be shifted to another location if a long-term trade disruption were to occur. However, shifting production in the global supply chain may have great costs or not be feasible for other reasons. Thailand, Indonesia, and Vietnam have similar patterns of exports to the United States, although in different volumes. Among countries with confirmed human avian flu cases, Thailand is the second largest supplier of U.S. imports. However, Thailand's total 2007 exports to the United States were just under $23 billion, and it ranked 18 th out of all exporters to the United States, with 1.2% of the U.S. import market. Indonesia and Vietnam were ranked 26 th and 31 st , respectively, with $14 billion and $11 billion in 2007 U.S. imports. Like China, Thailand's main exports to the United States are electrical machinery and machinery, comprising about 44% of Thailand's exports to the United States. Thailand, Indonesia, and Vietnam all export large quantities of fish to the United States. Thailand is the largest exporter of prepared crustaceans and mollusks (the second largest is China), and the second largest exporter of fresh crustaceans to the United States (after Canada). Indonesia and Vietnam are the third and fifth largest suppliers of prepared crustaceans, and the fourth and third largest suppliers of fresh crustaceans to the United States. Thailand and Indonesia also export optical and medical instruments to the United States, ranking 21 st and 28 th , respectively, in 2007 U.S. imports. The United States imports medical supplies such as dialysis instruments, diagnostic instruments, syringes, needles, and ultrasound devices from Thailand and Indonesia. In analyzing the trade data, it appears that if trade were disrupted between the United States and any one of Thailand, Indonesia, or Vietnam, the effects would probably be minimal. However, if U.S. trade was disrupted with all three countries and China (considered more likely under a flu pandemic), the U.S. supply of seafood and medical supplies could be impaired. Reduced seafood imports could increase not only the price of seafood, but it could cause increased demand and possible price increases in substitute goods. The impact of reduced medical supply imports could be more severe, possibly resulting in a shortage of certain medical supplies, since substitutes are generally not readily available. Oil comprised 95% ($10.8 billion) of U.S. imports from Iraq in 2007, representing 3% of U.S. oil imports. Iraq is the ninth-largest oil exporter to the United States. If oil imports from Iraq were to stop, the reduced supply of oil could cause domestic energy prices to increase. However, there are many factors determining domestic energy prices, and other events could overshadow, exacerbate, or offset any disruption of trade with Iraq due to an avian flu pandemic. Egypt, Turkey, and Azerbaijan all primarily export oil to the United States, though not in significant amounts relative to total U.S. oil imports. In 2007, Azerbaijan, Egypt, and Turkey ranked 27 th , 33 rd , and 49 th , respectively, in exports of oil to the United States. Turkey's main export to the United States was stone for monuments and construction, with 14% of the U.S. import market. Cambodia's and Azerbaijan's overall exports to the United States are relatively small and would likely have little impact on the U.S. economy if they were to be disrupted. The United States is the largest global producer and exporter of poultry, and the second-largest global producer and exporter of eggs. In 2005, U.S. farm sales of poultry were $23.3 billion, while U.S. imports of poultry were only $130 million. In 2007 the U.S. exported $3.3 billion in poultry, up from $2.2 billion in 2006. Poultry exports to China have increased exponentially, from $15.7 million in 2004 to $578.4 million in 2007. China is the second-largest importer of U.S. poultry, after Russia. Almost all U.S. poultry and egg imports are from Canada, which has not been affected by the highly pathenogenic avian influenza, H5N1. Some observers argue that as long as the United States remains unaffected by avian influenza the U.S. poultry industry may be positively affected by outbreaks of avian influenza elsewhere, as it may increase demand for U.S. poultry exports. On the other hand, news about avian influenza cases in other countries could reduce consumer demand for all poultry, even if it is considered influenza-free. If the United States were to shut its borders to trade completely, the impact could range from moderate to severe, depending on how long the restrictions were in place. A very short-term trade shutdown of just a few days may not have significant long term effects. As an example, in the days following September 11 th , 2001, shipments to the United States were slowed dramatically (though not stopped entirely) because of tightened security at the borders. Once the borders were effectively reopened business resumed with little if any economic impact from the slowdown in trade. A longer trade shutdown could have greater implications, both domestically and globally. Much would also depend on how Wall Street reacted. A sharp fall in financial markets would be likely, but the question is how resilient the U.S. economy would be. Many countries rely on the United States as an export market. The loss of that market even temporarily could cause economic hardships around the world and contribute to the beginning of a possible global economic slowdown. The United States is a large economy and does not rely on trade to the same extent as smaller economies, but it is not self-sufficient. There could possibly be an oil shortage, and energy prices could increase. Oil might not be available to all who need it. This would have implications for the rest of the economy, as transportation costs increase and cause price increases for goods across the economy. Also, many U.S. businesses rely on imports, both for intermediate goods and consumer products. It is difficult to determine which individual products could be in short supply, because many consumer goods that are generally not considered imported products depend on imports at some stage of their production. Also, some consumer goods that are imported have substitutes that may be produced in the United States. Finally, trade disruptions would account for only part of the economic impact of an avian flu pandemic. Other domestic and international economic events could have more severe impacts, which could be compounded by disruptions in global trade.	Concerns about potential disruptions in U.S. trade flows due to a global health or security crisis are not new. The possibility of an avian flu pandemic with consequences for global trade is a concern that has received attention recently, although some experts believe there is little cause for alarm. Experts disagree on the likelihood of an avian flu pandemic developing at all. This report considers possible trade disruptions, including possible impacts on trade between the United States and countries and regions that have reported avian influenza infections. These trade disruptions could include countries banning imported goods from infected regions at the onset of a pandemic, de facto bans due to protective health measures, or supply-side constraints caused by health crises in exporting countries.
IRS has made a concerted effort to implement the Restructuring Act’s taxpayer rights and protections mandates. Not surprisingly, given the magnitude of change required by these provisions, work remains in completing, and in some instances expanding on, current implementation efforts. To manage Restructuring Act implementation, IRS delegated lead responsibility for each of the provisions to the affected organizational unit and required those units to develop detailed implementation plans. For example, IRS assigned to its Collections unit the lead responsibility for implementing the 22 collection-related taxpayer protection provisions in title III of the act. Our review of each of these plans identified numerous action items, such as developing tax regulations, forms, instructions, and procedures, as well as milestones for completing the actions. According to IRS officials, although IRS has met all of the legal requirements of the provisions whose effective dates have passed, it is still in the process of completing several actions or implementation steps. For example, in order to meet the effective dates of some provisions, IRS issued temporary procedures until the final rulemaking could be completed. insufficient controls to establish accountability and control over assets. Accordingly, we made a number of recommendations to IRS regarding these problems and are awaiting a final response concerning its plans to implement the recommendations. In another instance, IRS has made changes to meet the Restructuring Act’s mandate but does not have information necessary to determine whether the implementation steps have been sufficient. The act prohibits IRS from using enforcement statistics to impose or suggest production quotas or goals for any employee, or to evaluate an employee based on such enforcement quotas. IRS has taken a number of actions to implement this mandate, such as issuing a handbook on the appropriate use of performance measures and conducting agencywide training sessions. IRS has also taken action on our recommendations, such as by clarifying the requirements for IRS managers to certify that they have not used enforcement statistics inappropriately. In its spring 1999 survey, IRS found that about 7 percent of Collections employees and 9 percent of Examination employees reported that their supervisors had either discussed enforcement statistics with them or used statistics to evaluate their performance. Until it has more recent comparison data, IRS will not know if its actions were sufficient to fulfill the Restructuring Act’s mandate. IRS has also experienced some difficulty in implementing the Restructuring Act. Two notable examples are the decline in enforcement actions, particularly liens, levies, and seizures and the backlog of “innocent spouse” cases. IRS’ use of enforcement actions to collect delinquent taxes has declined significantly since passage of the act. Comparing pre-Restructuring Act data on IRS’ use of liens, levies and seizures, with fiscal 1999 data shows that lien filings were down about 69 percent, levies down about 86 percent, and seizures down about 98 percent. Moreover, according to IRS, collections from delinquent taxpayers were down about $2 billion from fiscal year 1996 levels. fiscal year 1997, the last full year before passage of the Restructuring Act, about 42 percent of seizures resulted in the tax debt being fully resolved. In most cases, the debt was resolved when the taxpayers produced funds to fully pay their tax liabilities and have their assets returned. Prior to the seizures, the involved taxpayers had been unresponsive to other IRS collection efforts, including letters, phone calls, personal collection visits, and levies of bank accounts and wages. We concluded from these observations that there was little likelihood that the tax debts would have been paid without the seizure actions. At the conclusion of our seizure work in 1999, it was clear to us that neither IRS management officials nor front line employees believed that seizure authority was being used when appropriate. Front line employees expressed concerns about the lack of guidance on when to make seizures in light of Restructuring Act changes. Accordingly, we made recommendations aimed at (1) clarifying when seizures ought to be made, (2) preventing departures from process requirements established to protect taxpayer interests, and (3) delineating senior managers’ responsibilities for ensuring that seizures are made when justified. Effective use of tax collection enforcement authority, such as seizing delinquents’ property to resolve their tax debts, plays an important role in ensuring voluntary compliance---a practice dependent on taxpayers having confidence that their neighbors or competitors are complying with the tax law. A second example of IRS difficulty in implementing the Restructuring Act is related to “innocent spouse” cases. The Restructuring Act expanded innocent spouses’ right to seek relief from tax liabilities assessed on jointly filed returns. IRS published forms and temporary guidance to implement this provision and has just recently issued permanent guidance on equitable relief provisions. However, as Commissioner Rossotti has acknowledged, IRS was administratively unprepared to deal with the volume of requests for relief because its data systems did not allow the separation of single tax liability for spouses into multiple liabilities. Thus, IRS established manual processes and controls to deal with the requests, a measure requiring about 330 additional staff. As of October 1999, of the 41,000 relief requests received, only about 12 percent had been processed to the point where at least a preliminary determination had been reached. IRS considers the remaining relief requests to be a significant backlog that will require an average of about 12 staff hours per case to resolve. Underlying the Commissioner’s modernization strategy is the understanding that fulfilling the Restructuring Act’s mandate to place greater emphasis on taxpayer rights and needs while ensuring compliance depends on two key factors. First, IRS must make material improvements in the processes and procedures through which it interacts with taxpayers and collects taxes due. Second, IRS must make efficiency improvements that will allow reallocation of its limited resources. Historically, however, IRS has not had much success designing and implementing these kinds of process changes. The Commissioner has argued, and we agree, that this difficulty is due in large part to systemic barriers in IRS’ organization, management, and information systems. Accordingly, and in compliance with the Restructuring Act, the Commissioner has begun to implement a multifaceted modernization strategy, the first stages of which are designed to address these systemic barriers. Notwithstanding a reduction in the number of its field offices, IRS’ organizational structure has not changed significantly in almost 50 years. Under this structure, authority for serving taxpayers and administering the tax code is decentralized to 33 districts and 10 service centers, with each of these geographic units organized along functional lines—such as collection, examination, and taxpayer service. This has resulted in convoluted lines of authority. In the collection area, for example, IRS has three separate kinds of organizations spread over all 43 operational units that use four separate computer systems to collect taxes from all types of taxpayers. This decentralized structure has also allowed disparity among districts in their compliance approaches and, as a result, inconsistent treatment of taxpayers. To illustrate, in our review of IRS’ use of its seizure authority, we found that seizures were as much as 17 times more likely for delinquent individual taxpayers in some district offices than in others. Similar variations exist in other IRS programs as well. and tax issues. Through its new taxpayer-focused operating divisions, IRS is centralizing management of key functions and creating narrower scopes of responsibility. For example, IRS estimates that individual taxpayers account for 75 percent of all filers, yet only 17 percent of the tax code is ordinarily relevant to them. By creating a division devoted solely to individual taxpayers, IRS is creating a situation in which managers and employees in that division will be able to focus on compliance and service issues related to individual taxpayers and will need expertise in a much smaller body of tax law. Creating a simpler, more coherent organization and management structure is an important step, but it does not guarantee good management. IRS’ managers, at all levels, need to be skilled in results-oriented management, including planning, performance measurement, and the use of performance data in decisionmaking. Without these skills, IRS cannot be assured that its employees and the agency as a whole are performing as expected with regard to both taxpayer rights and enforcement. Our work has shown that ensuring that IRS has the capacity it needs in this area will be a challenge. For example, in our recent work on IRS seizures, we found that IRS did not generate information sufficient for senior managers to use in monitoring the program. IRS did not have a fully developed capability to monitor the quality of seizure work in terms of the appropriateness of seizure decisionmaking or the conduct of asset management and sales activity. In addition, collection managers were not systematically provided with information on the type of problems experienced by taxpayers involved in a seizure or on the resolution of those problems. We concluded that IRS managers were not collecting the information needed to effectively oversee the program and made recommendations to improve oversight. Our point today, however, is that generating and using basic management information needs to be routine among IRS managers at all levels and across all taxpayer groups and functions. The organizational and management changes I’ve described, while significant, will not be sufficient to achieve IRS’ mission. As an agency still dealing with the repercussions of a performance system that was, for many years, based on enforcement statistics, IRS well knows that performance measures can create powerful incentives to influence both organizational and individual behavior. Consequently, IRS needs to develop an integrated performance management system that aligns employee, program, and strategic performance measures and creates incentives for behavior supporting agency goals, including that of giving due recognition to taxpayers’ rights and interests. Developing and implementing performance measures are difficult tasks for any organization, but especially for an organization like IRS that must ensure both quality taxpayer service and tax law compliance. At the operational level, IRS is measuring its progress toward these goals through customer satisfaction surveys and through the business results measures of quality and quantity. Mindful of concerns that the Service had focused on revenue production as an end in itself, IRS established what it believes are outcome-neutral quantity measures. For example, instead of measuring the revenue generated by compliance employees, IRS is generally monitoring the total number of cases closed, regardless of how those cases were closed. We have reported in the past that IRS employees’ performance focused more on IRS’ objectives of revenue production and efficiency than on taxpayer service. Guided by these concerns and the Restructuring Act’s explicit prohibitions against using enforcement statistics to evaluate employees, IRS now recognizes that employees must have a clearer line of sight between their day-to-day activities, their resulting performance evaluations, and the agency’s broader goals. IRS is still exploring several different approaches for revising its employee evaluation system to make the relationship between employee performance and agency performance more transparent. accessing comprehensive information about individual taxpayer accounts or summary data on groups of taxpayers. Without this type of data, IRS managers will continue to have a difficult time monitoring and managing program outcomes—including identifying taxpayer needs and evaluating the effectiveness of programs to meet those needs. In doing our work on small business compliance issues, for example, we found that IRS could not reliably provide data on the extent to which small businesses filed various required forms, when they made tax deposits, or the extent to which they were involved in a variety of enforcement processes. For years, IRS has struggled to modernize its information systems to support high quality taxpayer service and management information needs. In 1995, we made over a dozen recommendations to correct management and technical weaknesses that jeopardized the modernization process. In February 1998, we made additional recommendations to ensure, among other things, that IRS develops a complete systems architectural blueprint for modernizing its information systems. Subsequently, in fiscal years 1998 and 1999, Congress provided IRS funds for systems modernization and limited their obligation until certain conditions, similar to our recommendations, were met. While IRS has made progress in addressing our recommendations and complying with the legislative conditions, the Service has not yet fully implemented our recommendations. As a result, at the direction of the Senate and House appropriation subcommittees responsible for IRS’ appropriation, we have continued to monitor and report on IRS’ system modernization efforts. gains to allow IRS to better target its resources to promote compliance and taxpayer service. Mr. Chairman, this concludes my prepared statement. I would be happy to answer any questions you or other Members of the Committee may have. For future contacts regarding this testimony, please contact James R. White at 202-512-9110. Thomas M. Richards, Deborah Parker Junod, Charlie Daniel, and Ralph Block made key contributions to this testimony.	Pursuant to a congressional request, GAO discussed the Internal Revenue Service's (IRS) progress in implementing the taxpayer rights and protection mandates of the IRS Restructuring and Reform Act of 1998 and IRS' ongoing efforts to modernize its organizational structure, performance management system, and information systems. GAO noted that: (1) IRS has embarked on a concerted effort to implement the taxpayer rights and protection provisions; (2) in some instances, implementation is not complete, and in some others, it is too early to tell if implementation is successful; (3) IRS has experienced difficulties in implementing some aspects of the mandates; (4) these difficulties included determining when enforced collection actions, such as the seizure of delinquent taxpayers' assets, are appropriate and dealing with requests for relief under the innocent spouse provisions; (5) to streamline its management structure and create a more taxpayer-focused organization, IRS is in the midst of instituting a major reorganization; (6) IRS' new organization structure is built around four operating units, each with end-to-end responsibility for serving a group of taxpayers with similar needs; (7) through its new taxpayer-focused divisions, IRS is centralizing management of key functions and creating narrower scopes of responsibility; (8) IRS needs to develop an integrated performance management system that aligns employee, program, and strategic performance measures and creates incentives for behavior supporting agency goals; (9) at the operating level, IRS is measuring its progress toward these goals through customer satisfaction surveys and through business results measures of quality and quantity; (10) IRS' system difficulties hinder, and will continue to hinder, efforts to better serve taxpayer segments; (11) IRS has dozens of discrete databases that are function specific and are designed to reflect transactions at different points in the life of a return or information report--from its receipt to disposition; (12) as a consequence, IRS does not have any easy means of accessing comprehensive information about individual taxpayer accounts or summary data on groups of taxpayers; (13) GAO made over a dozen recommendations to correct management and technical weaknesses that jeopardized IRS' information systems modernization process; (14) in fiscal years 1998 to 1999, Congress provided IRS funds for systems modernization and limited their obligation until certain conditions, similar to GAO's recommendations, were met; (15) while IRS made progress in addressing GAO's recommendations and complying with the legislative conditions, IRS has not yet fully implemented GAO's recommendations; and (16) GAO believes that IRS' ongoing efforts to modernize its organizational structure, performance management system, and information systems are heading the agency in the right direction.
In June 2009, the Supreme Court issued a decision in Ricci v. DeStefano , a case involving allegations of reverse discrimination by a group of white firefighters who challenged city officials in New Haven, Connecticut, over their refusal to certify a promotional test on which black and Hispanic firefighters had performed poorly relative to white firefighters. In a 5-4 vote, the Court held that the city's actions violated Title VII of the Civil Rights Act of 1964, which prohibits discrimination in employment on the basis of race, color, religion, sex, or national origin. The case has drawn considerable attention, not only because of the controversial nature of the reverse discrimination allegations but also because the Court reversed a decision by a three-judge appellate panel that included Judge Sonia Sotomayor, who was, at the time, a nominee for the Supreme Court and who has since become a member of the Court. In 2003, the City of New Haven administered an examination to determine which firefighters would qualify for promotion to lieutenant and captain positions over the following two years and the order in which they would be considered for promotion. Of the 77 candidates who took the lieutenant examination, 43 were white, 19 were black, and 15 were Hispanic; 25 whites, 6 blacks, and 3 Hispanics passed the exam. Based on the number of lieutenant positions available, the top 10 candidates, all of whom were white, were eligible for promotion. Of the 41 candidates who took the captain examination, 25 were white, 8 were black, and 8 were Hispanic; 16 whites, 3 blacks, and 3 Hispanics passed the test. Based on the number of captain positions available, the top 9 candidates, 7 of whom were white and 2 of whom were Hispanic, were eligible for promotion. Confronted with the significant racial disparity revealed by the test results, city officials held a series of public meetings to determine whether to certify the exam. Some firefighters, claiming that the statistical disparity demonstrated that the test was racially discriminatory, threatened to sue if the city made promotions based on the test results. Other firefighters argued that the test was fair and threatened to sue if the city denied promotions to the candidates who had performed well. Ultimately, the city declined to certify the exam, and a group primarily composed of white firefighters sued, claiming that the city's actions violated Title VII of the Civil Rights Act and the Equal Protection Clause of the Fourteenth Amendment. The district court sided with the City of New Haven, holding that the "[d]efendants' motivation to avoid making promotions based on a test with a racially disparate impact ... does not ... as a matter of law, constitute discriminatory intent, and therefore such evidence is insufficient for plaintiffs to prevail on their Title VII claim." Likewise, the district court rejected the plaintiffs' equal protection claim, ruling that the city's attempt to remedy the disparate impact of the test did not constitute an intent to discriminate against the non-minority firefighters and that the rejection of the test results did not amount to an unlawful racial classification because all applicants were treated the same with respect to the administration and invalidation of the tests. Subsequently, a three-judge panel of the Court of Appeals for the Second Circuit that included Judge Sonia Sotomayor issued a one-paragraph affirmation of the "well-reasoned opinion" of the district court, noting that because the city, "in refusing to validate the exams, was simply trying to fulfill its obligations under Title VII when confronted with test results that had a disproportionate racial impact, its actions were protected." Neither Judge Sotomayor nor the other judges provided additional insight into their legal reasoning in the decision. The Supreme Court granted review in order to consider the Title VII and equal protection claims at issue in the case. Under Title VII, two different types of discrimination are prohibited. The first is disparate treatment, which involves intentional discrimination, such as treating an individual differently because of his or her race. The second type of prohibited discrimination is disparate impact, which involves a neutral employment practice that is not intended to discriminate but that nonetheless has a disproportionate effect on protected individuals. An employer may defend against a disparate impact claim by showing that the challenged practice is "job related for the position in question and consistent with business necessity," although a plaintiff may still succeed by demonstrating that the employer refused to adopt an available alternative employment practice that has less disparate impact and serves the employer's legitimate needs. Under the Equal Protection Clause of the Fourteenth Amendment, "[n]o state shall ... deny to any person within its jurisdiction the equal protection of the laws." To maintain an equal protection challenge, government action must be established; that is, it must be shown that the government, and not a private actor, has acted in a discriminatory manner. Although the Fourteenth Amendment requires equal protection, it does not preclude the classification of individuals. A classification will not offend the Constitution unless it is characterized by invidious discrimination. Over the years, the Court has interpreted the equal protection clause in a way that requires different degrees of scrutiny for such classifications, depending on the category of persons affected. Under the strict scrutiny test, which is the most stringent form of review and applies to classifications based on race, the government must show that the classification drawn by a statute is narrowly tailored to meet a compelling governmental interest. The question that arose in Ricci was whether the city's failure to certify the test results violated Title VII's prohibition against disparate treatment or the constitutional requirement for equal protection. The firefighters who sued argued that the city's refusal to promote them constituted discrimination on the basis of race in violation of both Title VII and the Equal Protection Clause. City officials defended their actions, arguing that the city was attempting to comply with Title VII and avoid a lawsuit when it refused to certify test results that had a disparate impact on minority firefighters. The Supreme Court granted review to resolve the dispute. Ultimately, the Court ruled in favor of the white firefighters, holding that the city had violated Title VII's prohibition against disparate treatment when it discarded the test results. According to Justice Kennedy, who wrote the majority opinion, the city's rejection of the racially disparate exam results was, despite its seemingly well-intentioned attempt to avoid disparate impact liability, an explicitly race-based decision that would violate the disparate treatment prohibition in the absence of a valid defense. In order to reconcile what the majority viewed as two competing provisions of Title VII, the Court established a new standard ─ imported from its equal protection jurisprudence ─ for evaluating when attempts to avoid disparate impact liability excuse what otherwise would be prohibited disparate treatment under Title VII. According to the Court, "before an employer can engage in intentional discrimination for the asserted purpose of avoiding or remedying an unintentional disparate impact, the employer must have a strong basis in evidence to believe it will be subject to disparate-impact liability if it fails to take the race-conscious, discriminatory action." The Court explained: Applying the strong-basis-in-evidence standard to Title VII gives effect to both the disparate-treatment and disparate-impact provisions, allowing violations of one in the name of compliance with the other only in certain, narrow circumstances. The standard leaves ample room for employers' voluntary compliance efforts, which are essential to the statutory scheme and to Congress's efforts to eradicate workplace discrimination. And the standard appropriately constrains employers' discretion in making race-based decisions: It limits that discretion to cases in which there is a strong basis in evidence of disparate-impact liability, but it is not so restrictive that it allows employers to act only when there is a provable, actual violation. Applying this new standard, the Court found that the city did not have a strong basis in evidence to conclude that the promotion examination would constitute a disparate impact violation. Although the minority firefighters could have established a prima facie case of disparate impact based on the statistical results of the test, such a showing is not sufficient to establish a violation of Title VII. Rather, the city would have been liable only if the tests were not job-related and consistent with business necessity or if a less discriminatory alternative that would have met the fire department's needs was not adopted. The Court held that there was no evidence that the tests were not job-related or that there was a less discriminatory test available and therefore the city lacked a strong basis in evidence for believing that it would be subject to disparate impact liability. Because the case was ultimately decided on statutory grounds, the Court did not reach the constitutional question related to the firefighters' Equal Protection claim. Two justices filed concurring opinions in the case. Justice Scalia, writing for himself, indicated that Title VII's disparate impact provisions may warrant closer constitutional scrutiny. Although Justice Scalia agreed that it was unnecessary to reach the constitutional question in the current case, he noted that the Court's "resolution of this dispute merely postpones the evil day on which the Court will have to confront the question: Whether, or to what extent, are the disparate-impact provisions of Title VII of the Civil Rights Act of 1964 consistent with the Constitution's guarantee of equal protection?" Justice Alito also wrote a concurring opinion in which he was joined by Justices Scalia and Thomas. The primary purpose of Justice Alito's opinion appeared to be to rebut several arguments made by the dissenting Justices, particularly the dissent's interpretation of the evidentiary record. Justice Ginsburg, writing for the dissent, criticized the Court's opinion, arguing that it failed to recognize the "centrality of the disparate-impact concept to effective enforcement of Title VII" and the legacy of race discrimination in the firefighting profession. In addition, the dissenting justices, disagreeing with the notion that Title VII's disparate impact and disparate treatment provisions stand in conflict, rejected the Court's newly established "strong basis in evidence" standard. Rather, the dissenting justices would have held that an employer who discards a policy or practice that has a disparate impact does not violate Title VII's prohibition against disparate treatment, as long as the employer has good cause to believe the policy or practice is not a business necessity. Because "New Haven had ample cause to believe its selection process was flawed and not justified by business necessity," the dissenting justices would have held that the city did not violate Title VII. In the wake of the Court's ruling, the U.S. District Court for the District of Connecticut, to which the case had been remanded for entry of judgment, issued an order instructing state officials to promote the firefighters who had sued. The Court's decision in Ricci is likely to affect the workplace in several different ways. Although employees will still be able to bring Title VII disparate impact claims against their employers, the decision will make it more difficult for employers to voluntarily comply with Title VII by altering employment policies or practices that have an unintentionally discriminatory effect. Perhaps more importantly, the decision also signals that laws that prohibit disparate impact discrimination may face increasing constitutional scrutiny in the future, a trend that could fundamentally alter the current structure of Title VII and several other civil rights laws, as well as significantly limit the ability of employees to sue for unintentional discrimination. In addition, the Ricci decision has implications for Congress. Since Ricci was decided on statutory grounds, legislators who disagree with the Court's interpretation could introduce legislation that overturns the new "strong basis in evidence" standard or that provides an exception to the statutory prohibition against disparate treatment in the case of disparate impact. Such congressional action is not uncommon, particularly in the civil rights context. For example, the 111 th Congress recently passed the Lilly Ledbetter Fair Pay Act of 2009, which superseded the Court's 2007 decision in Ledbetter v. Goodyear Tire & Rubber Co., Inc. The difficulty for Congress, however, is that such legislation could potentially be subject to constitutional challenge if it offends the Equal Protection Clause's prohibition against disparate treatment and fails to pass the strict scrutiny test. Finally, as noted above, the Court's ruling in Ricci overturned a Second Circuit decision in which Judge Sotomayor participated. Although the Court's ruling did not appear to significantly affect her nomination, it is important to note that this new standard was not in effect when the Second Circuit issued its decision in the Ricci case and therefore could not have been applied by Judge Sotomayor or her colleagues at the time that they ruled in the case.	This report discusses Ricci v. DeStefano, a recent Supreme Court case involving allegations of reverse discrimination by a group of white firefighters who challenged city officials in New Haven, Connecticut, over their refusal to certify a promotional test on which black and Hispanic firefighters had performed poorly relative to white firefighters. In a 5-4 vote, the Court held that the city's actions violated Title VII of the Civil Rights Act of 1964, which prohibits discrimination in employment on the basis of race, color, religion, sex, or national origin. The case has drawn considerable attention, not only because of the controversial nature of the reverse discrimination allegations but also because the Court reversed a decision by a three-judge appellate panel that included Judge Sonia Sotomayor, who was, at the time, a nominee for the Supreme Court and who has since become a member of the Court.
In an April 1995 report, the National Academy of Public Administration recommended that EPA establish specific environmental goals and strategies to attain them, and use comparative risk analyses to select priorities and develop strategies for specific programs. NAPA also said that EPA should consolidate its planning and budgeting functions, use the budget process to allocate resources to the agency’s priorities, and establish accountability by setting and tracking benchmarks and evaluating performance. The NAPA study’s recommendations are similar to the requirements for federal agencies established by the Government Performance and Results Act of 1993 (GPRA). Under GPRA, agencies must establish strategic plans, by September 30, 1997. GPRA also requires agencies to submit to the Office of Management and Budget, beginning for fiscal year 1999, annual performance plans, including annual performance goals and performance measures. The first annual performance plans are to be submitted in the fall of 1997. In response to NAPA’s recommendations, in July 1995, EPA created a task force to study ways to improve the agency’s management processes. In its report, the task force recommended an integrated system composed of strategic planning, budgeting, and accountability processes. In the planning process, EPA was to develop a strategic plan that would be based on the agency’s goals. During the budgeting process, each goal in the strategic plan would be considered, and an annual performance plan would be prepared showing the agency’s progress to date and plans for future expenditures. During the accountability process, EPA would determine progress under the annual plans and use the data on progress to make corrections in the strategic and annual performance plans. In March 1996, the EPA Administrator and Deputy Administrator endorsed the task force’s recommendations for developing an integrated planning, budgeting, and accountability system and directed that the recommendations be implemented. In making a commitment to substantially revise the agency’s management systems, EPA officials recognized that the effort would take several years to complete. The EPA Administrator and Deputy Administrator also announced plans to create a new office by January 1997 to consolidate the agency’s planning, budgeting, and accountability processes. In the interim, a work group composed of employees on temporary assignment was established to begin developing the new system. In January 1997, the EPA Administrator approved the structure and staffing plans for the new office, called the Office of Planning, Analysis, and Accountability. The interim work group that had been assigned to develop the new system was detailed to the new office to continue its work. The work group has 21 employees, fewer than half the number that EPA had planned for the group. The new office is authorized 49 employees. As of the end of March 1997, EPA had published job announcements to fill 26 of the new positions. EPA officials told us that these announced positions, which are open only to current EPA employees, will be filled in May 1997. The remaining positions, which are to be announced governmentwide, are not likely to be filled before July 1997. The officials told us that the office was not fully staffed when it was established because time was required to determine the most appropriate types of skills and work experiences needed and to implement a competitive process for selecting staff. Given the office’s limited staffing, the development of an integrated system is in the early stages. For example, EPA is reviewing the agency’s former accountability process to find out what did and did not work well, contacting other federal agencies to determine how they account for progress in meeting their goals, and examining reporting systems in the agency’s program offices to identify their potential use in the new system. EPA hopes to have the accountability component in place by September 1999. According to EPA officials, the development of the new budgeting component will begin after the agency completes its strategic plan in September 1997. They said that EPA’s fiscal year 1999 budget will be structured along the lines of the goals in the strategic plan. Thus far, the work group members have spent most of their time developing a strategic plan, which is required by September 30, 1997, under GPRA. An important part of the new strategic planning process is the selection of goals and objectives that can be used to guide the agency’s actions and to measure its performance. Although EPA is making progress toward developing its strategic plan, it has not completed two studies that are intended to identify the most appropriate goals for the agency and to provide the latest scientific information on environmental risk. EPA officials told us that the September 30, 1997, strategic plan will be updated, as appropriate, to reflect the final results of these studies, which are likely to be completed in late 1997 or early 1998. Although EPA continues to expand and improve the environmental data it compiles, it still needs to fill data gaps; improve the quality of its data; integrate information systems; and build the capability to compile, organize, and analyze the data in ways useful to EPA managers and stakeholders. In addition to the measures of outputs or program activities that it currently relies on to assess its performance, EPA is working to develop environmental measures that enable the agency to evaluate the impact of its programs on the environment and determine whether they are achieving the desired results. The need to assess EPA’s performance in terms of changes in environmental conditions substantially increases the demand for high-quality environmental data. Such data are also needed to identify emerging problems so that they can be addressed before significant damage is done to the environment. Despite EPA’s efforts to improve the quality of its data, these data are often unreliable, and the agency’s many disparate information systems are not integrated. These shortcomings have been raised in various external and internal reports on EPA, including the Vice President’s report on reinventing government. In its April 1995 report, NAPA also identified the lack of high-quality data on environmental conditions as a particularly important problem for EPA. NAPA specifically noted the limited amount of information based on the real-time monitoring of environmental conditions. Without monitoring data, EPA must rely on estimates and limited, site-specific data. NAPA also concluded that much remains to be done to improve the overall management of environmental information in the agency. It noted that EPA had over 500 information systems and that program offices, which are responsible for their own data, use different methods and definitions to gather data. Furthermore, EPA relies on data compiled by other federal agencies and the states. According to NAPA, these agencies and the states also use divergent methods of collecting data. More recently, a 1996 EPA report concluded that the agency needs to redesign its many disparate fiscal and environmental data systems so that it and others can measure its success in meeting environmental goals and determine the costs of doing so. The agency’s difficulty in demonstrating its performance or the impact of its actions is illustrated by the findings of a team of agency personnel, which was formed in 1995 to evaluate the agency’s needs for environmental information. The team identified various problems with the information needed to report on environmental goals, such as gaps in the data and inconsistencies in the methods of collecting and/or reporting data across states or federal agencies. Specific examples include the lack of (1) national reporting on risk reduction at waste sites, (2) reliable data on the nature and cause of pesticide poisonings, (3) effective reporting on progress in improving the nation’s water quality, and (4) complete data on air pollutants. EPA and the states are devoting considerable attention to developing environmental indicators or measures for use in assessing programs’ performance and better informing the public about environmental conditions and trends. Some efforts are just starting, while some of the agency’s program and regional offices and some states have begun to use these measures in reporting on their programs’ performance. Although EPA and state officials believe that environmental measures are more useful than measures of activities for assessing programs’ performance, they recognize that scientific and technical issues have to be addressed before indicators that really measure environmental conditions and trends can be widely used. Developing and using environmental indicators for an entire program presents significant challenges. The scientific and technical challenges include identifying (1) a range of health or environmental conditions that can be measured and (2) changes in these conditions that can be linked to a program’s activities. These tasks are especially difficult because natural causes, such as changes in weather patterns, and other factors outside a program’s control can affect environmental conditions. In some cases, data or indicators are not available for a specific aspect of the environment because of high costs or technical difficulties. Thus, it could be some time before EPA is able to develop and use a set of environmental indicators that accurately reflect the impact of its programs or their results. According to EPA officials, the agency’s and the states’ efforts to develop and use environmental measures have been valuable but disparate. Furthermore, at a conference convened by EPA in September 1996 to better coordinate these efforts, as well as in interviews conducted by EPA staff to prepare for the conference, regional and state representatives cited several concerns. They said, for example, that (1) clarification is needed on EPA’s and the states’ direction in developing goals and indicators, (2) the qualities of a good indicator are not well understood, and (3) determining whether the best indicators have been chosen will take many years. The representatives also believed that the data and resources needed to develop and use environmental indicators are inadequate. An additional challenge will be to reach agreement within EPA and among its stakeholders on the specific environmental indicators that will be used to measure performance. A consensus may be difficult to reach because of the potential for debate on what is important about individual programs and whether a relatively small number of measures can adequately reflect the effects of an agency’s or a program’s activities. EPA will need a set of measures common to all the states to report to the Congress and the public on the agency’s performance and the state of the nation’s environment. At the same time, the development of national measures, to the extent that such measures drive the implementation of environmental programs, will reduce the states’ flexibility to tailor the programs to meet local needs and conditions, a major concern of the states. Reporting on new measures will also increase the states’ costs unless other reporting requirements are eliminated or reduced. In May 1995, EPA signed an agreement with state leaders to implement a new system of federal oversight for state environmental programs. This new National Environmental Performance Partnership System fundamentally changes EPA’s working relationship with the states because it places greater emphasis on the use of environmental goals and indicators, calls for environmental performance agreements between EPA and individual states, and provides opportunities for reducing the agency’s oversight of state programs that exhibit high performance in certain areas. As of March 1997, about half of the states had signed performance partnership agreements to participate in the system. EPA’s Office of Regional Operations and State/Local Relations is developing a set of core performance measures, including some environmental indicators, that the agency’s regional offices are to use in negotiating annual work plans and agreements with the states. The core measures are to be focused and limited in number, representing measurable priorities for each of EPA’s national program managers. They are to serve as the minimum measures in performance agreements with the states, which may develop additional measures to represent their own environmental or programmatic issues. In addition, a particular core measure may not be required if a state can demonstrate that the measure does not apply or cannot be addressed. According to EPA, its national program managers will finalize their core measures in April 1997 and its regional staff will begin negotiations with the states to incorporate the measures into the agreements for fiscal year 1998. At this point, it is too soon to know how extensively EPA’s regional offices will be negotiating measures that reflect programs’ direct effects on human health and the environment. The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. U.S. General Accounting Office P.O. Box 6015 Gaithersburg, MD 20884-6015 Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders may also be placed by calling (202) 512-6000 or by using fax number (301) 258-4066, or TDD (301) 413-0006. Each day, GAO issues a list of newly available reports and testimony. To receive facsimile copies of the daily list or any list from the past 30 days, please call (202) 512-6000 using a touchtone phone. A recorded menu will provide information on how to obtain these lists.	GAO discussed the Environmental Protection Agency's (EPA) efforts to improve its methods of establishing priorities, allocating resources, and measuring performance. GAO noted that: (1) in March 1996, the EPA Administrator announced plans to create a new Office of Planning, Analysis, and Accountability; (2) the office was established in January 1997; (3) in the interim, an EPA work group composed of employees on temporary assignment started to develop the new planning, budgeting, and accountability system; (4) however, the work group was not fully staffed, and the development of the new system is still in the early stages; (5) the new Office of Planning, Analysis, and Accountability will not be fully staffed before July 1997; (6) EPA faces long-term challenges to obtain the scientific and environmental data needed to fully support its new system; (7) although much environmental information has already been collected, many gaps exist and the data are often difficult to compile because divergent data collection methods have been used; (8) likewise, much effort is still required to identify, develop, and agree on a comprehensive set of environmental measures to link the agency's activities to changes in environmental conditions; and (9) without environmental measures, EPA has to rely solely on administrative measures, such as the number of permits issued or inspections made, to measure its performance or success.
RS21516 -- Iraq's Agriculture: Background and Status May 13, 2003 1. (back) Ahmad, Mahmood. "Agricultural PolicyIssues and Challenges in Iraq" Short- and Medium-term Options," from Iraq's Economic Predicament ,Kamil Mahdi, Editor. Exeter Arab and Islamic Studies Series, Ithaca Press,copyright©Kamil Mahdi, 2002, pp. 179-180. 2. (back) FAOSTAT, Food and AgriculturalOrganization, United Nations, http://apps.fao.org/ Note: A hectare equals about 2.47 acres. 3. (back) PECAD, FAS, USDA. "Iraq CropProduction." January 16, 2003. http://www.fas.usda.gov/pecad/highlights/2003/01/iraq_update/index.htm 4. (back) FAOSTAT, FAO, U.N. 5. (back) In the early 1990s, cultivated areatemporarily expanded to nearly 5.5 million hectares before returning to under 4 million. 6. (back) The Iraq government reported an expansionof irrigated area to 3.525 million hectares in 1990, but this appears unlikely and is inconsistent with anecdotalreports. This reported new irrigated area could be a "euphemistic"reclassification of the government program of draining the southeast marshlands. 7. (back) Springborg, Robert. "Infitah, AgrarianTransformation, and Elite Consolidation in Contemporary Iraq," The Middle East Journal , Vol. 40, No.1, Winter 1986, pp. 33-52. 8. (back) Ibid., p. 37. 9. (back) Springborg (1986), p. 40-41. 10. (back) FAOSTAT, FAO, U.N. 11. (back) Ibid. 12. (back) U.S. General Accounting Office. Iraq's Participation in U.S. Agricultural Export Programs , NSIAD-91-76, November 1990, http://161.203.16.4/d22t8/142766.pdf Note: under GSM-102 USDA's Commodity Credit Corporation (CCC) guarantees repayment for credit salesof 3 years or less; under GSM-103, CCC guarantees repayment for credit sales of more than 3 years but less than10 years. 13. (back) Ibid, p. 22-23. 14. (back) United Nations, Office of the IraqProgram -- Oil for Food; "About the Program: In Brief." http://www.un.org/depts/oip/background/inbrief.html 15. (back) Country Factsheet, The EconomistIntelligence Unit, http://www.economist.com/countries/Iraq . 16. (back) The Economist , "Diggingfor defeat: Iraq," May 2, 1998, Vol. 348, No. 8066, p.44. 17. (back) U.S. Bureau of the Census,International Data Base (IDB), Iraq, Oct. 10, 2002; http://www.census.gov/ipc/www/idbacc.html 18. (back) FAOSTAT, FAO, U.N. 19. (back) UNDP, Iraq Country Office,1999-2000 Report, June 2000. 20. (back) USDA, PSD database, April 2003. Note: during 1960-69 annual cereal production per capita averaged 249 kilograms, this fell to 177 in the 1970s, and130 in the 1980s, but had regained ground to 155 kilograms during the1990-94 period.	Iraq's agricultural sector represents a small, but vital component of Iraq's economy.Over the past several decades agriculture's role in the economy has been heavily influenced by Iraq'sinvolvement in military conflicts, particularly the 1980-88 Iran-Iraq War and the 1991 Gulf War, and by varyingdegrees of government efforts to promote and/or control agricultural production. In the mid-1980s, agricultureaccounted for only about 14% of the national GDP. After the imposition of U.N. sanctions and the Iraqigovernment's non-compliance with a proposed U.N. Oil-for-Food program in 1991, agriculture's share of GDP isestimatedto have risen to 35% by 1992. (1) Rapid population growth during the past three decades, coupled with limited arable land and a generalstagnation in agricultural productivity, has steadily increased dependence on imports to meet domestic food needssince themid-1960s. By 1980 Iraq was importing about half of its food supply. By 2002, between 80% and 100% of manybasic staples -- wheat, rice, sugar, vegetable oil, and protein meals -- were imported. This report will be updated if events warrant.
The Federal Emergency Management Agency (FEMA) provides two types of assistance for winter incidents: (1) "snow assistance," and (2) assistance for "severe winter storms." Both types of assistance are triggered by a presidential disaster declaration. The criteria used by FEMA to determine whether to recommend a declaration depend on the type of winter incident. Snow assistance determinations are based on snow accumulations. Determinations for severe winter storms are based on the severity and magnitude of the event and the capabilities of the state and affected local governments to respond to the incident. Requests for snow assistance and assistance for severe winter storms must also include the estimated cost of federal and nonfederal public assistance associated with the incident. FEMA divides the estimated cost of federal and nonfederal public assistance by the statewide population to give some measure of the per capita impact the incident has had on the state. This report describes snow assistance and assistance for severe winter storms, the declaration process, the criteria used to make eligibility determinations, and the types of assistance that are provided after the President has issued a major disaster declaration for the incident. This report also provides some historical data on winter incidents obligations for the incidents from FEMA's Disaster Relief Fund (DRF). The DRF is the main account used to fund a wide variety of programs, grants, and other forms of emergency and disaster assistance to states, local governments, certain nonprofit entities, and families and individuals affected by disasters. Under the Robert T. Stafford Disaster Relief and Emergency Assistance Act ( P.L. 93-288 , hereinafter the Stafford Act) there are two principal forms of presidential action to authorize federal assistance to states and localities through FEMA. Emergency declarations are made to protect property and public health and safety and to lessen or avert the threat of a major disaster or catastrophe. Emergency declarations are often made when a threat is recognized (such as the emergency declarations issued for Hurricane Katrina which were made prior to landfall) and are intended to supplement and coordinate local and state efforts prior to the event (such as evacuations and protection of public assets). In contrast, a major disaster declaration is made as a result of the disaster or catastrophic event and constitutes a broader authority that helps states and local communities, as well as families and individuals, recover from the damage caused by the event. It could be argued that FEMA policy conceptualizes snowstorms and severe winter storms differently. According to FEMA, a snowstorm is an event in which the state has record or near record snowfall in one or more counties that overwhelms the capability of the affected state and local governments to respond to the event. Severe winter storms, on the other hand, are events that occur during the winter season that include one or more of the following conditions: snow, ice, high winds, blizzard conditions, and other wintry conditions that cause substantial physical damage or property loss. Prior to 2009, FEMA provided federal assistance for snow removal costs for a stipulated period—usually two or three days. Most of these events were defined as a "snow emergency" because of the relatively limited assistance requested and provided. In November 2009, FEMA published new regulations for snowstorms and severe winter storms. Under the new regulations, snow-related events could be defined as major disasters. As FEMA explained, the intent of the change was to make FEMA's snow policy conform more closely to the Stafford Act: FEMA's 1999 Snow Assistance Policy evaluated requests for snow assistance under both the criteria for an ''emergency'' declaration under 44 CFR 206.35, as well as a request for a "major disaster" declaration under 44 CFR 206.36. However, the Stafford Act, 42 U.S.C. 5122, and FEMA regulations, 44 CFR 206.2(a)(17), expressly include "snowstorm" in the definition of a "major disaster." By comparison, FEMA regulations define "emergencies" as those types of events that do not qualify under the definition of a major disaster. In this revised policy, snowstorm events will be considered by FEMA for major disaster declarations under 44 CFR 206.36, consistent with the Stafford Act and FEMA regulations. As discussed below, in response to comments received on the July 2008 proposed policy, this final Snow Assistance Policy does not include the limitation proposed in 2008 that FEMA would only make recommendations for major disaster declarations for snow events. To determine the influence of the new regulations, obligations and declaration data from 2009 through 2014 were analyzed. From January of 2009 through June of 2014, 71 major disaster declarations were issued as part of a winter storm incident. These declarations led to more than $2.7 billion in federal obligations from the DRF. Figure 1 demonstrates both the number of declarations per year and the obligations associated with those incidents. The data suggest that both the number of declarations issued for winter storm incidents and the subsequent funding have increased since the new policy for snowstorms was issued by FEMA in 2009. From 1994, the first year for which there is available data on winter storms, through 2008, the average annual number of major disaster declarations associated with winter storms was 7.5. This number increased to an annual average of 12.4 for the period 2009-2013. Federal obligations also increased between these two periods, from an average of $274 million per year to an average of $508 million per year (data not shown). Analysis of DRF obligations data also indicated that winter storms involve more obligations from certain FEMA programs than others when compared to the DRF as a whole. Figure 2 displays the proportion of DRF obligations that were obligated for different programs in response to winter storms. Nearly 80% of DRF obligations for these incidents were for the Public Assistance Program, which assists with debris removal and the repair or replacement of public infrastructure. Public Assistance accounts for only 64% of all DRF obligations for major disasters during the same time period. Conversely, there were almost no funds provided through the Individual Assistance Program, which provides funds to individuals and households when the incident meets certain criteria. For all major disaster declarations between 2009 and 2014, the Individual Assistance Program accounted for 15% of the obligations. The Stafford Act stipulates several procedural actions a governor or tribal leader must take to request federal disaster assistance. The request is vital to the declaration process because the President can not issue a major disaster declaration without the request. In the case of winter storms, each county included in the request for a declaration must also have a record, or near record , snowfall according to official government snowfall data (see " Official Government Snowfall Data ," below). In addition, the state or tribal government must also demonstrate that the capabilities of the state or tribal government to effectively respond to the winter storm are, or will be , exceeded. Requests for snow assistance must be submitted within 30 days following the snowstorm and include an overview of the incident, copies of daily snowfall totals from the National Weather Service (NWS) stations and historical record snowfall data from the National Oceanic and Atmospheric Administration's (NOAA) National Climatic Data Center (NCDC). In addition to county snow accumulations, the estimated cost of federal and nonfederal public assistance associated with the incident must also be included in the request. FEMA divides the estimated cost of federal and nonfederal public assistance by the statewide population to give some measure of the per capita impact the incident has had on the state. The current per capita threshold is $1.39. In general, FEMA will make a recommendation to issue a major disaster declaration if estimated costs exceed $1.39 per capita. FEMA evaluates the above information and criteria to determine if the incident is eligible for a major disaster declaration under the Stafford Act, and then makes declaration recommendations. State and tribal governments must include official government snowfall data in their request for assistance. FEMA relies on official government data to make declaration recommendations to the President. Snowfall amounts measured and published by NOAA are used to compare the current snowstorm for each county for which snow assistance is requested. The NCDC publishes snowfall data from measurements made by observers from the NWS, airport stations, and the NWS Cooperative Network. NWS spotter resources may also be used as a primary source of snowfall data. FEMA will accept snowfall measurements from other sources that have been verified by the NCDC or NWS in cases where Cooperative Network Stations do not exist (or do not issue reports). FEMA uses the following definitions when considering a state or tribal government request for assistance. Near record snowfall approaches, but does not meet, or exceed the historic record snowfall within the county as published by the National Climatic Data Center (NCDC). FEMA generally considers snowfall within 10% of the record amount to be a near record snowfall. A record snowfall meets or exceeds the highest record snowfall within the county over a one-day, two-day, three-day, or longer period of time as published by the NCDC. A snowstorm is an event in which the state has record or near record snowfall in one or more counties that overwhelms the capability of the affected state and local governments to respond to the event. Snow assistance is available for all eligible costs incurred over a continuous 48-hour period. State and tribal governments may select a 48-hour period during which the highest eligible costs have been incurred. The 48-hour period selected cannot be changed after it has been submitted. FEMA may extend the eligible time period of assistance by 24 hours in counties where snowfall quantities greatly exceed record amounts. To be eligible for a time extension, the snowfall must exceed the historical record snowfall by at least 50%. The time period can be extended 24 hours in each designated county that meets this 50% criterion. Eligible assistance for snowstorms falls under Category B, emergency protective measures, as outlined in FEMA's Public Assistance Guide. Eligible assistance includes snow removal, snow dumps, deicing, salting, and sanding of roads and other facilities essential to eliminate or lessen immediate threats to life, public health, and safety. Other eligible activities related to the snowstorm include search and rescue, sheltering, and other emergency protective measures. State and tribal governments are responsible for notifying the FEMA Regional Administrator of any actual or anticipated proceeds from insurance covering snow removal or other snow assistance costs. FEMA will deduct the actual or anticipated amount of snow removal or other snow assistance costs from anticipated insurance proceeds from the policies in force at the time of the snowfall. Federal assistance may also be provided for severe winter storms. A severe winter storm is an event that includes one or more of the following: snow, ice, high winds, blizzard conditions, and other wintry conditions that cause substantial physical damage or property loss. The same procedural actions discussed previously must be taken by a governor or tribal leader when requesting federal disaster assistance for severe winter storms . As with requests for snow assistance, and in fact, a request for any major disaster declaration, the state or tribal government must demonstrate that the capabilities of the state or tribal government to effectively respond to the winter storm are, or will be, exceeded. The estimated cost of federal and nonfederal public assistance associated with the incident must also be included in the request. However, snow accumulations are not used as a criterion to make eligibility determinations and snow removal costs are not used to calculate the per capita impacts of the incident. The types of eligible assistance for severe winter storms vary according to the nature and severity of the incident. FEMA divides disaster-related work into two broad categories: (1) emergency work, and (2) permanent work. These are further subdivided into seven categories (see Table 1 ). Depending on the nature of the incident, one or more categories of work may be provided for the winter storm. However, it should be noted that a limited level of snow removal is provided for severe winter storms. Generally, snow removal is a precursor to the performance of otherwise eligible emergency work. For example, snow removal may be necessary to access downed power lines or gain access to a damaged building.	The Federal Emergency Management Agency (FEMA) provides two types of assistance for winter incidents: (1) snow assistance, and (2) assistance for severe winter storms. The assistance is triggered by a presidential disaster declaration. The criteria used by FEMA to determine whether to recommend a declaration depend on the type of winter incident. Snow assistance is based on record, or near record snowfall according to official government reports on snow accumulations. Acceptable government reports are snowfall amounts measured and published by the National Oceanic and Atmospheric Administration's National Climatic Data Center, or measurements made by observers from the National Weather Service. Determinations for severe winter storms are based on the severity and magnitude of the event and the capabilities of the state and affected local governments to respond to the incident. Both requests for snow assistance and assistance for severe winter storms must also include the estimated cost of federal and nonfederal public assistance associated with the incident. FEMA divides the estimated cost of federal and nonfederal public assistance by the statewide population to give some measure of the per capita impact the incident has had on the state. Snow assistance is available for all eligible costs incurred over a continuous 48-hour period. State and tribal governments may select a 48-hour period during which the highest eligible costs have been incurred. The 48-hour period selected cannot be changed after it has been submitted. As with most major disaster declarations, the types of assistance for severe winter storms vary according to the nature and severity of the incident. Generally, only a limited amount of snow removal is provided for severe winter storms. This is done to perform otherwise eligible emergency work (for example, to repair utility lines). This report describes snow assistance and assistance for severe winter storms, the declaration process, the criteria used to make eligibility determinations, and the types of assistance that are provided after the President has issued a major disaster declaration for the incident. This report also provides some historical data including obligations for the incidents from FEMA's Disaster Relief Fund (DRF). The DRF is the main account used to fund a wide variety of programs, grants, and other forms of emergency and disaster assistance to states, local governments, certain nonprofit entities, and families and individuals affected by disasters.
The Chief Administrative Officer of the House of Representatives (CAO) is an elected officer of the House. Elected at the beginning of each Congress with the slate of officers nominated by the majority party, the CAO's term coincides with the dates of that Congress. Initially created in the 104 th Congress (1995-1996) to replace the appointed Director of Non-Legislative and Financial Services, the CAO oversees human resources, financial services, technology infrastructure, procurement, facilities management, and other support functions for the House of Representatives. The CAO's portfolio complements the legislative operations of the Clerk of the House and the security functions of the Sergeant at Arms. Consolidation of administrative functions of the House under the direction of a single individual began with the creation of the appointed position of Director of Non-Legislative and Financial Services in the 102 nd Congress (1991-1992). Following the change in majority party from Democratic to Republican, the House in the 104 th Congress (1995-1996) abolished the position of Director of Non-Legislative and Financial Services and created an elected position of Chief Administrative Officer of the House to assume his duties. In the 102 nd Congress (1991-1992), Representative Richard Gephardt introduced H.Res. 423 , the House Administrative Reform Resolution of 1992. Among other provisions, H.Res. 423 created the Director of Non-Legislative and Financial Services who was "charged with running the daily nonlegislative and financial operations of the House." In debate on the resolution, Representative Gephardt summarized the role the director could play in the operation of the House. The Director is to be jointly appointed by the Speaker, the majority leader and the minority leader, and that individual must have extensive management and financial experience. Under the resolution, the Director, subject to policy direction and oversight of the House Administration Committee, would ultimately receive responsibility for the finance office, inside mail and internal mail operations, House information systems, office furnishings, office supply, office systems management, typewriter, the House restaurant system, telecommunications and telephone exchange, the barber shop and beauty shop, the non-legislative functions of printing services, the recording studio, and the records and registration office, the office of photography, the guide service, and the House child care center. Following debate, the House agreed to H.Res. 423 by a vote of 269 to 81. The resolution amended the Rules of the House to create Rule LII establishing the Director of Non-Legislative and Financial Services and defining the Director's authority over administrative and financial functions of the House. In January 1993, the rule governing the Director of Non-Legislative and Financial Services was incorporated into to Rule VI with the adoption of the rules for the 103 rd Congress (1993-1994). The first Director of Non-Legislative and Financial Services, Lt. Gen. Leonard P. Wishart, III (ret.), was jointly appointed by the Speaker, the majority leader, and the minority leader on October 23, 1992. In the 104 th Congress (1995-1996), as part of the rules package agreed to on January 5, 1995, the House abolished the appointed Director of Non-Legislative and Financial Services position and created a new officer of the House, the Chief Administrative Officer (CAO). Elected by the House, the CAO provides infrastructure and support for House member and committee operations. The support provided includes managing employee payroll, benefits, child care, parking, dining services, and installing furniture in member offices. The Committee on House Administration provides "oversight of the ... Chief Administrative Officer." Limited discussion of the creation of the CAO position took place in the debate on the Rules of the House ( H.Res. 6 ) for the 104 th Congress (1995-1996). Representative Ben Cardin advocated for appointing, not electing, the CAO to ensure the position remained bipartisan and outside of politics. …[W]here a partisan Chief Administrative Officer will replace a nonpartisan Chief Administrative Officer will replace a nonpartisan Director of Financial and Non-Legislative Services. Many of us on both sides of the aisle have been working for less partisanism [sic], particularly in the administration of the House of Representatives. It was the Republicans who worked with us to develop the Director of Financial and Non-Legislative Services, being approved by both the majority and minority, reporting to a committee composed of equal numbers of Democrats and Republicans. What happens under this particular bill? That office is abolished and replaced with a partisan Chief Administrative Officer. A few months ago the Republicans favored bipartisanism in administration to avoid the abuse of power by any one party. Now, just a few months later, we see a complete reversal. As an elected official of the House, the CAO is elected by House members on the first day of a new Congress. In general, the majority party introduces a resolution to elect the officers of the House, including the CAO. The slate of candidates is often chosen by the majority party leadership, sometimes with consultation with the minority. After the resolution's introduction, the minority party typically offers an amendment to nominate their own slate of candidates for office. The vote to agree to the resolution is generally a party line vote. In two cases, the Speaker has named an interim CAO following the resignation of the elected official. The first instance occurred in the 105 th Congress (1997-1998) when Speaker Newt Gingrich, pursuant to his authority under 2 U.S.C. § 75a-1(a), appointed Jeff Trandahl "to act as and to exercise temporarily the duties of the Chief Administrative Officer of the House of Representatives." The second instance occurred on July 15, 2010, following the resignation of CAO Daniel Beard. Speaker Nancy Pelosi used her authority pursuant to 2 U.S.C. § 75a-1(a) to appoint Daniel J. Strodel as interim CAO, effective July 18, 2010. The appointment for an interim CAO lasts until the House elects a replacement. The CAO's office supervises the non-legislative functions of the House of Representatives. CAO office divisions are organized along operational and mission lines that include the immediate office of the CAO, operations, and customer solutions. The immediate office includes the office of the chief administrative officer and his support staff. It is responsible for oversight of the operations and customer solutions divisions and directing studies ordered by the House leadership. The immediate office also supervises the management of the three House media galleries, which provide facilities for press coverage of the House; assists members of Congress and staff with the distribution of press releases; issues the CAO's semi-annual report on the office's activities and accomplishments; and issues the "Statement of Disbursements of the House." The immediate office also maintains a public website, http://cao.house.gov . Operations is responsible for developing and maintaining facilities and systems that are used by the House of Representatives, including financial management, procurement, technology, and human resources. In addition, operations staff serve as consultants to members' offices on their internal operations and systems. Operations is divided into four groups: Administration and Financial Services , handling procurement, financial counseling, payroll and benefits, budget management, resources management, human resources, and workplace safety; Workforce Services , handling employee and organizational development, employee assistance, the House learning center, and House child care; House Information Resources , handling technology support, technology infrastructure, business solutions, web solutions, facilities management, informational security, and systems engineering; and Immediate Operations Office , handling business continuity and disaster recovery, business improvement, portfolio management, and committee hearing rooms renovation. In addition, operations manages projects that affect all House employees. These include improving payroll and benefit services, introducing new financial and purchasing systems, upgrading "HouseNet," and updating the House messaging system. Customer Solutions is responsible for facilitating the daily work of congressional staff members through the CAO Customer Solutions Center (CCSC), which includes the CAO call center, FirstCall+. Customer Solutions is divided into three groups: Customer Solutions Delivery , handling the CCSC, the House recording studio, the office supply store, the House gift shop, and photography; Assets, Furnishings and Logistics , handling acquisition, payments, equipment maintenance, equipment inventory management, warehousing, carpet, drapes, upholstery, cabinetry, finishing, and modular furniture; and Immediate Customer Solutions Office , handling the disbursement of House resources and supplies and the management of customer relationships. Customer Solutions is also responsible for office renovations and moving members of the House and their staff to new offices. This responsibility includes holding equipment fairs to demonstrate new technology and products, and service fairs to highlight support offices, including the Architect of the Capitol, the Library of Congress (including the Congressional Research Service), the Clerk of the House, and the Sergeant at Arms. In March 2007, Speaker Nancy Pelosi, Majority Leader Steny Hoyer, and the then chair of the Committee on House Administration, the late Juanita Millender-McDonald, asked CAO Daniel Beard and his Senate counterparts to "undertake a 'Green the Capitol' initiative to ensure that the House institutes the most up-to-date industry and government standards for green building and green operating procedures. " Since 2007, the "Green the Capitol" initiative has worked to reduce the carbon footprint of the House through numerous programs including my green office, installing low VOC (volatile organic compounds) carpets in House offices, purchasing renewable electricity, using green cleaning products, and working with House food service vendor Restaurant Associates to use locally sourced food and biodegradable containers and utensils in the cafeterias. Since the creation of the office of the Director of Non-Legislative and Financial Services in the 102 nd Congress (1991-1992), seven individuals have served as either the Director or as CAO of the House on a temporary or permanent basis. Table A-1 provides a list of Directors and CAOs, including the Congress in which they served, and the date of their appointment or election.	The Chief Administrative Officer of the House of Representatives (CAO) is an elected officer of the House, chosen at the beginning of each Congress. The office of the CAO consists of three divisions: the immediate office of the CAO, operations, and customer solutions. Together, these divisions oversee human resources, financial services, technology infrastructure, procurement, facilities management, and other House support functions. An office initially created at the beginning the 104th Congress (1995-1996), the CAO assumed the duties previously performed by the Director of Non-Legislative and Financial Services, and manages the operations of other House administrative offices and support services.
Unmanned vehicles (UVs) are viewed as a key component of U.S. defense transformation. Perhaps uniquely among the military departments, the Department of the Navy (DON), which includes the Navy and Marine Corps, may eventually acquire every major kind of UV, including unmanned air systems (UASs)—which include unmanned aerial vehicles (UAVs) and armed UAVs known as unmanned combat air vehicles, or UCAVs—unmanned surface vehicles (USVs), unmanned underwater vehicles (UUVs) and autonomous underwater vehicles (AUVs), and unmanned ground vehicles (UGVs). Section 220 of the FY2001 defense authorization act ( H.R. 4205 / P.L. 106-398 of October 30, 2000) states, "It shall be a goal of the Armed Forces to achieve the fielding of unmanned, remotely controlled technology such that—(1) by 2010, one-third of the aircraft in the operational deep strike force aircraft fleet are unmanned; and (2) by 2015, one-third of the operational ground combat vehicles are unmanned." A 2005 report by the Naval Studies Board (NSB) recommended that the Navy and Marine Corps should accelerate the introduction of UAVs, and UUVs, UGVs; the report made several additional recommendations concerning DON UV efforts. The Navy Unmanned Combat Air System (N-UCAS) is the Navy's program for acquiring a UAS that can operate from aircraft carriers and penetrate enemy defenses to conduct surveillance and reconnaissance operations or suppress enemy air defenses (SEAD). The Navy plans to demonstrate the aircraft's suitability for carrier-based operations in 2013, and have it enter service in 2021 as a penetrating surveillance and reconnaissance system. The N-UCAS program was initiated as the UCAV-N program in conjunction with the Defense Advanced Research Projects Agency (DARPA). In December 2002, the Department of Defense (DOD) decided to merge the Air Force and Navy UCAV programs into a Joint Unmanned Combat Air System (J-UCAS) program. In October 2005, management of J-UCAS was transferred from DARPA, which had managed it since October 2003, to a joint Air Force-Navy office led by the Air Force. In February 2006, DOD announced that it was restructuring the J-UCAS program into a Navy-oriented UCAV program. The effort became a Navy program once again at the start of FY2007. Details about the J-UCAS program are being defined. The Broad Area Maritime Surveillance UAS (BAMS UAS) is the Navy's program for acquiring an unmanned, persistent, multi-sensor (radar, electro-optical/infrared, and electronic support measures) maritime ISR system that can cover any part of the world. BAMS UAS is to work with the Navy's planned P-8 Multi-Mission Aircraft (or MMA—the Navy's planned successor to the P-3 Orion maritime patrol aircraft). Competitors for BAMS UAS include variants of the existing Global Hawk and Predator UAVs, and possibly an unmanned version of the Gulfstream 550. The Navy's FY2008-FY2013 aircraft procurement plan calls for procuring the first four BAMS UASs in FY2011, and four more each in FY2012 and FY2013. The first BAMSs are expected to enter service in 2013. In support of the BAMS UAS program, the Navy, under the Global Hawk Maritime Demonstration (GHMD) program, has procured two Global Hawks under an Air Force production contract for use as test and demonstration assets in developing a concept of operations and tactics, training, and procedures for persistent ISR. Fire Scout —a small, unmanned helicopter—is the Navy's program for acquiring a Vertical Takeoff and Landing UAV (VTUAV) for use aboard Littoral Combat Ships (LCSs) as an ISR and communications-relay platform. Five Fire Scouts were procured in FY2006 and four were procured in FY2007. The Navy's FY2008-FY2013 aircraft procurement plan calls for procuring three in FY2008, five in FY2009, six each in FY2010 and FY2011, nine in FY2012, and 10 in FY2013. A planned improvement for Fire Scout is the Coastal Battlefield Reconnaissance and Analysis (COBRA) mine countermeasures payload. The Tactical Control System (TCS) , a part of the Fire Scout system, is being evaluated by the Navy as a possible control system for BAMS UAS (see above) and STUAS (see below). The Small Tactical UAS (STUAS) is a Navy-Marine Corps program(with additional Air Force and Special Operations Command [USSOCOM] participation in developing program requirements) initiated in FY2008 to develop a small UAV for persistent ISR operations. For the Navy, STUAS is to support ship and small-unit commanders involved in the Navy's participation in what the Administration refers to as the global war on terrorism (GWOT). The Navy and Marine Corps want to have STUAS enter service in FY2010. The Marine Corps organizes its UAS acquisition efforts into three tiers based on the level of the Marine Corps commander supported. Tier I UASs support small-unit (platoon and company) commanders. The current Tier I UAS is the Dragon Eye . In September 2006, the Marine Corps selected the Raven B —a UAS also operated by the Army and the USSOCOM—as the Marine Corps' follow-on Tier I UAS. The Marine Corps as of November 2006 operated more than 100 Tier I systems. Tier II UASs support battalion, Marine Expeditionary Unit (MEU), regimental, and division commanders. The Marine Corps wants the STUAS (see discussion above) to be its new Tier II system. Between now and STUAS' planned entry into service in FY2010, the Marine Corps is filling its need for Tier II UASs in Iraq through ISR service contracts. Boeing/Insitu is the current contractor; future contracts will be competed. Tier III UASs support Marine Expeditionary Force (MEF) and Joint Task Force (JTF) commanders. The current Tier III UAS is the Pioneer , which entered service with the Navy and Marine Corps in 1986 and is now in sustainment status. The Marine Corps is changing the Pioneers' ground control system (GCS) to a Replacement GCS based on the Army's "One System" GCS, providing a common GCS capability with the Army. The Marine Corps plans to ultimately use the One System GCS across all three UAS tiers. The Vertical UAS (VUAS) is the Marine Corps' planned follow-on Tier III UAS. The Marine Corps is currently developing requirements documentation and conducting an analysis of alternatives (AOA) for the program, and is evaluating options for sustaining its current Tier III capability until VUAS is fielded. The Navy reportedly was to complete a new USV master plan by the end of 2006. The Remote Minehunting System (RMS ) is a high-endurance, semi-submersible vehicle that tows a submerged mine-detection and -classification sensor suite. The Navy originally envisioned procuring at least 12 systems for use on at least 12 DDG-51-class Aegis destroyers, but in FY2003 reduced the program to 6 systems for 6 DDG-51s. Additional RMSs are now to be deployed from LCSs. The Office of Naval Research (ONR) reportedly is developing two USV prototypes as future options for a common USV or family of USVs. The Navy's Spartan Scout USV program uses an unmanned 7-meter (23-foot) or 11-meter (36-foot) boat capable of semi-autonomous operations that can be launched from surface ship or shore. The craft can be equipped with modular payload packages for missions such as mine warfare and antisubmarine warfare (ASW). The Navy accelerated deployment of Spartan; the first system was deployed in October 2003. The Navy's 2005 UUV master plan sets forth nine high-priority missions for Navy UUVs: (1) ISR, (2) mine countermeasures (MCM), (3) anti-submarine warfare (ASW), (4) inspection/identification, (5) oceanography, (6) communication/ navigation network nodes (CN3), (7) payload delivery, (8) information operations, and (9) time-critical strike operations. The plan stresses the need for commonality, modularity, and open-architecture designs for Navy UUVs, organizes Navy UUVs into four broad categories: Man-portabable UUVs with diameters of 3 to 9 inches and weights of 25 to 100 pounds, for use in special-purpose ISR, expendable CN3, very-shallow-water MCM, and explosive ordnance disposal (EOD); Lightweight vehicles with 12.75-inch diameters and weights of up to 500 pounds (the same as lightweight Navy torpedoes), for use in harbor ISR, special oceanography, mobile CN3, network attack, and MCM area reconnaissance; Heavyweight vehicles with 21-inch diameters and weights up to 3,000 pounds (the same as heavyweight Navy torpedoes), for use in tactical ISR, oceanography, MCM, clandestine reconnaissance, and decoys; and Large vehicles with diameters of 36 to 72 inches and weights of up to 20,000 pounds, for use in persistent ISR, ASW, long-range oceanography, mine warfare, special operations, EOD, and time-critical strike operations. The Navy is using its single Long-term Mine Reconnaissance System (LMRS) (which includes two UUVs) and its single Advanced Development UUV (which includes 1 vehicle) to support the development of the Mission-Reconfigurable UUV System (MRUUVS) . The MRUUVS is a 21-inch-diameter, submarine-launched and -recovered UUV being developed for conducting mine countermeasures and ISR missions in areas denied to inaccessible to other Navy systems. The Navy wants the MRUUVS program to start in FY2009, and the first MRUUVs to enter service in 2016. The Large-Displacement, Mission-Reconfigurable UUV System (LD-MRUUVS) is a large, clandestine UUV for launching from submarines, LCSs, and amphibious ships that is to be used for conducting multiple missions, including mine countermeasures (including neutralization), delivery of payloads for special operations forces, persistent ISR, and limited ASW in areas denied or inaccessible to other Navy systems. The Navy is currently developing requirements for the system, and the development effort will leverage technology developed for the 21-inch MRUUVS. The Surface Mine Countermeasure (SMCM) UUV System for use on older Avenger (MCM-1) class mine countermeasures ships and LCSs. The Navy plans to develop and field a few Increment 1 and Increment 2 versions of the SMCM UUV as user operational evaluation systems (UEOS), and then produce an Increment 3 version as a heavyweight-class UUV for use aboard LCSs, with the system entering service in FY2011. The Battlespace Preparation Autonomous Undersea Vehicle (BPUAV) is a 21-inch-diameter AUV with a side-looking sonar for mine detection for use aboard LCSs as a complement to other LCS mine countermeasures systems. The first BPAUV is to be delivered in December 2006 for integration into the first LCS. The Semi-Autonomous Hydrographic Reconnaissance Vehicle (SAHRV) , sponsored by USSOCOM, is a small, man-portable vehicle to be used by Navy Special Warfare (NSW) forces (i.e., Navy SEALs) for hydrographic reconnaissance and mapping operations in very shallow waters. The Navy states that SAHRV "has completed all phases of the acquisition cycle to the point of fielding and sustaining 17 operational units. As such, the SAHRV has achieved Full Operational Capability (FOC) defined by USSOCOM and continues to fulfill a critical requirements capability of NSW forces in the War on Terror." The Navy plans to improve the system's capabilities over time. The Armored Breaching Vehicle (ABV) , currently undergoing developmental testing and field user test and evaluation, is an unmanned, tracked combat engineer vehicle for breaching minefields and complex obstacles. The Army is considering purchasing some for its own use in Iraq. The Gladiator is a wheeled, tele-operated, semi-autonomous UGV for armed reconnaissance and breaching operations. It cab be equipped with machine guns, the Shoulder-Launched Multipurpose Assault Weapon (SMAW), an obscuration smoke system, and a system for breaching anti-personnel systems. The Marine Corps states that Gladiator "was recently removed from System Design and Development (SDD) but development of the revised system continues, test and contingency assets are being designed and built at Carnegie Mellon University (CMU). The Gladiator Baseline 0 Contingency project design and build [effort] is progressing, [and] delivery of the first system is scheduled for 3 rd qtr FY07 with developmental testing to commence in 4 th Qtr FY07. " The MarcBot IV is a small, tele-operated UGV for reconnaissance and surveillance, particularly in investigating improvised explosive devices (IEDs). More than 500 have been fielded for Marine Corps and Army use. An improved design (MarcBot V) is being developed. The Talon is a small (two-man-portable), commercial-off-the-shelf (COTS), tele-operated UGV used by explosive ordnance disposal (EOD) personnel. Numerous systems have been fielded for Marine Corps and Army use, and use of additional payloads (Such as metal detectors, explosive detectors, infrared devices, radars, and weapons) is being explored. The FIDO-PackBot is a UGV equipped with an explosive vapor detector for detecting vehicle-and personnel-borne IEDs at checkpoints and major points of entry. A large number of units are planned for Marine Corps and Army use., with the first entering service in early FY2007. Potential issues for Congress regarding naval UVs include the following: What implications might UVs have for required numbers and characteristics of naval ships and manned aircraft, and naval concepts of operations? Since the current Navy UCAV and Gladiator UGV programs will likely fall far short of meeting the goals established by Section 220 of P.L. 106-398 , should the these programs be accelerated so as to come closer to meeting the goals, or should the goals in Section 220 be amended? How will the restructuring of the J-UCAS program into the Navy-oriented UCAV program affect the Navy UCAV effort? Are the Marine Corps' UAV and UGV programs adequately coordinated with those of the Army? Is the Marine Corps' plan for using upgraded Pioneers as an interim tactical UAV the best approach? The Department of the Navy's proposed FY2008 budget, with funding for various Navy and Marine Corps UV programs, was submitted to Congress in February 2007.	Unmanned vehicles (UVs) are viewed as a key element of the effort to transform U.S. military forces. The Department of the Navy may eventually acquire every major kind of UV. Navy and Marine Corps UV programs raise several potential issues for Congress. This report will be updated as events warrant.
The Emergency Food and Shelter (EFS) program, the oldest federal program serving the homeless, was established in March 1983. The program was first funded through an emergency jobs appropriation bill ( P.L. 98-8 ) in which Congress allocated $50 million to the Federal Emergency Management Agency (FEMA) to provide emergency food and shelter to needy individuals. The program funds soup kitchens, food banks, and shelters, and also provides homeless prevention services. Local communities largely determine how funds will be used. The EFS program was not initially authorized, but continued to exist due to annual appropriations until 1987, when the Stewart B. McKinney Homeless Assistance Act ( P.L. 100-77 ) authorized it through FY1988. Congress has since reauthorized the program three times, first in 1988 for FY1989-FY1990 ( P.L. 100-628 ), again in 1990, for FY1991-FY1992 ( P.L. 101-645 ), and then in 1992 for FY1993-FY1994 ( P.L. 102-550 ). The program has not been reauthorized since 1994, but Congress has continued to fund it each year in annual appropriations bills. In FY2006, Congress funded the EFS program at $151.5 million ( P.L. 109-90 ). Although funds for the EFS program are appropriated to FEMA, a National Board was established to carry out the program, including the distribution of funds to local jurisdictions. The Board consists of designees from six charitable organizationsâUnited Way of America, Salvation Army, National Council of Churches of Christ in the U.S.A., Catholic Charities USA, United Jewish Communities, and the American Red Crossâand is chaired by a representative from FEMA. The EFS program's authorizing statute gives the National Board a great deal of discretion, and itself contains only minimal requirements. In addition to establishing the National Board, the statute requires the Board to be audited annually, release an annual report to Congress, disburse funds within three months of receipt, and establish its own written guidelines. The statute states that the written guidelines must include methods to identify local jurisdictions with the highest need, methods to determine the amount of funding to give to each local jurisdiction, and eligible program costs, reporting requirements, and a requirement that homeless individuals be members of local boards. These guidelines are published in the Federal Register. The National Board distributes funds directly to eligible local jurisdictions, which then determine how to allocate the funds among local service providers. Local jurisdictions must fulfill two requirements to be considered eligible. First, they must either be cities of 50,000 or more or counties (typically local jurisdictions are counties). Second, they must have the highest need for emergency food and shelter as determined by unemployment and poverty rates. Specifically, the National Board uses three measures to determine which local jurisdictions have the highest need: those with 13,000 or more residents unemployed and an unemployment rate of at least 4.7%; those with between 300 and 12,999 residents unemployed and an unemployment rate of at least 6.7%; or those with 300 or more unemployed and a poverty rate of at least 11%. Once the National Board determines which local jurisdictions are eligible to receive funds, it calculates the amount of funds each will receive by dividing the amount of available funds by the number of unemployed within all eligible local jurisdictions combined to arrive at a per capita rate of funding per unemployed person. It then distributes the funds by multiplying the per capita rate by the number of unemployed persons in each eligible local jurisdiction. Local jurisdictions that do not qualify for funding under one of the three measures of unemployment and poverty (sometimes referred to as direct funding) may still receive funds through a state set-aside process. The National Board reserves a portion of appropriated funds so that states may either fund local jurisdictions that otherwise do not qualify for funds, or provide additional funds to jurisdictions that have already qualified. In determining the portion of state set-aside funds to allocate from the total, the National Board uses its discretion, although it attempts to minimize fluctuations in funding from year to year and maintain a constant ratio of per capita state set-aside funding to per capita direct funding. The state set-aside allows states to address pockets of homelessness or poverty, help areas that undergo economic changes like plant closings, or assist communities where levels of unemployment or poverty do not quite rise to the required threshold. Each state has a set-aside committee that develops its own criteria to determine which local jurisdictions will receive set-aside funds, however the committees must give priority to those jurisdictions that did not receive funding based on unemployment and poverty measures. The National Board allocates the state set-aside funds based on a ratio of each state's average number of unemployed individuals in unfunded jurisdictions to the average number of unemployed in unfunded jurisdictions nationwide. In FY2006, Congress appropriated $151.5 million to the EFS program. Of this, just over $138 million was distributed to eligible local jurisdictions according to measures of unemployment and poverty, and approximately $11.8 million was distributed as state set-aside funding. All 50 states, the District of Columbia, Puerto Rico, and four territories received funds totaling $150,040,072. (See Table 1 .) Very little EFS program funding is used for administrative expenses. By statute, no more than 5% of the total appropriation may be used for administrative purposes. Local jurisdictions may use up to 2% of their funds, and state set-aside committees 0.5% of state set-aside funds toward the 5% total. The National Board uses no more than 1% of funds for administrative expenses. In the FY2006 appropriation for the program ( P.L. 109-90 ), Congress directed that no more than 3.5% of the total award go to pay administrative expenses. On average, no more than 2.5% of the total award is used for these expenses. Local boards determine which organizations within each jurisdiction will receive funds. Once the National Board identifies local jurisdictions that qualify for funds, it directs the United Way in each jurisdiction to convene a local board if one does not already exist. Local boards are comprised of representatives from the same six charitable organizations that make up the National Board. Instead of a FEMA representative, however, the head of the local government entity, or a designee, serves at the local level, and the chairperson of the board is elected. In addition, each local board must include a member who is homeless or formerly homeless, and if the jurisdiction is located within an Indian reservation, the board must invite a Native American to serve. Boards are encouraged to expand membership with representatives from minority populations, private non-profits, or government organizations. When local boards receive their share of funds from the National Board, they invite local service providersânonprofits and government agenciesâto apply for funds. The local boards select grantees, called local recipient organizations (LROs), based on the "demonstrated ability of an organization to provide food, shelter assistance or both." Funds are distributed twice per year, the first payment is automatic, and the second occurs after LROs clear an audit procedure. The local boards are responsible for monitoring LROs, establishing an appeals process for applicants denied funding, and reporting to the National Board on allocations and expenditures. Eligible expenses for which LROs may use funds include items for food pantries like groceries, food vouchers, and transportation expenses related to the delivery of food; items for mass shelters like hot meals, transportation of clients to shelters or food service providers, and toiletries; payments to prevent homelessness like utility assistance, hotel or motel lodging, rental or mortgage assistance and first month's rent; and LRO program expenses like building maintenance or repair, and equipment purchases up to $300. LROs may apply to local boards for variances in their budgets or waivers to use funds in a way not addressed in the guidelines, but which is in line with the program's intent. If a local board determines that the way it has allocated funds in its local jurisdiction is not meeting the actual need for services, or if any LRO is not using its grant effectively, the local board may reprocess and reallocate funds among other LROs. According to the National Board's guidelines, although EFS program funds are targeted to special emergency needs, the term applies to "economic, not disaster related, emergencies." When Congress created the program in 1983, the country was in the midst of a recession and high unemployment, so it gave jurisdiction to FEMA, the nation's emergency response agency, so that funds would be delivered quickly and efficiently. EFS funds are not distributed in a manner that is responsive to Presidentially-declared disasters, and LROs may not use funds to purchase supplies in anticipation of a natural disaster. However, there is no prohibition on using funds to provide services to those displaced by disaster as long as the services fall within the parameters of the program. In fact, there is past precedent for focusing EFS program funds on those individuals affected by disaster. After the Los Angeles riots in 1992, the Los Angeles area's local board issued special instructions to its LROs to provide help to those who needed it as a result of the riots. The National Board also fast tracked the Los Angeles board's second annual payment. Finally, local boards, supported by the National Board, issued to Congress and the White House "an urgent appeal to supplement this current year's allocation of the Emergency Food and Shelter Program in light of the increasing need both before and following the riots." Congress did not supplement the EFS Program funds, however. Beginning in FY2003 and continuing through FY2005, the President's budget request proposed moving the EFS program from FEMA to the Department of Housing and Urban Development (HUD) in order to consolidate homeless programs. Both the House and Senate Appropriations Committees specifically chose to keep the program within FEMA. In its FY2004 report for the Veterans Affairs, HUD and Independent Agencies Appropriations Bill ( S.Rept. 108-143 ), the Senate Appropriations Committee explicitly stated that it was not including the President's proposal to transfer the program to HUD in its bill. And Senator Robert Byrd, in a hearing before the Senate Appropriations Committee on Homeland Security appropriations for FY2004, noted that the EFS program had been "well run" and "well managed by FEMA." In its report for FY2005 ( S.Rept. 108-280 ), the Senate Appropriations Committee stated that the program is appropriately run within FEMA, and that it would not move it to HUD as the President requested. The President's FY2006 budget request left the EFS program within the Department of Homeland Security's Office of Emergency Preparedness and Response, also known as FEMA.	The Emergency Food and Shelter (EFS) Program allocates funds to local communities to fund homeless programs including soup kitchens, food banks, shelters, and homeless prevention services. The EFS program is part of the Federal Emergency Management Agency (FEMA), and after Hurricane Katrina struck, some questions arose about the use of EFS program funds for Presidentially-declared disasters. This report describes how the EFS program operates through its National Board, local boards, and local recipient organizations. It further discusses the use of EFS program funds during disasters, and recent attempts to move the program from FEMA to the Department of Housing and Urban Development (HUD).
Parking privileges for individuals with disabilities is distinct from the subject of physical accessibility of parking spaces or structures. The federal role in ensuring physical parking space accessibility is significant: under the Americans with Disabilities Act (ADA), a broad nondiscrimination statute, government entities, private businesses, and others must adhere to the ADA Standards for Accessible Design when re-striping existing or building new parking lots. The ADA standards mandate specific percentages of van-accessible parking spaces per parking facility and require accessible aisles between certain spaces. However, the ADA Standards for Accessible Design do not require governments or other entities to reserve accessible parking spaces or issue special license plates or placards for individuals with disabilities; nor does any other ADA regulation mandate the provision of such parking privileges. Therefore, any federal action on parking privileges occurs separately from federal rules on physical parking space accessibility. Congress first considered federal action on parking privileges for individuals with disabilities in the mid-1980s in response to complaints that some states did not honor parking placards for individuals with disabilities from other states. The first bills introduced during that period would have created federal guidelines and authorized penalties for states that failed to comply with those guidelines. Specifically, the initial bills proposed federal sanctions in the form of reduced highway apportionments for states that failed to recognize parking placards issued by other states or failed to implement federal rules. However, those early proposals were not reported out of their respective committees. Since that time, the federal government has created guidelines for parking privileges. In 1988, Congress enacted legislation requiring the Department of Transportation to create a "uniform system" of parking privileges for people with disabilities. Accordingly, the Department of Transportation promulgated the "Uniform System for Parking for Persons with Disabilities." However, Congress has never required states to comply with the Uniform System, nor has it authorized penalties for non-complying states. Rather, the enacted law and resulting federal guidelines are merely hortatory. The legislation required the department to "encourage adoption of such system by all the states," but it did not require states to adopt the federal guidelines. Thus, although the federal government has a strong advisory role, states have the ultimate responsibility for the development of parking privileges. The stated purpose of the Department of Transportation's Uniform System for Parking for Persons with Disabilities is to provide "guidelines to States for the establishment of a uniform system." Thus, the Uniform System provides model definitions and rules regarding eligibility, application procedures, and issuance of special license plates and placards. It also contains information to aid states in developing reciprocal systems of parking privileges, including sample placards and a model rule regarding reciprocity. The Uniform System is brief. It does not contain model rules regarding enforcement, nor does it provide model rules specifying lengths of time after which special plates or placards must be renewed or addressing whether eligible individuals must be primary users of vehicles with special license plates. Instead, it contains basic definitions and samples that the department encourages states to utilize as part of their own, more detailed, parking privilege systems. One key provision in the Uniform System is the model definition of eligible individuals. Unlike the ADA, which protects every individual with a "disability," the Uniform System extends parking privileges only to "persons with disabilities which impair or limit the ability to walk." This definition includes people who (1) "[c]annot walk 200 feet without stopping to rest"; (2) cannot walk without the aid of another person or certain assistive devices; (3) have respiratory volumes of less than a certain amount due to lung disease; (4) "[u]se portable oxygen"; (5) have cardiac conditions of a specified severity; or (6) "[a]re severely limited in their ability to walk due to an arthritic, neurological, or orthopedic condition." Under the Uniform System, individuals' fit within any of these categories must be "determined by a licensed physician." If an individual qualifies as a person with a disability which impairs or limits his or her ability to walk, then under the Uniform System's model rules, he or she may submit an application for special license plates or a windshield placard, which entitle the individual to park in specially reserved parking spaces. A certification from a licensed physician must accompany an initial application for such plates and placards. Under the Uniform System guidelines, states may not charge a higher fee for special license plates than they charge for regular license plates. Together with special license plates, placards "shall be the only recognized means of identifying vehicles permitted to utilize parking spaces reserved for persons with disabilities which limit or impair the ability to walk" under the Uniform System. The system delineates two types of windshield placards: removable windshield placards and temporary removable windshield placards. Removable windshield placards are appropriate for individuals who will qualify as persons with disabilities which impair or limit the ability to walk permanently or for at least six months. Temporary removable windshield placards are most appropriate for individuals who will have such an impairment or limitation for less than six months. The Uniform System provides samples of each type of windshield placard. The sample placards display the "International Symbol of Access," which was adopted by the disability rights organization Rehabilitation International in 1969. The symbol is a commonly recognized image of a wheelchair and is best known as a white chair on a blue background. The samples also include spaces in which to display names of issuing authorities and expiration dates for the placards. In addition to sample placards, which aid efforts for reciprocity among states indirectly by providing a commonly recognized symbol, the Uniform System includes a model rule that directly addresses reciprocity. It provides that states "shall recognize removable windshield placards, temporary removable windshield placards and special license plates which have been issued by issuing authorities of other States and countries." All states have laws governing parking privileges for individuals with disabilities, and nearly all states have adopted at least some portion of the Department of Transportation's Uniform System. Most states extend privileges to visitors with placards issued by other states. Also, most states issue placards closely resembling the Uniform System's sample placard. However, other aspects of the state systems vary greatly. Regarding eligibility, some states have incorporated the Uniform System's definition of an individual with a disability which limits or impairs the ability to walk word-for-word into their eligibility criteria. Other states' eligibility criteria are entirely distinct from the Uniform System definition. Between these two options, most states have incorporated the Uniform System's definition in their statutes but have modified or expanded it. For example, some states have added a category for blindness to the Uniform System definition. Most states extend parking privileges to individuals with special license plates or placards issued by other states. Many states even extend privileges to people with placards issued by other countries. The language in these reciprocity provisions differs from state to state. Some states codified most or all of the Uniform System's reciprocity provision. Other states adopted little or no language from the Uniform System but recognize out-of-state placards nonetheless. A few states extend conditional privileges to out-of-state visitors; for example, North Dakota extends privileges only to people from states that also extend privileges to traveling North Dakotans. However, even states that extend parking privileges to out-of-state visitors have rules that out-of-state visitors might not know to follow. For example, Iowa requires that placards be displayed only when individuals with disabilities are actually utilizing reserved parking spaces. The state laws are fairly similar regarding some application procedures and criteria for which the Uniform System provides model rules. For example, most states require eligible individuals to apply for both special license plates and either temporary or more permanent windshield placards. Likewise, most states issue special license plates or placards after receipt of an application containing certification by a physician, as the Uniform System suggests. In contrast, states' laws are relatively different regarding administrative aspects of parking privileges that the Uniform System does not address. For example, state rules regarding the duration for which removable windshield placards will be valid—an aspect the Uniform System does not address—vary from just two years to indefinitely. In sum, the Department of Transportation's Uniform System has increased uniformity in the state laws. Many states utilize uniform sample placards and have enacted statutes requiring reciprocal privileges for individuals bearing placards issued by other states. Nonetheless, the state systems differ in many aspects of parking privilege administration.	State law generally governs parking privileges for people with disabilities. However, federal regulations offer a uniform system of parking privileges, which includes model definitions and rules regarding license plates and placards, parking and parking space design, and interstate reciprocity. The federal government encourages states to adopt this uniform system. As a result, most states have incorporated at least some aspects of the uniform regulations into their handicapped parking laws. This report describes the federal role in parking privileges law, outlines the uniform system's model rules, and briefly discusses state responses to the model federal rules.
RS21753 -- Indonesia-U.S. Economic Relations March 2, 2004 Indonesia, like many East Asian economies, suffered a severe economic shock when the "Asian Financial Crisis" struck the country in mid-1997. Prior to thisperiod, Indonesia had enjoyed relatively healthy economic growth: from 1980-1989, real GDP growth averaged5.5%, and from 1990 to 1996, it averaged 8.0%(one of the highest GDP growth rates in the world). According to the World Bank, the proportion of people livingbelow poverty declined from 60% in 1970 toan estimated 11% by mid-1997. (3) The 1997 economic crisis (which began in Thailand and quickly spread to Indonesia and several other East Asian economies), (4) resulted in a sharp depreciationof Indonesia's currency (the rupiah), (5) large-scalecapital flight, high inflation, widespread corporate bankruptcies (caused in part by large short-term debt ofmany companies and corrupt business practices), and a near collapse of the banking system. (6) In 1998, real GDP plunged by 13.2%; exports andimports fell by 8.6% and 34.5%, respectively, and living standards (per capita GDP on a purchasing power parity basis) droppedby nearly 13% (see Table 1 ). Finally , thepoverty rate doubled between mid-August 1997 (pre-crisis) and late 1998/early 1999. (7) Political unrest followed the economic crisis, eventually leading to the resignation in May 1998 of President Suharto (or Soeharto) who had ruled the countrysince 1967. The collapse of the Suharto regime helped usher in a new era of democratic political reforms inIndonesia, although the transition to democracy hasnot been easy and political instability remains a problem. Indonesia's near economic meltdown forced it to turn tointernational lending institutions, such as theInternational Monetary Fund, the World Bank, the Asian Development Bank, and foreign governments for billionsof dollars in loans, debt rescheduling, andeconomic aid. Indonesia has been somewhat successful in bringing the economy back to at least pre-crisis levels, but several problems remain. On the positive side, real GDPfrom 2000-2003 grew at a relatively healthy pace, averaging 4.0% (although it was half the average level of realGDP growth during the early 1990s). Inaddition, Indonesia's living standards (measured according to per capita GDP in purchasing power parity) finallyreached and exceeded pre-crisis levels in 2002($3,320 in 2002 versus $3,201 in 1997). Living standards improved by 12.7% in 2003. Finally, Indonesian exports (in dollar terms) in 2003 were 6.6% higherthan 1997 levels. On the negative side, Indonesian imports in 2003 were 21.1% lower than pre-crisis levels,reflecting the effects of the sharp devaluation of therupiah. In addition, the stock of foreign direct investment (FDI) in Indonesia dropped each year from 1997-2002. While the stock of FDI is estimated to haverisen slightly in 2003, it is $14.8 billion (or 20.3%) lower than what it was in 1997. (8) Finally, the rate of unemployment in Indonesia has steadily risen over thepast few years, from 6.1% in 2000 to 8.7% in 2003. Table 1. Selected Economic Indicators for Indonesia's Economy: 1997-2003 Source: Economist Intelligence Unit and government of Indonesia. Data for 2003 are estimates. *PPP data are measurements of foreign data in national currencies converted into U.S. dollars based on a comparable level of purchasing power these datawould have in the United States. The short-term economic prospects for Indonesia are relatively positive. For example, Global Insight , an international forecasting firm, predicts thatIndonesia's real GDP will rise by 4.6% in 2004 and 5.0% in 2005. (9) However, Indonesia faces a number of challenges that threaten to undermine long-termgrowth prospects. These include widespread government corruption and a weak legal system, (10) large public debt, extensive government controlof keyeconomic sectors (such as oil and gas), a high level of corporate non-performing loans, a weak banking system,uncertainties surrounding the centralgovernment's efforts to decentralize fiscal and political authority to local governments, and failure by thegovernment to provide adequate protection ofintellectual property rights (IPR). In addition, the existence and activities of several separatist movements andterrorist groups in Indonesia constitute majorthreats to political and economic stability. (11) InOctober 2002, terrorists with reported links to Al Qaeda bombed a club in Bali frequented by western tourists,killing over 200 people (including seven Americans) and wounding hundreds more. (12) In August 2003, terrorists bombed a U.S.-run hotel in Jakarta , killing12 people and wounding 150. The bombings have had a chilling effect on Indonesia's tourism industry and raisedmajor concerns over the safety of foreigntourists and businesspeople in Indonesia. Ethnic, religious, and separatist violence in the country has displaced 1.3million Indonesians. (13) According to the World Trade Organization, Indonesia was the world's 28th largest exporter and the 39th largest importer in 2002. Indonesian trade data indicatethat Japan was its largest trading partner in 2002, followed by the United States, Singapore, South Korea, and China(see Table 2 ). The United States wasIndonesia's second largest export market and its third largest source of imports. Major Indonesian exports includedpetroleum and petroleum products, naturalgas, and clothing and accessories. Its major imports were petroleum and petroleum products, organic chemicals,and general industrial machinery. (14) According to Indonesian investment statistics (which record approved investment, as opposed to actual investment),the top five foreign investors in Indonesiaare the United Kingdom, Japan, Singapore, China, and Malaysia. Major sectors for FDI in Indonesia includechemicals, pharmaceuticals, paper; metal goods,transportation, and real estate. (15) Table 2. Indonesia's Major Trading Partner's: 2002 ($billions) Source: United Nations Conference on Trade and Development U.S. data indicate that Indonesia is not a large U.S. trading partner. In 2003, U.S. exports to, and imports, from Indonesia were $2.5 billion and $9.5 billion,respectively, making Indonesia the 37th largest U.S. export market and its 26th largestsource of imports. As indicated in Table 3 and figure 1 , U.S. exports toIndonesia declined sharply in 1998 and 1999 and have been relatively flat since. Overall, U.S. exports to Indonesiain 2003 were 44.4% lower than 1997 levels. U.S. imports from Indonesia grew slightly from 1997-2000, but have been relatively flat since. U.S. imports fromIndonesia in 2003 were only 3.6% higherthan 1997 levels. The top three U.S. exports to Indonesia in 2003 were soybeans, textile fibers, and animal feed,while the top U.S. imports from Indonesiawere clothing and apparel, telecommunications equipment (mainly audio and video equipment), and crude rubber. According to U.S. investment data (whichlists the value of U.S. FDI on a historical cost basis, i.e., the cumulative book value of investment), U.S. FDI inIndonesia stood at $7.5 billion at year-end 2002,down by $700 million from 2001 and by $1.4 billion from its peak in ($8.9 billion) in 2000. Currently, 77% of U.S.FDI in Indonesia is in the mining sector(mainly oil and gas). (16) Because Indonesia is a developing country and meets other criteria set in U.S. law, $1.3 billion worth of its exports entered the United States duty-free under theGeneralized System of Preferences (GSP). In an effort to boost U.S.-Indonesian commercial relations, promotepolitical stability in Indonesia, and combatterrorism, the Bush Administration on September 19, 2001 announced that the United States would add 11 productsimported from Indonesia (valued at about$100 million) that would be eligible for GSP treatment and pledged that the United States would provide up to $400million in financial aid and loan guaranteesunder U.S. trade programs operated by the Overseas Private Investment Corporation (OPIC), the Export-ImportBank (Eximbank), and the Trade andDevelopment Agency (TDA), largely targeted at Indonesia's oil and gas sector. Indonesia has gradually reformed its trade regime over the past 10 years, reducing its average un-weighted tariff from 20.0% in 1994 to 7.3% in 2003. In 1999,Indonesia agreed to eliminate various discriminatory trade policies on auto trade after it lost a case in the WTOdispute brought mainly by the United States andEuropean Union. Indonesia's enforcement of U.S. IPR has been a major issue of concern for U.S. firms. Accordingto the International Intellectual PropertyAlliance (IIPA), piracy levels in Indonesia are "among the highest in the world," rivaling those of China andVietnam. IIPA estimates that IPR piracy inIndonesia cost U.S. firms $260 million in lost trade in 2002. (17) Table 3. U.S. Trade With Indonesia: Selected Years ($millions) Source: U.S. International Trade Commission Dataweb. PDF version	Indonesia's economy continues to struggle against the lasting effects of the 1997-1998Asian financial crisis and thepolitical instability that resulted. Indonesia was one of the hardest hit economies in Asia; real GDP fell by 13.2 %in 1998. Indonesian-U.S. commercial tieswere sharply diminished as well, caused in part by declining Indonesia living standards and a loss of foreign investorconfidence in Indonesia (due largely topolitical instability). The Indonesian economy has improved over the past few years, however, recent activities ofterrorist elements in Indonesia and the rise ofseparatist movements threaten to undermine further an already fragile economy. This report will be updated asevents warrant.
Since China established the Hong Kong Special Administrative Region (HKSAR) on July 1, 1997, there have been questions about when and how the democratization of Hong Kong will take place. At present, Hong Kong's Chief Executive is selected by an "Election Committee" of 800 largely appointed people, and its Legislative Council (Legco) consists of 30 members elected by universal suffrage in five geographic districts and 30 members selected by 28 "functional constituencies" representing various important sectors. Hong Kong's Basic Law (adopted in 1990) establishes the goal of election of Hong Kong's Chief Executive and Legislative Council by universal suffrage, but does not establish a concrete timetable or path for such a transformation. The Standing Committee of China's National People's Congress (NPCSC) released its "Decision on Issues Relating to the Methods of Selecting the Chief Executive of the Hong Kong Special Administrative Region and for Forming the Legislative Council of the Hong Kong Special Administrative Region in the Year 2012 and on Issues Relating to Universal Suffrage" on December 29, 2007. In its decision, the NPCSC ruled out the direct election of Hong Kong's Chief Executive and Legco by universal suffrage in the elections of 2012. However, the decision also stated that the Chief Executive may be directly elected by universal suffrage in 2017, provided certain conditions were met. The NPCSC also decided that all members of the Legco may be elected by universal suffrage after the direct election of Chief Executive has taken place, effectively setting 2020 as the first possible year for fully democratic Legco elections. The NPCSC's decision also included a number of guidelines for the conduct of future elections in Hong Kong, as well as possible changes in election procedures that can and cannot be made before 2017. The decision was in response to a report on Hong Kong's constitutional development and the need to amend its election methods submitted to the NPCSC by Hong Kong's current Chief Executive Donald Tsang Yam-kuen on December 12, 2007. According to an NPCSC decision of 2004, in order to amend Hong Kong's methods or voting procedures, Hong Kong's Chief Executive must submit a report justifying its need. The initial responses to the NPCSC's decision—both within Hong Kong and internationally—were varied both in their interpretations of the content of the decision and the implications for democratization in Hong Kong. Tsang welcomed the decision as a clear timetable for democratization. Opinions from Hong Kong's various political parties ranged from strong approval to strong disappointment. U.S. and U.K. government representatives gave the decision a more mixed review, while Taiwanese officials considered the decision more proof that "one country, two systems" model would not work for Taiwan. In part, the differences in the response to the NPCSC's decision may be attributed to the perceived ambiguity of its wording, which allows for differing interpretations of its content. However, the apparent ambiguity of the decision's wording might also be the result of the NPCSC's efforts to abide by the technical legal aspects of the issues addressed by the decision. Portions of the decision are unequivocal. The first sentence of the first section of the decision clearly prohibits the election of the Chief Executive by universal suffrage in 2012, and the second sentence clearly prohibits the election of Legco by universal suffrage in 2012. The second sentence also prohibits altering the 50-50 split in the Legco between members elected by geographic regions and members selected by functional constituencies in the 2012 election. Other portions of the decision are more open to interpretation. Regarding both the Chief Executive and Legco elections of 2012, the decision states that "appropriate amendments may be [emphasis added] made to the specific method" of selection. However, the original Chinese— keyi zuo chu shidang xiugai —could be construed either as the NPCSC granting Hong Kong permission to make appropriate amendments or that Hong Kong may propose appropriate amendments, without implying that the amendments would be necessarily accepted by the NPCSC. Similarly, regarding the Chief Executive election of 2017 and subsequent Legco elections, the decision states it "may be implemented by the method of universal suffrage" [ keyi shixing you puxuan chansheng de banfa ], but the language is subject to the same ambiguity of interpretation between the granting of permission or the statement of possibility. Regardless of one's interpretation of these phrases, the decision does provide a clear statement of how election changes are to be made. Amending the election process involves a six-step process. First, the Chief Executive "shall make a report" [ ti chu baogao ] to the NPCSC on the need for amendment of Hong Kong's election process. Second, the NPCSC will make a determination [ queding ] on the issue of the need for amendment, but not on specific changes. Third, the Hong Kong government shall introduce a bill of amendments to the Legco. Fourth, Legco must pass the bill of amendments by at least a two-third majority. Fifth, the Chief Executive must approve the bill passed by Legco. Sixth, the bill shall be reported to the NPCSC for its approval [ pizhun ] when amending the election of the Chief Executive, and "for the record" [ beian ], when amending the election of Legco. The decision also is clear that a nominating committee [ timing weiyuanhui ] is also a required part of any process of selecting the Chief Executive, and that the nominating committee "may be formed with reference to" [ ke canzhao ] the Election Committee that currently selects the Chief Executive. On the day of the decision, Tsang issued an official statement, saying "The HKSAR Government and I welcome this decision, which has set a clear timetable for electing the Chief Executive and Legislative Council by universal suffrage." He also called on the people of Hong Kong to "treasure this hard-earned opportunity" and urged "everyone, with utmost sincerity, to bring an end to unnecessary contention, and to move towards reconciliation and consensus." Tsang set a goal of settling the election reforms for 2012 by the end of his second and final term in office, and hopes to "have formulated options" by the fourth quarter of 2008. To that end, he asked Hong Kong's Commission on Strategic Development "to consider the most appropriate electoral methods for the elections of the Chief Executive and the Legislative Council in 2012." Opinions among Hong Kong's political parties were mixed, generally along established ideological lines, with disagreement on the general and specific implications of the decision. According to Jackie Hung Ling-yu, a member of Hong Kong's Civil Human Rights Front (CHRF), "Beijing only tries to play with words to cheat Hong Kong people. There has not been any promise that we can have universal suffrage in 2017." Civic Party leader, Audrey Eu Yuet-mee, echoed Hung's view, maintaining that this was the second time that the NPCSC had ruled out universal suffrage in a specific election in Hong Kong. Martin Lee Chu-ming, founding chairman of Hong Kong's Democratic Party, called the decision "hollow and empty," providing neither a detailed roadmap nor a clear model for universal suffrage. In an interview on RTHK radio in Hong Kong, Tam Yiu-chung, chairman of the Democratic Alliance for the Betterment of Hong Kong (DAB), said that, in light of the NPCSC's decision, the focus should be on how the functional constituencies could work with universal suffrage. However, Yeung Sam, current Legco member from the Democratic Party, disagreed, stating that the functional constituencies were incompatible with universal suffrage. Liberal Party chairman James Tien Pei-chun took a broader view of the decision, stating, "No matter how you see it, you should try your best to ensure Hong Kong's three million-odd registered voters have a chance to elect the Chief Executive in 2017." Public opinion polls taken after the announcement of the decision have revealed a generally positive response. A telephone-based poll of over 1,000 Hong Kong residents conducted by a Hong Kong radio station on December 30 and 31, 2007, found half of the respondents were satisfied with the overall content of the decision, but 35% were dissatisfied. In a survey of 500 people done by Hong Kong University for the Hong Kong newspaper, Ming Pao , 42.7% of the respondents had welcomed the decision, 28.7% were opposed, and 23.6% were "half and half." A similar poll done by Chinese University of Hong Kong found 72.2% of the 909 respondents found the decision acceptable and 26.7% considered it unacceptable. A coalition of groups supporting universal suffrage in 2012 are organizing a public rally to be held on January 13, 2008. In support of the planned rally, members of Hong Kong's Democratic Party have pledged to continue their hunger strike—begun on December 23, 2007, the day the NPCSC opened their meeting to consider Tsang's report—until the day of the rally. A spokesperson for the U.S. consulate in Hong Kong indicated that the U.S. government was disappointed that the NPCSC had ruled out election by universal suffrage in 2012, but hope that all parties would work to make election reforms possible in 2012 and 2017. British Foreign Secretary David Miliband called the prohibition of direct elections in 2012 "a disappointment to all," but then noted that "the NPC's statement clearly points towards universal suffrage for the Chief Executive election in 2017 and the Legislative Council election thereafter." Taiwanese officials were more critical of the NPCSC's decision. Tung Chen-yuan, a member of Taiwan's Mainland Affairs Council, stated that the decision indicated that "the Chinese Communist Party does not allow genuine democracy," and demonstrated that the "one country, two systems" policy would not be accepted by the people of Taiwan. In light of the NPCSC's decision, Hong Kong's advancement towards democracy faces three critical issues. First, the status of Legco's functional constituencies will need to be resolved. Some Hong Kong politicians and analysts maintain that the functional constituencies are incompatible with the concept of universal suffrage and they will eventually have to be eliminated. Other Hong Kong politicians and analysts—as well as the NPCSC—hold that functional constituencies are not irreconcilable with universal suffrage, and that they represent sectors of the community which are considered important to Hong Kong's economic stability and development. A wide range of proposals have already been offered on how to handle the functional constituencies (including changing the number of functional constituencies and altering their voter eligibility requirements so that every Hong Kong voter could vote for at least one functional constituency Legco member), but finding a suitable compromise may prove to be difficult. Second, the composition of the nominating committee for the Chief Executive, and the requirements necessary to officially be nominated are possibly the greatest challenges facing the direct election of the Chief Executive. Currently, to be nominated, a person must receive the support of at least 100 of the 800 members of the largely appointed Election Committee. There have been calls to increase the number of members on the committee by including more people, and, in particular, the elected members of Hong Kong's District Councils. However, adding more people to the committee would either increase the possible number of nominees (assuming the 100 votes requirement was kept) or would necessitate changing the number of votes required to be nominated. Third, possibly the greatest challenge will be finding a proposed set of amendments for the elections in 2012 and 2017 that will receive the support of at least two-thirds of Legco. A proposal in 2005 to amend the election process for the 2007 Chief Executive election and the 2008 Legco election failed when a coalition of the various "pro-democracy" parties and the Liberal Party voted against the proposed amendments because they were seen as being too modest. In 2008 and beyond, the Hong Kong government will need to develop proposed legislation that provides enough "democracy" to obtain support from a sufficient number of Legco members associated with the parties that opposed the 2005 proposal without losing too many Legco members associated with parties (such as DAB) that supported the 2005 proposal. Support for the democratization of Hong Kong has been an element of U.S. foreign policy for over 15 years. The Hong Kong Policy Act of 1992 ( P.L. 102-383 ) states, "Support for democratization is a fundamental principle of United States foreign policy. As such, it naturally applies to United States policy toward Hong Kong. This will remain equally true after June 30, 1997." Congress might act to assist Hong Kong's progress towards universal suffrage and democracy by closely monitoring the development of "appropriate amendments" to the 2012 election process for both the Chief Executive and Legco. Congress might also encourage the State Department to provide greater assistance to its democracy-promotion efforts in Hong Kong. In FY2006, the State Department's Human Rights and Democracy Fund allocated $450,000 to a project in Hong Kong designed to strengthen political parties and civil society organizations. In addition, Congress could opt to pursue greater contact with Legco via provisions set out in Section 105 of the U.S.-Hong Kong Policy Act. Finally, Congress could include language in suitable legislation to reactivate the Section 301 provision of the U.S.-Hong Kong Policy Act that requires an annual report from the State Department to Congress on the status of Hong Kong.	The prospects for democratization in Hong Kong became clearer following a decision of the Standing Committee of China's National People's Congress (NPCSC) on December 29, 2007. The NPCSC's decision effectively set the year 2017 as the earliest date for the direct election of Hong Kong's Chief Executive and the year 2020 as the earliest date for the direct election of all members of Hong Kong's Legislative Council (Legco). However, ambiguities in the language used by the NPCSC have contributed to differences in interpretation of its decision. According to Hong Kong's current Chief Executive, Donald Tsang Yam-kuen, the decision sets a clear timetable for democracy in Hong Kong. However, representatives of Hong Kong's "pro-democracy" parties believe the decision includes no solid commitment to democratization in Hong Kong. The NPCSC's decision also established some guidelines for the process of election reform in Hong Kong, including what can and cannot be altered in the 2012 elections.
The U.S. Border Patrol, within the Department of Homeland Security’s (DHS) U.S. Customs and Border Protection (CBP), is responsible for patrolling 8,000 miles of the land and coastal borders of the United States to detect and prevent the illegal entry of aliens and contraband, including terrorists, terrorist weapons, and weapons of mass destruction. As of October 2006, the Border Patrol had 12,349 agents stationed in 20 sectors along the southwest, northern, and coastal borders. In May 2006, the President called for comprehensive immigration reform that included strengthening control of the country’s borders by, among other things, adding 6,000 new agents to the Border Patrol by the end of December 2008. This would increase the total number of agents from 12,349 to 18,319, an unprecedented 48 percent increase over the next 2 years. As shown in figure 1, this increase is nearly equivalent to the number of agents gained over the past 10 years. In addition, legislation has been proposed in Congress that would authorize an additional 10,000 agents, potentially increasing the size of the Border Patrol to about 28,000 agents by the end of 2012. FLETC is an interagency training provider responsible for basic, advanced, and specialized training for approximately 82 federal agencies, including CBP’s Border Patrol. Under a memorandum of understanding, FLETC hosts the Border Patrol’s training academy in Artesia, New Mexico, and shares the cost of providing training with the Border Patrol. For example, FLETC provides the facilities, some instructors (e.g., retired Border Patrol agents), and services (e.g., laundry and infirmary) that are paid for out of FLETC’s annual appropriations. CBP’s Office of Training and Development designs the training curriculum (in conjunction with the Border Patrol and with input from FLETC) for the academy, administers the Border Patrol Academy, and provides permanent instructors and staff. Basic training for new Border Patrol agents consists of three components: (1) basic training at the academy, (2) postacademy classroom training administered by the academy but conducted in the sectors, and (3) field training conducted on the job in the sectors. The academy portion of the training is currently an 81-day program consisting of 663 curriculum hours in six subject areas: Spanish, law/operations, physical training, driving, firearms, and general training. After graduating from the academy, new Border Patrol agents are required to attend classroom instruction at their respective sectors in Spanish and law/operations 1 day a week for a total of 20 weeks. Finally, new agents are generally assigned to senior agents in a sector’s field training unit for additional on-the-job training intended to reinforce new agents’ skills in safely, effectively, and ethically performing their duties under actual field conditions. The Border Patrol’s basic training program exhibits attributes of an effective training program. GAO’s training assessment guide suggests the kinds of documentation to look for that indicate that a training program has a particular attribute in place, such as incorporating measures of effectiveness into its course designs. As shown in table 1, the Border Patrol was able to document that its training program had key indicators in place for the applicable attributes of an effective training program. In addition, the Border Patrol is pursuing accreditation of its training program from the Federal Law Enforcement Training Accreditation organization. The core training curriculum used at the Border Patrol Academy has not changed since September 11, but the Border Patrol added new material on responding to terrorism and practical field exercises. For example, the Border Patrol added an antiterrorism course that covers, among other things, what actions agents should take if they encounter what they believe to be a weapon of mass destruction or an improvised explosive device. The Border Patrol also incorporated practical field exercises that simulate a variety of situations that agents may encounter, such as arresting an individual who is armed with a weapon, as shown in figure 2. With regard to capacity, Border Patrol officials told us they are confident that the academy can accommodate the large influx of new trainees anticipated over the next 2 years. In fiscal year 2006, the average cost to train a new Border Patrol agent at the academy was about $14,700. This cost represents the amounts expended by both the Border Patrol and FLETC. (See table 2.) The Border Patrol paid about $6,600 for the trainee’s meals and lodging, and a portion of the cost of instructors, and FLETC paid about $8,100 for tuition, a portion of the cost of instructors, and miscellaneous expenses such as support services, supplies, and utilities. The $14,700 cost figure does not include the costs associated with instructors conducting postacademy and field training in the sectors. For fiscal year 2007, the average cost to train a new agent will increase to about $16,200. This is primarily due to an increase in the number of instructors hired, which increased CBP’s instructor costs from about $2,800 to $6,100 per student. The Border Patrol’s average cost per trainee at the academy is consistent with that of training programs that cover similar subjects and prepare officers for operations in similar geographic areas. For example, the estimated average cost per trainee for a BIA police officer was about $15,300; an Arizona state police officer, $15,600; and a Texas state trooper, $14,700. However, differences in the emphasis of some subject areas over others dictated by jurisdiction and mission make a direct comparison difficult. For example, while both the Border Patrol and the Texas Department of Public Safety require Spanish instruction, the Border Patrol requires 214 hours of instruction, compared with 50 hours for a Texas state trooper. Similarly, the Border Patrol does not provide instruction in investigative techniques, while BIA, Arizona, and Texas require 139, 50, and 165 hours of such instruction, respectively. Table 3 shows a comparison of Border Patrol’s basic training program with other federal and nonfederal law enforcement basic training programs. The Border Patrol is considering several alternatives to improve the efficiency of basic training delivery and to return agents to the sectors more quickly. For example, in October 2007 the Border Patrol plans to implement a proficiency test for Spanish that should allow those who pass the test to shorten their time at the academy by about 30 days. According to Border Patrol officials, this could benefit about half of all trainees, because about half of all recruits already speak Spanish. The Border Patrol also plans to convert postacademy classroom training to computer-based training beginning in October 2007, allowing agents to complete the 1-day- a-week training at their duty stations rather than having to travel to the sector headquarters for this training. As a result, fewer senior agents will be required to serve as instructors for postacademy training. Finally, the Border Patrol is considering what other training it can shift from the academy to postacademy and field training conducted in the sectors, which could further reduce the amount of time trainees spend at the academy. While these strategies may improve the efficiency of training at the academy, officials expressed concern about the sectors’ ability provide adequate supervision and continued training once the new agents arrive at the sectors. Some Border Patrol officials are concerned with having enough experienced agents available in the sectors to serve as first-line supervisors and field training officers for these new agents. According to the Chief of the Border Patrol, agencywide the average experience level of Border Patrol agents is about 4 or 5 years of service. However, in certain southwest border sectors the average experience level is only about 18 months. Moreover, the supervisor-to-agent ratio is higher than the agency would like in some southwest sectors. Border Patrol officials told us that a 5-to-1 agent-to-supervisor ratio is desirable to ensure proper supervision of new agents, although the desired ratio in certain work units with more experienced agents would be higher. Our analysis of Border Patrol data showed that as of October 2006, the overall agent-to-supervisor ratios for southwest sectors, where the Border Patrol assigns all new agents, ranged from about 7 to 1 up to 11 to 1. These ratios include some work units with a higher percentage of experienced agents that do not require the same level of supervision as new agents. To augment the supervision of new agents, the Border Patrol is considering using retired Border Patrol agents to act as mentors for new agents. Nevertheless, given the large numbers of new agents the Border Patrol plans to assign to the southwest border over the next 2 years, along with the planned reassignment of experienced agents from the southwest border to the northern border, it will be a challenge for the agency to achieve the desired 5-to-1 ratio for new agents in all work units in those sectors receiving the largest numbers of new agents. In addition to concerns about having a sufficient number of experienced agents to serve as supervisors and field training officers, the Border Patrol does not have a uniform field training program that establishes uniform standards and practices that each sector’s field training should follow. As a result, Border Patrol officials are not confident that all new trainees currently receive consistent postacademy field training. Moreover, the addition of new training expectations may complicate this situation. The Border Patrol is in the process of developing a uniform field training program that it plans to implement beginning in fiscal year 2008. While Border Patrol officials are confident that the academy can accommodate the large influx of new trainees anticipated over the next 2 years, the larger challenge will be the sectors’ capacity to provide adequate supervision and training. The rapid addition of new agents along the southwest border, coupled with the planned transfer of more experienced agents to the northern border, will likely reduce the overall experience level of agents assigned to the southwest border. In turn, the Border Patrol will be faced with relying on a higher proportion of less seasoned agents to supervise these new agents. In addition, the possible shifting of some training from the academy to the sectors could increase demand for experienced agents to serve as field training officers. Moreover, without a standardized field training program, training has not been consistent from sector to sector, a fact that has implications for the sectors’ ability to add new training requirements and possibly consequences for how well agents will perform their duties. To ensure that these new agents become proficient in the safe, effective, and ethical performance of their duties, it will be extremely important that new agents have the appropriate level of supervision and that the Border Patrol have a sufficient number of field training officers and a standardized field training program. Mr. Chairman, this completes my prepared statement. I would be happy to respond to any questions you or other members of the subommittee may have at this time. For further information about this testimony, please contact me at (202) 512-8816 or by e-mail at Stanar@gao.gov. Key contributors to this testimony were Michael Dino, Assistant Director; Mark Abraham; E. Jerry Seigler; and Julie Silvers. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this testimony. This is a work of the U.S. government and is not subject to copyright protection in the United States. It may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately.	In May 2006, the President called for comprehensive immigration reform that included strengthening control of the country's borders by, among other things, adding 6,000 new agents to the U.S. Border Patrol by the end of December 2008. This unprecedented 48 percent increase over 2 years raises concerns about the ability of the Border Patrol's basic training program to train these new agents. This testimony is based on a recent report for the ranking member of this subcommittee on the content, quality, and cost of the Border Patrol's basic training program for new agents and addresses (1) the extent to which the Border Patrol's basic training program exhibits the attributes of an effective training program and the changes to the program since September 11, 2001; (2) the cost to train a new agent and how this compares to the costs of other similar law enforcement basic training programs; and (3) any plans the Border Patrol has developed or considered to improve the efficiency of its basic training program. To address these issues, GAO reviewed relevant documents; observed classroom training and exercises at the Border Patrol Academy in Artesia, New Mexico; assessed the methodologies of training cost estimates; and interviewed Border Patrol officials. The Border Patrol's basic training program exhibits attributes of an effective training program. GAO's training assessment guide suggests the kinds of documentation to look for that indicate that a training program has a particular attribute in place. The Border Patrol's training program included all of the applicable key attributes of an effective training program. The core curriculum used at the Border Patrol Academy has not changed since September 11, but the Border Patrol added new material on responding to terrorism and practical field exercises. Border Patrol officials are confident that the academy can accommodate the large influx of new trainees anticipated over the next 2 years. In fiscal year 2006, the average cost to train a new Border Patrol agent at the academy was about $14,700. While differences in programs make a direct comparison difficult, it appears that the Border Patrol's average cost per trainee at the academy is consistent with that of training programs that cover similar subjects and prepare officers for operations in similar geographic areas. For example, the estimated average cost per trainee for a Bureau of Indian Affairs police officer was about $15,300; an Arizona state police officer, $15,600; and a Texas state trooper, $14,700. The Border Patrol is considering several alternatives to improve the efficiency of basic training delivery at the academy and to return agents to the field more quickly. For example, in October 2007 the Border Patrol plans to implement a proficiency test for Spanish that should allow those who pass the test to shorten their time at the academy by about 30 days. The Border Patrol is also considering what training it can shift from the academy to postacademy training conducted in the field, which could further reduce the amount of time trainees spend at the academy. However, Border Patrol officials have expressed concerns with having a sufficient number of experienced agents available to serve as first-line supervisors and field training officers. The Border Patrol also currently lacks uniform standards and practices for field training, and shifting additional training responsibilities to the field could complicate this situation.
Treasury created CPP to help stabilize the financial markets and banking system by providing capital to qualifying regulated financial institutions through the purchase of preferred shares and subordinated debt. Rather than purchasing troubled mortgage-backed securities and whole loans, as initially envisioned under TARP, Treasury used CPP investments to strengthen the capital levels of financial institutions. Treasury determined that strengthening capital levels was the more effective mechanism to help stabilize financial markets, encourage interbank lending, and increase confidence in the financial system. On October 14, 2008, Treasury allocated $250 billion of the original $700 billion, later reduced to $475 billion, in overall TARP funds for CPP. In March 2009, the CPP allocation was reduced to $218 billion to reflect lower estimated funding needs, as evidenced by actual participation rates. On December 31, 2009, the program was closed to new investments. Institutions participating in CPP entered into securities purchase agreements with Treasury. Under CPP, qualified financial institutions were eligible to receive an investment of 1 percent to 3 percent of their risk-weighted assets, up to $25 billion. In exchange for the investment, Treasury generally received preferred shares that would pay dividends. As of the end of 2014, all the institutions with outstanding preferred share investments were required to pay dividends at a rate of 9 percent, rather than the 5 percent rate that was in place for the first 5 years after the purchase of the preferred shares. EESA requires that Treasury also receive warrants to purchase shares of common or preferred stock or a senior debt instrument to further protect taxpayers and help ensure returns on the investments. Institutions are allowed to repay CPP investments with the approval of their primary federal bank regulator, and after repayment, institutions are permitted to repurchase warrants on common stock from Treasury. Treasury continues to make progress winding down CPP. As of December 31, 2016, Treasury had received repayments and sales of original CPP investments for more than 97 percent of its original investment. For the life of the program, repayments and sales totaled almost $200 billion (see fig.1). In 2016, institutions’ repayments totaled about $25 million. Moreover, as of December 31, 2016, Treasury had received about $227 billion in returns, including repayments and income, from its CPP investments, which exceeds the amount originally disbursed by almost $22 billion. Income from CPP totaled about $27 billion, and included about $12 billion in dividend and interest payments, almost $7 billion in proceeds in excess of costs, and about $8 billion from the sale of warrants. After accounting for write-offs and realized losses from sales totaling about $5 billion, CPP had about $0.2 billion in outstanding investments as of December 31, 2016. Investments outstanding represent about 0.1 percent of the amount Treasury disbursed for CPP. Treasury’s most recent estimate of lifetime income for CPP (as of Sept. 30, 2016) was about $16 billion. As of December 31, 2016, 696 of the 707 institutions that originally participated in CPP had exited the program (see fig. 2). A total of 6 institutions exited CPP in 2016. Among the institutions that had exited the program, 262 repurchased their preferred shares or subordinated debentures in full. Another 165 institutions refinanced their shares through other federal programs. In addition, 190 institutions had their investments sold through auction, 43 institutions had their investments restructured through non-auction sales, and 32 institutions went into bankruptcy or receivership. The remaining 4 merged with other CPP institutions. The method by which institutions have exited the program has varied over time. From 2009 through 2011, a total of 336 institutions exited the program. During this 3-year period, most institutions exited by fully repaying the investment or by refinancing the investment through another program. From 2012 through 2016, a total of 360 institutions exited the program. During this 5-year period, most institutions exited by Treasury selling the investment through an auction, repaying the investment to Treasury, or restructuring the investment. Repayments. Repayments allow financial institutions to redeem their preferred shares in full. Institutions have the contractual right to redeem their shares at any time provided that they receive the approval of their primary regulator(s). Institutions must demonstrate that they are financially strong enough to repay the CPP investments to receive regulatory approval to proceed with a repayment exit. As of December 31, 2016, 262 institutions had exited CPP through repayments. Restructurings. Restructurings allow troubled financial institutions to negotiate new terms or discounted redemptions for their CPP investment. Treasury requires institutions to raise new capital from outside investors (or merge with another institution) as a prerequisite for a restructuring. With this option, Treasury receives cash or other securities that generally can be sold more easily than preferred stock, but the restructured investments sometimes result in recoveries at less than par value. According to Treasury officials, Treasury facilitated restructurings as an exit from CPP in cases where new capital investment and the redemption of the CPP investment by the institutions otherwise was not possible. Treasury officials said that they approved the restructurings only if the terms represented a fair and equitable financial outcome for taxpayers. Treasury completed 43 such restructurings through December 31, 2016. Auctions. Auctions allow Treasury to sell its preferred stock investments in CPP participants. Treasury conducted the first auction of CPP investments in March 2012, and has continued to use this strategy to sell its investments. As of December 31, 2016, Treasury had conducted a total of 28 auctions of stock from 190 CPP institutions. Through these transactions, Treasury received over $3 billion in proceeds, which was about 80 percent of the investments’ face amount. As we have previously reported, thus far Treasury has sold investments individually but noted that combining smaller investments into pooled auctions remained an option. Whether Treasury sells CPP investments individually or in pools, the outcome of this option will depend largely on investor demand for these securities and the quality of the underlying financial institutions. As of December 31, 2016, 11 institutions remained in CPP (see fig. 3). The largest outstanding investment, about $125 million, accounted for almost two-thirds of the outstanding CPP investments. The investments at the 10 other institutions ranged from about $1.5 million to $17 million. As figure 4 illustrates, Treasury’s original CPP investments were scattered across the country in 48 states and Puerto Rico and the amount of investments varied. Almost 4 percent (25) of the investments were greater than $1 billion and almost half (314) of the investments were less than $10 million. The largest investment totaled $25 billion and the smallest investment totaled about $300,000. The 11 institutions that remained in CPP as of December 31, 2016 were in Arkansas, California (2), Colorado, Florida, Kentucky, Maryland (2), Massachusetts, Missouri, and Puerto Rico. Treasury officials said that they expect the majority of the remaining institutions will require a restructuring to exit the program in the future because the overall weaker financial condition of the remaining institutions makes full repayment unlikely. However, they added that repayments, restructurings, and auctions all remain possible exit strategies for the remaining CPP institutions. Since we last reported in May 2016, Treasury continues to maintain its position of not fully writing off any investments. Treasury officials anticipate that the current strategy to restructure the remaining investments will result in a better return for taxpayers. According to officials, any savings achieved by writing off the remaining CPP assets and eliminating administrative costs associated with maintaining CPP would be limited, because much of the TARP infrastructure, such as staff resources, will remain intact for several years to manage other TARP programs. Treasury officials also noted that writing off the remaining assets, thereby not requiring repayment from the remaining institutions, would be unfair to the institutions that have already repaid their investment and exited the program. Treasury officials told us that they continue to have discussions with institutions about their plans to exit the program. Overall, the financial condition of institutions remaining in CPP as of December 31, 2016, appears to have improved since the end of 2011. As shown in figure 5, the median of all six indicators of financial condition that we analyzed improved from 2011 to September 30, 2016. However, some institutions show signs of financial weakness. As figure 5 illustrates, the median for the first three financial condition indicators—Texas ratio, noncurrent loan percentage, and net chargeoffs to average loans ratio—have decreased, which indicates stronger financial health. The median for the remaining three financial condition indicators—return on average assets, common equity Tier 1 ratio, and reserves to nonperforming loans—have increased, which also indicates stronger financial health. However, some institutions show signs of financial weakness. For example, 5 of the 11 institutions had negative return on average assets for the third quarter of 2016. Six institutions had a lower return on average assets for the third quarter of 2016, compared to the third quarter of 2011. The remaining institutions also had varying levels of reserves for covering losses, as measured by the ratio of reserves to nonperforming loans. For example, 4 institutions had lower levels of reserves for covering losses for the third quarter of 2016 compared to the third quarter of 2011. For 1 institution, four of the financial indicators had weakened from the third quarter of 2011 to the third quarter of 2016. Treasury officials stated that the remaining CPP institutions generally had weaker capital levels and poorer asset quality relative to institutions that had exited the program. They noted that this situation was a function of the life cycle of the program, because stronger institutions had greater access to new capital and higher earnings and were able to exit, while the weaker institutions had been unable to raise the capital or generate the earnings needed to exit the program. Of the remaining 11 CPP institutions as of December 31, 2016, 1 of the 9 required to pay dividends made the most recent scheduled dividend or interest payment. The 8 institutions that are delinquent have missed an average of 28 quarterly dividend payments, with 19 being the fewest missed payments and 32 being the most. Institutions can choose whether to pay dividends and may choose not to pay for a variety of reasons, including decisions they or their federal or state regulators make to conserve cash and capital. However, investors may view an institution’s ability to pay dividends as an indicator of its financial strength and may see failure to pay as a sign of financial weakness. Treasury officials told us that Treasury regularly monitors all institutions remaining in the program. For example, Treasury’s financial agent has provided quarterly valuations and credit reports for all of the institutions remaining in the CPP portfolio. In addition, Treasury has requested to attend the Board of Directors meetings at nine of the remaining institutions and has observed meetings at eight institutions. One institution has declined Treasury’s request. Treasury officials said that the agency currently does not plan to take any other actions with respect to its request to send a board observer to that institution but will continue to monitor the institution’s financial condition. As discussed previously, Treasury officials told us that they have continued to have discussions with institutions remaining in the program. We provided Treasury with a draft of this report for review and comment. Treasury provided technical comments that we have incorporated as appropriate. We are sending copies of this report to the appropriate congressional committees, the Secretary of the Treasury, and other interested parties. In addition, this report will be available at no charge on the GAO website at http://www.gao.gov. If you or your staff have any questions about this report, please contact me at (202) 512-8678 or garciadiazd@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. In addition to the contact named above, Karen Tremba (Assistant Director), Anne Akin (Analyst-in-Charge), William R. Chatlos, Lynda Downing, Risto Laboski, John Mingus, Tovah Rom, Jena Sinkfield, and Tyler Spunaugle have made significant contributions to this report.	CPP was established as the primary means of restoring stability to the financial system under the Troubled Asset Relief Program (TARP). Under CPP, Treasury invested almost $205 billion in 707 eligible financial institutions between October 2008 and December 2009. CPP recipients have made dividend and interest payments to Treasury on the investments. The Emergency Economic Stabilization Act of 2008, as amended, includes a provision that GAO report at least annually on TARP activities and performance. This report examines (1) the status of CPP, including repayments, investments outstanding, and number of remaining institutions; and (2) the financial condition of institutions remaining in CPP. To assess the program's status, GAO reviewed Treasury reports on the status of CPP. In addition, GAO reviewed information from Treasury officials to identify the agency's current efforts to wind down the program. Finally, GAO used financial and regulatory data to assess the financial condition of institutions remaining in CPP. GAO provided a draft of this report to Treasury for its review and comment. Treasury provided technical comments that GAO incorporated as appropriate. The Department of the Treasury (Treasury) continues to make progress winding down the Capital Purchase Program (CPP). As of December 31, 2016, investments outstanding stood at almost $0.2 billion (see figure), which represents about 0.1 percent of the original amount disbursed. Treasury had received almost $200 billion in repayments, including about $25 million in 2016. Further, Treasury's returns for the program, including repayments and income, totaled about $227 billion, exceeding the amount originally disbursed by almost $22 billion. Of the 707 institutions that originally participated in CPP, 696 had exited the program, including 6 institutions in 2016. Treasury officials expect that the majority of the remaining institutions will require a restructuring to exit the program. Restructurings allow institutions to negotiate terms for their CPP investments. With this option, Treasury requires institutions to raise new capital or merge with another institution and Treasury agrees to receive cash or other securities, typically at less than par value. Treasury officials expect to rely primarily on restructurings because the overall weaker financial condition of the remaining institutions makes full repayment unlikely. The financial condition of the institutions remaining in CPP as of December 31, 2016, appears to have improved since the end of 2011, but some institutions show signs of financial weakness. For example, 5 institutions had negative returns on average assets (a common measure of profitability) for the third quarter of 2016.
Madam Chairman and Members of the Subcommittee: We are pleased to be here to assist the Subcommittee in its inquiry into the classification of workers either as employees or independent contractors for federal tax purposes. Proper classification of workers has been the subject of several of our reports and congressional testimonies. Today, I would like to make 4 points taken from these reports and testimonies. • First, in deciding how to classify workers, employers may misclassify employees as independent contractors. In its most recent estimate on misclassification, IRS has estimated that 756,000 of 5.15 million employers (15 percent) misclassified workers as independent contractors in 1984. Many factors can cause misclassification, including cost considerations and confusion over the classification rules. For example, not incurring the costs of employment taxes (i.e., social security tax, unemployment tax, and income tax withholding) and employee benefits can give employers cost advantages over competitors who use employees. Further, both we and the Treasury Department have found that the common law rules used for classifying workers are unclear and subject to conflicting interpretations. • Second, even with the confusing rules, IRS is responsible as the nation’s tax administrator to enforce compliance with them. Under its Employment Tax Examination Program (ETEP), IRS has completed 12,983 audits, resulting in $830 million in recommended tax assessments and 527,000 workers reclassified to “employee” status between fiscal years 1988 and 1995. • Third, deliberations over any changes to the classification rules may need to consider potential impacts on income tax compliance. IRS has found that independent contractors compared to employees have lower compliance in paying income taxes and account for a higher proportion of the income tax gap. We identified two approaches that could boost independent contractor compliance within the existing common law rules. They include (1) improved information reporting on payments made to independent contractors and (2) withholding income taxes from such payments. • Fourth, aside from tax issues, an important consideration in these deliberations is the body of laws that create a safety net for American workers. Such laws generally apply only to employees. If changes to the classification rules lead to more workers being classified as independent contractors instead of employees, these worker protection laws would cover fewer people. I would like to discuss each of these points in more detail after providing an overview on factors that affect the classification decision. The rules for classifying a worker as either an employee or an independent contractor come from the common law. Under common law, the degree of control, or right to control, that a business has over a worker governs the classification. Thus, if a worker must follow instructions on when, where, and how to do the work, he or she is more likely to be an employee. IRS has adopted 20 common law rules to help employers classify workers (see appendix I). If workers are determined to be employees, employers must withhold and deposit income and social security taxes from wages paid as well as pay unemployment taxes and the employers’ share of social security taxes. In addition, the employers may be subjected to laws that govern the use of employees and any benefits provided to them. Employers do not have these responsibilities if the workers are independent contractors. Independent contractors must pay their own income and social security taxes on payments received. They have no unemployment tax responsibility but may purchase benefit packages to cover this contingency as well as others (e.g., health insurance). Ultimately, the decision to classify a worker as an employee or independent contractor depends on each employer’s circumstances. And, the extent to which a worker accepts the classification and understands its consequences plays a role. misclassification involved all industry groups and up to 20 percent of the employers in some industry groups. This noncompliance produced an estimated tax loss for 1984, after accounting for taxes paid by the misclassified independent contractors, of $1.6 billion in social security tax, unemployment tax, and income tax that should have been withheld from wages. In another set of estimates, IRS issued an employment tax gap report in 1995 that included the estimated tax gap associated with misclassification. This estimated tax gap was $2.3 billion in 1987 and $3.3 billion in 1992 for just social security and unemployment taxes. In doing these estimates, IRS did not identify the reasons for the misclassification but factors such as costs and unclear classification rules can play a role. For example, employers can lower their costs, such as payments of employment taxes or benefits, by using independent contractors. This cost advantage could be offset if an independent contractor can negotiate higher payments to purchase their own health, retirement, or other benefits. Otherwise, the incentive to misclassify workers as independent contractors exists. Second, many employers struggle in making the classification decision because of the unclear rules. Until the classification rules are clarified, we are not optimistic that the confusion over who is an independent contractor and who is an employee can be avoided. The Treasury Department characterized the situation in 1991 in the same terms as it used in 1982; namely, that “applying the common law test in employment tax issues does not yield clear, consistent, or satisfactory answers, and reasonable persons may differ as to the correct classification.” the cases reviewed, section 530 prohibited IRS from assessing $7 million of $17 million in recommended taxes and penalties against employers for misclassifying employees. The employers usually avoided the assessments by claiming a prior audit protection, even when the prior audit did not address employee classification or occurred over 20 years earlier. Section 530 also has precluded IRS from issuing clarifying regulations since 1978. IRS is responsible as the nation’s tax administrator to enforce the classification rules. Because of concerns about misclassification and income tax noncompliance by independent contractors, IRS centralized a portion of its employment tax compliance efforts into an Employment Tax Examination Program (ETEP) during 1987. IRS’ strategy was to identify any misclassification and require employers to correct it. Employers whose employees are reclassified are liable for the portion of the employment taxes that they would have owed if the worker had been classified as an employee for the audited tax years. From 1988 through 1995, IRS completed 12,983 ETEP audits. These audits recommended $830 million in employment tax assessments and reclassified 527,000 workers as employees. In addition, the IRS Examination Division auditors, as part of their regular income tax audits, also may address classification issues. However, the Examination Division does not accumulate data to identify audit results on these issues. Since late 1995, IRS has implemented initiatives to improve its enforcement of the classification rules and ease the burdens on those being audited. For example, IRS is revising its training to better ensure consistent application of the rules. IRS has circulated a draft of its training program so that employers know how IRS intends to interpret the rules. Further, IRS is testing ways to expedite and improve the settlement of disputes with employers over misclassification. These initiatives are too new for us to know whether they are working. Since 1977, we have supported measures to simplify the classification rules. However, the development of clearer rules for all types of working relationships and businesses is neither simple nor easy. In an effort to clarify the classification rules, we proposed a straightforward test in 1977 (see appendix III for details of this proposal). In sum, we proposed excluding workers from the common law definition of employee when they met each of four criteria. If the worker met three of the criteria, we proposed that the common law criteria should be applied. Otherwise, we proposed that the worker should be considered an employee. Our proposal was not widely accepted for various reasons, which we had recognized. For example, Treasury and IRS were concerned about lower tax compliance and lost tax revenue from having more self-employed workers and fewer employees. We have viewed our 1977 proposal as a good starting point for clarifying the classification rules. In doing so, the deliberations also may need to consider the potential impact on income tax compliance. IRS studies since the 1970s have documented a much lower level of income tax compliance by independent contractors compared to employees. IRS data for 1988 suggest that independent contractors accounted for most of the income tax gap created by those self-employed individuals who underreported their business income. do not distinguish between independent contractors and other self-employed individuals such as those who make or sell goods. Recognizing these concerns, our 1992 report identified other approaches to improve independent contractor compliance within the framework of the existing classification rules. These approaches would (1) require businesses to withhold taxes from payments to independent contractors or (2) improve information reporting on payments made to independent contractors. While each approach would increase to some extent the burdens on independent contractors and businesses that use them, we believe each approach can help improve income tax compliance. For example, withholding is the cornerstone of our tax compliance system for employees. It has worked well with over 99 percent of wages voluntarily reported. In addition, it provides a gradual and systematic method to pay taxes and better ensure credit for social security coverage. As early as 1979, we concluded that noncompliance among independent contractors was serious enough to warrant some form of tax withholding on payments to them. We continue to believe that withholding taxes from payments made to independent contractors has merit as a way to improve their income tax compliance. Several administrative problems would need to be resolved. For example, independent contractors with substantial business expenses, which lower taxable income, may have too much tax withheld from gross payments made to them. Appendix IV discusses such problems and possible solutions. returns but only 29 percent of the income not covered by information returns. While other options may exist, our 1992 report identified eight options that could strengthen information reporting and close potential loopholes: (1) Significantly increase the $50 penalty for not filing an information return. (2) Do not penalize businesses for past noncompliance with information reporting laws if they begin to file information returns when the penalty is increased. (3) Require IRS to administer an education program to make the business community aware of the filing requirement and of IRS’ intention to vigorously enforce it. (4) Lower the $600 reporting threshold for payments to independent contractors. (5) Require information reporting for payments to incorporated independent contractors. (6) Require businesses to separately report on their tax return the total amount of payments to independent contractors. (7) Require businesses to validate the tax identification numbers (TIN) of independent contractors before making any payments and withhold a portion of the payments until the TIN is validated. (8) Require businesses to provide independent contractors with a written explanation of their tax obligations and rights. Each of these options involves tradeoffs between taxpayer burden and tax compliance. Appendix V summarizes the pros and cons of each option. contractors. Changes to the classification rules could increase the number of unprotected independent contractors. For example, unemployment insurance is nearly universal, covering over 90 percent of American workers. This 60-year old program provides short-term financial support for covered workers who, through no fault of their own, become unemployed. It also helps the unemployed from having to turn to public assistance programs. During economic downturns, payments made to the unemployed may take on added significance, serving a macro-economic role of helping to stabilize the economy. However, federal law does not require coverage of independent contractors for unemployment insurance, although one state (California) has provisions that would allow independent contractors to apply for self-coverage. While we have not made an extensive survey to determine all affected laws, they are quite numerous. They include basic protections involving issues such as minimum wage, mandatory overtime pay, discrimination, occupational safety and health requirements, workers compensation insurance, and employer-sponsored fringe benefits such as pensions. Thus, if clarification of the classification rules pushes significantly more employees into independent contractor status, the worker protection laws would cover fewer people. Madam Chairman, this concludes my testimony. I would be pleased to answer any questions you or other members of the Subcommittee may have.	GAO discussed the classification of workers as employees or independent contractors for federal tax purposes. GAO noted that: (1) the Internal Revenue Service (IRS) has adopted 20 common law rules to help employers classify workers; (2) the rules require employers to withhold and deposit income and social security taxes, and pay the unemployment and social security taxes for workers determined to be employees; (3) employers that use independent contractors do not have these responsibilities because they pay their own social security and income taxes; (4) classifying a worker as an employee or independent contractor depends on the employer's circumstances, and the extent to which the worker accepts the classification; (5) in 1984, IRS estimated that about 756,000 employers misclassified their workers as independent contractors; (6) this noncompliance resulted in an estimated tax loss of $1.6 billion; (7) misclassifications occur because it is cheaper to hire independent contractors, but the rules for doing so are unclear; (8) IRS completed 12,983 employment tax examination program audits from 1988 to 1995, and recommended $830 million in employment tax assessments and that 527,000 workers be reclassified as employees; and (9) IRS is revising its training program to better ensure consistent application of common law rules, circulating a draft of its training program so that employers know how to interpret the rules, and testing ways to expedite disputes over worker misclassifications.
Social Security is financed primarily by payroll and self-employment taxes, as well as by a portion of the proceeds from the income taxation of Social Security benefits. The revenues are deposited in the U.S. Treasury. Social Security benefits and administrative expenses are also paid from the U.S. Treasury. By law, if Social Security revenues exceed expenditures, the "surplus" is credited to the Social Security trust funds in the form of U.S. government securities. The money itself, however, is used to pay for whatever other expenses the government may have at the time. There is no separate pool of money set aside for Social Security purposes. That is not to say that the trust funds are ephemeral—as long as the trust funds show a positive balance, they represent the authority and an obligation for the U.S. Treasury to issue benefit payments during periods when the program's expenditures exceed revenues. At the end of calendar year 2013, the trust funds were credited with holdings of $2.8 trillion. Section 201 of the Social Security Act provides the following guidelines for trust fund investment. 1. Funds not immediately in demand for benefits or administrative expenses are to be invested in interest-bearing obligations guaranteed as to both principal and interest by the United States. 2. Obligations are to be purchased at issue at the issue price or at the market price for outstanding obligations. 3. The Managing Trustee of the Social Security trust funds (the Secretary of the Treasury) is required to invest in special "nonmarketable" federal public-debt obligations—special issues to the trust funds that are not available to the general public—except where he or she determines that the purchase of marketable federal securities is "in the public interest." 4. Special issues shall have maturities fixed with due regard for the needs of the trust funds and will pay a rate of interest, calculated at the time of issue, equal to the average market yield on all marketable interest-bearing obligations of the United States that are not due or callable (redeemable) for at least four years. 5. Marketable federal securities purchased by the trust funds may be sold at the market price and special issue obligations may be redeemed at par plus accrued interest (without penalty for redemption before maturity). The Treasury Department has determined that the purchase of marketable federal securities (i.e., public issues) would be in the public interest only when it might serve to stabilize the market for Treasury issues. Because an "unstable market" would be characterized by falling bond prices, purchases of marketable federal securities at these times would appear to be advantageous for the trust funds. In practice, however, open market purchases have been rare. Although the trust funds have held public issues in the past, the trust funds currently hold special issues only. The interest earned on these holdings is credited to the trust funds semiannually (on June 30 and December 31); it is done by issuing additional federal securities to the trust funds. In calendar year 2013, net interest totaled $102.8 billion, representing 12% of total trust fund income. The effective annual rate of interest earned on all obligations held by the trust funds in calendar year 2013 was 3.8%. The interest rate earned on special issues purchased by the trust funds in August 2014 is 2.375%. The maturity dates of newly issued special issues are set by a standardized procedure. Revenues are invested immediately in short-term issues called certificates of indebtedness, which mature on the next June 30. On June 30 of each year, certificates of indebtedness that have not been redeemed are reinvested in longer-term special issue bonds. Generally, the maturities of these bonds range from 1 to 15 years; the goal is to have about one-fifteenth of them mature each year, depending on the needs of the trust funds. While some critics have questioned whether the current investment policy has constrained the earnings of the trust funds, over the years various advisory councils, congressional committees, and other groups generally have endorsed it. It has been justified as a way to ensure safety of principal and stability of interest, and as a way to avoid intrusion into private markets. It also has been regarded as a way to avoid the political influences that would be inherent in investing outside the U.S. government. Generally, the goal espoused has been to place the trust funds in the same position as any long-term investor seeking a safe rate of return by investing in U.S. securities, and neither advantage nor disadvantage the trust funds relative to these investors or other parts of the government. For most of the program's history, interest income to the trust funds has not been a major factor in program financing. In recent years, however, the increasing role of interest income, as well as interest by some policy makers in preventing any surplus Social Security tax revenues from being used for other government spending purposes, have focused attention on alternative investment practices. For example, there have been proposals to replace the special issues held by the trust funds with marketable federal securities, as well as proposals to allow any surplus Social Security tax revenues or a portion of trust fund reserves to be invested in assets other than U.S. government obligations, including equities.	The Social Security Act has always required surplus Social Security revenues (revenues in excess of program expenditures) to be invested in U.S. government securities (or U.S. government-backed securities). In recent years, attention has been focused on alternative investment practices in an effort to increase the interest earnings of the trust funds, among other goals. This report describes Social Security trust fund investment practices under current law.
With an overall goal of developing research that communities need to make sound decisions about how best to prevent and reduce girls’ delinquency, OJJDP established the Girls Study Group (Study Group) in 2004 under a $2.6 million multiyear cooperative agreement with a research institute. OJJDP’s objectives for the group, among others, included identifying effective or promising programs, program elements, and implementation principles (i.e., guidelines for developing programs). Objectives also included developing program models to help inform communities of what works in preventing or reducing girls’ delinquency, identifying gaps in girls’ delinquency research and developing recommendations for future research, and disseminating findings to the girls’ delinquency field about effective or promising programs. To meet OJJDP’s objectives, among other activities, the Study Group identified studies of delinquency programs that specifically targeted girls by reviewing over 1,000 documents in relevant research areas. These included criminological and feminist explanations for girls’ delinquency, patterns of delinquency, and the justice system’s response to girls’ delinquency. As a result, the group identified 61 programs that specifically targeted preventing or responding to girls’ delinquency. Then, the group assessed the methodological quality of the studies of the programs that had been evaluated using a set of criteria developed by DOJ’s Office of Justice Programs (OJP) called What Works to determine whether the studies provided credible evidence that the programs were effective at preventing or responding to girls’ delinquency. The results of the group’s assessment are discussed in the following sections. OJJDP’s effort to assess girls’ delinquency programs through the use of a study group and the group’s methods for assessing studies were consistent with generally accepted social science research practices and standards. In addition, OJJDP’s efforts to involve practitioners in Study Group activities and disseminate findings were also consistent with the internal control standard to communicate with external stakeholders, such as practitioners operating programs. According to OJJDP research and program officials, they formed the Study Group rather than funding individual studies of programs because study groups provide a cost-effective method of gaining an overview of the available research in an issue area. As part of its work, the group collected, reviewed, and analyzed the methodological quality of research on girls’ delinquency programs. The use of such a group, including its review, is an acceptable approach for systematically identifying and reviewing research conducted in a field of study. This review helped consolidate the research and provide information to OJJDP for determining evaluation priorities. Further, we reviewed the criteria the group used to assess the studies and found that they adhere to generally accepted social science standards for evaluation research. We also generally concurred with the group’s assessments of the programs based on these criteria. According to the group’s former principal investigator, the Study Group decided to use OJP’s What Works criteria to ensure that its assessment of program effectiveness would be based on highly rigorous evaluation standards, thus eliminating the potential that a program that may do harm would be endorsed by the group. However, 8 of the 18 experts we interviewed said that the criteria created an unrealistically high standard, which caused the group to overlook potentially promising programs. OJJDP officials stated that despite such concerns, they approved the group’s use of the criteria because of the methodological rigor of the framework and their goal for the group to identify effective programs. In accordance with the internal control standard to communicate with external stakeholders, OJJDP sought to ensure a range of stakeholder perspectives related to girls’ delinquency by requiring that Study Group members possess knowledge and experience with girls’ delinquency and demonstrate expertise in relevant social science disciplines. The initial Study Group, which was convened by the research institute and approved by OJJDP, included 12 academic researchers and 1 practitioner; someone with experience implementing girls’ delinquency programs. However, 11 of the 18 experts we interviewed stated that this composition was imbalanced in favor of academic researchers. In addition, 6 of the 11 said that the composition led the group to focus its efforts on researching theories of girls’ delinquency rather than gathering and disseminating actionable information for practitioners. According to OJJDP research and program officials, they acted to address this issue by adding a second practitioner as a member and involving two other practitioners in study group activities. OJJDP officials stated that they plan to more fully involve practitioners from the beginning when they organize study groups in the future and to include practitioners in the remaining activities of the Study Group, such as presenting successful girls’ delinquency program practices at a national conference. Also, in accordance with the internal control standard, OJJDP and the Study Group have disseminated findings to the research community, practitioners in the girls’ delinquency field, and the public through conference presentations, Web site postings, and published bulletins. The group plans to issue a final report on all of its activities by spring 2010. The Study Group found that few girls’ delinquency programs had been studied and that the available studies lacked conclusive evidence of effective programs; as a result, OJJDP plans to provide technical assistance to help programs be better prepared for evaluations of their effectiveness. However, OJJDP could better address its girls’ delinquency goals by more fully developing plans for supporting such evaluations. In its review, the Study Group found that the majority of the girls’ delinquency programs it identified—44 of the 61—had not been studied by researchers. For the 17 programs that had been studied, the Study Group reported that none of the studies provided conclusive evidence with which to determine whether the programs were effective at preventing or reducing girls’ delinquency. For example, according to the Study Group, the studies provided insufficient evidence of the effectiveness of 11 of the 17 programs because, for instance, the studies involved research designs that could not demonstrate whether any positive outcomes, such as reduced delinquency, were due to program participation rather than other factors. Based on the results of this review, the Study Group reported that among other things, there is a need for additional, methodologically rigorous evaluations of girls’ delinquency programs; training and technical assistance to help programs prepare for evaluations; and funding to support girls’ delinquency programs found to be promising. According to OJJDP officials, in response to the Study Group’s finding about the need to better prepare programs for evaluation, the office plans to work with the group and use the remaining funding from the effort— approximately $300,000—to provide a technical assistance workshop by the end of October 2009. The workshop is intended to help approximately 10 girls’ delinquency programs prepare for evaluation by providing information about how evaluations are designed and conducted and how to collect data that will be useful for program evaluators in assessing outcomes, among other things. In addition, OJJDP officials stated that as a result of the Study Group’s findings, along with feedback they received from members of the girls’ delinquency field, OJJDP plans to issue a solicitation in fiscal year 2010 for funding to support evaluations of girls’ delinquency programs. OJJDP has also reported that the Study Group’s findings are to provide a foundation for moving ahead on a comprehensive program related to girls’ delinquency. However, OJJDP has not developed a plan that is documented, is shared with key stakeholders, and includes specific funding requirements and commitments and time frames for meeting its girls’ delinquency goals. Standard practices for program and project management state that specific desired outcomes or results should be conceptualized, defined, and documented in the planning process as part of a road map, along with the appropriate projects needed to achieve those results, supporting resources, and milestones. In addition, government internal control standards call for policies and procedures that establish adequate communication with stakeholders as essential for achieving desired program goals. According to OJJDP officials, they have not developed a plan for meeting their girls’ delinquency goals because the office is in transition and is in the process of developing a plan for its juvenile justice programs, but the office is taking steps to address its girls’ delinquency goals, for example, through the technical assistance workshop. Developing a plan for girls’ delinquency would help OJJDP to demonstrate leadership to the girls’ delinquency field by clearly articulating the actions it intends to take to meet its goals and would also help the office to ensure that the goals are met. In our July report, we recommended that to help ensure that OJJDP meets its goals to identify effective or promising girls’ delinquency programs and supports the development of program models, the Administrator of OJJDP develop and document a plan that (1) articulates how the office intends to respond to the findings of the Study Group, (2) includes time frames and specific funding requirements and commitments, and (3) is shared with key stakeholders. OJP agreed with our recommendation and outlined efforts that OJJDP plans to undertake in response to these findings. For example, OJJDP stated that it anticipates publishing its proposed juvenile justice program plan, which is to include how it plans to address girls’ delinquency issues, in the Federal Register to solicit public feedback and comments, which will enable the office to publish a final plan in the Federal Register by the end of the year (December 31, 2009). Mr. Chairman, this concludes my statement. I would be pleased to respond to any questions that you or other Members of the Subcommittee may have. For questions about this statement, please contact Eileen R. Larence at (202) 512-8777 or larencee@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this statement. Individuals making key contributions to this statement include Mary Catherine Hult, Assistant Director; Kevin Copping; and Katherine Davis. Additionally, key contributors to our July 2009 report include David Alexander, Elizabeth Blair, and Janet Temko. This is a work of the U.S. government and is not subject to copyright protection in the United States. The published product may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately.	This testimony discusses issues related to girls' delinquency--a topic that has attracted the attention of federal, state, and local policymakers for more than a decade as girls have increasingly become involved in the juvenile justice system. For example, from 1995 through 2005, delinquency caseloads for girls in juvenile justice courts nationwide increased 15 percent while boys' caseloads decreased by 12 percent. More recently, in 2007, 29 percent of juvenile arrests--about 641,000 arrests--involved girls, who accounted for 17 percent of juvenile violent crime arrests and 35 percent of juvenile property crime arrests. Further, research on girls has highlighted that delinquent girls have higher rates of mental health problems than delinquent boys, receive fewer special services, and are more likely to abandon treatment programs. The Office of Juvenile Justice and Delinquency Prevention (OJJDP) is the Department of Justice (DOJ) office charged with providing national leadership, coordination, and resources to prevent and respond to juvenile delinquency and victimization. OJJDP supports states and communities in their efforts to develop and implement effective programs to, among other things, prevent delinquency and intervene after a juvenile has offended. For example, from fiscal years 2007 through 2009, Congress provided OJJDP almost $1.1 billion to use for grants to states, localities, and organizations for a variety of juvenile justice programs, including programs for girls. Also, in support of this mission, the office funds research and program evaluations related to a variety of juvenile justice issues. As programs have been developed at the state and local levels in recent years that specifically target preventing girls' delinquency or intervening after girls have become involved in the juvenile justice system, it is important that agencies providing grants and practitioners operating the programs have information about which of these programs are effective. In this way, agencies can help to ensure that limited federal, state, and local funds are well spent. In general, effectiveness is determined through program evaluations, which are systematic studies conducted to assess how well a program is working--that is, whether a program produced its intended effects. To help ensure that grant funds are being used effectively, you asked us to review OJJDP's efforts related to studying and promoting effective girls' delinquency programs. We issued a report on the results of that review on July 24, 2009. This testimony highlights findings from that report and addresses (1) efforts OJJDP has made to assess the effectiveness of girls' delinquency programs, (2) the extent to which these efforts are consistent with generally accepted social science standards and federal standards to communicate with stakeholders, and (3) the findings from OJJDP's efforts and how the office plans to address the findings. This statement is based on our July report and selected updates made in October 2009. With an overall goal of developing research that communities need to make sound decisions about how best to prevent and reduce girls' delinquency, OJJDP established the Girls Study Group (Study Group) in 2004 under a $2.6 million multiyear cooperative agreement with a research institute. OJJDP's objectives for the group, among others, included identifying effective or promising programs, program elements, and implementation principles (i.e., guidelines for developing programs). Objectives also included developing program models to help inform communities of what works in preventing or reducing girls' delinquency, identifying gaps in girls' delinquency research and developing recommendations for future research, and disseminating findings to the girls' delinquency field about effective or promising programs. OJJDP's effort to assess girls' delinquency programs through the use of a study group and the group's methods for assessing studies were consistent with generally accepted social science research practices and standards. In addition, OJJDP's efforts to involve practitioners in Study Group activities and disseminate findings were also consistent with the internal control standard to communicate with external stakeholders, such as practitioners operating programs. The Study Group found that few girls' delinquency programs had been studied and that the available studies lacked conclusive evidence of effective programs; as a result, OJJDP plans to provide technical assistance to help programs be better prepared for evaluations of their effectiveness. However, OJJDP could better address its girls' delinquency goals by more fully developing plans for supporting such evaluations.
The United States has historically sought to attract international students to its colleges and universities. In recent years international students have earned about one-third or more of all of the U.S. degrees at both the master’s and doctoral levels in several of the science, technology, engineering, and mathematics (STEM) fields. In academic year 2002-2003 alone, international students earned between 45 percent and 57 percent of all the STEM degrees in the United States. Several federal agencies coordinate efforts to attract and bring international students to the United States and implement related requirements. The Department of State (State) manages the student visa application process, administers some student exchange programs, offers grants to facilitate international exchanges, and provides information promoting educational opportunities in the United States. State’s Bureau of Educational and Cultural Affairs supports a global network of more than 450 advising centers around the world that provide comprehensive information about educational opportunities in the United States and guidance on how to access those opportunities. In addition, the Undersecretary for Public Diplomacy and Public Affairs has undertaken ongoing efforts at outreach. For example, the office has organized several delegations of American university presidents to travel overseas with the Undersecretary in order to emphasize the United States’ interest in welcoming international students. The Department of Homeland Security enforces immigration laws and oversees applications for changes in immigration status. It also administers the Student and Exchange Visitor Information System (SEVIS), an Internet-based system that maintains data on international students and exchange visitors before and during their stay in the United States. Finally, the Department of Education (Education) sponsors initiatives to encourage academic exchanges between the United States and other countries, and the Department of Commerce offers various activities to help U.S. educational institutions market their programs abroad. Students or exchange visitors interested in studying in the United States must first be admitted to a U.S. school or university before starting the visa process. Most full-time students enter the United States under temporary visas, which usually permit them to stay for the duration of their studies but may require renewals if they return home before their studies are complete. In order to apply for a visa at a U.S. embassy or consulate, students are required to submit a SEVIS -generated document issued by a U.S. college or university or State-designated sponsor organization when they apply for a visa. State advises student applicants to apply early for a student or exchange visitor visa to make sure that there is sufficient time to obtain an appointment for a visa interview and for visa processing. Among the long-standing requirements for students applying for a visa is that they demonstrate an “intent to return” to their country of origin after they complete their studies. Graduates who wish to stay and work in the United States beyond the time allowed by their student visas generally need to receive approval for a change in status, for example, through a temporary work visa or through permanent residency. Although the United States continues to enroll more international students than any other country, the number of international students enrolled in U.S. higher education institutions leveled off and even dropped slightly after 2001, as shown in figure 1. Figure 2 shows that the U.S. share of international students worldwide decreased between 2000 and 2004. According to the Institute of International Education, the decline in the number of international students attending U.S. higher education institutions between 2002 and 2003 was the first drop in over 30 years. While some preliminary data suggest that international student enrollment numbers may be rebounding, enrollments have yet to return to previous levels. Nevertheless, the United States continues to be a prime study destination for international students for numerous reasons: its high- quality higher education institutions, top-ranked graduate programs, strong research funding, English-language curriculum, and a diverse foreign-born faculty. As worldwide demand for higher education continues to rise, changes in the global higher education landscape have provided students with more options. For example, technological advancements have spurred online courses and even completely online programs that cater largely to nontraditional students having work and family commitments. Between 1995 and 2001, enrollment in distance education at the college level nearly quadrupled to over 3 million students, according to Education’s most recent data. In addition, international partnerships allow institutions to share faculty members and facilitate study abroad opportunities. International branch campuses now provide international students the opportunity to receive an American education without leaving their home country. Greater competition has prompted some countries to embrace instruction in English and encouraged other systems to expand their recruiting activities and incentives. Germany alone offers nearly 400 courses in English that are geared toward international students. In terms of recruiting, several of the participants during our global competitiveness and higher education forum suggested that some countries appear more committed to attracting international students than the United States or are now competing with the United States for the best and the brightest students. Japan offers the same subsidized tuition rates to international students as domestic students, while Singapore offers all students tuition grants covering up to 80 percent of tuition fees as long as they commit to working in Singapore for 3 years after graduation. France and Japan have also strengthened and expanded their scholarship programs for international students. Some countries’ recruiting efforts include providing scholarships to international students who may not be able to afford the costs of obtaining a higher education degree in the United States. In addition, some countries have also developed strategic plans or offices that address efforts to attract international students. The German Academic Exchange Service and EduFrance offer examples where government agencies have been tasked with international student recruitment. Participants at GAO’s forum on global competitiveness expressed concerns that the United States lacked such a national strategy for recruiting international students and emphasized a need to both explore new sources of international students as well as cultivate U.S. domestic capacity. As the cost of attending college in the United States rises, international students may be discouraged from coming here to study. Higher education in the United States ranks among the most expensive in the world. As shown from OECD data in table 1, in 2003-2004 annual average tuition at public U.S. colleges and universities ($4,587) was second only to Australia ($5,289) and more than 2.5 times higher than Europe’s system with the highest tuition fees, that of the United Kingdom. In terms of private higher education providers, U.S. institutions ranked the highest at more than $17,000 per year followed by Australia ($13,420), Italy ($3,992), and Portugal ($3,803). Moreover, student costs at U.S. colleges and universities continue to rise. Figure 3 depicts average undergraduate tuition and room and board costs between 1976 and 2004 for full-time students in degree-granting programs at both 4-year public and private higher education institutions as well as public 2-year institutions. Average costs for private colleges and universities have risen the most since 1990, from $13,237 to $26,489. However, in percentage terms the most growth took place at 4-year public institutions; the change between 1990 and 2004 was approximately 118 percent compared to a 100 percent increase at 4-year privates and an 83 percent increase at 2-year institutions. International students generally do not rely on U.S. federal funding to study in the United States. According to the Institute of International Education’s Open Doors 2004/2005 report, which provides data on international student mobility patterns from U.S. universities, an estimated 71 percent of all international students reported their primary source of funding coming from personal and family sources or other sources outside of the United States. The effects of high and rising tuition and other factors on international enrollment patterns are difficult to estimate, but some policymakers are concerned that costs may be discouraging some international students from coming to U.S. higher education institutions. After September 11, State and Homeland Security, as well as other agencies, took various steps to strengthen the visa process as an antiterrorism tool. This has made the visa process more robust, but may have contributed to real and perceived barriers for international students as well as fueled perceptions that international students were not welcome. Almost all visa applicants must now be interviewed by a consular adjudicating officer at a U.S. embassy or post; this requirement has both affected the number of visas issued and extended wait times for visas under certain circumstances. We have reviewed aspects of the visa process and have made many recommendations to strengthen the process in a way that reduces barriers for international students while balancing national security interests. In October 2002 we cited the need for a clear policy on how to balance national security concerns with the desire to facilitate legitimate travel when issuing visas and made several recommendations to help improve the visa process. In 2003, we reported that the Departments of State, Homeland Security, and Justice could more effectively manage the visa process if they had clear and comprehensive policies and procedures as well as increased agency coordination and information sharing. In 2005 we reported on State’s management of J-1 exchange programs. Separately in 2005, we reported on the department’s efforts to improve the time required to process visas for international science students and scholars as well as others. In 2004 we found that the time to adjudicate a visa depended largely on whether an applicant had to undergo a Visas Mantis security check. Visas Mantis security checks target foreigners who might be involved in violation or evasion of U.S. laws by exporting goods, software, technology, or sensitive information, aiming to prevent proliferation of weapons of mass destruction and conventional weapons. Between January 2004 and June 2006, almost 28 percent of all visa applications sent for Mantis security checks were for students or exchange participants. State has acknowledged that long wait times may discourage legitimate travel to the United States, potentially costing the country billions of dollars in economic benefits, including from foreign students, and adversely influencing foreign citizens’ impressions and opinions of our nation. Much progress has been made over the years with respect to the visa process. Since 2002, State and other agencies have implemented many of our recommendations aimed at strengthening the visa process as an antiterrorism tool while improving processes to facilitate legitimate travel. In particular, State has issued standard operating procedures, in consultation with Homeland Security, to inform consular officers on issues such as special security checks and student visa requirements. In 2005, we reported a significant decline in both Visas Mantis processing times and cases pending more than 60 days. Recent visa data show an increase in the number of student visas issued in the last few years. According to State Department data, the combined student visa issuance levels for fiscal year 2006 increased by about 20 percent from fiscal year 2002. See figure 4 for the issuance trends for individual student visa categories. Broader efforts to facilitate travel to the United States for international students have also been implemented. State has expedited interviews for students. In addition, the length of time that some visa clearances are valid has been extended. In February 2007, State issued guidance to posts that applicants should receive an appointment for a student visa interview within 15 days or less. We are continuing to study aspect of these issues, including visa delays and Visas Mantis security checks, which we will be reporting on in the coming months. The United States must maintain an appropriate balance between protecting national security interests and ensuring our long-term competitiveness. The United States has relied on undergraduate and graduate students from other countries to support both economic and foreign policy interests. Changes designed to protect national security in the wake of September 11 may have contributed to real and perceived barriers for international students, and the subsequent decline in international enrollments raises concerns about the long-term competitiveness of U.S. colleges and universities. Rising U.S. tuition costs and growing higher education options worldwide further demonstrate that the United States cannot take its position as the top destination for international students for granted. While federal efforts to reduce barriers for international students have helped, monitoring current trends and federal policies is essential to ensuring that the United States continues to obtain talented international students in the face of greater global competition. Mr. Chairman, this concludes my prepared statement. I would be happy to respond to any questions you or other members of the subcommittees may have at this time. For further information regarding this testimony, please contact me at (202) 512-7215. Individuals making key contributions to this testimony include Sherri Doughty, Carlo Salerno, Marissa Jones, John Brummet, Eugene Beye, Carmen Donohue, Eve Weisberg, Melissa Pickworth, and Susannah Compton. This is a work of the U.S. government and is not subject to copyright protection in the United States. It may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately.	More international students obtain a higher education in the United States than in any other country, and they make valuable contributions while they are here. For those students returning home after their studies, such exchanges support federal public diplomacy efforts and can improve understanding among nations. International students have earned about one-third or more of all U.S. degrees at both the master's and doctoral levels in several of the science, technology, engineering, and mathematics fields. Yet recent trends, including a drop in international student enrollment in U.S. colleges and universities, and policy changes after September 11, 2001, have raised concerns about whether the United States will continue to attract talented international students to its universities. This testimony is based on ongoing and published GAO work. It includes themes from a September 2006 Comptroller General's forum on current trends in international student enrollment in the United States and abroad. Invitees to the forum included experts from the Congress, federal agencies, universities, research institutions, higher education organizations, and industry. GAO identified key issues that may affect the United States' ability to continue attracting the world's most talented international students to our universities and colleges. First, the global higher education landscape is changing and providing more alternatives for students, as other countries expand their educational capacity and technology-based distance learning opportunities increase. For example, enrollment in college-level distance education has nearly quadrupled since 1995. In addition, U.S. universities are establishing branch campuses in other countries and partnerships with international institutions, allowing international students to receive a U.S. education without leaving home. Greater competition has prompted some countries to offer courses in English and to expand their recruiting activities and incentives. Some countries also have developed strategic plans or offices focused on attracting international students. Second, the cost of obtaining a U.S. degree is among the highest in the world and rising, which may discourage international students. Average tuition in 2003 at public U.S. colleges and universities was second only to Australia. Moreover, tuition and associated costs continue to rise. While the effects of high and rising costs and related factors are difficult to estimate, some policymakers are concerned they may be discouraging international students from coming to the United States. Lastly, visa policies and procedures, tightened after September 11 to protect our national security, contributed to real and perceived barriers for international students. Post-September 11 changes included a requirement that almost all visa applicants be interviewed, affecting the number of visas issued and extending wait times for visas under certain circumstances. GAO has made several recommendations to strengthen the visa process in a way that reduces barriers for international students while balancing national security, and recent changes have improved the process. Processing times for certain security reviews have declined, and recent data show more student visas issued in the last few years. The Department of State also has taken steps to ease the burden on students, including expediting interviews and extending the length of time that some visa clearances are valid. We are continuing to study aspects of these issues. The United States must maintain an appropriate balance between protecting national security interests and ensuring our long-term competitiveness. Monitoring current trends and federal policies is essential to ensuring that the United States continues to obtain talented international students in the face of greater global competition.
The NATO summit in Riga, Latvia, on November 28-29, 2006, focused primarily on consolidation of support for existing initiatives. Above all, key allies sought to ensure that member states demonstrate the political will to provide the troops and financing necessary to bring Afghanistan to stability, expected to require five years or more. Closely associated with the NATO mission in Afghanistan was a discussion of military capabilities. NATO's "transformation" involves policies intended to enhance capabilities, develop multinational initiatives and cooperation to solve or deter international conflicts, and find funding mechanisms to ensure an appropriate sharing of the burden among member and partner states. A third theme of the summit was the evolving role of partnerships. Some allies have doubts about new rounds of enlargement; partnerships are in part a means to develop closer association with non-member governments that play a substantial role in the international community. The effort to stabilize Afghanistan is NATO's most important mission. NATO's International Security Assistance Force (ISAF), in place since 2003, now covers the entire country. Its mission is to subdue a resurgent Taliban and provide a secure environment where economic reconstruction and good governance can take hold. The U.S.-led Operation Enduring Freedom (OEF) is a separate, counter-terror operation in Afghanistan that is attempting to eradicate Al Qaeda remnants. The allies believe that the ISAF mission is central to the effort to "transform" the alliance in an era of new global threats such as terrorism and proliferation. Although ISAF's core is NATO member states, the mission has a distinctly broader international signature, as it operates under a U.N. resolution and includes important non-NATO states such as Australia and Japan. "Transformation" also involves new capabilities, such as more deployable forces, and multinational formations using advanced communications and combat technologies, all evident in Afghanistan. There is a growing sense of anxiety in the alliance about Afghanistan's future. A Taliban insurgency is underway at a time when public support for the government of President Hamid Karzai appears to be waning due to corruption and ineffective policies. For NATO, some observers believe that there is an inherent tension in simultaneously undertaking a combat mission and a stabilization and reconstruction effort. NATO Secretary General de Hoop Scheffer has said that "there is no military solution. The answer is development, nation-building of roads, schools." He has repeatedly urged international donors to meet their pledges of assistance. The central element of ISAF's stabilization effort is the Provincial Reconstruction Team (PRT), of which NATO operates 24 around the country. PRTs consist of civil-military teams that provide security and undertake reconstruction projects, such as the building of roads and hospitals. In addition, they support regional officials sent by the Karzai government to extend the authority of Kabul. The success of ISAF may depend upon the ability of the Karzai government, and its successors, to develop good governance in a country that has long known corruption, violent tribal competition for territory and resources, and minimal central authority. Afghanistan's vigorous and growing narcotics trade, centered around poppy farms and heroin production, is an additional factor that the international community must overcome to stabilize the country. NATO currently has 37,000 troops in ISAF (of which approximately 17,000 are from the United States), the bulk of whom are in the south fighting a Taliban and warlord insurgency. NATO commanders have asked member states for more troops to quell the insurgency, but governments have been reluctant to send more combat troops in part due to public concern over casualties, which have been increasing, and over availability of troops, as some governments such as Italy and France have substantial contingents committed to peace operations in Lebanon, Kosovo, and elsewhere. National "caveats" are impeding ISAF's mission. Some governments place strictures on how and where their forces may be used. For example, the German parliament prohibits the country's ISAF contingent from going outside relatively stable northern Afghanistan, where they are located; they cannot be used in more restive parts of the country. Some governments restrict the use of certain types of equipment at night. There is also no mobile ISAF emergency force in Afghanistan able to move rapidly around the country to reinforce troops wherever violence flares. At the summit, France and Italy lifted their caveats; their forces may now fight where needed in Afghanistan. Timeliness, however, remains an issue. If there is an urgent need for such forces, will the French or Italian commander first call Paris or Rome to obtain permission to move their forces into harm's way? Germany refused to lift its caveats. NATO has operations in other distant theaters that are testing the allies' political will and military capabilities. KFOR (Kosovo Force) in Kosovo has been in place since 1999. Under a U.N. imprimatur, KFOR is charged with maintaining a secure environment, supporting an international civil administration, and controlling ethnic violence. The international community is seeking to resolve Kosovo's final status, likely to be a form of independence from Serbia, but any solution is unlikely to be fully embraced by the Kosovo Albanians and the Serb minority. In such circumstances, NATO forces, now numbering 17,000, may remain in some form for a period of time. NATO has other operations as well. NATO supports the African Union mission in Darfur to protect refugees with assistance in training, logistics, and intelligence. The allies have a small training mission inside and outside Iraq for that country's military officers. One other mission, Active Endeavor , is a counter-terror effort in the Mediterranean that controls shipping traffic in the search for weapons of mass destruction. At Riga, the allies declared the NATO Response Force (NRF) fully operational. The NRF has 20,000-25,000 soldiers, supplied on rotation by member governments, in a high-readiness state. The NRF is an insertion force, able to reach its destination within 5-30 days. One of its key characteristics is flexibility; NATO can create NRF packages sized, for example, for humanitarian assistance, naval operations, or high intensity conflict on land. The allies did not resolve the issue of what types of missions the NRF should engage; some believe that it should be used only for combat; others favor such missions as humanitarian assistance. The NRF has brought to the forefront the emerging issue of how to fund NATO operations. NATO now operates under the principle of "costs lie where they fall," meaning that governments that send troops to an operation pay for their own troops. Because Spain was leading the NRF on rotation during the Pakistani earthquake, Madrid bore costs substantially disproportionate to those of other allied governments. The current system of paying for operations is therefore a disincentive for some governments to participate. In addition, some NATO members, such as Iceland, Luxembourg, and Belgium, have no or minimal armed forces; larger states tend to bear much of the burden for operations. The Bush Administration and several other allies have proposed that all governments bear a proportional cost of operations, and that some equipment be bought and maintained jointly by the alliance. At Riga, the allies were unable to agree to common funding for the NRF. In September 2006, fourteen allies, including the United States, joined to form a "Strategic Airlift Capability" (SAC) and pledged to buy four large transport planesâthe Boeing C-17âin 2007. NATO operations have long been in need of sufficient air transport, and the joint funding effort is a considerable step towards meeting that need. At Riga, the allies launched an initiative to develop a core of available Special Operations Forces (SOF), which they might call upon for operations. NATO is attempting to build forces for irregular, counter-insurgency warfare, for which SOF are well-suited. SOF are heavily utilized, for example, in Afghanistan. Joint use of such forces can be difficult, given the differing signatures that different governments give such units. As part of NATO's "transformation," the allies are engaging countries that see similar threats and have the political will to contribute to security. This development is in part the result of the emergence of terrorism and WMD proliferation as global threats, and in part the result of concerted action by the alliance to persuade non-member governments that there is much to be gained from closer consultation and joint operations. U.S. officials wish to see NATO become "a platform for allies to work together to meet common needs," in concert with international organizations such as the U.N. and the EU, and non-member states. This effort is most evident in Afghanistan, where non-member states such as Australia, New Zealand, and Japan have contributed forces or lead Provincial Reconstruction Teams. It is also evident in NATO's Operation Active Endeavor , the counter-terror and counter-proliferation operation in the Mediterranean noted above. Not all NATO governments are enthusiastic about the partnership program. Some governments, for example, wish to limit Israel's association with NATO. They rule out the possibility of contemplating eventual membership for Israel in the alliance as long as the Arab-Israeli conflict endures. Some governments also believe that the idea of advanced partnerships brings Israel and some Partnership for Peace states with authoritarian governments, such as Kazakhstan, too close to the alliance. Some also believe that the partnership program dilutes the "Atlantic" nature of the alliance. There was a surprise development in the Partnership for Peace program at Riga. The Bush Administration had long opposed Serbia's entry into PfP, until Belgrade sends accused war criminals from the Kosovo conflict to The Hague for trial. However, President Bush reportedly answered an appeal from Serbian leadership to admit Serbia to PfP as a way to mitigate any potential popular response should Kosovo soon gain independence. The EU retains its prohibition against Serbian associate status. Some critics believe that the Riga summit accomplished little, other than consolidation of existing initiatives. Member governments' forces are clearly stretched, given NATO operations in Afghanistan, Kosovo, and Darfur, and non-NATO European-led operations in Africa and Lebanon. Enhancement of capabilities, development of the concept of partnership, and extensive training missions in a range of non-member states have absorbed resources and energy. In addition, more attention to political discussions is evident at NATO: the allies meet with energy specialists to explore enhancement of energy security, and routinely discuss the threats posed by Iran and North Korea. Energy security is clearly an emerging issue in the alliance. Protection of vulnerable pipelines in such countries as Nigeria and Kazakhstan or escorting oil tankers in time of conflict are matters under discussion among several allied governments. Senator Lugar has proposed that energy security become an Article V mission. At the same time, a consensus is lacking on such issues. Some allies believe that the United States and the EU-3, and not NATO, should manage the attempt to limit Iran's nuclear program, or that energy security is an issue best left to market forces and managed through the European Union. Enlargement of the alliance remains an issue of debate. Representative Tanner and Senator Lugar have introduced bills ( H.R. 987 and S. 494 , respectively) that endorse further enlargement of NATO. The bills state the principle that NATO remains open to qualified candidates; encourage the three candidate states, Albania, Croatia, and Macedonia, to continue to work to qualify for membership; and note the interest in Georgia and Ukraine to one day gain membership. The bills underscore the need for candidate and other interested governments to meet the qualifications for membership. By some accounts, each of the three candidate states has recently slipped somewhat in its efforts to make substantial progress in its Membership Action Plan (MAP), which requires candidates to modernize their militaries, limit corruption, develop a strong rule of law, and achieve other objectives. Although some U.S. officials have recently given alternative possible dates for Croatia's entry as 2008 or 2009, others note that a majority of the Croatian people do not support NATO membership. The opposition in Macedonia has boycotted the parliament, an extraordinary development in a modern democracy. Albania is a poor country with minimal resources and a small military. At the same time, each of the three governments has made considerable progress in establishing important democratic institutions in the past decade. Changes of government have been orderly. The governments participate in important NATO missions, such as in Afghanistan. And the leaders of the three governments, and most opposition parties, strongly desire both NATO and EU membership. Some European allies wish to move slowly on further enlargement. In the European Union there is clearly "enlargement fatigue" as member governments wonder whether a new round of enlargement might dilute the identity of the Union, complicate decision-making, and shake prospects for economic growth. The issues in NATO are somewhat different. Clearly, decision-making in NATO has become more complicated as membership has grown from sixteen to twenty-six states in less than a decade. Other issues pose greater problems, such as relations with and sharing of defense resources with the European Union, or finding a clear consensus on NATO missions, now built increasingly around political objectives such as stabilization and reconstruction, as in Afghanistan, in addition to the traditional mission of collective defense. Equally problematic for the Europeans is the consideration of two prospective candidate states, Ukraine and the Republic of Georgia. Earlier in 2006, the Bush Administration considered proposing to the allies that both countries be advanced to the MAP process. Some European allies, such as Germany and France, do not wish to damage relations with Russia by consideration of Ukraine and Georgia or rapid advancement of those countries in the partnership process, such as participation in a MAP. Ukraine has a large Russian population and great economic potential that Moscow does not wish to see wrested from its sphere. There is a division in Ukraine over possible membership in NATO. The current Prime Minister opposes his country's membership, a step effectively removing the country from near-term consideration for a path to membership. Georgia has two border and ethnic conflicts, sometimes aggressively fueled by Russia, that give the Tblisi government pronounced strategic problems. The allies offered Georgia an "Intensified Dialogue" in early 2006, a modest but clear way station on the course to a MAP and possible eventual consideration for membership. Congress held a broad range of hearings in the 109 th Congress on NATO issues, such as the conflict in Afghanistan, NATO partnerships, capabilities, and political will in the alliance to counter the threats of terrorism and proliferation. Such oversight hearings are again likely in the 110 th Congress. In particular, it is possible that Congress will debate the level of U.S. and allied forces in Afghanistan, and what types of financial and developmental assistance are necessary to stabilize the country. NATO and energy security remains an emerging issue. Senator Lugar and others introduced a bill, S. 2435 , on energy security in March 2006. Hearings were held, and there may be similar interest in such a bill in the 110 th Congress. In addition, he introduced a bill on NATO enlargement, the "NATO Freedom Consolidation Act of 2006," S. 4014 , which passed the Senate. No action was taken in the House. As noted above in the discussion of enlargement, two bills are now before Congress on the issue.	NATO leaders held a summit in Riga, Latvia, November 28-29, 2006. There were no major new initiatives. The allies concentrated their discussion on operations, above all in Afghanistan, capabilities, and partnerships. They also discussed enlargement, but no new members are likely to join the alliance for several years. This report will be updated as needed. See also CRS Report RL32342, NATO and the European Union , by [author name scrubbed] and [author name scrubbed].
The American Recovery and Reinvestment Act of 2009 (ARRA; P.L. 111-5 ) created an Emergency Contingency Fund (ECF) within the Temporary Assistance for Needy Families (TANF) block grant. The fund expired on September 30, 2010. It helped states, Indian tribes, and territories pay for additional costs of providing economic aid to families during the current economic downturn for FY2009 and FY2010. The TANF block grant provides states, Indian tribes, and territories with federal funding for a wide range of benefits and services to ameliorate the effects of, or address the root causes of, economic disadvantage for families with children. The bulk of federal TANF funding is in a basic block grant of $16.5 billion. Under the basic block grant, each state receives an amount that has remained the same, without adjustment, since the 1996 welfare reform law. States—taken together—are also required to contribute a minimum of $10.4 billion to TANF-funded or related programs under a maintenance of effort (MOE) requirement. This amount, too, has not been adjusted since the 1996 welfare reform law. TANF is best known for funding cash welfare payments for very low-income families with children. However, states may use TANF funds "in any manner reasonably calculated" to help states achieve the broad statutory purpose of the block grant. In FY2009, only 28% of federal and related state TANF funds were expended on basic assistance, the category of spending that most closely corresponds to traditional cash welfare. The cash welfare rolls had declined to 1.7 million families by July 2008, down from a historical peak of 5.1 million families in March 1994. TANF also provided considerable funding for state subsidized child care programs, programs that address child abuse and neglect, pregnancy prevention programs, youth programs, and early childhood development (e.g., pre-Kindergarten) programs. Absent additional TANF funds, the limited and fixed nature of the block grant means that states bear the full cost of increased costs (e.g., increases in cash welfare). To share this risk during periods of recession, the 1996 welfare reform law created a $2 billion Contingency Fund. This fund, hereafter in this report called the "regular" contingency fund, provides capped matching grants to states that meet criteria of economic need and increased state spending to help states meet recession-related costs. The overall cash assistance caseload began to rise in August 2008. From March 2008 to March 2010, the national caseload increased by 13%—with some states experiencing faster caseload growth. The regular TANF contingency fund provided 19 states with additional funding in FY2009 and early FY2010. However, some states (e.g., California and Florida) experienced substantial increases in their TANF cash assistance caseloads, and met the criterion of economic need required to draw regular contingency funds, but failed to draw them because of the increased state spending requirement of the regular fund. The ARRA included a number of provisions related to taxes and benefit payments, designed to partially offset the declines in family income and purchasing power resulting from the increased joblessness caused by the recession. As part of this package, the ARRA established within TANF a $5 billion ECF for FY2009 and FY2010. The ECF provided states, tribes, and territories with capped additional funding to help meet additional costs or create new programs to respond to the current economic downturn. Subject to a cap on state grants from the ECF, the fund paid states, tribes, and territories 80% of the increased costs of expenditures in the three categories of expenditures discussed below. While TANF funds a wide range of economic aid and human services to families, the ECF reimbursed for only three categories of activities: basic assistance, non-recurrent short-term aid, and subsidized employment. These categories typically are those that provide direct aid to families, rather than fund services. This category represents spending on what most people think of as cash welfare. Generally, it is a monthly check (or deposit on an electronic benefit card) to help very low-income families meet ongoing basic needs. In order to qualify for funding for increased basic assistance, a state must experience both an increase in the number of families receiving assistance benefits as well as an increase in expenditures for basic assistance. To determine eligibility for ECF grants on the basis of increased cash assistance, the average number of families receiving cash assistance in a current fiscal quarter in FY2009 or FY2010 was compared with the number of families receiving cash assistance in the comparable quarter in the "base year." The base year was defined as either FY2007 or FY2008, whichever had the lowest cash assistance caseload. If a state, tribe, or territory experienced an increase in the cash assistance caseload, it was reimbursed for 80% of the increased costs (if any) of basic assistance from the comparable quarter in the base year to the current quarter. This category represents spending on aid that is to meet a specific family situation and aid is limited to a four-month timeframe. States, tribes, and territories had broad latitude in defining the types of "short-term aid" that they provide to families under the ECF. Moreover, short-term aid was provided to families both on and off the cash assistance rolls. If a family received only non-recurrent short-term aid, and not ongoing TANF assistance, that family was not subject to the rules that apply to TANF cash welfare families (e.g., work participation, time limit, and child support enforcement requirements). Unlike basic assistance, which required both increased expenditures and that more families be assisted, ECF funding for non-recurrent short-term aid was based solely on increased expenditures. The expenditures on non-recurrent short-term aid in a current quarter in FY2009 or FY2010 were compared with expenditures in the comparable quarter in the base year. The base year for non-recurrent short-term aid was either FY2007 or FY2008, whichever had the lowest expenditures for this category of expenditures. The base year for non-recurrent short-term aid could have been different from that used to determined ECF eligibility for basic assistance. The ECF reimbursed 80% of the increased expenditures on short-term non-recurrent aid from the comparable quarter in the base year to the current quarter. This category represents work subsidies: payments to employers or third parties to help cover the costs of employee wages, benefits, supervision, and training. The subsidized job could have been in the private or public sector. As with non-recurrent short-term aid, states were permitted to subsidize jobs for those on the cash assistance rolls as well as for other persons. If a person's only ongoing TANF benefit was an employment subsidy, his or her family was not subject to the rules that apply to TANF families receiving cash welfare. To draw ECF grants for subsidized employment, a state only needed to show that it had increased its expenditures for subsidized employment. The comparison used to determine increased costs for subsidized employment was the same type of comparison used for short-term benefits, as discussed above. Expenditures for subsidized employment for a current quarter in FY2009 or FY2010 were compared to those in the comparable quarter in the base year. The base year for subsidized employment was FY2007 or FY2008, whichever year had the lowest expenditures in the category, and could have differed from the base years used for basic assistance and short-term non-recurrent aid. The ECF reimbursed 80% of the increased expenditures on subsidized employment from the comparable quarter in the base year to the current quarter. Each state was limited on what they can draw combined from the ECF and the TANF regular contingency fund. Over the two-year period, FY2009 and FY2010, a state could draw up to 50% of its basic block grant from the two funds. The ECF did not pay for the full increase in expenditures for basic assistance, short-term aid, or subsidized employment. It provided for an 80% reimbursement for these increased costs. This is sometimes referred to as an 80% match rate, though this is somewhat misleading because states, tribes, and territories did not need to come up with "new money" to cover the remaining 20%. They were able to use funding reallocated from other activities funded from the basic TANF block grant or MOE monies to cover these costs. Additionally, states were permitted to count the value of in-kind, third party payments toward the 20%. This was particularly important for subsidized employment. According to guidance from the Department of Health and Human Services (HHS), the state could have counted the value of employers' supervisory time toward the 20%. The limit on supervisory time was 25% of an employee's wage. At the end of FY2010 (September 30, 2010), all $5 billion appropriated to the ECF was awarded to states, tribes, and territories. Figure 1 shows the TANF ECF grant awards by category of spending. The figure shows cumulative grant awards. It shows that $1.6 billion, 32% of the total grant awards, was to help finance increases in expenditures for basic assistance. Another $2.1 billion, 41% of the total, was for non-recurrent short-term aid and $1.3 billion, 26% of the total, was for subsidized employment. A total of 49 states, the District of Columbia, Puerto Rico, and the Virgin Islands were awarded ECF funds. Only Wyoming and Guam failed to receive ECF grants. Table 2 shows ECF grant awards by category of expenditures, showing the dollar awards in each category as well as the percent of the total awards for each category by state. Most of these jurisdictions (48) were awarded funds for increases in their basic assistance caseload, with 44 jurisdictions awarded funds for non-recurrent short-term aid and 42 jurisdictions receiving funds for subsidized employment. Only three states (Nevada, New Hampshire, and New Mexico) received funding only for basic assistance. In addition, 25 tribes and tribal organizations were awarded ECF grants. These grants total $14.2 million. Twelve states (Colorado, Delaware, Maryland, Michigan, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Tennessee, and Washington State) received their maximum allotment of contingency funds, and some others were close to receiving their maximums. As discussed above, states, tribes, and territories were limited to receiving only up to 50% of their basic TANF block grant in combined grants from the regular and emergency contingency funds over the two years, FY2009 and FY2010. Table 2 shows state awards from the regular TANF contingency fund and the ECF, comparing the sum of these awards with their maximum grants. States are sorted in descending order, so that states closest to exhausting their maximum allotments are shown at the top of the table. The TANF ECF was enacted as a temporary measure to help finance extra economic support to families to help them weather the recession. Though the economy grew in the last half of 2009 and the first three quarters of 2010, unemployment remained high. Unemployment is typically considered a "lagging" indicator and falls only after an economic expansion has already been underway for some time. Historically, the trend in the cash welfare caseload has sometimes followed economic conditions, but sometimes not. After the 1990-1991 recession, welfare caseloads actually peaked in March 1994, before beginning their decline. President Obama's FY2011 budget proposal sought to establish a new Emergency Fund for FY2011. It would have been funded at $2.5 billion for that year. The House voted twice in 2010 to extend the ECF, though such proposals failed to clear the Senate. A provision of the Claims Resolution Act of 2010 ( P.L. 111-291 ) extended the basic TANF program through the end of FY2011 without the ECF.	The American Recovery and Reinvestment Act of 2009 (ARRA; P.L. 111-5) created a $5 billion Emergency Contingency Fund (ECF) within the Temporary Assistance for Needy Families (TANF) block grant to help states, Indian tribes, and the territories pay for additional economic aid to families during the current economic downturn. It was part of a package of tax and benefit program provisions aimed at stemming the decline in family incomes and purchasing power caused by increased unemployment. The ECF was a temporary fund for two years, FY2009 and FY2010, and expired on September 30, 2010. All of the available $5 billion was awarded by the fund's expiration date to states, tribes, and territories. Though the economy grew in the last half of 2009 and the first three quarters of 2010, unemployment remained high. Historically, the trend in the cash welfare caseload has sometimes followed economic conditions, but sometimes not. After the 1990-1991 recession, welfare caseloads actually peaked in March 1994 before beginning their decline. The 111th Congress considered legislation in 2010 to extend the ECF beyond September 30, 2010. However, though the House twice passed bills to extend the ECF, none of these measures received Senate approval. A provision of the Claims Resolution Act of 2010 (P.L. 111-291) extended the basic TANF program through the end of FY2011 without the ECF. TANF is best known for funding cash welfare payments for low-income families, but it actually provides funds for a wide range of benefits and services to ameliorate the effects of, or address the root causes of, economic disadvantage among families with children. While TANF funds a wide range of both economic aid and human services to families with children, the ECF was limited to funding three categories of expenditures: basic assistance, a category that most closely resembles traditional cash welfare; non-recurrent short-term (e.g., emergency) aid; and subsidized employment. These categories typically are those that provide direct aid to families, rather than fund services. States, Indian tribes, and the territories were reimbursed 80% of the costs of increased expenditures in these categories. To qualify for ECF grants for increased basic assistance expenditures, a state, tribe, or territory had to aid more families on its assistance rolls than it did in FY2007 or FY2008. Qualification of states, tribes, and territories for ECF grants supporting short-term aid or subsidized employment were dependent only on increased expenditures from FY2007 or FY2008. ARRA placed a limit on total ECF and other TANF contingency fund payments to states, at a combined 50% of a state's basic block grant over the two years, FY2009 and FY2010. A total of 49 states, the District of Columbia, Puerto Rico, and the Virgin Islands had their applications for ECF grants approved. Additionally, 25 tribes and tribal organizations had approved ECF applications. Of the total $5 billion awarded, $1.6 billion was for basic assistance, $2.1 billion for short-term aid, and $1.3 billion for subsidized employment. Twelve states (Colorado, Delaware, Maryland, Michigan, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Tennessee, and Washington State) have received their maximum ECF grants.
CPP was created to help stabilize the financial markets and banking system by providing capital to qualifying regulated financial institutions through the purchase of preferred shares and subordinated debt. Rather than purchasing troubled mortgage-backed securities and whole loans, as initially envisioned under TARP, Treasury used CPP investments to strengthen the capital levels of financial institutions. Treasury determined that strengthening capital levels was the more effective mechanism to help stabilize financial markets, encourage interbank lending, and increase confidence in the financial system. On October 14, 2008, Treasury allocated $250 billion of the original $700 billion, later reduced to $475 billion, in overall TARP funds for CPP. In March 2009, the allocation was reduced to reflect lower estimated funding needs, as evidenced by actual participation rates. On December 31, 2009, the program was closed to new investments. Under CPP, qualified financial institutions were eligible to receive an investment of 1–3 percent of their risk-weighted assets, up to $25 billion. In exchange for the investment, Treasury generally received preferred shares that would pay dividends. As of the end of 2014, all the institutions with outstanding preferred share investments were required to pay dividends at a rate of 9 percent, rather than the 5 percent rate in place for the previous 5 years. EESA requires that Treasury also receive warrants to purchase shares of common or preferred stock or a senior debt instrument to further protect taxpayers and help ensure returns on the investments. Institutions are allowed to repay CPP investments with the approval of their primary federal bank regulator, and after repayment, institutions are permitted to repurchase warrants on common stock from Treasury. Treasury largely has wound down its CPP investments, and as of February 29, 2016, had received $226.7 billion in repayments and income from its CPP investments, exceeding the amount originally disbursed by almost $22 billion. The repayments and income amounts included almost $200 billion in repayments and sales of original CPP investments, as well as about $12 billion in dividends and interest, almost $7 billion in proceeds in excess of costs, and about $8 billion from the sale of warrants (see fig.1). After accounting for write-offs and realized losses from sales totaling about $5 billion, CPP had almost $0.3 billion in outstanding investments as of February 29, 2016. Treasury’s most recent estimate of lifetime income for CPP (as of Nov. 30, 2015) was about $16 billion. As of February 29, 2016, 16 of the 707 institutions that originally participated in CPP remained in the program (see fig. 2). Of the 691 institutions that had exited the program, 261 repurchased their preferred shares or subordinated debentures in full. Another 165 institutions refinanced their shares through other federal programs, 28 through the Community Development Capital Initiative (CDCI) and 137 through the Small Business Lending Fund (SBLF), another Treasury fund that was separate from TARP. An additional 190 institutions had their investments sold through auction, 39 institutions had their investments restructured through non-auction sales, and 32 institutions went into bankruptcy or receivership. The remaining 4 merged with other institutions. As shown in figure 3, as of February 29, 2016, the remaining $257.1 million in outstanding CPP investments was concentrated in half of the remaining 16 institutions. The institutions with the eight highest amounts of outstanding CPP investments accounted for 88 percent ($225.5 million) of the outstanding investments, while one institution accounted for 49 percent ($124.97 million). The remaining $31.6 million (12 percent) was spread among the other eight institutions. Our analysis of financial condition metrics over the past 4 years indicates that among the 16 institutions remaining in CPP as of February 29, 2016, several have continued to face challenges. Although the median return on average assets—a key indicator of a company’s profitability—was higher in the fourth quarter of 2015 than in 2011, 9 of the 16 institutions had negative returns in 2015. Furthermore, 6 of the 16 institutions had a lower return on assets in 2015 than they did at the end of 2011. The remaining institutions also had varying levels of reserves for covering losses, as measured by the ratio of reserves to nonperforming loans. For example, 6 of 15 institutions had lower levels of reserves for covering losses in 2015 compared to 2011, while 9 institutions had higher levels. Treasury officials stated that the remaining CPP institutions generally had weaker capital levels and worse asset quality relative to institutions that had exited the program. They noted that this situation was a function of the lifecycle of the program, because stronger institutions had greater access to new capital and were able to exit, while the weaker institutions had been unable to raise the capital needed to exit the program. Many of the remaining CPP institutions were on the “problem bank list” of the Federal Deposit Insurance Corporation (FDIC) and most have been delinquent on their dividend payments for several years. The problem bank list contains banks with demonstrated financial, operational, or managerial weaknesses that threaten their continued financial viability; the number of problem banks is publicly reported on a quarterly basis. Specifically, as of December 31, 2015, 11 of the then 17 remaining CPP institutions (65 percent) were on FDIC’s problem bank list. The percentage of remaining CPP institutions on the problem bank list is higher than the number we reported for the previous 2 years: 47 of 83 (57 percent) in 2013 and 20 of 34 (59 percent) in 2014. Of the 16 CPP institutions remaining as of February 29, 2016, 1 of the 14 required to pay dividends made the most recent scheduled dividend or interest payment. The 13 institutions that are delinquent have missed an average of 23 quarterly dividend payments, with the fewest missed payments at 16 and the most missed payments at 29. Institutions can elect whether to pay dividends and may choose not to pay for a variety of reasons, including decisions they or their federal or state regulators make to conserve cash and capital. However, investors may view an institution’s ability to pay dividends as an indicator of its financial strength and may see failure to pay as a sign of financial weakness. Treasury officials told us that they regularly monitor and have direct and substantive conversations with the remaining 16 institutions, including discussions about their plans to exit the program. Treasury officials expect most of the remaining CPP institutions to exit through restructurings but do not have a specific end date for exiting all their CPP investments and winding down the CPP program. EESA does not require Treasury to set a specific date on which the program will expire. Although Treasury has not changed its exit strategy, which consists of repayments, restructurings, and auctions, the extent to which each approach has been used has shifted over time. Repayments. Repayments allow financial institutions, with the approval of their regulators, to redeem their preferred shares in full. Institutions have the contractual right to redeem their shares at any time. As of February 29, 2016, 261 institutions had exited CPP through repayments. Institutions must demonstrate that they are financially strong enough to repay the CPP investments to receive regulatory approval to proceed with a repayment exit. Restructurings. Restructurings allow troubled financial institutions to negotiate new terms or discounted redemptions for their investments. Raising new capital from outside investors (or a merger) is a prerequisite for a restructuring. With this option, Treasury receives cash or other securities that generally can be sold more easily than preferred stock, but the restructured investments are sometimes sold at a discount to par value. According to Treasury officials, Treasury facilitated restructurings as an exit from CPP in those cases in which new capital investment and redemption of the CPP investment by the institutions otherwise was not possible. Treasury officials said that they approved the restructurings only if the terms represented a fair and equitable financial outcome for taxpayers. Treasury completed 39 such restructurings through February 29, 2016. Auctions. Treasury conducted the first auction of CPP investments in March 2012, and has continued to use this strategy to sell its investments. As of February 29, 2016, Treasury had conducted a total of 28 auctions of stock from 190 CPP institutions. Through these transactions, Treasury received about $3 billion in proceeds, which was about 80 percent of the investment’s face amount. As we previously reported, Treasury has sold investments individually to date, but noted that combining smaller investments—into pooled auctions—remained an option. Whether Treasury sells stock individually or in pools, the outcome of this option will depend largely on investor demand for these securities and the quality of the underlying financial institutions. The method by which institutions have exited the program has varied over time. As shown in figure 4, from 2009 through 2011, the majority of institutions exiting CPP did so through repayment or refinancing their shares through CDCI and SBLF. From 2012 to 2014, auctions were the predominant exit strategy. During that same period, restructurings also increased. For example, in 2012, 4 percent of exits (7 of 159) were restructurings. In 2014, 15 percent (8 of 52) used restructuring as an exit strategy. In 2015, restructurings remained a common strategy, representing 35 percent (6 of 17) of exits, while auctions dropped from 44 percent (23 of 52) in 2014 to 29 percent (5 of 17) in 2015. Treasury officials told us they expected restructurings to be the primary exit strategy in the future, but as noted earlier, auctions remain a possible exit strategy. Treasury expects to rely on restructurings and auctions because the overall financial condition of the remaining institutions makes full repayment unlikely. At this time, Treasury does not have any plans to fully write off any investments. Treasury officials anticipate that the current strategy to restructure or auction the remaining investments will result in a better return for taxpayers. According to officials, any savings achieved by writing off the remaining CPP assets and eliminating costs associated with maintaining CPP would be limited, because much of the TARP infrastructure will remain intact for several years to manage other TARP programs. Treasury officials also noted that writing off the remaining assets could be seen as diminishing the equitable treatment of institutions across the program. That is, writing off the remaining assets, (and thereby not requiring repayment from the remaining institutions) would be unfair to the institutions that already had repaid their investment and exited the program. We provided Treasury with a draft copy of this report for review and comment. Treasury provided technical comments that we have incorporated as appropriate. We are sending copies of this report to the appropriate congressional committees. This report will be available at no charge on our website at http://www.gao.gov. If you or your staff have any questions about this report, please contact me at (202) 512-8678 or garciadiazd@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. In addition to the contact named above, Karen Tremba (Assistant Director), Anne Akin (Analyst-in-Charge), Bethany Benitez, William R. Chatlos, Lynda Downing, Risto Laboski, Marc Molino, Barbara Roesmann, Christopher Ross, and Max Sawicky have made significant contributions to this report.	CPP was established as the primary means of restoring stability to the financial system under the Troubled Asset Relief Program (TARP). Under CPP, Treasury invested almost $205 billion in 707 eligible financial institutions between October 2008 and December 2009. CPP recipients have made dividend and interest payments to Treasury on the investments. The Emergency Economic Stabilization Act of 2008 includes a provision that GAO report at least every 60 days on TARP activities. This report examines (1) the status of CPP, (2) the financial condition of institutions remaining in the program, and (3) Treasury's strategy for winding down the program. To assess the program's status, GAO reviewed Treasury reports on the status of CPP. In addition, GAO used financial and regulatory data to assess the financial condition of institutions remaining in CPP. Finally, GAO interviewed Treasury officials to examine the agency's exit strategy for the program. GAO provided a draft of this report to Treasury for its review and comment. Treasury provided technical comments that GAO incorporated as appropriate. The Capital Purchase Program (CPP) largely has wound down and the Department of the Treasury's (Treasury) returns on CPP investments surpassed the original amount disbursed. As of February 29, 2016, Treasury had received $226.7 billion in repayments and income from its CPP investments, exceeding the amount originally disbursed by almost $22 billion. As of the same date, 16 of the 707 institutions remained in the program. Treasury's most recent estimate of lifetime income for CPP (as of Nov. 30, 2015) was about $16 billion. Most of the remaining CPP institutions have continued to exhibit signs of financial weakness. Specifically, 9 of the 16 institutions had negative returns on average assets (a common measure of profitability) in 2015. Also, 6 institutions had a lower return on assets in 2015 than they did at the end of 2011. Treasury officials stated that the remaining CPP firms generally had weaker capital levels and worse asset quality than firms that had exited the program. Also, nearly all the firms that are required to pay dividends have continued to miss payments. Treasury expects most remaining CPP institutions to exit through restructurings but has not set time frames for winding down the program. Over the past 6 years, repayment of Treasury's investment and Treasury's auction of CPP securities to interested investors were the primary means by which institutions exited CPP. Restructurings—the expected exit method for the remaining firms—allow institutions to negotiate terms for their investments and require institutions to raise new capital or merge with another institution. With this option, Treasury agrees to receive cash or other securities, typically at a discount. Treasury officials expect to rely primarily on restructurings because the overall financial condition of the remaining institutions makes full repayment unlikely.
On July 30, 2002, President Bush signed into law the Sarbanes-Oxley Act of 2002, P.L. 107-204 . This law has been described by some as the most important and far-reaching securities legislation since passage of the Securities Act of 1933 and the Securities Exchange Act of 1934, both of which were passed in the wake of the Stock Market Crash of 1929. Sarbanes-Oxley had its genesis early in 2002 after the declared bankruptcy of the Enron Corporation, but for some time it appeared as though its impetus had slowed. However, when the WorldCom scandal became known in late June, the Congress showed renewed interest in enacting stiffer corporate responsibility legislation, and Sarbanes-Oxley quickly became law. The act established the Public Company Accounting Oversight Board (PCAOB or Board), which is supervised by the Securities and Exchange Commission (SEC or Commission). The act restricts accounting firms from performing a number of other services for the companies which they audit. The act also requires new disclosures for public companies and the officers and directors of those companies. Among the other issues affected by the legislation are securities fraud, criminal and civil penalties for violating the securities laws and other laws, blackouts for insider trades of pension fund shares, and protections for corporate whistleblowers. Currently, one of the most controversial provisions of the act is Section 404, Management Assessment of Internal Controls. The provision states: (a) Rules Required—The Commission shall prescribe rules requiring each annual report required by section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)) to contain an internal control report, which shall— (1) state the responsibility of management for establishing and maintaining an adequate internal control structure and procedures for financial reporting; and (2) contain an assessment, as of the end of the most recent fiscal year of the issuer, of the effectiveness of the internal control structure and procedures of the issuer for financial reporting. (b) Internal Control Evaluation and Reporting—With respect to the internal control assessment required by subsection (a), each registered public accounting firm that prepares or issues the audit report for the issuer shall attest to, and report on, the assessment made by the management of the issuer. An attestation made under this subsection shall be made in accordance with standards for attestation engagements issued or adopted by the Board. Any such attestation shall not be the subject of a separate engagement. The provision's controversy stems from charges that some aspects of Sarbanes-Oxley, particularly Section 404, are overly burdensome and costly for small and medium-sized companies. For example, one critic has stated that the costs of Section 404 are "extreme." "As one of our members testified before the House Small Business Committee, his company's efforts to comply with Section 404 in preparation to go public were simply too excessive to justify the effort—10% to 15% of gross revenues.... Well-published studies and hard data demonstrate similar cost percentages for small firms." The SEC over the years has taken various steps to delay compliance with Section 404 by defined small companies. For example, on May 17, 2006, the SEC issued a press release which, among other actions, announced that it would briefly postpone application of Section 404 to the smallest companies but that ultimately all public companies would be required to comply with the internal control reporting requirements of Section 404. This view taken by the Commission conflicted with several recommendations in a report issued by the Commission's Advisory Committee on Smaller Public Companies on April 23, 2006, which would exempt small companies from many of the internal reporting requirements of Section 404. On December 15, 2006, the SEC adopted rule changes which give smaller firms, referred to as non-accelerated filers, more time to comply with Section 404's internal controls reporting requirements. Under the extension, a non-accelerated filer must provide management's assessment concerning internal control over financial reporting in its annual reports for fiscal years ending on or after December 15, 2007. On April 4, 2007, the SEC's commissioners endorsed the recommendations of its staff to work closely with the PCAOB to issue auditing standards intended to ease the burden on small companies in complying with Section 404. Additionally, on May 23, 2007, the SEC commissioners voted unanimously to approve a relaxed set of guidelines for the internal accounting controls required by Section 404 for smaller public companies, defined in most cases as those with a public float below $75 million. The perceived problem of compliance with Section 404 reporting requirements faced by small and medium-sized companies was an issue in both the 109 th and 110 th Congresses and continued to be an issue in the 111 th Congress. Virtually identical bills addressing this issue were introduced in both houses of the 109 th Congress: H.R. 5405 in the House and S. 2824 in the Senate. Each bill was titled the Competitive and Open Markets that Protect and Enhance the Treatment of Entrepreneurs (COMPETE) Act. The bills would have permitted an issuer to elect voluntarily not to be subject to much of Section 404 of Sarbanes-Oxley if the issuer has a total market capitalization for the relevant reporting period of less than $700 million; has total product revenue for that reporting period of less than $125 million; has fewer than 1,500 record beneficial holders; has been subject to the various reporting requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934 for a period of less than 12 calendar months; or has not filed and was not required to file an annual report under Section 13(a) or 15(d) of the Securities Exchange Act of 1934. The bills would have set forth a de minimus standard for implementing the requirements of Section 404. The bills would also have required the SEC and the PCAOB to conduct a study assessing the principles-based Turnbull Guidance under the securities laws of Great Britain to the implementation of Section 404 of Sarbanes-Oxley and to submit the report to Congress within one year of enactment of the COMPETE Act. Bills introduced in the 110 th Congress continued the attempt to correct the perceived problems created by Section 404. H.R. 1049 , referred to the Committee on Financial Services, was titled the Amend Misinterpreted Excessive Regulation in Corporate America Act (AMERICA). The bill would have created an ombudsman for the Public Company Accounting Oversight Board (PCAOB or Board). The ombudsman would have been appointed by the Board and would have acted as a liaison between the PCAOB and any registered public accounting firm or issuer concerning issues or disputes related to the preparation or issuance of any audit report of that issuer, especially with respect to the implementation of Section 404; assured that safeguards existed to encourage complainants to come forward and to preserve confidentiality; and carried out other activities in accordance with guidelines prescribed by the Board. The bill would have required the SEC and the PCAOB to adopt revisions to their rules or standards under Section 404 of Sarbanes-Oxley so that the costs of implementation of Section 404 would not significantly increase the costs of complying with the annual audits required by the Securities Exchange Act. Further, the bill would have prohibited a private right of action to be brought against any registered public accounting firm in any federal or state court on the basis of a violation or alleged violation of the requirements of Section 404 or of the standards issued by the Board for the purposes of implementing the provisions of Section 404. H.R. 1508 , referred to the Committee on Financial Services, and S. 869 , referred to the Committee on Banking, Housing, and Urban Affairs, were titled the COMPETE Act of 2007 and were comparable. They were similar to H.R. 5405 and S. 2824 , introduced in the 109 th Congress. They would have amended Section 404 so that each registered public accounting firm preparing or issuing an audit report for an issuer would have been required to attest to and report on the management assessment of the issuer. The attestation and report on the assessment made by the management of the issuer would not have included a separate opinion on the outcome of the assessment. This attestation and report would have been required to be performed at three-year intervals. The attestation would have been required to be made in accordance with standards adopted by the Board. The SEC would have had to develop a standard of materiality for the conduct of the assessment and report on an internal control based upon whether the internal control had a material affect on the company's financial statements and was significant to the issuer's overall financial status. The bills would have permitted a smaller public company not to be subject to Section 404. A "smaller public company" was defined as having a total market capitalization for the relevant reporting period of less than $700 million and total product and services revenue for the reporting period of less than $125 million or at the beginning of the reporting period fewer than 1,500 record beneficial owners. The SEC and the Board would have had to conduct a study examining the lack of and impediments to robust competition for the performance of audits for issuers. The SEC and the Board would have also been required to conduct a study comparing and contrasting the principles-based Turnbull Guidance under the securities laws of Great Britain to the implementation of Section 404 of Sarbanes-Oxley. Several other bills affecting compliance with Section 404 were introduced in the 110 th Congress. Bills introduced in the 111 th Congress to provide an exemption for small companies from the requirements of Section 404 included H.R. 1797 and H.R. 3775 . On November 4, 2009, the House Financial Services Committee recommended H.R. 3817 , the Investor Protection Act, which contained a clause, inserted as a bipartisan amendment, permanently exempting businesses with a market capitalization up to $75 million from complying with the auditing requirements of Section 404. The SEC and others would study how the burden of compliance with Section 404 could be reduced for companies valued between $75 million and $250 million and whether reducing or eliminating their compliance with Section 404 would encourage these companies to offer their shares to the public on United States exchanges. This bill was included in H.R. 4173 , the Wall Street Reform and Consumer Protection Act of 2009, as Section 7606, passed by the House on December 11, 2009. The Senate-passed bill on financial regulatory reform, S. 3217 , did not have a comparable provision. House and Senate conferees on Wall Street reform approved a conference report, H.Rept. 111-517 , which has a provision exempting businesses with a market capitalization of $75 million or less from complying with the auditing requirements of Section 404. The provision also requires the Securities and Exchange Commission to determine how it can reduce the burden of complying with Section 404 for companies whose market capitalization is between $75 million and $250 million while maintaining investor protections. Both the House and the Senate agreed to the conference report. The President signed the bill, known as the Dodd-Frank Wall Street Reform and Consumer Protection Act, into law as P.L. 111-203 on July 21, 2010. Bills were introduced in the 112 th Congress which would allow, at least temporarily, certain companies capitalized at more than $75 million to have an exemption from complying with parts of Section 404 of Sarbanes-Oxley and other provisions of the federal securities laws. One of these bills, H.R. 3606 , eventually a combination of several House bills, passed both the House and the Senate and is titled the Jumpstart Our Business Startups Act (JOBS Act). The bill's Section 103 exempts certain companies with annual gross revenues of less than $1 billion, called emerging growth companies, from complying with the auditing requirements of Section 404(b) for up to five years. The President signed the bill on April 5, 2012.	Section 404 of the Sarbanes-Oxley Act of 2002 requires the Securities and Exchange Commission (SEC) to issue rules requiring annual reports filed by reporting issuers to state the responsibility of management for establishing and maintaining an adequate internal control structure and procedures for financial reporting and for each accounting firm auditing the issuer's annual report to attest to the assessment made of the internal accounting procedures made by the issuer's management. There have been criticisms that this provision is overly burdensome and costly for small and medium-sized companies. On December 15, 2006, the SEC adopted rule changes giving smaller firms more time to comply with Section 404's reporting requirements. Compliance with Section 404 by small and medium-sized companies was an issue in both the 109th and 110th Congresses and continued as an issue in the 111th Congress. On November 4, 2009, the House Financial Services Committee recommended H.R. 3817, the Investor Protection Act, which contained a clause, inserted as a bipartisan amendment, permanently exempting businesses with a market capitalization up to $75 million from complying with the auditing requirements of Section 404. This bill was included in H.R. 4173, the Wall Street Reform and Consumer Protection Act of 2009, as Section 7606, passed by the House on December 11, 2009. The Senate-passed bill on financial regulatory reform, S. 3217, did not have a comparable provision. House and Senate conferees on Wall Street reform approved a conference report, H.Rept. 111-517, which had a provision exempting businesses with a market capitalization of $75 million or less from complying with the auditing requirements of Section 404. Both the House and the Senate agreed to the conference report. The President signed the bill, known as the Dodd-Frank Wall Street Reform and Consumer Protection Act, into law as P.L. 111-203 on July 21, 2010. Bills were introduced in the 112th Congress which would allow, at least temporarily, certain companies capitalized at more than $75 million to have an exemption from complying with parts of Section 404 of Sarbanes-Oxley and other provisions of the federal securities laws. One of these bills, H.R. 3606, eventually a combination of several House bills, passed both the House and the Senate and is titled the Jumpstart Our Business Startups Act (JOBS Act). The bill has a provision which would exempt certain companies with annual gross revenues of less than $1 billion from complying with the auditing requirements of Section 404(b) for up to five years. The President signed the bill on April 5, 2012.