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This report provides a brief overview of federal statutes and where to find them, in print format and on the Internet. When Congress passes a law, it may amend or repeal earlier enactments or it may create new law. Newly enacted laws are published chronologically, first as separate statutes in "slip law" form and later cumulatively in the bound volumes of the Statutes at Large . Additionally, most statutes are also incorporated into the United States Code ( U.S.C. ). The U.S.C. and its commercial counterparts, United States Code Service ( U.S.C.S.) and United States Code Annotated ( U.S.C.A.) , take the federal statutes that are of a general and permanent nature and arrange them by subject into 51 separate titles. As the statutes that underlie the Code are revised, superseded, or repealed, the provisions of the Code are updated to reflect these changes. When a piece of legislation is enacted under the procedures set forth in Article 1, Section 7 of the Constitution, it is characterized as a "public law" or a "private law." Each new statute is assigned a number according to its order of enactment within a particular Congress (e.g., the 10 th public law enacted in the 112 th Congress was numbered as P.L. 112-10; the 10 th private law was numbered Priv. L. 112-10). Private laws are enacted for the benefit of a named individual or entity (e.g., due to exceptional individual circumstances, Congress enacts a law providing a government reimbursement to a named person who would not otherwise be eligible under general law). In contrast, public laws are of general applicability and permanent and continuing in nature. Public laws form the basis of the Code . The first official publication of the law is called the slip law. The Government Printing Office's (GPO's) Federal Digital System (FDsys) provides free online access to official federal government publications. Individual slip laws in printed pamphlet form can be obtained from the GPO. Federal Depository Libraries, located throughout the United States, also provide free public access to federal publications and other information. A list of Federal Depository Libraries and their locations is accessible on the Internet at http://catalog.gpo.gov/fdlpdir/FDLPdir.jsp . Some private and public libraries compile the laws in looseleaf binders or in microfiche collections. The United States Code Congressional and Administrative News ( U.S.C.C.A.N. ) compiles and publishes public laws chronologically in their slip law version. U.S.C.C.A.N. 's annual bound volumes and monthly print supplements include the texts of new enactments and selected Senate, House, and/or conference reports. The U.S.C.S. and the U.S.C.A. publish new public laws chronologically as supplements. Slip laws (both public laws and private laws) are accumulated, corrected, and published at the end of each session of Congress in a series of bound volumes entitled Statutes at Large . The laws are cited by volume and page number (e.g., 96 Stat. 1259 refers to page 1259 of volume 96 of the Statutes at Large ). Researchers are most likely to resort to this publication when they are interested in the original language of a statute or in statutes that are not codified in the Code , such as appropriations or private laws. Most statutes do not initiate new programs. Rather, most statutes revise, repeal, or add to existing statutes. Consider the following sequence of enactments. In 1952, Congress passed the Immigration and Nationality Act of 1952 (P.L. 82-414, 66 Stat. 163). This law generally consolidated and amended federal statutory law on the admission and stay of aliens in the United States and how they may become citizens. The Immigration and Nationality Act of 1952 was codified at Title 8 of the U.S.C. §§1 et seq. In 1986, Congress passed the Immigration Reform and Control Act of 1986 ( P.L. 99-603 , 100 Stat. 3359). Section 101 of this act amended Section 274 of the Immigration and Nationality Act of 1952 (codified at 8 U.S.C §1324) by adding Section 274a (codified at 8 USC §1324a). This new section (Section 274a) made it unlawful for a person to hire for employment in the United States an illegal alien. In 1996, Congress passed the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 ( P.L. 104-208 , Division C, 110 Stat. 3009). Section 412 of the 1996 act amended the employer sanctions process by requiring an employer to verify that a new employee is not an illegal alien. As with the 1986 act, the 1996 act expressly amended the Immigration and Nationality Act of 1952 (Section 274A in this case) and Section 1324a in Title 8 of the U.S.C. (8 U.S.C. §1324a). As the above sequence illustrates, the canvas upon which Congress works is often an updated, stand-alone version of an earlier public law (e.g., Immigration and Nationality Act of 1952, as amended), and not the U.S. Code . On the "Titles of United States Code " page of the Code an asterisk appears next to some of the titles. The asterisks refer to a note that states: "This title has been enacted as positive law." If the title is asterisked, the Code provides the authoritative version of the public law, as amended. For example, there is no asterisk beside Title 42 of the U.S.C . Thus, the provisions codified in Title 42 are not authoritative. Should there be a discrepancy, a court will accept the language in the Statutes at Large as the authoritative source and not the Code . It should be noted that there is no substantive difference between the language of the public law as published in the Statutes at Large and that of the Code . It is often difficult to find current, updated versions of frequently amended public laws. Many congressional committees periodically issue committee prints containing the major public laws within their respective jurisdictions. Alternatively, the various commercial publishers, discussed herein, print updated versions of major public laws. In addition, the amended versions of some major public laws can be found on the Internet. The United States Code (U.S.C.) is the official government codification of federal legislation. This resource has been printed by the GPO every six years since 1926 and supplemented by annual cumulative bound volumes. The latest edition is dated 2006. The Office of the Law Revision Counsel of the U.S. House of Representatives and FDsys provide authoritative and current online access to the U.S.C . In the U.S.C . , statutes are grouped by subject into 51 titles. Each title is further organized into chapters and sections. A listing of the titles is provided in each volume. Unlike the statutes, the Code is cited by title and section number (e.g., 28 U.S.C. §534 refers to Section 534 of Title 28). Notes at the end of each section provide additional information, including statutory origin of the Code provision (both by public law number and Statutes at Large citation), the effective date(s), a brief citation and discussion of any amendments, and cross references to related provisions. The United States Code Annotated ( U.S.C.A .) published by Thomson/West and the United States Code Service ( U.S.C.S. ) published by LexisNexis are unofficial, privately published editions of the Code . These publications often include the text of the Code , annotations to judicial decisions interpreting the sections, cross references to the Code of Federal Regulations ( C.F.R. ) provisions, and historical notes. Both also provide references to selected secondary sources. For example, the U.S.C.S . includes selected law review articles. Bound volumes of the U.S.C.A. and the U.S.C.S. are updated by annual inserts ("pocket parts") or supplements. These updates include newly codified laws and annotations. Both U.S.C.A. and U.S.C.S. issue pamphlets containing copies of recently enacted public laws arranged in chronological order. Since there is a time lag in publishing the official U.S.C. , codified versions of new enactments usually appear first in the U.S.C.A. and U.S.C.S. supplements. Each edition of the Code has a comprehensive index that is organized by subject. The index is updated in each annual supplement to the Code . Each edition of the Code also has a table that can be used to find an act and where it was codified in the Code . The public laws are arranged alphabetically and can be searched under their commonly known names. This reference also provides the public law number and the citations to the Statutes at Large , U.S.C ., and their amendments. For example, searching for the "Stone Act" in the table shows that it has been codified at 30 U.S.C. §161. The Statutes at Large table is one of the most useful research tools because it shows the relationship between public laws, the Statutes at Large , and the U.S.C . A researcher who has either a public law number or a Statutes at Large citation can use this table to ascertain where that law is codified and its present status. The table is particularly useful when searching in one section of a law that contains many subsections because it can be used to find where individual sections and subsections of a public law have been codified. For example, the table indicates that P.L. 99-661 , Section 1403 is codified in the U.S.C. at 20 U.S.C. §4702. U.S.C.A. and the U.S.C.S. also have their own versions of the research tools discussed above. Legal resources, including federal statutes, are widely available to both scholars and the general public through the Internet. Several considerations should be taken into account when using Internet materials. Materials on Internet sites may not be up-to-date, and it may be difficult to discern how current the material is or whether it has been revised. It may be difficult to find current federal statutes, especially in the case of "popular name" statutes that are amended frequently. On their websites, federal agencies do not always include the current versions of the statutes they administer, however, they may provide useful summaries and discussions of the statutes. Websites are constantly changing. The inclusion and location of information may differ from time to time. The address or URL of a website may also change. In addition, each website has its own search capabilities and format. With the foregoing caveats in mind, the following are public resources for the selected statutory materials described in this report. Public Laws Library of Congress - American Memory http://memory.loc.gov/ammem/amlaw/lwsllink.html This page provides access to the Statutes a t Large from the 1 st Congress (1789 - 1790) to the 43 rd Congress (1873 - 1874). An index is also available for the first eight volumes of the Statutes a t Large . Library of Congress: THOMAS http://thomas.loc.gov/ This page provides access to the full-text of public laws from the 101 st Congress (1989 – 1990) to present. GPO's Federal Digital System http://www.gpo.gov/fdsys/search/advanced/advsearchpage.action This page provides access to the Statutes at Large and public and private laws from the 104 th Congress (1995 - 1996) to the present. The "Advanced Search" capability enables more than one collection to be searched at a time by adding "more search criteria." United States Code Office of the Law Revision Counsel U.S.C. http://uscode.house.gov/search/criteria.shtml This page provides access to the 2006 edition and its supplements. The page also links to the previous editions and supplements. GPO's Federal Digital System http://www.gpo.gov/fdsys/search/advanced/advsearchpage.action This page provides access to the 1994 through 2006 editions and their supplements. The "Advanced Search" capability enables more than one collection to be searched at a time by adding "more search criteria." Popular Name Index Office of the Law Revision Counsel http://uscode.house.gov/popularnames/popularnames.htm#letterE This page provides a list of the popular and statutory names of Acts in alphabetical order. Other Resources U.S. Code Classification Tables http://uscode.house.gov/classification/tables.shtml This page shows where recently enacted laws will appear in the United States Code and which sections of the Code have been amended by those laws. The tables only include those provisions of law that have been classified to the Code .

This report provides a brief overview of federal statutes and where to find them, both in print and on the Internet. When Congress passes a law, it may amend or repeal earlier enactments or it may create new law. Newly enacted laws are published chronologically, first as separate statutes in "slip law" form and later cumulatively in a series of volumes known as the Statutes at Large. Statutes are numbered by order of enactment either as public laws or, far less frequently, private laws, depending on their scope. Most statutes are incorporated into the United States Code. The United States Code and its commercial counterparts arrange federal statutes, that are of a general and permanent nature, by subject into titles. As the statutes that underlie the Code are revised, superseded, or repealed, the provisions of the Code are updated to reflect these changes. Statutes and the United States Code can be found on the Internet. In addition, the slip law versions of public laws are available in official print form from the Government Printing Office. Federal Depository Libraries (e.g., university and state libraries) provide slip laws in print and/or microfiche format. The Statutes at Large series often is available at large libraries. The United States Code and its commercial counterparts are usually available at local libraries. Many statutes (for example, the Social Security Act and the Clean Air Act) are published and updated both in the public law, as amended, version and in the United States Code. For some titles the public law, as amended, is the authoritative version of the statute and not the Code. If the title is asterisked, the Code provides the authoritative version of the public law, as amended. After providing an overview on the basics of federal statutes, this report gives guidance on where federal statutes, in their various forms, may be located on the Internet. This report will be updated periodically.

When a new Congress convenes in January, one of its first orders of business is to receive the annual budget submission of the President. Following receipt of the President's budget, Congress begins the consideration of the budget resolution and other budgetary legislation for the upcoming fiscal year, which starts on October 1. The transition from one presidential administration to another raises special issues regarding the annual budget submission. Which President—the outgoing President or the incoming one—is required to submit the budget, and how will the transition affect the timing and form of the submission? The purpose of this report is to provide background information that addresses these questions. The Budget and Accounting Act of 1921, as amended, requires the President to submit a budget annually to Congress toward the beginning of each regular session (31 U.S.C. §1105a). This requirement first applied to President Warren Harding for FY1923. The deadline for submission of the budget, first set in 1921 as "on the first day of each regular session," has changed several times over the years: in 1950, to "during the first 15 days of each regular session"; in 1985, to "on or before the first Monday after January 3 of each year (or on or before February 5 in 1986)"; and in 1990, to "on or after the first Monday in January but not later than the first Monday in February of each year." The 20 th Amendment to the Constitution, ratified in 1933, requires each new Congress to convene on January 3 (unless the date is changed by the enactment of a law) and provides a January 20 beginning date for a President's four-year term of office. Therefore, under the legal framework for the beginning of a new Congress, the beginning of a new President's term, and the deadline for the submission of the budget, all outgoing Presidents prior to the 1990 change were obligated to submit a budget. The 1990 change in the deadline made it possible for an outgoing President to leave the annual budget submission to his successor, an option which the three outgoing Presidents since then (George H.W. Bush, Bill Clinton, and George W. Bush) took. Because President George H.W. Bush chose not to submit a budget for FY1994 (and was not obligated to do so), President Bill Clinton submitted the original budget for FY1994 rather than budget revisions. Similarly, the budget for FY2002 was submitted by the incoming President George W. Bush, rather than by outgoing President Bill Clinton. The Office of Management and Budget (OMB) provided considerable advance notice of the plan for FY2002. President George W. Bush indicated early on that he would not submit a budget for FY2010. In announcing the decision, then-OMB Director Jim Nussle stated: The FY2010 budget will be submitted by the next President. In order to lay the groundwork for the next Administration, we intend to prepare a budget database that includes a complete current services baseline and to gather information to develop current services program estimates for FY2010 from which the incoming Administration can develop its budget proposals. President Barack Obama submitted an overview of his budget, "A New Era of Responsibility: Renewing America's Promise" on February 26, 2009, two days after delivering an address on his economic and budget plan to a joint session of Congress. He submitted his Appendix , which contained detailed budget information on May 7, 2009, and additional supplemental volumes, including the Analytical Perspectives and the Terminations, Reductions, and Savings volume, on May 11, 2009. Incoming Presidents, except for Warren Harding, Bill Clinton, George W. Bush, and Barack Obama, assumed their position with a budget of their predecessor in place. Under the 1921 act, Presidents may submit budget revisions to Congress at any time. Six incoming Presidents chose to modify their predecessor's budget by submitting revisions shortly after taking office: Dwight Eisenhower, John Kennedy, Richard Nixon, Gerald Ford, Jimmy Carter, and Ronald Reagan. Six incoming Presidents chose not to submit revisions: Calvin Coolidge, Herbert Hoover, Franklin Roosevelt, Harry Truman, Lyndon Johnson, and George H. W. Bush. During the period beginning with the full implementation of the congressional budget process (in FY1977), six transitions of presidential administration have occurred. As Table 1 shows, the three outgoing Presidents required to submit a budget during this period (Gerald Ford, Jimmy Carter, and Ronald Reagan) did so on or before the statutory deadline. The three Presidents who were not required to submit an outgoing budget (George H.W. Bush, Bill Clinton, and George W. Bush) each chose to leave the budget submission to his successor. Once the original budget for a fiscal year has been submitted, a President or his successor may submit revisions at any time. Two incoming Presidents during this period (Jimmy Carter and Ronald Reagan) submitted budget revisions and one (George H.W. Bush) did not. The FY1978 revisions by President Jimmy Carter (a 101-page document) were submitted on February 22 and the FY1982 revisions by President Ronald Reagan (an initial 159-page document and a subsequent 435-page document) were submitted on March 10 and April 7, respectively. In past years, Congress authorized the submission of a budget for a fiscal year after the statutory deadline by enacting a deadline extension in law. For example, the deadlines for submission of the budgets for FY1981, FY1984, and FY1986 were extended from mid-January to late-January or early-February by P.L. 96 - 186 , P.L. 97 - 469 , and P.L. 99 - 1 , respectively. Beginning in the late 1980s, however, several original budgets have been submitted late without authorization. For FY1991, the budget was submitted a week after a deadline that already had been extended by law ( P.L. 101 - 228 ). For FY1989, the budget was submitted 45 days after the deadline without the consideration of any measure granting a deadline extension. The three most recent transition-year budgets (FY1994, FY2002, and FY2010) were submitted 66, 63, and 98 days beyond the deadline, respectively, without the consideration of a measure granting a deadline extension. Presidents Clinton and George W. Bush submitted the original budgets for FY1994 and FY2002 (on April 8, 1993, and April 9, 2001, respectively), and President Obama submitted the FY2010 budget on May 7, 2009. Although Presidents Reagan, Clinton, George W. Bush, and Barack Obama did not submit detailed budget proposals until April or May of their first year in office, each of them advised Congress regarding the general contours of their economic and budgetary policies in special messages submitted to Congress in February. Though President George H. W. Bush did not submit an official revision of President Reagan's FY1990 budget, he submitted a message to Congress that contained many of the same elements as budget revisions that had been submitted by previous incoming Presidents. In conjunction, each incoming President since Ronald Reagan has presented his special message on the budget to a joint session of Congress. Though the three Presidents who were not required to submit an outgoing budget (G.H.W. Bush, Clinton, and G.W. Bush) each chose to leave the budget submission to his successor, Presidents Clinton and George H.W. Bush helped facilitate the development of their successor's budget by providing a "transition budget" volume to Congress. On January 6, 1993, just prior to the inauguration of President Clinton, President George H. W. Bush submitted to Congress a 573-page, single-volume budgetary document, Budget Baselines, Historical Data, and Alternatives for the Future . Instead of constituting a budget in the usual sense, this document provided historical data, baseline budget projections under the status quo, and illustrations of budget projections using alternative economic assumptions and different broad policy outlines. Similarly, on January 16, 2001, President Clinton prepared a "transition budget" for incoming President George W. Bush, FY2002 Economic Outlook, Highlights From FY1994 To FY2001, FY2002 Baseline Projections . The volume was comparable in scope to the one issued for FY1994 by President George H. W. Bush just before he left office, providing revised budget projections and an economic and programmatic update.

At the time of a presidential transition, one question commonly asked is whether the outgoing or incoming President submits the budget for the upcoming fiscal year. Under past practices, outgoing Presidents in transition years submitted a budget to Congress just prior to leaving office, and incoming Presidents usually revised them. Six incoming Presidents—Dwight Eisenhower, John Kennedy, Richard Nixon, Gerald Ford, Jimmy Carter, and Ronald Reagan—revised their predecessor's budget shortly after taking office, while only two Presidents during this period, Lyndon Johnson and George H. W. Bush, chose not to do so. The deadline for submission of the President's budget, which has been changed several times over the years, was set in 1990 as "on or after the first Monday in January but not later than the first Monday in February of each year." The change made it possible for an outgoing President, whose term ends on January 20, to leave the annual budget submission to his successor. The three outgoing Presidents since the 1990 change—George H. W. Bush, Bill Clinton, and George W. Bush—exercised this option. Accordingly, the budget was submitted in 1993, 2001, and 2009 by the three incoming Presidents (Bill Clinton for FY1994, George W. Bush for FY2002, and Barack Obama for FY2010). Before President Barack Obama, the last three incoming Presidents that submitted a budget or revised their predecessor's budget (Ronald Reagan, Bill Clinton, and George W. Bush) did not submit detailed budget proposals during their transitions until early April; however, each of them advised Congress regarding the general contours of their economic and budgetary policies in a special message submitted to Congress in February concurrently with a presentation made to a joint session of Congress. President Barack Obama followed a comparable approach. He delivered an address on his economic and budget plan to a joint session of Congress on February 24, 2009, and submitted an overview document two days later. He submitted his detailed budget proposal on May 7, 2009, and submitted additional supplemental volumes four days later, on May 11, 2009. This report will be updated as developments warrant.

The length of time a congressional staff member spends employed in Congress, or job tenure, is a source of recurring interest among Members of Congress, congressional staff, those who study staffing in the House and Senate , and the public. There may be interest in congressional tenure information from multiple perspectives, including assessment of how a congressional office might oversee human resources issues, how staff might approach a congressional career, and guidance for how frequently staffing changes may occur in various positions. Others might be interested in how staff are deployed, and could see staff tenure as an indication of the effectiveness or well-being of Congress as an institution. This report provides tenure data for 16 staff position titles that are typically used in House Member offices, and information for using those data for different purposes. The positions include the following: Administrative Director Casework Supervisor Caseworker Chief of Staff Communications Director Counsel District Director Executive Assistant Field Representative Legislative Assistant Legislative Correspondent Legislative Director Office Manager Press Secretary Scheduler Staff Assistant Publicly available information sources do not provide aggregated congressional staff tenure data in a readily retrievable or analyzable form. The most recent publicly available House staff compensation report, which provided some insight into the duration which congressional staff worked in a number of positions, was issued in 2010 and relied on anonymous, self-reported survey data. Data in this report are instead based on official House pay reports, from which tenure information arguably may be most reliably derived, and which afford the opportunity to use complete, consistently collected data. Tenure information provided in this report is based on the House's Statement of Disbursements (SOD), published quarterly by the House Chief Administrative Officer, as collated by LegiStorm, a private entity that provides some congressional data by subscription. House Member staff tenure data were calculated for each year between 2006 and 2016. Annual data allow for observations about the nature of staff tenure in House Member offices over time. For each year, all staff with at least one week's service on March 31 were included. All employment pay dates from October 2, 2000, to March 24 of each year are included in the data. Utilizing official salary expenditure data from the House may provide more complete, robust findings than other methods of determining staff tenure, such as surveys; the data presented here, however, are subject to some challenges that could affect the interpretation of the information presented. Tenure information provided in this report may understate the actual time staff spend in particular positons, due in part to several features of the data. Overall, the time frame studied may lead to some underrepresentation in tenure duration. Figure 1 provides potential examples of congressional staff, identified as Jobholders A-D, in a given position. Since tenure data are not captured before October 2, 2000, some individuals, represented as Jobholder A, may have an unknown length of service prior to that date that is not captured. This feature of the data only affects a small number of employees within this dataset, since many tenure periods completely begin and end within the observed period of time, as represented by Jobholders B and C. The data last capture those who were employed in House Members' personal offices as of March 31, 2016, represented as Jobholder D, and some of those individuals likely continued to work in the same roles after that date. Data provided in this report represent an individual's consecutive time spent working in a particular position in the personal office of a House Member. They do not necessarily capture the overall time worked in a House office or across a congressional career. If a person's job title changes, for example, from staff assistant to caseworker, the time that individual spent as a staff assistant is recorded separately from the time that individual spent as a caseworker. If a person stops working for the House for some time, that individual's tenure in his or her preceding position ends, although he or she may return to work in Congress at some point. No aggregate measure of individual congressional career length is provided in this report. Other data concerns arise from the variation across offices, lack of other demographic information about staff, and lack of information about where congressional staff work. Potential differences might exist in the job duties of positions with the same or similar title, and there is wide variation among the job titles used for various positions in congressional offices. The Appendix provides the number of related titles included for each job title for which tenure data are provided. Aggregation of tenure by job title rests on the assumption that staff with the same or similar title carry out the same or 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 the interpretation of their time in a particular position. As presented here, tenure data provide no insight into the education, age, work experience, pay, full- or part-time status of staff, or other potential data that might inform explanations of why a congressional staff member might stay in a particular position. Staff could be based in Washington, DC, district offices, or both. It is unknown whether or to what extent the location of congressional employment might affect the duration of that employment. Tables in this section provide tenure data for selected positions in the personal offices of House Members and detailed data and visualizations for each position. Table 1 provides a summary of staff tenure for selected positions since 2006. The data include job titles, average and median years of service, and grouped years of service for each positon. The "Trend" column provides information on whether the time staff stayed in a position increased, was unchanged, or decreased between 2006 and 2016. Table 2 - Table 17 provide information on individual job titles over the same period. In all of the data tables, the average and the median length of tenure columns provide two different measures of central tendency, and each may be useful for some purposes and less suitable for others. The average represents the sum of the observed years of tenure, divided by the number of staff in that position. It is a common measure that can be understood as a representation of how long an individual remains, on average, in a job position. The average can be affected disproportionately by unusually low or high observations. A few individuals who remain for many years in a position, for example, may draw the average tenure length up for that position. A number of staff who stay in a position for only a brief period may depress the average length of tenure. The median represents the middle value when all the observations are arranged by order of magnitude. Another common measure of central tendency, the median can be understood as a representation of a center point at which half of the observations fall below, and half above. Extremely high or low observations may have less of an impact on the median. Generalizations about staff tenure are limited in at least three potentially significant ways, including: the relatively brief period of time for which reliable, largely inclusive data are available in a readily analyzable form; how the unique nature of congressional work settings might affect staff tenure; and the lack of demographic information about staff for which tenure data are available. Considering tenure in isolation from demographic characteristics of the congressional workforce might limit the extent to which tenure information can be assessed. Additional data on congressional staff regarding age, education, and other elements would be needed for this type of analysis, and are not readily available at the position level. Finally, since each House Member office serves as its own hiring authority, variations from office to office, which for each position may include differences in job duties, work schedules, office emphases, and other factors, may limit the extent to which aggregated data provided here might match tenure in a particular office. Despite these caveats, a few broad observations can be made about staff in House Member offices. Between 2006 and 2016, staff tenure, based on the trend of the median number of years in the position, appears to have increased by six months or more for staff in three position titles in House Member offices. The median tenure was unchanged for 13 positions. This may be consistent with overall workforce trends in the United States. Although pay is not the only factor that might affect an individual's decision to remain in or leave a particular job, staff in positions that generally pay less typically remained in those roles for shorter periods of time than those in higher-paying positions. Some of these lower-paying positions may also be considered entry-level positions in some House Member offices; if so, House office employees in those roles appear to follow national trends for others in entry-level types of jobs, remaining in the role for a relatively short period of time. Similarly, those in more senior positions, which often require a particular level of congressional or other professional experience, typically remained in those roles comparatively longer, similar to those in more senior positions in the general workforce. There is wide variation among the job titles used for various positions in congressional offices. Between October 2000 and March 2016, House and Senate pay data provided 13,271 unique titles under which staff received pay. Of those, 1,884 were extracted and categorized into one of 33 job titles used in CRS Reports about Member or committee offices. Office type was sometimes related to the job titles used. Some titles were specific to Member (e.g., District Director, State Director, and Field Representative) or committee (positions that are identified by majority, minority, or party standing, and Chief Clerk) offices, while others were identified in each setting (Counsel, Scheduler, Staff Assistant, and Legislative Assistant). Other job title variations reflect factors specific to particular offices, since each office functions as its own hiring authority. Some of the titles may distinguish between roles and duties carried out in the office (e.g., chief of staff, legislative assistant, etc.). Some offices may use job titles to indicate degrees of seniority. Others might represent arguably inconsequential variations in title between two staff members who might be carrying out essentially similar activities. Examples include: Seemingly related job titles, such as Administrative Director and Administrative Manager, or Caseworker and Constituent Advocate Job titles modified by location, such as Washington, DC, State, or District Chief of Staff Job titles modified by policy or subject area, such as Domestic Policy Counsel, Energy Counsel, or Counsel for Constituent Services Committee job titles modified by party or committee subdivision. This could include a party-related distinction, such as a Majority, Minority, Democratic, or Republican Professional Staff Member. It could also denote Full Committee Staff Member, Subcommittee Staff Member, or work on behalf of an individual committee leader, like the chair or ranking member. The titles used in this report were used by most House Members' offices, but a number of apparently related variations are included to ensure inclusion of additional offices and staff. Table A-1 provides the number of related titles included for each position used in this report or related CRS Reports on staff tenure. A list of all titles included by category is available to congressional offices upon request.

The length of time a congressional staff member spends employed in a particular position in Congress—or congressional staff tenure—is a source of recurring interest to Members, staff, and the public. A congressional office, for example, may seek this information to assess its human resources capabilities, or for guidance in how frequently staffing changes might be expected for various positions. Congressional staff may seek this type of information to evaluate and approach their own individual career trajectories. This report presents a number of statistical measures regarding the length of time House office staff stay in particular job positions. It is designed to facilitate the consideration of tenure from a number of perspectives. This report provides tenure data for a selection of 16 staff position titles that are typically used in House Member offices, and information on how to use those data for different purposes. The positions include Administrative Director, Casework Supervisor, Caseworker, Chief of Staff, Communications Director, Counsel, District Director, Executive Assistant, Field Representative, Legislative Assistant, Legislative Correspondent, Legislative Director, Office Manager, Press Secretary, Scheduler, and Staff Assistant. House Members' staff tenure data were calculated as of March 31, for each year between 2006 and 2016, for all staff in each position. An overview table provides staff tenure for selected positions for 2016, including summary statistics and information on whether the time staff stayed in a position increased, was unchanged, or decreased between 2006 and 2016. Other tables provide detailed tenure data and visualizations for each position title. Between 2006 and 2016, staff tenure appears to have increased by six months or more for staff in three position titles in House Member offices, based on the trend of the median number of years in the position. For 13 positions, the median tenure was unchanged. These findings may be consistent with overall workforce trends in the United States. Pay may be one of many factors that affect an individual's decision to remain in or leave a particular job. House Member office staff holding positions that are generally lower-paid typically remained in those roles for shorter periods of time than those in generally higher-paying positions. Lower-paying positions may also be considered entry-level roles; if so, tenure for House Member office employees in these roles appears to follow national trends for other entry-level jobs, which individuals hold for a relatively short period of time. Those in more senior positions, where a particular level of congressional or other professional experience is often required, typically remained in those roles comparatively longer, similar to those in more senior positions in the general workforce. Generalizations about staff tenure are limited in some ways, because each House office serves as its own hiring authority. Variations from office to office, which might include differences in job duties, work schedules, office emphases, and other factors, may limit the extent to which data provided here might match tenure in another office. Direct comparisons of congressional employment to the general labor market may have similar limitations. An employing Member's retirement or electoral loss, for example, may cause staff tenure periods to end abruptly and unexpectedly. This report is one of a number of CRS products on congressional staff. Others include CRS Report R43947, House of Representatives Staff Levels in Member, Committee, Leadership, and Other Offices, 1977-2016 and CRS Report R44323, Staff Pay Levels for Selected Positions in House Member Offices, 2001-2014.

Following the 2000 census, Texas was apportioned two additional congressional seats. Subsequently, the state legislature was unable to enact a redistricting map, resulting in litigation and, ultimately, imposition of a court-ordered congressional redistricting plan. The 2002 election was held under the court-ordered plan, resulting in a Democratic majority in the Texas congressional delegation. In October 2003, after the Republican party gained control of the Texas State House of Representatives, and thus, both houses of the legislature, it enacted a new congressional redistricting map with the goal "to increase [Republican] representation in the congressional delegation." The League of United Latin American Citizens (LULAC) and others challenged the new plan in court, alleging various statutory and constitutional violations. The district court entered judgment against LULAC on all claims, and they appealed to the U.S. Supreme Court. As the Court had just issued its decision in Vieth v. Jubelirer , it vacated the district court decision and remanded in light of its holding in Vieth. On remand, the district court again ruled against LULAC, finding that the scope of its consideration was limited to questions of political gerrymandering. In their appeal to the Supreme Court, appellants argued that the new redistricting plan should be invalidated as an unconstitutional partisan gerrymander. League of United Latin American Citizens (LULAC) v. Perry was a consolidation of four appeals before the U.S. Supreme Court. In this ruling, the Supreme Court's nine Justices filed six different opinions, each with subparts. Many issues were raised by the appellants in this case, but the decision primarily addressed two topics: (1) the constitutionality of partisan gerrymandering and (2) whether the Texas redistricting plan violated Section 2 of the Voting Rights Act. While not ruling out the possibility of a claim of unconstitutional partisan gerrymandering being within the scope of judicial review, the Court in LULAC v. Perry was unable to find a sufficient standard for making such a determination. Appellants in LULAC challenged the 2003 mid-decennial Texas redistricting plan on the grounds that it was an unconstitutional political gerrymander motivated by partisan objectives, in violation of equal protection and First Amendment guarantees under the Constitution. They maintained that the plan served no legitimate public purpose and burdened one group because of its political opinions and affiliation. Appellants urged the Court to adopt a rule or presumption of invalidity when a mid-decade redistricting plan is enacted solely for partisan purposes, thereby alleviating the need for courts to inquire about (or for parties to prove) the discriminatory effects of partisan gerrymandering. In evaluating appellants' arguments, the Court first noted that there were indications that "partisan motives did not dictate the plan in its entirety." The Court further determined that ascertaining the legality of an act arising from "mixed motives" can be complicated, and indeed, "hazardous," particularly when the actor is a legislature and the act is a series of choices. Hence, the Court expressed skepticism of a claim seeking to invalidate a statute based on a legislature's unlawful motive without reference to its content. Notwithstanding its skepticism, the Court also found that in order for a claim of unconstitutional partisan gerrymandering to prevail, it must show a burden on complainants' representational rights, "as measured by a reliable standard." Indeed, the Court noted, for this exact reason, a majority of the Vieth Court had rejected a test "markedly similar" to the one proposed by the appellants. In regard to appellants' reliance on the fact that the redistricting plan was enacted mid-decade, the Court announced that the Constitution and the Court's case law "indicate that there is nothing inherently suspect about a legislature's decision to replace, mid-decade, a court-ordered plan with one of its own." Even if there were, the Court commented, "the fact of mid-decade redistricting alone is no sure indication of unlawful political gerrymanders." The Court also observed that the "sole-intent standard" is no more compelling when bolstered by the fact that the redistricting was enacted mid-decade. Appellants proffered a second political gerrymandering theory: that mid-decade redistricting for exclusively partisan purposes violates the Constitution's one-person, one-vote requirement. Citing landmark Supreme Court holdings in Karcher v. Daggett and Kirkpatrick v. Preisler , they observed that population variances among congressional districts are acceptable only if they are "unavoidable," despite good faith efforts to attain complete equality "or for which justification is shown." From that premise, appellants maintained that due to population shifts in Texas since the 2000 census, the 2003 redistricting, which still relied on the 2000 census numbers, created unlawful population variances among the districts. To distinguish the Texas 2003 redistricting plan's reliance on three-year-old census numbers from other, more typical redistricting plans' reliance on three-year-old (or older) census numbers, appellants again highlighted the "voluntary, mid-decade" nature of the redistricting and its "partisan motivation." The Court found that the appellants' theory merely restated their primary argument that it was impermissible for the Texas legislature to redraw the districting map, mid-decade, for solely partisan purposes. Hence, for the same reasons it had originally rejected this argument, the Court once again found it unpersuasive. In its concluding statement, the Court announced: In sum, we disagree with appellants' view that a legislature's decision to override a valid, court-drawn plan mid-decade is sufficiently suspect to give shape to a reliable standard for identifying unconstitutional political gerrymanders. We conclude that appellants have established no legally impermissible use of political classifications. For this reason, they state no claim on which relief may be granted for their statewide challenge. Writing for the Court, Justice Kennedy announced that a majority of the Justices were unable to find a "reliable measure" of what constitutes unconstitutional partisan gerrymandering and therefore determined that the claims presented were not justiciable. Notably, however, a majority of the Court stopped short of concluding that standards a court could use to evaluate such claims do not exist, which left existing Court precedent basically unchanged. In the 2004 Supreme Court case of V ieth v. Jubelirer, a plurality of four justices argued that claims of unconstitutional partisan gerrymandering are not justiciable while another plurality of four justices maintained that such claims are justiciable, but were unable to agree upon a standard that courts could use in order to make such determinations. The deciding vote in Vieth , Justice Kennedy, determined that the claims presented were not justiciable, but left open the possibility that such standards might exist. Similar to its decision in Vieth , the Court in LULAC was also divided into three camps on the issue of whether partisan gerrymandering claims are beyond the scope of judicial review. In LULAC , the same four justices from Vieth argued that claims of unconstitutional partisan gerrymandering are justiciable, while not agreeing upon a standard for adjudicating such claims. Of the four justices in Vieth who believed that such claims are not justiciable, the two who remain on the Court maintained that same position in LULAC . Two justices who joined the Court since its ruling in Vieth , Chief Justice Roberts and Justice Alito, generally agreed with Justice Kennedy's position, leaving open the possibility that the Court might discern a standard for adjudicating unconstitutional partisan gerrymandering claims in a future case. As a result, a majority of the Court in LULAC was unable to find a "reliable measure" of what constitutes an unconstitutional partisan gerrymandering. Therefore, the Court determined that the claims presented in this case were not justiciable, but declined to conclude that standards a court could use to evaluate such claims do not exist. In the aftermath of LULAC , it appears theoretically possible for a claim of unconstitutional partisan gerrymandering to prevail. However, the critical standard that a court could use to ascertain such a determination and grant relief remains unresolved. Appellants in LULAC argued that changes to Texas's congressional District 23 diluted the voting rights of Latinos who remained in the district after the 2003 redistricting, causing the Latino share of the citizen voting-age population to drop from 57.5% to 46%, in violation of Section 2 of the Voting Rights Act. Although the Supreme Court acknowledged the district court's finding that Latino voting strength was unquestionably weakened, the question for the Court was whether it constituted vote dilution. Engaging in a threshold analysis for establishing a Section 2 violation in accordance with its landmark decision, Thornburg v. Gingle s, the Court determined that appellants satisfied all three Gingles requirements; that is, District 23 possessed the requisite cohesion among the Latino minority group, bloc voting among the majority population, and a Latino citizenry that was "sufficiently large and geographically compact to constitute a majority in a single-member district." Nevertheless, the appellee argued that it met its Section 2 obligations by creating a new District 25 as an "offsetting opportunity" district. Noting that it has rejected the premise that a state can compensate for the "less-than-equal" opportunity of some individuals by providing greater opportunity to others, the Court rejected the appellee's argument. Next, as directed by the text of Section 2 of the Voting Rights Act, the Court turned to consider the "totality of the circumstances" to determine whether members of the Latino population have less opportunity than other members of the electorate to participate in the political process and to elect candidates of their choice. The Court determined that changes to District 23 stymied the progress of a racial group that had historically been subject to substantial voting-related discrimination and was increasingly politically active and cohesive. In effect, the Court noted, "the State took away the Latinos' opportunity because Latinos were about to exercise it." The Court further announced that the state "chose to break apart a Latino opportunity district to protect the incumbent congressman from the growing dissatisfaction of the cohesive and politically active Latino community in the district." Then, purporting to compensate for the injury, the state created an entirely new district, combining two groups of Latinos, geographically far apart and representing differing communities of interest. Even assuming that the redrawing of District 23 was close to proportional representation, the Court held that "its troubling blend of politics and race—and the resulting vote dilution of a group that was beginning to achieve §2's goal of overcoming prior electoral discrimination—cannot be sustained." Accordingly, the Supreme Court ruled that District 23 violated Section 2 of the Voting Rights Act because it diluted the voting power of Latinos. This portion of the opinion was written by Justice Kennedy and joined by Justices Souter, Ginsburg, Stevens, and Breyer. After rejecting the statewide challenge to Texas's redistricting as an unconstitutional partisan gerrymander, and holding that congressional District 23 violates Section 2 of the Voting Rights Act, the Supreme Court in LULAC remanded the case for further proceedings. In accordance with the Supreme Court's ruling, on June 29, 2006, a federal district court in Texas ordered parties in the case to submit remedial proposals, including supporting maps and briefs. The court heard oral argument on August 3 and adopted a new plan on August 4 redrawing Texas congressional districts 15, 21, 23, 25, and 28. The court ordered that special elections in the redrawn districts for the 110 th Congress be held in conjunction with the November 7, 2006, general election. As a result of the Court's ruling, commentators have observed other states may dispense with the tradition of redrawing congressional districts only once per decade following the decennial census, and instead, redistrict following a change in political control of the state government. It has also been noted, however, that there does not appear to be any urgency on the part of state legislatures to do so. In the 111 th Congress, H.R. 3025 , the "Fairness and Independence in Redistricting Act of 2009," (Representative Tanner) and S. 1332 , the "Fairness and Independence in Redistricting Act of 2009," (Senator Johnson) are pending. These bills would, among other things, prohibit states from carrying out more than one congressional redistricting after a decennial census and apportionment, unless a court required the state to conduct subsequent redistricting to comply with the Constitution or to enforce the Voting Rights Act; require states to conduct redistricting through the use of independent commissions; and impose standards of compactness, contiguity, and geographical continuity.

In a splintered, complex decision, the U.S. Supreme Court in League of United Latin American Citizens (LULAC) v. Perry largely upheld a Texas congressional redistricting plan that was drawn mid-decade against claims of unconstitutional partisan gerrymandering. The Court invalidated one Texas congressional district, District 23, finding that it diluted the voting power of Latinos in violation of Section 2 of the Voting Rights Act. While not ruling out the possibility of a claim of partisan gerrymandering being within the scope of judicial review, a majority of the Court in this case was unable to find a "reliable" standard for making such a determination. In the 111 th Congress, H.R. 3025 , the "Fairness and Independence in Redistricting Act of 2009," (Representative Tanner) and S. 1332 , the "Fairness and Independence in Redistricting Act of 2009," (Senator Johnson) are pending. These bills would, among other things, prohibit states from carrying out more than one congressional redistricting after a decennial census and apportionment, unless a court required the state to conduct subsequent redistricting to comply with the Constitution or to enforce the Voting Rights Act; require states to conduct redistricting through the use of independent commissions; and impose standards of compactness, contiguity, and geographical continuity.

In the three decades since its enactment, the Clean Air Act (CAA) has seen many skirmishes over how its text should be interpreted. A current, and major, one involves the extent to which a power plant or factory may alter its facilities or operations without bringing about a "modification" of that emissions source. A "modification" turns an existing emissions source into a "new source," which has to meet more stringent air pollution control requirements in the CAA than does an existing source. Legally speaking, the issue is—What changes to an "existing stationary source" of air pollution are significant enough to be a "modification" so as to trigger the CAA's New Source Performance Standards (NSPSs) and pre-construction "new source review" (NSR)? Our topic in this report, however, is narrower. It is the widely used exemption to what constitutes a modification for "routine maintenance, repair, and replacement" (RMRR) at stationary sources. On the meaning of this vague phrase turns considerable sums of money, since routine maintenance, repair, and replacement, by virtue of the exemption, does not require the facility to install the state-of-the-art, often expensive, pollution controls demanded by NSPSs and NSR. This report surveys the original statutory, regulatory, and case law landscape on RMRR, then describes more recent regulatory and judicial developments. In enacting the CAA of 1970, Congress drew a sharp line between existing and new stationary sources of air pollution. For many existing stationary sources, Congress believed, retrofitting the latest air-pollution control technology would not be economically or technologically feasible. But new sources, built as they are after adoption of a new pollution standard, could feasibly install state-of-the-art controls, and given the CAA's goal of cleaning the air and avoiding new pollution problems, it was imperative they do so. So the CAA of 1970 adopted different approaches for existing and new stationary sources. For existing sources of major air pollutants (but not hazardous emissions), states were given wide discretion to set emission ceilings for individual sources. By contrast, for new sources of air pollutants that "may reasonably be anticipated to endanger public health or welfare," EPA itself sets the standards—the earlier-mentioned NSPSs—rather than give the states discretion. NSPSs are strict technology-based standards, set at the emissions rate that can be achieved by use of the best adequately demonstrated technology. The 1977 amendments went further. In areas where the air is either cleaner than national ambient standards require ("Prevention of Significant Deterioration," or PSD, areas) or dirtier than national standards ("nonattainment areas"), proposed "major" new sources must undergo NSR before they can be built. Both PSD-area NSR and nonattainment-area NSR are complex, requiring among other things that the would-be builder obtain a pre-construction permit containing emission limits based on "best available control technology" (PSD areas) or "lowest achievable emission rate" (nonattainment areas). The RMRR issue arises because the CAA says that not only newly constructed stationary sources, but also modifications of existing sources , are subject to NSPSs and NSR. In the act's words, NSPSs apply to any "new source," defined as— any stationary source, the construction or modification of which is commenced after the publication of regulations (or, if earlier, proposed regulations) prescribing a [NSPS] which will be applicable to such source. The PSD and nonattainment-area portions of the act, mandating NSR, are to similar effect. NSR in such areas is triggered by proposals to build either "major" new sources or modifications of existing sources . Enhancing the similarity, the act says that the meaning of "modification" for determining applicability of NSR is the same as for applicability of NSPSs. Thus, the pivotal issue is— Precisely what changes to a stationary source constitute a " modification " ? The CAA defines "modification" as— any physical change in, or change in the method of operation of, a stationary source which increases the amount of any air pollutant emitted by such source or which results in the emission of any air pollutant not previously emitted. To reiterate, this definition determines both which changes in a source are subject to NSPSs, and which trigger NSR. Note that it does not cover just any "physical change ... or change in the method of operation," but only those that result in an increase in emissions . The definition leaves many questions unanswered, as it does not define its component phrases—"physical change," "change in the method of operation," and "increases the amount of any air pollutant." The meaning of each of these phrases has been the subject of litigation. Given that a mere modification triggers NSPSs and NSR, it is unsurprising that an entire "reconstruction" of an existing facility does so as well. EPA defines a "reconstruction" as— replacement of components of an existing facility to such an extent that (1) [t]he fixed capital cost of the new components exceeds 50 percent of the fixed capital cost that would be required to construct a comparable entirely new facility, and (2) [i]t is technologically and economically feasible to meet the applicable [NSPSs]. Observe that in contrast with modifications, a change in a facility can constitute a reconstruction irrespective of whether it increases emissions. But let's return to modifications. EPA's definition of "modification" echoes the act's definition, but also states six kinds of changes in a stationary source the Agency does not consider to be modifications—based on its view that Congress could not have intended that every change at a source, no matter how minor, would subject the source to heightened pollution-control requirements. The most debated of these EPA-developed exceptions is for RMRR—that is: [m]aintenance, repair, and replacement, which the [EPA] Administrator determines to be routine for a source category.... Until recently (see below), EPA regulations did not further specify the kinds of activities included as RMRR. Rather, eligibility for the RMRR exemption was through case-by-case analysis, "weighing the nature, extent, purpose, frequency, and cost of the proposed work, as well as other relevant factors, to arrive at a common sense determination." This case-by-case approach of EPA was approved in the leading case of Wisconsin Electric Power Co. v. Reilly (" WEPCO "). WEPCO had concluded that "extensive renovation" of its generating units was needed and submitted a proposed "life extension" program to the state. Among the renovations proposed were repair and replacement of the turbine generators, boilers, mechanical and electrical auxiliaries, and the common plant support facilities. EPA determined that WEPCO's proposal triggered both NSPS and PSD-area NSR, requiring a permit before construction could begin. Relevant here, EPA dismissed WEPCO's argument that the proposal was RMRR. In WEPCO , the Seventh Circuit ruled that using EPA's case-by-case approach, the agency's ruling that the proposal went beyond RMRR was proper. The extent of the work on the plant, said the court, was substantial and unprecedented. Also, the purpose of the project ("life extension"), its infrequency (only once or twice in the unit's life), and its high cost all pointed to non-routineness. In recent years, the RMRR exemption has assumed center stage. The curtain-raising act was the filing of CAA enforcement actions by the Clinton Administration against electric utilities across the Midwest and South (involving 36 power plants, several owned by TVA), accusing them of making plant changes that exceeded "routine maintenance" without installing the more stringent NSR controls. Following this, in May, 2001, President Bush's National Energy Policy Development Group issued a recommended national energy policy, directing EPA to review the impact of NSR on investment in new utility and refinery generation capacity, energy efficiency, and environmental protection. This resulted in EPA's June, 2002 report to the President on the impact of NSR, which asserted the desirability of specifying certain categories of activities that categorically qualify as "routine maintenance." On December 31, 2002, EPA published final regulations that affect how, for NSR purposes, sources are to calculate emission increases resulting from a change, and that amend other features of its NSR rules. More relevant here, EPA on the same day proposed a rule purporting to clarify the RMRR exception in the manner recommended in its report—by specifying activity categories that will be considered RMRR without regard to other considerations. EPA v. Whitman. While this RMRR proposal was pending, the Eleventh Circuit rendered its long-awaited decision in EPA v. Whitman . Whitman arose when the EPA determined that the TVA violated the CAA through various rehabilitation projects at its coal-fired electric power plants that went beyond RMRR, but were undertaken without permits. It embodied this determination in an administrative compliance order (ACO). The ACO was affirmed by EPA's Environmental Appeals Board, which also endorsed the agency's multi-factor test for RMRR applied in WEPCO . The Eleventh Circuit, however, found that although the CAA empowers EPA to issue ACOs with the status of law, the CAA was unconstitutional to the extent that severe civil and criminal penalties can be imposed by a court for noncompliance with such an agency order, generally issued without an adjudication. Rather, EPA must prove the CAA violation in district court . Hence, the court held, TVA was free to violate the ACOs here without fear of penalty. Note that this decision, important as it is to enforcement of the RMRR exception, did not speak to the contours of the exception itself. The October, 2003 final rule. The contours of RMRR were significantly reshaped, however, when EPA in October, 2003 finalized its equipment-replacement rule proposal of the previous December. The final rule declares a set of equipment replacement activities that will be viewed as per se RMRR, in contrast to the old case-by-case approach. According to the regulatory preamble, the new approach is "intended to provide greater regulatory certainty without sacrificing the current level of environmental protection...." and addresses the criticism that the case-by-case approach "hamper[s] activities important to assuring the safe, reliable, and efficient operation of existing plants." (The new rule represented final action on only part of the agency's December, 2002 proposal. For the moment, EPA is not taking action on the proposed annual maintenance, repair, and replacement "allowance." The allowance was an annual maintenance cost allowance established for each facility based on an industry-specific percentage.) The new rule specifies that the replacement of components of a process unit with identical components or their functional equivalents constitutes RMRR, provided the replacement cost (including related costs such as labor and equipment rentals) is less than 20% of the current replacement value of the process unit of which the component is a part, the replacement does not change the unit's basic design parameters, and the unit continues to meet enforceable emission limitations and any operational limitations that constrain emissions. The agency acknowledges that the new approach will allow replacement of components under more circumstances than the former case-by-case approach—the key trigger of the controversy over the new rules. The former approach remains available as an "alternative and/or supplement," but it is anticipated that the higher thresholds of the new per se approach will make resort to the case-by-case approach uncommon. Finally, the new rule imposes no recordkeeping requirements, on the belief that records normally kept by a business, together with EPA's broad CAA authority to inspect facilities, will allow proper enforcement. The new rule applies only to conduct after the rule's effective date, and thus does not constitute a defense to pending CAA enforcement actions based on failure to meet RMRR. State of New York v. Environmental Protection Agency. In multiple lawsuits filed in the D.C. Circuit, fifteen states (mostly in the Northeast, plus California, Illinois, New Mexico, Wisconsin, and the District of Columbia), plus several localities and environmental groups, argue that the equipment-replacement RMRR rule goes beyond EPA's authority under the CAA. These suits have been consolidated under the name State of New York v. Environmental Protection Agency . On December 24, 2003, the court granted petitioners' motion to stay the rule pending the court's full review. "Petitioners," said the court, "have demonstrated the irreparable harm and likelihood of success on the merits" required for the issuance of such a stay. Because stays pending review are not often granted, one may assume that this judicial statement betokens an uphill climb by EPA in defending the rule. With the new rule thus suspended (it was to have taken effect on December 26, 2003), the old case-by-case approach continues to apply. The court on December 24 also declined to consolidate the above actions with another group of consolidated cases that challenged the December, 2002 final rule. It did agree, however, to designate the same panel for the equipment-replacement rule cases as has been assigned for the December, 2002 final rule cases, due to the related nature of the two groups of cases.

A major Clean Air Act issue is the extent to which an existing power plant or factory may be altered without effecting a "modification." A "modification" of an existing air pollution source is subject to the act's stringent air pollution control requirements for new sources. The topic of this report is a widely used exemption to "modification" allowing changes that constitute "routine maintenance, repair, and replacement" without triggering such stringent requirements. The report surveys the original legal landscape surrounding this exemption—in the contexts of determining applicability of New Source Performance Standards, and New Source Review in Prevention of Significant Deterioration and nonattainment areas. It then summarizes the many significant developments during the current Bush Administration, both in the Federal Register and in the courts. This report will be updated as events warrant.

This report is an overview of the FY2010 appropriations for the Department of Homeland Security (DHS) programs that are designed to provide assistance to state and local governments, and public and private entities, such as ports. These programs are primarily used by first responders, which include firefighters, emergency medical personnel, emergency managers, and law enforcement officers. Specifically, the appropriations for these programs provide for grants, training, exercises, and other support to states, territories, and tribal and joint jurisdictions to prepare for terrorism and major disasters. The programs are administered by two different organizations within the Federal Emergency Management Agency: the Grant Programs Directorate (GPD) and the National Preparedness Directorate (NPD). This report will be updated to reflect appropriated funding for these programs in FY2010. GPD is responsible for administering the State and Regional Preparedness Program and the Metropolitan Statistical Area (MSA) Preparedness Program. The State and Regional Preparedness Program includes seven programs intended to provide resources to support preparedness projects and activities that build state and local homeland security capabilities as outlined in the National Preparedness Guidelines, the Target Capabilities List, and the National Strategy for Homeland Security of 2007. The State and Regional Preparedness Program includes: State Homeland Security Grant Program (SHSGP); Firefighter Assistance Grants Program (FIRE); Driver's License Security Grants Program (DLSGP, formerly known as REAL ID); Citizen Corps Grant Program (CCP); Interoperable Emergency Communications Grant Program (IECGP); Regional Catastrophic Preparedness Grant Program (RCPGP); Medical Surge Grant Program (MSGP); and Emergency Management Performance Grants (EMPG). The Metropolitan Statistical Area Preparedness Program is specifically designed to provide assistance to high-threat, high-risk urban areas, and critical infrastructure (primarily transportation infrastructure). The Metropolitan Statistical Area Preparedness Program includes: Urban Area Security Initiative (UASI); and Transportation Infrastructure Protection (including port, rail/transit, bus, and Buffer Zone Protection security programs). NPD is responsible for administering the Training, Measurement, and Exercise Programs, which fund state and local preparedness exercises, training, technical assistance activities and evaluations. In FY2010 this account funds the National Exercise Program (NEP), State and Local Training Programs, Technical Assistance (TA) Programs, and Evaluations and National Assessments. Congress appropriated approximately $4.2 billion for DHS programs for state and locality homeland security in FY2010. Conferees also established limits on the amount FEMA and grantees can use funding for management and administration costs. See Table 1 below for FY2009 and FY2010 funding levels. Additionally, Table 1 provides information on the Administration's FY2010 budget request, and the House- and Senate-passed versions of the FY2010 DHS appropriations. Even though Congress has appropriated funding for FEMA's grant programs, Congress could elect to address three issues when considering appropriating future funds for DHS's state and local assistance programs. The first issue is the overall reduction in funding for state and local assistance programs, the second issue is the allocation method DHS uses to determine state and local grant awards, and the third issue is the reduction in appropriations for the Assistance to Firefighters Program. One issue that has been debated annually by Congress is the overall amount to be appropriated for these programs. In FY2010, the Administration proposed to reduce the overall funding for these programs by $909 million. The House-passed version of H.R. 2892 proposed to reduce the overall funding for these programs in FY2010 by $817 million and the Senate-passed version of H.R. 2892 proposed a reduction of $559 million. With the enactment of the FY2010 DHS appropriations, Congress determined to fund FEMA programs with an approximate appropriation total of $4.2 billion, which was a reduction of $610 million from the amount appropriated in FY2009. As stated earlier in this report, this reduction is either the result of the elimination of funding for some grant programs or through the reduction of funding for others. In the past eight years, Congress has appropriated an approximate total of $33 billion for state and local homeland security assistance with an average annual appropriation of $3.7 billion. In FY2009 Congress appropriated a high total of funding of $4.78 billion; the lowest appropriated amount was $1.43 billion in FY2002. Some might argue that since over $33 billion has been appropriated and allocated for state and local homeland security, jurisdictions should have met their homeland security needs. This point of view could lead one to assume that Congress should reduce funding to a level that ensures states and localities are able to maintain their homeland security capabilities, but doesn't fund new homeland security projects. Additionally, some may argue that states and localities should assume more responsibility in funding their homeland security projects and the federal government should reduce overall funding. This, however, may be difficult due to the present state and local financial circumstances. Another argument for maintaining current funding levels is the ever changing terrorism threat and the constant threat of natural and accidental man-made disasters. As one homeland security threat (natural or man-made) is identified and met, other threats develop and require new homeland security capabilities or processes. Some may also argue that funding amounts should be increased due to what appears to be an increase in natural disasters and their costs. Another potential issue of debate is how grant program funding is distributed to states and localities. Specifically, Congress may want to continue to address the funding distribution methodologies to ensure states and localities meet their homeland security needs. This issue has garnered Congress' attention the most over the past eight years, with the issue addressed in P.L. 110-53 in January 2007. Specifically, P.L. 110-53 required that SHSGP and UASI allocations be based entirely on risk; however, SHSGP recipients were guaranteed a minimum amount annually through 2012. This funding debate has been primarily focused on SHSGP and UASI; funding allocation methodologies for the majority of GPD and NPD programs have not been discussed during this debate. Some observers have criticized the guaranteed minimum allocation for SHSGP and the continued use of population as a key variable for other grant program distribution methodologies (for such grant programs as Emergency Management Performance Grants and Citizen Corps Programs). For example, the National Commission on Terrorist Attacks Upon the United States (9/11 Commission) recommended that all homeland security assistance be allocated based only on risk. Since P.L. 110-53 required DHS to guarantee a minimum amount of SHSGP funding to states, it could be argued that the law did not meet the 9/11 Commission recommendation. On the other hand, some might contend that the statue requires funds to be allocated on the basis of risk but with a floor that provides a guaranteed minimum. While the 9/11 Commission criticized the allocation of federal homeland security assistance and recommended that the distribution not "remain a program for general revenue sharing," commissioners acknowledged that "every state and city needs to have some minimum infrastructure for emergency response." The 9/11 Commission also recommended that state and local homeland security assistance should "supplement state and local resources based on the risks or vulnerabilities that merit additional support." In a policy document published prior to his inauguration, President Obama stated, in what arguably is in agreement with the 9/11 Commission, that homeland security assistance should be based solely on risk. Due to this criticism, Congress may wish to consider conducting oversight hearings on how DHS allocates homeland security funding to jurisdictions. Instead of guaranteed minimums, Congress could require that DHS allocate funding based solely on risk. This option, however, might result in some jurisdictions receiving no or limited allocations. Arguably, a risk assessment process used to allocate homeland security assistance would determine that every state and locality has some risk, whether terrorism or natural disaster related, and needs some amount of funding. Such a process, however, would require DHS to evaluate state and local capabilities (currently DHS relies primarily on grant recipient self evaluations), vulnerabilities, and risk in a manner that accurately reflects the nation's current homeland security environment. For FY2010, the Administration proposed $170 million for Assistance to Firefighter Grants (AFG), a 70% decrease from the FY2009 level, and $420 million for SAFER (Staffing for Adequate Fire and Emergency Response Firefighters), double the amount appropriated in FY2009. The total amount requested for firefighter assistance (AFG and SAFER) was $590 million, a 24% decrease from FY2009. The FY2010 budget proposal stated that the firefighter assistance grant process will give priority to applications that enhance capabilities for terrorism response and other major incidents. AFG grants are used primarily for firefighting equipment, while SAFER grants are used for hiring (by career departments) and recruitment/retention (by volunteer departments). The $170 million request for AFG would have been the lowest level for the program since FY2001, the program's initial year. On the other hand, the proposed doubling of the SAFER budget to $420 million would have been the highest level for this program since its inception. In evaluating the budget proposal, Congress may assess whether there is an appropriate balance between funding for firefighter equipment and hiring/recruitment. House-passed H.R. 2892 provided $800 million for firefighter assistance, including $390 million for AFG and $420 million for SAFER. Although the SAFER level matches the Administration's request, the AFG level is more than twice what the Administration proposed. According to the House committee report, the Administration's request of $170 million for AFG "is woefully inadequate given the vast needs of fire departments across the nation for equipment." The committee directed FEMA to continue granting funds to local fire departments, include the United States Fire Administration in the grant decision process, and maintain an all-hazard focus while granting eligibility for activities such as wellness. Senate-passed H.R. 2892 provided $810 million for firefighter assistance, including $390 million for AFG and $420 million for SAFER. The committee directed DHS to continue funding applications according to local priorities and priorities established by the United States Fire Administration, and to continue direct funding to fire departments through the peer review process. P.L. 111-83 provided $390 million for AFG and $420 million for SAFER, identical to the levels in both the House and Senate-passed bills. The Conference Agreement directed FEMA to continue the present practice of funding applications according to local priorities and those established by the USFA, to maintain an all-hazards focus, to grant funds for eligible activities in accordance with the authorizing statute, and to continue the current grant application and review process as specified in the House report.

Since FY2002, Congress has appropriated more than $33 billion for homeland security assistance to states, specified urban areas and critical infrastructures (such as ports and rail systems), the District of Columbia, and U.S. insular areas. The Grant Programs Directorate and the National Preparedness Directorate, within the Federal Emergency Management Agency, administer these programs for the Department of Homeland Security. Each assistance program has either an all-hazards purpose or a terrorism preparedness purpose. These programs are primarily used by first responders, which include firefighters, emergency medical personnel, emergency managers, and law enforcement officers. Specifically, the appropriations for these programs provide for grants, training, exercises, and other support to states, territories, and tribal and joint jurisdictions to prepare for terrorism and major disasters. This report provides information on enacted FY2009 and FY2010 funding for these grant programs. It also identifies potential issues Congress may wish to address. The report will be updated when congressional or executive branch actions warrant.

Peru has had a turbulent political history, alternating between periods of democratic and authoritarian rule. Political turmoil dates back to Peru's traumatic experience during the Spanish conquest, which gave rise to the economic, ethnic and geographic divisions that characterize Peruvian society today. Since its independence in 1821, Peru has had 13 constitutions, with only nine of 19 elected governments completing their terms. Peru's most recent transition to democracy occurred in 1980 after 12 years of military rule. The decade that followed was characterized by a prolonged economic crisis and the government's unsuccessful struggle to quell a radical Maoist guerrilla insurgency known as the Shining Path (Sendero Luminoso). In 1985, leftist Alan García of the American Popular Revolutionary Alliance (APRA) was elected president. During his first term (1985-1990) García's antagonistic relationship with the international financial community and excessive spending on social programs led to hyperinflation. His security policies were unable to defeat the Shining Path. By 1990, the Peruvian population was looking for a change and found it in the independent candidate Alberto Fujimori. Once in office, Fujimori implemented an aggressive economic reform program and stepped up counterinsurgency efforts. When tensions between the legislature and Fujimori increased in 1992, he initiated a "self coup," dissolving the legislature and calling a constituent assembly to write a new constitution. This allowed him to fill the legislature and the judiciary with his supporters. President Fujimori was re-elected in 1995, but his popularity began to falter as the economy slowed and civic opposition to his policies increased. He was increasingly regarded as an authoritarian leader, due in part to the strong-handed military tactics his government used to wipe out the Shining Path that resulted in serious human rights violations. President Fujimori won a third term in 2000, but the elections were marred by irregularities. Within weeks of taking office, a bribery scandal broke that, combined with allegations of human rights violations committed by his top aides, forced Fujimori to agree to call new elections in which he would not run. An interim government served from November 22, 2000 to July 28, 2001, when the newly-elected government of Alejandro Toledo took office. Toledo's presidency (2001-2006) was characterized by extremely low approval ratings but high economic growth rates; 5.9% in 2005 and 8% in 2006. Toledo was able to push through several reforms, including a tax reform measure and a free trade agreement with the United States. Despite the economic improvements, Toledo's presidency was marred by allegations of corruption and recurrent popular protests. On June 4, 2006, former President Alan García defeated populist Ollanta Humala 53% to 47% in a close election. García won in the second round after garnering support from Peru's business community, which had been reluctant to support him in the first round. A retired army officer who led an October 2000 uprising against then-President Alberto Fujimori, Humala espoused nationalist, anti-globalization policies. Many observers were concerned that Humala had authoritarian tendencies. Now the opposition leader in Peru's Congress, Humala was charged in August 2006 with murder in connection to his military actions in the 1990s. In the legislative elections, Humala's alliance won 45 of the 120 seats in the unicameral Congress; García's party APRA won 36 seats, the center-right National Unity coalition captured 17 seats, and Fujimori supporters won 13 seats. President Alan García has taken steps to assure the international financial community that he is running Peru as a moderate rather than as the leftist he had been in his early career. Since initiating his political comeback in 2001, when he made an unsuccessful bid for the presidency against Alejandro Toledo, García has softened his populist rhetoric and apologized for his earlier errors. President García seems to have embraced sound economic policies, and the Peruvian economy has continued to perform well. However, his government has faced periods of social unrest and popular protests over lingering concerns about poverty and inequality. García's approval ratings have varied widely, reaching a high of 76% in August 2007 after his response to an 8.0 earthquake that killed at least 519 Peruvians, and then falling to 29% in November after a series of corruption scandals in his government. García has made solidifying relations with the United States a top priority and shown himself to be a strong U.S. ally and a leading supporter of free trade in Latin America. Key political challenges facing the García administration include: Reducing poverty and inequality. According to the World Bank, the wealthiest 10% of the Peruvian population control 41% of the country's income whereas the poorest 10% control just 1% of the income. In recent years, Peru has seen rising popular demands for a solution to economic inequality. Poverty is more prevalent among indigenous households at 63% compared to 43% among non-indigenous households. President García has pledged to increase public investment and social spending in order to reduce poverty and inequality, but has struggled to meet popular expectations. Fujimori Trials. In December 2007, the main trial began against former President Fujimori who is accused of corruption and human rights abuses. While most Peruvians feel that Fujimori ought to be prosecuted for his past crimes, many also feel that the possible punishment he faces – up to 30 years in prison and a fine of $33 million – is too harsh. As the trial continues, President García may lose the support of the Fujimorista bloc in the Peruvian Congress, which he relies on to pass legislation, as well as popular support. In a separate case, also in December, a judge sentenced Fujimori to six years in prison for ordering an illegal search of a private residence during his last days in office. Counternarcotics policies. The government has increasingly relied on forced eradication to reach its coca eradication targets, which has in turn produced violent clashes between coca farmers and police. In 2006, the government eradicated 12,688 hectares of coca, making it the second year in a row that it surpassed its goal of eradicating 10,000 hectares. Former Shining Path guerillas have reportedly been involved in coca growing and in providing security for drug-traffickers in Peru. President García has continued the pro-market economic policies of his predecessor, Alejandro Toledo, who presided over one of the highest economic growth rates in Latin America throughout his term, with 8% growth in 2006. García has embraced the U.S.- Peru Trade Promotion Agreement (PTPA), appointed a fiscally conservative finance minister, and cut government pay. Economic growth has been fueled by Peru's strong exports of minerals, textiles, and agricultural products such as sugarcane, potatoes, and asparagus. Peru is the world's second largest producer of silver and sixth largest producer of both gold and copper. It is also a significant producer of zinc and lead. The Peruvian economy has been boosted by U.S., Brazilian and Argentine investments in the Camisea natural gas project, which by 2009 is expected to be exporting liquified natural gas to the United States and Mexico. President García has sought to reassure poor Peruvians that he is addressing their needs by pledging austerity measures such as halving the Government Palace's annual spending and redirecting the funds to a rural irrigation project. García says he will also find ways to use trade to reduce the level of poverty in Peru and widen income distribution. His government is seeking to boost rural development by increasing its investments in road construction, sanitation projects, and water connections. Peru enjoys strong ties with the United States, characterized by extensive economic linkages and significant counternarcotics and security cooperation. Since the presidency of Alejandro Toledo in 2001, Peru has focused on strengthening those ties. Some 200,000 U.S. citizens visit Peru annually and over 400 U.S. companies are represented in Peru. President García met with President Bush at the White House in October 2006 and again on April 23, 2007, at which time the leaders discussed their shared commitment to fighting the production and consumption of illicit drugs and to securing congressional approval of the PTPA. On December 14, 2007, Presidents Bush and Garcia met again for the signing of H.R. 3688 , the implementation bill for the PTPA. Issues in U.S.-Peruvian relations include democratic development, human rights, counternarcotics, and trade issues, which are at the forefront of the bilateral agenda. The United States provided $141.7 million in foreign aid to Peru in FY2006 and another estimated $138.9 million in FY2007. The FY2008 request for Peru is for $93.2 million, with the most significant cuts occurring in counternarcotics funds traditionally provided through the Andean Counterdrug Initiative (ACI). Beginning in FY2008, alternative development programs previously supported by ACI funds will be shifted to the Economic Support Fund (ESF) account. ACI has been the primary U.S. assistance program to help Colombia and its neighbors address drug trafficking and related economic development issues. The Consolidated Appropriations Act for FY2008 ( H.R. 2764 / P.L. 110-161 ) stipulates that funding from the Development Assistance and Global Health and Child Survival (formerly Child Survival and Health) accounts be made available for Peru at no less than the amount allocated in FY2007. It also provides funding for environmental programs in Peru at FY2006 levels. The joint explanatory statement to the Consolidated Appropriations Act recommends providing $30 million in Economic Support Funds and $36.8 million in ACI funds to Peru in FY2008. The U.S. Agency for International Development has four main goals for Peru: strengthening democracy; increasing governance in isolated areas where drug traffickers operate; reducing poverty; and decreasing maternal mortality and other health threats. Peru was recently selected to participate in the Millennium Challenge Account (MCA) Threshold Program. That program will focus on combating corruption, strengthening the rule of law, and improving resource management in Peru. The government of Peru has taken steps to expand and enforce its labor laws and to prosecute those accused of past and current human rights violations. According to Human Rights Watch, while the Peruvian government has made some progress in holding those accused of past abuses responsible for their actions, many are still able to avoid prosecution. The State Department's Country Reports on Human Rights Practices covering 2006 says that while the Peruvian government generally respects the rights of its citizens, ongoing problems include abuse of detainees and inmates by police and prison guards; poor prison conditions; trafficking in persons; child labor in the informal sector; and failure to enforce labor laws, among others. Human rights groups have also expressed concerns that a law passed in December 2006 to regulate the activities of non-governmental organizations operating in Peru unnecessarily restricts freedom of expression and association in the country. Peru is a major illicit drug-producing and transit country, accounting for 28% of global cocaine production. In 2006, according to United Nations figures, coca cultivation increased by 7% in Peru even though the government increased its coca eradication efforts by 4% from 2005 levels. The United States and Peru signed a five-year cooperative agreement for 2002-2007 that links alternative development to coca eradication more directly than past programs have. Peru is the second largest coca cultivating country in the world after Colombia, but receives less than one quarter of the funding Colombia receives through the Andean Counter Drug Initiative. In FY2008, counternarcotics assistance to Peru is estimated to total $66.8 million, down from the $106.5 million allocated in FY2006, and an estimated $103.3 million in counternarcotics funding provided in FY2007. Recent aid reductions appear to be due to overall budget cutbacks rather than any U.S. government dissatisfaction with Peru's counternarcotics efforts. The United States is Peru's largest trading partner. Since December 2001, exports from Peru have received preferential duty treatment through the Andean Trade Preference Act (ATPA), later amended by the Andean Trade Promotion and Drug Eradication Act (ATPDEA) in August 2002. These trade preferences were scheduled to end on December 31, 2006. However, the acts have been extended twice, and are now scheduled to expire on February 29, 2008. ATPDEA gives duty-free market access to selected Peruvian goods without requiring reciprocal trade concessions or addressing issues such as intellectual property rights. On December 7, 2005, the United States and Peru concluded negotiations on the U.S.-Peru Trade Promotion Agreement (PTPA). President Bush notified the Congress of the United States' intention to enter into the PTPA on January 6, 2006, and the agreement was signed on April 12, 2006. The PTPA was ratified by the Peruvian legislature in June 2006. Whereas the ATPDEA provides temporary trade preferences to some goods from Peru, the PTPA is a comprehensive trade agreement that will permanently eliminate tariffs and other barriers on U.S.-Peru bilateral goods and services trade. After several Members of Congress indicated that some of the provisions in the agreement would have to be strengthened, the Bush Administration and Congress reached an agreement on May 10, 2007 on a new trade framework that includes core labor and environmental standards. On June 27, 2007, Peru's Congress approved the amendments to the PTPA. PTPA implementing legislation ( H.R. 3688 ) passed the House on November 8, 2007, by a vote of 285 to 132; the Senate on December 4 by a vote of 77 to 18; and was signed by President Bush on December 14, ( P.L. 110-138 ). During its second session, the 110 th Congress is likely to be interested in implementation of the PTPA.

Peru, a coca-producing country in the Andean region of South America, has had a turbulent political history. Despite its tumultuous past, Peru has recently taken steps to consolidate its democracy and pursue market-friendly economic policies. For the past seven years, Peru, a leading mineral exporter, has posted some of the fastest economic growth rates in Latin America. GDP growth reached 8% in 2007. In June 2006, former president Alan García (1985-1990) was elected president in a close race. After taking office, García embraced the United States-Peru Trade Promotion Agreement (PTPA), which the two countries signed on April 12, 2006 and the Peruvian legislature ratified in June 2006. PTPA implementing legislation ( H.R. 3688 ) passed the House on November 8, 2007, by a vote of 285 to 132; the Senate on December 4 by a vote of 77 to 18; and was signed by President Bush on December 14, ( P.L. 110-138 ). In addition to trade matters, congressional interest in Peru focuses on human rights issues and counternarcotics cooperation. See CRS Report RL34108, U.S.-Peru Economic Relations and the U.S.-Peru Trade Promotion Agreement and CRS Report RS22521, Peru Trade Promotion Agreement: Labor Issues . This report will be updated periodically.

Conscience clause laws allow medical providers to refuse to provide services to which they have religious or moral objections. These laws are generally designed to reconcile "the conflict between religious health care providers who provide care in accordance with their religious beliefs and the patients who want access to medical care that these religious providers find objectionable." Although conscience clause laws have grown to encompass protections for entities that object to a wide array of medical services and procedures, such as providing contraceptives or terminating life-support, the original focus of conscience clause laws was on permitting health care providers to refuse to participate in abortion or sterilization procedures on religious or moral grounds. In 1973, Congress passed the first conscience clause law, commonly referred to as the Church Amendment, in response to the U.S. Supreme Court's decision in Roe v. Wade and a U.S. district court decision that enjoined a Catholic hospital from prohibiting a physician from performing a sterilization procedure at the facility. During consideration of the Church Amendment, Senator Frank Church explained the need for the conscience clause, stating, "It clears up any ambiguity in the present law by making it explicitly clear that it is not the intention of Congress to mandate religious hospitals to perform operations that are contrary to deeply held religious beliefs." The Church Amendment provides that individuals or entities that receive grants, contracts, loans, or loan guarantees under the Public Health Service Act (PHSA), the Community Mental Health Centers Act, or the Developmental Disabilities Services and Facilities Construction Act may not be required to perform abortions or sterilization procedures or make facilities or personnel available for the performance of such procedures if such performance "would be contrary to [the individual or entity's] religious beliefs or moral convictions." The Church Amendment also prohibits entities that receive federal funds under the specified statutes or under a biomedical or behavioral research program administered by the Department of Health and Human Services (HHS) from engaging in employment discrimination against doctors or other medical personnel who either perform abortions or sterilization procedures or who refuse to perform such services on moral or religious grounds. By 1978, five years after the Court's decision in Roe , virtually all of the states had enacted conscience clause legislation in one form or another. From 1978 to 1996, there was a lull in conscience clause activity, with one exception. When Congress enacted the Civil Rights Restoration Act in 1988, it adopted the Danforth Amendment, which mandates neutrality with respect to abortion. Specifically, the amendment clarifies that Title IX of the Education Amendments of 1972, which prohibits sex discrimination in federally funded education programs, may not be construed to prohibit or require any individual or entity to provide or pay for abortion-related services, nor may it be construed to permit the imposition of a penalty on any person who has sought or received abortion-related services. Nearly a decade after the Danforth Amendment, Congress passed additional conscience provisions in the Omnibus Consolidated Rescissions and Appropriations Act of 1996. Under the act, which added Section 245 to the PHSA, the federal government and state and local governments are prohibited from discriminating against health care entities that refuse to undergo abortion training, provide such training, perform abortions, or provide referrals for the relevant training or for abortions. Section 245 protects doctors, medical students, and health training programs from being denied federal financial assistance or a license or certification that they would otherwise receive but for their refusal to provide abortion services or training. One year after passing the 1996 omnibus legislation, Congress again revisited the abortion conscience clause issue when it approved the Balanced Budget Act of 1997. Concerned that managed care plans might seek to prevent doctors from informing patients about medical services not covered by their health plans, Congress amended the federal Medicare and Medicaid programs to prohibit managed care plans from restricting the ability of health care professionals to discuss the full range of treatment options with their patients. The legislation, however, simultaneously exempted managed care providers under these programs from the requirement to provide, reimburse for, or provide coverage of a counseling or referral service if the managed care plan objects to the service on moral or religious grounds. Thus, a Medicare and Medicaid managed care plan cannot prevent providers from providing abortion counseling or referral services, but it can refuse to pay providers for providing such information, although the plan must notify new and existing enrollees of such a policy if it does indeed have one. The effect of the 1997 legislation was to extend the coverage of conscience clause laws beyond the individuals who provide medical care to the companies that pay for such care under the Medicare and Medicaid programs. The law allows Medicare and Medicaid-funded health plans to refuse to provide counseling and referral for abortion-related services. Earlier conscience clause laws permitted providers to opt out only of the actual provision of such services. The 1997 legislation would appear to have a broader impact than the 1973 Church Amendment, both in terms of its effect on the entities that may refuse to provide abortion services and on the individuals who wish to access such services. In a similar vein, recent abortion bills introduced in Congress have proposed changes that would expand the scope of current conscience clause laws. This legislation is discussed in the next section. The Abortion Non-Discrimination Act (ANDA) has been introduced in every Congress since the 107 th Congress. In general, ANDA would amend the nondiscrimination provision in the PHSA to expand the definition of the term "health care entity" to include hospitals, provider-sponsored organizations, health maintenance organizations (HMOs), health insurance plans, or any other kind of health care facility, organization, or plan. Supporters of ANDA maintain that expanding the definition of "health care entity" is necessary because some state legislatures and courts have weakened existing conscience clause protections, which proponents view as critical to shielding religious hospitals and other medical providers that oppose abortion. Opponents contend, however, that ANDA would impose serious restrictions on a woman's access to abortion. Critics also argue that ANDA would allow providers to drop abortion coverage not only for moral or religious reasons, but also for financial reasons, such as the desire to save money by reducing coverage. Although ANDA has not been considered by recent Congresses, conscience clause provisions with similar language were inserted in the FY2005, FY2006, and FY2008 appropriations measures for the Departments of Labor, HHS, and Education. These provisions are commonly referred to as the Weldon Amendment because they were added to the FY2005 appropriations measure following the adoption of an amendment offered by Representative Dave Weldon. The language used in the appropriations measures has remained the same since 2004. The provisions state: None of the funds made available in this act may be made available to a Federal agency or program, or to a State or local government, if such agency, program, or government subjects any institutional or individual health care entity to discrimination on the basis that the health care entity does not provide, pay for, provide coverage of, or refer for abortions. The Weldon Amendment defines the term "health care entity" to include "an individual physician or other health care professional, a hospital, a provider-sponsored organization, a health maintenance organization, a health insurance plan, or any other kind of health care facility, organization, or plan." The Weldon Amendment prevents the federal government and state and local governments from enacting policies that require health care entities to provide or pay for certain abortion-related services. In addition, the Weldon Amendment increases both the number and type of health care providers and professionals who could refuse to provide abortion training or services without reprisals. For example, prior law protected only individual doctors or medical training programs that did not provide abortions or abortion training, and appeared to apply primarily in the medical education setting or to doctors in their individual practices. In contrast, the appropriations provisions allow large health insurance companies and HMOs to refuse to provide coverage or pay for abortions. Because an HMO's refusal to provide abortion-related services would affect a much larger number of patients than an individual doctor's refusal to provide such services, the Weldon Amendment has the potential of denying abortion-related services to a significantly expanded number of individuals. Although the Weldon Amendment language is similar to the proposed ANDA, it differs in two important respects. First, ANDA would deny all federal funds to entities that engage in abortion-related discrimination. The Weldon Amendment, however, denies only those funds available under the annual Labor, HHS, and Education appropriations measure. Second, the passage of ANDA would result in permanent legislation, while the Weldon Amendment language remains in effect for only the relevant fiscal years. Thus, although the Weldon Amendment expands prior law, it provides for smaller penalties and is temporary in nature. On December 19, 2008, HHS issued a new rule to implement the Church Amendment, Section 245 of the PHSA, and the Weldon Amendment. The new rule provides definitions for some of the terms used in the conscience protection laws, establishes a written certification of compliance requirement for recipients of federal health care funds, and identifies HHS's Office of Civil Rights as the entity responsible for complaint handling and investigation. At the time the rule was issued, HHS maintained that it was necessary to educate the public and health care providers on the protections afforded by federal law. The agency noted that the new rule would "[foster] a more inclusive, tolerant environment in the health care industry than may currently exist." Opponents of the new rule, however, argued that the rule could jeopardize the health of individuals by making it more difficult to obtain health care services and information. They noted, for example, that the new rule could limit the availability of oral contraceptives. On March 10, 2009, HHS published a proposed rule in the Federal Register to rescind the December 19, 2008, final rule. HHS explained that the comments received during consideration of the rule "raised a number of questions that warrant further consideration." The agency stated further, It is important that the Department have the opportunity to review this regulation to ensure its consistency with current Administration policy. Accordingly, we believe it would benefit the Department to review this rule, accept further comments, and reevaluate the necessity for regulations implementing the statutory requirements. Thus, the Department is proposing to rescind the December 19, 2008 final rule, and we are soliciting public comment to aid our consideration of the many complex questions surrounding the issue and the need for regulation in this area. The comment period for the proposed rule ended on April 9, 2009. Since that date, HHS has not indicated whether the rule will be rescinded. Legislation that attempts to reduce the number of uninsured individuals and restructure the private health insurance market has been passed by both the House of Representatives and the Senate. H.R. 3962 , the Affordable Health Care for America Act, and H.R. 3590 , the Patient Protection and Affordable Care Act, include provisions that address the coverage of abortion by health benefits plans that would be available through a health insurance exchange. In addition to addressing the coverage of abortions by plans in an exchange, the abortion provisions in both measures also provide conscience protection for specified entities. H.R. 3962 , the House-passed bill, would prohibit a federal agency or program, or state or local government that receives federal financial assistance under the measure from subjecting any individual or institutional health care entity to discrimination on the basis that the health care entity does not provide, pay for, provide coverage of, or refer for abortions. H.R. 3962 would also prohibit a federal agency or program, or state or local government that receives federal financial assistance under the bill from requiring any health plan created or regulated by the measure to subject any individual or institutional health care entity to discrimination on the basis that the health care entity does not provide, pay for, provide coverage of, or refer for abortions. In contrast, H.R. 3590 , the Senate-passed bill, would prohibit exchange plans from discriminating against any individual health care provider or health care facility because of its unwillingness to provide, pay for, provide coverage of, or refer for abortions. Neither measure would affect federal conscience protection and abortion-related antidiscrimination laws or Title VII of the Civil Rights Act of 1964.

Conscience clause laws allow medical providers to refuse to provide services to which they have religious or moral objections. In some cases, these laws are designed to excuse such providers from performing abortions. While substantive conscience clause legislation, such as the Abortion Non-Discrimination Act, has not been approved, appropriations bills that include conscience clause provisions have been passed. This report describes the history of conscience clauses as they relate to abortion law and provides a legal analysis of the effects of such laws. The report also discusses the issuance of a new rule to implement some of the existing conscience clause laws, and recent efforts to rescind that rule. Finally, the report reviews the conscience protection provisions of the House- and Senate-passed health reform measures, H.R. 3962 and H.R. 3590.

On February 25, 2009, the House passed H.R. 1105 , Omnibus Appropriations Act, 2009, which would provide funding for 9 of the 12 regular appropriations acts, including Labor-HHS-Education appropriations. Subsequently, the Senate passed H.R. 1105 without amendment on March 10, 2009. H.R. 1105 , which became P.L. 111-8 on March 11, 2009, provides $5.31 billion for programs authorized under Title I of the Workforce Investment Act (WIA). On February 13, 2009, both the House and the Senate passed the conference version of H.R. 1 , the American Recovery and Reinvestment Act of 2009 (hereafter referred to as "the ARRA"); subsequently, H.R. 1 was signed by the President and became P.L. 111-5 on February 17, 2009. The House had previously passed its version of H.R. 1 (hereafter referred to as the "House bill") on January 28, 2009, while the Senate passed S.Amdt. 570 , an amendment in the nature of a substitute to H.R. 1 (hereafter referred to as the "Senate bill"), on February 10, 2009. Under the ARRA, funds were provided to several existing workforce development programs administered by the U.S. Department of Labor (DOL), including programs authorized by Title I of WIA. The ARRA provides $4.2 billion in funding for these WIA Title I workforce development programs. The Workforce Investment Act of 1998 ( P.L. 105-220 ) provides job training and related services to unemployed and underemployed individuals. WIA programs are administered by the DOL, primarily through its Employment and Training Administration (ETA). State and local WIA training and employment activities are provided through a system of One-Stop Career Centers. WIA programs operate on a program year (PY) of July 1 to June 30 (e.g., FY2009 appropriations fund programs from July 1, 2009, until June 30, 2010). Although WIA authorized funding through September 30, 2003, WIA programs continue to be funded through annual appropriations. Title I of WIA authorizes numerous job training programs, including: state formula grants for Youth, Adult, and Dislocated Worker Employment and Training activities; Job Corps; and national programs, including Native American programs, Migrant and Seasonal Farmworker programs, Veterans' Workforce Investment programs, the YouthBuild program, National Emergency Grants, and demonstration and pilot projects. In FY2009, programs and activities authorized under Title I of WIA were funded at $5.3 billion, including $3.0 billion for state formula grants for youth, adult, and dislocated worker training and employment activities. This report briefly summarizes each WIA Title I program, provides a recent funding history of Title I programs, and summarizes funding for WIA programs in the ARRA. Except for Job Corps and the Veterans' Workforce Investment Program, all WIA programs are administered by the Department of Labor's (DOL) Employment and Training Administration (ETA). The administration of Job Corps and Veterans' Workforce Investment is discussed below. The three formula grant programs for youth, adults, and dislocated workers provide funding for employment and training activities provided by the national system of One-Stop Career Centers. Funds are distributed to states by statutory formulas based on measures of unemployment and poverty status for youth and adult allocations and unemployment measures only for dislocated worker allocations. States in turn distribute funds to local workforce investment boards. This program provides training and related services to low-income youth ages 14-21 through formula grants allocated to states, which, in turn allocate funds to local entities. Programs funded under the youth activities chapter of WIA provide 10 "program elements" that consist of strategies to complete secondary school, alternative secondary school services, summer employment, work experience, occupational skill training, leadership development opportunities, supportive services, adult mentoring, follow-up services, and comprehensive guidance and counseling. In FY2009, funding for state grants for youth activities is $924 million. This program provides training and related services to individuals ages 18 and older through formula grants allocated to states, which in turn, allocate funds to local entities. Participation in the adult program is based on a "sequential service" strategy that consists of three levels of services. Any individual may receive "core" services (e.g., job search assistance). To receive "intensive" services (e.g. individual career planning and job training), an individual must have received core services and need intensive services to become employed or to obtain or retain employment that allows for self-sufficiency. To receive training services (e.g. occupational skills training), an individual must have received intensive and need training services to become employed or to obtain or retain employment that allows for self-sufficiency. In FY2009, funding for state grants for adult activities is $862 million. A majority of WIA dislocated worker funds are allocated by formula grants to states (which in turn allocate funds to local entities) to provide training and related services to individuals who have lost their jobs and are unlikely to return to those jobs or similar jobs in the same industry. The remainder of the appropriation is reserved by DOL for a National Reserve account, which in part provides for National Emergency Grants to states or local entities (as specified under Section 173). In FY2009, funding is $1.184 billion for state grants for dislocated worker training activities and is $283 million for the National Reserve. Job Corps is primarily a residential job training program first established in 1964 that provides educational and career services to low-income individuals ages 16 to 24, primarily through contracts administered by DOL with corporations and nonprofit organizations. Most participants in the Job Corps program work toward attaining a high school diploma or a General Educational Development (GED) certificate, with a subset also receiving career technical training. Currently, there are 122 Job Corps centers in 48 states, the District of Columbia, and Puerto Rico. In FY2009, total funding for Job Corps is $1.68 billion, including $1.54 billion for operations, $115 million for construction, and $29 million for administration. In addition to state formula grants, WIA establishes a number of competitive grant-based programs to provide employment and training services to special populations. This competitive grant program provides training and related services to low-income Indians, Alaska Natives, and Native Hawaiians through grants to Indian tribes and reservations and other Native American groups. In FY2009, funding for the Native Americans programs was $52.8 million. This competitive grant program, which is also referred to as the National Farmworker Jobs Program, provides training and related services, including technical assistance, to disadvantaged migrant and seasonal farmworkers and their dependents through discretionary grants awarded to public, private, and nonprofit organizations. The program was first authorized by the Economic Opportunity Act of 1964. This program is funded in FY2009 at $82.6 million. This program provides training and related services to veterans through competitive grants to states and nonprofit organizations. It has been administered by DOL's Veterans' Employment and Training Service (VETS) since FY2001. In FY2009, funding for the Veterans' Workforce Investment Program is $7.6 million. The purpose of pilot and demonstration programs is to develop and evaluate innovative approaches to providing employment and training services. In recent years, two programs have been specified in appropriations language and funded under the authority of Section 171. Each is described below. This competitive grant program combines two previous demonstration projects, the Prisoner Reentry Initiative (PRI) and the Responsible Reintegration of Youthful Offenders (RRYO). PRI, which was first funded in FY2005, funds faith-based and community organizations that help recently released prisoners find work when they return to their communities. RRYO, first funded in FY2000, supports projects that serve young offenders and youth at risk of becoming involved in the juvenile justice system. In FY2008, the Reintegration of Ex-Offenders program combined the PRI and RRYO into a single funding stream. In FY2009, funding for this single program is $108.5 million. This competitive grant program, also known as the Community College Initiative, funds entities to strengthen the capacity of community colleges to train workers in the skills required to succeed in high-growth, high-demand industries. CBJT grants were first funded in FY2005, with funds drawn from the Dislocated Worker National Reserve. In FY2009, funding for CBJT is $125 million. This competitive grant program funds projects that provide education and construction skills training for disadvantaged youth. Since its inception in 1992, the program was administered by the Department of Housing and Urban Development, but was moved to DOL by the YouthBuild Transfer Act ( P.L. 109-281 ), effective FY2007. Participating youth work primarily through mentorship and apprenticeship programs to rehabilitate and construct housing for homeless and low-income families. Funding in FY2009 for YouthBuild is $70 million. Table 1 shows appropriations for the FY2008 and FY2009. Amounts include all WIA programs described above, plus technical assistance; pilots, demonstrations and research; and evaluation. In FY2009, aggregate funding for WIA programs is $5.314 billion, an increase of 2.5% compared to the FY2008 funding level of $5.186 billion. The three state formula grant programs—youth, adult, and dislocated worker training—comprise $2.97 billion, or 56%, of WIA Title I funding. Job Corps, funded at $1.68 billion in FY2009, makes up just under 32% of Title I funding. In the Consolidated Appropriations Act, 2008 ( P.L. 110-161 ), Congress rescinded $250 million from the unexpended balances for FY2005 and FY2006 that had been appropriated for state formula grants for the Youth, Adult, and Dislocated Worker programs authorized under Title I of WIA. On February 13, 2009, both the House and the Senate passed the conference version of H.R. 1 , the American Recovery and Reinvestment Act of 2009; subsequently, H.R. 1 was signed by the President and became P.L. 111-5 on February 17, 2009. Under the ARRA, funds were provided to several existing workforce development programs administered by the DOL, including programs authorized by Title I of WIA. The ARRA provides $4.2 billion in funding for these WIA Title I workforce development programs. The ARRA provides funding for a number of existing workforce development programs, including the three state formula grant programs that provide funding for youth, adults, and dislocated workers—Title I-B of the WIA. Other programs authorized by the WIA also received funding: National Reserve (WIA Title I-D, Section 173), YouthBuild (WIA Title I-D, Section 173A), and Pilot and Demonstration Programs (WIA Title I-D, Section 171). Table 2 shows details of funding for Title I programs in the ARRA.

This report tracks recent appropriations and related legislation for Title I of the Workforce Investment Act of 1998 (WIA) (P.L. 105-220). Following a brief summary of each WIA program, the report presents information on WIA funding for FY2008 and FY2009 and the provisions for WIA Title I programs in the American Recovery and Reinvestment Act (ARRA), which was signed into law on February 17, 2009 (P.L. 111-5). WIA provides, in general, job training and related services to unemployed and underemployed individuals. WIA programs are administered by the Department of Labor (DOL), primarily through DOL's Employment and Training Administration (ETA). State and local WIA training and employment activities are provided through a system of One-Stop Career Centers. Authorization of appropriations under WIA expired in FY2003 but is annually extended through appropriations acts. Reauthorization legislation was considered in the 108th and 109th Congresses. WIA authorizes several job training programs: state formula grants for Adult, Youth, and Dislocated Worker Employment and Training Activities; Job Corps; and other national programs, including the Native American Program, the Migrant and Seasonal Farmworker Program, the Veterans' Workforce Investment Program, Responsible Reintegration for Young Offenders, the Prisoner Reentry Program, and Community-Based Job Training Grants (also known as the Community College Initiative). An additional national program, YouthBuild, formerly in the Department of Housing and Urban Development (HUD), was made a part of WIA on September 22, 2006, by the YouthBuild Transfer Act (P.L. 109-281). Appropriations for WIA are made through the Departments of Labor, Health and Human Services, and Education and Related Agencies Appropriations Act (Labor-HHS-ED). In FY2009, aggregate funding for WIA Title I programs is $5.31 billion, an increase of 2.5% compared to the FY2008 funding level of $5.19 billion. In the Consolidated Appropriations Act, 2008 (P.L. 110-161), Congress rescinded $250 million from the unexpended balances for FY2005 and FY2006 that had been appropriated for state formula grants for the Youth, Adult, and Dislocated Worker programs authorized under Title I of WIA. Funding of $4.2 billion for WIA Title I programs was provided through the ARRA and is in addition to the FY2009 appropriations. This report will be updated as major legislative developments occur.

Federal laws have long prohibited corrupt payments of things of value to federal officials, such as payments in the form of "bribes" from favor-seekers in the private sector. The regulations and limitations on mere "gifts" to federal officials from domestic sources — where there is not necessarily any bargain (reciprocity), compensation, or favor explicitly sought, understood, or agreed to — are, however, of a more recent vintage. The ethical issues and problems of "gifts" to public officials may arise because of the tacit or subtle influence or feelings of gratitude and appreciation that a public official may feel towards his or her benefactors that might "sway his decisions" and erode the official's "sense of mission to the public" in favor of loyalty to "his private benefactors and patrons." This concern, of course, must be balanced to some extent with the normal, expected, and generally innocent expressions of gratitude from the public, the realities of friendships and personal relationships, as well as the requirements of protocol and etiquette in an public officer's official and ceremonial duties and functions. With respect to the President, the exigencies of the office and considerations of protocol, courtesy, and etiquette, have led to an express exemption from the general limitation in regulations on the acceptance of private gifts which might apply to other officers and employees in the executive branch of the United States Government. The current restriction under federal statutory law on the receipt or solicitation of "gifts" by federal employees and officials was enacted as part of the Ethics Reform Act of 1989. The underlying statutory restriction enacted in 1989 in many respects merely codified similar gift standards which had already been applicable to all executive branch employees by way of executive orders and regulations since 1965. The current law, codified at 5 U.S.C. §7353(a), prohibits any federal officer or employee from soliciting or receiving any gift of any amount from a prohibited source, that is, from someone who is seeking action from, doing business with, or is regulated by one's agency, or whose interests may be substantially affected by the performance or nonperformance of one's official duties. The statute expressly provides in the next paragraph, however, that the designated supervisory ethics agencies in the government may make exceptions to this general restriction, and may issue regulations setting out circumstances under which gifts from private sources may be accepted for those under their jurisdictions. In the executive branch of the federal government, the regulations and interpretations of the Office of Government Ethics [OGE] apply to gifts that are offered to or received by executive branch officials. The regulations of the Office of Government Ethics set out the guidelines and standards for receipt of gifts by officials in the executive branch of the federal government. The executive branch gift regulations generally follow the statutory prohibitions by restricting the solicitation or acceptance of gifts from a "prohibited source" and , furthermore, restrict the solicitation or receipt of any gifts that are given "because of the employee's official position," often referred to as "status gifts." Under the regulations, "prohibited sources" are persons seeking official action from the employee's agency, those who do business or are seeking to do business with the agency, those whose activities are regulated by the employee's agency, persons whose interests may be substantially affected by the performance of the employee's official duties, or an organization a majority of whose members fit the above categories. Although an official may not receive a gift given because of his official position, that is, if the gift would not have been given "had the employee not held the status, authority or duties associated with his Federal position," an executive branch official may accept a gift without limitation when it is clear that the gift "is motivated by a family relationship or personal friendship rather than the position of the employee." Within the executive branch gift regulations there are numerous exceptions which would permit the acceptance (but not the solicitation) of certain things of value in particular circumstances. Such exceptions to the prohibition may allow, for example, the receipt of gifts of "minimal value" (under $20 in value), incidental food or drinks at events, bona fide awards, normal loans, prizes, honorary degrees, pensions, discounts which are generally available, and free attendance at certain widely attended conferences and similar events which are seen to benefit the agency. The federal regulations on gifts are not directly applicable to the spouses of federal officials since such regulations extend only to "officers or employees" of the government. However, in many cases, gifts to the spouse of a federal official may be "imputed" to the federal official himself or herself, and would thus come within the same kinds of restrictions, limitations, or permissions on gifts to the federal employee. The OGE regulations apply to gifts accepted or solicited directly or indirectly, and expressly provide that a gift which is "solicited or accepted indirectly includes" gifts which are "[g]iven with the employee's knowledge and acquiescence to his parent, sibling, spouse, child or dependant relative because of that person's relationship to the employee...."  As noted, the President and Vice President are generally exempt by regulation from the statutory gift restrictions and the regulations promulgated by the Office of Government Ethics as to the receipt of gifts. Under these regulations, the President is expressly exempt from the broad restrictions on receiving or accepting gifts from prohibited sources or gifts given because of his official position, and thus may accept gifts from the general public, even from "prohibited sources," or gifts given because of his official position, as long as the President does not "solicit or coerce" the offering of gifts from such sources, nor accept a gift in return for an official act. The exception for the President and Vice President in the OGE regulations states: Because of the considerations relating to the conduct of their offices, including those of protocol or etiquette, the President and the Vice President may accept any gift on his own behalf or on behalf of any family member, provided that such acceptance does not violate §2635.202(c)(1) or (2), 18 U.S.C. §201(b) or 201(c)(3), or the Constitution of the United States. In promulgating its rules and exceptions, the Office of Government Ethics has noted that: "The ceremonial and other public duties of the President and Vice President make it impractical to subject them to standards that require an analysis of every gift offered." The regulations and exemptions indicate that the President is still subject to the prohibition on receiving a gift "in return for being influenced in the performance of an official act," and is still subject to the instruction under the regulations not to "solicit or coerce the offering of a gift," at 5 C.F.R. §2635.202(c)(2). It appears that the existing prohibition on "solicitations" of gifts would reach only solicitations which are restricted by the general rule, that is, solicitations of gifts from "prohibited sources," or given "because of the employee's official position." Since the President is not flatly prohibited from accepting gifts from the general public, such a gift made to the President personally, and accepted, may be retained by him when he leaves office. Gifts coming to the White House that are not intended for the President or First Lady personally, however, but rather are given with the intent to be made for the "White House," or otherwise made to the government of the United States, and personal gifts not retained by the President or First Lady, are catalogued, distributed, or disposed of by the United States. "Furnishings," for example, may be accepted by the National Park Service for use in the White House; "historic material" may be accepted by the Archivist for the Archives or Presidential Libraries; and other gifts for the United States, or ones not retained by the President, may be transferred to the General Services Administration for disposition, storage, or sale. In practice, domestic or private gifts are screened, categorized, and evaluated by aides in the White House Gift Office, and then distributed appropriately. If personal gifts to the President or First Lady are not to be retained by them, they are generally recorded, tracked, and sent to the National Archives and Records Administration [NARA] for courtesy storage, and possible eventual use and display at a presidential library. The process in the Reagan White House was explained as follows: While gifts from family and friends go directly from the White House Gift Unit to the first family, it is simply impossible for the President and First Lady to retain, or even view, most of the gifts from the general public. The Gift Unit, therefore, sees to the disposition of most of these items. Some are transferred to the National Archives, and eventually join head of state gifts as part of a presidential library museum collection. The President and all federal officials are restricted by the Constitution, at Article I, Section 9, clause 8, from receiving any "presents" from foreign governments, kings, or princes, without the consent of the Congress. The Congress has consented generally, in the Foreign Gifts and Decorations Act, to the acceptance of gifts of "minimal value" from foreign governments offered as souvenirs or marks of courtesy, and the acceptance of other gifts when a refusal of the gift may cause "offense or embarrassment" or otherwise harm the foreign relations of the United States. A tangible gift of more than minimal value accepted for reasons of protocol or courtesy may not be kept as a personal gift, however, but is considered accepted on behalf of and property of the United States, and in the case of such a gift for the President or the President's family, is handled by the National Archives and Records Administration. In the past, Presidents, as well as Vice Presidents and other federal officials, have been allowed to accept an award such as the Nobel Prize for a variety of reasons. With respect specifically to the prohibition on acceptance of things of value and gifts from foreign governments, the Nobel Prize is funded and managed by a private foundation and a private foundation board, and is thus not considered to be a gift given by a foreign government nor an instrumentality of a foreign state. The President and all federal officials are subject to the restrictions of the bribery law at 18 U.S.C. §201(b)(2), prohibiting the receipt of or agreement to receive anything of value "in return for being influenced" in the performance of one's official duties; and the so-called "illegal gratuities" clause of that statute, 18 U.S.C. §201(c)(1)(B), prohibiting the receipt of anything of value "for or because of" an official act performed or to be performed. The bribery provision requires a "corrupt" bargain or understanding to do some official act in return for something of value (often referred to as a quid pro quo ), where the payment was the motivation for the official act; while under the "illegal gratuities" provision, the official act may have been done even without the payment as motivation, but the payment was connected to the act in some way, for example, as a thank-you or other reward ( i.e. , a "gratuity"). Neither provision is technically a "gift" law, and neither applies merely to gifts given with no demonstrated connection to a particular official act. In addition to restrictions on the receipt of gifts, the President is required to publicly disclose personal financial information, including personal gifts over minimal amounts ($350 as of this writing) which have been received by him and his immediate family. These public disclosure reports are required each May 15 th , and upon leaving office, under the provisions of the Ethics in Government Act of 1978, as amended. Despite the permissibility of the receipt and acceptance of gifts by the President and the First Lady from the American public, certain acceptances of private gifts have in the past engendered some public and press criticism, and thus the receipt of particularly lavish or excessive gifts, even if free of legal liability, may not be free from political or public relations consequences.

This report addresses provisions of federal law and regulation restricting the acceptance of personal gifts by the President of the United States. Although the President, like all other federal officers and employees, is prohibited from receiving personal gifts from foreign governments and foreign officials without the consent of Congress (U.S. Const., art. I, §9, cl. 8), the President is generally free to accept unsolicited personal gifts from the American public. Most of the restrictions on federal officials accepting gifts from "prohibited sources" (those doing business with, seeking action from, or regulated by one's agency) are not applicable to the President of the United States (5 C.F.R. §2635.204(j)), although the President may not solicit gifts from such sources. The President, in a similar manner as other federal officials, may also receive unrestricted gifts from relatives and gifts that are given on the basis of personal friendship. When personal gifts accepted by the President or his immediate family exceed a certain amount, those gifts are required to be publicly disclosed in financial disclosure reports filed annually by the President. 5 U.S.C. app., §§101(f)(1), 102(a)(2). The President remains subject to the bribery and illegal gratuities law which prohibits the receipt of a gift or of anything of value when that receipt, or the agreement to receive such thing of value, is connected in some way to the performance (or nonperformance) of an official act.

Our review of surveys and academic studies, and interviews with people with Social Security expertise, suggest that most individuals do not understand key details of Social Security rules that could potentially affect their retirement benefits or the benefits of their spouses and survivors. Specifically, many people approaching retirement age are unclear on how claiming age affects the amount of monthly benefits, how earnings (both before and after claiming) affect benefits, the availability of spousal benefits, and other factors that may influence their claiming decision. For example, while some people understand that delaying claiming leads to higher monthly benefits, many are unclear about the actual amount that benefits increase with claiming age. The surveys also showed that many people do not understand the implications of the retirement earnings test, under which SSA withholds benefits for some claimants earning above an annual income limit but which are, on average, paid back later with interest. Understanding these rules and other information, such as life expectancy and longevity risk, could be central to people making informed decisions about when to claim benefits. With an understanding of Social Security benefits, people would also be in a better position to balance other factors that influence when they claim benefits, including financial need, poor health, and psychological factors. SSA makes comprehensive information on key rules and other considerations related to claiming retirement benefits available through its website, publications, personalized benefits statements, and online calculators. The information provided includes many of the items identified from our literature review and expert interviews, including how claiming age affects monthly benefit amounts, how benefits are determined, details on spousal and survivor benefits, the retirement earnings test, information about life expectancy and longevity risk, and the taxation of benefits. In particular, SSA’s website provides access to information on available benefits, key program rules, and interactive calculators that can be used to get estimates on what future benefits would be. Additionally, the Social Security statement is the most widespread piece of communication that SSA provides to individuals about their future benefits. It is a 4- to 6-page summary of personalized information that includes an estimate of the individual’s future benefit payable at age 62, full retirement age (FRA), and age 70, as well as estimates for the individual’s current disability and survivor benefit amounts. In May 2012, SSA made the statement available electronically for those establishing an online account. Since September 2014, SSA has mailed printed statements to workers age 25, 30, 35, 40, 45, 50, 55, and 60 or older who have not created a personal online Social Security account. At age 60, SSA sends the statement annually. While important information is provided through SSA’s website and publications to help people make informed decisions about when to claim retirement benefits, our observation of 30 claims interviews in SSA field offices and of a demonstration of the online claims process found that some key information may not be consistently provided to potential claimants when they file. POMS states that claims specialists are to provide information, and avoid giving advice, to claimants. The POMS also specifies that when taking an application for Social Security benefits, the claims specialist is responsible for explaining the advantages and disadvantages of filing an application so that the individual can make an informed filing decision. The SSA protocol has claims specialists follow a screen-by-screen process of questions and prompts to collect basic information from claimants, but does not prompt questions or discussion of some key information. The following summarizes key information that was not consistently covered during the in-person claims process. We discuss additional areas of key information in our full report. How claiming age affects monthly benefits: POMS states that claimants filing for benefits should be advised that higher benefits may be payable if filing is delayed. It also states that claimants should, if applicable, be provided with at least three monthly benefit amounts at three different claiming ages—at the earliest possible month for claiming, at FRA, and age 70. In 18 of 26 in-person interviews we observed in which delaying claiming was a potential choice, the claims specialist mentioned that the claimant’s benefit amount would be higher if he or she delayed claiming. However, the remaining 8 did not discuss this option. Of the 18 interviews that mentioned delayed claiming, 13 claims specialists presented at least the three benefit amounts per POMS, while 5 did not. Surveys have shown that most individuals do not know how much monthly benefits can increase by waiting to claim, so offering benefit estimates at different ages is likely to provide information many claimants do not have. This information can influence the age at which they claim, and expert opinion and past GAO reports have found that delayed claiming can be an important strategy to consider for most retirees. In contrast, the online claims process includes screens that provide information on how claiming at different ages raises or lowers monthly benefits. How taking retroactive benefits affects monthly benefits: SSA allows for up to 6 months of retroactive benefits when a claimant is at least FRA or has a “protective filing date”—a documented date within the 6 months prior to a claims appointment when a claimant first contacted SSA about filing a retirement claim. In 10 of the 30 observed interviews, claims specialists offered the opportunity to claim up to 6 months of retroactive benefits as a lump sum. While retroactive benefits offer an attractive lump sum, taking it essentially means applying for benefits up to 6 months earlier, and results in a permanent reduction in the monthly benefit amount. POMS provides eligibility criteria for retroactive benefits. However, it does not instruct claims specialists to inform claimants that taking lump-sum retroactive benefits will result in permanently lower monthly benefits, compared to not taking retroactive benefits, a tradeoff claimants may not be aware of. The claims specialist explained this tradeoff in only 1 of the interviews we observed. In another interview, a claimant who initially said he wanted benefits to start later in the year changed his mind to start 6 months earlier after being offered a lump sum. In the online claims process, if a claimant has the option of starting benefits retroactively and chooses not to, the claimant is asked to provide a reason. This step runs the risk of making the claimant believe he is making an unusual decision, or a mistake, by choosing a later claiming date. How lifetime earnings affect monthly benefits: We observed only 8 interviews in which a claims specialist mentioned that benefits are based on 35 years of earnings and that working longer could potentially raise benefits by boosting average lifetime earnings. While POMS does not require claims specialists to explain how earnings affect benefit amounts, the claims process could be modified to include prompts for claims specialists to inform claimants that benefits are based on 35 years of earnings—information that SSA already makes available on its website. By discussing how years of earnings are calculated to determine one’s benefit amounts, claims specialists might better inform claimants who are deciding when to claim, especially for those who have fewer than 35 years of earnings. Similarly, the online application process does not inform claimants that benefits are based on the highest 35 years of earnings. How the retirement earnings test affects income before and after FRA: Individuals who claim benefits before their FRA but continue to work for pay face a retirement earnings test, with earnings above a certain limit resulting in a temporary reduction of monthly benefits. In the 18 interviews we observed in which a potential claimant was younger than FRA, most of the claims specialists explained, accurately, that the claimant would have benefits withheld if he or she earned more than the retirement earnings limit. However, in fewer than half of applicable interviews (7 of 17) did the claims specialists explain that any benefits withheld due to earnings would be recalculated and result in higher benefit amounts after FRA. Some claims specialists mentioned only that earnings may result in lower benefits, or that the claimant cannot earn above the limit, perhaps inaccurately suggesting the earnings test would result in a permanent loss of benefits. In one interview, a claims specialist told the claimant she would be “penalized” if she earned over the limit. POMS states that, when applicable, the claims specialist should explain to claimants that earnings could be withheld based on the annual earnings test, but does not instruct claims specialists to explain that the earnings test is not a penalty or tax, or that withheld benefits are repaid. However, if claimants do not understand the full implications of the earnings test, they could erroneously think it will result in a permanent loss in benefits and, as a result, unnecessarily stop working or reduce their working income. This was made clear in one interview in which a claimant with earnings likely to be above the limit said she might have to quit one of her two jobs unless she waited until FRA to claim. In the online application process, screens provide information explaining that any benefits withheld because of the retirement earnings test will raise monthly benefits after FRA. How life expectancy and longevity risk could factor into the claiming decision: While claims specialists are not specifically required to discuss life expectancy and longevity risk, the POMS does state that information should be provided to help claimants make informed filing decisions. SSA also emphasizes the importance of considering longevity and life expectancy in information made available on its website. According to the American Academy of Actuaries and the Society of Actuaries, understanding how longevity, and in particular longevity risk, can affect retirement planning is an important aspect of preparing for a well-funded retirement. However, the subject of how family health and longevity might influence the timing of benefit claims arose only twice in our 30 observations, and both times because the claimant raised the subject. Similarly, the online application process does not inform claimants that life expectancy and longevity risk are important considerations in deciding when to claim. Potentially misleading use of breakeven ages: Additionally, in contrast to providing potential claimants with key information to help inform their claiming decisions, the POMS instructs claims specialist not to provide a “breakeven age”—the age at which the cumulative higher monthly benefits starting later would equal the cumulative lower benefits from an earlier claiming date. Research shows that breakeven analysis can influence people to claim benefits earlier than they might otherwise. During our in-person observations, we saw 6 instances in which a claims specialist presented a breakeven age to help a claimant compare claiming benefits now or waiting to claim. In some interviews, claims specialists not only offered a breakeven year, they added their conclusion that the analysis showed that claiming earlier was preferable. One claims specialist showed the claimant that it would take 11 and 1/2 years to make up the difference for waiting to claim, and added that “according to the actuaries, that is a reasonable choice.” Another claims specialist said the breakeven analysis showed “it pays to file early.” Many American will rely heavily on Social Security for a substantial portion of their retirement income, so it is imperative that they have the necessary information to make informed claiming decisions. Though we found SSA’s claims process largely provides accurate information and avoids overt financial advice, certain key information is not provided or explained clearly during the claims process. POMS specifies that claims specialists should explain the advantages and disadvantages of filing for Social Security benefits to help people make informed filing decisions. However, because SSA is not fully operationalizing this guidance in the claims interviews, some claimants do not receive all the information that is critical to making informed claiming decisions. The claims process, either in person with a claims specialist or online, allows for SSA to add additional questions or prompts—potentially using language SSA already provides on its website and in publications. Updating this information would help each individual receive the information they need to make an optimal decision. In our issued report, we make several recommendations that would ensure potential claimants are consistently provided with key information during the claiming process to help them make informed decisions about when to claim Social Security retirement benefits. Specifically, we recommend that SSA take steps to ensure that: when applicable, claims specialists inform claimants that delaying claiming will result in permanently higher monthly benefit amounts, and at least offer to provide claimants their estimated benefits at their current age, at FRA (unless the claimant is already older than FRA), and age 70; claims specialists understand that they should avoid the use of breakeven analysis to compare benefits at different claiming ages; when applicable, claims specialists inform claimants that monthly benefit amounts are determined by the highest (indexed) 35 years of earnings, and that in some cases, additional work could increase benefits; when appropriate, claims specialists clearly explain the retirement earnings test and inform claimants that any benefits withheld because of earnings above the earnings limit will result in higher monthly benefits starting at FRA; claims specialists explain that lump sum retroactive benefits will result in a permanent reduction of monthly benefits. For the online claiming process, SSA should evaluate removing or revising the online question that asks claimants to provide a reason for not choosing retroactive benefits; and the claims process include basic information on how life expectancy and longevity risk may affect the decision to claim benefits. SSA generally agreed with our recommendations. Chairman Collins, Ranking Member McCaskill, and Members of the Committee, this concludes my prepared remarks. I would be happy to answer any questions that you may have at this time. For further information regarding this testimony, please contact Charles Jeszeck at (202) 512-7215 or jeszeckc@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this statement. Individuals who make key contributions to this testimony include Mark Glickman (Assistant Director), Laurel Beedon, Susan Chin, Susan Aschoff, Alexander Galuten, Frank Todisco (Chief Actuary), and Walter Vance. 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This testimony summarizes the information contained in GAO's September 2016 report, entitled Social Security: Improvements to Claims Process Could Help People Make Better Informed Decisions about Retirement Benefits ( GAO-16-786 ). GAO's review of nine surveys and academic studies, and interviews with retirement experts, suggest that many individuals do not fully understand key details of Social Security rules that can potentially affect their retirement benefits. For example, while some people understand that delaying claiming leads to higher monthly benefits, many are unclear about the actual amount that benefits increase with claiming age. The studies and surveys also found widespread misunderstanding about whether spousal benefits are available, how monthly benefits are determined, and how the retirement earnings test works. Understanding these rules and other information, such as life expectancy and longevity risk, could be central to people making well-informed decisions about when to claim benefits. By having this understanding of retirement benefits, people would also be in a better position to balance other factors that influence when they should claim benefits, including financial need, poor health, and psychological factors. The Social Security Administration (SSA) makes comprehensive information on key rules and other considerations related to claiming retirement benefits available through its publications, website, personalized benefits statements, and online calculators. However, GAO observed 30 in-person claims at SSA field offices and found that claimants were not consistently provided key information that people may need to make well-informed decisions. For example, in 8 of 26 claims interviews in which the claimant could have received higher monthly benefits by waiting until a later age, the claims specialist did not discuss the advantages and disadvantages of delaying claiming. Further, only 7 of the 18 claimants for whom the retirement earnings test could potentially apply were given complete information about how the test worked. SSA's Program Operations Manual System (POMS) states that claims specialists should explain the advantages and disadvantages of filing an application so that the individual can make an informed filing decision. The problems we observed during the claims interviews occurred in part because the questions included in the claims process did not specifically cover some key information. Online applicants have more access to key information on the screen or through tabs and pop-up boxes as they complete an application. However, similar to in-person interviews, the online application process does not inform claimants that benefits are based on the highest 35 years of earnings or that life expectancy is an important consideration in deciding when to claim.

The extended appropriations process for FY2011 began with the Obama Administration's FY2011 budget requested in February 2010 and culminated with the enactment of P.L. 112-10 on April 15, 2011. During that time, Congressional debate centered around two proposals, H.R. 1 , which was approved by the House on February 19, 2011, and S.Amdt. 149 , offered as a substitute proposal during Senate consideration of H.R. 1 . Although both proposals were rejected by the Senate on March 9, they were viewed by some as the starting point of final negotiations between House and Senate leaders that eventually led to the compromise embodied by P.L. 112-10 . Between the start of FY2011 on October 1, 2010, and the enactment of P.L. 112-10 on April 15, 2011, the federal government was funded through a series of resolutions continuing funding at FY2010 levels, with adjustments and exceptions. This report is intended to facilitate comparative analysis of the key proposals in the now completed FY2011 appropriations process. The report begins with a brief analysis of how each proposal could be expected to impact the federal budget deficit, which was a consideration of great importance to many lawmakers. This is followed by a table depicting discretionary funding levels provided in each of the three proposals by appropriations subcommittee and bill title, and comparing the FY2010 and FY2011 enacted appropriations. The table reflects the most recent estimates of FY2011 appropriations, which remain subject to change. This will be the final update of this report. A key issue in the FY2011 appropriations debate was the impact of discretionary federal spending on the nation's budget deficit. The budget deficit represents the level of spending, as measured by outlays, in excess of revenues. Appropriations acts, like those detailed in this report, provide budget authority. The outlays for a fiscal year result from the budget authority provided in that fiscal year as well as some budget authority provided in previous fiscal years. Included in the outlay level are all types of spending (i.e., emergency, non-emergency, overseas contingency operations) occurring during the fiscal year. Under the Congressional Budget Office (CBO) March 2011 baseline, the last CBO baseline estimate published prior to the enactment of P.L. 112-10 , the budget deficit for FY2011 was estimated at $1,399 billion. In that baseline, CBO assumes a full-year continuation of funding in FY2011 at roughly FY2010 levels. The proposals analyzed in this report provide annualized discretionary outlay levels as follows: FY2011 President's Budget (February 2010)—$1,415 billion CBO Baseline—$1,361 billion H.R. 1 —$1,356 billion S.Amdt. 149 —$1,372 billion P.L. 112-10 —$1,365 billion H.R. 1 , the proposal which proposed the greatest reduction to budget authority relative to current levels, would result in a discretionary outlay level that is $5 billion under the CBO March 2011 baseline level of discretionary outlays. This reduction in discretionary outlays comprises 0.4% of the deficit estimated under the CBO baseline. Savings from other proposals that would produce smaller reductions in discretionary outlays would correspondingly represent a smaller fraction of the CBO March 2011baseline deficit. The proposal that was ultimately enacted, P.L. 112-10 , is expected to result in a discretionary outlay level that is $4 billion above the CBO March 2011 baseline level of discretionary outlays. Some reductions in discretionary spending could also affect the level of mandatory or net interest spending or the amount of revenue collected, potentially impacting the ultimate deficit level for FY2011. For a more detailed look at the broad budgetary impact on FY2011 spending proposals, see CRS Report R41771, FY2011 Appropriations in Budgetary Context , by [author name scrubbed] and [author name scrubbed]. The table below is intended to provide a sense of how funding for federal departments and agencies would be impacted by the different proposals, rather than the impact of each proposal on overall budget numbers. The data represent discretionary appropriations as provided in the respective proposals, by bill title. The final column compares the FY2010 and FY2011enacted funding levels. The title and bill totals do not include scorekeeping adjustments. Rescissions of prior year funding are noted as separate line items and are not deducted from the title totals.

FY2011 funding levels were not enacted in the 111th Congress. Thus, the debate over FY2011 appropriations continued into the 112th Congress and FY2011 spending proposals became a key focal point in the budget debates between the now-Republican-controlled House of Representatives and the Obama Administration. This report was originally intended to facilitate comparison of three key spending proposals for FY2011—the Administration's budget request, H.R. 1, and S.Amdt. 149 to H.R. 1—to FY2010 enacted funding levels. It has been updated to include the enacted FY2011 appropriations in P.L. 112-10. The report begins with a brief analysis of how each proposal could be expected to impact the federal budget deficit. The bulk of the report consists of a funding table that details the recommended discretionary appropriations in these proposals, by subcommittee and bill title, and compares the enacted FY2010 and enacted FY2011 appropriations. More detailed analysis of individual appropriations measures can be found at CRS.gov. This is the final update of this report.

The Organic Foods Production Act of 1990 (OFPA) regulates the marketing of organic products by setting national standards for production and processing (handling). To be labeled or sold as "organic," an agricultural product must be produced and handled without the use of synthetic substances, such as chemical pesticides, and in accordance with an organic plan agreed to by an accredited certifying agent and the producer and handler of the product. Products meeting these standards may be labeled as "organic" and may bear a U.S. Department of Agriculture (USDA) seal. Exceptions to the OFPA's general prohibition on the use of synthetic substances in organic products appear on a National List of Allowed and Prohibited Substances. The OFPA requires the Secretary to establish a National Organic Standards Board (NOSB) to develop the National List and to recommend exemptions for otherwise prohibited substances. The OFPA contains guidelines for the inclusion of substances on the National List. The OFPA also requires the Secretary to promulgate regulations "to carry out" the Act. The Secretary published the National Organic Program Final Rule (Final Rule) in December 2000 and it became effective on October 21, 2002 (codified at 7 C.F.R. pt. 205). Among other things, the Final Rule sets forth a four-tier labeling system for organic foods. Under this system, the type of labeling permitted on a product varies according to the percentage of organic ingredients it contains. The labeling scheme distinguishes: products containing 100% organic ingredients, which may be labeled "100 percent organic"; (2) products containing 94 to 100% organic ingredients, which may be labeled "organic"; (3) products containing 70 to 94% organic ingredients, which may be labeled "made with organic (specified ingredients or food group(s))"; and (4) products containing less than 70% percent organic ingredients, which may identify each organic ingredient on the label or in the ingredient statement with the word "organic." In October 2002, Mr. Arthur Harvey filed a pro se suit against the USDA in the U.S. District Court for the District of Maine, alleging that multiple provisions of the Final Rule were inconsistent with the OFPA and the Administrative Procedures Act. The district court ruled in favor of the USDA (i.e., granted summary judgment) on all nine counts brought by Harvey. Harvey subsequently appealed the case to the First Circuit and was supported by a number of public interest groups that filed "friends of the court" or Amici Curiae briefs. The First Circuit sided with Harvey on three counts and remanded the holdings to the district court for further action. In brief, the court found that: nonorganic ingredients not commercially available in organic form but used in the production of items labeled "organic" must have individual reviews in order to be placed on the National List of Allowed and Prohibited Substances; synthetic substances are barred in the processing or handling of products labeled "organic"; and dairy herds converting to organic production are not allowed to be fed feed that is only 80% organic for the first nine months of a one-year conversion. The three holdings did not invalidate OFPA provisions, but rather, qualified or invalidated agency regulations, thereby affecting the implementation of the National Organic Program. On June 9, 2005, the district court issued an order pursuant to the circuit court's instructions that established a two-year time frame in which the Secretary of Agriculture was to create and enforce new rules for the implementation of the National Organic Program in compliance with the circuit court's ruling. Under the order, the Secretary was to issue new regulations within a year (June 9, 2006) but has an additional year to start enforcing them (June 9, 2007). The phase-in implementation was selected by the court in an effort to prevent consumer confusion, commercial disruption, and unnecessary litigation. The rulings in Harvey and subsequent requirements for new regulations, however, were superceded in part, as a result of amendments made to the OFPA by the FY2006 agriculture appropriations act ( P.L. 109-97 , §797). On June 7, 2006, the USDA published revised final rules based on Harvey and the amended OFPA. The amendments made in the appropriations measure address many of the legal concerns (e.g., lack of authority for agency action) observed by the First Circuit. The following paragraphs examine each holding where the court determined that a provision of the Final Rule was inconsistent with the OFPA and then discuss the effect of the applicable provisions from the appropriations act. Each section ends with the USDA's latest regulatory action. Plaintiff challenged the portion 7 C.F.R. §205.606 which permits the introduction of nonorganically produced agricultural products as ingredients in, or as substances on, processed products labeled as "organic" when the specified product is not commercially available in organic form. The regulation lists five specific products—Cornstarch, Gums, Kelp, Lecithin, and Pectin—and also allows for any other nonorganically produced agricultural product when the product is not commercially available in organic form. The OFPA, however, requires all specific exemptions to the Act's prohibition on nonorganic substances to be placed on the National List following notice and comment and periodic review. Harvey claimed that §205.606 provided a blanket exemption to the OFPA's review requirements and allowed ad hoc decisions to be made regarding the use of synthetic substances. The USDA, on the other hand, maintained that the regulation does not establish a blanket exemption, but rather, only permits the use of the five products specifically listed in the section. The court found the USDA's interpretation plausible; however, because the district court did not clarify the regulation's meaning, the circuit court also found Harvey's interpretation potentially credible. Accordingly, the court remanded the count to the district court for entry of a declaratory judgment that would interpret the regulation in a manner consistent with the National List requirements of the OFPA. A declaratory judgment stating that §205.606 does not establish a blanket exemption to the National List requirements in statute for nonorganic agricultural products that are not commercially available was issued on June 9, 2005. The USDA, in compliance with the order, issued a Notice in the Federal Register clarifying the meaning of the regulation on July 1, 2005. However, because of the potential for confusion, the order states that the clarified meaning of §205.606 will not become effective and enforceable until two years from the date of the judgment (June 9, 2007). In the FY2006 agriculture appropriations act, Congress amended 7 U.S.C. §6517(d)—titled "Procedure for Establishing a National List"—to authorize the Secretary of the USDA to develop emergency procedures for designating agricultural products that are commercially unavailable in organic form for placement on the National List for a period of no longer than 12 months. The amendment does not define what an "emergency procedure" would entail; thus, the Secretary would appear to have the authority to describe the term's parameters and to select the substances subject to it. While this amendment creates an expedited petition process for commercially unavailable organic agricultural products, it does not appear to alter the ruling described above. The new rule published on June 7, 2006, did not clarify the conditions of "emergency procedure." However, it clearly restated that the five listed substances were the only nonorganically produced products that could be used as ingredients in organic products, subject to agency restriction when that ingredient is not commercially available in organic form. Plaintiff challenged 7 C.F.R. §205.600(b) and the portion of §205.605(b) that permits synthetic substances as ingredients in, or as substances on, processed products labeled as "organic." Section 205.600(b) provides that synthetic substances may be used "as a processing aid or adjuvant" if they meet six criteria; §205.605(b) lists 38 synthetic substances specifically allowed in or on processed products labeled as "organic." The court found that 7 U.S.C. §6510(a)(1) and §6517(c)(B)(iii) forbid the use of synthetic substances during the processing or handling of a product, unless otherwise required by law. The court noted that the OFPA contemplates the use of certain synthetic substances during the production or growing of organic products, but not during the handling or processing stages. By allowing the use of certain synthetic substances "as processing aids," the court concluded that the regulations contravened the plain language of the OFPA. The circuit court reversed the district court's grant of summary judgment and remanded the count to the district court for entry of summary judgment in Harvey's favor. On remand, the district court ordered the Secretary of the USDA to publish new rules implementing the circuit court's judgment within one year of the date of the judgment (June 9, 2006), but allowed the Secretary to exempt nonconforming products placed in commerce as "organic" for up to two years after the date of the judgment (June 9, 2007). The FY2006 agriculture appropriations act amended §6510(a)(1) and strikes §6517(c)(B)(iii)—provisions that the First Circuit relied upon to emphasize that synthetics were not allowed during the processing or handling of a product. Before the amendment, §6510(a)(1) barred a person on a handling operation from adding any synthetic ingredient during the processing or postharvest handling of a covered product. The amendment added the phrase "not appearing on the National List" after "ingredient," thereby apparently allowing the use of synthetics on the National List during processing or postharvest handling of a covered product. Section 6517(c) establishes guidelines for placing substances on the National List and in subsection (B) sets forth specific requirements with regard to the types of substances that may be exempted for use in production and handling. Specifically subpart (iii) of §6517(c)(B) states that the substance "is used in handling and is non-synthetic but is not organically produced" (emphasis added). This provision, which the court noted "specifically requires the exempted substances be nonsynthetic [sic]," was deleted by the amendment. As there no longer appears to be any general prohibition (though there are other requirements that must be met) against the placement of synthetics on the National List for use during the processing or handling of a covered product, the First Circuit's ruling in count three is likely moot. The USDA determined that there was no need to revise §205.600(b) and §205.605(b) because Congress sufficiently addressed the contradiction and approved the necessary legislative changes. Plaintiff challenged the Final Rule's exception to the OFPA's requirements for dairy herds being converted to organic production. Pursuant to 7 U.S.C. §6509(e)(2), a dairy animal whose milk or milk products will be sold or labeled as organically produced must be raised and handled in accordance with the OFPA for not less than the 12-month period immediately prior to the sale of such milk or milk products. Section §205.236(a)(2) of the Final Rule, however, allows whole dairy herds transitioning to organic production to use 80% organic feed for the first nine months and 100% organic feed for the final three months (i.e., "80-20" rule). The court found the OFPA's requirement for a single type of organic handling for twelve months and the Final Rule's bifurcated approach in direct conflict. The court determined that nothing in the OFPA's plain language permits the creation of an "'exception' permitting a more lenient phased conversion process for entire dairy herds," and consequently, found the regulation invalid. The circuit court reversed the district court's grant of summary judgment and remanded the count to the district court for entry of summary judgment in Harvey's favor. On remand, the district court ordered the USDA to promulgate regulations implementing the circuit court's decision within one year of the date of the judgment (June 9, 2006) and to start enforcement by June 9, 2007. In the FY2006 agriculture appropriations act, Congress amended 7 U.S.C. §6509(e)(2) by adding an exception to the general feeding requirement listed in the provision (i.e., raised and handled in accordance with the OFPA for not less than the 12-month period immediately prior to sale). The new provision, titled "Transition Guideline," allows crops and forage from land included in the organic system plan of a dairy farm that is in the third year of organic management to be consumed by the dairy animals of the farm during the 12-month period immediately prior to the sale of the organic milk or milk products. Generally, crops or forage intended to be sold or labeled as "organic" can not have prohibited substances applied to them for the three years immediately preceding harvest of the crop. Accordingly, while this amendment allows feed for dairy animals to come from land that is still transitioning to "organic" status, it would not appear to allow dairy cows to be fed prohibited substances or genetically modified organisms. Congress' amendment to §6509 likely made the court's ruling in count seven moot. The Secretary revised 7 C.F.R. §205.236 to create two exceptions to the general rule that milk labeled as "organic" must come from cows under continuous organic management for no less than 12 months. First, animals may consume crops and forage from the producer's land that is in the third year of organic management (i.e., the transition guideline). Second, producers converting entire herds to organic production who were still using the "80-20" feed rule before the publication of the new regulation may continue to do so, provided that no milk may be labeled as "organic" by this method after June 9, 2007. This exception allows a period of transition to occur in accordance with the court's order for enforcement of new regulations by the same date.

The First Circuit's ruling in Harvey v. Veneman brought much attention and uncertainty to the U.S. Department of Agriculture's National Organic Program. In the case, Harvey alleged that multiple provisions of the National Organic Program Final Rule (Final Rule) were inconsistent with the Organic Foods Production Act of 1990 (OFPA). The First Circuit sided with Harvey on three counts, putting into question the use of synthetics and commercially unavailable organic agricultural products, as well as certain feeding practices for dairy herds converting to organic production. On remand, the district court ordered a two-year time frame for the implementation and enforcement of new rules consistent with the ruling; however, in the FY2006 agriculture appropriations act (P.L. 109-97), Congress amended the OFPA to address the holdings of the case. This report describes the OFPA, discusses those holdings where the court determined that a provision of the Final Rule was inconsistent with the OFPA, and analyzes the most recent legislative action as well as new regulations from the USDA. This report will be updated as warranted.

To improve federal efforts to assist state and local personnel in preparing for domestic terrorist attacks, H.R. 525 would create a single focal point for policy and coordination—the President’s Council on Domestic Terrorism Preparedness—within the Executive Office of the President. The new council would include the President, several cabinet secretaries, and other selected high-level officials. An Executive Director with a staff would collaborate with executive agencies to assess threats; develop a national strategy; analyze and prioritize governmentwide budgets; and provide oversight of implementation among the different federal agencies. In principle, the creation of the new council and its specific duties appear to implement key actions needed to combat terrorism that we have identified in previous reviews. Following is a discussion of those actions, executive branch attempts to implement them, and how H.R. 525 would address them. In our May 2000 testimony, we reported that overall federal efforts to combat terrorism were fragmented. There are at least two top officials responsible for combating terrorism and both of them have other significant duties. To provide a focal point, the President appointed a National Coordinator for Security, Infrastructure Protection and Counterterrorism at the National Security Council. This position, however, has significant duties indirectly related to terrorism, including infrastructure protection and continuity of government operations. Notwithstanding the creation of this National Coordinator, it was the Attorney General who led interagency efforts to develop a national strategy. H.R. 525 would set up a single, high-level focal point in the President’s Council on Domestic Terrorism Preparedness. In addition, H.R. 525 would require that the new council’s executive chairman—who would represent the President as chairman—be appointed with the advice and consent of the Senate. This last requirement would provide Congress with greater influence and raise the visibility of the office. We testified in July 2000 that one step in developing sound programs to combat terrorism is to conduct a threat and risk assessment that can be used to develop a strategy and guide resource investments. Based upon our recommendation, the executive branch has made progress in implementing our recommendations that threat and risk assessments be done to improve federal efforts to combat terrorism. However, we remain concerned that such assessments are not being coordinated across the federal government. H.R. 525 would require a threat, risk, and capability assessment that examines critical infrastructure vulnerabilities, evaluates federal and applicable state laws used to combat terrorist attacks, and evaluates available technology and practices for protecting critical infrastructure against terrorist attacks. This assessment would form the basis for the domestic terrorism preparedness plan and annual implementation strategy. In our July 2000 testimony, we also noted that there is no comprehensive national strategy that could be used to measure progress. The Attorney General’s Five-Year Plan represents a substantial interagency effort to develop a federal strategy, but it lacks desired outcomes. The Department of Justice believes that their current plan has measurable outcomes about specific agency actions. However, in our view, the plan needs to go beyond this to define an end state. As we have previously testified, the national strategy should incorporate the chief tenets of the Government Performance and Results Act of 1993 (P.L. 130-62). The Results Act holds federal agencies accountable for achieving program results and requires federal agencies to clarify their missions, set program goals, and measure performance toward achieving these goals. H.R. 525 would require the new council to publish a domestic terrorism preparedness plan with objectives and priorities, an implementation plan, a description of roles of federal, state and local activities, and a defined end state with measurable standards for preparedness. In our December 1997 report, we reported that there was no mechanism to centrally manage funding requirements and to ensure an efficient, focused governmentwide approach to combat terrorism. Our work led to legislation that required the Office of Management and Budget to provide annual reports on governmentwide spending to combat terrorism. These reports represent a significant step toward improved management by providing strategic oversight of the magnitude and direction of spending for these programs. Yet we have not seen evidence that these reports have established priorities or identified duplication of effort as the Congress intended. H.R. 525 would require the new council to develop and make budget recommendations for federal agencies and the Office of Management and Budget. The Office of Management and Budget would have to provide an explanation in cases where the new council’s recommendations were not followed. The new council would also identify and eliminate duplication, fragmentation, and overlap in federal preparedness programs. In our April 2000 testimony, we observed that federal programs addressing terrorism appear in many cases to be overlapping and uncoordinated. To improve coordination, the executive branch has created organizations like the National Domestic Preparedness Office and various interagency working groups. In addition, the annual updates to the Attorney General’s Five-Year Plan track individual agencies’ accomplishments. Nevertheless, we have still noted that the multitude of similar federal programs have led to confusion among the state and local first responders they are meant to serve. H.R. 525 would require the new council to coordinate and oversee the implementation of related programs by federal agencies in accordance with the domestic terrorism preparedness plan. The new council would also make recommendations to the heads of federal agencies regarding their programs. Furthermore, the new council would provide written notification to any department that it believes is not in compliance with its responsibilities under the plan. Federal efforts to combat terrorism are inherently difficult to lead and manage because the policy, strategy, programs, and activities to combat terrorism cut across more than 40 agencies. Congress has been concerned with the management of these programs and, in addition to H.R. 525, two other bills have been introduced to change the overall leadership and management of programs to combat terrorism. On March 21, 2001, Representative Thornberry introduced H.R. 1158, the National Homeland Security Act, which advocates the creation of a cabinet-level head within the proposed National Homeland Security Agency to lead homeland security activities. On March 29, 2001 Representative Skelton introduced H.R. 1292, the Homeland Security Strategy Act of 2001, which calls for the development of a homeland security strategy developed by a single official designated by the President. In addition, several other proposals from congressional committee reports and various commission reports advocate changes in the structure and management of federal efforts to combat terrorism. These include Senate Report 106-404 to Accompany H.R. 4690 on the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriation Bill 2001, submitted by Senator Gregg on September 8, 2000; the report by the Gilmore Panel (the Advisory Panel to Assess Domestic Response Capabilities for Terrorism Involving Weapons of Mass Destruction, chaired by Governor James S. Gilmore III) dated December 15, 2000; the report of the Hart-Rudman Commission (the U.S. Commission on National Security/21st Century, chaired by Senators Gary Hart and Warren B. Rudman) dated January 31, 2001; and a report from the Center for Strategic and International Studies (Executive Summary of Four CSIS Working Group Reports on Homeland Defense, chaired by Messrs. Frank Cilluffo, Joseph Collins, Arnaud de Borchgrave, Daniel Goure, and Michael Horowitz) dated 2000. The bills and related proposals vary in the scope of their coverage. H.R. 525 focuses on federal programs to prepare state and local governments for dealing with domestic terrorist attacks. Other bills and proposals include the larger issue of homeland security that includes threats other than terrorism, such as military attacks. H.R. 525 would attempt to resolve cross-agency leadership problems by creating a single focal point within the Executive Office of the President. The other related bills and proposals would also create a single focal point for programs to combat terrorism, and some would have the focal point perform many of the same functions. For example, some of the proposals would have the focal point lead efforts to develop a national strategy. The proposals (with one exception) would have the focal point appointed with the advice and consent of the Senate. However, the various bills and proposals differ in where they would locate the focal point for overall leadership and management. The two proposed locations for the focal point are in the Executive Office of the President (like H.R. 525) or in a Lead Executive Agency. Table 1 shows various proposals regarding the focal point for overall leadership, the scope of its activities, and it’s location. Location of focal point Executive Office of the President Lead Executive Agency (National Homeland Security Agency) Lead Executive Agency (Department of Justice) Lead Executive Agency (National Homeland Security Agency) Homeland security (including domestic terrorism, maritime and border security, disaster relief and critical infrastructure activities) Homeland security (including antiterrorism and protection of territory and critical infrastructures from unconventional and conventional threats by military or other means) Domestic terrorism preparedness (crisis and consequence management) Domestic and international terrorism (crisis and consequence management) Homeland security (including domestic terrorism, maritime and border security, disaster relief, and critical infrastructure activities) Homeland Defense (including domestic terrorism and critical infrastructure protection) Based upon our analysis of legislative proposals, various commission reports, and our ongoing discussions with agency officials, each of the two locations for the focal point—the Executive Office of the President or a Lead Executive Agency—has its potential advantages and disadvantages. An important advantage of placing the position with the Executive Office of the President is that the focal point would be positioned to rise above the particular interests of any one federal agency. Another advantage is that the focal point would be located close to the President to resolve cross agency disagreements. A disadvantage of such a focal point would be the potential to interfere with operations conducted by the respective executive agencies. Another potential disadvantage is that the focal point might hinder direct communications between the President and the cabinet officers in charge of the respective executive agencies. Alternately, a focal point with a Lead Executive Agency could have the advantage of providing a clear and streamlined chain of command within an agency in matters of policy and operations. Under this arrangement, we believe that the Lead Executive Agency would have to be one with a dominant role in both policy and operations related to combating terrorism. Specific proposals have suggested that this agency could be either the Department of Justice (per Senate Report 106-404) or an enhanced Federal Emergency Management Agency (per H.R. 1158 and its proposed National Homeland Security Agency). Another potential advantage is that the cabinet officer of the Lead Executive Agency might have better access to the President than a mid-level focal point with the Executive Office of the President. A disadvantage of the Lead Executive Agency approach is that the focal point—which would report to the cabinet head of the Lead Executive Agency—would lack autonomy. Further, a Lead Executive Agency would have other major missions and duties that might distract the focal point from combating terrorism. Also, other agencies may view the focal point’s decisions and actions as parochial rather than in the collective best interest. H.R. 525 would provide the new President’s Council on Domestic Terrorism Preparedness with a variety of duties. In conducting these duties, the new council would, to the extent practicable, rely on existing documents, interagency bodies, and existing governmental entities. Nevertheless, the passage of H.R. 525 would warrant a review of several existing organizations to compare their duties with the new council’s responsibilities. In some cases, those existing organizations may no longer be required or would have to conduct their activities under the supervision of the new council. For example, the National Domestic Preparedness Office was created to be a focal point for state and local governments and has a state and local advisory group. The new council has similar duties that may eliminate the need for the National Domestic Preparedness Office. As another example, we believe the overall coordinating role of the new council may require adjustments to the coordinating roles played by the Federal Emergency Management Agency, the Department of Justice’s Office of State and Local Domestic Preparedness Support, and the National Security Council’s Weapons of Mass Destruction Preparedness Group in the policy coordinating committee on Counterterrorism and National Preparedness. In our ongoing work, we have found that there is no consensus—either in Congress, the Executive Branch, the various commissions, or the organizations representing first responders—as to whether the focal point should be in the Executive Office of the President or a Lead Executive Agency. Developing such a consensus on the focal point for overall leadership and management, determining its location, and providing it with legitimacy and authority through legislation, is an important task that lies ahead. We believe that this hearing and the debate that it engenders, will help to reach that consensus. This concludes our testimony. We would be pleased to answer any questions you may have. For future questions about this statement, please contact Raymond J. Decker, Director, Defense Capabilities and Management at (202) 512-6020. Individuals making key contributions to this statement include Stephen L. Caldwell and Krislin Nalwalk. Combating Terrorism: Observations on Options to Improve the Federal Response (GAO-01-660T, Apr. 24, 2001). Combating Terrorism: Accountability Over Medical Supplies Needs Further Improvement (GAO-01-463, Mar. 30, 2001). Combating Terrorism: Federal Response Teams Provide Varied Capabilities; Opportunities Remain to Improve Coordination (GAO-01-14, Nov. 30, 2000). Combating Terrorism: Linking Threats to Strategies and Resources (GAO/T-NSIAD-00-218, July 26, 2000). Combating Terrorism: Comments on Bill H.R. 4210 to Manage Selected Counterterrorist Programs (GAO/T-NSIAD-00-172, May 4, 2000). Combating Terrorism: How Five Foreign Countries Are Organized to Combat Terrorism (GAO/NSIAD-00-85, Apr. 7, 2000). Combating Terrorism: Issues in Managing Counterterrorist Programs (GAO/T-NSIAD-00-145, Apr. 6, 2000). Combating Terrorism: Need to Eliminate Duplicate Federal Weapons of Mass Destruction Training (GAO/NSIAD-00-64, Mar. 21, 2000). Critical Infrastructure Protection: Comprehensive Strategy Can Draw on Year 2000 Experiences (GAO/AIMD-00-1, Oct. 1, 1999). Combating Terrorism: Need for Comprehensive Threat and Risk Assessments of Chemical and Biological Attack (GAO/NSIAD-99-163, Sept. 7, 1999). Combating Terrorism: Observations on Growth in Federal Programs (GAO/T-NSIAD-99-181, June 9, 1999). Combating Terrorism: Issues to Be Resolved to Improve Counterterrorist Operations (GAO/NSIAD-99-135, May 13, 1999). Combating Terrorism: Observations on Federal Spending to Combat Terrorism (GAO/T-NSIAD/GGD-99-107, Mar. 11, 1999). Combating Terrorism: Opportunities to Improve Domestic Preparedness Program Focus and Efficiency (GAO/NSIAD-99-3, Nov. 12, 1998).

This testimony discusses the Preparedness Against Domestic Terrorism Act of 2001 (H.R. 525). To improve federal efforts to help state and local personnel prepare for domestic terrorist attacks, H.R. 525 would create a single focal point for policy and coordination--the President's Council on Domestic Terrorism Preparedness--within the White House. The new council would include the President, several cabinet secretaries, and other selected high-level officials. H.R. 525 would (1) create an executive director position with a staff that would collaborate with other executive agencies to assess threats, (2) require the new council to develop a national strategy, (3) require the new council to analyze and review budgets, and (4) require the new council to oversee implementation among the different federal agencies. Other proposals before Congress would also create a single focal point for terrorism. Some of these proposals place the focal point in the Executive Office of the President and others place it in a lead executive agency. Both locations have advantages and disadvantages.

RS20771 -- Quadrennial Defense Review (QDR): Background, Process, and Issues Updated June 21, 2001 The Quadrennial Defense Review for 2001 is a congressionally mandated review of national defense strategy. The Secretary of Defense is required to analyze, among other things, forcestructure, modernization plans, military infrastructure, and the defense budget with a view towards establishing aroadmap for defense programs for the next 20 years. Thiscomprehensive assessment could profoundly effect the nation's ability to carry out its national security strategy inthe new millennium. Genesis of QDR 2001. The1990s produced a number of defense related studies meant to reshape American military strategy in lightof the downfall of the Soviet Union and the end of the Cold War. These studies included the "Base Force" structure,the Bottom Up Review, the Commission on Roles and Missions, theQuadrennial Defense Review of 1997, and the 1997 National Defense Panel. In the early 1990s the Chairman ofthe Joint Chiefs of Staff, General Colin Powell, coined the term "BaseForce." It was used to designate a proposed structure representing the minimum armed forces necessary for theUnited States to meet the national security objectives defined by policymakers, notably the capability to conduct two major theater wars simultaneously. (1) In 1993, the Bottom Up Review (BUR) acknowledged the significant changesin the global securityenvironment by articulating a strategy where the Department of Defense sought to prevent conflict by promotingdemocracy and peaceful resolution of conflict while connecting theU.S. military to the militaries of other countries, especially those of the former Soviet Union. (2) The BUR addressed the need for peacekeeping andpeace enforcement operations butused the two major theater war (MTW) scenario as the main force shaping construct. (3) Iraq and North Korea were seen as regional powers able to initiatesimultaneous conflictsrequiring a U.S. military response. Their capabilities in turn drove force planning, structure, and capabilities of theAmerican military forces. The BUR was criticized on various grounds. Some thought the resultant construct was merely a budget driven review and failed to adequately address the challenges of the newinternational security environment. As a result, in the 1994 National Defense Authorization Act, Congressmandated the Commission on Roles and Missions (CORM). The CORM waslater criticized for failing to depart from the two-MTW scenario. Its most significant contributions includedsuggestions that DoD undertake a major quadrennial strategy review and thatthe Chairman of the Joint Chiefs of Staff develop a clear vision for future joint operations. (4) Reacting to one of the CORM recommendations,Congress directed the 1997 QuadrennialDefense Review as a method to conduct a "fundamental and comprehensive examination of America's defenseneeds." (5) The First QDR. QDR 97 described a strategy of "shape, respond, prepare" in which the military must shape the environment throughdeterrence and engagement, remain prepared to engage in a spectrum of conflicts ranging from small scalecontingencies to major theater war, and prepare for an uncertain future. Inaddition, the report acknowledged the military must contend with additional threats including the proliferation ofweapons of mass destruction, advanced technologies, the drug trade,organized crime, uncontrolled immigration, and threats to the U.S. homeland. (6) As with the BUR and CORM, the QDR retained the two-MTW construct asits force shaping tool. As aresult, the1997 QDR was again criticized by many as a budget driven assessment of what military force structurewould be like if funded at present budget levels. The Military Force Structure Review Act of 1996 established the independent National Defense Panel (NDP) as a forum to review the results of the 1997 QDR. The NDP report tookexception to what it termed broadly as the QDR's less than ambitious plan for defense transformation, stating that,"our current security arrangements--will not be adequate to meetingthe challenges of the future." (7) It also recommendeda comprehensive look at scaling back or cancelling "legacy systems." (8) Most significantly the NDP report challenged therequirement to fight two major theater wars simultaneously as simply a force sizing tool and not a viable strategy. The two-MTW construct was criticized as a means to justify Cold Warbased force structure and as a roadblock to implementing transformation strategies enabling the military to preparefor future threats. (9) The second Quadrennial Defense Review is now fully under way. The 2001 QDR presents an opportunity to assess future U.S. security challenges and link them to an overarchingmilitary strategy designed to protect the interests of the U.S. as a whole. Its results however, are not binding, andmay be significantly altered by the administration. The 106th Congress created a permanent requirement for a Quadrennial Defense Review by inserting Section 118 into Chapter 2 of title 10, United States Code, which states that everyfour years the Secretary of Defense will: .....conduct a comprehensive examination of the national defense strategy, force structure, force modernization plans, infrastructure, budgetplan, and other elements of the defense program and policies of the United States with a view towards determiningand expressing the defense strategy of the United States andestablishing a defense program for the next 20 years. (10) The purpose of the 2001 QDR as stated in the National Defense Authorization Act for Fiscal Year 2000 is to1) delineate a military strategy consistent with the most recent NationalSecurity Strategy (11) , 2) define the defense programsto successfully execute the full range of missions assigned the military by that strategy, and 3) identify the budgetplan necessary tosuccessfully execute those missions at a low-to-moderate level of risk. The questions listed below are intended to assist DoD in formulating a comprehensive military strategy in lightof the evolving international security environment and rapidly emergingtechnologies. Congress specifically requires the Secretary of Defense to consider precision guided munitions, stealth,night vision, digitization, and communications as he formulates hispreferred force structure options for the next 20 years. (12) QDR Input. While OSD is responsible for the integration of the QDR effort, it is the Joint Staff that will gather the data and formulatethe inputs from the individual Services, the combatant commands, and Defense Agencies into the end result. TheJoint Staff QDR organization is led by a general officer steeringcommittee that will receive input from eight different panels. Those panels are Strategy and Risk Assessment; ForceGeneration, Capability and Structure; Modernization; Sustainment,Strategic Mobility and Infrastructure; Readiness; Transformation, Innovation and Joint Experimentation;Information Superiority; and Human Resources. Each panel's input will go to aPreparation Group which is assisted by an Integration Group providing budget, analysis, and administrative support. The Joint Requirements Oversight Council, the Service OperationalDeputies, and the Joint Chiefs of Staff will provide guidance and help resolve panel issues as needed. Recentinformation suggests that OSD will form six major issue panels to developoptions and make recommendations for the QDR report. Those panels are tentatively: strategy; force structure;capabilities and investment; information warfare, intelligence, and space;personnel and readiness support infrastructure; and joint organizations. (14) Several process issues will garner attention as the QDR is undertaken. First, the timing of the QDR itself may be called into question. Numerous major policy actions by the BushAdministration must be considered prior to delineating the National Security Strategy. Second, determining theappropriate military strategy with which to frame the review will be acrucial step. Last, prior studies were criticized by some as being a budget driven process as opposed to strategydriven. Although the military strategy ultimately defined by the QDR willmost likely have budgetary limitations, it is deemed essential to provide a clear picture of how that strategyeffectively defends U.S. national interests. Timing of the QDR. As discussed earlier, the QDR process was established as a Title 10 requirement for the Secretary of Defense toconduct a QDR "every four years, during a year evenly divisible by four" and to submit the report to Congress "notlater than September 30 of the year in which the review isconducted." (15) The National Security Strategy isdue in June of 2001 with the QDR report to follow by September 30, 2001. If the administration substantiallychanges previoussecurity strategy, DoD will most likely require more time to formulate its strategy and concepts based on the newNational Security Strategy and delineate a coherent military strategywithin which to frame the QDR. It has been suggested by some that the administration take a different approachto the review. Conducting a broad strategic review and using it toestablish priorities with a more extensive study to follow might allow both the administration and DoD to take amore measured view. (16) This method could affectthe administration'sfirst budget submission in 2002. Using results of QDR97 to shape the defense budget until the comprehensivestudy is complete might allow the administration to more coherentlytranslate its National Security Strategy into a different or revamped defense strategy. This approach would requireCongress to amend the QDR legislation now in law. Appropriate Strategy. Structuring our military forces on the premise the U.S. military will need to fight two simultaneous regionalconflicts provided a logical yardstick during the Cold War and time frame immediately afterward. Some see it asa less likely occurrence in today's environment given the lack ofeligible adversaries that could muster the necessary forces and resources to create that scenario. Since that time,it has been criticized as being more an argument to retain the currentforce structure at the expense of restructuring. Opponents of the two-MTW construct contend it is difficult tosubstantiate the necessity of countering major, cross-border, conventionalconflicts in the current international security environment. The emerging asymmetric threats of terrorism,narco-trafficking, weapons of mass destruction, information warfare,environmental sabotage, anti-access operations, and other low intensity operations may dictate a different approachto force sizing. (17) Conversely, modifying orcompletely changing thecurrent strategy may have an impact on our allies around the world. Changing the two-MTW construct could beperceived by some allies as a lack of resolve and backing away fromcurrent security commitments. Strategy/Budget Mismatch. The cost of most strategies considered will probably exceed current budget levels. Estimates range fromover $20 billion to $100 billion per year shortfall to fund the 1997 QDR force. (18) The Iraqi no-fly zone enforcement, the Balkans peacekeeping force, andnumerous other small scalecommitments continue to place a strain on the current budget. Budget estimates for transforming the military tomeet future threats while maintaining a credible force to deter currentthreats or win possible conflicts far outreach the proposed defense budgets in the current future years defenseprogram. (19) The overall goal of the QDR processis to create a defensestrategy, complementing the National Security Strategy, bounded by a budget that ensures a "low-to-moderate levelof risk" when executed. In order to do this, most defense specialistssee a likely necessity to either increase the defense budget, restructure and reduce current costs, or reduce thedemands of the current defense strategy. They have urged that the QDRapproach as monitored by Congress address those hard choices. Besides the process issues mentioned above, Congress may be interested in other aspects of the QDR. It will be important to ensure the DoD QDR organization is an effective analyticstructure that emphasizes jointness and total force thinking versus protection of individual service equities or servicebudget shares. The roles of the regional commander-in-chiefsshould be analyzed as they compete for limited service resources during growing commitments. The transformationstrategies of each service could require a reassessment ofprocurement decisions of systems designed for conventional battle as the United States moves further into theinformation age. The methods of estimating the risks involved in changingthe strategy, the construct the strategy is based upon, and the transformation philosophies of the services could wellaffect the outcome of the QDR. Translating the QDR into a coherentand useful defense strategy to guide the United States into an uncertain future will require challenging choices bythe Congress and Bush Administration.

The congressionally mandated Quadrennial Defense Review (QDR) directs DoD toundertake a wide-ranging review of strategy, programs,and resources. Specifically, the QDR is expected to delineate a national defense strategy consistent with the mostrecent National Security Strategy by defining force structure,modernization plans, and a budget plan allowing the military to successfully execute the full range of missionswithin that strategy. The report will include an evaluation by theSecretary of Defense and Chairman of the Joint Chiefs of Staff of the military's ability to successfully execute itsmissions at a low-to-moderate level of risk within the forecast budgetplan. The results of the 2001 QDR could well shape U.S. strategy and force structure in coming years. This reportwill be updated as future events warrant.

In 2006, expenditures on energy-related goods and services represented nearly 10% of total expenditures for older households. There are two main components of energy expenditures. Over half (57%) are for utilities and fuel to operate, heat, and cool homes; the remaining 43% are for gasoline and motor oil. Within the category of utilities and fuel, electricity comprises the largest share of spending, representing nearly two-thirds (62.8%) of this category. Second is natural gas (27.6%), and the remaining 9.6% are petroleum-based fuels like fuel oil and propane. However, the reliance on certain fuels varies widely by geographic region. Natural gas is the most commonly used source in the Northeast (55%), Midwest (79%) and West (66%), while electricity is the most commonly used source in the South (52%). In the Northeast, heating oil is also a significant fuel source, where it is reported second to natural gas as a primary fuel source (see Table 1 ). Petroleum-based products like fuel oil, propane, and gasoline comprise about 50% of household energy expenditures. Increases in costs in this category reflect the significant increases in the price of crude oil over the past five years. Over the past five years, the price per barrel of crude oil has risen nearly 200%. Over the same period, prices charged to consumers for petroleum-based energy costs (energy commodities) increased 117%, while prices charged for energy services increased 38% (see Table 2 ). Growth in overall energy spending is driven by two key factors: the price charged to the consumer and the quantity demanded. Energy prices to consumers have increased 70% between 2000 and 2007 as compared to a 20% rise in overall prices over the same time period. More recently, in 2007, overall energy prices rose 17.4% as compared to a 4.1% rise in overall prices (see Table 2 ). In fact, the increase in energy prices in December of 2007 accounted for about one-third of the overall CPI increase in that month. Beyond the direct effect of rising energy prices on household spending, there are also indirect effects on overall consumer prices that must be taken into account. All of the non-energy goods and services consumed by households rely to some degree on energy for their production. It takes energy to run a plant, and gasoline to fuel trucks and other forms of transport to take goods to the store to sell. Higher energy prices to manufacturers may be passed through to the consumer and thus increase overall inflation rates of goods and services. The consumer price index, excluding energy, has been rising in recent years, increasing from 1.5% in 2003 to 2.8% in 2007, suggesting that higher energy prices are affecting other areas of consumption as well. Older households account for approximately 20% of our nation's total consumption on energy-related products. Yet, they are disproportionately affected by higher energy costs. Although in actual dollar terms older households spend slightly less on energy-related consumption than households headed by a person under age 65, they spend a higher share of their income on energy-related expenditures. As shown in Table 3 , in 2006, older households spent 9.5% of their income on energy-related services compared to 7.4% for younger households in 2006. Among older households, lower-income elderly spend significantly more as a share of income for energy-related services compared to those with higher incomes. Older households with less than $15,000 in household income spent approximately 20% of their income for energy-related expenditures, as compared to 7.3% for elderly households with incomes over $15,000 in 2006. For utilities and fuel, these same households spent 13% of their income to heat and operate their homes, compared to only 4.7% for older households with $15,000 or more in income (see Table 4 ). The $15,000 threshold for household income in Table 4 is a close approximation to older households that have incomes below or near 150% of poverty. The 150% of poverty threshold is used by current public programs that provide low-income energy assistance to households (see discussion below). In 2006, about 22% of older Americans had family incomes below 150% of the poverty thresholds. These estimates are for 2006 and do not reflect the additional 17% increase in energy prices that occurred in 2007. Over time, growth in energy expenditures has increased faster than income of older households (see Figure 1 ). However, among older households, the data indicate that energy-related spending for low-income households is not increasing as fast as overall energy prices or energy-related spending for higher-income households. Average annual energy-related spending for low-income households (after adjusting for inflation) has increased only 5.9% since 2000, compared to 20% for higher-income households (see Table 4 ). This difference may reflect lower-income households changing their behavior in response to rising energy costs. According to an AARP survey, older Americans with household incomes below $25,000 are significantly more likely to reduce their savings and other spending to offset higher gasoline prices. Other alternatives that households explore in response to rising energy costs have included replacing heating and cooling systems with more energy-efficient units, installing energy-efficient windows, and purchasing more fuel-efficient cars. Although these alternatives may save costs in the longer-run, many lower-income households do not have sufficient funds to purchase them. The key public program that provides energy assistance to low-income households is the Low-Income Home Energy Assistance Program (LIHEAP). LIHEAP was established in 1981 ( P.L. 97-35 ) and is a block grant program under which the federal government makes annual grants to states, territories, and tribes to operate home energy assistance programs for low-income households. The LIHEAP statute authorizes two types of funds: block grant funds, which are allocated to all states using a statutory formula, and contingency funds, which are allocated to one or more states at the discretion of the Administration. Federal law limits LIHEAP eligibility to households with incomes up to 150% of the federal poverty guidelines (or, if greater, 60% of the state median income). States may adopt lower income limits, but no household with income below 110% of the poverty guidelines may be considered ineligible. In FY2004 (the most recent year for which data are available), 40% of low-income households eligible for LIHEAP had a member aged 60 or older. Over time, while energy costs have risen as a share of income, public programs like LIHEAP have faced declining funding. While utility and fuel expenditures have increased 34.6% from 2000 to 2005, the average benefit for LIHEAP has increased 12.6% over the same time period. These estimates do not include growth rates between 2005 and 2007, during which time energy prices increased another 20.8%. In the FY2008 Consolidated Appropriations Act ( P.L. 110-161 ), Congress appropriated $1.98 billion in LIHEAP funds and an additional $590 million in contingency funds. In the 110 th Congress, two bills have been introduced that would appropriate an additional $1 billion in LIHEAP contingency funds. Both bills, H.R. 4275 and S. 2405 , are entitled the "Keeping Americans Warm Act." In addition, a number of bills have been introduced that would provide additional funds for LIHEAP through various means, including penalties collected from energy suppliers and profits from carbon allowance trading. S. 1238 , the "Energy Security and Corporate Accountability Act of 2007," has also been introduced in the 110 th Congress and would allow low-income households eligible under the LIHEAP program to be eligible for state funds to assist them in paying transportation expenses associated with gasoline and motor oil purchases as well as public transportation.

Energy-related expenditures include spending for utilities and fuel to operate, heat, and cool homes and spending for gasoline and motor oil for private transportation. Energy prices to consumers have increased 70% between 2000 and 2007, driven largely by growth in prices for energy commodities such as petroleum. Petroleum-based products such as fuel oil, propane and gasoline comprise about 50% of household energy expenditures. Older Americans are disproportionately affected by higher energy costs. As a share of income, households headed by a person age 65 or older spend more on energy-related expenditures than their younger counterparts. In addition, low-income households (those with less than $15,000 in household income) spent nearly 20% of their household income on energy-related expenditures in 2006 (the latest year for which data are available). This compares to 7.3% spent by older households with incomes above $15,000. These estimates are for 2006 and do not reflect the additional 17% increase in energy prices that occurred in 2007. The key public program that provides energy assistance to low-income households is the Low-Income Home Energy Assistance Program (LIHEAP). Approximately 40% of low-income households that were eligible for LIHEAP have a household member aged 60 or older. Funding for the LIHEAP Program has not kept pace with recent increases in energy costs of older Americans. This report will explore the burden of rising energy costs on older Americans and discuss implications for public policies. This report will be updated when new data is released.

DOE’s Office of Fossil Energy oversees research on key coal technologies, but DOE does not systematically assess the maturity of those technologies. Using TRLs we developed for these technologies, we found consensus among stakeholders that CCS is less mature than efficiency technologies. Although federal standards for internal control require agency managers to compare actual program performance to planned or expected results and analyze significant differences, we found that DOE’s Office of Fossil Energy does not systematically assess the maturity of key coal technologies as they progress toward commercialization. While DOE officials reported that individual programs are aware of the maturity of technologies and DOE publishes reports that assess the technical and economic feasibility of advanced coal technologies, we found that the Office of Fossil Energy does not use a standard set of benchmarks or terms to describe or report on the maturity of technologies. In addition, DOE’s goals for advancing these technologies sometimes use terms that are not well defined. The lack of such benchmarks or an assessment of the maturity of key coal technologies and whether they are achieving planned or desired results limits: DOE’s ability to provide a clear picture of the maturity of these technologies to policymakers, utilities officials, and others; congressional and other oversight of the hundreds of millions of dollars DOE is spending on these technologies; and policymakers’ ability to assess the maturity of CCS and the resources that might be needed to achieve commercial deployment. Other agencies similarly charged with developing technologies, such as NASA and the Department of Defense (DOD), use TRLs to characterize the maturity of technologies. Table 1 shows a description of TRLs used by NASA. DOE has acknowledged that TRLs can play a key role in assessing the maturity of technologies during the contracting process. The agency recently issued a Technology Readiness Assessment Guide, which lays out three key steps to conducting technology readiness assessments during the contracting process. Identify critical technology elements that are essential to the successful operation of the facility. Assess maturity of these critical technologies using TRLs. Develop a technology maturity plan which identifies activities required to bring technology to desired TRL level. Although use of the Guide is not mandatory, DOE’s Office of Environmental Management uses the Guide as part of managing its procurement activities––a result of a GAO recommendation––and its Office of Nuclear Energy has begun using TRLs to measure and communicate risks associated with using critical technologies in a novel way. Furthermore, the National Nuclear Security Administration has used TRLs recently as well. In the absence of an assessment from DOE, we asked stakeholders to gauge the maturity of coal technologies using a scale we developed based on TRLs. Table 2 shows the TRLs we developed for coal technologies by adapting the NASA TRLs. for EOR use. However, this plant does not produce electricity. plants have already been demonstrated commercially. For example, a number of ultrasupercritical plants ranging from 600 to more than 1,000 MW have been built or are under construction in Europe and Asia, and there are five IGCC plants in operation around the world, including two in the United States. Commercial deployment of CCS within 10 to 15 years is possible according to DOE and other stakeholders, but is contingent on overcoming a variety of economic, technical, and legal challenges. Many technologies to improve plant efficiency have been used and are available for commercial use now, but still face challenges. injection wells can be permitted as Class I (injections of hazardous wastes, industrial nonhazardous wastes, municipal wastewater) or Class V wells (injections not included in other classes, including wells used in experimental technologies such as pilot CO for geologic sequestration. endangerment of underground sources of drinking water until the operator meets all the closure and post-closure requirements and EPA approves site closure of the well. According to EPA, once site closure is approved, well operators will only be liable under the SDWA if they violate or fail to comply with EPA orders in situations where an imminent and substantial endangerment to health is posed by a contaminant that is in or likely to enter an underground source of drinking water. EPA plans to finalize the geologic sequestration rule in fall 2010. Neither the proposed rule nor the final rule will address liability for unintended releases of stored CO emissions in lieu of more efficient coal plants. In addition, some higher efficiency plant designs also face technical challenges in that they require more advanced materials than are currently available. For example, “advanced” ultrasupercritical plants require development of metal alloys to withstand steam temperatures that could be 300 to 500 degrees Fahrenheit higher than today’s ultrasupercritical plants according to DOE. From a legal perspective, most stakeholders reported that making efficiency upgrades to the existing fleet of coal power plants was limited by the prospect of triggering the Clean Air Act’s New Source Review (NSR) requirements––additional requirements that may apply when a plant makes a major modification, a physical or operational change that would result in a significant net increase in emissions. emissions than efficiency improvements alone but could raise electricity costs, increase demand for water, and could affect the ability of individual plants to operate reliably. Technologies to improve plant efficiency offer potential near-term reductions, but also raise some concerns. According to key reports and stakeholders, the successful deployment of CCS technologies is critical to helping the United States meet potential limits in greenhouse gas emissions. In addition, CCS could allow coal to remain part of the nation’s diverse fuel mix. IEA estimated that CCS technologies could meet 20 percent of reductions needed to reduce global CO This report also noted that the cost of meeting this goal would increase if CCS was not deployed. Massachusetts Institute of Technology (MIT) researchers called CCS the “critical enabling technology” to reduce CO emissions while allowing continued use of coal in the future. In 2009, NAS reported that if CCS technologies are not demonstrated commercially in the next decade, the electricity sector could move more towards using natural gas to meet emissions targets. Our past work has also found that switching from coal to natural gas can lead to higher fuel costs and increased exposure to the greater price volatility of natural gas. On the other hand, most stakeholders told us that CCS would increase electricity prices, and key reports raise similar concerns. MIT estimated that plants with post-combustion capture have 61 percent higher cost of electricity, and IGCC plants with pre-combustion capture have a 27 percent higher cost compared to plants without these technologies. Similarly, DOE estimated that plants with post-combustion capture have 83 percent higher cost of electricity, while IGCC plants with pre- combustion capture having a 36 percent higher cost. DOE has also raised concerns about CCS and water consumption. Specifically, DOE estimated that post-combustion capture technology could almost double water consumption at a coal plant, while pre-combustion capture would increase water use by 73 percent. Some utility officials also said CCS could lead to a decline in the ability of individual plants to operate reliably because a power plant might need to shut down if any of the three components (capture, transport, and storage) of CCS became unavailable. In addition, more electricity sources would need to make up for the higher parasitic load associated with CCS. The National Coal Council has also reported temporary declines in reliability during past deployments of new coal technologies. Emission Goals with 21st Century Technologies (Washington, D.C., December 2009). We provided a draft of our report to the Secretary of Energy and the Administrator of EPA for review and comment. In addition, we provided selected slides on reliability of electricity supply to NERC for comment. We received written comments from DOE’s Assistant Secretary of the Office of Fossil Energy, which are reproduced in appendix III. The Assistant Secretary concurred with our recommendation, stating that DOE could improve its process for providing a clearer picture of technology maturity and that it planned to conduct a formal TRL assessment of coal technologies in the near future. The Assistant Secretary also provided technical comments, which we have incorporated as appropriate. In addition, EPA and NERC provided technical comments, which we have incorporated as appropriate. As agreed with your offices, unless you publicly announce the contents of this report earlier, we plan no further distribution until 30 days from the report date. At that time, we will send copies of this report to the appropriate congressional committees, Secretary of Energy, Administrator of EPA, and other interested parties. In addition, the report will be available at no charge on GAO’s Web site at http://www.gao.gov. If you or your staffs have any questions regarding this report, please contact me at (202) 512-3841 or gaffiganm@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made major contributions to this report are listed in appendix IV. all U.S. emissions of COCO2 is the most prevalent greenhouse gas (GHG) program and interviewed senior DOE staff on these Visited coal power plants and research facilities in three selected states—AL, MD, and WV4 We conducted this performance audit from July 2009 through May 2010, in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. We selected this nonprobability sample of states because they contained projects involving advanced coal technologies. To conduct this work, we reviewed key reports including those from the Department of Energy’s (DOE) national laboratories, the National Academy of Sciences, International Energy Agency (IEA), Intergovernmental Panel on Climate Change, Global CCS Institute, the National Coal Council, and academic reports. To identify stakeholders’ views on these technologies, we conducted initial scoping interviews with power plant operators, technology vendors, and federal officials from the Environmental Protection Agency (EPA) and DOE. Following this initial round of interviews, we selected a group of 19 stakeholders with expertise in carbon capture and storage (CCS) or technologies to improve coal plant efficiency and asked them a set of standard questions. This group of stakeholders included representatives from major utilities that are planning or implementing projects that use these technologies, technology vendors that are developing these technologies, federal officials that are providing research, development, and demonstration funding for these technologies, and researchers from academia or industry that are actively researching these technologies. During these interviews, we asked stakeholders to describe the maturity of technologies in terms of a scale we developed, based on Technology Readiness Levels (TRL). TRLs are a tool developed by the National Aeronautics and Space Administration and used by various federal agencies to rate the extent to which technologies have been demonstrated to work as intended using a scale of 1 to 9. In developing TRLs for coal technologies, we consulted with the Electric Power Research Institute (EPRI), which had recently used a similar approach to examine the maturity of coal technologies. Specifically, EPRI developed specific benchmarks to describe TRLs in the context of a commercial scale coal power plant. For example, they defined TRL 8 as demonstration at more than 25 percent the size of a commercial scale plant. We applied these benchmarks to a commercial scale power plant, which we defined as 500 megawatts (MW) and emitting about 3 millions tons of carbon dioxide (CO) annually. We based this definition on some of the key reports we reviewed, which used 500 MW as a standard power plant, and stated that such a plant would emit about 3 million tons of CO emissions from a power plant can vary based on a variety of factors, including the amount of time that a power plant is operated. We also reviewed available data on the use of key coal technologies compiled by IEA and the Global CCS Institute. The following are GAO’s comments on the Department of Energy’s letter dated June 4, 2010. In addition to the contact names above, key contributors to this report included Jon Ludwigson (Assistant Director), Chloe Brown, Scott Heacock, Alison O’Neill, Kiki Theodoropoulos, and Jarrod West. Important assistance was also provided by Chuck Bausell, Nirmal Chaudhary, Cindy Gilbert, Madhav Panwar, and Jeanette Soares.

Coal power plants generate about half of the United States' electricity and are expected to remain a key energy source. Coal power plants also account for about one-third of the nation's emissions of carbon dioxide (CO2 ), the primary greenhouse gas that experts believe contributes to climate change. Current regulatory efforts and proposed legislation that seek to reduce CO2 emissions could affect coal power plants. Two key technologies show potential for reducing CO2 emissions: (1) carbon capture and storage (CCS), which involves capturing and storing CO2 in geologic formations, and (2) plant efficiency improvements that allow plants to use less coal. The Department of Energy (DOE) plays a key role in accelerating the commercial availability of these technologies and devoted more than $600 million to them in fiscal year 2009. Congress asked GAO to examine (1) the maturity of these technologies; (2) their potential for commercial use, and any challenges to their use; and (3) possible implications of deploying these technologies. To conduct this work, GAO reviewed reports and interviewed stakeholders with expertise in coal technologies. DOE does not systematically assess the maturity of key coal technologies, but GAO found consensus among stakeholders that CCS is less mature than efficiency technologies. Specifically, DOE does not use a standard set of benchmarks or terms to describe the maturity of technologies, limiting its ability to provide key information to Congress, utilities, and other stakeholders. This lack of information limits congressional oversight of DOE's expenditures on these efforts, and it hampers policymakers' efforts to gauge the maturity of these technologies as they consider climate change policies. In the absence of this information from DOE, GAO interviewed stakeholders with expertise in CCS or efficiency technologies to identify their views on the maturity of these technologies. Stakeholders told GAO that while components of CCS have been used commercially in other industries, their application remains at a small scale in coal power plants, with only one fully integrated CCS project operating at a coal plant. Efficiency technologies, on the other hand, are in wider commercial use. Commercial deployment of CCS is possible within 10 to 15 years while many efficiency technologies have been used and are available for use now. Use of both technologies is, however, contingent on overcoming a variety of economic, technical, and legal challenges. In particular, with respect to CCS, stakeholders highlighted the large costs to install and operate current CCS technologies, the fact that large scale demonstration of CCS is needed in coal plants, and the lack of a national carbon policy to reduce CO2 emissions or a legal framework to govern liability for the permanent storage of large amounts of CO2. With respect to efficiency improvements, stakeholders highlighted the high cost to build or upgrade such coal plants, the fact that some upgrades require highly technical materials, and plant operators' concerns that changes to the existing fleet of coal power plants could trigger additional regulatory requirements. CCS technologies offer more potential to reduce CO2 emissions than efficiency improvements alone, and both could raise electricity costs and have other effects. According to reports and stakeholders, the successful deployment of CCS technologies is critical to meeting the ambitious emissions reductions that are currently being considered in the United States while retaining coal as a fuel source. Most stakeholders told GAO that CCS would increase electricity costs, and some reports estimate that current CCS technologies would increase electricity costs by about 30 to 80 percent at plants using these technologies. DOE has also reported that CCS could increase water consumption at power plants. Efficiency improvements offer more potential for near term reductions in CO2 emissions, but they cannot reduce CO2 emissions from a coal plant to the same extent as CCS. GAO recommends that DOE develop a standard set of benchmarks to gauge and report to Congress on the maturity of key technologies. In commenting on a draft of this report, DOE concurred with our recommendation.

The Americans with Disabilities Act (ADA) has often been described as the most sweeping nondiscrimination legislation since the Civil Rights Act of 1964. It provides broad nondiscrimination protection in employment, public services, public accommodations, and services operated by private entities, transportation, and telecommunications for individuals with disabilities. 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." The ADA and its regulations require reasonable accommodation or modifications in policies, practices, or procedures when such modifications are necessary to render the goods, services, facilities, privileges, advantages, or accommodations accessible to individuals with disabilities. This concept is found in title I, regarding employment, title II, regarding public entities, and title III, regarding public accommodations. The reasonable accommodation or modification requirement has been interpreted to allow the use of service animals, even in places where animals are generally not permitted. Recently, the Department of Justice (DOJ) promulgated regulations containing specific details about service animals, including when they may be denied access, and defining service animals as trained dogs. This report focuses on these regulatory requirements. Currently, the DOJ regulations for titles II and III of the ADA define service animal as "any dog that is individually trained to do work or perform tasks for the benefit of an individual with a disability, including a physical, sensory, psychiatric, intellectual, or other mental disability." Previously, the DOJ regulations had defined service animal as a dog or other animal individually trained to do work or perform tasks for the benefit of an individual with a disability; however, the variety of animal species promoted as service animals led to DOJ's limitation of the definition. The regulations specifically exclude other species of animals whether or not they are wild or domestic or trained or untrained. DOJ notes that, at the time of the promulgation of the original regulations, "few anticipated the variety of animals that would be promoted as service animals in the years to come, which ranged from pigs, and miniature horses to snakes, iguanas, and parrots." Arguments were made by commentators on the proposed regulations for the inclusion of monkeys, particularly capuchin monkeys, who were trained to provide in-home services to individuals with paraplegia and quadriplegia. However, DOJ rejected these arguments noting the potential for disease transmission and unpredictable aggressive behavior. The DOJ regulations specifically define a service animal as "any dog that is individually trained to do work or perform tasks for the benefit of an individual with a disability." The regulations elaborate on the meaning of this requirement mandating that the "work or tasks performed by a service animal must be directly related to the handler's disability." Examples of work or tasks are provided and include the following: Assisting individuals who are blind or have low vision with navigation Alerting individuals who are deaf or hard of hearing to the presence of people or sounds Providing non-violent protection or rescue work Pulling a wheelchair Assisting an individual during a seizure Alerting individuals to the presence of allergens Retrieving items such as medicine or the telephone Providing physical support and assistance with balance to individuals with mobility disabilities Helping individuals with psychiatric and neurological disabilities by preventing or interrupting impulsive or destructive behaviors However, the fact that the presence of an animal may deter crime or provide emotional support does not constitute work or a task. DOJ emphasizes the importance of the concept of doing work or performing tasks and states that "unless the animal is individually trained to do something that qualifies as work or a task, the animal is a pet or support animal and does not qualify for coverage as a service animal." The process for determining if an animal is doing work or performing a task is described as two-part: first, the animal must recognize the problem, and second, the animal must respond. An example would be recognition by a service animal that a person is about to have a psychiatric episode, and a response to this recognition by nudging, barking, or removing the individual to a safe location. Whether or not to include "comfort animals" in the definition of service animals was controversial. DOJ recognizes that the Fair Housing Act (FHA) and the Air Carriers Access Act (ACAA) may create legal obligations for an entity to allow a comfort animal and that this difference from the ADA requirements could lead to confusion. However, DOJ notes that its distinction between a service animal and a comfort animal is based on differences in the covered entities; ADA titles II and III govern a broader range of public settings than either the FHA or the ACAA. Despite the regulatory limitation in the definition to dogs, miniature horses may be allowed in certain circumstances. Although they are not included in the definition of service animal, the regulations specifically provide that a public entity (title II) or public accommodation (title III) "shall make reasonable modifications in policies, practices, or procedures to permit the use of a miniature horse by an individual with a disability if the miniature horse has been individually trained to do work or perform tasks for the benefit of the individual with a disability." DOJ notes that this provision for miniature horses was made since miniature horses are a viable alternative to dogs for individuals with allergies or who have religious beliefs that preclude the use of dogs. In addition, the longer life span of miniature horses reduces the replacement cost of an animal. In order to determine whether the modifications required for a miniature horse are "reasonable," the regulations provide that public entities or public accommodations shall consider four factors: The type, size, and weight of the miniature horse and whether the facility can accommodate these features Whether the handler has sufficient control over the miniature horse Whether the miniature horse is house broken Whether the miniature horse's presence compromises legitimate safety requirements The specific times when a service animal may be properly excluded, discussed infra, are applicable to miniature horses. In addition, ponies and full sized horses are not covered and miniature horses may be excluded if their presence results in "a fundamental alteration to the nature of the programs, activities, or services provided." Generally, a public entity (title II) or a place of public accommodation (title III) must modify its policies, practices, and procedures to allow an individual with a disability to use a service animal. More specifically, individuals with disabilities must be permitted to be accompanied by their service animal in areas where other members of the public, or participants in programs or activities are allowed. A public entity or place of public accommodation may not ask or require a surcharge for a service animal, even if people with pets must pay an additional fee. However, there are certain limitations on these requirements, and, as noted previously, these limitations also apply to miniature horses. The animal must be under its handler's control and the public entity or place of public accommodation is not responsible for the care or supervision of the animal. The regulations specifically allow a public entity or a place of public accommodation to ask an individual with a disability to remove a service animal from the premises when the animal is out of control and its handler does not take effective action to control it, or the animal is not housebroken. In its discussion of these exceptions, DOJ observes that an animal may misbehave when provoked or injured. If there is reason to suspect this has occurred, a public entity or a place of public accommodation should determine the facts and, if provocation or injury has occurred, take steps to prevent any similar actions. When the service animal is properly excluded, the public entity or a place of public accommodation must give the individual with a disability the opportunity to participate in the service, program, or activity without the animal. A public entity or place of public accommodation may not ask about the nature or extent of an individual's disability but may ask two questions to determine if the animal is a service animal, when it is not readily apparent. These two questions are if the animal is required because of a disability, and what work or task the animal is trained to do. Although the DOJ title II and III regulations provide significant guidance regarding service animals, there are still some issues remaining. For example, the exact interaction between the ADA's requirements and those of other statutes, such as the Fair Housing Act, is somewhat uncertain. When a facility has a mixed use—such as a hotel which allows both residential and short-term stays but does not allocate space for these different uses in separate, discrete units—both the ADA and the Fair Housing Act may apply to the facility. Exactly how the differing service animal requirements would apply in this situation is unclear and will most likely await judicial determinations. Similarly, DOJ regulations do not address the issues involved when an individual with allergies to dogs and an individual with a disability using a service animal both attempt to use a place of public accommodation. This situation, which may occur more often given the more expansive definition of disability provided in ADA Amendments Act, was at issue in Lockett v. Catalina Channel Express, Inc . In Lockett , Catalina Channel Express (CCE), which operates a ferry between Long Beach and Catalina Island, instituted a policy of excluding animals from part of the ferry because of a request by a frequent passenger for an area free of animal dander. When an individual with a visual impairment and a guide dog attempted to buy a ticket for this part of the ferry, the CCE refused, although it changed its policy two weeks later. The court of appeals found that the CCE had made a "one-time reasonable judgment … while it investigated the competing interests" and emphasized the narrowness of its holding. Thus, there is considerable ambiguity concerning how potentially conflicting claims for accommodations relating to service animals should be addressed.

The Americans with Disabilities Act (ADA) has as its purpose providing "a clear and comprehensive national mandate for the elimination of discrimination against individuals with disabilities." In order to effectuate this purpose, the ADA and its regulations require reasonable accommodation or modifications in policies, practices, or procedures when such modifications are necessary to render the goods, services, facilities, privileges, advantages, or accommodations accessible to individuals with disabilities. The reasonable accommodation or modification requirement has been interpreted to allow the use of service animals, even in places where animals are generally not permitted. The Department of Justice (DOJ) has promulgated regulations containing specific details about service animals, and this report focuses on these regulatory requirements. Generally, a public entity (ADA title II) or a place of public accommodation (ADA title III) must modify its policies, practices, and procedures to allow an individual with a disability to use a service animal. The regulations also define service animals. A service animal is "any dog that is individually trained to do work or perform tasks for the benefit of an individual with a disability, including a physical, sensory, psychiatric, intellectual, or other mental disability." (emphasis added). However, despite the regulatory limitation of the definition to dogs, miniature horses may be allowed in certain circumstances. A service animal does not need to be allowed when the animal is out of control or the animal is not housebroken. In addition, a public entity or place of public accommodation may not ask about the nature or extent of an individual's disability but may ask two questions to determine if the animal is a service animal when it is not readily apparent. These questions are, if the animal is required because of a disability, and what work or task the animal is trained to do. Several issues remain unresolved by the DOJ regulations. For example, the relationship between the ADA and Fair Housing Act in some situations is unclear. In addition, there is considerable ambiguity concerning how potentially conflicting claims for accommodations relating to service animals should be addressed.

The Navy previously organized itself into aircraft carrier battle groups (CVBGs) and Amphibious Ready Groups (ARGs). An ARG typically included 3 amphibious ships that together were capable of embarking a Marine Expeditionary Unit (MEU), which is a force of about 2,200 Marines, their ground-combat equipment, and an aircraft detachment. ARGs traditionally operated overseas in the company of CVBGs. Navy officials more recently decided that the CVBG/ARG combination offered insufficient flexibility for deploying significant naval capability in several locations around the world at the same time. They also decided that with the increasing capabilities of Navy ships, naval formations other than the large CVBG/ARG combination could now be sufficient to perform certain missions. As a result, the Navy has implemented a new Global Concept of Operations (CONOPS) that reorganized the Navy into a larger number of independently deployable, strike-capable formations. The most significant change was the conversion of ARGs into independently deployable formations called Expeditionary Strike Groups (ESGs). An ESG is an ARG that has been reinforced with 3 surface combatants, an attack submarine carrying Tomahawk cruise missiles, and perhaps a land-based P-3 Orion long-range maritime patrol aircraft. The Global CONOPS also created independently deployable surface strike groups (SSGs), each consisting of a few surface combatants (most or all Tomahawk-armed), and independent operations by 4 Trident SSGN submarines that have been converted to carry Tomahawks and special operations forces. CVBGs under the Global CONOPS plan were redesignated Carrier Strike Groups (CSGs). Implementing the Global CONOPS changed the Navy from a fleet with 11 independently deployable CVBG/ARG formations into one with 20 major independently deployable strike groups (11 CSGs and 9 ESGs) and additional independently deployable capabilities in the form of SSGs and Trident SSGNs. The Navy's traditional means of maintaining forward-deployed presence had been the standard six-month deployment. Although the six-month limit on deployment length and the predictability of the rotational deployment schedule were considered key to the Navy's ability to maintain its forward deployments while meeting its personnel recruiting and retention goals, Navy officials concluded that the deterrent value of forward-deployed naval forces might be enhanced by making naval forward deployments more flexible and less predictable. Navy officials also concluded that orienting Navy readiness toward maintaining standard six-month deployments resulted in a fleet that offered insufficient flexibility for surging large numbers of naval forces in a short time to respond to major regional contingencies. As a result, although six-month (and now seven-month) deployments will still take place, the Navy has put more flexibility into its deployment plans by deploying some CSGs and ESGs for less than or more than six or seven months, as operational needs dictate. The Navy has implemented an initiative called the Fleet Response Plan (FRP) that is intended to increase the Navy's ability to surge multiple formations in response to emergencies. Under the FRP, CSGs and ESGs that have just returned from deployments will be kept, for a time, on alert for potential short-notice redeployment if needed, and CSGs and ESGs that are approaching their next scheduled deployment will be maintained in a higher readiness status so that they, too, could be deployed on short notice, prior to their scheduled deployment dates. Implementing the FRP with 11 CSGs, the Navy says, permits the Navy to deploy up to 6 CSGs within 30 days, and an additional CSG within another 60 days after that. For this reason, the FRP is also referred to as "6+1." A February 2008 Government Accountability Office (GAO) report stated: The Navy has taken several positive steps toward implementing a sound management approach for FRP, but has not developed implementation goals, fully developed performance measures, or comprehensively assessed and identified the resources required to achieve FRP goals. GAO's prior work has shown that key elements of a sound management approach include: defining clear missions and desired outcomes, establishing implementation goals, measuring performance, and aligning activities with resources. The Navy has made progress in implementing FRP since GAO's prior reports. For example, it has established a goal of having three carrier strike groups deployed, three ready to deploy within 30 days of being ordered to do so, and one more within 90 days (referred to as 3+3+1). The Navy also has established a framework to set implementation goals for all forces, established some performance measures that are linked to the FRP phases, and begun efforts to identify needed resources. However, the Navy has not yet established a specific implementation goal for expeditionary strike groups and other forces. In addition, the Navy has not fully developed performance measures to enable it to assess whether carrier strike groups have achieved adequate readiness levels to deploy in support of the 3+3+1 goal. Moreover, the Navy has not fully identified the resources required to achieve FRP goals. Until the Navy's management approach fully incorporates the key elements, the Navy may not be able to measure how well FRP is achieving its goals or develop budget requests based on the resources needed to achieve expected readiness levels. The Navy has not fully considered the long-term risks and tradeoffs associated with the changes made as FRP has been implemented, such as carrier operational and maintenance cycles and force structure. The Navy has extended the intervals between carrier dry-dock maintenance periods from 6 years to 8 years and begun a test program that will extend some carrier dry-dock intervals to as much as 12 years, and it has lengthened operational cycles for carriers and their airwings to 32 months. GAO previously advocated that the Department of Defense adopt a risk management approach to aid in its decision making that includes assessing the risks of various courses of action. However, the Navy has not fully considered the long-term risks and tradeoffs of these recent changes because it has not performed a comprehensive assessment of how the changes, taken as a whole, might affect its ability to meet FRP goals and perform its missions. In addition, while the Navy has developed force structure plans that include two upcoming periods when the number of available aircraft carriers temporarily drops from 11 to 10, the plans included optimistic assumptions about the length of the gaps and the availability of existing carriers and did not fully analyze how the Navy would continue to meet FRP goals with fewer carriers. Until the Navy develops plans that use realistic assumptions and accurately identify the levels of risk the Navy is willing to accept during these gap periods, senior Navy leadership may not have the information it needs to make informed tradeoff decisions. Homeporting Navy ships in overseas locations, called forward homeporting, can reduce transit times between home port and operating area and thus permit the Navy to provide a larger number of ship days on station in overseas operating areas. The U.S. Navy's principal forward homeporting location is Japan, where the Navy since the early 1970s has forward homeported a CVBG (now a CSG) and an ARG (now the core of an ESG). The Navy traditionally has also forward-homeported a small number of other ships, such as fleet command ships and repair ships, in forward locations such as Italy and the U.S. territory of Guam. The Navy in recent years has forward-homeported four mine warfare ships at Bahrain in the Persian Gulf and three attack submarines at Guam. Increasing the number of ships forward-homeported in the Pacific can improve the Navy's ability to respond to contingencies in locations such as the Korean Peninsula or the Taiwan Strait. A March 2002 CBO report presented an option for homeporting as many as 11 attack submarines at Guam. The final report of the 2005 Quadrennial Defense Review (QDR) directed the Navy to provide at least six aircraft carriers and 60% of its submarines in the Pacific. The Navy is implementing these two measures, which do not necessarily require additional forward homeporting. (They can be accomplished, for example, by moving ships from Atlantic Fleet home ports to San Diego or the Puget Sound area.) The Navy in recent years has experimented with the concept of long-duration deployments with crew rotation. This concept, which the Navy calls Sea Swap, is another way to reduce the amount of time that deployed ships spend transiting to and from operating areas. Sea Swap involves deploying Navy ships overseas for periods such as 12, 18, or 24 months rather than 6 or 7 months, and rotating successive crews out to the ships for 6-month periods of duty. Sea Swap can reduce the number of ships the Navy needs to have in its inventory to maintain one such ship on station in an overseas operating area by 20% or more. Potential disadvantages of Sea Swap include extensive wear and tear on the deployed ship due to lengthy periods of time at sea, a reduced sense of crew "ownership" of a given ship (which might reduce a crew's incentive to keep the ship in good condition), and reduced opportunities for transit port calls (which have diplomatic value and are beneficial for recruiting and retention). The Navy in recent years has conducted Sea Swap experiments with surface combatants and mine warfare ships that Navy officials have characterized as successful in terms of ship days on station, total costs, ship maintenance and material condition, and crew re-enlistment rates during deployment. In 2004, it was reported that a review of the Sea Swap experiment conducted by the Center for Naval Analyses found that although Sea Swap was successful in these terms, crew members participating in the experiment who were surveyed viewed the concept negatively and indicated they would be less likely to stay in the Navy if all deployments were conducted this way. The Navy made changes in later Sea Swap experiments to address issues that led to crew dissatisfaction, including lost liberty calls and increased training and work. In 2005, Navy officials testified that applying Sea Swap somewhat widely throughout the fleet could help permit the fleet to be reduced from a then-planned range of 290 to 375 ships down to a range of 260 to 325 ships. More recently, Navy officials have expressed less enthusiasm for extending Sea Swap beyond surface combatants. A July 2006 press article reported that the Navy may limit Sea Swap in the surface fleet to smaller combatants such as patrol craft, Littoral Combat Ships (LCSs), and frigates. The Navy plans to use Sea Swap to keep two of its four SSGNs continuously deployed. A May 2008 GAO report stated: Rotational crewing represents a transformational cultural change for the Navy. While the Navy has provided leadership in some rotational crewing programs, the Navy has not fully established a comprehensive management approach to coordinate and integrate rotational crewing efforts across the department and among various types of ships.... The Navy has not assigned clear leadership and accountability for rotational crewing or designated an implementation team to ensure that rotational crewing receives the attention necessary to be effective. Without a comprehensive management approach, the Navy may not be able to lead a successful transformation of its crewing culture. The Navy has promulgated crew exchange instructions for some types of ships that have provided some specific guidance and increased accountability. However, the Navy has not developed an overarching instruction that provides high-level guidance for rotational crewing initiatives and it has not consistently addressed rotational crewing in individual ship-class concepts of operations.... The Navy has conducted some analyses of rotational crewing; however, it has not developed a systematic method for analyzing, assessing and reporting findings on the potential for rotational crewing on current and future ships. Despite using a comprehensive data-collection and analysis plan in the Atlantic Fleet Guided Missile Destroyer Sea Swap, the Navy has not developed a standardized data-collection plan that would be used to analyze all types of rotational crewing, and life-cycle costs of rotational crewing alternatives have not been evaluated. The Navy has also not adequately assessed rotational crewing options for future ships. As new ships are in development, DOD guidance requires that an analysis of alternatives be completed. These analyses generally include an evaluation of the operational effectiveness and estimated costs of alternatives. In recent surface ship acquisitions, the Navy has not consistently assessed rotational crewing options. In the absence of this, cost-effective force structure assessments are incomplete and the Navy does not have a complete picture of the number of ships it needs to acquire. The Navy has collected and disseminated lessons learned from some rotational crewing experiences; however, some ship communities have relied on informal processes. The Atlantic Sea Swap initiative used a systematic process to capture lessons learned. However, in other ship communities the actions were not systematic and did not use the Navy Lessons Learned System. By not systematically recording and sharing lessons learned from rotational crewing efforts, the Navy risks repeating mistakes and could miss opportunities to more effectively implement crew rotations. Another strategy for increasing the percentage of time that Navy ships can be deployed is multiple crewing, which involves maintaining an average of more than one crew for each Navy ship. Potential versions include having two crews for each ship (dual crewing), 3 crews for every 2 ships, 4 crews for every 3 ships, 5 crews for every 4 ships, or other combinations, such as 8 crews for every 5 ships. The most basic version of Sea Swap maintains an average of one crew for each ship in inventory, but Sea Swap could be combined with multiple crewing. For many years, the Navy's nuclear-powered ballistic missile submarines (SSBNs) have been operated successfully with dual crews. The above-mentioned March 2002 CBO report presented the option of applying multiple crewing to the attack submarine fleet. Potential disadvantages of multiple crewing include the costs of recruiting, training, and retaining additional crews, the difficulty of achieving fully realistic training using land-based simulators (whose use would be more necessary because a given crew would not always have access to a ship for training), a reduced sense of crew "ownership" of a given ship, and increased wear and tear on the ship due to more intensive use of the ship at sea (which can reduce ship life). The Navy plans to use dual crewing for its first few LCSs, and then switch the LCS fleet to a "4-3-1" crewing strategy when the total number of LCSs grows to a larger number. Under the 4-3-1 plan, four crews would be used for every three LCSs to keep one of those three LCSs continuously deployed. The Navy is experimenting with a concept, first announced in 2006, called global fleet stations, or GFSs. The core of a GFS is an amphibious ship or high-speed sealift ship that is forward deployed to a region of interest. Smaller Navy ships, such as LCSs, might then operate in conjunction with this core ship to perform various missions. The Navy in 2007 is conducting six-month pilot GFS in the Caribbean built around the high-speed sealift ship Swift, and plans to follow this in late 2007 with a second, year-long, GFS in the Gulf of Guinea, off the western coast of Africa, that is to be built around an amphibious ship. The Navy states that the GFS concept offers a means to increase regional maritime security through the cooperative efforts of joint, inter-agency, and multinational partners, as well as Non-Governmental Organizations.... From its sea base, each GFS would serve as a self-contained headquarters for regional operations with the capacity to repair and service all ships, small craft, and aircraft assigned. Additionally, the GFS might provide classroom space, limited medical facilities, an information fusion center, and some combat service support capability. The GFS concept provides a leveraged, high-yield sea based option that achieves a persistent presence in support of national objectives. Additionally, it complements more traditional CSG/ESG training and deployment cycles. Potential oversight issues for Congress include the following: How might the changes discussed above affected the planned size and structure of the fleet? For what kinds of ships should Navy use Sea Swap or multiple crewing? How will FRP and the forward-homeporting of additional ships affect the distribution of Navy ship overhaul and repair work? How many additional ships, of what types, should the Navy forward homeport in the Pacific, and precisely where?

The Navy has implemented new kinds of naval formations, more flexible forward-deployment schedules, and a ship readiness plan (called the Fleet Response Plan, or FRP) for surge-deploying several aircraft carriers in a short period of time to respond to contingencies. The Navy has also forward-homeported additional ships, experimented with long-duration deployments with crew rotation (which the Navy calls Sea Swap), investigated multiple-crewing of ships, and is experimenting with a new forward-deployment concept called global fleet stations, or GFSs. These actions raise several potential issues for Congress. This report will be updated as events warrant.

Inflation, the general rise in the prices of goods and services, is important to policymakers for several reasons. First, rising inflation is unpopular with the public, in part because some households are more adversely affected by inflation than others. Second, high or rising inflation can reduce productivity by distorting price signals, so that it is hard for businesses to tell if prices are changing in relative terms, and by individuals wasting resources in order to maintain the purchasing power of their wealth. Finally, inflation plays a key role in macroeonomic stabilization policy. Changes in inflation often indicate changes in the business cycle—rising inflation is often a sign that the economy is overheating and falling inflation is a sign that the economy is sluggish. The Federal Reserve (Fed) is mandated to keep inflation low and stable, and alters interest rates in order to do so. In recent years, the Fed has focused attention on the core rate of inflation, a measure of inflation that excludes food and energy prices, in explanations of its policy decisions. For example, in July 2007, the third sentence of the 10-sentence Federal Open Market Committee statement summarizing the committee's policy decision read, "Readings on core inflation have improved modestly in recent months." In Fed Chairman Ben Bernanke's July 2007 testimony to Congress, he stated that "Food and energy prices tend to be quite volatile, so that, looking forward, core inflation...may be a better gauge than overall inflation of underlying inflation trends." When core inflation approached 3% in 2006, Chairman Bernanke said that it had "reached a level that, if sustained, would be at or above the upper end of the range that many economists, including myself, would consider consistent with price stability...." This report defines core inflation, reviews recent trends, and analyzes the advantages and drawbacks of using core inflation. No official measure of "inflation" exists. Inflation is measured as the percent change in a price index. Several indices track price changes, with each data series measuring something different. The most commonly cited measure of inflation is the percent change in the consumer price index (CPI) . This index measures the price of a basket of consumer goods and services that is representative of overall consumer purchases in urban areas. When food and energy prices are omitted from the CPI, the remaining basket is commonly referred to as the core CPI . The overall measure of CPI, which includes food and energy, is often referred to as the headline CPI . Another common measure of inflation is the percent change in the GDP (gross domestic product) price deflator , which is used to transform nominal GDP into real GDP. Since the GDP deflator is based on the prices of all goods and services in the economy, it is a broader measure of inflation than the CPI. A subset of the GDP deflator that is conceptually similar to the CPI, but includes more items and areas, is the personal consumption expenditures (PCE) price deflator ; for technical reasons, the Fed sometimes prefers this measure to the CPI in their analyses. Core measures of the GDP and PCE deflators are also available. Conceptually, core inflation could be any measure of inflation that attempts to strip out price volatility, but the most common definition of core strips out only two particularly volatile categories of goods, food and energy. The four most volatile items in the CPI are all food or energy products. The standard deviation of energy prices is estimated to be 12 times higher than overall inflation. Omitting food and energy prices from the CPI is not a trivial modification—food and beverages accounted for 15% of the headline CPI basket, and energy accounted for an additional 9% in 2006. While excluding food from core inflation has become conventional, it may no longer be warranted. The volatility of food has decreased significantly since the 1970s. Until 2007, the recent divergence between headline and core inflation was driven by energy prices. In 2007, food prices rose rapidly—it is too soon to tell whether this development marks a renewed period of persistent volatility. If food prices are no longer volatile, then policymakers may be losing useful information by omitting them. In recent years, headline inflation has typically outpaced core inflation, as seen in Figure 1 , because of the rapid rise in energy prices. In 2007, headline inflation was also driven up by a 3.9% increase in food prices. The difference between core and headline has not always been trivial—from 2003 to 2006, core inflation was 0.9 percentage points lower than headline. Considering that the Fed judges 2% inflation to be on the low side and 3% inflation on the high side, the definition used in these years would have arguably strongly colored their policy stance. The difference between core and headline inflation over this period was overwhelmingly the result of energy prices, which rose by an average of 12.8% a year as measured by the CPI. When comparing purchasing power over two time periods, headline inflation is the relevant measure. Comparisons over time of wages, wealth, rates of return, government transfers such as Social Security payments, and so on should all use a headline measure of inflation, because all of these concepts depend on a broad measure of inflation. For example, adjusting household income by core inflation would not be useful since food and energy consumption account for about one-quarter of average household expenditures. Similarly, government programs and parts of the tax code that are adjusted for inflation are based on headline inflation. Economic growth is also calculated by first adjusting GDP by headline inflation. Core inflation is used by policymakers for the reason offered by Chairman Bernanke in the introduction—policymakers are most concerned about the future path of inflation, and current core inflation data may give better information than current headline data about future headline inflation. Headline inflation often does not have good predictive power over short-time periods because food and energy prices are so volatile. For example, the monthly headline inflation rate varied between -6.3% and 7.5% in 2006 at annualized rates, whereas the core rate varied between 1.2% and 3.6%. Policymakers are concerned with future inflation because of lags between a change in policy and its effect on the economy. In essence, it is already too late for policy to influence current inflation, a policy change today can only affect future inflation. Theoretically, short-term changes in inflation can be caused by the supply-side or demand-side of the economy. When rising inflation is demand-driven, it means that spending is growing too quickly in the overall economy, and production cannot keep pace. This phenomenon is captured in the famous saying "too much money chasing too few goods." The Fed's task is to counteract this by raising interest rates in order to reduce the growth rate of interest-sensitive spending. Likewise, if spending is rising too slowly, inflation will fall, which the Fed can counteract by reducing interest rates. In the short run, the overall inflation rate can also be affected by sharp price changes of individual goods caused by supply shocks. For example, bad weather can drive up food prices or a reduction in the oil supply can drive up energy prices. Since these supply shocks are temporary, they should not have any lasting effect on inflation (holding aggregate spending constant), in which case they can be ignored by policymakers. In the long run, price shocks on the supply side should cancel each other out (since, across all goods, there will be an equal number of positive and negative surprises), and average inflation should be completely demand driven. Ideally, policymakers would like to be able to identify whether any change in inflation was demand-driven or supply-driven. Unfortunately, there is no straightforward way to do this, so they have commonly used core inflation as a proxy for demand-driven inflation, reasoning that food and energy are two sectors of the economy that are most susceptible to supply shocks. Furthermore, policymakers are particularly concerned with inflationary expectations, and a rising core rate may be a better sign than rising headline that inflationary expectations have risen. Relying on core inflation for policymaking has its drawbacks, however. There is no inherent reason that changes in food and energy prices cannot be caused by changes in aggregate demand. For example, rapid spending growth could push up energy prices if supply does not rise in response. In fact, an argument has been made that a change in aggregate demand would first show up in price changes of goods that have flexible pricing, such as commodities that are traded on financial markets where prices change continually to clear the market. Both energy and basic foodstuffs are traded on financial markets, although the CPI measures final food and energy products, not basic commodities. Furthermore, a rise in the price of any one good need not lead to a change in inflation if the prices of other goods fall to offset it. Technically, if a rise in one price leads to a rise in overall inflation, it must be because of some accommodation on the Fed's part (because it did not raise interest rates enough to induce other prices to fall). Most economists believe that some accommodation to relative price changes is desirable because it reduces the volatility of economic growth, whereas zero accommodation could lead to needless disruptions in economic activity. For example, Fed Governor Frederic Mishkin used the Fed's macro model of the U.S. economy to show that when the Fed reacts to changes in headline inflation instead of core inflation, future inflation will be slightly less volatile, but unemployment will be significantly more volatile. But if the Fed accommodates a rise in the price of one good too much, then the price of all goods could start rising. In other words, a rise in headline inflation could feed through to higher core inflation. This scenario occurred in the 1970s where rising energy prices resulted in a rise in total inflation. In scenarios like this one, a focus on core inflation could forestall a needed policy change until it is too late. Indeed, a case can be made today that more of a focus on headline inflation would have avoided the persistent upward trend in core inflation that has occurred from 2003 to 2007 and brought core inflation above the Fed's self-defined "comfort zone." The weakness with the focus on core inflation is that when energy prices rise continually for a period of several years, they no longer represent random price fluctuations that offer no useful information about future inflation. As a result, too much monetary policy accommodation may have taken place recently, causing the economy to overheat. Future events will reveal if this is the case, or if the rise in core inflation can be painlessly reversed without a recession. In the end, the question of what measure of inflation is best for policymaking is an empirical one. One study found that "no core measure does an outstanding job forecasting [headline] CPI inflation...we find no strong evidence to suggest that a selected core measure will be able to retain its usefulness as a tool to forecast inflation for any given period..." Another study did not find a statistically significant relationship between core inflation and future headline inflation, although the relationship becomes significant when limited to a more recent time period. Two other studies found that headline inflation is a better predictor of future headline inflation than core inflation. An explanation for this finding is that during the past 10 years, changes in core inflation have tended to lag behind changes in headline inflation as illustrated in Figure 1 . One study found that a core measure that excludes only energy was a better predictor of future inflation from 1983 to 2001 than a measure excluding food and energy. In fact, that study found food prices to be a better predictor of future inflation than any other measure, including core inflation. Some studies suggest that there may be more sophisticated measurements that are better gauges of underlying inflationary pressures than the standard definition of core inflation. Core inflation has the advantage from a policy perspective, however, of being transparent, whereas the more sophisticated measurements could be hard for the public to understand and open to accusations of data mining or manipulation. While this advantage may make core inflation a useful tool for communicating Fed policy to the public, the empirical evidence suggests it to be, by itself, an inadequate tool for policymaking.

Inflation measures the rate of change in all prices. Maintaining low and stable inflation is one of the primary goals of macroeconomic policy. But how should inflation be measured? Policymakers, particularly at the Federal Reserve, often refer to core inflation in their policy decisions. Core inflation is commonly defined as a measure of inflation that omits changes in food and energy prices. Some policymakers prefer to use core inflation to predict future overall inflation because food and energy price volatility makes it difficult to discern trends from the overall inflation rate. A drawback of an over-reliance on core inflation, however, is that an extended period of rapidly rising food or energy prices could cause all other prices to accelerate. A focus on core may cause policymakers to fail to react to such a rise in inflation until it is too late. This scenario may have occurred recently. Many economists are concerned that rapid increases in food and energy prices are now pushing overall inflation to uncomfortably high levels. Furthermore, several studies have failed to find core inflation to be a good forecaster of future inflation, casting doubt on the very rationale for relying on it.

The National Telecommunications and Information Administration (NTIA), a part of the Department of Commerce, is the executive branch's principal advisory office on domestic and international telecommunications and information technology issues and policies. Among its objectives, it has a mandate to provide greater access for all Americans to telecommunications services; to provide support for U.S. attempts to open foreign telecommunications and information markets; to advise the Secretary of Commerce, the President, and Vice President and the executive branch in international telecommunications and information negotiations; to fund research grants for new technologies and their applications; and to assist non-profit organizations in converting to digital transmission in the 21 st century. Generally, congressional policymakers have supported the NTIA's mandate and objectives through the appropriations process. The recent history of the NTIA budget, FY2000-FY2007, is as follows (appropriations for FY2008 will be included once the final bill has been passed): It should be noted that in FY2001, the Clinton Administration requested additional funding for digitizing existing public broadcasting transmissions and construction of new public digital broadcasting facilities. While the final appropriations did not match the Clinton Administration's request of $423 million, it represented a substantial increase in NTIA's historical budget. Congress has generally maintained consistent funding for NTIA in its appropriations, regardless of the request. For FY2009 , the Bush Administration has proposed a continued reduction in the NTIA budget, primarily reflected in eliminating NTIA's program to construct and maintain public telecommunications facilities. The Administration also sees NTIA having a larger role in national emergency planning (see below). Until FY2004, the NTIA budget had three major components: salaries and expenses; information infrastructure grants programs; and public telecommunications facilities, planning and construction. However, the infrastructure grants program was eliminated in FY2005. In both FY2006 and FY2007, the Bush Administration requested ending funding for the public telecommunications facilities, planning and construction program. This portion of the NTIA budget includes funding to maintain ongoing programs for domestic and international policy development, federal spectrum and related research. For FY2009, the Bush Administration has requested $19.2 million. According to the Administration, this would sustain current efforts to provide basic research, analytical, and management topics of interest to the U.S. telecommunications and information sectors of the economy. Other administrative and policy responsibilities that fall to NTIA but are not separate program functions include domestic and international telecommunications policymaking. The NTIA advises the President, Vice President and Secretary of Commerce on international telecommunications treaties and represents U.S. positions and policies at international conferences, such as the World Radio Conference held by the International Telecommunication Union. The NTIA also advises the executive branch on ways to implement the 1996 Telecommunications Act ( P.L. 104-104 ), further competition in telecommunications and develop "technology neutral" telecommunications policies. At the same time, it has produced a series of reports on the "digital divide" in America—who comprises this divide and what policies may help close the divide. The NTIA also is overseeing the transition of the management of the Internet domain name system to the private sector. Spectrum Policy. Among the many administrative functions that also fall under salaries and expenses is management of the U.S. spectrum for federal use. The Federal Communications Commission (FCC) has the primary role of managing the non-federal portion of the spectrum, which not only includes private sector use, but state and local government use of the spectrum as well. The NTIA also advises the President and executive branch on national spectrum policy, manages the federal portion of the spectrum for public safety use, and encourages policies that provide greater private sector use of existing broadcast spectrum. Domain Names. The Department of Commerce, through NTIA, maintains formal oversight over the International Corporation for Assigned Names and Numbers (ICANN), the private, non-profit corporation which serves as the technical coordinator of the domain name system. ICANN's authority is governed by a Memorandum of Understanding (MOU) with the Department of Commerce and NTIA. The MOU was intended to provide the transition of the management of the domain name system to the private sector, with the United States and other governments participating as minority stakeholders. The NTIA is currently the accredited U.S. government's representative to ICANN's Government Advisory Committee (GAC). Digital Transition. The third NTIA program that the Bush Administration has requested funding for comes out of the 2005 Deficit Reduction Act. That law—and new NTIA program—called for the creation of a Digital Transition and Safety Public Fund, which offset receipts from the auction of licenses to use electromagnetic spectrum recovered from discontinued analog television signals. The Bush Administration began setting these reimbursable funds at $45 million in FY2007. The receipts would fund the following programmatic functions at NTIA: a digital-analog converter box program to assist consumers in meeting the 2009 deadline for receiving television broadcasts in digital format; public safety interoperable communications grants, which will be made to ensure that public safety agencies have a standardized format for sharing voice and data signals on the radio spectrum; New York City 9/11 digital transition funding, until the planned Freedom Tower is built; assistance to low-power television stations, for conversion from analog to digital transition; a national alert and tsunami warning program; and funding to enhance a national alert system as stated in the ENHANCE 911 Act of 2004. The PTFPC program in NTIA assists public broadcasting stations, state and local governments, Indian tribes, and non-profit organizations construct facilities to bring educational and cultural programs to the U.S. public using broadcast and non-broadcast telecommunications and information technologies. The program provides competitive grants to public broadcasting organizations to plan, buy and employ new broadcast equipment and services nationwide. The public broadcast system had a mandate to convert all of its television broadcasts to digital by May 31, 2003. The Corporation for Public Broadcasting has reported that most, but not all, of its public broadcast members have me that goal. For FY2009, the Bush Administration has requested zero funding, to close out existing digital construction and conversion projects and to end NTIA's role in this area. The Bush Administration is seeking to place all funding for construction of public broadcasting facilities and conversion of analog broadcast to digital in the federal funding for the Corporation for Public Broadcasting, so it can expedite digital conversion. In FY2005 , the Bush Administration requested the termination of NTIA's information infrastructure grants program, called the Technology Opportunity Program (TOP). Congress agreed with this request and eliminated funding for this program. TOP was a competitive, merit-based matching grant program that was started in FY1994 to provide emerging telecommunications and information technologies to grant recipients in new and innovative ways. The Bush Administration and Congress agreed that this program had successfully served its purpose of creating new pilot programs in areas not served or underserved by telecommunications and Internet technologies. While some policymakers have called for new funding for this program, no new legislation authorizing appropriations has been introduced to date. Policymakers continue to examine the proper role of NTIA in supporting its programs and policies, as well as the overall budget for NTIA to support its mission. According to some, the Telecommunications Act of 1996 set into law a de-regulatory environment that requires less, not more, federal direction of telecommunications and information technology use. The explosive growth of the Internet since the mid-1990s has reached nearly every part of America, and Internet access is virtually ubiquitous. Therefore, beyond budget issues, the role of NTIA has changed in some policy areas. Two important issues facing NTIA's administration of public telecommunications policy are domain name registration and use of spectrum. Regarding domain names, the expiration of the Department of Commerce/NTIA MOU with ICANN on September 30, 2006, has led to speculation over whether, and how, the MOU might be renewed. IT also has raised concerns over the extent to which (if at all) NTIA might ultimately relinquish control over ICANN and the domain name system. Second, some are concerned that NTIA is seeking to develop a larger and broader policy role in spectrum management as a result of losing funding in other program areas, such as the TOP program and perhaps eventually the PTFPC program. Because spectrum and its use is an important alternative to terrestrial communications transmission and reception, federal policy regarding its use and applications is an important national issue. Some question whether NTIA's evolving role in spectrum management is being fully coordinated with other federal institutions, such as that of the Federal Communications Commission. A second important issue is the role of NTIA in the auction and management of spectrum. The third NTIA program that is administered by NTIA but not directly funded by appropriated money comes out of the 2005 Deficit Reduction Act. That law ( P.L. 109-171 ) called for the creation of a Digital Transition and Safety Public Fund, which would provide funding for further use of the electromagnetic spectrum, by offsetting receipts received from the auction of licenses to use the older analog spectrum for other purposes. The initial auction was held on January 24, 2008. The receipts from the auction will fund the following programmatic functions at NTIA, perhaps the most notable (and receiving the most public attention) is a digital-analog converter box program to assist consumers in meeting the February 2009 deadline for receiving television broadcasts in digital format. Congress is watching this transition period, and NTIA's role in it, very closely. Concerns about changes in NTIA's mission and objectives also has been raised regarding the Bush Administration's elimination of funding for the TOP program and reducing funding for the PTFPC program. The Administration contends that the efforts of the former will be picked up by the private sector, and the latter by the Corporation for Public Broadcasting. Some still contend that it is not clear whether all of the possible areas of information infrastructure development have been saturated through the TOP program; or if not yet saturated, whether industry will find it profitable to provide the "last mile" of telecommunications and Internet connections in areas not yet served. For public telecommunications and facilities planning and construction, an issue may arise as to whether the Corporation for Public Broadcasting has the resources to administer a facilities construction program. The ultimate question may be whether this change will fundamentally affect the pace at which national broadcasting is converted to digital transmission.

For FY2009, the Bush Administration has proposed a budget of $19.2 million for NTIA, with this money going towards administrative functions. There would be no funding under another NTIA program, which supports public telecommunications facilities planning and construction. Under the FY2008 enacted appropriation ( P.L. 110-161 ) NTIA is funded at $36.3 million, which was $3.3 million below the FY2007 enacted and $17.7 million above the President's request. There are two major components to the NTIA appropriated budget (a third program, which is a revolving fund based on spectrum auctions, is discussed below). The first is Salaries and Expenses. For FY2008, the Bush Administration recommended $18.6 million; Congress approved $17.5 million for FY2008. In the past, a large part of this program has been for the management of various information and telecommunications policies both domestically and internationally. For the second NTIA component, the Public Telecommunications and Facilities Program (PTFPC), the Bush Administration has requested that this program's funding be eliminated, arguing that most of the construction and refurbishing of public telecommunications facilities has already been done, and that any remaining support that is needed should come from local public broadcasting entities. However, for FY2008, Congress disagreed, citing the ongoing need for upgrading of public broadcasting facilities, particularly as the deadline of converting all analog broadcasts to digital in 2009 approaches. For FY2008, Congress funded this program at $18.8 million. Under at third program, NTIA operates a revolving fund which uses offset receipts from the auction of licenses recovered from discontinued analog signals. An important part of this program is to fund a digital-analog converter box program to assist consumers in meeting the February 2009 deadline for receiving television broadcasts in digital format.

Wahhabism is a puritanical form of Sunni Islam and is practiced in Saudi Arabia and Qatar, although it is much less rigidly enforced in the latter. The word "Wahhabi" is derived from the name of a Muslim scholar, Muhammad bin Abd al Wahhab, who lived in the Arabian peninsula during the eighteenth century (1703-1791). Today, the term "Wahhabism" is broadly applied outside of the Arabian peninsula to refer to a Sunni Islamic movement that seeks to purify Islam of any innovations or practices that deviate from the seventh-century teachings of the Prophet Muhammad and his companions. In most predominantly Muslim nations, however, believers who adhere to this creed or hold similar perspectives prefer to call themselves "Unitarians" ( muwahiddun ) or "Salafiyyun" (sing. Salafi, noun Salafiyya). The latter term derives from the word salaf meaning to "follow" or "precede," a reference to the followers and companions of the Prophet Mohammed. Some Muslims believe the Western usage of the term "Wahhabism" unfairly carries negative and derogatory connotations. Although this paper explains differences in these terms, it will refer to Wahhabism in association with a conservative Islamic creed centered in and emanating from Saudi Arabia and to Salafiyya as a more general puritanical Islamic movement that has developed independently at various times and in various places in the Islamic world. Muhammad bin Abd al Wahhab, whose name is the source of the word "Wahhabi," founded a religious movement in the Arabian peninsula during the eighteenth century (1703-1791) that sought to reverse what he perceived as the moral decline of his society. In particular, Abd al Wahhab denounced many popular Islamic beliefs and practices as idolatrous. Ultimately, he encouraged a "return" to the pure and orthodox practice of the "fundamentals" of Islam, as embodied in the Quran and in the life of the Prophet Muhammad. Muhammad bin Saud, the ancestral founder of the modern-day Al Saud dynasty, partnered with Abd al Wahhab to begin the process of unifying disparate tribes in the Arabian Peninsula. Their partnership formed the basis for a close political relationship between their descendants that continues today. Since its emergence, Wahhabism's puritanical and iconoclastic philosophies have resulted in conflict with other Muslim groups. Wahhabism opposes most popular Islamic religious practices such as saint veneration, the celebration of the Prophet's birthday, most core Shiite traditions, and some practices associated with the mystical teachings of Sufism. In the past, this has brought Wahhabis based in the Arabian peninsula and elsewhere into confrontation with non-Wahhabi Sunni Muslims, Shiite Muslims, and non-Muslims in neighboring areas. The first Saudi kingdom was destroyed by Ottoman forces in the early 19 th century after Wahabbi-inspired warriors seized Mecca and Medina and threatened Ottoman dominance. Similarly, during the 1920s, Wahhabi-trained Bedouin warriors allied with the founder of the modern Saudi kingdom, Abd al Aziz ibn Saud, attacked fellow Sunnis in western Arabia and Shiites in southern Iraq, leading to political confrontations and military engagements with the British empire. Since the foundation of the modern kingdom of Saudi Arabia in 1932, there has been a close relationship between the Saudi ruling family and the Wahhabi religious establishment. Wahhabi-trained Bedouin warriors known as the Ikhwan were integral to the Al Saud family's military campaign to reconquer and unify the Arabian peninsula from 1912 until an Ikhwan rebellion was put down by force in 1930. Thereafter, Wahhabi clerics were integrated into the new kingdom's religious and political establishment, and Wahhabi ideas formed the basis of the rules and laws adopted to govern social affairs in Saudi Arabia. Wahhabism also shaped the kingdom's judicial and educational policies. Saudi schoolbooks historically have denounced teachings that do not conform to Wahhabist beliefs, an issue that remains controversial within Saudi Arabia and among outside observers. In September 2007, the State Department again designated Saudi Arabia as a "Country of Particular Concern" under the International Religious Freedom Act because "religious freedom remains severely restricted." According to the State Department's 2007 International Religious Freedom Report on Saudi Arabia, "the Saudi Government confirmed a number of policies to foster greater religious tolerance, to halt the dissemination of intolerant literature and extremist ideology within Saudi Arabia and around the world, to protect the right to private worship and the right to possess and use personal religious materials, to curb harassment by the religious police, to empower its Human Rights Commission, to eliminate discrimination against non-Muslim religious minorities, and to respect the rights of Muslims who do not follow the Government's interpretation of Islam." The report also notes that members of the Shiite Muslim minority continue to face political, educational, legal, social, and religious discrimination and that there is "no legal recognition or protection of religious freedom." As noted above, among adherents in general, preference is given to the term "Salafiyya" over "Wahhabism." These terms have distinct historical roots, but they have been used interchangeably in recent years, especially in the West. Wahhabism is considered by some Muslims as the Saudi form of Salafiyya. Unlike the eighteenth-century Saudi roots of Wahhabism, however, modern Salafi beliefs grew from a reform-oriented movement of the late nineteenth and early twentieth century, which developed in various parts of the Islamic world and progressively grew more conservative. In line with other puritanical Islamic teachings, Salafis generally believe that the Quran and the Prophet's practices ( hadith ) are the ultimate religious authority in Islam, rather than the subsequent commentaries produced by Islamic scholars that interpret these sources. Salafiyya is not a unified movement, and there exists no single Salafi "sect." However, Salafi interpretations of Islam appeal to a large number of Muslims worldwide who seek religious renewal in the face of modern challenges. According to a number of scholars, the waging of violent jihad is not inherently associated with puritanical Islamic beliefs. Among certain puritanical Muslims—be they self-described Salafis or Wahhabis—advocacy of jihad is a relatively recent phenomenon and remains highly disputed within these groups. Although Wahhabi clerics and converts have advocated religiously motivated violence and played military roles at key moments in Saudi history, most scholars date the ascendancy of militancy within the wider Salafi community to the war of resistance against the Soviet occupation of Afghanistan during the 1980s. The war against the Soviets gained wide support throughout the Muslim world and mobilized thousands of volunteer fighters. Radical beliefs spread rapidly through select groups of mosques and madrasa s (Islamic religious schools), located on the Afghanistan-Pakistan border, which were created to support the Afghan resistance and funded primarily by Saudi Arabia. Similar U.S. and European funding provided to Pakistan to aid the Afghan mujahideen also may have been diverted to fund the construction and maintenance of madrasa s. Following the war, militant Salafis with ties to the Afghan resistance denounced leaders of countries such as Saudi Arabia and Egypt as "apostates" and as vehicles for facilitating Western imperialism. The Taliban movement also emerged from this network of institutions. Violent Salafist-inspired groups such as Al Qaeda continue to advocate the overthrow of the Saudi government and other regimes and the establishment of states that will sustain puritanical Islamic doctrine enforced under a strict application of shari ' a or Islamic law. Although the majority of Salafi adherents do not advocate the violence enshrined in Bin Laden's message, violent Salafist ideology has attracted a number of followers throughout the Muslim world. Analysts note that some receptive groups are drawn to the anti-U.S. political messages preached by Bin Laden and his supporters, despite the fact that these groups may hold different religious beliefs. There have been two major allegations against Wahhabism and against the Saudi Arabian government, which is viewed as its principal proponent: It is widely acknowledged that the Saudi government, as well as wealthy Saudi individuals, have supported the spread of the Wahhabist ideas in several Muslim countries and in the United States and Europe. Some have argued that this proselyting has promoted terrorism and has spawned Islamic militancy throughout the world. Saudi funding of mosques, madrasa s, and charities, some of which have been linked to terrorist groups such as Al Qaeda, has raised concern that Wahhabi Islam has been used by militants who tailor this ideology to suit their political goals and who rely on Saudi donations to support their aspirations. Some reports suggest that teachings within Saudi domestic schools may foster intolerance of other religions and cultures. A 2002 study by the Center for Strategic and International Studies (CSIS) indicates that "some Saudi textbooks taught Islamic tolerance while others viciously condemned Jews and Christians...[and] use rhetoric that was little more than hate literature." Others also have argued that the global spread of Wahhabist teachings threatens the existence of more moderate Islamic beliefs and practices in other parts of the world, including the United States. A 2005 report from Freedom House's Center for Religious Freedom cites examples of what its authors calls "hate ideology" taken from a number of Saudi government publications that have been distributed in U.S. mosques and Islamic centers. Recent attention to Wahhabi clerics in Saudi Arabia has focused on harsh sectarian rhetoric accusing Shiite Muslims in Iraq and elsewhere of religious apostasy and political disloyalty worthy of punishment. An October 2006 petition signed by 38 prominent Saudi religious figures called on Sunnis everywhere to oppose a joint "crusader [U.S.], Safavid [Iranian] and Rafidi [derogatory term for Shiite] scheme" to target Iraq's Sunni Arab population. The Saudi Arabian government has strenuously denied the above allegations. Saudi officials continue to assert that Islam is tolerant and peaceful, and they have denied allegations that their government exports religious or cultural extremism or supports extremist religious education. In response to allegations of teaching intolerance, the Saudi government has embarked on a campaign of educational reforms designed to remove divisive material from curricula and improve teacher performance, although the outcome of these reforms remains to be seen. Confrontation with religious figures over problematic remarks and activities poses political challenges for the Saudi government, because some key Wahhabi clerics support Saudi government efforts to de-legitimize terrorism inside the kingdom and have sponsored or participated in efforts to religiously re-educate former Saudi combatants. In light of allegations against Wahhabism, some critics have called for a reevaluation of the relationship between the United States and Saudi Arabia, although others maintain that U.S. economic and security interests require continued and close ties with the Saudis. The Bush administration has praised Saudi counter-terrorism cooperation, and President Bush has praised Islam and denounced groups that have "hijacked a great religion." The Final Report of the National Commission on Terrorist Attacks Upon the United States (the "9/11 Commission") claims that "Islamist terrorism" finds inspiration in "a long tradition of extreme intolerance" that flows "through the founders of Wahhabism," the Muslim Brotherhood, and prominent Salafi thinkers. The report further details the education and activities of some 9/11 hijackers in the Al Qassim province of Saudi Arabia, which the report describes as "the very heart of the strict Wahhabi movement in Saudi Arabia." According to the Commission, some Saudi "Wahhabi-funded organizations," such as the now-defunct Al Haramain Islamic Foundation, "have been exploited by extremists to further their goal of violent jihad against non-Muslims." Due in part to these findings, the Commission recommended a frank discussion of the relationship between the United States and its "problematic ally," Saudi Arabia. Wahhabism has been a focus of congressional hearings, which have examined the relationship between Wahhabi religious belief and terrorist financing, as well as its alleged ties to the spread of intolerance. Several bills in the 108 th Congress criticized Saudi-funded religious institutions and alleged that they provide ideological support for anti-Western terrorism. Section 7105(b) of the Intelligence Reform and Terrorism Prevention Act of 2004 ( P.L. 108 - 458 , December 17, 2004) expressed the sense of Congress that "there should be a more robust dialogue between the people and Government of the United States and the people and Government of Saudi Arabia." Section 7120(b) of the act required the President to submit to Congress within 180 days a strategy for collaboration with Saudi Arabia, which was to include proposals for promoting tolerance and diversity in Saudi Arabia and for diminishing support for extremist groups from Saudi sources. The report was submitted in classified form in September 2005. In the 110 th Congress, P.L. 110 - 53 , the Implementing Recommendations of the 9/11 Commission Act of 2007 (signed August 3, 2007), states that "the Kingdom of Saudi Arabia has an uneven record in the fight against terrorism, especially with respect to... support for radical madrassas... and restrictions on religious pluralism." The bill requires the Administration to submit a report to Congress 180 days following enactment describing the long-term strategy of the United States to engage with the government of Saudi Arabia to facilitate political, economic, and social reforms, including greater religious freedom. House and Senate versions of the Saudi Arabia Accountability Act of 2007 ( H.R. 2976 and S. 2243 ) contain findings related to extremism and incitement. S. 2243 specifically would require the President to certify whether the government of Saudi Arabia "has stopped financing and disseminating materials, and other forms of support, that encourage the spread of radical Wahhabi ideology." Both bills have been referred to committees of jurisdiction.

The terrorist attacks of September 11, 2001, and subsequent discussions of religious extremism have called attention to Islamic puritanical movements known as Wahhabism and Salafiyya. Al Qaeda leaders and their ideological supporters have advocated a violent message that some suggest is rooted in these conservative Islamic traditions. Other observers have accused Saudi Arabia, the birthplace of Wahhabism, of having disseminated religious ideology that promotes hatred and violence, targeting the United States and its allies. Saudi officials strenuously deny these allegations. This report provides a background on these traditions and their relationship to active terrorist groups; it also summarizes recent charges and responses, including the findings of the final report of the 9/11 Commission and relevant legislation in the 110th Congress. The report will be updated to reflect major developments. Related CRS products include CRS Report RL33533, Saudi Arabia: Background and U.S. Relations, by [author name scrubbed], CRS Report RL32499, Saudi Arabia: Terrorist Financing Issues, by [author name scrubbed], CRS Report RS21529, Al Qaeda after the Iraq Conflict, by [author name scrubbed], CRS Report RS21654, Islamic Religious Schools, Madrasas: Background, by [author name scrubbed], and CRS Report RL31718, Qatar: Background and U.S. Relations, by [author name scrubbed].

We defined the financial services industry to include the following sectors: depository credit institutions, which include commercial banks, thrifts (savings and loan associations and savings banks), and credit unions; holdings and trusts, which include investment trusts, investment companies, and holding companies; nondepository credit institutions, which extend credit in the form of loans, and which include federally sponsored credit agencies, personal credit institutions, and mortgage bankers and brokers; the securities sector, which is made up of a variety of firms and organizations (e.g., broker-dealers) that bring together buyers and sellers of securities and commodities, manage investments, and offer financial advice; and the insurance sector, including carriers and insurance agents that provide protection against financial risks to policyholders in exchange for the payment of premiums. The financial services industry is a major source of employment in the United States. EEO-1 data showed that the financial services firms we reviewed for this work, which have 100 or more staff, employed nearly 3 million people in 2004. Moreover, according to the U.S. Bureau of Labor Statistics, employment in the financial services industry was expected to grow at a rate of 1.4 percent annually from 2006 through 2016. EEO-1 data for 1993 through 2006 generally do not show substantial changes in representation by minorities and women at the management level in the financial services industry, but some racial/ethnic minority groups experienced more change in representation than others. Figure 1, which is based on information that we obtained in preparation for our June 2006 report, shows that overall management-level representation by minorities increased from 11.1 percent to 15.5 percent from 1993 through 2004. Specifically, African-Americans increased their representation from 5.6 percent to 6.6 percent, Asians from 2.5 percent to 4.5 percent, Hispanics from 2.8 percent to 4.0 percent, and American Indians from 0.2 to 0.3 percent. Management-level representation by white women was largely unchanged at slightly more than one-third during the period, while representation by white men declined from 52.2 percent to 47.2 percent. As shown in figure 2, EEO-1 data also show that the depository and nondepository credit sectors, as well as the insurance sector, were somewhat more diverse at the management level than the securities and holdings and trust sectors. In 2004, minorities held 19.9 percent of management-level positions in nondepository credit institutions, such as mortgage banks and brokerages, but 12.4 percent in holdings and trusts, such as investment companies. In preparation for this testimony, we contacted EEOC to obtain and analyze EEO-1 for 2006 and found that diversity remained about the same at the management level in the financial services industry (see fig. 3) as it had in previous years. For example, the 2006 EEO-1 data show that African-Americans and Asians represented about 6.4 percent and 5.0 percent, respectively, of all financial services managers in 2006. In addition, the 2006 EEO-1 data show that commercial banks and insurance companies continued to have higher representation by minorities and women at the management level than securities firms. However, it is important to keep in mind that EEO-1 data may actually overstate representation levels for minorities and white women in the most senior-level positions, such as Chief Executive Officers of large investment firms or commercial banks, because the category that captures these positions—“officials and managers”—covers all management positions. Thus, this category includes lower-level positions (e.g., Assistant Manager of a small bank branch) that may have a higher representation of minorities and women. Recognizing this limitation, starting in 2007, EEOC revised its data collection form for employers to divide the “officials and managers” category into two subcategories: “executive/senior-level officers and managers” and “first/midlevel officials.” We hope that the increased level of detail will provide a more accurate picture of diversity among senior managers in the financial services industry over time. However, it is too soon to assess the impact of this change on diversity measures at the senior management level. Officials from the firms that we contacted said that their top leadership was committed to implementing workforce diversity initiatives, but they noted that making such initiatives work was challenging. In particular, the officials cited ongoing difficulties in recruiting and retaining minority candidates and in gaining employees’ “buy-in” for diversity initiatives, especially at the middle management level. Minorities’ rapid growth as a percentage of the overall U.S. population, as well as increased global competition, have convinced some financial services firms that workforce diversity is a critical business strategy. Since the mid-1990s, some financial services firms have implemented a variety of initiatives designed to recruit and retain minority and women candidates to fill key positions. Officials from several banks said that they had developed scholarship and internship programs to encourage minority students to consider careers in banking. Some firms and trade organizations have also developed partnerships with groups that represent minority professionals and with local communities to recruit candidates through events such as conferences and career fairs. To help retain minorities and women, firms have established employee networks, mentoring programs, diversity training, and leadership and career development programs. Industry studies have noted, and officials from some financial services firms we contacted confirmed, that senior managers were involved in diversity initiatives. Some of these officials also said that this level of involvement was critical to success of a program. For example, according to an official from an investment bank, the head of the firm meets with all minority and female senior executives to discuss their career development. Officials from a few commercial banks said that the banks had established diversity “councils” of senior leaders to set the vision, strategy, and direction of diversity initiatives. A 2005 industry trade group study and some officials also noted that some companies were linking managers’ compensation with their progress in hiring, promoting, and retaining minority and women employees. A few firms have also developed performance indicators to measure progress in achieving diversity goals. These indicators include workforce representation, turnover, promotion of minority and women employees, and employee satisfaction survey responses. Officials from several financial services firms stated that measuring the results of diversity efforts over time was critical to the credibility of the initiatives and to justifying the investment in the resources such initiatives demanded. While financial services firms and trade groups we contacted had launched diversity initiatives, officials from these organizations, as well as other information, suggest that several challenges may have limited the success of their efforts. These challenges include the following: Recruiting minority and women candidates for management development programs. Available data on minority students enrolled in Master of Business Administration (MBA) programs suggest that the pool of minorities, a source that may feed the “pipeline” for management-level positions within the financial services industry and other industries, is relatively small. In 2000, minorities accounted for 19 percent of all students enrolled in MBA programs in accredited U.S. schools; in 2006, that student population had risen to 25 percent. Financial services firms compete for this relatively small pool not only with one another but also with firms from other industries. Fully leveraging the “internal” pipeline of minority and women employees for management-level positions. As shown in figure 4, there are job categories within the financial services industry that generally have more overall workforce diversity than the “official and managers” category, particularly among minorities. For example, minorities held 22 percent of “professional” positions in the industry in 2004 as compared with 15 percent of “officials and managers” positions. According to a 2006 EEOC report, the professional category represented a possible pipeline of available management-level candidates. The EEOC report states that the chances of minorities and women (white and minority combined) advancing from the professional category into management-level positions is lower when compared with white males. Retaining minority and women candidates that are hired for key management positions. Many industry officials said that financial services firms lack a critical mass of minority men and women, particularly in senior-level positions, to serve as role models. Without a critical mass, the officials said that minority or women employees may lack the personal connections and access to informal networks that are often necessary to navigate an organization’s culture and advance their careers. For example, an official from a commercial bank we contacted said he learned from staff interviews that African-Americans believed that they were not considered for promotion as often as others partly because they were excluded from informal employee networks needed for promotion or to promote advancement. Achieving the “buy-in” of key employees, such as middle managers. Middle managers are particularly important to the success of diversity initiatives because they are often responsible for implementing key aspects of such initiatives and for explaining them to other employees. However, some financial services industry officials said that middle managers may be focused on other aspects of their responsibilities, such as meeting financial performance targets, rather than the importance of implementing the organization’s diversity initiatives. Additionally, the officials said that implementing diversity initiatives represents a considerable cultural and organizational change for many middle managers and employees at all levels. An official from an investment bank told us that the bank has been reaching out to middle managers who oversaw minority and women employees by, for example, instituting an “inclusive manager program.” In closing, despite the implementation of a variety of diversity initiatives over the past 15 years, diversity at the management level in the financial services industry has not changed substantially. Further, diversity at the most senior management positions within the financial services industry may be lower than the overall industry management diversity statistics I have discussed today. While EEOC has taken steps to revise the EEO-1 data to better assess diversity within senior positions, this data may not be available for some period of time. Initiatives to promote management diversity at all levels within financial services firms appear to face several key challenges, such as recruiting and retaining candidates and achieving the “buy-in” of middle managers. Without a sustained commitment to overcome these challenges, management diversity in the financial services industry may continue to remain generally unchanged over time. Mr. Chairman, this concludes my prepared statement. I would be pleased to respond to any questions you or other Members of the Subcommittee may have. For further information about this testimony, please contact Orice M. Williams on (202) 512-8678 or at williamso@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 testimony include Wesley M. Phillips, Assistant Director; Emily Chalmers; William Chatlos; Kimberly Cutright; Simin Ho; Marc Molino; and Robert Pollard. 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.

As the U.S. workforce has become increasingly diverse, many private and public sector organizations have recognized the importance of recruiting and retaining minority and women candidates for key positions. However, previous congressional hearings have raised concerns about a lack of diversity at the management level in the financial services industry, which provides services that are essential to the continued growth and economic prosperity of the country. This testimony discusses findings from a June 2006 GAO report and more recent work on diversity in the financial services industry. Specifically, GAO assesses (1) what the available data show about diversity at the management level from 1993 through 2006 and (2) steps that the industry has taken to promote workforce diversity and the challenges involved. To address the testimony's objectives, GAO analyzed data from the Equal Employment Opportunity Commission (EEOC); reviewed select studies; and interviewed officials from financial services firms, trade organizations, and organizations that represent minority and women professionals. GAO's June 2006 report found that, from 1993 through 2004, overall diversity at the management level in the financial services industry did not change substantially, but some racial/ethnic minority groups experienced more change in representation than others. EEOC data show that management-level representation by minority women and men increased overall from 11.1 percent to 15.5 percent during the period. Specifically, African-Americans increased their representation from 5.6 percent to 6.6 percent, Asians from 2.5 percent to 4.5 percent, Hispanics from 2.8 percent to 4.0 percent, and American Indians from 0.2 percent to 0.3 percent. In preparation for this testimony, GAO collected EEOC data for 2006, which shows that diversity at the management level in the financial services industry remained about the same as it had in previous years. Financial services firms and trade groups have initiated programs to increase workforce diversity, but these initiatives face challenges. The programs include developing scholarships and internships, partnering with groups that represent minority professionals, and linking managers' compensation with their performance in promoting a diverse workforce. Some firms have developed indicators to measure progress in achieving workforce diversity. Industry officials said that among the challenges these initiatives face are recruiting and retaining minority candidates, as well as gaining the "buy-in" of key employees, such as the middle managers who are often responsible for implementing such programs. Without a sustained commitment to overcoming these challenges, diversity at the management level may continue to remain generally unchanged over time.

The House of Representatives amended its internal Rules on January 4, 2007, with the adoption of H.Res. 6 , to apply greater restrictions, more transparency, and further regulation concerning the acceptance by Members and staff of "gifts" from outside, private sources, including specifically "gifts" of travel-expense reimbursements or payments provided by lobbyists, foreign agents, or their clients. Additional changes to internal House Rules on "ethics" were made by the "Honest Leadership and Open Government Act of 2007," P.L. 110-81 , September 14, 2007 ( S. 1 , 110 th Congress). Under the new House Rules, in a similar manner as under the former Rules, no gifts from outside, private sources may be accepted by Members and staff unless expressly permitted by one of the provisions of the House Rules. Thus, gifts from all outside, private sources continue to be restricted and limited, with several important exceptions. Gifts with a value of under $50 may still be accepted, other than from lobbyists, foreign agents and their clients; and gifts from relatives and personal friends may continue to be accepted and exchanged. In addition, the 23 specific exceptions to the gift prohibition listed in the House Rules continue to be in force. The exception for reasonable and necessary expenses for some "officially connected" travel is also still provided, and Members and staff may continue to accept such travel expenses from many private sources, other than lobbyists, foreign agents, and certain of their clients, but with several additional restrictions, including more detailed disclosure of such travel. All private reimbursement or payment of "officially connected" travel expenses, however, must now receive prior approval from the House Committee on Standards of Official Conduct. The House Rules now provide a restriction on accepting most gifts from registered lobbyists, agents of foreign principals, and private organizations that employ lobbyists or foreign agents. Additionally, unlike previous rules and laws, lobbyists themselves are now expressly prohibited from offering gifts which they know should not be accepted by Members or staff under internal House Rules, and must certify in required reports to the federal government that no such gifts were offered. There still exists under House Rules a general exemption allowing the receipt of most gifts of under $50 from private sources, but this exception now applies only to gifts other than from lobbyists, foreign agents, and their private clients. Under the former Rules, this exemption had allowed Members and staff to receive a gift, such as a meal, a bottle of liquor or wine, or a ticket for entertainment, that did not exceed $49.99, even if such gift was from a lobbyist. Under the new House Rules, however, the under-$50 exception for gifts no longer applies if the gift is from a "registered lobbyist or agent of a foreign principal or from a private entity that retains or employs registered lobbyists or agents...." Members and staff may thus no longer accept most free meals paid for by lobbyists, foreign agents, or their clients (under this $50 de minimis exception), and may no longer accept tickets to sporting or entertainment events provided by lobbyists, foreign agents, or their clients, unless they pay full face value for the ticket. When Members and staff are allowed to accept gifts of tickets and passes to sporting or entertainment events under the $50 exception, or when they reimburse for the full value of the ticket, the "value" of the ticket or pass will now be determined by the actual "face value" printed on the ticket. When there is no face value on the ticket, such as in the case of passes to certain luxury boxes or suites in certain venues, then the value of ticket will now be the highest face-value price of a ticket to the same event. Under the former Rules of the House, Members or staff had been permitted, within certain limitations, to accept reasonable and necessary travel expenses from private sources when the travel was for purposes "connected" to official duties, and when the payment for the travel was not from a lobbyist or an agent of a foreign principal. The extent of travel allowed was for four days for domestic travel, and seven days for international travel (excluding travel days), and certain disclosures of the travel and expenses were required to be made within 30 days of the end of the trip. Even under the former House Rules, "officially connected" travel could not be primarily for recreational purposes, nor could a Member or staffer have received gifts of "recreational" activities of $50 or more incurred during the course of an otherwise legitimate "officially connected" trip. Although there had been criticism expressed for the lack of enforcement of the prior Rules, "officially connected" travel expenses paid for by lobbyists, and the payment by any private source of expenses of $50 or more for "recreational" activities, such as golfing, scuba diving, or jet-skiing, had been expressly prohibited on such travel. Under the amendments to the House Rules, new and additional restrictions are placed upon the acceptance from private sources of expenses for "officially connected" travel. The House Committee on Standards of Official Conduct has issued two documents in memorandum form concerning "officially connected" travel: "Travel Guidelines and Regulations," February 20, 2007, and "New Travel Rules for Official Connected Travel Paid for by a Private Source," March 14, 2007. In a similar manner as under the former Rules, travel under the new Rules must have a demonstrable connection and relevance to one's official duties and responsibilities. In addition to the restrictions and limitations carried forward from the former Rules, there are five substantial changes to the regulation of "officially connected" travel expenses: In addition to the past prohibition on the receipt of travel expenses or payments from registered lobbyists or foreign agents, the House Rules now also prohibit the receipt of such payments or expenses for "officially connected" travel from "a private entity that retains or employs registered lobbyists or agents of a foreign principal," except if an entity is a qualified "institution of higher education," or when provided by any entity for a one-day event when in conformance with regulations prescribed by the House Committee on Standards of Official Conduct. An "institution of higher education," even one which retains a lobbyist, may therefore provide "officially connected" travel expenses to Members and staff for events, up to four days domestic and seven days for foreign travel, when approved by the House Committee on Standards. Additionally, any organization or entity which retains a lobbyist may sponsor a one-day event (including an overnight and, in some cases, two overnights), as long as there is only a de minimis lobbyist participation in the planning, organization, request or arrangement of the trip, and no lobbyist accompanies the Member or staffer on "any segment" of the travel. In addition to merely prohibiting a lobbyist from financing such "officially connected" travel, as in the former Rules, lobbyists or foreign agents are now not allowed to plan, organize, request, or arrange for such a trip for which a Member or employee of the House may accept expenses, unless the event is being sponsored by an institution of higher education, or when such participation concerning a one-day event is de minimis . Furthermore, a lobbyist or foreign agent is prohibited from accompanying the Member or staffer on "any segment" of a trip, except one sponsored by an institution of higher education. The new House Rules now require that Members or staff who seek to accept private expenses for "officially connected" travel, before accepting such expenses, provide to the House Committee on Standards of Official Conduct a written certification from the private source of the trip that (1) the trip will not be financed by a registered lobbyist or foreign agent; (2) that this private source either does not retain a lobbyist or foreign agent, or is a qualified "institution of higher education"; (3) that this private source will not accept money earmarked directly or indirectly from another source for this trip; (4) that the travelers will not be accompanied by a lobbyist or foreign agent (except as allowed for institutions of higher education); and (5) that the trip will not be planned, organized, requested, or arranged by a lobbyist or foreign agent, except as permitted. Before accepting and participating in any such travel, the Member or employee must obtain the prior approval of the Committee for each trip, and all filings, disclosures and certifications will be made available to the public. The disclosures required after a privately financed "officially connected" trip must be filed within 15 days of the completed travel (instead of 30 days), and are to detail, in addition to the information required under the old Rules, a "description of the meetings and events attended." House Rules provide that the "necessary" expenses that may be accepted in relation to "officially connected" travel must also be "reasonable." The House Committee on Standards of Official Conduct has determined that the purpose of a trip must have a demonstrable connection to legislative or policy interests of Congress, and that officially connected activities must occur during each day of the trip; that transportation in coach or business class is generally "reasonable," unless there are extenuating circumstances requiring first-class or charter travel; and that lodging accommodations for trips arranged specifically for Members or staff may only be at "appropriate" facilities, considering cost, location and proximity to the officially connected events. For events arranged without regard to congressional participation, lodging and food provided for all other attendees are presumptively reasonable. For events arranged specifically for Members and staff, food costs must be reasonable, and one factor for consideration will be the per diem rates for meals for official Government travel. Expenses for such travel may be accepted only from entities that have a significant role in organizing and conducting the trip, and that also have a clear and defined interest in the purpose of the trip or events. Members or employees of the House had generally been required to reimburse the owner of private aircraft to avoid violations of House gift rules, unofficial office account rules, or federal campaign finance laws. Criticism of this practice arose, however, because Members and staff were allowed to use private, corporate aircraft for travel for "personal" or "official" purposes, while reimbursing the owner of such aircraft at rates which were, arguably, far below the fair market value for a comparable, privately chartered flight. In addition, the convenience and ease for a Member of Congress to take such a flight, and the special "access" to Members such flights provided for corporate officials and lobbyists, regardless of the amount of reimbursement from official or personal funds for the flights, concerned reformers worried about the normal gratitude that such special favors for Members might engender and the potential resulting undue influence on the Member's judgment. Under the new House Rules, Rule XXIII, cl. 15, Members and staff are now prohibited from using any funds, whether personal funds, campaign funds, or official funds, to pay for or reimburse the expenses of traveling on a private or corporate aircraft. Members and staff traveling for personal, campaign or official purposes will generally be required to fly on commercially scheduled airlines, or to charter flights from companies in that business. It appears that under existing exceptions to the gift rule, however, Members and staff can still fly on a private, corporate aircraft when the Member or staffer is to be involved in a permissible outside, business endeavor, or in employment discussions with a prospective private employer which owns the aircraft, when the private company or prospective employer normally would make such aircraft available to one involved in the business endeavor, or to one being interviewed or otherwise seeking employment. Similarly, if an aircraft is owned by an individual who provides a flight on the "basis of personal friendship" to a Member or staffer, then a flight can be accepted under such exception (with approval from the House Committee on Standards of Official Conduct when the value of the flight would be in excess of $250). Members or staff may also fly on their personally owned or family owned or leased aircraft. The new House Rules, although tightening restrictions on gifts from lobbyists, foreign agents, and their clients, still allow the acceptance of private gifts under the 23 express exceptions to the gifts rule, even when certain of those gifts are from lobbyists. Under these exceptions Members and staff may continue, for example, to accept gifts from and exchange gifts with " relatives " in unlimited amounts; may accept gifts given "on the basis of a personal friendship " (even if the personal friend is a lobbyist or foreign agent); may, under the so-called reception exception , partake of "food or drink of nominal value" offered "other than as part of a meal," such as hors d'oeuvers, pastries, snacks, and drinks typically served at receptions; may continue to accept "free attendance" at " widely attended " gatherings (including meals served to all attendees), when such attendance is appropriate to one's official duties; may accept free attendance and transportation for certain charitable events ; may still accept personal hospitality of an individual (other than from a registered lobbyist or foreign agent); and may accept the receipt of such things as: bona fide noncash awards; prizes; plaques and trophies; inheritances; items of "nominal value" (such as greeting cards or baseball caps); expenses for training in certain circumstances; informational materials; promotional items of home state products; things paid for by the federal, state, or local government; expenses for outside business or employment travel; and lawful political contributions, as well as expenses for political events provided by a political organization.

On January 4, 2007, the House adopted new internal rules to prohibit the receipt of most gifts by Members and staff from lobbyists, foreign agents, and most of their private clients. Additionally, the new House Rules placed more restrictions and requirements on the acceptance from outside private sources of travel expenses for "officially connected" travel by Members and staff. Such restrictions are designed specifically to further limit the participation and involvement of lobbyists, foreign agents, or their clients in such travel events, and to provide for more transparency and disclosures of any such travel. With the passage of the "Honest Leadership and Open Government Act of 2007" ( P.L. 110-81 , September 14, 2007), further ethics provisions applicable to House Members and staff were adopted.

Medicaid is a cooperative federal-state program through which the federal government provides financial assistance to states for medical care and other services for poor, elderly, and disabled individuals. Although participation in the Medicaid program is voluntary, states, as a condition of participation, are required to have a plan that complies with federal Medicaid statutes and regulations in order to qualify for federal assistance. States also have considerable discretion in administering their Medicaid program, which generally includes setting the payment rates at which providers are reimbursed for their services to Medicaid beneficiaries. Given declining state revenues and increased demand for public programs like Medicaid, states have been faced with difficult choices about how to allocate limited funds. To address budget shortfalls, many states have sought to trim down their Medicaid costs in various ways, including reducing the rates at which Medicaid health care providers are reimbursed. In several instances, providers and others have argued that these reductions make reimbursement rates inadequate and have turned to the courts to challenge these reductions. When challenging these reimbursement rates, plaintiffs have often claimed that the rates violate the requirements of Section 1902(a)(30)(A) of the Social Security Act, often referred to as Medicaid's "equal access provision," which requires a state Medicaid plan to provide such methods and procedures relating to the utilization of, and the payment for, care and services available under the plan…as may be necessary to safeguard against unnecessary utilization of such care and services and to assure that payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area.... Medicaid beneficiaries and others have claimed that because of inadequate Medicaid reimbursement rates, the requirements of the equal access provision are not met (e.g., the state did not consider, or the state plan's methods or procedures do not assure, that Medicaid payments are consistent with efficiency, economy, quality of care, or are sufficient to enlist providers to provide Medicaid services). In other words, plaintiffs have generally argued that the provider reimbursement rates are so low that they do not allow for sufficient care and services to be provided to beneficiaries, as compared to the care in that area that is available to individuals who do not participate in the Medicaid program. In determining whether a state's provider reimbursement rates violate the equal access provision, a significant question arises in these cases: whether private parties can sue to enforce these requirements. Because the Medicaid Act contains no express language that allows private parties to challenge reimbursement rate cuts, plaintiffs desiring to challenge cuts in Medicaid payment rates under the equal access provision have sought out other legal vehicles to bring their claims. Historically, plaintiffs have brought their claims under 42 U.S.C. §1983, which allows individuals to sue local governments and state and local officers in order to redress violations of federal law. Based on this section, plaintiffs have alleged that state officials violated their rights because the reimbursement rates did not comply with the requirements of the equal access provision. Multiple courts found that Medicaid providers and beneficiaries could enforce the equal access provision by bringing an action under Section 1983. However, in 2002, the Supreme Court's decision in Gonzaga University v. Doe restricted plaintiffs' ability to bring an action under Section 1983. As the Court explained in Gonzaga , "we now reject the notion that our cases permit anything short of an unambiguously conferred right to support a cause of action brought under section 1983." In the wake of Gonzaga , most appellate courts held that the equal access provision is not privately enforceable under Section 1983. Thus, in light of this decision, Medicaid providers and beneficiaries have sought other legal avenues for challenging Medicaid reimbursement rates. In February 2008, the State of California legislature enacted a 10% cut in certain Medi-Cal (i.e., California's Medicaid program) provider reimbursement rates, in light of the state's fiscal distress. Plaintiffs, a group of pharmacies, health care providers, senior citizens' groups, and beneficiaries, claimed a violation of the Supremacy Clause of the Constitution based on the idea that the state rate cut is preempted by the federal equal access provision. The plaintiffs contended that the state failed to properly evaluate whether the reduced rates would comply with the equal access provision and bear a reasonable relationship to providers' costs, which they argued was required under Ninth Circuit precedent. After the district court found that the plaintiffs did not have an implied right of action under the equal access provision or the Supremacy Clause, the Ninth Circuit vacated the district court's decision and remanded the case to the district court. The Ninth Circuit explained that "a plaintiff may bring suit under the Supremacy Clause to enjoin implementation of a state law allegedly preempted by federal statute regardless of whether the federal statute at issue confers an express 'right' or cause of action on the plaintiff." On April 1, 2009, the director filed a petition for Supreme Court review, and the petition was denied. On remand, the district court found that the defendant, the director of California's Department of Health Care Services, did not meet the requirements of the equal access provision, as the director failed to demonstrate that the state of California considered whether the 10% rate reduction would be consistent with efficiency, economy, quality of care, and equality of access requirements. Accordingly, plaintiffs demonstrated a likelihood of succeeding on the merits of their Supremacy Clause claim. In addition, because it appeared that Medi-Cal patients could be irreparably harmed by the rate cut, the court granted in relevant part the plaintiffs' motion for preliminary injunction to enjoin enforcement of the reduction, which was affirmed by the court of appeals. The California legislature later enacted legislation amending the rate cuts, under which the 10% rate cut would expire and smaller rate cuts would be instituted. The director moved to vacate the Ninth Circuit's decision on the grounds that it became moot because of a change in law. The state's motion was denied. In February 2010, the proceedings on remand led the director to petition the Supreme Court again for review of the case. The Court invited the Solicitor General to express views on the lawsuit, and the Solicitor recommended that the Court decline to take the case. Nevertheless, the Court granted certiorari on one of the two issues presented to the Court—whether Medicaid recipients and providers can bring an action under the Supremacy Clause to enforce the equal access provision by asserting that the federal provision preempts a state law reducing reimbursement rates. Accordingly, the Court will likely address the ability of private parties to bring an action under the Supremacy Clause to determine whether the California law is preempted by the Medicaid act. With respect to the issue before the Court, the respondents (i.e., the Medicaid providers and beneficiaries) argued in briefs to the Supreme Court that based on Court precedent, a statutory cause of action is unnecessary in order to bring a preemption claim under the Supremacy Clause. They also asserted that in order to prevent injury, the Court has permitted private parties to obtain relief from state laws that are preempted by federal law. On the other hand, the director of California's Department of Health Care Services claimed that the Ninth Circuit improperly allowed use of the Supremacy Clause, as the decisions in question essentially allow Medi-Cal beneficiaries and providers to invoke the Supremacy Clause to enforce a federal statute (i.e., equal access provision) despite the fact that the statute does not expressly create any privately enforceable rights. The director's petition urges the Supreme Court to find that "[d]ressing the lawsuit up as a preemption challenge should not change the conclusion that the [equal access provision] is not privately enforceable." Further, the director argued that given that Congress did not provide for a private right of action under the equal access provision, allowing a private party's preemption claims to proceed based on an alleged conflict with a federal statute frustrates congressional intent and would negate the principle that "'private rights of action to enforce federal law must be created by Congress.'" The Court will hear oral arguments in the Douglas cases during its October 2011 term. Some commentators have noted that the Court's decision in Douglas may be important, as the case could determine whether the Supremacy Clause provides a basis for court review of various issues related to a state's Medicaid program—issues that may have been immune from review because, for example, there appeared to be no private right of action. More specifically, a holding for the Medicaid providers and beneficiaries could permit Medicaid litigation that Gonzaga had obstructed, by giving standing to individuals under the Supremacy Clause who did not have a private right of action under Section 1983. In addition, it has been observed that the potential significance of Douglas goes beyond the Medicaid program, as the Court's decision could determine whether a private party may bring a preemption challenge under other federal statutes that these parties could not otherwise enforce. Advocates for Medicaid beneficiaries have opined that a decision in their favor is vital, because if the Court sides with the California Medicaid program, it may be difficult for providers and beneficiaries to enforce states' obligations under Medicaid, and this is increasingly critical given the expansion of the Medicaid program by recent health reform legislation, the Patient Protection and Affordable Care Act (PPACA), as amended. On the other hand, as several states have argued in an amicus brief, allowing private litigants to sue to enforce the equal access provision would lead to more court orders compelling states to increase spending for programs like Medicaid and would be detrimental to their ability to provide financial assistance. Since the Court only agreed to evaluate whether a cause of action may be brought under the Supremacy Clause for a potential violation of the equal access provision, it is unlikely that the Court will address whether the rate cuts actually violated the Medicaid Act. Also, in counseling against Supreme Court review of this case, the Solicitor General noted in an amicus brief that CMS regulations would address the requirements for Medicaid plans to meet the equal access provision. As the Solicitor noted, "[t]he nature and extent of the obligations imposed on States under [the equal access provision] are best suited for expert agency consideration in the first instance." On April 29, 2011, CMS issued proposed regulations that address the equal access provision. The proposed regulations contemplate a state-level process for reviewing reimbursement rates that involves identifying and collecting data on access to Medicaid services, analyzing and monitoring this data for access issues, and maintaining a corrective action plan to follow should access problems arise.

Given declining state revenues and increased demand for public programs like Medicaid, states have been faced with difficult choices about how to allocate limited funds. To address budget shortfalls, many states have sought to shrink their Medicaid costs in various ways, including reducing the rates at which health care providers are reimbursed for the services they provide to Medicaid beneficiaries. In several instances, providers and others have argued that the reduced rates do not comply with federal Medicaid requirements and have turned to the courts to challenge these reductions. When challenging these reimbursement rates, Medicaid providers have often claimed that the rates violate the requirements of Section 1902(a)(30)(A) of the Social Security Act, commonly referred to as Medicaid's "equal access provision." This provision compels state Medicaid programs to assure that Medicaid payments "are consistent with efficiency, economy, and quality of care," and are "sufficient to enlist enough providers" so that care and services are available at least to the extent that they are available to an area's general population. Based on this provision, Medicare providers have argued that because of cuts in reimbursement rates, the state Medicaid program does not provide the level of care or services to beneficiaries that is required under federal law. However, an important question arises in these cases: whether Medicaid beneficiaries and health care providers can sue state officials to enforce the equal access provision. Because the Medicaid Act contains no express language that allows private parties to challenge reimbursement rate cuts, plaintiffs desiring to challenge cuts in Medicaid payment rates under the equal access provision have sought out other legal vehicles to bring their claims. Since 2002, courts have often barred these suits when based on "section 1983." But on January 18, 2011, the Supreme Court granted certiorari in Douglas v. Independent Living Center of California, a set of consolidated cases in which plaintiffs took a different approach to challenging provider reimbursement rates. In Douglas, health care providers and Medicaid beneficiaries challenged cutbacks in reimbursement rates for certain health care providers, arguing that since the reduced reimbursement rates do not comply with Medicaid's equal access provision, they are preempted under the Supremacy Clause of the Constitution. The Ninth Circuit agreed, and blocked implementation of the reduced rates, explaining that the Supremacy Clause provides a basis for challenging a state's purported failure to abide by Medicaid's equal access provision. Some commentators have noted that the Court's decision in Douglas may be significant, as the case could determine whether the Supremacy Clause provides a basis for judicial review of various issues related to a state's Medicaid program—issues that may have been immune from review because, for example, there appeared to be no private right of action. It has also been observed that the possible implications of Douglas go beyond the Medicaid program, as the Supreme Court's decision could determine whether a private party may bring a preemption challenge with respect to federal statutes that these parties could not otherwise enforce. This report provides relevant background on the Medicaid program and an overview of the Douglas case. In addition, it may be noted that the Centers for Medicare and Medicaid Services (CMS) recently issued proposed regulations that address the equal access provision. Although proposed regulations do not address whether a private party may bring an enforcement action under the equal access provision, the regulations do provide guidance on how states can comply with it.

Under traditional indemnity plans, the physician has no legal relationship to the patient’s health plan. The contractual relationships are between the patient and the physician—under which the patient is obligated to pay the physician a fee for service rendered—and between the patient and the plan—under which the plan is obligated to indemnify the patient for medical expenditures incurred according to the terms of the insurance contract. Although disputes between the patient and plan may arise over denial of payment, claims regarding the quality of services that result in medical injury are resolved in state common law tort systems under principles of medical malpractice law. Complaint and appeal procedures are regulated by a patchwork of federal and state laws. No federal standards, however, prescribe how complaint and appeal systems are to be structured and administered. For example, the Employee Retirement Income Security Act of 1974 (ERISA), a federal law governing most employer-sponsored health plans, requires that all health plans provide a mechanism to permit participants and beneficiaries to appeal a plan’s denial of a claim. Regulations promulgated pursuant to ERISA generally require that plans approve or deny appeals within 60 days. Some states may have statutes or regulations governing indemnity plan complaint and appeal procedures; however, under ERISA the states are prevented from regulating self-funded health plans, which enroll approximately 87 percent of indemnity plan members. The groups we contacted identified 9 of the 11 elements recommended for HMO complaint and appeal systems as applicable to indemnity plans. The two HMO-related elements not considered applicable to indemnity plans were a two-level appeal process and the member’s right to appear at one appeal hearing. The elements considered important to a sound complaint and appeal process for indemnity plans fell into three general categories—timeliness, integrity of the decision-making process, and effective communication—and included the following: explicit time periods, set out in plan policies, within which plans resolve complaints or appeals. Appeals, according to the criteria, were to be resolved within 30 days; expedited review of appeals in situations in which, were a plan to follow its usual time period for processing an appeal, the patient’s health might be jeopardized. Such situations might include, for example, admission to, or discharge from, an acute-care hospital. Criteria called for expedited review to be completed within 72 hours or 2 business days of the appeal; appeal decisions made by medical professionals with appropriate appeal decisions made by individuals not involved in the initial decision; information provided about how to register a complaint or appeal; oral complaints accepted by the plan; oral appeals accepted by the plan; appeal rights included in notice of denial of coverage or payment of written notice of appeal denials, including further appeal rights where applicable. This standard would not apply in cases where members have no further appeal rights—for example, in plans that offered only one level of review. Nearly all the recommended elements were present in the policies of at least half the plans in our study. As shown in table 1, five elements—explicit time periods for resolving member appeals, appeal decisions made by medical professionals with appropriate expertise, provision of information on how to register a complaint or appeal, plan acceptance of oral complaints, and inclusion of appeal rights in notice of denial of coverage or payment—were included in the policies of a large majority of the indemnity plans in our study. However, the remaining four elements—expedited review of appeals in urgent situations, appeal decisions made by individuals not involved in the initial decision, plan acceptance of oral appeals, and written notice of appeal denials including further appeal rights—were present in the policies of only two-thirds or fewer of the plans reporting. We asked plans to indicate whether the complaint and appeal policies they described applied to both insured and self-funded business. Four plans provided no information on this issue, while one stated that its indemnity plan had no self-funded members. Of the five remaining plans, three stated that the complaint and appeal policies they reported to us applied to all members, insured as well as self-funded, and two stated that most self-funded purchasers follow the plans’ policies. Three plans stated that self-funded purchasers may become involved in the appeal process, generally after the member has exhausted the plan’s standard appeal process. According to an official at one plan, because such purchasers are actually responsible for the cost of care, they have the discretion to overturn denials made by the plan. All 10 plans in our study had established time periods within which complaints and appeals were to be resolved. Two plans reported that their time period for resolving an appeal was 21 days; several allowed 30 days, and several others allowed 60 days. Six plans (of nine included in this analysis) reported that their policies contained expedited appeal processes for use in circumstances in which delay in care might jeopardize the patient’s health. One plan’s policies called for appeals involving admission to, or services from, an acute-care hospital in a life-threatening or other serious injury situation to be resolved within 3 hours, while other types were to be resolved within 2 business days. Another plan’s policies called for expedited appeals to be resolved within 72 hours. Two plans allowed up to 3 business days, while another allowed up to 7 days. The remaining three plans stated that they did not have such expedited review policies. The final plan is excluded from our analysis of this element; an official from this plan stated that the plan does not require preauthorization of any procedures and that an expedited review process is unnecessary because all decisions regarding coverage are made after the care is received. Nine plans reported that they included doctors or nurses on their appeal committees. We did not, however, analyze individual appeal cases and so were unable to determine whether doctors and nurses with appropriate expertise made appeal decisions in cases of denials resulting from medical necessity decisions. Five plans, out of 10 reporting, required that persons reviewing appeals not be the same individuals involved in the case earlier. All 10 plans in our study reported that they provide written information to members describing the complaint and appeal process. We reviewed the materials provided to members—including member handbooks, member contracts, newsletters, and other forms of communication—and judged them to be clear and understandable. Nine plans accepted oral complaints from members, while one plan required members to put complaints in writing. Only two plans, however, accepted oral appeals from members; the remaining eight required members to file appeals in writing. One plan that accepted oral appeals, however, noted in its policy that oral appeals must be filed in person. In our prior study of HMOs, some plan officials told us that they prefer members to submit appeals in writing in order to ensure that members’ concerns are accurately characterized. Seven plans, out of nine responding, described member appeal rights when informing members of a denial of payment or authorization. Regarding denials of members’ appeals, six plans (of nine providing data) reported that they included further appeal rights, where applicable, in written notices of denial. Further appeal rights might include additional levels of appeal within the plan or the right to appeal to a state organization or the member’s employer. Two of the remaining three plans provided written notice of appeal denials but did not include further appeal rights despite offering additional internal levels of appeal, while one plan responded to members only if the appeal was resolved in the member’s favor. Compared with the 38 HMOs in our previous report, a smaller proportion of the 10 indemnity plans’ policies and procedures included the recommended elements. However, the disparity in the number of HMOs and indemnity plans participating in our studies might account for some of the noted differences. At the individual carrier level, in most cases, the prevalence of recommended elements was nearly the same in the indemnity plan and HMO operated by the same carrier, but several carriers had less conformance in their indemnity plan. As shown in table 2, on the whole, a smaller percentage of indemnity plans than HMOs had the nine recommended elements applicable to both indemnity and HMO plans. Four elements were incorporated by a similar, and relatively high, proportion of plans of each type. Large differences were evident in two elements—expedited review and written notice of appeal denials, including further appeal rights—where a substantially lower proportion of indemnity plans included the elements than did HMOs. We found smaller differences in three elements: a slightly higher percentage of indemnity plans than HMOs specify that appeal decisions must be made by individuals not involved in the initial decision, and a slightly higher percentage of HMOs than indemnity plans accept oral appeals and explain appeal rights in denial notices. Regarding the remaining four elements, we noted only slight differences. We also examined the extent to which individual insurance carriers offering both indemnity and HMO plans included recommended elements in the complaint and appeal systems for each type of plan. Figure 1 compares the prevalence of recommended elements in indemnity plans with those in place in the HMO offered by the same carrier. For 7 of the 10 carriers in our study, the indemnity plan and HMO had nearly the same proportion of recommended elements. At the remaining 3 carriers, the HMO included the greater proportion of elements, with 1 carrier showing substantial differences across plans. In commenting on a draft of our report, NAIC officials stated that we had accurately characterized their criteria governing consumer complaint and appeal systems for indemnity health plans. As arranged with your office, unless you publicly announce its contents earlier, we plan no further distribution of this report until 30 days after its issue date. We will then send copies to those who are interested and make copies available to others on request. Please call me on (202) 512-7119 if you or your staff have any questions. Major contributors to this report include Rosamond Katz and Steve Gaty. Bernice Steinhardt Director, Health Services Quality and Public Health 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. 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Pursuant to a congressional request, GAO reviewed the key features that are important to indemnity plans' complaint and appeal systems, focusing on: (1) the elements that are considered important to a system for processing indemnity plan member complaints and appeals; (2) the extent to which indemnity plan complaint and appeal systems contain these elements; and (3) how indemnity plans compare with health maintenance organizations (HMO) in the extent to which their complaint and appeal systems incorporate recommended elements. GAO noted that: (1) guidelines issued by the regulatory and consumer advocacy groups in GAO's study identified nine elements as important to indemnity plan complaint and appeal systems, falling into three general categories: (a) timeliness; (b) integrity of the decisionmaking process; and (c) communication with members; (2) nearly all the recommended elements were present in the policies of at least half of the plans in GAO's study; (3) five elements--explicit time periods for resolving member appeals, appeal decisions made by medical professionals with appropriate expertise, provision of information on how to register a complaint or appeal, plan acceptance of oral complaints, and inclusion of appeal rights in notice of denial of coverage or payment--were included in the policies of a large majority of indemnity plans in GAO's study; (4) however, the remaining four elements--expedited review of appeals in urgent situations, appeal decisions made by individuals not involved in the initial decision, plan acceptance of oral appeals, and written notice of appeal denials including further appeal rights, were present in the policies of only two-thirds or fewer of the plans reporting; (5) taken together, a smaller proportion of indemnity plans in GAO's study incorporated recommended elements in their complaint and appeal systems than did HMOs in GAO's previous study; and (6) when compared with HMOs operated by the same carrier, indemnity plans generally incorporated about the same proportion of recommended elements as did HMOs.

Lifeline is a federal program, established in 1984, that assists eligible individuals in paying the recurring monthly service charges associated with either wireline or wireless telephone usage. The program is part of the Low Income Program supported by the Universal Service Fund. Eligible households can receive up to $9.25 per month in Lifeline discounts. Additional state support may be available. Approximately 2,000 telephone companies are eligible to provide these discounts. A household applies for the discounts through their designated telecommunications service provider. Support is not given directly to the subscriber, but to the service provider. The provider is reimbursed through the Lifeline Program and in turn passes the discount on to the subscriber. The Universal Service Administrative Company (USAC), an independent not-for-profit organization, is the designated administrator of the Universal Service Fund (USF), of which the Lifeline Program is a part. USAC administers the USF programs for the Federal Communications Commission and does not set or advocate policy. The Lifeline program covers the minutes of use for the eligible subscriber. Depending on the package selected the subscriber is allocated a set number of usage minutes per month. Once the allocation is used the subscriber may choose to pay for additional minutes of use. Although not required, most providers that offer a prepaid wireless option provide a wireless phone to the subscriber for free. The cost of this phone is not covered under the Lifeline program but is borne by the designated provider. Although the prepaid wireless option is growing in popularity the Lifeline program also covers a wireline option or a postpaid wireless option. As with the case of the prepaid wireless option the program solely covers the minutes of use, not the device. The Lifeline program is available to eligible low-income consumers in every state, territory, and commonwealth, and on Tribal lands. To participate in the program, consumers must either have an income that is at or below 135% of the federal Poverty Guidelines or participate in one of the following assistance programs: Medicaid; Supplemental Nutrition Assistance Program (Food Stamps or SNAP); Supplemental Security Income (SSI); Federal Public Housing Assistance (Section 8); Low-Income Home Energy Assistance Program (LIHEAP); Temporary Assistance to Needy Families (TANF); National School Lunch Program's Free Lunch Program; Bureau of Indian Affairs General Assistance; Tribally-Administered Temporary Assistance for Needy Families (TTANF); Food Distribution Program on Indian Reservations (FDPIR); Head Start (if income eligibility criteria are met); or state assistance programs (if applicable). The Lifeline Pre-Screening Tool ( http://www.lifelinesupport.org/ls/eligibility/default.aspx ) provided by USAC can help determine whether a household is eligible for Lifeline assistance. At least once each year, beginning in 2012, consumers who are receiving lifeline service must recertify their eligibility and that no one else in their household has a lifeline discounted service. A failure to recertify eligibility will result in removal from the program. Consumers apply for Lifeline through their local telephone company or designated state agency. The Companies in My State ( http://www.lifelinesupport.org/ls/companies.aspx ) provided by USAC can help locate a Lifeline provider in your state. The National Association of Regulatory Utility Commissioners (NARUC) provides a listing and links to state utility commissions ( http://www.naruc.org/Commissions/CommissionsList.cfm ). Telecommunications carriers that provide interstate service and certain other providers of telecommunications services are required to contribute to the federal 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 receives no federal monies. Some consumers may notice a "Universal Service" line item on their telephone bills. This line item appears when a company chooses to recover its USF contributions directly from its customers by billing them this charge. The FCC permits, but does not require, this charge to be passed on directly to customers. 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. Federal rules prohibit eligible low-income consumers from receiving more than one Lifeline discount per household. An eligible consumer may receive a discount on either a wireline or wireless service, but not both. If a household is currently receiving more than one monthly Lifeline service, it must select one provider to provide Lifeline service and it must contact the other provider to de-enroll from their program. Subscribers found to be violating this rule will be de-enrolled and may also be subject to criminal and/or civil penalties.

The concept that all Americans should have affordable access to the telecommunications network, commonly called the "universal service concept," can trace its origins back to the 1934 Communications Act. The preservation and advancement of universal service has remained a basic tenet of federal communications policy, and in the mid-1980s the Federal Communications Commission (FCC) established the Lifeline program to provide support for low-income subscribers. The Lifeline program, which is administered under the Universal Service Fund (USF) Low Income Program, was established by the FCC in 1984 to assist eligible low-income subscribers to cover the recurring monthly service charges incurred for telephone usage. Although the program solely covers costs associated with the minutes of use, not the telephone, misinformation connecting the program to payment for a "free phone" has resulted in a significant number of constituent inquiries.

The Americans with Disabilities Act (ADA) is a broad civil rights act prohibiting discrimination against individuals with disabilities. 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." In 2008, Congress enacted the ADA Amendments Act (ADAAA), P.L. 110-325 , to address Supreme Court decisions which interpreted the definition of disability narrowly. On September 23, 2009, the Equal Employment Opportunity Commission (EEOC) issued proposed regulations under the ADA Amendments Act. Comments on the proposed regulations must be submitted on or before November 23, 2009. Prior to a discussion of the proposed regulations, it is helpful to briefly examine the new statutory definition of disability. The ADAAA defines the term disability with respect to an individual as "(A) a physical or mental impairment that substantially limits one or more of the major life activities of such individual; (B) a record of such an impairment; or (C) being regarded as having such an impairment (as described in paragraph (3))." Although this is essentially the same statutory language as was in the original ADA, P.L. 110-325 contains new rules of construction regarding the definition of disability, which provide that the definition of disability shall be construed in favor of broad coverage to the maximum extent permitted by the terms of the act; the term "substantially limits" shall be interpreted consistently with the findings and purposes of the ADA Amendments Act; an impairment that substantially limits one major life activity need not limit other major life activities to be considered a disability; an impairment that is episodic or in remission is a disability if it would have substantially limited a major life activity when active; and the determination of whether an impairment substantially limits a major life activity shall be made without regard to the ameliorative effects of mitigating measures, except that the ameliorative effects of ordinary eyeglasses or contact lenses shall be considered. The ADA Amendments Act, which states that the definition of disability shall be construed broadly, and which specifically rejects portions of the EEOC's ADA regulations, necessitated regulatory changes. The major changes made to the regulations include specific examples of impairments that will consistently meet the definition of disability, changes in the definition of the term "substantially limits," and expansion of the definition of "major life activity" including changes to the concept of the major life activity of working. The EEOC also amended its interpretative guidance for Title I of the ADA. The ADA definition of disability is a functional definition, not a categorical definition. The EEOC's proposed regulatory definition reiterates the statutory definition and provides guidance on its interpretation. Noting that "disability is determined based on an individualized assessment," the EEOC provides examples of impairments that will consistently meet the definition of disability, and examples of impairments that may be disabling for some individuals but not for others. The EEOC notes that these lists are illustrative, and other types of impairments that are not listed may consistently meet the definition of disability. Examples are also provided of impairments that are usually not disabilities. EEOC states that the following listed impairments will consistently meet the definition of disability: autism, cancer, cerebral palsy, diabetes, epilepsy, HIV or AIDS, multiple sclerosis and muscular dystrophy, major depression, bipolar disorder, post-traumatic stress disorder, obsessive compulsive disorder, and schizophrenia. The EEOC examples of impairments that may be disabling for some individuals but not for others include the following: asthma, high blood pressure, learning disabilities, back or leg impairments, carpal tunnel syndrome, and hyperthyroidism. "Temporary, non-chronic impairments of short duration with little or no residual effects (such as the common cold, seasonal or common influenza, a sprained joint, minor and not-chronic gastrointestinal disorders, or a broken bone that is expected to heal completely) usually will not substantially limit a major life activity." EEOC's listing of specific impairments that "will consistently meet the definition of disability" could arguably be seen as contrary to the ADA's statutory definition. One commentator contends that this may mean that an employer would have no argument against coverage of the listed disabilities and, therefore, this approach is contrary to the ADA's individualized assessment approach. However, the EEOC appendix to the proposed regulations notes that, under the ADA, disability is determined based on an individualized assessment, and that the proposed regulation "recognizes, and offers examples to illustrate, that characteristics associated with some types of impairments allow an individualized assessment to be conducted quickly and easily, and will consistently render those impairments disabilities." It is also interesting to note that in its list of conditions that will usually not substantially limit a major life activity, the EEOC included seasonal or common influenza. It did not discuss whether pandemic influenza would be covered. However, in separate guidance, the EEOC found that H1N1, as currently experienced, would not be interpreted as a disability. The ADA Amendments Act states that the purposes of the legislation are to carry out the ADA's objectives of the elimination of discrimination and the provision of "'clear, strong, consistent, enforceable standards addressing discrimination' by reinstating a broad scope of protection available under the ADA." P.L. 110-325 rejects the Supreme Court's holdings that mitigating measures are to be used in making a determination of whether an impairment substantially limits a major life activity as well as holdings defining the "substantially limits" requirements. The substantially limits requirements of Toyot a Motor Manufacturing v. Williams , as well as the existing EEOC regulations defining substantially limits as "significantly restricted," are specifically rejected in the new law. The current EEOC regulations state that three factors should be considered in determining whether an individual is substantially limited in a major life activity: the nature and severity of the impairment, the duration or expected duration of the impairment, and the permanent or long-term impact of the impairment. The proposed regulations do not contain these factors. They state that an impairment is a disability "if it substantially limits the ability of an individual to perform a major life activity as compared to most people in the general population. An impairment need not prevent, or significantly or severely restrict, the individual from performing a major life activity in order to be considered a disability." The Senate Managers' Statement for the ADAAA discussed the meaning of substantially limited and, after quoting from the committee report for the original 1990 ADA, stated, "We particularly believe that this test, which articulated an analysis that considered whether a person's activities are limited in condition, duration and manner, is a useful one." It could be argued that the EEOC's proposed regulations do not conform with congressional intent. The EEOC, in its proposed appendix to the proposed regulations, notes that the Senate Managers' Report does make reference to the "condition, duration and manner" analysis, but argues that congressional intent to override the Supreme Court's Toyota decision is best served by an elimination of this analysis. The House debate contains a colloquy between Representatives Pete Stark and George Miller on the subject of the meaning of "substantially limits" in the context of learning, reading, writing, thinking, or speaking. The colloquy finds that an individual who has performed well academically may still be considered an individual with a disability. Representative Stark stated the following: Specific learning disabilities, such as dyslexia, are neurologically based impairments that substantially limit the way these individuals perform major life activities, like reading or learning, or the time it takes to perform such activities often referred to as the condition, manner, or duration. This legislation will reestablish coverage for these individuals by ensuring that the definition of this disability is broadly construed and the determination does not consider the use of mitigating measures. The EEOC's proposed regulations echo this colloquy, specifically stating the following: An individual with a learning disability who is substantially limited in reading, learning, thinking, or concentrating compared to most people, as indicated by the speed or ease with which he can read, the time and effort required for him to learn, or the difficulty he experiences in concentrating or thinking, is an individual with a disability, even if he has achieved a high level of academic success, such as graduating from college. The determination of whether an individual has a disability does not depend on what an individual is able to do in spite of an impairment. The ADA Amendments Act specifically lists examples of major life activities including caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, and working. The act also states that a major life activity includes the operation of a major bodily function. The House Judiciary Committee report indicates that "this clarification was needed to ensure that the impact of an impairment on the operation of major bodily functions is not overlooked or wrongly dismissed as falling outside the definition of 'major life activities' under the ADA." There had been judicial decisions which found that certain bodily functions had not been covered by the definition of disability. For example, in Furnish v. SVI Sys., Inc. the Seventh circuit held that an individual with cirrhosis of the liver due to infection with Hepatitis B was not an individual with a disability because liver function was not "integral to one's daily existence." The proposed EEOC regulations echo the statutory listing of major life activities and add sitting, reaching, and interacting with others, noting that this list is illustrative, not exhaustive. The House Education and Labor Committee report provided examples for major life activities that were not included in the statutory language, and included reaching and interacting with others. The House report also included examples not in the proposed regulations: writing, engaging in sexual activities, drinking, chewing, swallowing, and applying fine motor coordination. The ADA Amendments Act includes working as an example of a major life activity. What it means to be substantially limited in the major life activity of working is also addressed by the EEOC's proposed regulations. The EEOC notes that usually an individual with a disability will be substantially limited in another major life activity so that it would be unnecessary to determine whether the individual was substantially limited regarding working. However, where that is not the case, the EEOC proposes that "[a]n impairment substantially limits the major life activity of working if it substantially limits an individual's ability to perform, or to meet the qualifications for, the type of work at issue." The EEOC also states that this interpretation is to be construed broadly and should "not demand extensive analysis." "Type of work" is described in the EEOC's proposed appendix as including "the job the individual has been performing or for which he is applying, and jobs that have qualifications or job-related requirements which the individuals would be substantially limited in performing as a result of the impairment." Prior to the enactment of the ADAAA, some courts had required a statistical analysis of the availability of certain jobs in order to determine whether an individual was substantially limited in the major life activity of working. The EEOC states that this statistical analysis will no longer be needed. Using the proposed "type of work" standard, the EEOC envisions courts using evidence from the individual regarding his or her educational and vocational background and the limitations of the impairment. Generally, the EEOC would not consider necessary expert testimony concerning the types of jobs in which an individual is substantially limited. As discussed, the terms "class of jobs" and "broad range of jobs in various classes," which are in the existing regulations, are eliminated in the proposed regulation in favor of the term "type of work." The EEOC describes this change as "more straightforward and easier to understand" as well as being consistent with congressional intent for broad coverage. However, this change has been described as "the most problematic issue arising from the EEOC's proposed regulations" since it is not predicated on specific statutory language or legislative history. It could be argued, as EEOC notes, that the change is consistent with congressional intent that the focus of an ADA case should be on whether discrimination has occurred, not on whether the individual has met the definition of disability. Such a change in the regulations could have a significant effect on judicial determinations.

The Americans with Disabilities Act (ADA) is a broad civil rights act prohibiting discrimination against individuals with disabilities. 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." In 2008, Congress enacted the ADA Amendments Act (ADAAA), P.L. 110-325, to address Supreme Court decisions which interpreted the definition of disability narrowly. On September 23, 2009, the Equal Employment Opportunity Commission (EEOC) issued proposed regulations under the ADA Amendments Act. Comments on the proposed regulations must be submitted on or before November 23, 2009. The ADA Amendments Act, which states that the definition of disability shall be construed broadly and which specifically rejects portions of the EEOC's ADA regulations, necessitated regulatory changes. The major changes made to the regulations include specific examples of impairments that will consistently meet the definition of disability, changes in the definition of the term "substantially limits," and expansion of the definition of "major life activity" including changes to the concept of the major life activity of working. The EEOC also amended its interpretative guidance for Title I of the ADA.

The Higher Education Act of 1965, as amended (HEA; P.L. 89-329), authorizes the operation of numerous federal aid programs that provide support both to individuals pursuing a postsecondary education and to institutions of higher education (IHEs). It also authorizes certain activities and functions. The most recent comprehensive reauthorization of the HEA was in 2008 under the Higher Education Opportunity Act (HEOA; P.L. 110-315 ). As amended by the HEOA, appropriations were authorized for most HEA discretionary spending programs through FY2014. However, under generally applicable provisions in the General Education Provisions Act (GEPA), the authorization periods for most HEA programs were effectively extended through the end of FY2015. From September 30, 2015, through December 18, 2015, Congress provided additional appropriations for many of these programs with three consecutive continuing resolutions. On December 18, 2015, the Consolidated Appropriations Act, 2016 was enacted ( P.L. 114-113 ), under which Congress provided additional appropriations for many of the HEA programs through FY2016, such that they will continue operation until through September 30, 2016. Additional legislative action must occur for the provisions extended by the Consolidated Appropriations Act, 2016 to continue beyond September 30, 2016. Not all authorizations of appropriations in the HEA were set to expire at the end of FY2014. For some HEA programs, authorization of appropriations or mandatory budget authority is permanent, while for others authorization is provided through a date beyond the end of FY2014. For a number of programs, the period during which appropriations are authorized to be provided has ended. For instance, the authorizations of appropriations for Teacher Quality Partnership Grants expired at the end of FY2011. In a few other instances that are discussed below, program authority had a sunset date (e.g., the end of FY2014, the end of FY2015). The General Education Provisions Act (GEPA) contains a broad array of statutory provisions that are applicable to the majority of federal education programs administered by the U.S. Department of Education (ED). GEPA Section 422 provides that, in the absence of the enactment of a law to extend or repeal a program administered by ED, the authorization of appropriations for, or the duration of, a program is extended for one additional fiscal year beyond its terminal year. The authorization of appropriations for such programs in the additional year shall be the same as that for the terminal year of the program. Section 422 of GEPA explicitly states that the automatic one-year extension does not apply to the authorization of appropriations for commissions, councils, or committees that are required by statute to terminate on a specific date. Prior to the conclusion of FY2015, two HEA committees had specific termination dates: Under Section 114(f), the authority for the National Advisory Committee on Institutional Quality and Integrity (NACIQI) terminated on September 30, 2015. Under Section 491(k), the authority for the Advisory Committee for Student Financial Assistance (ACSFA) was provided until October 1, 2015. Congress did not extend or repeal many of the provisions authorized by the HEA through FY2014. Thus, except for the advisory committees noted above, GEPA automatically extended most of these HEA programs and authorizations of appropriations through FY2015 at the same levels as were authorized to be provided for FY2014. However, because GEPA Section 422 only provides an additional one-year extension to HEA programs and many of those programs that were set to expire at the end of FY2014 were automatically extended through FY2015 under GEPA—and subsequently through FY2016, under the Consolidated Appropriations Act, 2016—additional legislative action must occur if these expiring provisions are to continue beyond September 30, 2016. Most HEA provisions that were set to expire at the end of FY2014 had been provided an additional one-year extension under GEPA. This additional one-year extension terminated at the end of FY2015. The implications of this expiration in the context of a particular program or activity depend on the nature of the provision that expired. In general, there is a distinction between an authorization provision that establishes the authority for a program, policy, project, or activity and a provision that explicitly authorizes subsequent congressional action to provide appropriations. The Comptroller General has explained that there is no constitutional or general statutory requirement that an appropriation must be preceded by a specific act that authorized it. "Congress may ... appropriate funds for a program or object that has not been previously authorized or which exceeds the scope of a prior authorization, in which event the enacted appropriation, in effect, carries its own authorization and is available to the agency for obligation and expenditure. " That is, in the event that an authorization of appropriations has lapsed, an appropriation would generally provide the necessary legal authorization for the agency to spend money for the particular purpose specified in the appropriations act. Furthermore, if an authorization of appropriations for an activity expires but the underlying authority for that activity does not, those statutory authorities still exist and the agency may continue to take actions pursuant to them, assuming that appropriations are available for those purposes. Extension of the HEA authorization provisions that expired at the end of FY2014 and were extended through GEPA to the end of FY2015, the vast majority of which are discretionary authorizations of appropriations, could be addressed in a variety of ways through either the authorization or appropriations processes (or both). For instance, one or more laws could be enacted that extend the authorization of appropriations for an individual program or multiple programs. Alternatively, a program for which the authorization of appropriations has expired may continue to operate if Congress continues to appropriate funds for it. In a few other instances, however, where the authority for the program itself terminates, an explicit extension of that program would be required for it to continue to operate. For the HEA provisions that, with the GEPA extension, expired at the end of FY2015, a law could be enacted to explicitly extend the authorization. For instance, prior to the enactment of the HEOA ( P.L. 110-315 ) in 2008, the most recent reauthorization of the HEA, HEA programs were extended beyond their prior terminal authorization date of FY2003 through a series of Higher Education Extension Acts that temporarily extended the HEA. These extension acts broadly extended the authorization of appropriations for and the duration of each program authorized under the HEA for an additional period of time beyond their prior terminal authorization dates. As an alternative to an explicit authorization extension, for many of the HEA provisions that expired, with the GEPA extension, at the end of FY2015, additional funds could be appropriated for periods beyond FY2015 to ensure a program's continued operation. As was previously mentioned, in general, an appropriation for the purposes of a program with an expired authorization of appropriations would ensure the continued operation of that program. For example, although the authorization of appropriations under HEA, Title II, Part A, for Teacher Quality Partnership Grants was provided only through FY2011 (and extended under GEPA through FY2012), the program remains operational due to continued funding provided in previous appropriations acts through FY2015, and now through FY2016 under the Consolidated Appropriations Act, 2016. While it seems that most of the HEA programs that expired at the end of FY2015 could continue operations with the appropriation of funds for FY2016, it appears that an explicit extension would be required for the advisory committees mentioned above to ensure continued operation in their current form beyond the end of FY2015. Congress uses an annual appropriations process to fund routine activities of most federal agencies. This process anticipates regular appropriations bills to fund activities before the beginning of the fiscal year. When this process is delayed beyond the start of the fiscal year, one or more continuing appropriations acts (continuing resolutions) can be used to provide funding until action on regular appropriations is completed. In the event a regular appropriations bill to appropriate funding for the expiring HEA provisions is not enacted prior to their expiration date, a continuing resolution (CR) could be enacted to provide continued funding for these expiring provisions. In most cases, the appropriation of funds for a program through a CR would be sufficient for a program's continued operation. However, for those programs with explicit termination or sunset dates, a CR or other appropriations law would likely need to contain specific language, beyond the appropriation of funds, indicating Congress's intent to continue the operation of the program. Thus, for certain provisions, the extension of the explicit authorization for the program or activity may be required for continued operations. Beginning on September 30, 2015, a variety of measures were taken to provide additional appropriations for federal programs beyond FY2015. First, three CRs were enacted, which, in general, provided continuing appropriations for federal programs through December 18, 2015. Then, on December 18, 2015 the Consolidated Appropriations Act, 2016 was enacted ( P.L. 114-113 ), under which Congress provided additional appropriations for many of the HEA programs through FY2016. Thus, many of the HEA programs that, under GEPA provisions, were set to expire at the end of FY2015 continued to operate through December 18, 2015, under the various CRs and will continue to operate through FY2016 under the Consolidated Appropriations Act, 2016. Congress did not, however, extend the authorization of or provide additional funding under any of the CRs or the Consolidated Appropriations Act, 2016 for the Advisory Committee for Student Financial Assistance. Because the Advisory Committee for Student Financial Assistance neither received additional funding nor an extension of authorization, it has disbanded and operations ceased immediately upon the expiration of its authorization. Additionally, although Congress did not provide additional funding for the Federal Perkins Loan program under the CRs or the Consolidated Appropriations Act, 2016, it did provide authorization for the continued operation, but not additional appropriations, for the program through separate legislation—the Federal Perkins Loan Program Extension Act of 2015 ( P.L. 114-105 ). Under the act, institutions of higher education may continue to award Perkins Loans to eligible undergraduate students through September 30, 2017 and to eligible graduate and professional students through September 30, 2016. Beyond then, the act specifically prohibits additional appropriations for the program. It also specifies that the automatic one-year extension under GEPA Section 422 will not apply to further extend the program. In the event additional funding is not provided beyond September 30, 2016 for those HEA programs that were funded through the Consolidated Appropriations Act, 2016 either through regular appropriations or another CR, a funding gap would follow. Should this occur, an agency must suspend operations of affected programs, except in certain situations when law authorizes continued activity, until further appropriations are provided. The programs may subsequently resume once funds for them are appropriated, unless otherwise provided. In many past instances, a CR following a funding gap has contained authorization extensions and provided that those extensions shall be considered to have been enacted on the date that the funding gap commenced, as if no funding gap occurred. For instance, under the Continuing Appropriations Act of 2014 ( P.L. 113-46 ), which followed the FY2013 16-day funding gap from October 1, 2013, to October 16, 2013, appropriations were provided for federal programs and the time covered by the joint resolution was "considered to have begun on October 1, 2013." This may be especially relevant for programs with a specific termination date, such as the advisory committees discussed above. While additional action beyond providing appropriations is likely needed to continue their operation, should these programs not receive an explicit extension prior to the termination, it appears that Congress would have the ability to restore the committees through provisions in a CR as if a lapse in authorization never occurred, such that it may be unnecessary to reform the committees completely (e.g., appoint new committee members). In addition to the HEA, the Compact of Free Association contains several provisions that relate to the eligibility of students and IHEs of the Freely Associated States to participate in the HEA programs. In accordance with the Compact of Free Association, students and IHEs in the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau are eligible to receive appropriations for and participate in many federal student aid programs through FY2023 (e.g., Pell Grants). With respect to the Federal Supplemental Educational Opportunity Grant (FSEOG) program and the Federal Work Study (FWS) program, however, the Compact of Free Association, as amended by the Consolidated and Further Continuing Appropriations Act of 2015 ( P.L. 113-235 ), extended eligibly for students and IHEs in Palau to receive appropriations for and participate in the programs only through the end of FY2015. The various CRs temporarily extended the provisions of the Compact of Free Association pertaining to students and IHEs in Palau and their eligibility to receive appropriations for and participate in the FSEOG and FWS programs, and the Consolidated Appropriations Act, 2016 further extended these provisions through FY2016. However, it appears this extension would expire September 30, 2016 without additional legislative action. Table 1 presents information on the discretionary authorization of appropriations or mandatory budget authority for HEA programs and activities. For each program, it identifies the HEA section authorizing the appropriation of funds or providing mandatory budget authority; whether budget authority for these funds is classified as discretionary (D) or mandatory (M); the amount authorized to be appropriated during specified fiscal years; the period or duration for which the authorization of appropriations or mandatory budget authority is provided; whether the authorization provision is extended by GEPA; and for discretionary spending authorizations of appropriations, the amount appropriated for FY2016 under the Consolidated Appropriations Act, 2016; for mandatory programs, budget authority for FY2016. Generally, the provisions are presented in the order in which they appear in the HEA.

The Higher Education Act of 1965, as amended (HEA; P.L. 89-329), authorizes the operation of numerous federal aid programs that provide support both to individuals pursuing a postsecondary education and to institutions of higher education (IHEs). It also authorizes certain activities and functions. The HEA was first enacted in 1965. It has since been amended and extended numerous times, and it has been comprehensively reauthorized eight times. The most recent comprehensive reauthorization occurred in 2008 under the Higher Education Opportunity Act (HEOA; P.L. 110-315), which authorized most HEA programs through FY2014. Many of the programs with HEA authorizations set to expire at the end of FY2014 were automatically extended through FY2015 under Section 422 of the General Education Provisions Act (GEPA). Additionally, many HEA programs due to expire at the end of FY2015 were extended through FY2016 under the Consolidated Appropriations Act, 2016 (P.L. 114-113). This report identifies provisions under the HEA that were, with GEPA extensions, set to expire at the end of FY2015. It also discusses authorization and appropriations options for extending the statutory authorities that are scheduled to lapse. These options include an explicit extension of, or an appropriation of funds for, these programs either through a regular appropriations measure or a continuing resolution. Finally, for all HEA mandatory and discretionary programs and activities, the report provides information on the authorization of appropriations or mandatory budget authority, the duration for which such authority is provided, the applicability of extensions under GEPA, and FY2016 appropriations and mandatory budget authority.

NPRC maintains the personnel and medical records of nearly all former members of the U.S. military service departments who served during the twentieth century and responds to requests for these records. The records maintained by NARA are the property of the Department of Defense (DoD), which reimburses NARA for storing and servicing the records. NARA maintains DoD’s records at the Military Personnel Records facility in St. Louis, Missouri, which opened in 1955 for this purpose. Although the building experienced a major fire in 1973 that destroyed some records, it currently contains about 55 million military personnel records and an additional 39 million auxiliary records such as military pay vouchers. The records—paper copy—are kept in cardboard boxes stacked on 10 foot high shelves. They are filed in sections according to branch of service, time period of service, or date of transfer to NPRC. Within the sections, records are filed alphabetically, by service number or by registry number (a sequential numbering system). Each box is marked with the name or number of the first record in the box to identify its contents. Figure 1 shows the central corridor of a typical storage area, and figure 2 shows a typical row of records in the storage area. Prior to 1999, NPRC operated in the same fashion as it had since the 1950s, when its building first opened. Request processing was manual and labor intensive. Only recently has the NPRC begun to make computers and other technology available to its staff that processes requests. Even telephones were not installed on employees’ desks until February 2000. The pre- reengineering philosophy was that having telephones on the desks of all technicians might reduce productivity. As a result of not having telephones on their desks, technicians generally did not contact requesters to obtain additional information to assist them in locating the requested military service record or to clarify an unclear request. In the past, requests that were unclear and could not be clarified were returned to the requester. For requests that were clear, staff located the appropriate cardboard box, pulled the record, processed the request, and later returned the record. For each request, staff created a reply using forms with preprinted responses that could be checked off. The forms were handwritten and sent out with the relevant record copies. NPRC was organized by branches of service—the Army, Navy and Air Force—and each branch processed its own records. Technicians were assigned work based on the level of difficulty of the tasks required to fulfill the requests. These tasks could range from simply photocopying a form to formulating complex correspondence. More complex cases were assigned to higher pay grade employees. However, the division of workload among branches and pay grades made it difficult to respond to fluctuations in workload and affected timeliness and customer service, according to NPRC officials. In 1997, NPRC began an ongoing business process reengineering project to improve timeliness among other things. In February 1999, a pilot team began using the new work processes. When the reengineering project is fully implemented, NPRC will be organized into five units or cores. As of March 2001, four of the cores had been implemented. Each core will process requests pertaining to records of veterans in all military services. Within the cores, each technician is expected to be able to process requests of varying levels of difficulty. In addition, NPRC is introducing computer technology into its processing. NPRC has implemented an interim computer system with the capability to track requests electronically, identify duplicate requests, and access prior responses concerning a record. Ultimately, NPRC expects to implement a more capable computer system that, among other things, will enable it to receive requests electronically and directly access other agencies’ data bases in order to fulfill requests. NPRC officials expect these two features to significantly improve timeliness. The challenge that NPRC faces in shortening the amount of time it takes to respond to requests for records is in part a function of its human capital challenges. Our designation in January 2001 of strategic human capital management as a governmentwide high-risk area underscored the connection between human capital challenges and programmatic challenges and risks. To help agencies manage these challenges, in September 2000 we published a human capital self-assessment checklist.The checklist emphasized the need to pursue a workforce planning strategy, through which an organization should identify its current and future human capital needs, including the size and deployment of its workforce across the organization, and the knowledge, skills, and abilities needed for the agency to pursue its mission, goals, and business strategies. Moreover, an agency’s workforce planning strategy should be linked to strategic and program planning efforts. In fiscal year 2000, on average, NPRC took 54 days to respond to written requests for records. Although NPRC completed about 6 percent of record requests within 10 days in fiscal year 2000, its goal is to eventually complete 95 percent of requests within 10 days by fiscal year 2005. This goal is identified in NARA’s strategic plan under the Government Performance and Results Act. NPRC officials attribute delays in completing requests primarily to the large backlog of requests waiting to be processed. As of the end of the second quarter of fiscal year 2001, NPRC had a backlog of about 214,000 requests. This would represent about a 3-month wait from the time NPRC receives the request to the time that a technician begins to process the request. NPRC officials identify two events as the cause of the backlog. The first is the loss of 43 employees out of a staff of 273 who accepted buyouts—cash incentives to retire or resign—in fiscal year 1995. According to NARA, the buyout was part of a governmentwide effort to streamline the federal workforce. The second is the ongoing implementation of NPRC’s reengineering project. NPRC officials told us that reengineering slowed down productivity because employees were participating in training, moving to redesigned work spaces, and adjusting to the restructuring of the work process. Data from NPRC showing changes in the backlog appear consistent with NPRC’s explanation of the causes of the backlog. Specifically, the backlog initially increased dramatically in fiscal year 1995, the year of the buyout; dropped to about 61,000 in 1997 as the number of staff rose to pre-buyout levels; and increased dramatically again during fiscal years 1999 and 2000 when NPRC began implementing the reengineering project. Our analysis of workload and staffing data provided by the NPRC shows that productivity declined by about 25 percent from the end of fiscal year 1997 to the end of fiscal year 2000. Figure 3 shows the request backlogs from 1993 through 2000. NPRC’s current efforts are not likely to improve response time soon, and it is unclear whether NPRC will meet its fiscal year 2005 timeliness goal. NPRC’s use of overtime has not stopped the growth in the backlog of requests while reengineering is being implemented. NPRC expects the backlog to continue to increase as its employees adjust to the new process. Moreover, in the long term it is not clear that the reengineering project will result in NPRC meeting its timeliness goals. NPRC does not have a plan that shows how it will achieve its fiscal year 2005 timeliness goal, in part because NPRC does not yet have data to show what level of production it will achieve by operating in the reengineered environment. In addition, NPRC has not yet implemented its proposed computer system, which it expects to have a significant impact on timeliness. NPRC is using overtime in an attempt to contain the growth of the backlog while it implements its reengineering. However, the number of cases completed through overtime work has not reduced the backlog. Even while using overtime, NPRC was unable to complete its incoming workload in the first 6 months of fiscal year 2001. As a result, the backlog of cases grew by about 69,000 cases to 214,000 cases in the first half of fiscal year 2001. NPRC projects that it can complete about 26,000 to 28,000 additional cases per year by using overtime given its current overtime budget. Even if NPRC could keep up with its normal workload during regular hours and overtime efforts were applied only to reducing the backlog, we estimate it would take over 7 years to eliminate the backlog. NPRC officials expect the backlog of requests to increase as it implements its reengineering. According to NPRC officials, employees are still adjusting to their expanded roles and the new process. These adjustments include learning to work in teams, handling requests of varying difficulty levels and for different service branches, and using computers to receive, track, and draft responses to requests. The productivity of staff working under the old system is greater than that of staff working under the reengineered system. According to NARA, NPRC’s units working in the new environment completed about 15 cases per staff day. In fiscal year 2000 units still operating under the old process completed about 31 cases per staff day. However, according to NPRC officials, future productivity numbers may not be comparable to those achieved under the old process. This is because NPRC anticipates handling cases completely and correctly the first time they are received, which could take longer. NPRC officials estimate that the backlog could exceed 240,000 cases at the end of this year. This is almost 100,000 cases more than at the end of fiscal year 2000. Currently, it is not clear whether reengineering will result in NPRC meeting its goal of answering 95 percent of requests within 10 working days by fiscal year 2005. NPRC does not have a plan that shows how it will achieve its fiscal year 2005 timeliness goal. NPRC has not identified specific timeframes, staff, or production levels needed to meet its long- term goal and how its use of overtime and its reengineering efforts will enable it to meet the goal. According to NPRC officials, they do not have such a plan because they do not have enough information to develop such a plan. For example, the officials said that they do not have data on the overall NPRC productivity improvements anticipated in the reengineered environment. NPRC is currently developing this type of data. While NPRC has begun implementing its reengineering, full implementation of its proposed computer technologies has not occurred. NPRC is depending on electronic receipt of requests and the ability to access other agency data bases to significantly improve timeliness. NPRC officials believe that these technologies will significantly free up time for staff to work on more cases. They believe that in some situations requests will be filled electronically without human intervention. NPRC officials do not anticipate beginning to implement receipt of electronic requests until April 2002, and accessing other agency data bases could begin as late as fiscal year 2004. NPRC is attempting to improve its timeliness in responding to requests for veterans’ records. NPRC is using overtime to control the backlog while it implements the business reengineering in an effort to revamp its outmoded manual process. However, NPRC’s use of overtime has not been able to control its backlog, which is expected to increase significantly. NPRC’s ability to realize any potential benefits from reengineering is hampered by the existence of the backlog. Computer technology, which is expected to significantly improve timeliness, has not been fully implemented. NPRC does not have a plan that shows what it needs to meet its long-term timeliness goal and how its actions will enable it to do so. Without such a plan, NPRC cannot provide assurances that it will meet its timeliness goal and that its actions will be sufficient to improve timeliness. We recommend that NARA require NPRC to develop a plan that shows what is needed to meet its fiscal year 2005 timeliness goal, including human capital issues such as staffing and production levels and timeframes, and how its use of overtime and reengineering will enable it to meet its goal. We received written comments on a draft of this report from NARA (see app. I). In its comments, NARA stated that it supported our recommendation to develop a plan that shows what is needed to meet its fiscal year 2005 timeliness goal. NARA noted that it expects to complete a plan that will link reengineering milestones to cycle time improvements by mid-July of this year. NARA also indicated that the draft report did not take into account its customer service and human capital management initiatives. However, the draft report discussed changes in both the work environment and quality of customer service as they potentially relate to timeliness – the central focus of our review. NARA also commented that timeliness was just one facet of its effort and that its “balanced scorecard” approach established other goals. We agree that measuring timeliness without measuring other factors, such as quality of the work, would be inappropriate. Finally, NARA commented that the draft report tried to compare productivity statistics from before reengineering to the pilot phase of the reengineering project. We disagree. In fact, we explicitly acknowledged that future productivity numbers may not be comparable to those achieved under the old process because of the NPRC’s plan to handle cases completely and correctly the first time they are received. This approach may take longer than the previous system, but, to the extent that it reduces duplicate requests and other rework, it would ultimately improve timeliness. NARA also provided technical comments, which we incorporated where appropriate. NARA stated that the NPRC backlog is not a factor in the timeliness of the Veterans Benefits Administration’s (VBA’s) servicing of disability compensation claims. However, our previous work on VBA’s process shows that NPRC is an external source from which VBA often needs documentation. To expedite obtaining this information, VBA established its own unit at the NPRC in 1999. As agreed with your offices, unless you publicly announce its contents earlier, we plan no further distribution of this report until 30 days after its issue date. At that time, we will send copies of this report to the Honorable John Carlin, Archivist of the United States; appropriate congressional committees; and other interested parties. We will also make copies available to others on request. If you have any questions about this report, please call me on (202) 512- 7101 or Irene Chu, Assistant Director, on (202) 512-7102. Other key contributors were Martin Scire, Bob Sampson, and Patrick di Battista.

The National Personnel Records Center (NPRC) is responsible for maintaining the official military personnel records of discharged members of the military services. Veterans frequently need their records for a variety of reasons, such as obtaining disability compensation, health benefits, GI bill education benefits, home loan guarantees, and burial in national cemeteries. However, access to these benefits has been hampered due to delays in obtaining documentation of their military service from NPRC. This report evaluates NPRC's timeliness in responding to veterans' requests for records. GAO reviewed (1) how long it took NPRC to answer veterans' requests for records and (2) whether the actions NPRC was taking would improve response time. GAO found that, in fiscal year 2000, NPRC took an average of 54 days to respond to written requests for records, answering about six percent of written requests within 10 working days. Actions NPRC was taking to respond more quickly were unlikely to significantly improve timeliness soon, and the prospects for meeting its fiscal year 2005 goal of answering 95 percent of requests within 10 working days were unclear.

Since the collapse of the Berlin Wall, the European threat environment has changed dramatically. NATO no longer needs a static, layered defense of ground forces to repel a large-scale Soviet invasion. Instead, the alliance must address new and different threats for which NATO would face far less warning time, yet more complex circumstances, than a conventional assault; these might include terrorism, weapons of mass destruction, proliferation, and ethnic strife. As conflicts from the Balkans to Afghanistan have demonstrated, the alliance must be able to prepare for security contingencies requiring the rapid deployment of more agile forces distant from the treaty area. During NATO's air war against Yugoslavia in the spring of 1999, U.S. aircraft flew a disproportionately large share of the combat sorties. The Kosovo action exposed a great disparity in defense capabilities between the United States and its allies. That gap, along with the transformation of the overall threat environment, prompted the development of two parallel and, it was hoped, complementary transatlantic security initiatives aimed at, among other things, bridging the technology gap between U.S. and European forces. The Balkans conflicts of the 1990s motivated the European Union (EU) to speed the construction of a European defense arm, called the European Security and Defense Policy (ESDP). One aspect of ESDP is the development of rapid reaction forces to undertake several military tasks—including humanitarian and rescue missions, peacekeeping, and crisis management—in which other countries, including the United States, might choose not to participate. To achieve this, the EU states in 1999 set forth "headline goals" for creating a 60,000-strong crisis management force that would be deployable within two months and sustainable for one year. In 2004, Brussels announced the planned formation of 13, 1500-troop battlegroups that would be available for rapid deployment to crisis areas. Also that year, the EU created the European Defense Agency, intended to help coordinate the development of European defense capabilities. In January 2007, the EU stated that the battlegroups were fully operational. The other significant change occurred at NATO's Washington, D.C. summit in April 1999, when the alliance launched the Defense Capabilities Initiative (DCI). The Initiative was intended not only to improve NATO's ability to fulfill NATO's traditional Article 5 (collective defense) commitments, but also to prepare the alliance to meet emerging security challenges that may require a variety of types of missions, both within and beyond NATO territory. To accomplish these tasks, the alliance must ensure that its troops have the appropriate equipment, supplies, transport, communications, and training. Accordingly, DCI aimed to improve NATO core capabilities by listing 59 "action items" in five categories: mobility and deployability; sustainability and logistics; effective engagement; survivability; and consultation, command and control. Before long, however, analysts realized that DCI was not meeting its goals because the changes that had been agreed to required most countries to increase their defense spending. Most, however, did not. The aftermath of September 11 further highlighted allied military limitations vis-a-vis the United States. NATO invoked Article 5 for the first time, but during the subsequent war in Afghanistan, the United States initially relied mainly on its own military, accepting only small contingents of special forces from a handful of other countries; allied combat and peacekeeping forces entered the fray in larger numbers only after the Taliban had been defeated. Analysts believe that the allies were not invited to contribute because they lacked many of the military capabilities—airborne refueling, air transport, precision-guided munitions (PGMs), and night vision equipment—necessary to conduct a high-tech campaign designed to achieve a swift victory with minimum civilian and U.S. casualties. Lack of interoperability was also an issue. NATO sought to address the perceived problems of DCI at its November 2002 meeting in Prague by approving the Prague Capabilities Commitment (PCC). Like DCI, PCC seeks to improve members' operational capabilities to address evolving defense needs. Analysts describe PCC as an attempt to resuscitate DCI, which foundered because it was too broad and diffuse. PCC is also intended to improve upon DCI in light of the security threat that emerged on September 11. In an effort to combat terrorism, it emphasizes air lift, secure communications, PGMs, and protection against weapons of mass destruction. NATO officials point out, however, that PCC differs from DCI in several important ways: PCC is focused on a smaller number of goals, emphasizes multinational cooperation and specialization, requires specific commitments from member states, and was designed with a particular force in mind: the NATO Response Force (NRF). PCC calls for alliance members to make commitments to bolster their capabilities in eight specific areas: (1) chemical, biological, radiological, and nuclear defense; (2) intelligence, surveillance, and target acquisition; (3) air-to-ground surveillance (AGS); (4) command, control, and communications; (5) combat effectiveness; (6) strategic air and sea lift; (7) air-to-air refueling; and (8) deployable combat support and combat service support units. PCC also places greater emphasis on multinational commitments and pooling of funds than did DCI; this enables smaller countries to combine resources to purchase hardware that would be unaffordable for each alone. The Netherlands, for example, volunteered to lead a group of countries buying conversion kits to transform conventional bombs into PGMs. Germany managed a consortium that will acquire strategic air transport capabilities, while Spain headed another group that would lease tanker aircraft. Norway and Denmark coordinated procurement of sealift assets. The Czech Republic has concentrated on countering the effects of chemical, biological, radiological and nuclear (CBRN) weapons. In addition, PCC recognizes the value of role specialization, or niche capabilities. This concept is especially important to the new member states. Romania, for example, can offer alpine troops, Hungary has a skilled engineering corps on call, and the Czech and Slovak Republics have units trained in countering the effects of chemical and biological weapons. PCC is also much more specific in its requirements of commitments than was DCI. Defense officials argue that DCI was loaded down with too many vague requirements and that many countries contented themselves by picking the low-hanging fruit, acquiring the less costly materiel. PCC is drafted to extract specific, quantifiable commitments from member states; at Prague, the alliance approved a package of proposals from individual countries obliging them to acquire specific equipment. Unlike Washington and Prague, subsequent NATO summits in Istanbul (2004), Riga (2006), and Bucharest (2008) did not result in new initiatives setting out extensive programmatic objectives for enhancing the alliance's capabilities. At the conclusion of the Istanbul summit, the member heads of state and government in their Final Communiqué reaffirmed their commitment to improving NATO capabilities through PCC, a task they referred to as "a long-term endeavor." The summit declaration stated that PCC implementation was progressing and singled out for praise the multinational cooperative efforts to acquire lift, refuellers, and AGS. The leaders agreed to "further the transformation of our military capabilities to make them more modern, more usable and more deployable to carry out the full range of Alliance missions." They also urged some nations to reorient their national resources toward investments in deployable capabilities. Finally, the leaders approved the creation of a NATO Active Layered Theater Ballistic Missile Defense program as an important element of force protection. In the final communiqué of their November 2006 Riga summit, NATO leaders stated their intention to continue building on their work on capabilities at Prague and Istanbul. After describing the status of several alliance missions, they declared that force adaptation and support for expeditionary operations should proceed and laid out a pared-down list of key activities. They noted that progress toward one major goal—beefed up airlift capacity—had been achieved through two cooperative initiatives: 1) the Strategic Airlift Interim Solution, under which several countries committed to buying Airbus A400M cargo planes by 2010 have, in the interim, chartered Antonov transporters from Ukraine; and 2) the creation of a NATO Strategic Airlift Capability, under which 15 member states and one partner (Sweden) agreed to pool funds to purchase three or four C-17 aircraft; the planes will be staffed by international crews and will be available for NATO, EU, UN, or other international operations, military or humanitarian. The communiqué also reported progress on key capabilities in other areas, including special operations, networking, intelligence sharing, AGS, missile defense, and anti-CBRN capabilities. The 2008 Bucharest summit declaration did not mention PCC, but referred instead to the more general Comprehensive Political Guidance, agreed to at Riga. The Guidance "provides a framework and political direction for NATOs continuing transformation, setting out, for the next 10 to 15 years, the priorities for all Alliance capability issues, planning disciplines and intelligence." In light of NATO missions, particularly in Afghanistan, the Bucharest declaration also stressed the urgency of acquiring specific capabilities such as strategic and intra-theater airlift and communications, and pointed toward a possible future NATO missile defense system. It also once more encouraged member states to bolster defense spending. To meet the goals of PCC, the European allies need to restructure and modernize their militaries and address deficiencies in equipment procurement and in R&D programs. However, this implies increased defense spending, requiring a reversal of the trend of the past decade: between 1992 and 1999, defense expenditures by European NATO countries fell 22%. Although the United States also cut back on defense during that period, it still spends a much higher share of GDP on defense than most other NATO countries, and has boosted defense outlays significantly in recent years. While France and the UK have increased their spending, Germany, with the second-largest military in the alliance, has drastically reduced its military budget. Most assessments of the progress of PCC are classified. A late-2005 NATO Parliamentary Assembly (NPA) report noted that it was difficult to gauge the progress of PCC because of incomplete information, mainly stemming from a lack of transparency on force goals of member states. Nevertheless, the study noted progress in several areas, including sealift, anti-CBRN and in equipping aircraft with PGMs. In April 2008, another NPA report providing an overview of the current state of play of efforts to improve alliance capabilities. It highlighted other initiatives NATO has undertaken to acquire expeditionary assets, singling out in particular airlift, special forces and information superiority, noting that "operations in Afghanistan are serving as the principal driver for capability requirements today." It also reemphasized the continuing utility of asset pooling and specialized "niche" capabilities. Reading between the lines of NATO publications and statements, some analysts sense that there have been real improvements in boosting capabilities. For example, at their June 2005 meeting, NATO defense ministers issued a communiqué stating that PCC had "brought some improvements in capabilities, but critical deficiencies persist, particularly in support for our deployed forces." One year later, however, the ministers' statement was more sanguine, noting progress in a number of areas and indicating that they had "provided further guidance on the way ahead." Shortly before the Riga summit, the alliance issued a media summit guide stating that "[b]y the end of 2008, over 70 per cent of the 460 or so [PCC] commitments made by Allies will have been fulfilled. Most of the remainder will be completed by 2009 and beyond." However, a 2008 National Defense University study characterized the results of PCC as "mixed." The Riga final communiqué noted that NATO is involved in six missions and operations on three continents. Some analysts conclude that the capabilities debate has increasingly been driven by the experience of NATO forces in these missions as military leaders assess their earlier goals in light of actual operations, especially in Afghanistan. This is particularly the case with special forces and with strategic lift, which one observer has termed "potentially the alliance's Achilles heel of capabilities." In addition, U.S. NATO Ambassador Victoria Nuland has noted that increased operational tempo demonstrates the need for greater spending on new military assets. Because NATO operates under a consensus rule, the fact that the alliance adopted both DCI and PCC implies that all member states agreed to the need to strengthen capabilities of an expeditionary nature. Some critics, however, have questioned the two initiatives, arguing that NATO already enjoyed vastly superior technological prowess vis-à-vis countries other than the United States, and that the alliance's military capabilities—whatever their shortcomings—are more than sufficient to address any threat. Others are skeptical of the possible motives behind the push for more advanced capabilities; they contend that massive defense spending increases are unnecessary and wasteful, and that PCC merely serves to boost sales for high-technology arms and equipment manufacturers. Finally, some analysts have challenged the significance of the capabilities gap between the United States and its NATO allies. Supporters, meanwhile, also have expressed reservations. Some question whether member states, particularly the Europeans, will approve sufficient funding in their defense budgets to make the required changes. This has increasingly been the case for countries that have made significant contributions to overseas NATO missions, particularly in Afghanistan. Unless military budgets are increased substantially, the costs of deployment, maintenance, and equipment replacement will likely displace expenditures for modernization. It has also been suggested that the capabilities requirements effectively raise the bar for new members of the alliance. Finally, some analysts insist that DCI and PCC need to be viewed in the context of the traditional debate over NATO burdensharing. Shortly after the Prague summit, Jiri Sedivy, director of Prague's Institute of International Relations noted that "[p]eople talk about new members like the Czech Republic not contributing enough to NATO, but what they don't realize is that the Western Europeans have failed to keep their promises since the 1950s." By focusing on specific, agreed-upon military capability requirements, the alliance hopes to end-run this decades-old problem.

With the end of the Cold War, NATO began to reassess its collective defense strategy and to anticipate possible new missions. The conflicts in the Balkans highlighted the need for more mobile forces, for greater technological equality between the United States and its allies, and for interoperability. In 1999, NATO launched the Defense Capabilities Initiative (DCI), an effort to enable the alliance to deploy troops quickly to crisis regions, to supply and protect those forces, and to equip them to engage an adversary effectively. At its 2002 summit, NATO approved a new initiative, the Prague Capabilities Commitment (PCC), touted as a slimmed-down, more focused DCI, with quantifiable goals. Analysts cautioned that the success of PCC would hinge upon increased spending and changed procurement priorities, particularly by the European allies. At NATO's 2004 Istanbul summit and its 2006 Riga summit, the alliance reaffirmed the goals of PCC. The 2008 Bucharest summit declaration did not mention PCC, but, in light of NATO missions, particularly in Afghanistan, stressed the urgency of acquiring specific capabilities such as airlift and communications. Congress may review the alliance's progress in boosting NATO capabilities. This report will not be updated. See also CRS Report RS22529, The NATO Summit at Riga, 2006, by [author name scrubbed].

The responsibility to protect federal buildings was established in the Federal Works Agency in June 1948. Specifically, Congress authorized the Federal Works Administrator to appoint uniformed guards as special policemen with the responsibility of "the policing of public buildings and other areas under the jurisdiction of the Federal Works Agency." The special policemen were given the same responsibility as sheriffs and constables on federal property to enforce the laws enacted for the protection of persons and property, and to prevent "breaches of peace, suppress affrays or unlawful assemblies." On June 30, 1949, the Federal Works Agency was abolished, and all of its functions, including the protection of federal buildings, were transferred to the General Services Administration (GSA). In September 1961, Congress authorized the GSA Administrator to appoint non-uniformed special policemen to: conduct investigations in order to protect property under the control of GSA; enforce federal law to protect persons and property; and make an arrest without a warrant for any offense committed upon federal property if a policeman had reason to believe the offense was a felony and the person to be arrested was guilty of the felony. The GSA Administrator formally established the Federal Protective Service (FPS) in January 1971 through GSA Administrative Order 5440.46. FPS, as an official GSA agency, continued to protect federal property and buildings with both uniformed and non-uniformed policemen. FPS was transferred to the Department of Homeland Security (DHS), and placed within the U.S. Immigration and Customs Enforcement (ICE), with enactment of the Homeland Security Act of 2002 ( P.L. 107 - 296 ). The act required the DHS Secretary to "protect the buildings, grounds, and property that are owned, occupied, or secured by the Federal Government (including any agency, instrumentality, or wholly owned or mixed ownership corporation thereof) and persons on the property." Under current statutory provisions FPS officers are authorized to: enforce federal laws and regulations to protect persons and federal property; carry firearms; make arrests without a warrant for any offense against the United States committed in the presence of an officer or for any federal felony; serve warrants and subpoenas issued under the authority of the United States; conduct investigations, on and off federal property, of offenses that may have been committed against the federal property or persons on the property; and carry out other activities for the promotion of homeland security as the DHS Secretary may prescribe. According to the DHS Inspector General (DHS IG), contract guard services "represent the single largest item in the FPS operating budget, with an estimated FY2006 budget of $487 million." FPS currently uses approximately 15,000 contract security guards who, along with approximately 950 FPS law enforcement officers, provide security and law enforcement coverage to all GSA owned and operated federal property. FPS contract security guard responsibilities include federal building access control, employee and visitor identification checks, security equipment monitoring, and roving patrols of the interior and exterior of federal property. Within the National Capital Region (NCR), contracts with 54 private security guard companies provide approximately 5,700 guards to protect 125 federal facilities. FPS issues task orders to contract security guard services that detail terms and conditions under which the contract security guard services are to be provided. Some of these task orders include the identification of buildings requiring protection, specific guard post locations, the hours and days of the week each post is to be staffed, whether security guards are to be armed, and the number of guards at each post. FPS requires that security guard contractors ensure that their guards are qualified by undergoing background checks. They must possess required licenses, certifications, and permits. Additionally, companies that employ contract security guards must comply with performance requirements that include items such as guard appearance, work hours, supervision, equipment, and record keeping. Contract security guards are also required to undergo training and pass an FPS administered written examination. The required training, licenses, certification, and permits include but are not limited to the following tasks and skills: background investigation; contractor provided basic training; contractor provided refresher training; Cardiopulmonary Resuscitation (CPR) training and certification; domestic violence prevention certification; FPS provided orientation training; contractor provided firearms training; firearms qualification; annual firearms re-qualification; medical screening; first aid certification; drug screening; written exam; state weapons permit; expandable baton certification; and use of magnetometers and X-ray machine. Following the 2006 audit of the NCR's FPS security guard contracts, the DHS IG concluded that FPS has become increasingly reliant on its contract guard force, is not adequately monitoring its security guard contracts, and that contract violations in the NCR exist. Some of the contract violations included unarmed guards working at armed posts, a guard with felony convictions being employed by one contractor, and guards without the required security clearances. Additionally, the DHS IG reported that "these lapses in contractor oversight can result in the government paying for services it did not receive, loss of monies resulting from contract deductions due to nonperformance, and placing FPS-protected facilities, employees, and facility visitors at risk." The ICE Assistant Secretary, Julie L. Myers, received the DHS IG audit prior to its release in October 2006, and formally responded to the audit's findings and recommendations. She asserted, for example, that ICE and FPS will improve their monitoring of the contract security guard program by increasing the number of ICE and FPS employees trained to oversee the program, will provide them with better training, and will use the tracking mechanisms to ensure contract security guard quality assurance. To address issues associated with the management of FPS security guard contracts, Congress enacted P.L. 110 - 356 (the Federal Protective Service Guard Contracting Reform Act of 2008) which requires the DHS Secretary, acting through the Assistant Secretary of U.S. Immigration and Customs Enforcement, to establish guidelines that prohibit convicted felons—who own contract security guard businesses—from being awarded federal security guard contracts. Additionally, 18 months after the enactment of these guidelines, the Administrator for Federal Procurement Policy is to report to Congress on establishing similar guidelines for all of the federal government. In FY2009 the physical security of federal property is being maintained solely by contract security guards. DHS intends for FPS to continue maintaining security policy and standards, conducting building security assessments, and monitoring federal agency compliance with security standards. Also, in FY2009, the FPS continues to provide law enforcement and security services at National Security Special Events (NSSE) that may increase threats at or in the vicinity of federal facilities. Such events included the 2008 Democratic and Republican National Nominating Conventions, and the inauguration of President Barack Obama. Additionally, the Administration, in the FY2010 budget request, proposes to transfer FPS from ICE to the National Protection and Programs Directorate (NPPD) within DHS. In FY2007, the Administration realigned its workforce and reduced the number of FPS law enforcement officers and investigators. A Government Accountability Office (GAO) report, issued in June 2008, stated that FPS's staff decreased by approximately 20%, from about 1,400 employees at the end of FY2004 to approximately 1,100 employees at the end of FY2007. According to the GAO, this reduction in FPS's staff resulted in the reduction of security at federal facilities and increased the risk of crime or terrorist attacks. Finally, GAO stated that the decision by FPS to eliminate proactive security patrols at federal facilities resulted in FPS law enforcement personnel not being able to conduct security operations. Such operations involve inspecting suspicious vehicles, monitoring suspicious individuals, or detecting and deterring criminal activity in and around federal buildings. In July 2009, GAO issued another report that found that FPS does not have a strategic human capital plan to guide its workforce planning efforts. This included processes for training, retention, and staff development. GAO also found that the majority of FPS "customers" did not rely on FPS in emergency situations. On January 3, 2007, the National Association of Security Companies (NASCO) established and hosted the first meeting of its Federal Protective Service Working Group. NASCO reportedly established this working group in response to the increased use of contract security guards by DHS for the physical security of federal property. This working group is to begin the task-analysis process for security guards and law enforcement officers for federal and commercial markets to provide basic "best practices" guidelines for security. NASCO states that the three primary goals of the working group are to establish the security guard definition, to identify security functions and tasks, and to validate these functions for contract and training requirements. To address the issues identified by the GAO and FPS's reduction in its workforce, the 110 th Congress enacted P.L. 110 - 329 (the Consolidated Security, Disaster Assistance, and Continuing Appropriations Act of 2009) which requires the Office of Management and Budget and DHS to fully fund FPS operations through the collection of security fees paid by federal departments and agencies. The security fee is intended to ensure that FPS maintains not fewer than 1,200 full-time equivalent staff and 900 full-time equivalent police officers, inspectors, area commanders, and special agents. The Administration states that the transfer of FPS to NPPD will allow ICE to focus its law enforcement operations on protecting the nation by targeting the people, money, and materials that support terrorists and criminals relating to the nation's borders. Also, the Administration states that FPS should be transferred to NPPD given the directorate's responsibility of implementing the National Infrastructure Protection Plan (NIPP). This proposal is based primarily on: 1) to allow ICE to focus its operations on border security; and 2) to reinforce, or "solidify" NPPD's role in infrastructure protection. Both of these reasons may be considered valid considering the increased congressional and national interest in ICE and border security, and, to what appears to be, a logical location for DHS's infrastructure protection law enforcement agency. Conversely, one could argue that NPPD does not include any other law enforcement operational entity that has a similar infrastructure protection responsibility. Only the Senate-passed version of H.R. 2892 propose to transfer FPS to NPPD.

The Federal Protective Service (FPS)—within U.S. Immigration Customs Enforcement (ICE) in the Department of Homeland Security (DHS)—is responsible for protecting federal government property, personnel, visitors, and customers, including property leased by the General Services Administration (GSA). FPS currently employs over 15,000 contract security guards to protect federal property. DHS continued the use of contract security guards to focus FPS activities on maintaining security policy and standards, conducting building security assessments, and monitoring federal agency compliance with security standards in FY2009. P.L. 110-329 (the Consolidated Security, Disaster Assistance, and Continuing Appropriations Act of 2009) included provisions on FPS maintaining a certain number of police officers. The 110th Congress also enacted P.L. 110-356 (the Federal Protective Service Guard Contracting Reform Act of 2008) which addressed the issue of awarding federal contracts to privately owned contract security guard businesses. The 111th Congress has yet to take any legislative action on FPS, however, the Administration's FY2010 budget request proposes to transfer FPS from ICE to the National Protection and Programs Directorate (NPPD) within DHS, which the Senate-passed version of H.R. 2892 supports. This report will be updated as developments warrant.

Funding for House committees (except for the Committee on Appropriations) follows a two-step process of authorization and appropriation. Operating budgets for all standing and select committees of the House (except for the Committee on Appropriations) are authorized pursuant to a chamber funding resolution, and funding is provided by annual appropriations in the Legislative Branch Appropriations bill and other appropriations acts. On March 17, 2017, the House adopted H.Res. 173 , providing for the expenses of certain committees of the House of Representatives in the 115 th Congress, by voice vote. The resolution authorized a total of $266.3 million for committee expenses, $132.7 million for the first session and $133.6 million for the second session. The use of committee funds is subject to chamber rules, law, and regulations promulgated by the Committee on House Administration, the Commission on Congressional Mailing Standards, and the Ethics Committee, among other House entities. These regulations may be found in a wide variety of sources, including statute, House rules, committee resolutions, the Committee Handbook, the Franking Manual, the House Ethics Manual, "Dear Colleague" letters, and formal and informal guidance. Committee funds may be used only to support the conduct of official committee business. They may not be used for personal or campaign purposes, or comingled with funds appropriated to any other source of official funds, such as the Member Representational Allowance (MRA). Information on individual committee spending is published quarterly in the Statements of Disbursement of the House . This report is organized into three sections. The first provides an overview of the committee funding process in the House and analyzes funding levels since 1996. The second reviews House floor and committee action on committee funding in the 115 th Congress. The final section provides illustrations of the rules and regulations that structure the use of committee funds, and analyzes actual committee funding spending patterns during six previous years. Contemporary funding for House committees (except for the Committee on Appropriations) follows a two-step process of authorization and appropriation. Operating budgets for all standing and select committees of the House continued or created at the beginning of a new Congress (except for the Committee on Appropriations) are authorized biennially pursuant to an omnibus committee funding resolution, and appropriations are included in the Legislative Branch Appropriations bill. Pursuant to House Rule X, clause 6, the Committee on House Administration reports an omnibus resolution to authorize the expenses of each standing and select committee of the House, except the Committee on Appropriations, for each two-year Congress. For a two-year Congress, the omnibus committee funding resolution typically specifies a dollar amount limit for each committee that shall be available for its expenses (divided between the first and second sessions), in addition to a reserve fund for unanticipated expenses. This resolution does not appropriate funds; the actual appropriation for House committee expenses is provided in the annual Legislative Branch Appropriations bill. In effect, the dollar amounts specified in the omnibus committee funding resolution limit how much of the amount appropriated for committee expenses will be available for any particular committee. In preparation for the omnibus resolution, House committees (except the Appropriations Committee) are required by regulations of the Committee on House Administration to submit an operating budget request for the two years of a Congress. The chair of each committee usually introduces a House resolution with his or her committee's proposed authorization. Typically, these actions take place during late February, with committees approving their proposed budgets at a committee organizing meeting. The individual resolutions are referred to the Committee on House Administration, which may hold hearings on each committee's request. The chair and the ranking minority Member from each committee are typically the only witnesses who testify at these hearings, giving them an opportunity to explain and defend their budgets. After completion of the hearings, the chair of the Committee on House Administration introduces the omnibus funding resolution for that two-year Congress, which, after its referral to the Committee on House Administration, serves as the legislative vehicle for committee markup. The resolution is typically reported out of committee without amendment. The omnibus resolution is usually considered by the House during March of the first session of a Congress, and agreed to with little debate. Prior to this consideration, during the first three months of each new Congress, House Rule X, clause 7, authorizes interim funding for House committees based on their authorizations from the preceding Congress. Specifically, under Rule X, clause 7, between January 3 and March 31 of an odd-numbered year, a committee is authorized to spend in a single month 9% of the committee's last annual authorization. Funding for all House committees is included in the Legislative Branch Appropriations bill. Line-item appropriations are not made for individual committees, except the Committee on Appropriations. Instead, funding is provided as a single total amount for all committees (except the Committee on Appropriations), under the heading "Committee Employees" and the subheading "Standing Committees, Special and Select," within the House account "Salaries and Expenses." Since authorizations for committee funds are made on a biennial, calendar-year basis and appropriations are made annually on a fiscal-year basis, there is no one-to-one correspondence between the authorization and the appropriations in any given year. For any individual biennial funding resolution, funds may be drawn from money appropriated in three different fiscal years ; for the 115 th Congress, the overlapping timelines of fiscal years, calendar years, and committee expense authorization periods are visualized in Figure 1 . Finally, although appropriations are made annually for House committee funding, the language typically states that the funding shall remain available until the end of the second calendar year of the current Congress. For example, in both FY2015 and FY2016, committee funds were appropriated to remain available until December 31, 2016. Clause 6(d) of House Rule X requires that "the minority party [be] treated fairly in the appointment" of committee staff employed pursuant to such expense resolutions. In recent years, the House majority leadership has encouraged its committee leaders to provide the minority with one-third of the committee staff and resources authorized in the biennial funding resolutions. Statements made by the chair and ranking Member of the Committee on House Administration at the beginning of its committee funding review in recent Congresses indicate a general consensus that all House committees should provide at least one-third minority staffing. Figure 2 shows the aggregate committee funding authorization level from 1996 to 2018, in both nominal and real dollars. Since 1996, aggregate committee funding has increased by slightly more than 68%, from $79.4 million in 1996 to $133.6 million in 2018, for an average annual increase of 3.1%. In constant dollars, however, aggregate funding has increased only 8.0% between 1996 and 2017, for an annual average real increase of less than four-tenths of 1%. The Committee on House Administration held a hearing on committee expense requests on February 15 and 16, 2017. Chairs and ranking Members from each standing and select committee (except the Committee on Appropriations) testified on their budget requests. Representative Gregg Harper, chair of the panel, indicated that the committee had "worked to strike the right balance" in providing funds for committees while remaining conscious of costs. During the hearing, the chairman and the ranking minority Member, Representative Robert Brady, reiterated the long-standing expectation that committee resources would reflect a distribution of two-thirds of the committee staff to the majority, and one-third to the minority, and a similar distribution of nonstaff resources. In their testimony, most committee chairs and ranking minority Members explicitly acknowledged mutually satisfactory arrangements had been reached regarding the distribution of committee staff and other resources. On March 7, 2017, H.Res. 173 , providing for the expenses of certain committees of the House of Representatives in the 115 th Congress, was introduced and referred to the Committee on House Administration. On March 8, 2017, the Committee on House Administration marked up H.Res. 173 , which was reported to the House by voice vote. In the second session of the 115 th Congress, on March 7 and June 26, 2018, the Committee on House Administration considered committee resolutions 115-9 and 115-19, respectively. These resolutions allocated funds from the reserve fund for unanticipated expenses, established by H.Res. 173 . In both instances, the committee agreed to the resolution by voice vote and without amendment. On March 17, 2017, the House agreed to H.Res. 173 by voice vote. The resolution authorized a total of $266.3 million for committee expenses, $132.7 million for the first session and $133.6 million for the second session. Appropriations for House standing and select committees are typically included annually in the Legislative Branch Appropriations bill. The following amounts were appropriated for the expenses of House standing committees (except for the Committee on Appropriations) in recent appropriations bills: In FY2019, $127.9 million was appropriated in H.R. 5895 , the Energy and Water, Legislative Branch, and Military Construction and Veterans Affairs Appropriations Act, 2019, to remain available until December 31, 2020. In FY2018, $127.1 million was appropriated in H.R. 1625 , the Consolidated Appropriations Act, 2018, to remain available until December 31, 2018. In FY2017, $127.1 million was appropriated in H.R. 244 , the Consolidated Appropriations Act, 2017, to remain available until December 31, 2018. In FY2016, $123.9 million was appropriated in H.R. 2029 , the Consolidated Appropriations Act, 2016, to remain available until December 31, 2016. In accordance with the regulations contained in the Committee Handbook, "Committee funds are provided to pay ordinary and necessary expenses incurred by committee Members and employees in the United States." Ordinary and necessary expenses are defined as "reasonable expenditures in support of official committee business that are consistent with all applicable Federal laws, Rules of the House of Representatives, and regulations of the Committee on House Administration." All expenditures of a committee are subject to review by its committee chair. Funding "may not be used to defray any personal, political or campaign-related expenses, or expenses related to a Member's personal office." Committees may employ permanent staff, consultants, detailees, fellows, interns, temporary and shared employees, and volunteers. The terms and conditions of employment for committee staff are determined by the committee chair. Total staff ceilings for each committee are set by the Speaker. Employees of a House committee are covered by the Congressional Accountability Act. Domestic travel including transportation, lodging, and meals (excluding alcohol) is reimbursable from committee funds. Travel expenses may not be for personal or political campaign events and may not exceed 60 consecutive days. Foreign travel is coordinated through the State Department Travel Office and is subject to House Rule X, clause 8(b)(3), whereby each Member and employee on foreign travel must submit an itemized report of expenses to the committee chair. To better understand how committees have used their authorized funds, the following sections provide an analysis of annual committee expenditures during several different legislative years. Specifically, committee expenditures are analyzed to determine (1) the percentage of each committee's annual authorization that is expended, and (2) major categories of committee spending. Data on yearly committee expenditures were compiled using the quarterly Statement of Disbursements of the House , which reports all individual House expenditures disbursed during the previous quarter. Because late-arriving bills for committee expenses may be paid for up to two years following the end of a fiscal year for which funds are appropriated, obligations incurred by a committee during a particular legislative year are often paid over the course of multiple calendar years. For example, H.R. 244 , the Consolidated Appropriations Act for Fiscal Year 2017, provided that appropriations for House committees remain available until December 31, 2018. This would suggest that financial obligations made by committees in 2017 may be paid with remaining FY2017 appropriations through the quarter ending December 31, 2020. Consequently, the total expenditures of a committee in any given legislative year are calculated using quarterly Statement of Disbursements reports from both the year in which the committee operated, as well as subsequent years. The following analysis calculates total disbursements made for legislative years 2010 through 2015, years for which House Statements of Disbursements are available electronically, and the bulk of late-arriving bills as described above have been received. In addition, data on disbursements from a sample of earlier legislative years—1997, 1998, 2003, and 2004—are analyzed in order to detect any longer-term trends in how committee funds have been used. As shown in Figure 3 , the majority of committees between 2010 and 2015 used almost all of the funds authorized to them. Specifically, approximately 55% of committees spent 95% or more of their authorization; approximately 77% of committees spent 90% or more of their authorization; and approximately 98% of committees spent 80% or more of their authorization. House spending is categorized by the standard budget object classes used for the federal government. These include personnel compensation; personnel benefits; travel; rent, communications, and utilities; printing and reproduction; other services; supplies and materials; transportation of things; and equipment. The disbursement volumes also contain a category for franked mail. Table 1 shows percentages for each object class. The largest category of spending, accounting for approximately 91% of total committee spending during the years analyzed, was for "Personnel compensation." Beyond these staff expenses, committees spent an aggregate of 3.4% of their expenditures on "Equipment," just over 2% on "Supplies and Materials," and less than 1% on travel. The use of most committee funds on personnel is consistently true both across time and across individual committees.

Funding for House committees (except for the Committee on Appropriations) follows a two-step process of authorization and appropriation. Operating budgets for all standing and select committees of the House (except for the Committee on Appropriations) are authorized pursuant to a simple resolution, and funding is provided in the Legislative Branch Appropriations bill and other appropriations acts. Subsequent resolutions may change committee authorizations. On March 17, 2017, the House adopted H.Res. 173, providing for the expenses of certain committees of the House of Representatives in the 115th Congress, by voice vote. The resolution authorized a total of $266.3 million for committee expenses, $132.7 million for the first session and $133.6 million for the second session. The use of committee funds is subject to chamber rules, law, and regulations promulgated by the Committee on House Administration, the Commission on Congressional Mailing Standards, and the Ethics Committee. Committee funds may be used only to support the conduct of official business of the committee. They may not be used for personal or campaign purposes. Information on individual committee spending is published quarterly in the Statements of Disbursement of the House. This report is organized in three sections. The first provides an overview of the committee funding process in the House and analyzes funding levels since 1996. The second reviews House floor and committee action on committee funding in the 115th Congress. The final section summarizes the rules and regulations that structure the use of committee funds, and analyzes committee spending patterns during several previous years.

Amber Alerts (also referred to as AMBER ) use technology to disseminate information about child abductions in a timely manner. Typically an Amber Alert is triggered for children under 18 who are believed by law enforcement officers to have been abducted (except in cases of parental abduction). Research has found that most abducted children murdered by their kidnappers are killed within three hours of the abduction. Prompt response to child abductions is therefore deemed critical by many. Law enforcement officers are encouraged to send out an alert if circumstances indicate that the child is in harm's way, if they have sufficient descriptive information about the child and/or the abductor for an alert, and if they believe that the immediate broadcast of an alert will help. When there is information about a vehicle used in an abduction, this information will usually be transmitted to highway message boards, if that technology is in place. While each plan sets its own parameters, most follow guidelines set by the National Center for Missing and Exploited Children (NCMEC). A typical Amber Alert would include an Emergency Alert System (EAS) broadcast, alerts on highway message boards, and notifications to public service partners such as police, highway patrols and the field crews of public utilities. A number of counties and cities have Amber Alert programs that notify local residents using e-mail or telephone alert systems to aid in the recovery of abducted children. Alerts can also be sent by text messages to cell phones and other wireless devices. AT&T Mobility, Sprint Nextel, Verizon Wireless and T-Mobile are among the wireless service providers that participate in the Amber Alert network; subscribers can sign up for free text messages. These systems have the advantage of targeting selected audiences by function or geographical location but may not be received in a timely manner; telephone alert systems, for example, can be blocked by call-screening technologies. Amber Alert technology and alerting techniques are also used for other missing person notifications. A number of local or faith-based organizations maintain services to assist in locating missing adults. Some states participate in a consortium that operates an Amber Alert Web Portal using Internet technology. Information about an Amber Alert is sent to a web portal and reconfigured for different types of broadcasting, including cell phones, pagers, e-mail, highway signs, TV news websites, and emergency communications centers. The technology allows police officers to transmit details and photos through encrypted computer systems in patrol cars. Information, therefore, is disseminated both more quickly and more widely, maximizing the opportunity to find a missing child in the critical first three hours. The alert system is managed from a dedicated web portal that can be accessed by statewide or local systems. The software recognizes the reported locations of abductions and sends emergency messages to targeted areas. The Emergency Alert System (EAS) is jointly administered by the Federal Communications Commission (FCC) and the Federal Emergency Management Agency (FEMA), in cooperation with the National Weather Service (NWS), an organization within the National Oceanic and Atmospheric Administration (NOAA).The EAS sends emergency messages with the cooperation of broadcast radio and television and most cable television stations. Its most common use is for weather alerts. EAS technology is also used in the Amber Alert programs administered in some states and communities. To facilitate transmittal, EAS messages are classified by types of events, which are coded. These event codes speed the recognition and retransmittal process at broadcast stations. For example, a tornado warning is TOR, evacuation immediate is EVI, a civil emergency message is CEM. When a message is received at the broadcast station, it can be relayed to the public either as a program interruption or, for television, a "crawl" at the bottom of the TV screen. In the early stages of Amber Alert program development the CEM (civil emergency) event code was used for EAS messages. In February 2002, the FCC added several new event and location codes for broadcast and cable stations to use; included was a Child Abduction Emergency (CAE) event code. Although broadcaster participation is mandatory for national alerts, the participation of broadcast and cable stations in state and local emergency announcements is voluntary. The PROTECT Act ( P.L. 108-21 ) formally established the federal government's role in the Amber Alert system in 2003. Congress has encouraged federal support for other alert programs as well. The Office of Justice Programs, at the Department of Justice, includes an Amber Alert division, the National AMBER Alert Initiative. The Department of Justice, the Department of Transportation, NCMEC, broadcasters, and law enforcement officers collaborate on national strategies for the Amber Alert program. One collaborative initiative was to develop standard procedures for emergency call takers responding to a report of a missing or abused child. Members of the joint committee that developed the standard included the Association of Public-Safety Communications Officials (APCO), the National Academies of Emergency Dispatch (NAED), the National Emergency Number Association (NENA), NCMEC, and the Department of Justice. The American National Standards Institute (ANSI) Board of Standards Review approved the standard in December 2007 [APCO American National Standard (ANS)1.101.1-2007]. The National Emergency Child Locator Center has been established within NCMEC, as required by the Homeland Security Appropriations Act, 2007 ( P.L. 109-295 , Title VI, Subtitle E). The purpose of the center is to identify children separated from their families as the consequence of a disaster and reunite them expeditiously. NCMEC is to operate a toll-free call center, set up a website with information about displaced children, and take other steps to collect and disseminate information about the children and their families. NCMEC established a website with links to reports of missing children and missing adults in the aftermath of Hurricanes Katrina and Rita. The National Center for Missing Adults (NCMA) operates as the national clearinghouse for missing adults. NCMA also maintains a national database of missing adults determined to be "endangered" or otherwise at-risk. NCMA was formally established after the passage of Kristen's Act ( P.L. 106-468 ), in 2002. NCMA is a division of the Nation's Missing Children Organization, Inc. (NMCO)—a 501c (3) non-profit organization working in cooperation with the U.S. Department of Justice's Bureau of Justice Assistance, Office of Justice Programs. Kristen's Act authorized the Attorney General to make grants to public agencies or not-for-profit organizations to perform these functions: to assist law enforcement and families in locating missing adults; to maintain a national, interconnected database for the purpose of tracking missing adults who are determined by law enforcement to be endangered due to age, diminished mental capacity, or the circumstances of disappearance, when foul play is suspected or circumstances are unknown; to maintain statistical information of adults reported as missing; to provide informational resources and referrals to families of missing adults; to assist in public notification and victim advocacy related to missing adults; and to establish and maintain a national clearinghouse for missing adults. All 50 states operate Amber Alert programs for missing children. Many states have extended their Amber Alert programs to include missing adults or participate in other alert programs. Silver Alert programs, for example, are operated for the benefit of those with Alzheimer's Disease and other cognitive impairments. Silver Alerts are modeled on Amber Alerts and use many of the same technologies and information channels for disseminating information. CRS has prepared an analysis of 11 states with active alert programs, evaluating program features such as legal authority, administrative responsibility, training, and interstate coordination. The states are: Colorado, Delaware, Florida, Georgia, Kentucky, North Carolina, Ohio, Oklahoma, Rhode Island, Texas, and Virginia. The Emergency Alert System is being upgraded to digital technology and in time will be connected to a gateway that will be able to receive and direct alerts of all types, to any designated location, using any digital media. The gateway, the Integrated Public Alert and Warning System (IPAWS), is being developed through FEMA's National Continuity Program Directorate. One of the new alert technologies that will use the gateway is the Commercial Mobile Alert System (CMAS). The regulations for CMAS were established by the FCC through its rule-making process. In addition to message formats and other standards, regulations require three alert categories that must be carried by participating carriers: presidential, imminent threat, and Amber Alerts. Another investment in emergency communications infrastructure that will likely benefit Amber Alerts and similar programs is for the transition to Internet protocols in 911 call centers and networks. Unlike most existing 911 systems, which use analog technology, IP-enabled networks can transmit information digitally. The networks, which operate like the Internet but do not necessarily connect to the Internet, can support any type of broadband communication and therefore can be used for a variety of communications purposes. In compliance with requirements of the Homeland Security Appropriations Act, 2007, the Department of Homeland Security issued the National Emergency Communications Plan (NECP) in July 2008. The plan focused on the communications needs of first responders at the site of disasters. The next version of the plan, due in 2010, is expected to expand the planning process to include 911 systems, alert programs, and other communications tools that are needed in responding to large-scale emergencies. The NECP is widely viewed as the capstone of coordinated planning for emergency communications between and among agencies at all levels of government. The scope of the plan, however, may not be wide enough to include the type of technology-policy decisions that would ensure that all facets of emergency communications are developed in concert. Such a step is widely considered to be essential to an effective response capacity for crises big or small, personal or global, that would endeavor to protect everyone with equal zeal and efficiency.

Amber Alerts (also referred to as AMBER plans) were created to disseminate information about child abductions in a timely manner. Research has found that most abducted children murdered by their kidnappers are killed within three hours of the abduction. Prompt response to child abductions is therefore deemed critical by many. Amber Alert plans are voluntary partnerships including law enforcement agencies, highway departments, and companies that support emergency alerts. Technologies used for alerts include the Emergency Alert System (EAS), highway message boards, telephone alert systems, the Internet, text messaging, and e-mail. All 50 states have statewide Amber Alert programs. Because kidnappers can cross state lines with their victims, the Department of Justice will often be involved in responding to an abduction. For this and other reasons, there is increased federal involvement in and support of Amber Alert plans. The National Center for Missing Adults is another example of an alert program that receives support from the U.S. Department of Justice. Amber Alert and related technologies are in place for other at-risk programs as well. For example, a number of states have created Silver Alert programs to assist in locating missing adults with cognitive impairments. Government, non-profit, and volunteer programs use alert technologies as tools to meet their larger goals. Participants choose among the tools available to them. From the perspective of technology policy, more thought might be given by the various program managers, and policy-makers in general, as to how to ensure that the development paths of these technologies mesh. Ideally program alerts should be interoperable – able to exchange information seamlessly across different systems. Planning for state and national emergency alert systems might provide gateways that would ensure access for alerts from all certified programs. Among the new systems being developed, with federal support, that could provide such gateways are the Commercial Mobile Alert System, for cell phone alerts, and new networks using Internet protocols to support 911 call center and other non-commercial communications needs.

T he 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 114 th Congress (2015-2016), 1,200 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.). 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 114 th Congress, 1,200 pieces of legislation received floor action in the House of Representatives. Of these, 907 (76%) were bills or joint resolutions, and 293 (24%) were simple or concurrent resolutions. Of the 1,200 measures receiving initial House floor action in the 114 th Congress, 1,068 originated in the House, and 132 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 borne out in practice in the 114 th Congress. As is reflected in Table 1 , 78% 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, 76% of measures receiving House floor action in the 114 th Congress were sponsored by Republicans, 24% by Democrats, and none by political independents. The ratio of majority to minority party sponsorship of measures receiving initial House floor action in the 114 th Congress varied widely based on the parliamentary procedure used to call up the legislation on the House floor. As noted in Table 2 , 69% of the measures considered under the Suspension of the Rules procedure were sponsored by Republicans, 31% by Democrats, and none 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 generally used 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 172 measures the Congressional Research Service identified as being initially brought to the floor under the terms of a special rule in the 114 th Congress, all but one 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 76% of the measures brought up in this manner. The following section documents the parliamentary mechanisms that the House used to bring legislation to the floor for initial consideration during the 114 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 114 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 114 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 leadership announced additional policies that restrict 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 114 th Congress (2015-2016). In the 114 th Congress, 743 measures, representing 62% of all legislation receiving House floor action, were initially brought up using the Suspension of the Rules procedure. This includes 703 bills or joint resolutions and 40 simple or concurrent resolutions. When only lawmaking forms of legislation are counted, 78% of bills and joint resolutions receiving floor action in the 114 th Congress came up by Suspension of the Rules. Eighty-nine percent of measures brought up by Suspension of the Rules originated in the House. The remaining 11% were Senate-passed measures. House rules and precedents place certain types of legislation in a special "privileged" category, which allows measures 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 114 th Congress include the following: Order of b usiness r esolutions. 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 a ssignment r esolutions. 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. Providing for a djournment. 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 p rivileges 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 and resolutions impeaching government officials. Bereavement r esolutions. Resolutions expressing the condolences of the House of Representatives over the death of a Representative, President, or former President have been treated as privileged. Measures r elated to House o rganization. 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. Correcting e nrollments. 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. In the 114 th Congress, 197 measures, representing 16% 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 197 measures were simple or concurrent resolutions. The most common type of measure brought up in the House as "privileged business" during the 114 th Congress was special orders of business (special rules) reported by the Rules Committee, followed by resolutions assigning Representatives to committees. 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 most Members and staff 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 114 th Congress, 172 measures, or 14% 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, 163 (95%) were bills or joint resolutions, and nine (5%) were simple or concurrent resolutions. When only lawmaking forms of legislation are counted, 18% of bills and joint resolutions receiving floor action in the 114 th Congress came up by special rule. Ninety-one percent of the measures considered under a special rule during the 114 th Congress originated in the House, 9% being Senate legislation. As noted above, all but one measure—a Senate bill—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 Speakers of both parties 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 114 th Congress, 87 measures, or 7% of all legislation identified by LIS as receiving House floor action, were initially considered by unanimous consent. Of these, 41 (47%) were bills or joint resolutions, and 46 (53%) were simple or concurrent resolutions. When only lawmaking forms of legislation are counted, 5% of bills and joint resolutions receiving floor action in the 114 th Congress came up by unanimous consent. Of the measures initially considered by unanimous consent during the 114 th Congress, 66% originated in the House. House Rule XV, clause 2 (sometimes called the "discharge rule"), establishes a means by which a majority of the House can bring to the floor for consideration a bill or resolution that has not been reported from House committee. Discharging a committee in this manner is a lengthy, multi-step process that is rarely successful. If a measure has been referred and pending in committee for at least 30 legislative days, any Member may submit a petition to discharge the committee of its further consideration. If 218 Members—a majority of the House—sign such a petition, a motion to discharge the committee of consideration of the measure may then be offered on the floor. This discharge motion can be made only on a second or fourth Monday that occurs after the petition is filed, and such a motion may not be made in the last six days of a congressional session. The motion to discharge is debatable for 20 minutes, and if it is adopted, a Member may then move that the House consider the legislation in question. In modern practice, it has become common for Members to introduce a special rule establishing unique terms of debate and amendment for an unreported measure and then file a discharge petition on that resolution after it has been pending before the Rules Committee for at least seven legislative days. In the 114 th Congress, one measure—a special rule introduced by a majority party Member providing for the consideration of an unreported bill—was brought to the House floor by the procedures contained in the discharge rule. The House of Representatives has established special parliamentary procedures to bring private legislation to the chamber floor and consider legislation dealing with the business of the District of Columbia. It has also created the Calendar Wednesday procedure, where the standing committees are recognized in turn to call up measures that have been reported but not granted a rule by the Rules Committee. These procedures are infrequently used, and no legislation was brought before the House in the 114 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 114th Congress (2015-2016) and the parliamentary procedures used to bring them up for initial House consideration. In the 114th Congress, 1,200 pieces of legislation received floor action in the House of Representatives. Of these, 907 (76%) were bills or joint resolutions, and 293 (24%) were simple or concurrent resolutions. Of these 1,200 measures, 1,068 originated in the House, and 132 originated in the Senate. During the same period, 62% of all measures receiving initial House floor action came before the chamber under the Suspension of the Rules procedure, 16% came to the floor as business "privileged" under House rules and precedents, 14% 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 was processed under the procedures associated with clause 2 of Rule XV, the House Discharge Rule. When only lawmaking forms of legislation (bills and joint resolutions) are counted, 78% of measures receiving initial House floor action in the 114th Congresses came before the chamber under the Suspension of the Rules procedure, 18% were raised by a special rule reported by the Committee on Rules and adopted by the House, and 5% came up by unanimous consent. No lawmaking forms of legislation received House floor action via the Discharge Rule or by virtue of being "privileged" under House rules. The party sponsorship of legislation receiving initial floor action in the 114th Congress varied based on the procedure used to raise the legislation on the chamber floor. Sixty-nine percent of the measures considered under the Suspension of the Rules procedure were sponsored by majority party Members. All but one of the 172 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.

The fundamental policy assumption that has changed between the U.S. ratification of the 1992 Framework Convention on Climate Change (FCCC) and the current Bush Administration's decision to abandon the Kyoto Protocol process concerns costs. The ratification of the FCCC was based at least partially on the premise that significant reductions could be achieved at little or no cost. This assumption helped to reduce concern some had (including those of the former Bush Administration) that the treaty could have deleterious effects on U.S. competitiveness—a significant consideration because developing countries are treated differently from developed countries under the FCCC. Further ameliorating this concern, compliance with the treaty was voluntary. While the United States could "aim" to reduce its emissions in line with the FCCC's goal, if the effort indeed involved substantial costs, the United States could fail to reach the goal (as has happened) without incurring any penalty under the treaty. This flexibility would have been eliminated under the Kyoto Protocol with its mandatory reduction requirements. The possibility of failure to comply with a binding commitment intensifies one's perspective on potential costs: How confident can one be in the claim that carbon reductions can be achieved at little or no cost? Compliance cost estimates ranging from $5.5 billion to $200 billion annually cause some to pause. The current Bush Administration was sufficiently concerned about potential CO 2 control costs to reverse a campaign pledge to seek CO 2 emissions reductions from power plants, in addition to its decision to abandon the Kyoto Protocol process. Proposed CO 2 reduction schemes present large uncertainties in terms of the perceived reduction needs and the potential costs of achieving those reductions. In an attempt to prevent any CO 2 control program from incurring unacceptable costs, several cost-limiting "safety valves" have been proposed to bound costs. These safety valves are designed to work with market-based CO 2 reduction schemes, similar to the tradeable permit strategy used by the acid rain program, and would effectively limit the unit (per ton of emissions) control costs sources would pay. This report examines four such safety valves: (1) a straight carbon tax, (2) a contingent reduction scheme, (3) unlimited permit purchases, (4) cost-based excess emissions penalties. In general, market-based mechanisms to reduce CO 2 emissions focus on specifying either the acceptable emissions level (quantity), or compliance costs (price), and allowing the marketplace to determine the economically efficient solution for the other variable. For example, a tradeable permit program sets the amount of emissions allowable under the program (i.e., the number of permits available caps allowable emissions), while permitting the marketplace to determine what each permit will be worth. Likewise, a carbon tax sets the maximum unit (per ton of CO 2 ) cost that one should pay for reducing emissions, while the marketplace determines how much actually gets reduced. In one sense, preference for a carbon tax or a tradeable permit system depends on how one views the uncertainty of costs involved and benefits to be received. For those confident that achieving a specific level of CO 2 reduction will yield significant benefits—enough so that even the potentially very high end of the marginal cost curve does not bother them—a tradeable permit program may be most appropriate. CO 2 emissions would be reduced to a specific level, and in the case of a tradeable permit program, the cost involved would be handled efficiently, though not controlled at a specific cost level. This efficiency occurs because through the trading of permits, emission reduction efforts concentrate at sources at which controls can be achieved at least cost. However, if one feels more certain of the potential downside risk of substantial control costs to the economy than of the benefits of a specific level of reduction, then a carbon tax may be most appropriate. In this approach, the level of the tax effectively caps the marginal cost of control that affected activities would pay under the reductions scheme, but the precise level of CO 2 achieved is less certain. Emitters of CO 2 would spend money controlling CO 2 emissions up to the level of the tax. However, since the marginal cost of control among millions of emitters is not well known, the overall emissions reductions for a given tax level on CO 2 emissions cannot be accurately forecast. Hence, a major policy question is whether one is more concerned about the possible economic cost of the program and therefore willing to accept some uncertainty about the amount of reduction received (i.e., carbon taxes); or one is more concerned about achieving a specific emission reduction level with costs handled efficiently, but not capped (i.e., tradeable permits). A model for a tradeable permit approach is the sulfur dioxide (SO 2 ) allowance program contained in Title IV of the 1990 Clean Air Act Amendments. Also called the acid rain control program, the tradeable permit system is based on two premises. First, a set amount of SO 2 emitted by human activities can be assimilated by the ecological system without undue harm. Thus the goal of the program is to put a ceiling, or cap, on the total emissions of SO 2 rather than limit ambient concentrations. Second, a market in pollution licenses between polluters is the most cost-effective means of achieving a given reduction. This market in pollution licenses (or allowances, each of which is equal to one ton of SO 2 ) is designed so that owners of allowances can trade those allowances with other emitters who need them or retain (bank) them for future use or sale. Initially, most allowances were allocated by the federal government to utilities according to statutory formulas related to a given facility's historic fuel use and emissions; other allowances have been reserved by the government for periodic auctions to ensure market liquidity. There are no existing U.S. models of an emissions tax, although five European countries have carbon-based taxes. As a stalemate has continued on strategies to control CO 2 emissions, particularly because of costs fears, attention increasingly focuses on the cost-limiting benefit of a carbon tax, either as the primary strategy or as a component blending a carbon tax with the reduction certainty of the tradeable permit system. The object is to create a safety valve to avert unacceptable control costs, particularly in the short term. These safety valves limit unit (per ton) costs of reducing emissions. Four ideas are identified below: Carbon taxes: generally conceived as a levy on natural gas, petroleum, and coal according to their carbon content, in the approximate ratio of 0.6 to 0.8 to 1, respectively. However, proposals have been made to impose the tax downstream of the production process. Several European countries have carbon taxes in varying degrees and forms. Unlimited permits at set price: generally conceived as part of an auction system where permits are allocated to affected sectors by auction with an unlimited number available at a specific price. The most recent proposal is by the National Commission on Energy Policy, which recommends an initial limiting price of $7/ton that would increase by 5% annually. Other variations include the Resources for the Future/Skytrust proposal, which would increase the limiting price ($25/ton) by 7% above inflation annually, and the Brookings proposal, which would set up a short-term market based on a $10/ton price, and a long-term market based on market rates. Contingent reduction: generally conceived as a declining emission cap system where the rate of decline over time is determined by the market price of permits. If permit prices remain under set threshold prices, the next reduction in the emission cap is implemented. If not, the cap is held at the current level until prices decline. Discussions have centered on a 2% annual declining cap subject to a $5 a permit CO 2 cost cap. Excess emissions penalty: generally involves a fee on emissions exceeding available permits based on control costs or other economic criteria, rather than criminal or civil considerations. For example, Oregon's CO 2 standard for new energy facilities includes a fee of 57 cents per short ton on CO 2 emissions in excess of the standard (increase to 85 cents proposed). Table 1 summarizes the key considerations of each of the proposals identified above. As indicated, each safety valve effectively controls cost, but at the price of some uncertainty about the amount of emissions reduced. If one uses the existing Title IV acid rain control program as a baseline, the excess emissions penalty option is the most similar, while the carbon tax option is the most different. The excess emissions penalty option would work in essentially the same fashion as the acid rain program, with the primary difference being the penalty for having insufficient permits at the end of the year. Under Title IV, the penalty is intended to be punitive—to punish the offender for breaking the law. Thus, the offender pays a fine three times the estimated cost of control in addition to forfeiting a future permit. The overriding assumption is that the offender could have reduced his emissions sufficiently, but refused to do so. Under the excess emissions penalty option, there is uncertainty as to whether an offender could have reduced his emissions sufficiently at the estimated price, and that reductions at a cost greater than that price are either socially unacceptable or economically unjustifiable. Hence, the penalty is assessed on the basis of a socially acceptable or economically justifiable price so that the offender pays a cost for his unlawful activity and is encouraged to comply with the law, but is not punished beyond what society has deemed reasonable. Arriving at such an acceptable penalty could be contentious. The carbon tax is the most radical compared with the Title IV program because it dispenses with the permit system approach to emissions control. All the pressure under a carbon tax scheme is on the timing, pace, and level of the tax, as there is no stigma for not controlling pollution. The strength of this approach is that it is self-enforcing, and considerable revenues will be generated that could be recycled to polluters or used for other priorities. However, U.S. environmental policy has generally opposed any approach suggesting a polluter's right to pollute, which the carbon tax approach does grant. Depending on how the unlimited permit approach is implemented, it can look and act a lot like a carbon tax. If the initial allocation of permits is by auction and unlimited permits are available at a low price, the auction price will equal the unlimited permit price, resulting in a carbon tax equal to the excess emissions permit price. Thus, without limits on the quantity of permits allowed, the unlimited permits approach is merely a carbon tax by another name, at least in the short term. In addition, the unlimited permits system requires the tracking mechanisms of a tradeable permit system if it is ever to evolve into a permit system. As with a carbon tax, setting the unlimited permit price could be contentious. The contingent reduction approach attempts to turn both the price and the quantity of reductions into variables solved by the trading market. This requires agreements on both the profiles of emissions reductions and threshold price triggers. It also puts enormous pressure on the trading permit market to produce an accurate price to make the whole system work. Although in some ways the most innovative, the contingent approach also could be the most difficult in terms of arriving at acceptable parameters for the reductions and triggers. In short, employing a safety valve shifts much of the emission reduction debate from compliance targets to the specifications of the safety valve. The safety valve becomes the controlling mechanism of the permit tradeable system, or the sole mechanism in the case of a carbon tax. Whether this shift would contribute to an acceptable result is not clear.

Proposed CO2 reduction schemes present large uncertainties in terms of the perceived reduction needs and the potential costs of achieving those reductions. Several cost-limiting "safety valves" have been proposed to bound costs of any CO2 control program, including (1) a straight carbon tax, (2) a contingent reduction scheme, (3) unlimited permit purchases, and (4) cost-based excess emissions penalties. Employing a safety valve shifts much of the emission reduction debate from compliance targets to the specifications of the safety valve, in particular, the level of the tax or fee involved. This report will be updated if events warrant.

The Coast Guard, which is a part of the Department of Homeland Security (DHS), is the lead federal agency for maritime homeland security. Section 888(a)(2) of The Homeland Security Act of 2002 ( P.L. 107-296 of November 25, 2002), which established DHS, specifies five homeland security missions for the Coast Guard: (1) ports, waterways, and coastal security, (2) drug interdiction, (3) migrant interdiction, (4) defense readiness, and (5) other law enforcement. The Coast Guard, in its own budget materials, excludes drug interdiction and other law enforcement from its definition of its homeland security missions. Under the Ports and Waterways Safety Act of 1972 (P.L. 92-340) and the Maritime Transportation Security Act (MTSA) of 2002 ( P.L. 107-295 of November 25, 2002), the Coast Guard has responsibility to protect vessels and harbors from subversive acts. With regard to port security, the Coast Guard is responsible for evaluating, boarding, and inspecting commercial ships approaching U.S. waters, countering terrorist threats in U.S. ports, and helping protect U.S. Navy ships in U.S. ports. A Coast Guard officer in each port area is the Captain of the Port (COTP), who is the lead federal official for security and safety of vessels and waterways in that area. Table 1 below shows FY2005-FY2008 funding for the Coast Guard's five statutorily defined homeland security missions. As shown in the table, the Coast Guard for FY2008 is requesting a total of about $4.5 billion, or a bit more than half its total proposed budget, for these five missions. The Coast Guard states that in FY2006, it met it performance targets for two of its five statutorily defined homeland security missions (ports, waterways, and coastal security, and other law enforcement) and did not meet them for two others (defense readiness and migrant interdiction). Performance regarding the fifth mission (drug interdiction) was to be determined as of February 2007. Potential issues for Congress concerning the Coast Guard's homeland security operations include, among others, the following: the sufficiency of Coast Guard funding, assets, and personnel levels for performing both homeland and non-homeland security missions; the division of the Coast Guard's budget between homeland security and non-homeland security missions; whether the Coast Guard is achieving sufficient interoperability and coordination with other DHS, federal, state, and local authorities involved in the maritime aspects of homeland security, including coordination of operations and coordination and sharing of intelligence; monitoring compliance with the facility and vessel security plans that the Coast Guard has reviewed and approved; how the Coast guard assesses security risks to various ports and prioritizes these risks for allocating port-security funding; completing foreign port security assessments; implementing a long-range vessel-tracking system required by MTSA; implementing Automatic Identification System (AIS); inland waterway security; and response plans for maritime security incidents. A December 2006 report from the DHS Inspector General on major DHS management challenges stated: To implement the Maritime Transportation Security Act of 2002 in a timely and effective manner, USCG must balance the resources devoted to the performance of homeland and non-homeland security missions; improve the performance of its homeland security missions; maintain and re-capitalize USCG's Deepwater fleet of aircraft, cutters, and small boats; restore the readiness of small boat stations to perform their search and rescue missions; and increase the number and quality of resource hours devoted to non-homeland security missions. For example, while overall resource hours devoted to USCG's homeland security missions grew steadily from FY 2001 through FY 2005, USCG continues to experience difficulty meeting its performance goals for homeland security missions. A July 2006 report from the DHS Inspector General on Coast Guard mission performance in FY2005 stated: Since FY 2001, more [Coast Guard] resource hours have been dedicated to homeland security missions than for non-homeland security missions. However, after an initial drop in FY 2002, non-homeland security resource hours have increased every period, and have now returned to within 3% of baseline levels.... The Coast Guard has been more successful in meeting goals for its traditional non-homeland security missions, meeting 22 of 28 goals (79%) where measurable goals and results existed, but still leaving room for improved performance. Not including the Ports, Waterways, and Coastal Security mission, by far the largest user of resource hours of any Coast Guard mission, the Coast Guard achieved only 26% of its homeland security goals (5 of 19).... Growth in total resource hours has leveled off. Since resource hours are based on the limited and finite number of available assets, the Coast Guard will be unable to increase total resource hours without the acquisition of additional aircraft, cutters, and boats. Consequently, the Coast Guard has a limited ability to respond to an extended crisis, and therefore must divert resources normally dedicated to other missions. To improve performance within their overall constraints, the Coast Guard must ensure that a comprehensive and fully defined performance management system is implemented, and that experienced and trained personnel are available to satisfy increased workload demands. In March 2005, the Government Accountability Office (GAO) testified that: The Maritime Transportation Security Act of 2002 charged the Coast Guard with many maritime homeland security responsibilities, such as assessing port vulnerabilities and ensuring that vessels and port facilities have adequate security plans, and the Coast Guard has worked hard to meet these requirements. GAO's reviews of these efforts have disclosed some areas for attention as well, such as developing ways to ensure that security plans are carried out with vigilance. The Coast Guard has taken steps to deal with some of these areas, but opportunities for improvement remain. A December 30, 2007, press article on a prototype port security system in Miami called Project Hawkeye and the AIS states in part: A Coast Guard plan to combat terrorism by creating the maritime equivalent of an air traffic control system in the coastal waters here, a test for a nationwide effort, has fallen far short of expectations. The Coast Guard installed long-range surveillance cameras, coastal radar and devices that automatically identify approaching vessels to help search out possible threats. But the radar, it turns out, confuses waves with boats. The cameras cover just a sliver of the harbor and coasts. And only a small fraction of vessels can be identified automatically. Officials acknowledge the limited progress that the Department of Homeland Security and the Coast Guard have made toward creating a viable defense here in Miami or at harbors nationwide against a maritime attack, despite the billions of dollars invested since 2001.... Miami was selected to serve as a laboratory for the Maritime Domain Awareness project.... The surveillance effort in Miami, known as Project Hawkeye, was intended to search out vessels that might present a threat, allowing the Coast Guard to try to foil an impending attack. Using radar, the Coast Guard would track boats larger than 25 feet within 12 miles of shore. Smaller vessels—as little as a Jet Ski—would be tracked with infrared cameras up to five miles offshore. The surveillance would cover an area from Fort Lauderdale to the Florida Keys. To identify which vessels among the thousands might pose a danger, the Coast Guard would rely on sophisticated software that would assemble and analyze all this data. Under the plan, Coast Guard officials would be alerted when boats entered restricted waters, loitered in a vulnerable spot or displayed an unusual course or speed. The cameras have at times proved helpful, allowing the Coast Guard to investigate how a ship went aground or to monitor security contractors at the cruise ship terminal, to make sure they are doing their job, said Capt. Liam Slein, deputy commander of the Miami sector. But the cameras, it turns out, are not powerful enough or installed widely enough to track small boats approaching the many inlets in the Miami area. The radar system is so unreliable—mistaking waves for boats, splitting large ships in two or becoming confused by rain—Coast Guard staff personnel have been told not to waste much time looking at it. And technology the Coast Guard has required for large ships and wants installed on commercial fishing vessels, devices that automatically identify an approaching ship's name, location and course, has also provoked concerns. The Automated Identification System, as it is known, was first developed as a collision avoidance measure, not a security system, and was not made tamperproof. A captain or crew wanting to hide or disguise their location could simply turn the system off, or enter data that transmitted false information about the vessel's whereabouts and identity.... Most critically, the software system intended to make sense of all the collected data has not yet been installed in Miami. That means that very little of what the cameras are filming or the radar is tracking is ever used or even watched. The data is of such limited value that at least for now, the Coast Guard has assigned only volunteers to deal with it.... A surveillance system similar to the one in Miami is supposed to be installed at as many as 35 ports. But given the challenges here, and the unwillingness of Congress to finance the still-unproven effort, the Coast Guard has delayed expanding the effort to other ports until at least 2014. A March 31, 2007, press article about a private-sector vessel tracking system called the Automated Vessel Tracking System states in part: The Automated Secure Vessel Tracking System has proven itself to businesses around the world. It gave real-time information to oil companies as Hurricane Katrina raged in 2005, helping them follow oil platforms that had been torn from their moorings. It has tracked ships in distress far out to sea. But the system is getting more attention these days because of who isn't using it: the Coast Guard. Juneau is one of the few Coast Guard district headquarters that subscribes to the system. Congress ordered the Coast Guard to begin testing by Sunday a system that would track all ships approaching U.S. ports. The Coast Guard says a system will be in place, but critics are concerned that it will prove to be insufficient. The Coast Guard and Maritime Transportation Act of 2006 says the Coast Guard, part of the Department of Homeland Security, must begin a three-year pilot program of a system capable of tracking 2,000 ships at once "to aid maritime security and response to maritime emergencies."... Some lawmakers are trying to convince the Coast Guard that the answer already exists in the maritime industry's vessel tracking system.... The Coast Guard has been relying primarily on a radio-based tracking system. Its new system is expected to use satellite technology, but not immediately and then only on a limited basis, Schumer said. The system being pushed by [Senator] Schumer, [Representative] Sanchez and other members of Congress, however, has been used to monitor ship movement for the last five years by a coalition of nonprofit maritime organizations. The system relies on emergency beacons that already are fixtures on most commercial vessels. A software program "pings" the ship via satellite and retrieves data such as the name of the vessel, its owner, its latitude and longitude, its speed and its course. It can also track a ship's route across the ocean, allowing observers to know whether the ship stopped and met another vessel at sea or diverted to a port that wasn't on its usual route.... The tracking system was created in 1999 by a small family-run company called Yukon Fuel Co. in Anchorage to keep tabs on its tugs and barges as they supplied fuel and freight to isolated Alaskan villages, fishing camps and mining sites. The software proved so popular that the family sold Yukon and formed Secure Asset Reporting Services Inc. to market the system, said Clayton Shelver, the company's chief executive.... The Coast Guard isn't the only player that still needs convincing. Most major shipping companies haven't signed on either. So far, only Taiwan-based Evergreen Marine Corp. has agreed to test it.

The Coast Guard is the lead federal agency for maritime homeland security. For FY2008, the Coast Guard is requesting a total of about $4.5 billion, or a bit more than half its total proposed budget, for the five missions defined in The Homeland Security Act of 2002 ( P.L. 107-296 ) as the Coast Guard's homeland security missions. The Coast Guard's homeland security operations pose several potential issues for Congress. This report will be updated as events warrant.

As discussed in our May 2010 report, TSA deployed SPOT nationwide before first determining whether there was a scientifically valid basis for using behavior and appearance indicators as a means for reliably identifying passengers who may pose a risk to the U.S. aviation system. A validation study by DHS’s Science and Technology Directorate is under way now, but questions exist regarding whether the study’s methodology is sufficiently comprehensive to validate the SPOT program. Specifically, DHS’s plan to assess SPOT is not designed to fully validate whether behavior detection can be used to reliably identify individuals in an airport environment who pose a security risk. The results of an independent assessment are needed to determine whether current validation efforts are sufficiently comprehensive to validate the program, and to support future requests for increased funding. According to TSA, SPOT was deployed before a scientific validation of the program was completed, but TSA stated that this deployment was made in response to the need to address potential threats to the aviation system, such as suicide bombers. TSA also stated that the program was based upon scientific research available at the time regarding human behaviors. Moreover, TSA stated that no other large-scale U.S. or international screening program incorporating behavior- and appearance-based indicators has ever been rigorously scientifically validated. However, a 2008 report issued by the National Research Council of the National Academy of Sciences stated that the scientific evidence for behavioral monitoring is preliminary in nature. The report also noted that an information-based program, such as a behavior detection program, should first determine if a scientific foundation exists and use scientifically valid criteria to evaluate its effectiveness before deployment. The report added that such programs should have a sound experimental basis and that the documentation on the program’s effectiveness should be reviewed by an independent entity capable of evaluating the supporting scientific evidence. As we reported in May 2010, an independent panel of experts could help DHS develop a comprehensive methodology to determine if the SPOT program is based on valid scientific principles that can be effectively applied in an airport environment for counterterrorism purposes. Thus, we recommended that the Secretary of Homeland Security convene an independent panel of experts to review the methodology of the validation study on the SPOT program being conducted to determine whether the study’s methodology is sufficiently comprehensive to validate the SPOT program. We also recommended that this assessment include appropriate input from other federal agencies with expertise in behavior detection and relevant subject matter experts. DHS concurred and stated that its current validation study includes an independent review of the study th at will include input from a broad range of federal and operational agencies and relevant experts, including those from academia. According to DH S’s Science and Technology Directorate, this independent review is expected to be completed in early April 2011. As discussed in our May 2010 report, DHS has contracted with the American Institutes for Research to conduct its validation study. DHS stated that the ongoing independent review will include, among other things, recommendations on additional studies that should be undertaken to more fully validate the science underlying the SPOT screening process. As we noted in our report, research on other issues, such as determining the number of individuals needed to observe a given number of passengers moving at a given rate per day in an airport environment or the duration that such observation can be conducted by BDOs before observation fatigue affects effectiveness, could provide additional information on the extent to which SPOT can be effectively implemented in airports. Additional research could also help determine the need for periodic refresher training for the BDOs since research has not yet determined whether behavior detection is easily forgotten or can be potentially degraded with time or lack of use. Because such questions exist, the results of an independent panel of experts to assess the methodology of the study could provide DHS with additional assurance regarding whether the study’s methodology is sufficiently comprehensive to validate the SPOT program. Moreover, DHS stated that its current effort to validate the science underlying SPOT includes 3 years of operational SPOT referral data and preliminary results indicate that it is supportive of SPOT. However, in May 2010, we reported weaknesses in TSA’s process for maintaining operational data from the SPOT program database. Because of these data- related issues, we reported that meaningful analyses could not be conducted to determine if there is an association between certain behaviors and the likelihood that a person displaying certain behaviors would be referred to a law enforcement officer or whether any behavior or combination of behaviors could be used to distinguish deceptive from nondeceptive individuals. As we reported in March 2011, Congress may wish to consider limiting program funding pending receipt of an independent assessment of TSA’s SPOT program. We identified potential budget savings of about $20 million per year if funding were frozen at current levels until validation efforts are complete. Specifically, in the near term, we reported that Congress could consider freezing appropriation levels for the SPOT program at the 2010 level until the validation effort is completed. Assuming that TSA is planning to expand the program at a similar rate each year, this action could result in possible savings of about $20 million per year, or $100 million over 5 years, since TSA is seeking about a $20 million increase for SPOT in fiscal year 2011. We also reported that upon completion of the validation effort, Congress may also wish to consider the study’s results—including those on the program’s effectiveness in using behavior-based screening techniques to detect terrorists in the aviation environment—in making future funding decisions regarding the program. In May 2010, we reported that TSA is not fully utilizing the resources it has available to systematically collect the information obtained by BDOs on passengers whose behaviors and appearances resulted in either a referral to a BDO or to a LEO, and who thus may pose a risk to the aviation system. As we previously reported, TSA does not provide official guidance on how or when BDOs or other TSA personnel should enter data into the Transportation Information Sharing System or which data should be entered. Official guidance on what data should be entered into the system on passengers could better position TSA personnel to be able to consistently collect information to facilitate synthesis and analysis in “connecting the dots” with regard to persons who may pose a threat to the aviation system. Moreover, as of May 2010, TSA had not developed a schedule or milestones by which database access would be deployed to SPOT airports, or a date by which access at all SPOT airports would be completed. Setting milestones for expanding Transportation Information Sharing System access to all SPOT airports, and setting a date by which the expansion will be completed, could better position TSA to identify threats to the aviation system that may otherwise go undetected and help TSA track its progress in expanding Transportation Information Sharing System access as management intended. Thus, we previously recommended that TSA provide guidance in the SPOT standard operating procedures or other directives to BDOs, and to other TSA personnel as appropriate, on how and when to input data into the Transportation Information Sharing System database. In March 2011, TSA stated that it has taken steps to implement our recommendation by revising SPOT standard operating procedures to provide guidance directing the input of BDO data into the Transportation Information Sharing System. TSA plans to implement these revised procedures in April 2011. In addition, all SPOT airports have access to the Transportation Information Sharing System as of March 2011 according to TSA. In addition, as we previously reported, studying airport video recordings of the behaviors exhibited by persons transiting airport checkpoints who were later charged with or pleaded guilty to terrorism-related offenses could provide important insights about behaviors that may be common among terrorists or could demonstrate that terrorists do not generally display any identifying behaviors. In addition, such images could help determine if BDOs are looking for the right behaviors or seeing the behaviors they have been trained to observe. Using CBP and Department of Justice information, we examined the travel of key individuals allegedly involved in six terrorist plots that have been uncovered by law enforcement agencies. We determined that at least 16 of the individuals allegedly involved in these plots moved through 8 different airports where the SPOT program had been implemented. Six of the 8 airports were among the 10 highest-risk airports, as rated by TSA in its Current Airport Threat Assessment. In total, these individuals moved through SPOT airports on at least 23 different occasions. For example, according to Department of Justice documents, in December 2007 an individual who later pleaded guilty to providing material support to Somali terrorists boarded a plane at the Minneapolis-Saint Paul International Airport en route to Somalia. Similarly, in August 2008, an individual who later pleaded guilty to providing material support to al Qaeda boarded a plane at Newark Liberty International Airport en route to Pakistan to receive terrorist training to support his efforts to attack the New York subway system. Our survey of federal security directors at 161 SPOT airports indicated that most checkpoints at SPOT airports have surveillance cameras installed. Thus, we reported that TSA may be able to utilize the information collected from the video infrastructure at the nation’s airports to study the behavior of persons who were later charged with or pleaded guilty to terrorism-related offenses to help improve and refine the existing SPOT program. As a result, in our May 2010 report, we recommended that if the current validation effort determines that the SPOT program has a scientifically validated basis for using behavior detection for counterterrorism purposes in the airport environment, then TSA should study the feasibility of using airport checkpoint surveillance video recordings to enhance its understanding of terrorist behaviors. DHS agreed with our recommendation and noted that TSA agrees this could be a useful tool and is working with DHS’s Science and Technology Directorate to utilize video case studies of terrorists, if possible. TSA officials agreed that examining video recordings of individuals who were later charged with or pleaded guilty to terrorism-related offenses, as they used the aviation system to travel to overseas locations allegedly to receive terrorist training or to execute attacks, could help inform the SPOT program’s identification of behavioral indicators. In March 2011, TSA stated that it is exploring ways to better utilize video recordings to identify these behavioral indicators. Chairman Broun, Ranking Member Edwards, and Members of the Subcommittee, this concludes my statement. I look forward to answering any questions that you may have at this time. For questions about this statement, please contact Stephen M. Lord at (202) 512-4379 or lords@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 testimony are David M. Bruno, Assistant Director; Ryan Consaul; Katherine Davis; Emily Gunn; and Tracey King. 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 attempted passenger aircraft bombing of Northwest flight 253 on December 25, 2009, provided a vivid reminder that the civil aviation system remains an attractive terrorist target. To enhance aviation security, in October 2003 the Department of Homeland Security's (DHS) Transportation Security Administration (TSA) began testing of its Screening of Passengers by Observation Techniques (SPOT) program to identify persons who may pose a risk to aviation security. The SPOT program utilizes behavior observation and analysis techniques to identify potentially high-risk passengers. This testimony provides information on (1) the extent to which TSA has validated the scientific basis for SPOT and (2) other operational challenges. This statement is based on a prior report GAO issued in May 2010 on SPOT, including selected updates made in March 2011. For the updates, GAO reviewed documentation on TSA's progress in implementing the report's recommendations. As GAO reported in May 2010, TSA deployed its behavior detection program nationwide before first determining whether there was a scientifically valid basis for the program. According to TSA, the program was deployed before a scientific validation of the program was completed in response to the need to address potential security threats. However, a scientific consensus does not exist on whether behavior detection principles can be reliably used for counterterrorism purposes, according to a 2008 report of the National Research Council of the National Academy of Sciences. DHS is conducting a study on the scientific basis of SPOT. Thus, in May 2010, GAO recommended that DHS convene an independent panel of experts to review the methodology of its study. DHS concurred and stated that it is convening an independent panel to review its current efforts to help validate the scientific basis for the program, which is expected to complete its work by early April 2011. Nonetheless, DHS's study to assess SPOT is not designed to fully validate whether behavior detection can be used to reliably identify individuals in an airport environment who pose a security risk. For example, factors such as the length of time behavior detection officers (BDO) can observe passengers without becoming fatigued are not part of the plan and could provide additional information on the extent to which SPOT can be effectively implemented. The results of a panel to review DHS's methodology could help ensure a rigorous, scientific validation of SPOT. As GAO previously reported, TSA experienced SPOT operational challenges, including not systematically collecting and analyzing information obtained by BDOs on passengers who may pose a threat to the aviation system. Better utilizing existing resources would enhance TSA's ability to quickly verify passenger identity and could help TSA to more reliably "connect the dots" with regard to persons who pose a threat. Thus, GAO recommended that TSA clarify BDO guidance for inputting information into the database used to track suspicious activities, and develop a schedule to expand access to this database across all SPOT airports. TSA agreed and in March 2011 stated that it has revised the SPOT standard operating procedures on how BDOs are to input data into the database used to report suspicious activities. TSA plans to implement these revised procedures in April 2011. TSA also reported that all SPOT airports have access to this database as of March 2011. In addition, GAO reported that individuals allegedly involved in six terrorist plots transited SPOT airports. GAO recommended in May 2010 that TSA study the feasibility of using airport video recordings of the behaviors exhibited by persons transiting airport checkpoints who were later charged with or pleaded guilty to terrorism-related offenses. GAO reported that such recordings could provide insights about behaviors that may be common among terrorists or could demonstrate that terrorists do not generally display any identifying behaviors. TSA agreed that studying airport videos could be a useful tool in understanding terrorist behaviors in the airport environment and in March 2011 reported that it is exploring ways to better utilize such recordings. GAO has made recommendations in prior work to strengthen TSA's SPOT program. TSA generally concurred with the recommendations and has actions under way to address them. GAO provided the updated information to TSA. TSA had no comment.

In 2005, Indiana enacted a statute requiring citizens voting in person on primary or general election day, or casting a ballot in person at the office of the circuit court clerk prior to election day, to present a photo identification card issued by the government. Often referred to as the "Voter ID Law," it does not apply to absentee ballots submitted by mail and excepts persons who reside and vote in state-licensed facilities such as nursing homes. It further provides that a voter who is indigent or has a religious objection to being photographed may cast a provisional ballot that will only be counted if the voter executes an appropriate affidavit before the circuit court clerk within 10 days after the election. Under Indiana law, photo identification is not required for registering to vote, and for qualified voters, the state offers free photo identification. Shortly after enactment of the Voter ID Law, the Indiana Democratic Party and the Marion County Democratic Central Committee (hereafter referred to as the "Democratic Party") filed suit in federal district court against state officials responsible for enforcement of the law, seeking a judgment declaring the statute invalid on its face and enjoining its enforcement. Seeking the same relief, a second suit was filed on behalf of two elected officials and several nonprofit organizations representing groups of elderly, disabled, poor, and minority voters, and the cases were consolidated. In defense of the law, the State of Indiana intervened. In sum, the plaintiffs alleged that the Voter ID Law substantially burdens the right to vote in violation of the Fourteenth Amendment; that it is neither a necessary nor appropriate means of avoiding election fraud; and that it will arbitrarily disenfranchise qualified voters without the requisite identification and place an unjustified burden on those who cannot obtain such identification. In granting defendant's motion for summary judgment, the federal district court found that the plaintiffs had "not introduced evidence of a single, individual Indiana resident who will be unable to vote as a result of [the Voter ID Law] or who will have his or her right to vote unduly burdened by its requirements." Rejecting an expert's report that up to 989,000 registered Indiana voters did not possess either a driver's license or other acceptable photo identification "as utterly incredible and unreliable," the court estimated that as of 2005 (when the statute was enacted), approximately 43,000 Indiana residents did not possess driver's licenses or state-issued identification. The Democratic Party appealed. In affirming the lower court ruling, the U.S. Court of Appeals for the 7 th Circuit held that the Democratic Party had standing to challenge the constitutionality of the Voter ID Law on its face. Next, pointing out that no plaintiff was claiming that the law would deter him or her from voting, the court inferred that "the motivation for the suit is simply that the law may require the Democratic Party to work harder to get every last one of their supporters to the polls." Finally, rejecting the argument that the law should be evaluated under the same strict standard applicable to a poll tax, the court held that the burden placed on voters was balanced by the benefit of reducing the risk of voter fraud. The Democratic Party appealed. Voting 6 to 3, in April 2008, the Supreme Court affirmed the decision of the 7 th Circuit, persuaded that both lower courts had correctly determined that the evidence in the record was insufficient to support a facial attack on the constitutionality of Indiana's Voter ID Law. Justice Stevens wrote the "lead opinion," which was joined by Chief Justice Roberts and Justice Kennedy; Justice Scalia wrote a concurrence, joined by Justices Thomas and Alito; Justice Souter filed a dissent, joined by Justice Ginsburg; and Justice Breyer filed a dissent. The lead opinion in Crawford begins with an analysis of the Court's 1966 decision in Harper v. Virginia Board of Elections , which invalidated a Virginia statute conditioning the right to vote on the payment of a $1.50 poll tax. The Harper Court concluded that whenever a state makes the affluence of a voter or the payment of a fee an electoral standard, it violates the Equal Protection Clause of the Fourteenth Amendment. The opinion further notes that under Harper, even rational restrictions on the right to vote are invidious if they are unrelated to voter qualifications. Clarifying that standard, however, the lead opinion finds that in the Court's 1983 decision, Anderson v. Celebrezze , the Court confirmed the general rule that "'evenhanded restrictions that protect the integrity and reliability of the electoral process itself' are not invidious" and indeed, satisfy the Harper standard. As the opinion explains, "[r]ather than applying any 'litmus test' that would neatly separate valid from invalid restrictions, we concluded that a court must identify and evaluate the interests put forward by the State as justifications for the burden imposed by its rule, and then make the 'hard judgment' that our adversary system demands." Application of this balancing test, the opinion further points out, was made in subsequent election decisions by the Court. In making the judgment in Crawford as to whether the Indiana Voter ID Law is justified by a legitimate state interest, the opinion analyzes each of the three interests identified by the State of Indiana—deterring and detecting voter fraud; preventing voter fraud; and safeguarding voter confidence—and finds that they are "unquestionably relevant" to the state interest of protecting the integrity of the electoral process. Furthermore, it notes that even the petitioners in this case, while charging the statute was motivated by partisan goals, did not question the legitimacy of the interests identified by the State of Indiana. On the issue of voter fraud, it determines that the only type of voter fraud that the Voter ID Law seeks to address is in-person voter impersonation at the polls, but that the record contains no evidence of such fraud ever occurring within Indiana. On the other side of the coin, the Crawford lead opinion also discusses the burdens that the Voter ID Law imposes on voters, burdens that are not imposed by non-photo identification requirements. For example, it points out the possible inconveniences of a voter's photo identification being lost or stolen or no longer representing the likeness of a voter, thereby creating an impediment to voting. However, it concludes that "burdens of that sort arising from life's vagaries ... are neither so serious nor so frequent as to raise any question about the constitutionality of [the Voter ID Law]; the availability of the right to cast a provisional ballot provides an adequate remedy for problems of that character." The relevant burdens imposed by the law, the opinion finds, are those that are placed on people who are eligible to vote, but do not possess photo identification that complies with the Voter ID Law. If the State of Indiana required voters to pay a tax or a fee to obtain the requisite photo identification, the fact that most voters already possess a valid driver's license or other acceptable identification would not save the statute under the Court's holding in Harper , the lead opinion notes. However, in Indiana, free photo identification cards are available through the Bureau of Motor Vehicles (BMV). In view of that fact, the opinion concludes that "for most voters ... the inconvenience of making a trip to the BMV, gathering the required documents, and posing for a photograph surely does not qualify as a substantial burden on the right to vote or even represent a significant increase over the usual burdens of voting." For a "limited number of persons," based on evidence in the record and facts of which the Court takes judicial notice, the Voter ID Law may still impose a "somewhat heavier burden." However, the lead opinion determines that the severity of that burden is mitigated by the fact that eligible voters may cast provisional ballots that will ultimately be counted. While casting a provisional ballot requires traveling to the circuit court clerk's office within 10 days to execute an affidavit, it is "unlikely" that the requirement would create a constitutional problem "unless it is wholly unjustified." Moreover, even if the burden cannot be justified to a few voters, it would be insufficient to establish the relief sought by the petitioners in this case: invalidation of the Voter ID Law in all its applications. In view of such relief sought by the petitioners, the opinion finds that they bear a "heavy burden of persuasion," asking the Court "in effect, to perform a unique balancing analysis that looks specifically at a small number of voters who may experience a special burden" and weigh that against the State of Indiana's interests in protecting election integrity. On the basis of the record before the Court, the lead opinion determines that it "cannot conclude that the Voter ID Law imposes 'excessively burdensome requirements' on any class of voters" and that it "'imposes only a limited burden on voters' rights,'" which are justified by the interests advanced by the State of Indiana. It also finds that if a "nondiscriminatory law is supported by valid neutral justifications," those justifications should not be ignored merely "because partisan interests may have provided one motivation" for its enactment. Finally, the opinion cautions that even if the statute constituted an unjustified burden on some voters, the petitioners failed to demonstrate that the proper remedy was to invalidate the entire statute. The concurrence, written by Justice Scalia, finds that the Indiana Voter ID Law is "a generally applicable, nondiscriminatory voting regulation" and disputes the notion that "individual impacts are relevant to determining the severity of the burden it imposes." Indeed, according to the concurring opinion, it is the job of state legislatures to assess the costs and benefits of election regulations and "their judgment must prevail unless it imposes a severe and unjustified overall burden upon the right to vote, or is intended to disadvantage a particular class." Judicial review of such election regulations must be applied in such an objective and uniform manner that legislatures know beforehand whether the resulting burden is too severe. Specifically criticizing the lead opinion, the concurrence characterizes it as a "record-based resolution" that "neither rejects nor embraces the rule of our precedents, provides no certainty, and will embolden litigants who surmise that our precedents have been abandoned." In sum, the concurrence labels it an "indulgence" that the State of Indiana accommodates certain voters by permitting the casting of provisional ballots, finding it not to be a constitutional requirement. Instead, it concludes that it is constitutionally sufficient that the Voter ID Law does not significantly increase typical burdens of voting and that the state's interests are enough to sustain that minimal burden. According to the concurrence, "[t]hat should end the matter." The Souter dissent warns that the Voter ID Law poses a threat of "nontrivial burdens" on the voting rights of tens of thousands of Indiana's citizenry and accordingly, is likely to result in a substantial percentage of those individuals being deterred from voting. It concludes that the law is unconstitutional under the standard the Court established in its 1992 decision, Burdick v. Takushi , finding that a state may not burden the right to vote "merely by invoking abstract interests" even if legitimate or compelling, but must make a "particular, factual showing that threats to its interests outweigh the particular impediments it has imposed." In view of "no evidence of in-person voter impersonation fraud in the State," the dissenting opinion determines that the State of Indiana failed to justify the practical limitations on voting rights created by the law and finds that it creates an "unreasonable and irrelevant burden on voters who are poor and old." The Breyer dissent compares the Voter ID Law with similar laws in Georgia and Florida that require photo identification for voting, but accept a broader range of identification. For example, the State of Florida accepts student ID cards, employee badges and cards from neighborhood associations, and will accept a provisional ballot on the condition that the voter's signature matches the signature on file. The State of Indiana, according to the dissent written by Justice Breyer, did not sufficiently justify the "significantly harsher, unjustified burden" created by its law. In the wake of the Supreme Court's ruling in Crawford , some commentators have speculated that more states are likely to enact laws requiring photo identification for voting. However, even though the Court's ruling strikes down a facial challenge to Indiana's Voter ID Law, it appears to leave open the possibility of "as applied" challenges to such laws, if greater evidence of the burdens imposed on voters' rights can be provided. Furthermore, while three members of the Court—Justices Scalia, Thomas, and Alito—hold the position that a "record-based" evaluation of the impact of such laws on individuals is inappropriate, that view does not appear to be shared by the remainder of the Court.

In a splintered decision issued in April 2008, the Supreme Court upheld an Indiana statute requiring photo identification for voting, determining that lower courts had correctly decided that the evidence in the record was insufficient to support a facial attack on the constitutionality of the law. Written by Justice Stevens, the lead opinion in Crawford v. Marion County Election Board finds that the law imposes only "a limited burden on voters' rights," which is justified by state interests.

The Americans with Disabilities Act has often been described as the most sweeping nondiscrimination legislation since the Civil Rights Act of 1964. It provides broad nondiscrimination protection and, 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." Title III of the ADA prohibits discrimination against individuals with disabilities by places of public accommodations, and has been the basis of numerous legal actions. Several of these have involved the filing of multiple law suits by an individual with a disability based on de minimus violations. Of the actions which have resulted in judicial decisions, some have rejected the allegations, finding that the plaintiff was a vexatious litigant, while others have rejected the suits finding that the plaintiff had no standing since the plaintiff could not establish an intent to return to the entity with the alleged ADA violations. Some courts, however, have upheld the plaintiff's action even where numerous previous suits had been filed. Legislation has been introduced since the 106 th Congress to require that a plaintiff provide notice of non compliance with the ADA to an entity prior to commencing a legal action. Title III of the ADA provides that no individual shall be discriminated against on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation by any person who owns, leases (or leases to), or operates a place of public accommodation. Entities covered by the term "public accommodation" are listed and include, among others, hotels, restaurants, theaters, auditoriums, laundromats, museums, parks, zoos, private schools, day care centers, professional offices of health care providers, and gymnasiums. Although the sweep of Title III is broad, there are some limitations on its nondiscrimination requirements. A failure to remove architectural barriers is not a violation unless such a removal is "readily achievable." "Readily achievable" is defined as "easily accomplishable and able to be carried out without much difficulty or expense." Reasonable modifications in practices, policies or procedures are required unless they would fundamentally alter the nature of the goods, services, facilities, or privileges. No individual with a disability may be excluded, denied services, segregated or otherwise treated differently than other individuals because of the absence of auxiliary aids and services unless the entity can demonstrate that taking such steps would fundamentally alter the nature of the goods, services, or facilities or would result in an undue burden. An undue burden is defined as an action involving "significant difficulty or expense." The remedies and procedures of section 204(a) of the Civil Rights Act of 1964 are incorporated in Title III of the ADA. This allows for both private suit and suit by the Attorney General when there is reasonable cause to believe that there is a pattern or practice of discrimination against individuals with disabilities. Monetary damages are not recoverable in private suits but may be available in suits brought by the Attorney General. Section 204(c) of the Civil Rights Act requires that when there is a state or local law prohibiting an action also prohibited by Title II, no civil action may be brought "before the expiration of thirty days after written notice of such alleged act or practice has been given to the appropriate State or local authority...." The ADA does not specifically incorporate this requirement, and the courts which have considered the issue have generally found that this requirement was not incorporated in the ADA. Although situations involving the filing of multiple law suits by an individual with a disability based on de minimus violations have generally been settled out of court, there have been judicial decisions involving these issues. Generally, the cases that have gone to court have addressed questions concerning whether the plaintiff is a vexatious litigant or whether the plaintiff has standing. In Molski v. Mandarin Touch Restaurant a California district court found that the plaintiff was a vexatious litigant who filed hundreds of law suits designed to harass and intimidate business owners into agreeing to cash settlements. The plaintiff, Jack Molski, had a physical disability which required that he use a wheelchair and had filed between 300-400 lawsuits in federal courts since 1998. The district court reviewed the cases and found that "many are nearly identical in terms of the facts alleged, the claims presented, and the damages requested." In fact, the court noted in one complaint Mr. Molski claimed that on May 20, 2003, he went to El 7 Mares restaurant which he alleged lacked adequate parking and had a food counter that was too high. After the meal, the plaintiff alleged that he attempted to use the restroom but because the toilet's grab bars were improperly installed, he injured his shoulder and he was also unable to wash his hands due to faulty design. In two other cases, Mr. Molski alleged that he encountered almost identical problems in another restaurant and at a winery on the same day, May 20, 2003. The court found these complaints to be indicative of a clear intent to harass businesses. Even though the court noted that it was "possible, even likely, that many of the businesses sued were not in full compliance with the ADA," the court found the sanctions for bad faith were not therefore barred, especially where the motive was to garner funds. The district court ordered the plaintiff to obtain the leave of the court prior to filing any other claims under the ADA observing that "in addition to misusing a noble law, Molski has plainly lied in his filings to this Court. His claims of being the innocent victim of hundreds of physical and emotional injuries over the last four years defy belief and common sense." In a related suit, the California district court also found against the counsel in the Molski case holding that the counsel was required to seek leave of the court before filing any additional ADA claims. These two cases were upheld on appeal to the ninth circuit in Molski v. Evergreen Dynasty Corp . After a detailed examination of the cases in light of standards for vexatious litigation, the ninth circuit noted: For the ADA to yield its promise of equal access for the disabled, it may indeed be necessary and desirable for committed individuals to bring serial litigation advancing the time when public accommodations will be compliant with the ADA. But as important as this goal is to disabled individuals and to the public, serial litigation can become vexatious when, as here, a large number of nearly-identical complaints contain factual allegations that are contrived, exaggerated, and defy common sense. Similarly, the court of appeals held that the district court was within its discretion to impose a pre-filing order. The ninth circuit observed "[t]hat the Frankovich Group filed numerous complaints containing false factual allegations, thereby enabled Molski's vexatious litigation, provided the district court with sufficient grounds on which to base its discretionary imposition of sanctions." Several courts have addressed the standing issue. Some courts have found that a plaintiff lacks standing to bring an ADA claim for injunctive relief under Title III if the plaintiff cannot establish that he or she intends to return to the entity with the alleged ADA violations. For example, in Harris v. Stonecrest Care Auto Center, the district court questioned the plaintiff's credibility due to the fact that he had brought at least twenty other ADA related lawsuits, and carefully examined the requirements of standing. Noting that Title III of the ADA was intended to remedy discrimination in the area of public accommodation by providing injunctive relief, the court concluded that since the plaintiff had visited the gas station "solely for the purpose of bringing a Title III claim and supplemental state claims, any injunctive relief (the court) might grant would not satisfy the redressability requirement of standing." Similarly, in Tampa Bay Americans with Disabilities Association, Inc. v. Nancy Markoe Gallery, Inc., the court found that the plaintiff failed to demonstrate a real and immediate threat of future injury since her visits to the store were infrequent, there was a gap in time between visits, and she did not live in the same city as the store. The court also noted "with some concern" that the Tampa Bay Americans with Disabilities Association had filed 16 previous ADA cases and the individual plaintiff had filed 14. However, in Hollynn D'Llil v. Best Western Encina Lodge and Suites , the Ninth Circuit held that the plaintiff's declaration and testimony were sufficient to confer standing despite her past ADA litigation which involved about 60 ADA suits. The court, emphasizing the plaintiff's testimony detailing her intent to return to Santa Barbara and noting her friends who lived there, found that her past litigation did not impugn her credibility. Changes in the ADA's statutory language to address the issue of vexatious law suits have been proposed since the 106 th Congress. Proponents of such legislation have argued that notification requirements would help prevent the filing of suits designed to generate money for plaintiffs and law firms. Those opposed to the legislation have argued that it would undermine enforcement of the ADA and that vexatious suits are best dealt with by state bar disciplinary procedures or by the courts. Representative Hunter introduced H.R. 881 , the ADA Notification Act of 2011, 112 th Congress, on March 2, 2011. This bill is identical to H.R. 2397 which Representative Hunter introduced in the 111 th Congress. H.R. 881 would amend Title III of the ADA to deny state or federal court jurisdiction in a civil action brought under Title III of the ADA, or under a state law that conditions a violation of its provisions on a violation of Title III, except in certain situations. The courts would have jurisdiction if a plaintiff provides the defendant written notice of the alleged violation by registered mail prior to filing a complaint; the written notice identifies the facts that constitute the alleged violation, including the location and date of the alleged violation; a remedial period of 90 days elapses after the date on which the plaintiff provides the written notice; the written notice informs the defendant that the plaintiff is barred from filing the complaint until the end of the remedial period; and the complaint states that, as of the date on which the complaint is filed, the defendant has not corrected the alleged violation. H.R. 881 also provides that a court may extend the remedial period by not more than thirty days if the defendant applies for an extension. The legislation in previous Congresses is similar, but not identical, to that in the 111 th and 112 th . H.R. 3479 , 110th Congress, and H.R. 2804 , 109th Congress, had essentially the same notification provisions as those in H.R. 881 , 112 th Congress. However, the notification provisions would not have applied to civil actions brought under Rule 65 of the Federal Rules of Civil Procedure or civil actions under state or local court rules requesting preliminary injunctive relief or temporary restraining orders. H.R. 728 , 108 th Congress, differed from the more recent legislation by, for example, allowing notice to be provided in person, not just by registered mail. Although the bill was not passed in the 108 th Congress, the House Subcommittee on Rural Enterprises, Agriculture, and Technology of the House Small Business Committee held hearings on the bill on April 8, 2003. The two ADA Notification Acts in the 107 th Congress, H.R. 914 and S. 792 , like their predecessors H.R. 3590 and S. 3122 , 106 th Cong., contained similar language. Hearings were held by the Subcommittee on the Constitution of the House Committee on the Judiciary on H.R. 3590 on May 18, 2000.

The Americans with Disabilities Act (ADA) provides broad nondiscrimination protection in employment, public services, and public accommodation and services operated by private entities. Since the 106th Congress, legislation has been introduced to require plaintiffs to provide notice to the defendant prior to filing a complaint regarding public accommodations. In the 112th Congress, H.R. 881 was introduced by Representative Hunter to amend Title III of the ADA to require notification.

H.Res. 6 renamed five committees. The name of the Committee on Education and the Workforce was changed to the Committee on Education and Labor. The name of the Committee on International Relations was changed to the Committee on Foreign Affairs. The name of the Committee on Resources was changed to the Committee on Natural Resources. The name of the Committee on Government Reform was changed to the Committee on Oversight and Government Reform. The name of the Committee on Science was changed to the Committee on Science and Technology. The Rule X, clause 11 jurisdiction of the Permanent Select Committee on Intelligence was updated to reflect the overhaul of the intelligence community, including the creation of the director of national intelligence. Pursuant to a statement inserted in the Congressional Record by Rules Committee Chairwoman Louise Slaughter during the debate on H.Res. 6 , the jurisdiction of the Committee on Small Business was reaffirmed to include the Small Business Administration and its programs, as well as small business matters related to the Regulatory Flexibility Act and the Paperwork Reduction Act. Other programs and initiatives that address small businesses outside the confines of those acts were referenced as well. Also inserted in the Congressional Record during debate on H.Res. 6 was a memorandum of understanding between the Committee on Homeland Security and the Committee on Transportation and Infrastructure detailing the jurisdictional agreement related to the Federal Emergency Management Agency and to port security. House Rule X, clause 5(d), which generally limits committees to five subcommittees was waived for three committees. The Armed Services Committee was permitted to have seven subcommittees; the Foreign Affairs Committee was permitted to have seven subcommittees; and the Transportation and Infrastructure Committee was permitted to have six subcommittees. The Committee on Oversight and Government Reform was authorized to adopt a committee rule that authorized and regulated the taking of depositions by a Member or counsel of the committee, including depositions in response to a subpoena. The rules resolution permitted the new committee rule to require those being deposed to subscribe to an oath. It also required the committee rule to provide the minority with equitable treatment, by providing notice of such a proceeding and a reasonable opportunity to participate. The Rules Committee was allowed to publish the record votes taken during committee consideration in committee reports and through other means such as the Internet. The Rules Committee report was shielded from a point of order if the report was filed without a complete list of record votes taken during consideration of a special rule. Committees of jurisdiction were required to publish lists of earmarks, limited tax benefits, and limited tariff benefits contained in any reported bill, unreported bill, manager's amendment, or conference report that comes to the House floor.

This report details changes in the committee system contained in H.Res. 6 , the Rules of the House for the 110 th Congress, agreed to by the House January 4, 2007. The report will not be updated unless further rules changes for the 110 th Congress are adopted.

ITAA, a trade association, issued a report titled Help Wanted: The IT Workforce Gap at the Dawn of a New Century in February 1997 that focused on issues relating to the IT labor market. Responding to this report, the National Economic Council and the Departments of Commerce, Education, and Labor began to discuss the workforce requirements of the IT sector; subsequently, federal officials agreed to cosponsor a convocation on the IT worker issue. The convocation, cosponsored by the Departments of Commerce and Education, the University of California at Berkeley, and ITAA, was designed to bring together leaders from industry, academia, and government to develop new educational strategies and forge partnerships that would increase the quantity and quality of the American IT workforce. Federal officials noted that the convocation would support the administration’s goals for lifelong learning. New Deficit: The Shortage of Information Technology Workers, examining the potential for shortages of IT workers. In its report, Commerce presented BLS projections that between 1994 and 2005 the United States would require slightly over 1 million additional IT workers. BLS projections, based on surveys conducted for the Occupational Employment Statistics program and on the Current Population Survey, estimate future occupational needs resulting from expected national growth and separations from employment over time. Although there is no single, universally accepted definition of the occupations that should be designated as IT occupations, Commerce based its analysis of demand on job growth projections for the three IT occupations used by BLS—computer programmers, systems analysts, and computer scientists and engineers. BLS descriptions of these occupations are as follows: (1) computer programmers write and maintain the detailed instructions, called “programs” or “software,” that list in logical order the steps that computers must execute to perform their functions; (2) systems analysts use their knowledge and skills in a problem-solving capacity, implementing the means for computer technology to meet the individual needs of an organization; (3) computer scientists generally design computers and conduct research to improve their design or use, and develop and adapt principles for applying computers to new uses; and (4) computer engineers work with the hardware and software aspects of systems design and development. BLS projections for new IT workers over the 11 years from 1994 to 2005 include IT workers to fill newly created jobs (820,000) in the three occupational categories and to replace workers (227,000) who are leaving these fields as a result of retirement, change of profession, or other reasons. The report noted that, according to BLS, of the three IT occupations, the greatest job growth is predicted for systems analysts (92 percent). (See table 1.) The number of computer engineers and scientists is expected to grow by 90 percent, while the number of computer programmer positions is expected to grow at a much slower rate (12 percent). The projected job growth for all occupations between 1994 and 2005 is 14 percent. Since the report was issued, Commerce has issued an update with revised BLS projections showing even stronger growth. Between 1996 and 2006, there will be over 1.3 million projected job openings as a result of growth and net replacements; about 1.1 million of these job openings will be due to growth alone. Information Technology: Assessment of the Commerce Department’s Report on Worker Demand and Supply 2005 (projected) Commerce identifies the supply of potential IT workers as the number of students graduating with bachelor’s degrees in computer and information sciences. The report presents data from the Department of Education showing that 24,553 students earned bachelor’s degrees in computer and information sciences in 1994, a decline of more than 40 percent from 1986. While the Commerce report highlights the supply of IT workers as those with bachelor’s degrees in computer and information sciences, Commerce does note that IT workers may also acquire needed skills through other training paths—master’s degrees, associate degrees, or special certification programs. Commerce’s report also includes information from BLS that indicates, in the case of computer professionals, there is no universally accepted way to prepare for such a career but that employers almost always seek college graduates. number for IT workers when Commerce compared the IT worker demand with the available supply. Commerce also noted that, although employers almost always seek college graduates for computer professional positions, there is no universally accepted way to prepare for a career as a computer professional. According to the BLS Occupational Outlook Handbook, which defines qualifications for jobs and careers in terms of education and experience of IT workers with a bachelor’s degree, some workers have a degree in computer science, mathematics, or information systems, while others have taken special courses in computer programming to supplement their study in other fields such as accounting or other business areas. According to the National Science Foundation, only about 25 percent of those employed in computer and information science jobs in 1993 actually had degrees in computer and information science. Other workers in these fields had degrees in such areas as business, social sciences, mathematics, engineering, psychology, economics, and education. The Commerce report did not take this information into account in any way in estimating the future supply of IT workers. The report also stated that IT workers acquire needed skills through various training paths, but it provided no analysis of the extent to which companies are training and retraining workers. potential supply of IT workers, it used only the number of students earning bachelor’s degrees in computer and information sciences when it compared the potential supply of workers with the magnitude of IT worker demand. Commerce stated that upward movement in salaries is evidence of a short supply of IT workers and cited several surveys and newspaper articles illustrating salary increases. For example, the report cited a survey conducted by the Deloitte & Touche Consulting Group showing that salaries for computer network professionals rose an average of 7.4 percent from 1996 to 1997. The report also cited an annual survey by Computerworld, a weekly newspaper covering the computer industry and targeting IT workers and managers, showing that in 11 of 26 positions tracked, average salaries increased by more than 10 percent from 1996 to 1997. Increases in starting salaries were also reported in the Wall Street Journal and The Washington Post. These wage increases, however, may not be conclusive evidence of a long-term limited supply of IT workers but may be an indication of a current tightening of labor market conditions for IT workers. According to BLS data, increases have been less substantial when viewed over a longer period of time. For example, the percentage changes in weekly earnings for workers in computer occupations over the 1983 through 1997 period were comparable with or slightly lower, in the case of computer systems analysts and scientists, than the percentage changes for all professional specialty occupations. Thus, salary increases for these occupations have been consistent with the salary increases for other skilled occupational categories over time. What is uncertain is whether the recent trend toward higher rates of increase will continue. Regarding unfilled jobs, Commerce cited the ITAA report, which concluded that about 190,000 U.S. IT jobs were unfilled in 1996 because of a shortage of qualified workers and that these shortages were likely to worsen. According to the ITAA survey, 82 percent of the IT companies responding expected to increase their IT staffing in the coming year, while more than half of the non-IT companies planned IT staff increases. provides useful information on unfilled jobs among the firms responding to its survey, the findings cannot be generalized to the national level. ITAA surveyed a random sample of 2,000 large and midsize IT and non-IT companies about their IT labor needs and received a total of 271 responses—a response rate of about 14 percent. We consider a 14-percent response rate to be unacceptably low as a basis for any generalizations about the population being surveyed. In order to make sound generalizations, the effective response rate should usually be at least 75 percent for each variable measured—a goal used by many practitioners. Furthermore, ITAA’s estimate of the number of unfilled IT jobs is based on reported vacancies, and adequate information about those vacancies is not provided, such as how long positions have been vacant, whether wages offered are sufficient to attract qualified applicants, and whether companies consider jobs filled by contractors as vacancies. These weaknesses tend to undermine the reliability of ITAA’s survey findings. Commerce cited support for an emerging shortage in its observation that some companies are drawing upon talent pools outside the United States to meet their demands for IT workers. For example, the Commerce report stated that India has more than 200,000 programmers and, in conjunction with predominantly U.S. partners, has developed into one of the world’s largest exporters of software; in 1996 and 1997, outsourced software development accounted for 41 percent of India’s software exports. Commerce also cited a Business Week article, “Forget the Huddled Masses: Send Nerds,” to illustrate that companies are searching for IT workers in foreign labor markets such as Russia, Eastern Europe, East Asia, and South Africa. United States is exaggerated and that it is not necessary to recruit foreign workers to fill IT jobs. Additional systematic information about the magnitude of the phenomenon of companies meeting their demands for IT workers outside of the United States would be useful. The report identified the decline in the number of computer science graduates as a factor contributing to an inadequate supply of IT workers. The introduction to the report stated that evidence suggests that job growth in information technology fields now exceeds the production of talent. Commerce reported that between 1994 and 2005, an annual average of 95,000 new systems analysts, computer scientists and engineers, and computer programmers will be required to satisfy the increasing demand for IT workers and that only 24,553 students earned bachelor’s degrees in computer and information sciences in 1994. Because there is a disparity between these two numbers, Commerce concluded that it will be difficult to meet the demand for IT workers. Commerce did not adequately explain why the decline in conferred bachelor’s degrees in computer science would reflect a short supply of IT workers. As stated in the section on supply, IT workers come from a variety of educational backgrounds and have a variety of educational credentials such as master’s degrees, associate degrees, or special certifications. In addition, Commerce reported on the decline from 1986, although that year represents a peak in the number of computer science degrees conferred, which had risen steadily from the 1970s but has remained relatively stable in the 1990s. Commerce’s conclusions about the IT workforce are inconsistently reported in separate segments of its report. First, the title of the report states that America’s new deficit is a shortage of information technology workers. The introduction also states that there is substantial evidence that the United States is having trouble keeping up with the demand for new information technology workers. However, the report notes that current statistical frameworks and mechanisms for measuring labor supply do not allow for precise identification of IT worker shortages and, in its summary chapter, Commerce concludes that more information is needed to fully characterize the IT labor market. We agree with Commerce’s conclusion that more information and data are needed about the current and future IT labor market. Mr. Chairman, this concludes my prepared statement. I will be happy to answer any questions that you or 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. 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GAO discussed the Department of Commerce's report on the demand and supply of information technology (IT) workers. GAO noted that: (1) Commerce's report has serious analytical and methodological weaknesses that undermine the credibility of its conclusion that a shortage of IT workers exists; (2) however, the lack of support presented in this one report should not necessarily lead to a conclusion that there is no shortage; (3) instead, as the Commerce report states, additional information and data are needed to more accurately characterize the IT labor market now and in the future; (4) the report appears to appropriately establish that the demand for IT workers is expected to grow, but it does not adequately describe the likely supply of IT workers; (5) although Commerce reported that only 24,553 U.S. students earned bachelor's degrees in computer and information sciences in 1994, Commerce also stated the Bureau of Labor Statistics projects increasing job growth--an annual average of 95,000 new computer programmers, systems analysts and computer scientists and engineers will be required to satisfy the increasing demand for IT workers between 1994 and 2005; (6) pointing to the disparity between these two numbers and referring to evidence from other sources, Commerce concludes in the report's title and introduction that there is a shortage of IT workers; (7) Commerce did not, however, consider other likely sources of workers, such as college graduates with degrees in other areas; and (8) as a result, rather than supporting its conclusion that a shortage of IT workers exists, the data and analysis support the report's observation that more needs to be known about the supply and demand for IT workers.

Federal excess and underutilized property is an ongoing challenge facing the government due in part to unreliable data. In June 2012, we found that the FRPC did not ensure that key data elements—including buildings’ utilization, condition, annual operating costs, mission dependency, and value—were defined and reported consistently and accurately. For example, the FRPP data did not accurately describe the properties at 23 of the 26 locations we visited, often overstating the condition and annual operating costs of buildings. The types of inconsistencies and inaccuracies we identified in these five key data elements suggest that the FRPP database is not a useful decision-making tool for managing federal real property. Our review focused on five civilian federal real property-holding agencies—GSA and the departments of Energy (DOE), the Interior (Interior), Veterans Affairs (VA), and Agriculture (USDA). We reviewed key agency-reported FRPP data elements including utilization, condition index, annual operating costs, and value, and we found inconsistencies and inaccuracies for each of these data elements. For example, several buildings that received high scores for condition were actually in poor condition, with problems including: asbestos, mold, health concerns, radioactivity, and flooding (see fig. 1). In addition to the various problems we found and documented with real property data, we have also found that the federal government continues to face other challenges when managing excess and underutilized properties. Such challenges include (1) the high cost of property disposal, (2) legal requirements prior to disposal such as those related to preserving historical properties and the environment, (3) stakeholder resistance to property disposal or reuse plans, and (4) remote property locations that make selling or disposal difficult. Given the complexities of issues related to excess and underutilized federal real property management, unsuccessful implementation of cost savings efforts across administrations, and the issues that remain with data reporting, we concluded that a national strategy could provide a clear path forward to help federal agencies manage excess and underutilized property in the long term. A national strategy can guide federal agencies and other stakeholders to systematically identify risks, resources needed to address those risks, and investment priorities when managing federal portfolios. Without a national strategy, the federal government may be ill-equipped to sustain efforts to better manage excess and underutilized property. In our June 2012 report, we recommended that OMB, in consultation with the FRPC, develop a national strategy for managing federal excess and underutilized real property. OMB did not directly state whether it agreed or disagreed with our recommendation. Up to now, no comprehensive national strategy has been issued. We view such a strategy as a key step needed to improve the federal government’s management of its real property portfolio. Additionally, FRPP is not yet a useful tool for describing the nature, use, and extent of excess and underutilized federal real property. We concluded in June 2012 that FRPP data must be consistent and reliable to help decision makers overcome these long-standing problems. Accordingly, in the same report, we recommended that GSA and FRPC take action to improve the FRPP. GSA stated that they intend to improve the agency’s management of FRPP data by: making enhancements to clearly define data collection requirements, performing data quality tests and assessments to ensure data developing new performance measures to support government-wide goals, and improving collaboration with agencies. GSA developed an action plan for implementing GAO’s recommendations and was scheduled to complete these changes by June 2013. We are in the process of determining whether these actions improve FRPP consistency and reliability. We plan to report our results as part of our 2015 high risk update. The federal government manages a wide variety of structures that represent over half of the federal government’s real property assets, including roads and parking structures, utility systems, monuments, and radio towers. In January 2014, we found that incorrect and inconsistent data on structures limit the value of the government-wide FRPP data the government collects. First, at the most basic level, some of the data agencies submit on their structures are incorrect, undermining agencies’ ability to manage their structures and the reliability of the data in FRPP. Second, even if agencies effectively apply the OMB guidance, the government-wide data will continue to face reliability problems because of the flexibility built into FRPP guidance on how agencies track key elements, such as defining and counting structures. For example, agencies we reviewed—including the Department of Transportation (DOT), DOE, VA, USDA, and Interior—defined structures differently leading to inconsistencies in what assets are included in the FRPP. Figure 2 provides examples of some facilities we visited that were classified as structures, even though they were similar to buildings (having features such as walls, roofs, doors, windows, and air- conditioning systems in some cases). We concluded that agencies must improve their data quality in order to document performance and support decision making. Additionally, the agencies we reviewed submitted incorrect information for key data elements for structures, such as replacement value, annual operating costs, and condition. GSA officials who manage the FRPP said that FRPC chose to provide flexibility in the reporting guidance for data on structures to account for the wide diversity in federal structures, but it also aggregates the data as if they were comparable. We found that, even if this data were useful, FRPC reports very little information on structures. Officials at GSA told us that there is low interest in and demand for this information, creating few incentives to improve data reliability. We recommended that OMB, in coordination with the FRPC, develop guidance to improve agencies’ internal controls to produce consistent, accurate and reliable information on their structures. We also recommended that GSA, in coordination with the FRPC, clarify the definition of structures and assess the feasibility of limiting the data collected on structures submitted to the FRPP. OMB and GSA agreed with the recommendations, and GSA provided an action plan in December 2013 to implement them, but no timeframe was provided for when the proposed actions would be completed. In a 2014 report, we found that civilian agencies followed most leading practices in managing their facility maintenance and repair backlogs, except for transparent reporting about the funding amounts agencies are spending to maintain their assets and manage their backlogs. However, the deferred maintenance and repair of federal real property contributes to deteriorating assets in the federal inventory, and we found that the eventual need to address deferred maintenance and repair could significantly affect future budget resources. The five federal agencies we reviewed for our 2014 report— GSA, DOE, VA, Interior, and the Department of Homeland Security (DHS) — reported fiscal year 2012 deferred maintenance and repair backlog estimates that ranged from nearly $1 billion to $20 billion. However, agencies do not share a common definition of deferred maintenance, resulting in dissimilar backlog estimates. In addition, financial reporting requirements as well as FRPP reporting guidance do not require a specific process for determining deferred maintenance and repair backlogs, and agencies can use their existing processes to do so. For example, Interior excludes, while DHS includes, costs for some assets scheduled for disposal. As a result, when agencies report information in their financial reports and to FRPP, data include dissimilar backlog estimates and makes estimates across agencies not comparable. As such, an opportunity exists to better conform to leading practices and increase transparency. We recommended that OMB, in collaboration with agencies, collect and report information on agencies’ costs for annual maintenance and repair performed and funding spent to manage their existing backlogs. OMB agreed with our recommendation, and along with FRPC, has taken actions to improve management of deferred maintenance, including working to refine FRPP data and develop performance measures that reflect current federal real-property management priorities, but OMB has not yet fully implemented our recommendation. Thus, as OMB and FRPC agencies work to improve FRPP data and develop new performance metrics, the opportunity exists to revise requirements for agencies to collect and report costs of annual maintenance and repair and to address deferred maintenance and repair backlogs as we recommended earlier this year. In June 2010, the President issued a memorandum directing federal agencies to achieve $3 billion in real property cost savings by the end of fiscal year 2012 through a number of methods, including disposal of excess property, energy efficiency improvements, and other space consolidation efforts. Agencies reported real property cost savings of $3.8 billion across the OMB categories of disposal, space management, sustainability, and innovation in response to the June 2010 presidential memorandum. Space management savings, defined by OMB as those savings resulting from, among other things, consolidations or the elimination of lease arrangements that were not cost effective, accounted for the largest portion of savings reported by all agencies. In October 2013, we found that space management savings accounted for about 70 percent of the savings reported by the six agencies we reviewed— GSA, USDA, DOE, DHS, the Department of Justice (DOJ), and the Department of State (State). The requirements of the memorandum, as well as agencies’ individual savings targets and the time frame for reporting savings, led the selected agencies to primarily report savings from activities that were planned or under way at the time the memorandum was issued. GAO’s October 2013 review of the six selected agencies found several problems that affected the reliability and transparency of the cost savings data that the government reported in response to the June 2010 memorandum. For example, OMB did not require agencies to provide detailed documentation of their reported savings or include specific information about agencies’ reported savings on Performance.gov, limiting transparency. Furthermore the memorandum and subsequent guidance issued by OMB were not clear on the types of savings that could be reported, particularly because the term “cost savings” was not clearly defined. For instance, officials from several agencies we reviewed said the guidance was unclear about whether savings from cost avoidance measures could be reported. In addition some agencies made different assumptions in reporting disposal savings. Some agencies did not deduct costs associated with disposals, and some reported savings outside the time frame of the memorandum. For example, two agencies reported one year of avoided operations and maintenance savings for the year in which the disposal occurred, while three agencies reported up to 3 years of savings depending on when disposals occurred during the 3-year period. Agency officials stated that the memorandum broadened their understanding of real property cost-savings opportunities. However, we concluded that establishing clearer standards for identifying and reporting savings would improve the reliability and transparency of the reporting of cost savings and help decision-makers better understand the potential savings of future initiatives to improve federal real-property management. As such, we recommended that OMB establish clear and specific standards to help ensure reliability and transparency in the reporting of future real-property cost savings. OMB generally agreed with the recommendation. We are in the process of determining the extent to which OMB has implemented the recommendation and plan to report our final results as part of our 2015 high risk update. Sustained progress is needed to address the conditions and persistent challenges that make the area of federal real property management high risk. Multiple administrations have committed to a more strategic approach toward managing real property. However, problems with data reliability remain an underlying challenge for agencies to properly manage the multiple areas of real property reform. We will continue to monitor these agencies’ efforts to implement our recommendations, which we believe are critical to addressing the challenges that have led us to keep federal real property management on our High Risk List. Chairman Mica, Ranking Member Connolly, and Members of the Subcommittee, this concludes my prepared statement. I would be happy to answer any questions that you may have at this time. For further information regarding this testimony, please contact David Wise at (202) 512-2834 or wised@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 Keith Cunningham (Assistant Director), David Sausville (Assistant Director), Raymond Griffith, Geoffrey Hamilton, Amy Higgins, Hannah Laufe, and Sara Ann Moessbauer.

The federal real property portfolio, comprising approximately 900,000 buildings and structures and worth billions of dollars, presents several key management challenges. GAO has designated federal real property management as a high risk issue since 2003 due to long-standing challenges including unreliable data on this property, excess and underutilized property, over-reliance on leasing, and challenges with security. Since then, the federal government has given high-level attention to reforming real property management and has made some progress. It established the FRPC, chaired by OMB, in 2004. The FRPC created the FRPP, which is intended to be a comprehensive database developed for describing the nature, use, and extent of all real property under the custody and control of executive branch agencies. The FRPP is managed by GSA and began collecting data in 2005. GAO's recent work has found, however, that data problems related to federal real property have continued. This statement discusses data guidance and reliability issues GAO has found regarding federal civilian agencies' data on: (1) excess and underutilized property, (2) structures, (3) maintenance backlogs, and (4) cost saving estimates. It is based on previous GAO reports on federal real property issued from June 2012 through January 2014 and some updates on the status of recommendations made in those reports. To obtain these updates, GAO monitored agency actions taken and performed follow-up with agency officials. GAO found in 2012 that government-wide real property data were not sufficiently reliable to support sound management and decision making about excess and underutilized property. The Federal Real Property Council (FRPC) had not ensured that key data elements of the Federal Real Property Profile (FRPP) were defined and reported consistently and accurately. For example, FRPP data did not accurately describe the properties at 23 of the 26 locations GAO visited, often overstating the condition and annual operating costs of buildings. GAO recommended that the General Services Administration (GSA), in consultation with FRPC, develop a plan to improve the FRPP. Consequently, GSA developed an action plan and was scheduled to complete these changes by June 2013. GAO is determining whether these actions improve FRPP consistency and reliability and plans to report the results as part of GAO's 2015 high risk update. In 2014, GAO found that incorrect and inconsistent data on federal structures such as roads, bridges, railroads, and utility systems, limited the value of the government-wide FRPP data. For example, agencies GAO reviewed defined structures differently leading to inconsistencies. GAO recommended that GSA, in coordination with FRPC, clarify the definition of structures and assess the feasibility of limiting the data on structures submitted to the FRPP. GSA provided an action plan in December 2013 to implement GAO's recommendations, but no timeframe was provided for when the proposed actions would be completed. In a 2014 report, GAO found that civilian agencies followed most leading practices in managing their facility maintenance and repair backlogs, except for transparent reporting about the funding amounts agencies are spending to maintain their assets and manage their backlogs. Different agency financial reporting requirements as well as FRPP reporting guidance did not require a specific process for determining deferred maintenance and repair backlogs, and agencies could use their existing processes. Thus, GAO recommended that OMB, in collaboration with agencies, collect and report information on agencies' costs for annual maintenance and repair performed and funding spent to manage their existing backlogs. OMB and FRPC agencies have taken actions to improve management of deferred maintenance, including working to refine FRPP data, but have not yet fully implemented GAO's recommendation. In a 2013 review of selected agencies' reporting of real property cost savings data, GAO identified several challenges that reduced the reliability and transparency of the data the government reported. For example, OMB did not require agencies to provide detailed documentation of their reported savings or include specific information about agencies' reported savings on Performance.gov, limiting transparency. Furthermore, guidance issued by OMB was not clear on the types of savings that could be reported, particularly because the term "cost savings" was not clearly defined. GAO recommended that OMB establish clear and specific standards to help ensure reliability and transparency in the reporting of future real-property cost savings. OMB generally agreed with the recommendation. GAO is determining the extent to which OMB has implemented it and GAO plans to report the results as part of GAO's 2015 high risk update.

The Employee Retirement Income Security Act of 1974 (ERISA) provides a comprehensive federal scheme for the regulation of private-sector employee benefit plans. One of the primary goals in enacting ERISA was to "protect ... the interests of participants and ... beneficiaries" of employee benefit plans, and assure that participants receive promised benefits from their employers. To this end, ERISA "provid[es] for appropriate remedies, sanctions, and ready access to the Federal courts." An integral part of ERISA's enforcement scheme is ERISA Section 502(a), which allows private parties as well as government entities to bring various civil actions to enforce provisions of ERISA. In general, ERISA regulates two types of pension plans, defined benefit plans and defined contribution plans. A defined benefit plan is a plan under which an employee is promised a specified future benefit, traditionally an annuity beginning at retirement. In a defined benefit plan, the employer bears the investment risk and is responsible for any shortfalls. By contrast, a defined contribution plan provides each participant with an individual account that accrues benefits based on amounts contributed to the account by both the employer and the employee. The employee bears the investment risk, and thus the value of the account at the time of retirement is unknown. ERISA subjects both defined benefit and defined contribution plans to a number of requirements, including requirements for fiduciary responsibility. Section 502(a)(2) of ERISA authorizes the Secretary of Labor, a participant, a beneficiary, or a plan fiduciary to bring a civil action caused by a breach of fiduciary duty under Section 409 of ERISA. That section makes a plan fiduciary personally liable for breaches against an ERISA plan, and a breaching fiduciary must make good to the plan "any losses to the plan resulting from a breach" and restore to the plan any profits made from using the assets of the plan in improper ways. It also subjects such a fiduciary to other relief as a court may deem appropriate, including removal of the fiduciary. One controversial issue with respect to breach of fiduciary duty claims under ERISA is that while an individual plaintiff ( e.g. , a plan participant) may bring a civil action under Section 502(a)(2), the Supreme Court has found that any recovery must "inure[] to the benefit of a plan as a whole." In Massachusetts Mutual Life Insurance Co. v. Russell , the Supreme Court ruled that a plan beneficiary could not bring a civil action for monetary damages against a plan fiduciary who had been responsible for the improper processing of a benefit claim. The plaintiff in Russell , who was disabled with a back ailment, alleged that she was injured when her employer's disability committee terminated her disability benefits. The Court rejected the beneficiary's claim, explaining ERISA Section 409 did not authorize a beneficiary to bring a claim against a fiduciary for monetary damages. Based on the text of Section 409 and the legislative history of ERISA, the Court opined that relief for an individual beneficiary was not available under Section 409 based on the idea that a plaintiff could only recover losses on behalf of the entire plan. In LaRue , the plaintiff, a participant in a 401(k) plan administered by his former employer, requested that plan administrators change an investment in his individual account. The plan administrators failed to make this change, and the individual's account allegedly suffered losses of approximately $150,000. LaRue brought an action against his former employer and the 401(k) plan, claiming the plan administrator breached his fiduciary duty by neglecting to properly follow the investment instructions. LaRue brought a claim in district court under ERISA Section 502(a)(3), which permits a participant to bring a civil action to enjoin any act or practice which violates ERISA or the terms of the plan, or obtain "appropriate equitable relief" for these violations. The participant argued that because the defendants failed to invest the money as he directed, his account was depleted and he was entitled to receive "make-whole" or "other equitable relief" under Section 502(a)(3). The district court dismissed the participant's claims, holding that because the defendant did not possess any of the funds belonging to the participant, the relief the participant sought was monetary damages, and this remedy was not available to the plaintiff as "equitable relief" under Section 502(a)(3). LaRue appealed the decision, arguing to the Fourth Circuit Court of Appeals that he should be able to recoup losses under both 502(a)(3) and 502(a)(2) of ERISA. The court affirmed the district court's decision with regard to Section 502(a)(3), finding that the make-whole relief the participant sought could not be characterized as "equitable" relief. With regard to Section 502(a)(2), the court found that because the argument regarding Section 502(a)(2) was raised for the first time on appeal, the argument was waived. However, the court did discuss the merits of the Section 502(a)(2) claim. Relying on the Russell case, the Fourth Circuit held that LaRue's claim failed because Section 502(a)(2) provides remedies only for an entire plan, not for an individual's account. The court focused on the idea that the loss was personal to the defendant and was suffered by him alone. While the court acknowledged that the participant's plan account was indeed part of the "entire plan," the court found no basis to interpret the statute in this manner, and claimed that such an interpretation could undermine Congress's intent to limit the scope of relief under ERISA. Given that the plaintiff sought to recover losses only for himself, the participant could not sue under Section 502(a)(2). The Supreme Court rejected the Fourth Circuit's decision with respect to Section 502(a)(2), finding that "although §502(a)(2) does not provide a remedy for individual injuries distinct from plan injuries, that provision does authorize recovery for fiduciary breaches that impair the value of plan assets in a participant's individual account." The Department of Labor, writing an amicus brief in LaRue , had argued for this result. In explaining the holding, Justice Stevens, writing for the majority, distinguished LaRue from the Russell case in two ways. First, the Court explained that the type of fiduciary misconduct occurring in LaRue violated "principal statutory duties" imposed by ERISA that "relate to the proper plan management, administration, and investment of fund assets." Conversely, in Russell , the fiduciary's breach ( i.e. , a delay in processing a benefit claim) fell outside of these principal duties. Second, the Court found that in Russell, the emphasis placed on protecting the "entire plan" from fiduciary breach under Section 409 applies to defined benefit plans, which were the norm at the time of the case. However, as the Supreme Court noted in LaRue , defined contribution plans are more popular today, and the "entire plan" language in Russell does not apply to these plans. The Court explained that for defined benefit plans, fiduciary misconduct would not affect an individual entitlement to a benefit unless the misconduct detrimentally affected the entire plan. By contrast, "for defined contribution plans ... fiduciary misconduct need not threaten the solvency of the entire plan to reduce benefits below the amount that participants would otherwise receive." The Court went on to note that "whether a fiduciary breach diminishes plan assets payable to all participants and beneficiaries, or only to persons tied to particular individual accounts, it creates the kinds of harms that concerned the draftsmen of §409." Although all of the justices agreed on the outcome of the LaRue case, they disagreed as to the reasoning behind it. Chief Justice Roberts, joined by Justice Kennedy, wrote a concurring opinion suggesting that it is "at least arguable" that a claim such as the one made in LaRue should be evaluated not as a breach of fiduciary duty claim, but as a claim for benefits brought under Section 502(a)(1)(B) of ERISA. Justice Roberts pointed to the fact that allowing a Section 502(a)(1)(B) action to be brought as a claim under Section 502(a)(2) could allow plaintiffs to circumvent certain protections that exist for plan administrators under Section 502(a)(1)(B). For example, as Justice Roberts pointed out, most courts recognize that before a plaintiff can bring a claim for benefits under Section 502(a)(1)(B), that a plaintiff has to exhaust the administrative remedies available under the plan before filing suit. The extra protections for a plan and its administrators, Justice Roberts explains, encourage employers and others to offer benefits to employees. Justice Thomas, writing a separate concurrence joined by Justice Scalia, found the majority's reliance on "trends in the pension market" and the "concerns of ERISA's drafters" to be misplaced. Justice Thomas concluded that the participant had a legitimate claim based on the "unambiguous text" of Sections 409 and 502(a)(2). Justice Thomas articulated that losses to the participant's individual 401(k) account were losses to the plan, because assets in the participant's account were plan assets. A defined contribution plan, the Justice points out, is not a "collection of unrelated accounts." These plans are "essentially the sum of [their] parts" and that losses to an individual account must be losses to the plan under ERISA. As has been pointed out, the LaRue case affirmed that individuals participating in defined contribution plans may bring a claim in the event that a plan fiduciary's inappropriate actions create losses to an individual's account. While some commentators praised the LaRue decision for offering protection to individuals in 401(k) plans, others have suggested that the case will likely lead to an increase in litigation of claims by 401(k) participants who have suffered individual account losses. One question arising from the LaRue decision is the implications of Justice Roberts's concurrence. Courts may be faced with the issue of whether the availability of relief under Section 502(a)(1)(B) affects a participant's ability to bring a claim under Section 502(a)(2). Another question is whether, under Section 502(a)(2), a participant is required to exhaust administrative remedies provided by a plan before filing suit. This question was raised in a footnote in the majority opinion, but was not answered by the Court.

In LaRue v. DeWolff, Boberg & Associates , a participant in a 401(k) plan requested that plan administrators change an investment in his individual account. The plan administrators failed to make this change, and the individual's account allegedly suffered losses. The participant brought an action against his former employer and the 401(k) plan, claiming the plan administrator breached his fiduciary duty by neglecting to properly follow the investment instructions. At issue in the LaRue case was whether an individual could bring an action under ERISA to recover the losses. The Supreme Court held that a plan participant in a 401(k) plan could sue a plan fiduciary under Section 502(a)(2) of ERISA to recover losses caused by a fiduciary breach that only affected his individual account. This report discusses breach of fiduciary duty claims under ERISA Section 502(a)(2) and the LaRue case, and will be updated as events warrant.

Crime is ordinarily proscribed, tried, and punished according to the laws of the place where it occurs. American criminal law applies beyond the geographical confines of the United States, however, under certain limited circumstances. A surprising number of federal criminal statutes have extraterritorial application, but prosecutions have been relatively few. This may be because when extraterritorial criminal jurisdiction does exist, practical and legal complications, and sometimes diplomatic considerations, may counsel against its exercise. Legislative Powers : The Constitution does not forbid either congressional or state enactment of laws that apply outside the United States. Nor does it prohibit either the federal government or the states from prosecuting conduct committed abroad. In fact, several passages suggest that the Constitution contemplates the application of American law beyond the geographic confines of the United States. It speaks, for example, of "felonies committed on the high seas," "offences against the law of nations," "commerce with foreign nations," and of the impact of treaties. Limitations : Nevertheless, the powers granted by the Constitution are not without limit. The clauses enumerating Congress's powers carry specific and implicit limits that govern the extent to which the power may be exercised overseas. Other limitations appear elsewhere in the Constitution, most notably in the due process clauses of the Fifth Amendment. A related due process challenge is based on notice. It is akin to the concerns over secret laws and vague statutes, the exception to the maxim that ignorance of the law is no defense. Conceding this outer boundary, however, the courts fairly uniformly have held that questions of extraterritoriality are almost exclusively within the discretion of Congress; a determination to grant a statutory provision extraterritorial application—regardless of its policy consequences—is not by itself constitutionally suspect. For this reason, the question of the extent to which a particular statute applies outside the United States has generally been considered a matter of statutory, rather than constitutional, construction. General rules of statutory construction have emerged that can explain, if not presage, the result in a given case. The first of these rules holds that a statute that is silent on the question of its application abroad will be construed to have only domestic application unless there is a clear indication of some broader intent. At least until recently, the second rule of construction stated that the nature and purpose of a statute may provide an indication of whether Congress intended a statute to apply beyond the confines of the United States. Although hints of it can be found earlier, the rule was first clearly announced in United States v. Bowman . The Supreme Court's emphatic endorsement of the domestic presumption in a civil context in Morrison cast some doubt on Bowman 's continued vitality. Early indications were that the courts and commentators were unwilling to go that far. The Court in RJR Nabisco , another civil case, however, may have changed that. In RJR Nabisco , the Court seemed to take direct aim at Bowman without naming it. There may be some real question of the extent to which the Court still considers Bowman good law. The final rule declares that unless a contrary intent is clear, Congress is assumed to have acted so as not to invite action inconsistent with international law. International law supports rather than dictates decisions in the area of the overseas application of American law. Neither Congress nor the courts are bound to the dictates of international law when enacting or interpreting statutes with extraterritorial application. Yet Congress looks to international law when it evaluates the policy considerations associated with legislation that may have international consequences. For this reason, the courts interpret legislation with the presumption that Congress or the state legislature intends its laws to be applied within the bounds of international law, unless it indicates otherwise. Congress has expressly provided for the extraterritorial application of federal criminal law most often by outlawing various forms of misconduct when they occur "within the special maritime and territorial jurisdiction of the United States." The obligations and principles of various international treaties, conventions, or agreements to which the United States is a party supply the theme for a second category of federal criminal statutes with explicit extraterritorial application. Members of another category of explicit extraterritorial federal criminal statutes either cryptically declare that their provisions are to apply overseas or describe a series of jurisdictional circumstances under which their provisions have extraterritorial application, not infrequently involving the foreign commerce of the United States in conjunction with other factors. The Supreme Court in RJR Nabisco did endorse implied extraterritoriality in the case of "piggyback" statutes—conspiracy, attempt, aiding and abetting, among them—whose provisions are necessarily predicated on some other crime and whose overseas application matches that of its predicates. Federal crimes committed abroad present investigators and prosecutors with legal, practical, and often diplomatic obstacles that can be daunting. With respect to diplomatic concerns, the Third Restatement of Foreign Relations Law observes: It is universally recognized, as a corollary of state sovereignty, that officials of one state may not exercise their functions in the territory of another state without the latter's consent. Thus, while a state may take certain measures of nonjudicial enforcement against a person in another state, ... its law enforcement officers cannot arrest him in another state, and can engage in criminal investigation in that state only with that state's consent. Failure to comply can result in strong diplomatic protests, liability for reparations, and other remedial repercussions, to say nothing of the possible criminal prosecution of offending foreign investigators. Mutual Legal Assistance Treaties and Agreements : Congress has endorsed diplomatic efforts to increase multinational cooperative law enforcement activities. The United States has over 70 mutual legal assistance treaties in force. They ordinarily provide clauses for locating and identifying persons and items; service of process; executing search warrants; taking witness depositions; persuading foreign nationals to come to the United States voluntarily to present evidence here; and forfeiture-related seizures. Cooperative Efforts : American law enforcement officials have historically used other, often less formal, cooperative methods overseas to investigate and prosecute extraterritorial offenses. Over the last few decades the United States has taken steps to facilitate cooperative efforts. In addition to the more traditional presence of members of the Armed Forces and State Department personnel and contractors, federal civilian law enforcement agencies have assigned an increasing number of personnel overseas. Search and Seizure Abroad : Overseas cooperative law enforcement assistance occasionally has Fourth Amendment implications. The Supreme Court's United States v. Verdugo-Urquidez decision makes it clear that the Fourth Amendment does not apply to the search of the overseas property of foreign nationals unless the property owner has some "previous significant voluntary connections with the United States." The Fourth Amendment's application abroad to U.S. citizens and foreign nationals with significant connections to the United States is less clear. Prior to Verdugo-Urquidez , neither the Fourth Amendment nor its exclusionary rule were considered applicable to foreign searches and seizures conducted by foreign law enforcement officials, except under two circumstances. The first covered foreign conduct that "shocked the conscience of the court." The second reached foreign searches or seizures in which U.S. law enforcement officials were so deeply involved as to constitute "joint ventures" or some equivalent level of participation. Since Verdugo-Urquidez , the courts have held as a general rule the Fourth Amendment is inapplicable to searches or seizures of U.S. citizens by foreign officials in other countries, but have continued to acknowledge the "joint venture" and "shocked conscience" rarely found exceptions to the general rule. Nevertheless, "the Fourth Amendment's reasonableness standard applies to United States officials conducting a search affecting a United States citizen in a foreign country." On the other hand, even under such circumstances, "a foreign search is reasonable if it conforms to the requirements of foreign law," and "such a search will be upheld under the good faith exception to the exclusionary rule when United States officials reasonably rely on foreign officials' representations of foreign law." Self-Incrimination Overseas : Like the Fourth Amendment protection against unreasonable searches and seizures, the Fifth Amendment self-incrimination clause and its attendant Miranda warning requirements do not apply to statements made overseas to foreign officials subject to the same "joint venture" and "shocked conscience" exceptions. The Fifth Amendment and Miranda requirements do apply to custodial interrogations conducted overseas by American officials regardless of the nationality of the defendant. As a general rule to be admissible at trial in this country, however, any confession or other criminating statements must have been freely made. Statute of Limitations: 18 U.S.C. Section 3292 and Related Matters : As a general rule, prosecution of federal crimes must begin within five years. Federal capital offenses, certain federal sex offenses, and various violent federal terrorist offenses, however, may be prosecuted at any time. Prosecution of nonviolent federal terrorism offenses must begin within eight years. Moreover, the statute of limitations is suspended or tolled during any period in which the accused is a fugitive. Whatever the applicable statute of limitations, Section 3292 authorizes the federal courts to suspend it in order to await the arrival of evidence requested of a foreign government. Extradition : Extradition is perhaps the oldest form of international law enforcement assistance. It is a creature of treaty by which one country surrenders a fugitive to another for prosecution or service of sentence. The United States has bilateral extradition treaties with roughly two-thirds of the nations of the world. Treaties negotiated before 1960 and still in effect reflect the view then held by the United States and other common law countries that criminal jurisdiction was territorial and consequently extradition could not be had for extraterritorial crimes. Subsequently negotiated agreements either require extradition regardless of where the offense occurs, permit extradition regardless of where the offense occurs, or require extradition where the extraterritorial laws of the two nations are compatible. More recent extradition treaties address other traditional features of the nation's earlier agreements that complicate extradition, most notably the nationality exception, the political offense exception, and the practice of limiting extradition to a list of specifically designated offenses. As an alternative to extradition, particularly if the suspect is not a citizen of the country of refuge, foreign authorities may be willing to expel or deport him under circumstances that allow the United States to take him into custody. In the absence of a specific treaty provision, the fact that the defendant was abducted overseas and brought to the United States for trial rather than pursuant to a request under the applicable extradition treaty does not deprive the federal court of jurisdiction to try him. Venue : Federal crimes committed within the United States must be tried where they occur. Crimes committed outside the United States are tried where Congress has provided. Congress has enacted both general and specific venue statutes governing extraterritorial offenses. Section 3238, the general provision, permits the trial of extraterritorial crimes either (1) in the district into which the offender is "first brought" or in which he is arrested for the offense; or (2) prior to that time, by indictment or information in the district of the offender's last known residence, or if none is known, in the District of Columbia. The phrase "first brought" as used in Section 3238 means "first brought while in custody." As the language of the section suggests, venue for all joint offenders is proper wherever venue for one of their number is proper. Courts are divided over whether Section 3238 may be applied even though venue may have been proper without recourse to its provisions. Testimony of Witnesses Outside the United States: Federal courts may subpoena a U.S. resident or national found abroad to appear before it or the grand jury. They ordinarily have no authority to subpoena a foreign national located in a foreign country. Mutual legal assistance treaties and similar agreements generally contain provisions to facilitate a transfer of custody of foreign witnesses who are imprisoned overseas and in other instances to elicit assistance to encourage foreign nationals to come to this country and testify voluntarily. Unable to secure the presence of foreign witnesses located aboard, federal courts may authorize depositions to be taken abroad, under "exceptional circumstances and in the interests of justice," and under even more limited circumstances, they may admit such depositions into evidence in a criminal trial. When a deposition is taken abroad, the courts prefer that the defendant be present, that his counsel be allowed to cross-examine the witness, that the deposition be taken under oath, that a verbatim transcript be taken, and that the deposition be captured on videotape; but they have permitted depositions to be admitted into evidence at subsequent criminal trials in this country, notwithstanding the fact that one or more of these optimal conditions are not present. In nations whose laws might not otherwise require, or even permit, depositions under conditions considered preferable under U.S. law, a treaty provision sometimes addresses the issue. National Security Concerns : When witnesses and other evidence are located abroad, a defendant's statutory and constitutional rights may conflict with the government's need for secrecy for diplomatic and national security reasons. Rule 16 of the Federal Rules of Criminal Procedure entitles a defendant to disclosure of any of his statements in the government's possession, but the prosecution's case may have evolved from foreign intelligence gathering. The Sixth Amendment assures a criminal defendant of "compulsory process for obtaining witnesses in his favor," but providing a witness who is also a terrorist suspect and in federal custody may have an adverse impact on the witness's value as an intelligence source. The Sixth Amendment promises a criminal defendant the right to confront the witnesses against him, even a witness who presents classified information to the jury. Congress has provided the Classified Information Procedures Act (CIPA) as a means of accommodating the conflict of interests. The CIPA permits the court to approve prosecution-prepared summaries of classified information to be disclosed to the defendant and introduced in evidence, as a substitute for the classified information. The summaries, however, must be an adequate replacement for the classified information, because ultimately the government's national security interests "cannot override the defendant's right to a fair trial."

Criminal law is usually territorial. It is a matter of the law of the place where it occurs. Nevertheless, a number of American criminal laws apply extraterritorially outside of the United States. Application is generally a question of legislative intent, express or implied. There are two exceptions. First, the statute must come within Congress's constitutional authority to enact. Second, neither the statute nor its application may violate due process or any other constitutional prohibition. Claims of implied extraterritoriality must overcome additional obstacles. Federal laws are presumed to apply only within the United States, unless Congress clearly provides otherwise. Moreover, the courts will also presume that Congress intends its statutes to be applied in a manner that does not offend international law. Historically, in order to overcome these presumptions, the lower federal courts have read certain vintage Supreme Court cases broadly. The Supreme Court's recent pronouncements in Morrison v. National Australia Bank, Ltd. and RJR Nabisco, Inc. v. European Community, however, suggest a far more restrictive view. Although the crimes over which the United States has extraterritorial jurisdiction may be many, so are the obstacles to their enforcement. For both practical and diplomatic reasons, criminal investigations within another country require the acquiescence, consent, or preferably the assistance, of the authorities of the host country. The United States has mutual legal assistance treaties with several countries designed to formalize such cooperative law enforcement assistance. It has agreements for the same purpose in many other instances. Cooperation, however, may introduce new obstacles. Searches and interrogations carried out jointly with foreign officials, certainly if they involve Americans, must be conducted within the confines of the Fourth and Fifth Amendments. And the Sixth Amendment imposes limits upon the use in American criminal trials of depositions taken abroad. The nation's recently negotiated extradition treaties address some of the features of earlier agreements which complicate extradition for extraterritorial offenses, that is, dual criminality requirements; reluctance to recognize extraterritorial jurisdiction; and exemptions on the basis of nationality or political offenses. To facilitate the prosecution of federal crimes with extraterritorial application Congress has enacted special venue, statute of limitations, and evidentiary statutes. To further cooperative efforts, it enacted the Foreign Evidence Request Efficiency Act, P.L. 111-79, which authorizes federal courts to issue search warrants, subpoenas, and other orders to facilitate criminal investigations in this country on behalf of foreign law enforcement officials. This report is an abridged version of a report, which with citations to authority, footnotes, attachments, and bibliography, appears as CRS Report 94-166, Extraterritorial Application of American Criminal Law, by Charles Doyle.

S ection 1332 of the Patient Protection and Affordable Care Act (ACA; P.L. 111-148 , as amended) allows states to apply for waivers of specified provisions of the ACA. Under a state innovation waiver, a state is expected to implement a plan (in place of the waived provisions) that meets certain minimum requirements. The Centers for Medicare & Medicaid Services' (CMS's) initial interpretation of these requirements was published in guidance released in 2015 but has since been superseded, as with other aspects of the waiver process, in updated guidance released by the agency on October 24, 2018. Under current guidance, the state's plan must provide health insurance coverage to as many state residents as would be covered absent the waiver and must make available to a comparable number of residents coverage that is both as affordable and as comprehensive as it would be absent the waiver. However, applications do not need to demonstrate that the affordable and comprehensive health insurance coverage will be purchased by a comparable number of state residents. Additionally, the state's plan cannot increase the federal deficit. This report answers frequently asked questions about how states can use and apply for state innovation waivers. It also addresses recent changes to the Section 1332 waiver process, as made by the 2018 CMS guidance. A state may apply to waive any or all of the ACA provisions listed below for plan years beginning on or after January 1, 2017. Part I of S ubtitle D of the ACA : Part I of Subtitle D comprises Sections 1301-1304. In general, the provisions in Part I relate to the establishment of qualified health plans (QHPs). Part II of S ubtitle D of the ACA : Part II of Subtitle D comprises Sections 1311-1313, which largely include provisions related to the establishment of health insurance exchanges and related activities. Section 1402 of the ACA : This section includes the provision of cost-sharing reductions to eligible individuals who purchase individual market coverage through a health insurance exchange. Section 36B of the Internal Revenue Code (IRC) : This section includes the provision of premium tax credits to eligible individuals who purchase individual market coverage through a health insurance exchange. Section 4980H of the IRC: This section includes the shared responsibility requirement for large employers (often called the employer mandate ). Section 5000A of the IRC: This section includes the requirement for individuals to maintain health insurance coverage (often called the individual mandate ). Each part noted above is comprised of many provisions, which makes the scope of the provisions that can be waived under a state innovation waiver quite broad. For example, Part I of Subtitle D of the ACA includes provisions that outline requirements for health plans to be certified as QHPs. It defines the essential health benefits (EHB) package that each QHP must offer, places limitations on the enrollee cost sharing that QHPs may impose, and requires that QHPs provide coverage meeting a minimum level of actuarial value. Additionally, Part I of Subtitle D establishes requirements for catastrophic health plans and determines eligibility for such plans. The Secretary of the Department of Health and Human Services (HHS) is to review and grant waiver requests for provisions not included in the IRC; the Secretary of the Treasury is to review and grant requests to waive provisions in the IRC (the availability of premium tax credits and the application of the employer and individual mandates). The Secretary of HHS or the Treasury is to assess a waiver application to determine whether the state's plan meets the requirements related to coverage, affordability, comprehensiveness, and federal-deficit neutrality outlined in statute and further described in guidance. These requirements are described in Table 1 . The Secretary or Secretaries (as appropriate) may grant a request for a state innovation waiver if a state's application meets the requirements. In making this determination, the Secretaries will "consider favorably" any waiver that incorporates some or all of the following principles: provide increased access to affordable private market coverage, encourage sustainable spending growth, foster state innovation, support and empower those in need, and promote consumer-driven health care. In guidance, HHS and the Treasury note that their assessment of a state's waiver application considers changes to the state's health care system that are contingent only upon approval of the waiver. Their assessment does not consider policy changes that are dependent on further state action or other federal determinations. For example, the Secretary's or Secretaries' (as appropriate) assessment of a state innovation waiver application would not consider changes to Medicaid or the state Children's Health Insurance Program (CHIP) that require approval outside of the state innovation waiver process, and savings accrued as a result of changes to Medicaid or CHIP would not be considered when determining whether the state innovation waiver meets the deficit-neutrality requirement. HHS and the Treasury indicate that this is the case regardless of whether a state's application for a state innovation waiver is submitted alone or in coordination with another waiver application. (For more information about the coordinated waiver process, see " May States Submit State Innovation Waiver Applications in Coordination with Other Federal Waiver Applications? ") Although not possible initially, HHS and the Treasury indicated in the updated guidance released in October 2018 that technical enhancements have made it feasible for CMS to support some federally facilitated health insurance exchange (FFE) variation. For example, waivers that would require a state to create its own website to replace the consumer-facing aspects of HealthCare.gov also can incorporate CMS's enrollment functionalities (e.g., account creation, application, enrollment and coverage maintenance experience for consumers). States are asked to work with HHS early in the waiver application process to determine whether specific modifications can be accommodated. States are responsible for funding all FFE modifications and associated operational support. Therefore, these costs are not considered when determining whether a waiver application satisfies the deficit neutrality requirement; however, any other changes to CMS administrative processes are taken into account. In guidance issued in October 2018, HHS and the Treasury describe some federal operational considerations that may limit the scope of the waivers. Specifically, the Internal Revenue Service (IRS) generally is not able to accommodate any state-specific changes to tax rules. The IRS may be able to accommodate small changes to the administration of federal tax provisions, in particular when such changes overlap with the IRS's current capabilities. For example, waivers that would require the IRS to expand premium tax credit eligibility to individuals with household income under 100% of the federal poverty level may be feasible, because it incorporates a similar special rule that the IRS currently administers. States are responsible for funding all changes to IRS administrative processes associated with wavier implementation. These costs are incorporated into the assessment of whether a waiver application satisfies the deficit neutrality requirement. A state seeking a state innovation waiver must enact a law that allows the state to carry out the actions under the waiver prior to submitting an application for a waiver. In certain circumstances, a state can be considered to have enacted such a law by coupling a state law that enforces ACA provisions and/or the state plan with administrative or executive actions. Prior to submitting an application, a state must provide a public notice and comment period and conduct public hearings regarding the state's application. Upon conclusion of these activities, a state may submit its application to the Secretary of HHS. The Secretary of HHS is to transmit any application seeking to waive requirements in the IRC to the Secretary of the Treasury for review. The Secretary or Secretaries (as appropriate) are to review a state's application to determine whether it is complete. A state's application is not considered complete unless it includes the materials identified in regulations. The materials include, but are not limited to, information about the enacted state legislation allowing the state to carry out the actions under the waiver, a description of the plan or program the state expects to implement in place of the waived provisions, and analyses showing that the state's plan or program meets the requirements for granting a waiver. If a state's application is not complete, the state is to be notified about the missing elements and given an opportunity to submit them. Once the Secretary or Secretaries (as appropriate) make a preliminary determination that a state's application is complete, the entire application is to be made available to the public for review and comment. The final decision of the Secretary or Secretaries on a state's application must be issued no later than 180 days after the determination that the Secretary of HHS received a complete application from a state. It is possible for a state to receive federal funding under an approved waiver. A state's receipt of a state innovation waiver could result in the residents of the state not receiving the "premium tax credits, cost-sharing reductions, or small business credits under sections 36B of the Internal Revenue Code of 1986 or under part I of subtitle E for which they would otherwise be eligible." If this occurs, the state is to receive the aggregate amount of subsidies that would have been available to the state's residents had the state not received a state innovation waiver—this is referred to as pass-through funding . The amount of pass-through funding is to be determined annually by the appropriate Secretary and may be updated at any time to account for changes in state or federal law. The state is to use the pass-through funding for purposes of implementing the plan or program established under the waiver. State innovation waivers cannot extend longer than five years unless a state requests continuation and such request is not denied by the appropriate Secretary. Requests for continuation are to be deemed granted if they are not denied by the appropriate Secretary within 90 days of submission. The Secretaries are required to develop a process for coordinating applications for state innovation waivers and applications for other existing waivers under federal law relating to the provision of health care, including waivers available under Medicare, Medicaid, and CHIP. Under the coordinated process, a state must be able to submit a single application for a state innovation waiver and any other applicable waivers available under federal law. The single application must comply with the procedures described for state innovation waiver applications and the procedures in any other applicable federal law under which the state seeks a waiver. As discussed in the answer to the question " What Are the Minimum Requirements for a Successful Application? ," HHS and the Treasury have indicated that an application for a state innovation waiver will be assessed on its own terms and that assessment of the state innovation waiver will not consider the impact of changes that require separate federal approval. This is the case even if the state submits a single application for multiple waivers. As of the date of this report, 14 states have submitted applications for state innovation waivers—Alaska, California, Hawaii, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Jersey, Ohio, Oklahoma, Oregon, Vermont, and Wisconsin. HHS and the Treasury have approved eight applications, from Alaska, Hawaii, Maine, Maryland, Minnesota, New Jersey, Oregon, and Wisconsin. All of these waivers were considered and approved under the initial state innovation waiver guidance, and all but one of the approved waivers implement a variant of a statewide individual market reinsurance program. Massachusetts, Ohio, and Vermont received notification from HHS and the Treasury that their applications were incomplete, and it does not appear that any of these states has modified its application in response to the notification. If one of these three states does take action, any further review of its waiver application would be under the updated state innovation waiver guidance. California, Iowa, and Oklahoma have withdrawn their applications. See Table 2 for more details.

Section 1332 of the Patient Protection and Affordable Care Act (ACA; P.L. 111-148, as amended) provides states with the option to waive specified requirements of the ACA. In the absence of these requirements, a state is to implement its own plan to provide health insurance coverage to state residents that meets the ACA's terms. Under a state innovation waiver, a state can apply to waive ACA requirements related to qualified health plans, health insurance exchanges, premium tax credits, cost-sharing subsidies, the individual mandate, and the employer mandate. The state can apply to waive any or all of these requirements, in part or in their entirety. To obtain approval for a waiver application, a state must show that the plan it will implement in the absence of the waived provision(s) meets certain requirements. Under current guidance, the state's plan must provide coverage to as many state residents as would be covered absent the waiver and must make available to a comparable number of residents coverage that is both as affordable and as comprehensive as would be absent the waiver. However, applications do not need to demonstrate that the affordable and comprehensive coverage will be purchased by a comparable number of state residents. Additionally, the state's plan cannot increase the federal deficit. The Secretary of the Department of Health and Human Services (HHS) and the Secretary of the Treasury share responsibility for reviewing state innovation waiver applications and deciding whether to approve applications. The earliest a state innovation waiver could have gone into effect was January 1, 2017. In October 2018, the Centers for Medicare & Medicaid Services (CMS) released updated guidance regarding the state innovation waiver process that superseded previously issued CMS guidance from December 2015. In general, the updated guidance attempts to make it easier for a state plan to be approved. The updated guidance applies to all waiver applications that had not been approved prior to the date of the guidance's release. Waivers approved under the previously issued guidance did not require reconsideration. As of the date of this report, eight states—Alaska, Hawaii, Maine, Maryland, Minnesota, New Jersey, Oregon, and Wisconsin—have approved state innovation waivers. All of these waivers were considered and approved under the initial state innovation waiver guidance, and all but one of the approved waivers implement a variant of a statewide individual market reinsurance program. Massachusetts, Ohio, and Vermont have submitted applications and received notification that their applications were incomplete. It does not appear that any of these states has modified its application in response to the notification (as of the date of this report). If these states take action, any further review of their waiver application would be under the updated state innovation waiver guidance. Three states—California, Iowa, and Oklahoma—submitted waiver applications and have since withdrawn their applications.

In July 2005, we reported that DHS had established a draft Target Capabilities List that provides guidance on the specific capabilities and levels of capability that FEMA would expect federal, state, local, and tribal first responders to develop and maintain. We reported that DHS defined these capabilities generically and expressed them in terms of desired operational outcomes and essential characteristics, rather than dictating specific, quantifiable responsibilities to the various jurisdictions. DHS planned to organize classes of jurisdictions that share similar characteristics—such as total population, population density, and critical infrastructure—into tiers to account for reasonable differences in capability levels among groups of jurisdictions and to appropriately apportion responsibility for development and maintenance of capabilities among levels of government and across these jurisdictional tiers. According to DHS’s Assessment and Reporting Implementation Plan, DHS intended to implement a capability assessment and reporting system based on target capabilities that would allow first responders to assess their preparedness to identify gaps, excesses, or deficiencies in their existing capabilities or capabilities they will be expected to access through mutual aid. In addition, this information could be used to measure the readiness of federal civil response assets and the use of federal assistance at the state and local level and to provide a means of assessing how federal assistance programs are supporting national preparedness. In implementing this plan, DHS intended to collect preparedness data on the capabilities of the federal government, states, local jurisdictions, and the private sector to provide information about the baseline status of national preparedness. DHS’s efforts to implement these plans were interrupted by the 2005 hurricane season. In August 2005, Hurricane Katrina—the worst natural disaster in our nation’s history—made final landfall in coastal Louisiana and Mississippi, and its destructive force extended to the western Alabama coast. Hurricane Katrina and the following Hurricanes Rita and Wilma— also among the most powerful hurricanes in the nation’s history— graphically illustrated the limitations at that time of the nation’s readiness and ability to respond effectively to a catastrophic disaster, that is, a disaster whose effects almost immediately overwhelm the response capacities of affected state and local first responders and require outside action and support from the federal government and other entities. In June 2006, DHS concluded that target capabilities and associated performance measures should serve as the common reference system for preparedness planning. In September 2006, we reported that numerous reports and our work suggest that the substantial resources and capabilities marshaled by federal, state, and local governments and nongovernmental organizations were insufficient to meet the immediate challenges posed by the unprecedented degree of damage and the resulting number of hurricane victims caused by Hurricanes Katrina and Rita. We also reported that developing the capabilities needed for catastrophic disasters should be part of an overall national preparedness effort that is designed to integrate and define what needs to be done, where, based on what standards, how it should be done, and how well it should be done. In October 2006, Congress passed the Post-Katrina Act that required FEMA, in developing guidelines to define target capabilities, ensure that such guidelines are specific, flexible, and measurable. In addition, the Post-Katrina Act calls for FEMA to ensure that each component of the national preparedness system, which includes the target capabilities, is developed, revised, and updated with clear and quantifiable performance metrics, measures, and outcomes. We recommended, among other things, that DHS apply an all- hazards, risk management approach in deciding whether and how to invest in specific capabilities for a catastrophic disaster; DHS concurred, and FEMA said it planned to use the Target Capabilities List to assess capabilities to address all hazards. In September 2007, FEMA issued the Target Capabilities List to provide a common perspective to conduct assessments to determine levels of readiness to perform critical tasks and to identify and address any gaps or deficiencies. According to FEMA, policymakers need regular reports on the status of capabilities for which they have responsibility to help them make better resource and investment decisions and to establish priorities. Further, FEMA officials said that emergency managers and planners require assessment information to help them address deficiencies; to identify alternative sources of capabilities (e.g., from mutual aid or contracts with the private sector); and to identify which capabilities should be tested through exercises. Also, FEMA said that agencies or organizations that are expected to supplement or provide capabilities during an incident need assessment information to set priorities, make investment decisions, and position capabilities or resources, if needed. In April 2009, we reported that establishing quantifiable metrics for target capabilities was a prerequisite to developing assessment data that can be compared across all levels of government. At the time of our review, FEMA was in the process of refining the target capabilities to make them more measurable and to provide state and local jurisdictions with additional guidance on the levels of capability they need. Specifically, FEMA planned to develop quantifiable metrics—or performance objectives—for each of the 37 target capabilities that are to outline specific capability targets that jurisdictions (such as cities) of varying size should strive to meet, being cognizant of the fact that there is not a “one size fits all” approach to preparedness. However, FEMA has not yet completed these quantifiable metrics for its 37 target capabilities, and it is unclear when it plans to do so. In October 2009, in responding to congressional questions regarding FEMA’s plan and timeline for reviewing and revising the 37 target capabilities, FEMA officials said they planned to conduct extensive coordination through stakeholder workshops in all 10 FEMA regions and with all federal agencies with lead and supporting responsibility for emergency support-function activities associated with each of the 37 target capabilities. The workshops were intended to define the risk factors, critical target outcomes, and resource elements for each capability. The response stated that FEMA planned to create a Task Force comprised of federal, state, local, and tribal stakeholders to examine all aspects of preparedness grants, including benchmarking efforts such as the Target Capabilities List. FEMA officials have described their goals for updating the list to include establishing measurable target outcomes, providing an objective means to justify investments and priorities, and promoting mutual aid and resource sharing. In November 2009, FEMA issued a Target Capabilities List Implementation Guide that described the function of the list as a planning tool and not a set of standards or requirements. We reported in July 2005 that DHS had identified potential challenges in gathering the information needed to assess capabilities, including determining how to aggregate data from federal, state, local, and tribal governments and others and integrating self-assessment and external assessment approaches. In reviewing FEMA’s efforts to assess capabilities, we further reported in April 2009 that FEMA faced methodological challenges with regard to (1) differences in data available, (2) variations in reporting structures across states, and (3) variations in the level of detail within data sources requiring subjective interpretation. We recommended that FEMA enhance its project management plan to include milestone dates, among other things, a recommendation to which DHS concurred. In October 2010, we reported that FEMA had enhanced its project management plan. Nonetheless, the challenges we reported in July 2005 and April 2009 faced by DHS and FEMA, respectively, in their efforts to measure preparedness and establish a system of metrics to assess national capabilities have proved to be difficult for them to overcome. We reported that in October 2010, in general, FEMA officials said that evaluation efforts they used to collect data on national preparedness capabilities were useful for their respective purposes, but that the data collected were limited by data reliability and measurement issues related to the lack of standardization in the collection of data. For example, FEMA’s Deputy Director for Preparedness testified in October 2009 that the “Cost-to-Capabilities” (C2C) initiative developed by FEMA’s Grant Programs Directorate (at that time already underway for 18 months) had a goal as a multiyear effort to manage homeland security grant programs and prioritize capability-based investments. We reported in October 2010, that as a result of FEMA’s difficulties in establishing metrics to measure enhancements in preparedness capabilities, officials discontinued the C2C program. Similarly, FEMA’s nationwide, multiyear Gap Analysis Program implementation, proposed in March 2009, was “to provide emergency management agencies at all levels of government with greater situational awareness of response resources and capabilities.” However, as we reported in October 2010, FEMA noted that states did not always have the resources or ability to provide accurate capability information into its Gap Analysis Program response models and simulation; thus, FEMA had discontinued the program. FEMA officials reported that one of its evaluation efforts, the State Preparedness Report, has enabled FEMA to gather data on the progress, capabilities, and accomplishments of a state’s, the District of Columbia’s, or a territory’s preparedness program, but that these reports included self- reported data that may be subject to interpretation by the reporting organizations in each state and not be readily comparable to other states’ data. The officials also stated that they have taken steps to address these limitations by, for example, creating a Web-based survey tool to provide a more standardized way of collecting state preparedness information that will help FEMA officials validate the information by comparing it across states. We reported in October 2010 that FEMA officials said they had an ongoing effort to develop measures for target capabilities—as planning guidance to assist in state and local assessments —rather than as requirements for measuring preparedness by assessing capabilities; FEMA officials had not yet determined how they plan to revise the list and said they are awaiting the completed revision of Homeland Security Presidential Directive 8, which is to address national preparedness. As a result, FEMA has not yet developed national preparedness capability requirements based on established metrics to provide a framework for national preparedness assessments. Until such a framework is in place, FEMA will not have a basis to operationalize and implement its conceptual approach for assessing federal, state, and local preparedness capabilities against capability requirements to identify capability gaps for prioritizing investments in national preparedness. Mr. Chairman, this completes my prepared statement. I would be pleased to respond to any questions that your or other Members of the Committee may have at this time. For further information about this statement, please contact William O. Jenkins Jr., Director, Homeland Security and Justice Issues, at (202) 512- 8777 or jenkinswo@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this statement. In addition to the contact named above, the following individuals from GAO’s Homeland Security and Justice Team also made major contributions to this testimony: Chris Keisling, Assistant Director; John Vocino, Analyst-In-Charge; C. Patrick Washington, Analyst, and Lara Miklozek, Communications Analyst. This appendix presents additional information on the Federal Emergency Management Agency’s National Preparedness Guidelines as well as key steps and critical practices for measuring performance and results.

This testimony discusses the efforts of the Federal Emergency Management Agency (FEMA)--a component of the Department of Homeland Security (DHS)--to measure and assess national capabilities to respond to a major disaster. According to the Congressional Research Service, from fiscal years 2002 through 2010, Congress appropriated over $34 billion for homeland security preparedness grant programs to enhance the capabilities of state, territory, local, and tribal governments to prevent, protect against, respond to, and recover from terrorist attacks and other disasters. Congress enacted the Post-Katrina Emergency Management Reform Act of 2006 (Post-Katrina Act) to address shortcomings in the preparation for and response to Hurricane Katrina that, among other things, gave FEMA responsibility for leading the nation in developing a national preparedness system. The Post-Katrina Act requires that FEMA develop a national preparedness system and assess preparedness capabilities--capabilities needed to respond effectively to disasters--to determine the nation's preparedness capability levels and the resources needed to achieve desired levels of capability. Federal, state, and local resources provide capabilities for different levels of "incident effect" (i.e., the extent of damage caused by a natural or manmade disaster). FEMA's National Preparedness Directorate within its Protection and National Preparedness organization is responsible for developing and implementing a system for measuring and assessing national preparedness capabilities. The need to define measurable national preparedness capabilities is a well-established and recognized issue. For example, in December 2003, the Advisory Panel to Assess Domestic Response Capabilities noted that preparedness (for combating terrorism) requires measurable demonstrated capacity by communities, states, and private sector entities throughout the United States to respond to threats with well-planned, well-coordinated, and effective efforts. This is consistent with our April 2002 testimony on national preparedness, in which we identified the need for goals and performance indicators to guide the nation's preparedness efforts and help to objectively assess the results of federal investments. We reported that FEMA had not yet defined the outcomes of where the nation should be in terms of domestic preparedness. Thus, identifying measurable performance indicators could help FEMA (1) track progress toward established goals, (2) provide policy makers with the information they need to make rational resource allocations, and (3) provide program managers with the data needed to effect continual improvements, measure progress, and to enforce accountability. In September 2007, DHS issued the National Preparedness Guidelines that describe a national framework for capabilities-based preparedness as a systematic effort that includes sequential steps to first determine capability requirements and then assess current capability levels. According to the Guidelines, the results of this analysis provide a basis to identify, analyze, and choose options to address capability gaps and deficiencies, allocate funds, and assess and report the results. This proposed framework reflects critical practices we have identified for government performance and results. This statement is based on our prior work issued from July 2005 through October 2010 on DHS's and FEMA's efforts to develop and implement a national framework for assessing preparedness capabilities at the federal, state, and local levels, as well as DHS's and FEMA's efforts to develop and use metrics to define capability levels, identify capability gaps, and prioritize national preparedness investments to fill the most critical capability gaps. As requested, this testimony focuses on the extent to which DHS and FEMA have made progress in measuring national preparedness by assessing capabilities and addressing related challenges. In summary, DHS and FEMA have implemented a number of efforts with the goal of measuring preparedness by assessing capabilities and addressing related challenges, but success has been limited. DHS first developed plans to measure preparedness by assessing capabilities, but did not fully implement those plans. FEMA then issued the target capabilities list in September 2007 but has made limited progress in developing preparedness measures and addressing long-standing challenges in assessing capabilities, such as determining how to aggregate data from federal, state, local, and tribal governments. At the time of our review of FEMA's efforts in 2008 and in 2009, FEMA was in the process of refining the target capabilities to make them more measurable and to provide state and local jurisdictions with additional guidance on the levels of capability they need. We recommended in our April 2009 report that FEMA enhance its project management plan with, among other things, milestones to help it implement its capability assessment efforts; FEMA agreed with our recommendation. We reported in October 2010 that FEMA had enhanced its plan with milestones in response to our prior recommendation and that officials said they had an ongoing effort to develop measures for target capabilities--as planning guidance to assist in state and local assessments--rather than as requirements for measuring preparedness by assessing capabilities; FEMA officials had not yet determined how they plan to revise the list.

The genesis of the Religious Freedom Restoration Act (RFRA) lies in the Supreme Court's decision in Employment Division, Oregon Department of Human Resources v. Smith . In that case, decided in 1990, the Court narrowed the scope of the Free Exercise Clause of the First Amendment, which provides that "Congress shall make no law ... prohibiting the free exercise [of religion]." The specific issue before the Court in Smith was whether two Native Americans who had been fired from their jobs as drug counselors after they were discovered to have ingested peyote in a ritual of the Native American Church were eligible for state unemployment benefits. The Court determined that they were not, and in so doing also altered the standard of review generally used for free exercise cases. Before Smith , the Court had generally applied a strict scrutiny test to government action that allegedly burdened the exercise of religion. That test required the government to show that an action burdening religion served a compelling government interest and that no less burdensome course of action was feasible. If the government could not so demonstrate, the test required that the religious practice be exempted from the government regulation or prohibition at issue. In Smith , the Court abandoned the strict scrutiny test and held that religiously neutral laws may be uniformly applied to all persons without regard to any burden or prohibition placed on their exercise of religion. The Free Exercise Clause, the Court said, never "relieves an individual of the obligation to comply with a 'valid and neutral law of general applicability' on the ground the law proscribes (or prescribes) conduct that his religion prescribes (or proscribes)." In the case at hand, that new standard meant that the Free Exercise Clause mandated no religious exemption from Oregon's drug laws for Native American use of peyote in a sacramental ceremony and, consequently, no eligibility for unemployment benefits of the two Native Americans who lost their jobs because of their participation in such a ceremony. More generally, the Court asserted that the question of whether religious practices ought to be accommodated by government was a matter to be resolved by the political process and not by the courts, although it admitted that "leaving accommodation to the political process will place at a relative disadvantage those religious practices that are not widely engaged in...." In 1993, Congress enacted the Religious Freedom Restoration Act (RFRA) to restore the compelling interest test set forth in earlier cases in all circumstances where the freedom of religious exercise is being burdened and to provide a claim for relief when the government substantially burdens the religious exercise. Thus, RFRA granted government the right to substantially burden a person's exercise of religion only if it demonstrates that application of the burden to the person is (1) in furtherance of a compelling governmental interest and (2) the least restrictive means of furthering that compelling governmental interest. O Centro Espirita Beneficente Uniao do Vegetal (UDV) is a religious sect with origins in the Amazon Rainforest in which members of the church receive communion by drinking a sacramental tea containing a hallucinogen ( hoasca ) regulated under the Controlled Substances Act by the federal government. In 1999, federal agents seized a shipment of hoasca from Brazil that was to be used in UDV ceremonies. The church challenged the seizure and requested a preliminary injunction to prevent the further seizure of hoasca or the arrest of any UDV members using the drug. The complaint alleged that the application of the Controlled Substances Act to the church's sacramental use of hoasca violated RFRA. At a hearing on the preliminary injunction, the government conceded that the application of the Controlled Substances Act would substantially burden a sincere exercise of religion by the UDV, but argued that there was no RFRA violation because the application of the Controlled Substances Act was "the least restrictive means of advancing three compelling governmental interests: protecting the health and safety of UDV members, preventing the diversion of hoasca from the church to recreational users, and complying with the 1971 United Nations Convention on Psychotropic Substances, a treaty signed by the United States and implemented by the [Controlled Substances] Act." The district court found that the government had failed to "demonstrate a compelling interest justifying what it acknowledged was a substantial burden on the UDV's sincere religious exercise." The court entered a preliminary injunction prohibiting the government from enforcing the Controlled Substances Act with respect to the UDV's importation and use of hoasca . The injunction required the church to import hoasca pursuant to federal permits, to restrict control of the church's supply of hoasca to persons of church authority, and to warn members of the dangers of hoasca . The government appealed the issuance of the injunction, and a panel of the United States Court of Appeals for the Tenth Circuit affirmed, as did a majority of the Circuit sitting en banc. The government appealed to the Supreme Court. In making its appeal, the government put forth three arguments challenging the lower court's decision. First, it challenged the preliminary injunction itself, alleging that the court used the wrong test for determining whether a preliminary injunction was proper. Second, it argued that enforcement of the Controlled Substances Act precluded any type of waiver for UDV. Third, it argued that compliance with the United Nations Convention on Psychotropic Substances also prevented it from allowing UDV to use hoasca , a substance covered under the convention. The government did not challenge the district court's factual findings or its conclusion that the evidence presented at the hearing regarding health risks and risk of diversion was "in equipoise" and "virtually balanced." Rather, the government challenged the district court's determination that evidence "in equipoise" was sufficient for issuing a preliminary injunction against enforcement of the Controlled Substances Act. On appeal, the government noted "the well-established principle that the party seeking pretrial relief bears the burden of demonstrating a likelihood of success on the merits." The government argued that a "mere tie in the evidentiary record" was insufficient for issuing a preliminary injunction. Along with a majority of the en banc Court of Appeals, the Supreme Court rejected this argument, finding that the government "failed to demonstrate that the application of the burden to the UDV would, more likely than not, be justified by the asserted compelling interest." The Court also rejected the government's contention that the UDV bore the burden of disproving the asserted compelling interests at the hearing on the preliminary injunction, citing another recent case which held that "respondents must be deemed likely to prevail unless the government has shown that respondents' proposed less restrictive alternatives are less effective than [enforcing the Act]." The Court stated that "Congress' express decision to legislate the compelling interest test indicates that RFRA challenges should be adjudicated in the same manner as constitutionally mandated applications of the test, including at the preliminary injunction stage." The government also challenged the district court's determination that it failed to articulate a compelling governmental interest to justify its burden on the UDV's religious practices by arguing that the Controlled Substances Act "precludes any consideration of individualized exceptions such as [those] sought by the UDV." The Supreme Court summarized the government's position, saying that "under the government's view, there is no need to assess the particulars of the UDV's use or weigh the impact of an exemption for that specific use, because the Controlled Substances Act serves a compelling purpose and simply admits of no exceptions." However, the Court rejected the government's assertion that Congress's classification of hoasca as a Schedule I substance "relieves the government of the obligation to shoulder its burden under RFRA." The Court noted that the Controlled Substances Act authorizes the Attorney General to "waive the requirement for registration of certain manufacturers, distributors, or dispensers if he finds it consistent with the public health and safety," and that an exception has been made for the religious use of peyote by the Native American Church and all members of every recognized Indian Tribe. The Court found that "[i]f such use is permitted ... for thousands of Native Americans practicing their faith, it is difficult to see how [the government] can preclude any consideration of a similar exception for the 130 or so American members of the UDV who want to practice theirs." The Court held that the peyote exemption not only undermined the government's contention that the Act admits no exceptions under RFRA, but that it also found that the government failed to provide evidence of how such an exemption has "undercut" the government's ability to enforce the law with respect to nonreligious uses. The Court rejected the government's reliance on other cases where the Court found that the government had a compelling interest in the uniform application of a particular program, finding that in this case the government's claim was not based on the administration of a statutory program, but rather on "slippery-slope concerns that could be invoked in response to an RFRA claim for an exception to a generally applicable law." In so doing, the Court stated that "RFRA operates by mandating consideration, under the compelling interest test, of exceptions to 'rule[s] of general applicability,'" and noted that it had recently reaffirmed "the feasibility of case-by-case consideration of religious exemptions to generally applicable rules." With respect to its obligation to comply with the United Nations Convention on Psychotropic Substances, the Court also rejected the government's contention that compliance with the treaty itself was enough to justify the burden on the UDV's religious exercises. In so doing, the Court stated that it did "not doubt the validity of [the government's] interests [in complying with the treaty], any more than [it] doubt[ed] the general interest in promoting public health and safety by enforcing the Controlled Substances Act, but under RFRA invocation of such general interests, standing alone, is not enough." The Court proceeded to affirm the judgment of the United State Court of Appeals for the Tenth Circuit and remanded the case for further proceedings. Presumably, the remand leaves open the possibility that the government could at some point establish a compelling interest that justifies the burden on the UDV. It should also be noted that the Court did not address the constitutionality of RFRA as it applies to the federal government, as this was not a question presented to it on appeal. The potential impact of the Court's decision is uncertain because the Court focused on the importance of a case-by-case approach with respect to religious exemptions from generally applicable rules. The Court's decision does not establish a broad precedent for religious exemptions from criminal statutes. It does, however, appear to establish a precedent with respect to the type of evidence that must be presented by the government to establish a compelling interest. The Court made it clear that the government could not establish a compelling interest in simply enforcing an existing statute; there must be some other justification for the burden on religious expression.

On February 21, 2006, the Supreme Court issued an opinion in Gonzales v. O Centro Espirita Beneficente Uniao do Vegetal (UDV), a case addressing the use of an hallucinogenic tea in the context of religious ceremonies conducted by a religious sect in New Mexico. In its decision, the Court determined that under the Religious Freedom Restoration Act (RFRA), the federal government could not prohibit the sect's use of the tea absent a compelling government interest in doing so, and that the federal government had failed to establish a compelling interest. This report provides an overview of RFRA and the O Centro Espirita case.

When a President dies, a number of activities and events are set in motion. The vast majority of these activities and events are governed by custom rather than statute, and may be influenced by the wishes of the deceased President's family. Typically, the incumbent President issues a presidential proclamation that serves as an official announcement of the death. By federal law, U.S. flags should be flown at half-staff for 30 days. In recent decades, presidential proclamations have also given specific guidance where the flag should be flown at half-staff, such as "at the White House and on all buildings, grounds, and naval vessels of the United States for a period of 30 days from the day of his death. I also direct that for the same length of time, the representatives of the United States in foreign countries shall make similar arrangements for the display of the flag at half-staff over their Embassies, Legations, and other facilities abroad, including all military facilities and stations." The Commanding General, Military District of Washington, U.S. Army is responsible for state funeral arrangements, as described in detail in the Army pamphlet entitled State, Official, and Special Military Funerals . According to this document, the current President, ex-President, President-elect, and any other person specifically designated by the current President are entitled to an official state funeral. An excerpt from the pamphlet on key responsibilities and delegations follows: 3. Responsibilities. a. The President notifies the Congress that he has directed that a State Funeral be conducted. The Congress, which has sole authority for use of the U.S. Capitol, makes the Rotunda available for the State Ceremony through its own procedures. b. The Secretary of Defense is the designated representative of the President of the United States. The Secretary of the Army is the designated representative of the Secretary of Defense for the purpose of making all arrangements for State Funerals in Washington, D.C. This includes participation of all Armed Forces and coordination with the State Department for participation of all branches of the Government and the Diplomatic Corps. c. The Commanding General, Military District of Washington, U.S. Army as the designated representative of the Secretary of the Army, will make all ceremonial arrangements for State Funerals in Washington, D.C. and will be responsible for the planning and arranging of State Funerals throughout the continental United States. Many variations of ceremonies and traditional events and activities honoring the former President are possible. A short list of possibilities may include the following: A former President's remains may lie in repose for one day and then be moved to the Capitol Rotunda to lie in state , during which time a funeral ceremony and public viewing may occur . A former President, as former C ommander-in- C hief, is entitled to burial and ceremony in the Arlington National Cemetery. If , however, the former President is to be buried outside of Washington, DC , honors may be rendered at a train station, terminal, or airport that serves as a point of departure for the remains.Other honors that may be rendered during ceremonies include musical honors , gun and cannon salutes , and a U.S. Air Force coordinate d flyover . Most recently, following former President Gerald R. Ford's death on December 26, 2006, President George W. Bush announced the death, and also issued a proclamation that U.S. flags on all federal facilities be flown at half-staff. Two days later, President Bush issued Executive Order 13421, which proclaimed January 2, 2007, a day of respect and remembrance for the former President and ordered the closing of federal offices and agencies. A funeral took place in the Capitol Rotunda on December 30, 2006, where former President Ford lay in state, with subsequent services on January 2, 2007, at Washington National Cathedral. Funeral services for the former President were conducted on January 3, 2007, in Grand Rapids, MI, with interment at the Gerald R. Ford Presidential Library and Museum. Note: .mil web addresses may be more easily accessed using Internet Explorer This website contains information on the evolution of state funerals, military honors for former Presidents, ceremonial traditions of past state funerals (including lying in state or repose), military honors, and FAQs. http://www.usstatefuneral.mdw.army.mil/ This Army pamphlet outlines state and official funeral policy, and it contains detailed information on funeral eligibility, procedures, and sequences of events. http://armypubs.army.mil/epubs/DR_pubs/DR_a/pdf/web/p1_1.pdf The White House Historical Association has published a number of online articles and other content on past funerals. A few selected articles are as follows: A Presidential Funeral https://www.whitehousehistory.org/a-presidental-funeral Arlington ' s Ceremonial Horses and Funerals at the White House https://www.whitehousehistory.org/arlingtons-ceremonial-horses-and-funerals-at-the-white-house-1 Modern Mourning Observations at the White House https://www.whitehousehistory.org/modern-mourning-observations-at-the-white-house To view images, documents, and other materials on presidential funerals, see the Association's digital library: https://www.whitehousehistory.org/digital-library Since 1901, Washington National Cathedral has been the location of funeral and memorial services for several U.S. Presidents: https://cathedral.org/history/prominent-services/presidential-funerals/ Presidential libraries and museums provide preservation of and access to historical materials, including funeral information. Similar or other materials may be viewable online within digital collections at each individual library's website: https://www.archives.gov/presidential-libraries The Library of Congress contains a number of historical papers, images, audio recordings, films, narratives, and other content related to Presidents and corresponding funerals and ceremonies. For help with finding specific items, librarian and reference specialists at the main reading room can provide assistance: http://www.loc.gov/rr/main/ Gerald R. Ford: https://www.c-span.org/video/?195963-1/gerald-ford-michigan-service-burial Ronald W. Reagan: https://www.c-span.org/video/?182165-1/ronald-reagan-funeral-service Richard M. Nixon: https://www.c-span.org/video/?56426-1/president-nixon-funeral Lyndon B. Johnson: https://www.c-span.org/video/?182212-1/lyndon-johnson-funeral-service Harry S. Truman: https://www.youtube.com/watch?v=4Nfo1UjjJXE Dwight D. Eisenhower: http://www.dwightdeisenhower.com/155/Final-Post Herbert Hoover: https://www.youtube.com/watch?v=AtZLxjsX39Q John F. Kennedy: https://www.jfklibrary.org/asset-viewer/archives/JFKWHF/WHN28/JFKWHF-WHN28/JFKWHF-WHN28 Franklin D. Roosevelt: https://www.c-span.org/video/?298665-1/president-franklin-roosevelt-funeral Eleven U.S. Presidents have "lain in state" at the U.S. Capitol Rotunda: http://history.house.gov/Institution/Lie-In-State/Lie-In-State/ The Architect of the Capitol (AOC) provides a brief history of President Lincoln's funeral and his catafalque (currently on display at the U.S. Capitol Visitor's Center): https://www.aoc.gov/blog/lincoln-catafalque-us-capitol Concurrent resolutions have authorized commemorative compilations of tributes delivered in Congress for several former Presidents. These volumes are prepared by the Congressional Research Service under the direction of the Joint Committee on Printing. For example, see President Ford's tribute collection: https://www.gpo.gov/fdsys/pkg/CDOC-110hdoc61/pdf/CDOC-110hdoc61.pdf For further assistance in locating these tribute collections for Presidents (or other individuals), please contact CRS. The AOC has an onsite database of approximately 1,000 images of state funerals at the Capitol for the following presidents: Kennedy, Hoover, Eisenhower, Lyndon B. Johnson, Reagan and Ford. The images depict presidents lying in state in the Rotunda and related funerary ceremonies occurring at the Capitol. For more inquiries into accessing the images, congressional staff may fill out an agency contact form at https://www.aoc.gov/contact-form . Martin Nowak, The White House in Mourning: Deaths and Funerals of Presidents in Office (Jefferson, NC: McFarland, 2010). Brady Carlson, Dead Presidents: A n American A dventure I nto the S trange D eaths and S urprising A fterlives of O ur nation 's L eaders (New York: W.W. Norton, 2017). Brian Lamb and C-SPAN, Who 's Buried in Grant 's Tomb : a Tour of Presidential Gravesites. (New York: Perseus Books Group, 2010). Ambassador Mary Mel French, "Ceremonies: State and Official Funerals," in United States Protocol: The Guide to Official Diplomatic Etiquette (Lanham, MD: Rowman and Littlefield, 2010).

This fact sheet is a brief resource guide for congressional staff on funerals and burials for Presidents of the United States. It contains an overview of past practices for presidential funerals and selected online information resources related to official and ceremonial protocols, past presidential funerals, congressional documents, and other documents and books.

T he major federal securities laws that form the basis for the regulation of securities in the United States were enacted in the wake of the stock market crash of 1929. These acts include the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940, and the Investment Advisers Act of 1940. Other important securities acts were passed late in the 20 th century and early in the 21 st century. These acts include the Insider Trading Sanctions Act of 1984, the Insider Trading and Securities Fraud Enforcement Act of 1988, the Private Securities Litigation Reform Act of 1995, the Securities Litigation Uniform Standards Act of 1998, the Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank), the Stop Trading on Congressional Knowledge (STOCK) Act of 2012, and the Jumpstart Our Business Startups (JOBS) Act of 2012. The Securities Act of 1933 makes it illegal to offer or sell securities to the public unless they have been registered with the Securities and Exchange Commission (SEC or Commission). A registration statement becomes effective twenty days after it is filed with the commission, unless it is delayed or suspended. Registration under the 1933 Act covers only the securities actually being offered and only for the purposes of the offering in the registration statement. The registration statement consists of two parts: the prospectus, which must be provided to every purchaser of the securities, and Part II, which contains information and exhibits which do not have to be provided to purchasers but which are available for inspection. Section 7 of the 1933 Act, referring to Schedule A, sets forth the information which must be contained in the registration statement. This schedule requires a great deal of information, such as the underwriters, the specific type of business, significant shareholders, debt and assets of the company, and opinions as to the legality of the issue. Section 10(a) of the 1933 Act specifies the information which the prospectus must contain. There are also numerous regulations issued by the commission which provide further details about the registration process under the 1933 Act. Certain transactions and securities are exempted from the registration process. The exempted transactions include private placements, intrastate offerings, and small offerings. Among the exempted securities are government securities, bank securities, and short-term commercial paper, all securities for which it is believed that other, adequate means of government regulation exist. The Securities Exchange Act of 1934 is concerned with many different areas, one of which is the ongoing process of disclosure to the investing public through the filing of periodic and updated reports with the commission. Any issuer which has a class of securities traded on a national securities exchange or, in certain circumstances, has total assets exceeding $10,000,000 and a class of equity securities held of record by 2,000 shareholders or 500 shareholders who are not accredited investors must register under the 1934 Act with the SEC. Every issuer which must register under the 1934 Act must file periodic and other reports with the SEC. Section 12 requires the filing of a detailed statement about the company when the company first registers under the 1934 Act. Section 13 requires a registered company to file annual and quarterly reports with the SEC. These reports must contain essentially all material information, financial and otherwise, about the company which the investing public would need in making a decision about whether to invest in the company. Section 14 contains information about proxy solicitation. Some exemptions from these reporting requirements are provided. The commission has issued extensive regulations to specify information which these reports must provide. Failure to disclose material information is actionable. For example, Section 18(a) of the Securities Exchange Act grants an express private right of action to investors who have been injured by reliance upon material misstatements or omissions of facts in reports which have been filed with the SEC. Section 10(b) of the 1934 Act, the general antifraud provision, and Rule 10b-5, issued by the SEC to carry out the statutory fraud prohibition, provide for a cause of action for injuries which have been caused by omissions, misrepresentations, or manipulations of material facts in statements other than those filed in documents with the SEC. The Investment Company Act of 1940 was enacted to protect investors who use others to manage and diversify their investments. An investment company that meets the statutory definition of "investment company" and that is not exempted from the act must register with the SEC and file specified information. Unless the investment company complies with the provisions of the act, it cannot participate in certain activities involving securities. Various affiliations and interests of directors, officers, and employees of investment companies are circumscribed. For example, an investment company cannot have a board of directors with more than 60% of the members considered interested persons of the company. Registered investment companies must file specified reports and financial statements. The Investment Advisers Act of 1940 defines an investment adviser as any person who for compensation advises others as to the value of securities or as to the advisability of investing in, purchasing, or selling securities or who for compensation analyzes securities. Unless registered with the SEC, it is unlawful for any investment adviser to make use of the mails or any means or instrumentality of interstate commerce in connection with his business as an investment adviser. An investment adviser may be registered by filing specified information with the SEC. The Insider Trading Sanctions Act of 1984 was enacted because of the belief that [i]nsider trading threatens ... markets by undermining the public's expectations of honest and fair securities markets where all participants play by the same rules. This legislation provides increased sanctions against insider trading in order to increase deterrence of violations. "Insider trading" is the term used to refer to trading in the securities markets while in possession of "material" information (generally, information that would be important to an investor in making a decision to buy or sell a security) that is not available to the general public. The act provides that, if the commission believes that any person has bought or sold a security while in possession of material nonpublic information, the commission may bring an action in U.S. district court to seek a civil penalty. The penalty may be up to three times the profit gained or loss avoided. After a number of hearings and considerable debate in the 100 th Congress, the President signed the Insider Trading and Securities Fraud Enforcement Act of 1988 ( P.L. 100-704 ). This act expanded the scope of civil penalties to control persons who fail to take adequate steps to prevent insider trading; increased the maximum jail terms for criminal securities law violations and maximum criminal fines for individuals and for corporate persons; initiated a bounty program giving the SEC discretion to reward informants who provide assistance to the agency; and required broker-dealers and investment advisers to establish and enforce written policies reasonably designed to prevent the misuse of inside information. The Private Securities Litigation Reform Act of 1995 was enacted to address the perceived problem of an increase in frivolous shareholder lawsuits. The stated reasons for bringing these lawsuits were varied—fraud, mismanagement, nondisclosure of material information—but practically all of the lawsuits involved the loss of money by shareholders of the corporation. Some of the lawsuits had merit because some corporate managers had, according to proponents, misled or defrauded investors. However, some of the lawsuits were deemed frivolous and were brought when, for example, the share value of the stock of a corporation went down for reasons having nothing to do with the culpability of corporate managers. The act limits shareholder lawsuits in federal courts by such actions as having the court appoint a lead plaintiff determined to be the most capable of adequately representing the interests of class members, prohibiting a person from being a lead plaintiff in any more than five class actions in a three-year period, guaranteeing that plaintiffs receive full disclosure of settlement terms, providing a safe harbor for forward-looking statements, providing for proportionate liability, and providing for auditor disclosure of corporate fraud. The Securities Litigation Uniform Standards Act of 1998 (SLUSA) was enacted in response to the perceived failure of the Private Securities Litigation Reform Act of 1995 (PSLRA) to curb alleged abuses of securities fraud litigation. PSLRA had set out a framework for bringing securities fraud cases in federal courts. In many instances, plaintiffs circumvented PSLRA by bringing cases in state courts on the basis of common law fraud or other non-federal claims. SLUSA attempted to make certain that plaintiffs could not avoid the PSLRA requirements by allowing a securities fraud case to be brought only in a federal court and only under a uniform standard if five criteria are satisfied: (1) The lawsuit is a covered class action; (2) The claim is based on state statutory or common law; (3) The claim concerns a covered security; (4) The plaintiff alleges a misrepresentation or omission of a material fact; and (5) The misrepresentation or omission is made in connection with the purchase or sale of a covered security. The Sarbanes-Oxley Act of 2002 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 2002, Congress showed renewed interest in enacting stiffer corporate responsibility legislation, and Sarbanes-Oxley quickly became law. The act establishes a Public Company Accounting Oversight Board, which is supervised by the SEC. The act restricts accounting firms from performing a number of other services for the companies that they audit. The act also requires additional disclosures for public companies and the officers and directors of those companies. Among the other issues affected by Sarbanes-Oxley are securities fraud, internal assessment of management controls of the covered corporation, 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. Dodd-Frank, passed in response to the financial downturn in the early part of the 21 st century, effected the most significant changes to financial regulation since laws enacted in response to the Great Depression of 1929. Although making changes to practically all of the financial regulatory agencies, Dodd-Frank affected the securities industry in a number of specific ways. Title VII of Dodd-Frank concerns the regulation of the over-the-counter swaps markets and sets out general jurisdictional parameters for the Commodity Futures Trading Commission (CFTC) and the SEC. The title requires the CFTC and the SEC to consult with each other in issuing regulations to fill in the details of their jurisdiction in regulating the various kinds of swaps. Title IX, "Investor Protections and Improvements in the Regulation of Securities," sets out new powers of the SEC. In an attempt to increase investor influence, Title IX creates an Office of the Investor Advocate and a whistleblower bounty program for persons who disclose securities fraud. Title IX has a number of other provisions aimed at increasing investor protection, such as expanding the regulation of credit rating agencies, requiring public corporations to submit executive compensation packages to shareholders for nonbinding votes, setting out requirements for the submission of proxy solicitation materials for nominating members to corporate boards, and establishing a Public Company Accounting Oversight Board to oversee public accounting firms. In the miscellaneous provisions of Title XV, Dodd-Frank requires the SEC to issue rules involving the disclosure by publicly traded companies of various minerals originating near the Democratic Republic of the Congo that are benefiting armed groups in the area. The STOCK Act amends various titles of the U.S. Code, such as titles 5, 7, and 15, to prohibit Members of Congress and employees of Congress from trading stocks based on inside information that they have received as a result of their congressional duties and positions. For example, Section 4 of the STOCK Act amends 15 U.S.C. § 78u-1 to prohibit insider trading by these persons and states that '[t]he purpose of the amendment made by this subsection is to affirm a duty arising from a relationship of trust and confidence owed by each Member of Congress and each employee of Congress." The JOBS Act is intended to encourage the funding of small businesses and startups by easing various securities reporting requirements. Among its seven titles, Title I, concerning emerging growth companies, and Title III, concerning crowdfunding, may be of special note. An emerging growth company, defined to apply to a company with total annual gross revenues of less than $1 billion, is allowed to phase in various SEC regulations over a period of time and may confidentially submit to the SEC a draft registration statement for nonpublic review prior to public filing. Title III exempts certain companies from the 1933 Securities Act's registration requirements if various requirements are met (e.g., the aggregate amount of securities sold to all investors during a 12-month period does not exceed $1 million; the aggregate amount of securities sold to any investor during a 12-month period cannot exceed the greater of $2,000 or 5% of the annual income or net worth of the investor if either the annual income or net worth is less than $100,000 or, if more than $100,000, the greater of 10% of the annual income or net worth of the investor, not to exceed a maximum aggregate amount of $100,000; and the transaction must be sold through a funding portal, such as a website.

This report discusses in a very general way the major federal securities laws. The major federal securities laws may be grouped into two categories according to the time of their passage: the acts passed in the wake of the stock market crash of 1929 and the acts passed later in the 20th century and early in the 21st century. The acts in the first group include the most important of the federal securities acts: the Securities Act of 1933, which concerns the initial registration of securities, and the Securities Exchange Act of 1934, which requires ongoing disclosure reports. The acts in the second group include laws which specifically prohibit insider trading, restrict the bringing of shareholder derivative suits, and require additional reporting by officers and directors. This report will be updated as warranted.

The President is responsible for appointing individuals to positions throughout the federal government. In some instances, the President makes these appointments using authorities granted to the President alone. Other appointments, generally referred to with the abbreviation PAS, are made by the President with the advice and consent of the Senate via the nomination and confirmation process. This report identifies, for the 112 th Congress, all nominations submitted to the Senate for executive-level full-time positions in the 15 executive departments for which the Senate provides advice and consent. It excludes appointments to regulatory boards and commissions as well as to independent and other agencies. This report features a pair of tables presenting information for each of these 15 executive departments. The first table in each pair provides information on full-time positions requiring Senate confirmation as of the end of the 112 th Congress and the pay levels of those positions. The second table for each department tracks appointment activity within the 112 th Congress by the Senate (confirmations, rejections, returns to the President, and elapsed time between nomination and confirmation) as well as further related presidential activity (including withdrawals and recess appointments). In some instances, no appointment action occurred within an agency during the 112 th Congress. Information for this report was compiled using the Senate nominations database of the Legislative Information System (LIS) 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 . Table 1 summarizes appointment activity, during the 112 th Congress, related to full-time PAS positions in the 15 executive departments. President Barack H. Obama submitted 116 nominations to the Senate for full-time positions to executive departments. Of these 116 nominations, 90 were confirmed; 11 were withdrawn; and 15 were returned to the President under the provisions of Senate rules. The length of time a given nomination may be pending in the Senate has varied widely. Some nominations were confirmed within a few days, others were confirmed within several months, and some were never confirmed. This report provides, for each executive department nomination confirmed in the 112 th Congress, the number of days between nomination and confirmation ("days to confirm"). For confirmed nominations, a mean of 151.4 days elapsed between nomination and confirmation. The median number of days elapsed was 131.5. Each of the 15 executive department profiles provided in this report is divided into two parts: a table listing the organization's full-time PAS positions as of the end of the 112 th Congress and a table listing appointment action for vacant positions during the 112 th Congress. Data for these tables were collected from several authoritative sources. In each department profile, the first of these two tables identifies, as of the end of the 112 th Congress, each full-time PAS position in that department and its pay level. For most presidentially appointed positions requiring Senate confirmation, the pay levels fall under the Executive Schedule. As of January 2013, these pay levels ranged from level I ($199,700) for Cabinet-level offices to level V ($145,700) 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 or appointment, date of confirmation, and number of days between receipt of a nomination and confirmation. It also notes actions other than confirmation (e.g., 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 appointment 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 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. For a small number of positions within a department, the two tables may contain slightly different titles for the same position. This is a result of the fact that the title used in the nomination the White House submits to the Senate, the title of the position as established by statute, and the title of the position used by the department itself are not always identical. The first table listing incumbents at the end of the 112 th Congress uses data provided by the department itself. The second table listing nomination action within each department relies primarily upon the Senate nominations database of the LIS. This information is based upon the nomination sent to the Senate by the White House. Any inconsistency in position titles between the two tables is noted in the notes following each appointment table. 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. The table also includes the mean and median values for the "days to confirm" column. Table A-2 provides summary data for each of the 15 executive departments identified in this report. The table summarizes the number of positions, nominations submitted, individual nominees, confirmations, nominations returned, and nominations withdrawn for each department. It also provides the mean and median values for the numbers of days taken to confirm nominations within each department. During the 112 th Congress, the Presidential Appointments Streamlining and Efficiency Act ( P.L. 112-166 ) was enacted, which eliminated the requirement for the Senate's advice and consent for 163 positions in federal agencies. A number of those positions, listed in Appendix B , have been included in previous versions of this tracking report. This report notes each agency and position affected. A list of department abbreviations can be found in Appendix C . Appendix A. Presidential Nominations, 112 th Congress Appendix B. Positions Affected by P.L. 112-166 Appendix C. Abbreviations of Departments

The President makes appointments to positions within the federal government, either using the authorities granted to the President alone or with the advice and consent of the Senate. There are some 349 full-time leadership positions in the 15 executive departments for which the Senate provides advice and consent. This report identifies all nominations submitted to the Senate during the 112th Congress for full-time positions in these 15 executive departments. Information for each department is presented in tables. The tables include full-time positions confirmed by the Senate, pay levels for these positions, and appointment action within each executive department. Additional summary information across all 15 executive departments appears in the Appendix. During the 112th Congress, the President submitted 116 nominations to the Senate for full-time positions in executive departments. Of these 116 nominations, 90 were confirmed, 11 were withdrawn, and 15 were returned to him in accordance with Senate rules. For those nominations that were confirmed, a mean (average) of 151.4 days elapsed between nomination and confirmation. The median number of days elapsed was 131.5. Information for this report was compiled using the Senate nominations database of the Legislative Information System (LIS) 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.

Prior to 1975, the Internal Revenue Code (IRC) was silent as to the tax treatment of organizations whose primary purpose is influencing elections. The Internal Revenue Service (IRS) treated contributions to political organizations as gifts, which meant that the organizations did not have taxable income and were not required to file tax returns. By the early 1970s, it was apparent that these organizations had sources of income besides contributions, and the IRS indicated it would require those with investment and other types of income to file tax returns and pay tax at the corporate rate. P.L. 93-635 , enacted in 1975, added Section 527 to the IRC to address the tax treatment of political organizations. The section grants tax-exempt status to qualifying political organizations. This treatment is the focus of this report, but it should be noted that Section 527 has two other purposes: it imposes a tax on 501(c) organizations that make political expenditures and it clarifies that expenditures by political organizations on behalf of an individual are generally not income to the individual. Political organizations that qualify under Section 527 are taxed only on certain income. A political organization is any organization, including a party, committee, association, or fund, that is organized and operated primarily to directly or indirectly accept contributions and/or make expenditures for an exempt function . An exempt function is the influencing or attempting to influence the selection, nomination, election, or appointment of an individual to a federal, state, or local public office, to an office in a political organization, or as a Presidential or Vice-Presidential elector. An exempt function does not necessarily involve explicitly advocating for or against the individual. For example, when determining whether an issue advocacy communication is for an exempt function , the IRS looks at such things as whether it identifies a candidate, identifies his or her position on the issue and this has been raised to distinguish the candidate from others, is timed to coincide with an election, targets voters in a particular election, and is not part of an ongoing series of similar communications by the organization on the same issue. 527 organizations are subject to tax only on political organization taxable income . This is the organization's gross income, excluding exempt function income , less $100 and any allowable deductions. Exempt function income is any amount received, to the extent that it is segregated to use for an exempt function , as: contributions of money or other property, membership dues, fees, or assessments, proceeds, which are not received in the ordinary course of business, from political fundraising and entertainment events or from the sale of campaign materials, and proceeds from conducting a bingo game. The tax rate is generally the highest corporate income tax rate. However, under IRC § 527(h), income of the principal campaign committee of a Congressional candidate is taxed using the graduated corporate tax rate schedule. This is not true for campaign committees of candidates for state or local office. 527 organizations include the entities regulated by the Federal Election Campaign Act (FECA), as amended by the Bipartisan Campaign Reform Act (BCRA). For example, political parties and candidate committees are 527 organizations. However, because some 527 organizations are unrelated to federal elections, not all 527 organizations are regulated by FECA. In recent years, there has been considerable debate about the extent to which FECA regulates certain types of 527 organizations and the constitutional limitations on such regulation. For more information, see CRS Report RL33888, Section 527 Political Organizations: Background and Issues for Federal Election and Tax Laws , by [author name scrubbed], Erika Lunder, and [author name scrubbed]. Prior to 2000, certain political organizations received the tax benefits of Section 527 without reporting their existence to the FEC or the IRS. This was because not all 527 organizations reported to the FEC under FECA and organizations only filed a return to the IRS if they had taxable income. The fact that organizations could qualify under Section 527 without reporting to the FEC was largely unnoticed until 1996, when the IRS began issuing guidance on the types of activities that qualify as exempt functions . This awareness helped lead to an increase in the number of 527 organizations, called "stealth PACs," that were designed to avoid reporting to the FEC. In 2000 and 2002, Congress amended Section 527 to require that organizations report to the IRS, the FEC, or a state. An organization must notify the IRS of its 527 status by electronically filing Form 8871 within 24 hours of its formation. The information provided on Form 8871 includes the organization's name, address, and purpose; names and addresses of certain employees and directors; and name of and relationship to any related entities. An organization that fails to timely file the form will not be treated as a 527 organization (i.e., it will be subject to tax on all income) for the period between its formation and the filing. An organization that fails to notify the IRS within thirty days of any material change to the reported information will not be treated as a 527 organization for the period between the change and the notification. The notice requirements do not apply to a 527 organization that: anticipates having gross receipts of less than $25,000 for any year, is a political committee of a state or local candidate, is a state or local committee of a political party, or is required to report to the FEC as a political committee. A 527 organization that accepts a contribution or makes an expenditure for an exempt function must periodically file a disclosure report, Form 8872, with the IRS. The report may be filed electronically, and organizations with annual contributions or expenditures exceeding $50,000 must do so. The organization may file on a (1) quarterly basis in a year with a regularly scheduled election and semi-annually in any other year or (2) monthly basis. There are additional requirements for pre-general election, post-general election, and year-end reports. An organization that fails to file a timely or accurate Form 8872 is subject to a penalty that equals the highest corporate tax rate multiplied by the amount of contributions and/or expenditures to which the failure relates. A periodic report must include (1) the name, address, occupation, and employer of any contributor who makes a contribution during the reporting period and has given at least $200 during the year, along with the amount and date of the contribution, and (2) the amount, date, and purpose of each expenditure made to a person during the reporting period if that person has received at least $500 during the year, along with the person's name, address, occupation, and employer. The disclosure requirements do not apply to a political organization that is not required to or did not file a Form 8871 (see above) or is a qualified state or local political organization. The requirements also do not apply to any expenditure that is an independent expenditure (i.e., an expenditure that expressly advocates for a candidate but is made without the candidate's cooperation). In 2003, the Eleventh Circuit Court of Appeals vacated and remanded, with instructions to dismiss for lack of jurisdiction, a district court's decision that held most of the disclosure requirements were unconstitutional. The district court had held that the requirements for organizations involved in state and local elections violated the Tenth Amendment and the requirement to disclose expenditures violated the First and Fifth Amendments. The basis of the district court's decision was that the requirements were part of a regulatory (campaign finance reform) scheme that was subject to a higher level of scrutiny than action under Congress' taxing powers would be. The district court then closely examined the requirements and found some to be impermissible. For example, the district court held that the requirement to disclose expenditures was unconstitutional because Congress had not sufficiently tailored the requirement to meet its informational and corruption-related goals or established a compelling reason to treat political organizations differently than other tax-exempt organizations. The Court of Appeals held that the disclosure requirements fell within Congress' power to tax and that the Anti-Injunction Act, which requires taxpayers pay a tax before disputing it, barred the suit. Section 527 organizations with gross receipts of at least $25,000 ($100,000 if a qualified state or local political organization) must annually file an information return, Form 990, with the IRS. Form 990 includes such information as the organization's revenue sources and functional expenses. Contributions of at least $5,000 must be reported on the form's Schedule B. An organization that fails to file a timely or accurate return is subject to a penalty of $20 per day, not to exceed the lesser of $10,000 or 5% of the organization's gross receipts. For organizations with more than $1 million in gross receipts, the penalty is $100 per day and is limited to $50,000. A 527 organization is not required to file Form 990 if it is: state or local committee of a political party, a political committee of a state or local candidate, required to report to the FEC as a political committee, a caucus or association of state or local officials, an authorized committee under FECA § 301(6) of a candidate for federal office, a national committee under FECA § 301(14) of a political party, or a Congressional campaign committee of a political party committee. Any tax-exempt organization with political organization taxable income must file a tax return, Form 1120-POL, with the IRS. An organization that does not file a return will be penalized for each month the return is late in an amount that equals 5% of the tax due, not to exceed 25% of the tax due. An organization that is late in paying its taxes will be penalized for each month the payment is late in an amount that equals 0.5% of the unpaid tax, not to exceed 25% of the unpaid tax. Neither penalty will be imposed if the organization shows that the failure was due to reasonable cause. The penalties may be increased if the failure was due to negligence or fraud. The IRS and the 527 organization must make Forms 8871, 8872, and 990 publicly available. An organization that fails to do so is subject to a penalty of $20 per day, which is limited to $10,000 for failures relating to Forms 8872 and 990. Furthermore, the IRS must post electronically-submitted Forms 8871 and 8872 in an on-line database within 48 hours of their filing. The database also includes some organizations' Forms 8871, 8872, and 990 that were submitted on paper. The database is available on the IRS website at http://www.irs.gov. Some 527 organizations may have to report to the IRS and the FEC. As discussed above, organizations that report to the FEC as political committees do not file Forms 8871, 8872, and 990 with the IRS. Under BCRA, organizations that spend more than $10,000 on electioneering communications must report to the FEC. Organizations that report to the FEC solely under this rule are not exempt from the IRS reporting requirements since they are not reporting to the FEC as political committees. The 527 Transparency Act of 2007 would no longer allow 527 organizations to file the periodic expenditure and contribution reports with the IRS on a semi-annual basis. Instead, all 527 organizations that report to the IRS would be required to file monthly reports, in addition to pre-election, post-election, and year-end reports. An organization that failed to do so would face a penalty equal to 30% of the expenditures and contributions that were not adequately reported, with the organization's managers jointly and severally liable for the penalty. Additionally, contributions to that organization would be subject to the gift tax. The organizations would be required to notify their contributors about the failure within 90 days of the IRS's final determination that the failure had occurred. Finally, the bill would require that the reports be simultaneously filed with the FEC. The State and Local Candidate Fairness Act of 2007 would change the tax rate at which state and local candidates' principal campaign committees are taxed. As mentioned, 527 organizations are generally taxed at the highest corporate income tax rate on their political organization taxable income, but the principal campaign committees of congressional candidates are taxed according to the graduated corporate income rate schedule. H.R. 3771 would extend that special rule to the principal campaign committees of state and local candidates so that these committees would also be taxed using the graduated rates.

Political organizations have the primary purpose of influencing federal, state, or local elections and conducting similar activities. Those that qualify under Section 527 of the Internal Revenue Code are taxed only on certain income. Under the Code, 527 organizations are subject to reporting requirements that involve registration, the periodic disclosure of contributions and expenditures, and the annual filing of tax returns. Section 527 organizations must also comply with applicable campaign finance laws. In the 110th Congress, the 527 Transparency Act of 2007 (H.R. 1204) would change the frequency of the periodic disclosure requirements and the penalties for violating them, and the State and Local Candidate Fairness Act of 2007 (H.R. 3771) would change the tax rates at which state and local candidates' principal campaign committees are taxed. This report describes these organizations, the reporting requirements they face under the Internal Revenue Code, and the two bills.

Obesity is a condition that has been deemed an epidemic in the United States. Results of a survey by the National Center for Health Statistics found that in the years 2003 to 2004, an estimated 66% of U.S. adults were either overweight or obese. The American Obesity Association estimates that approximately 127 million adults in the United States are overweight, 60 million obese, and 9 million severely obese. It has been argued that obese individuals have been the targets of discrimination. There is no federal law that specifically prohibits obesity discrimination. However, some obese individuals have argued that their weight can be considered a disability for purposes of the Americans with Disabilities Act (ADA) or the Rehabilitation Act of 1973 and, therefore, they have legal protection against weight discrimination. Courts have evaluated numerous claims of obesity discrimination brought under the ADA and the Rehabilitation Act. Congress enacted the ADA in 1990 to provide a clear and comprehensive national mandate for the elimination of discrimination against individuals with disabilities. The ADA prohibits discrimination based on disability in the areas of employment, public services, public accommodations, and services operated by private entities, transportation, and telecommunications. In order to prevail in a discrimination case, the plaintiff must prove, among other things, that he or she has a disability within the meaning of the ADA. The ADA defines "disability" with respect to an individual as "(A) a physical or mental impairment that substantially limits one or more of the major life activities of such individual [such as walking, or working]; (B) a record of such an impairment; or (C) being regarded as having such an impairment." The Equal Employment Opportunity Commission (EEOC) has promulgated ADA regulations that give insight as to what constitutes an impairment within the meaning of the term "disability," as well as what is considered to be "substantially limit[ing] a major life activity." The ADA regulations have been used by the courts in determining the validity of obesity discrimination claims. Obesity discrimination cases have also been brought under the Rehabilitation Act of 1973. Section 504 of the Rehabilitation Act states that "no otherwise qualified individual ... shall, solely by reason of her or his disability, ... be subjected to discrimination under any program or activity receiving Federal financial assistance." Courts have often applied the same standard when deciding cases arising under the ADA or Section 504 of the Rehabilitation Act. Also, the standards for determining employment discrimination under the Rehabilitation Act are identical to those used in title I of the ADA. The ADA regulations address whether obesity can be an impairment that qualifies as a disability under the ADA. In general, the regulations suggest that the ADA offers limited protection to obese individuals. The ADA regulations state that temporary, non-chronic impairments of short duration, with little or no long term or permanent impact, are usually not disabilities. Such impairments may include, but are not limited to, broken limbs, sprained joints [and] concussions.... Similarly, except in rare circumstances, obesity is not considered a disabling impairment. The EEOC has expounded on how obesity is to be covered under the ADA. In its ADA compliance manual, the EEOC states that being overweight, in and of itself, generally is not an impairment. On the other hand, severe obesity, which has been defined as body weight more than 100% over the norm is clearly an impairment. In addition, a person with obesity may have an underlying or resultant physiological disorder, such as hypertension or a thyroid disorder. A physiological disorder is an impairment. Based on the ADA regulations and EEOC guidance, it may be difficult for an obese plaintiff to successfully bring a discrimination claim. Still, courts have found some plaintiffs entitled to protection under the ADA. Both state and federal courts have considered whether the ADA or Section 504 applies to obesity and have used varying (and sometimes conflicting) lines of reasoning and conclusions. Courts have disagreed on issues such as (1) whether a plaintiff must have a physiological disorder in order for the plaintiff's morbid obesity to be covered under the ADA and (2) whether a plainitiff's obesity can cause a "substantial limitation of a major life activity." The following cases include some of the different arguments that courts have used in finding that a plaintiff is eligible or non-eligible for ADA or Section 504 protection. One of the first appellate decisions to address weight discrimination as a disability was Cook , which established that an obese plaintiff can be considered disabled. In Cook , the plaintiff applied for a position she had previously held as an institutional attendant. At the time Cook applied, she was five feet two inches tall and weighed 320 pounds. The institution refused to rehire Cook, claiming that Cook's weight compromised her ability to evacuate patients in an emergency situation and increased her chances of developing aliments that could lead to Cook to be out of work or claim workers' compensation. Cook brought a claim under Section 504 of the Rehabilitation Act of 1973, as well as certain state statutes, claiming that the failure to hire her was based on an unlawful perceived disability—although she was fully able to perform the job, the institution considered her physically impaired. The First Circuit Court of Appeals agreed with Cook. However, the court acknowledged that Cook could also prevail because she had an actual physical impairment. The court pointed to the fact that Cook had admitted that she was morbidly obese, and had presented expert testimony that morbid obesity is a physiological disorder, a dysfunction of the metabolic system. The institution argued that Cook's claims failed because her weight was a condition that was both "mutable" and "voluntary." The court rejected the institution's arguments and noted that nowhere in the Rehabilitation Act, nor in the regulations implementing the act, was there a mention of either characteristic disqualifying a claim. The court also discussed whether Cook's weight "substantially limited one or more [of Cook's] major life activities." The court pointed to evidence introduced by the institution demonstrating that Cook was not hired because the institution believed that her morbid obesity interfered with her ability to undertake physical activities such as walking, lifting, or bending. On this basis alone, the court stated, a jury could find that the institution perceived the plaintiff's impairment to interfere with a major life activity. In addition, the court explained that the plaintiff could be found substantially limited, without having to seek out other jobs that she was qualified to perform. The court stated that "denying an applicant ... a job that requires no unique physical skills, due solely to the perception that the applicant suffers from a physical limitations that would keep her from qualifying for a broad spectrum of jobs, can constitute treating an applicant as if her condition substantially limited a major life activity, viz., working." The First Circuit also concluded that there was no evidence that Cook could not perform the job, and it upheld the district court's decision for Cook. The Second Circuit in Francis also examined claims of obesity discrimination under disability law. In this case, the City of Meriden disciplined Francis, a firefighter employed by the city, after he failed to meet certain weight guidelines. Francis claimed that this discipline was discrimination based on a perceived disability in violation of the ADA and the Rehabilitation Act. The court found that Francis' claims failed because Francis only alleged that the city disciplined him for not meeting a weight standard, not because he suffered from an impairment within the meaning of the disability statutes. In its analysis, the court discussed the applicability of the ADA and the Rehabilitation Act to obesity. The Second Circuit stated that Francis's claim failed because "obesity, except in special cases where obesity relates to a physiological disorder, is not an impairment within the meaning of [the ADA or the Rehabilitation Act]." The court also pointed out, in dicta, that a cause of action may exist against an employer who discriminates against an employee based on the perception that the employee is morbidly obese. Still, the court concluded that simply failing to meet weight guidelines was insufficient for ADA protection. In 2006, the Sixth Circuit took up the issue of obesity discrimination in EEOC v. Watkins . In Watkins , the EEOC claimed that the defendant company violated the ADA when it discharged a morbidly obese employee after the employee sustained an injury on the job. The employee, whose weight fluctuated between 340 and 450 pounds during his employment, was injured during a routine job activity. The employee claimed he was unaware of any physiological or psychological cause for his heavy weight. After taking a leave of absence following his injury, the employee's personal doctor cleared him to work. However, a company doctor found that the employee weighed more than 400 pounds, had a limited range of motion, and shortness of breath after a few steps. The doctor determined that even though the employee met the Department of Transportation's standards for truck drivers, the employee could not safely perform the requirements of his job. The employee was terminated as a result. The EEOC argued under a "regarded as" theory, claiming that although the employee had an actual impairment, the impairment was erroneously regarded as an inability to perform his job. In its analysis, however, the Sixth Circuit did not focus on how the company regarded the employee, but instead on whether morbid obesity qualified as an ADA impairment. The court cited the ADA regulations stating that an impairment is defined in relevant part as "any physiological disorder or condition." The court interpreted this definition to require evidence of a physiological cause of morbid obesity in order for an impairment to exist under the ADA. Because the EEOC did not produce any evidence that the employee suffered from a physiological condition, the Sixth Circuit affirmed summary judgment for Watkins. It is likely that courts will continue to look at obesity discrimination under the ADA. Based on the various ways in which courts have interpreted the act and its supporting regulations, the outcome of these cases will remain an open question.

The Americans with Disabilities Act (ADA) provides broad nondiscrimination protection for individuals with disabilities. However, to be covered under the statute, an individual must first meet the definition of an individual with a disability. Questions have been raised as to whether and to what extent obesity is a disability under the ADA and whether the ADA protects obese individuals from discrimination. This report provides background regarding how obesity is covered under the ADA and its supporting regulations. It also discusses some of the ways in which courts have applied the ADA to obesity discrimination claims.

Annually, the Forest Service receives appropriations to operate its nationwide programs. On the basis of these appropriations, the Forest Service allocates a portion to each of its regions to carry out the regional and field office programs. In the case of the Alaska Region, appropriations are further allocated to (1) the regional office, which provides overall direction and support for programs and activities in the region as well as funds for the State and Private Forestry operations located in Anchorage, Alaska; (2) the centralized field costs, which fund programs or activities that usually have regionwide benefits; (3) the four field offices to operate “on the ground” programs; and (4) reserve accounts from which distributions are made during the year to the field offices. As shown on table 1, the Alaska Region’s operating costs ranged from $108 million to $127 million annually during fiscal years 1993 through 1997 and were estimated to be about $106 million for fiscal year 1998. Until fiscal year 1998, the Alaska Region used a category of operating costs, known as centralized field costs, as a means to improve efficiency by having one office—either the regional office or one of the field units—manage certain programs or activities for the benefit of multiple offices. Centralized field costs include activities such as payments to the National Finance Center for payroll and accounting services. Overall, the centralized field costs established by the region increased from about $5 million in fiscal year 1993 to almost $9 million in fiscal year 1997, and the number of programs or activities included in these costs fluctuated from 24 to 41 during the same period. However, this overall increase is not reflective of the increases or decreases in individual centralized field costs during this period because the same programs or activities were not funded each year nor did the amounts of individual centralized field costs remain constant. As a component of the Alaska Region’s overall operating budget, these costs averaged about 5 percent of the total. Regional office budget officials viewed the use of these centralized field costs as a means to better achieve efficiency because the costs of certain programs or activities generally would be managed centrally rather than allocating each unit’s share of the cost and then requiring each unit to pay its proportional amount. Field office officials cited both the advantages and disadvantages of using centralized field costs. Yet none of these field office officials could provide us with specific examples of disadvantages that negatively affected their operations or what more they could have accomplished if centralized field costs had not existed. In the conference report for the Forest Service’s fiscal year 1998 appropriations, the conferees expressed concern “about the appearance that expenditures for regional office operations and centralized field costs have risen significantly as a proportion of annual appropriated funds since 1993.” As a result, in the appropriations act the Congress limited the Alaska Regional Office’s expenditures for the regional office’s operations and centralized field costs to $17.5 million, without 60 days prior notice to the Congress. The preliminary budget allocation for fiscal year 1998 regional office operations and centralized field costs totaled about $26.5 million. According to a regional budget official, the region is currently implementing the following measures to meet the congressional limitation: Eliminating all existing centralized field costs by allocating the funds directly to the field units whenever the office and amounts are known. Placing unallocated funds into a reserve account and distributing them as decisions are reached as to which office will receive the money. Separating the costs associated with the State and Private Forestry organizational unit from the regional office’s expenses. According to the regional budget official, the region eliminated centralized field costs and was able to reduce the planned regional office cost allocations to about $18.7 million as of March 4, 1998. Although this estimate exceeds the $17.5 million congressional limitation, according to an Alaska Region budget official, further adjustments will be made as the year progresses to ensure that regional office operating expenses do not exceed the amount allowed by the Congress. He also stated that centralized field costs will not be used in the future. The Alaska Region establishes reserves because of the uncertainty about the timing or the amount of funds needed for certain projects. Once the specific amount or responsible unit is determined, the region distributes the necessary reserves to the unit responsible for making the payment. In fiscal years 1995 through 1997, the Alaska Region distributed reserves ranging from $6 million to $12 million. The four field offices received from 87 to 98 percent of the reserves during this period, and the remainder went to the region for regional office operations. Any ending balance in the reserve category becomes the carryover amount for the next fiscal year. To determine whether reserves play a positive or negative role in effectively implementing programs, we spoke with officials of each of the four field offices. The officials agreed that establishing a reserve amount to facilitate the accounting for unknowns was an effective procedure and believed that the region’s actions in this case generally led to less paperwork for the local units. In most cases, the field offices viewed reserves as a reasonable approach to addressing the uncertainties related to contracting, such as delays, cost increases, or the lack of appropriate bids. Thus, overall, the field office officials generally supported the process of establishing reserves and the manner in which the regional office approached the distribution of these funds. Beginning in fiscal year 1995, the Forest Service’s Pacific Research Station scientists performed work in connection with the Tongass Land Management Plan. The work of the Research Station scientists was jointly funded: Part of the expenses was funded from the Alaska Region’s portion of the National Forest System appropriation, which is normally used for forest planning activities, and another part was funded by the Research Station’s portion of the Research appropriation, which is used for research activities. The work performed by the Research Station scientists dealt with (1) the revision of the Tongass Land Management Plan, including resource conservation assessments, resource analyses, workshops, and risk assessment panels and (2) the post-plan priority research studies identified in the plan as important for further amendments or revisions to the plan. Although we asked for documentation of the rationale for decisions about the funding split for the particular work performed by the research scientists, neither of these organizations could provide us with adequate explanations or documentation. According to the Forest Service’s records, for fiscal years 1995 through 1998 the work of the scientists will have cost about $4.7 million, of which $2.8 million was funded by the National Forest System appropriation and $1.9 million was funded by the Research appropriation. Our analysis of these data showed that the Research Station scientists used 60 percent of the funds for the revision of the plan and 40 percent for post-plan studies. According to an Intra-Agency Agreement, the Alaska Region and the Research Station plan to continue funding post-plan studies at about $1.35 million annually in future years with $900,000 and $450,000 from the National Forest System and Research appropriations, respectively. The Congress provided the National Forest System appropriation for the management, protection, improvement, and utilization of the National Forest System and for forest planning, inventory, and monitoring, all of which are non-research activities. We asked regional budget and fiscal officials to provide (1) justification for the charges to the National Forest System appropriation for the work of the Pacific Research Station scientists and (2) the criteria that they used to make this determination. These officials said that such a determination was not made and that they could not provide us with information on the types of tasks performed by the scientists with National Forest System funds. They also could not provide us with any criteria, such as agency guidance or procedures, that were available in 1995 to make such a determination. In effect, when the Research Station scientists requested National Forest System funds for work on the Tongass Land Management Plan, the Alaska Region provided the funds requested, but it did not determine if the activities funded were a proper charge to the appropriation. On March 4, 1998, the Alaska Region provided us with its final budget allocation for fiscal year 1998, and again we asked the budget officials for their justification for charges to the National Forest System appropriation for the work of the Pacific Northwest Research Station scientists, including the documentation required by the August 1997 revision to the Forest Service’s Service-Wide Appropriations Handbook. These officials said that such a justification was not made and that they had not complied with the documentation requirements of the Handbook. The Forest and Rangeland Research appropriation was provided by the Congress for the Forest Service’s research stations to conduct, support, and cooperate in investigations, experiments, tests, and other activities necessary to obtain, develop, and disseminate the scientific information required to protect and manage forests and rangelands, all of which are research activities. We asked the Pacific Northwest Research Station staff, including the Science Manager for the Tongass Land Management Plan team, to provide justification for the charges to the Research appropriation for the work of the Research Station scientists and the criteria used to make the determination. This official said that such a determination was not documented and that he could not provide us with documentation on the types of tasks performed using research funds. Also, the official could not provide us with any criteria to make such a determination. On March 4, 1998, the Research Station provided us with the estimated budget allocation for fiscal year 1998, and again we asked the Pacific Northwest Research Station’s Science Manager for justification for the charges to the Research appropriation for the work of the Research Station scientists, including the documentation required by the August 1997 revision to the Forest Service’s Service-Wide Appropriations Handbook. This official said that such a justification was not made and that the Research Station had not complied with the documentation requirements of the handbook, although it is in the process of developing a procedure to address the handbook’s requirements. The Department of Agriculture’s Office of Inspector General addressed a similar issue in its May 1995 report on the use of the National Forest System appropriation for research studies performed by the Forest Service’s research stations. The report pointed out that the Forest Service’s directives did not provide clear guidance for determining the type of reimbursable work that research stations could do for the Forest Service’s other units. According to the Inspector General’s report, this situation resulted in unauthorized augmentation of the Forest Service’s Forest and Rangeland Research appropriation. The Inspector General recommended that the Forest Service supplement its direction in its manual that provides guidance on the type of reimbursable work that research stations may perform for the Forest Service’s other units and establish procedures for reviewing the work that research stations perform for other units to ensure that it is in compliance with appropriations law and the direction in the manual. On August 28, 1997, the Forest Service issued an interim directive to its Service-Wide Appropriations Handbook that provides direction on jointly funded projects, including preparing financial plans and determining the appropriate funding allocations However, as of the date of our report, neither the Alaska Region nor the Research Station have complied with the August 1997 directive. Furthermore, because of the lack of documentation or adequate explanations, we could not determine whether the National Forest System and the Research appropriations were used appropriately or inappropriately in fiscal years 1995 through 1998. This type of documentation is particularly important when projects, such as the revision of the Tongass Land Management Plan and post-plan studies, are jointly funded by two appropriations that were provided for specifically different purposes, because the tasks funded by each must be identified and charged to the correct appropriation. Clearly, the use of one appropriation to accomplish the purpose of another is improper. It is imperative that the Forest Service in general and the Alaska Region in particular have procedures in place to ensure that appropriations are made available only for their stated purposes and that controls are in place to ensure that the procedures are used throughout the Forest Service. In our report, we recommended that the Chief of the Forest Service direct the Alaska Regional Forester and the Pacific Northwest Research Station Director to (1) fully comply with the Forest Service’s August 28, 1997, direction on special Research funding situations, which requires the preparation of financial plans and documentation of the determination of the appropriate funding allocations, and (2) establish procedures to ensure compliance with appropriations law Forest Service-wide. To date, we have not received the Forest Service’s statement of actions taken on our recommendations required by 31 U.S.C. 720. Mr. Chairman, this concludes our prepared statement. We will be pleased to respond to any questions that you or the Members of the Committee may have. The first copy of each GAO report and testimony is free. Additional copies are $2 each. 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Pursuant to a congressional request, GAO discussed: (1) the National Forest Service's Alaska Region's allocation of funds for its operating costs for fiscal year (FY) 1993 through FY 1998; (2) the nature, purpose, and allocation of centralized field costs and the steps the Alaska Region is taking to comply with the congressional limitation on the expenditures for the regional office and centralized field costs; (3) the rationale for and the distribution of regional reserve funds; and (4) whether the Forest Service's National Forest System and Research appropriations were used appropriately to pay for work performed by the Pacific Northwest Research Station in connection with the revision of the Tongass Land Management Plan and for post-plan studies. GAO noted that: (1) the Alaska Region's operating costs ranged from $108 million to $127 million annually during FY 1993 through FY 1997; (2) the region allocated 71 to 76 percent of these funds to field offices carrying out local programs, 13 to 17 percent for managing regional office operations, 4 to 7 percent for centralized field costs, 2 to 5 percent for regional reserves, and 2 to 4 percent for state and private forestry operations; (3) for FY 1998, the region's estimated allocations totalled about $106 million to carry out these regional programs; (4) until FY 1998, the Alaska Region used centralized field costs to manage certain programs or activities for the benefit of multiple offices; (5) the Forest Service's FY 1998 appropriations act limited the Alaska Regional Office's expenditures for regional office operations and centralized field costs to $17.5 million; (6) to comply with this legislative requirement, the Alaska Region eliminated the use of the centralized field cost category, included unallocated funds in regional reserve accounts until the funds are distributed to the field units, and separated the costs for state and private forestry operations from the operations of the regional office; (7) the Alaska Region establishes reserves because of the uncertainty about the timing or the amount of funds needed for certain projects; (8) once the specific amount or responsible unit is determined, the region distributes the necessary reserves to the unit responsible for making the payment; (9) any ending balance in the reserve category becomes the carryover amount for the next fiscal year; (10) beginning in FY 1995, both the Alaska Region's portion of the National Forest System appropriation and the Pacific Northwest Research Station's portion of the Forest and Rangeland Research appropriation funded the work performed by the Research Station scientists on the revision of the Tongass Land Management Plan and post-plan studies; (11) documentation of the rationale for decisions about the funding split for particular work performed by the research scientists could not be provided; and (12) GAO could not determine whether the National Forest System and Research appropriations were used appropriately or inappropriately for FY 1995 through FY 1998.

The Davis-Bacon Act was enacted in 1931, in part, to protect communities and workers from the economic disruption caused by contractors hiring lower-wage workers from outside their local area, thus obtaining federal construction contracts by underbidding competitors who pay local wage rates. Labor administers the act through its Wage and Hour Division, which conducts voluntary surveys of construction contractors and interested third parties on both federal and nonfederal projects to obtain wages paid to workers in each construction job by locality. It then uses the data submitted on these survey forms to determine locally prevailing wage and fringe benefit rates for its four construction types: building, heavy, highway, and residential. To determine a prevailing wage for a specific job classification, Labor considers sufficient information to be the receipt of wage data on at least three workers from two different employers in its designated survey area. Then, in accordance with its regulations, Labor calculates the prevailing wage by determining if the same wage rate is paid to the majority (more than 50 percent) of workers employed in a specific job classification on similar projects in the area. If the same rate is not paid to the majority of workers in a job classification, the prevailing wage is the average wage rate weighted by the number of employees for which that rate was reported. In cases where the prevailing wage is also a collectively bargained, or union, rate, the rate is determined to be “union-prevailing.” To issue a wage determination—a compilation of prevailing wage rates for multiple job classifications in a given area—Labor must, according to its procedures, also have sufficient data to determine prevailing wages for at least 50 percent of key job classifications. Key job classifications are those determined necessary for one or more of the four construction types. By statute, Labor must issue wage determinations based on similar projects in the “civil subdivision of the state” in which the federal work is to be performed. Labor’s regulations state the civil subdivision will be the county, unless there are insufficient wage data. When data from a county are insufficient to issue a wage rate for a job classification, a group of counties is created. When data are still insufficient, Labor includes data from contiguous counties, combined in “groups” or “supergroups” of counties, until sufficient data are available to meet threshold guidelines to make a prevailing wage determination. Expansion to include other counties, if necessary, may continue until data from all counties in the state are combined. Counties are combined based on whether they are metropolitan or rural, and cannot be mixed. Labor has taken several steps over the last few years to address issues with its Davis-Bacon wage surveys. For example, it finished 22 open surveys that had accumulated since the agency started conducting statewide surveys in 2002. Officials said completing these surveys will allow them to focus on more recent surveys. Labor also changed how it collects and processes information for its four construction types by surveying some construction types separately rather than simultaneously, using other available sources of wage data, adjusting survey time frames, and processing survey data as it is received rather than waiting until a survey closes. For highway surveys, Labor officials said they began using certified payrolls as the primary data source because certified payrolls provide accurate and reliable wage information and eliminate the need for Labor to verify wage data reported in surveys. Labor officials estimated these changes will reduce the processing time for highway surveys by more than 80 percent, or from about 42 months to 8 months. For building and heavy surveys, Labor began a five-survey pilot in 2009, adjusting survey time frames—with shorter time frames for areas in which there are many active projects—to allow Labor to better manage the quantity of data received. In addition, Labor officials said their regional office staff have begun processing survey data as they are received rather than waiting until a survey closes, which, they said, will improve timeliness and accuracy because survey respondents will be better able to recall submitted information when contacted by regional office staff for clarification and verification. Labor expects these changes to reduce the time needed to process building and heavy surveys by approximately 54 percent, or from about 37 months to 17 months. However, while it is too early to fully assess the effects of Labor’s 2009 actions, our review found that changes to data collection and processing may not achieve expected results. We were able to analyze the timeliness of 12 of the 16 surveys conducted under Labor’s new processes at the time of our review. Of those 12 surveys—8 highway and 4 building and heavy—which we assessed against Labor’s revised timelines, we found 10 behind schedule, 1 on schedule, and 1 not started as of September 10, 2010. A challenge to survey timeliness is the fact that Labor conducts a “universe” or “census” survey of all active construction projects within a designated time frame and geographic area. As a result, the number of returned survey forms and the time required for the regional offices to process the data can vary widely. For example, for 14 surveys conducted prior to Labor’s 2009 changes, the number of forms returned per survey ranged from less than 2,000 to more than 8,000, and the average processing time per survey for data clarification and analysis ranged from 10 months to more than 40. Moreover, Labor cannot entirely control when it receives survey forms. Some regional office officials said the bulk of the forms are returned on the last day of a survey limiting officials’ ability to gain time by processing forms while the survey is ongoing as planned under the 2009 changes. To address these challenges, OMB guidance suggests agencies consider the cost and benefits of conducting a sample survey (versus a census survey) because it can often ensure data quality in a more efficient and economical way. The fact that Labor is behind schedule on surveys begun under the new processes may affect its ability to update the many published nonunion- prevailing wage rates which are several years old. Labor’s fiscal year 2010 performance goal was for 90 percent of published wage rates for building, heavy, and highway construction types to be no more than 3 years old. Our analysis found that 61 percent of published rates for these construction types were 3 years old or less. However, this figure can be somewhat misleading because of the difference in how union- and nonunion- prevailing wage rates are updated. Union-prevailing rates account for almost two-thirds of the more than 650,000 published building, heavy, and highway rates and, according to Labor’s policy, can be updated when there is a new collective bargaining agreement without Labor conducting a new survey. We found almost 75 percent of those rates were 3 years old or less. However, 36 percent of the nonunion-prevailing wage rates were 3 years old or less and almost 46 percent were 10 or more years old. These rates are not updated until Labor conducts a new survey. Several of the union and contractor association representatives we interviewed said the age of the Davis-Bacon nonunion-prevailing rates means they often do not reflect actual prevailing wages, which can make it difficult for contractors to successfully bid on federal projects. Beyond concerns with processes and timelines, we also found that critical problems with Labor’s wage survey methodology continue to hinder its survey quality. OMB guidance states that agencies need to consider the potential impact of response rate and nonresponse on the quality of information obtained through a survey. A low response rate may mean the results are misleading or inaccurate if those who respond differ substantially and systematically from those who do not respond. However, Labor cannot determine whether its Davis-Bacon survey results are representative of prevailing wages because it has not calculated survey response rates since 2002, and, other than a second letter automatically sent to nonrespondents, does not currently have a program to systematically follow up with or analyze nonrespondents. While a senior Labor official said the agency is taking steps to again calculate response rates, these changes have not been fully implemented and it is unclear if they will result in improved survey quality. The utility of issuing wage determinations at the county level is also questionable. Labor’s regulations state the county will normally be the civil subdivision for which a prevailing wage is determined; however, Labor is often unable to issue wage rates for job classifications at the county level because it does not collect enough data to meet its current sufficiency standard of wage information on at least three workers from two employers. In the results from the four surveys we reviewed, Labor issued about 11 percent of wage rates for key job classifications using data from a single county (see fig. 1).24, 25 Moreover, in 1997, Labor’s OIG reported that issuing rates by county may cause wage decisions to be based on an inadequate number of responses. In the four surveys we reviewed, more than one-quarter of the wage rates were based on data reported for six or fewer workers (see fig. 2). We analyzed wage rates for key job classifications because wage rates for nonkey job classifications can only be issued at the county or group level, but not at the supergroup or state level. Regional office officials said they may combine rates from counties with the exact same wage and fringe benefit data in their final wage compilation report, the WD-22. However, the rates being combined may have been calculated at different geographic levels—for example, one county’s rates may have been calculated at the group level while another county’s rates my have been calculated at the supergroup level. The geographic level at which rates for combined counties were calculated is not reported on the WD-22; therefore, we reported the percentage of these rates separately. In our interviews with stakeholders, concerns about the survey process and accuracy of the published wage determinations were cited as disincentives to participate. Contractors may lack the necessary resources, may not understand the purpose of the survey, or may not see the point in responding because they believe the prevailing wages issued by Labor are inaccurate, stakeholders told us. Officials we interviewed in Labor regional offices echoed many of these same concerns about contractor participation. While 19 of the 27 contractors and interested parties we interviewed said the survey form was generally easy to understand, some identified challenges with completing specific sections, such as how to apply the correct job classification. Labor officials said they did not pretest the current survey form with respondents, and our review of reports by Labor’s contracted auditor for four published surveys found most survey forms, which are verified against payroll data, had errors in areas such as number of employees and hourly and fringe benefit rates. Labor officials said they have plans to address portions of the form that confuse respondents, but could not provide specifics on how they intend to solicit input from respondents—a step recommended by OMB to reduce error. Fifteen stakeholders we interviewed said there is a lack of transparency in wage determinations because key information is not available or hard to find. Both contractor associations and union officials said improving transparency in how the published wage rates are set could enhance understanding of the process and result in greater participation in the survey. A senior Labor official said the agency is considering posting information used to determine wage rates online. Finally, while the pre-survey briefing is one of Labor’s primary outreach efforts to inform stakeholders about upcoming surveys, awareness of these briefings was mixed. In three states that were surveyed for building and heavy construction in 2009 or 2010—Arizona, North Carolina, and West Virginia—all the union representatives we interviewed said they were aware of the pre-survey briefing and representatives from four of the six state contractor associations we interviewed said they were aware a briefing had been conducted. However, in Florida and New York—last surveyed in 2005 and 2006 respectively—none of the 12 contractors we interviewed were aware that a briefing had been conducted prior to the survey. Seven of 27 stakeholders indicated that alternative approaches, such as webinars or audioconferences, might be helpful ways to reach additional contractors. While Labor has made some changes to improve the wage determination process, further steps are needed to address longstanding issues with the quality of wage determinations and enhance their transparency. In our report, we suggested that Congress consider amending its requirement that Labor issue wage rates by civil subdivision to provide the agency with more flexibility. To improve the quality and timeliness of the wage surveys, we recommended that Labor enlist an independent statistical organization to evaluate and provide objective advice on the survey, including its methods and design; the potential for conducting a sample survey instead of a census survey; the collection, processing, tracking and analysis of data; and the promotion of survey awareness. We also recommended that Labor take steps to improve the transparency of its wage determinations, which could encourage greater participation in its survey. After reviewing the draft report, Labor agreed with our recommendation to improve transparency, but said obtaining expert survey advice may be premature, given current and planned changes. We believe a time of change is exactly when the agency should obtain expert advice to ensure their efforts improve the quality of the wage determination process. A complete discussion of our recommendations, Labor’s comments, and our response are provided in our report. Chairman Walberg, Ranking Member Woolsey, and Members of the Subcommittee, this concludes my prepared remarks. I would be happy to answer any questions you may have. For further information regarding this statement, please contact Andrew Sherrill at (202) 512-7215 or sherrilla@gao.gov. Contact points for our Office of Congressional Relations and Public Affairs may be found on the last page of this statement. Individuals who made key contributions to this testimony include Gretta L. Goodwin (Assistant Director), Amy Anderson, Brenna Guarneros, Susan Aschoff, Walter Vance, Ronald Fecso (Chief Statistician), Melinda Cordero, Mimi Nguyen, and Alexander Galuten. 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 the Department of Labor's (Labor) procedures for determining prevailing wage rates under the Davis-Bacon Act. Davis-Bacon wages must be paid to workers on certain federally funded construction projects, and their vulnerability to the use of inaccurate data has long been an issue for Congress, employers, and workers. More recently, the passage of the American Recovery and Reinvestment Act of 2009, focused attention on the need for accurate and timely wage determinations, with more than $300 billion estimated to provide substantial funding for, among other things, federally funded building and infrastructure work potentially subject to Davis-Bacon wage rates. In the 1990s, we issued two reports that found process changes were needed to increase confidence that wage rates were based on accurate data. A third report found that changes then planned by Labor, if successfully implemented, had the potential to improve the wage determination process. However, in 2004, Labor's Office of Inspector General (OIG) found that wage data errors and the timeliness of surveys used to gather wage information from contractors and others, continued to be issues. The testimony will discuss (1) the extent to which Labor has addressed concerns regarding the quality of the Davis-Bacon wage determination process and (2) additional issues identified by stakeholders regarding the wage determination process. This testimony is based on our recently issued report, titled "Davis-Bacon Act: Methodological Changes Needed to Improve Wage Survey." In summary, we found that recent efforts to improve the Davis-Bacon wage survey have not yet addressed key issues with survey quality, such as the representativeness and sufficiency of survey data collected. Labor has made some data collection and processing changes; however, we found some surveys initiated under these changes were behind Labor's processing schedule. Stakeholders said contractors may not participate in the survey because they do not understand its purpose or do not believe the resultant prevailing wages are fully accurate. In addition, they said addressing a lack of transparency in how the published wage rates are set could result in a better understanding of the process and greater participation in the survey. We suggest Congress consider amending its requirement that Labor issue wage rates by civil subdivision to allow more flexibility. To improve the quality and timeliness of the Davis-Bacon wage surveys, we recommend Labor obtain objective expert advice on its survey design and methodology. We also recommend Labor take steps to improve the transparency of its wage determinations.

VA, Education, and Labor assess education and training programs for various purposes. VA’s approval process is meant to ensure that education and training programs meet VA standards for receipt of veteran education assistance benefits, while Education’s and Labor’s processes are primarily for awarding student aid and providing apprenticeship assistance. VA administers a number of programs designed to assist individuals in gaining access to postsecondary education or training for a specific occupation (see table 1). VA generally provides its assistance in the form of payments to veterans, service persons, reservists, and certain spouses and dependents. Benefits can be used to pursue a degree program, vocational program, apprenticeship, and on-the-job training (see fig. 1). Before an individual entitled to VA education assistance can obtain money for an education or training program, the program must be approved by an SAA, or by VA in those cases in which an SAA has not been contracted to perform the work. VA’s administrative structure for the education and training assistance programs includes its national office, which oversees the four regional processing offices (RPO), and the national contract with SAAs. RPOs administer the education assistance programs and process benefits for veterans. SAAs review education and training programs to determine which programs should be approved and ensure schools and training providers are complying with VA standards. SAAs have six core duties: (1) approval of programs, (2) visits to facilities, (3) technical assistance to individuals at facilities, (4) outreach, (5) liaison with other service providers, and (6) contract management. Sixty SAAs exist in the 50 states, the District of Columbia, and Puerto Rico. Eight states have two SAAs. SAAs are usually part of a state’s department of education (31 SAAs). In some states, SAAs are organizationally located in other departments such as labor (9 SAAs) or veterans’ services (19 SAAs). The U.S. Department of Education’s approval process is to ensure that schools meet federal Education standards to participate in federal student financial aid programs. In order for students attending a school to receive Title IV financial aid, a school must be (1) licensed or otherwise legally authorized to provide postsecondary education in the state in which it is located, (2) accredited by an entity recognized for that purpose by the Secretary of Education, and (3) certified to participate in federal student aid programs by Education. As such, the state licensing agencies, accrediting agencies, and certain offices within Education are responsible for various approval activities. State licensing agencies grant legal authority to postsecondary institutions to operate in the state in which they are located. Each of the states has its own agency structure, and each state can choose its own set of standards. Accrediting agencies develop evaluation criteria and conduct peer evaluations to assess whether or not those criteria are met by postsecondary institutions. Institutions or programs that meet an agency’s criteria are then “accredited” by that agency. As of November 2005, there were 60 recognized private accrediting agencies of regional or national scope. The U.S. Department of Education’s Office of Postsecondary Education evaluates and recognizes accrediting agencies based on federal requirements to ensure these agencies are reliable authorities as to the quality of education or training provided by the institutions of higher education and the higher education programs they accredit. The U.S. Department of Education’s Office of Federal Student Aid determines the administrative and financial capacity of schools to participate in student financial aid programs, conducts ongoing monitoring of participant schools, and ensures participant schools are accredited and licensed by the states. The purpose of the Department of Labor’s approval process is to establish and promote labor standards to safeguard the welfare of apprentices. Labor establishes standards and registers programs that meet the standards. Labor directly registers and oversees programs in 23 states but has granted 27 states, the District of Columbia, and 3 territories authority to register and oversee their own programs, conducted by state apprenticeship councils (SACs). Labor reviews the activities of the SACs. SACs ensure that apprenticeship programs for their respective states comply with federal labor standards, equal opportunity protections, and any additional state standards. Figure 2 shows the agencies responsible for the approval processes for the various types of education and training programs. In 2001, SAAs received additional responsibilities as a result of legislative changes. This included responsibility for actively promoting the development of apprenticeship and on-the-job training programs and conducting more outreach activities to eligible persons and veterans to increase awareness of VA education assistance. SAAs were also charged with approving tests used for licensing and certification, such as tests to become a licensed electrician. For those tests that have been approved, veterans can use VA benefits to pay for testing fees. From fiscal years 2003 to 2006, SAA funding increased from $13 million to $19 million to expand services and support the additional responsibilities. Funding is scheduled to begin to decrease in fiscal year 2008. Many education and training programs approved by SAAs have also been approved by Education and Labor. Sixty-nine percent of all programs approved by SAAs are offered by institutions that have also been certified by Education. Seventy-eight percent of SAA-approved programs in institutions of higher learning (e.g., colleges and universities) have been certified by Education. Also, 64 percent of SAA-approved non-college degree programs are in institutions that have been certified by Education. Although less than 2 percent of all programs approved by SAAs are apprenticeship programs, VA and SAA officials reported that many of these programs have also been approved by Labor. Similar categories of approval standards exist across agencies, but the specific standards within each category vary and the full extent of overlap is unknown. For example, while VA and Education’s approval standards both have requirements for student achievement, the New England Association of Schools and Colleges, an accrediting agency, requires that students demonstrate competence in various areas such as writing and logical thinking, while VA does not have this requirement. Also among the student achievement standards, VA requires schools to give appropriate credit for prior learning, while Education does not have such a requirement. Table 2 shows the similar categories of standards that exist across agencies. policies related to student achievement, such as minimum satisfactory grades, but the requirements differ in level of specificity. Despite the overlap in approved programs and standards, VA and SAAs have made limited efforts to coordinate approval activities with Education and Labor. VA reported that while it has coordinated with Education and Labor on issues related to student financial aid and apprentices’ skill requirements, it believes increased coordination is needed for approval activities in order to determine the extent of duplicative efforts. Most of the SAA officials we spoke with reported that they have coordinated with SACs to register apprenticeship programs in their states. Labor reported that it coordinated with VA’s national office in several instances, including providing a list of registered apprenticeship programs. Education reported that it does not have formalized coordination with VA but has had some contacts to inform VA of its concerns regarding specific institutions. Information is not available to determine the amount of resources spent on SAA duties and functions, including those that may overlap with those of other agencies. VA does not require SAAs to collect information on the amount of resources they spend on specific approval activities. The SAA officials we spoke with said that their most time-consuming activity is conducting inspection and supervisory visits of schools and training facilities. However, the lack of data on resource allocation prevented us from determining what portions of funds spent by SAAs were for approval activities that may overlap with those of other agencies. SAA and other officials reported that SAA activities add value because they provide enhanced services to veterans and ensure program integrity. According to these officials, SAAs’ added value includes a focus on student services for veterans and on VA benefits, more frequent on-site monitoring of education and training programs than Education and Labor, and assessments and approval of a small number of programs that are not reviewed by other agencies, such as programs offered by unaccredited schools, on-the-job training programs, and apprenticeship programs not approved by Labor. SAA approval activities reportedly ensure that (1) veterans are taking courses consistent with occupational goals and program requirements, (2) schools and training programs have evaluated prior learning and work experience and grant credit as appropriate, and (3) school or program officials know how to complete paperwork and comply with policies required by VA educational assistance through technical assistance. According to officials we interviewed, SAAs generally conduct more frequent on-site monitoring of education and training programs than Education or Labor, possibly preventing fraud, waste, and abuse. Some officials reported that SAAs’ frequent visits were beneficial because they ensure that schools properly certify veterans for benefits and that benefits are distributed accurately and quickly. States, schools, and apprenticeship officials we spoke with reported that without SAAs, the quality of education for veterans would not change. However, veterans’ receipt of benefits could be delayed and the time required to complete their education and training programs could increase. Despite areas of apparent added value, it is difficult to fully assess the significance of SAA efforts. VA does measure some outputs, such as the number of supervisory visits SAAs conduct, but it does not have outcome- oriented measures, such as the amount of benefit adjustments resulting from SAAs’ review of school certification transactions, to evaluate the overall effectiveness and progress of SAAs. (See table 3.) We made several recommendations to the Department of Veterans Affairs to help ensure that federal dollars are spent efficiently and effectively. We recommended that the Secretary of the Department of Veterans Affairs take steps to monitor its spending and identify whether any resources are spent on activities that duplicate the efforts of other agencies. The extent of these actions should be in proportion to the total resources of the program. Specifically: VA should require SAAs to track and report data on resources spent on approval activities such as site visits, catalog review, and outreach in a cost-efficient manner, and VA should collaborate with other agencies to identify any duplicative efforts and use the agency’s administrative and regulatory authority to streamline the approval process. In addition, we recommended that the Secretary of the Department of Veterans Affairs establish outcome-oriented performance measures to assess the effectiveness of SAA efforts. VA agreed with the findings and recommendations and stated that it will (1) establish a working group with the SAAs to create a reporting system to track and report data for approval activities with a goal of implementation in fiscal year 2008, (2) initiate contact with appropriate officials at the Departments of Education and Labor to identify any duplicative efforts, and (3) establish a working group with the SAAs to develop outcome-oriented performance measures with a goal of implementation in fiscal year 2008. While VA stated that it will initiate contact with officials at Education and Labor to identify duplicative efforts, it also noted that amending its administrative and regulatory authority to streamline the approval process may be difficult due to specific approval requirements of the law. We acknowledge these challenges and continue to believe that collaboration with other federal agencies could help VA reduce duplicative efforts. We also noted that VA may wish to examine and propose legislative changes needed to further streamline its approval process. Madame Chairwoman, this completes my prepared statement. I would be happy to respond to any questions that you or other members of the subcommittee may have. For further information regarding this testimony, please contact me at (202) 512-7215. Individuals making key contributions to this testimony include Heather McCallum Hahn, Andrea Sykes, Kris Nguyen, Jacqueline Harpp, Cheri Harrington, Lara Laufer, 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.

In fiscal year 2006, the Department of Veterans Affairs (VA) paid $19 million to state approving agencies (SAA) to assess whether schools and training programs are of sufficient quality for veterans to receive VA education assistance benefits when attending them. The Departments of Education and Labor also assess education and training programs for various purposes. This testimony describes (1) changes that have occurred in state approving agencies' duties and functions since 1995, (2) the extent to which the SAA approval process overlaps with efforts by the Departments of Education and Labor, and (3) the additional value that SAA approval activities bring to VA education benefit programs. This testimony is based on a March 2007 report (GAO-07-384). Since 1995, legislative changes effective in 2001 created additional responsibilities for SAAs, including promoting the development of apprenticeship and on-the-job training programs, providing outreach services, and approving tests for occupational licensing. From fiscal years 2003 to 2006, SAA funding increased from $13 million to $19 million to expand services and support the additional responsibilities. However, funding is scheduled to decrease beginning in fiscal year 2008. Many education and training programs approved by SAAs have also been approved by Education or Labor, and VA has taken few steps to coordinate approval activities with these agencies. More than two-thirds of all programs approved by SAAs are offered by institutions that have been certified by Education. Many apprenticeship programs approved by SAAs have also been approved by Labor, although apprenticeship programs make up less than 2 percent of all programs approved by SAAs. Similar categories of approval standards, such as student achievement, exist across agencies, but the specific standards within each category vary and the full extent of the overlap is unknown. For example, VA requires schools to give appropriate credit for prior learning while Education does not have such a requirement. Despite the overlap in approved programs and standards, VA and SAAs have made limited efforts to coordinate approval activities with other federal agencies. VA does not require SAAs to collect information on the amount of resources they spend on specific approval activities; therefore, information is not available to determine the amount of resources spent on SAA duties and functions, including those that may overlap with those of other agencies. SAAs reportedly add value to the approval process for education and training programs, but the lack of outcome-oriented performance measures makes it difficult to assess the significance of their efforts. Areas of added value include (1) a focus on student services for veterans and on the integrity of VA benefits, (2) more frequent on-site monitoring of education and training programs than provided by Education or Labor, and (3) assessments and approval of a small number of programs that are not reviewed by other agencies. States, schools, and apprenticeship officials we spoke with reported that without SAAs, the quality of education for veterans would not change. However, veterans' receipt of benefits could be delayed and the time required to complete their education and training programs could increase. Despite areas of apparent added value, it is difficult to fully assess the significance of SAA efforts. VA measures some outputs, such as the number of supervisory visits SAAs conduct, but it does not have outcome-oriented performance measures, such as the amount of benefit adjustments resulting from SAAs' reviews, to evaluate the overall effectiveness of SAAs.

Virtually every federal crime comes with a hidden feature. Helpers and hands-on offenders face the same punishment. The result is the work of 18 U.S.C. 2, which visits the same consequences on anyone who orders the commission of a federal crime. This secondary liability is much like that which accompanies conspiracy, and the rationale is the same for both: society fears the crimes of several more than the crimes of one. (a) Whoever commits an offense against the United States or aids, abets, counsels, commands, induces or procures its commission, is punishable as a principal. Section 2(a), the aiding and abetting subsection, is more frequently prosecuted than §2(b), the causes subsection. Although its elements are variously described, it is often said that, "[i]n order to aid and abet another to commit a crime it is necessary that a defendant in some sort associate himself with the venture, that he participate in it as in something that he wishes to bring about, [and] that he seek by his action to make it succeed." Aiding and abetting means assisting in the commission of someone else's crime. Section 2(a) demands that the defendant embrace the crime of another and consciously do something to contribute to its success. That means that the defendant must know that the offense is afoot before it occurs if he is to be convicted of aiding and abetting. That does not mean that the defendant must aid in every aspect of the substantive offense. At common law: "where several acts constitute[d] together one crime, if each [was] separately performed by a different individual[,] ... all [were] principals as to the whole.... Indeed, ... a person's involvement in the crime could be not merely partial but minimal too: [t]he quantity [of assistance was] immaterial, so long as the accomplice did something to aid the crime.... That principal continues to govern aiding and abetting law under §2." Yet, neither knowledge without assistance nor assistance without intent is enough. Moreover, §2(a) requires that someone else commit a federal offense, because "[a]iding and abetting is not itself a federal offense, but merely describes the way in which a defendant's conduct resulted in the violation of a particular law." In Standefer , the Supreme Court rejected the petitioner's contention that "he could not be convicted of aiding and abetting a principal, Niederberger, when that principal had been acquitted of the charged offense." That view still prevails. A completed offense is a prerequisite to conviction for aiding and abetting, but the hands-on offender need be neither named nor convicted. As a general rule, the defendant's aiding and abetting must come before or at the time of the offense. Assistance given after the crime has occurred is a separate, less severely punished, offense—acting as an accessory after the fact. Whether by prosecutorial discretion or judicial pronouncement, accomplices sometimes void the application of federal principles of secondary criminal liability which usually govern conspiracy as well as aiding and abetting cases. It happens most often when there is a substantial culpability gap between the accomplice or co-conspirator and the primary offender. The cases ordinarily involve one of three types of accomplices or co-conspirators: victims, customers, and subordinates. "Victims" include "persons who pay extortion, blackmail, or ransom monies." Not every victim qualifies for the exception. Some do. Some do not. Culpability makes a difference. For instance, the Hobbs Act outlaws extortion by public officials. Yet, the erstwhile victim who is the moving party or a willing participant in a scheme to corrupt a public official is likely to be convicted and sentenced either for bribery or as an accomplice to extortion. "Customers" who have escaped conviction as co-conspirators or accomplices include drinkers, bettors, johns, and drug addicts. Examples from the Supreme Court include United States v. Farrar and Rewis v. United States . In Farrar , the Court held a speak-easy's customers could not be prosecuted as aiders and abettors of the establishment's unlawful sale of liquor. In Rewis , it reached the same conclusion for the customers of a gambling den. Rewis had been convicted of interstate travel in aid of unlawful gambling, following a jury charge that included an aiding and abetting instruction. The Court concluded that Congress had not intended mere bettors to be covered. It later indicated that same could be said of the federal gambling business statute, 18 U.S.C. 1955, when it observed that "§1955 proscribes any degree of participation in an illegal gambling business, except participation as a mere bettor." The same logic may cover a prostitute's customer. The federal Controlled Substances Act (CSA) reenforces the preexisting view that a drug trafficker's customers cannot be prosecuted coconspirators or aiders and abettors in his trafficking. Prior to the act, federal law punished the trafficker but not his customer. Since enactment of the CSA, federal law punishes the trafficker severely for possession with intent to distribute, but it punishes the customer for simply possession, ordinarily as a misdemeanor. "Subordinates" have more difficulty avoiding secondary liability. Nevertheless, in Gebardi , the Supreme Court held that a woman who agreed to be transported in interstate commerce for immoral purposes could not be charged with conspiracy to violate the Mann Act which outlawed interstate transportation of a woman for immoral purposes. Later lower federal courts continued to honor the Gebardi construction of the Mann Act, but limited it to cases in which the prostitute did no more than acquiesce in her interstate transportation. Moreover, the Occupational Safety and Health Act's (OSHA's) provisions do not allow employees of an OSHA offender to be prosecuted as aiders and abettors. On the other hand, no such benefit accrues to subordinates supervised by offenders of the federal gambling business statute, which condemns those who own or supervise an unlawful gambling enterprise which involves direction of five or more individuals. There is no consensus over how subordinates of a drug kingpin may be treated. (b) Whoever willfully causes an act to be done which if directly performed by him or another would be an offense against the United States, is punishable as a principal. Although the words "commands, induces or procures" in §2(a) would seem to capture crimes committed through an agent, as the 1948 report explained the language of §2(b) leaves no doubt. Section 2(b) applies to defendants who work through either witting or unwitting intermediaries, through the guilty or the innocent. Whether the intermediary is a subordinate or an undercover government agent, he may be well aware that his conduct constitutes an element of the underlying offense. On the other hand, whether the intermediary is a dupe or a facilitating governmental official, §2(b) also applies even if he is unaware of the nature of his conduct. When the intermediary is an innocent party, no one but the "causing" individual need commit the underlying offense. Yet there must be an underlying crime. Section 2(b) imposes no liability unless the actions of the defendant and his intermediary, taken together, constitute an offense. Congress gave little indication of its purpose when it changed "causes" to "willfully causes," in 1951. The amendment originated in the Senate Judiciary Committee, after the House had passed its version of the bill. The committee report explained why it changed "is a principal" to "is punishable as a principal," but said nothing about why it added the word "willfully." There has been some speculation that the word "willfully" was added to address an observation by Judge Learned Hand. Judge Hand had observed that §2(a) had a mental element ("knowing"), but that §2(b) had no comparable element. In any event and although it seems far from certain, it appears that the courts understand "willfully" to mean a dual form of "intentionally." They believe that an individual "willfully" causes an offense when he intends the commission of conduct that constitutes a crime and then intentionally uses someone else to commit it. An individual may incur liability under §2(b) even if he is unaware that the underlying conduct is in fact a crime. Federal courts sometimes mention a withdrawal defense comparable to one available in conspiracy cases. In conspiracy, withdrawal is not a defense for conspiracy itself but only for the crimes committed in foreseeable furtherance of the scheme after the defendant's withdrawal. "To establish withdrawal from a conspiracy, the defendant has the burden to demonstrate that he took affirmative action by making a clean breast to the authorities or by communicating his withdrawal in a manner reasonably calculated to reach his coconspirators." In aiding and abetting, the withdrawal defense in federal cases may be more limited. Certainly, an individual faces no liability under §2(a) if the underlying offense goes uncommitted as a consequence of the withdrawal of his necessary assistance. Aiding and abetting needs a completed offense. The question is more difficult in cases where the crime blooms in spite of an abettor's abandonment. "[I]t is unsettled if a defendant can withdraw from aiding and abetting a crime. Other courts have reached varying results when considering the applicability of the withdrawal defense to the federal accomplice liability statute." Proponents of a general withdrawal defense may claim support from recent dicta in Rosemond . Rosemond had been convicted of two crimes, distributing marijuana (21 U.S.C. 841) and discharging a firearm during a drug trafficking offense (18 U.S.C. 924(c)). The Tenth Circuit had upheld an alternative aiding and abetting instruction concerning the firearm charge. The Supreme Court explained that an accomplice must know of the substantive offense beforehand in order to be shown to have embraced its commission. It did so in a manner suggesting an accomplice might be able to withdraw and escape liability prior to the commission of the substantive offense, even if he had contributed to the crime's ultimate success. "Congress has not enacted a general civil aiding and abetting statute.... Thus, when Congress enacts a statute under which a person may sue and recover damages from a private defendant for the defendant's violation of some statutory norm, there is no general presumption that the plaintiff may also sue aiders and abettors." With this in mind, the courts have concluded, for example, that aiders and abettors incur no civil liability as a consequence of their violations of the Anti-Terrorism Act; the Electronic Communications Privacy Act; the Stored Communications Act; or RICO.

Virtually every federal criminal statute has a hidden feature; primary offenders and even their most casual accomplices face equal punishment. This results from 18 U.S.C. 2, which visits the same consequences on anyone who orders or assists in the commission of a federal crime. Aiding and abetting means assisting in the commission of someone else's crime. Section 2(a) demands that the defendant embrace the crime of another and consciously do something to contribute to its success. An accomplice must know the offense is afoot if he is to intentionally contribute to its success. While a completed offense is a prerequisite to conviction for aiding and abetting, the hands-on offender need be neither named nor convicted. On occasion, an accomplice will escape liability, either by judicial construction or administrative grace. This happens most often when there is a perceived culpability gap between accomplice and primary offender. Such accomplices are usually victims, customers, or subordinates of a primary offender. Section 2(b) (willfully causing a crime) applies to defendants who work through either witting or unwitting intermediaries, through the guilty or the innocent. Whether the intermediary is a subordinate or an undercover government agent, he may be well aware that his conduct constitutes an element of the underlying offense. On the other hand, whether the intermediary is a dupe or a facilitating governmental official, §2(b) applies even if the intermediary is unaware of the nature of his conduct. Section 2(a) requires two guilty parties, a primary offender and an accomplice. Section 2(b) permits prosecution when there is only one guilty party, a "causing" individual and an innocent agent. Both subsections, however, require a completed offense. Federal courts sometimes mention, but rarely apply, a withdrawal defense comparable to one available in conspiracy cases. Proponents of a general withdrawal defense in §2 cases may find support in recent Supreme Court dicta. In Rosemond, the Court explained that an accomplice must know of the pending substantive offense in order to be shown to have embraced its commission. It did so in a manner suggesting that an accomplice might be able to withdraw and escape liability prior to the commission of the substantive offense, even if he had contributed to the crime's ultimate success. There is no general civil aiding and abetting statute. Aiding and abetting a violation of a federal criminal law does not trigger civil liability unless Congress has said so in so many words. This report is an abridged version of CRS Report R43769, Aiding, Abetting, and the Like: An Overview of 18 U.S.C. 2, by [author name scrubbed], without the footnotes, attribution for quotations, and citations to authority found there.

percentage of organ donors who belonged to racial and ethnic minority groups increased from about 16 to 23 percent. The organ donation process usually begins at a hospital when a patient is identified as a potential organ donor. Only those patients pronounced brain dead are considered for organ donation. Most organ donors either die from nonaccidental injuries, such as a brain hemorrhage, or accidental injuries, such as a motor vehicle accident. Other causes of death that can result in organ donation include drowning, gunshot or stab wound, or asphyxiation. Once a potential organ donor has been identified, a staff member of either the hospital or the OPO typically contacts the deceased’s family, which then has the opportunity to donate the organs. If the family consents to donation, OPO staff coordinate the rest of the organ procurement activities, including recovering and preserving the organs and arranging for their transport to the hospital where the transplant will be performed. One donor may provide organs to several different patients. Each cadaveric donor provides an average of three organs. In 1996, OPOs procured kidneys from 93 percent of organ donors and livers from 82 percent of them; other organs were procured at lower rates. The national system of 63 OPOs currently in operation coordinates the retrieval, preservation, transportation, and placement of organs. For Medicare and Medicaid payment purposes, HCFA certifies that an OPO meets certain criteria and designates it as the only OPO for a particular geographic area. OPOs must meet service area and other requirements. As of January 1, 1996, each OPO had to meet at least one of the following service area requirements: 1. It must include an entire state or official U.S. territory. 2. It must either procure organs from an average of at least 24 donors per calendar year in the 2 years before the year of redesignation, or it must request and receive an exception to this requirement. 3. If it operates exclusively in a noncontiguous U.S. state, territory, or commonwealth, the OPO must procure organs at the rate of 50 percent of the national average of all OPOs for both kidneys procured and transplanted per million population. 4. If it is a new entity, the OPO must demonstrate that it can procure organs from at least 50 potential donors per calendar year. In addition, an OPO must be a nonprofit entity and meet other requirements for the composition of its board, its accounting, its staff, and its procedures. To ensure the fair distribution and safety of organs, OPOs must have a system to equitably allocate organs to transplant patients. In addition, OPOs must arrange for appropriate tissue typing of organs and ensure that donor screening and testing for infectious diseases, including the human immunodeficiency virus, are performed. OPOs use a variety of methods for increasing donation such as raising public awareness of organ donation and developing relationships with hospitals. The goal of public education is to promote the consent process, giving people the information they need to make decisions about organ and tissue donation and encouraging them to share their decisions with their families. Such public education campaigns include mass media advertising; presentations to schools, churches, civic organizations, and businesses; and informational displays in motor vehicle offices, city and town halls, public libraries, pharmacies, and physician and attorney offices. In addition, education efforts help hospital staff clarify organ and tissue recovery policies to ensure that potential donors are consistently recognized and referred. OPOs also conduct hospital development activities to build strong relationships with service area hospitals to promote organ donation. determined to be a new entity and not subject to meeting the performance standard. A population-based standard, however, does not accurately assess OPO performance because OPO service areas consist of varying populations. Although potential organ donors share certain characteristics, including causes of death, absence of certain diseases, and being in a certain age group, OPO service area populations can differ greatly in these characteristics. For example, motor vehicle accidents, the cause of death for about one-quarter of organ donors in 1994 and 1995, ranged from about 4.4 to about 17.9 per 100,000 population among the states and the District of Columbia. In addition, the rates of acquired immunodeficiency syndrome, a disease that eliminates someone for consideration as an organ donor, differ among the states and the District of Columbia—from 2.8 to 246.9 cases per 100,000 people in 1994. Furthermore, although most organ donors were between 18 and 64 years of age in 1994 and 1995, this age group constitutes from 56 to 66 percent of the population in different states. Thus, the number of potential organ donors can vary greatly for OPOs serving equally sized populations. We identified several performance measures as alternatives to the current population-based standard. The alternatives we examined included measuring organ procurement and transplantation compared with (1) the number of deaths, (2) the number of deaths adjusted for cause of death and age, (3) the number of potential donors based on medical records reviews, and (4) the number of potential donors based on modeling estimates in an OPO service area. In developing its current OPO performance standard, HCFA considered using the number of service area deaths as the basis for assessing performance. Although some organs, typically kidneys, are obtained from living donors, OPOs recover organs from cadaveric donors. Therefore, the number of deaths in an OPO’s service area more accurately reflects the number of an OPO’s potential donors. In 1994, the United States had about 2.3 million deaths out of a population of about 260 million. Although using total deaths fails to consider other factors about and characteristics of potential donors, it would eliminate considering a portion of the population that an OPO clearly could not consider for organ donation. HCFA also considered using an adjusted measure of deaths for the performance standard. Measuring OPO performance according to the number of service area deaths adjusted for cause of death and age more accurately reflects the number of potential donors than measuring performance according to the number of all service area deaths. The number of service area deaths adjusted for cause of death and age better estimates the number of potential donors because it accounts for the small subset of the deceased that may be suitable organ donation candidates. Adjusting for cause of death and limiting consideration to deaths of those under age 75, we found that in 1994 about 147,000, or 6 percent, of the 2.3 million U.S. deaths involved these causes of death or were of people in this age group. This estimate, however, is much larger than the estimates some have made of a national donor pool of from 5,000 to 29,000 people per year. We found that both the death and adjusted-death measures have drawbacks that limit their usefulness, however, including lack of timely data and inability to identify those deaths suitable for use in organ donation. We ranked the OPOs, using 1994-95 OPO procurement and transplant data, according to the current population-based measure and these two alternative measures—number of deaths and adjusted deaths. Although three OPOs would not qualify for recertification under any of these measures, according to our review, the number of and which OPOs would not qualify vary depending on the measure used. More OPOs would have been subject to termination under either of these alternative measures. HCFA did not consider two other methods for determining the number of potential donors—medical records reviews and modeling—that show promise for determining OPOs’ ability to acquire all usable organs. Reviewing hospital medical records is the most accurate method of estimating the number of potential donors in an OPO’s service area. A medical records review involves reviewing all deaths at a hospital with an in-depth examination of those meeting certain criteria. Reviewing the records of these patients reveals the patients’ suitability for organ donation based on several factors, including cause of death, evidence of brain death, and contraindications for donation such as age and disease. Such reviews can identify that subset of deaths in which patients could have become organ donors—the true number of potential donors for an OPO service area. Most OPOs do conduct medical records reviews but at varying levels of sophistication. For records reviews to be useful for assessing OPO performance, the reviews would have to be conducted consistently among OPOs and the results would need to be available for validation. Such reviews, however, are labor intensive and therefore expensive. Although most OPOs are conducting some form of medical records reviews and therefore already incurring the costs of these reviews, HCFA must consider its own and the OPOs’ additional expense involved in standardizing such reviews. Other considerations include the extent to which the reviews would add to the cost of organs and whether these costs would outweigh the benefit of more accurately measuring the number of potential donors. Another alternative, modeling, shows promise and would be less expensive than medical records reviews. At least one group is developing a modeling method using substitute measures to provide a valid measure for estimating the number of potential donors. The goal of this effort is to design an estimating procedure that will be relatively simple to execute, inexpensive, and valid. This approach uses information from hospitals in the OPO’s service area on variables, such as total number of deaths, total staffed beds, Medicare case mix, medical school affiliation, and trauma center certification, to predict the number of potential donors. Using existing data would make this alternative less costly than medical records reviews; however, the accuracy of such a model has yet to be established. If the number of potential donors for an OPO can be reasonably predicted using a set of variables, this could eliminate concerns about the cost of implementing medical records reviews. HCFA believes its current standard identifies OPOs that are poor performers. When publishing its final rule, however, the agency stated that it was interested in any empirical research that would merit consideration for further refining its standard. The approaches we identified in our report merit HCFA’s consideration. potential donors at a reasonable cost, it should choose one and begin assessing OPO performance accordingly. HCFA has concurred with our recommendation. It has indicated that when the ongoing research on medical records reviews and modeling are complete and it receives the studies, it will review the results to determine if it can support a better performance standard. HCFA’s continuous monitoring of the developments in approaches to identifying potential organ donors is important. Because the demand for organs surpasses the supply, OPOs are required by law to conduct and participate in systematic efforts to acquire all usable organs from potential donors. As we have reported, unless HCFA measures OPO performance according to the number of potential donors, the agency cannot determine OPOs’ effectiveness in acquiring organs. 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: (1) whether the current standard for assessing the local organ procurement organizations' (OPO) effectiveness appropriately measures the extent to which OPOs are maximizing their ability to identify, procure, and transplant organs and tissue; and (2) alternatives to the current standard that could be more effective. GAO noted that: (1) the Health Care Financing Administration's (HCFA) current performance standard does not accurately assess OPO's ability to meet the goal of acquiring usable organs because it is based on the total population, not the number of potential donors within the OPOs' service areas; (2) GAO identified two alternative performance measures that would better estimate the number of potential organ donors--measuring the rates of organ procurement and transplantation compared with either the number of deaths or the number of deaths adjusted for cause of death and age; (3) both these approaches have limitations, however, in data availability and accuracy; (4) two other methods for assessing OPO performance--medical records reviews and modeling--show promise because they could more accurately determine the number of potential donors; and (5) because OPOs must meet performance goals to continue to operate, approaches that more accurately differentiate between OPOs that achieve greater or lesser proportions of all possible donations in their service areas can help increase donations.

Section 2 would have addressed the problem of regional shortages of petroleum and natural gas products by amending the Clayton Act to make it unlawful for "any person to refuse to sell, or to export or divert, existing supplies of petroleum, gasoline, or other fuel derived from petroleum or natural gas with the primary intention of increasing prices or creating a shortage in a geographic market." The provision set out the circumstances that were to be considered by a court in determining whether the actions made unlawful were done "with the intent of increasing prices or creating a shortage...." Sections 3-5 would have imposed review, reporting, and study requirements on the Federal Trade Commission (FTC), the Attorney General, and the Government Accountability Office (GAO). Section 3 would have required the FTC and the Attorney General, to (1) conduct a study of section 7 of the Clayton Act (15 U.S.C. § 18), the so-called antimerger section, in order to determine "whether [that] section ... should be amended to modify how that section applies to persons engaged in the business of exploring for, producing, refining ... or otherwise making available petroleum, gasoline or other fuel derived from petroleum or natural gas"; and, within 270 days of S. 2557 's enactment, (2) report to Congress the study's findings, "including recommendations and proposed legislation, if any." The report was to be based, in addition to the parties' own study of section 7 of the Clayton Act, on the Section 4-required GAO study. Section 4 would have required the GAO, within 180 days of enactment, to evaluate "the effectiveness of divestitures required under" consent decrees entered into within the past 10 years between either the FTC or the Department of Justice and "persons engaged in" the same segments of the petroleum or natural gas industries as those subject to study (as noted above) by the Attorney General and the FTC. The GAO study, was to have been submitted to Congress, the Attorney General, and the FTC, within 180 days of S. 2557 's enactment. Further, section 4 of S. 2557 would have required that the Attorney General and the FTC, in addition to reviewing the report for purposes of their report to Congress mandated in section 3(b) of S. 2557 , also "consider whether any additional action is required to restore competition or prevent a substantial lessening of competition occurring as a result of any transaction that was the subject of the [GAO] study...." Section 5 would have required the Attorney General and the FTC to establish a "joint federal-State task force" with any state Attorney General who chose to participate, to investigate information sharing (including [that facilitated] through the use of exchange agreements and commercial information services), among persons [described in the mandates for the above-cited studies, and] (including any person about which the Energy Information Administration collects financial and operating data as part of its Financial Reporting System). Section 6 would have created the "No Oil Producing and Exporting Cartels Act of 2006" ("NOPEC") as an amendment to the Sherman Antitrust Act (15 U.S.C. §§ 1-7) by inserting new provisions to make illegal, and an antitrust violation, actions by "any foreign state, or any instrumentality or agent of any foreign state, … to act collectively or in combination with any other foreign state, ... or any other person, whether by cartel or any other association or form of cooperation or joint action—" to engage in certain, specified actions with respect to natural gas or petroleum products, including those to (1) limit either "the production or distribution," (2) "set or maintain the price of," or (3) "take any [other] action in restraint of trade"— if any of those actions "has a direct, substantial, and reasonably foreseeable effect on" U.S. commerce. Pursuant to proposed section 8(c) of the Sherman Act, the doctrine of sovereign immunity would not protect any foreign state from "the jurisdiction or judgments" of U.S. courts in any action brought on account of conduct alleged to be in violation of the foregoing prohibitions. Proposed section 8(d) would prohibit use of the act of state doctrine as a court's rationale for "declin[ing] ... to make a determination on the merits in an action brought under this section." The final provisions of section 6 would add language to 28 U.S.C. § 1605(a), which lists exceptions to the Foreign Sovereign Immunities Act, to clarify that sovereign immunity does not apply in instances "in which [an] action is brought under section 8 of the Sherman Act." Technical matters concerning references to existing statutes or to statutory provisions (several of which have been renumbered in the past several years, including editorial renumbering after enactment) are best addressed by the Senate Office of Legislative Counsel. Similarly, that Office might also best provide U.S. Code citations to accompany the statutory section references so as to clarify exactly which provisions are being named, amended, or added. In addition, that Office's familiarity with legislative drafting considerations should enable them to suggest the most advantageous placement of proposed provisions. Making it unlawful for "any person to refuse to sell, export or divert, existing supplies of petroleum..." would likely be challenged by those who would note that the courts, beginning with the Supreme Court's 1919 decision in United States v. Colgate & Co., have long acknowledged the right of an individual businessman to do business, or not, with whomever he likes, and on whatever terms and conditions he deems acceptable: In the absence of any purpose to create or maintain a monopoly, the [Sherman] act does not restrict the long recognized right of trader or manufacturer engaged in an entirely private business, freely to exercise his own independent discretion as to parties with whom he will deal; and, of course, he may announce in advance the circumstances under which he will refuse to sell. Section 1 of the Sherman Act prohibits "contracts or conspiracies in restraint of trade" —in other words, collusion. Section 2 prohibits "monopolization" or "attempted monopolization"—which may entail unilateral, "guilty behavior" by either a would-be monopolist in his quest to become one (attempt), or an existing monopolist acting to maintain his monopoly position by other than the "superior product, business acumen, or historic accident" which served to create the monopoly in the first place. Presently, absent either the collusion (joint action) made unlawful by section 1 of the Sherman Act, or the "guilty behavior" which might constitute violation of section 2, there is not any statutory constraint on unilateral business decisions, and the courts have been reluctant to infer one. The Federal Trade Commission has released two reports—in July 2005 and March 2006 - concerning the gasoline industry. The former "analyze[d] in detail the multiple factors that affect supply and demand—and thus prices for gasoline ...; the latter, an interim report, was produced in response to Congressional directives, and outlines the Commission's rationale and methods for combining the mandated studies. Tasking the FTC with the study and reporting requirements contained in sections 3 and 4, in addition to those contained in other legislation, might result in the Commission's inability to conduct timely enforcement activities and/or continue its program to monitor "weekly average gasoline and diesel prices in 360 cities nationwide to find and, if necessary, recommend appropriate action on pricing anomalies that might indicate anticompetitive conduct." Provisions similar to the NOPEC provisions of S. 2557 , an apparent attempt to nullify the courts' refusal, in 1979, to sanction a suit against OPEC by the International Ass'n of Machinists and Aerospace Workers (IAM), would not necessarily accomplish the presumed goal of precluding OPEC's influence on gasoline prices. First, a provision that would add language to the Sherman Act to make certain actions unlawful under that statute, may be redundant: those actions taken abroad by a non-sovereign that have the requisite effect on U.S. commerce are already reachable under the U.S. antitrust laws, even absent specific statutory authorization. As stated by the United States Court of Appeals for the Second Circuit in 1945: We should not impute to Congress an intent to punish all whom its courts can catch, for conduct which has no consequences within the United States. American Banana Co. v. United Fruit Co., 213 U.S. 347, 357, .... On the other hand , it is settled law ... that any state may impose liabilities, even upon persons not within its allegiance, for conduct outside its borders that has consequences within its borders which the state reprehends; and these liabilities other states will ordinarily recognize. In addition, the Foreign Sovereign Immunities Act (FSIA) of 1976 contains a commercial activity exception to the general rule that a foreign state is protected from the jurisdiction of U.S. courts by the doctrine of sovereign immunity. There is no sovereign immunity, according to existing statute (28 U.S.C.A. § 1605(a)(2)), in circumstances in which the [judicial] action is based upon a commercial activity carried on in the United States by the foreign state; or upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere; or upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States; S. 2557 , for example, would have stated specifically that actions brought pursuant to the Sherman Act do not trigger sovereign immunity, but the provision did not define OPEC as a "country" for purposes of the act; such a lack could present a problem for two reasons. The S. 2557 language did not, seemingly, add meaningfully to the general "commercial activity exception" language of FSIA. The IAM's unsuccessful attempt to use FSIA to sue OPEC for, inter alia , price fixing under the antitrust laws is a useful illustration; it foundered for reasons that do not seem to have been remedied by the bill's proposed statutory provisions. The district court found that because OPEC was not a country, FSIA was inapplicable, and no action could be brought against OPEC under it. Further, and perhaps more important, the court found that the "indirect purchaser" doctrine denied the IAM standing to sue (477 F.Supp. at 560-61). Congress has not granted indirect purchasers standing under the federal antitrust laws, although several states have done so with regard to their own antitrust laws. Although proposed section 8(e) of the Sherman Act would allow suits to be brought by the Attorney General, it would not alter a current prohibition on private actions—the indirect purchaser doctrine. Affirming the district court's dismissal of the IAM suit, the appeals court reasoning was based on non-FSIA, non-antitrust factors, and couched in language that does specifically mention the act of state doctrine, indicating the questionable effectiveness of proposed section 8(d)'s direction that courts not "decline, based on the act of state doctrine, to make a determination on the merits in an action brought on this section." While the case is formulated as an anti-trust action, the granting of any relief would in effect amount to an order from a domestic court instructing a foreign sovereign to alter its chosen means of allocating and profiting from its own valuable natural resources. On the other hand, should the court hold that OPEC's actions are [antitrust] legal this "would greatly strengthen the bargaining hand" of the OPEC nations in the event that Congress or the executive chooses to condemn OPEC's actions.

This report addresses one of several approaches to the issue of rising gasoline prices put forward in the 109th Congress. S. 2557 was introduced on April 6, 2006, by Senator Specter, Chairman of the Senate Judiciary Committee, reported by that committee on April 27, but was not scheduled for floor action. The bill sought to amend the antitrust laws to accomplish four things. Mitigate regional shortages of petroleum and natural gas products Mandate federal agency reviews to (a) fine-tune the statutory provision most concerned with mergers (Section 7 of the Clayton Act, 15 U.S.C. § 18, which makes unlawful any merger or acquisition in or affecting commerce that may "substantially" lessen competition or "tend to create a monopoly" in any line or commerce in any section of the country) so that it would be particularly applicable to mergers in the oil and gas industry, and (b) examine the effectiveness of the divestiture remedy for mergers in that industry Establish a federal-state task force to examine information-sharing in the oil and gas industries; and Make U.S. antitrust law applicable to certain actions carried out by the Organization of Petroleum Exporting Countries (OPEC).

President Bush and Moroccan King Mohammed VI announced at a meeting in Washington, D.C. on April 23, 2002, that the two countries would seek to negotiate a free trade agreement. On October 1, 2002, U.S. Trade Representative Robert Zoellick sent Congress formal notification of the Administration's intention to begin FTA talks with Morocco. In his notification letter, Zoellick stated that the completion of an FTA with Morocco would "support this Administration's commitment to promote more tolerant, open and prosperous Muslim societies." Negotiations for the FTA were launched on January 21, 2003, in Washington. After a total of eight negotiating rounds, U.S. Trade Representative Robert Zoellick and Moroccan Minister Taib Fassi-Fihri reached agreement on March 2, 2004 on a comprehensive FTA. After the required 90-day congressional notification period expired, the two sides signed the agreement on June 15, 2004. Both the Senate and House approved implementing legislation in July 2004, and President Bush signed the legislation into law ( P.L. 108-302 ) on August 3, 2004. The Moroccan Parliament ratified the agreement on January 18, 2005, but subsequently had to legislate changes in the country's intellectual property laws to implement its FTA obligations. According to the Office of the U.S. Trade Representative, Morocco was chosen as an FTA partner for multiple reasons. First, USTR officials stated that a trade agreement with Morocco would further the executive branch's goal of promoting openness, tolerance, and economic growth across the Muslim world. Second, Morocco has been a strong ally in the war against terrorism. Third, the FTA would ensure stronger Moroccan support for U.S. positions in WTO negotiations. Fourth, USTR officials maintained that an FTA would help Morocco strengthen its economic and political reforms. Fifth, the agreement is expected to provide U.S. exporters and investors with increased market access. The Moroccan trade pact is now the fourth FTA (after Israel, Jordan, and Bahrain) the United States has in force with a Middle Eastern country. An agreement with Oman has been signed, but not yet considered by Congress. Each agreement is intended to be an integral part of President Bush's strategy to create a Middle East Free Trade Area by 2013. Morocco is a moderate Arab state which maintains close relations with Europe and the United States. Situated in North Africa on a land mass slightly larger than California, Morocco borders the North Atlantic ocean and Mediterranean Sea between Algeria and Western Sahara. Approximately 99% of its 30 million people are Muslim. The government of Morocco today is a constitutional monarchy. King Mohammed VI, who assumed the throne in July 1999, is the head of state. The constitution grants the King extensive powers, including the authority to appoint the prime minister and several key ministers individually, and approve the Council of Ministers, the power to dismiss the government, the power to dissolve the parliament, and the power to rule by decree. The King also serves as the supreme commander of the armed forces and serves as Morocco's religious leader or "Commander of the Faithful." The King, and not the Prime Minister, also defines the policy directions and priorities of the government. On the one hand, there have been some calls from elements of the Moroccan press for reform of the constitution to reduce the powers of the King, while enhancing the powers of the Parliament. On the other hand, many analysts believe that King Mohammed VI is dedicated to addressing Morocco's underlying social problems, while gradually liberalizing the political system further. Following September 2002 parliamentary elections, King Mohammed named Driss Jettou as Prime Minister and head a six-party center-left coalition government. Mr. Jettou is often described as a forceful technocratic leader. Yet Morocco's over 20 political parties create a fragmented political system, making it difficult for the government to reach consensus on how best to address its many social and economic problems. Critically, high unemployment that averages over 20% in urban areas, increasing income inequality, and widespread poverty provide fertile ground for increasing support for a fundamentalist Islamist movement, al-Adl wal-Ihsane (Justice and Charity). With a per capita income of about $2,000 (2002), Morocco also faces challenges typical of many poor developing countries. These include preparing the economy for freer trade, reducing public sector wage rates and bloated ministries, increasing labor market flexibility and skills, restoring a crumbling infrastructure, and reducing dependence on imported energy. Morocco's economy is based on mining, agriculture, fishing, tourism, a growing manufacturing sector, and a deregulated telecommunications sector. Morocco has the world's largest phosphate reserves, and exports of phosphates from state-owned companies account for about 17% of Morocco's total exports. Agriculture accounts for between 15-20% of GDP and employs between 40-45% of its workforce (services employs around 35% and industry around 15%). Morocco is a net exporter of fruits and vegetables and a net importer of cereals, oilseeds, and sugar. Severe droughts often hurt Morocco's farm production, thereby serving as a drag on economic growth. The Moroccan economy also depends heavily on the inflow of funds from Moroccans working abroad. The illegal production and export of cannabis also plays a role in the economy, particularly in the north. The European Union is its primary trading partner, accounting for nearly 67% of its exports and 55% of its imports in 2002. France is Morocco's single largest trading partner by a wide margin. The United States is a relatively small trading partner, accounting for about 5% of Morocco's total trade. The Bush Administration's decision to negotiate a FTA with Morocco was a surprise to a number of observers. A U.S. Chamber of Commerce official, for example, questioned the decision on the grounds that the United States does not do a lot of business with Morocco and that other Middle Eastern countries, such as Egypt and Turkey, would be more suitable partners. The Bush Administration, backed by a coalition of U.S. companies that support the negotiation, responded that both U.S. economic and political interests (see below) will be well served by the proposed FTA. Before the FTA, U.S. exports to Morocco faced an average tariff of 20% versus a 4% average tariff that Moroccan exports face in the U.S. market. By moving towards duty-free treatment, two-way trade flows should expand beyond the current small $ 854 million level (comprising U.S. exports of $469 million and imports of $385 million in 2003). In addition to the current leading U.S. exports to Morocco (aircraft, corn, and machinery), U.S. exports of products such as wheat, soybeans and feed grains, beef and poultry are expected to increase under the FTA. New commercial opportunities for U.S. exporters may also be derived by offsetting current tariff preferences as embodied in the European Union-Morocco Association Agreement, which became effective on March 1, 2000. This agreement provides preferential tariff treatment for most EU industrial goods, but largely excludes agriculture. Because agriculture will be included in the U.S.-Moroccan FTA, many U.S. agricultural interests believe they can enhance their position vis-a-vis European producers. The U.S.-Moroccan Business coalition also argues that the FTA will increase the access American firms have to Morocco's service sector. Besides telecommunications and tourism, the coalition maintains that new opportunities for U.S. firms in the banking, energy, audio-visual, telecommunications, finance, and insurance sectors are likely to be opened up as a result of Moroccan economic reforms. In addition, the FTA could support the Bush Administration's trade strategy of "competitive liberalization." By helping a developing country that recognizes the importance of trade liberalization as a key ingredient of development, the Moroccan FTA could demonstrate to other developing countries the benefits of economic reform and trade liberalization, including the WTO round of multilateral negotiations - the Doha Development Agenda. As a Chair of the G-77 and Africa Group within the WTO, the Bush Administration maintains that Morocco is in a leading position to promote the benefits of the Doha Round to other developing countries. Similar to the Jordan-U.S. FTA, the FTA with Morocco is viewed by the Administration as a tool to support a moderate Muslim state in the region. By contributing to increased development and prosperity in Morocco, the FTA is intended to contribute to the stability of the region and send a concrete signal to countries in the Middle East about the benefits of closer economic and political ties with the United States. The FTA is also a mechanism for advancing the overall U.S.-Moroccan relationship. As Morocco is one of the strongest U.S. allies in the war on terrorism in the Middle East, the FTA is intended as a reward for its support, as well as send a signal to the rest of the Arab world that the United States wants closer ties. At a time many voices in the Arab and Muslim world are calling for boycotts against the United States, Morocco is seeking a closer economic relationship. The agreement provides that more than 95% of bilateral trade in consumer and industrial products will become duty-free immediately, and all other remaining tariffs will be eliminated within nine years. U.S. export sectors such as information technology products, construction equipment, and chemical stand to benefit. For the import-sensitive textile and apparel sector, trade will be duty-free if imports meet the Agreement's rules of origin. The Agreement requires qualifying apparel to contain either U.S. or Moroccan yarn and fabric and a limited amount of third country content. On agriculture, U.S. poultry, beef, and wheat exports will benefit from liberalization of Morocco's tariff-rate quotas. Morocco will also provide immediate duty-free access on products such as pecans, frozen potatoes, and breakfast cereals and more graduated duty-free access on other products such as soybeans, sorghum, and grapes. For its part, the United States will phase-out all agricultural tariffs, most in fifteen years. Morocco will provide U.S. service providers such as audiovisual, express delivery, telecommunications, computer and related services, construction, and engineering with enhanced access to its market. U.S. banks and insurance companies will have the right to establish subsidiaries and joint ventures in Morocco, as well as the right to establish branches, subject to a four year phase-in for most insurance providers. Protections and non-discriminatory treatment are provided for digital products such as U.S. software, music, text, and videos. Protections for U.S. patents, trademarks, and copyrights parallel and in some cases deepen the standards of other U.S. FTAs. In the area of telecommunications, each government commits to that users of the telecom network will have reasonable and non-discriminatory access to the network. U.S. phone companies will have the right to interconnect with former monopoly networks in Morocco at non-discriminatory, cost-based rates. The agreement provides for anti-corruption measures in government contracting. U.S. companies are provided access to bidding on a range of Moroccan government contracts and procurement. Both countries also commit to enforce their domestic labor and environmental laws, and the agreement includes a cooperative mechanism in both labor and environmental areas. Agricultural producers in the United States welcome the tariff reductions that will be phased in as a result of the FTA. In particular, the American Soybean Association said that the duty on soybeans for processing will be eliminated immediately, and soybeans imported for other uses and processed soy products will be reduced by 50% in the first year of the agreement and phased out over the next five years. Previous import duties in Morocco were 2.5% on soybeans for processing, 25% on soybean meal, and 75.5% for soy products that are used in human food. The National Cattlemen's Beef Association looks forward to increased market access to Morocco's hotel and restaurant industry as Morocco opens its market to U.S. beef with a low in-quota tariff that goes to zero quickly. According the U.S. Trade Representative's Office, producers of poultry, wheat, corn, and sorghum will also gain from the agreement. Most U.S. trade advisory committees endorsed the agreement. The most senior committee, the Advisory Committee for Trade Policy and Negotiations, found the agreement "to be strongly in the U.S. interest and to be an incentive for additional bilateral and regional agreements." Advisory committees on services, goods, and intellectual property also expressed broad support. However, the Labor Advisory Committee expressed concerns that were echoed by several Ways and Means Committee Democrats at the July 7, 2004 hearing. These concerns were basically whether the trade agreement goes far enough in encouraging Morocco to meet basic international labor standards. However, the accord generally is credited with influencing significant labor reforms in Morocco. For example, a new labor law that went into effect on June 8, 2004 (1) raises the minimum employment age from 12 to 15 to combat child labor; (2) reduces the work week from 48 to 44 hours with overtime rates payable for additional hours; (3) calls for periodic review of the Moroccan minimum wage; and (4) guarantees rights of association and collective bargaining and prohibits workers from taking actions against workers because they are union members. The U.S. Department of Labor, meanwhile, has created an assistance program with a budget of nearly $9.5 million to improve industrial relations and child labor standards in Morocco, and the Moroccan government has ratified seven of the eight core International Labor (ILO) conventions.

The United States and Morocco reached agreement on March 2, 2004 to create a free trade agreement (FTA). The Senate approved implementing legislation ( S. 2677 ) on July 2, 2004 by a vote of 85-13 and the House approved identical legislation ( H.R. 4842 ) on July 22, 2004 by a vote of 323-99. The next day, the Senate passed House approved H.R. 4842 without amendment by unanimous consent. The legislation was signed by President Bush into law ( P.L. 108-302 ) on August 3, 2004. The agreement entered into force on January 1, 2006, a year later than planned due to the need for Morocco's Parliament to pass amendments to its intellectual property laws. The FTA is intended to strengthen bilateral ties, boost trade and investment flows, and bolster Morocco's position as a moderate Arab state. More than 95% of bilateral trade in consumer and industrial products became duty-free upon entry into force, while most other remaining barriers are to be phased out over a number of years. This report will be updated later this year.

Arguably, while each at-risk locality must be provided adequate resources to effectively fight this war, no single jurisdiction or response discipline can fight it alone. Effective homeland security efforts require continuous regional collaboration and coordination. Such an approach includes developing national guidelines and standards and monitoring and assessing preparedness against those standards to effectively manage risk. The National Strategy for Homeland Security, released in 2002 following the proposal for DHS, emphasized a shared national responsibility for security involving close cooperation among all levels of government and acknowledged the complexity of developing a coordinated approach within our federal system of government and among a broad range of organizations and institutions involved in homeland security. The national strategy highlighted the challenge of developing complementary systems that avoid unintended duplication and increase collaboration and coordination so that public and private resources are better aligned for homeland security. The national strategy established a framework for this approach by identifying critical mission areas with intergovernmental initiatives in each area. For example, the strategy identified such initiatives as modifying federal grant requirements and consolidating funding sources to state and local governments. The strategy further recognized the importance of assessing the capability of state and local governments, developing plans, and establishing standards and performance measures to achieve national preparedness goals. In addition, many aspects of DHS’ success depend on its maintaining and enhancing working relationships within the intergovernmental system as the department relies on state and local governments to accomplish its mission. The creation of DHS was an initial step toward reorganizing the federal government to respond to some of the intergovernmental challenges identified in the National Strategy for Homeland Security. The Homeland Security Act established ONCRC within DHS to oversee and coordinate federal programs for, and relationships with, federal, state, local, and regional authorities in the NCR. Specifically, ONCRC was mandated to coordinate the activities of DHS relating to NCR, including cooperating with the DHS’ Office for State and Local Government Coordination; coordinate with federal agencies in the NCR on terrorism preparedness to ensure adequate planning, information sharing, training, and execution of the federal role in domestic preparedness activities; coordinate with federal, state, and regional agencies and the private sector in NCR on terrorism preparedness to ensure adequate planning, information sharing, training, and execution of domestic preparedness activities among these agencies and entities; serve as a liaison between the federal government and state, local, and regional authorities, and private sector entities in NCR to facilitate access to federal grants and other programs. With regard to resource assessments and needs, the NCR’s responsibilities also include assessing and advocating for resources needed by state, local, and regional authorities in the NCR to implement efforts to secure the homeland and submitting an annual report to Congress that (1) identifies resources required to fully implement homeland security efforts, (2) assesses progress in implementing homeland security efforts in the NCR, and (3) includes recommendations to Congress regarding additional resources needed to fully implement homeland security efforts in the NCR. In fiscal years 2002 and 2003, 16 separate federal grant programs conveyed about $340 million to state and local emergency management, law enforcement, fire, public health, and other emergency response agencies in NCR. Two funding sources—the fiscal year 2002 Department of Defense Emergency Supplemental Appropriation (almost $230 million) and the fiscal year 2003 Urban Area Security Initiative ($60.5 million) accounted for about 85 percent of those funds. The Urban Area Security Initiative funds were designated for regional use, and a plan has been developed for using the funds to benefit the region as a whole. These funds have been targeted for equipment ($26.5 million), planning ($12.4 million), exercises ($4 million), and administrative costs ($1.8 million), among other things. The other grant programs were not specifically designated for regional purposes, and spending for these funds was determined by individual local jurisdictions. These funds were available for such purposes as purchasing additional equipment and supplies for first responders; planning, coordinating, and evaluating exercises; training first responders; funding the emergency preparedness planning efforts and administration; and providing technical assistance. NCR jurisdictions reported using or planning to use these funds to purchase a range of equipment—for example, vehicles and communications equipment—supplies, training, and technical assistance services. In our report, we discuss issues associated with managing federal first responder grants in NCR, assessing gaps in first responder capacities and preparedness in the region, and the role of the Office for National Capital Region Coordination in coordinating and assessing efforts to enhance first responder capacity across NCR. Effectively managing first responder federal grants funds requires the ability to measure progress and provide accountability for the use of public funds. A strategic approach to homeland security includes identifying threats and managing risks, aligning resources to address them, and assessing progress in preparing for those threats and risks. As with other major policy areas, demonstrating the results of homeland security efforts includes developing and implementing strategies, establishing baselines, developing and implementing performance goals and data quality standards, collecting reliable data, analyzing the data, assessing the results, and taking action based on the results. The purpose of these efforts with regard to first responder grant funds to be able to answer three basic, but difficult, questions: For what types of threats and emergencies should first responders be prepared? What is required—for example, coordination, equipment, training—to be prepared for these threats and emergencies? How do first responders know that they have met their preparedness goals? NCR is an example of the difficulties of answering the second and third questions in particular. The region faces significant challenges in managing homeland security dollars. ONCRC and NCR jurisdictions face three interrelated challenges that limit their ability to jointly manage federal funds in a way that demonstrates increased first responder capacities and preparedness while minimizing inefficiency and unnecessary duplication of expenditures. First, a lack of preparedness standards for both equipment and performance means that it is difficult to assess first responder capabilities, identify gaps in those capabilities, and measure progress in closing those gaps. As in other areas of the nation generally, NCR does not have a set of accepted benchmarks (best practices) and performance goals that could be used to identify desired goals and determine whether first responders have the ability to respond to threats and emergencies with well-planned, well-coordinated, and effective efforts that involve police, fire, emergency medical, public health, and other personnel from multiple jurisdictions. Second, a strategic plan for the use of homeland security funds—whether in NCR or elsewhere—should be based on established goals, priorities, and measures, and align spending plans with those priorities and goals. At the time of our review, ONCRC had developed a regional spending plan for the Urban Area Security Initiative grants, but this plan was not part of a broader coordinated plan for spending federal grant funds and developing first responder capacity and preparedness in NCR. The lack of benchmarks and performance goals may contribute to difficulties in developing a coordinated region-wide plan for determining how to spend federal funds and assessing the benefits of that spending. Third, there is no established process or means for regularly and reliably collecting data on (1) the amounts of first responder grants available to each jurisdiction and (2) the budget plans and criteria used for determining spending allocations and budget priorities. Reliable data are needed to establish accountability, analyze gaps, and assess progress toward meeting established performance goals. Without such data, it is difficult to verify the results of preparedness assessments and to establish a baseline that could be used to develop plans to address outstanding needs. It should be noted that the fragmented nature of the multiple federal grants available to first responders—some awarded to states, some to localities, some directly to local first responder agencies—may make it more difficult to collect and maintain region-wide data on grant funds received and the use of those funds in NCR. Without national standards, guidance on likely threats and scenerios for which to be prepared, coordinated plans, and reliable data, it is difficult for us or ONCRC to determine what gaps, if any, remain in the emergency response capacities and preparedness within NCR. Determining the existence of gaps in NCR’s emergency preparedness is difficult currently because there is little baseline data on the region’s preparedness, and DHS’s Office for National Capital Region Coordination does not have information on how NCR localities used federal grant dollars to enhance their capacities or preparedness. Even if those data were available, a lack of standards against which to evaluate the data would also have made it difficult to assess any gaps. The Office for Domestic Preparedness collected information on regional security risks and needs for NCR jurisdictions, and ONCRC based funding decisions for the Urban Area Security Initiative on the results. However, as already noted, it is not clear how the Urban Area Security Initiative spending plan links to the actual and planned uses for the other funding sources that comprised about $279.5 million of the $340 million in federal homeland security grants to the NCR during fiscal years 2002 and 2003. Each jurisdiction provided us with information on their perceived gaps and specific needs for improving emergency preparedness. However, there is no consistent method for identifying these gaps among jurisdictions within NCR. Several jurisdictions told us that they identify remaining gaps based on requests from emergency responder agencies. Other jurisdictions said they have established emergency management councils or task forces to review their preparedness needs and are developing a more strategic plan for funding those needs. Officials of most NCR jurisdictions commonly identified the need for more comprehensive and redundant communications systems and upgraded emergency operations centers. We recognize that NCR is a complex multijurisdictional area comprising the District of Columbia and surrounding county and city jurisdictions in Maryland and Virginia. The region is the home to the federal government, many national landmarks, and military installations. Coordination within this region presents the challenge of working with numerous jurisdictions that vary in size, political organization, and experience with managing large emergencies. According to emergency management officials we contacted, DHS’ Office for National Capital Region Coordination could play a potentially important role in assisting them to implement a coordinated, well-planned effort in using federal resources to improve the region’s preparedness. In our view, meeting ONCRC’s statutory mandate would fulfill such a key responsibility. We recognize that the Office for National Capital Region Coordination was created about 15 months ago, and that some start-up time has been required. To date, however, it appears that ONCRC’s efforts have not focused on assessing what has been accomplished with funds available within NCR to date and identifying what needs remain and for what purposes. ONCRC has concentrated its efforts on developing a coordinated assessment and plan for the use of Urban Area Security Initiative funds. Although we believe that those steps are important for rationalizing and prioritizing the expenditure of homeland security dollars designated for region-wide use, ONCRC’s efforts generally do not address expenditures from the majority of the homeland security grant dollars received in NCR. In addition, it is difficult for the ONCRC to meet its statutory responsibilities without an NCR emergency preparedness baseline, a region-wide plan for prioritizing expenditures and assessing their benefits, and reliable data on funds that are available and those have been spent. According to DHS, a governance structure was approved in February 2004 that will provide the essential region-wide coordination that is necessary. Our report contains several recommendations. To help ensure that emergency preparedness grants and associated funds are managed in a way that maximizes their effectiveness, we recommend that the Secretary of the Department of Homeland Security take the following three actions to fulfill DHS’s statutory responsibilities in NCR: Work with NCR jurisdictions to develop a coordinated strategic plan to establish goals and priorities for enhancing first responder capacities that can be used to guide the use of federal emergency preparedness funds. Monitor the plan’s implementation to ensure that funds are used in a way that promotes effective expenditures that are not unnecessarily duplicative. Identify and address gaps in emergency preparedness and evaluate the effectiveness of expenditures in meeting those needs by adapting standards and preparedness guidelines based on likely scenarios for NCR and conducting assessments based on them. In their comments on a draft of our report, DHS and the Senior Policy Group generally agreed with our recommendations, but also said that NCR jurisdictions had worked cooperatively together to identify opportunities for synergies and lay a foundation for meeting the challenges noted in the report. The Senior Policy Group noted the challenge and critical importance of integrating private sector initiatives as part of the broader effort. DHS and the Senior Policy Group also agreed that there is a need to continue to improve preparedness by developing more specific and improved preparedness standards, clearer performance goals, and an improved method for tracking regional initiatives. They believe the governance process now in place will accomplish essential regional coordination. Coordinated planning for the use of federal grant funds and monitoring the results achieved with those funds are fundamental for assessing and building the needed first responder capacity of the region to prepare for, mitigate, respond to, and recover from major emergency events in the region—whether the result of nature, accident, or terrorist act. The urgent nature of the security risk to the National Capital Region requires a coordinated, well-planned approach to the expenditure of federal first responder grants. To maximize the positive impact of such federal dollars, duplication needs to be minimized, available resources used to the maximum extent possible, and a strategic, region-wide plan based on an assessment of preparedness gaps developed to guide those expenditures. Assessments of the current status of emergency preparedness and of any existing preparedness gaps require the existence and application of various types of standards. DHS’s Office for National Capital Region Coordination has a significant, statutorily mandated role in meeting those requirements. It has made a good first step in developing a region-wide plan for the use of the Urban Area Initiative Grants. However, information and analysis of planned and actual expenditures by local NCR jurisdictions is also needed to develop a region-wide plan for the use of federal grants. Mr. Chairman, that concludes my statement. I would be pleased to answer any questions you or other members of the Committee may have. For questions regarding this testimony, please contact William O. Jenkins, Jr., on (202) 512-8777 or Patricia A. Dalton, Director, on (202) 512-6737. Other individuals making key contributions to this testimony included Amelia Shachoy, Ernie Hazera, John Bagnulo, and Wendy Johnson. 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.

Since the tragic events of September 11, 2001, the National Capital Region (NCR), comprising jurisdictions including the District of Columbia and surrounding jurisdictions in Maryland and Virginia, has been recognized as a significant potential target for terrorism. GAO was asked to report on (1) what federal funds have been allocated to NCR jurisdictions for emergency preparedness; (2) what challenges exist within NCR to organizing and implementing efficient and effective regional preparedness programs; (3) what gaps, if any, remain in the emergency preparedness of NCR; and (4) what has been the role of the Department of Homeland Security (DHS) in NCR to date. In fiscal years 2002 and 2003, grant programs administered by the Departments of Homeland Security, Health and Human Services, and Justice awarded about $340 million to eight NCR jurisdictions to enhance emergency preparedness. Of this total, the Office for National Capital Region Coordination (ONCRC) targeted all of the $60.5 million Urban Area Security Initiative funds for projects designed to benefit NCR as a whole. However, there was no coordinated regionwide plan for spending the remaining funds (about $279.5 million). Local jurisdictions determined the spending priorities for these funds and reported using them for emergency communications and personal protective equipment and other purchases. NCR faces several challenges in organizing and implementing efficient and effective regional preparedness programs, including the lack of a coordinated strategic plan for enhancing NCR preparedness, performance standards, and a reliable, central source of data on funds available and the purposes for which they were spent. Without these basic elements, it is difficult to assess first responder capacities, identify first responder funding priorities for NCR, and evaluate the effectiveness of the use of federal funds in enhancing first responder capacities and preparedness in a way that maximizes their effectiveness in improving homeland security.

For some 45 years, the primary international organization for coordinating restrictions on dual-use exports was COCOM, the Coordinating Committee For Multilateral Export Controls. COCOM was formed in 1949 to limit military-related transfers to Communist countries. At the time of its termination at the end of March 1994, it consisted of 17 industrial countries, including all members of NATO—except Iceland—and Japan and Australia. COCOM operated on the basis of "consensus," and functioned without the existence of a treaty or specific international legal authorization. In reality, COCOM "consensus" gave any member—and that member was most likely to be the United States—a veto over the export by any other member of a controlled good or technology. The day-to-day operations of COCOM involved meetings of a Secretariat in Paris at which the members agreed upon the technical specifications of the dual-use items that were being considered for export to Eastern Europe, the former Soviet Union, and the People's Republic of China. The Secretariat also decided whether to allow exceptions to agreed-upon restrictions. Irregular COCOM "High Level" meetings set or enunciated overall policy for the members. To provide guidance, COCOM created three lists of controlled items: an International Industrial List, an International Atomic Energy List, and an International Munitions List. The export control organizations of the member countries then incorporated some variant of the listed items. In the United States, the Export Administration Regulations contained the U.S. version of the items on the COCOM lists. Since COCOM had no independent legal existence, implementation of COCOM decisions depended upon the effectiveness of the export control laws and bureaucracies of each of the individual members. It was the responsibility of COCOM member countries to pass and enforce adequate laws and regulations to control exports. The comprehensiveness of the member countries' export control regimes, the degree of high level attention given to export controls, and the effectiveness of the export control bureaucracies varied considerably. In almost every instance, the United States was the most active in pursuing COCOM limitations on exports, while its major trading partners—especially France, the United Kingdom, and West Germany—often seemed more concerned about facilitating exports. After the dissolution of the Soviet Union, COCOM members agreed, in November 1993, to disband COCOM, replace it with a new entity, and to move to "national discretion" in export licensing decisions as of January 1994. National discretion meant that each country, not COCOM as an entity, would determine what should be exported, and no country could veto the export decisions of another. Beginning in November 1993, Clinton Administration representatives undertook a major effort to create a "broadly based" replacement accord for COCOM which, as initially conceived would include the formerly COCOM-proscribed countries. It was initially hoped that this successor accord would be in place by the time that COCOM was disbanded on March 31, 1994. That deadline was not met. This effort resulted in the establishment of initial elements of the Wassenaar Arrangement, by 28 nations at the Hague on December 19, 1995, subject to the approval of their governments. After meetings in early April and mid-July 1996, the Secretariat of the Arrangement was established in Vienna in 1996. Initially called the "New Forum", the Wassenaar Arrangement has as its primary focus two basic areas: (1) conventional weapons exports and, (2) sensitive dual-use items and technologies with military end uses. The Clinton Administration viewed the new accord as the "centerpiece" of its efforts to promote "multilateral restraint" in conventional arms sales and transfers of sensitive military technologies. The Clinton Conventional Arms Transfer Policy, set out in February 1995, was a restatement of a policy approach that has guided U.S. arms transfers since the Reagan Administration. The Wassenaar Arrangement (formally titled the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies) does not appear to break any new ground in the multilateral conventional arms control area. Previous attempts to achieve regional conventional arms sales agreements—most notably the effort in 1991-1992 by the George H.W. Bush Administration aimed at securing restraint on Middle East arms sales by the five permanent members of the U.N. Security Council—failed due to the lack of consensus among the parties regarding which weapons could be sold and to whom. Elements of the Wassenaar Arrangement dealing with conventional weapons transfers depend for their success on securing the agreement of other weapons suppliers to forego activities that might otherwise be to their political or financial benefit. There are four major areas of policy concern within the Wassenaar Arrangement. These areas are membership, target countries, materials to be controlled, and organization/operational procedures. The initial negotiations on the successor accord among the 17 COCOM members were expanded to include, in addition to the original members, several new European countries and New Zealand as participants. Then at the January 1994 Moscow summit, Secretary of State Christopher and Russian Foreign Minister Kozyrev issued a joint statement welcoming the decision to establish a new multilateral regime and indicating Russia's wish to join. In the spring of 1994, State Department officials stated that they would oppose the accession of Russia to the new regime as long as it continued weapons sales to Iran. The Russian decision to sell nuclear power reactors to Iran further complicated matters. By early 1995, the United States still was unwilling to agree to Russian participation in the formation of the new regime, while other members of COCOM were unwilling to start the new regime without the Russians. The matter was resolved in June 1995 at a Gore-Chernomyrdin meeting when the Russians agreed not to make any new weapons contracts with Iran or to sell nuclear reprocessing equipment. The "agreed membership criteria" under the Wassenaar Arrangement are that participants have adequate export controls, adhere to the major existing nonproliferation regimes—the Missile Technology Control Regime, Australia Group, and Nuclear Suppliers Group—and have "responsible" export control policies toward the so-called pariah countries: Iran, Iraq, Libya, and North Korea. According to Clinton Administration officials, China has not been invited to join the new regime because of concerns by the United States and its allies regarding Chinese weapons exports to Iran, Pakistan, and other shortcomings in meeting membership criteria. Closely related to the question of Russian participation, has been the participation of the other members of the former Soviet Union. The export control system that existed in the Soviet Union was centralized in Moscow. The countries that had been part of the Soviet Union had few responsibilities for controlling exports. Since 1991, the amount of attention paid by these newly independent countries to developing adequate export controls has varied greatly. Even now, a high level of uncertainty continues to exist as to the export control capabilities and the willingness of leaders of these countries to support export controls generally, and an association such as the Wassenaar Arrangement specifically. A second major area of policy concern relates to countries against which the new Arrangement is to be targeted. From the outset, the United States has wanted to target "countries of concern," specifically identified as Iran, Iraq, Libya, and North Korea. However, most of the countries participating in the negotiations have preferred setting a general objective of promoting security and stability and then letting each member country determine its export control policies and target countries. As currently constructed, Wassenaar "will not, however, be directed against any state or group of states; impede bona fide civil transactions; nor interfere with the rights of states to acquire legitimate means with which to defend themselves." France, Germany, and Russia, in particular, are opposed to a U.S. proposal to require advance notification of arms sales to regions of concern. However, former Under Secretary of State Lynn Davis noted that participants in the Wassenaar Arrangement have national policies banning arms and related exports to Iran, Libya, Iraq, and North Korea. Secretary Davis also noted the U.S. will continue to insist that prospective new members adhere to such policies. Based on discussions at the December 1996 plenary session, Secretary Davis said that no participating country was currently transferring arms or ammunition to Afghanistan in keeping with a recent U.N. Security Council resolution. Under the Wassenaar Arrangement, member states have agreed to control exports or retransfers of items and technologies contained on an agreed basic list of Dual-Use Goods and Technologies, and a separate Munitions List. Information on transfers of more than 100 sensitive dual-use goods and technologies on the agreed list are to be shared by members of the Arrangement. Arms transfer reporting is currently confined to the categories of major weapons systems used for the CFE (Conventional Forces, Europe) Treaty and the United Nations Arms Register. Related to the questions concerning which items should be controlled is the issue of regime organization and operations. None of the participants in the process appears to favor the types of strong controls—and U.S. dominance—that existed under COCOM. National discretion with coordination is the most rigorous procedural option that emerged from the negotiations. Indeed, American officials have publicly acknowledged that only the United States favors prior notification of transfers, and this procedure is not part of the new regime. During plenary sessions and working group discussions, under Wassenaar, member governments are to share information on potential threats to peace and stability. They are to examine closely dubious weapons or technology acquisition trends. Specific information regarding global transfers to non-participating countries of arms in the seven categories, including model and type, (and technology) is to be made available in this manner, as are notices of denials of transfers of specific items on the lists established by the Wassenaar Arrangement. Members will regularly review the dual-use and Munitions List to reflect technological advancements and experience gained. The Arrangement envisions "more intensive consultations and more intrusive information sharing" among 6 major weapons suppliers: the United Kingdom, the U.S., France, Russia, Germany, and Italy. Through transparency of national activities involving weapons and technology transfers, it is hoped that dangerous acquisition patterns can be detected and halted before they become problematic. At the July 11-12, 1996 meeting in Vienna, the 33 Wassenaar states approved the "Initial Elements" to govern the Arrangement, and set November 1, 1996, as the date to launch both the control aspects of the agreement and the information exchange. Under the Arrangement, twice a year Participating States report all transfers or licenses issued for sensitive dual-use goods or technology (items in Annex 1 which is a subset of the Dual-Use list)—currently for transfers in the seven U.N. categories. In the case of conventional arms transfers, a biannual data exchange among participants gives details of arms deliveries . Twice a year, Participating States also report denials of licenses to transfer items on the Dual-Use list to non-member states. When a Participating State denies an export license for sensitive dual-use items, it is to notify other participants on an early and timely basis (preferably within 30 days, but definitely within 60 days). The Arrangement does not prohibit a participating country from making an export to a particular destination that has been denied by another participant (this practice is called "undercutting"). But participants are required to notify other participants within 60 days, and preferably within 30 days, after they approve a license for an export of sensitive dual-use goods that are essentially identical to those that have been denied by another participant during the previous three years. At the December 1999 plenary session of Wassenaar Arrangement members, the U.S. team proposed reporting on specific exports rather than aggregated reporting, reporting on exports of all listed items (not just the sensitive and very sensitive items), extensive pre-export reporting, and a "no undercut rule" which would ban exports by a Wassenaar partner of goods already denied by another partner. Russian and Ukrainian delegates reportedly blocked these reforms and the primary accomplishment was a joint statement of the importance of strong enforcement based on national laws. Beginning with the December 2000 plenary meeting, member states continued to reaffirm their concern regarding the threats posed by the illicit possession and use of Man Portable Air-Defence Systems (MANPADS) and agreed on elements of export controls on such weapons. In subsequent December plenary meetings of the Wassenaar Arrangement, through 2005, member states have also reaffirmed their commitment to prevent the acquisition of conventional arms and dual-use goods and technologies by terrorist groups and organizations and by individual terrorists, agreed to a document setting out detailed "best practice" guidelines and criteria for small arms and light weapons (SALW) exports, and agreed to impose strict controls on the activities of those who engage in the brokering of conventional arms by introducing and implementing adequate laws and regulations based on agreed Elements for Effective Legislation on Arms Brokering. The agreed membership criteria of the Wassenaar Arrangement basically rely upon statements by members that they will abide by fairly general standards. Since the Russian export control system and those of other NIS countries lack substantial transparency, what steps can be taken to ensure that the membership criteria will be complied with by these states and others with traditions of weak export control systems? Is there an effective means by which the United States can induce acceptance of higher standards for evaluating sensitive technology transfers by other participating states? Is legislation sanctioning nations that continue to transfer weapons and technology to aggressive nations in regions of tension such a mechanism? Would a greater emphasis on use of oversight mechanisms in U.S. law, such as the Arms Export Control Act, or the reauthorization of the Export Administration Act provide the United States with a more effective means of achieving some of the fundamental goals it has been pursuing through the Wassenaar Arrangement?

This report provides background on the Wassenaar Arrangement, which was formally established in July 1996 as a multilateral arrangement aimed at controlling exports of conventional weapons and related dual-use goods and military technology. It is the successor to the expired Coordinating Committee for Multilateral Export Controls (COCOM). This report focuses on the current status, features, and issues raised by the establishment and functioning of the Wassenaar Arrangement. It will be updated only if warranted by notable events related to the Arrangement.

Payments to MA organizations are based on the MA organization’s bid and benchmark and are adjusted for differences in projected and actual enrollment, beneficiary residence, and health status. PPACA changed how the benchmark and rebate are calculated. Payments to MA organizations and the additional benefits that MA organizations offer are based in part on the relationship between the MA organizations’ bids—their projection of the revenue required to provide beneficiaries with services that are covered under Medicare FFS—and a benchmark. If an MA organization’s bid is higher than the benchmark, the organization must charge beneficiaries a premium to collect the amount by which the bid exceeds the benchmark. If an MA organization’s bid is lower than the benchmark, the organization receives the amount of the bid plus additional payments, known as rebates, equal to a percentage of the difference between the benchmark and the bid. MA organizations are required to use rebates to provide additional benefits, such as dental or vision services; reduce cost-sharing; reduce premiums; or some combination of the three. CMS adjusts payments to MA organizations to account for differences in projected and actual enrollment, beneficiary residence, and health status. CMS adjusts for differences in projected and actual enrollment through its method for paying MA organizations. Specifically, MA organizations get paid a PMPM amount and thus only get paid for actual enrollees. CMS also adjusts PMPM payments to MA organizations on the basis of the ratio of the benchmark rate in the beneficiary’s county to the plan benchmark. Thus, if a beneficiary comes from a county that has a benchmark rate that is lower than the plan’s benchmark, the plan will receive a lower PMPM payment for that beneficiary. Finally, to help ensure that health plans have the same financial incentive to enroll and care for beneficiaries regardless of their health status, payments to MA organizations are adjusted for beneficiary health status—a process known as risk adjustment. Final payments are adjusted to account for differences between the projected average risk score—a relative measure of expected health care use for each beneficiary—submitted in plans’ bids and the actual risk scores for enrolled beneficiaries. Bidding rules for employer health plans differ from those for MA plans available to all beneficiaries and SNPs. Specifically, MA organizations are able to negotiate specific benefit packages and cost-sharing amounts with employers after the MA organizations submit their bid for an employer group plan. In contrast, MA organizations’ bids for all other MA plans must reflect their actual benefit package—including additional benefits, reduced cost-sharing, and reduced premiums—and MA organizations cannot change the benefits after the bid is approved by CMS. PPACA changed how the benchmark is calculated beginning in 2011. These changes have resulted in a decrease, on average, in county benchmarks relative to average Medicare FFS expenditures. In 2011, benchmark rates were held constant at 2010 benchmark rates. From 2012 through 2016, the benchmark will be a blend of the traditional benchmark formula and a new quartile-based formula. Counties will be stratified into quartiles based on their Medicare FFS expenditures, with the first quartile of counties (the 25 percent of counties that have the highest Medicare FFS expenditures) having a benchmark equal to 95 percent of FFS expenditures. Counties in the second, third, and fourth quartiles will have benchmarks of 100 percent, 107.5 percent, and 115 percent, respectively, of FFS expenditures. In addition, any MA organization that receives 3 or more stars on CMS’s 5-star quality rating system will receive a bonus to the PPACA portion of their blended benchmark. In 2017 and future years, the quartile-based formula will determine 100 percent of the benchmark value. PPACA also changed how the rebate is calculated. This change resulted in decreased rebate amounts starting in 2012. By 2014, the rebate amounts will be equal to 50, 65, or 70 percent of the difference between the benchmark and the bid, depending on the number of stars a plan receives on CMS’s 5-star quality scale. Prior to 2012, MA organizations received a rebate equal to 75 percent of the difference between the benchmark and the bid. SNPs and employer group plans have specific eligibility requirements. SNPs serve specific populations, including beneficiaries who are dually eligible for Medicare and Medicaid, are institutionalized, or have certain chronic conditions. Employer group plans are MA plans offered by employers or unions to their Medicare-eligible retirees and Medicare- eligible active employees, as well as to Medicare-eligible spouses and dependants of participants in such a plan. In those cases where an active employee is enrolled in an employer’s non-Medicare health plan, the Medicare employer group plan would serve as a secondary payer, while the employer’s non-MA plan for active employees would serve as the primary payer. Among plans available to all beneficiaries, 2011 expenses and profits represented similar percentages of total revenue compared to projections. Among plans with specific eligibility requirements—that is, SNPs and employer group plans—2011 expenses were lower and profits were higher as a percentage of revenue compared to projections. As a percentage of 2011 total revenue, MA organizations’ actual medical expenses, nonmedical expenses, and profits were, on average, similar to projected values for plans available to all beneficiaries. As a percentage of revenue, medical expenses and profits were slightly lower than projected, while nonmedical expenses were slightly higher. Also, as a percentage of revenue, all three categories were within 0.3 percentage points of what MA organizations had projected (see table 1). MA plans that were available to all beneficiaries received slightly higher total revenue per beneficiary than projected, which could be a result of differences between actual and projected health status and geographic location of beneficiaries who enrolled. For instance, MA plans could have received additional Medicare payments if they enrolled beneficiaries who were expected to need more health care, who were disproportionately from counties with higher benchmarks, or a combination of these two reasons. Because of the higher total revenue, medical expenses as a percentage of revenue were 0.2 percentage points lower than projected, despite MA organizations’ spending more dollars on medical expenses than projected. The percentage of revenue spent on medical expenses and profits varied substantially between MA contracts. For example, while MA organizations spent an average of 86.3 percent of revenue on medical expenses, approximately 39 percent of beneficiaries were covered by contracts where less than 85 percent of revenue was spent on medical expenses, and 13 percent of beneficiaries were covered by contracts where less than 80 percent of revenue was spent on medical expenses (see table 2). Further, while the average profit margin was 4.5 percent among plans available to all beneficiaries, 26 percent of beneficiaries in our analysis were covered by contracts where profit margins were negative. In contrast, 15 percent of beneficiaries in our analysis were covered by contracts where profit margins were 10 percent or higher. For MA organizations with either high or low benchmarks, profit margins and the percentage of total revenue devoted to expenses were, on average, similar to projections. As a percentage of revenue, MA organizations with high benchmarks had slightly lower-than-projected medical expenses but slightly higher-than-projected nonmedical expenses and profits (see table 3). As a percentage of revenue, MA organizations with low benchmarks had slightly higher-than-projected medical expenses and nonmedical expenses but slightly lower profits. In addition, MA organizations with high benchmarks had higher profit margins compared to those with low benchmarks. Specifically, organizations with high benchmarks had an average profit margin of 5.9 percent and made $668 per beneficiary compared to 3.5 percent and $313 per beneficiary for organizations with low benchmarks. The accuracy of MA organizations’ projections varied on the basis of the type of plan they offered under each contract. Among the three plan types studied (HMO, PPO, and PFFS), PFFS contracts had the largest differences, in percentage point terms, between their actual and projected expenses and profits. For example, as a result of spending, on average, a higher-than-projected percentage of total revenue on medical and nonmedical expenses, PFFS contracts reported an actual profit margin of only 0.3 percent after projecting a 4.3 percent profit margin (see table 4). HMO contracts had the highest profit margins and were the only type of contract, among the three studied, that averaged higher profits than projected. Specifically, HMO contracts had a 5.3 percent profit margin, which was slightly higher than projected—5.0 percent—and substantially higher than the profit margins of PPO and PPFS contracts—2.5 percent and 0.3 percent, respectively. SNPs’ profits were higher than projected both in terms of a percentage of total revenue and in dollars. SNPs received somewhat higher revenue than projected and spent a lower percentage of total revenue on medical and nonmedical expenses than projected (see table 5). As a result of the higher-than-projected revenue and spending a lower percentage of revenue on expenses, SNPs reported an average profit per beneficiary of $1,115, which was 44 percent higher than projected ($777) and 149 percent higher than the profit per beneficiary for plans available to all Medicare beneficiaries ($447). Compared to plans available to all Medicare beneficiaries, SNPs spent more in terms of amount per beneficiary, but less in percentage terms, on medical and nonmedical expenses. CMS officials said SNPs might have higher profit margins because of the potential additional risk of providing a plan that targets a specific population. For instance, the officials noted that it may be more difficult to predict revenue and spending for a SNP’s targeted population. SNPs may face higher medical expenses because beneficiaries enrolled in such plans may have increased health care needs. According to CMS officials, SNPs may also face higher administrative expenses for several reasons, such as potentially higher marketing expenses associated with targeting SNPs’ designated population. Employer group plans had higher revenue, had higher profit margins, and spent a lower percentage of total revenue on expenses than projected. Specifically, total revenue per beneficiary was about 14 percent higher than projected—$11,364 compared to $9,957 (see table 6). In addition, employer group plans spent 86.3 and 6.1 percent of total revenue on medical expenses and nonmedical expenses, respectively, compared to a projected 89.5 and 6.3 percent, and these plans also had an actual profit margin of 7.6 percent compared to a 4.2 percent projected profit margin. The combined effects of higher revenue and a higher profit margin translated into average profits per beneficiary of $861, which was 108 percent higher than projected ($413) and 93 percent higher than the profit per beneficiary for plans available to all Medicare beneficiaries ($447). Unlike other MA plans, projections for employer group plans may vary from their actual profits and expenses because MA organizations that offer such plans are able to negotiate specific benefit packages and cost-sharing amounts with employers after they submit their bids to CMS. We requested comments from CMS, but none were provided. As agreed with your office, unless you publicly announce the contents of this report earlier, we plan no further distribution until 30 days from the report date. At that time, we will send copies to the Secretary of Health and Human Services, interested congressional committees, and others. In addition, the report will be available at no charge on the GAO website at http://www.gao.gov. If you or your staff has any questions about this report, please contact me at (202) 512-7114 or cosgrovej@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made major contributions to this report are listed in appendix I. In addition to the contact named above, Christine Brudevold, Assistant Director; Sandra George; Gregory Giusto; Brian O’Donnell; and Elizabeth T. Morrison made key contributions to this report.

MA organizations are entities that contract with the Centers for Medicare & Medicaid Services (CMS) to offer one or more private plans as an alternative to the Medicare fee-for-service (FFS) program. These MA plans are generally available to all Medicare beneficiaries, although certain types of plans, such as employer group plans, have specific eligibility requirements. Payments to MA organizations are based, in part, on the projected expenses and profits that MA organizations submit to CMS. These projections also affect (1) the extent to which MA beneficiaries receive additional benefits not provided under FFS and (2) beneficiary cost-sharing and premium amounts. The Patient Protection and Affordable Care Act (PPACA) required that, starting in 2014, MA organizations have a minimum medical loss ratio of 85 percent--that is, they must spend 85 percent of revenue on medical expenses, quality-improving activities, and reduced premiums. This report examines how MA organizations' actual expenses and profits for 2011 as a percentage of revenue and in dollars compared to projections for the same year, both for plans available to all Medicare beneficiaries and for plans with specific eligibility requirements. GAO analyzed data on MA organizations' projected and actual allocation of revenue to expenses and profits. The percentage of revenue spent on medical expenses reported in GAO's study is not directly comparable to the PPACA medical loss ratio calculation, as the final rule defining the calculation was issued after actual 2011 data were submitted. Medicare Advantage (MA) organizations' actual medical expenses, nonmedical expenses (such as marketing, sales, and administration) and profits as a percentage of total revenue were, on average, similar to projected values for plans available to all beneficiaries in 2011, the most recent year for which data were available at the time of the request for this work. MA organizations' actual medical expenses, nonmedical expenses, and profits were 86.3 percent, 9.1 percent, and 4.5 percent of total revenue, respectively. As a percentage of revenue, all three categories were within 0.3 percentage points of what MA organizations had projected. In addition, MA organizations received, on average, $9,893 in total revenue per beneficiary, slightly higher than the projected amount of $9,635. The percentage of revenue spent on medical expenses and profits varied between MA contracts. For example, while MA organizations spent an average of 86.3 percent of revenue on medical expenses, 39 percent of beneficiaries were covered under contracts where less than 85 percent of revenue was spent on medical expenses. In addition, the accuracy of MA organizations' projections varied on the basis of the type of plans offered under the contract. For example, contracts for private fee-for-service plans--a plan type with new provider network requirements in 2011--had average profit margins that were 4 percentage points lower than projected. In 2011, plans offered by MA organizations with specific eligibility requirements had higher-than-projected profits. Special needs plans (SNP), which serve specific populations, such as those with specific chronic conditions, had an 8.6 percent profit margin, but had projected 6.2 percent. This higher percentage, combined with higher-than-projected revenue, resulted in SNPs reporting an average profit per beneficiary of $1,115, or 44 percent higher than projected ($777). Employer group plans, which are offered by employers or unions to their employees or retirees, as well as to Medicare-eligible spouses and dependants of participants in such plans, had a 7.6 percent profit margin, but had projected 4.2 percent. The higher profit margin, combined with higher-than-projected revenue, resulted in employer plans receiving an average profit per beneficiary of $861, or 108 percent higher than projected ($413). GAO requested comments from CMS, but none were provided.

OMB Circular A-126 sets forth executive branch policy with respect to the management and use of government aviation assets. The purpose of the circular is to minimize cost and improve the management of government aircraft. The circular provides that government aircraft must be operated only for official purposes. Under the circular, there are three kinds of official travel: Travel to meet mission requirements: Mission requirements are defined as “activities that constitute the discharge of an agency’s official responsibilities,” and the circular provides examples of these kinds of activities. For purposes of the circular, mission requirements do not include official travel to give speeches, attend conferences or meetings, or make routine site visits. Required use travel: Agencies are permitted to use government aircraft for nonmission travel where it is required use travel—which is travel that requires the use of government aircraft to meet bona fide communications needs, security requirements, or exceptional scheduling requirements of an executive agency. Other travel for the conduct of agency business: Government aircraft are also available for other travel for the conduct of agency business when no commercial airline or aircraft is reasonably available to fulfill the agency requirement or the actual cost of using a government aircraft is not more than the cost of using commercial airline or aircraft service. In addition to other requirements for federal agencies, the circular directs agencies that use government aircraft to report semiannually to GSA each use of such aircraft for nonmission travel by senior federal officials, members of the families of such officials, and any nonfederal travelers, with certain exceptions. The circular provides that the format of the report is to be specified by GSA, but must list all travel during the preceding 6-month period and include the following information: the name of each such traveler, the official purpose of the trip, and the destination(s), among other things. The circular provides for one exception to these reporting requirements: Agencies using the aircraft are not required to report classified trips to GSA, but must maintain information on those trips for a period of 2 years and have the data available for review as authorized. In addition, in a memorandum to the heads of executive departments and agencies and employees of the Executive Office of the President, the President specifically directed that “all use of Government aircraft by senior executive branch officials shall be documented and such documentation shall be disclosed to the public upon request unless classified.” The OMB bulletin implementing this memorandum explains that “it is imperative that we not spend hard-earned tax dollars in ways that may appear to be improper.” GSA has issued regulations applicable to federal aviation activities. The FTR implements statutory requirements and executive branch policies for travel by federal civilian employees and others authorized to travel at government expense. The FMR generally pertains to the management of federal property and includes a specific part on management of government aircraft. As shown in table 1, the FTR specifically exempts from reporting trips that are classified, but does not contain any exemption for reporting by intelligence agencies. In contrast, the FMR states that intelligence agencies are exempt from the requirement to report to GSA on government aircraft. According to senior GSA officials, although the exemption for intelligence agencies is contained in the FMR—which largely deals with the management of federal property—it applies to reporting requirements in the FTR for senior federal officials who travel on government aircraft. Through issued executive branch documents, agencies are required to provide data about senior federal official nonmission travel—except for classified trips—to GSA, and GSA has been directed to collect this specified information. Accordingly, through its regulations, GSA has directed agencies to report required information on senior federal official travel; however, its regulations allow certain trips not to be reported, in addition to classified trips. Specifically, GSA exempted intelligence agencies from reporting any information on senior federal travel on government aircraft regardless of whether it is classified or unclassified. This is inconsistent with executive branch requirements we indentified. GSA has not articulated a basis—specifically, a source of authority or rationale—that would allow it to deviate from collecting what it has been directed to collect by the President and OMB. This could undermine the purposes of these requirements, which include aiding in the oversight of the use of government aircraft and helping to ensure that government aircraft are not used for nongovernmental purposes. Further, GSA officials stated that it is the agency’s practice to implement regulations that do not introduce real or potential conflicts with other authorities. According to GSA senior officials, the agency is unable to identify the specific historical analysis for inclusion of the intelligence agencies’ reporting exemption in the FMR. GSA added the exemption for intelligence agency reporting of information on government aircraft to the FMR in 2002; however, there is no explanation for the inclusion of the exemption in the regulation or implementing rule. GSA senior officials told us that the exemption for intelligence agencies enabled intelligence agencies to comply with Executive Order 12333, which requires the heads of departments and agencies with organizations in the intelligence community or the heads of such organizations, as appropriate, to “protect intelligence and intelligence sources and methods from unauthorized disclosure with guidance from the Director of Central Intelligence.” However, GSA has not articulated how an exemption for senior federal official travel data for nonmission purposes is necessary for agencies to Identifying an adequate basis for comply with Executive Order 12333.the intelligence agency reporting exemption or removing the exemption from its regulations if an adequate basis cannot be identified could help GSA ensure its regulations for senior federal official travel comply with executive branch requirements. GSA aggregates the data reported by agencies on senior federal travel to produce publically available reports describing the use of government aircraft by senior federal officials and how government aircraft are used to support agency missions. Specifically, these Senior Federal Travel Reports provide analysis on the number of trips taken by senior federal officials, the costs of such trips, the number of agencies reporting, and the number and costs of trips taken by cost justification. The reports also list those departments, agencies, bureaus, or services that report no use of senior federal official travel during the reporting time frame. According to the reports, they are intended to provide transparency and better management and control of senior federal official use of government aircraft and the ability to examine costs as they relate to trip use justifications. Specifically, according to the FBI, the exemption contained in FMR § 102-33.385 applies to all data on government aircraft stated in FMR § 102-33.390, which includes senior federal travel information. The FBI also determined that the exemption applies to all of the FBI, not just the intelligence elements, and includes all flights, both mission and nonmission. did not indicate that additional flights may have been omitted on the basis of GSA’s exemption for intelligence agencies. GSA senior officials told us that they cannot identify which organizations, components, or offices of departments or agencies within the intelligence community do not report senior federal official travel data to GSA. These officials stated that this is because they do not distinguish between instances where an agency reports no information because the agency is invoking the exemption and instances where the agency reports no information for some other reason, such as that no flights were taken on agency aircraft. Asking agencies to identify instances where they are invoking the exemption would better position GSA to collect and report on this information. Standards for Internal Control in the Federal Government calls for agencies to establish controls, such as those provided through policies and procedures, to provide reasonable assurance that agencies and operations comply with applicable laws and regulations. These standards also call for the accurate and timely recording of transactions and events to help ensure that all transactions are completely and accurately recorded, as well as for an agency to have relevant, reliable, and timely Further, GSA officials stated that it could be possible communications. to obtain follow-up information from agencies that did not provide travel data in order to determine why agencies had not reported data. Collecting additional information on which agencies are invoking the exemption and including such information in its reports could help ensure more complete reporting on the use of government aircraft, which could help provide GSA with reasonable assurance that its Federal Official Travel Reports are accurate and also provide the public a more comprehensive understanding of these trips. departments and agencies, the only exception for the reporting of this kind of travel is for classified trips. However, GSA has established an exception to these reporting requirements that is inconsistent with the executive branch requirements that gave GSA authority to collect senior federal travel data. GSA has not identified the basis—specifically, a source of authority or rationale—for this exemption as applied to senior federal official travel for nonmission purposes that would allow for it to deviate from executive branch specifications. Identifying an adequate basis for the intelligence agency reporting exemption or removing the exemption from its regulations if an adequate basis cannot be identified could help GSA ensure its regulations for senior federal official travel comply with executive branch requirements. In addition, collecting additional information on which agencies or organizations within the federal government are utilizing this exemption, and including such information in its Senior Federal Travel Reports, could help provide GSA with reasonable assurance that its published reports using these data are accurate. We recommend that the Administrator of GSA take the following two actions: To help ensure that GSA regulations comply with applicable executive branch requirements, identify an adequate basis for any exemption that allows intelligence agencies not to report to GSA unclassified data on senior federal official travel for nonmission purposes. If GSA cannot identify an adequate basis for the exemption, GSA should remove the exemption from its regulations. To help ensure the accuracy of its Senior Federal Official Travel Reports, collect additional information from agencies on instances where travel is not being reported because of an exemption for intelligence agencies, as opposed to some other reason, and include such information in its reports where departmental data do not include trips pursuant to an agency’s exercise of a reporting exemption. We provided a draft of this report to GSA for review and comment. GSA provided written comments which are reprinted in appendix I and summarized below. In commenting on our report, GSA concurred with both of the recommendations and identified actions to address them. In response to our recommendation that GSA identify an adequate basis for the intelligence agency exemption as applied to senior federal official travel for nonmission purposes, or remove it from its regulations, GSA stated that it will remove the exemption. Specifically, GSA stated that it will remove section 102.33.390(b) in Subpart E of the FMR, "Reporting Information on Government Aircraft.” This action will remove the reporting requirement related to senior federal official travel from the FMR and such reporting will continue to be governed by the FTR. As a consequence, the exemption for intelligence agencies, which is only contained in the FMR, will no longer be applicable to unclassified data on senior federal official travel for nonmission purposes. In response to our recommendation that GSA collect and report additional information from agencies on instances where travel is not being reported because of an exemption for intelligence agencies, GSA stated that it will add indicator data elements for agencies to identify when classified data is withheld from the senior federal official travel data they submit to GSA. These actions, when fully implemented, will address both of our recommendations. As agreed with your office, unless you publicly announce the contents of this report earlier, we plan no further distribution until 30 days from the report date. At that time, we will send copies to the Attorney General and other interested parties. This report will also be available at no charge on GAO’s website at http://www.gao.gov. If you or your staff have any questions about this report, please contact me at (202) 512-9627 or maurerd@gao.gov. Contact points for our Office of Congressional Relations and Public Affairs may be found on the last page of this report. Key contributors to this report are listed in appendix II. In addition to the contact named above, Chris Currie, Assistant Director; Chris Ferencik, Analyst in Charge; Janet Temko, Senior Attorney; and Mary Catherine Hult made significant contributions to the work.

The federal government owns or leases over 1,700 aircraft to accomplish a wide variety of missions. Federal agencies are generally required to report trips taken by senior federal officials on their aircraft to GSA unless the trips are classified pursuant to executive branch requirements. In February 2013, GAO reported on DOJ senior executives' use of DOJ aviation assets for nonmission purposes for fiscal years 2007 through 2011. GAO identified several issues with respect to the implementation of a provision of GSA regulations that exempts intelligence agencies from reporting information about government aircraft to GSA and that provision's application to unclassified data on senior federal official travel for nonmission purposes. GAO was asked to review GSA's oversight of executives' use of government aircraft for nonmission purposes. This report addresses the extent to which (1) GSA's reporting exemption for intelligence agencies is consistent with executive branch requirements and (2) GSA ensures the accuracy of its reporting on the use of government aircraft by senior federal officials. GAO reviewed relevant executive branch requirements and GSA regulations, as well as data submitted by DOJ to GSA on trips taken by senior federal officials on DOJ aircraft and interviewed GSA officials. The exemption in General Services Administration (GSA) regulations that allows intelligence agencies not to report unclassified data on senior federal official travel for nonmission purposes is not consistent with executive branch requirements, and GSA has not provided a basis for deviating from these requirements. Specifically, executive branch documents—including Office of Management and Budget (OMB) Circular A-126, OMB Bulletin 93-11, and a 1993 presidential memorandum to the heads of all executive departments and agencies—require agencies to report to GSA, and for GSA to collect data, on senior federal official travel on government aircraft for nonmission purposes, except for trips that are classified. As a result, GSA is not collecting all specified unclassified data as directed, and GSA has not provided a basis for deviating from executive branch requirements. Identifying an adequate basis for the intelligence agency reporting exemption or removing the exemption from its regulations if a basis cannot be identified could help GSA ensure its regulations for senior federal official travel comply with executive branch requirements. GSA aggregates data on senior federal official travel to create publically available Senior Federal Official Travel Reports that, among other things, provide transparency of senior federal officials' use of government aircraft. However, GSA does not determine which agencies' travel is not reported under the exemption for intelligence agencies. For example, in February 2013 GAO found that the Federal Bureau of Investigation (FBI)—which is a member of the intelligence community—did not report to GSA, based on the intelligence agency exemption, information for 395 unclassified nonmission flights taken by the Attorney General, FBI Director, and other Department of Justice (DOJ) executives from fiscal years 2009 through 2011. However, GSA's Senior Federal Official Travel Reports GAO reviewed for those years provided information on flights for other DOJ components but did not indicate that additional flights may have been omitted on the basis of GSA's exemption for intelligence agencies. GSA senior officials stated that they do not collect this information because they do not distinguish between instances where an agency reports no information because it is invoking the exemption or some other reason, such as that no flights were taken on its aircraft. However, these officials also stated that it could be possible to obtain follow-up information from agencies that did not provide travel data in order to determine why agencies had not reported data. Consistent with Standards for Internal Control in the Federal Government , if GSA collected additional information from agencies on instances where nonmission travel was not reported because of the exemption for intelligence agencies, as opposed to some other reason, and included such information in its reports, it could help GSA ensure the accuracy of its Senior Federal Official Travel Reports. GAO recommends that GSA identify the basis of its reporting exemption, and collect additional information when travel is not being reported. GSA concurred and identified actions to address our recommendations.

RS21794 -- Iraq Coalition: Public Opinion Indicators in Selected European Countries March 31, 2004 Following deadly terrorist attacks in Madrid, Spain, on March 11, 2004, Spanish voters ousted the incumbent conservative and U.S.-allied government in favor of the Socialist Party in parliamentary elections on March 14. Although many factors likely contributed to this outcome, one of them appears to have been the outgoing Spanishgovernment's strong support for U.S. policy in Iraq and contribution of Spanish forces to the U.S.-led coalition,despite widespread opposition at home to the war in Iraq. Socialist Party leader and Prime Minister-designateJoséLuis Rodriguez Zapatero has said he would uphold his campaign promise to withdraw Spanish troops from coalitionoperations in Iraq unless they become part of a U.N.-sanctioned force. Although no other European government has echoed Zapatero's position, this series of events has increased speculation that other coalition partners in Iraq may face similar pressures from their electorates, which couldundermine the ability of coalition governments to sustain their forces in Iraq for a long period of time. The Madridbombings, terrorism, and Iraq may become prominent issues for voters across Europe in the upcoming June 2004elections to the European Parliament. The United States, meanwhile, seeks to broaden international participationinstabilization operations in Iraq in order to relieve heavily deployed U.S. forces there, and as the United Statespreparesto turn over sovereignty to the Iraqis by July 2004. This report briefly examines selected public opinion indicators in key European countries that currently contribute tothe U.S.-led coalition in Iraq. Overall, polls over the past year show that Spain was no anomaly in terms of strongpublic opposition to military involvement in Iraq. Some European governments appeared to support U.S. policyinIraq in defiance of, rather than as a result of, public sentiment at home. The Bush Administration contends that thewar in Iraq has reduced the danger of global terrorism. However, a majority in public opinion surveys throughoutEurope contend that the war in Iraq has increased rather than diminished that threat. At the same time, some opinionsurveys show that public support across Europe for military operations in Iraq would increase substantially if theUnited Nations were to authorize or lead peacekeeping and reconstruction efforts. The survey data referenced in this report derive from several sources, as noted; as such, varying methodologies arereflected that may not permit cross-country comparisons. Most polls cited in this report were conducted prior totheMarch 11 Madrid terrorist attacks. Multiple country surveys are referenced at the end of the report. The United Kingdom and British Prime Minister Tony Blair in particular have been the most stalwart supporters of theU.S. case for going to war in Iraq and U.S.-led stabilization efforts. After the United States, Britain provides thelargest contingent of military forces Iraq (at a current strength of 8,200 troops) and commands a multinationaldivisionin southern Iraq. As the major combat phase of the war in Iraq was winding down in April 2003, a solid majority of the British expressed "approval of the military action in Iraq" (65%) and the "U.K.'s participation in it" (64%), according to asurvey released by the U.S. Department of State in May 2003. By the end of 2003, still two-thirds (66%) favoredthepresence of British forces serving in Iraq. (1) Nevertheless, criticism of the Blair government has grown, with many inBritain coming to believe that Blair had misled the public about the threat posed by Saddam Hussein. (2) In March 2004, the Pew Research Center for the People and the Press (henceforth, the "Pew Center"), released resultsof a multinational survey taken in February 2004 that showed increasingly negative British views on Iraq. Amongthefindings of the Pew Center's study for Britain: In response to the question, Did Britain make the right or wrong decision to use military force inIraq? -- 43% said it was the right decision, and 47% said it was the wrong decision. Has the war in Iraq helped or hurt the war on terrorism? -- 36% said it helped, 50% said ithurt, and 5% said it had no effect. (A different poll taken around the same time showed that 67% said the war inIraqincreased the threat of terrorism, 9% said it decreased the threat, and 21% said it had noeffect.) (3) Who could do the best job at helping the Iraqi people form a stable government, the U.S. and its allies or the United Nations? -- 10% said the U.S. and its allies, 82% said the U.N., 4% said both, and 2%saidneither. Italy contributes the third largest national contingent of troops to Iraq, with nearly 3,000 military and paramilitarytroops serving in the U.K.-led multinational division in the south. Following the Spanish parliamentary electionsinMarch 2004, the conservative Italian government under Prime Minister Silvio Berlusconi pledged to keep Italiantroops in Iraq. Berlusconi also expressed steadfast support for the Italian military role in Iraq after a November 2003suicide bomb attack on coalition forces in Iraq killed nearly 20 Italian troops, the largest single number of Italianmilitary casualties since World War II. In contrast, Italian center-left opposition party leaders have recently saidthatthey would support an end to Italy's military role in Iraq. (4) In April 2003, the Italian public seemed split on the war in Iraq. According to one poll, 55% disapproved of the war,compared with 42% who expressed support. At the same time, 55% approved of the Italian government's decisiontoopen Italian bases and airspace to coalition forces. (5) Italian polls through the rest of 2003 and early 2004 showed a consistently even split in Italian public opinion betweenthose in favor of or against withdrawing Italian troops from Iraq, with a slightly greater percentage in favor ofwithdrawal. However, polls taken after the November 2003 suicide attacks against Italian personnel in Iraqsuggesteda growing resolve to see through Italy's commitment to Iraqi stabilization rather than pull out. (6) Spain's announcement after the March 11 Madrid attacks that it would withdraw its troops from Iraq has appeared toinfluence public opinion in Italy. In a mid-March poll that asked, Do you favor or oppose a decision similartoSpain's to withdraw troops by June 30? , 67% said they were in favor versus 26% opposed. (7) A February 2004 poll from AP/Ipsos showed results in Italy similar to those in Britain on a few related questions,including: In response to the question, Has the military action in Iraq increased, decreased, or had no effect on the threat of terrorism? -- 65% said it increased the threat, 6% said it decreased the threat, 20% saidit hadno effect, and 9% said they were unsure. Poland has commanded a multinational peacekeeping division in central Iraq since late summer 2003 and contributesabout 2,500 troops to the peacekeeping operation. In the aftermath of the March 2004 Madrid terrorist attacks,Polishleaders have also pledged to keep Polish forces in Iraq "as long as needed," although President AleksanderKwasniewski publicly criticized apparent intelligence discrepancies regarding Saddam Hussein's presumed arsenalofweapons of mass destruction. Polish officials and the public at large have become increasingly concerned about thepotential for terrorist attacks at home. In addition, after the recent announcement by embattled Polish PrimeMinisterLeszek Miller that he would resign in May 2004, Polish policy on Iraq is likely to come into greater play as apoliticalissue as a new government is formed, or if early elections are held. A coalition partner in the center-left governmenthas called for a timetable for the withdrawal of Polish troops from current military operations in Iraq. The Polish polling company CBOS has run regular surveys of Poland's participation in Iraq operations. Their pollingresults have shown moderately varying levels of support for and opposition to Polish troop involvement in Iraq. Ingeneral, a slightly greater share of Poles have opposed Polish troops serving with multinational stabilization forcesinIraq. An early March 2004 poll showed that 42% of Poles backed Poland's involvement in Iraq while 53% wereopposed. A November 2003 surveyed showed that 75% of those polled said they feared Poland would become the target of aterrorist attack, several months before the Madrid bombings. (8) As noted above, the former Spanish government's staunchly pro-U.S. position on Iraq had become a prominent electoral issue even before Madrid was rocked by terrorist bombs on March 11. Spain currently has about 1,300troops serving in the Polish-led division in central Iraq. At the start of the war in Iraq in March 2003, polls showed that up to 90% of Spaniards opposed the U.S.-led war. The extent of Spanish disapproval exceeded all other major European countries, including those whose governmentsopposed the war, such as France and Germany. In the run-up to the March 2004 parliamentary elections in Spain, but before the March 11 terrorist attacks in Madrid,opinion polls showed that the party of former Prime Minister Aznar was still slightly ahead of the Socialistopposition,despite no evidence of increasing support for Aznar's policies in Iraq or suggestion that Aznar's successor as partyleader would change course on Iraq. Widespread predictions of a conservative victory (prior to March 11) suggestthatthe Iraq issue alone would probably not have determined the election outcome. Rather, the bombings themselvescoupled with the Aznar government's early response to them (including its mistaken charge against the Spanishterrorist group ETA) appear to account for the late surge among Spanish voters for the Socialists. In a poll from February 2004, 66% of those polled in Spain thought the Iraq war had increased the threat of terrorism,8% thought it had decreased, 17% said it had no effect, and 9% were not sure. In the same poll, an 85% majoritysaidthey were worried about the threat of terrorism in their home country. (9) Turkey denied permission in March 2003 for U.S. troops to open a northern front into Iraq through Turkey but Ankarahas since opened bases and airspace to U.S.-led stabilization operations. Turkey does not currently contribute troopsto coalition stabilization operations but maintains a small military presence in northern Iraq and remains highlyconcerned about instability along Turkey's southern border. U.S. officials have pressed the Turkish government tocontribute to multinational peacekeeping efforts in Iraq. Turkey was the target of two terrorist bombing attacks inNovember 2003. In the run-up to the 2003 war in Iraq, overwhelmingly strong anti-war sentiment in Turkey contributed to the parliament's decision to block access to coalition forces through Turkish territory. Since then, opinion polls haveshown greater moderation of Turkish views on coalition efforts in Iraq (as well as on opinions of the United Statesingeneral). (10) However, in September 2003, stillnearly two-thirds of Turks surveyed opposed sending Turkish troops toIraq. In addition, 73% of those polled believed the United States would fail in its efforts to stabilize Iraq. (11) In the March 2004 Pew Center survey, Turks polled in May 2003 were evenly divided on whether Iraqis will be betteroff or worse off in the long run, as a result of the U.S.-led campaign to remove Saddam Hussein from power. Otherquestions from the Pew Center survey showed the following results from February 2004 polling: Did Turkey make the right or wrong decision not to use military force against Iraq? -- 72% said it was the right decision, and 22% said it was the wrong decision. Has the war in Iraq helped or hurt the war on terrorism? -- 24% said it helped, 56% said ithurt, and 8% said it had no effect. Who could do the best job at helping the Iraqi people form a stable government, the U.S. and its allies or the United Nations? -- 11% said the U.S. and its allies, 59% said the U.N., 6% said both, and 10%saidneither. Associated Press/Ipsos News Center. "Many in neighboring countries, Europe believe Iraq has increased terrorist threat," March 5, 2004. Available at http://www.ipsos-na.com . The Economist. "Those awkward hearts and minds." April 1, 2003. The German Marshall Fund of the United States. "Transatlantic Trends 2003." Available at http://www.transatlantictrends.org . Released September 4,2003. The Pew Research Center for the People and the Press. A Year After Iraq War: Mistrust of America in Europe EverHigher, Muslim Anger Persists . Available at http://www.people-press.org . Released March 16, 2004. U.S. Department of State, Office of Research. "Opinion Analysis: Key West European still mostly negative aboutmilitary action in Iraq," May 14, 2003.

Several European countries currently contribute military forces to U.S.-ledcoalition operations to stabilize Iraq, one year after the start of the war against former Iraqi leader Saddam Hussein. Many European governments have sent troops to Iraq despite strong domestic opposition, although the level ofopposition, as measured by opinion polls, varies from country to country and can show changes over time. TheMarch2004 terrorist attacks in Madrid and the announcement by the new Spanish government that it would likely removeSpanish troops from Iraq by July 2004 have raised questions about the sustainability of other countries' troopdeployments. This report surveys selected public opinion indicators in key European coalition countries. It maybeupdated as new polling data becomes available. See related CRS Report RL31843(pdf), Iraq: International AttitudestoOperation Iraqi Freedom and Reconstruction.

HCFA’s vision, which we support, is for a single, unified system to replace the nine current systems now used by Medicare, the nation’s largest health insurer, serving about 37 million Americans. The goals of MTS are to better protect program funds from waste, fraud, and abuse; allow better oversight of Medicare contractors’ operations; improve service to beneficiaries and providers; and reduce administrative expenses. At present, HCFA expects MTS to be fully operational in September 1999, and to process over 1 billion claims and pay $288 billion in benefits per year by 2000. These are ambitious goals, and we realize that developing such a system is complex and challenging. Currently, when legislative or administrative initiatives result in revised payment or coverage policies, each of the nine automated systems maintained by Medicare contractors to process claims must be modified. An integrated system would eliminate the need for such cumbersome and costly multiple processes. In January 1994, HCFA awarded a contract to GTE Government Systems Corporation to design, develop, and implement the new automated system for processing claims. Two related contracts were awarded: to Intermetrics, Inc., in April 1994 for what is known as independent verification and validation, or IV&V—a separate technical check on GTE’s work; and to SETA Corporation in September 1995 for systems testing. Over the last 12 years, the federal government has spent more than $200 billion on information technology, and we have evaluated hundreds of these projects. On the basis of this work, we have determined that two basic, recurring problems constrain the ability of organizations to successfully develop large systems: (1) failure to adequately select, plan, prioritize, and control information system projects; and (2) failure to take advantage of business process improvements that can significantly reduce costs, improve productivity, and provide better services to customers. These problems have often led to meager results in federal agency efforts to design, develop, and acquire complex information systems. For example, after investing over 12 years of effort, the Federal Aviation Administration (FAA) chose to cut its losses in its problem-plagued Advanced Automation System by cancelling or extensively restructuring elements of this modernization of the nation’s air traffic control system. The reasons for FAA’s problems included the failure to (1) accurately estimate the project’s technical complexity and resource requirements, (2) finalize system requirements, and (3) adequately oversee contractor activities. Similarly, our work on IRS’ Tax Systems Modernization, designed to automate selected tax-processing functions, identified several weaknesses. For example, IRS lacked (1) a disciplined process for managing definition of requirements, and (2) a management process for controlling software development. These problems caused significant rework and delays. Last year, to help federal agencies improve their chances of success, we completed a study of how successful private and public organizations reached their goals of acquiring information systems that significantly improved their ability to carry out their missions. Our report describes an integrated set of fundamental management practices that were instrumental in producing success. The active involvement of senior managers, focusing on minimizing project risks and maximizing return on investment, was essential. To accomplish these objectives, senior managers in successful organizations consistently followed these practices—which have become known as best practices—to ensure that they received information needed to make timely and appropriate decisions. Among others, one key practice is for executives to manage information systems as investments rather than expenses. This requires using disciplined investment control processes that provide quantitative and qualitative information that senior managers can use to continuously monitor costs, benefits, schedules, and risks; and to ensure that structured systems-development methodologies are used throughout the system’s life cycle. A consensus has emerged within the administration and the Congress that better investment decisions on information technology projects are needed to help the government improve service. Important changes recently made to several laws and executive policy guidance are instituting best-practice approaches of leading organizations into the federal government. This month, the Office of Management and Budget will issue guidance that describes an analytical framework for making information technology investment decisions. Developed in cooperation with GAO, this guidance calls for agencies to implement management practices to select, control, and evaluate information technology investments throughout their life cycles. HCFA has not yet instituted a set of well-defined investment control processes to measure the quality of development efforts and monitor progress and problems. This situation has contributed to a series of problems related to requirements-definition, schedule, and costs; these problems raise concerns that MTS may suffer the same fate as many other complex systems—extensive delays, large cost increases, and the inability to achieve potential benefits. First, HCFA has not sufficiently followed sound practices in defining MTS project requirements. As a result, HCFA has twice redirected the approach and, 2 years into the contract, requirements definition at the appropriate level of specificity has not been completed. Requirements, which are defined during the analysis phase of a project, document the detailed functions and processes the system is expected to perform and the performance level to be achieved. They are intended to correct deficiencies in the current system and take advantage of opportunities to improve program economy, efficiency, and service. Because requirements provide the foundation for designing, developing, testing, and implementing the system, it is critical that they be precisely defined to avoid ambiguity and overlap, and that they completely and logically describe all features of the planned system. Using an appropriate methodology to define requirements significantly reduces risk that requirements defects will cause technical problems. Originally, HCFA’s plans called for GTE to document the current systems’ requirements, while HCFA staff defined new or future requirements for MTS. However, in September 1994, HCFA concluded that GTE’s analysis of the current systems did not contain enough detail to fully describe the current systems’ requirements. HCFA then directed GTE to provide additional detail. In September 1995, HCFA concluded that the products GTE was developing were too detailed, and again directed GTE to refocus its efforts—this time, however, on assisting HCFA staff in defining future MTS requirements. On the basis of our experience in evaluating other systems, such multiple redirections in the analysis phase of a major project indicate that HCFA’s process to control requirements lacks discipline. HCFA currently lacks an effective process for managing requirements, and has not provided adequate guidance to staff responsible for defining requirements. These deficiencies have also been cited by the IV&V contractor as an area of significant risk. Because of problems in completing the definition of requirements, and HCFA’s plans to implement a fully functional MTS in September 1999, HCFA is proceeding into the next phase of system development, the design phase, before requirements have been completed. HCFA plans to select an MTS design alternative by the end of this calendar year, but requirements are not scheduled to be completed until September 1996. Because design alternatives are used to determine how the system will be structured, if the alternatives do not reflect key requirements, the system’s future capabilities may be seriously constrained. The IV&V contractor pointed out that HCFA’s plan to select the system design in parallel with defining system requirements also increases risks that the system will not meet important goals. HCFA officials told us they believe that MTS requirements are sufficiently defined to prepare high-level system-design alternatives, but the IV&V contractor disagrees. To support critical design decisions, requirements need to be sufficiently detailed to include such functions and processes as performance levels and response times. When we reviewed HCFA’s preliminary set of requirements, we found that many of them did not contain enough detail. Second, HCFA’s development schedule for MTS contains significant overlap—or concurrency—among the various system-development phases: analysis, design, programming, testing, validation, and implementation. As shown in figure 1, the April 1994 MTS schedule—an early estimate by HCFA—is used only to illustrate the sequential nature of these phases. The November 1995 schedule shows extensive concurrency; for example, the analysis and design phases are occurring simultaneously during the period from July 1994 to September 1996. In our January 1994 report on MTS, we stated that if a contractor advances too far into a succeeding system-development phase before sufficient progress has been made in the previous phase, the risk that technical problems will occur is significantly increased. Senior HCFA officials recently told us that the MTS schedule contains concurrency because it is important to deploy the system before the end of the century; otherwise, significant costs would be incurred to modify existing systems. What is needed is quantifiable information on this cost, compared with an assessment of the risks of concurrency. HCFA has not, however, implemented a formal process to assess and manage system-development risks. The IV&V contractor has also cited this lack of a formal risk-assessment process as a problem. In addition, while HCFA’s MTS schedule has been revised several times because of the redirection of requirements definition in the analysis phase, the initial and final system-implementation dates have remained largely unchanged. As a result, the time scheduled to complete the rest of the system-development phases to meet those dates is now significantly compressed. For example, because HCFA did not adjust the initial operating capability date, it is now scheduled, at one point in a 1-year period, to work concurrently on the remaining development phases—design, programming, testing, and validation. On the basis of our previous work on large systems-development efforts, we believe that failure to allow for sufficient time to complete system-development phases increases risk and will likely result in reduced systems capability. Moreover, HCFA has not developed an integrated schedule that reflects both HCFA and contractor activities, work products, and time frames needed to perform these activities. Such a schedule provides an important tool for closely monitoring progress and problems in completing various activities. Without detailed insight about the actual status of all development activities, management will not have the information it needs to make timely decisions. HCFA’s IV&V contractor also cited concerns about the lack of an integrated schedule baseline for MTS. HCFA officials agreed that such a schedule is important. Finally, HCFA has not sufficiently developed disciplined processes to adequately monitor progress in achieving cost and benefit objectives, which are important to managing projects as investments. The estimated MTS project costs, pegged by HCFA at $151 million in 1992, have not been updated since then, and HCFA is not tracking internal costs associated with the project, such as personnel, training, and travel. According to HCFA officials, they plan to update their cost estimate next year, to reflect their current understanding of MTS’ capabilities. Similarly, except for estimated administrative savings of $200 million a year during the first 6 years of operation (1997-2002), HCFA has not yet quantified other important expected benefits of MTS, such as targets for reducing fraud, waste, and abuse, and improving services to beneficiaries and providers. Without current information on costs and potential benefits, HCFA executives will not be in the best position to realistically monitor performance or identify and maximize the system’s true return on investment. We have seen an inescapable pattern in agencies’ development of information systems: even on a small scale, those that are not developed according to sound practices encounter major, expensive problems later on. The larger the project, the bigger the risk. It takes serious, sustained effort and disciplined management processes to effectively manage system development. Effective oversight greatly reduces exposure to risk; without it, risk is dramatically and needlessly increased. The risks we see in the development of MTS can be substantially reduced if HCFA management implements some of the best practices that have been proven effective in other organizations: managing systems as investments, changing information management practices, creating line manager ownership, better managing resources, and measuring performance. HCFA still has time to correct these deficiencies. We are encouraged by HCFA’s expression of interest in learning about how to implement the best practices in systems development used by successful organizations, and look forward to working with them. This concludes our statement, Mr. Chairmen. We will be happy to respond to any questions you or other members of the subcommittees may have at this time. 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. 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. 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GAO discussed the Health Care Financing Administration's (HCFA) approach to managing the Medicare Transaction System (MTS). GAO noted that: (1) MTS is designed to unify the nine Medicare claims-processing systems, improve Medicare contractor oversight, improve services to beneficiaries and providers, reduce administrative expenses, and better protect Medicare program funds from waste, fraud, and abuse; (2) although HCFA plans to mitigate large scale problems by implementing MTS in increments and design MTS to allow for future modifications, the lack of an effective management approach exposes the system to undue risks; (3) HCFA has not adequately defined MTS project requirements, has not identified significant system-development overlap, and lacks reliable cost and benefit information; and (4) HCFA could substantially reduce MTS development risks by implementing some of the best practices that have been proven effective in other organizations, such as changing HCFA information management practices, creating line manager ownership, better managing MTS resources, and measuring MTS project performance.

On March 31, 2015, the Supreme Court decided in Armstrong v. Exception Child Center, Incorporated , that private parties cannot seek an injunction from a federal court to prevent state Medicaid officials from implementing a state plan that may violate federal law. This report provides an overview of the decision in Armstrong , the potential implications of this decision for Medicaid, and the availability of equitable relief against state officers in federal courts generally. Medicaid is a cooperative federal-state program through which the federal government provides financial assistance to states for medical care and other services for poor, elderly, and disabled individuals. Although participation in the Medicaid program is voluntary, states, as a condition of participation, are required to have a plan that complies with federal Medicaid statutes and regulations in order to qualify for federal assistance. Nevertheless, states have considerable discretion in administering their Medicaid programs, which generally includes setting the payment rates at which providers are reimbursed for their services to Medicaid beneficiaries. In the context of these rate-setting determinations, providers and others have argued that reductions make reimbursement rates inadequate and have turned to the courts to challenge these reductions. When challenging these reimbursement rates, plaintiffs have often claimed that the rates violate the requirements of Section 1902(a)(30)(A) of the Social Security Act, often referred to as Medicaid's "equal access provision." This provision requires a state Medicaid plan to provide such methods and procedures relating to the utilization of, and the payment for, care and services available under the plan…as may be necessary to safeguard against unnecessary utilization of such care and services and to assure that payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area .... Medicaid beneficiaries and others have claimed that because of inadequate Medicaid reimbursement rates, the requirements of the equal access provision are not met (e.g., the state did not consider, or the state plan's methods or procedures do not assure, that Medicaid payments are consistent with efficiency, economy, and quality of care, or are sufficient to enlist providers to provide Medicaid services). In other words, plaintiffs have generally argued that the provider reimbursement rates are so low that they do not allow for sufficient care and services to be provided to beneficiaries, as compared to the care in that area that is available to individuals who do not participate in the Medicaid program. In determining whether a state's provider reimbursement rates violate the equal access provision, a significant threshold question arises in these cases: whether private parties can sue to enforce these federal requirements. Because the Medicaid Act contains no express language that allows private parties to challenge reimbursement rate cuts, plaintiffs desiring to challenge cuts in Medicaid payment rates under the equal access provision have sought out other legal vehicles to bring their claims. Historically, plaintiffs had brought their claims under 42 U.S.C. § 1983, which allows individuals to sue local governments and state and local officers in order to redress violations of federal law. Based on this cause of action, plaintiffs have alleged that state Medicaid officials violated their federal rights because the reimbursement rates did not comply with the requirements of the equal access provision. Multiple courts found that Medicaid providers and beneficiaries could enforce the equal access provision by bringing an action under Section 1983. However, in 2002, the Supreme Court's decision in Gonzaga University v. Doe restricted plaintiffs' ability to bring an action under Section 1983. As the Court explained in Gonzaga , "we now reject the notion that our cases permit anything short of an unambiguously conferred right to support a cause of action brought under Section 1983." In the wake of Gonzaga , most appellate courts held that the equal access provision is not privately enforceable under Section 1983. Thus, in light of the Gonzaga decision, Medicaid providers and beneficiaries have sought other legal avenues for challenging Medicaid reimbursement rates. Plaintiffs have also sought to enforce federal laws against state officials through an equitable cause of action first recognized by the Supreme Court in Ex parte Young , under which "federal courts may in some circumstances grant injunctive relief against state officers who are violating, or planning to violate, federal law." In Young , the Court upheld a federal circuit court's order enjoining the Minnesota attorney general from enforcing railroad rates set by a state commission under Minnesota law. The basis for the injunction in this case was the determination that the Minnesota railroad rate scheme violated the Dormant Commerce Clause, and was therefore unconstitutional. Although actions under Ex parte Young are frequently permitted, the Court has found that the availability of an equitable remedy had been foreclosed by Congress. In Seminole Tribe of Florida v. Florida , the Court noted that "where Congress has prescribed a detailed remedial scheme for the enforcement against a State of a statutorily created right, a court should hesitate before casting aside those limitations" and permitting an action against a state officer based upon Ex parte Young. Therefore, the fact that Congress had specified a detailed process by which tribes were to enforce their rights against a state under the Indian Gaming Regulatory Act (IGRA) indicated that Congress intended to preclude tribal litigants from seeking to enforce those same provisions through Ex parte Young. Following the narrowing of Section 1983 remedies in the wake of Gonzaga , private plaintiffs have sought to enjoin state officials that they believe are in violation of federal Medicaid requirements under Ex parte Young . In 2012, the Supreme Court had the opportunity to consider the availability of such a remedy in Douglas v. Independent Living Center of Southern California . While the case was pending, the Centers for Medicare and Medicaid Services (CMS) approved the modifications to California's Medicaid program. In light of this "different posture," a majority of the Court voted to remand the case to the Ninth Circuit to determine what effect, if any, the administrative action should have on the question of whether a cause of action is available under the Supremacy Clause. Four Justices dissented from the majority opinion. In the dissent's view, the administrative actions by CMS "have no impact on the question" of the availability of a cause of action under the Supremacy Clause. Upon reaching that question, the dissent would have held that the Supremacy Clause does not provide an independent cause of action where Congress has declined to provide a private right of action to enforce a federal statute. During the October 2014 term, the Supreme Court was again presented with the question posed by Douglas , namely, whether the Supremacy Clause independently provides a cause of action to prevent state officials from violating a federal statute. The facts of this case, Armstrong v. Exceptional Child Center, Incorporated , are similar to the facts of Douglas . In Armstrong , Idaho's reimbursement rates for providers of "habilitation services" were challenged by providers of these services. As in Douglas , the Armstrong plaintiffs argued that the rates were in violation of the equal access provision required under Medicaid. However, in contrast to Douglas , Idaho's rates had already received approval from CMS. Therefore, Armstrong presented an opportunity for the Court to squarely address the question presented in Douglas , but without the risk of intervening administrative action requiring a remand to the lower courts. In answer to that question, a majority of the Court held that the Supremacy Clause did not provide a cause of action for private parties to enforce the Medicaid equal access requirement. While recognizing that federal courts are empowered to enjoin state enforcement actions that are preempted by federal law, the majority held that this power is not derived from the Supremacy Clause, but from courts' inherent equitable powers. The Supremacy Clause merely provides a "rule of decision" when courts are confronted with a conflict between state and federal law. But, the authority to resolve that conflict must come from another source, such as a statutory cause of action created by Congress or the equitable powers of the judiciary. With respect to whether the courts could enjoin Idaho's implementation of its Medicaid rates as a form of equitable relief, the majority found that Congress had foreclosed such an option for the plaintiffs. This holding was grounded on two main observations. First, a separate enforcement mechanism had been provided by Congress in the form of the withholding of federal funds from a noncompliant state Medicaid plan. Second, the majority found the terms of the equal access provision to be judicially unadministrable. In particular, the majority stated, It is difficult to imagine a requirement broader and less specific than §30(A)'s mandate that state plans provide for payments that are "consistent with efficiency, economy, and quality of care," all the while "safeguard[ing] against unnecessary utilization of . . . care and services." Explicitly conferring enforcement of this judgment-laden standard upon the Secretary alone establishes, we think, that Congress "wanted to make the agency remedy that it provided exclusive," thereby achieving "the expertise, uniformity, widespread consultation, and resulting administrative guidance that can accompany agency decisionmaking," and avoiding "the comparative risk of inconsistent interpretations and misincentives that can arise out of an occasional inappropriate application of the statute in a private action." Four Justices dissented in Armstrong , arguing that while the Supremacy Clause may not provide the plaintiffs with a cause of action, the evidence of congressional intent to foreclose equitable relief was insufficient. In particular, the dissent argued that the agency enforcement mechanism in Medicaid was not the type of "detailed remedial scheme" that had previously been relied upon by the Court to deny equitable relief. In addition to concerns about the weight given to alternative enforcement mechanisms in this case, the dissent may also have disagreed with the burden the majority required the plaintiffs to meet before they would be allowed to seek equitable relief. Specifically, the dissent observed that equitable preemption actions differ from suits brought by plaintiffs invoking 42 U. S. C. §1983 or an implied right of action to enforce a federal statute. Suits for "redress designed to halt or prevent the constitutional violation rather than the award of money damages" seek "traditional forms of relief." By contrast, a plaintiff invoking §1983 or an implied statutory cause of action may seek a variety of remedies—including damages—from a potentially broad range of parties. Rather than simply pointing to background equitable principles authorizing the action that Congress presumably has not overridden, such a plaintiff must demonstrate specific congressional intent to create a statutory right to these remedies. In other words, the dissent would appear to view equitable relief as a "traditional" and "background" form of relief that Congress must affirmatively foreclose, rather than a legislatively created cause of action that Congress must affirmatively create. The dissent further stated that "For these reasons, the principles that we have developed to determine whether a statute creates an implied right of action, or is enforceable through §1983, are not transferable to the Ex parte Young context." The immediate effect of the Armstrong decision would appear to be the insulation of state Medicaid programs and officials from suits brought by private parties, such as beneficiaries or providers, alleging violations of federal Medicaid requirements. Without a private avenue of enforcement directly against states, future litigation will likely focus on federal actions to approve state plans, possibly as actions seeking review of a final agency action under the Administrative Procedure Act. Though the availability of such a cause of action may not be in doubt, whether the level of review in the context of such an action is sufficient may be a topic of future debate. As noted by Justice Breyer in his concurrence in Armstrong , The law may give the federal agency broad discretionary authority to decide when and how to exercise or to enforce statutes and rules. As a result, it may be difficult for respondents to prevail on an APA claim unless it stems from an agency's particularly egregious failure to act. But, if that is so, it is because Congress decided to vest broad discretion in the agency to interpret and to enforce §30(A). The potential significance of Armstrong beyond the Medicaid program also remains to be seen. The Court's decision could inform future litigation brought by a private party seeking to compel state officials to comply with other federal statutes, particularly where those statutes provide mechanisms for federal agencies to enforce their requirements. Additionally, the decision may inform the drafting and consideration of legislation in Congress, insofar as the opinion clarifies the analysis and presumptions the Court will utilize when considering whether equitable relief has been foreclosed.

On March 31, 2015, the Supreme Court decided in Armstrong v. Exception Child Center, Incorporated, that private parties cannot seek an injunction from a federal court to prevent state Medicaid officials from implementing a state plan that may violate Medicaid's equal access requirement under federal law. Medicaid is a cooperative federal-state program through which the federal government provides financial assistance to states for medical care and other services for poor, elderly, and disabled individuals. States have considerable discretion in administering their Medicaid program, which generally includes setting the payment rates at which providers are reimbursed for their services to Medicaid beneficiaries, but must comply with certain federal requirements. One such requirement, known as equal access, requires rates to be sufficient to enlist enough providers so that care and services under Medicaid will be at least comparable to those available to the general population. In Armstrong, providers of certain Medicaid services challenged the state's reimbursement for those services, and sought to enjoin the state from implementing the reduced rates. A majority of the Court held that the Supremacy Clause of the Constitution did not provide a private right of action against state officials that are allegedly violating, or planning to violate, federal law. Further, the existence of an administrative enforcement scheme conducted by the Centers for Medicare and Medicaid Services counseled against allowing an action against the state to proceed in equity. Four Justices dissented, and would have permitted the plaintiffs to seek equitable relief from the courts to enjoin the state. Without a private avenue of enforcement directly against states, future litigation will likely focus on federal actions to approve state plans, possibly as suits seeking review of a final agency action under the Administrative Procedure Act. The potential significance of Armstrong beyond the Medicaid program remains to be seen, but could inform future litigation brought by a private party seeking to compel state officials to comply with other federal statutes, or the drafting and consideration of legislation in Congress, insofar as the opinion clarifies the analysis and presumptions the Court will utilize when considering whether equitable relief has been foreclosed.

China has made clear advances in space capabilities over the past decade. The country has launched over 100 orbital missions since 1970, including a string of 50 consecutive successful Long March rocket launches from 1996 to 2006, after overcoming technical problems with the help of U.S. companies in the mid-1990s. China sent humans into space in 2003 and 2005, and orbited a lunar explorer in October 2007 that is paving the way for additional moon exploration. China is now a world leader in yearly space launches, yet remains notably less active than Russia or the United States, as shown in Table 1 . China's space program was initially institutionalized under the People's Liberation Army (PLA). In a series of government reforms in the 1990s, the China National Space Administration (CNSA)—roughly equivalent to the U.S. National Aeronautics and Space Administration (NASA)—was created under the civilian Commission of Science, Technology and Industry for National Defense. The PLA continues to play a role in China's overall space activities, managing both manned civilian and military efforts, while CNSA handles unmanned scientific projects and international collaboration. China's space activities and intentions are not transparent; the dual-use nature of most space technology compounds the uncertainties of interpreting Chinese decision making. China's Space White Paper of 2006 states that Chinese space activities are subservient to domestic social and economic development goals, which include national security. China has been a strong proponent of an arms control regime in space and has argued for the peaceful use of outer space in the United Nations' Conference on Disarmament and at the Prevention of an Arms Race in Outer Space dialogue. Some claim that China takes this stand in order to prevent further progress by the United States in space while allowing it to covertly catch up. China's spending on space is growing, although details are often not available. The CNSA reports to have a budget about one-tenth the size of NASA's. Western experts estimate Chinese space spending at $1.4-2.2 billion per year, on par with France and Japan. Chinese budget opacity, the dual-use nature of most space technology, and currency conversion difficulties make direct comparisons uncertain. China collaborates with other countries on civilian space activities, but it is not considered a key member of the international space community. Currently, China collaborates with Russia, the European Union (EU), Brazil, Canada, Nigeria, and others. The Russian partnership is probably the most active and has benefitted China's manned space effort significantly. A China-EU collaborative framework on space has been in place since 1998. This includes cooperation on the EU-led Galileo satellite positioning system, but progress on this has been slow and sometimes controversial. Competition in space also exists among China, India, Japan, and South Korea. Although there may be military implications to this competition, each country seems more focused on building national pride by displaying technology prowess. China's program to launch humans into space began earnestly in 1992 and is designated as "Project 921." China has apparently chosen the more expensive route of sending humans into space, over machines, for the wider attention it attracts both domestically and internationally. A manned program builds greater national prestige—an increasingly important political benefit in China—and by drawing international attention to the country's technical capabilities. China has made steady, although unremarkable progress in its human space schedule. Compared to the U.S. Apollo and Soviet Soyez programs of the 1960s and 1970s, China's Shenzhou effort is far more modest. Project 921 is divided into three phases. Phase I included the first five Shenzhou flights, culminating in China's first human spaceflight on October 15, 2003. Phase II began with Shenzhou 6, which flew two Chinese taikonauts on a five-day mission starting on October 12, 2005. Shenzhou 7 was a three-day mission starting on September 24, 2008, and built experience with extra-vehicular activities. Shenzhou 8, 9, and 10 are scheduled for 2009-2010 and will attempt to establish a space laboratory module with docking capability. Shenzhou 9 will test docking procedures with the module delivered by Shenzhou 8, and Shenzhou 10 will carry a crew to the module. Phase III is less well developed, but includes establishing a permanent space station. China claims that it has not set a date for development of the station. The Shenzhou modules have been designed to dock at the International Space Station if that becomes politically feasible in the future. On October 24, 2007, China successfully launched Chang-e 1, the country's first lunar probe. Approximately 14 days later, the probe entered final orbit around the moon. China became the fourth country to orbit a satellite around the moon; Japan became the third only weeks before China. Orbiting 200 kilometers (124 miles) above the surface, China's explorer uses stereo cameras and X-ray spectrometers to map three dimensional images of the lunar surface. One goal of the mission is to begin mapping potential lunar resources that could some day be used by Chinese industry. China plans to send Chang-e 2, equipped with a robotic lunar rover, to the moon around 2012. Approximately five years later, Chang-e 3 is scheduled to send another rover to collect samples that will be returned to Earth. After this third phase, an effort to send humans to the moon will commence, but China denies that it has a timetable for this effort. China also has plans to explore Mars and the outer solar system and is discussing collaboration with Russia to do so. These plans are more vague and uncertain than Program 921 and the lunar exploration. China and the United States have a limited history of both civilian and military collaboration in space. China has publicly pushed for more dialogue and joint activities. Mistrust of Chinese space intentions grew in the mid-1990s when U.S. companies were accused of transferring potentially sensitive military information to China. Since then, cooperation has stagnated, often roiled by larger economic, political, and security frictions in the U.S.-China relationship. In September 2006, NASA Administrator Michael Griffin visited his Chinese counterpart, Laiyan Sun, in China. He couched the visit as a "get acquainted" opportunity rather than the start of any serious cooperation in order to keep expectations low. No follow-on activities were announced after the trip, although the Chinese issued a four-point proposal for ongoing dialogue between the two organizations that stressed annual exchanges and confidence building measures. On January 11, 2007, China conducted its first successful anti-satellite (ASAT) weapons test, destroying one of its inactive weather satellites. No advance notice of the test was given, nor has China yet explained convincingly the intentions of the test. The international community condemned the test as an irresponsible act because it polluted that orbital slot with thousands of pieces of debris that will threaten the space assets of more than two dozen countries, including China's, for years. Understanding the nuances of China's intent in conducting the test is important, but remains open to interpretation. How was the decision made to conduct a test that would contradict Beijing's publicly-held position on the peaceful use of outer space, and that would almost certainly incur international condemnation? Some speculate that the United States' unilateral positions encouraged China to conduct the test to demonstrate that it could not be ignored. In particular, the U.S. National Space Policy issued in September 2006 declares that the United States would "deny, if necessary, adversaries the use of space capabilities hostile to U.S. national interests." Given China's apparent commitment to space, the growing U.S. dependence on space for security and military use, and Chinese concerns over Taiwan, the ASAT test may have been a demonstration of strategic Chinese deterrence. Others saw a more nefarious display of China's space capabilities, and a sign that China has more ambitious objectives in space. Still others speculate that the engineers running China's ASAT program simply wanted to verify the technology that they had spent decades developing and significantly underestimated the international outrage the test provoked. The Chinese ASAT test seemed to derail any movement to build on the meeting between NASA and CNSA. Some believe that China's ASAT test will continue to dampen momentum that might have been building for the two countries to expand cooperation, while others argue that it is a pressing reason to boost dialogue. Some of the most important challenges of expanding cooperation in space with China include: Inadvertent technology transfer. From this perspective, increased space cooperation with China should be avoided until Chinese intentions are clearer. Joint space activities could lead to more rapid (dual-use) technology transfer to China, and in a worst-case scenario, result in a "space Pearl Harbor," as postulated by a congressionally appointed commission led by Donald Rumsfeld in 2001. Moral compromise. China is widely criticized for its record on human rights and non-democratic governance. Any collaboration that improves the standing of authoritarian Chinese leaders might thus be viewed as unacceptable. Ineffectiveness. Some argue that increased collaboration will not produce tangible benefits for the United States, especially without a new bilateral political climate. The potential benefits of expanded cooperation and dialogue with China include: Improved transparency. Regular meetings could help the two nations understand each others' intentions more clearly. Currently, there is mutual uncertainty and mistrust over space goals, resulting in the need for worst-case planning. Offsetting the need for China's unilateral development. Collaborating with China—instead of isolating it—may keep the country dependent on U.S. technology rather than forcing it to develop technologies alone. This can give the United States leverage in other areas of the relationship. Cost savings. China now has the economic standing to support joint space cooperation. Cost-sharing of joint projects could help NASA achieve its challenging work load in the near future. Some have argued that U.S. space commerce has suffered from the attempt to isolate China while doing little to keep sensitive technology out of China. Information and data sharing. Confidence building measures (CBMs) such as information exchange on debris management, environmental and meteorological conditions, and navigation, are widely considered an effective first step in building trust in a sensitive relationship. NASA has done some of this with CNSA in the past, but more is possible. Space policy dialogue. Another area of potential exchange could begin with "strategic communication," an attempt for each side to more accurately understand the other's views, concerns, and intentions. Dialogue on "rules of the road," a "code of conduct," or even select military issues could be included. Joint activities. This type of cooperation is more complex and would probably require strong political commitments and confidence building measures in advance. Bi-and multi-lateral partnerships on the international space station, lunar missions, environmental observation, or solar system exploration are potential options. A joint U.S.-Soviet space docking exercise in 1975 achieved important technical and political breakthroughs during the Cold War.

China has a determined, yet still modest, program of civilian space activities planned for the next decade. The potential for U.S.-China cooperation in space—an issue of interest to Congress—has become more controversial since the January 2007 Chinese anti-satellite test. The test reinforced concerns about Chinese intentions in outer space and jeopardized space assets of more than two dozen countries by creating a large cloud of orbital space debris. Some argue that Chinese capabilities now threaten U.S. space assets in low earth orbit. Others stress the need to expand dialogue with China. This report outlines recent activities and future plans in China's civilian space sector. It also discusses benefits and trade-offs of possible U.S.-China collaboration in space, as well as several options to improve space relations, including information exchange, policy dialogue, and joint activities. For more information, see CRS Report RS21641, China's Space Program: An Overview, by [author name scrubbed].

The Energy Policy and Conservation Act of 1975 (1) authorized the creation of the StrategicPetroleum Reserve (SPR) for the storage of up to 1 billion barrels of crude oil. The federalgovernment began filling the SPR in 1977, mostly with imported oil. By 1992, the SPR held 575million barrels of crude oil, and in May 2003, over a decade later, holds approximately 600 millionbarrels in reserve. Since the creation of the SPR in 1975, debate has periodically focused on theoptimal size of the SPR, specifically whether it should be expanded to 700 million or 1 billionbarrels of oil. In the 108th Congress, legislation passed by the House ( H.R. 6 ) wouldrequire the SPR to be filled to its current capacity of 700 million barrels of crude oil and providesfunding of $1.5 billion to expand the capacity of the SPR to 1 billion barrels. (2) Worldwide concern over the unstable nature of the crude oil market has led other nations to establish emergency oil stocks as part of International Energy Administration (IEA) agreements tomanage supply disruptions. For example, at the end of 1999 Japan held 315 million barrels of crudeoil, OECD Europe held 325 million barrels, South Korea held 43 million barrels, and Taiwan held13 million barrels. The U.S. is the only country in this group where security stocks are totallygovernment owned. In Japan, South Korea, and OECD Europe, the total stock is divided betweengovernment and mandated private stocks. In Taiwan, the stock is completely mandated private. (3) Although decisions on the size of the SPR and private stocks are made through very different decision processes, they are linked by the fact that both may be useful in times of supply disruption. When supply is disrupted, prices rise quickly through active futures, spot, and product markets. Higher prices give businesses an incentive to bring product to market, which mitigates potentialphysical shortages, giving policy makers time to consider an SPR draw-down. If businesses havereduced available inventories to cut costs, their ability to play this role is diminished. For thisreason, the size and availability of private stocks of crude oil is relevant to debates over the optimalsize of the SPR as well as when, and under what circumstances, to use the SPR. The case for the existence of the SPR is usually framed in a benefit/cost framework. (4) Thebenefits are typically defined as avoided costs which are then set against the real resource, oropportunity, costs of maintaining the reserve. The same approach is followed for considering marginal adjustments to the reserve, but with a focus on the additional value of avoided costsimplied by a reserve expansion set against the marginal resource cost of expanding the reserve. Although debate on the size of the SPR is normally framed in terms of millions of barrels of crudeoil held, another measure, consistent with International Energy Agency (IEA) measurement, is thenumber of days of net imports for which the reserve can substitute. Although the primary focus ofSPR usage is concerned with international oil market disruptions, the SPR could also be used intimes of emergency stemming from domestic supply disruption. The benefit of maintaining the SPR lies in avoiding the effects of severe oil price spikes and shortages that might result from supply disruptions. Significant, rapid spikes in the price of crudeoil and actual shortages can have damaging effects on the macroeconomic performance of theeconomy. Reduced economic output, leading to increased unemployment and a reduction in the rateof economic growth are possible consequences. In terms of the balance of payments, higher oilprices will mean a greater expense for oil imports, causing the balance of trade to deteriorate. The costs of the SPR are much like those of other public investment projects. The capital costof the reserve and/or expansion of the reserve, costs associated with providing for the draw of thereserve, the operations and management cost, and the cost of the oil stored in the reserve are all partof total cost. The cost of the stored oil is a real budget cost in the year of acquisition to be recoupedlater when, and if, the reserve is drawn down. Proponents of the SPR see the existence, as well as the use, of the reserve contributing to stability in the oil market. The existence of the reserve could deter some politically or economicallymotivated disruptions. If the reserve is drawn upon, it might allow affected economies time to makeother adjustments to the new market conditions, including diplomacy, which might remedy, ormitigate the underlying cause of the disruption. The existence and/or use of the reserve might calmuncertain oil markets and dampen the effect of underlying market imbalances leading to a moderatedprice spike. Those opposed to market intervention see less benefit associated with the SPR and its use. They believe that the freely functioning market can mitigate most disruptions and that governmentintervention in market processes is unlikely to enhance resource allocation. In this view, friendlysuppliers might expand short term output in case of a disruption, and higher prices will allocateavailable supplies to their most pressing needs, minimizing the effect of the supply disruption. The SPR is not a stand-alone policy for energy security. In the longer term, diversifying energy sources and improving energy efficiency, engaging in productive dialogue with oil producers andenhancing the price responsiveness of consumer demand are all important measures. In the shorterterm, encouraging fuel switching capability and demand reduction can be useful energy securitymeasures. The implicit assumption underlying the SPR debate appears to be that the stock of private oilreserves held by the U.S. petroleum industry is known, unchanging, and available to reach the marketduring a supply disruption. To put the SPR expansion issue in proper context, the optimal size ofthe SPR might be considered as part of the total stock of reserves the nation has to draw upon intimes of emergency. (5) Consider the followingextreme, hypothetical cases. If the private sector wereable, technically and economically, to run the oil production system with zero inventories, or reservestocks, every world oil market supply disruption would be quickly transmitted to the domesticconsumer market, leading to immediate shortages and price spikes. In this case, a large reserve,coupled with quick response usage rules might be required for market stability. At the otherextreme, if the oil industry found it either technologically or economically useful to hold a year'sworth of supply in reserve which it was willing to draw down as needed, there might be little needfor any government reserve. If, in reality, we are somewhere between these extremes, so might bethe requirement for the SPR, and, as a corollary, if the capability of privately held stocks varies, somust the capability of the SPR if our overall ability to meet market challenges is to remain constant. In fact, the behavior of private levels of crude oil stocks have not been constant, they have been declining. Crude oil stocks, excluding the SPR, stood at 285.1 million barrels on May 16, 2003. One year ago the stock stood at 325.6 million barrels, which implies a reduction of 12.4 percent instocks held by the nation's oil industry. (6) Figure 1 , computed by the IEA, shows the behavior of totalU.S. oil stocks, measured as days of net imports. (7) Figure 1 shows a decade long decline in the ability of industry stocks, alongwith the SPR, to replace imported oil. Several forces are at work in Figure 1 . First,the increasing dependence of the U.S. on imported oil makes a stock of any size lesscapable of replacing imports. Even if the actual stocks shown in the figure wereconstant, days of imports would decline if the quantity of oil we import rises. Table1 shows that net imports of crude oil have increased from approximately 5.7 millionbarrels per day on average in 1989 to approximately 9.0 million barrels per day onaverage in 2002. (8) This increased dependency hascontributed to the downward trendof Figure 1 . Table 1. Net Imports of Petroleum, 1989-2002 (in thousands of barrels per day) Source: U.S. Energy Information Administration. Monthly Energy Review, March2003 , p. 43. Secondly, as noted above, in the short term, stocks of privately held oil have declined. Figure 2 shows the behavior of U.S. stocks, measured in billions ofbarrels, in the longer term, from 1973-2002. The figure shows that non-SPR crudeoil stocks have experienced a long term decline since their peak in the mid 1970's,even though in the last two decades imports and consumption have risen. Figure 2also suggests some increased volatility in the level of privately held stocks since themid 1990's. This behavior might be expected if firms were optimizing theirinventory holdings. Additions to stock when prices of crude oil are low and drawdowns from inventory when prices are high enhance profit opportunities. (9) Trends similar to those observed in crude oil have also occurred in petroleum products. The Petroleum Industry Research Foundation, Inc. calculates that finishedgasoline stocks fell from a 30 day stock in 1985 to an 18-19 day stock in 2001. Thistranslated into a 41 million barrel decline in gasoline stocks over the period. Anadditional complication is that gasoline is not as fungible as it once was. Differentblends of gasoline to satisfy differing air pollution standards in various parts of thecountry put further strain on a system that is reducing stocks. (10) Finally, not only privately held stocks have declined, but the privately held capacity to hold stocks has also declined. In 1990, the capacity of refineries in theU.S. to hold stocks of crude oil was 204 million barrels; by 2002 this capacity haddeclined to 183.3 million barrels, a reduction of over 10 percent. (11) This decline incapacity, coupled with the decline in held stocks, suggests that the industry might beattempting to reduce the level of inventory as a way of managing cost. Much of U.S.industry has adopted "just in time" inventory techniques as a way to lower costs andenhance efficiency. It would be consistent with this trend for the petroleum sectorto follow a similar strategy. Figure 3 represents a "break even" analysis of the relationship between totalstocks of U.S. crude oil and time, assuming that the nation has a security target ofninety days of import substitution, consistent with IEA targets. The IEA data arebased on total stocks of crude oil which ignores the lower operational inventoryconstraint for industry and, therefore, may overstate the ability of combined stocksto actually meet emergency needs. Although the IEA analysis suggests a developing problem for the U.S. in terms of replacing imported oil in times of emergency, the real situation may be even morechallenging than the IEA analysis suggests. Energy Information Administration datashows that in the fall of 2002 and again in early 2003 private stocks of crude oil werereduced to the lower operational inventory levels discussed earlier. At those timesthere were no additional crude oil reserves in the private sector in a practical sense. (12) The more the private sector economizes on crude oil stock holdings, the more likelyit is that the lower operational inventory constraint will become effective during amarket disruption, limiting the ability of industry to meet consumer demand. While private sector stocks exist primarily because of the economic andtechnological requirements of the oil industry, they have also served a publicpurpose. Private stocks have at least partially played the role of a public good. Theyhave provided benefits to the domestic oil market as a whole, as well as to policymakers as they faced difficult decisions about when, and if, to draw on the SPR. Private sector stocks are usually drawn down first, with market forces guiding thedecision. Decisions on the optimal size of the SPR may need to take into accountchanges in industry practices which might affect the ability of private stocks of crudeoil to play this role in the future. Net stocks of privately held crude oil, in many ways the first buffer between an international oil supply disruption and U.S. consumer markets, were reduced to verylow levels during the recent disruptions to the oil markets. Industry holds less stockin 2003 than it did a decade ago, even though U.S. dependence on crude oil importshas risen. The SPR currently holds approximately 600 million barrels of crude oilwhich could be used in a supply emergency. The effect of the rising dependence onimports and the reduced availability of private stocks implies that 600 million barrelsof crude oil translates into fewer days of replaced reserves.

Periodically, since the inception of the Strategic Petroleum Reserve (SPR) in 1975, debate has occurred concerning its optimal size. In the 108th Congress, the House has passed energy legislation( H.R. 6 ) which would require the SPR to be filled to its current capacity ofapproximately 700 million barrels and would authorize funds to further expand the capacity of thereserve to 1 billion barrels. Analysis of the SPR issue has been carried out in a benefit/cost framework in which benefits, the avoided cost to the national economy of a supply disruption, are set against the real resourcecosts associated with investing in the SPR. The role of the privately held stock of crude oil has beenlargely static in these analyses. The data show, however, that private stock behavior has beenchanging. Industry holds less crude oil, and has less capacity to hold crude oil, than a decade ago.These changes reflect a decade long strategy of reducing operating costs to remain competitive.However, oil markets face greater exposure to supply disruption today because our dependence onimported crude oil has risen substantially since 1992. The effectiveness of the SPR in providingsecurity from crude oil supply disruptions may be primarily a function of its size, but may also bedependent on the underlying stocks of crude oil held by the private sector. The International Energy Agency (IEA) has studied the behavior of crude oil stocks in the U.S. since 1989. It finds that our total stocks, measured as days of net imports that can be replaced bystock draw-down, have been declining. This trend results from the interaction of increasing importdependency, the essentially constant size of the SPR over the period, and the declining size ofprivately held stocks. The IEA concludes that with no change in any of these factors, the U.S. willno longer be able to replace ninety days of net imports from domestic stocks in 2006. Because the IEA focuses on total reserves, its analysis may overstate the ability of U.S. stocks to mitigate oil supply disruptions. This is because not all privately held oil stocks can be drawn uponwithout disrupting the functioning of the system itself. Once these lower operational inventory levelsare considered, the thinness of privately held stocks is apparent. As a result, the ability of privatelyheld stocks to provide a buffer to supply disruptions is reduced. This report will be updated as events warrant.

The Defense Base Closure and Realignment Act of 1990 (Base Closure Act), as amended,generally governs the military base realignment and closure (BRAC) process. (2) After three previous BRACrounds, Congress authorized a fourth round for 2005, which is now underway. (3) The BRAC process involves a complex statutory scheme, under which numerousgovernmental entities play a role in recommending bases to be closed or realigned. A brief summaryof the major steps in the process is illustrated in Figure 1 on the following page. In addition toestablishing the basic framework for the BRAC process, the Base Closure Act sets forth a varietyof selection criteria and mandatory procedures, such as the requirements that certain information bedisclosed and that certain meetings be made open to the public This report analyzes whether judicial review is available when plaintiffs allege that theDepartment of Defense (DOD), the independent BRAC Commission (Commission), or the Presidenthas either (1) failed to comply with procedural requirements of the Base Closure Act or (2) failedto properly apply specified selection criteria in making BRAC determinations. Congress couldemploy numerous strategies to attempt to "enforce" the Base Closure Act. (4) However, this report focuseson the effect a failure to comply would have if Members of Congress or other parties sued based onan alleged failure to comply with the Act's provisions. (5) In particular, the report synthesizes key federal court decisions thataddress three potential bases for judicial review of BRAC-related actions: the AdministrativeProcedure Act (APA), the Base Closure Act, and the U.S. Constitution. Figure 1: The BRAC Process (6) Additional CRS reports addressing a variety of BRAC issues are also available. (7) The Administrative Procedure Act (APA) provides for judicial review of "final agencyaction," (8) unless either oftwo exceptions applies: (1) when a statute precludes judicial review or (2) when "agency action iscommitted to agency discretion by law." (9) In Dalton v. Specter , Members of Congress and other plaintiffs sought to enjoin the Secretaryof Defense (Secretary) from closing a military installation during a previous BRAC round becauseof alleged substantive and procedural violations of the Base Closure Act. (10) Specifically, plaintiffsalleged that the Secretary's report and the Commission's report were subject to judicial review underthe APA. (11) In Dalton , the Supreme Court held that the issuances of the Secretary's report and theCommission's report were not judicially reviewable actions under the APA because they were not"final agency action[s]." (12) The Court explained that "'[t]he core question' for determiningfinality [of agency action under the APA is] 'whether the agency has completed its decisionmakingprocess, and whether the result of that process is one that will directly affect the parties.'" (13) Because the Base ClosureAct established a process under which the President takes the final action that affects militaryinstallations (see Figure 1 on the previous page), the actions of the Secretary and the Commissiondid not directly affect the parties. (14) Thus, the Court held that they were unreviewable under theAPA. (15) The Dalton decision affirmed the analysis in Cohen v. Rice , in which the First Circuit statedthat the President's statutory right to affect the BRAC process meant that previous steps of the BRACprocess were not final. (16) As the Cohen court explained: Under the 1990 Act, the President is not required tosubmit the Commission's report to Congress. In addition, the 1990 Act gives the President the powerto order the Commission to revise its report, and, in the final analysis, the President has the powerto terminate a base closure cycle altogether via a second rejection of a Commission report. (17) In addition, a subsequent Supreme Court decision described the BRAC reports as "purely advisory"and subject to the "absolute discretion" of the President, thus making them non-final agency actionfor APA purposes. (18) Importantly, the Dalton Court applied its analysis of finality under the APA to bothsubstantive claims (applying improper selection criteria) and procedural claims (e.g., failing to makecertain information public). (19) Therefore, the lack of finality in BRAC actions taken by theSecretary or the Commission bars judicial review of such actions under the APA. (20) Four Justices concurred in the Dalton Court's judgment that judicial review was not availableunder the APA, but argued in a separate concurring opinion that the Court should not have decidedthe issue of whether the agency actions were final. (21) The foundation for this argument is that under the APA, judicialreview is not available if statutes preclude judicial review. (22) Justice Souter -- writing for these four Justices -- argued that "the text, structure, and purposeof the Act compel the conclusion that judicial review of the Commission's or the Secretary'scompliance with it is precluded" (except for certain environmental objections to base closureimplementation plans). (23) Souter's opinion concluded that Congress intended for BRACactions to be "quick and final, or [for] no action [to] be taken at all." (24) Souter cited a variety of evidence to support the contention that Congress generally intendedto preclude judicial review under the Base Closure Act: (25) statutorily-mandated strict time deadlines for making and implementing BRACdecisions "the all-or-nothing base-closing requirement at the core of theAct" congressional frustration resulting from previous attempts to close militarybases "nonjudicial opportunities to assess any procedural (or other) irregularities,"(i.e., the opportunities for the Commission and the Comptroller General to review the Secretary'srecommendations, the President's opportunity to consider procedural flaws, and Congress'sopportunity to disapprove the recommendations) "the temporary nature of the Commission" the fact that the Act expressly provides for judicial review regarding objectionsto base closure implementation plans under the National Environmental Policy Act of 1969 (NEPA)that are brought "within a narrow time frame," but the Act does not explicitly provide for any otherjudicial review Importantly, whether the Supreme Court applies the rationale of the Dalton majority orJustice Souter's Dalton concurrence, the Court would likely decide not to review the BRAC actionsof the Secretary or the Commission under the APA in the 2005 round. Under the APA, judicial review of agency action is not available if "agency action iscommitted to agency discretion by law." (26) Even if the actions of the Secretary or the Commission were heldto be final agency action (which would be unlikely, given the Dalton decision), courts might considerthose agency actions to be committed to agency discretion by law -- thus making them judiciallyunreviewable. (27) Because there is a "strong presumption that Congress intends judicial review of administrativeaction," "clear and convincing evidence" of contrary congressional intent must exist in order for thisexception to judicial review to apply. (28) The issue of whether actions of the Secretary or the Commission under the Base Closure Actare committed to agency discretion by law has not been adjudicated by the Supreme Court. Instead,several Supreme Court cases have addressed this issue in non-BRAC contexts and one D.C. Circuitcase addressed the applicability of the exception to the Base Closure Act. These cases are analyzedin the following paragraphs. In Heckler v. Chaney , the Supreme Court explained that the exception for agency actionbeing committed to agency discretion applies if "a court would have no meaningful standard againstwhich to judge the agency's exercise of discretion." (29) The Court continued, saying that "if no judicially manageablestandards are available for judging how and when an agency should exercise its discretion, then itis impossible to evaluate agency action for 'abuse of discretion,' [as provided for in 5 U.S.C. §706]." (30) In National Federation , the D.C. Circuit found that the criteria DOD and the Commissionuse for making BRAC determinations do not provide judicially manageable standards, as requiredby the Heckler test. (31) The D.C. Circuit articulated the rationale for its finding: [T]he subject matter of those criteria is not 'judiciallymanageable' . . . . [because] judicial review of the decisions of the Secretary and the Commissionwould necessarily involve second-guessing the Secretary's assessment of the nation's military forcestructure and the military value of the bases within that structure. We think the federal judiciary isill-equipped to conduct reviews of the nation's military policy. (32) Based on this finding, the National Federation court held that application of the selection criteriato military installations during the BRAC process is agency action committed to agency discretionby law, thus making it judicially unreviewable under the APA. (33) More recently, the Supreme Court observed that this exception has generally applied in threecategories of cases: (1) cases involving national security; (2) cases where plaintiffs sought judicial review of an agency's refusal to pursue enforcementactions; and (3) cases where plaintiffs sought review of "an agency's refusal to grant reconsideration of anaction because of material error." (34) Although the Base Closure Act may not fit squarely within any of those three categories, theSupreme Court might adopt the D.C. Circuit's construction of the exception from NationalFederation were it to construe the exception in the context of BRAC. In Dalton , the Supreme Court held that the President's approval of the Secretary's BRACrecommendations was not judicially reviewable under the APA, because the President is not anagency. (35) Althoughthe APA's definition of an "agency" does not explicitly include or exclude the President, (36) the Court had previouslyheld that the President is not subject to the APA, due to separation of powers principles. (37) The Dalton Court distinguished between two types of potential claims: (1) claims that thePresident exceeded his statutory authority and (2) claims challenging the constitutionality of thePresident's actions. (38) The Court stated that not every case of ultra vires conduct by an executive official was ipso facto unconstitutional. (39) In Dalton , the lower court had held that the President would be acting in excess of his statutoryauthority under the Base Closure Act if the Secretary or the Commission had failed to comply withstatutorily-required procedures during previous stages of the BRAC process. (40) On appeal, the SupremeCourt characterized this claim as a statutory claim -- not as a constitutional claim. (41) The Court assumed arguendo that some statutory claims against the President could bejudicially reviewable apart from the APA. (42) However, it stated that statutory claims are not judiciallyreviewable apart from the APA "when the statute in question commits the decision to the discretionof the President." (43) According to the Court, the Base Closure Act did not limit the President's discretion in anyway. (44) Thus, thePresident's authority to approve the BRAC recommendations was "not contingent on the Secretary'sand Commission's fulfillment of all the procedural requirements imposed upon them by the [BaseClosure] Act." (45) Therefore, the issue of how the President chose to exercise his discretion under the Base Closure Actwas held to be judicially unreviewable. (46) Justice Blackmun, concurring in part and concurring in the judgment, attempted to narrowlydefine the scope of the Dalton decision. (47) He considered the decision to be one that would allow judicialreview of a claim (1) if the President acted in contravention of his statutory authority (e.g., addinga base to the Commission's BRAC recommendations list) or (2) if a plaintiff brought "a timely claimseeking direct relief from a procedural violation" (e.g., a claim that a Commission meeting shouldbe public or that the Secretary should publish proposed selection criteria and allow for publiccomment). (48) However, Justice Blackmun's argument that plaintiffs could seek relief from a proceduralviolation of the Base Closure Act appears to directly conflict with Chief Justice Rehnquist's opinionon behalf of the Dalton majority, which stated: The President's authority to act is not contingent on theSecretary's and Commission's fulfillment of all the procedural requirements imposed upon them bythe [Base Closure] Act. Nothing in § 2903(e) requires the President to determine whether theSecretary or Commission committed any procedural violations in making their recommendations,nor does § 2903(e) prohibit the President from approving recommendations that are procedurallyflawed. (49) As mentioned in the preceding section of this report, the Dalton Court explained that claims thatthe President acted in excess of his statutory authority differ from claims that the Presidentunconstitutionally acted in the absence of statutory authority. (50) Specifically, the Courtdistinguished the issues in Dalton from those in Youngstown Sheet & Tube Co. v. Sawyer , alandmark case on presidential powers. (51) The Court said that Youngstown "involved the conceded absence of any statutory authority, not a claim that the President acted in excess of such authority." (52) Because the Base ClosureAct provides statutory authority to the President, the Dalton Court did not find it necessary toexamine the constitutional powers of the President (e.g., the President's powers asCommander-in-Chief). A litigant could also challenge the constitutionality of the Base Closure Act itself. For example,in National Federation , plaintiffs unsuccessfully argued that the 1988 Base Closure Act violated thenon-delegation doctrine and the separation of powers doctrine. (53) However, the BaseClosure Act has not yet been held unconstitutional by any federal appellate courts.

The 2005 round of military base realignments and closures (BRAC) is now underway. TheDefense Base Closure and Realignment Act of 1990 (Base Closure Act), as amended, establishesmandatory procedures to be followed throughout the BRAC process and identifies criteria to be usedin formulating BRAC recommendations. However, judicial review is unlikely to be available toremedy alleged failures to comply with the Base Closure Act's provisions. A synopsis of the relevantlaw regarding the availability of judicial review in this context is included below: The actions of the Secretary of Defense (Secretary) and the independent BRACCommission (Commission) are not considered to be "final agency action," and thus cannot bejudicially reviewed pursuant to the Administrative Procedure Act (APA). Even if a court determined that the actions of the Secretary and the Commission were "final agency action," the court would likely consider the case to fall under oneof two APA exceptions to judicial review: (1) when statutes preclude judicial review or (2) whenagency action is committed to agency discretion by law. The President's actions cannot be judicially reviewed under the APA, becausethe President is not an "agency" covered by the statute. A claim that the President exceeded his statutory authority under the BaseClosure Act has been held to be judicially unreviewable, because the Base Closure Act gives thePresident broad discretion in approving or disapproving BRACrecommendations. Thus, courts would likely allow the BRAC process to proceed even if the Department ofDefense, the Commission, or the President did not comply with the Base Closure Act's requirements. This report was prepared by [author name scrubbed], Law Clerk, under the general supervision of[author name scrubbed], Legislative Attorney. It will be updated as case developments warrant.

The Fed directly changes two interest rates. The first, called the discount rate , is an administered rate explicitly set by the Fed. It is the rate at which the Fed lends short-term funds to banks, pursuant to P.L. 96-221 , the Monetary Control Act of 1980. It is determined by the seven-person Board of Governors of the Federal Reserve System. The second, known as the federal funds rate , is a market rate at which banks lend to each other overnight to meet their "reserve requirements " and other liquidity needs. The Fed sets a target for this rate and historically has bought and sold primarily U.S. Treasury securities with an aim to achieving the target, which speedily becomes known to market participants. It is decided by a 12-person Federal Open Market Committee, which includes each member of the board plus a varying five-person roster selected from among the 12 regional Federal Reserve Bank presidents (among the 12, the New York bank is always represented on the FOMC). On January 6, 2003, the Board of Governors announced a fundamental change to the setting of the discount rate. Henceforth, it was to be made a "penalty" rate for those banks who chose to borrow from the Federal Reserve to meet temporary reserve deficiencies as opposed to borrowing in the federal funds market (the "penalty" aspect of the discount rate comes from the fact that it is set above the target for federal funds). A primary discount rate of 2¼% was initially set for banks judged to be in a sound financial condition, whereas banks whose financial condition was judged to be riskier would be required to pay a higher secondary rate of 2¾%. This change in operating procedure is shown in Table 1 . Since the onset of the financial crisis in the summer of 2007, the Fed has not made an issue of whether banks borrow at the discount window or in the federal funds market even though the discount rate remains slightly higher than the target rate for federal funds. Because the discount rate is administered, changes in it are stated explicitly and all transactions with the Federal Reserve are at that rate. Hence, the changes shown in Table 1 are the relevant transactions rate. However, because the federal funds rate is market determined, it may vary from day to day or within a day from the announced target set by the FOMC. Thus, the federal funds rates shown in Table 1 are the target rates. Reference to the available financial data may show rates in the federal funds market that vary somewhat from the target in response to shifts in market conditions. At its December 16, 2008 meeting, the FOMC, for the first time, set a range for the federal funds target. This is because it was having difficulty holding the actual federal funds rate at the 1% target rate set on October 29, 2008. For much of the period between that date and December 16, the actual federal funds rate was substantially below the 1% target. The Fed tries to keep the economy operating at an output level consistent with a low rate of inflation and low unemployment. It therefore seeks a level of interest rates at which the economy will grow at its potential to produce. The interest rate levels consistent with this growth rate vary with the course of the business cycle. Different rates are judged appropriate at different times. Changes in the federal funds target are the most visible signs of shifts in Fed monetary policy stance and they immediately affect financial institutions and markets of all kinds here and abroad. Unusual financial market conditions such as those related to the Asian financial crisis of 1997-1998, the Russian debt crisis of 1998, the terrorist attacks of September 2001, and the financial crisis that began in the summer of 2007 also influence Fed decisions on rate changes. The Fed reports to Congress twice yearly on its monetary policy including rate changes, in oversight hearings in February and July as originally required by P.L. 95-188 , the Federal Reserve Reform Act. Since 2001, the stance of monetary policy has varied considerably. Initially, it was aimed at setting an expansion in motion. To do this, the federal funds target was reduced from 5½% in March 2001 to 1% in June 2003. It remained at 1% for a year. As the expansion gathered momentum, the target was raised gradually to 5¼%, in 17 equal increments spread over two years. Even as the FOMC drew attention to upward movements in the core rate of inflation at various meetings during 2006 and 2007, it continued to express the view that inflation would moderate over time, as would the rate of growth of GDP. These reasons appear to be important for leaving the rate unchanged at 5¼% for more than a year. However, during the late summer of 2007, the fall in housing prices and conditions in financial markets related to the difficulty in refinancing subprime mortgages and extending credit in general became a matter of great concern. To ease these conditions, the Board of Governors on August 17, 2007, reduced the discount rate for primary credit to 5¾%. This was followed on September 18 with another reduction of ½% and a reduction in the federal funds target to 4¾%. Additional cuts of ¼% in both rates were approved on October 31 and December 11, 2007. On January 22, 2008, the target was reduced by ¾% and on January 30 by a further ½%. The economy began to soften in the third quarter of 2007 (GDP growth was negative, falling at an annual rate of -0.2%). In the first quarter of 2008 it was positive again, and rose at an annual rate of 0.9%. During the second quarter, growth was also positive and at an annualized rate of 2.8%. Unhappily, GDP contracted again in both the third and fourth quarters and, again, during the first quarter of 2009 (it contracted at a 6.3% annual rate during 2008:4 and 6.1% during 2009:1) . The unemployment rate began to rise on a sustained basis beginning in February 2008 and, 13 months later, in March, 2009, it had risen to 8.5% from 4.8%. Job losses since the employment peak in December 2007 are some 5.1 million. As conditions in financial markets worsened and the economy softened, the FOMC and the Board approved further reductions in the federal funds target and discount rate during 2008. Both rates were lowered on March 18, April 30, October 8, October 29, and December 16, and the discount rate was reduced itself on March 16. They now stand at a range of 0% to ¼% and ½%, respectively. As these developments were taking place, the world price of energy began to rise at a brisk rate. Rising energy prices threatened to boost the overall rate of inflation, posing a challenge to the Fed's mandated commitment to stable prices. Initially, the Fed reacted by holding the federal funds target steady. However, as the magnitude and international scope of the credit crisis became apparent and energy and other commodity prices began to fall, the target was lowered and the Fed undertook a number of new and innovative measures to shore up the financial system and contain the economic contraction. These measures, as well as traditional monetary policy measures, have been unprecedented in their magnitude. During March 2008, the total reserves of depository institutions were $44.3 billion, of which $41.3 billion were required. One year later, total reserves were $780 billion, of which only $55.3 billion were required. Initiatives announced on March 17, 2009, should add nearly $2 trillion to total reserves over the remainder of 2009. The next scheduled meeting of the FOMC is June 23-24, 2009. For further discussion, see CRS Report RL30354, Monetary Policy and the Federal Reserve: Current Policy and Conditions , by [author name scrubbed].

The Federal Open Market Committee (FOMC) decided at its scheduled meeting, held on April 29, 2009, to leave unchanged the target rate for federal funds, which is now at a range from 0% to ¼%. In doing so, it took notice of its previous decision to add up to $1.75 trillion to the reserves of depository institutions by purchasing agency mortgage-backed securities ($1.25 trillion), agency debt ($200 billion), and Treasury securities ($300 billion). It also repeated that other measures had been adopted to facilitate the flow of credit to households and small businesses. In making its decision, the FOMC stressed that while the pace of the economic contraction appears to have slowed somewhat, the following factors remain: (1) a continuing pattern of job losses, lower household wealth, and tight credit; (2) the decline in global demand is increasing; and (3) while inflationary pressures remain subdued, they may be inconsistent with longer term growth and price stability (meaning that the United States may be facing deflation in the future). Nevertheless, a gradual recovery of sustainable economic growth in the context of price stability is expected to begin, given Fed action to stabilize financial markets and institutions and the monetary and fiscal stimulus now in place. The FOMC pledged to employ all available tools to promote the resumption of sustainable economic growth in a stable price environment. It expects that this will require an exceptionally low federal funds target for some time. The Board of Governors also decided to keep unchanged the discount rate for primary credit at ½%. The next scheduled meeting of the FOMC is set for June 23-24, 2009. This report will be updated as events warrant.

Mr. Chairman and Members of the Subcommittee: I am pleased to be here today to discuss our work on federal advisory committees as the Subcommittee explores possible changes to the Federal Advisory Committee Act (FACA) and the advisory committee process. Last November we presented to the Subcommittee an overview of advisory committees since 1993. We have issued two reports on FACA since then on issues that you, Mr. Chairman, and Senator John Glenn asked us to examine. The most recent of these reports, which is being released today, gathered the views of federal advisory committee members and federal agencies on specific FACA matters. The other report, which was issued last month, assessed the General Services Administration’s (GSA) efforts in carrying out its oversight responsibilities under FACA. My statement today will focus on these two reports, as you requested. As you are well aware, federal agencies often receive advice from advisory committees, and this advice covers a range of topics and issues, including national policy and scientific matters. In fiscal year 1997, federal agencies could turn to 963 advisory committees for advice. Most of these committees were discretionary; that is, they were created by agencies acting under their own authority or were authorized—but not mandated—by Congress. The rest were mandated by Congress or the President. Congress has long recognized the importance of federal agencies receiving advice from knowledgeable individuals outside of the federal bureaucracy. Nevertheless, Congress enacted FACA in 1972 out of concern that federal advisory committees were proliferating without adequate review, oversight, or accountability. FACA provisions are intended to ensure that (1) valid needs exist for establishing and continuing advisory committees, (2) the committees are properly managed and their proceedings are as open to the public as is feasible, and (3) Congress is regularly informed of the committees’ activities. responsible for all matters relating to advisory committees. GSA has developed guidelines to assist agencies in implementing FACA; has provided training to agency officials; and was instrumental in creating, and has collaborated with, the Interagency Committee on Federal Advisory Committee Management. Although FACA was enacted to temper the growth in advisory committees, the number of advisory committees grew steadily from fiscal year 1988 until fiscal year 1993, when the number totaled 1,305. In February 1993, the President issued Executive Order 12838, which directed agencies to reduce the number of discretionary advisory committees by at least one-third by the end of fiscal year 1993. Under authority provided by the executive order, the Office of Management and Budget (OMB) established ceilings for each agency on its maximum allowable number of discretionary committees. Subsequently, the number of advisory committees declined from 1,305 in 1993 to 963 in fiscal year 1997, the most recent fiscal year for which complete data are available. Although the number of advisory committees has decreased, the average number of members per committee and the average cost per committee have increased. On average, between fiscal years 1988 and 1997, the number of members per advisory committee increased from about 21 to 38, and the cost per advisory committee increased from $90,816 to $184,868. In constant 1988 dollars, the average cost per advisory committee increased from $90,816 to $140,870 over the same period. A total of 36,586 individuals served as members of the 963 committees in fiscal year 1997. According to data published by GSA, the cost to operate the 963 committees last fiscal year was about $178 million. To gather the views of advisory committee members on committee operations for our report being released today, we surveyed a statistically representative sample of advisory committee members. The questionnaire responses we received from 607 members are generalizable to the approximately 28,500 committee members for whom we had names and addresses. We also sent a questionnaire to 19 federal agencies to obtain their views on FACA requirements, and all 19 completed the questionnaire. These 19 agencies account for about 90 percent of the federal advisory committees. reviewed committee charters and justification letters, annual reports for advisory committees, and other pertinent documents; applicable laws and regulations; and GSA’s guidance to federal agencies. We also interviewed Committee Management Secretariat officials at GSA and committee management officers at nine agencies. The information from these two reports led us to three general observations. 1. Advisory committees appear to be adhering to the requirements of FACA and Executive Order 12838. These requirements do not appear to be overly burdensome to agencies. 2. Concerns surfaced about certain advisory committee requirements that the Subcommittee may wish to explore in its consideration of FACA. 3. GSA has fallen short of fulfilling its FACA oversight responsibilities. In response to our June 1998 report, GSA said it will take immediate action to improve its oversight. I will turn now to each of these observations in more detail. In examining the responses of advisory committee members to our questionnaire, we determined the overall response to each question and, in addition, separately reported the responses of peer review panel members and general advisory committee members where appropriate. The answers the committee members gave to our survey showed that, generally, they believed that their advisory committees were providing balanced and independent advice and recommendations. The committee members also reported that they believed their committees had a clear and worthwhile purpose and that the committees’ advice and recommendations were consistent with that purpose and considered by the agencies. These responses are shown graphically in the following two figures, which group together by topic a number of the specific questions that we asked committee members. FACA sets out requirements for agencies and advisory committees to follow, and we asked the 19 agencies about their perceptions of how useful or burdensome those requirements were. With regard to the requirements in general, figure 3 shows the range of agencies’ responses. The largest number of agencies considered the requirements to be useful. agencies whether FACA had prohibited them from receiving or soliciting input on issues or concerns from public groups (other than from advisory committees). Most of the agencies—16 of the 19—answered no. There has been some question about whether the possibility of litigation over compliance with FACA requirements has inhibited agencies from forming new advisory committees. The most frequent response—received from 14 of the 19 agencies—was that this possibility did not inhibit the formation of new committees. As I noted earlier, Executive Order 12838 established ceilings for each agency on its maximum allowable number of discretionary advisory committees. A majority of the agencies (12) said that the ceilings did not deter them from seeking to establish new advisory committees. Seven agencies, however, said the ceilings did deter them. An agency could request approval from OMB to establish a committee that would place it over its ceiling. Two of the seven agencies had done so during fiscal years 1995-1997, and OMB approved their requests. Although committee members and agencies responding to our questionnaires generally provided a more positive than negative image of FACA, their responses also pointed to concerns and issues that the Subcommittee may wish to explore in its consideration of FACA. We list these concerns in no particular order of priority. About 13 percent of the general advisory committee members said that agency officials had asked their advisory committees on occasion to give advice or make recommendations on the basis of inadequate data or analysis. A majority of the 19 agencies reported that two FACA requirements—preparing an annual report on closed advisory committee meetings and filing advisory committee reports with the Library of Congress—required little labor on their part but offered little value, at least in the agencies’ estimation. Seven agencies offered suggestions for changing the FACA requirements, including two that suggested that rechartering be required every 5 years instead of the current 2 year cycle. Under FACA, peer review panels are treated as advisory committees, and six agencies indicated that they used peer review panels. Five of these agencies said that panels should be exempt from some, most, or all FACA requirements. Agencies identified 26 congressionally mandated committees that they believed should be terminated. GSA regulations allow agencies to determine whether members of the public may speak at advisory committee meetings. (Members of the public are allowed to submit their remarks in writing.) All 19 agencies allowed members of the public to speak before at least some advisory committees. However, agencies placed restrictions on the public’s ability to speak at committee meetings (e.g., only if time permitted), and the restrictions varied from agency to agency. Advisory committees may also have subcommittees. Meetings of subcommittees may be exempt from FACA requirements, and agencies reported that about 27 percent of the meetings subcommittees held during fiscal year 1997 were not covered by FACA. For these meetings, the subcommittees may voluntarily follow FACA requirements. However, the extent to which the requirements are followed appears to vary. For example, of the eight agencies that responded, only two said Federal Register notices were given for all or most subcommittee meetings. Five said a designated federal officer attended all or most subcommittee meetings. Although 16 agencies said FACA had not prohibited them from soliciting or receiving input from the public, 3 agencies said it had prohibited them. One agency said that it had to limit its prior practice of forming working groups or task forces to address specific local projects or programs. Another agency said that FACA had made it more cumbersome to seek citizen input because of the staff time required to complete FACA paperwork. And, the third agency said that solicitation of a consensus opinion from a task force or working group could lead to that task force or working group being considered subject to FACA. Finally, there appears to be some concern among agencies about the possibility of being sued for noncompliance with FACA if they obtain input from parties who are outside of the agency and its advisory committees. Although 10 agencies said the possibility of such litigation has inhibited them to little or no extent from obtaining outside input independent of FACA, 8 agencies said that it has inhibited them to some, a moderate, or very great extent. The Director of GSA’s Committee Management Secretariat said that the responses from committee members and agencies had suggested areas that should be examined further, several of which GSA already had been examining and others that GSA plans to examine. Although the GSA Committee Management Secretariat does not have authority to stop the formation or continuation of an advisory committee, FACA and GSA regulations assign it certain responsibilities for overseeing the federal advisory committee program. These responsibilities include ensuring that advisory committees are established with complete charters conducting a comprehensive review annually to independently assess whether each advisory committee should be continued, merged, or terminated; submitting information to the President in time to meet the statutory due date for the President’s annual report to Congress on advisory committees; and ensuring that agencies provide Congress with follow-up reports on recommendations made by presidential advisory committees. We concluded in our June report that the Secretariat had not carried out each of these four responsibilities. For example, even though all charters and justification letters had been reviewed by the Secretariat, 36 percent of the 203 charters and 38 percent of the 107 letters from October 1996 through July 1997 that we reviewed were missing one or more items required by FACA or GSA regulations. When reviewing the advisory committees’ annual reports for fiscal year 1996, the Secretariat did not independently assess whether committees should be continued, merged, or terminated. For 8 of the last 10 annual presidential reports on advisory committees, GSA submitted its report to the President after the President’s report was due to Congress. The Secretariat did not ensure that agencies prepared for Congress the 13 follow-up reports required on recommendations made by presidential advisory committees in fiscal years 1995 and 1996, and in fact none had been prepared. Based on our findings, we recommended that the GSA Administrator direct the Committee Management Secretariat to fully carry out the responsibilities assigned to it by FACA in a timely and accurate manner. In response to that recommendation, the GSA Administrator said the Associate Administrator for Govermentwide Policy will ensure that the Committee Management Secretariat takes immediate and appropriate action to implement our recommendation. there appear to be areas in which those requirements warrant a fresh look. In addition, there is room for GSA’s Committee Management Secretariat to improve its fulfillment of its FACA oversight responsibilities. GSA says that it is acting on both fronts. Still, the Subcommittee may wish to explore the concerns surfaced in our reports as it considers ways to improve FACA. Mr. Chairman, this concludes my statement. I will be pleased 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. 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GAO discussed the: (1) views of federal advisory committee members and federal agencies on specific Federal Advisory Committee Act (FACA) matters; and (2) General Services Administration's (GSA) efforts in carrying out its oversight responsibilities under FACA. GAO noted that: (1) advisory committees appear to be adhering to the requirements of FACA and Executive Order 12838, which led to the establishment of ceilings for each agency on the number of discretionary advisory committees; (2) these requirements do not appear to be overly burdensome to agencies; (3) although the responses of committee members and agencies portrayed a more positive than negative image of FACA, their responses did raise concerns and issues that the House Committee on Government Reform and Oversight, Subcommittee on Government Management, Information, and Technology may wish to explore in its consideration of FACA; (4) there appears to be some concern among agencies about the possibility of being sued for noncompliance with FACA if they obtain input from parties who are outside of the agency and its advisory committees; (5) GSA's Committee Management Secretariat has fallen short of fulfilling its FACA oversight responsibilities; (6) further, GSA did not ensure that the advisory committees were established with complete charters and justification letters; (7) 36 percent of the 203 advisory committee charters and 38 percent of the 107 justification letters from October 1996 through July 1997 that GAO reviewed were missing one or more items required by FACA or GSA regulations; and (8) GSA said that it will take immediate action to improve its oversight.

The Workforce Investment Act of 1998 (WIA; P.L. 105-220 ) is the primary federal program that supports workforce development. WIA includes four main titles: Title I—Workforce Investment Systems—provides job training and related services to unemployed or underemployed individuals. Title I programs, which are primarily administered through the Employment and Training Administration (ETA) of the U.S. Department of Labor (DOL), include three state formula grant programs, multiple national programs, Job Corps, and demonstration programs. In addition, Title I authorizes the establishment of a One-Stop delivery system through which state and local WIA training and employment activities are provided and through which certain partner programs must be coordinated; Title II—Adult Education and Literacy—provides education services to assist adults in improving their literacy and completing secondary education; Title III—Workforce Investment-Related Activities—amends the Wagner-Peyser Act of 1933 to integrate the U.S. Employment Service (ES) into the One-Stop system established by WIA; and Title IV—Rehabilitation Act Amendments of 1998—amends the Rehabilitation Act of 1973, which provides employment-related services to individuals with disabilities. The authorizations for appropriations for most programs under the Workforce Investment Act (WIA) of 1998 ( P.L. 105-220 ) expired at the end of Fiscal Year (FY) 2003. Since that time, WIA programs have been funded through the annual appropriations process. In the 108 th and 109 th Congresses, bills to reauthorize WIA were passed in both the House and the Senate; however, no further action was taken. In the 112 th Congress, the Senate Committee on Health, Education, Labor, and Pensions (HELP) released discussion drafts in June 2011 of legislation to amend and reauthorize WIA. While markup of this legislation was scheduled, it was ultimately postponed indefinitely. No legislation has been introduced. The House Committee on Education and the Workforce, however, has ordered reported H.R. 4297 —the Workforce Investment Improvement Act of 2012. This bill was introduced on March 29, 2012, by Representative Virginia Foxx of North Carolina, the chair of the Subcommittee on Higher Education and Workforce Training, (for herself, Representative Howard P. "Buck" McKeon of California, and Representative Joseph Heck of Nevada). A legislative hearing on H.R. 4297 was held before the full Committee on Education and the Workforce on April 17, 2012. On June 7, 2012, the committee, after considering 23 amendments to H.R. 4297 , ordered the bill reported by a vote of 23 to 15. This report summarizes each of the WIA titles and highlights the major features of H.R. 4297 pertaining to each title. The report also compares the proposed provisions of H.R. 4297 to current law in the following tables: Table 1 . Major Provisions of Title I. This table covers provisions governing the "workforce investment systems" that provide for, among other things, state formula grants, state and local planning procedures, and the establishment of the One-Stop delivery system. WIA established the One-Stop delivery system as a way to co-locate and coordinate the activities of multiple employment programs for adults, youth, and various targeted subpopulations. The delivery of these services occurs primarily through more than 3,000 career centers nationwide. Table 2 . Major Provisions of Title II. This table covers provisions for adult education and literacy activities. Table 3 . Major Provisions of Title III. This table covers changes to the Wagner-Peyser Act of 1933, which was also amended in Title III of WIA. Wagner-Peyser provides authorization for the Employment Service. Table 4 . Major Provisions of Title IV of WIA and Title V of H.R. 4297 . This table addresses amendments to the Rehabilitation Act of 1973, in particular to the Vocational Rehabilitation and other employment-related provisions of that act, which authorizes various employment services for individuals with disabilities. Title I of the Workforce Investment Act—Workforce Investment Systems—authorizes the establishment of a One-Stop delivery system through which state and local WIA training and employment activities are provided and through which certain partner programs must be coordinated. Title I also authorizes funding for the three major state formula grant programs (Adult, Youth, and Dislocated Worker), Job Corps (a DOL-administered program for low-income youth), and several other national programs that are directed toward subpopulations with barriers to employment (e.g., Native Americans). H.R. 4297 takes a fundamentally different approach from current law to the federal role in the delivery of workforce development services by consolidating multiple programs into a single block grant that is allocated to states by formula. At the same time, H.R. 4297 maintains the One-Stop delivery system as the delivery mechanism for employment and training services. The Adult Education and Family Literacy Act (AEFLA) is the current law that authorizes funds supporting programs related to basic education (i.e., instruction at the secondary school level and below) for individuals who are beyond school age, not enrolled in school, and lacking a high school diploma or equivalent. The program also funds educational services for English learners. The largest portion of AEFLA funds are grants to states that are subsequently allotted to local entities that conduct educational programs. H.R. 4297 reauthorizes Title II programs through 2018. It limits the annual authorized appropriation level to FY2012 levels and changes several AEFLA provisions to emphasize the relationship between adult education and employment. AEFLA is also amended to align with the new WIA performance indicators. Title III of the Workforce Investment Act—Workforce Investment-Related Activities—makes amendments to the Wagner-Peyser Act of 1933 (29 U.S.C. 49 et seq. ), which authorizes the Employment Service (ES). The ES is the central component of most states' One-Stop delivery systems, as ES services are universally accessible to job seekers and employers and ES offices may not exist outside of the One-Stop delivery system. Although the ES is one of the required partners in the One-Stop delivery system, its central mission—to facilitate the match between individuals seeking work and employers seeking workers—makes it critical to the functioning of the workforce development system under WIA. Title III adds Section 15 ("Employment Statistics") to Wagner-Peyser, which requires the Secretary of Labor to develop, provide, and improve various types of labor market information. H.R. 4297 repeals Sections 1-14, which authorize the Employment Service. Funding from the ES is consolidated into the new Workforce Investment Fund. The Rehabilitation Act, as amended, authorizes grants to support programs related to employment and independent living for individuals with disabilities. Most programs under the Rehabilitation Act are administered by the Rehabilitation Services Administration (RSA) of the Department of Education (ED). In FY2012, the Vocational Rehabilitation (VR) grants to the states program accounted for the majority of the funds that were appropriated under the Rehabilitation Act. VR is a mandatory One-Stop partner program. Title V of H.R. 4297 reauthorizes the VR grants to the states program through FY2018 and limits authorization to the prior year's appropriation plus an increase equal to inflation. It also increases emphasis on students transitioning out of school by requiring state plans to address how they will serve this population and requiring that 10% of each state's federal allotments be set aside for services to transitioning students. H.R. 4297 also repeals several smaller programs that were authorized under the Rehabilitation Act.

The Workforce Investment Act of 1998 (WIA; P.L. 105-220) is the primary federal program that supports workforce development activities, including job search assistance, career development, and job training. WIA established the One-Stop delivery system as a way to co-locate and coordinate the activities of multiple employment programs for adults, youth, and various targeted subpopulations. The delivery of these services occurs primarily through more than 3,000 One-Stop career centers nationwide. The authorizations for appropriations for most programs under the WIA expired at the end of Fiscal Year (FY) 2003. Since that time, WIA programs have been funded through the annual appropriations process. In the 108th and 109th Congresses, bills to reauthorize WIA were passed in both the House and the Senate; however, no further action was taken. In the 112th Congress, the Senate Committee on Health, Education, Labor, and Pensions (HELP) released discussion drafts in June 2011 of legislation to amend and reauthorize WIA. While markup of this legislation was scheduled, it was ultimately postponed indefinitely. No legislation has been introduced. The House Committee on Education and the Workforce, however, has ordered reported H.R. 4297—the Workforce Investment Improvement Act of 2012. This bill was introduced on March 29, 2012, by Representative Virginia Foxx of North Carolina, the chair of the Subcommittee on Higher Education and Workforce Training (for herself, Representative Howard P. "Buck" McKeon of California, and Representative Joseph Heck of Nevada). A legislative hearing on H.R. 4297 was held before the full Committee on Education and the Workforce on April 17, 2012. On June 7, 2012, the committee, after considering 23 amendments to H.R. 4297, ordered the bill reported by a vote of 23 to 15. H.R. 4297 would maintain the One-Stop delivery system established by WIA but would repeal numerous programs authorized by WIA and other federal legislation, and it would consolidate other programs into a new single funding source—the Workforce Investment Fund. In addition, H.R. 4297 would increase the role of business representatives in the state and local governance structure of WIA and would increase the ability for states to propose further program consolidation in the funding and delivery of workforce services. Adult Education and Vocational Rehabilitation retain separate titles and funding in H.R. 4297. This report first provides a brief introduction to the four main titles of WIA and then compares the proposed provisions of H.R. 4297 to the current law provisions by each of the four titles.

The Hardest Hit Fund (HHF), created in 2010, is one of several temporary programs that were established to help prevent home mortgage foreclosures in the wake of housing and mortgage market turmoil that began around 2007-2008. It provided funding to 19 states (including the District of Columbia) to design locally tailored initiatives to prevent home foreclosures. While many of the temporary programs that were established to help households facing foreclosure have since ended, the HHF remains active. Participating states have until December 31, 2020 to use their HHF funds. The HHF was established administratively by the Department of the Treasury using authority provided to it under the Emergency Economic Stabilization Act of 2008 (EESA, P.L. 110-343 ). EESA was enacted in response to financial market turmoil in the fall of 2008. It established the Troubled Asset Relief Program (TARP), which authorized the Secretary of the Treasury to purchase or insure up to $700 billion in troubled assets owned by financial institutions. EESA also contained language indicating that the purposes of the act included, among other things, protecting home values and preserving homeownership. EESA provided the Treasury Secretary with broad authority in how to implement TARP, including wide latitude in deciding what assets might be purchased or guaranteed and what qualified as a financial institution. Using this broad authority, and to comply with the homeownership preservation purposes of EESA, Treasury used some TARP funds to create certain programs designed to prevent home foreclosures, including the HHF. The programs are designed in such a way to qualify as activities authorized by EESA. Treasury set aside a total of $37.5 billion in TARP funds to use for foreclosure prevention initiatives. Of this amount, $9.6 billion was provided to the HHF. This funding was allocated to selected states through five rounds of funding. The first four rounds of funding—a total of $7.6 billion—were allocated in 2010. Treasury's authority to make additional commitments of TARP funds expired on October 3, 2010, meaning that it did not have the authority to provide additional TARP funds to the HHF after that date. However, in December 2015 the Consolidated Appropriations Act, 2016 ( P.L. 114-113 ) authorized Treasury to make up to an additional $2.0 billion in unused TARP funds available to the HHF. Treasury allocated this additional $2.0 billion to the HHF states in 2016, bringing the total amount of HHF funding to $9.6 billion. Table 1 shows the 19 states (including DC) that received funds through the HHF and the total amount that was allocated to each state through the five rounds of funding. The HHF was intended to provide funding to certain states that were deemed to be the "hardest hit" by the turmoil in housing and financial markets that started in 2007-2008, based on features such as house price declines or high unemployment rates. Funding was allocated through five rounds using different criteria to identify eligible states and allocate funds among the eligible states. The first four rounds took place in 2010. The fifth round took place in 2016 after Congress authorized Treasury to allocate additional unused TARP funds to the program. Round One: In February 2010, Treasury made a total of $1.5 billion available to five states that had experienced the greatest declines in home prices as of December 2009: California, Arizona, Florida, Nevada, and Michigan. Round Two: In March 2010, Treasury made a total of $600 million available to five states that had large proportions of their populations living in areas of economic distress, defined as counties with average unemployment rates above 12% in 2009: North Carolina, Ohio, Oregon, Rhode Island, and South Carolina. (The five states that received funding in the first round were not eligible.) Round Three: In August 2010, Treasury made a total of $2 billion available to 17 states and the District of Columbia, all of which had unemployment rates at or above the national average between June 2009 and June 2010. Nine of the states that received funds through one of the previous rounds (all but Arizona) also received funding in the third round. The states that received funding for the first time in the third round were Alabama, Georgia, Illinois, Indiana, Kentucky, Mississippi, New Jersey, Tennessee, and the District of Columbia. Round Four: In September 2010, Treasury provided a total of $3.5 billion to the 19 states (including DC) that had received funding in earlier rounds. A total of $7.6 billion was provided to states through the first four rounds. In early 2016, after Congress authorized Treasury to provide an additional $2 billion in TARP funds to the program, Treasury allocated this amount to participating states through two phases: Round 5, Phase 1: In February 2016, Treasury allocated $1 billion to participating states based on their population and utilization of previous HHF funds. States had to have used at least 50% of the HHF funding they previously received to be eligible for this funding. Each participating state except Alabama received additional funding in this phase. (Alabama had not used 50% of its previously allocated HHF funds.) Round 5, Phase 2: In April 2016, Treasury allocated $1 billion competitively to participating states. All but six participating states received additional funds through this phase. Five states did not apply for funding (Alabama, Arizona, Florida, Nevada, and South Carolina), while one state (Georgia) applied but did not receive any funding. HHF funds are provided to state housing finance agencies (HFAs) to use for designing programs that address foreclosures and are tailored to local conditions. For example, a state that had experienced steep decreases in house prices might choose to use funds to reduce the principal balances of certain mortgages, while a state experiencing high unemployment might want to use funds to provide temporary mortgage assistance to unemployed homeowners. The programs designed by states must meet the requirements of EESA and be approved by Treasury. In addition, states that received funding through the third round of the HHF must use that funding specifically for foreclosure prevention programs that target the unemployed. As of December 2016, there were over 80 HHF programs in the 19 states (including DC) that received HHF funding. (Every participating state was using funds for at least two types of programs, and many states were using funds for several different types of programs.) The most common types of state HHF programs have included the following (details and eligibility criteria vary by state): Mortgage Modification : Facilitating modifications of eligible borrowers' mortgage terms. Principal Reduction: Reducing mortgage principal as part of a sustainable mortgage modification or refinance. Mortgage Reinstatement: Providing funds to help eligible borrowers who have regained the ability to make regular monthly payments bring a mortgage current. Unemployment Assistance: Helping eligible unemployed or underemployed borrowers make monthly mortgage payments for a period of time. Transition Assistance: Providing relocation payments or other assistance to eligible borrowers to facilitate a short sale or deed-in-lieu of foreclosure (foreclosure alternatives that result in the borrower losing the home but avoiding the foreclosure process). Second Lien Assistance: Providing assistance to eligible borrowers to modify or extinguish a second mortgage on the property in conjunction with a modification of a primary mortgage or to facilitate a short sale. Blight Elimination: Providing funds to demolish or otherwise address vacant and abandoned homes. Removing vacant and abandoned homes may help avoid negative impacts on nearby home values, which in turn could help prevent additional foreclosures. Down Payment Assistance: Providing funds for down payment assistance in an effort to prevent foreclosures by encouraging home buying activity in certain areas. In addition, states can use funds for other types of foreclosure prevention programs that are approved by Treasury. For example, states have used HHF funds for programs that help households avoid foreclosure by providing assistance to homeowners with reverse mortgages and assistance to pay tax liens. States can continue to make changes to their HHF programs, subject to Treasury's approval. As of December 2016, participating states had drawn about $7 billion of the total $9.6 billion HHF allocation from their Treasury accounts. Of that amount, they had disbursed a total of about $5.8 billion. Of the participating states, Oregon has disbursed the highest share of its HHF funding (about 80%) while Alabama has disbursed the smallest share (just over 30%). According to Treasury data, over 290,000 homeowners had been assisted through the HHF as of December 2016. This number does not include blighted properties that have been removed through some states' blight elimination programs. Treasury does not have the authority to commit additional TARP funds to the HHF. Therefore, there will be no additional funding for the program without congressional action. However, if participating states do not meet certain spending deadlines, Treasury may rescind some of their funds and reallocate them to other participating states. States that are participating in the HHF were originally required to use their HHF funds by December 31, 2017, a deadline set by Treasury. However, when it allocated the fifth round of funding, Treasury extended the deadline for using HHF funds to December 31, 2020. More information on the HHF is available on Treasury's website. In particular, Treasury's quarterly Program Performance Summaries provide information on how participating states are using their funds and the amount of funding each state has disbursed to date. Treasury's website also includes links to state websites, which provide more information on specific state HHF programs and how eligible homeowners can apply. The Special Inspector General for the Troubled Asset Relief Program (SIGTARP) provides oversight of TARP programs, including the HHF, in quarterly reports and audit reports.

The Hardest Hit Fund (HHF), administered by the Department of the Treasury, is one of several temporary programs that were created to help prevent home foreclosures in the aftermath of housing and mortgage market turmoil that began around 2007-2008. It provided a total of $9.6 billion in Troubled Asset Relief Program (TARP) funds to 19 states (including the District of Columbia) that were deemed to be "hardest hit" by the housing market turmoil, as defined by factors such as house price declines or unemployment rates. In 2010, a total of $7.6 billion was allocated to selected states through four rounds of funding. Different funding rounds used different criteria to identify eligible states. In December 2015, the Consolidated Appropriations Act, 2016 (P.L. 114-113) authorized Treasury to make up to an additional $2.0 billion in unused TARP funds available to the HHF, bringing total program funding to $9.6 billion. Treasury allocated this additional funding to the states that were already participating in the HHF through two phases in 2016. The Hardest Hit Fund is intended to provide funds to participating states to design foreclosure prevention programs that respond to local conditions. Participating states are using their funds for a variety of programs, including mortgage modifications, helping unemployed homeowners with mortgage payments, facilitating short sales and other foreclosure alternatives, and removing blighted homes, among other programs. Most participating states are using their funding for several different types of programs. As of December 2016, participating states had disbursed about $5.8 billion of the total $9.6 billion allocated to the HHF and assisted over 290,000 homeowners. States have until December 31, 2020, to use their HHF funds.

This report provides overview information on the proposed FY2011 budget request for the Department of Homeland Security (DHS) programs that provide assistance to state and local governments. These programs are primarily used by first responders, including firefighters, emergency medical personnel, emergency managers, and law enforcement officers. Specifically, these programs provide assistance for training, exercises, the purchase of equipment, and other support for terrorism and disaster preparedness and response activities. This report provides a table with requested funding amounts, and briefly discusses potential policy issues that Congress may want to address during the FY2011 budget and appropriations process. These issues include the proposed elimination of specific grant programs and a proposed reduction in funding for the Assistance to Firefighters Program. In the FY2011 budget request, the Administration denotes three categories of grants: State and Regional Preparedness Programs; Metropolitan Statistical Area Preparedness Programs; and Training, Measurement, and Exercise Programs. While the amounts requested generally resemble the appropriations for the current fiscal year, and funding for six programs would increase, the request includes no funding for seven programs. Table 1 provides information on the FY2010 enacted amounts and the FY2011 budget request for DHS's State and Local Programs. As Congress begins its appropriation process, Members may opt to consider issues associated with the Administration's proposed budget request for state and local homeland security assistance programs. Two of these issues include the elimination of seven programs and the reduction of funding for the Assistance to Firefighters Program. Both of these issues are linked in the Administration's budget request because eliminating assistance programs would reduce total appropriations unless funding for the remaining programs is increased. The Administration, however, does not request increases in all of the remaining programs. For some programs, the Administration requests a reduction in funding. For FY2011, the Administration proposed a total appropriation of $4.0 billion for state and local homeland security programs, which is $164 million less than Congress appropriated in FY2010. This proposed reduction in the total appropriation is a combination of reducing funding to some programs, such as the Assistance to Firefighters Program, and eliminating selected programs. These proposed reductions and elimination of certain programs are partially offset by proposed increases in funding for some programs, such as the State Homeland Security Grant Program and the Urban Area Security Initiative. The Administration stated that the proposed reduction in the number of assistance programs would consolidate prior individual programs and expand the eligible activities of the remaining programs, which might result in increased competition among homeland security projects and stakeholders at the state and local levels. An example of this is the proposed elimination of the Interoperable Communications Program because both the State Homeland Security Grant Program and the Urban Area Security Initiative allow grantees to purchase communication equipment. The Administration further states that the consolidation would increase state and locality discretion and encourage grantees to prioritize investments that meet specific homeland security needs that vary from grantee to grantee. The elimination of selected programs could potentially lead to two scenarios in which states and localities would attempt to continue funding all of their homeland security projects, including those that are eliminated but eligible under other programs, which might result in reduced funding for all homeland security projects; and would eliminate funding for selected homeland security projects. Congress could address this issue by increasing total appropriations for the remaining programs, thus reducing the possibility of some homeland security projects not being funded or being only partially funded. This option would not, however, reduce the competition at the state and local levels among stakeholders and homeland security projects. Conversely, Congress could take a different approach from the Administration's request and continue funding the programs that have been identified for elimination. This option might ensure that numerous homeland security projects receive baseline funding; however, this approach might result in less funding for larger programs such as the State Homeland Security Grant Program and the Urban Area Security Initiative. Finally, Congress could agree with the Administration and eliminate funding for some assistance programs and reduce total appropriations. This option could cause grantees to prioritize their homeland security projects and allocate funding according to their needs. This option, however, might result in some grantees being unable to fund a number of projects they deem as needed. For FY2011, the Administration proposed $610 million for firefighter assistance programs, which is $200 million less than the FY2010 appropriation. Specifically, the Administration's FY2011 budget proposed $305 million for the Assistance to Firefighters Assistance Program (AFG)—a decrease of $95 million from the FY2010 level—and $305 million for the Staffing for Adequate Fire & Emergency Response Grant Program (SAFER)—a decrease of $105 million. The FY2011 request for AFG would be, if approved, the lowest amount appropriated since FY2001, the initial year of the program. The Administration's budget request does not provide information on why it has proposed to reduce AFG funding. Unlike many DHS grant programs, AFG employs a competitive grant process that awards funding directly to applying fire departments and Emergency Medical Service organizations. In recent years, the amount of total AFG funding requested in applications has continued to rise, from $2.3 billion in FY2006 to $3.2 billion in FY2009. Thus, the reduction of available funding in the assistance to firefighter programs could potentially heighten competition among fire departments for federal grant money. Ultimately, more fire departments would not receive federal grants for equipment, training, hiring, recruitment/retention, and other purposes, and would thus either rely more on local government budgets or go without. As it did in FY2010, Congress could choose to increase FY2011 funding for firefighter assistance over the level recommended by the Administration. Such a scenario would prevent a significant drop in the number of fire departments and EMS organizations receiving funding in FY2011. On the other hand, Congress could choose to agree with the Administration's request, thereby transferring more of the funding burden to the local level.

The President's budget request proposed total appropriations of $4.0 billion in FY2011 for homeland security assistance to states and localities, which is $164 million less than Congress appropriated in FY2010. These assistance programs are used by state and local governments, primarily first responder entities, to meet homeland security needs and enhance capabilities to prepare for, respond to, and recover from both man-made and natural disasters. The Administration's budget request not only proposes to reduce total appropriations for these programs, but also to eliminate some programs, such as the Metropolitan Medical Response System, the Emergency Operations Centers Program, and the Interoperable Communications Program. This report briefly discusses issues of debate associated with the budget request. This report will be updated as congressional appropriations actions warrant.

The complexity of the environment in which CMS and its contractors operate the Medicare program cannot be overstated. CMS is an agency within the Department of Health and Human Services (HHS) but has responsibilities over expenditures that are larger than those of most other federal departments. Under the fee-for-service system—which accounts for over 80 percent of program beneficiaries—physicians, hospitals, and other providers submit claims for services they provide to Medicare beneficiaries to receive reimbursement. The providers billing Medicare, whose interests vary widely, create with program beneficiaries and taxpayers a vast universe of stakeholders. About 50 Medicare claims administration contractors carry out the day-to- day operations of the program and are responsible not only for paying claims but for providing information and education to providers and beneficiaries that participate in Medicare. They periodically issue bulletins that outline changes in national and local Medicare policy, inform providers of billing system changes, and address frequently asked questions. To enhance communications with providers, the agency recently required contractors to maintain toll-free telephone lines to respond to provider inquiries. It also directed them to develop Internet sites to address, among other things, frequently asked questions. In addition, CMS is responsible for monitoring the claims administration contractors to ensure that they appropriately perform their claims processing duties and protect Medicare from fraud and abuse. In 1996, the Congress enacted the Health Insurance Portability and Accountability Act (HIPAA), in part to provide better stewardship of the program. This act gave HCFA the authority to contract with specialized entities, known as program safeguard contractors (PSC), to combat fraud, waste, and abuse. HCFA initially selected 12 firms to conduct a variety of program safeguard tasks, such as medical reviews of claims and audits of providers’ cost reports. Previously, only claims administration contractors performed these activities. In response to the escalation of improper Medicare payments, Congress and executive branch agencies have focused attention on efforts to safeguard the Medicare Trust Fund. HIPAA earmarked increased funds for the prevention and detection of health care fraud and abuse and increased sanctions for abusive providers. The HHS Office of Inspector General (OIG) and the Department of Justice (DOJ) subsequently became more aggressive in pursuing abusive providers. In response, the medical community has expressed concern about the complexity of the program and the fairness of certain program safeguard activities, such as detailed reviews of claims, and the process for appealing denied claims. Recent actions address some of these concerns. Since 1996, the HHS OIG has repeatedly estimated that Medicare contractors inappropriately paid claims worth billions of dollars annually. The depletion of Medicare’s hospital trust fund and the projected growth in Medicare’s share of the federal budget have focused attention on program safeguards to prevent and detect health care fraud and abuse. It has also reinforced the importance of having CMS and its contractors develop and implement effective strategies to prevent and detect improper payments. HIPAA provided the opportunity for HCFA to enhance its program integrity efforts by creating the Medicare Integrity Program (MIP). MIP gave the agency a stable source of funding for its safeguard activities. Beginning in 1997, funding for antifraud-and-abuse activities has increased significantly—by 2003, funding for these activities will have grown about 80 percent. In fiscal year 2000, HCFA used its $630 million in MIP funding to support a wide range of efforts, including audits of provider and managed care organizations and targeted medical review of claims. By concentrating attention on specific provider types or benefits where program dollars are most at risk, HCFA has taken a cost-effective approach to identify overpayments. Based on the agency’s estimates, MIP saved the Medicare program more than $16 for each dollar spent in fiscal year 2000. CMS is only one of several entities responsible for ensuring the integrity of the Medicare program. HIPAA also provided additional resources to both the HHS OIG and DOJ. The HHS OIG has emphasized the importance of safeguarding Medicare by auditing providers and issuing compliance guidance for various types of providers. It also pursues potential fraud brought to its attention by contractors and other sources, such as beneficiaries and whistleblowers. DOJ has placed a high priority on identifying patterns of improper billing by Medicare providers. DOJ investigates cases that have been referred by the HHS OIG and others to determine if health care providers have engaged in fraudulent activity, and it pursues civil actions or criminal prosecutions, as appropriate. The False Claims Act (31 U.S.C. sec. 3729 to 3733) gives DOJ a powerful enforcement tool as it provides for substantial damages and penalties against providers who knowingly submit false or fraudulent bills to Medicare, Medicaid, or other federal health programs. DOJ has instituted a series of investigations known as national initiatives, which involve examinations of similarly situated providers who may have engaged in common patterns of improper Medicare billing. As safeguard and enforcement actions have increased, so have provider concerns about their interaction with contractors. Individual physicians and representatives of medical associations have made a number of serious charges regarding the following. Inadequate communications from CMS’ contractors. Providers assert that the information they receive is poorly organized, difficult to understand, and not always communicated promptly. As a result, providers are concerned that they may inadvertently violate Medicare billing rules. Inappropriate targeting of claims for review and excessive paperwork demands of the medical review process. For example, some physicians have complained that the documentation required by some contractors goes beyond what is outlined in agency guidance or what is needed to demonstrate medical necessity. Unfair method used to calculate Medicare overpayments. Providers expressed concern that repayment amounts calculated through the use of samples that are not statistically representative do not accurately represent actual overpayments. Overzealous enforcement activities by other federal agencies. For example, providers have charged that DOJ has been overly aggressive in its use of the False Claims Act and has been too accommodating to the OIG’s insistence on including corporate integrity agreements in provider settlements. Lengthy process to appeal denied claim. Related to this issue is that a provider who successfully appeals a claim that was initially denied does not earn interest for the period during which the administrative appeal was pending. We have studies underway to examine the regulatory environment in which Medicare providers operate. At the request of the House Committee on the Budget and the House Ways and Means Subcommittee on Health, we are reviewing CMS’ communications with providers and have confirmed some provider concerns. For example, our review of several information sources, such as bulletins, telephone call centers, and Internet sites, found a disappointing performance record. Specifically, we reviewed recently issued contractor bulletins—newsletters from carriers to physicians outlining changes in national and local Medicare policy—from 10 carriers. Some of these bulletins contained lengthy discussions with overly technical and legalistic language that providers may find difficult to understand. These bulletins also omitted some important information about mandatory billing procedures. Similarly, we found that the calls we placed to telephone call centers this spring were rarely answered appropriately. For example, for 85 percent of our calls, the answers that call center representatives provided were either incomplete or inaccurate. Finally, we recently reviewed 10 Internet sites, which CMS requires carriers to maintain. We found that these sites rarely met all CMS requirements and often lacked user-friendly features such as site maps and search functions. We are continuing our work and formulating recommendations that should help CMS and its contractors improve their communications with providers. We are also in the preliminary stages of examining how claims are reviewed and how overpayments are detected to assess the actions of contractors as they perform their program safeguard activities. Although we have not yet formulated our conclusions, agency actions may address some provider concerns. For example, HCFA clarified the conditions under which contractors should conduct medical reviews of providers. In August 2000, the agency issued guidance to contractors regarding the selection of providers for medical reviews, noting, among other things, that a provider’s claims should only be reviewed when data suggest a pattern of billing problems. Although providers may be wary of the prospect of medical reviews, the extent to which they are subjected to such reviews is largely unknown. Last year, HCFA conducted a one-time limited survey of contractors to determine the number of physicians subject to complex medical reviews in fiscal year 2000. It found that only 1,891, or 0.3 percent, of all physicians who billed the Medicare program that year were selected for complex medical reviews—examinations by clinically trained staff of medical records. In regard to physician complaints about sampling methodologies, HCFA outlined procedures to give providers several options to determine overpayment amounts. Contractors would initially review a small sample (probe sample) of a provider’s claims and determine the amount of the overpayment. A provider could then (1) enter into a consent settlement, whereby the provider accepts the results of this probe review and agrees to an extrapolated “potential” overpayment amount based on the small sample, (2) accept the settlement but submit additional documentation on specific claims in the probe sample to potentially adjust downward the amount of the projected overpayment, or (3) require the contractor to review a larger statistically valid random sample of claims to extrapolate the overpayment amount. According to agency officials, although providers can select any of these options, consent settlements are usually chosen when offered because they are less burdensome for providers, as fewer claims have to be documented and reviewed. In response to concerns regarding its use of the False Claims Act, DOJ issued guidance in June 1998 to all of its attorneys that emphasized the fair and responsible use of the act in civil health care matters, including national initiatives. In 1999, we reviewed DOJ’s compliance with its False Claims Act guidance and found that implementation of this guidance varied among U.S. Attorneys’ Offices. However, the next year we reported that DOJ had made progress in incorporating the guidance into its ongoing investigations and had also developed a meaningful assessment of compliance in its periodic evaluations of U.S. Attorneys’ Offices. Regarding corporate integrity agreements, we noted in our March 2001 report that these agreements were not always a standard feature of DOJ settlements. For example, 4 of 11 recent settlements that we reviewed were resolved without the imposition of such agreements. Finally, some providers’ concerns about the timeliness of the appeals process could be addressed by the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA), which imposes deadlines at each step of the appeals process. For example, initial determination of a claim must be concluded within 45 days from the date of the claim, and redetermination must be completed within 30 days of receipt of the request. These revisions are scheduled to take effect on October 1, 2002. CMS’ oversight of its contractors is essential to ensuring that the Medicare program is administered efficiently and effectively. CMS is faced with the challenge of protecting program dollars and treating providers fairly. However, to accomplish these goals, contractors must implement CMS’ policies fully and consistently. Historically, the agency’s oversight of contractors has been weak, although it has made substantial improvements in the past 2 years. Continued vigilance in this area is critical as CMS tries to cope with known weaknesses and begins to rely on new specialty contractors for some of its payment safeguard activities. Medicare’s claims administration contractors are responsible for all aspects of claims administration, conduct particular safeguard activities, and are the primary source of Medicare communications to providers. However, oversight of Medicare contractors has historically been weak, leaving the agency without assurance that contractors are implementing program safeguards or paying providers appropriately. For years, HCFA’s contractor performance and evaluation program (CPE)—its principal tool used to evaluate contractor performance—lacked the consistency that agency reviewers need to make comparable assessments of contractor performance. HCFA reviewers had few measurable performance standards and little direction on monitoring contractors’ payment safeguard activities. The reviewers in HCFA’s 10 regional offices, who were responsible for conducting these evaluations, had broad discretion to decide what and how much to review as well as what disciplinary actions to take against contractors with performance problems. This highly discretionary evaluation process allowed key program safeguards to go unchecked and led to the inconsistent treatment of contractors with similar performance problems. Dispersed responsibility for contractor activities across many central office components, limited information about how many resources are used or needed for contractor oversight, and late and outdated guidance provided to regional offices have also weakened contractor oversight. Over the years, we have made several recommendations to improve HCFA’s oversight of its claims administration contractors. For example, we recommended that the agency strengthen accountability for evaluating contractor performance. In response to our recommendations, HCFA has established an executive-level position at its central office with ultimate responsibility for contractor oversight, instituted national review teams to conduct contractor evaluations, and provided more direction to its regional offices through standardized review protocols and detailed instructions for CPE reviews. Although the agency has taken a number of steps to improve its oversight efforts, our ongoing work suggests that opportunities for additional improvement exist. Last month, we joined CMS representatives as they conducted a CPE review at a contractor’s telephone center. Although providers’ ability to appropriately bill Medicare is dependent on their obtaining accurate and complete answers to their questions, the review focused primarily on adherence to call center procedures and the timeliness of responses to provider questions. Moreover, the CMS reviewer selected a small number of cases to evaluate—only 4 of the roughly 140,000 provider calls this center receives each year. While CMS’ management of claims administration contractors suffers from weak oversight, its contracting practices for selecting fiscal intermediaries and carriers may contribute to these difficulties. Unlike most of the federal government, the agency was exempted from conducting full and open competitions by the Social Security Act. Thus, for decades, HCFA has relied on many of the same contractors to perform program management activities, and has been at a considerable disadvantage in attracting new entities to perform these functions. Congress included provisions in HIPAA that provided HCFA with more flexibility in contracting for program safeguard activities. It allowed the agency to contract with any entity that was capable of performing certain antifraud activities. In May 1999, HCFA implemented its new contracting authority by selecting 12 program safeguard contractors—PSCs—using a competitive bidding process. These entities represent a mix of health insurance companies, information technology businesses, and several other types of firms. In May of this year, we reported on the opportunities and challenges that the agency faces as it integrates its PSCs into its overall program safeguard strategy. The PSCs represent a new means of promoting program integrity and enable CMS to test a multitude of options. CMS is currently experimenting with these options to identify how PSCs can be most effectively utilized. For example, some PSCs are performing narrowly focused tasks that are related to a specific service considered to be particularly vulnerable to fraud and abuse. Others are conducting more broadly based work that may have national implications for the way program safeguard activities are conducted in the future or which may result in the identification of best practices.

In fiscal year 2000, Medicare made more than $200 billion in payments to hundreds of thousands of health care providers who served nearly 40 million beneficiaries. Because of the program's vast size and complexity, GAO has included Medicare on its list of government areas at high risk for waste, fraud, abuse, and mismanagement. GAO first included Medicare on that list in 1990, and it remains there today. GAO has continually reported on the efforts of the Health Care Financing Administration -- recently renamed the Centers for Medicare and Medicaid Services (CMS) -- to safeguard Medicare payments and streamline operations. CMS relies on its claims administration contractors to run Medicare. As these contractors have become more aggressive in identifying and pursuing inappropriate payments, providers have expressed concern that Medicare has become to complex and difficult to navigate. CMS's oversight of its contractors has historically been weak. In the last two years, however, CMS has made substantial progress. GAO has identified several areas in which CMS still need improvement, especially in ensuring that contractors provide accurate, complete, and timely information to providers on Medicare billing rules and coverage policies.

Digital radio broadcasting was introduced in the 1980s as a European research project, leading to the adoption of a European standard called Digital Audio Broadcasting (DAB), updated in 2006 to DAB+. DAB/DAB+ standards are compatible with many digital cellphone standards, notably digital GSM, massively deployed as the European standard beginning in the early 1990's. Digital radio broadcasts over cell phones became available in Europe in the late 1990's. By 2000, the DAB radio standard and GSM had converged and DAB radio chips were incorporated into some handsets to provide radio listening as a feature. For example, a digital phone from Nokia, with a tuner installed could, be converted into a radio by downloading software onto the phone, and adding an antenna (connected to the charger connection) and headphones (connected to the audio jack). With the introduction of smartphones, the conversion from phone to radio became more straightforward for the consumer, as discussed in the following paragraphs. In the United States, digital broadcast radio was authorized by the Federal Communications Commission (FCC) in 2002 as HD Radio, a trademark of iBiquity Digital Corporation. HD Radio is iBiquity's core business. Radio stations that broadcast HD Radio pay fees to iBiquity. In 2011, an analysis by Pew Research identified 2,103 HD Radio stations, approximately 13% of all radio stations, noting that the number appeared to have plateaued. For 2012, Pew reported that the number of radio stations dropping HD Radio was greater than the number of stations adopting it. iBiquity reported "close to 2,100" HD Radio stations as of September 2014. The FCC reported 15,433 licensed radio stations (AM, FM, or HD channels) as of September 2014. iBiquity also markets digital radios and radio chips; the primary consumer market is for car radios. As the chips it developed for digital car radios became smaller, iBiquity began to explore the possibility of including them in iPods or smartphones, promoting the radio chips to the wireless industry at a 2010 conference of the CTIA, a major wireless industry association. A dongle for iPod or iPhone (iOS operating system) had been introduced in 2009 by at least one manufacturer to provide an external HD Radio connection. HD Radio dongles for wireless mobile devices using iOS or Android operating systems are available from several manufacturers through sources such as Amazon.com or BestBuy and similar retailers. They are activated by downloading and accepting an HD Radio app. In 2014, the BBC launched a campaign, the "Universal Smartphone Radio Project," to expand the market for digital radio listeners by adding an FM/DAB/Internet chip to smartphones. The BBC reportedly is leading an industry coalition that includes the National Association of Broadcasters (NAB) and Commercial Radio Australia. In the United States the FM/DAB/Internet chip for smartphones is marketed as NextRadio. It was introduced in the United States by Emmis Communications in 2013. NextRadio is enhanced through cloud services provided by TagStation. NextRadio requires a smartphone with the customized chip and radio tuner and uses an app that makes it possible to listen to over-the-air radio while connected to the Internet, providing a number of interactive features. There are approximately 32 devices currently available in the United States with NextRadio pre-installed. The business case for marketing radio/phone combinations is straightforward for the radio industry: increase radio listeners—and advertising revenue—by reaching potential new audiences through their cellphones. Radio reached 92% of all Americans over age 12 in 2012 (roughly 250 million people), a market penetration virtually unchanged in a decade. At the end of 2013, there were 175 million active smartphones in the United States. Among adults (18+), 56% had smartphones. Demographically, smartphone owners tend to be younger, with higher income and education levels than other cell phone owners. A study projecting smartphone use in the United States shows the number of users rising from 62.6 million in 2010 to 220 million in 2018. Research conducted with the support of NAB indicated significant interest in NextRadio among survey participants: smartphone users 18 to 49 years old. The corresponding market demand has not yet materialized, however. About 6.5 million NextRadio-enabled smartphones were in circulation by late 2014, most of them purchased with a Sprint subscription. Of these phones, 1.25 million had been activated for NextRadio, that is, either the pre-loaded app was activated by a Sprint subscriber, or a separately purchased app was downloaded and activated after the purchase of the smartphone. Emmis Communications, which provided the market data, forecast that the number of activated NextRadio smartphones would rise to 14.5 million by mid-2015, based on the number of new smartphones coming to market that will be compatible with NextRadio. Emmis has a three-year agreement (extending into 2016) with Sprint that requires the carrier to preload the NextRadio application on at least 30 million smartphones sold through its network. In return, Emmis contracted to pay Sprint $15 million per year over the life of the contract, plus certain revenue sharing. The agreement between Emmis and Sprint does not limit the ability of NextRadio LLC to place the NextRadio application on FM-enabled devices on other wireless networks. Through August 31, 2014, the NextRadio application had not generated a material amount of revenue. The radio industry continues to work with other leading United States network providers, device manufacturers, regulators and legislators to cause FM tuners to be enabled in all smartphones. Emmis granted the U.S. radio industry (as defined in the funding agreements) a call option on substantially all of the assets used in the NextRadio and TagStation businesses in the United States. The call option may be exercised in August 2017 or August 2019 by paying Emmis a purchase price equal to the greater of (i) the appraised fair market value of the NextRadio and TagStation businesses, or (ii) two times Emmis' cumulative investments in the development of the businesses. The business case for wireless carriers to include FM radio is more complex. As subscribers switch to smartphones, wireless service providers have the opportunity to include NextRadio as a product enhancement. Although the radio access is free to listeners, the interactive services delivered over the Internet may be billable by the wireless service as data traffic. Decisions may be influenced by broader strategies for building customer bases and adding new features. From the perspective of its customers, Sprint views the broadcast radio feature as providing another entertainment choice for its subscribers. T-Mobile, however, is expanding its offer of free music streaming (no data charges) as a means of attracting new subscribers for its mobile services. Other carriers may consider music streaming as a source of income and may not wish to install a radio-based competitor. Reportedly, Apple will pre-install the app for its music streaming service, Beats, in iPhones and iPads beginning in 2015, possibly boosting interest in streaming music. Some research shows that trends favor Internet streaming over radio, although radio remains an important source for information and entertainment. Additionally, carriers may need to consider whether a market commitment to provide over-the-air radio could constrain development of other chip-based services in the future. The smartphones arriving on the market today rely on fourth-generation standards but, by 2020, many industry leaders are predicting a transition to fifth-generation technologies. 5G devices may be substantially re-engineered to take advantage of new wireless network capabilities. As Emmis noted in the above-quoted filing with the Securities and Exchange Commission, the broadcasting industry is lobbying regulators and legislators in support of including NextRadio chips in smartphones. The basis of the industry campaign, as expressed by NAB, is the value of radio information in times of disaster. The topic of using radio-enabled cellphones for emergency alerts in the United States has periodically been considered by policy makers in the field of emergency communications, but no specific actions have been taken to include this technology in emergency planning. Instead, emergency planning at the federal level has focused on improving the communications capabilities for wireless messages based on the Internet Protocol (IP). As discussed in the 2014 National Emergency Communications Plan (NECP), IP-enabled networks permit the interconnection and management of emergency alerts and information across a wide choice of devices, including smartphones, electronic signs, Next Generation 9-1-1 services, and the Emergency Alert System (EAS). A goal of the NECP and emergency planners at all levels is to provide important information to as many people as possible, in a timely manner. To that purpose, federal, state, local, and tribal agencies are using communications technologies to connect to many types of devices. The reasoning, discussed in the 2014 NECP, is that if people are most readily reached by, for example, social media, then alerts must be delivered by social media. The number of active smartphone social network users in the United States was estimated at 97.9 million users in 2013 and is projected to grow to 160.5 million by 2017. The backbone of the United States' Emergency Alert System (EAS) is a network of high-power AM radio broadcast stations that broadcast alerts across wide areas. These stations are referred to as Primary Entry Point stations because they are the point of entry for emergency alerts and warnings. These alerts are in turn picked up and distributed across the country by additional radio stations, television, most cable systems, and other media, as required by the FCC. Since 2009, the Federal Emergency Management Administration (FEMA) has been enhancing the PEP backbone to reach 90% of the country's population. The Federal Emergency Management Agency (FEMA) jointly administers EAS with the FCC, in cooperation with the National Weather Service (NWS), an organization within the National Oceanic and Atmospheric Administration (NOAA). The NOAA/NWS weather radio system—referred to as National Weather Radio—is the primary source for alerts and warnings over EAS. Measures to improve NWR and related networks are ongoing. For example, FEMA is developing the Integrated Public Alert and Warning System (IPAWS) to meet requirements for an alert system as specified by an Executive Order issued by President George W. Bush. When completed, IPAWS should be able to accept any legitimate alert or action announcement, verify it, and relay it to wide variety of communications devices. Legislation passed in 2006 set in motion requirements for delivering alerts to cellphones, now known as Wireless Emergency Alerts (WEA). WEA uses the IPAWS network to deliver geographically targeted messages to cellphones over commercial wireless networks. Radio-enabled cellphones are able to receive WEA messages as well as radio broadcast alerts. Similarly, over-the-air TV broadcasts might be delivered to mobile devices (typically tablets) that have been enabled through the addition of a dongle. With an increasing number of people relying on mobile devices connected to the Internet as their primary source of information, the reliability of these networks has become a concern for policy makers. At the federal level, for example, the FCC has undertaken a number of actions intended to improve wireless network reliability. Rapid advancements in wireless technologies are resolving many of the network vulnerabilities identified by the FCC and other federal agencies. For example, the industry is stepping up the installation of small-scale networks that reduce reliance on vulnerable high-site towers, and is investing in new standards that allow networks to use each other's capacity. A new chip that may be introduced in 2015 has numerous applications that will not rely on cell towers. For example, one application being developed for this chip is planned to handle wireless connections for 1 million people congregated at Times Square on New Year's Eve. Continued improvements in emergency communications infrastructure and management are key goals of the NECP. For example, policies need to be developed that will accelerate the transition from analog to digital technologies for 9-1-1 calls. How responses are managed is also under study. Immediately after the Boston Marathon bomb attack in April 2013, for example, fearful that a cellphone signal might trigger another bomb, authorities ordered that wireless phone networks be turned off. This practice is being reconsidered given the ubiquity of cellphones for communications and their use for WEA.

The concurrent developments of digital radio broadcasting and digital cellular networks have enabled hybrid products that incorporate over-the-air broadcasting into cellphones. A recent introduction (2013) is a hybrid radio/smartphone with Internet connectivity, marketed in the United States as NextRadio. NextRadio uses a chip that receives analog FM and digital radio, with enhancements such as customized radio listening; the primary radio connection is over-the-air, not through Internet streaming. On the assumption that radio broadcasting is more accessible and reliable than communications over wireless networks with Internet connectivity, some broadcasting industry leaders have proposed that FM radio chips be required—or at least encouraged—for smartphones as part of the nation's emergency communications preparedness. To give perspective on the proposal for widespread deployment of FM radio chips in smartphones as an emergency preparedness measure, this report provides information on consumer and industry trends in radio and wireless network communications. It also provides a brief overview of the role of technology in disseminating emergency alerts and information.

In August 2014, we reported that, on the basis of our review of land-use agreement data for fiscal year 2012, VA does not maintain reliable data on the total number of land-use agreements and VA did not accurately estimate the revenues those agreements generate. According to the land- use agreement data provided to us from VA’s Capital Asset Inventory (CAI) system—the system VA utilizes to record land-use agreements— VA reported that it had over 400 land-use agreements generating over $24.8 million in estimated revenues for fiscal year 2012. However, when one of VA’s administrations—the Veterans Health Administration (VHA)— initiated steps to verify the accuracy and validity of the data it originally provided to us, it made several corrections to the data that raised questions about their accuracy, validity, and completeness. Examples of these corrections include the following: at one medical center, one land-use agreement was recorded 37 times, once for each building listed in the agreement; and VHA also noted that 13 agreements included in the system should have been removed because those agreements were terminated prior to fiscal year 2012. At the three VA medical centers we reviewed, we also found examples of errors in the land-use agreement data. Examples of these errors include the following: VHA did not include 17 land-use agreements for the medical centers in New York and North Chicago, collectively. VHA incorrectly estimated the revenues it expected to collect for the medical center in West Los Angeles. VHA revised its estimated revenues from all land-use agreements in fiscal year 2012 from about $700,000 to over $810,000. However, our review of VA’s land-use agreements at this medical center indicated that the amount that should have been reflected in the system was approximately $1.5 million. VA policy requires that CAI be updated quarterly until an agreement ends. VA’s approach on maintaining the data in CAI relies heavily on data being entered timely and accurately by a staff person in the local medical center; however, we found that VA did not have a mechanism to ensure that the data in CAI are updated quarterly as required and that the data are accurate, valid, and complete. By implementing a mechanism that will allow it to assess whether medical centers have timely entered the appropriate land-use agreement data into CAI, and working with the medical centers to correct the data, as needed, VA would be better positioned to reliably account for land-use agreements and the associated revenues that they generate. In our August 2014 report, we also found weaknesses in the billing and collection processes for land-use agreements at three selected VA medical centers due primarily to ineffective monitoring. Inadequate billing: We found inadequate billing practices at all three medical centers we visited. Specifically, we found that VA had billed partners in 20 of 34 revenue-generating land-use agreements for the correct amount; however, the partners in the remaining 14 agreements were not billed for the correct amount. On the basis of our analysis of the agreements, we found that VA underbilled by almost $300,000 of the approximately $5.3 million that was due under the agreements, a difference of about 5.6 percent. For most of these errors, we found that VA did not adjust the revenues it collected for inflation. We also found that the West Los Angeles medical center inappropriately coded the billing so that the proceeds of its sharing agreements, which totaled over $500,000, were sent to its facilities account rather than the medical-care appropriations account that benefits veterans, as required. VA officials stated that the department did not perform systematic reviews of the billings and collections practices at the three medical centers, which we discuss in more detail later. A mechanism for ensuring transactions are promptly and accurately recorded could help VA collect revenues that its sharing partners owe. Opportunities for improved collaboration: At New York and North Chicago, we found that VA could improve collaboration among key internal staff, which could enhance the collections of proceeds for its land-use agreements. For example, at the New York site, the VA fiscal office created spreadsheets to improve the revenue collection for more than 20 agreements. However, because the contracting office failed to inform the fiscal office of the new agreements, the fiscal office did not have all of the renewed contracts or amended agreements that could clearly show the rent due. According to a VA fiscal official at the New York office, repeated requests were made to the contracting office for these documents; however, the contracting office did not respond to these requests by the time of our visit in January 2014. By taking additional steps to foster a collaborative environment, VHA could improve its billing and collection practices. No segregation of duties: On the basis of a walkthrough of the billing and collections process we conducted during our field visits, and an interview with a West Los Angeles VA official, we found that West Los Angeles did not properly segregate duties. Specifically, the office responsible for monitoring agreements also bills the invoices, receives collections, and submits the collections to the agent cashier for deposit. Because of the lack of appropriate segregation of duties at West Los Angeles, the revenue-collection process has increased vulnerability to potential fraud and abuse. This assignment of roles and responsibilities for one office is not typical of the sites we examined. At the other medical centers we visited, these same activities were separated amongst a few offices, as outlined in VA’s guidance on deposits. VA headquarters officials informed us that program officials located at VA headquarters do not perform any systematic review to evaluate the medical centers’ processes related to billing and collections at the local level. VA officials further informed us that VHA headquarters also lacks critical data—the actual land-use agreements—that would allow it to routinely monitor billing and collection efforts for land-use agreements across the department. One VA headquarters official told us that the agency is considering the merits of dispatching small teams of staff from program offices located at VA’s headquarters to assist the local offices with activities such as billing and collections. However, as of May 2014, VA had not implemented this proposed action or any other mechanism for monitoring the billing and collections activity at the three medical centers. Until VA performs systematic reviews, VA will lack assurance that the three selected medical centers are taking all required actions to bill and collect revenues generated from land-use agreements. In our August 2014 report, we found that VA did not effectively monitor many of its land-use agreements at the New York and West Los Angeles medical centers. We found problems with unenforced agreement terms, expired agreements, and instances where land-use agreements did not exist. Examples include the following: In West Los Angeles, VA waived the revenues in an agreement with a nonprofit organization—$250,000 in fiscal year 2012 alone—due to financial hardship. However, VA policy does not allow revenues to be waived. In New York, one sharing partner—a local school of medicine—with seven expired agreements remained on the property and occupied the premises without written authorization during fiscal year 2012. Our review of VA’s policy on sharing agreements showed that VA did not have any specific guidance on how to manage agreements before they expired, including the renewal process. In New York, we observed more antennas on the roof of a VA facility than the New York medical center had recorded in CAI. After we brought this observation to their attention, New York VA officials researched the owners of these antennas and could not find written agreements or records of payments received for seven antennas. According to New York VA officials, now that they are aware of the antennas, they will either establish agreements with the tenants or disconnect the antennas. The City of Los Angeles has used 12 acres of VA land for recreational use since the 1980s without a signed agreement or payments to VA. An official said that VA cannot negotiate agreements in this case due to an ongoing lawsuit brought on behalf of homeless veterans about its land-use agreement authority. We found that VA had not established mechanisms to monitor the various agreements at the West Los Angeles and New York medical centers. VA officials stated that they had not performed systematic reviews of these agreements and had not established mechanisms to enable them to do so. Without a mechanism for accessing land-use agreements to perform needed monitoring activities, VA lacks reasonable assurance that the partners are meeting the agreed-upon terms, agreements are renewed as appropriate, and agreements are documented in writing, as required. This is particularly important if sharing partners are using VA land for purposes that may increase risk to VA’s liability (e.g., an emergency situation that might occur at the park and fields in the city of Los Angeles). Finally, with lapsed agreements, VA not only forgoes revenue, but it also misses opportunities to provide additional services to veterans in need of assistance and to enhance its operations. Our August 2014 report made six recommendations to the Secretary of Veterans Affairs to improve the quality of the data collected on specific land-use agreements (i.e., sharing, outleases, licenses, and permits), enhance the monitoring of its revenue process and monitoring of agreements, and improve the accountability of VA in this area. Specifically, we recommended that VA develop a mechanism to independently verify the accuracy, validity, and completeness of VHA data for land-use agreements in CAI; develop mechanisms to monitor the billing and collection of revenues for land-use agreements to help ensure that transactions are promptly and accurately recorded at the three medical centers; develop mechanisms to foster collaboration between key offices to improve billing and collections practices at the New York and North Chicago medical centers; develop mechanisms to access and monitor the status of land-use agreements to help ensure that agreement terms are enforced, agreements are renewed as appropriate, and all agreements are documented in writing as required, at the New York and West Los Angeles selected medical centers; develop a plan for the West Lost Angeles medical center that identifies the steps to be taken, timelines, and responsibilities in implementing segregation of duties over the billing and collections process; and develop guidance on managing expiring agreements at the three medical centers. After reviewing our draft report, VA concurred with all six of our recommendations. VA’s comments are provided in full in our August 2014 report. In November 2014, VA provided us an update on the actions it is taking to respond to these recommendations in our August 2014 report. These actions include (1) drafting CAI changes to improve data integrity and to notify staff of expiring or expired agreements, (2) updating guidance and standard operating procedures for managing land-use agreements and training staff on the new guidance, and (3) transitioning oversight and operations of the West Los Angeles land-use agreement program to the regional level. If implemented effectively, these actions should improve the quality of the data collected on specific land-use agreements, enhance the monitoring of VA’s revenue process and agreements, and improve accountability for these agreements. Chairman Coffman, Ranking Member Kuster, and members of the subcommittee, this concludes my prepared remarks. I look forward to answering any questions that you may have at this time. For further information on this testimony, please contact Stephen Lord at (202) 512-6722 or lords@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 testimony include Matthew Valenta, Assistant Director; Carla Craddock; Marcus Corbin; Colin Fallon; Olivia Lopez; and Shana Wallace. 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.

VA manages one of the nation's largest federal property portfolios. To manage these properties, VA uses land-use authorities that allow VA to enter into various types of agreements for the use of its property in exchange for revenues or in-kind considerations. GAO was asked to examine VA's use of land-use agreements. This report addresses the extent to which VA (1) maintains reliable data on land-use agreements and the revenue they generate, (2) monitors the billing and collection processes at selected VA medical centers, and (3) monitors land-use agreements at selected VA medical centers. GAO analyzed data from VA's database on its land-use agreements for fiscal year 2012, reviewed agency documentation, and interviewed VA officials. GAO also visited three medical centers to review the monitoring of land-use agreements and the collection and billing of the associated revenues. GAO selected medical centers with the largest number of agreements or highest amount of estimated revenue. The site visit results cannot be generalized to all VA facilities. According to the Department of Veterans Affairs' (VA) Capital Asset Inventory system—the system VA utilizes to record land-use agreements and revenues—VA had hundreds of land-use agreements with tens of millions of dollars in estimated revenues for fiscal year 2012, but GAO's review raised questions about the reliability of those data. For example, one land-use agreement was recorded 37 times, once for each building listed in the agreement, 13 agreements terminated before fiscal year 2012 had not been removed from the system, and more than $240,000 in revenue from one medical center had not been recorded. VA relies on local medical center staff to enter data timely and accurately, but lacks a mechanism for independently verifying the data. Implementing such a mechanism and working with medical centers to make corrections as needed would better position VA to reliably account for its land-use agreements and the associated revenues they generate. GAO found weaknesses in the billing and collection processes for land-use agreements at three selected VA medical centers due primarily to ineffective monitoring. For example, VA incorrectly billed its sharing partners for 14 of 34 agreements at the three centers, which resulted in VA not billing $300,000 of the nearly $5.3 million owed. In addition, at the New York center, VA had not billed a sharing partner for several years' rent that totaled over $1 million. VA began collections after discovering the error; over $200,000 was outstanding as of April 2014. VA stated that it did not perform systematic reviews of the billing and collection practices at the three centers and had not established mechanisms to do so. VA officials at the New York and North Chicago centers stated that information is also not timely shared on the status of agreements with offices that perform billing due to lack of collaboration. Until VA addresses these issues, VA lacks assurance that it is collecting the revenues owed by its sharing partners. VA did not effectively monitor many of its land-use agreements at two of the centers. GAO found problems with unenforced agreement terms, expired agreements, and instances where land-use agreements did not exist. Examples include the following: In West Los Angeles, VA waived the revenues in an agreement with a nonprofit organization—$250,000 in fiscal year 2012 alone—due to financial hardship. However, VA policy does not allow revenues to be waived. In New York, one sharing partner—a local School of Medicine—with seven expired agreements remained on the property and occupied the premises without written authorization during fiscal year 2012. The City of Los Angeles has used 12 acres of VA land for recreational use since the 1980s without a signed agreement or payments to VA. An official said that VA cannot negotiate agreements due to an ongoing lawsuit brought on behalf of homeless veterans about its land-use agreement authority. VA does not perform systematic reviews and has not established mechanisms to do so, thus hindering its ability to effectively monitor its agreements and use of its properties. GAO is making six recommendations to VA including recommendations to improve the quality of its data, foster collaboration between key offices, and enhance monitoring. VA concurred with the recommendations.

The Americans with Disabilities Act, often described as the most sweeping nondiscrimination legislation since the Civil Rights Act of 1964, provides protections against discrimination for individuals with disabilities. Due to concern about the spread of highly contagious diseases such as the 2009 H1N1 pandemic influenza and extensively drug-resistant tuberculosis (XDR-TB), questions have been raised about the application of the ADA in such situations. The threshold issue when discussing the applicability of the ADA is whether the individual in question is a person with a disability. Generally, individuals with serious contagious diseases would most likely be considered individuals with disabilities. However, this does not mean that an individual with a serious contagious disease would have to be hired or given access to a place of public accommodation if such an action would place other individuals at a significant risk. Such determinations are highly fact specific and the differences between the contagious diseases discussed by the courts (e.g., HIV infection, tuberculosis, and hepatitis) and pandemic influenza may give rise to differing conclusions. Each contagious disease has specific patterns of transmission that affect the magnitude and duration of a potential threat to others. The starting point for an analysis of rights provided by the ADA is whether an individual is an individual with a disability. The term "disability," with respect to an individual, is defined as "(A) a physical or mental impairment that substantially limits one or more of the major life activities of such individual; (B) a record of such an impairment; or (C) being regarded as having such an impairment (as described in paragraph(3))." The ADA was amended by the ADA Amendments Act of 2008, P.L. 110-325 , to expand the interpretation of the definition of disability from that of several Supreme Court decisions. Although the statutory language is essentially the same as it was in the original ADA, P.L. 110-325 contains new rules of construction regarding the definition of disability, which provide that the definition of disability shall be construed in favor of broad coverage to the maximum extent permitted by the terms of the act; the term "substantially limits" shall be interpreted consistently with the findings and purposes of the ADA Amendments Act; an impairment that substantially limits one major life activity need not limit other major life activities to be considered a disability; an impairment that is episodic or in remission is a disability if it would have substantially limited a major life activity when active; the determination of whether an impairment substantially limits a major life activity shall be made without regard to the ameliorative effects of mitigating measures, except that the ameliorative effects of ordinary eyeglasses or contact lenses shall be considered. Generally, individuals with serious contagious diseases would most likely be considered individuals with disabilities. However, what is defined as a "serious" contagious disease is fact specific. For example, the Equal Employment Opportunity Commission (EEOC) has indicated that individuals infected with the 2009 H1N1 pandemic influenza virus would not be individuals with disabilities. However, if the disease were to become more severe, an infected individual might be considered to be an individual with a disability under the ADA. The EEOC guidance does not delineate when the illness would be serious enough to be encompassed by the ADA. Even if a contagious disease is serious and an infected individual is covered by the ADA, if that individual poses a direct threat to others, he or she would not necessarily have to be hired or given access to a place of public accommodation. Title I of the ADA, which prohibits employment discrimination against otherwise qualified individuals with disabilities, specifically states that "the term 'qualifications standards' may include a requirement that an individual shall not pose a direct threat to the health or safety of other individuals in the workplace." In addition, the Secretary of Health and Human Services (HHS) is required to publish, and update, a list of infectious and communicable diseases that may be transmitted through handling the food supply. Similarly, title III, which prohibits discrimination in public accommodations and services operated by private entities, states: "Nothing in this title shall require an entity to permit an individual to participate in or benefit from the goods, services, facilities, privileges, advantages and accommodations of such entity where such individual poses a direct threat to the health or safety of others. The term 'direct threat' means a significant risk to the health or safety of others that cannot be eliminated by a modification of policies, practices, or procedures or by the provision of auxiliary aids or services." Although title II, which prohibits discrimination by state and local government services, does not contain such specific language, it does require an individual to be "qualified" and this is defined in part as meeting "the essential eligibility requirements of the receipt of services or the participation in programs or activities...." Contagious diseases were discussed in the ADA's legislative history. The Senate report noted that the qualification standards permitted with regard to employment under title I may include a requirement that an individual with a currently contagious disease or infection shall not pose a direct threat to the health or safety of other individuals in the workplace and cited to School Board of Nassau County v. Arline , a Supreme Court decision concerning contagious diseases and Section 504 of the Rehabilitation Act of 1973. Similarly, the House report of the Committee on Education and Labor reiterated the reference to Arline and added "[t]hus the term 'direct threat' is meant to connote the full standard set forth in the Arline decision." The Department of Justice issued amended regulations for titles II and III of the ADA which were published in the Federal Register on September 15, 2010. Although these regulations did not directly address contagious diseases, they did contain some revised language concerning the direct threat exception. Both the title II and title III regulations provide that public entities or places of public accommodations are not required to permit an individual to participate in services or activities when that individual poses a direct threat to the health or safety of others. In determining whether an individual poses a direct threat, both titles require "an individualized assessment, based on reasonable judgment that relies on current medical knowledge or on the best available objective evidence, to ascertain: The nature, duration, and severity of the risk; the probability that the potential injury will actually occur; and whether reasonable modifications of policies, practices, or procedures or the provision of auxiliary aids or services will mitigate the risk." Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. §794, in part prohibits discrimination against an otherwise qualified individual with a disability in any program or activity that receives federal financial assistance. Many of the concepts used in the ADA originated in Section 504, its regulations, and judicial interpretations. The legislative history of the ADA, as discussed above, specifically cited to the Supreme Court's interpretation of Section 504 in Arline which held that a person with active tuberculosis was an individual with a disability but may not be otherwise qualified to teach elementary school. Footnote 16, which was referenced in the ADA's legislative history, states in relevant part that "a person who poses a significant risk of communicating an infectious disease to others in the workplace will not be otherwise qualified for his or her job if reasonable accommodation will not eliminate that risk." The Court in Arline examined the standards to be used to determine if an individual with a contagious disease is otherwise qualified. In most cases, the Court observed, an individualized inquiry is necessary in order to protect individuals with disabilities from "deprivation based on prejudice, stereotypes, or unfounded fear, while giving appropriate weight to such legitimate concerns of grantees as avoiding exposing others to significant health and safety risks." The Court adopted the test enunciated by the American Medical Association (AMA) amicus brief and held that the factors which must be considered include "findings of facts, based on reasonable medical judgments given the state of medical knowledge, about (a) the nature of the risk (how the disease is transmitted), (b) the duration of the risk (how long is the carrier infectious), (c) the severity of the risk (what is the potential harm to third parties) and (d) the probabilities the disease will be transmitted and will cause varying degrees of harm." The Court also emphasized that courts "normally should defer to the reasonable medical judgments of public health officials" and that courts must consider whether the employer could reasonably accommodate the employee. Arline was remanded for consideration of the facts using this standard and the district court held that since the teacher had had negative cultures and the possibility of infection was "extremely rare," the school board must reinstate her or pay her salary until retirement eligibility. The Supreme Court in Bragdon v. Abbott , addressed the ADA definition of individual with a disability and held that the respondent's asymptomatic HIV infection was a physical impairment impacting on the major life activity of reproduction thus rendering the HIV infection a disability under the ADA. The Court also addressed the question of what is a direct threat, finding that the ADA's direct threat language codified the Court's decision in Arline. In Bragdon the plaintiff, an individual with asymptomatic HIV infection, sought dental treatment from the defendant and was told that she would be treated only in a hospital, not in the office. The plaintiff, Ms. Abbott, filed an ADA complaint and prevailed at the district court, court of appeals and the Supreme Court on the issue of whether she was an individual with a disability but the case was remanded for further consideration regarding the issue of direct threat. The Supreme Court provided some guidance regarding the direct threat issue in Bragdon stating that "the existence, or nonexistence, of a significant risk must be determined from the standpoint of the person who refuses the treatment or accommodation, and the risk assessment must be based on medical or other objective evidence." Dr. Bragdon had the duty to assess the risk of infection "based on the objective, scientific information available to him and others in his profession. His belief that a significant risk existed, even if maintained in good faith, would not relieve him from liability." On remand for consideration of the direct threat issue, the first circuit court of appeals held that summary judgment was warranted, finding that Dr. Bragdon's evidence was too speculative or too tangential to create a genuine issue of fact. Both Arline and Bragdon dealt with the issue of whether an individual was a direct threat to others. In Chevron U.S.A. Inc., v. Echazabal , the Supreme Court dealt with the issue of whether an individual was a threat to himself and held unanimously that the ADA does not require an employer to hire an individual with a disability if the job in question would endanger that individual's health. The ADA's statutory language provides for a defense to an allegation of discrimination that a qualification standard is "job related and consistent with business necessity." The act also allows an employer to impose as a qualification standard that the individual shall not pose a direct threat to the health or safety of other individuals in the workplace but does not discuss a threat to the individual's health or safety. The ninth circuit in Echazabal had determined that an employer violated the ADA by refusing to hire an applicant with a serious liver condition whose illness would be aggravated through exposure to the chemicals in the workplace. The Supreme Court rejected the ninth circuit decision and upheld a regulation by the EEOC that allows an employer to assert a direct threat defense to an allegation of employment discrimination where the threat is posed only to the health or safety of the individual making the allegation. Justice Souter found that the EEOC regulations were not the kind of workplace paternalism that the ADA seeks to outlaw. "The EEOC was certainly acting within the reasonable zone when it saw a difference between rejecting workplace paternalism and ignoring specific and documented risks to the employee himself, even if the employee would take his chances for the sake of getting a job." The Court emphasized that a direct threat defense must be based on medical judgment that uses the most current medical knowledge. The lower courts have dealt with a number of direct threat cases under the ADA. Although a comprehensive survey of these cases is beyond the scope of this report, they have involved a number of types of disabilities as well as varying occupations and accommodations. The disabilities at issue have often involved AIDS or HIV infection or mental illness but have also included hepatitis, and other conditions. The various occupations have included public health care workers, public safety officers, transportation operators, food handlers, and industrial workers.

The Americans with Disabilities Act (ADA), 42 U.S.C. §§12101 et seq., provides broad nondiscrimination protection for individuals with disabilities in employment, public services, public accommodations and services operated by private entities, transportation, and telecommunications. 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." Due to concern about the spread of highly contagious diseases such as pandemic influenza and extensively drug-resistant tuberculosis (XDR-TB), questions have been raised about the application of the ADA in such situations. Generally, individuals with serious contagious diseases would most likely be considered individuals with disabilities. However, this does not mean that an individual with a serious contagious disease would have to be hired or given access to a place of public accommodation if such an action would place other individuals at a significant risk. Such determinations are highly fact specific and the differences between the contagious diseases may give rise to differing conclusions since each contagious disease has specific patterns of transmission that affect the magnitude and duration of a potential threat to others.

The U.S. Department of Agriculture (USDA) administers a number of agricultural conservation programs that assist private landowners with natural resource concerns. These include working land programs, land retirement and easement programs, watershed programs, emergency programs, technical assistance, and other programs. The number and funding levels for agricultural conservation programs have steadily increased over the past 60 years. Early conservation efforts undertaken by Congress were focused on reducing high levels of soil erosion and providing water to agriculture in quantities and quality that enhanced farm production. By the early 1980s, however, concern was growing that these programs were not adequately dealing with environmental problems resulting from agricultural activities (especially off the farm). In 1985, conservation policy took a new direction when Congress passed the Food Security Act of 1985 (1985 farm bill, P.L. 99-198 ), which established the first conservation programs designed to deal with environmental issues resulting from agricultural activities. Provisions enacted in subsequent farm bills, including in 1990, 1996, 2002, 2008, and 2014, reflect a rapid evolution of the conservation agenda, including the growing influence of environmentalists and other nonagricultural interests in the formulation of conservation policy, and a recognition that agriculture was not treated like other business sectors in many environmental laws. Congress also began funding many of these new programs through mandatory spending for the first time, using the borrowing authority of USDA's Commodity Credit Corporation (CCC) as the funding mechanism instead of annual appropriations. In addition to the original soil erosion and water quality and quantity issues, the conservation agenda has continued to expand to address other natural resource concerns, such as wildlife habitat, air quality, wetlands restoration and protection, energy efficiency, and sustainable agriculture. Lead agricultural conservation agencies within USDA are the Natural Resources Conservation Service (NRCS), which provides technical assistance and administers most conservation programs, and the Farm Service Agency (FSA), which administers the Conservation Reserve Program (CRP). These agencies are supported by others in USDA that supply research and educational assistance, including the Agricultural Research Service (ARS), the Economic Research Service (ERS), the National Institute of Food and Agriculture (NIFA), and the Forest Service (FS). In addition, agricultural conservation programs involve a large array of partners, including other federal agencies, state and local governments, and private organizations, among others, who provide funds, expertise, and other forms of assistance to further agricultural conservation efforts. USDA provides technical and financial assistance to attract interest and encourage participation in conservation programs. Participation in all USDA conservation programs is voluntary. These programs protect soil, water, wildlife, and other natural resources on privately owned agricultural lands to limit environmental impacts of production activities both on and off the farm, while maintaining or improving production of food and fiber. Some of these programs center on improving or restoring resources that have been degraded, while others seek to create conditions with the objective of limiting degradation in the future. Though programs in this report are listed alphabetically, agricultural conservation programs can be grouped into the following categories based on similarities: working land programs, land retirement and easement programs, watershed programs, emergency programs, compliance, technical assistance, and other programs and overarching provisions. The majority of conservation programs are funded through USDA's Commodity Credit Corporation (CCC) as mandatory spending. Congress authorizes mandatory programs at specified funding levels (or acreage enrollment levels for CRP and CSP) for multiple years, typically through omnibus legislation such as the farm bill. Mandatory programs are funded at these levels unless Congress limits funding to a lower amount through the appropriations or legislative process (or puts a ceiling on acreage that can be enrolled). Discretionary programs are funded each year through the annual appropriations process. Despite a steady increase in mandatory funding authority, select conservation programs have been reduced or capped through annual appropriation acts since FY2003. Many of these spending reductions were at the request of the Administration. The mix of programs and amount of reductions vary from year to year. Some programs, such as the CRP, have not been reduced by appropriators in recent years, while others, such as EQIP, have been repeatedly reduced below authorized levels. Authorized mandatory funding for conservation programs has been reduced by a total of more than $4 billion over the past 10 years. FY2018 marks the first time in 15 years that an appropriations act does not reduce mandatory conservation program funding. Sequestration has also had an effect on conservation programs. Sequestration is a process of automatic, largely across-the-board reductions that permanently cancel mandatory and/or discretionary budget authority to enforce statutory budget goals. Discretionary accounts have avoided sequestration in recent years through adjustments to spending limits, although sequestration continues on mandatory accounts. Most all mandatory conservation programs were subject to sequestration in FY2014 through FY2018. Even with sequestration and appropriations act reductions, total annual mandatory funding for conservation programs has grown from a total of $3.9 billion in FY2008 to over $5 billion in FY2018. Before the 1985 farm bill, few conservation programs existed, and only two would be considered large by today's standards. In contrast, leading up to the debate on the 2014 farm bill, there were over 20 distinct conservation programs with total annual spending greater than $5 billion. The differences and number of these programs created general confusion about the purpose, participation, and policies of the programs. Discussion about simplifying or consolidating conservation programs to reduce overlap and duplication, and to generate savings, continued for a number of years. The Agricultural Act of 2014 ( P.L. 113-79 , 2014 farm bill), contained several program consolidation measures, including the repeal of 12 active and inactive programs, the creation of two new programs, and the merging of two programs into existing ones. A number of conservation programs were repealed by the 2014 farm bill or have gone unfunded by Congress in recent years. Table 1 lists these programs and the most recent congressional action taken. The tabular presentation that follows provides basic information covering each of the USDA agricultural conservation programs, including administering agency or agencies within USDA; brief program description; major amendments to the program in the Agricultural Act of 2014 ( P.L. 113-79 ), commonly referred to as the 2014 farm bill; national scope and availability, including participation levels and acres enrolled; states with the highest level of funds obligated or acres enrolled; volume of application backlog or public interest in each program; authorized funding levels, whether mandatory spending or discretionary appropriations, and any funding restrictions; FY2018 funding level in the Consolidated Appropriations Act of 2018 ( P.L. 115-124 ), or, if applicable, the authorized level in the Agricultural Act of 2014 (sequestration and carryover not included unless noted); FY2019 funding level requested by the Administration (sequestration and carryover included where known); statutory authority, recent amendments, and U.S. Code reference; expiration date of program authority unless permanently authorized; and program's website link. Information for the following tables is drawn from agency budget presentations, explanatory notes, and websites; written responses to questions published each year in hearing records of the Agriculture Appropriations Subcommittees of the House and Senate Appropriations Committees; and spending estimates from the Congressional Budget Office. Further information about these programs may be found on the NRCS website at http://www.nrcs.usda.gov and on the "conservation programs" page of the FSA website at http://www.fsa.usda.gov .

The Natural Resources Conservation Service (NRCS) and the Farm Service Agency (FSA) in the U.S. Department of Agriculture (USDA) currently administer 20 programs and subprograms that are directly or indirectly available to assist producers and landowners who wish to practice conservation on agricultural lands. The differences and number of these programs have created general confusion about the purpose, participation, and policies of the programs. While recent consolidation efforts removed some duplication, a large number of programs remain. The programs discussed in this report are as follows Agricultural Conservation Easement Program (ACEP) Agricultural Management Assistance (AMA) Conservation Operations (CO); Conservation Technical Assistance (CTA) Conservation Reserve Program (CRP) CRP—Conservation Reserve Enhancement Program (CREP) CRP—Farmable Wetland Program CRP—Grasslands Conservation Stewardship Program (CSP) Emergency Conservation Program (ECP) Emergency Forest Restoration Program (EFRP) Emergency Watershed Protection (EWP) Environmental Quality Incentives Program (EQIP) EQIP—Conservation Innovation Grants (CIG) Grassroots Source Water Protection Program Healthy Forests Reserve Program (HFRP) Regional Conservation Partnership Program (RCPP) Voluntary Public Access and Habitat Incentive Program Water Bank Program Watershed and Flood Prevention Operations Watershed Rehabilitation Program This tabular presentation provides basic information covering each of the programs. In each case, a brief program description is followed by information on major amendments in the Agricultural Act of 2014 (P.L. 113-79, 2014 farm bill), national scope and availability, states with the greatest participation, the backlog of applications or other measures of continuing interest, program funding authority, FY2018 funding, FY2019 Administration budget request, statutory authority, the authorization expiration date, and a link to the program's website.

This report provides a cumulative history of Department of Energy (DOE) funding for renewable energy compared with funding for the other energy technologies—nuclear energy, fossil energy, energy efficiency, and electric systems. Specifically, it provides a comparison that covers cumulative funding over the past 10 years (FY2009-FY2018), a second comparison that covers the 41-year period since DOE was established at the beginning of FY1978 through FY2018, and a third comparison that covers a 71-year funding history (FY1948-FY2018) for DOE and predecessor agencies. The final amount of FY2017 Energy and Water Development appropriations for DOE energy technologies was established by the Consolidated Appropriations Act, 2017 ( P.L. 115-31 ), which was signed by the President on May 5, 2017. The act contained appropriations for all FY2017 appropriations bills, including Energy and Water Development programs (Division D). Final funding for FY2018 was set by the Consolidated and Further Continuing Appropriations Act, 2018 ( P.L. 115-141 ), which was signed by the President on May 23, 2018. Funding levels for DOE are included in Energy and Water Development programs (Division D). Figure 1 presents the fiscal year funding totals for DOE in real terms (2016 dollars) since 1978 for each technology or energy source. Table 1 shows the cumulative funding totals in real terms (2016 dollars) for the past 10 years (first column), 41 years (second column), and 71 years (third column). Table 2 converts the data from Table 1 into relative shares of spending for each technology or energy source, expressed as a percentage of total spending for each period. Figure 2 displays the data from the first column of Table 2 as a pie chart. That chart shows the relative shares of cumulative DOE spending for each technology or energy source over the 10 years from FY2009 through FY2018. Figure 3 provides a similar chart for the period from FY1978 through FY2018. Figure 4 shows a chart for FY1948 through FY2018. The availability of energy—especially gasoline and other liquid fuels—played a critical role in World War II. Another energy-related factor was the application of research and development (R&D) to the atomic bomb (Manhattan Project) and other military technologies. During the post-World War II era, the federal government began to apply R&D to the peacetime development of energy sources to support economic growth. At that time, the primary R&D focus was on fossil fuels and new forms of energy derived from nuclear fission and nuclear fusion. The Atomic Energy Act of 1946 established the Atomic Energy Commission (AEC), which inherited all of the Manhattan Project's R&D activities and placed nuclear weapon development and nuclear power management under civilian control. A major focus of the AEC was research on "atoms for peace," the use of nuclear energy for civilian electric power production. Prompted by the oil embargo declared by the Organization of Arab Petroleum Exporting Countries in 1973, the Federal Energy Administration was established in mid-1974. In early 1975, the Energy Research and Development Administration (ERDA) was established, incorporating the AEC and several energy programs that had been operating under the Department of the Interior and other federal agencies. The Department of Energy (DOE) was established by law in 1977, incorporating activities of the FEA and ERDA. All of the energy R&D programs—fossil, nuclear, renewable, and energy efficiency—were brought under its administration. DOE also undertook a small program in energy storage and electricity system R&D that supports the four main energy technology programs. From FY1948 through FY1977, the majority of federal government support for energy R&D focused on fossil energy and nuclear power technologies. Total spending on fossil energy technologies over that period amounted to about $17.1 billion, in constant FY2016 dollars. The federal government spent about $51.6 billion (in constant FY2016 dollars) during that period for nuclear energy R&D (in all the tables and figures in this report, the "nuclear" category includes both fission and fusion). The energy crises of the 1970s spurred the federal government to expand its R&D programs to include renewable (wind, solar, biomass, geothermal, hydro) energy and energy efficiency technologies. Comparatively modest efforts to support renewable energy and energy efficiency began during the early 1970s. Since FY1978, DOE has been the main supplier of energy R&D funding compared to other federal agencies. In real (constant dollar) terms, funding support for all four of the main energy technologies skyrocketed during the 1970s to a combined peak in FY1979 at about $8.6 billion (2016 constant dollars). Funding then dropped steadily, to about $2.0 billion (2016 dollars) per year during the late 1990s. Since then, funding has increased gradually—except that the American Recovery and Reinvestment Act of 2009 ( P.L. 111-5 ) provided a one-year spike of $13 billion (2016 dollars) in FY2009. For FY2018, DOE energy R&D funding stood at nearly $4.5 billion (2016 dollars).

Energy-related research and development (R&D)—on coal-based synthetic petroleum and on atomic bombs—played an important role in the successful outcome of World War II. In the postwar era, the federal government conducted R&D on fossil and nuclear energy sources to support peacetime economic growth. The energy crises of the 1970s spurred the government to broaden the focus to include renewable energy and energy efficiency. Over the 41-year period from the Department of Energy's (DOE's) inception at the beginning of FY1978 through FY2018, federal funding for renewable energy R&D amounted to about 18% of the energy R&D total, compared with 6% for electric systems, 16% for energy efficiency, 24% for fossil, and 37% for nuclear. For the 71-year period from 1948 through 2018, nearly 13% went to renewables, compared with nearly 5% for electric systems, 11% for energy efficiency, 24% for fossil, and 48% for nuclear.

OPAP was established by the Secretary of State following the August 1998 bombings of U.S. embassies in Nairobi, Kenya, and Dar es Salaam, Tanzania. The panel was formed to consider the future of U.S. overseas representation, to appraise its condition, and to develop practical recommendations on how best to organize and manage embassies and consulates. Citing weaknesses in security, infrastructure, technology, human capital, and management, OPAP concluded that the U.S. overseas presence was “perilously close to the point of system failure.” OPAP made recommendations in eight areas, including that of creating the right size and location for U.S. overseas presence. A key OPAP theme stressed that a rightsizing process should consider the relationship between embassy size and security. Specifically, OPAP recommended that rightsizing be used to reduce the number of people at risk overseas. OPAP made five additional recommendations regarding the size and location of overseas posts: Rightsize the U.S. overseas presence; reduce the size of some posts, close others, reallocate staff and resources, and establish new posts where needed to enhance the American presence where the bilateral relationship has become more important. Form a new Interagency Overseas Presence Committee—a permanent committee to regularly adjust U.S. presence to U.S. goals and interests. Adopt explicit criteria to guide size and location decisions. Support the concept of small posts. Encourage ambassadors to initiate rightsizing. OPAP also recommended that some administrative services be performed at regional centers or in the United States—actions that would lessen the need for administrative staff at some posts, thereby reducing security vulnerabilities. In February 2000, President Clinton directed the Secretary of State to lead an interagency effort to implement OPAP’s recommendations. In a March 2000 report to the Congress, the Department of State said that the interagency committee planned to complete pilot studies by June 2000 to assess staffing levels, to recommend necessary changes at the study posts, and to develop decision criteria applicable to subsequent rightsizing reviews to be conducted at all overseas posts over a 5-year period. State anticipated that reviews at half the posts (about 130 posts) would be completed within 2 years. In early 2000, State organized an interagency rightsizing committee representing key agencies, including the Departments of Agriculture, Commerce, Defense, Transportation, Energy, Justice, the Treasury, and State; the intelligence community; and the U.S. Agency for International Development (USAID). Pilot studies were conducted at six embassies— Amman, Jordan; Bangkok, Thailand; Mexico City, Mexico; New Delhi, India; Paris, France; and Tbilisi, Georgia, from March to May 2000. Teams with representatives from State, the intelligence community, Defense, Justice, USAID, and the Treasury visited all six posts; officials from other agencies made some of the trips. These embassies were selected because of the complexity of their missions and because they represented broad geographical and agency coverage. The Department of State told us that the interagency teams did not have written guidelines. Moreover, according to agency representatives who participated in the studies, the teams did not systematically assess staffing at the pilot posts. According to the former interagency committee leader, the teams attempted to use the criteria that OPAP suggested for making staffing decisions, but found that the criteria were too broad to guide determinations on specific post size. Prior to travel, the teams reviewed each embassy’s Mission Performance Plan describing objectives and priorities. In addition, the Department of State directed the teams to draft a list of general questions that linked staffing to the goals and objectives laid out in each embassy’s Mission Performance Plan, as a discussion guide. At each embassy, the teams received a briefing from the ambassador and then concentrated on interviewing key agency representatives, to obtain information and opinions on agencies’ staffing levels and workload. The teams spent a few days at each post. For example, a team was in Tbilisi for 2 days, Paris for about 3 days, and Mexico City for 5 days. Some team members and representatives of the interagency rightsizing committee told us that 2 to 5 days at an embassy was too little time to permit detailed analysis of workload or to fully explore alternative ways of conducting business, such as regionalizing operations or outsourcing administrative functions. This is partly attributable to the size and complexity of embassy operations at the posts visited. Four of the embassies—Bangkok, Mexico City, New Delhi, and Paris—are among the largest and most complex in the world. Though smaller, the remaining two embassies both have substantial numbers of U.S. and foreign national employees, from multiple agencies. The ambassador who led three of the pilot studies told us that a comprehensive review of staff levels would take much longer than the 2 to 5 days the teams spent at the embassies, and that the pilot studies were not designed for that purpose. However, he believed that the length of visit was sufficient to identify potential functions that warranted additional study to determine if staffing levels should be adjusted. The interagency committee’s June 2000 report to the Under Secretary of State summarizing results of the pilot studies concluded that it was impractical to develop a staffing methodology that would be applicable to all posts, as OPAP had recommended, because no two posts are sufficiently similar. In addition, the report questioned the need for additional rightsizing of overseas posts, stating that agencies had adjusted staff levels during the 1990s in response to budget constraints to ensure that only the most essential overseas functions were performed. As a result, the report concluded that agencies had already performed rightsizing. The report also concluded that planned rightsizing reviews of additional posts over 5 years should not be conducted, as the benefits of rightsizing may not outweigh the costs of conducting the reviews. Regarding OPAP’s recommendation to establish an interagency board to review staff levels at overseas posts, the committee’s report concluded that an interagency advisory board could be helpful as a forum to discuss programmatic issues with major overseas staffing implications and to provide informal and nonbinding advice to agencies and ambassadors. However, some agencies opposed the establishment of an interagency board, even on an advisory basis, because they believed it was unnecessary and would limit agency independence in making staffing decisions. Although the interagency committee did not recommend major changes in staff levels as a general theme in its June 2000 report, it did recommend that the regional financial service centers in Bangkok and Paris be relocated to the United States, and that several other potential opportunities for staff level reductions be explored. In addition, the report raised concerns about heavy embassy staff workloads, an issue not specifically addressed by OPAP. According to the committee’s report, an expanded American role in promoting and protecting U.S. interests overseas has imposed a dramatic and often overwhelming burden of work and responsibility on embassy staff. The committee found a common perception at each post that “Washington’s demands for reports, demarches, and other initiatives are numerous, un-prioritized, unrealistic, and insatiable.” The report also noted concerns about the ambassador’s ability to manage embassy staff and resources, noting that several ambassadors had indicated reluctance to challenge staffing levels of non- State agencies. The summary report also endorsed the initiation of separate interagency law enforcement pilot studies that the Attorney General had recommended in April 2000. These studies were intended to determine a methodology for deciding the appropriate type and number of law enforcement personnel to be assigned overseas, and to review the law enforcement policy role and staffing requirements at U.S. diplomatic missions. As part of this pilot, the law enforcement working group visited Mexico City, Bangkok, and Paris. State officials are unclear as to how the results of the working group will eventually affect staffing levels or rightsizing efforts. They noted, however, that law enforcement agencies have significantly increased their presence at a number of overseas posts in recent years. Table 1 summarizes the observations and conclusions for each post contained in the summary report on the pilot studies. Regarding staffing in Paris, the interagency committee’s report noted that the ambassador had testified to the Congress that staff could be significantly reduced, but had not recommended which specific positions should be eliminated. The report recommended that the ambassador identify specific positions for elimination by September 2000. In addition, an informal “lessons learned” paper, prepared by the study team, suggested that staffing in Paris should be the subject of urgent, interagency review with a view toward reducing work demands, privatizing some administrative positions, and moving some functions to the United States. The ambassador who led the pilot study team said that reduction of work demands could be achieved if the White House, through the Office of Management and Budget, established relative policy priorities and questioned, and perhaps overrode, staffing decisions made by individual agencies. The study team also cited examples of work that may not need to be performed in Paris, or that could be privatized, including some translation services and reporting on information available in public sources. In addition, the team noted that there may be ways to reduce the amount of embassy staff time spent in supporting the large number of official visitors. After the pilot studies were completed, the ambassador at the U.S. Embassy in Paris asked headquarters agencies to review workload requirements, with a view toward reducing workload so that rightsizing could take place. In October 2000, State provided guidance to the ambassador on work requirements and priorities for the embassy. In November 2000, the ambassador said that this guidance would not permit him to reduce staff, as it would not be fair to cut staff and ask the remaining staff to take on an undiminished workload. Although the ambassador expressed disappointment in this effort to identify potential workload and staff reductions, he reiterated his position that staff reductions were needed in view of security concerns at the post, and in the interest of achieving operational efficiencies. The concern regarding embassy security in Paris was attributable to the absence of “setback” from public streets, making the embassy highly vulnerable to terrorist attack. According to Department of State officials, the departure of the ambassador in late 2000, the November 2000 U.S. elections, and the change in administrations detracted from follow-up on the potential rightsizing actions in Paris, as well as on the rightsizing committee’s observations and conclusions concerning the other pilot posts. However, the current administration has made the embassy rightsizing process a priority by including it as one of the President’s management initiatives, and it may revisit the observations of the pilot studies as a part of this process. State’s August 2001 Final Report on Implementing the Recommendations of the Overseas Presence Advisory Panel agreed with the recommendations of OPAP to rightsize the overseas presence, rather than with the positions taken in the interagency committee’s report on the pilot studies. State’s final report also stated that the administration will analyze and review overall U.S. government presence and will develop a credible and comprehensive overseas staffing allocation process. However, it did not include a timetable for implementation or indicate whether more reviews of staffing issues at specific posts will be conducted. State’s report mentioned only one specific action taken that would directly affect staff levels at the pilot posts—the relocation of the Paris Regional Financial Service Center to Charleston, South Carolina, proposed by Congress prior to the pilot studies. State did not indicate any additional rightsizing actions taken or planned for the embassy in Paris, nor did it comment on any of the other five pilot posts. On August 25, 2001, the President announced that the rightsizing of embassies and consulates would be one of 14 initiatives in the President’s Management Agenda. The Office of Management and Budget is currently formulating a strategy for leading this initiative. In view of the September 11 terrorist attacks, the rightsizing of embassies and consulates has become more important than ever. Regrettably, the pilot studies conducted in 2000 do not provide a strong basis upon which the administration can pursue rightsizing, as they did not result in a methodology or blueprint for rightsizing around the world. Nevertheless, the studies did suggest that there may be opportunities to reduce embassy size, for example by moving some activities to the United States or to regional centers. If these suggestions prove feasible, their implementation could reduce security vulnerabilities at some overseas posts and could potentially free up resources to meet foreign policy needs elsewhere. We are currently planning work to further examine the suggestions raised by the pilot studies, as well as other issues to be considered as the administration implements the embassy rightsizing initiative. The Director of the Department of State’s Office of Management Policy and Planning, which has overall responsibility for rightsizing initiatives in the department, provided oral comments on a draft of this report. He said that the department agrees with the report’s conclusion and, on the whole, agrees with the report’s observations regarding the pilot studies. He said that the department is working closely with the Office of Management and Budget on rightsizing activities. We contacted officials in the Departments of State, Defense, the Treasury, Justice, and Commerce, and in the USAID, who participated in the interagency rightsizing committee effort, to discuss how the pilot studies, were carried out and the studies’ observations and results. We also obtained internal reports on the studies from some of these agencies. We interviewed Department of State personnel involved in the rightsizing studies, including the former Under Secretary of State for Management; the Director of the Office of Management Policy and Planning, which had responsibility for the pilot studies; and the former ambassador who led the pilot studies in Mexico City, Paris, and Tbilisi, and who was a co-chair for the overall pilot study exercise. We were unable to interview the other co- chair who prepared the June 2000 interagency report summarizing results of the pilot studies, as she is retired and unavailable. To explore the relationship between rightsizing and embassy security in OPAP’s report, we interviewed the Chairman of OPAP. We conducted our review from April to September 2001, in accordance with generally accepted government auditing standards. We are sending copies of this report to interested congressional committees and to the Secretary of State. We will make copies available to others upon request. Please contact me at (202) 512-4128 if you or your staff have any questions about this report. Major contributors to this report are John Brummet and Lynn Moore.

The Department of State is leading an interagency assessment of staffing needs in U.S. embassies and consulates to improve mission effectiveness and reduce security vulnerabilities and costs. This process, called "rightsizing," was begun in response to the recommendations of the Overseas Presence Advisory Panel. In the aftermath of the August 1998 bombings of U.S. embassies in Africa, the Panel determined that overseas staffing levels had not been adjusted to reflect changing missions and requirements; thus, some embassies and consulates were overstaffed, and others were understaffed. The Panel recommended a rightsizing strategy to improve security by reducing the number of embassy staff at risk. The Panel also recommended the establishment of a permanent committee to regularly adjust the U.S. presence, and the adoption of explicit criteria to guide decisions on the size and location of posts. A State-led interagency committee conducted pilot studies at six embassies in 2000 to (1) develop a methodology for assessing staffing at embassies and consulates during the next five years and (2) recommend adjustments to staffing levels at the embassies studied. The interagency committee formed teams that visited U.S. embassies in Amman, Jordan; Bangkok, Thailand; Mexico City, Mexico; New Delhi, India; Paris, France; and Tbilisi, Georgia. The pilot studies did not result in a staffing methodology at all embassies and consulates, as had been anticipated. The interagency committee said that it was impractical to develop explicit criteria for staffing levels at all posts because each post has unique characteristics and requirements. Contrary to the Panel's recommendations, the committee's report also questioned the need for rightsizing and establishing a permanent committee to adjust U.S. presence. The report did recommend the relocation of the regional finance centers in France and Thailand, and it identified instances in which additional study was needed.

The President's authority to issue pardons is delineated in Article II, Section 2, Clause 1 of the Constitution, which states: "The President shall ... have power to grant Reprieves and Pardons for Offences against the United States, except in Cases of Impeachment." This express language itself implies the inherent limits of the pardon power. First, the pardon power is limited to "offenses against the United States," preventing the President from intruding upon state criminal or civil proceedings. Likewise, the pardon power does not extend to "Cases of Impeachment," preventing presidential interference with Congress's power to impeach. Absent these limitations, the President's authority to grant pardons is essentially unfettered. For instance, a pardon may be bestowed at any time after the commission of an offense, irrespective of whether charges have actually been pressed. Also, a pardon may be issued subsequent to conviction and during the service of sentence. Additionally, a pardon may be granted after a sentence has been served, in order to restore the civil rights of the individual in question. Furthermore, the President may also pardon a large group of offenders, as was done subsequent to the Civil War. The establishment of the pardon power in the Constitution was derived from English custom and the view of the Framers that "there may be instances where, though a man offends against the letter of the law ... peculiar circumstances in his case may entitle him to mercy." Further, this power was properly reposed in the President, according to Alexander Hamilton, as "one man appears to be a more eligible dispenser of the mercy of the government, than a body of men." In determining that the President should exercise the pardon power, the Framers further decided that minimal limitations should be placed on the power. For instance, the Framers rejected a proposal that the Senate have consent power over pardons. The Framers likewise rejected James Madison's argument that treason should be excepted. Based upon this broad grant of authority under the Constitution, the courts have traditionally held that the President's pardoning power may not be circumscribed by Congress. In Ex Parte Garland , for instance, the Supreme Court held that the pardon power "is not subject to legislative control. Congress can neither limit the effect of his pardon, nor exclude from its exercise any class of offenders. The benign prerogative of mercy reposed in him cannot be fettered by any legislative restrictions." The Court repeated this maxim in United States v. Klein ("[t]o the executive alone is intrusted the power of pardon; and it is granted without limit"), and again in Ex Parte Grossman ("[t]he executive can reprieve or pardon all offenses ... without modification or regulation by Congress"). Finally, in Schick v. Reed , the Court declared that the President's pardon power "flows from the Constitution alone, not any legislative enactments," and "cannot be modified, abridged, or diminished by the Congress." However, Members of Congress have introduced resolutions expressing the sense of Congress that the President either should or should not grant pardons to certain individuals or groups of individuals. Members of Congress have also proposed constitutional amendments that would restrict the President's pardon power. It appears that the pardon power is generally used to pardon specific offenders for any of a broad range of crimes that might stem from a series of related events. In the case of the pardon of President Nixon, for instance, President Ford issued a pardon "for all offenses ... which he ... has committed or may have committed or taken part in," precluding any prosecution of President Nixon related to the Watergate Scandal. Another high-profile example of broad use of the pardon power is seen in President Bush's pardon of individuals facing charges relating to the Iran-Contra Affair. Specifically, President Bush issued full pardons for six persons who had either pled guilty, been convicted, or were facing trial. While the above examples indicate that pardons are often used to completely absolve a pardonee for his or her illegal act(s), the inherent flexibility of the pardon power also establishes that the President may grant limited or conditional pardons. This is seen primarily in the commutation of sentences, which has been described by the judiciary as an inherent power woven into the President's pardon authority. In Ex parte Wells , for instance, the Supreme Court rejected the argument that the power to pardon did not include the authority to commute, declaring that "the mistake in the argument is, in considering an incident of the power to pardon the exercise of a new power, instead of its being a part of the power to pardon." The Court went on to note that "[t]he power to offer a condition, without ability to enforce its acceptance, when accepted by the convict, is the substitution by himself, of a lesser punishment than the law has imposed upon him, and he cannot complain if the law executes the choice he has made." While the cases discussed above seem to establish conclusively the broad scope of the President's pardoning power, the actual legal effect of executive clemency is less clear. Specifically, courts have disagreed as to whether a pardon erases only the punishment for an offense, or whether a pardon also blots out the existence of an offender's guilt. In United States v. Wilson , for instance, Chief Justice Marshall declared that a pardon "exempts the individual, on whom it is bestowed, from the punishment the law inflicts for a crime he has committed." The Court's initial declaration that a pardon merely remits punishment was repudiated during the Reconstruction era, however. Specifically, in Ex Parte Garland , Chief Justice Field declared that "a pardon reaches both the punishment prescribed for the offense and the guilt of the offender; and when the pardon is full, it releases the punishment and blots out of existence the guilt, so that in the eye of the law the offender is as innocent as if he had never committed the offense. If granted before conviction, it prevents any of the penalties and disabilities consequent upon conviction from attaching; if granted after conviction, it removes the penalties and disabilities, and restores him to all his civil rights; it makes him, as it were, a new man, and gives him a new credit and capacity." This broad interpretation of the pardoning power was subsequently narrowed by the Court in the early part of the 20th Century. In Carlesi v. New York , the Court considered a situation where an individual who had received a presidential pardon was subsequently convicted of forgery in a state court. Upon conviction of the later offense, the individual was sentenced as a second offender, predicated upon the pardoned offense. The Supreme Court approved of the basis for the increased sentence, stating: "... we must not be understood as in the slightest degree intimating that a pardon would operate to limit the power of the United States in punishing crimes against its authority to provide for taking into consideration past offenses committed by the accused as a circumstance of aggravation even although for such past offenses there had been a pardon granted." This view has adhered in the modern era. In Nixon v. United States , for instance, the Court determined that "the granting of a pardon is in no sense an overturning of a judgment of conviction by some other tribunal; it is an executive action that mitigates or sets aside punishment for a crime." This restricted view of the effect of a pardon was further reinforced in two cases stemming from the pardons of officials involved in the Iran-Contra affair. In In re North , the United States Court of Appeals for the District of Columbia held that a pardon did not remove an indictment from a former CIA official's criminal record, precluding the recovery of attorneys fees under the Ethics in Government Act. A similar result was reached in In re Elliott A br ams , where the D.C. Court of Appeals, sitting en banc , held that a pardon did not preclude an individual from being disciplined for professional misconduct. These recent decisions seem to represent an implicit rejection of the sweeping language employed in Garland , in favor of a return to the view that a pardon only nullifies the punishment for an offense, with the underlying guilt remaining in effect. Regarding the legal nature of warrants of pardon and their delivery and acceptance, it appears that pardons must be physically delivered before they become legally effective. In United States v. Wilson , Chief Justice Marshall, writing for the Court, stated: "A pardon is an act of grace, proceeding from the power entrusted with the execution of the laws, which exempts the individual, on whom it is bestowed, from the punishment the law inflicts for a crime he has committed. It is the private, though official act of the executive magistrate, delivered to the individual for whose benefit it is intended ..." The Court further declared: "A pardon is a deed, to the validity of which delivery is essential, and delivery is not complete, without acceptance." Chief Justice Marshall went on to explain that a warrant of pardon must be pleaded like any other private instrument before any court may take judicial notice thereof. This standard was reiterated in Burdick v. United States , where the Court stressed that the contention that pardons have automatic effect by their "mere issue" was rejected in Wilson "with particularity and emphasis." The Court further stressed in Burdick that a pardon may be refused, since its acceptance may involve "consequences of even greater disgrace than those from which it purports to relieve." It also appears that a pardon may be revoked at any time prior to acceptance or delivery. In In re De Puy , the District Court for the Southern District of New York addressed a situation where a pardon issued by President Johnson on March 3, 1869 was revoked on March 6th, 1869 by incoming President Grant. The court held that the pardon had been properly withdrawn, as it had not yet been delivered to the grantee, a person on his behalf, or to the official with exclusive custody and control over him. In an analogous situation, President George W. Bush sent a master warrant of clemency to the Pardon Attorney on December 23, 2008 for 19 individuals. One day later, the President "directed the Pardon Attorney not to execute and deliver" a pardon to one of the individuals, Isaac R. Toussie, a real estate developer who plead guilty to mail fraud and using false documents to receive government-insured mortgages, after it was disclosed that his father had donated $28,500 to the Republican National Committee. Rather, the Pardon Attorney was given an opportunity to review the Toussie case, which had not been reviewed according to Department of Justice regulations, discussed below, or the recipient of a recommendation by the Pardon Attorney on whether to grant clemency. As a practical aid to the consideration of requests for presidential clemency, the Office of the Pardon Attorney is charged with accepting and reviewing applications for clemency, and preparing recommendations as to the appropriate disposition of applications. Pursuant to Department of Justice regulations, a person "seeking executive clemency by pardon, reprieve, commutation of sentence, or remission of fine shall execute a formal petition" addressed to the President and submitted to the Office of the Pardon Attorney in Washington, D.C. These regulations state that a petition for pardon should not be filed "until the expiration of a waiting period of at least five years after the date of the release of the petitioner from confinement or, in case no prison sentence was imposed, until the expiration of a period of at least five years after the date of the conviction of the petitioner." Furthermore, the regulations state that "[g]enerally, no petition should be submitted by a person who is on probation, parole, or supervised release." After a petition for executive clemency is received, an investigation is conducted by employing the services of appropriate governmental agencies, such as the Federal Bureau of Investigation. Subsequently, the Pardon Attorney presents the petition and related material to the Attorney General via the Associate Attorney General, along with a recommendation as to the proper disposition of the petition. In turn, the Attorney General reviews the petition and all related information, and makes the final decision as to whether the petition merits approval or disapproval by the President. This recommendation is then submitted to the President in writing. Pursuant to regulations, the petition for clemency, as well as all "reports, memoranda, and communications submitted or furnished in connection with the consideration" of a petition are generally available only to the officials involved in the proceedings. However, these documents may be made available for whole or partial inspection, where the Attorney General determines that "their disclosure is required by law or the ends of justice." It is important to note that these regulations do not appear to impose rigid restrictions on the Pardon Attorney's ability to consider petitions for pardon, but, rather, are identified as being advisory in nature. Indeed, these regulations have been cited by the courts as being "primarily intended for the internal guidance of the personnel of the Department of Justice." Furthermore, it is important to note that the aforementioned regulations do not have any binding effect, do not create any legally enforceable rights in persons applying for clemency, and do not circumscribe the President's "plenary power under the Constitution to grant pardons and reprieves" to any individual he deems fit, irrespective of whether an application has been filed.

The Constitution of the United States of America imbues the President with broad authority to grant pardons and reprieves for offenses against the United States. This report provides an overview of the scope of the President's pardoning power, the legal effects of a pardon, and the procedures that have traditionally been adhered to in the consideration of requests for pardons. Members of Congress have introduced resolutions expressing the sense of Congress that the President either should or should not grant pardons to certain individuals or groups of individuals, such as H.Res. 9 in the 111th Congress and H.Con.Res. 24, H.Con.Res. 37, and H.Con.Res. 214 from the 110th Congress. Additionally, Members of Congress have also proposed constitutional amendments that would restrict the President's pardon power, such as H.J.Res. 48 from the 110th Congress.

RS20558 -- The Individuals with Disabilities Education Act: Discipline Legislation in the 106th Congress January 12, 2001 IDEA provides federal funds to the states to assist them in providing an education for children with disabilities. As a condition for the receipt of these funds,IDEA contains requirements on the provision of services and detailed due process procedures. In 1997 Congressamended IDEA in the most comprehensive andcontroversial reauthorization since IDEA's original enactment in 1975. One of the most contentious issuesaddressed in the 1997 legislation related to thedisciplinary procedures applicable to children with disabilities. IDEA was originally enacted in 1975 because children with disabilities often failed to receive an education or received an inappropriate education. This lack ofeducation led to numerous judicial decisions, including PARC v. State of Pennsylvania (1) and Mills v. Board of Education of theDistrict of Columbia (2) whichfound constitutional infirmities with the lack of education for children with disabilities when the states wereproviding education for children without disabilities. As a result, the states were under considerable pressure to provide such services and they lobbied Congress to assistthem. (3) Congress responded with the grantprogram still contained in IDEA but also delineated specific requirements that the states must follow in order toreceive these federal funds. The statute providedthat if there was a dispute between the school and the parents of the child with a disability, the child must "stay put"in his or her current educational placementuntil the dispute is resolved. A revised stay put provision remains in IDEA. Issues relating to children with disabilities who exhibit violent or inappropriate behavior have been raised for years and in 1988 the question of whether there wasan implied exception to the stay put provision was presented to the Supreme Court in Honig v. Doe. (4) Although the Supreme Court did not find such animpliedexception, it did find that a ten day suspension was allowable and that schools could seek judicial relief when theparents of a truly dangerous child refuse topermit a change in placement. In 1994, Congress amended IDEA's stay put provision to give schools unilateralauthority to remove a child with a disability to aninterim alternative educational setting if the child was determined to have brought a firearm to school. In 1997 Congress made significant changes to IDEA in P.L. 105-17 and attempted to strike "a careful balance between the LEA's (local education agency) duty toensure that school environments are safe and conducive to learning for all children, including children withdisabilities, and the LEA's continuing obligation toensure that children with disabilities receive a free appropriate public education." (5) This current law does not immunize a child with a disability from disciplinaryprocedures but these procedures may not be identical to those for children without disabilities. In brief, if a childwith a disability commits an action that would besubject to discipline, school personnel have the following options: suspending the child for up to ten days with no educational services provided, conducting a manifestation determination review to determine whether there is a link between the child's disability and the misbehavior. Ifthe child's behavior is not a manifestation of a disability, long term disciplinary action such as expulsion may occur,except that educational services may notcease. If the child's behavior is a manifestation of the child's disability, the school may review the child's placementand, if appropriate, initiate a change inplacement. placing the child in an interim alternative education setting for up to forty five days (which can be renewed) for situations involving weaponsor drugs, and asking a hearing officer to order a child be placed in an interim alternative educational setting for up to forty-five days (which can berenewed) if it is demonstrated that the child is substantially likely to injure himself or others in his currentplacement. School officials may also seek a Honig injunction as discussed previously if they are unable to reach agreement with a student's parents and they feel that the newstatutory provisions are not sufficient. (6) Violence in schools surfaced on the congressional agenda in the 106th Congress with S. 254 , the Violent and Repeat Juvenile Accountability andRehabilitation Act of 1999 which passed the Senate on May 20, 1999, and H.R. 1501 , the Child Safety andProtection Act which passed the House onJune 17, 1999. Both of these bills contained amendments offered on the floor relating to discipline under IDEA. Essentially these amendments would havechanged section 615 of IDEA to eliminate IDEA's different disciplinary procedures for children with disabilitiesin certain situations. In the Senate theamendment applied to children with disabilities who carry or possess a gun or firearm while in the House theamendment would have covered a weapon. TheSenate passed Amendment 355, offered by Senators Frist and Ashcroft, by a vote of 74 to 25. (7) The House passed Amendment 35, offered byRepresentativeNorwood, by a vote of 300 to 128. (8) The legislationwas not enacted. These House and Senate amendments were the subject of emotional debate. The general theme sounded by proponents of the amendments was that recentincidents of gun violence in the schools necessitated the changes in IDEA to allow school officials more control overdiscipline. The opponents of theamendments argued that the discipline provisions in IDEA had been carefully crafted in the 1997 reauthorizationand that the result of the amendments would bemore criminal behavior by depriving children with disabilities who had possessed weapons of supervision andeducational services. (9) Two amendments relating to children with disabilities were offered and accepted during House Education and Workforce Committee markup of H.R. 4141 , 106th Cong. One amendment, offered by Representative Norwood, concerned the disciplineof a child with a disability who carries or possesses a weapon. The other amendment, offered by Representatives Talent, McIntosh and Tancredo, concerned the discipline of achild with a disability who knowingly possessesor uses illegal drugs at school or commits an aggravated assault or battery at school. The amendment offered by Rep. Norwood required that each state that receives funds under the Act shall require each local educational agency to have in effect apolicy which would allow school personnel to discipline a child with a disability who carries or possesses a weaponat school in the same manner in which schoolpersonnel may discipline a child without a disability. This would have included expulsion or suspension and a childwho is suspended or expelled would not havebeen entitled to continue educational services, including the provision of a free appropriate public education(FAPE), if the state does not require a child without adisability to receive educational services after being expelled or suspended. However, a local educational agencymay have chosen to provide educational ormental health services for such a child. If such services are provided, there was no requirement to provide the childwith any particular level of service and thelocation of the services is at the discretion of the local educational agency. School personnel were permitted tomodify the disciplinary action on a case by casebasis. A child with a disability who is disciplined under this amendment would have been able to assert a defense that the carrying or possession of the weapon wasunintentional or innocent. This provision could have helped to address the problem of a child with limited mentalcapacities who had someone place a gun in hisor her backpack; however, the exact implications of this provision are somewhat uncertain since it was not specifiedto whom or when this defense would beasserted. The term weapon was defined as having the meaning given to "dangerous weapon" at 18 U.S.C. �930(g)(2). That definition stated: "The term 'dangerousweapon' means a weapon, device, instrument, material, or substance, animate or inanimate, that is used for, or isreadily capable of, causing death or seriousbodily injury, except that such term does not include a pocket knife with a blade of less than 2 � inches in length." The amendment offered by Representatives Talent, McIntosh and Tancredo required that each state that receives funds under the Act shall require each localeducational agency to have in effect a policy under which school personnel may discipline a child with a disabilityin the same manner as a child without adisability if the child with a disability (1) knowingly possesses or uses illegal drugs or sells or solicits the sale ofa controlled substance at a school, on schoolpremises, or to or at a school function or (2) commits an aggravated assault or battery, as defined under State or locallaw, at a school, on school premises, or to orat a school function. Like the amendment offered by Representative Norwood, this amendment would have includedexpulsion or suspension and a child who issuspended or expelled would not have been entitled to continue educational services, including FAPE, if the statedoes not require a child without a disability toreceive educational services after being expelled or suspended. However, a local educational agency may havechosen to provide educational or mental healthservices for such a child. If such services are provided, there was no requirement to provide the child with anyparticular level of service and the location of theservices was at the discretion of the local educational agency. School personnel were permitted to modify thedisciplinary action on a case by case basis. As with the Norwood amendment, a child with a disability who is disciplined under this amendment would have been able to assert a defense that the possessionor use of the illegal drugs, or the sale or solicitations of the controlled substance, was unintentional or innocent. This provision could have helped to address theproblem of someone placing drugs in the backpack of a child with limited mental capacities; however, the exactimplications of this provision were somewhatuncertain since it was not specified to whom or when this defense would be asserted. The amendment did notprovide for any similar defense for an allegation ofaggravated assault or battery. The definition of controlled substance was the same as the definition in section 4141 of H.R. 4141 . This section states that the term controlledsubstance "means a drug or other substance identified under Schedule I, II, III, or IV, or V in section 202(c) of theControlled Substances Act (21 U.S.C.�812(c))." Illegal drug "means a controlled substance, but does not include such a substance that is being legallypossessed or used under the supervision of alicensed health-care professional or that is legally possessed or used under any other authority under the ControlledSubstances Act or under any other provision ofFederal law." These amendments were not enacted.

Although Congress described its 1997 changes to discipline provisions in theIndividuals with Disabilities EducationAct (IDEA) as a "careful balance," it was not long before amendments to change the provisions surfaced. In 1999the Senate passed S. 254, 106thCong., the Violent and Repeat Juvenile Accountability and Rehabilitation Act of 1999, and the House passedH.R. 1501, 106th Cong., the ChildSafety and Protection Act, both of which contained amendments to IDEA. These amendments would have changedsection 615 of IDEA to eliminate IDEA'sdifferent disciplinary procedures for children with disabilities in certain situations. In the Senate the amendmentapplied to children with disabilities who carry agun or firearm while in the House the amendment would cover a weapon. These amendments were not enacted. Two amendments relating to children with disabilities were offered and accepted during House Education andWorkforce Committee markup of H.R. 4141, 106th Cong., the Elementary and Secondary Education Act Amendments. One amendment, offered byRepresentative Norwood, concerned the discipline ofa child with a disability who carries or possesses a weapon. The other amendment, offered by RepresentativesTalent, McIntosh and Tancredo, concerned thediscipline of a child with a disability who knowingly possesses or uses illegal drugs at school or commits anaggravated assault or battery at school. Theseamendments were not enacted. This report will be updated as appropriate. For a more detailed discussion of the due process provisions inIDEA see CRS Report 98-42, Individuals withDisabilities Education Act: Discipline Provisions in P.L. 105-17, by [author name scrubbed].

The basic antitrust law is § 1 of the Sherman Act (15 U.S.C. § 1), which prohibits contracts and conspiracies in restraint of trade. Although most alleged restraints are analyzed pursuant to the rule of reason, some categories of anticompetitive activity (e.g., price fixing, joint refusals to deal, tying the purchase of a desired commodity to the purchase of a less-desired commodity) have, over the years, been deemed automatically to violate § 1 as per se offenses because "the effect and ... purpose of the practice are to threaten the proper operation of a predominantly free-market economy." As the antitrust laws are not industry-specific, whether an entity is subject to the strictures of the antitrust laws depends on whether, and under what circumstances, Congress has specifically exempted an industry or activity. Where Congress has been silent, however, the courts have created the doctrine of "implied immunity" to cover situations in which the application of the antitrust laws would be contrary to an expressed public policy or could subject entities to possibly conflicting mandates. The Supreme Court has been generally unreceptive to arguments in favor of implied antitrust immunity (i.e., that inferred, with respect to a member of a regulated industry, from the mere fact that Congress has given regulatory jurisdiction over an industry to a federal agency; or, with respect to those acting in purported furtherance of a congressional statute, from the mere existence of the legislative pronouncement), except in instances where "there is a plain repugnance" between the antitrust laws and the regulatory scheme or statutorily expressed preference. As the Court put it in Silver v. New York Stock Exchange , the problem arises from the need to reconcile pursuit of the antitrust aim of eliminating restraints on competition with the effective operation of a public policy contemplating [certain activity] which may well have anti-competitive effects in general and in specific applications. 373 U.S. 341, 349 (1963). Distillation of the Court's previous jurisprudence on implied immunity from the antitrust laws—especially that concerning the securities industry—has yielded several still-valid guidelines for determining whether a particular practice will be protected. In Silver , supra , the practice at issue was the Exchange's disconnection of a broker's private wire service, which service he alleged was critical to his ability to profitably do business. Because the Court found the manner in which the Exchange and its members carried out their collective refusal to deal to be "fundamentally unfair," it decided that "the Exchange ha[d] plainly exceeded the scope of its authority under the Securities Exchange Act to engage in self-regulation and ha[d] not even reached the threshold of justification under that statute for what would otherwise be an antitrust violation." Moreover, since the SEC could exercise no regulatory supervision over the application of the Exchange rules that permitted or required wire-service termination, there was no potential for conflict between the securities regulatory scheme and enforcement of the antitrust laws. Therefore, implied immunity was not available, and the actions were amenable to prosecution under § 1 of the Sherman Act (15 U.S.C. § 1). Gordon v. New York Stock Exchange involved an antitrust challenge to the system of fixed commission rates for securities transactions of less than $500,000. There, because there had been a time when "[t]he antitrust law had forbidden the very thing that the securities law had then permitted, namely an anticompetitive rate setting process," the Court determined that immunity was required in order to make the securities market scheme (and the SEC's specifically authorized supervision of stock exchange commission rates) work. As the Court explained: [T]o deny antitrust immunity with respect to commission rates would be to subject the exchanges and their members to conflicting standards. 422 U.S. at 689. The third major Supreme Court securities/antitrust decision was U.S. v. National Association of Securities Dealers ( NASD ). In that instance, the Court looked at challenged price restrictions imposed on the sale and transfer of mutual fund shares in the secondary market (i.e., the market for transactions occurring after the initial sale of the shares). It concluded that because the purpose of the Investment Company Act was to "restrict most of secondary market trading," it had to reject the Government's too-literal reading of the applicable section of the act and find instead that the agreements in question were immune as "among the kinds of restrictions Congress contemplated when it enacted that section." Moreover, even though the SEC had not prescribed any rules or regulations concerning the restrictions, it had the power to do so: [Although t]he Government also urges that the SEC's unexercised power ... is insufficient to create repugnancy between its regulatory authority and the antitrust laws ... we see no way to reconcile the Commission's power to authorize these restrictions with the competing mandate of the antitrust laws. 422 U.S. at 721, 722. The Securities and Exchange Commission administers a comprehensive body of securities regulation statutes, including the Securities Act of 1933 (15 U.S.C. §§ 77a et seq. ), and the Securities Exchange Act of 1934 (15 U.S.C. §§ 78a et seq. ). The typical manner in which investment securities are offered to the public first involves underwriting services offered by an underwriting firm to an issuer of securities. The most common delivery of those services has been said to be by "firm-commitment agreements." In such an agreement the underwriter agrees that on a fixed date the issuer will be given a certain amount of money for a certain amount of its securities. Such an agreement removes the uncertainty of an early cash infusion for the issuer and transfers the risk of selling the issue to the underwriter. In the first half of the twentieth century, syndicates, consisting of a few to many underwriting firms, emerged to manage many of the risks that underwriters assume. A syndicate often buys the entire new issue of the securities at a fixed price and then reoffers it to the public at a somewhat higher predetermined price. The price difference is in effect a kind of commission for the syndicate. These principal underwriters often contact other brokers or underwriters who act as wholesalers of the securities. The issuer and the underwriters often agree on the size and the pricing of the offering. Credit Suisse gave the Court the opportunity—not exercised since 1981 —to reiterate and apply its previously stated standards for granting implied antitrust immunity. An antitrust suit (originally a class action) was filed by a group of IPO purchasers against the underwriters of those issues (10 major investment banks) alleging conspiracy, price fixing-related, and tying violations of § 1 of the Sherman Act. The particular, allegedly harmful practices included (1) required investor promises to place bids in the aftermarket at prices above the initial public offering price, referred to as "laddering"; (2) required investor commitments to purchase other, less attractive securities, a kind of tying arrangement; and (3) investor payment of excessive commissions. These requirements, according to the investors, artificially inflated the share prices of the securities and constituted per se price fixing. At first glance, this system of agreement by the issuer and all of the major underwriters of size and pricing of the offering does appear, in fact, to be antitrust-violative price manipulation. However, not all underwriter manipulations have been prohibited. A "little price manipulation" has been permitted in order to further appropriate market goals. The Securities and Exchange Commission has traditionally recognized certain types of manipulative activities, considered "stabilizing" activities, as permissible under § 9(a)(6) of the Securities Exchange Act and SEC Rule 10b-1. In fact, the Court itself indicated that the complaint was an attack not on the existence of the SEC-approved joint IPO activity, but rather, the abuse of that activity. The Court, in an opinion authored by Justice Breyer, began its analysis of the availability of implied antitrust immunity in this instance by noting that all of the challenged activities meet the basic prerequisite for implied antitrust immunity in the regulated securities industry: they are "central to the proper functioning of well-regulated capital markets." Further, the SEC has, and has exercised, its specific authority to supervise those activities. Moreover, injured investors are specifically authorized to recover damages, and have successfully sued under the securities statutes, for violation of applicable SEC regulations "for conduct virtually identical to the conduct at issue here." Further, the Court observed, the challenged practices all seemed to describe "conditions that the investors apparently were willing to accept in order to obtain an allocation of new shares that were in high demand." Continuing, the opinion noted the variously nuanced SEC decisions concerning, for example, commissions and future sales, and "laddering," the Court observing that it would "often be difficult for someone who is not familiar with accepted syndicate practices to ... distinguish what is forbidden from what is allowed"—the more so because "evidence tending to show unlawful antitrust activity and evidence tending to show lawful securities marketing activity may overlap." Further, since antitrust challenges to securities-marketing activities could be brought "throughout the Nation in dozens of different courts with different nonexpert judges," the decision to defer to the SEC's expertise seemed only logical. We believe it fair to conclude that, where conduct at the core or the marketing of new securities is at issue; where securities regulators proceed with great care to distinguish the encouraged and permissible from the forbidden; where the threat to antitrust lawsuits, through error and disincentive, could seriously alter underwriter conduct in undesirable ways, to allow an antitrust lawsuit would threaten serious harm to the efficient functioning of the securities markets. 127 S.Ct. at 2396. Given (1) Congress's expressed concern that securities markets become and remain stable, (2) the continued oversight and actions of a single expert regulatory agency versus the probability of diverse and possibly conflicting decisions by nonexpert judges in the event of securities/antitrust lawsuits, and (3) the likelihood of conflict between the mandates of antitrust law and allowable activities under the securities laws, the Court found that "the securities laws are 'clearly incompatible' with the application of the antitrust laws." Accordingly, implied immunity from prosecution under the antitrust laws is accorded to participants in securities markets. Justice Stevens concurred separately to emphasize that, in his opinion, neither the incompatibility between the antitrust and securities laws, nor the question of implied antitrust immunity for regulated entities should have been the issue. In my view, agreements among underwriters on how best to market IPOs, including agreements on price and other terms of sale to initial investors, should be treated as procompetitive joint ventures for purposes of antitrust analysis. In all but the rarest of cases, they cannot be conspiracies in restraint of trade within the meaning of § 1 of the Sherman Act .... 127 S.Ct. at 2398. Justice Thomas's dissent found fault with the Court's assertion that the securities acts were silent on whether the antitrust laws should be applicable to entities in the securities industry. He noted that both the Securities Act of 1933 and the Securities and Exchange Act of 1934 state, in "savings clauses," that their remedies "shall be in addition to any and all other rights and remedies that may exist at law or in equity": Therefore, both statutes explicitly save the very remedies the Court holds to be impliedly precluded. 127 S.Ct. at 2399.

In Credit Suisse Securities v. Billing, the Supreme Court examined whether entities in a heavily regulated industry are necessarily entitled to immunity from prosecution under the federal antitrust laws simply by virtue of their regulated status. The Court had previously ruled that, absent a specific congressional mandate, such immunity may be granted only by findings either of "clear repugnance" between the regulatory scheme and enforcement of the antitrust laws, or sufficiently pervasive regulation of an industry as would be disrupted by application of the antitrust laws; the Credit Suisse opinion reaffirms that reasoning. A class of securities investors alleged that they had paid artificially inflated prices for certain securities because of purportedly antitrust-violative actions taken by the underwriters of some initial public offerings (IPOs). The challenged practices included the formation of syndicates; requiring purchasers of IPOs to make future purchases ("laddering"); and requiring purchasers to buy other, less desirable securities ("tying"). In response, defendants/appellants asserted that they were immune to prosecution under the antitrust laws because of the pervasive regulation of the securities industry by the Securities and Exchange Commission (SEC), which administers a comprehensive system of regulation including major parts of the Securities Act of 1933 and the Securities Exchange Act of 1934. The SEC, they argued, should be the sole arbiter of the validity of their actions, notwithstanding that Congress had not expressly so provided in the applicable legislation. Although the district court, which agreed with the underwriters, dismissed the case, the United States Court of Appeals for the Second Circuit reversed after a lengthy discussion of Supreme Court case law in the area. The Supreme Court reversed the court of appeals, accepting the "pervasive regulation of the securities industry" argument. Specifically, it found that the conduct at issue was "at the core of marketing new securities," noted that "securities regulators proceed with great care to distinguish the encouraged and permissible from the forbidden," and concluded, therefore, "that the securities laws are 'clearly incompatible with the application of the antitrust laws in this context." This report will not be updated.

The U.S. Refugee Admissions Program (USRAP), which is managed by the Department of State (DOS), resettles refugees from around the world in the United States. Under U.S. law, a refugee is a person fleeing his or her country because of persecution or a well-founded fear of persecution on account of race, religion, nationality, membership in a particular social group, or political opinion. Once a refugee case is approved for U.S. resettlement, the USRAP determines where in the country the refugee(s) will be resettled. This determination is made through DOS's Reception and Placement Program (R&P), which provides initial resettlement services to arriving refugees. The placement of refugees, especially Syrians, in the United States has been highly controversial in recent years. Some states have attempted to stop the resettlement of Syrian refugees within their borders. In his March 6, 2017, executive order, "Protecting The Nation From Foreign Terrorist Entry Into The United States," President Trump expressed support for greater state and local government involvement in the placement of refugees: The Secretary of State shall examine existing law to determine the extent to which, consistent with applicable law, State and local jurisdictions may have greater involvement in the process of determining the placement or resettlement of refugees in their jurisdictions, and shall devise a proposal to lawfully promote such involvement. The Refugee Act of 1980 amended the Immigration and Nationality Act (INA) to establish a process for refugee admissions and authorize federal assistance to resettle refugees in the United States. The latter provisions established the Office of Refugee Resettlement (ORR) in the Department of Health and Human Services (HHS) and authorized various forms of refugee resettlement assistance, including a program for initial resettlement of refugees in the United States. The Refugee Act gave the President the authority to determine whether this initial resettlement program should be administered by ORR or another office; DOS had previously been responsible for initial refugee resettlement. President Jimmy Carter subsequently determined that DOS should retain administration of this program, known as the Reception and Placement Program. Each year, DOS's Bureau of Population, Refugees, and Migration (PRM) requests proposals from public and private nonprofit organizations that are interested in providing services and assistance to refugees under the R&P Program; PRM enters into a cooperative agreement with each successful applicant. The organizations, sometimes referred to as voluntary agencies, maintain nationwide networks of local affiliates to provide services to refugees. The services include pre-arrival services (e.g., placement); reception upon arrival in the United States; basic needs support (e.g., housing, furnishings, food, and clothing) for at least 30 days; and help accessing health, employment, education, and other services, as needed. The R&P Program primarily serves aliens who are admitted to the United States as refugees, but others, such as Iraqi and Afghan special immigrants, may also receive benefits. Decisions about which R&P agencies will resettle particular approved refugee cases are made at weekly meetings in which resettlement agency representatives review biographic and other information about incoming refugees. As part of the "sponsorship assurance" process, an agency agrees to assume responsibility for a refugee case and provide required R&P services. A refugee with relatives or close friends in the United States will likely be resettled near them. "Otherwise, the resettlement agency that agrees to sponsor the case decides on the best match between a community's resources and the refugee's needs." With some exceptions, refugees with U.S. ties are placed within 100 miles of, and within the same state as, the local affiliate providing them with R&P services. Refugees without U.S. ties must be placed within 50 miles of, and within the same state as, their local affiliate. As of May 31, 2017, in FY2017, refugee arrivals have been placed in the District of Columbia and every state except Wyoming. In FY2016, the only states with no refugee placements were Delaware and Hawaii. (See Appendix for refugee placement data for FY2011-FY2017.) Regardless of their initial placement location, however, refugees in the United States are free to relocate. The movement from the placement location to another area is known as secondary migration. The INA provisions on refugee resettlement assistance set requirements for the R&P Program's placement process. Under these provisions, t he ORR director and the agency administering the R &P P rogram ( that is, PRM ) are directed to consult at least quarterly with state and local governments and nonprofit resettlement agencies about the intended distribution of refugees. The ORR director is further tasked with developing and implementing, in consultation with the resettlement agencies and state and local governments, policies for the placement and resettlement of refugees in the United States. To the extent practicable, these policies are to insure that an arriving refugee is not placed in an area that is highly impacted by refugees unless the new arrival has close family in the area; provide for local affiliates of resettlement agencies to meet at least quarterly with state and local governments to plan and coordinate the appropriate placement of arriving refugees in the states and localities; and consider the proportion of refugees in the local population; the availability of employment, affordable housing, and other resources for refugees in the area; the likelihood of refugees becoming self-sufficient; and the likely secondary migration of refugees to and from the area. In addition, the agency administering the R&P Program is directed to consider the recommendations of a state in determining where to place refugees within that state. As part of PRM's annual R&P Program request for proposals, each current R&P agency and new applicant is required to provide data and narrative information about the agency and its affiliates. The FY2017 R&P request for proposals included the following criteria for evaluating the placement portion of the proposals: Documented local affiliate ability to provide quality, language-appropriate reception and placement services for arriving refugees of diverse backgrounds. Explanation of how the applicant will respond to an increased or decreased resettlement need while ensuring the required level of service to all refugees. Evidence of community support for local affiliates and for the refugee program. Documented contributions of significant private resources to the R&P Program at the local level. Additional documentation is required when an applicant is proposing to establish a new resettlement site: Prior to proposing a new site, applicants must consult with stakeholders in the proposed new site. The rationale should document all such community consultations, including what topics were discussed, who was consulted, when meetings were held, and the outcome of the discussions. Participation shall include, at minimum, representation from the following offices: state refugee coordinator; state refugee health coordinator; local governance (city and/or county, as applicable); local and/or county public health, welfare, and social services; and public education. In these consultations, applicants shall discuss the size and scope of the proposed program, and the participant stakeholders' abilities to adequately receive and serve the proposed caseload. Under the R&P Program, as noted, initial resettlement services are provided to newly arriving refugees by a local affiliate of one of the participating resettlement agencies. Thus, as a general matter, refugees are not resettled in states that do not have any local affiliates or in parts of states that do not have local affiliates within an allowable distance (see " Placement of Refugees "). Special arrangements, however, may be made by the R&P Program in cases in which an arriving refugee has family or close friends who live more than 100 miles from the nearest R&P affiliate within the same state. In these cases, known as remote placement cases, the R&P Program can arrange for a social service agency or other organization located in the general area where the family or friends live to assist in providing R&P services to the refugee. As of the date of this report, two states—Wyoming and Mississippi—have no local affiliates, but refugees can still be resettled in these states through the remote placement process. The resettlement agencies participating in the R&P Program provide initial resettlement services using a combination of R&P Program funds and contributions from other sources. Table 1 shows obligated funds for the Reception and Placement Program since FY2011. This funding includes a per refugee grant, which is provided to the local affiliate resettling the refugee. For FY2017, the per-refugee grant is $2,075. Of this total, $1,125 must be used for direct support of refugees and $950 is available to the local affiliate to spend on its staff and infrastructure . This table shows the number of refugee arrivals that were initially placed in each state, the District of Columbia, and Puerto Rico during fiscal years 2011 through 2017 (as of May 31, 2017). It does not show the total refugee population in each state in each year. The total for each column represents the total number of refugee admissions to the United States in the corresponding year.

The U.S. Refugee Admissions Program (USRAP), which is managed by the Department of State (DOS), resettles refugees from around the world in the United States. Once a refugee case is approved for U.S. resettlement, the USRAP determines where in the country the refugee(s) will be resettled. This determination is made through DOS's Reception and Placement Program (R&P), which provides initial resettlement services to arriving refugees. R&P initial resettlement assistance is separate from longer-term resettlement assistance provided through the Department of Health and Human Services' (HHS) Office of Refugee Resettlement (ORR). Each year, DOS's Bureau of Population, Refugees, and Migration (PRM) requests proposals from public and private nonprofit organizations that are interested in providing services and assistance to refugees under the R&P Program. It then enters into a cooperative agreement with each successful applicant. The organizations, sometimes referred to as voluntary agencies, maintain nationwide networks of local affiliates to provide services to refugees. The services include pre-arrival services (e.g., placement); reception on arrival in the United States; basic needs support (e.g., housing, furnishings, food, and clothing) for at least 30 days; and help accessing health, employment, education, and other services, as needed. Funding comes from the R&P Program and contributions from other sources. Decisions about which R&P agencies will resettle particular approved refugee cases are made at weekly meetings in which representatives of the resettlement agencies review biographic and other information about incoming refugees. As part of the "sponsorship assurance" process, an agency agrees to assume responsibility for a refugee case and provide required R&P services. Once refugees are in the United States, however, they do not have to remain in their initial placement area. They can relocate at any time. The R&P Program is subject to a set of statutory requirements. Regarding the placement process, the ORR director and the agency administering the R&P Program are required to consult regularly with state and local governments and resettlement agencies about the intended distribution of refugees among the states and localities. The agency administering the R&P Program is further required to consider the recommendations of the state in determining where to place refugees within a state. As of May 31, 2017, in FY2017, refugee arrivals have been placed in the District of Columbia and every state except Wyoming. In FY2016, the only states with no refugee placements were Delaware and Hawaii.

The ability to accurately and reliably measure pollutant concentrations is vital to successfully implementing GLI water quality criteria. Without this ability, it is difficult for states to determine if a facility’s discharge is exceeding GLI water quality criteria and if a discharge limits are required. For example, because chlordane has a water quality criterion of 0.25 nanograms per liter but can only be measured down to a level of 14 nanograms per liter, it cannot always be determined if the pollutant is exceeding the criterion. As we reported in 2005, developing the analytical methods needed to measure pollutants at the GLI water quality criteria level is a significant challenge to fully achieving GLI goals. Although methods have been developed for the nine BCCs for which GLI water quality criteria have been established, EPA has only approved the methods to measure mercury and lindane below GLI’s stringent criteria levels. Analytical methods for the other BCCs either have not received EPA approval or cannot be used to reliably measure to GLI criteria levels. Once EPA approves an analytical method, Great Lakes states are able to issue point source permits that require facilities to use that method unless the EPA region has approved an alternative procedure. According to EPA officials, specific time frames for developing and approving methods that measure to GLI criteria have not yet been established. EPA officials explained that developing EPA-approved methods can be a time- consuming and costly process. Table 1 shows the status of the methods for the nine BCCs. As we reported in 2005, if pollutant concentrations can be measured at or below the level established by GLI water quality criteria, enforceable permit limits can be established on the basis of these criteria. The Great Lakes states’ experience with mercury illustrates the impact of sufficiently sensitive measurement methods on identifying pollutant discharges from point sources. Methods for measuring mercury at low levels were generally not available until EPA issued a new analytical method in 1999 to measure mercury concentrations below the GLI water quality criterion of 1.3 nanograms per liter of water. This more sensitive method disclosed a more pervasive problem of high mercury levels in the Great Lakes Basin than previously recognized and showed, for the first time, that many facilities had mercury levels in their discharges that were exceeding water quality criteria. Since this method was approved, the number of permits with discharge limits for mercury rose from 185 in May 2005 to 292 in November 2007. Moreover, EPA and state officials are expecting this trend to continue. As EPA officials explained, it may take up to two permit cycles—permits are generally issued for 5-year periods—-to collect the monitoring data needed to support the inclusion of discharge limits in permits. EPA officials are expecting a similar rise in permits with discharge limits for polychlorinated biphenyls (PCBs) when detection methods are approved. Permit flexibilities often allow facilities’ discharges to exceed GLI water quality criteria. These flexibilities can take several forms, including the following: Variance. Allows dischargers to exceed the GLI discharge limit for a particular pollutant specified in their permit. Compliance schedule. Allows dischargers a grace period of up to 5 years in complying with a permitted discharge limit. Pollutant Minimization Program (PMP). Sets forth a series of actions by the discharger to improve water quality when the pollutant concentration cannot be measured down to the water quality criterion. A PMP is often used in conjunction with a variance. Mixing Zone. Allows dischargers to use the areas around a facility’s discharge pipe where pollutants are mixed with cleaner receiving waters to dilute pollutant concentrations. Within the mixing zone, concentrations of pollutants are generally allowed to exceed water quality criteria as long as standards are met at the boundary of the mixing zone. This flexibility expires in November 2010 with some limited exceptions. These flexibilities are generally only available to permit holders that operated before March 23, 1997, and are in effect for 5 years or the length of the permit. GLI allows states to grant such permit flexibilities under certain circumstances, such as when the imposition of water quality standards would result in substantial and widespread economic and social impacts. Table 2 shows the number and type of BCC permit flexibilities being used as of November 2007 in the Great Lakes Basin for mercury, PCBs, and dioxin, as well as BCC discharge limits contained in permits. According to EPA and state officials, in many cases, facilities cannot meet GLI water quality criteria for a number of reasons, such as technology limitations, and the flexibilities are intended to give the facility time to make progress toward meeting the GLI criteria. With the exception of compliance schedules, the GLI allows for the repeated use of these permit flexibilities. As a result, EPA and state officials could not tell us when the GLI criteria will be met. In our 2005 report, we described several factors that were undermining EPA’s ability to ensure progress toward achieving consistent implementation of GLI water quality standards. To help ensure full and consistent implementation of the GLI and to improve measures for monitoring progress toward achieving GLI’s goals, we made a number of recommendations to the EPA Administrator. EPA has taken some actions to implement the recommendations contained in our 2005 report, as the following indicates: Ensure the GLI Clearinghouse is fully developed. We noted that EPA’s delayed development of the GLI Clearinghouse—a database intended to assist the states in developing consistent water quality criteria for toxic pollutants—was preventing the states from using this resource. To assist Great Lakes states in developing water quality criteria for GLI pollutants, we recommended that EPA ensure that the GLI Clearinghouse was fully developed, maintained, and made available to Great Lakes states. EPA launched the GLI Clearinghouse on its Web site in May 2006 and in February 2007, EPA Region 5 provided clearinghouse training to states. The clearinghouse currently contains criteria or toxicity information for 395 chemicals. EPA officials told us that the clearinghouse is now available to the states so they can independently calculate water quality criteria for GLI pollutants. EPA officials told us that some states, including Ohio, Wisconsin, and Illinois, plan on updating their water quality standards in the near future and believe that the clearinghouse will benefit them as well as other states as they update their standards. Gather and track information to assess the progress of GLI implementation. In 2005, we reported that EPA’s efforts to assess progress in implementing the GLI and its impact on reducing point source discharges have been hampered by lack of information on these discharges. To improve EPA’s ability to measure progress, we recommended that EPA gather and track information on dischargers’ efforts to reduce pollutant loadings in the basin. EPA has begun to review the efforts and progress made by one category of facilities— municipal wastewater treatment facilities—to reduce their mercury discharges into the basin. However, until EPA develops additional sources of information, it will not have the information needed to adequately assess progress toward meeting GLI goals. Increase efforts to resolve disagreements with Wisconsin. Although we found that the states had largely completed adoption of GLI standards, EPA had not resolved long-standing issues with Wisconsin regarding adoption and implementation of GLI provisions. To ensure the equitable and timely implementation of GLI by all the Great Lakes states, we recommended that that the EPA Administrator direct EPA Region 5, which is responsible for Wisconsin, to increase efforts to resolve disagreements with the state over inconsistencies between the state’s and the GLI’s provisions. Wisconsin officials believe the GLI provisions are not explicitly supported by Wisconsin law. Subsequently, EPA and Wisconsin officials have held discussions on this matter, and neither Wisconsin nor EPA officials believe that these disagreements are significantly affecting GLI implementation. However, they have been unable to completely resolve these issues. We found that similar issues have also surfaced with New York. Issue a permitting strategy for mercury. Because we found that Great Lakes’ states had developed inconsistent approaches for meeting the GLI mercury criterion, including differences in the use of variances, we recommended that EPA issue a permitting strategy to ensure a more consistent approach. EPA disagreed with this recommendation, asserting that a permitting strategy would not improve consistency. Instead, the agency continued to support state implementation efforts by developing guidance for PMPs, evaluating and determining compliance, and assessing what approaches are most effective in reducing mercury discharges by point sources. One such effort is EPA Region 5’s review of mercury PMP language in state-issued permits for wastewater treatment facilities. This review resulted in recommendations to the states in May 2007 to improve the enforceability and effectiveness of PMP provisions. However, additional efforts will be needed to ensure consistency at other types of facilities, such as industrial sites, across the Great Lakes states. In closing, Madam Chairwoman and Members of the Subcommittee, although progress has been made with mercury detection and increased knowledge of wastewater treatment facilities’ pollutant discharges to the Great Lakes, information is still lacking on the full extent of the problem that BCCs pose in the Great Lakes. As methods are developed to determine whether facilities’ discharges for other BCCs meet GLI criteria and EPA approves them, and as more permits include discharge limits, more information will be available on pollutant discharges in the basin. Even with these advances, however, extensive use of permit flexibilities could continue to undercut reductions in pollution levels and the ultimate achievement of GLI’s goals. This concludes my prepared statement. I would be happy to respond to any questions that you or Members of the Subcommittee 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 statement. For further information about this testimony, please contact David Maurer at (202) 512-3841 or maurerd@gao.gov. Key contributors to this testimony were Greg Carroll, Katheryn Summers Hubbell, Sherry L. McDonald, and Carol Herrnstadt Shulman. Other contributors included Jeanette Soares and Michele Fejfar. 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.

Millions of people in the United States and Canada depend on the Great Lakes for drinking water, recreation, and economic livelihood. During the 1970s, it became apparent that pollutants discharged into the Great Lakes Basin from point sources, such as industrial and municipal facilities, or from nonpoint sources, such as air emissions from power plants, were harming the Great Lakes. Some of these pollutants, known as bioaccumulative chemicals of concern (BCC), pose risks to fish and other species as well as to the humans and wildlife that consume them. In 1995, the Environmental Protection Agency (EPA) issued the Great Lakes Initiative (GLI). The GLI established water quality criteria to be used by states to establish pollutant discharge limits for some BCCs and other pollutants that are discharged by point sources. The GLI also allows states to include flexible permit implementation procedures (flexibilities) that allow facilities' discharges to exceed GLI criteria. This testimony is based on GAO's July 2005 report, Great Lakes Initiative: EPA Needs to Better Ensure the Complete and Consistent Implementation of Water Quality Standards (GAO-05-829) and updated information from EPA and the Great Lakes states. This statement addresses (1) the status of EPA's efforts to develop and approve methods to measure pollutants at the GLI water quality criteria levels, (2) the use of permit flexibilities, and (3) EPA's actions to implement GAO's 2005 recommendations. As GAO reported in 2005, developing the sensitive analytical methods needed to measure pollutants at the GLI water quality criteria level is a significant challenge to achieving GLI's goals. Of the nine BCCs for which criteria have been established, only two--mercury and lindane--have EPA-approved methods that will measure below those criteria levels. Measurement methods for the other BCCs are either not yet approved or cannot reliably measure to GLI criteria. Without such measurement, it is difficult for states to determine whether a facility is exceeding the criteria and if discharge limits are required in the facility's permit. As methods become available, states are able to include enforceable discharge limits in facilities' permits. For example, since EPA approved a more sensitive method for mercury in 1999, the number of permits with mercury limits has increased from 185 in May 2005 to 292 in November 2007. EPA and state officials expect this trend to continue. Similar increases may occur as more sensitive analytical methods are developed and approved for other BCCs. Flexibilities included in permits allow facilities' discharges to exceed GLI water quality criteria. For example, one type of flexibility--variances--will allow facilities to exceed the GLI criteria for a pollutant specified in their permits. Moreover, the GLI allows the repeated use of some of these permit flexibilities, and does not set a time frame for facilities to meet the GLI water quality criteria. As a result, EPA and state officials do not know when the GLI criteria will be met. In the 2005 report, GAO made a number of recommendations to EPA to help ensure full and consistent implementation of the GLI and to improve measures for monitoring progress toward achieving GLI's goals. EPA has taken some actions to implement the recommendations. For example, EPA has begun to review the efforts and progress made by one category of facilities--municipal wastewater treatment plants--to reduce their mercury discharges into the basin. However, until EPA gathers more information on the implementation of GLI and the impact it has had on reducing pollutant discharges from point sources, as we recommended, it will not be able to fully assess progress toward GLI goals.

Increasing pressures on the quantity and quality of available water supplies are raising interest in—and concern about—changing operations at Corps facilities to meet municipal and industrial (M&I) demands. Corps M&I reallocations at Lake Lanier (GA) are central to an ongoing tri-state conflict involving Alabama, Florida, and Georgia. Furthermore, the agency is studying whether to reallocate storage to M&I use at dams in numerous states (e.g., Colorado, Kentucky, and Georgia), and Corps data indicate that more reallocation requests are forthcoming. A reallocation embodies tradeoffs; shifting storage to M&I use from a currently authorized purpose (e.g., hydropower or navigation) changes the types of benefits produced by a dam and the stakeholders served. The federal role in M&I water supply development is constrained, with states and local entities having the prominent role. Congress recognized state primacy in developing M&I supplies in the Water Supply Act of 1958 (1958 WSA; P.L. 85-500; 72 Stat. 319; 43 U.S.C 390b) as follows: It is hereby declared to be the policy of the Congress to recognize the primary responsibilities of the States and local interests in developing water supplies for domestic, municipal, industrial, and other purposes and that the Federal Government should participate and cooperate with States and local interests in developing such water supplies in connection with the construction, maintenance, and operation of Federal navigation, flood control, irrigation, or multiple purpose projects. Therefore, although the federal government has made significant investments in water resources infrastructure, these investments primarily have been to support flood control, navigation, irrigation, multipurpose dams (including hydropower), and diversion facilities. The largest federal projects were constructed by the Department of the Interior's Bureau of Reclamation under the Reclamation Act of 1902 and subsequent project authorizations known as Reclamation Law, and by the Department of Defense's Army Corps of Engineers (hereafter referred to as the Corps) through myriad Rivers and Harbors, Flood Control, and Water Resources Development Act (WRDA) legislation. Since the 1960s, construction of large federal dams has slowed markedly, in response to their high cost, their ecological and social impacts, and the availability of appropriate sites. Reservoir planning in recent decades largely has focused on balancing competing objectives in operating existing reservoirs (as opposed to planning new projects), and in some cases on managing for new objectives. Congress authorizes the Corps to undertake construction of dams and other water resources infrastructure. Each dam and the reservoir it creates are operated in large measure to meet the project's authorized purposes and for compliance with federal laws. For each project (or set of projects in a basin), the principal purposes generally are laid out in the language authorizing project construction or in agency documents supporting the authorization, and in subsequent legislation specific to that project. Approximately 91 Corps reservoirs have M&I storage as a specifically authorized purpose (e.g., Lake Sakakawea, ND; Joe Pool Lake, TX). Congress, through general legislation, has included additional requirements (e.g., fish and wildlife protection and coordination) for all Corps facilities, and has given the Corps authority to provide some additional benefits from its projects, such as recreation. The 1958 WSA and Section 6 of the Flood Control Act of 1944 (58 Stat. 890, 33 U.S.C. 708) provide the Corps some general, but limited, authority to provide M&I water supply. The 1944 authority allows the Corps to provide surplus water at its facilities (i.e., water not assigned to a project purpose) for M&I use on a temporary basis. This report does not analyze the Corps' use of the 1944 authority because it is not likely to have a significant future role in the permanent reallocation of significant quantities of water for M&I purposes. Instead, this report focuses on how the 1958 WSA has been implemented by the Corps, and provides data on the 44 Corps reservoirs that have had all or some of their storage reallocated under the Corps' 1958 WSA discretionary authority. For a discussion of legal issues related to the 1958 WSA, see CRS Report R40714, Use of Federal Water Projects for Municipal and Industrial Water Supply: Legal Issues Related to the Water Supply Act of 1958 (43 U.S.C. § 390b) , by Cynthia Brougher. In the 1958 WSA, Congress provided the Corps some general M&I water supply authority, but limited the agency's decision-making without congressional approval. Specifically, Section 301 of the 1958 WSA provides: Modifications of a reservoir project heretofore authorized, surveyed, planned, or constructed to include storage [for water supply] which would seriously affect the purposes for which the project was authorized, surveyed, planned, or constructed, or which would involve major structural or operational changes shall be made only upon the approval of Congress. That is, M&I water supply can be provided as long as it is accomplished incidental to operations for the authorized purposes. If provision of water supply seriously affects a facility's authorized purposes or would cause a major operational change, the reallocation requires congressional authorization. How to gauge whether an effect is serious or a change is major was not defined by Congress. After passage of the 1958 WSA, the Corps developed a guidance manual for implementing this authority (EM 1165-2-105). In March 1977, the Corps adopted as part of its manual the following provision for determining when a reallocation does not require congressional approval: Modifications of reservoir projects to allocate all or part of the storage serving any authorized purpose from such purpose to storage serving domestic, municipal, or industrial water supply purposes are considered insignificant if the total reallocation of storage that may be made for such water supply uses in the modified project is not greater than 15 per centum of total storage capacity allocated to all authorized purposes or 50,000 acre feet, whichever is less. Earlier guidance had not included numeric criteria. The questions of whether the Corps has regularly exceeded its discretionary authority and how many reservoirs have storage reallocated under this authority have received attention in the wake of a federal court decision related to Corps operations and reallocations at Lake Lanier (GA). Numerous lawsuits related to Lake Lanier were consolidated and transferred to the U.S. District Court for the Middle District of Florida in 2007. A July 17, 2009, court order addressed a fundamental question common to many of the cases: whether the Corps violated Section 301 of the 1958 WSA by not seeking congressional approval for changes made in Lake Lanier operations to provide M&I water supply. The court order largely agreed with Florida, Alabama, the Alabama Power Company, and the Southeastern Federal Power Customers. These litigants had contended that the Corps was obligated to seek congressional approval, because the provision of water supply required major operational changes that harmed authorized purposes. The court estimated that, since the mid-1970s, the Corps had reallocated more than 21% of Lake Lanier's usable storage without seeking congressional authorization; this reallocation represents roughly 260,000 acre-feet (AF). The court found that "de facto reallocations" started in the mid-1970s with operational changes that shifted storage from hydropower to M&I supply. Subsequently the Corps contracted with M&I water providers for storage space for withdrawals directly from the lake. The court found that the cumulative impacts of the Corps' actions exceeded its discretionary authority to reallocate. The court order and its effect on M&I water supply for communities in northern Georgia have raised questions about how the Corps has reallocated water at its other facilities. A total of 135 Corps reservoirs have roughly 11 million acre-feet (AF) of storage designated for M&I water. Most of the M&I water stored is authorized under project-specific authorities. However, 44 reservoirs derive all or part of their M&I storage authority from the 1958 WSA (see Table 1 for a list of the reservoirs). The 1958 WSA is the basis for less than 640,000 AF of the Corps' M&I storage. Table 1 shows that the Corps has reallocated more than 50,000 AF of storage space for M&I use at only one reservoir, Lake Texoma (TX/OK). The Corps has used its discretionary authority to perform four reallocations at Lake Texoma—one for 84,099 AF and three smaller reallocations, for a total of 103,003 AF. Other Texoma reallocations have been made with specific congressional approval. The 84,099 AF reallocation from hydropower to M&I use was approved in a 1985 Corps document that included a compensation arrangement for lost hydropower, which had been negotiated among Lake Texoma stakeholders. The Corps found that the reallocation would neither significantly harm the lake's authorized purposes (in part because of the compensation arrangement), nor require significant structural modifications. The Corps thus concluded that the transfer could be performed under the 1958 WSA without congressional approval, even though it exceeded the agency-established policy limiting reallocations without congressional approval to 50,000 AF. Table 1 shows that the Corps stayed below the 15% of usable storage criterion, except at Cowanesque Lake (PA), where reallocated water supply represents almost 30% of storage. The Cowanesque Lake case is unusual in that it represents a mix of project-specific reallocation direction from Congress and use of the Corps' discretionary authority under the 1958 WSA. The Cowanesque reallocation was mentioned in P.L. 99-88 , the Supplemental Appropriations Act of 1985, and was discussed as occurring under the Corps' 1958 WSA discretionary authority in the accompanying H.Rept. 99-236. As previously noted, the 1958 WSA indicates that the reallocation to water supply should not be made if it seriously affects authorized purposes or results in a major operational or structural change. The Corps is to evaluate these potential effects when studying whether to make or recommend to Congress a reallocation. Whether the studies used to support the reallocations shown in Table 1 sufficiently evaluated how an M&I reallocation may affect authorized purposes or may constitute a major operational change is a general concern raised by the 2009 court order's questioning of the Corps evaluations related to Lake Lanier operations. An evaluation of the sufficiency of Corps reallocation analyses is beyond the scope of this CRS report. Lake Lanier is not in Table 1 because the July 2009 court order found that the M&I uses exceeded the 1958 WSA authority. Similarly, Lake Cumberland (KY) is not included, although M&I withdrawals occur there, because these withdrawals have not been authorized. Enforcement action to stop the withdrawals at Lake Cumberland has not been taken. How many other unauthorized withdrawals and operational actions that support M&I uses occur at other Corps facilities is largely unknown; many Corps dams are decades old, often predating the 1958 WSA, and their operations have evolved incrementally over time. To date, the Corps' operation of Lake Lanier for M&I water supply has constituted the agency's most controversial provision of M&I water supply. The 2009 court order raised numerous concerns, including the possibility that previous reallocations at other Corps facilities could be disputed, and uncertainty about how future reallocation at Corps facilities will be evaluated and performed. Thus far, most Corps reallocations have taken place without the national attention or litigation of Lake Lanier, either using the Corps' delegated authority or through specific congressional legislative direction. As shown in Table 1 , existing reallocations under the 1958 WSA, with few exceptions, were within the numeric criteria that the Corps established for implementing its discretionary authority. Whether Congress agrees with the Corps' interpretation and use of its discretionary authority is a policy issue of increasing relevance as interest grows in M&I reallocation at federal facilities. Other issues raised by current use of the discretionary authority and reservoir operations include whether multiple reallocations in a single basin are to be treated separately or on a watershed basis, how much discretion the agency should have in making reallocation agreements with stakeholders, including financial charging and crediting arrangements, and how the agency should handle ongoing unauthorized withdrawals. Current policies on M&I reallocations at Corps facilities reflect numerous decisions and tradeoffs that may be reexamined as more reallocations are requested. For example, if reallocations to M&I are made, how is the transition to be carried out, given that stakeholders, such as recreation interests and hydropower customers, have developed around existing operations? How should the federal government charge for the M&I storage space provided? Should the federal government credit for return flows (i.e., water not consumed by M&I uses that is returned to a Corps reservoir)? M&I water supply at Corps facilities also is part of several broader water policy questions for Congress. For example, what is the appropriate federal role in municipal water supply? Should that role change if a community's existing water supply is reduced by potential climate change effects, such as extended drought? Do current water resources infrastructure operations, laws, divisions of responsibilities, and institutions reflect the national interest and present challenges? Addressing these questions is complicated by the wide range of opinions on the proper response and the difficulty of enacting any change to how federal facilities are operated, other than incremental change or project-specific measures, because of the many affected constituencies.

Congress has limited the use of Army Corps of Engineers dams and reservoirs for municipal and industrial (M&I) water supply. Growing M&I demands have raised interest in—and concern about—changing current law and reservoir operations to give Corps facilities a greater role in M&I water storage. A reallocation of storage to M&I use from a currently authorized purpose (e.g., hydropower or navigation) changes the types of benefits produced by a facility and the stakeholders served. While Congress has specifically authorized 91 Corps multi-purpose facilities for M&I supply, it also has delegated to the Secretary of the Army constrained authority to reallocate storage to M&I water supply. In the Water Supply Act of 1958 (1958 WSA; P.L. 85-500), Congress provided that storage at Corps facilities could be allocated to M&I water supply without congressional approval if this reallocation did not seriously harm authorized project purposes or involve major structural or operational changes. Whether the Corps has regularly exceeded its discretion to reallocate is a concern raised in response to a July 2009 federal court order that found the Corps exceeded its discretion at Lake Lanier (GA). In order to guide its implementation of the discretionary authority to reallocate, the agency developed guidance on what may constitute a major change or serious harm to an authorized purpose. Since 1977 that guidance has included quantitative limits on reallocations conducted without congressional authorization. Issues for Congress include whether the Corps' interpretation of its discretionary authority is consistent with congressional intent and whether current law and policy are appropriate for current demands and constraints on water resources. CRS analysis of available data indicates that the Corps generally has not exceeded agency-established quantitative limits, with two exceptions in addition to Lake Lanier. One of the exceptions, Cowanesque Lake (PA), was made with the consent of Congress but conducted under the 1958 WSA authority. The other exception was a 1985 reallocation from hydropower to M&I use at Lake Texoma (TX/OK). The Corps found that a reallocation at Lake Texoma would neither require significant modification of the project, nor seriously harm authorized purposes (as the result of compensation being provided for lost hydropower). The Corps concluded that it could make the reallocation without congressional approval using its discretionary authority, in spite of the reallocation exceeding the agency-established quantitative limit. Whether this or other Corps reallocations and operational changes performed without congressional authorization (including those that have fallen within agency-established quantitative guidelines) have seriously harmed other project purposes or constituted a major operational change cannot be independently determined by available data, and is beyond the scope of the analysis herein.

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.

Throughout the first session of the 110 th Congress, the Senate considered four nominations to the six-seat FEC. Nominees Robert D. Lenhard (D), Hans A. von Spakovsky (R), and Steven T. Walther (D) served in recess appointments at the agency during that time and until their appointments expired at the end of the first session. The fourth nominee, David M. Mason (R), served at the agency since 1998 and was renominated (although his re-nomination was withdrawn in May 2008, as was von Spakovsky's). Throughout the first session of the 110 th Congress, the von Spakovsky nomination generated controversy. In particular, some Senators and others debated von Spakovsky's actions on voting rights issues while serving at the Justice Department. Much of a June 13, 2007, Senate Rules and Administration Committee hearing and subsequent markup focused on von Spakovsky. On September 26, 2007, after being unable to reach agreement on reporting the nominations individually, the committee reported all four nominees en bloc without recommendation. In the closing days of the first session, the Senate was unable to reach a compromise over the nominees, including whether they should be considered on the floor separately or as a group. The apparent stalemate over the nominations continued into the second session of the 110 th Congress. The Lenhard, Mason, von Spakovsky, and Walther nominations remained pending in the Senate early in the second session of the 110 th Congress, but because the three recess appointments expired at the end of the first session, just two commissioners—Mason (R) and Ellen L. Weintraub (D)—remained in office. Both were previously confirmed by the Senate and could continue serving in holdover status following expired terms. Few developments occurred in early 2008. However, additional nomination activity took place beginning in April. First, Lenhard requested that his nomination be withdrawn. Second, on May 6, 2008, President George W. Bush made three new nominations to the FEC and withdrew Mason's re-nomination. Donald F. McGahn II (R), an election lawyer, was nominated to the Mason seat. At the same time, the President withdrew Lenhard's name and nominated Cynthia L. Bauerly (D), a Senate staffer, to that seat. Caroline C. Hunter (R), then a member of the Election Assistance Commission (EAC), was nominated to the FEC seat formerly held by Michael E. Toner. (Toner resigned from the Commission in 2007.) On May 16, 2008, von Spakovsky requested that his nomination be withdrawn. On May 22, 2008, following a hearing the previous day, the Senate Rules and Administration Committee favorably reported the Bauerly, Hunter, and McGahn nominations. Also on May 22, 2008, the White House announced the President's intention to nominate Matthew S. Petersen (R), a Senate staffer, to the seat formerly held by von Spakovsky. Walther's nomination also continued to remain pending. On June 24, 2008, the Senate confirmed Bauerly, Hunter, McGahn, Petersen, and Walther. The five new commissioners joined Ellen Weintraub, who continues to serve at the FEC in holdover status. FEC appointments issues remained quiet until April 2009, when the terms of Commissioners McGahn and Walther expired. They joined Commissioner Weintraub in holdover status. As Table 1 shows, even with three expired terms, six commissioners remain in office. (The FEC would not lose its policymaking quorum until fewer than four commissioners remained in office.) On May 1, 2009, President Obama announced his intention to nominate Service Employees International Union (SEIU) associate general counsel John J. Sullivan to the Commission. The Senate received the nomination on May 4. Sullivan would replace Commissioner Weintraub. Even a two-member Commission was not halted entirely. FECA does not appear to require a four-commissioner majority to permit the FEC to carry out basic information-gathering functions, such as requiring written reports, gathering evidence in enforcement cases, and authorizing subpoenas. With fewer than four commissioners, agency staff and remaining commissioners could also continue to provide general information, and to prepare for a repopulated Commission. Existing campaign law and regulations remained in effect. In addition, in December 2007, when the FEC still had five commissioners, the Commission voted to amend its rules of internal procedure to permit remaining commissioners to execute some duties. Revisions to the FEC's so-called "Directive 10" permit the Commission to continue meeting with fewer than four members to: approve general public information, such as educational guides; appoint certain staff; and approve other basic administrative and employment matters. FECA requires affirmative votes from at least four commissioners to: (1) make, amend, or repeal rules, (2) approve enforcement actions, (3) initiate, or defend itself in, certain court actions, (4) issue advisory opinions, (5) develop forms, (6) conduct hearings and investigations, and (7) refer cases of apparent criminal conduct to law enforcement. FECA also requires a minimum four-vote majority to administer at least some elements of the presidential public financing program, including certifying payments to eligible candidates. The Federal Election Commission was without a quorum of four commissioners for more than six months in 2008. Commission staff and the remaining two commissioners continued to provide information to the regulated community and to prepare for additional commissioners. In the interim, however, the absence of a quorum at the FEC delayed administering aspects of the presidential public financing program, rulemakings, and enforcement actions. Immediate issues facing the repopulated Commission included rulemaking to implement portions of the Honest Leadership and Open Government Act of 2007 (HLOGA), pending enforcement cases and advisory opinion requests, and administering the presidential public campaign financing program. The Commission also needed to respond to ongoing litigation surrounding the Bipartisan Campaign Reform Act. During 2009, the Commission continued to work through these and other issues that arose before, during, and after the shutdown. The loss of a policymaking quorum would not occur again unless fewer than four commissioners were in office. Nonetheless, the 2008 "shutdown" may continue to be of interest to the 111 th Congressional consideration of oversight or appropriations issues.

Three recess appointments to the Federal Election Commission (FEC) expired at the end of the first session of the 110th Congress, leaving the agency with just two commissioners. Because the Federal Election Campaign Act (FECA) requires that at least four commissioners vote affirmatively to execute some of the agency's major functions, the FEC was unable to issue regulations, approve enforcement actions, and administer aspects of the presidential public campaign financing program. The Commission also could not issue advisory opinions. Existing campaign finance law and regulations remained in effect. Remaining commissioners and staff continued routine business. On June 24, 2008, the Senate confirmed five nominees to the FEC. Those five commissioners joined a sixth member who continued to serve in holdover status. Therefore, the Commission was restored to full decision-making strength. By the end of April 2009, the terms of three commissioners (total) had expired, but because commissioners may continue to serve in holdover status, six members remained in office. Examining the Commission's operating status and its backlog from 2008 may be an oversight or appropriations issue of interest to the 111th Congress. CRS Report R40091, Campaign Finance: Potential Legislative and Policy Issues for the 111th Congress, by [author name scrubbed], discusses other recent campaign finance developments, including FEC issues.) Although the loss of the Commission's policymaking quorum has now been resolved, this report will be updated occasionally to reflect subsequent developments.

By the end of 2017, the People's Republic of China (PRC) had the world's largest number of internet users, estimated at over 750 million people. At the same time, the country has one of the most sophisticated and aggressive internet censorship and control regimes in the world. PRC officials have argued that internet controls are necessary for social stability, and are intended to "enhance people's cultural taste" and "strengthen spiritual civilization." The PRC government employs a variety of methods to control online content and expression, including website blocking and keyword filtering; regulating and monitoring internet service providers; censoring social media; and arresting "cyber dissidents" and bloggers who broach sensitive social or political issues. The government also monitors the popular mobile app WeChat. WeChat began as a secure messaging app, similar to WhatsApp, but it is now used for much more than just messaging and calling (e.g., mobile payments)—and all the data shared through the app is also shared with the Chinese government. During the 2017 Communist Party Congress, censors took steps to "restrict with one hand and disseminate with the other." Censors using a variety of tools sought to eliminate certain words and expressions from appearing on social media (e.g., attempts to protest or ridicule senior political figures), while disseminating information supportive of the government and its leaders. In its 2017 Annual Report, Reporters Without Borders (Reporters Sans Frontières, RSF) called China the "world's biggest prison for journalists" and warned that the country "continues to improve its arsenal of measures for persecuting journalists and bloggers." China ranks 176 th out of 180 countries in RSF's 2017 World Press Freedom Index, surpassed only by Turkmenistan, Eritrea, and North Korea in restrictions on press freedom. At the end of 2017, RSF asserted that China was holding 52 journalists and bloggers in prison. This report describes the current state of internet freedom in China, U.S. government and private sector activity to support internet freedom around the world, and related issues of congressional interest. The U.S. government continues to advocate policies to promote internet freedom in China's increasingly restrictive environment and to mitigate the global impact of Chinese government censorship. The Department of State, the Broadcasting Board of Governors (BBG), and Congress have taken an active role in fighting global internet censorship. Since 2008, the Department of State has invested over $145 million in global internet freedom programs. These programs support digital safety, policy advocacy, technology, and research to help global internet users overcome barriers to accessing the internet. The State Department's Internet Freedom and Business and Human Rights Section within the Bureau of Democracy, Human Rights, and Labor leads U.S. government policy and engagement on internet freedom issues. Efforts include the following: raising concerns about internet restrictions with foreign governments; collaborating with like-minded governments to advance internet freedom, including in multilateral fora such as the United Nations Human Rights Council, the G-7, and the G-20; working with interagency partners and civil society stakeholders to advance internet freedom, including at the annual Internet Governance Forum, an international multistakeholder venue for addressing global internet governance; convening discussions on emerging and critical internet freedom challenges; and building awareness within the U.S. government by conducting training on internet freedom issues for federal officials. The State Department was also a founding member and is an ongoing participant in the Freedom Online Coalition (FOC), a group of governments collaborating to advance human rights online. Examples of FOC work include building cross-regional support for internet freedom language in key international documents and joint statements on issues of concern to help shape global norms on human rights online. The Digital Defenders Partnership is a project of the Freedom Online Coalition. The partnership, established in 2012, provides emergency support for internet users who are under threat for peacefully exercising their rights online. It awards grants around the world for a number of purposes, including establishing new internet connections when existing connections have been cut off or are being restricted; developing methods to protect bloggers and digital activists; developing tools needed to respond to emergencies; developing decentralized, mobile internet applications that can link computers as an independent network; supporting digital activists with secure hosting and distributed denial of service mitigation; and building emergency response capacity. In 2016, the BBG created the Office of Internet Freedom (OIF) to oversee the efforts of BBG-funded internet freedom projects, including the work carried out by the Open Technology Fund, a joint endeavor managed by BBG and Radio Free Asia. OIF manages and supports the research, development, deployment, and use of BBG-funded internet freedom (IF) technologies. OIF provides anticensorship technologies and services to citizens and journalists living in repressive environments. OIF also supports global education and awareness of IF matters, to enhance users' ability to safely access and share digital news and information without fear of repressive censorship or surveillance. The FY2018 budget for the OIF is included in the State Department's appropriation for satellite transmissions. The Consolidated Appropriations Act, 2018, provides that "in addition to amounts otherwise available for such purposes, up to $34,508,000 of the amount appropriated under this heading may remain available until expended for satellite transmissions and internet freedom programs, of which not less than $13,800,000 shall be for internet freedom programs." Internet freedom programs are also funded through grants by the Open Technology Fund. There has been one hearing in the 115 th Congress about Internet Freedom in China by the Congressional-Executive Commission on China (CECC). In 2000, Congress created the CECC to monitor China's compliance with international human rights standards, to encourage the development of the rule of law in the PRC, and to establish and maintain a list of victims of human rights abuses in China. On April 26, 2018, the CECC held a hearing on "digital authoritarianism and the global threat to free speech." The Commission heard from three witnesses about aspects of China's restrictions to free speech: Sarah Cook Senior Research Analyst for East Asia and Editor, China Media Bulletin, Freedom House Clive Hamilton Professor of Public Ethics, Charles Sturt University, Canberra, Australia, and author, Silent Invasion, China 's Influence in Australia Katrina Lantos Swett President, Lantos Foundation The hearing explored issues such as China's desire to control the internet, such as through the shutdown of popular social media apps that do not meet the country's standards of "core socialist values." The hearing also examined U.S. policies promoting internet freedom and firewall circumvention, and the global impact of Chinese government censorship and efforts to "export" its system and values. No legislation has been introduced in the 115 th Congress related to global internet freedom in authoritarian regimes. In response to criticism, particularly of their operations in China, a group of U.S. information and communications technology (ICT) companies, along with nongovernmental organizations, investors, and universities, formed the Global Network Initiative (GNI) in 2008. The GNI aims to promote best practices related to the conduct of U.S. companies in countries with poor internet freedom records. The GNI uses a self-regulatory approach to promote due diligence and awareness regarding human rights. For example, GNI has adopted a set of principles and supporting mechanisms to provide guidance to the ICT industry and its stakeholders on how to protect and advance freedom of expression and the right to privacy when faced with pressures from governments to take actions that infringe upon these rights. Participating companies voluntarily agree to undergo third-party assessments of their compliance with GNI principles. While some human rights groups have criticized the GNI's guidelines for being weak or too broad, GNI's supporters argue that the initiative sets realistic goals and creates real incentives for companies to uphold free expression and privacy. In May 2018, the GNI continued its participation in RightsCon, a yearly summit that explores issues affecting free expression and protection of global journalism, gender diversity and digital inclusion, encryption and cybersecurity, and other topics related to internet freedom. For many years, the development of the internet and its use in China have raised U.S. congressional concerns, including those related to human rights, trade and investment, and cybersecurity. Congressional interest in the internet in China has been tied to human rights concerns in a number of ways, including the use of the internet as a U.S. tool for promoting freedom of expression and other rights in China; the use of the internet by political dissidents in the PRC, and the political repression that such use often provokes; and the role of U.S. internet companies in both spreading freedom in China and complying with or enhancing PRC censorship and social control efforts. Congress has funded a variety of activities to support global internet freedom, including censorship circumvention technology development, internet and mobile communications security training, media and advocacy skills, and public policy. China and Iran have been the primary targets of such efforts, particularly circumvention and secure communications programs. In past years, U.S. congressional committees and commissions have held hearings on the internet and China, including the roles of U.S. internet companies in China's censorship regime, cybersecurity, free trade in internet services, and the protection of intellectual property rights. Freedom on the Net 2017 : Manipulating Social Media to Undermine Democracy Freedom House November 2017 https://freedomhouse.org/report/freedom-net/freedom-net-2017 How to Circumvent Online Censorship Electronic Frontier Foundation Updated August 10, 2017 https://ssd.eff.org/en/module/how-circumvent-online-censorship The Impact of Media Censorship: Evidence from a Field Experiment in China Yuyu Chen David Y. Yang January 4, 2018 https://stanford.edu/~dyang1/pdfs/1984bravenewworld_draft.pdf China's G reat F irewall I s R ising: How H igh W ill I t G o? The Economist January 4, 2018 https://www.economist.com/news/china/21734029-how-high-will-it-go-chinas-great-firewall-rising Online C ensorship: W ho A re the G atekeepers of O ur D igital L ives? Engineering and Technology Magazine The Institution of Engineering October 11, 2017 https://eandt.theiet.org/content/articles/2017/10/online-censorship-who-are-the-gatekeepers-of-our-digital-lives/

By the end of 2017, the People's Republic of China (PRC) had the world's largest number of internet users, estimated at over 750 million people. At the same time, the country has one of the most sophisticated and aggressive internet censorship and control regimes in the world. PRC officials have argued that internet controls are necessary for social stability, and intended to protect and strengthen Chinese culture. However, in its 2017 Annual Report, Reporters Without Borders (Reporters Sans Frontières, RSF) called China the "world's biggest prison for journalists" and warned that the country "continues to improve its arsenal of measures for persecuting journalists and bloggers." China ranks 176th out of 180 countries in RSF's 2017 World Press Freedom Index, surpassed only by Turkmenistan, Eritrea, and North Korea in the lack of press freedom. At the end of 2017, RSF asserted that China was holding 52 journalists and bloggers in prison. The PRC government employs a variety of methods to control online content and expression, including website blocking and keyword filtering; regulating and monitoring internet service providers; censoring social media; and arresting "cyber dissidents" and bloggers who broach sensitive social or political issues. The government also monitors the popular mobile app WeChat. WeChat began as a secure messaging app, similar to WhatsApp, but it is now used for much more than just messaging and calling, such as mobile payments, and all the data shared through the app is also shared with the Chinese government. While WeChat users have recently begun to question how their WeChat data is being shared with the Chinese government, there is little indication that any new protections will be offered in the future. The U.S. government continues to advocate policies to promote internet freedom in China's increasingly restrictive environment and to mitigate the global impact of Chinese government censorship. The Department of State, the Broadcasting Board of Governors (BBG), and Congress have taken an active role in fighting global internet censorship: Since 2008, the State Department has created programs that support digital safety, policy advocacy, technology, and research to help global internet users overcome barriers to accessing the internet, including the Freedom Online Coalition. In 2016, the BBG created the Office of Internet Freedom to oversee the efforts of BBG-funded internet freedom projects, including the research, development, deployment, and use of BBG-funded internet freedom technologies. In 2000, Congress created the Congressional-Executive Commission on China (CECC) to monitor China's compliance with international human rights standards, to encourage the development of the rule of law in the PRC, and to establish and maintain a list of victims of human rights abuses in China. Additionally, the U.S. information and communications technology (ICT) industry has taken steps to advance internet freedom. In 2008, a group of U.S. ICT companies, along with nongovernmental organizations, investors, and universities, formed the Global Network Initiative (GNI). The GNI aims to promote best practices related to the conduct of U.S. companies in countries with poor internet freedom records. In the 115th Congress, the CECC held a hearing on April 26, 2018, on "digital authoritarianism and the global threat to free speech." No legislation has been introduced in the 115th Congress related to global internet freedom in authoritarian regimes.

Cloud computing is a new form of delivering IT services that takes advantage of several broad evolutionary trends in information technology, including the use of virtualization. According to NIST, cloud computing is a means “for enabling convenient, on-demand network access to a shared pool of configurable computing resources that can be rapidly provisioned and released with minimal management effort or service provider interaction.” NIST also states that an application should possess five essential characteristics to be considered cloud computing; on-demand self service, broad network access, resource pooling, rapid elasticity, and measured service. Cloud computing offers three service models: infrastructure as a service, where a vendor offers various infrastructure components; platform as a service, where a vendor offers a ready-to-use platform on which customers can build applications; and software as a service, which provides a self- contained operating environment used to deliver a complete application such as Web-based e-mail. In addition, four deployment models for providing cloud services have been developed: private, community, public, and hybrid cloud. In a private cloud, the service is set up specifically for one organization, although there may be multiple customers within that organization and the cloud may exist on or off the premises. In a community cloud, the service is set up for related organizations that have similar requirements. A public cloud is available to any paying customer and is owned and operated by the service provider. A hybrid cloud is a composite of the deployment models. The adoption of cloud computing has the potential to provide benefits related to information security. The use of virtualization and automation in cloud computing can expedite the implementation of secure configurations for virtual machine images. Other advantages relate to cloud computing’s broad network access and use of Internet-based technologies. For example, several agencies stated that cloud computing provides a reduced need to carry data in removable media because of the ability to access the data through the Internet, regardless of location. Additional advantages relate to the potential economies of scale and distributed nature of cloud computing. In response to our survey, 22 of the 24 major agencies identified low-cost disaster recovery and data storage as a potential benefit. The self-service aspect of cloud computing may also provide benefits. For example, 20 of 24 major agencies identified the ability to apply security controls on demand as a potential benefit. In addition to benefits, the use of cloud computing can create numerous information security risks for federal agencies. In response to our survey, 22 of 24 major agencies reported that they are either concerned or very concerned about the potential information security risks associated with cloud computing. Several of these risks relate to being dependent on a vendor’s security assurances and practices. Specifically, several agencies stated concerns about: the possibility that ineffective or non-compliant service provider security controls could lead to vulnerabilities affecting the confidentiality, integrity, and availability of agency information; the potential loss of governance and physical control over agency data and information when an agency cedes control to the provider for the performance of certain security controls and practices; the insecure or ineffective deletion of agency data by cloud providers once services have been provided and are complete; and potentially inadequate background security investigations for service provider employees that could lead to an increased risk of wrongful activities by malicious insiders. Multitenancy, or the sharing of computing resources by different organizations, can also increase risk. Twenty-three of 24 major agencies identified multitenancy as a potential information security risk because one customer could intentionally or unintentionally gain access to another customer’s data, causing a release of sensitive information. Another concern is the increased volume of data transmitted across agency and public networks. This could lead to an increased risk of the data being intercepted in transit and then disclosed. Although there are numerous potential information security risks related to cloud computing, these risks may vary based on the particular deployment model. For example, NIST states that private clouds may have a lower threat exposure than community clouds, which may have a lower threat exposure than public clouds. Several industry representatives stated that an agency would need to examine the specific security controls of the vendor the agency was evaluating when considering the use of cloud computing. Federal agencies have begun to address information security for cloud computing; however, they have not developed the corresponding guidance. About half of the 24 major agencies we asked reported using some form of public or private cloud computing for obtaining infrastructure, platform, or software services. These agencies identified measures they are taking or plan to take when using cloud computing. These actions, however, have not always been accompanied by development of related policies or procedures to secure their information and systems. Most agencies have concerns about ensuring vendor compliance and implementation of government information security requirements. In addition, agencies expressed concerns about limitations on their ability to conduct independent audits and assessments of security controls of cloud computing service providers. Several industry representatives agreed that compliance and oversight issues are a concern and raised the idea of having a single government entity or other independent entity conduct security oversight and audits of cloud computing service providers on behalf of federal agencies. Agencies also stated that having a cloud service provider that had been precertified as being in compliance with government information security requirements through some type of governmentwide approval process would make it easier for them to consider adopting cloud computing. Other agency concerns related to the division of information security responsibilities between customer and vendor. Until these concerns are addressed, the adoption of cloud computing may be limited. While several governmentwide cloud computing security activities are under way by organizations such as the Office of Management and Budget (OMB) and the General Services Administration (GSA), significant work remains to be completed. For example, OMB stated that it began a federal cloud computing initiative in February 2009; however, it does not yet have an overarching strategy or an implementation plan. According to OMB officials, the initiative includes an online cloud computing storefront managed by GSA and will likely contain several pilot cloud computing projects, each with a lead agency. However, as of March 2010, a date had not been set for the release of the strategy or for any of the pilots. In addition, OMB has not yet defined how information security issues, such as a shared assessment and authorization process, will be addressed in this strategy. Federal agencies have stated that additional guidance on cloud computing security would be helpful. Addressing information security issues as part of this strategy would provide additional direction to agencies looking to use cloud computing services. Accordingly, we recommended that OMB establish milestones for completing a strategy for implementing the cloud computing initiative and ensure the strategy addresses the information security challenges associated with cloud computing, such as needed agency-specific guidance, controls assessment of cloud computing service providers, division of information security responsibilities between customer and provider, a shared assessment and authorization process, and the possibility for precertification of cloud computing service providers. OMB agreed with our recommendation and noted that it planned to issue a strategy over the next 6 months that covers activities for the next 5 to 10 years based on near term lessons learned. OMB also identified several federal activities planned in the short term to address security issues in cloud computing. GSA has established the Cloud Computing Program Management Office that manages several cloud computing activities within GSA and provides administrative support for cloud computing efforts by the Federal Chief Information Officers (CIO) Council. Specifically, the program office manages a storefront, www.apps.gov, established by GSA to provide a central location where federal customers can purchase software as a service cloud computing applications. GSA has also initiated a procurement to expand the storefront by adding infrastructure as a service cloud computing offerings such as storage, virtual machines, and Web hosting. Establishing both an assessment and authorization process for customers of these services and a clear division of security responsibilities will help ensure that these services, when purchased and effectively implemented, protect sensitive federal information. GSA officials stated that they need to work with vendors after a new procurement has been completed to develop a shared assessment and authorization process, but have not yet developed specific plans to do so. Accordingly, we recommended that GSA ensure that full consideration is given to the information security challenges of cloud computing, including a need for a shared assessment and authorization process as part of their procurement for infrastructure as a service cloud computing technologies. GSA agreed and identified plans for ensuring issues such as a shared assessment and authorization process would be addressed. The Federal CIO Council established the Cloud Computing Executive Steering Committee to promote the use of cloud computing in the federal government. Under this committee, the security subgroup has developed the Federal Risk and Authorization Management Program, which is a governmentwide program to provide joint authorizations and continuous security monitoring services for all federal agencies, with an initial focus on cloud computing. The subgroup is currently working with its members to define interagency security requirements for cloud systems and services and related information security controls. However, a deadline for completing development and implementation of a shared assessment and authorization process has not been established. We recommended that OMB direct the CIO Council Cloud Computing Executive Steering Committee to develop a plan, including milestones, for completing a governmentwide security assessment and authorization process for cloud services. OMB agreed and identified current activities of the CIO Council which are intended to address the recommendation. NIST is responsible for establishing information security guidance for federal agencies to support FISMA; however, it has not yet established guidance specific to cloud computing or to information security issues specific to cloud computing, such as portability and interoperability, and virtualization. The NIST official leading the institute’s cloud computing activities stated that existing NIST guidance in SP 800-53 and other publications applies to cloud computing and can be tailored to the information security issues specific to cloud computing. However, both federal and private sector officials have made clear that existing guidance is not sufficient. Accordingly, we recommended that NIST issue cloud computing guidance to federal agencies to more fully address key cloud computing domain areas that are lacking in SP 800-53 areas such as virtualization, and portability and interoperability, and include a process for defining roles and responsibilities of cloud computing service providers and customers. NIST officials agreed and stated that the institute is planning to issue guidance on cloud computing and virtualization this year. In summary, the adoption of cloud computing has the potential to provide benefits to federal agencies; however, it can also create numerous information security risks. Federal agencies have taken steps to address cloud computing security, but many have not developed corresponding guidance. OMB has initiated a federal cloud computing initiative, but has not yet developed a strategy that addresses the information security issues related to cloud computing, and guidance from NIST to ensure information security is insufficient. While the Federal CIO Council is developing a shared assessment and authorization process, which could help foster adoption of cloud computing, this process remains incomplete, and GSA has yet to develop plans for a shared assessment and authorization process for its procurement of cloud computing infrastructure as a service offerings. Until federal guidance and processes that specifically address information security for cloud computing are developed, agencies may be hesitant to implement cloud computing, and those programs that have been implemented may not have effective information security controls in place. Chairman Towns, Chairwoman Watson, and Members of the Committee and Subcommittee, this concludes my prepared statement. I would be pleased to respond to any questions. For questions about this statement, please contact Gregory C. Wilshusen at (202) 512-6244 or wilshuseng@gao.gov. Individuals making key contributions to this testimony included Season Dietrich, Vijay D’Souza, Nancy Glover, and Shaunyce Wallace. 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.

Cloud computing, an emerging form of computing where users have access to scalable, on-demand capabilities that are provided through Internet-based technologies, reportedly has the potential to provide information technology services more quickly and at a lower cost, but also to introduce information security risks. Accordingly, GAO was asked to testify on the benefits and risks of moving federal information technology into the cloud. This testimony summarizes the contents of a separate report that is being released today which describes (1) the models of cloud computing, (2) the information security implications of using cloud computing services in the federal government, and (3) federal guidance and efforts to address information security when using cloud computing. In preparing that report, GAO collected and analyzed information from industry groups, private-sector organizations, and 24 major federal agencies. Cloud computing has several service and deployment models. The service models include the provision of infrastructure, computing platforms, and software as a service. The deployment models relate to how the cloud service is provided. They include a private cloud, operated solely for an organization; a community cloud, shared by several organizations; a public cloud, available to any paying customer; and a hybrid cloud, a composite of deployment models. Cloud computing can both increase and decrease the security of information systems in federal agencies. Potential information security benefits include those related to the use of virtualization and automation, broad network access, potential economies of scale, and use of self-service technologies. In addition to benefits, the use of cloud computing can create numerous information security risks for federal agencies. Specifically, 22 of 24 major federal agencies reported that they are either concerned or very concerned about the potential information security risks associated with cloud computing. Risks include dependence on the security practices and assurances of a vendor, and the sharing of computing resources. However, these risks may vary based on the cloud deployment model. Private clouds may have a lower threat exposure than public clouds, but evaluating this risk requires an examination of the specific security controls in place for the cloud's implementation. Federal agencies have begun efforts to address information security issues for cloud computing, but key guidance is lacking and efforts remain incomplete. Although individual agencies have identified security measures needed when using cloud computing, they have not always developed corresponding guidance. Agencies have also identified challenges in assessing vendor compliance with government information security requirements and clarifying the division of information security responsibilities between the customer and vendor. Furthermore, while several governmentwide cloud computing security initiatives are under way by organizations such as the Office of Management and Budget and the General Services Administration, significant work needs to be completed. For example, the Office of Management and Budget has not yet finished a cloud computing strategy, or defined how information security issues will be addressed in this strategy. The General Services Administration has begun a procurement for expanding cloud computing services, but has not yet developed specific plans for establishing a shared information security assessment and authorization process. In addition, while the National Institute of Standards and Technology has begun efforts to address cloud computing information security, it has not yet issued cloud-specific security guidance. Until specific guidance and processes are developed to guide the agencies in planning for and establishing information security for cloud computing, they may not have effective information security controls in place for cloud computing programs. In the report being released today, GAO recommended that the Office of Management and Budget, the General Services Administration, and the Department of Commerce take steps to address cloud computing security, including completion of a strategy, consideration of security in a planned procurement of cloud computing services, and issuance of guidance related to cloud computing security. These agencies generally agreed with GAO's recommendations.

The idea of using the tax code to achieve energy policy goals and other national objectives is not new but, historically, U.S. federal energy tax policy promoted the exploration and development—the supply of—oil and gas. The 1970s witnessed (1) a significant cutback in the oil and gas industry's tax preferences, (2) the imposition of new excise taxes on oil (some of which were subsequently repealed or expired), and (3) the introduction of numerous tax preferences for energy conservation, the development of alternative fuels, and the commercialization of the technologies for producing these fuels (renewables such as solar, wind, and biomass, and nonconventional fossil fuels such as shale oil and coalbed methane). Comprehensive energy policy legislation containing numerous tax incentives, and some tax increases on the oil industry, was signed on August 8, 2005 ( P.L. 109-58 ). The law, the Energy Policy Act of 2005, contained about $15 billion in energy tax incentives over 11 years, including numerous tax incentives for the supply of conventional fuels, as well as for energy efficiency, and for several types of alternative and renewable resources, such as solar and geothermal. The Tax Relief and Health Care Act of 2006 ( P.L. 109-432 ), enacted in December 2006, provided for one-year extensions of some of these provisions. But some of these energy tax incentives expired on January 1, 2008, while others are about to expire at the end of 2008. In early December 2007, it appeared that congressional conferees had reached agreement on another comprehensive energy bill, the Energy Independence and Security Act ( H.R. 6 ), and particularly on the controversial energy tax provisions. The Democratic leadership in the 110 th Congress proposed to eliminate or reduce tax subsidies for oil and gas and use the additional revenues to increase funding for their energy policy priorities: energy efficiency and alternative and renewable fuels, that is, reducing fossil fuel demand rather than increasing energy (oil and gas) supply. In addition, congressional leaders wanted to extend many of the energy efficiency and renewable fuels tax incentives that either had expired or were about to expire. The compromise on the energy tax title in H.R. 6 proposed to raise taxes by about $21 billion to fund extensions and liberalization of existing energy tax incentives. However, the Senate on December 13, 2007, stripped the controversial tax title from its version of the comprehensive energy bill ( H.R. 6 ) and then passed the bill, 86-8, leading to the President's signing of the Energy Independence and Security Act of 2007 ( P.L. 110-140 ), on December 19, 2007. The only tax-related provisions that survived were (1) an extension of the Federal Unemployment Tax Act surtax for one year, raising about $1.5 billion; (2) higher penalties for failure to file partnership returns, increasing revenues by $655 million; and (3) an extension of the amortization period for geological and geophysical expenditures from five to seven years, raising $103 million in revenues. The latter provision was the only tax increase on the oil and gas industry in the final bill. Those three provisions would offset the $2.1 billion in lost excise tax revenues going into the federal Highway Trust Fund as a result of the implementation of the revised Corporate Average Fuel Economy standards. The decision to strip the much larger $21 billion tax title stemmed from a White House veto threat and the Senate's inability to get the votes required to end debate on the bill earlier in the day. Senate Majority Leader Harry Reid's (D-Nev.) effort to invoke cloture fell short by one vote, in a 59-40 tally. Since then, the Congress has tried several times to pass energy tax legislation, and thus avoid the impending expiration of several popular energy tax incentives, such as the "wind" energy tax credit under Internal Revenue Code (IRC) §45, which, since its enactment in 1992, has lapsed three times only to be reinstated. Several energy tax bills have passed the House but not the Senate, where on several occasions, the failure to invoke cloture failed to bring up the legislation for consideration. Senate Republicans objected to the idea of raising taxes to offset extension of expiring energy tax provisions, which they consider to be an extension of current tax policy rather than new tax policy. In addition, Senate Republicans objected to raising taxes on the oil and gas industry, such as by repealing the (IRC) §199 deduction, and by streamlining the foreign tax credit for oil companies. The Bush Administration repeatedly threatened to veto these types of energy tax bills, in part because of their proposed increased taxes on the oil and gas industry. Frustrated with the lack of action on energy tax legislation over the last two years, House Democrats introduced and approved several such bills, such as H.R. 5351 , which was approved by the House on February 27, 2008. House Speaker Pelosi and other Democrats sent President Bush a letter February 28, 2008, urging him to reconsider his opposition to the Democratic renewable energy plan, arguing that their energy tax plan would "correct an imbalance in the tax code." At this writing, a renewed legislative effort is being made to enact energy tax legislation, although the two chambers were moving in different directions on how to bring the legislation to the floor. In the House, energy tax provisions are part of H.R. 6899 , House Democratic leadership's latest draft of broad-based energy policy legislation, the Comprehensive American Energy Security and Consumer Protection Act. Passed on September 16, 2008, the bill would expand oil and gas drilling offshore by allowing oil and gas exploration and production in areas of the outer continental shelf that are currently off limits, except for waters in the Gulf of Mexico off the Florida coast. Under the bill, states could allow such drilling between 50 and 100 miles offshore, while the federal government could permit drilling from 100 to 200 miles offshore. Revenue from the new offshore leases would be used to assist the development of alternative energy, and would not be shared by the adjacent coastal states. The bill would also repeal the current ban on leasing federal lands for oil shale production if states enact laws providing for such leases and production. H.R. 6899 also would enact a renewable portfolio standard, a requirement that power companies generate 15% of their energy from renewable sources by 2020. The energy tax provisions in H.R. 6899 (Title XIII, the Energy Tax Incentives Act of 2008) are largely the same as those in H.R. 5351 , an approximately $18 billion energy tax package that was approved by the House on February 27, 2008. They also include some of the measures in H.R. 6049 , another energy tax bill that was also approved by the House. H.R. 5351 is, in turn, a smaller version of the energy tax title that was dropped from H.R. 3221 in December 2007, but larger than the $16 billion bill approved by the Ways and Means Committee in 2007 ( H.R. 2776 ). However, because H.R. 6899 incorporates some of the incentives of H.R. 6049 , its total cost is higher than the cost of H.R. 5351 : about $19 billion over 10 years, instead of $18 billion. H.R. 6899 includes several tax incentives for renewable energy that would reduce revenue by an estimated $19 billion over 10 years. At a cost of $6.9 billion over 10 years, it extends a renewable energy production tax credit, covering wind facilities for one additional year, through 2009, and certain other renewable energy production for three years, through 2011, while capping credits for facilities that come into service after 2009. The bill extends for eight years, through 2016, a credit for investing in solar energy and fuel cells, at a cost of $1.8 billion. It also extends the energy-efficient commercial building deduction for five years, the credit for efficiency improvements to existing homes for one year, and a credit for energy-efficient appliances for three years. The measure provides for the allocation of $2.625 billion in energy conservation bonds, $1.75 billion in clean renewable energy bonds, and $1.75 billion in energy security bonds to finance the installation of natural gas pumps at gas stations; all would be tax-credit bonds, which provide a tax credit in lieu of interest, and projects financed through the bonds would have to comply with Davis-Bacon requirements. It also creates a new tax credit for plug-in electric vehicles, an accelerated recovery period for smart electric meters and grid systems, and provides $1.1 billion in tax credits for carbon capture and sequestration projects. The tax title also includes one non-energy tax subsidy: a $1.1 billion provision to restructure the New York Liberty Zone tax incentives to allow for new transportation projects. H.R. 6899 is fully offset, raising $19 billion in taxes, including many of the same energy tax increases on oil companies also previously approved by the House. The energy tax provisions in H.R. 6899 are entirely offset, mainly by denying the IRC §199 manufacturing deduction to certain major integrated oil companies (including oil companies controlled by foreign governments—including CITGO ) and freezing the deduction for all other oil and gas producers at the current rate of 6%. Earlier §199 repeal proposals had been criticized for seeking to end the deduction only for U.S.-based major companies, while exempting Venezuelan-controlled CITGO because, not being a crude oil producer, it does not meet the definition of a "major integrated oil and gas producer." The entire provision would raise $13.9 billion over 10 years. Additional revenue—about $4.0 billion over 10 years—would come from a provision to streamline the tax treatment of foreign oil-related income so it is treated the same as foreign oil and gas extraction income. In addition to the H.R. 6899 , the Republican leadership in the House has introduced its own energy tax bill, H.R. 6566 , which also extends and expands some of the energy tax incentives and contains no tax increases (offsets). The energy tax provisions in this bill are, however, smaller and somewhat narrower than those in H.R. 6899 . In the Senate, legislative efforts on energy tax incentives and energy tax extenders center around S. 3478 , the Energy Independence and Investment Act of 2008, a $40 billion energy tax bill offered by Finance Committee Chairman Max Baucus and ranking Republican Charles Grassley. Senate Majority Leader Harry Reid said on September 12 that S. 3478 is "must-pass" legislation. Reid told reporters the energy tax package, which includes extensions of tax incentives for renewable energy, should be prioritized even ahead of the broader energy policy bills being considered, and the rest of the non-energy tax extenders package. Reid said he hopes to bring the bill to the floor during the week of September 15, but noted that the schedule depends on whether Senate Republicans will agree to move to the legislation. While most of the tax incentives in the bill are extensions of existing policy and are not controversial, the legislation would need to be paid for through new sources of revenue. One proposed offset—which has been previously blocked by Republicans—would repeal the IRC §199 manufacturing deduction for the five major oil and gas producers, raising $13.9 billion over 10 years. The bill also would be paid for through a new 13% excise tax on oil and natural gas pumped from the Outer Continental Shelf, a proposal to eliminate the distinction between foreign oil and gas extraction income and foreign oil-related income, and an extension and increase in the oil spill tax through the end of 2017. In total, tax increases on the oil and gas industry would account for $31 billion of the $40 billion total cost of the legislation. The final major offset would come from a requirement on securities brokers to report on the cost basis for transactions they handle to the Internal Revenue Service, a provision expected to raise about $8 billion in new revenues over 10 years. The tax offsets, or tax increases in S. 3478 are not without controversy, however, particularly the repeal of the IRC §199 manufacturing deduction for the five major oil and gas producers, as discussed previously. Several times the House has approved energy tax legislation, and several times in the Senate such legislation failed a cloture vote and thus could not be brought to the floor for debate. As noted above, Republicans have in the past objected to the idea of raising taxes to offset extension of expiring energy tax provisions, which they consider to be an extension of current tax policy rather than new tax policy. In addition, some Senate Republicans have objected to raising taxes on the oil and gas industry, particularly by repealing the IRC §199 deduction. The Bush Administration threatened to also veto any energy tax bill that would increase taxes on the oil and gas industry. At this writing, it appears that inclusion of the §199 deduction repeal as an offset might preclude the energy tax bill from coming to the Senate floor—some believe that it would fail another cloture vote—so this provision might not survive the process. Finally, the debate in the Senate over energy tax incentives and energy tax extenders is seen as potentially involving three other separate proposals: (1) The Gang of 20 proposal or "New Energy Reform Act of 2008"(this has not yet been introduced); (2) A Bingaman/Baucus bill (also not formally introduced); and (3) the Republican "Gas Price Reduction Act" (introduced by Senator McConnell as Senate Amendment 5108). A side-by-side comparison of H.R. 6899 and S. 3478 is in Table 1 . Revenue estimates were generated by the Joint Committee on Taxation.

The Comprehensive American Energy Security and Consumer Protection Act, H.R. 6899, was introduced on September 15, 2008, and approved by the House on September 16, 2008. This plan allows oil and gas drilling in the Outer Continental Shelf (OCS), and it incorporates most of the energy tax provisions from an energy tax bill, H.R. 5351, and some of H.R. 6049, both of which were previously approved by the House of Representatives but failed to be taken up by the Senate. In the Senate, legislative efforts on energy tax incentives and energy tax extenders center around S. 3478, the $40 billion energy tax bill offered by Finance Committee Chairman Max Baucus and ranking Republican Charles Grassley, and supported by Senate Democratic leadership. In the Senate, controversy over tax increases on the oil and gas industry, particularly over proposed repeal of the tax code's §199 deduction for the major integrated oil companies, continues; it remains unclear whether an energy tax bill with this provision will pass a cloture vote to limit debate, and thus be taken up. This report is a side-by-side comparison of energy tax bills H.R. 6899 and S. 3478.

RS20968 -- Jordan-U.S. Free Trade Agreement: Labor Issues Updated July 15, 2003 Labor issues over the agreement revolved around two sets of provisions: labor provisions and dispute settlement provisions. The labor provisions of the U.S.-Jordan FTA, located in the body of the agreement, are relatively straightforward,occupyone page of text, and require three things. First, they require: (a) that each country enforce its own labor laws inmannersaffecting trade; and (b) that those laws reflect both "internationally recognized worker rights" as defined by the U.S.TradeAct of 1974, as amended, and "core labor standards" as defined by the International Labor Organization. Second,theprovisions require that the Parties to the agreement not "waive" or "derogate from" their own labor laws as anencouragement for trade with the other Party. Third, they provide that each Party will be considered in compliancewith theagreement where any deviation from the requirements reflects a "reasonable exercise of . . . discretion" or "resultsfrom abona fide decision regarding the allocation of resources." The dispute settlement procedures, slightly longer than the labor provisions, occupy one and one-half pages of text. Theyprovide for resolution of disputes that arise over: (a) interpretation of the agreement; (b) alleged failure of a Partyto carryout its obligations under the agreement; and (c) measures taken by a Party that allegedly severely distort the balanceof tradebenefits or substantially undermine the fundamental objectives of the agreement. Pursuing a dispute through the complete resolution procedure provided for in the agreement would take 270 days, or aboutnine months. Any dispute would move up the ladder for consideration first through consultations between "contactpoints." These would be followed with consideration by a Joint Committee, and further consideration by a DisputeSettlement Panel. The Panel is required to present a report containing its findings of fact and its determinations, which will benon-binding. Ifthe dispute is still not resolved within 30 days after the Joint Committee presents its report, the affected Party willbeentitled to take "any appropriate and commensurate measure ." Supporters, including many Democrats, argued that the labor provisions did not break much new ground. Conceptually, theU.S.-Jordan provisions are similar to those in the NAFTA labor side agreement, in that in both agreements, eachcountrymust (a) enforce its own worker rights laws; while over the long term (b) strive toward adopting a complete bodyof workerrights principles; and (c) not waive or derogate from its own labor laws as an encouragement for trade. (Provisionsof thetwo agreements are compared in Table 1 .) Opponents, including many Republicans, saw the labor provisions as breaking considerable new ground because they werelocated in the body of the agreement, where they would be subject to dispute settlement procedures and possiblysanctions. Moreover, the dispute resolution procedure entitled either party to take "any appropriate and commensuratemeasure" if thedispute resolution procedure on the included labor provisions fails - and that would appear to include sanctions. The Call for a Memorandum of Understanding. As a compromise measure, some observers suggested that the United States and Jordan exchange side letters or memoranda ofunderstandingagreeing that any "appropriate and commensurate measure" does not mean sanctions, but leaving open what elsethe wordsmight mean. (2) Such letters were actually exchangedby the ambassador of Jordan and U.S. Trade Representative RobertZoellick on July 23, 2001. These identical letters pledged to resolve any differences that might arise between thetwocountries under the agreement, without recourse to formal dispute settlement procedures. They also specified thateachgovernment "would not expect or intend to apply the Agreement's dispute settlement enforcement procedures ... inamanner that results in blocking trade." In House floor debate, the agreement to not use sanctions was viewedalternately as: (1) part of "a cooperative structure ... to help secure compliance without recourse to ... traditional trade sanctionsthat arethe letter of the agreement" (Thomas); and (2) "a step backwards for future constructive action on trade" (Levin). The exchange of letters paved the way for House and Senate approval of the trade agreement. The House approved H.R. 2603 by a voice vote on July 31, 2001. The Senate approved H.R. 2603 by a voice vote onSeptember 24. The Government of Jordan had already approved it on July 15. It became law as P.L. 107-43 onSeptember28, 2001. During the Senate debate, Senator Phil Gramm warned that he will oppose any effort to turn theU.S.-JordanFTA into a model for how future trade agreements should deal with worker rights (and environmental protectionissues). He argued that they should not be part of trade deals. Conversely, Senate Finance Committee Chairman MaxBaucusindicated he hoped the U.S.-Jordan FTA would set a precedent for how future trade agreements would address issueslikelabor and the environment. He also refuted a statement made by Senator Graham that the provisions wouldundermine U.S.sovereignty or prevent lawmakers from enacting and enforcing U.S. labor and environmental laws. If Congress had not been able to resolve the issue of sanctions with the exchange of memoranda of understanding or similardocuments, it would have had several other options other than to approve the agreement as negotiated. It could have(a)approved the agreement with conditions, and in effect required the President to renegotiate it; (b) amended anyimplementing legislation; or (c) as under the fast-track procedure, simply disapproved the agreement and theimplementinglegislation containing the language of the agreement as introduced. The labor provisions of the U.S.-Jordan FTA and reaction to them can also be viewed in the context of the larger ongoingdebate in Congress about the linkage of worker rights and trade. The most recent debate has been ongoing since 1994, when presidential "fast-track" authority to negotiate new tradeagreements, contained in the Omnibus Trade and Negotiating Act (OCTA) of 1988 ( P.L. 100-418 ), expired. TheOCTAincluded as a principal negotiating objective of the United States in trade agreements "to promote workerrights. " Underthat authority, NAFTA was negotiated with its labor side agreement. The issue of debate in recent years has beenwhich ofthree courses to follow - whether to include in new fast-track authority: (a) more limited presidential authority toincludelabor provisions than in the expired legislation; (b) similar authority; or (c) broader authority. After fast-track renewal efforts spanning parts of nine years, Congress finally included language that is arguably morelimited in some aspects, but which also includes more detailed requirements. P.L. 107-210 , signed August 6, 2002,finallyrenewed presidential fast-track authority (or trade promotion authority - TPA, as it is more recently being called). Therenewed authority to negotiate trade agreements on an expedited basis (without amendment and with limited debate)includes numerous labor provisions as both overall negotiating objectives, and principal negotiating objectives: Overall negotiating objectives (typically advisory in nature) reiterate the two concepts included in the expired 1988authority: (1) to promote respect for worker rights (but specifying that it shall be done in the international LaborOrganization, which has virtually no enforcement powers - a limitation not included in the expired legislation); and(2) toensure that domestic labor laws are not weakened as an encouragement for trade. The principal negotiating objectives on "labor and the environment" (typically enforceable) include three goals new tofast-track language, but somewhat reflective of both NAFTA and Jordan trade agreements, and also of previousattempts torenew fast-track authority. These are: (1) to strengthen the capacity of U.S. trading partners to promote respect forworkerrights; (2) to ensure that a party does not fail to enforce its own labor laws in a manner affecting trade; and (3) toensure thatlabor policies do not unjustifiably discriminate against U.S. exports or serve as disguised barriers to trade. With the passage of new trade promotion authority in August of 2002, the debate now has shifted once more, and the newfocus is on monitoring the kinds of labor provisions that will be negotiated as part of new trade agreements currentlyinnegotiation. Stakeholders. Stakeholders are watching to see how provisions of the new trade promotion authority law will become translated into trade agreements, to the extent that negotiatorsattempt toand are able to include them in future trade agreements. Stakeholders against actually including labor provisions in the body of trade agreements argue that (1) such provisionsimpede the flow of free trade and are not needed; (2) any labor and environment provisions could put U.S.companies atserious disadvantage vis-a-vis their competitors in the World Trade Organization; (3) the U.S.-Jordan languageshould be a"one time" occurrence rather than a precedent; and (4) that potential violations of core labor standards should bepursuedmultilaterally through the International Labor Organization (ILO) rather than through trade agreements. The ILO,part of theUnited Nations, was established in 1919 to promote worker rights. As mentioned, it has no direct enforcementpowers,working instead through technical assistance and moral suasion. Stakeholders in favor of including labor provisions in the body of trade agreements argue in favor of using the U.S.-JordanFTA labor provisions as a model for other trade agreements. The AFL-CIO asserts that an even more elaboratemechanismthan is included in the U.S.-Jordan FTA is needed (a) to ensure that foreign labor laws are brought up tointernationalstandards on a clear timetable, and (b) to prevent the use of trade and investment agreements as business tools toforce downwages and working conditions in the United States and abroad. The U.S.-Jordan FTA continues and arguably advances the linkage of worker rights provisions and trade beyond thatcontained in the NAFTA labor side agreement. It does this: (a) by including the worker rights provisions in thebody of theagreement, and (b) by raising the possibility of "sanctions" in that either country may take "any appropriate andcommensurate measure" if the dispute procedures do not lead to resolution - even though letters exchanged by U.S.andJordan governments have pledged not to exercise those sanctions with regards to potential labor violations. TheJordanagreement's influence was also felt in the reauthorization of TPA language which would continue to permit newtradeagreements to include provisions similar to those in the Jordan agreement in the body of the agreement. Table 1. Comparison of Key Provisions of U.S.-Jordan Free Trade Agreement and NAFTA

The U.S.-Jordan Free Trade Agreement (FTA), implemented as P.L. 107-43, which went into effect December 17, 2001, breaks new ground by including multiple worker rights provisions inthe bodyof a U.S. trade agreement, rather than as a side agreement, for the first time. For this reason, it adds somecontroversy to thecongressional debate over whether worker rights provisions should be included in future trade agreements. Someobserverseye this configuration of worker rights protections as a model for future trade agreements; others view it as aone-timeoccurrence justified only because Jordan has a strong tradition of labor protections; still others oppose the inclusionof laborprovisions in trade agreements under any circumstances. This report will be updated as events warrant.

Historically, crime control has been the responsibility of local and state governments, with little involvement from the federal government. However, as crime became more rampant in the United States, the federal government increased its support for domestic crime control by creating a series of grant programs designed to assist state and local law enforcement. In the late 1980s through the mid-1990s, Congress created the Edward Byrne Memorial Formula Grant (Byrne Formula Grant) program and the Local Law Enforcement Block Grant (LLEBG) program, along with other grant programs, to assist state and local law enforcement in their efforts to control domestic crime. In 2005, however, legislation was enacted that combined the Byrne Formula Grant and LLEBG programs into the Edward Byrne Memorial Justice Assistance Grant (JAG) program. This report provides background information on the JAG program. It begins with a discussion of the programs that were combined to form the JAG program: the Byrne Formula Grant and LLEBG programs. The report then provides an overview of the JAG program. This is followed by a review of appropriations for JAG and its predecessor programs going back to FY1998. As mentioned, prior to creating the JAG program in the middle part of the past decade, Congress provided federal assistance to state and local governments for a variety of criminal justice programs through the Byrne Formula Grant and LLEBG programs. Each program is briefly described below. The Byrne Formula Grant program was authorized by the Anti-Drug Abuse Act of 1988 ( P.L. 100-690 ). Funds awarded to states under the Byrne Formula Grant program were to be used to provide personnel, equipment, training, technical assistance, and information systems for more widespread apprehension, prosecution, adjudication, detention, and rehabilitation of offenders who violate state and local laws. Grant funds could also be used to provide assistance (other than compensation) to victims of crime. Twenty-nine "purposes areas" were established by Congress to define the nature and scope of the programs and projects that could be funded with the formula grant funds. The purpose of the LLEBG program, which was also a formula grant program, was to provide units of local government with federal grant funds so they could either hire police officers or create programs that would combat crime and increase public safety. Like the Byrne Formula Grant program, LLEBG had program purpose areas outlining what types of programs LLEBG funds could support. There were six program purpose areas that governed how state and local governments could use their funding under the LLEBG program. The Violence Against Women and Department of Justice Reauthorization Act of 2005 ( P.L. 109-162 ) combined the Byrne Grant programs and LLEBG into the Edward Byrne Memorial Justice Assistance Grant program (JAG). Congress consolidated the programs to streamline the process for states applying for funding under the programs. JAG funds are allocated to the 50 states, the District of Columbia, Puerto Rico, Guam, the Virgin Islands, America Samoa, and the Northern Mariana Islands. The formula used by the JAG program to allocate funds combines elements of the formulas used in the Byrne Formula Grant program and LLEBG. Under the current JAG formula, the total funding allocated to a state is based on the state's population and reported violent crimes. Specifically, half of a state's allocation is based on a state's respective share of the United States' population. The other half is based on the state's respective share of the average number of reported violent crimes in the United States for the three most recent years for which data are available. Under current law, each state and territory is guaranteed to receive no less than 0.25% of the amount appropriated for the JAG program in a given fiscal year (i.e., the minimum allocation). Therefore, after each state's allocation is calculated using the JAG formula, if a state's allocation is less than the minimum allocation, the state receives the minimum allocation as its award. If a state's initial allocation was greater than the minimum amount, then the state receives the minimum allocation plus a share of the remaining funds based on the state's proportion of the country's population and the reported number of violent crimes (population and violent crime data for the states that received the minimum allocation as their award are excluded when allocating the remaining funds for the states that receive more than the minimum allocation). After each state's allocation is calculated, 40% of the state's allocation is directly awarded to units of local government. Awards to units of local government under JAG are made the same way they were under LLEBG; namely, each unit of local government's award is based on the jurisdiction's proportion of the average number of violent crimes committed in its respective state. Only units of local government that would receive $10,000 or more are eligible for a direct allocation. The balance of funds not awarded directly to units of local government is administered by the state, which must be distributed to state police departments that provide criminal justice services to units of local government and to units of local government who were not eligible to receive a direct award from Bureau of Justice Assistance (BJA). Also, like the Byrne Formula Grant program, each state is required to "pass through" a certain percentage of the funds directly awarded to the state. For JAG, the pass-through percentage is calculated as the ratio of the total amount of expenditures on criminal justice by the state for the most recent fiscal year to the total amount of expenditures on criminal justice by both the state and all units of local government in the past fiscal year. The Violence Against Women and Department of Justice Reauthorization Act of 2005 consolidated the program purpose areas under the Byrne Formula Grant and LLEBG programs into a total of seven program purpose areas under the JAG program. The seven broad program purpose areas are intended to give states and local units of government flexibility in creating programs to address local needs. JAG funds can be used for state and local initiatives, technical assistance, training, personnel, equipment, supplies, contractual support, and criminal justice information systems to improve or enhance such areas as law enforcement programs; prosecution and court programs; prevention and education programs; corrections and community corrections programs; drug treatment programs; planning, evaluation, and technology improvement programs; and crime victim and witness programs (other than compensation). The program purposes areas are broad enough to allow programs funded under the Byrne Grant program and LLEBG to continue to be funded under JAG. Funding for JAG has averaged $440 million per fiscal year since Congress started appropriating funding for the program in FY2005. However, as shown in Table 1 , funding for the program fluctuated over that time period. The appropriations data also show that there has been a general downward trend in providing assistance to state and local law enforcement through these formula grant programs. Trends in funding for the Byrne Formula Grant, LLEBG, and JAG programs roughly mirror those of other Department of Justice (DOJ) grant accounts. The amounts appropriated for JAG over the fiscal years have been below the amount authorized for the program, which was $1.095 billion per fiscal year for FY2006-FY2012. Since funding was authorized for the program in FY2006, the most Congress appropriated for JAG—$546 million for FY2009—represented 50% of the amount authorized per fiscal year.

The Edward Byrne Memorial Justice Assistance Grant (JAG) program was created by the Violence Against Women and Department of Justice Reauthorization Act of 2005 (P.L. 109-162), which collapsed both the Edward Byrne Memorial Formula (Byrne Formula) Grant and the Local Law Enforcement Block Grant (LLEBG) into a single program. This report provides a brief overview of JAG and its funding. JAG funds are awarded to state and local governments based on a statutorily defined formula. Each state's allocation is based on its proportion of the country's population and the state's proportion of the average total number of reported violent crimes (homicide, rape, robbery, and aggravated assault) for the last three years. After a state's allocation is calculated, 60% goes directly to the state government and the remaining 40% is awarded directly to units of local government in the state. State and local governments can use their JAG funding for programs or projects in one of seven purpose areas: (1) law enforcement programs; (2) prosecution and court programs; (3) prevention and education programs; (4) corrections and community corrections programs; (5) drug treatment programs; (6) planning, evaluation, and technology improvement programs; and (7) crime victim and witness programs (other than compensation). Funding for JAG has averaged $440 million per fiscal year since Congress started appropriating funding for the program in FY2005. However, funding for the program fluctuated over that time period. The appropriations data also show that since FY1998 there has been a general downward trend in providing assistance to state and local law enforcement through the LLEBG, Byrne Formula, and JAG grant programs.

The Federal Election Campaign Act (FECA), as amended by the Bipartisan Campaign Reform Act of 2002 (BCRA), regulates "federal election activity," which is defined to include (1) voter registration drives in the last 120 days of a federal election; (2) voter identification, get-out-the vote drives (GOTV), and generic activity in connection with an election in which a federal candidate is on the ballot; (3) "public communications" that refer to a clearly identified federal candidate and promote, support, attack, or oppose that candidate (regardless of whether the communications expressly advocate a vote for or against a candidate); and (4) services by a state or local party employee who spends at least 25% of paid time per month on activities in connection with a federal election. FECA further defines "public communications" as broadcast, cable, satellite, newspaper, magazine, outdoor advertising facility, mass mailing, or telephone bank communications made to the general public, "or any other form of general public political advertising." As a result, candidate and party committees can only use regulated federal funds to pay for such "federal election activity." Regulated federal funds, also known as "hard money," are funds that are subject to FECA's contribution limitations, source restrictions, and reporting requirements. Shortly after enactment of the BCRA amendments to FECA in 2002, the FEC promulgated regulations that exempted Internet communications from federal campaign finance regulation altogether by excluding such communications from the definition of "public communication." In response, the two primary sponsors of BCRA in the House of Representatives, Representatives Shays and Meehan, filed suit in U.S. district court against the FEC. In seeking to invalidate the regulations, the plaintiffs argued, inter alia, that by not regulating Internet activities, the FEC was opening a new avenue for circumvention of federal campaign finance law, contrary to Congress's intent in enacting BCRA. In 2004, in Shays v. FEC, the U.S. District Court for the District of Columbia agreed with the BCRA sponsors and generally overturned the FEC's initial regulations governing political communications on the Internet. The Shays court held that excluding all Internet communications from the FEC rule defining "public communication," at 11 CFR § 100.26, was inconsistent with Congress's use of the phrase, "or any other form of general public political advertising," in the BCRA definition of "public communication." Further, the court found that the FEC had failed to provide legislative history that would persuade the court to ignore the plain meaning of the statute. While not all Internet communications fall within the phrase, "any other form of general public political advertising," the court observed that "some clearly do." However, the court left it to the FEC to determine precisely what constitutes "general public political advertising" in the context of the Internet. Furthermore, while the court specifically upheld the definition of "generic campaign activity" as a "public communication," it found that the FEC's 2002 Notice of Proposed Rulemaking (NPRM) failed to provide adequate notice to the public, under the Administrative Procedure Act (APA), that the FEC might establish such a definition. As the court noted, it could not "fathom how an interested party 'could have anticipated the final rulemaking from the draft rule.'" The Shays court also found that the FEC rule exempting Internet communications from the definition of "public communications" meant that no matter how closely such communications were coordinated with political parties or candidate campaigns, they could not be considered "coordinated communications" and hence, subject to FECA regulation. As the court observed, it had long been a tenet of campaign finance law that, in order to prevent circumvention of regulation, FECA treated expenditures made "in cooperation, consultation, or concert, with or at the suggestion of a candidate" as a contribution to such candidate. According to the court, the exclusion of Internet communications from coordinated communications contrasted with prior FEC rules and was contrary to Congress's intent in enacting the statute. The court remanded the case to the FEC for further action consistent with its decision. In response to the district court's decision in Shays v. FEC , in April 2005, the FEC published an NPRM seeking comment on its proposal to amend the definition of "public communication" to conform to the ruling. In its NPRM, the FEC requested comments on proposed rules to include paid Internet advertisements in the definition of "public communication." In addition, the FEC sought comment on the related definition of "generic campaign activity," on proposed changes to disclaimer regulations, and on proposed exceptions to the definitions of "contribution" and "expenditure" for certain Internet activities and communications that would qualify as individual volunteer activity or that would qualify for the "press exemption." According to the FEC, the proposed rules were intended to ensure that political committees properly finance and disclose their Internet communications, without impeding individual citizens from using the Internet to speak freely regarding candidates and elections (e.g., blogging). The comment period closed and a public hearing was held in June 2005, and in anticipation of congressional action, the FEC delayed consideration of the Internet regulations. However, in the absence of congressional legislation, in March 2006, the FEC voted unanimously to approve the new regulations. In so doing, the commissioners cited the 2004 Shays v. FEC federal district court decision as requiring them to take such action. Generally, the Internet regulations reflect an attempt by the FEC to leave blogs, created and wholly maintained by individuals, free of FECA regulation, so long as such services are not performed for a fee. As stated in its NPRM: While drafting a proposed rule, the Commission recognized the important purpose of BCRA in preventing actual and apparent corruption and the circumvention of the Act as well as the plain meaning of "general public political advertising," and the significant public policy considerations that encourage the promotion of the Internet as a unique forum for free or low-cost speech and open information exchange. The Commission was also mindful that there is no record that Internet activities present any significant danger of corruption or the appearance of corruption, nor has the Commission seen evidence that its 2002 definition of "public communication" has led to circumvention of the law or fostered corruption or the appearance thereof. Therefore the Commission proposed to treat paid Internet advertising on another person's website as a "public communication," but otherwise sought to exclude all Internet communications from the definition of "public communication." The regulations apply only when money is exchanged for Internet-related campaign advertisements. Accordingly, the funds expended for such advertisements are subject to the limitations, source restrictions, and reporting requirements of FECA. Key aspects of the FEC regulations include the following: Regulation of paid Internet ads as " public communications " —The definition of "public communication" includes paid Internet ads placed on another individual or entity's website as a form of "general public political advertising," with no dollar threshold required; the advertiser, not the website operator, is considered to be making the public communication. Accordingly, the fees for such ads are subject to FECA contribution limits, source restrictions, and disclosure requirements. Disclaimer requirements —Disclaimers (statements of attribution) are required on all political committee websites available to the public. As "public communications," paid Internet ads must contain disclaimers if they expressly advocate the election or defeat of a clearly identified federal candidate or solicit contributions. Disclaimers are not required on e-mails from individuals or groups unless they are political committees, in which case disclaimers are required if more than 500 substantially similar, unsolicited e-mails are sent within a 30-day period. Disclosure of fees paid by candidates to bloggers —Payments to bloggers from candidates are required to be disclosed only on candidate disclosure statements; no such disclaimers are required on blog sites. Coordinated communications —Internet advertisements made for the purpose of influencing a federal election, placed on the website of another person or entity for a fee —and coordinated with a candidate or party committee—are considered "coordinated communications" and as such, constitute in-kind contributions to the candidate or committee. Accordingly, the fees for such ads are subject to FECA contribution limits, source restrictions, and disclosure requirements. Media exemption —Under the definition of "contribution," the general exemption from FECA coverage of news stories, commentaries, and editorials distributed through broadcasters, newspapers, and periodicals applies to such communications that are distributed over the Internet. Exceptions for individual or volunteer activity on the Internet —Under the definitions of "contribution" and "expenditure," an uncompensated individual or group of individuals using Internet equipment and services in order to influence a federal election, whether or not such services were known by or coordinated with a campaign, are excluded from FECA regulation. During Congress's consideration of BCRA in 2001 and 2002, the subject of communications over the Internet was not addressed, but it was discussed during debate on a previous version of what became BCRA during House consideration of H.R. 417 (Shays-Meehan) in the 106 th Congress. An amendment was offered to that bill by Representative DeLay to exempt communications over the Internet from regulation under FECA, but was defeated by a vote of 160-268. During the 109 th Congress, several bills were proposed to exempt all communications over the Internet from the BCRA definition of "public communication," and therefore, regulation under FECA. These proposals included H.R. 1606 (Hensarling), the Online Freedom of Speech Act, which was considered by the House under suspension of the rules but, on a 225-182 vote, failed to receive the two-thirds necessary for passage. The bill was brought up again and ordered reported favorably by the House Administration Committee on March 9, 2006, setting up consideration by the House, but the vote was postponed pending FEC regulatory action. Also during the 109 th Congress, in response to concerns that the Online Freedom of Speech Act could open the door to FECA circumvention (for example, by allowing corporations and unions to finance advertisements), two additional bills were offered: H.R. 4194 (Shays-Meehan) would have excluded Internet communications from FECA regulation, but regulated communications placed on a website for a fee and those made by most corporations and unions, by any political committee, and by state and local parties; and H.R. 4900 (Allen-Bass) would have exempted from FECA regulation most individual online communications and advertisements below a dollar threshold. In the wake of the new FEC regulations approved on March 27, 2006, however, House floor action was postponed indefinitely. During the 110 th Congress, the regulation of political communications on the Internet was not the subject of major legislative action. H.R. 894 (Price, NC) would have extended "stand by your ad" disclaimer requirements to Internet communications, among others. It was referred to the Committee on House Administration. H.R. 5699 (Hensarling) would have exempted from treatment as a contribution or expenditure any uncompensated Internet services by individuals and corporations that are wholly owned by individuals engaging primarily in Internet activities, which do not derive a substantial portion of revenue from sources other than income from Internet activities, except payment for (1) a public communication (other than a nominal fee), (2) the purchase or rental of an email address list made at the direction of a political committee, or (3) an email address list that is transferred to a political committee. H.R. 5699 also would have exempted blogs and other Internet and electronic publications from treatment as an expenditure by including such communications in the general media exemption applicable to broadcast stations and newspapers. It was referred to the Committee on House Administration. Similar legislation has not yet been introduced in the 111 th Congress.

The Federal Election Campaign Act (FECA) regulates "federal election activity," which is defined to include a "public communication" (i.e., a broadcast, cable, satellite, newspaper, magazine, outdoor advertising facility, mass mailing, or telephone bank communication made to the general public) or "any other form of general public political advertising." In 2006, in response to a federal district court decision, the FEC promulgated regulations amending the definition of "public communication" to include paid Internet advertisements placed on another individual or entity's website. As a result, a key element of online political activity—paid political advertising—is subject to federal campaign finance law and regulations. During the 110th Congress, the regulation of political communications on the Internet was not the subject of major legislative action. H.R. 894 (Price, NC) would have extended "stand by your ad" disclaimer requirements to Internet communications, among others. H.R. 5699 (Hensarling) would have exempted from treatment as a contribution or expenditure any uncompensated Internet services by individuals and certain corporations. Similar legislation has not yet been introduced in the 111th Congress. This report will be updated in the event of major legislative, regulatory, or legal developments.

Our review of medical records for a sample of newly enrolled veterans at six VA medical centers found several problems in medical centers’ processing of veterans’ requests that VA contact them to schedule appointments, and thus not all newly enrolled veterans were able to access primary care. For the 60 newly enrolled veterans in our review who requested care but had not been seen by primary care providers, we found that 29 did not receive appointments due to the following problems in the appointment scheduling process: Veterans did not appear on VHA’s New Enrollee Appointment Request (NEAR) list. We found that although 17 newly enrolled veterans in our review requested that VA contact them to schedule appointments, medical center officials said that schedulers did not contact the veterans because they had not appeared on the NEAR list. According to VHA policy, as outlined in its July 2014 interim scheduling guidance, VA medical center staff should contact newly enrolled veterans to schedule appointments within 7 days from the date they were placed on the NEAR list. Medical center officials were not aware that this problem was occurring, and could not definitively tell us why these veterans never appeared on the NEAR list. VA medical center staff did not follow VHA scheduling policy. We found that VA medical centers did not follow VHA policies for contacting newly enrolled veterans for 12 veterans in our review. VHA policy states that medical centers should document three attempts to contact each newly enrolled veteran by phone, and if unsuccessful, send the veteran a letter. However, for 5 of 12 newly enrolled veterans, our review of their medical records revealed no attempts to contact them, and medical center officials could not tell us whether the veterans had ever been contacted to schedule appointments. Medical center staff attempted to contact the other 7 veterans at least once each, but failed to reach out to them with the frequency required by VHA policy. For the remaining 31 of 60 newly enrolled veterans included in our review who did not have a primary care appointment: 24 were unable to be contacted to schedule appointments or upon contact, declined care, according to VA medical center officials. These officials said that in some cases they were unable to contact veterans due to incorrect or incomplete contact information in veterans’ enrollment applications; in other cases, they said veterans were seeking a VA identification card, for example, and did not want to be seen by a provider at the time they were contacted. 7 had appointments scheduled but had not been seen by primary care providers at the time of our review. Four of those veterans had initial appointments that needed to be rescheduled, which had not yet been done at the time of our review. Appointments for the remaining 3 veterans were scheduled after VHA provided us with a list of veterans who had requested care. For the 120 newly enrolled veterans across the six VA medical centers in our review who requested care and were seen by primary care providers, we found the average number of days between newly enrolled veterans’ initial requests that VA contact them to schedule appointments and the dates the veterans were seen by primary care providers ranged from 22 days to 71 days. Slightly more than half of the 120 veterans in our sample were seen by providers in less than 30 days; however, veterans’ experiences varied widely, even within the same medical center, and 12 of the 120 veterans in our review waited more than 90 days to be seen by a provider. We found that two factors generally impacted newly enrolled veterans’ experiences regarding the number of days it took to be seen by primary care providers: 1. Appointments were not always available when veterans wanted to be seen, which contributed to delays in receiving care. For example, one veteran was contacted within 7 days of being placed on the NEAR list, but no appointment was available until 73 days after the veteran’s preferred appointment date, and a total of 94 days elapsed before the veteran was seen by a provider. In another example, a veteran wanted to be seen as soon as possible, but no appointment was available for 63 days. Officials at each of the six medical centers in our review told us that they have difficulty keeping up with the demand for primary care appointments for new patients because of shortages in the number of providers, or lack of space due to rapid growth in the demand for these services. 2. Weaknesses in VA medical center scheduling practices may have impacted the amount of time it took for veterans to see primary care providers and contributed to unnecessary delays. Staff at the medical centers in our review did not always contact veterans to schedule appointments in accordance with VHA policy, which states that attempts to contact newly enrolled veterans to schedule appointments must be made within 7 days of their addition to the NEAR list. Among the 120 veterans included in our review that were seen by primary care providers, 37 (31 percent) were not contacted within 7 days to schedule an appointment; compliance varied across medical centers. As a result of these findings, we recommended that VHA review its processes for identifying and documenting newly enrolled veterans requesting appointments and revise as appropriate, to ensure that all veterans requesting appointments are contacted in a timely manner to schedule them. VHA concurred with this recommendation, and indicated that by December 31, 2016, it plans to review and revise the process from enrollment to scheduling to ensure that newly enrolled veterans requesting appointments are contacted in a timely manner. VHA also indicated that it will implement internal controls to ensure its medical centers are appropriately implementing the process. VHA’s oversight of veterans’ access to primary care is hindered, in part, by data weaknesses and the lack of a comprehensive scheduling policy, both of which are inconsistent with federal internal control standards. These standards call for agencies to have reliable data and effective policies to achieve their objectives, and for information to be recorded and communicated to the entity’s management and others who need it to carry out their responsibilities. A key component of VHA’s oversight of veterans’ access to primary care, particularly for newly enrolled veterans, relies on monitoring appointment wait times. However, VHA monitors only a portion of the overall time it takes newly enrolled veterans to access primary care. For newly enrolled veterans, VHA calculates primary care appointment wait times starting from veterans’ preferred dates, rather than the dates veterans initially requested that VA contact them to schedule appointments. (A preferred date is the date that is established when a scheduler contacts the veteran to determine when he or she wants to be seen.) Therefore, these data do not capture the time veterans wait prior to being contacted by schedulers, making it difficult for officials to identify and remedy scheduling problems that may arise prior to making contact with veterans. (See fig. 1.) Our review of medical records for 120 newly enrolled veterans found that, on average, the total amount of time it took to be seen by primary care providers was much longer when measured from the dates veterans initially requested VA contact them to schedule appointments than it was when using appointment wait times calculated using veterans’ preferred dates as the starting point. For example, we found one veteran applied for VHA health care benefits in December 2014, which included a request to be contacted for an initial appointment. The VA medical center contacted the veteran to schedule a primary care appointment 43 days later. When making the appointment, the medical center recorded the veteran’s preferred date as March 1, 2015, and the veteran saw a provider on March 3, 2015. Although the medical center’s data showed the veteran waited 2 days to see a provider, the total amount of time that elapsed from the veteran’s request until the veteran was seen was actually 76 days. Further, ongoing scheduling errors, such as incorrectly revising preferred dates when rescheduling appointments, understated the amount of time veterans waited to see providers. For example, during our review of appointment scheduling for 120 newly enrolled veterans, we found that schedulers in three of the six VA medical centers included in our review had made errors in recording veterans’ preferred dates when making appointments. For example, in some cases primary care clinics cancelled appointments, and when those appointments were re-scheduled, schedulers did not always maintain the original preferred dates in the system, but updated them to reflect new preferred dates recorded when the appointments were rescheduled. We found 15 appointments for which schedulers had incorrectly revised the preferred dates. In these cases, we recalculated the appointment wait time based on what should have been the correct preferred dates, according to VHA policy, and found the wait- time data contained in the scheduling system were understated. Officials attributed these errors to confusion by schedulers resulting from the lack of an updated standardized scheduling directive, which VHA rescinded and replaced with an interim directive in July 2014. As in our previous work, we continue to find scheduling errors that affect the reliability of wait-time data used for oversight, which make it difficult to effectively oversee newly enrolled veterans’ access to primary care. As a result of these findings, we recommended that VHA monitor the full amount of time newly enrolled veterans wait to receive primary care, and issue an updated scheduling directive. VHA concurred with both of these recommendations, and indicated that by December 31, 2016, it plans to begin monitoring the full amount of time newly enrolled veterans wait to be seen by primary care providers. It also indicated that it plans to submit a revised scheduling directive for VHA-wide internal review by May 1, 2016. This most recent work on veterans’ access to primary care expands further the litany of VA health care deficiencies and weaknesses that we have identified over the years, particularly since 2010. As of April 1, 2016, there were about 90 GAO recommendations regarding veterans’ health care awaiting action by VHA. These include more than a dozen recommendations to address weaknesses in the provision and oversight of veterans’ access to timely primary and specialty care, including mental health care. Until VHA can make meaningful progress in addressing these and other recommendations, which underscore a system in need of major transformation, the quality and safety of health care for our nation’s veterans is at risk. Chairman Miller, Ranking Member Brown, 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 concerning this testimony, please contact Debra A. Draper at (202) 512-7114 or draper@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this statement. Other individuals who made key contributions are Janina Austin, Assistant Director; Jennie F. Apter; Emily Binek; David Lichtenfeld; Vikki L. Porter; Brienne Tierney; and Emily Wilson. 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 March 2016 report, entitled VA Health Care: Actions Needed to Improve Newly Enrolled Veterans' Access to Primary Care , GAO-16-328 . GAO found that not all newly enrolled veterans were able to access primary care from the Department of Veterans Affairs' (VA) Veterans Health Administration (VHA), and others experienced wide variation in the amount of time they waited for care. Sixty of the 180 newly enrolled veterans in GAO's review had not been seen by providers at the time of the review; nearly half were unable to access primary care because VA medical center staff did not schedule appointments for these veterans in accordance with VHA policy. The 120 newly enrolled veterans in GAO's review who were seen by providers waited from 22 days to 71 days from their requests that VA contact them to schedule appointments to when they were seen, according to GAO's analysis. These time frames were impacted by limited appointment availability and weaknesses in medical center scheduling practices, which contributed to unnecessary delays. VHA's oversight of veterans' access to primary care is hindered, in part, by data weaknesses and the lack of a comprehensive scheduling policy. This is inconsistent with federal internal control standards, which call for agencies to have reliable data and effective policies to achieve their objectives. For newly enrolled veterans, VHA calculates primary care appointment wait times starting from the veterans' preferred dates (the dates veterans want to be seen), rather than the dates veterans initially requested VA contact them to schedule appointments. Therefore, these data do not capture the time these veterans wait prior to being contacted by schedulers, making it difficult for officials to identify and remedy scheduling problems that arise prior to making contact with veterans. Further, ongoing scheduling errors, such as incorrectly revising preferred dates when rescheduling appointments, understated the amount of time veterans waited to see providers. Officials attributed these errors to confusion by schedulers, resulting from the lack of an updated standardized scheduling policy. These errors continue to affect the reliability of wait-time data used for oversight, which makes it more difficult to effectively oversee newly enrolled veterans' access to primary care.

RS21630 -- Immigration of Religious Workers: Background and Legislation September 30, 2003 Permanent legal immigration to the United States is regulated by a set of numerical limits and systems of preference categories delineated in the Immigrationand Nationality Act (INA), and employment-based immigration comprises one of the major groups of the preferencecategory systems. (1) Aliens who come tothe United States through the permanent legal immigration categories are commonly known as legal permanentresidents (LPRs). The fourth category of theemployment-based preference system is known as "special immigrants," and the largest number of specialimmigrants are ministers of religion and religiousworkers. (2) Religious workers are treated separatelyfrom ministers of religion and are limited to 5,000 immigrants annually. Accompanying spouses and minorchildren of ministers of religion and religious workers are included as special immigrants. Prior to the Immigration Act of 1990 ( P.L. 101-649 ), ministers of religion were admitted to the United States without numerical limits, and there was noseparate provision for religious workers. Religious workers immigrated through one of the more general categoriesof numerically-limited, employment-basedimmigration that were in effect at that time. The Immigration Act of 1990 amended the INA to redefine the specialimmigrant category to include ministers ofreligion and religious workers, but contained a "sunset"of the provision for religious workers on September 30,1994. It was subsequently extended severaltimes, most recently through September 30, 2003. (3) The 1990 Act also created a new nonimmigrant (i.e., temporary) visa for religious workers, commonlyreferred to as the R visa. (4) Defining what constitutes religious work is daunting given the theological diversity of religions, denominations, and faith traditions. The education, training,and ordination requirements for ministers of religion and religious workers vary greatly by religious group. Underthe special immigrant provisions, the INAdefines ministers of religion and religious workers as follows: (C) an immigrant, and the immigrant's spouse and children if accompanying or following to join the immigrant,who -- (i) for at least 2 years immediately preceding the time of application foradmission, has been a member of areligious denomination having a bona fide nonprofit, religious organization in the UnitedStates; (ii) seeks to enter the United States -- (I) solely for the purpose of carrying on the vocation of a minister of thatreligiousdenomination, (II) before October 1, 2003, in order to work for the organization at the requestof the organization in aprofessional capacity in a religious vocation or occupation, or (III) before October 1, 2003, in order to work for the organization (or a bona fide organization which is affiliatedwith the religious denomination and is exempt from taxation as an organization described in Section 501(c)(3) ofthe Internal Revenue Code of 1986) at therequest of the organization in a religious vocation or occupation; and (iii) has been carrying on such a vocation, professional work, or other workcontinuously for at least the 2-yearperiod described in clause (i); (5) The regulations further define religious occupation as "an activity which relates to a traditional religious function." (6) The nonimmigrant R visa category ofreligious workers holds to the same definitions; aliens on R visas are not, however, held to the 2-year experiencerequirement. Religious workers are notsubject to the labor certification requirements that many other employment-based immigrants must meet. (7) The INA is silent on what constitutes a religious denomination, but the regulations offer the following definition: Religious denomination means a religious group or community of believers having some form of ecclesiasticalgovernment, a creed or statement of faith, some form of worship, a formal or informal code of doctrine anddiscipline, religious services and ceremonies,established places of religious worship, religious congregations, or comparable indica of a bona fide religious denomination. For the purposes of this definition,an interdenominational religious organization which is exempt from taxation pursuant to �501(c)(3) of the InternalRevenue Code will be treated as a religiousdenomination. (8) The U.S. Citizenship and Immigration Services Bureau in the Department of Homeland Security (DHS) is the lead agency for immigrant admissions. (9) In the wider sweep of legal immigration to the United States, religious workers represent a tiny fraction of the annual flow -- 0.3% of the 1,063,732 immigrantsin FY2002. While the number of nonimmigrant R visas issued since FY1992 (first year the category was available)exceeds that of the permanent admissions,it likewise constitutes a small portion of all nonimmigrants admitted. The issuances of R visas has moved steadilyupward, but the levels of admission forpermanent religious workers has varied since FY1992 ( Figure 1 ). Most religious workers who become LPRs are not arriving from abroad; rather they are adjusting status after they have lived in the United States. In FY2002,only 389 of the 3,127 religious workers and their families arrived from abroad, while 87.6% adjusted to LPR statusas religious workers in the United States. Itis likely that most of those who adjusted status had entered on R visas as temporary religious workers. PDF version Bills ( H.R. 2152 / S. 1580 ) to extend the religious worker provision through September 30, 2008, have been introduced in bothchambers. Congressman Barney Frank introduced H.R. 2152 on May 19, 2003. The House JudiciaryCommittee ordered H.R. 2152 reported onSeptember 10, 2003, and the House passed H.R. 2152 on September 17, 2003. Senate Committee on theJudiciary Chairman Orrin Hatch introduceda bill similar to H.R. 2152, the Religious Worker Act of 2003 (S. 1580), on September 3, 2003. Although the extension of the religious worker provision has a broad base of support, efforts to make it a permanent immigration category have not succeeded. Some have criticized the religious worker provision as vulnerable to fraud. A few have expressed fear that it maybe an avenue for religious extremists to enterthe United States. Others, however, point out that the INA has provisions to guard against visa fraud and to excludefrom admission aliens who may threatenpublic safety or national security, and who commit fraud to enter the United States. (10) 1. (back) The largest preference grouping isfamily-based immigration. Other groupings include diversity and humanitarian admissions. For more information,see CRS Report RS20916(pdf) , Immigration and Naturalization Fundamentals , by [author name scrubbed]. 2. (back) Other "special immigrants" include certainemployees of the U.S. government abroad, Panama Canal employees, retired employees of internationalorganizations, certain aliens who served in the U.S. armed forces, and certain aliens declared a ward of a juvenilecourt. INA �101(a)(27). 3. (back) Immigration and Nationality TechnicalCorrections Act of 1994 ( P.L. 103-416 ), the Religious Workers Act of 1997 ( P.L. 105-54 ), and the ReligiousWorkersAct of 2000 ( P.L. 106-409 ). 4. (back) Religious workers on the nonimmigrantR visas may be admitted for up to 5 years. 5. (back) INA �101(a)(27)(C); 8 U.S.C.1101(a)(27)(C). 6. (back) The regulations elaborate: "(E)xamplesinclude but are not limited to liturgical workers, religious instructors, religious counselors, cantors, catechists,workers in religious hospitals or religious health care facilities, missionaries, religious translators, or religiousbroadcasters. The group does not includejanitors, maintenance workers, clerks, fund raisers, or persons solely involved in the solicitation of donations." 8C.F.R. �204.5(m)(2). 7. (back) Labor certification provisions are aimedat ensuring that foreign workers do not displace or adversely affect working conditions of U.S. workers. For a fulldiscussion, see: CRS Report RS21520(pdf) , Labor Certification for Permanent Immigrant Admissions , by[author name scrubbed]. 8. (back) 8 C.F.R. �204.5(m)(2). For a discussionof the tax exempt status, see: CRS Report RL31545, Congressional Protection of Religious Liberty ,by [author name scrubbed],p. 47-48. 9. (back) Other agencies with primary responsibilityfor immigration functions are the Bureau of Customs and Border Protection and the Bureau of Immigration andCustoms Enforcement, both in DHS, and the Bureau of Consular Affairs in the Department of State. 10. (back) For a full discussion of the groundsof inadmissibility, see CRS Report RL31215, Visa Issuances: Policy, Issues, and Legislation , by RuthEllen Wasem.

A provision in immigration law that allows for the admission of immigrants to performreligious work is scheduledto sunset on September 30, 2003. Although the provision has a broad base of support, some have expressed concernthat the provision is vulnerable to fraud. The foreign religious worker must be a member of a religious denomination that has a bona fidenonprofit, religious organization in the United States, and musthave been in the religious vocation, professional work, or other religious work continuously for at least 2 years. Bills (H.R. 2152/S. 1580) to extend the religious worker provision through September 30, 2008, have been introduced in both chambers. The House passed H.R. 2152 onSeptember 17, 2003. This report will be updated as legislative activity warrants.

RS20721 -- Terrorist Attack on USS Cole: Background and Issues for Congress Updated January 30, 2001 On October 12, 2000, the U.S. Navy destroyer Cole (1) was attacked by a small boat laden with explosives during a brief refueling stop in the harbor ofAden,Yemen. (2) The suicide terrorist attack killed 17members of the ship's crew, wounded 39 others, and seriously damaged the ship. (3) The attack has been widelycharacterized as a "boat bomb" adaptation of the truck-bomb tactic used to attack the U.S. Marine Corps barracksin Beirut in 1983 and the Khobar Towers U.S.military residence in Saudi Arabia in 1996. The FBI, in conjunction with Yemeni law-enforcement officials, is leading an investigation to determine who is responsible for the attack. At least six suspects arein custody in Yemen. Evidence developed to date suggests that it may have been carried out by Islamic militantswith possible connections to the terrorist networkled by Usama bin Ladin. (4) In addition to the FBI-ledinvestigation, Secretary of Defense William Cohen has formed a special panel headed by retired GeneralWilliam W. Crouch, former Vice Chief of Staff of the Army, and retired Admiral Harold W. Gehman, Jr, formercommander-in-chief of U.S. Joint ForcesCommand. The panel, in a report released January 9, 2001, avoided assigning blame but found significantshortcomings in security throughout the region andrecommend improvements in training and intelligence designed to thwart terrorist attacks. A Navy investigation,the results of which were released by theCommander of the Atlantic Fleet on January 19, 2001, concluded that many of the procedures in the ship's securityplan had not been followed, but that even ifthey had been followed, the incident could not have been prevented. Consequently, no single individual should bedisciplined for the incident, i.e. blame must bedistributed at a number of administrative levels. Members and staff have also held classified meetings on the attackwith Administration officials. The attack on the Cole raises potential issues for Congress concerning (1) procedures used by the Cole and other U.S. forces overseas to protect against terroristattacks; (2) intelligence collection, analysis, and dissemination as it relates to potential terrorist attacks; and (3) U.S.anti-terrorism policy and how the U.S. shouldrespond to this attack. These issues are discussed below. Force-protection procedures. Before it arrived at Aden for its brief refueling stop, the Cole, like all visitingU.S. ships, was required to file a force-protection plan for the visit. This plan was approved by higher U.S. militaryauthorities, and was implemented during theship's visit. In accordance with the plan, the Cole at the time of the attack was operating under threat conditionBravo, which is a heightened state of readinessagainst potential terrorist attack. (The lowest condition of heightened readiness is Alpha; Bravo is higher; Charlieis higher still, and Delta is the highest.) Thisthreat condition includes steps that are specifically intended to provide protection against attack by small boats. Members of the House and Senate Armed Services committees and other observers have raised several issues concerning the force-protection procedures beingused by the Cole and by other U.S. military forces and bases in the region, including the following: What were the elements of the Cole's force-protection plan and how were these elements determined? Did the Cole effectively implement all the elements of this plan? If not, why not? If so, does this indicate that the plan was not adequate fordefending against this type of attack? Was the force-protection plan, including the use of threat condition Bravo, appropriate in light of the terrorist threat information that wasavailable to military officials in the days leading up to the ship's visit? Was the ship's threat condition consistentwith the very high threat condition beingmaintained at that time by the U.S. embassy in Yemen? What changes, if any, should be made in force-protection policies for ships and other U.S. military forces and bases overseas, particularly inthe Middle East and Persian Gulf region? Given the need for Navy ships to periodically refuel and receive otherservices from local sources, as well as thepotential difficulty of identifying hostile craft in often-crowded harbors, how much can be done to reduce the riskof future attacks like this one? What can be doneto protect against more sophisticated terrorist tactics for attacking ships, such as using midget or personalsubmarines, scuba divers with limpet mines, orcommand-detonated harbor mines? Should the Navy reduce its use of ports for refueling stops and instead rely moreon at-sea tanker refuelings? How manyadditional tankers, at what cost, might be needed to implement such a change, and how would this affect the Navy'sability to use such stops to contribute to U.S.engagement with other countries? In addition to these issues, members of the House and Senate Armed Services committees at the hearings also raised an underlying question on whether the Cole'srefueling stop was necessary from an operational (as opposed to political/diplomatic) point of view. (5) Intelligence collection, analysis, and dissemination. Members of the Armed Services and Intelligencecommittees as well as other observers have raised several questions relating to the role of intelligence collection,analysis and dissemination in the Cole attack andin preventing other terrorist attacks against the United States. In some cases, these questions have been spurred bypress reports about the existence of informationand analyses from the U.S. Intelligence Community that, some argue, might have helped prevent the attack had itbeen given greater consideration or beendisseminated more quickly. (6) The details of theseclaims are currently under investigation by the Executive Branch and Committees in Congress. Questionsinclude the following: Does the United States have sufficient intelligence collection capacity, particularly in the form of human intelligence (as opposed tointelligence gathering by satellites or other technical means), for learning about potential terrorist attacks,particularly in the Middle East or Persian Gulf? Doesthe attack on the Cole represent a U.S. intelligence failure, or does it instead reflect the significant challenges oflearning about all such attacks soon enough tohead them off? In the days and weeks prior to the attack on the Cole, was all the available intelligence information about potential terrorist attacks in theMiddle East and Persian Gulf given proper weight in U.S. assessments of the terrorist threat in that region? Werereports providing information and analyses ofpotential terrorist attacks in the region disseminated on a timely basis to U.S. military and civilian officials in theregion who have responsibility for providingadvice or making decisions about ship refueling stops or other military operations? Was there adequate coordination, prior to the attack on the Cole, between the Defense Department [including the National Security Agency],the State Department, and the U.S. Central Command (the regional U.S. military command for the Middle East andPersian Gulf) in sharing and using availableintelligence information and analyses on potential terrorist attacks? What actions, if any, should be taken to improve U.S. intelligence collection and analysis, particularly as it relates to potential terroristattacks on U.S. assets in the Middle East and Persian Gulf or elsewhere? U.S. anti-terrorism policy and potential response. Beyond these more specific issues, the attack on the Coleposes several additional potential issues relating to U.S. anti-terrorism policy in general. Some of these issueshighlight dilemmas and concerns inherent inpolicies designed to prevent or mitigate terrorist acts. These issues include the following: Why was Yemen chosen for refueling? U.S. Navy ships began making refueling stops in Aden in January 1999. Since then, Navy ships have stopped there 27 times to refuel, twice to make port visits, and once to take on supplies. Members of the Armed Services Committeesand other observers have asked why the U.S. Central Command decided in 1998 to begin using Yemen for refuelingstops rather than continuing to use nearbyDjibouti on the Horn of Africa (which U.S. Navy ships had used for refueling for several years) - and why CentralCommand continued to use Yemen this year forrefuelings when an April 2000 State Department report on worldwide terrorism characterized Yemen as a havenfor terrorists but did not mention Djibouti. Members and others have asked whether the risk of a terrorist attack against a U.S. ship in Yemen was properlybalanced against the political/diplomatic goals ofimproving relations with Yemen and encouraging its development toward a stable, pro-Western, democratic countrythat does not support terrorism and cooperateswith U.S. efforts to contain Iraq. In response, General Tommy R. Franks, the current Commander-in-Chief of U.S.Central Command, stated the followingregarding the process that led his predecessor, General Anthony C. Zinni, to the decision to use Yemen for refuelingstops: The decision to go into Aden for refueling was based on operational as well as geo-strategic factors and included anassessment of the terrorist and conventional threats in the region. As you know, the Horn of Africa was in greatturmoil in 1998. We had continuing instability inSomalia, the embassy bombings in Kenya and Tanzania, an ongoing war between Ethiopia and Eritrea, and aninternal war in Sudan....As of December 1998, 14 ofthe 20 countries in the USCENTCOM AOR [U.S. Central Command area of responsibility] were characterized as"High Threat"countries. Djibouti, which had been the Navy refueling stop in the Southern Red Sea for over a decade, began to deteriorate as auseful port because of the Eritrea-Ethiopia war. This war caused increased force-protection concerns for our ships,as well as congestion in the port resulting inoperational delays. The judgment at this time was that USCENTCOM needed to look for more refueling options,and Aden, Yemen was seen as a viablealternative. At the time the refueling contract was signed, the addition brought the number of ports available in theUSCENTCOM AOR to 13. Selection of whichof these ports to use for a specific refueling operation involves careful evaluation of the threat and operationalrequirements. The terrorism threat is endemic in the AOR, and USCENTCOM takes extensive measures to protect our forces.... Thethreat situation was monitored regularly in Yemen and throughout the AOR. The intelligence community andUSCENTCOM consider this AOR a High Threatenvironment, and our assessments of the regional threat and the threat in Yemen were consistent in their evaluation.We had conducted a number of threatassessments in the port, and throughout the area. However, leading up to the attack on USS Cole on 12 October,we received no specific threat information forYemen or for the port of Aden that would cause us to change our assessment. Had such warning been received,action would have been taken by the operatingforces in response to the warning. (7) Anticipating new modes of terrorist attack. Truck bombs have been used to attack U.S. targets for at least 17 years. Did U.S. intelligence and counter-terrorism agencies anticipate or consider sufficiently plausible the possible useof the maritime equivalent of a truck bombagainst a U.S. Navy ship in a harbor? If not, what changes, if any, should be made to improve the ability of U.S.intelligence and counter-terrorism agencies toidentify and give sufficient prominence to modes of terrorist attack that have not been previously used? Should U.S.officials reach out more to non-governmentalorganizations and individuals for help in this regard? Protecting against threats posed by persons with legitimate access. What is the best way to defend against terroristattacks by persons with legitimate access to U.S. installations or forces? The Cole was refueled by a private Yemeniship supply company that had advanceinformation on the ship's itinerary. Although it now appears that the attack may have been carried out by personswith no connection to this firm, the attack stillraises questions about the security implications of relying on private foreign companies to refuel U.S. Navy ships. What steps can be taken to reduce the riskposed by relying on such firms? Should, for example, the State Department's Anti-Terrorism Assistance program(ATA) be enhanced so that it can better assistforeign governments, when needed, in personnel screening and security procedures? The role of the FBI in overseas counter-terrorism investigations. Some observers have asked whether (or underwhat circumstances) it is appropriate for the FBI, traditionally a domestic U.S. law-enforcement agency, to take a de facto lead role in overseas investigations ofterrorist attacks. Although the FBI's investigative skills are critical to such investigations, some observers argue thatother skills outside the FBI's area ofspecialization, including having an in-depth understanding of foreign countries and cultures and the diplomaticability to ensure host nation cooperation, areequally important components of such investigations. Clearly, small nations may feel overwhelmed by largenumbers of FBI agents and the political sensitivitiesof their insistence on questioning local witnesses/suspects. Conferees on the FY2001 Foreign OperationsAppropriations bill ( H.R. 4811 ) made $4million for counter-terrorism training in Yemen contingent on FBI certification that Yemen is fully cooperating inthe Cole investigation. Insuring coordination of any retaliatory response. An important challenge facing U.S. counter-terrorism officials isto ensure that U.S. actions for military/economic retaliation for terrorist attacks are adequately planned. The needfor maintaining secrecy in planning militaryactions can discourage interagency coordination, which in turn can create a potential for making a planning mistake. Some observers argue that the U.S. cruisemissile attack on what some believe was a legitimate pharmaceutical factory in Sudan in response to the 1998embassy bombings in East Africa was a mistakecaused in part by lack of interagency coordination that deprived decisionmakers of important data which might haveinfluenced the target-selection process. (8) If itis determined that the attack was linked to Bin Ladin, a major issue is how the U.S. responds and prevents furtherattacks from a network that is believedresponsible for several anti-U.S. attacks since 1992. The U.S. retaliatory attack on Afghanistan in August 1998,a response to the East Africa Embassy bombings,did little to damage Bin Ladin's network or his ability to plan attacks.

On October 12, 2000, the U.S. Navy destroyer Cole was attacked by a small boat ladenwith explosives during a briefrefueling stop in the harbor of Aden, Yemen. The suicide terrorist attack killed 17 members of the ship's crew,wounded 39 others, and seriously damaged theship. Evidence developed to date suggests that it may have been carried out by Islamic militants with possibleconnections to the terrorist network led by Usamabin Ladin. The FBI, Defense Department, and Navy launched investigations to determine culpability for the attackand to review procedures. A broad DoD reviewof accountability was conducted by a special panel. On January 9, 2001, the panel issued its report which avoidedassigning blame but found significantshortcomings in security against terrorist attacks, including inadequate training and intelligence. On January 23,2001, Senate Armed Services CommitteeChairman, John Warner, announced intentions for the Committee to hold its own investigation. Issues for Congressinclude the adequacy of (1) procedures byU.S. forces to protect against terrorist attacks; (2) intelligence related to potential terrorist attacks; and (3) U.S.anti-terrorism policy and response. This report willbe updated if major new developments warrant.

The Homeland Security Act of 2002 combined 22 federal agencies specializing in various missions under DHS. Numerous departmental offices and seven key operating components are headquartered in the NCR.components were not physically consolidated, but instead were dispersed across the NCR in accordance with their history. As of July 2014, DHS employees were located in 94 buildings and 50 locations, accounting for approximately 9 million gross square feet of government-owned and - leased office space. When DHS was formed, the headquarters functions of its various DHS began planning the consolidation of its headquarters in 2005. According to DHS, increased colocation and consolidation were critical to (1) improve mission effectiveness, (2) create a unified DHS organization, (3) increase organizational efficiency, (4) size the real estate portfolio accurately to fit the mission of DHS, and (5) reduce real estate occupancy costs. Between 2006 and 2009, DHS and GSA developed a number of capital planning documents to guide the DHS headquarters consolidation process. For example, DHS’s National Capital Region Housing Master Plan identified a requirement for approximately 4.5 million square feet of office space on a secure campus. In addition, DHS’s 2007 Consolidated Headquarters Collocation Plan summarized component functional requirements and the projected number of seats needed on- and off- campus for NCR headquarters personnel. From fiscal year 2006 through fiscal year 2014, the St. Elizabeths consolidation project had received $494.8 million through DHS appropriations and $1.1 billion through GSA appropriations, for a total of over $1.5 billion. However, from fiscal year 2009—when construction began—through the time of the fiscal year 2014 appropriation, the gap between requested and received funding was over $1.6 billion. According to DHS and GSA officials, this gap created cost escalations of over $1 billion and schedule delays of over 10 years. In our September 2014 report, we found that DHS and GSA planning for the DHS headquarters consolidation did not fully conform with leading capital decision-making practices intended to help agencies effectively plan and procure assets. Specifically, we found that DHS and GSA had not conducted a comprehensive assessment of current needs, identified capability gaps, or evaluated and prioritized alternatives that would help officials adapt consolidation plans to changing conditions and address funding issues as reflected in leading practices. DHS and GSA officials reported that they had taken some initial actions that may facilitate consolidation planning in a manner consistent with leading practices. For example, DHS has an overall goal of reducing the square footage allotted per employee across the department in accordance with current workplace standards, such as standards for telework and hoteling.and GSA officials acknowledged that new workplace standards could create a number of new development options to consider, as the new standards would allow for more staff to occupy the current space at St. Elizabeths than previously anticipated. DHS and GSA officials also reported analyzing different leasing options that could affect consolidation efforts. However, we found that the consolidation plans, which were finalized between 2006 and 2009, had not been updated to reflect these actions. GAO/AIMD-99-32 and OMB Capital Programming Guide. our September 2014 report, we recommended that DHS and GSA conduct (1) a comprehensive needs assessment and gap analysis of current and needed capabilities that takes into consideration changing conditions, and (2) an alternatives analysis that identifies the costs and benefits of leasing and construction alternatives for the remainder of the project and prioritizes options to account for funding instability. DHS and GSA concurred with these recommendations and stated that their forthcoming draft St. Elizabeths Enhanced Consolidation Plan would contain these analyses. Finally, we found that DHS had not consistently applied its major acquisition guidance for reviewing and approving the headquarters consolidation project. Specifically, we found that DHS had guidelines in place to provide senior management the opportunity to review and approve its major projects, but DHS had not consistently applied these guidelines to its efforts to work with GSA to plan and implement headquarters consolidation. DHS had designated the headquarters consolidation project as a major acquisition in some years but not in others. In 2010 and 2011, DHS identified the headquarters consolidation project as a major acquisition and included the project on DHS’s Major Acquisitions Oversight List. Thus, the project was subject to the oversight and management policies and procedures established in DHS major acquisition guidance; however, the project did not comply with major acquisition requirements as outlined by DHS guidelines. For example, we found that the project had not produced any of the required key acquisition documents requiring department-level approval, such as life-cycle cost estimates and an acquisition program baseline, among others. In 2012, the project as a whole was dropped from the list. In 2013 and 2014, DHS included the information technology (IT) acquisition portion of the project on the list, but not the entire project. DHS officials explained that they considered the St. Elizabeths project to be more of a GSA acquisition than a DHS acquisition because GSA owns the site and the majority of building construction is funded through GSA appropriations. We recognize that GSA has responsibility for managing contracts associated with the headquarters consolidation project. However, a variety of factors, including the overall cost, scope, and visibility of the project, as well as the overall importance of the project in the context of DHS’s mission, make the consolidation project a viable candidate for consideration as a major acquisition. By not consistently applying this review process to headquarters consolidation, we concluded that DHS management risked losing insight into the progress of the St. Elizabeths project, as well as how the project fits in with its overall acquisitions portfolio. Thus, in our September 2014 report, we recommended that the Secretary of Homeland Security designate the headquarters consolidation program a major acquisition, consistent with DHS acquisition policy, and apply DHS acquisition policy requirements. DHS concurred with the recommendation. In our September 2014 report, we found that DHS and GSA cost and schedule estimates for the headquarters consolidation project at St. Elizabeths did not conform or only minimally or partially conformed with leading estimating practices, and were therefore unreliable. Furthermore, we found that in some areas, the cost and schedule estimates did not fully conform with GSA guidance relevant to developing estimates. We found that DHS and GSA cost estimates for the headquarters consolidation project at St. Elizabeths did not reflect leading practices, which rendered the estimates unreliable. For example, we found that the 2013 cost estimate—the most recent available—did not include (1) a life- cycle cost analysis of the project, including the cost of repair, operations, and maintenance; (2) was not regularly updated to reflect significant changes to the program including actual costs; and (3) did not include an independent estimate to assist in tracking the budget. In addition, a sensitivity analysis had not been performed to assess the reasonableness of the cost estimate. We have previously reported that a reliable cost estimate is critical to the success of any program. Specifically, we have found that such an estimate provides the basis for informed investment decision making, realistic budget formulation and program resourcing, meaningful progress measurement, proactive course correction when warranted, and accountability for results. Accordingly, we concluded that DHS and GSA would benefit from maintaining current and well- documented estimates of project costs at St. Elizabeths—even if project funding is not fully secured—and these estimates should encompass the full life cycle of the program and be independently assessed. In addition, we found that the 2008 and 2013 schedule estimates did not include all activities for both the government and its contractors necessary to accomplish the project’s objectives and did not include schedule baseline documents to help measure performance as reflected in leading practices and GSA guidance. For the 2008 schedule estimate, we also found that resources (such as labor, materials, and equipment) were not accounted for and a risk assessment had not been conducted to predict a level of confidence in the project’s completion date. In addition, we found the 2013 schedule estimate was unreliable because, among other things, it was incomplete in that it did not provide details needed to understand the sequence of events, including work to be performed in fiscal years 2014 and 2015. We concluded that developing cost and schedule estimates consistent with leading practices could promote greater transparency and provide decision makers needed information about the St. Elizabeths project and the larger DHS headquarters consolidation effort. However, in commenting on our analysis of St. Elizabeths cost and schedule estimates, DHS and GSA officials said that it would be difficult or impossible to create reliable estimates that encompass the scope of the entire St. Elizabeths project. Officials said that given the complex, multiphase nature of the overall development effort, specific estimates are created for smaller individual projects, but not for the campus project as a whole. Therefore, in their view, leading estimating practices and GSA guidance cannot reasonably be applied to the high-level projections developed for the total cost and completion date of the entire St. Elizabeths project. GSA stated that the higher-level, milestone schedule currently being used to manage the program is more flexible than the detailed schedule GAO proposes, and has proven effective even with the highly variable funding provided for the project. We found in our September 2014 report, however, that this high-level schedule was not sufficiently defined to effectively manage the program. For example, our review showed that the schedule did not contain detailed schedule activities that include current government, contractor, and applicable subcontractor effort. Specifically, the activities shown in the schedule only address high-level agency square footage segments, security, utilities, landscape, and road improvements. While we understand the need to keep future effort contained in high-level planning packages, in accordance with leading practices, near-term work occurring in fiscal years 2014 and 2015 should have more detailed information. We recognize the challenges of developing reliable cost and schedule estimates for a large-scale, multiphase project like St. Elizabeths, particularly given its unstable funding history and that incorporating GAO’s cost- and schedule-estimating leading practices may involve additional costs. However, unless DHS and GSA invest in these practices, Congress risks making funding decisions and DHS and GSA management risk making resource allocation decisions without the benefit that a robust analysis of levels of risk, uncertainty, and confidence provides. As a result, in our September 2014 report, we recommended that, after revising the DHS headquarters consolidation plans, DHS and GSA develop revised cost and schedule estimates for the remaining portions of the consolidation project that conform to GSA guidance and leading practices for cost and schedule estimation, including an independent evaluation of the estimates. DHS and GSA concurred with the recommendation. In our September 2014 report, we also stated that Congress should consider making future funding for the St. Elizabeths project contingent upon DHS and GSA developing a revised headquarters consolidation plan, for the remainder of the project, that conforms with leading practices and that (1) recognizes changes in workplace standards, (2) identifies which components are to be colocated at St. Elizabeths and in leased and owned space throughout the NCR, and (3) develops and provides reliable cost and schedule estimates. Mr. Chairman and members of the Subcommittee, this concludes my prepared statement. I look forward to responding to any questions that you may have. For questions about this statement, please contact David C. Maurer, Director, Homeland Security and Justice Issues, (202) 512-9627 or maurerd@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 David J. Wise (Director), Adam Hoffman (Assistant Director), John Mortin (Assistant Director), Karen Richey (Assistant Director), Juana Collymore, Daniel Hoy, Tracey King, Abishek Krupanand, Jennifer Leotta, David Lutter, and Jan Montgomery. 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 2014 report, entitled: Federal Real Property: DHS and GSA Need to Strengthen the Management of DHS Headquarters Consolidation ( GAO-14-648 ). The Department of Homeland Security (DHS) and General Services Administration (GSA) planning for the DHS headquarters consolidation does not fully conform with leading capital decision-making practices intended to help agencies effectively plan and procure assets. DHS and GSA officials reported that they have taken some initial actions that may facilitate consolidation planning in a manner consistent with leading practices, such as adopting recent workplace standards at the department level and assessing DHS's leasing portfolio. For example, DHS has an overall goal of reducing the square footage allotted per employee across DHS in accordance with current workplace standards. Officials acknowledged that this could allow more staff to occupy less space than when the campus was initially planned in 2009. DHS and GSA officials also reported analyzing different leasing options that could affect consolidation efforts. However, consolidation plans, which were finalized between 2006 and 2009, have not been updated to reflect these changes. According to DHS and GSA officials, the funding gap between what was requested and what was received from fiscal years 2009 through 2014, was over $1.6 billion. According to these officials, this gap has escalated estimated costs by over $1 billion--from $3.3 billion to the current $4.5 billion--and delayed scheduled completion by over 10 years, from an original completion date of 2015 to the current estimate of 2026. However, DHS and GSA have not conducted a comprehensive assessment of current needs, identified capability gaps, or evaluated and prioritized alternatives to help them adapt consolidation plans to changing conditions and address funding issues as reflected in leading practices. DHS and GSA reported that they have begun to work together to consider changes to their plans, but as of August 2014, they had not announced when new plans will be issued and whether they would fully conform to leading capital decision-making practices to help plan project implementation. DHS and GSA did not follow relevant GSA guidance and GAO's leading practices when developing the cost and schedule estimates for the St. Elizabeths project, and the estimates are unreliable. For example, GAO found that the 2013 cost estimate--the most recent available--does not include a life-cycle cost analysis of the project, including the cost of operations and maintenance; was not regularly updated to reflect significant program changes, including actual costs; and does not include an independent estimate to help track the budget, as required by GSA guidance. Also, the 2008 and 2013 schedule estimates do not include all activities for the government and its contractors needed to accomplish project objectives. GAO's comparison of the cost and schedule estimates with leading practices identified the same concerns, as well as others. For example, a sensitivity analysis has not been performed to assess the reasonableness of the cost estimate. For the 2008 and 2013 schedule estimates, resources (such as labor and materials) are not accounted for and a risk assessment has not been conducted to predict a level of confidence in the project's completion date. Because DHS and GSA project cost and schedule estimates inform Congress's funding decisions and affect the agencies' abilities to effectively allocate resources, there is a risk that funding decisions and resource allocations could be made based on information that is not reliable or is out of date.