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On March 2, 2009, the House Judiciary Committee reported the District of Columbia House Voting Rights Act of 2009, H.R. 157 (111 th Congress). The bill, as amended ( H.Rept. 111-22 ), among other provisions, would expand the U.S. House of Representatives by two members to a total of 437 members. The first of these two new seats would be allocated to create a voting member representing the District of Columbia. The second seat would be assigned in accordance with 2000 census data and existing federal law, resulting in the addition of a fourth congressional seat in the state of Utah that would be a temporary at-large district. No further action was taken by the House. On February 26, 2009, the Senate passed a related bill, S. 160 , by a vote of 61-37. During the 110 th Congress, the House passed similar legislation, H.R. 1905 , by a vote of 241 to 177. A similar bill, S. 1257 , was considered by the Senate, but a motion to invoke cloture failed by a vote of 57 to 42. This report discusses the constitutionality of the aspect of this legislation that would create an at-large congressional district. For discussion of other issues relating to this legislation, see CRS Report RL33824, The Constitutionality of Awarding the Delegate for the District of Columbia a Vote in the House of Representatives or the Committee of the Whole , by [author name scrubbed]; CRS Report RS22579, District of Columbia Representation: Effect on House Apportionment , by [author name scrubbed]; and CRS Report RL33830, District of Columbia Voting Representation in Congress: An Analysis of Legislative Proposals , by [author name scrubbed]. The U.S. Constitution provides the states with primary authority over congressional elections, but grants Congress the final authority over most aspects of such elections. This congressional power is at its most broad in the case of House elections, which have historically been decided by a system of popular voting. Article I, § 4, cl. 1 provides that The Times, Places and Manner of holding Elections for Senators and Representatives, shall be prescribed in each State by the Legislature thereof; but the Congress may at any time by Law make or alter such Regulations, except as to the Places of chusing Senators. The Supreme Court and lower courts have interpreted this language to mean that Congress has extensive power to regulate most elements of congressional elections, including a broad authority to protect the integrity of those elections. The Constitution does not specify how members of the House are to be elected once they are apportioned to a state. Originally, most states having more than one Representative divided their territory into geographic districts, permitting only one member of Congress to be elected from each district. Other states, however, allowed House candidates to run at-large or from multi-member districts or from some combination of the two. In those states employing single-member districts, however, the problem of gerrymandering, the practice of drawing district lines in order to maximize political party advantage, quickly arose. Accordingly, Congress began establishing standards for House districts. Congress first passed federal redistricting standards in 1842, when it added a requirement to the apportionment act of that year that Representatives "should be elected by districts composed of contiguous territory equal in number to the number of Representatives to which each said state shall be entitled, no one district electing more than one Representative." (5 Stat. 491.) The Apportionment Act of 1872 added another requirement to those first set out in 1842, stating that districts should contain "as nearly as practicable an equal number of inhabitants." (17 Stat. 492.) A further requirement of "compact territory" was added when the Apportionment Act of 1901 was adopted stating that districts must be made up of "contiguous and compact territory and containing as nearly as practicable an equal number of inhabitants." (26 Stat. 736.) Although these standards were never enforced if the states failed to meet them, this language was repeated in the 1911 Apportionment Act and remained in effect until 1929, with the adoption of the Permanent Apportionment Act, which did not include any districting standards. After 1929, there were no congressionally imposed standards governing congressional redistricting; in 1941, however, Congress enacted a law providing for various contingencies if states failed to redistrict after a census—including at-large representation. (55 Stat 761.) In 1967, Congress reimposed the requirement that Representatives must run from single-member districts, rather than running at-large. (81 Stat. 581.) Both the 1941 and 1967 laws are still in effect, codified at 2 U.S.C. §§ 2a and 2c. In Branch v. Smith , the Supreme Court considered the operation and inherent tension between these two provisions. The question of congressional authority was not in dispute in this litigation. Rather, the Court noted in passing that the current statutory scheme governing apportionment of the House of Representatives was enacted in 1929 pursuant to congressional authority under the "Times, Places and Manner" provision of the Constitution. Consequently, it seems likely that Congress has broad authority, within specified constitutional parameters, to establish how members' districts will be established, including the creation of at-large districts. It might be suggested that creating an at-large congressional district in a state could violate the "one person, one vote" standard established by the Supreme Court in Wesberry v. Sanders. In Wesberry , the Supreme Court first applied the one person, one vote standard in the context of evaluating the constitutionality of a Georgia congressional redistricting statute that created a district with two to three times as many residents as the state's other nine districts. In striking down the statute, the Court held that Article I, section 2, clause 1, providing that Representatives be chosen "by the People of the several States" and be "apportioned among the several States ... according to their respective Numbers," requires that "as nearly as is practicable, one man's vote in a congressional election is to be worth as much as another's." While it is not beyond dispute, it does not appear that the creation of an at-large district under the circumstances outlined in H.R. 157 would be interpreted to create a conflict with the "one person, one vote" standard. Under H.R. 157 , each Utah voter would have the opportunity to vote both for a candidate to represent his or her congressional district as well as for a candidate to represent the state at-large. Each person's vote for an at-large candidate would be of equal worth. Further, each person's vote for an at-large candidate would not affect the value of his or her vote for a candidate representing a congressional district. Accordingly, all Utah residents' votes would have equal value, thereby arguably comporting with the one person, one vote principle. Based on the authority granted to Congress under the Constitution to regulate congressional elections and relevant Supreme Court precedent, it appears that a federal law establishing a temporary at-large congressional district would likely be upheld as constitutional.

This report discusses the constitutionality of legislation, such as the District of Columbia House Voting Rights Act of 2009, H.R. 157 (111th Congress), that would create an at-large congressional district. While it is not without doubt, based on the authority granted to Congress under the Constitution to regulate congressional elections and relevant Supreme Court precedent, it appears that federal law establishing a temporary at-large congressional district would likely be upheld as constitutional. H.R. 157, among other provisions, would expand the U.S. House of Representatives by two members to a total of 437 members. The first of these two new seats would be allocated to create a voting member representing the District of Columbia. The second seat would be assigned in accordance with 2000 census data and existing federal law, resulting in the addition of a fourth congressional seat in the state of Utah that would be a temporary at-large district. On March 2, 2009, the House Judiciary Committee reported the bill, as amended (H.Rept. 111-22), but no further action was taken by the House. On February 26, 2009, the Senate passed a related bill, S. 160, by a vote of 61-37. During the 110th Congress, the House passed similar legislation, H.R. 1905, by a vote of 241 to 177. A companion bill, S. 1257, was considered by the Senate, but a motion to invoke cloture failed by a vote of 57 to 42.

Historically, the Congress has limited VA’s authority to provide medical care to veterans, expanding it in a careful and deliberate manner. Although VA’s authority has increased significantly over the years, important limitations have not been recognized by VA in establishing and operating new access points. At the access points we visited, many veterans receive primary care contrary to applicable statutory limitations and priorities on their eligibility for such services. As authority for operating contract access points, VA relies on a statute (38 U.S.C. 8153) that permits it to enter into agreements “for the mutual use, or exchange of use, of specialized medical resources when such an agreement will obviate the need for a similar resource to be provided” in a VA facility. Specialized medical resources are equipment, space, or personnel that—because of cost, limited availability, or unusual nature—are unique in the medical community. VA officials assert that primary care provided at access points is a specialized medical resource because its limited availability to veterans in areas where VA facilities are geographically inaccessible (or inconvenient) makes it unique. One significant aspect of VA’s reliance on this authority is that it effectively broadens the eligibility criteria for contract outpatient care, thus allowing some veterans, who would otherwise be ineligible, to receive treatment. In our view, this statute does not authorize VA to provide primary care through its access points. Nothing in the statute suggests that the absence of a VA facility close to veterans in a particular area makes primary care physicians unique in the medical community. The purpose of allowing VA to contract for services under the specialized medical resources authority is not to expand the geographic reach of its health care system, but to make available to eligible veterans services that are not feasibly available at a VA facility that presently serves them. Furthermore, contracting for the provision of primary care at access points does not obviate the need for primary care physicians at the parent VA facility. VA has specific statutory authority (38 U.S.C. 1703) to contract for medical care when its facilities cannot provide necessary services because they are geographically inaccessible. that are more restrictive than those under 38 U.S.C. 8153, upon which VA relies. For example, under 38 U.S.C. 8153, a veteran who has income above a certain level and no service-connected disability is eligible for pre- and post-hospitalization medical services and for services that obviate the need for hospitalization. But under 38 U.S.C. 1703, that same veteran is not eligible for pre-hospitalization medical services or for services that obviate the need for hospitalization. If access points are established in conformance with 38 U.S.C. 1703, VA would need to limit the types of services provided to all veterans except those with service-connected disabilities rated at 50 percent or higher (who are eligible to receive treatment of any condition). All other veterans are generally eligible for VA care based on statutory limitations (and to the extent that VA has sufficient funds). For example, veterans with service-connected conditions are eligible for all care needed to treat those conditions. Those with disabilities rated at 30 or 40 percent are eligible for care of non-service-connected conditions at contract access points to complete treatment incident to hospital care. Furthermore, veterans with disabilities rated at 20 percent or less, as well as those with no service-connected disability, may only be eligible for limited diagnostic services and follow-up care after hospitalization. Most veterans currently receiving care at access points do not have service-connected conditions and, therefore, do not appear to be eligible for all care provided. VA is to assess each veteran’s eligibility for care on the merits of his or her unique situation each time that the veteran seeks care for a new medical condition. We found no indication that VA requires access point contractors to establish veterans’ eligibility or priority for primary care or that contractors were making such determinations for each new condition. Last year, VA proposed ways to expand its statutory authority and veterans’ eligibility for VA health care. Several bills have been introduced that, if enacted, should authorize VA hospitals to establish contract access points and provide more primary care services to veterans in the same manner as the new access points are now doing. VA hospital directors are likely to face an evolving series of financial challenges as they establish new access points. In the short term, hospitals must finance new access points within their existing budgets; this will generally require a reallocation of resources among hospitals’ activities. Over the longer term, VA hospitals may incur unexpected, significant cost increases to provide care to veterans who would otherwise not have used VA’s facilities. These costs may, however, be offset somewhat if access points allow hospitals to serve current users more efficiently. So far, VA hospitals have successfully financed access points by implementing local management initiatives, unrelated to the access points, which allow the hospitals to operate more efficiently. For example, one hospital director estimated that he had generated resources for new access points by consolidating underused medical wards at a cost savings of $250,000. To date, most directors have concluded that it was more cost-effective to contract for care in the target locations than operate new access points themselves. Essentially, they have found that it is not cost-effective to operate their own access points for a relatively small number of veterans. For example, one hospital that targeted 173 veterans for an access point concluded that this number could be most efficiently served by contracting for care. By contrast, private providers seem willing to serve small numbers of veterans on a contractual, capitated basis because they already have a non-VA patient base and sufficient excess capacity to meet VA’s needs. The longer-term effects of new access points on VA’s budget are less certain. This is because VA has not clearly delineated its goals and objectives; nor has it developed a plan that specifies the total number of potential access points, time frames for beginning operations, estimates of current and potential new veterans to be served, and related costs. Of these, key cost factors appear to be the magnitude of new users and their willingness to be referred to VA hospitals for specialty and inpatient care. Costs could potentially vary greatly depending on whether VA hospitals’ primary objective is to improve convenience for current users or to expand their market share by attracting new users. average, each spend about $300,000 a year to provide primary care to about 1,500 veterans. This hospital can reduce the number of teams to 4 once it enrolls 1,500 veterans at new access points closer to their homes. These newly established access points could be cost-effective if their total costs are the same or lower than the VA hospital’s costs—$300,000 or less in this case. VA hospitals, however, could experience significant budget pressures if new access points modestly increase VA’s market share. For example, VA currently serves about 2.6 million of our nation’s 26 million veterans. To date, 40 percent of the 5,000 veterans enrolled at VA’s 12 new access points had not received VA care within the last 3 years. Most of the new users we interviewed had learned about the access points through conversations with other veterans, friends, and relatives or from television, newspapers, and radio. VA’s access points may prove more attractive to veterans in part because they overcome barriers such as geographic inaccessibility and quality of care. About half of the veterans who have used VA health care in the past, and a larger portion of the new users, said that it matters little whether they receive care in a VA-operated facility. In fact, almost two-thirds of the new users indicated that if hospitalization is needed, they would choose their local hospital rather than a distant VA facility. Veterans will also generally benefit financially by enrolling in new VA access points. For example, prior VA users will save expenses incurred traveling to distant VA facilities as well as out-of-pocket costs for any primary care received from non-VA providers; most said that they use both VA and non-VA providers. New VA users will also save out-of-pocket costs, with low-income veterans receiving free care and high-income veterans incurring relatively nominal charges. now VA pays the contract provider a capitated rate and then bills the insurer to recover its costs on a fee-for-service basis. The combination of these factors could lead to VA attracting several hundred thousand new users through its access points. This may force VA to turn veterans away if sufficient resources are not available, or it may cause VA to seek additional appropriations to accommodate the potential increased demand. Currently, VA is to provide outpatient care to the extent resources are available. When resources are insufficient to care for all eligible veterans, VA is to care for veterans with service-connected disabilities before providing care to those without such disabilities. Furthermore, when VA provides care to veterans without service-connected disabilities, it is to provide care for those with low incomes before those with high incomes. Presently, most of the nine hopsitals encourage current and new users to enroll in their new access points. For example, the 3 hospitals we visited had enrolled 1,250 veterans in new access points. Of the 1,250, about 20 percent had service-connected disabilities, including about 4 percent rated at 50 percent or higher. Of the remaining 80 percent, most had low incomes, including about 10 percent who were receiving VA pensions or aid and attendance benefits. Inequities in veterans’ access to VA care have been a long-standing concern. For example, about three-fourths of veterans (both those with service-connected conditions and others) using VA clinics live over 5 miles away, including about one-third who live over 25 miles away. Establishing new access points gives VA the opportunity to reduce some of these veterans’ travel distances. Although VA provided general guidance, it left the development of specific criteria for targeting new locations and populations to be served to network and hospital directors. Directors have several options when targeting new locations and populations to be served. For example, they could target those current users or potential new users living the greatest distances from VA facilities. have improved convenience for existing users and attracted new users as well. However, two new access points have served only current VA users, while another one has served only new users. VA’s plans to establish access points could represent a defining moment for its health care system as it prepares to move into the 21st century. On one hand, VA hospitals could use a relatively small amount of resources to improve access for a modest number of current or new users, such as those living the greatest distances from VA facilities or in the most underserved areas. On the other hand, VA hospitals could, over the next several years, open hundreds of access points and greatly expand market share. There are over 26 million veterans and 550,000 private physicians who could contract to provide care at VA expense. VA’s growth potential appears to be limited only by the availability of resources and statutory authority, new veteran users’ willingness to be referred to VA hospitals, and other health care providers’ willingness to contract with VA hospitals. Although VA should be commended for encouraging hospital directors to serve veterans using their facilities in the most convenient way possible, VA has not established access points in conformance with existing statutory authority. In our view, under current statutes, new access points should be VA-operated or provide contract care for only those services or classes of veterans specifically designated by VA’s geographic inaccessibility authority. While legislative changes are needed to authorize VA hospitals to provide primary care to veterans in the same manner as the new access points are now doing, such changes carry with them several financial and equity-of-access implications. In addition, VA has not developed a plan to ensure that hospitals establish access points in an affordable manner. If developed, such a plan could articulate the number of new access points to be established, target populations to be served, time frames to begin operations, and related costs and funding sources. It could also articulate specific travel times or distances that represent reasonable veteran travel goals that hospitals could use in locating access points. points in accordance with the statutory service priorities. If sufficient resources are not available to serve all eligible veterans expected to seek care, new access points that are established would serve, first, veterans with service-connected disabilities and then, second, other categories of veterans, with higher income veterans served last. Finally, this approach could provide for more equitable access to VA care than VA’s current strategy of allowing local hospitals to establish access points that serve veterans on a first-come, first-served basis and then rationing services when resources run out. Mr. Chairman, this concludes my statement. I will be happy to answer any questions that you or other Members may have. For more information, please call Paul Reynolds, Assistant Director, at (202) 512-7109. Michael O’Dell, Patrick Gallagher, Abigail Ohl, Robert Crystal, Sylvia Shanks, Linda Diggs, Larry Moore, and Joan Vogel also contributed to the preparation of this statement. The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. U.S. General Accounting Office P.O. Box 6015 Gaithersburg, MD 20884-6015 Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders may also be placed by calling (202) 512-6000 or by using fax number (301) 258-4066, or TDD (301) 413-0006. Each day, GAO issues a list of newly available reports and testimony. To receive facsimile copies of the daily list or any list from the past 30 days, please call (202) 512-6000 using a touchtone phone. A recorded menu will provide information on how to obtain these lists.

GAO discussed the Department of Veterans Affairs' (VA) plan to improve veterans' access to primary health care. GAO noted that: (1) by creating new access points, VA may be able to cost-effectively improve users' access to health care and reduce the inequities in veterans' access caused by geographic inaccessibility; (2) creating new access points may increase costs dramatically, since VA failure to adhere to statutory eligibility limitations has resulted in an increase in the amount of services provided and members receiving benefits; (3) the lack of a VA facility in a particular area does not necessarily justify the establishment of a new primary care access point in that area; (4) VA hospitals need to find ways to finance new access points through reorganization of resources rather than with additional funds; (5) in some underserved areas, it has been more cost-effective to contract for health care services rather than establishing a new VA access point; and (6) new access points could cause financial difficulties for VA, because these new facilities will make VA funded care more accessible to veterans who would otherwise not have used VA facilities.

T he Public Safety Officers' Benefits (PSOB) program was authorized by P.L. 94-430 , the Public Safety Officers' Benefits Act of 1976 ("the PSOB Act"). The PSOB program was "designed to offer peace of mind to men and women seeking careers in public safety and to make a strong statement about the value that America places on the contributions of those who serve their communities in potentially dangerous circumstances." The program was created by Congress out of a concern that "the hazards inherent in law enforcement and fire suppression and the low level of state and local death benefits might discourage qualified individuals from seeking careers in public safety, thus hindering the ability of communities to protect themselves." The PSOB program is administered by the Department of Justice, Bureau of Justice Assistance's (BJA's), PSOB Office. The PSOB Office is responsible for reviewing, processing, and making determinations about claims for benefits under the PSOB program. The PSOB program originally provided only death benefits to survivors of public safety officers killed in the line of duty. Since its inception in 1976, the PSOB program has been expanded to provide disability benefits to public safety officers disabled by an injury suffered in the line of duty and education benefits to the spouses and children of public safety officers killed or disabled in the line of duty. Each of these benefits is discussed in more detail below. The PSOB death benefit is a mandatory program, and the disability and education benefits are discretionary programs. As such, Congress appropriates "such sums as are necessary" each fiscal year to fund the PSOB death benefit program while appropriating separate amounts for both the disability and education benefits programs. Only individuals who are public safety officers, or their eligible survivors, are eligible to receive PSOB benefits. For the purposes of the PSOB Act, a "public safety officer" is defined as an individual serving a public agency in an official capacity, with or without compensation, as a law enforcement officer, firefighter, or a chaplain; an employee of the Federal Emergency Management Agency (FEMA) who is performing official duties, if those official duties are related to a major disaster or emergency that has been or is later declared to exist with respect to the area under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.) and are determined by the Administrator of FEMA to be hazardous duties; an employee of a state, local, or tribal emergency management or civil defense agency who is performing official duties in cooperation with FEMA, if those official duties are related to a major disaster or emergency that has been or is later declared to exist with respect to the area under the Robert T. Stafford Disaster Relief and Emergency Assistance Act and are determined by the head of the agency to be hazardous duties; or a member of a rescue squad or ambulance crew who, as authorized or licensed by law and by the applicable agency or entity, is engaging in rescue activities or providing emergency medical services. The PSOB program provides a death benefit to eligible survivors of a public safety officer whose death is the direct and proximate result of a traumatic injury sustained in the line of duty or certain work-related heart attacks or strokes. To receive a death benefit, the claimant must establish that the public safety officer died as the direct and proximate result of an injury sustained in the line of duty. Under the program, it is presumed that a public safety officer who dies from a heart attack, stroke, or vascular rupture while engaged in, on duty after, or within 24 hours of participating in a non-routine stressful or strenuous physical law enforcement, fire suppression, rescue, hazardous material response, emergency medical services, prison security, disaster relief, or other emergency response activity or a training exercise involving non-routine stressful or strenuous physical activity, has died in the line of duty for death benefit purposes. However, the statutory presumption can be overcome with competent medical evidence to the contrary. The PSOB program pays a one-time lump sum death benefit to eligible survivors of a public safety officer killed in the line of duty. The amount paid to the officer's survivors is the amount authorized to be paid on the date that the officer died, not the amount authorized to be paid on the date that the claim is approved. The current death benefit is $350,079. Survivors of state and local law enforcement officers and firefighters may receive a death benefit if the officer or firefighter died on or after September 29, 1976. Survivors of federal law enforcement officers and firefighters may receive a death benefit if the officer or firefighter died on or after October 12, 1984. A death benefit may be awarded to survivors of members of federal, state, and local public rescue squads or ambulance crews who died on or after October 15, 1986. A death benefit may be awarded to survivors of FEMA personnel and state, local, and tribal emergency management and civil defense agency employees working in cooperation with FEMA who died on or after October 30, 2000. Survivors of chaplains who serve a police or fire department in an official capacity who died on or after September 11, 2001, are eligible to receive a death benefit under the PSOB program. Finally, the survivors of an officer who died of a heart attack, stroke, or vascular rupture on or after December 15, 2003, are eligible to receive a death benefit. PSOB death benefits are paid to eligible survivors in the following order: If the officer is survived by only a spouse and no children, 100% of the death benefit goes to the spouse. If the officer is survived by a spouse and children, 50% of the death benefit goes to the spouse and the remaining 50% is distributed equally among the officer's children. If the officer is survived by only children and not a spouse, the death benefit is equally distributed among the officer's children. If the officer is survived by neither a spouse nor children, the death benefit is paid to the individual(s) designated by the officer in the most recently executed designation of beneficiary on file at the time of the officer's death. If the officer does not have a designation of beneficiary on file, the benefit is paid to the individual(s) designated by the officer in the most recently executed life insurance policy on file at the time of the officer's death. If the officer is survived by neither a spouse nor eligible children, and the officer does not have a life insurance policy, the death benefit is equally distributed between the officer's surviving parents. If the officer is survived by neither a spouse, nor eligible children, nor parents, and the officer did not have a designation of beneficiary or a life insurance policy on file at the time of his or her death, the benefit is paid to surviving adult, non-dependent, children of the officer. Title XIII of P.L. 101-647 expanded the scope of the PSOB program to provide a disability benefit to public safety officers who have been permanently and totally disabled as the direct and proximate result of a catastrophic injury sustained in the line of duty, if the injury permanently prevents the officer from performing any gainful work. The claimant is responsible for establishing that he or she suffered a permanent and total disability as the direct and proximate result of an injury sustained in the line of duty. Like the PSOB death benefit program, the disability benefit program pays a one-time lump sum disability benefit to public safety officers disabled in the line of duty. The current disability benefit is $350,079. Most public safety officers (federal, state, and local law enforcement officers; firefighters; and members of rescue squads and ambulance crews) are eligible to receive disability benefits if they were disabled by an injury suffered in the line of duty on or after November 29, 1990. As of October 30, 2000, employees of FEMA and state, local, and tribal emergency management and civil defense agency employees working in cooperation with FEMA are also eligible to receive disability benefits. Chaplains who serve a police or fire department in an official capacity who are disabled on or after September 11, 2001, are also eligible to receive disability benefits under the PSOB program. A death or disability benefit will not be paid if the fatal or catastrophic injury was caused by the intentional misconduct of the public safety officer or the officer's intention to bring about his or her death, disability, or injury; if the public safety officer was voluntarily intoxicated at the time of his or her fatal or catastrophic injury; if the public safety officer was performing his or her duties in a grossly negligent manner at the time of his or her fatal or catastrophic injury; if an eligible survivor's actions were a substantial contributing factor to the officer's fatal or catastrophic injury; or with respect to any individual employed in a capacity other than a civilian capacity. When making a determination about whether a death or disability benefit is to be paid, the PSOB Office is required to presume that none of the above conditions applied in the case of the officer's death or disability. In addition, the PSOB Office shall not determine that the above conditions applied absent clear and convincing evidence. The Federal Law Enforcement Dependents Assistance Act of 1996 ( P.L. 104-238 ) authorized the Public Safety Officers' Educational Assistance (PSOEA) program. PSOEA provides assistance to spouses and children of public safety officers killed or disabled in the line of duty who attend a program of higher education at an eligible educational institution. PSOEA funds may be used to defray expenses associated with attending college, including tuition, room and board, books, supplies, and education-related fees. The spouse of a deceased or disabled public safety officer is eligible to receive education benefits under PSOEA anytime during his or her lifetime. However, the child of a deceased or disabled public safety officer is no longer eligible for assistance after his or her 27 th birthday, absent a finding of extraordinary circumstances. However, the age limitation can be extended for certain circumstances related to delays in approving a claim for benefits. A spouse or child of a deceased or disabled public safety officer cannot receive PSOEA funds for more than 45 months of full-time education or a proportionate period of part-time education. Currently, the amount of the PSOB educational benefit is $1,041 per month of full-time college attendance. Under the PSOEA program, the families of federal, state, and local police, fire, and emergency public safety officers are covered for line-of-duty deaths that occurred on or after January 1, 1978. Families of disabled federal law enforcement officers are eligible for benefits if the officer was disabled on or after October 3, 1996, whereas families of disabled state and local police, fire, and emergency public safety officers are eligible for benefits if the officer was disabled on or after November 13, 1998. Families of FEMA personnel and state, local, and tribal emergency management and civil defense agency employees are covered for such injuries sustained on or after October 30, 2000. Claimants are allowed to appeal claims that are denied by the PSOB Office. A claimant has 33 days after being served with a notice of denial to request a determination by a hearing officer. The claimant may file supporting evidence or legal arguments along with the request for a hearing officer determination. After the appeal is assigned to a hearing officer, the claimant is notified that any supporting evidence and legal arguments he or she wishes to provide must be filed with both the hearing officer and the PSOB Office. The hearing officer, who reviews the claim de novo—meaning that the hearing officer reviews the entire claim anew rather than reviewing the finding, determinations, decisions, judgments, rulings, or other actions of the PSOB Office—and makes a determination. A claimant appealing the denial of a death or disability benefit can request that the hearing officer hold a hearing. A request for a hearing will not be granted if the claimant does not request a hearing within 90 days of the claim being assigned to a hearing officer, unless, for good cause shown, the Director of BJA (the Director) extends the filing deadline. The purpose of the hearing is to allow the hearing officer to collect evidence from the claimant and his witnesses and any other evidence the hearing officer may decide is necessary or useful. At the hearing, the hearing officer may exclude evidence whose probative value is substantially outweighed by undue delay, waste of time, or needless presentation of cumulative evidence. Witnesses (other than the claimant and anyone who the claimant has shown to be essential to the presentation of the claim) are prevented from hearing the testimony of other witnesses at the hearing. If a claim is denied by the hearing officer, the claimant can appeal to the Director. If the denied claim is not appealed to the Director, the hearing officer's determination is considered the final agency determination of the claim. A claimant has 33 days after being notified by the hearing officer that the claim has been denied to file an appeal with the Director, unless, for good cause shown, the Director extends the filing deadline. Like the request for a hearing officer determination, the claimant may file supporting evidence or legal arguments along with the request for an appeal. If the Director denies the claim, the claimant can appeal the denial in the United States Court of Federal Claims pursuant to 28 U.S.C. § 1491(a). However, to petition the court to review the denial of a claim, the claimant must exhaust the administrative remedies available, meaning that the claimant must have asked for both a hearing officer determination and a Director review. The Director's determination constitutes the final agency determination of the claim.

The Public Safety Officers' Benefits (PSOB) program provides three different types of benefits to public safety officers and their survivors: death, disability, and education benefits. The PSOB program is administered by the Department of Justice, Bureau of Justice Assistance's (BJA's) PSOB Office. The PSOB death benefit is a mandatory program, and the disability and education benefits are discretionary programs. As such, Congress appropriates "such sums as are necessary" each fiscal year to fund the PSOB death benefit program while appropriating separate amounts for both the disability and education benefits programs. The PSOB program provides a one-time lump sum death benefit to eligible survivors of public safety officers whose deaths are the direct and proximate result of a traumatic injury sustained in the line of duty or from certain line-of-duty heart attacks, strokes, and vascular ruptures. The PSOB program provides a one-time lump sum disability benefit to public safety officers who have been permanently and totally disabled by a catastrophic injury sustained in the line of duty, if the injury permanently prevents the officer from performing any gainful work. The PSOB program also provides assistance for higher education expenses (e.g., tuition and fees, books, supplies, and room and board) to spouses and children of public safety officers who have been killed or disabled in the line of duty. Educational assistance is available to the spouse and children of a public safety officer after the PSOB death or disability claim has been approved and awarded. Claimants have the opportunity to appeal denied claims. If the PSOB Office denies a claim, the claimant can request that a hearing officer review the claim. If the hearing officer denies the claim, the claimant can request that the Director of BJA review the claim. Claimants may file supporting evidence or legal arguments along with their request for a review by a hearing officer or the Director. If the claim is denied by the Director, claimants can appeal the denial in the United States Court of Federal Claims pursuant to 28 U.S.C. §1491(a).

On January 11, 2007, at 5:28 pm EST, the PRC conducted its first successful direct-ascent anti-satellite (ASAT) weapons test, launching a ballistic missile armed with a kinetic kill vehicle (not an exploding conventional or nuclear warhead) to destroy the PRC's Fengyun-1C weather satellite at about 530 miles up in low earth orbit (LEO) in space. The PLA conducted the test near China's Xichang Space Center in Sichuan province. The weapon under development was fired from a mobile transporter-erector-launcher (TEL). China reportedly used a two-stage, solid-fuel medium-range ballistic missile that was launched from a TEL. A U.S. intelligence official testified to Congress that the U.S. designation of this ASAT weapon is SC-19. A National Security Council spokesman issued the White House's public response on January 18, stating that "China's development and testing of such weapons is inconsistent with the spirit of cooperation that both countries aspire to in the civil space area." He stated that the PRC used a land-based, medium-range ballistic missile. He also noted that the United States and other countries responded with formal protests to China. Australia, Canada, United Kingdom, South Korea, Japan, Taiwan, and the European Union reportedly also issued concerns. Russia downplayed the test. China did not give advance warnings and its Foreign Ministry did not issue a public statement until January 23, saying that China calls for the peaceful use of space and that the test was not aimed at any country. The critical challenge in the short term is posed by the space debris resulting from the PRC's intentional destruction of a satellite. It was the first such destruction of a satellite since the ASAT tests conducted during the Cold War by the United States and the Soviet Union in the 1980s. Since then, neither the United States nor Russia has destroyed satellites in space, while many more civilian and military satellites have been used by countries and companies. In LEO (up to 2,000 km, or 1,242 miles altitude), reconnaissance and weather satellites, and manned space missions (including the International Space Station, Space Shuttle, and China's manned flights) are vulnerable to the increase in space debris resulting from China's satellite destruction. This debris cloud (estimated at 950 pieces 4 inches or bigger plus thousands of smaller pieces) threatens space assets in LEO, according to the Johnson Space Center. The Director of Space Operations at the Air Force said that his staff tracked about 14,000 particles before January 11, and that number increased to about 15,000. The Commander of the Strategic Command (STRATCOM) testified that the last U.S. kinetic ASAT test occurred in 1985 and at the lower altitude of LEO, and even so, the debris took over 20 years to come down out of space and burn up in the atmosphere. China's test was in the upper altitude of LEO and the resulting debris is seen as a threat to space assets for more than 20 years. According to the Air Force Space Command, the space debris increased the collision risk for about 700 spacecraft. China has known about international concerns about space debris. Its "Space White Paper" of October 2006 stated that China has "actively participated" in the Inter-Agency Space Debris Coordination Committee, initiated a Space Debris Action Plan, and increased international exchanges on space debris research. The longer-term implications concern some questions about China's capability and intention to attack U.S. satellites. Whereas the Secretary of Defense has reported publicly to Congress since 1998 that China's military has been developing an ASAT capability, some observers doubted the Pentagon's assertions. China's January 2007 test confirmed China's long-suspected program to develop ASAT weapons, a program that could potentially put at risk U.S. military and intelligence satellites that are needed to provide tracking and targeting for rapid reaction or other operations. China demonstrated a limited capability to use a missile to launch a kinetic kill vehicle to destroy one of its own satellites in LEO under testing conditions that it controlled. The mobility of this ASAT weapon under development also could present challenges for U.S. tracking and warning time. Aside from developing and testing this ASAT capability, China does not have enough satellite interceptors, although it can produce enough of them by 2010 to destroy most U.S. satellites in LEO with little warning, estimates the Defense Department. Also, the ASAT test did not threaten the U.S. missile defense system. The Director of the Defense Intelligence Agency testified to Congress that the test demonstrated China's capability "to eventually deploy an ASAT system that could threaten U.S. satellites." Threat consists of capabilities and intentions, stressed the Chairman of the Joint Chiefs of Staff, General Peter Pace, at a news conference on March 7, 2007. He visited China on March 22-26, and reported that the intention of the ASAT test remained unclear. China has not explained how it intends to use this ASAT weapon that has been tested. Various comments by PLA officers and PRC civilian analysts have justified the ASAT test as needed to counter perceived U.S. "hegemony" in space and target the vulnerability of U.S. dependence on satellites. A PLA Air Force colonel wrote in late 2006 that U.S. military power, including long-range strikes, have relied on superiority in space and that leveraging space technology can allow a rising power to close the gap with advanced countries more rapidly than trying to catch up. A PRC specialist at Fudan University indicated that China's ASAT program is developed partly to maintain China's nuclear deterrence, perceived as undermined by U.S. space assets. An analyst at the PLA's Academy of Military Science argued that China does not have a clear space deterrence theory and that China likely seeks a limited capability to counter U.S. dominance in space and reduce the likelihood of U.S. attacks against space assets. Some news reports speculated that this ASAT test surprised U.S. intelligence. Although China's test confirmed long-standing Defense Department reporting about China's counter-space program, some warnings seemed inconsistent with China's January 2007 kinetic kill ASAT test. In the three annual reports on the PLA from 2004 to 2006 (required by the FY2000 National Defense Authorization Act), the Secretary of Defense reported to Congress that China could destroy or disable satellites in space "only" by launching a ballistic missile or space launch vehicle "armed with a nuclear weapon." However, the Pentagon's 2003 report warned that China was developing a "direct-ascent ASAT system" that could be fielded between 2005 and 2010. Also, U.S. intelligence reportedly knew about the PLA's previous tests and preparations for this latest ASAT test. A number of U.S. intelligence agencies had a "full court press underway" to monitor the ASAT test on January 11, and it was the fourth test that the United States monitored using missile-warning satellites. China conducted three previous tests in this weapon program between September 2004 and February 2006, according to a U.S. official. Despite foreign protests, China did not issue an official statement until January 23, 12 days after the ASAT test. China's Foreign Ministry simply stated that its "experiment" did not target or threaten any country and that China opposes the weaponization of space or an arms race in space. Beijing's lack of a prepared explanation and delay in issuing a statement raised questions about whether the top leaders approved the PLA's ASAT tests, coordinated between the Foreign Ministry and the PLA, miscalculated foreign responses, or approved the ASAT program and anticipated criticisms but decided anyway to test. Adding to concerns about China's intentions, the ASAT test did not come at a time of bilateral tensions. After the U.S.-China summit in April 2006, NASA and the STRATCOM proposed civilian and military space contacts with China, and NASA's Administrator visited China in September 2006. In this debate, National Security Advisor Stephen Hadley questioned whether China's leaders knew about the PLA's ASAT test in advance, suggesting that U.S. protests sought to compel top ruler Hu Jintao to become directly involved or responsible. However, Deputy Under Secretary of Defense Richard Lawless called the speculation "farfetched," since Hu is the Central Military Commission Chairman (as well as Communist Party General-Secretary and PRC President). China could have signaled a perceived self-confidence in countering U.S. forces in a possible conflict over Taiwan or another area of dispute. Then-Commander of the Pacific Command (PACOM), Admiral William Fallon, said that the PLA was trying to counter U.S. military power in a possible conflict over Taiwan. Also, the ASAT weapon demonstration was undeniably traced to the PLA. Morever, the January 2007 test followed sudden changes made by the PLA Air Force in its control of airspace and flight routes near Shanghai, including a rare shutdown of the busy Pudong airport, in November and December 2006. PRC officials and scholars have been warning that 2007 is a critical year with potential crises in the Taiwan Strait, citing their concerns about perceived pro-independence moves by Taiwan's president. The PLA Air Force's actions and ASAT test could have signaled to Washington to heed Beijing's words about Taipei. Some in China argued that the new U.S. National Space Policy prompted China's test, while U.S. officials have contended that, regardless, China has developed a range of counter-space weapons to challenge U.S. space dominance. News reports stressed a hardline tone of the policy (signed by President Bush in August 2006, with a public version issued in October 2006), which stated opposition to new space arms control and denial of the use of space to adversaries "hostile" to U.S. interests. Under Secretary of State for Arms Control and International Security Robert Joseph contended that the United States does not monopolize space or deny access to space for peaceful purposes. He characterized the space policy as responding to "growing threats" from a number of countries that "are exploring and acquiring capabilities to counter, attack, and defeat U.S. space systems," when the United States is more dependent on space than other nations. Even before issuance of the U.S. space policy, China conducted three previous tests of this direct-ascent ASAT weapon and, by September 2006, China had used a ground-based laser to illuminate a U.S. satellite in several tests of a system to "blind" satellites. Before and after this latest ASAT test, PRC military and civilian analysts have voiced concerns about China's perceived vulnerability against U.S. dominance in military and space power. After the test, a Senior Colonel of the PLA's Academy of Military Sciences said that "outer space is going to be weaponized in our lifetime" and that "if there is a space superpower, it's not going to be alone, and China is not going to be the only one." In wake of the ASAT weapon test, the PRC's military and civilian analysts argued that the PRC's "peaceful" motive for the test was to prompt the United States to engage in space arms control. At the United Nations in October and December 2006, the United States was the only country to vote against a resolution on the "Prevention of an Arms Race in Outer Space" (PAROS), adopted by the General Assembly. However, PAROS seeks to prevent the weaponization of outer space, and even if there were such an agreement, it would not ban the type of land-based ASAT weapon (not space-based weapon) that China tested. A former PLA officer at China's Arms Control and Disarmament Association noted that the Foreign Ministry's silence about the test was "baffling" and that "if it is a negotiating chip, it's illogical not to come out and announce something." China's Foreign Ministry had not prepared any explanation for the ASAT test, and its short statement of January 23 did not mention arms control. It was at a regular news conference a week later that the ministry called for a "legal document." Indeed, China had already subtly shifted its stance on space arms control at the United Nations, dropping an original call for not testing, deploying, or using on land, at sea, or in the atmosphere any weapons for warfighting in outer space. The PRC's ASAT test raised an issue of whether there are benefits in talking with China and other countries about an arms control agreement (such as PAROS), a code of conduct, or other security-building measures. China's ASAT test did not violate any existing arms control treaty, although it broke a voluntary moratorium since the 1980s on such destruction of a satellite. A middle-ground view between seeking and rejecting sweeping arms control suggested that there could be a narrowly-targeted ban on kinetic ASAT weapons that create space debris. In contrast, the Bush Administration objected to the implication that China's ASAT test was another reason to pursue outer space arms control, noting that PAROS would not ban China's ground-launched ASAT activities. Also, the Administration decided not to send demarches to dissuade China from such testing. An issue is whether to lodge a diplomatic protest to China for any future test. It is questionable that China's leaders would heed U.S.-only objections to a PLA program. Still, some urge a new strategic dialogue, given concerns about China's miscalculations and crisis-management. Regarding other policies, General Pace visited China in March, continuing to pursue military-to-military ties. However, the ASAT test likely affected debates in Congress about whether to relax legal restrictions for contacts with the PLA (a debate prodded by PACOM) and whether to resume commercial satellite deals (such as space launches). There also is an issue about whether to continue or suspend bilateral space cooperation proposed in 2006 by STRATCOM, which could include talks on collision avoidance, signals interference, and station keeping (maneuvering satellites). For other responses, at a hearing of the Senate Armed Services Subcommittee on Strategic Forces on March 28, 2007, the STRATCOM Commander urged support for programs for space situational awareness and Prompt Global Strike. (See CRS Report RL32496, U.S.-China Military Contacts: Issues for Congress , by [author name scrubbed]; CRS Report RL33601, U.S. Military Space: Status of Selected Programs ; and CRS Report RL33067, Conventional Warheads for Long-Range Ballistic Missiles: Background and Issues for Congress , by [author name scrubbed].)

On January 11, 2007, the People's Republic of China (PRC) conducted its first successful direct-ascent anti-satellite (ASAT) weapons test in destroying one of its own satellites in space. The test raised international concerns about more space debris. Longer-term, the test raised questions about China's capability and intention to attack U.S. satellites. The purpose of this CRS Report, based on open sources and interviews, is to discuss that ASAT test by China's military, the People's Liberation Army (PLA), and issues about U.S. assessments and policies. This report will not be updated.

Employers have frequently sought to trim the high cost of providing group health coverage for their workers by reducing retiree benefits or narrowing the group of retirees eligible for coverage. Under one commonly used formula, employers often provide one level of benefits to retirees under age 65 to cover them until they are eligible for Medicare and then reduce or eliminate the benefit when the retiree becomes Medicare eligible. In Erie County Retirees Ass ' n v. County of Erie , however, a federal appeals court ruled that the Age Discrimination in Employment Act (ADEA) applies to retirees and held that the practice of providing different benefits to older and younger retirees based on their eligibility for Medicare constitutes age discrimination in violation of the ADEA because Medicare eligibility is an "explicitly" age-related factor. In 2000, the Equal Employment Opportunity Commission (EEOC) adopted the court's reasoning as the agency's national enforcement policy, but the Commission later rescinded its position to further review the issue. Following two years of study, the EEOC proposed a rule in 2004 that would allow employer-sponsored retiree health plans to reduce or eliminate benefits for Medicare-eligible retirees without violating the ADEA. According to the EEOC: Since the ADEA requires only equal treatment, employers threatened to comply with the ADEA not by raising benefits for older retirees, but by reducing benefits to younger retirees or by eliminating all benefits for all retirees. Indeed, the Erie County case was settled by requiring younger retirees to pay higher premiums and move into an HMO plan. In light of evidence that employers would 'equalize' benefits by reducing them ... the EEOC sought, in essence, to undo the court's decision in Erie County by issuing a rule specifying that the practice of coordinating a retiree's health benefits would not violate the ADEA. The ADEA prohibits discrimination against workers over 40 years of age in compensation or with respect to employment "terms, conditions, or privileges." The act's legislative history contained a Statement of Managers, which suggested that the practice of coordinating retiree health plans with Medicare was not prohibited. In Erie County , however, the Third Circuit disregarded that evidence of congressional intent when it ruled that providing inferior benefits to Medicare-eligible retirees than to younger retired workers may be illegal age discrimination. It remanded the case for a trial court determination of whether the plan was saved by the equal-benefit or equal-cost provisions of the ADEA, which provide a "safe harbor" for employers who provide equal benefits to older and younger workers or who incur equal costs on behalf of each. In the Erie County case, a group of retirees who were over the age of 65 sued the county claiming that their retiree health program was inferior to the program offered to younger retirees. Designed to supplement Medicare benefits, older retirees were offered an HMO plan that coordinated all health care services through a primary care physician. The county provided former employees who were not Medicare-eligible with a "hybrid point of service program" that combined the features of an HMO with a traditional indemnity plan. The district court granted partial summary judgment for the county, holding that the ADEA was not intended to apply to retirees such as plaintiffs, who based their age discrimination claim on disparities in health coverage arising from Medicare eligibility. In its reversal, the Third Circuit found that age discrimination had occurred since the medical benefits for older retirees were based solely on their eligibility for Medicare, and "Medicare eligibility follow[s] ineluctably upon attaining age 65." In reviewing the ADEA, the Third Circuit concluded that an age-based disparity in retiree health benefits is only lawful if the program falls within a "safe harbor" established by the "equal benefit/equal cost" standard. Both the legislative history of the ADEA and the "plain language" of the safe harbor provision indicated Congress's intent that the section apply when an employer reduces health benefits on the basis of Medicare eligibility. In other words, the County of Erie could only prevail if it established that the benefits offered to Medicare-eligible retirees were equal to those provided to younger retirees or that its costs for providing benefits to the two groups were equal. The Third Circuit remanded the case back to the trial court, which ultimately found that the county's plan was unlawful because: (1) older retirees were required to pay a greater percentage of their overall premium than were younger retirees; and (2) younger retirees were given the option between HMO coverage or indemnity coverage, while older retirees could only elect HMO coverage. For these reasons, the trial court concluded that older retirees were provided inferior benefits in violation of ADEA. The EEOC had initially supported the position adopted by the Third Circuit in Erie County , which the agency then incorporated in its "Compliance Manual" as part of its national enforcement policy on the ADEA. In 2001, however, after consulting various labor and employer groups, the EEOC rescinded its policy regarding employer-sponsored retiree health plans, announcing that it would study the issue further. The EEOC study demonstrated a considerable decline in the number of employers providing retiree health benefits in the decade preceding, due to higher health care coverage costs, the number of employees nearing retirement age, and changes in accounting rules for retiree health benefits. In addition, it found that "concern about the potential application of the ADEA to employer-sponsored retiree health benefits is adversely affecting the continued provision of this important retirement benefit." In other words, when faced with the prospect of equalizing benefits, many employers were choosing not to increase benefits for Medicare-eligible retirees, but instead to reduce benefits for younger retirees or to eliminate retiree benefits altogether. Indeed, the Erie County case resulted in a settlement in which benefits were reduced for younger retirees. Ultimately, the EEOC concluded that a reversal of policy was required in the "public interest" to protect retiree health coverage as a valuable benefit to older individuals, and, therefore, the agency proposed to amend the EEOC's ADEA regulations. As proposed, the EEOC rule would exempt from ADEA requirements the alteration, reduction, or elimination of employer-sponsored retiree health benefits when retirees become eligible for Medicare or other comparable state retiree health benefits. The EEOC cited § 9 of the ADEA, which permits the EEOC to "establish such reasonable exemptions to and from any or all provision of [the act] as it may find necessary and proper in the public interest," as its authority for issuing the regulation. Noting that employers are not legally obligated to provide any retiree health benefits and arguing that the safe harbor provisions of the ADEA have become unworkable given the broad diversity of employer health plan options currently available, the EEOC indicated that the exemption provides a "necessary and proper" incentive to employers not to eliminate all retiree health benefits, nor to reduce the benefits of younger retirees to equal those provided to their Medicare-eligible counterparts. Implementation of the proposed rule, however, was delayed in 2005 by a federal district court in Philadelphia that initially found the rule in conflict with the Third Circuit decision in the Erie County case. In AARP v. EEOC , the court first ordered a permanent injunction against enforcing the rule, finding that it "is contrary to congressional intent and the plain language of the Age Discrimination in Employment Act." The EEOC, according to the court, has the power to issue rules, regulations and exemptions within ... explicit or implicit gaps that Congress left in the ADEA. In the case of the challenged exemption, however, the Third Circuit held that Congress did not allow for ambiguity with regard to the applicability of the ADEA to retiree health benefits. In other words, the court found that the EEOC was interpreting too broadly its powers to create exemptions to the ADEA. The EEOC filed an appeal with the Third Circuit. Meanwhile, the U.S. Supreme Court decided National Cable and Telecommunications Association v. Brand X Internet Services in 2005. The Justices there ruled that a federal court under the " Chevron doctrine" is required to defer to an agency's interpretation of law—even if its differs from the court's own views—if the particular statute is within the agency's administrative authority, if it is ambiguous on the point in contention, and if the agency's interpretation is "reasonable." In other words, the agency's interpretation of a statute is entitled to deference except where a court finds that the law in question is clear and unambiguous, leaving no gaps for the agency decision to fill. In view of Brand X , the EEOC moved the district court to reconsider whether prior judicial precedent foreclosed issuance of the proposed rule on retiree health benefits. Ultimately, the district court reversed its earlier decision, holding that the EEOC does, indeed, have the authority to issue the challenged regulation. ... Brand X makes it clear that where a court's holding states merely the 'best' interpretation of a statute, not the 'only permissible' interpretation, the court decision does not foreclose a later, differing agency interpretation.... Because the Third Circuit's opinion in Erie County did not hold that it was the only permissible interpretation of the ADEA, it cannot foreclose a contrary interpretation by the EEOC. Despite the decision to vacate its earlier judgment, the court left in place the injunction preventing implementation of the proposed EEOC rule pending the outcome of appeals that the parties filed with the Third Circuit. In 2007, the Third Circuit issued its ruling in AARP v. EEOC . Although the appellate court affirmed the district court's decision upholding the EEOC's retiree health benefit rule, the Third Circuit reached its decision on different legal grounds. Specifically, the court held that the proposed rule does fall within the EEOC's exemption authority under § 9. According to the court, because "the power to grant exemptions provides an agency with authority to permit certain actions at variance with the express provisions of the statute in question ... Congress made plain its intent to allow limited practices not otherwise permitted under the statute, so long as they are 'reasonable' and 'necessary and proper in the public interest.'" Finding that the retiree health benefit rule was a reasonable, necessary, and proper exercise of the EEOC's exemption authority under the ADEA, the court upheld the rule and lifted the injunction, allowing the final regulations to become effective on December 26, 2007, when the EEOC published them in the Federal Register . Although the American Association of Retired Persons (AARP) filed a petition with the Supreme Court requesting review of the Third Circuit's decision, the Court recently declined to review the case. The EEOC's final rule contains a narrowly drawn exemption from the ADEA to permit the practice of coordinating employer-provided retiree health coverage with eligibility for Medicare. Specifically, employers may, without violating the ADEA, alter, reduce, or eliminate health benefits for retirees when the participant becomes eligible for Medicare or comparable state health benefits. The EEOC emphasizes that the rule is not intended to encourage employers to eliminate any retiree health benefits they may currently provide. The final regulations also include an appendix with questions and answers that provide the following specific guidance: The exemption does not mean that the ADEA does not apply to retirees, or that all forms of retiree health coverage are exempted. Only the specific practice of coordinating retiree health benefits with Medicare or a comparable state health plan is exempted from ADEA. Employers may offer to retirees "Medicare carve out plans" under which Medicare is primary and the employer plan secondary for retirees, but they may not offer such plans to active employees. The exemption also applies to dependent and/or spousal health benefits included as part of retirees' benefits, although these may be altered, reduced, or eliminated even when the retirees' are not. No other aspects of ADEA coverage or employment benefits other than retiree health benefits are affected by the exemption. The exemption applies to existing, as well as newly created, employee health benefit plans. The exemption does not apply to active employees over the age of Medicare (or state health plan) eligibility. As noted above, the Supreme Court recently denied a request to review the Third Circuit's decision upholding the EEOC regulation. As a result, the EEOC's new retiree health benefit rule has survived legal challenge and remains in effect.

Under the Age Discrimination in Employment Act (ADEA), the Equal Employment Opportunity Commission (EEOC) has the authority to issue reasonable exemptions the Commission finds to be in the public interest. In 2004, the EEOC approved a narrowly drawn exemption to permit the practice of coordinating employer-provided retiree health coverage with eligibility for Medicare. However, the proposed regulation was challenged in court, and a permanent injunction blocking its implementation remained in effect for several years while the courts considered the issue. Recently, a federal appeals court upheld the EEOC's promulgation of the proposed rule and lifted the injunction, allowing the EEOC to publish the final rule, which became effective in December 2007. The final rule states that it is not a violation of the ADEA to alter, reduce, or eliminate health benefits for retirees when the participant becomes eligible for Medicare or comparable state health benefits. According to the EEOC, if employers were required to provide equal health benefits to both younger and older retirees, employers would be more likely to reduce benefits for younger retirees or eliminate benefits for all retirees than to increase benefits for older, Medicare-eligible retirees. Thus, the ADEA exemption is designed to eliminate any incentive for employers to cut retiree health benefits.

The Navy pilot allows servicemembers the option of either participating in the current program or of selecting their own carrier from a list of approved small business carriers. Key features of the servicemember arranged move include shipment location information, direct claims settlement with the carrier, full replacement value for lost or damaged household goods, and payment via the government charge card. Initiated in January 1998, the pilot included only shipments originating at Puget Sound, Washington, headed to San Diego, California; Norfolk, Virginia; New London, Connecticut; Pensacola, Florida; and Jacksonville, Florida. To increase participation, the pilot’s origin site was expanded from Puget Sound (including Whidbey Island and Everett, Washington) to include San Diego, Norfolk, and New London in July 1998. However, due to potential competition with another pilot that will also serve the Florida area, Pensacola and Jacksonville remain as destination sites only. The pilot does not have a specific end date; however, DOD established a target in the November 1997 Defense Reform Initiative Report to offer the Navy option to every servicemember by January 1, 2000. The Navy pilot is one of four quality-of-life initiatives DOD is pursuing to change the way it is currently doing business, adopt commercial business practices, and achieve quality moving services for military families. The other three pilots are described below. The Army’s pilot at Hunter Army Airfield, Savannah, Georgia, which was initiated in February 1996, is a quality-of-life effort to improve the relocation process and to test commercial practices in a military environment. Services provided by the contractor include point-to-point move management with a single point of contact for the member, assistance in buying/selling a residence, full replacement value for lost or damaged household goods, direct claims settlement with the servicemember, and visibility of the shipment for approximately 1,400 annual moves. The contract will end on September 30, 1999. In January 1999, the Military Traffic Management Command (MTMC), which manages the current personal property program, began a pilot involving 50 percent of the moves in North Carolina, South Carolina, and Florida, which will total approximately 18,500 moves annually. Key features of the pilot include the selection of carriers based on servicemember satisfaction and past performance rather than on price alone; achieving stronger carrier commitment through long-term contracts; offering full-value replacement protection and direct claims settlement to users. The pilot is planned to run for 3 years, ending September 2002. DOD announced on February 12, 1999, that it intended to begin the Full Service Moving Project as a fourth test. This pilot would be similar to the pilot at Hunter Army Airfield, with modifications based on the Army’s lessons learned, and it would involve a larger number of moves (approximately 45,000 annually). The pilot would be tested in the National Capital (Washington, D.C.) Region, Georgia, and North Dakota. Like the Army pilot, it is intended to replace the existing program by using a contractor or contractors to provide both transportation and move management services. No official start date has been set for this pilot program. Status of the Navy Pilot As of March 1999, 223 servicemembers have participated in the pilot. In its second year of operation, the pilot has been expanded from one to four shipment sites. Program results thus far show (1) participation has been relatively low compared to the other pilots that are under way or planned, (2) servicemembers are satisfied arranging their own move, according to limited survey data, and (3) workload would increase for personal property officials because this option adds an alternative to the current program. As of March 26, 1999, a total of 223 members have participated in the pilot and 132 moves have been completed. Participation has been low, in part, because of the pilot’s short duration and eligibility restrictions. Although the Puget Sound office began to offer this option in January 1998, the other three sites did not offer it until late July 1998, and then only for Navy military members moving to one of six destinations. The pilot’s eligibility restrictions exclude civilians and members of the other services. Also, only certain types of domestic household goods shipments are eligible. The pilot excludes shipments of boats and mobile homes as well as shipments from non-temporary storage or from a mini-warehouse. Shipments must weigh at least 3,000 pounds and are expected to cost between $2,500 and $25,000. As of the end of calendar year 1998, the participating personal property offices reported interviewing 1,083 Navy members that were moving to or from the six pilot sites to determine whether their shipments met pilot eligibility criteria. Some 573, or 53 percent, of them had eligible shipments and 133, or 23 percent, selected the option. Over 90 percent of those determined as ineligible had household goods not weighing at least 3,000 pounds. Site officials reported that about 70 percent of eligible members cited the effort involved in selecting a carrier as the primary reason that they did not use the option (see table 1 for participant information by site). Navy officials have recently modified eligibility requirements to increase participation in the pilot. The major changes would increase eligibility by (1) reducing the weight minimum from 3,000 pounds to 1,000 pounds, (2) allowing boats, and (3) eliminating current restrictions to allow shipments to any domestic destination. To measure customer satisfaction with the pilot, the Navy uses a nine-question customer survey that servicemembers are asked to fill out and return after the move is completed. The survey includes questions pertaining to pickup and delivery time, loss, damage, and overall satisfaction. The survey asks, among other things, if the move was of a better quality than the servicemembers’ prior move and if the customer would (1) choose the pilot again, (2) recommend it to someone else, and (3) use the same carrier again. As of February 1999, the Navy had received 30 customer satisfaction surveys. These surveys are predominantly from the Puget Sound personal property office because Puget Sound was the first site to offer the pilot. Of the 30 surveys, 23 indicate that the pilot was a better quality move than other military moves. Eighteen of the 30 shipments (60 percent) had no claims, and 12 had a claim. Of the 12 claims made, only 2 exceeded $500. One of these claims was for $1,900 for broken china. Despite this damage, the customer responded that this was a better quality move than prior ones and stated that they would use the same carrier and the pilot again (see table 2 for selected survey responses). While the pilot offers advantages to the servicemember, it would add to the workload of the personal property officials who are responsible for the bulk of day-to-day program management. Among their additional duties, or duties that were previously handled by MTMC, are negotiating agreements with participating small business carriers, providing individual counseling to potential participants, maintaining up-to-date carrier information and performance data, and tracking customer satisfaction survey results. These are additional duties not previously handled by the personal property office. Local contracting officers at each participating installation enter into agreements with companies that offer acceptable discounts off of commercial rates. The agreements are entered into with companies that are self-certified as small businesses and on MTMC’s approved list. These agreements provide for the use of a government charge card for simplified payment and for direct claims settlement with the carrier at full repair or replacement value at no additional cost to the government. In addition, carriers are required to provide information on a shipment’s location through the use of a toll-free help line and a pager for direct delivery notification, which are designed to improve service and reduce storage costs. The personal property office provides servicemembers with the names of participating movers that have been determined to have reasonable prices. The property offices also maintain carrier quality books that contain a carrier’s performance history, the returned customer satisfaction surveys, and the carrier’s marketing materials. Participating servicemembers are required to contact at least three moving companies and document the basis for their preference of one of the carriers. The contracting officer can then make the selection considering both price and the servicemember’s recommendation concerning non-price factors such as quality. The award is made to the firm selected under the simplified acquisition procedures contained in Federal Acquisition Regulation part 13. The Navy does not plan to conduct an evaluation of the pilot program separate from its own evaluation. The U.S. Transportation Command (USTRANSCOM) is currently in the process of developing and coordinating an evaluation plan with the services to evaluate the personal property pilot tests, and it will make a recommendation as to the follow-on course of action. In this regard, the Navy has modified its customer survey questions so that the survey questions match the USTRANSCOM survey questions. Navy officials are also accumulating pilot project transportation costs and developing a methodology to compare these costs with those that the government would have otherwise paid. Presently, the pilot has only been tested as an option to the current program at a few Navy sites and not as an option at the other pilot sites. The other pilots are designed to test an approach to replace the current program. However, the USTRANSCOM draft evaluation plan does not address the feasibility or potential benefits of incorporating the pilot option into the pilots that may replace the current program. Further, the evaluation plan does not directly assess the unique aspects of the pilot, which include limiting carrier selection to small business carriers and using the government charge card for payment. Consequently, DOD may not have the information it needs to craft a DOD-wide personal property program. Navy officials are concerned about several aspects of the USTRANSCOM evaluation plan. In March 1999, they stated that the data elements to be collected should be better defined, that a consistent evaluation time period should be established, and that expert advice should be sought. The officials also believe that cost comparisons of overhead will be difficult because the same personnel who administer the current program are implementing the Navy pilot. In our recent testimony and report on the Army’s Hunter pilot and in our comments on several draft evaluation plans, we have stated similar concerns about the current evaluation plan. These concerns include the need to (1) develop a comprehensive strategy for testing the unique characteristics and/or processes of each pilot and (2) use expert advice in finalizing a methodologically-sound evaluation plan. The Navy pilot program differs from other ongoing or proposed pilot programs because it adds an option to the current program; it is not intended to replace the current program. The pilot participation levels and results thus far provide general information about the program’s potential benefits and customer satisfaction compared to the current program— which DOD is proposing to replace. Since the Navy pilot option is not to be integrated and tested with the other pilots, information on the viability of providing this option will only be available in comparison to the current program. Further, the draft evaluation plan does not identify a specific method for assessing the pilot’s unique features. Consistent with the recommendation in our report on the Army’s Hunter pilot that the Secretary of Defense develop a comprehensive strategy for testing each of the approaches, we recommend that the Secretary of Defense, in developing this strategy, consider testing the Navy pilot and/or its unique features in conjunction with one or more of the other pilots. Doing so would test the Navy pilot in an environment that is more consistent with the changes being considered and likely to be implemented. DOD stated that it concurred with the report and its recommendations. Specifically, DOD stated that, as part of its plan to develop a comprehensive strategy for evaluating each of the pilots, it would determine—in concert with the services—how best to incorporate the features of the Navy pilot into the other pilots. DOD’s comments are reprinted in appendix I. To determine how the Navy plans to implement and evaluate the pilot program, we reviewed available program documents and met with program management officials at the Naval Supply Systems Command, Mechanicsburg, Pennsylvania. We discussed how the pilot is being implemented and managed, the contract terms and conditions, and the key characteristics of the pilot. Further, we discussed and reviewed the customer survey results and other data that will be provided to USTRANSCOM for its evaluation of the pilot. We also discussed with Navy Supply Systems Command and Naval Audit Service officials their concerns with the USTRANSCOM evaluation plan. We visited and interviewed officials at the Fleet and Industrial Supply Center, Puget Sound, Bremerton, Washington, to determine how the pilot was implemented at its first location. We discussed the process used to establish and manage the pilot at Puget Sound while continuing to operate the current system. Additionally, we discussed their experiences and observations with the pilot. We also visited and interviewed program, contracting, and government charge card officials at the Fleet and Industrial Supply Center, Norfolk, Virginia, to determine how implementation was progressing and to compare the pilot operations at Puget Sound to those of Norfolk. To provide information on the pilot’s progress, we visited and interviewed Naval Supply Systems Command officials to determine how sites were selected for expansion after the pilot was established at Puget Sound. Further, we attended a “lessons learned” conference that included personal property officials from all of the pilot sites as well as from the Navy Transportation Support Center, Bureau of Naval Personnel, and the Defense Finance and Accounting Service to understand the problems these organizations encountered with the pilot and possible solutions. To obtain information on pilot participation, we reviewed weekly reports summarizing the number of military members that were eligible and those that were selected to participate. We also discussed the reasons for their participation with site officials. To provide information on available cost data, we reviewed the cost comparisons developed by site officials that compare actual pilot transportation costs to estimated/constructed costs for the same move under the current system. We did not independently verify any data reported by pilot sites or Naval Supply Systems Command headquarters. Our review was conducted between October 1998 and April 1999 in accordance with generally accepted government auditing standards. We are sending copies of this report to the Honorable William S. Cohen, Secretary of Defense; the Honorable Richard Danzig, Secretary of the Navy; General Charles T. Robertson, Jr., Commander in Chief, USTRANSCOM; Rear Admiral Donald E. Hickman, Commander, Naval Supply Systems Command; Major General Mario F. Montero, Jr., Commander, MTMC; and the Honorable Jacob J. Lew, Director, Office of Management and Budget. We will also make copies available to others upon request. Please contact me at (202) 512-8412 if you or your staff have any questions concerning this report. Major contributors to this report are listed in appendix II. Daniel A. Omahen, Evaluator-in-Charge John R. Beauchamp, Senior Evaluator The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary, VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. U.S. General Accounting Office P.O. Box 37050 Washington, DC 20013 Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders may also be placed by calling (202) 512-6000 or by using fax number (202) 512-6061, or TDD (202) 512-2537. Each day, GAO issues a list of newly available reports and testimony. To receive facsimile copies of the daily list or any list from the past 30 days, please call (202) 512-6000 using a touchtone phone. A recorded menu will provide information on how to obtain these lists.

Pursuant to a legislative requirement, GAO provided information on the Navy Personal Property Pilot. GAO noted that: (1) between January 1998 and March 1999, 223 servicemembers have used the pilot program to arrange their own move rather than use the current program; (2) participation has been relatively low compared to the other three pilots under way or planned, which involve substantially more shipments--approximately 1,400 to 45,000 shipments annually; (3) survey data indicate that participants are satisfied with the pilot and would use the option again; (4) because the pilot offers servicemembers a choice between the current program and arranging their own move, implementing the option increases the workload for local personal property officials; (5) the member arranged move option is not featured in any of the other pilots, which are broader in scope and are intended to replace the current program; (6) while the U.S. Transportation Command is responsible for evaluating all of the pilots to determine which one could provide better long-term results, its plan for doing so has not been finalized; and (7) in addition, the U.S. Transportation Command's draft evaluation plan proposes to collect information on the extent the Navy pilot works as an option within the current program at a few Navy sites, which may not provide adequate data to assess the Navy pilot's feasibility or its compatibility with the other pilots' results.

The disposal of LLRW is the end of the radioactive material lifecycle that spans production, use, processing, interim storage, and disposal. The nuclear utility industry generates the bulk of this LLRW through the normal operation and maintenance of nuclear power plants, and through the decommissioning of these plants. Other LLRW is generated from medical, industrial, agricultural, and research applications. Common uses of radioactive material are in radiotherapy, radiography, smoke detectors, irradiation and sterilization of food and materials, measuring devices, and illumination of emergency exit signs. In the course of working with these radioactive materials, other material, such as protective clothing and gloves, pipes, filters, and concrete, that come in contact with them will become contaminated and therefore need to be disposed of as LLRW. In the 1960s, the Atomic Energy Commission, a predecessor agency to DOE, began to encourage the development of commercial LLRW disposal facilities to accommodate the increased volume of commercial waste that was being generated. Six such disposal facilities were licensed, two of which, the Richland facility, licensed in 1965, and the Barnwell facility, licensed in 1969, remain today. Each of these facilities is located within the boundaries of or adjacent to a much larger site owned by DOE. The third facility, in Clive, Utah, operated by EnergySolutions (formerly known as Envirocare of Utah), was originally licensed by the state of Utah in 1988 to only accept naturally occurring radioactive waste. In 1991, Utah amended the facility’s license to permit the disposal of some LLRW, and the Northwest Compact agreed to allow the facility to accept these wastes from noncompact states. By 2001, the facility was allowed to accept all types of class A waste. At this time, sufficient available disposal capacity exists for almost all LLRW. However, fast-approaching constraints on the availability of disposal capacity for class B and class C wastes could adversely affect the disposal of many states’ LLRW. Specifically, beginning on June 30, 2008, waste generators in 36 states will be precluded from using the Barnwell disposal facility for their class B and class C LLRW. That facility currently accepts about 99 percent of the nation’s class B and class C commercial LLRW. Although the Barnwell and Richland facilities have more than sufficient capacity to serve waste generators from the 14 states that are members of the facilities’ respective compacts until at least 2050, the remaining 36 states will have no disposal options for their class B and class C LLRW. Although waste generators in these 36 states will no longer have access to Barnwell, they can continue to minimize waste generation, process waste into safer forms, and store waste pending the development of additional disposal options. While NRC prefers the disposal of LLRW, it allows on- site storage as long as the waste remains safe and secure. Since September 11, 2001, both the public’s concern with, and its perception of, risk associated with radioactive release, including that from stored LLRW, have increased. However, should an immediate and serious threat come from any specific location of stored waste, NRC has the authority under the act to override any compact restrictions and allow shipment of the waste to a regional or other nonfederal disposal facility under narrowly defined conditions. Waste minimization techniques and storage can alleviate the need for disposal capacity, but they can be costly. For example, in June 2004 we reported that one university built a $12 million combined hazardous and radioactive waste management facility. Two-thirds of this facility is devoted to the processing and temporary storage of class A waste. Additional disposal capacity for the estimated 20,000 to 25,000 cubic feet of class B and class C LLRW disposed of annually at Barnwell may become available with the opening of a new disposal facility in Texas. This facility has received a draft license and appears to be on schedule to begin operations in 2010. Although the facility may accept some DOE cleanup waste, there is presently no indication that it will be made available to all waste generators beyond the two states that are members of the Texas Compact (Texas and Vermont). In contrast, available disposal capacity for the nation’s class A waste does not appear to be a problem in either the short or long term. Our June 2004 report noted that EnergySolutions’ Clive facility had sufficient disposal capacity, based upon then-projected disposal volumes, to accept class A waste for at least 20 years under its current license. This facility currently accepts about 99 percent of the nation’s class A LLRW. Since our report was issued, domestic class A waste has declined from about 15.5 million cubic feet in 2005 to about 5 million cubic feet in 2007. This decline is primarily attributed to DOE’s completion of several cleanup projects. DOE waste constituted about 50 percent of the total waste accepted by EnergySolutions in 2007. This reduction in projected class A disposal volumes will extend the amount of time the Clive facility can accept class A waste before exhausting its capacity. According to the disposal operator, capacity for this facility has been extended another 13 years, to 33 years of capacity. It is important to note, however, that our June 2004 analysis of available LLRW disposal capacity considered only domestically produced LLRW. We did not consider the impact of imported LLRW on available class A, B, and C disposal capacity at Clive, Barnwell, and Richland. Although disposal capacity at the time of our June 2004 report appeared adequate using then- projected waste disposal volumes, the impact of adding additional waste from overseas waste generators is unclear. While none of the foreign countries we surveyed for our March 2007 report indicated that they have disposal options for all of their LLRW, almost all either had disposal capacity for their lower-activity LLRW or central storage facilities for their higher-activity LLRW, pending the availability of disposal capacity. Specifically, we surveyed 18 foreign countries that previously had or currently have operating nuclear power plants or research reactors. Ten of the 18 countries reported having available disposal capacity for their lower-activity LLRW and 6 other countries have plans to build such facilities. Only 3 countries indicated that they have a disposal option for some higher-activity LLRW. Many countries that lack disposal capacity for LLRW provide centralized storage facilities to relieve waste generators of the need to store LLRW on-site. Specifically, 7 of the 8 countries without disposal facilities for lower-activity LLRW had centralized storage facilities. Eleven of the 15 countries without disposal facilities for at least some higher-activity LLRW provide central storage facilities for this material. Of the 18 countries we surveyed, only Italy indicated that it lacked disposal availability for both lower- and higher-activity LLRW and central storage facilities for this waste. As reported by Italy to the international Nuclear Energy Agency, in 1999, the government began to develop a strategy for managing the liabilities resulting from the country’s past national nuclear activities. The strategy established a new national company to shut down all of Italy’s nuclear power plants and to promptly decommission them. It also created a national agency that would establish and operate a disposal site for radioactive waste. A subsequent government decree in 2001 prompted an acceleration of the process to select a disposal site, with the site to begin operations in 2010. However, the Italian government has more recently reported it has encountered substantial difficulties establishing a disposal site because local governments have rejected potential site locations. In total, Italy will have an estimated 1.1 million cubic feet of lower-activity LLRW that will result from decommissioning its nuclear facilities in addition to the 829,000 cubic feet of this waste already in storage. Our March 2007 report identified several management approaches used in foreign countries that, if adopted in the United States, could improve the management of radioactive waste. These approaches included, among other things, using a comprehensive national radioactive waste inventory of all types of radioactive waste by volume, location, and waste generator; providing disposition options for all types of LLRW or providing central storage options for higher-radioactivity LLRW if disposal options are unavailable; and developing financial assurance requirements for all waste generators to reduce government disposition costs. We also identified another management approach used in most countries—national radioactive waste management plans—that also might provide lessons for managing U.S. radioactive waste. Currently, the United States does not have a national radioactive waste management plan and does not have a single federal agency or other organization responsible for coordinating LLRW stakeholder groups to develop such a plan. Such a plan for the United States could integrate the various radioactive waste management programs at the federal and state levels into a single source document. Our March 2007 report recommended that DOE and NRC evaluate and report to the Congress on the usefulness of adopting the LLRW management approaches used in foreign countries and developing a U.S. radioactive waste management plan. Although both agencies generally agreed with our recommendations, NRC, on behalf of itself and DOE, subsequently rejected two approaches that our March 2007 report discussed. Specifically, NRC believes that the development of national LLRW inventories and a national waste management plan would be of limited use in the United States. In a March 2008 letter to GAO on the actions NRC has taken in response to GAO’s recommendations, NRC stated that the approach used in the United States is fundamentally different from other countries. In particular, NRC argued that, because responsibility for LLRW disposal is placed with the states, the federal government’s role in developing options for managing and/or disposing of LLRW is limited. NRC also expressed concern about the usefulness and significant resources required to develop and implement national inventories and management plans. We continue to believe comprehensive inventories and a national plan would be useful. A comprehensive national radioactive waste inventory would allow LLRW stakeholders to forecast waste volumes and to plan for future disposal capacity requirements. Moreover, a national radioactive waste management plan could assist those interested in radioactive waste management to identify waste quantities and locations, plan for future storage and disposal development, identify research and development opportunities, and assess the need for regulatory or legislative actions. For example, there are no national contingency plans, other than allowing LLRW storage at waste generator sites, to address the impending closure of the Barnwell facility to class B and class C LLRW from noncompact states. The availability of a national plan and periodic reporting on waste conditions might also provide the Congress and the public with a more accessible means for monitoring the management of radioactive waste and provide a mechanism to build greater public trust in the management of these wastes in the United States. Mr. Chairman, this concludes my prepared statement. I would be happy to respond to any questions that you or Members of the Committee may have at this time. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this testimony. For further information about this testimony, please contact Gene Aloise at (202) 512- 3841 or aloisee@gao.gov. Major contributors to this statement were Daniel Feehan (Assistant Director), Thomas Laetz, Lesley Rinner, and Carol Herrnstadt Shulman. 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.

Disposal of radioactive material continues to be highly controversial. To address part of the disposal problem, in 1980, Congress made the states responsible for disposing of most low-level radioactive waste (LLRW), and allowed them to form regional compacts and to restrict access to disposal facilities from noncompact states. LLRW is an inevitable by-product of nuclear power generation and includes debris and contaminated soils from the decommissioning and cleanup of nuclear facilities, as well as metal and other material exposed to radioactivity. The Nuclear Regulatory Commission (NRC) ranks LLRW according to hazard exposure--classes A, B, C, and greater-than-class C (GTCC). The states are responsible for the first three classes, and the Department of Energy (DOE) is responsible for GTCC. Three facilities dispose of the nation's LLRW--in Utah, South Carolina, and Washington State. The testimony addresses (1) LLRW management in the United States and (2) LLRW management in other countries. It is substantially based on two GAO reports: a June 2004 report (GAO-04-604) and a March 2007, report (GAO-07-221) that examined these issues. To prepare this testimony, GAO relied on data from the two reports and updated information on current capacity for LLRW and access to disposal facilities. As GAO reported in 2004, existing disposal facilities had adequate capacity for most LLRW and were accessible to waste generators (hereafter referred to as disposal availability) in the short term, but constraints on the disposal of certain types of LLRW warranted concern. Specifically, South Carolina had decided to restrict access to its disposal facility by mid-2008 for class B and C waste--the facility now accepts about 99 percent of this waste generated nationwide--to only waste generators in the three states of its compact. If there are no new disposal options for class B and C wastes after 2008, licensed users of radioactive materials can continue to minimize waste generation, process waste into safer forms, and store waste pending the development of additional disposal options. While NRC prefers that LLRW be disposed of, it allows on-site storage as long as the waste remains safe and secure. In contrast, disposal availability for domestic class A waste is not a problem in the short or longer term. In 2004, GAO reported that the Utah disposal facility--which accepts about 99 percent of this waste generated nationwide--could accept such waste for 20 years or more under its current license based on anticipated class A waste volumes. Since 2005, the volume of class A waste disposed of has declined by two-thirds primarily because DOE completed several large cleanup projects, extending the capacity for an additional 13 years, for a total of 33 years of remaining disposal capacity. However, the June 2004 analysis, and the updated analysis, were based on the generation of LLRW only in the United States and did not consider the impact on domestic disposal capacity of importing foreign countries' LLRW. Ten of the 18 countries surveyed for GAO's March 2007 report have disposal options for class A, B and most of C waste, and 6 other countries have plans to build such facilities. Only 3 countries indicated that they have a disposal option for some class C and GTCC waste; however, almost all countries that do not provide disposal for LLRW have centralized storage facilities for this waste. Only Italy reported that it had no disposal or central storage facilities for its LLRW, although it plans to develop a disposal site for this waste that will include waste from its decommissioned nuclear power plants and from other nuclear processing facilities. Italy initially expected this disposal site to be operational by 2010, but local governments' resistance to the location of this disposal site has delayed this date. The March 2007 report also identified a number of LLRW management approaches used in other countries that may provide lessons to improve the management of U.S. radioactive waste. These approaches include the use of comprehensive national radioactive waste inventory databases and the development of a national radioactive waste management plan. Such a plan would specify a single entity responsible for coordinating radioactive waste management and include strategies to address all types of radioactive waste. GAO had recommended that NRC and DOE evaluate and report to the Congress on the usefulness of these approaches. While the agencies considered these approaches, they expressed particular concerns about the significant resources required to develop and implement a national inventory and management plan for LLRW.

Information systems can be complex undertakings consisting of a multitude of pieces of equipment and software products, and service providers. Each of these components may rely on one or more supply chains. Obtaining a full understanding of the sources of a given information system can also be extremely complex. According to the Software Engineering Institute, the identity of each product or service provider may not be visible to others in the supply chain. Typically, an acquirer, such as a federal agency, will only know about the participants directly connected to it in the supply chain. In addition, the complexity of corporate structures, in which a parent company (or its subsidiaries) may own or control companies that conduct business under different names in multiple countries, presents additional challenges to fully understanding the sources of an information system. As a result, the acquirer will have little visibility into the supply chains of its suppliers. Federal procurement law and policies promote the acquisition of commercial products when they meet the government’s needs. Commercial providers of IT use a global supply chain to design, develop, manufacture, and distribute hardware and software products throughout the world. Many of the manufacturing inputs required for those products— whether physical materials or knowledge—are acquired from various sources around the globe. Figure 1 depicts the potential countries of origin of common suppliers of various components within a commercially available laptop computer. The Federal Information Security Management Act of 2002 (FISMA) establishes federal agency information security program requirements that support the effectiveness of information security controls over information resources that support federal operations and assets. Its framework creates a cycle of risk management activities necessary for an effective security program, and it assigns responsibilities to the National Institute of Standards and Technology (NIST) for providing standards and guidelines on information security. In its August 2009 revision of Special Publication (SP) 800-53 (Revision 3), which provides recommended security controls for federal agencies and organizations, NIST included for the first time a security control for supply chain protection (SA-12). SA-12 identified several specific measures organizations could use to provide additional supply chain protections, such as conducting due diligence reviews of suppliers; using trusted shipping and warehousing; and employing independent analysis and penetration testing of IT systems, components, and products. In addition, SP 800-53, Revision 3, includes a security control for system and service acquisition policies and procedures (SA-1). Thus, for systems where both controls are selected, agencies should develop, disseminate, and review acquisition policy and implementing procedures that help protect against supply chain threats throughout the system development life cycle. Further, in March 2011, NIST published SP 800- 39, an approach to organizationwide management of information security risk, which states that organizations should monitor risk on an ongoing basis as part of a comprehensive risk management program. Reliance on a global supply chain introduces multiple risks to federal information systems and underscores the importance of threat assessments and risk mitigation. Supply chain threats are present at various phases of a system’s development life cycle. Key threats that could create an unacceptable risk to federal agencies include the following: installation of hardware or software containing malicious logic, which is hardware, firmware, or software that is intentionally included or inserted in a system for a harmful purpose; installation of counterfeit hardware or software, which is hardware or software containing non-genuine component parts or code; failure or disruption in the production or distribution of critical products resulting from manmade or natural causes; reliance on a malicious or unqualified service provider for the performance of technical services; and installation of hardware or software that contains unintentional vulnerabilities, such as defects in code that can be exploited. Such threats can have a range of impacts, including allowing attackers to take control of systems and read, modify, or delete sensitive information; decreasing the reliability of IT equipment; decreasing the availability of material needed to develop systems; or allowing remote attackers to cause a denial of service, among other things. Threat actors can introduce these threats into federal information systems by exploiting vulnerabilities that could exist at multiple points in the global supply chain. In addition, supply chain vulnerabilities can include weaknesses in agency acquisition or security procedures, controls, or implementation related to an information system. Examples of types of vulnerabilities that could be exploited include acquisition of IT products or parts from sources other than the original manufacturer or authorized reseller, such as independent distributors, brokers, or on the gray market; applying untested updates and software patches to information acquiring equipment, software, or services from suppliers without understanding their past performance or corporate structure; and using delivery or storage mechanisms that are not secure. If a threat actor exploits an existing vulnerability, it could lead to the loss of the confidentiality, integrity, or availability of the system and associated information. Although the four agencies in our review—the Departments of Energy, Homeland Security (DHS), Justice, and Defense—have acknowledged the risks presented by supply chain vulnerabilities, they varied in the extent to which they have addressed these risks by (1) defining supply chain protection measures for department information systems, (2) developing implementing procedures for these measures, and (3) establishing capabilities for monitoring compliance with and the effectiveness of such measures. Three of the four departments have made limited progress in addressing supply chain risk: In May 2011, the Department of Energy revised its information security program, which requires Energy components to implement provisions based on NIST and Committee on National Security Systems guidance. However, the department was unable to provide details on implementation progress, milestones for completion, or how supply chain protection measures would be defined. Because it had not defined these measures or associated implementing procedures, the department was also not in a position to monitor compliance or effectiveness. Although its information security guidance mentions the NIST control related to supply chain protection, DHS has not defined the supply chain protection measures that system owners should employ. The department’s information security policy manager stated that it was in the process of developing policy that would address supply chain protection, but did not provide details on when it would be completed. In addition, in the absence of such a policy, DHS was not in a position to develop implementation procedures or to monitor compliance or effectiveness. The Department of Justice has defined specific security measures for protecting against supply chain threats through the use of provisions in vendor contracts and agreements. Officials identified (1) a citizenship and residency requirement and (2) a national security risk questionnaire as two provisions that address supply chain risk. However, Justice has not developed procedures for ensuring the effective implementation of these protection measures or a mechanism for verifying compliance with and the effectiveness of these measures. By contrast, the Department of Defense has made more progress. Specifically, the department’s supply chain risk management efforts began in 2003 and include a policy requiring supply chain risk to be addressed early and across a system’s entire life cycle and calling for an incremental implementation of supply chain risk management through a series of pilot projects; a requirement that every acquisition program submit and update a “program protection plan” that is to, among other things, help manage risks from supply chain exploits or design vulnerabilities; procedures for implementing supply chain protection measures, such as an implementation guide describing 32 specific measures for enhancing supply chain protection and procedures for program protection plans identifying ways in which programs should manage supply chain risk; and a monitoring mechanism to determine the status and effectiveness of supply chain protection pilot projects, as well as monitoring compliance with and effectiveness of program protection policies and procedures for several acquisition programs. In addition, the four national security-related agencies participate in interagency efforts to address supply chain security, including participation in the Comprehensive National Cybersecurity Initiative,development of technical and policy tools, and collaboration with the intelligence community. In support of the cybersecurity initiative, Defense and DHS jointly lead an interagency initiative on supply chain risk management to address issues of globalization affecting the federal government’s IT. Also, DHS has developed a comprehensive portfolio of technical and policy-based product offerings for federal civilian departments and agencies, including technical assessment capabilities, acquisition support, and incident response capabilities. Further, the four national security-related departments participate in an Office of the National Counterintelligence Executive-led initiative to (1) develop a common methodology for conducting threat assessments on entities that do business with the national security community and (2) request from agencies and centrally store copies of threat assessments for future use by components of the national security community. To assist the three national security-related agencies in better addressing IT supply chain-related security risks for their departmental information systems, we made several recommendations to the Secretaries of Energy and Homeland Security and the Attorney General. Specifically, we recommended that Energy develop and document departmental policy that defines which security measures should be employed to protect against supply chain threats; develop, document, and disseminate procedures to implement the supply chain protection security measures defined in departmental policy; and develop and implement a monitoring capability to verify compliance with, and assess the effectiveness of, supply chain protection measures. In commenting on our report, Energy stated that it concurred with the spirit of our recommendations. Energy also expressed concern that the recommendations are not fully aligned with the administration’s initiatives and stated that it believes policies and standards to address IT supply chain risk management must be coordinated at the national level, not independently through individual agencies. We agree that national or federal policies and standards should be coordinated and promulgated at the national or federal level. However, we also believe–as intended by our recommendations—that federal departments are responsible for developing departmental policies and procedures that are consistent and aligned with federal guidance. Our recommendations to Energy are based on and consistent with federal guidance on supply chain risk management. In addition, we recommended that DHS develop and document departmental policy that defines which security measures should be employed to protect against supply chain threats; develop, document, and disseminate procedures to implement the supply chain protection security measures defined in departmental policy; and develop and implement a monitoring capability to verify compliance with, and assess the effectiveness of, supply chain protection measures. In commenting on a draft of our report, DHS concurred with our recommendations and described steps the department is taking to address them, including developing departmental policy to define supply chain protection measures, examining risk management procedures, and exploring options for verifying compliance with and effectiveness of its supply chain protection measures. We also recommended that Justice develop, document, and disseminate procedures to implement the supply chain protection security measures defined in departmental policy; and develop and implement a monitoring capability to verify compliance with, and assess the effectiveness of, supply chain protection measures. Justice concurred with the recommendations. In summary, the global IT supply chain introduces a myriad of security vulnerabilities to federal information systems that, if exploited, could introduce threats to the confidentiality, integrity, and availability of federal information systems. Thus the potential exists for serious adverse impact on an agency’s operations, assets, and employees. These risks highlight the importance of national security-related agencies fully addressing supply chain security by defining measures and implementation procedures for supply chain protection and monitoring compliance with and the effectiveness of these measures. Until these agencies develop comprehensive policies, procedures, and monitoring capabilities, increased risk exists that they will be vulnerable to IT supply chain threats. Chairman Stearns, Ranking Member DeGette, and Members of the Subcommittee, this completes my statement. I would be happy to answer any questions you have at this time. If you have any questions regarding this statement, please contact Gregory C. Wilshusen at (202) 512-6244 or wilshuseng@gao.gov. Other key contributors to this statement include Michael W. Gilmore (Assistant Director), Bradley W. Becker, Kush K. Malhotra, and Lee McCracken. 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.

Information technology (IT) systems and the products and services that support them are essential to the operations of the federal government. These products and services are delivered through a complex global supply chain, and the exploitation of vulnerabilities in the IT supply chain is an emerging threat. Federal law requires establishment of information security programs, and implementing standards and guidelines provide for managing supply chain risk. GAO was asked to testify on its recently issued report that, among other things, identified key risks associated with the supply chains used by federal agencies to procure IT equipment, software, and services, and assessed the extent to which four national security-related agencies have addressed such risks. In producing that report, GAO analyzed federal acquisition and information security laws, regulations, standards, and guidelines; examined departmental policies and procedures; and interviewed officials from four national security-related departments, the intelligence community, and nonfederal entities. Reliance on a global supply chain introduces multiple risks to federal information systems and underscores the importance of threat assessments and mitigation. Supply chain threats are present at various phases of a system’s development life cycle and could create an unacceptable risk to federal agencies. Key supply chain-related threats include installation of intentionally harmful hardware or software (i.e., containing “malicious logic”); installation of counterfeit hardware or software; failure or disruption in the production or distribution of critical products; reliance on malicious or unqualified service providers for the performance of technical services; and installation of hardware or software containing unintentional vulnerabilities, such as defective code. These threats can have a range of impacts, including allowing attackers to take control of systems or decreasing the availability of critical materials needed to develop systems. These threats can be introduced by exploiting vulnerabilities that could exist at multiple points in the supply chain. Examples of such vulnerabilities include acquisition of products or parts from unauthorized distributors; application of untested updates and software patches; acquisition of equipment, software, or services from suppliers without knowledge of their past performance or corporate structure; and use of insecure delivery or storage mechanisms. These vulnerabilities could by exploited by malicious actors, leading to the loss of the confidentiality, integrity, or availability of federal systems and the information they contain. The four national security-related agencies in GAO’s review—the Departments of Energy, Homeland Security, Justice, and Defense—varied in the extent to which they have addressed supply chain risks. Specifically, Energy and Homeland Security had not yet defined supply chain protection measures for department information systems and are not in a position to develop implementing procedures and monitoring capabilities. Justice has defined supply chain protection measures but has not developed implementation procedures or monitoring capabilities. Until these agencies develop comprehensive policies, procedures, and monitoring capabilities, increased risk exists that they will be vulnerable to IT supply chain threats. By contrast, the Department of Defense has made greater progress: it has defined supply chain protection measures and implementing procedures and initiated efforts to monitor compliance and effectiveness. In addition, various interagency efforts are under way to address supply chain risks affecting federal IT. In its report, GAO recommended that the Departments of Energy, Homeland Security, and Justice take steps, as needed, to develop and document policies, procedures, and monitoring capabilities that address IT supply chain risk. In commenting on a draft of the report, the departments generally concurred with the recommendations.

In recent years attention has been focused by international organizations and non-governmental organizations in various fora on the issue of international small arms and light weapons transfers (SA/LW) to less-developed nations undergoing civil conflicts. Views expressed by these groups have raised the interest of governments in examining the implications of the international trade in such weapons, particularly, illicit trading. International actions to deal with the small arms and light weapons trade generally have developed slowly in view of widely divergent views among nations concerned or affected by this trade, either as a recipient or supplier. Congressional interest in the subject resulted in a mandate to the State Department to provide a comprehensive report addressing significant policy questions regarding the international proliferation of small arms and light weapons. This report, formally submitted to Congress in October 2000, provided the first major overview of key views of the U.S. government on this topic. The central elements of U.S. policy regarding international transfers of small arms and light weapons began to develop in the 1990's as part of overall U.S. policy toward conventional arms transfers generally. For its part, the United States, while recognizing that nations have a legal right to acquire weapons, including small arms, for legitimate self-defense purposes, also recognizes that there have been civil conflicts in various less developed nations and regions that have been exacerbated by ready access to small arms and light weapons. The U.S. government wants to deal, in a practical and effective way with the problem of international small arms and light weapons trafficking in regions of conflict, while continuing to recognize the "legitimacy of legal trade, manufacturing, and ownership of arms." To date, the United States Government has taken the position that illicit trafficking in small arms and light weapons poses the greatest threat to regional security in less-developed areas of the world undergoing civil strife. Thus, the United States believes that combating the illicit weapons trade should be the focal point of international efforts. U.S. diplomacy has been directed to achieving that outcome. Illicit trafficking includes illegal sales to insurgent groups and criminal organizations, illegal diversion of legitimate sales or transfers, and black market sales in contravention of embargoes or national laws. The re-circulation of small arms and light weapons from one conflict to another, and illegal domestic manufacturing of these items are also considered elements of illicit trafficking. The United States has adopted a multi-pronged approach in its diplomacy to combat illicit small arms trafficking. The first element of United States policy is to attempt to curb black market or unauthorized transfers of small arms to zones of conflict, to terrorists, to international criminal organizations, and to drug traffickers. The second is to attempt to raise the arms export standards of other nations to U.S. standards. The third is to streamline and strengthen United States export procedures to improve accountability without interfering with the legal trade in and transfer of arms. The fourth is to support the destruction of excess stockpiles of small arms, particularly in regions where conflicts have ended. As U.S. Ambassador Donald J. McConnell has summarized the U.S. perspective: "Ultimately, simple "one size fits all" solutions are ineffective in dealing with the complex, often region-specific problems caused by the proliferation of small arms and light weapons. Focused efforts to identify and curb the sources and methods of the illicit trade via robust export controls, law enforcement measures, and efforts to expeditiously destroy excess stocks and safeguard legitimate government stocks from theft or illegal transfer are the best ways to attack the problem. " The U.S. State Department has reported that currently as many as seventy nations produce small arms and light weapons, many through licensing arrangements with other producers. These weapons are generally inexpensive and require minimal maintenance and training to operate. The foreign small arms and light weapons trade, whether it is legal or illegal, does not lend itself to easy monitoring. There is a lack of global standards generally and there are widely differing standards among nations on how to monitor and regulate this trade. Definitions of what items should be covered are also a source of difficulty. While the export licensing and monitoring laws, regulations and procedures of the United States are widely acknowledged to be the most transparent, comprehensive, and stringent in the world, in many countries arms transfers that would be illegal in the United States are not prohibited as a matter of law or regulation. Small arms and light weapons are easily concealed, thus making it relatively easy for corrupt officials to permit illicit trafficking or for criminals to transfer these weapons, especially in nations that lack the human and financial resources needed for adequate inspections and export/import controls. Routes used for smuggling excess weapons into zones of conflict are chosen specifically to defy discovery and monitoring. Furthermore, poorer nations desperate for hard currency are tempted to market excess weapons to secure this revenue. And the widespread availability of these weapons further complicates establishment of control measures. According to the State Department, available rough estimates indicate that the overall number of small arms and light weapons in circulation globally range from 100 to 500 million and up. Efforts to obtain precise data on totals regarding these weapons and their sources, whether legal or illegal, is generally guesswork. The United States has been active in international efforts to address the illicit trade in small arms and light weapons. On November 15, 1997, the United States and 27 other nations signed the Inter-American Convention Against the Illicit Trafficking in Firearms. This convention, which will be legally binding on its adherents, includes provisions to establish a system to license and track firearms sales in states of the Western Hemisphere, to enhance information exchanges on this trade among adherent states, and to mark firearms to facilitate their global tracing. This convention has not been ratified by many of its key signatories. It was submitted to the U.S. Senate in April 1998. It is still pending before that body. On December 17, 1999, the United States and the European Union signed a "Statement of Common Principles on Small Arms and Light Weapons." This statement contains a pledge by the parties to observe restraint in their export policies and to harmonize these policies and procedures governing small arms. This statement also included a commitment to plan together for a United Nations small arms conference aimed at "achieving tangible results...including an Action Plan for the international community to deal with the problem." The United States has also provided resources to assist other nations destroy their excess weapons stocks. The State Department cites U.S. assistance, through contributing experts and funds, in the destruction of small arms and light weapons and ammunition in Liberia, Kuwait, Haiti, Panama, Mali, Albania, and the former Yugoslavia. The United States has also facilitated an agreement among 10 nations in Southeastern Europe to seize and destroy illicit and surplus arms in that region. The United States continues to participate in international fora aimed at addressing various issues associated with the international small arms and light weapons trade. It actively pursued its principal policy goals at the United Nations Conference on the "Illicit Trade of Small Arms and Light Weapons In All Its Aspects," held July 9-20, 2001 at United Nations Headquarters in New York City. The program of action agreed to at this conference is non-binding on any state. It encourages nations to ensure that manufacturers use markings on small arms and light weapons to facilitate the tracing of illicit weapons transfers. It also encourages nations to establish procedures to monitor legal sales, transfer and stockpiling of small arms and light weapons, and urges governments to make the illegal manufacture, trade and possession of such weapons a criminal offense. The U.N. Conference further agreed to hold a follow-up conference to review measures undertaken to achieve the above goals. On June 26, 2006, the United Nations began a conference aimed at reviewing the progress made in implementation of the previously agreed program of action to prevent, combat, and eradicate the illicit trade in small arms and light weapons. This conference met through July 7, 2006. The conference was unable to agree on an outcome document. The United States Representative to the conference stated on July 7, 2006, that the United States would continue to provide assistance to those nations seeking to implement the program originally agreed upon in 2001. He noted that it was the intent of the United States to continue its efforts in the areas of transport controls, export controls, and marking and tracing. It further "intended to expand its efforts in Africa and Eastern Europe." Other conference participants expressed similar commitments in support of the 2001 program of action.

This report provides general background on U.S. policy regarding the international trade in small arms and light weapons (SA/LW). It outlines major questions associated with the international trade in these items, and reviews United States efforts to assist in controlling the illicit transfers of these items. This report will be revised as developments warrant.

In our prior work, we identified concerns associated with BIA management of energy resources and categorized them into five broad areas: (1) oversight of BIA activities; (2) collaboration and communication; (3) BIA workforce planning; (4) technology; and (5) BIA’s data. In the past 2 years, we issued three reports on Indian energy resources and development in which we made 14 recommendations to BIA. BIA agreed with most of these recommendations, and has identified steps it will take to address some of the recommendations. In a June 2015 report, we found that BIA review and approval is required throughout the development process, including the approval of leases, right-of-way (ROW) agreements, and appraisals. However, BIA does not have a documented process or the data needed to track its review and response times—such as data on the date documents are received, the date the review process is considered complete by the agency, and the date documents are approved or denied. However, a few stakeholders we interviewed and some literature we reviewed suggested that BIA’s review and approval process can be lengthy and increase development costs and project development times, resulting in missed development opportunities, lost revenue, and jeopardized viability of projects. For example, in 2014, the Acting Chairman for the Southern Ute Indian Tribe reported that BIA’s review of some of its energy-related documents took as long as 8 years. Specifically, as of April 30, 2014, the tribe had been waiting for at least 5 years for BIA to review 81 pipeline ROW agreements—11 of these 81 ROW agreements had been under review for 8 years. According to the tribal official, had these ROW agreements been approved in a timely manner, the tribe would have received revenue through various sources, including tribal permitting fees, oil and gas severance taxes, and royalties. The tribal official noted that, during the period of delay, prices for natural gas rose to an historic high but had since declined. Therefore, the official reported that much of the estimated $95 million in lost revenue would never be recovered by the tribe. In another example from our June 2015 report, one lease for a proposed utility-scale wind project took BIA more than 3 years to review and approve and according to a tribal official, the lease was only reviewed and approved after multiple calls and letters from the tribe to BIA headquarters. According to a tribal official, the long review time contributed to uncertainty about the continued viability of the project because data used to support the economic feasibility and environmental impact of the project became too old to accurately reflect current conditions. We recommended in our June 2015 report that Interior direct BIA to develop a documented process to track its review and response times. Interior agreed with the recommendation and stated it would try to implement a tracking and monitoring mechanism by the end of fiscal year 2017 for oil and gas leases. However, Interior did not indicate whether it intends to track and monitor its review of other energy-related documents that must be approved before tribes can develop resources. Without comprehensively tracking and monitoring its review process, BIA cannot ensure that documents are moving forward in a timely manner, and lengthy review times may continue to contribute to lost revenue and missed development opportunities for Indian tribes. Further, in a June 2016 report, we found that BIA took steps to improve its process for reviewing revenue-sharing agreements but still had not established a systematic mechanism for monitoring or tracking. We recommended, among other things, that BIA develop a systematic mechanism for tracking these agreements through the review and approval process. Interior concurred with this recommendation and stated that BIA would develop such a mechanism and in the meantime would use a centralized tracking spreadsheet. In June 2015, we reported that the added complexity of the federal process, which can include multiple regulatory agencies, prevents many developers from pursuing Indian energy resources for development. In a November 2016 report, we reported that Interior has recognized the need for collaboration in the regulatory process and described the creation of the Indian Energy Service Center as a center point of collaboration for permitting that will break down barriers between federal agencies. We found that BIA had taken steps to form an Indian Energy Service Center that was intended to, among other things, help expedite the permitting process associated with Indian energy development. We reported that the Service Center had the potential to increase collaboration between BIA and BLM on some permitting requirements associated with oil and gas development. However, we found that BIA did not coordinate with other key regulatory agencies, including Interior’s Fish and Wildlife Service, the U.S. Army Corps of Engineers, and the Environmental Protection Agency. As a result, the Service Center was neither established as the central point for collaborating with all federal regulatory partners generally involved in energy development, nor did it serve as a single point of contact for permitting requirements. Without serving in these capacities, the Service Center was limited in its ability to improve efficiencies in the federal regulatory process. We also found that in forming the Service Center, BIA did not involve key stakeholders, such as the Department of Energy (DOE)—an agency with significant energy expertise—and BIA employees from agency offices. By not involving key stakeholders, BIA was missing an opportunity to incorporate their expertise into its efforts. We recommended that BIA include other regulatory agencies in the Service Center so that it can act as a single point of contact or a lead agency to coordinate and navigate the regulatory process. We also recommended that BIA establish formal agreements with key stakeholders, such as DOE, that identify the advisory or support role of the office, and establish a process for seeking and obtaining input from key stakeholders, such as BIA employees, on the Service Center’s activities. Interior agreed with our recommendations and described its plans to address them. In addition, in 2005, Congress provided an option for tribes to enter into an agreement with the Secretary of the Interior that allows the tribe, at their discretion, to enter into leases, business agreements, and ROW agreements for energy resource development on tribal lands without review and approval by the Secretary. However, in our June 2015 report, we found that uncertainties about Interior’s regulations for implementing this option have contributed to deter tribes from pursuing such agreements. We recommended that Interior provide clarifying guidance. In August 2015, Interior stated the department was considering further guidance. As of December 2016, however Interior had not provided additional guidance. In our June 2015 report, we found that BIA’s long-standing workforce challenges, such as inadequate staff resources and staff at some offices without the skills needed to effectively review energy-related documents, were factors hindering Indian energy development. Further, in November 2016, we found that some BIA offices had high vacancy rates for key energy development positions, and some offices reported not having staff with key skills to review energy-related documents. For example, BIA agency officials in an area where tribes are considering developing wind farms told us that they would not feel comfortable approving proposed wind leases because their staff do not have the expertise to review such proposals. Consequently, these officials told us that they would send a proposed wind lease to higher ranking officials in the regional office for review. Similarly, an official from the regional office stated that they do not have the required expertise and would forward such a proposal to senior officials in Interior’s Office of the Solicitor. The Director of BIA told us that BIA agency offices generally do not have the expertise to help tribes with solar and wind development because it is rare that such skills are needed. Through the Indian Energy Service Center, BIA plans to hire numerous new staff over the next 2 years, which could resolve some of the long- standing workforce challenges that have hindered Indian energy development in the past. However, BIA is hiring new staff without incorporating effective workforce planning principles. Specifically, BIA has not assessed key skills needed to fulfill its responsibilities related to energy development or identified skill gaps, and does not have a documented process to provide reasonable assurance its workforce composition at agency offices is consistent with its mission, goals, and tribal priorities. As a result, BIA cannot provide reasonable assurance it has the right people in place with the right skills to effectively meet its responsibilities or whether new staff will fill skill gaps. We recommended in our November 2016 report that BIA assess critical skills and competencies needed to fulfill its responsibilities related to energy development and identify potential gaps. We also recommended BIA establish a documented process for assessing BIA’s workforce composition at agency offices taking into account BIA’s mission, goals, and tribal priorities. Interior agreed with our recommendations and stated it was taking steps to implement them. In June 2015, we found that BIA did not have the necessary geographic information system (GIS) mapping data for identifying who owns and uses resources, such as existing leases. Interior guidance states that efficient management of oil and gas resources relies, in part, on GIS mapping technology because it allows managers to easily identify resources available for lease and where leases are in effect. According to a BIA official, without GIS data, the process of identifying transactions, such as leases and access agreements for Indian land and resources, can take significant time and staff resources to search paper records stored in multiple locations. We recommended BIA should take steps to improve its GIS capabilities to ensure it can verify ownership in a timely manner. Interior stated it will enhance mapping capabilities by developing a national dataset composed of all Indian land tracts and boundaries in the next 4 years. In June 2015, we found that BIA did not have the data it needs to verify who owns some Indian oil and gas resources or identify where leases are in effect. In some cases, BIA cannot verify ownership because federal cadastral surveys—the means by which land is defined, divided, traced, and recorded—cannot be found or are outdated. The ability to account for Indian resources would assist BIA in fulfilling its responsibilities, and determining ownership is a necessary step for BIA to approve leases and other energy-related documents. We recommended that BIA identify land survey needs. Interior agreed with the recommendation and stated it will develop a data collection tool to identify the extent of its survey needs in fiscal year 2016. As of December 2016, Interior had not provided information on the status of its efforts to develop a data collection tool. In conclusion, our reviews have identified a number of areas in which BIA could improve its management of Indian energy resources. Interior has stated that it intends to take some steps to implement our recommendations, and we will continue to monitor its efforts. We look forward to continuing to work with this committee in overseeing BIA, BIE, and IHS to ensure that they are operating in the most effective and efficient manner, consistent with the federal government’s trust responsibilities, and working toward improving service to tribes and their members. Chairman Farenthold, Ranking Member Plaskett, and Members of the Committee, this concludes my prepared statement. I would be pleased to answer any questions that you may have at this time. If you or your staff members have any questions about this testimony, please contact me at (202) 512-3841 or ruscof@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this testimony. Christine Kehr (Assistant Director), Richard Burkard, Jay Spaan, and Kiki Theodoropoulos made key contributions to this testimony. This is a work of the U.S. government and is not subject to copyright protection in the United States. The published product may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately.

Indian tribes and their members hold considerable energy resources and may decide to use these resources to provide economic benefits and improve the well-being of their communities. However, according to a 2014 Interior document, these resources are underdeveloped relative to surrounding non-Indian resources. Development of Indian energy resources is a complex process that may involve federal, tribal, and state agencies. Interior's BIA has primary authority for managing Indian energy development and generally holds final decision-making authority for leases, permits, and other approvals required for development. GAO's 2017 biennial update to its High Risk List identifies federal management of programs that serve tribes and their members as a new high risk area needing attention by Congress and the executive branch. This testimony highlights the key findings of three prior GAO reports ( GAO-15-502 , GAO-16-553 , and GAO-17-43 ). It focuses primarily on BIA's management of Indian energy resources and development. For the prior reports, GAO analyzed federal data; reviewed federal, academic, and other literature; and interviewed tribal, federal and industry stakeholders. In three prior reports on Indian energy development, GAO found that the Department of the Interior's (Interior) Bureau of Indian Affairs (BIA) has inefficiently managed Indian energy resources and the development process and thereby limited opportunities for tribes and their members to use those resources to create economic benefits and improve the well-being of their communities. GAO has also reported numerous challenges facing Interior's Bureau of Indian Education and BIA and the Department of Health and Human Services' Indian Health Services in administering education and health care services, which put the health and safety of American Indians served by these programs at risk. For the purposes of this testimony, GAO is focusing on the concerns related to Indian energy. GAO categorized concerns associated with BIA management of energy resources and the development process into several broad areas, including oversight of BIA activities, collaboration, and BIA workforce planning. Oversight of BIA activities . In a June 2015 report, GAO found that BIA review and approval is required throughout the development process. However, BIA does not have a documented process or the data needed to track its review and response times—such as data on the date documents are received, the date the review process is considered complete, and the date documents are approved or denied. GAO recommended that BIA develop a documented process to track its review and response times. Interior generally agreed and stated it would try to implement a tracking and monitoring mechanism by the end of fiscal year 2017 for oil and gas leases. Interior did not indicate whether it intends to track and monitor its review of other energy-related documents that must be approved before tribes can develop resources. Collaboration . In a November 2016 report, GAO found that BIA has taken steps to form an Indian Energy Service Center that is intended to, among other things, help expedite the permitting process associated with Indian energy development. However, BIA did not coordinate with key regulatory agencies, including Interior's Fish and Wildlife Service, the Environmental Protection Agency and the U.S. Army Corps of Engineers. GAO recommended that BIA include other regulatory agencies in the Service Center so that it can act as a single point of contact or lead agency to coordinate and navigate the regulatory process. Interior agreed with our related recommendation and described plans to address it. BIA workforce planning . In June 2015 and in November 2016, GAO reported concerns associated with BIA's long-standing workforce challenges, such as inadequate staff resources and staff at some offices without the skills needed to effectively review energy-related documents. GAO recommended that BIA assess critical skills and competencies needed to fulfill its responsibilities related to energy development, and that it establish a documented process for assessing BIA's workforce composition at agency offices. Interior agreed with our recommendations and stated it is taking steps to implement them. In the past 2 years, GAO issued three reports and made 14 recommendations to BIA to improve its management of Indian energy resources, such as to track its review process, improve collaboration, and conduct workforce planning. BIA agreed with most recommendations and identified some steps it intends to take to implement them.

During the three decades in which uranium was used in the government’s nuclear weapons and energy programs, for every ounce of uranium that was extracted from ore, 99 ounces of waste were produced in the form of mill tailings—a finely ground, sand-like material. By the time the government’s need for uranium peaked in the late 1960s, tons of mill tailings had been produced at the processing sites. After fulfilling their government contracts, many companies closed down their uranium mills and left large piles of tailings at the mill sites. Because the tailings were not disposed of properly, they were spread by wind, water, and human intervention, thus contaminating properties beyond the mill sites. In some communities, the tailings were used as building materials for homes, schools, office buildings, and roads because at the time the health risks were not commonly known. The tailings and waste liquids from processing uranium ore also contaminated the groundwater. Tailings from the ore processing resulted in radioactive contamination at about 50 sites (located mostly in the southwestern United States) and at 5,276 nearby properties. The most hazardous constituent of uranium mill tailings is radium. Radium produces radon, a radioactive gas whose decay products can cause lung cancer. The amount of radon released from a pile of tailings remains constant for about 80,000 years. Tailings also emit gamma radiation, which can increase the incidence of cancer and genetic risks. Other potentially hazardous substances in the tailings include arsenic, molybdenum, and selenium. DOE’s cleanup authority was established by the Uranium Mill Tailings Radiation Control Act of 1978. Title I of the act governs the cleanup of uranium ore processing sites that were already inactive at the time the legislation was passed. These 24 sites are referred to as Title I sites. Under the act, DOE is to clean up the Title I sites, as well as the nearby properties that were contaminated. In doing so, DOE works closely with the affected states and Indian tribes. DOE pays for most of this cleanup, but the affected states contribute 10 percent of the costs for remedial actions. Title II of the act covers the cleanup of sites that were still active when the act was passed. These 26 sites are referred to as Title II sites. Title II sites are cleaned up mostly at the expense of the private companies that own and operate them. They are then turned over to the federal government for long-term custody. Before a Title II site is turned over to the government, the Nuclear Regulatory Commission (NRC) works with the sites’ owners/operators to make sure that sufficient funds will be available to cover the costs of long-term monitoring and maintenance. The cleanup of surface contamination consists of four key steps: (1) identifying the type and extent of the contamination; (2) obtaining a disposal site; (3) developing an action plan, which describes the cleanup method and specifies the design requirements; and (4) carrying out the cleanup using the selected method. Generally, the primary cleanup method consists of enclosing the tailings in a disposal cell—a containment area that is covered with compacted clay to prevent the release of radon and then topped with rocks or vegetation. Similarly, the cleanup of groundwater contamination consists of identifying the type and extent of the contamination, developing an action plan, and carrying out the cleanup using the selected method. According to DOE, depending on the type and extent of the contamination, and the possible health risks, the appropriate method may be (1) leaving the groundwater as it is, (2) allowing it to cleanse itself over time (called natural flushing), or (3) using an active cleanup technique such as pumping the water out of the ground and treating it. Mr. Chairman, we now return to the topics discussed in our report: the status and cost of DOE’s surface and groundwater cleanup and the factors that could affect the federal government’s costs in the future. Since our report was issued on December 15, 1995, DOE has made additional progress in cleaning up and licensing Title I sites. As of April 1996, DOE’s surface cleanup was complete at 16 of the 24 Title I sites, under way at 6 additional sites, and on hold at the remaining 2 sites. Of the 16 sites where DOE has completed the cleanup, 4 have been licensed by NRC as meeting the standards of the Environmental Protection Agency (EPA). At 10 of the other 12 sites, DOE is working on obtaining such a license, and the remaining 2 sites do not require licensing because the tailings were relocated to other sites. Additionally, DOE has completed the surface cleanup at about 97 percent of the 5,276 nearby properties that were also contaminated. Although DOE expects to complete the surface cleanup of the Title I sites by the beginning of 1997, it does not expect all of NRC activities to be completed until the end of 1998. As for the cleanup of groundwater at the Title I sites, DOE began this task in 1991 and currently expects to complete it in about 2014. Since its inception in 1979, DOE’s project for cleaning up the Title I sites has grown in size and in cost. In 1982, DOE estimated that the cleanups would be completed in 7 years and that only one pile of tailings would need to be relocated. By 1992, however, the Department was estimating that the surface cleanup would be completed in 1998 and that 13 piles of tailings would need to be relocated. The project’s expansion was caused by several factors, including the development of EPA’s new groundwater protection standards; the establishment or revision of other federal standards addressing such things as the transport of the tailings and the safety of workers; and the unexpected discovery of additional tailings, both at the processing sites and at newly identified, affected properties nearby. In addition, DOE made changes in its cleanup strategies to respond to state and local concerns. For example, at the Grand Junction, Colorado, site, the county’s concern about safety led to the construction of railroad transfer facilities and the use of both rail cars and trucks to transport contaminated materials. The cheaper method of simply trucking the materials would have routed extensive truck traffic through heavily populated areas. Along with the project’s expansion came cost increases. In the early 1980s, DOE estimated that the total cleanup cost—for both the surface and groundwater—would be about $1.7 billion. By November 1995, this estimate had grown to $2.4 billion. DOE spent $2 billion on surface cleanup activities through fiscal year 1994 and expects to spend about $300 million more through 1998. As for groundwater, DOE has not started any cleanup. By June 1995, the Department had spent about $16.7 million on site characterization and various planning activities. To make the cleanup as cost-effective as it can, DOE is proposing to leave the groundwater as it is at 13 sites, allow the groundwater to cleanse itself over time at another 9 sites, and use an active cleanup method at 2 locations, in Monument Valley and Tuba City, Arizona. The final selection of cleanup strategies depends largely on DOE’s reaching agreement with the affected states and tribes. At this point, however, DOE has yet to finalize agreements on any of the groundwater cleanup strategies it is proposing. At the time we issued our report, the cleanups were projected to cost at least another $130 million using the proposed strategies, and perhaps as much as another $202 million. More recently, DOE has indicated that the Department could reduce these costs by shifting some of the larger costs to earlier years; reducing the amounts built into the strategies for contingencies, and using newer, performance-based contracting methods. Once all of the sites have been cleaned up, the federal government’s responsibilities, and the costs associated with them, will continue far into the future. What these future costs will amount to is currently unknown and will depend largely on how three issues are resolved. First, because the effort to clean up the groundwater is in its infancy, its final scope and cost will depend largely on the remediation methods chosen and the financial participation of the affected states. Since the time we issued our report, DOE has reported some progress in developing its groundwater cleanup plans. However, it is still too early to know whether the affected states or tribes will ultimately persuade DOE to implement more costly remedies than those the Department has proposed or whether any of the technical assumptions underlying DOE’s proposed strategies will prove to be invalid. If either of these outcomes occurs, DOE may implement more costly cleanup strategies, and thereby increase the final cost of the groundwater cleanup. In its fiscal year 1997 congressional budget request, DOE identified five sites where it believes it may have to implement more expensive alternatives than the ones it initially proposed. In addition, the final cost of the groundwater cleanup depends on the ability and willingness of the affected states to pay their share of the cleanup costs. According to DOE, several states may not have funding for the groundwater cleanup program. DOE believes that it is prohibited from cleaning up the contamination if the states do not pay their share. Accordingly, as we noted in our report, we believe that the Congress may want to consider whether and under what circumstances DOE can complete the cleanup of the sites if the states do not provide financial support. Second, DOE may incur further costs to dispose of uranium mill tailings that are unearthed in the future in the Grand Junction, Colorado, area. DOE has already cleaned up the Grand Junction processing site and over 4,000 nearby properties, at a cost of about $700 million. Nevertheless, in the past, about a million cubic yards of tailings were used in burying utility lines and constructing roads in the area and remain today under the utility corridors and road surfaces. In future years, utility and road repairs will likely unearth these tailings, resulting in a potential public health hazard if the tailings are mishandled. In response to this problem, DOE has worked with NRC and Colorado officials to develop a plan for temporarily storing the tailings as they are unearthed and periodically transporting them to a nearby disposal cell—referred to as the Cheney cell, located near the city of Grand Junction—for permanent disposal. Under this plan, the city or county would be responsible for hauling the tailings to the disposal cell, and DOE would be responsible for the cost of placing the tailings in the cell. The plan envisions that a portion of the Cheney disposal cell would remain open, at an annual cost of roughly $200,000. When the cell is full, or after a period of 20 to 25 years, it would be closed. However, DOE does not currently have the authority to implement this plan because the law requires that all disposal cells be closed upon the completion of the surface cleanup. Accordingly, we suggested in our report that the Congress might want to consider whether DOE should be authorized to keep a portion of the Cheney disposal cell open to dispose of tailings that are unearthed in the future in this area. Finally, DOE’s costs for long-term care are still somewhat uncertain. DOE will ultimately be responsible for the long-term custody, that is, the surveillance and maintenance, of both Title I and Title II sites, but the Department bears the financial responsibility for these activities only at Title I sites. For Title II sites, the owners/operators are responsible for funding the long-term surveillance and maintenance. Although NRC’s minimum one-time charge to site owners/operators is supposed to be sufficient to cover the cost of the long-term custody so that they, not the federal government, bear these costs in full, at the time we issued our December 1995 report, NRC had not reviewed its estimate of basic surveillance costs since 1980, and DOE was estimating that basic monitoring would cost about three times more than NRC had estimated. Since then, NRC and DOE have worked together to determine what level of basic monitoring should occur and how comprehensive the inspection reports should be. However, DOE still maintains that ongoing routine maintenance will be needed at all sites, while NRC’s charge does not provide any amount for ongoing maintenance. In light of the consequent potential shortfall in maintenance funds, our report recommended that NRC and DOE work together to update the charge for basic surveillance and determine whether routine maintenance will be required at each site. On the basis of our recommendations, NRC officials agreed to reexamine the charge and determine the need for routine maintenance at each site. They also said that they are working with DOE to clarify the Department’s role in determining the funding requirements for long-term custody. Mr. Chairman, this concludes our prepared statement. We will be pleased 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 6015 Gaithersburg, MD 20884-6015 Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders may also be placed by calling (202) 512-6000 or by using fax number (301) 258-4066, or TDD (301) 413-0006. Each day, GAO issues a list of newly available reports and testimony. To receive facsimile copies of the daily list or any list from the past 30 days, please call (202) 512-6000 using a touchtone phone. A recorded menu will provide information on how to obtain these lists.

GAO discussed the status and cost of the Department of Energy's (DOE) uranium mill tailings cleanup program and the factors that could affect future costs. GAO noted that: (1) surface contamination cleanup has been completed at two-thirds of the identified sites and is underway at most of the others; (2) if DOE completes its surface cleanup program in 1998, it will have cost $2.3 billion, taken 8 years longer than expected, and be $621 million over budget; (3) DOE cleanup costs increased because there were more contaminated sites than originally anticipated, some sites were more contaminated than others, and changes were needed to respond to state and local concerns; (4) the future cost of the uranium mill tailings cleanup will largely depend on the future DOE role in the program, remediation methods used, and the willingness of states to share final cleanup costs; and (5) the Nuclear Regulatory Commission needs to ensure that enough funds are collected from the responsible parties to protect U.S. taxpayers from future cleanup costs.

The economic substance doctrine is a judicial rather than statutory tax doctrine that has been used by the Internal Revenue Service (IRS) and applied by the courts for many years to disallow, for tax purposes, transactions that technically comply with the Internal Revenue Code (the Code), but produce tax benefits outside of what Congress intended. Throughout the years it has remained a matter of judicial interpretation and case law. There have been, however, suggestions that the doctrine should be codified to produce uniformity among the courts in applying the doctrine. Generally, proposals would codify the definition of "economic substance" rather than codifying the doctrine. This codification has been proposed in several bills during the 110 th Congress. Although the language in each proposal has been similar, the overall subject matter for the bills has been diverse. A section entitled "Clarification of Economic Substance Doctrine" has been included in the Abusive Tax Shelter Shutdown and Taxpayer Accountability Act of 2007, the Stop Tax Haven Abuse Act, the Responsible Fatherhood and Healthy Families Act of 2007, the Export Products Not Jobs Act, and the Food and Energy Security Act of 2007. Other bills have contained a similar provision entitled "Codification of Economic Substance Doctrine." Thus far, only one bill containing a provision to define "economic substance" in the Internal Revenue Code has been passed by either body of Congress. The Senate passed version of H.R. 2419 contains a section clarifying economic substance. This report analyzes the proposal as contained in the Senate amendment. Unless otherwise noted, all further references to "the Farm Bill," " H.R. 2419 ,"or "the current proposal" will be referring to the bill as passed by the Senate. H.R. 2419 adds a subsection to section 7701 of the Internal Revenue Code. It attempts to define the situations in which a court may find that a transaction has economic substance. These are limited to those transactions in which the taxpayer's economic position is changed in a meaningful way and "the taxpayer has a substantial purpose (other than a Federal tax purpose) for entering into such transaction." When a potential for profit is the basis of the taxpayer's position that a transaction has economic substance, the expectation of profit must be reasonable. Even when it is deemed reasonable, the present value of the expected profit must be compared to the present value of the expected net Federal tax benefit. The profit potential must be considered "substantial" when compared to the tax benefit. Further, if the only "substantial purpose (other than Federal tax purposes)" is a reduction in non-Federal taxes, there is no economic substance if similarities between Federal tax law and the other tax law result in a corresponding reduction in Federal taxes that at least equals the reduction in non-Federal taxes. When the purpose of the transaction is a financial accounting benefit, that will not be considered a "substantial purpose (other than Federal tax purposes)" if the financial accounting benefit stems from a reduction in Federal taxes. In addition to clarifying economic substance, the bill would establish a penalty for transactions found lacking in economic substance. This penalty would be 30% of the understatement in tax that resulted from disallowance of the transaction. The penalty would be reduced to 20% in cases where the facts relevant to the tax treatment of the disallowed transaction are "adequately disclosed in the return on a statement attached to the return." In contrast to most penalties provided for in the Code, the proposed penalty is calculated on the tax understatement rather than on the underpayment, so a taxpayer may be liable for a penalty even if that taxpayer does not have an outstanding tax balance. The penalty can only be imposed by the Chief Counsel of the IRS or by an Office of Chief Counsel branch chief to whom the Chief Counsel has delegated such authority (hereinafter "Chief Counsel or delegate"). The authority to compromise all or part of the penalty is similarly limited. Compromise of the penalty is also limited to situations in which the understatement from the noneconomic substance transaction has been reduced. The bill requires the individual asserting the penalty to first notify the taxpayer of the intent to assert the penalty. The taxpayer must also have the opportunity to respond in writing. While the penalty may be imposed following litigation in which a court finds that the economic substance doctrine is relevant and that the transaction lacked economic substance, such litigation is not required for assertion of the penalty. The Chief Counsel or delegate may determine that the economic substance doctrine is relevant and assert the penalty after finding that a transaction lacked economic substance. The penalty must be rescinded, however, if a court determines, in a final order, that the economic substance doctrine was not relevant to the transaction. When taxpayers underpay their taxes, they must pay interest on the amount that was underpaid. This is true even when the underpayment is created by a determination that a position taken on a tax return is not allowed for tax purposes—resulting in an assertion of additional tax liability. Section 163(m) of the Internal Revenue Code prohibits deduction of interest on understatements due to reportable transactions that were not properly disclosed. The bill would add language to also prohibit deduction of interest on underpayments due to a transaction that lacked economic substance. There is no exception to allow deduction of the interest if the facts relevant to the transaction had been disclosed on the tax return. The proposed bill provides a definition of "economic substance" for courts to use when they find that the economic substance doctrine is relevant. It makes no claim to clarify when the doctrine is relevant. Instead it codifies a definition that settles some differences between courts in terms of what is required to find that a transaction has economic substance. The rationale provided by the Court of Federal Claims in Coltec Industries v. United States suggests an additional justification for codifying the definition of economic substance (if not the doctrine itself). The court said that, in determining their tax liabilities, taxpayers "must be able to rely on clear and understandable rules established by Congress. If federal tax laws are applied in an unpredictable and arbitrary manner, albeit by federal judges for the 'right' reasons . . . , public confidence in the Code and tax enforcement system surely will be further eroded." Codifying the definition of economic substance arguably could provide a "clear and understandable rule." There are, however, phrases and concepts in the proposed definition that may be less than clear. If so, they may cause uncertainty rather than providing clarification. Some of these are "changes in a meaningful way," "substantial purpose," and substantial profit (in comparison to tax benefit). Additionally, since the courts are left to determine when the economic substance doctrine is relevant, there may still be room to apply the codified definition "in an unpredictable and arbitrary manner." The current bill proposes a 30% penalty on the understatement resulting from transactions that lack economic substance if the transaction was not disclosed. Some other proposals have set the penalty at 40%. If the transaction is disclosed, the penalty would be reduced to 20%. However, in either case, there is no provision for abating the penalty based on reasonable cause. The penalty is one of strict liability. Taxpayer reliance on advice from tax professionals is irrelevant even when that advice is based on substantial authority. Arguably, taxpayers have some protection from the penalty because it can only be imposed by the Chief Counsel or delegate. However, since it is left to the courts to determine whether the economic substance doctrine is relevant, taxpayers are placed in a situation in which they may need professional guidance as to whether the doctrine is applicable, but cannot rely on that guidance to avoid a substantial penalty if a court determines that the doctrine applies and the transaction lacked economic substance. Further complicating taxpayers' quandary is the assertion by the Joint Committee on Taxation that If the tax benefits are clearly consistent with all applicable provisions of the Code and the purposes of such provisions, it is not intended that such tax benefits be disallowed if the only reason for such disallowance it that the transaction fails the economic substance doctrine as defined in this provision. Thus, taxpayers, tax professionals, and the courts will still be in the position of trying to determine Congress's purpose for various provisions of the tax code. In some cases, there is sufficient legislative history to determine the purpose, but in other cases there is not. As a result, taxpayers might avoid legitimate business transactions out of fear of a potential penalty. This could reduce risk-taking and innovation in business and, possibly, lead to a decline in productivity and profitability. Some, however, believe that the penalty's results will be positive "caus[ing] taxpayers to forego entering into noneconomic, tax-motivated transactions that Congress never intended." Clarifying the economic substance doctrine through codification has been a persistent provision in legislative proposals in recent Congresses. Though the revenue projections of the current proposal vary, the proposal is viewed as providing increased revenue for the "pay-go" budget procedures. It may also reduce government costs by eliminating some abusive tax shelter schemes, thus reducing the resources needed to pursue both the promoters and participants in abusive tax shelters. Others oppose codification of even a definition of economic substance, in part because it may provide "the seeds of the next tax shelter problem." It is the business of tax professionals to examine the Code closely to determine how it can best be used to result in the least amount of tax owed. New laws aimed at clarifying current law, both statutory and case law, are apt to be viewed as challenges. It seems likely that someone will devise a transaction that a court might, in the past, have found to lack economic substance but which meets the criteria for having economic substance under the proposed bill. In this case, some may argue that codification of the definition may hinder rather than help actions against abusive tax shelters. There is also some question about both the cost saving and revenue raising prospects for the proposal. IRS Chief Counsel Donald L. Korb has questioned whether the strict liability penalty would ever be asserted by the IRS and has indicated that it would make litigation more complex and eliminate taxpayers' incentive to cooperate with the IRS.

The economic substance doctrine was judicially developed. A number of bills introduced in the 110 th Congress would codify the definition of "economic substance," provide a strict liability penalty for underpayments resulting from disallowed transactions that lack economic substance, and prohibit deduction of interest on those underpayments. The proposals would not codify the doctrine, itself, nor provide standards for a court's determination that the doctrine was relevant to a particular case. Codification has been dubbed a "revenue raiser," though there is disagreement as to both the amount that would be raised and the way in which codification would increase revenue.

Unanimous consent agreements are special orders of the Senate that are agreed to without objection by the chamber's membership. Fundamental to the management of the contemporary Senate, these devices are typically employed to structure floor proceedings and to expedite the chamber's business. Two general types of unanimous consent permeate Senate operations: "simple" and "complex." Both types set aside the rules, precedents, or orders of the Senate via the unanimous concurrence of all Senators. A simple unanimous consent request addresses routine matters, such as dispensing with quorum calls or requesting that certain staff aides have floor privileges. To be sure, there are occasions when a simple unanimous consent request can have policy consequences, such as an objection to setting aside an amendment or dispensing with the reading of an amendment. Simple unanimous consent requests have been used since the First Congress. For example, a Senate rule adopted on April 16, 1789, stated: Every bill shall receive three readings [prior] to its being passed; and the President [of the Senate] shall give notice at each, whether it be first, second, or third; which readings shall be on three different days, unless the Senate unanimously directs otherwise. The focus of this report is on the complex variety: their historical origin, some benchmarks in their evolution, and how they came to be reflected in the Senate's rulebook. Complex agreements establish a tailor-made procedure for virtually anything taken up by the Senate, such as bills, joint resolutions, concurrent resolutions, simple resolutions, amendments, nominations, treaties, or conference reports. As two Senate parliamentarians wrote: There is a fundamental difference between the Senate operating under a unanimous consent agreement and the Senate operating under the Standing Rules. Whereas the Senate Rules permit virtually unlimited debate, and very few restrictions on the right to offer amendments, these agreements usually limit time for debate and the right of Senators to offer amendments. Senators generally accept the debate and amendment restrictions common to most unanimous consent agreements largely for two overlapping reasons: they facilitate the processing of the Senate's workload, and they serve the interests of individual lawmakers. Based on trust, and reached after often protracted negotiations, unanimous consent agreements are the equivalent of "binding contracts" that can only be changed or modified by unanimous consent. It is not clear when the Senate actually began to employ unanimous consent agreements to limit debate or to fix a time for a vote on a measure. Perhaps the first instance occurred in the mid-1840s. On March 24, 1846, Senator William Allen, D-OH, stated that the Senate had been debating a joint resolution concerning the Oregon Territory for more than two months, and it was now time to proceed to a final vote on the matter. Noting that the Senate neither allowed for the previous question (a motion employed in the House to end debate) nor adopted resolutions directing that a vote should occur at a specific time, Senator Allen pointed out that it was the Senate's habit to have "a conversational understanding that an end would be put to a protracted debate at a particular time." A Senate colleague suggested that Allen delay several days before making such a request. Two days later Senator Allen again asked that the Senate informally agree to fix "a definite day on which the vote might be taken." The Senate, he said, should simply refuse to adjourn until there is a final vote. No action occurred on Allen's recommendation. On April 13, 1846, however, a consensus developed among Senators that a final vote on the joint resolution should occur three days later. Finally, after spending around 65 days debating the matter, the Senate on April 16 enacted the joint resolution. Indeed, if this was the first time that the Senate employed something like a unanimous consent agreement to end debate and precipitate a vote on a measure, there is little question that these accords became both more commonly used and more sophisticated in their procedural features. By 1870, noted two scholars, unanimous consent agreements "were being used with some frequency." These early unanimous consent agreements were, "as they are today, time-limitation agreements that provided for the disposal of a measure by a specified time." An April 24, 1879, exchange illustrates the practical use of these accords for limiting debate and setting the time for a vote. The exchange is reminiscent of what occurs in today's Senate. The President pro tempore . The Chair will once more state the proposition and again ask the Senate whether there be any objection to it. The proposition is, that at three o'clock to-morrow, all debate on this bill shall cease, and the Senate shall then proceed to vote upon the pending amendment or amendments that may be offered, and finally on the bill itself without debate. Mr. Conkling . That is right. The President pro tempore . Is there objection to that understanding. The Chair hears none, and it is agreed to. Bill managers apparently took the initiative in propounding unanimous consent agreements. Their increasing use in subsequent decades led one Senator, Roger Mills, D-TX, to complain that the Senate "reaches its vote on all questions like the historic Diet of Poland, by the unanimous agreement of the whole, and not by the act of the majority." Other issues associated with these early accords also sowed confusion among the membership. Many of the complaints stemmed from the fact that the early unanimous consent agreements were often viewed "as an arrangement simply between gentlemen" and could, as a president pro tempore once said, be "violated with impunity by any member of the Senate." To reduce the confusion, the Senate adopted a new rule. The fundamental objective of Rule XII was to clarify several uncertainties associated with these senatorial contracts. In the early 1900s, the Senate took modest steps to reduce some of the confusion associated with unanimous consent agreements, such as requiring these accords to be submitted in writing to the desk, read to the chamber, and "printed on the title page of the daily calendar of business as long as they were operative." More changes were in the offing, however. Two overlapping factors explain why the Senate agreed to a formal rules change to govern these accords. First, there were a couple of ambiguities associated with these accords that continued to arouse contention and confusion. Past precedents simply did not adequately address these recurring problems. Second, a riveting event—a Senator was caught by "surprise" when a unanimous consent agreement was entered into—underscored the need for a formal rule (Rule XII) to clear up issues associated with these "gentlemen's agreements." On the matter of ambiguity, there were two principal issues. First, could these agreements be changed or modified by another unanimous consent agreement? Second, could the presiding officer enforce these accords? Today, both principles are accepted as procedural "givens." Not so several decades ago. For example, on March 3, 1897, Senator George Hoar, R-MA, stated: "I think it is very serious, indeed, under any circumstances, to set the precedent of revoking a unanimous-consent agreement by other unanimous-consent agreements." As another example, one of the Senate's institutional leaders, Henry Cabot Lodge, R-MA., argued: "If it is to be supposed that unanimous-consent agreements are to be modified, we shall soon find it impossible to get a unanimous-consent agreement. I think nothing is more important than the rigidity with which the Senate preserves unanimous-consent agreements." Or as Senator Joseph O'Gorman, D-NY, stated: "Has it not been established by the precedents of this body that a unanimous-consent agreement could not be impaired or modified either by another unanimous-consent agreement or by an order of the Senate?" To be sure, other Senators contended that these compacts could be modified by another unanimous consent agreement. As to the enforcement of these accords, presiding officers took different positions. As one presiding officer observed, "it has been the universal ruling of the Chair that the Chair can not enforce a unanimous-consent agreement, but that it must rest with the honor of Senators themselves." On another occasion, the president of the Senate asked: "[W]hat is the pleasure of the Senate, whether he shall enforce the agreements entered into by unanimous consent or not?" Senator John Sherman, R-OH, replied that the chair should "enforce the agreement with respect to the bill under consideration." The chair then asked, "In similar cases, what is the pleasure of the Senate?" Senator Eugene Hale, R-ME, provided this answer: "We'll cross that bridge when we reach it." Contrarily, "Vice Presidents Charles Fairbanks and James Sherman were not timid about enforcing [unanimous consent agreements] at times." Sundry other issues were also associated with these compacts. For example, Senators argued about whether a motion to recommit a bill violated a unanimous consent agreement to vote on the bill. Some Senators said that if they were not present when a unanimous consent agreement was proposed, colleagues could object for them. In response, Senator Thomas Martin, VA, the ostensible Democratic floor leader, stated: "When unanimous consent is asked, unless objection is made from the floor of the Senate by a Senator who is present, he can not leave his vote here to be recorded against it. The Senate can not do business by proxy that way." Senator Reed Smoot, R-UT, was caught off-guard when a unanimous consent agreement he opposed was agreed to. The issue involved a 1913 bill (S. 4043) to prohibit interstate commerce in intoxicating liquors. A unanimous consent agreement was properly made and announced by the presiding officer. Senator Smoot, who was present in the chamber, had planned to object but was momentarily distracted and failed to lodge a timely dissent. For the next two days the Senate debated the legitimacy of the unanimous consent agreement and whether it could be modified by another unanimous consent agreement. In the end, the presiding officer submitted the question of legitimacy to the Senate, which voted 40 to 17 (with 37 Members not voting) to instruct the chair to resubmit the unanimous consent agreement to the Senate. When this was done, Senator Smoot objected to the accord. Quickly, another unanimous consent agreement on the liquor bill was propounded by Senator Jacob Gallinger, R-NH, and it was accepted by the Senate. In short, uncertainties and controversies influenced the Senate on January 16, 1914, to adopt a formal rule to govern unanimous consent agreements. There was relatively little debate on Rule XII. The major controversy involved whether these compacts could be modified by another unanimous consent agreement. Unsurprisingly, Senator Lodge argued against the new rule on the ground that to permit any subsequent changes to unanimous consent agreements would only lead to delays in expediting the Senate's business. Senator Charles Thomas, D-CO, responded: "It seems to me the most illogical thing in the world to say that the Senate of the United States can unanimously agree to something and by that act deprive itself of the power to agree unanimously to undo it." By a vote of 51 to 8, the Senate adopted Rule XII. Two critical portions of the rule stipulate that (1) unanimous consent agreements are orders of the Senate, which means that the presiding officer is charged with enforcing their terms; and (2) the Senate, by unanimous consent, could change a unanimous consent agreement. As orders of the Senate, unanimous consent agreements are now printed in the Senate Journal . (They are also printed in the Senate's daily Calendar of Business , as noted earlier, and the Congressional Record .) In subsequent decades, the Senate witnessed increasing use of unanimous consent agreements. The contemporary Senate regularly operates via the terms of unanimous consent agreements. They are used on every type of measure or matter that comes before the Senate, and at least since the post-World War II period, all party leaders and floor managers have extensively relied on them to process the chamber's business. During the majority leadership of Senator Lyndon Johnson, D-TX (1955-1960), unanimous consent agreements were often comprehensive in scope (e.g., identifying when a measure is to be taken up, when it is to be voted upon for final passage, and what procedures apply in-between these two stages). Today, in a period of heightened individualism and partisanship, unanimous consent agreements tend to be piecemeal, such as establishing debate limits on a number of discrete amendments without limiting the number of amendments or specifying a time or date for final passage of the legislation. Still, compared with the compacts promulgated during the early 1900s, today's accords are often broader in scope, more complex, and involve more procedural detail. A large body of precedents has even evolved to govern "how [unanimous consent agreements] are to be interpreted and applied in various situations." In short, unanimous consent agreements are essential to the processing of the Senate's workload and protecting the procedural prerogatives of individual senators.

Unanimous consent agreements are fundamental to the operation of the Senate. The institution frequently dispenses with its formal rules and instead follows negotiated agreements submitted on the floor for lawmakers' unanimous approval. Once entered into, unanimous consent agreements can only be changed by unanimous consent. Their objectives are to waive Senate rules and to expedite floor action on measures or matters. Typically, these accords (sometimes called time-limitation agreements) restrict debate and structure chamber consideration of amendments. Given their importance to chamber operations, it is worthwhile to understand the background, or origin, of unanimous consent agreements. The purpose of this report is to examine how and why these informal agreements became special orders of the Senate enforceable by the presiding officer. This report will be updated as circumstances warrant. Further information on unanimous consent agreements can be found in CRS Report 98-225, Unanimous Consent Agreements in the Senate, by [author name scrubbed]; CRS Report RS20594, How Unanimous Consent Agreements Regulate Senate Floor Action, by [author name scrubbed]; and CRS Report 98-310, Senate Unanimous Consent Agreements: Potential Effects on the Amendment Process, by [author name scrubbed].

RS20762 -- Election Projections: First Amendment Issues Updated January 23, 2001 Media projections are speech, and the First Amendment provides that "Congress shall make no law . . . abridging the freedom of speech, or of the press." It ispossible, however, though by no means certain, that Congress could limit the right of broadcast radio and televisionstations to report election result projections. This is because the Supreme Court, citing "spectrum scarcity," i.e. , the limited number of availablebroadcast frequencies, has "permitted more intrusive regulationof broadcast speakers than of speakers in other media." Turner Broadcasting System v. FederalCommunications Commission , 512 U.S. 622, 637 (1994). But torestrict broadcast radio and television, but not cable television and the Internet, would seem to go only a small waytoward banning media election projections. A statute that restricted speech of media other than broadcast radio and television, if challenged, would be subject to "strict scrutiny" by the courts. This meansthat the courts would uphold it only if the government proves that it is necessary "to promote a compelling interest"and is "the least restrictive means to furtherthe articulated interest." Sable Communications of California, Inc. v. Federal CommunicationsCommission , 492 U.S. 115, 126 (1989). Would there be a "compelling interest" in prohibiting media projections? Though there might be a compelling interest in preventing the media from interferingwith elections so as potentially to affect the outcome, it seems questionable whether election projections, if theyare understood by potential voters to be merelyprojections, could be said to interfere with elections. Voters who hear or read such projections presumably knowthat they are only projections, and that their votescould still make a difference in the election. If they decide that that difference is not significant enough to makeit worth their while to vote, then they have made afree choice. The Supreme Court has written in another context: "The First Amendment directs us to be especiallyskeptical of regulations that seek to keep peoplein the dark for what the government perceives to be their own good." 44 Liquormart, Inc. v. RhodeIsland , 517 U.S. 484, 503 (1996). If there is concern that some potential voters might be misled by projections to think that the winner of an election has been determined, then Congress might beable to require that disclosures accompany projections. Although the First Amendment protects the right not tospeak as well as the right to speak, the courtsmight view compelled disclosures in this case as serving a compelling interest in protecting the right to vote. In the seemingly unlikely event that a court were to find a compelling interest in prohibiting media election result projections, then the government would stillhave to show that there was no less restrictive means to further that interest. Making this determination would entailconsideration of other proposals to deal withthe perceived problem. The purpose of legislation banning exit polling within a prescribed distance from the polls would be to make exit polling more difficult. In Burson v. Freeman ,504 U.S. 191 (1992), the Supreme Court upheld a Tennessee statute that prohibited the solicitation of votes and thedisplay or distribution of campaign materialswithin 100 feet of the entrance to a polling place. The Court recognized that this statute both restricted politicalspeech, to which the First Amendment "has itsfullest and most urgent application," and "bar[red] speech in quintessential public forums," the use of which forassembly and debate "has, from ancient times,been a part of the privileges, immunities, rights, and liberties of citizens." Id . at 196, 197. Further, thestatute restricted speech on the basis of its content, as itrestricted political but not commercial solicitation, and therefore was not "a facially content-neutral time, place, ormanner restriction." Id . at 197. The Court therefore subjected the Tennessee statute to strict scrutiny, which means that it required the state to show that the regulation serves a compelling stateinterest and "is necessary to serve the asserted interest." Id . at 199. Although applying strict scrutinyusually results in a statute's being struck down, in this casethe Court concluded "that a State has a compelling interest in protecting voters from confusion and undueinfluence," and "in preserving the integrity of itselection process." Id . Or, more simply, in preventing "two evils: voter intimidation and election fraud." Id . at 206. The next question, then, was whether a100-foot restricted zone is necessary to serve this compelling interest. The Court, noting that "all 50 States limitaccess to the areas in or around polling places,"said that, though it would not specify a precise maximum number of feet permitted by the First Amendment, 100feet "is on the constitutional side of the line." Id .at 206, 211. In Daily Herald Co. v. Munro , 838 F.2d 380 (9th Cir. 1988), decided prior to Burson , the Ninth Circuit struck down a Washington statute that prohibited exitpolling within 300 feet of a polling place. The court granted that "[s]tates have an interest in maintaining peace,order, and decorum at the polls and 'preservingthe integrity of their electoral processes.'" Id . at 385. But the court found that "the statute is notnarrowly tailored to advance that interest," because it prohibitsnondisruptive as well as disruptive exit polling. Id . "Moreover, the statute is not the least restrictivemeans of advancing the state's interest. The statute isunnecessarily restrictive because [another Washington statute] already prohibits disruptive conduct at the polls,"and "that several other less restrictive means ofadvancing this interest exist: for example, reducing the size of the restricted area; requiring the media to explain thatthe exit poll is completely voluntary;requiring polling places to have separate entrances and exits, . . . or prohibiting everyone except election officialsand voters from entering the polling room." Id . This reasoning of the Ninth Circuit may no longer stand after the Supreme Court's decision in Burson . As for the statute's being unnecessary because anotherstatute already prohibited disruptive conduct, the Court in Burson found that "[i]ntimidation andinterference laws [ i.e. , laws that prohibit only disruptive conduct]fall short of serving a State's compelling interests because they 'deal with only the most blatant and specific attempts'to impede elections." 504 U.S. at 206-207. As for there being a less restrictive means to preserve the integrity of the electoral process, the Court in Burson did not require the state to provide "factual findingto determine the necessity of [its] restrictions on speech." 504 U.S. at 222 (Stevens, J., dissenting). Rather, it foundthat "the link between ballot secrecy andsome restricted zone surrounding the voting area . . . is common sense." Id . at 207. But the plaintiffs in Munro also "argue[d] that the statute is unconstitutional for another reason: that the stated purpose for the statute of protecting order at thepolls was a pretext, and that the state's true motive was to prevent the media from broadcasting election resultsbefore the polls closed." Id. at 386. The courtfound "that, assuming that at least one purpose of the statute was to prevent broadcasting early returns, the statuteis unconstitutional because this purpose isimpermissible . . . . [A] general interest in insulating voters from outside influences is insufficient to justify speechregulation." Id . at 387. "In addition," the courtsaid, even if this were a permissible purpose, "the statute is not narrowly tailored to protect voters from thebroadcasting of early returns. Election-daybroadcasting is only one use to which the media plaintiffs put the information gathered from exit polling . . ." Id . at 387-388. The information is also used toanalyze the results of elections, and prohibiting exit polling prohibits speech involving such other uses of theinformation. Reading Munro together with Burson suggests that Congress could prohibit the solicitation of votes and the display or distribution of campaign materials within100 feet (or some other reasonable distance) of the entrance to a polling place, but could not prohibit exit pollingfor the purpose of preventing voters fromreceiving media projections. Any limit on exit polling would seem permissible only to the extent it could bejustified as part of a general restriction on interferingwith voters before they vote. In Burson , the Court found that the Tennessee statute'srestriction could be limited to voter solicitation, and need "not restrict othertypes of speech, such as charitable and commercial solicitation or exit polling, within the 100-foot zone." 504 U.S.at 207. But the Court did not say that a statutecould not also restrict other types of speech, if it could demonstrate that doing so was necessary to servea compelling governmental interest. A post- Burson court of appeals case found greater justification for restricting campaigning than for restricting exit polling, because, "[w]hile there is no evidenceof widespread voter harassment or intimidation by exit-pollers, there is evidence that poll workers do create theseproblems." Schirmer v. Edwards , 2 F.3d 117,122 (5th Cir. 1993), cert. denied , 511 U.S. 1017 (1994). The court distinguished Munro on this basis, and upheld a 600-foot campaign-free zone. If Congress could not ban media projections outright, could it prohibit government officials from releasing ballot counts to the media? Could Congress, that is,deny media access to ballot counts, either when the polls have not closed in the jurisdiction whose votes are beingcounted, or when the polls have not closedacross the nation? The purpose of restricting access in the latter case would be to prevent potential voters in statesin western time zones from being influenced bylearning the results in states in eastern time zones. The First Amendment, the Supreme Court has written, goes beyond protection of the press and the self-expression of individuals to prohibit government from limiting the stock of information from which members ofthe public may draw." Free speech carries with it some freedom to listen. "In a variety of contexts this Court hasreferred to a First Amendment right to 'receiveinformation and ideas.'" Richmond Newspapers, Inc. v. Virginia , 448 U.S. 555, 575-576 (1980). Nevertheless, although "news gathering is not without its First Amendmentprotections"( Branzburg v. Hayes , 408 U.S. 665, 707 (1972)), these protections are not generally as greatas are protections from censorship. The Court has heldthat the First Amendment does not prevent prison officials from prohibiting "face-to-face interviews between pressrepresentatives and individual inmates." Pellv. Procunier , 417 U.S. 817, 819 (1974). In so holding, the Court did not find it necessary for the government to establish a compelling need to justify the prohibition, as the government in the ordinarycase must to justify statutes that censor speech. Rather, the Court "balance[d] First Amendment rights" againstgovernmental interests such as "the legitimatepenological objectives of the corrections system" and "internal security within the corrections facilities," taking intoaccount available alternative means ofcommunication. Id . at 824, 822, 823. Furthermore, the Court wrote, although the First Amendmentbars the "government from interfering in any way with a freepress," it does not "require government to accord the press special access to information not shared by members ofthe public generally." Id . at 834, 833. If Congress enacted a statute prohibiting the release of ballot counts, and it were challenged as unconstitutional, the court presumably would apply the sort ofbalancing test it used in Pell v. Procunier to reach a decision. It would assess the importance of denyingmedia access to ballot counts, perhaps consideringwhether media projections, or learning the results in other states, tend to mislead potential voters, or whetherpotential voters are merely making free choices aboutthe importance of their vote in light of status of the election at the time they hear a media projection or the resultin another state. A court might also evaluate the efficacy of prohibiting the release of ballot counts, considering, for example, whether, if denied access to ballot counts, the mediamight nevertheless make projections based merely on exit polls, which might be more misleading than those basedon ballot counts. Finally, a court mightconsider whether Congress could accomplish its goal by alternative means that would restrict speech less. Anexample might be to require that projections beaccompanied by disclosure of the information on which the projection is based. Whether or not there is a First Amendment barrier to banning exit polling within a prescribed distance from the polls, or to prohibiting the release of ballot counts,there is still the question of Congress's power to regulate in this area. Congress has clear power to regulate Houseand Senate elections, but less clear power toregulate presidential elections, aspects of which the Constitution vests in the states. For additional information onthis subject, see CRS Report RL30747 , Congressional Authority to Standardize National Election Procedures , by [author name scrubbed].

Media projections may be based both on exit polls and on information acquired as toactual ballot counts. The FirstAmendment would generally preclude Congress from prohibiting the media from interviewing voters after they exitthe polls. It apparently would also precludeCongress from prohibiting the media from reporting the results of those polls. Congress, could, however, ban votersolicitation within a certain distance from apolling place, and might be able to include exit polling within such a ban. It also might be able to deny media accessto ballot counts, either when the polls havenot closed in the jurisdiction whose votes are being counted, or when the polls have not closed across the nation.

Alien legalization or "amnesty," as well as special provisions to allow certain aliens to adjust to legal permanent resident (LPR) status, are among the most controversial issues of U.S. immigration policy. Among the thorny questions raised by such proposals are: would unauthorized aliens (i.e., illegal aliens) currently in the United States be eligible for the visa? and would the proposal include a mechanism for guest workers to obtain LPR status? This report summarizes the main options for foreign nationals currently in the United States—legally or illegally—to become LPRs. As discussed more fully below, most of these options would hinge on Congress enacting special legislation. In the 109 th Congress, both chambers passed major overhauls of immigration law but did not reach agreement on a comprehensive reform package. The Senate-passed bill ( S. 2611 ) would have enabled certain groups of unauthorized aliens in the United States to obtain legal permanent residence and certain guest workers to adjust to LPR status. In the 110 th Congress, a bipartisan compromise was negotiated with Bush Administration officials and introduced in the Senate on May 21, 2007. That bill would have enabled unauthorized aliens in the United States to become LPRs if they had met certain conditions, paid penalty fees, and fulfilled other requirements. During his time in the Senate, President Barack Obama supported comprehensive immigration reform legislation that included increased enforcement as well as a pathway to legal residence for certain unauthorized residents. Similar views have been expressed Secretary of Homeland Security Janet Napolitano. Immigrant admissions, as well as adjustments to LPR status, are subject to a complex set of numerical limits and preference categories that give priority for admission on the basis of family relationships, needed skills, humanitarian concerns, and geographic diversity. When Congress first codified the assortment of immigration laws into the Immigration and Nationality Act (INA) in 1952, the assumption was that most aliens who would receive LPR status would be coming to the United States from abroad. Indeed, 30 years ago, more than 80% of the 386,194 aliens who became LPRs of the United States had arrived from abroad. In FY2008, 58% of all LPRs were adjusting status within the United States. That the number of LPRs arriving from abroad has generally remained around 400,000 for the past 30 years while the total number of LPRs now hovers around one million annually, highlights the contribution that aliens adjusting to LPR status after being in the United States is making to the growth of permanent legal immigration. In addition to LPRs, each year millions of foreign nationals come temporarily on nonimmigrant visas (e.g., tourists, foreign students and intra-company business transfers). It is estimated that annually hundreds of thousands of foreign nationals either overstay their nonimmigrant visas or enter the country illegally and thus may become unauthorized aliens. As of March 2008, there were an estimated 11.9 million aliens living here without legal authorization to do so. Almost 40%, an estimated 4.4 million, arrived in the 2000-2005 period. There are several main options for aliens in the United States to become LPRs without leaving the country, and as Figure 1 illustrates, most involving unauthorized aliens would require Congress to enact a law. To adjust status under current law, aliens must be in the United States legally on a temporary visa and eligible for a LPR visa; aliens fleeing persecution may be granted asylum; or—in very limited circumstances—unauthorized aliens may become LPRs through cancellation of removal by an immigration judge. Even aliens in the United States legally on a temporary visa can only adjust to LPR status if they qualify under the statutory set of numerical limits and preference categories that give priority for admission on the basis of family relationships, needed skills, and geographic diversity. INA §245 permits an alien who is legally but temporarily in the United States to adjust to LPR status if the alien becomes eligible on the basis of a family relationship or job skills, without having to go abroad to obtain an immigrant visa. INA §245 was limited to aliens who were here legally until 1994, when Congress enacted a three-year trial provision (commonly referred to as §245(i)) that allowed aliens here illegally to adjust status once they became eligible for an LPR visa, provided they paid a large penalty fee. In 2000, Congress temporarily reinstated §245(i) through April 30, 2001 ( P.L. 106-554 ). Over the years, Congress has enacted statutes that enable certain aliens in the United States on a recognized—but non-permanent—basis to adjust their status to legal permanent residence when they are not otherwise eligible for an immigrant visa. Since the codification of the INA in 1952, there have been at least 16 Acts of Congress that have enabled certain aliens in the United States in some type of temporary legal status to adjust to LPR status. Most of these adjustment of status laws focused on humanitarian cases, e.g., aliens paroled into the United States by the Attorney General or aliens from specific countries who were given blanket relief from removal such as temporary protected status (TPS), deferred enforced departure (DED), or extended voluntary departure (EVD). The other major group of aliens adjusting status through special provisions involved nonimmigrants and typically were employment-based. Beneficiaries of these special provisions included nonimmigrant alien physicians who had graduated from a medical school or qualified to practice medicine in a foreign state and were fully and permanently licensed and practicing medicine in a U.S. state on January 9, 1978; nonimmigrant retired employees of international organizations and/or their immediate families who have lived in the United States for specified periods of time, totaling at least 15 years for eligible adults and 7 years for children; and nonimmigrant nurses here as of September 1, 1989, who had been employed in the United States as registered nurses for at least three years before application for adjustment and whose continued employment met specified certification standards. The issue of whether aliens residing in the United States without legal authorization may be permitted to become LPRs has been debated periodically, and at various times Congress has enacted legalization programs. In 1929, for example, Congress enacted a law that some consider a precursor to legalization because it permitted certain aliens arriving prior to 1921 "in whose case there is no record of admission for permanent residence" to register with INS's predecessor agency so that they could become LPRs. In 1952, Congress included a registry provision (aimed at aliens who had been admitted but whose files were lost) when it codified the INA, and this provision ultimately evolved into an avenue for unauthorized aliens to legalize their status. When Congress passed the Immigration Reform and Control Act (IRCA) of 1986, it included provisions that enabled several million aliens illegally residing in the United States to become LPRs. Generally, legislation such as IRCA is referred to as an "amnesty" or a legalization program because it provides LPR status to aliens who are otherwise residing illegally in the United States. Although legalization is considered distinct from adjustment of status, most legalization provisions are codified under the adjustment or change of status chapter of INA. There were two temporary legalization programs created by IRCA. The "pre-1982" program provided legal status for otherwise eligible aliens who had resided continuously in the United States in an unlawful status since before January 1, 1982. They were required to apply during a 12-month period beginning May 5, 1987. The "special agricultural worker" (SAW) program provided legal status for otherwise eligible aliens who had worked at least 90 days in seasonal agriculture in the United States during the year ending May 1, 1986. They were required to apply during an 18-month period beginning June 1, 1987, and ending November 30, 1988. Approximately 2.7 million aliens qualified for legal status under the pre-1982 and SAW programs. Of this total, 1.6 million or 59% qualified under the pre-1982 program, and 1.1 million or 41% qualified under the SAW program. The Attorney General has the discretionary authority under the INA to grant relief from deportation and adjustment of status to otherwise illegal aliens who meet certain criteria. Generally, aliens seeking this type of relief are those who have established "deep roots" in the United States and who can demonstrate good moral character as well as hardship to their family here if they are returned to their native country. Decisions to grant relief are made on a case-by-case basis. This avenue, formerly known as suspension of deportation, is now called cancellation of removal as a result of the Illegal Immigrant Reform and Immigrant Responsibility Act (IIRIRA) of 1996 ( P.L. 104-208 , Division C). In addition to changing the terminology, IIRIRA established tighter standards for obtaining this relief. The hardship threshold previously was "extreme" hardship to the alien, the alien's citizen or permanent resident alien spouse, children, or parent. Now the language states "exceptional and extremely unusual hardship." The length of time the alien had to be physically residing in the United States was increased from 7 to 10 years. Moreover, the time span used to calculate the 10-year physical presence requirement now terminates when the alien receives a notice to appear (the document that initiates removal proceedings) or when the alien commits a serious crime. IIRIRA also established for the first-time limits on the number of people who could receive cancellation of removal—4,000 each fiscal year.

Immigration patterns have changed substantially since 1952, when policy makers codifying the Immigration and Nationality Act (INA) assumed that most aliens becoming legal permanent residents (LPRs) of the United States would be arriving from abroad. In 1975, more than 80% of all LPRs arrived from abroad. By 2005, however, only 34% of all aliens who became LPRs had arrived from abroad; most LPRs adjust status within the United States. This report summarizes the main avenues for foreign nationals currently in the United States—legally or illegally—to become LPRs. Alien legalization or "amnesty," as well as adjustment of status and cancellation of removal options, are briefly discussed. Designed as a primer on the issues, the report provides references to other CRS products that track pertinent legislation and analyze these issues more fully. This report will be updated as needed.

The Employee Retirement Income Security Act of 1974 (ERISA) provides a comprehensive federal scheme for the regulation of private-sector employee benefit plans. While ERISA does not require an employer to offer employee benefits, it does mandate compliance with its provisions if such benefits are offered. Besides the regulation of pension plans, ERISA also regulates welfare benefit plans offered by an employer to provide medical, surgical and other health benefits. ERISA applies to health benefit coverage offered through health insurance or other arrangements (e.g., self-funded plans). Health plans, like other welfare benefit plans governed by ERISA, must comply with certain standards, including plan fiduciary standards, reporting and disclosure requirements, and procedures for appealing a denied claim for benefits. However, these health plans must also meet additional requirements under ERISA. This report discusses some of these additional requirements for group health plans, as well as health insurance issuers that provide group health coverage. As enacted in 1974, ERISA's regulation of health plan coverage and benefits was limited. However, beginning in 1986, Congress added to ERISA a number of requirements on the nature and content of health plans, including rules governing health care continuation coverage, limitations on exclusions from coverage based on preexisting conditions, parity between medical/surgical benefits and mental health benefits, and minimum hospital stay requirements for mothers following the birth of a child. The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) added a new Part 6 to Title I of ERISA, which requires the sponsor of a group health plan to provide an option of temporarily continuing health care coverage for plan participants and beneficiaries under certain circumstances. Under ERISA section 601, a plan maintained by an employer with 20 or more employees must provide "qualified beneficiaries" with the option of continuing coverage under the employer's group health plan in the case of certain "qualified events." A qualifying event is an event that, except for continuation coverage under COBRA, would result in a loss of coverage, such as the death of the covered employee, the termination (other than by reason of the employee's gross misconduct) or reduction of hours of the covered employee's employment, or the covered employee becoming entitled to Medicare benefits. Under section 602 of ERISA, the employer must typically provide this continuation coverage for 18 months. However, coverage may be longer, depending on the qualifying event. Under ERISA 602(1), the benefits offered under COBRA must be identical to the health benefits offered to "similarly situated non-COBRA beneficiaries," or in other words, beneficiaries who have not experienced a qualifying event. The health plan may charge a premium to COBRA participants, but it cannot exceed 102% of the plan's group rate. After 18 months of required coverage, a plan may charge certain participants 150% of the plan's group rate. However, the American Recovery and Reinvestment Act of 2009 includes provisions to subsidize health insurance coverage through COBRA. ARRA provides for COBRA premium subsidies of 65% to help the unemployed afford health insurance coverage from their former employer. The subsidy is available for up to nine months to those individuals who meet the income test and who are involuntarily terminated from their employment on or after September 1, 2008, and before January 1, 2010. For more information on the COBRA premium subsidies, see CRS Report R40420, Health Insurance Premium Assistance for the Unemployed: The American Recovery and Reinvestment Act of 2009 , coordinated by [author name scrubbed]. The Health Insurance Portability and Accountability Act of 1996 (HIPAA) added a new Part 7 to Title I of ERISA to provide additional health plan coverage requirements. Other federal legislation amended Part 7 of ERISA to require plans that offer specific health benefits to meet certain standards. The requirements of Part 7 generally apply to group health plans, as well as health insurance issuers that offer group health insurance coverage. HIPAA was enacted in 1996 in part to "improve the portability and continuity of health insurance coverage in the group and individual markets." One of the ways that HIPAA implements this goal is by amending ERISA, as well as other federal laws, to limit the circumstances under which a group health plan or insurer providing group health coverage may exclude a participant or beneficiary with a preexisting condition from coverage. A preexisting condition exclusion under a group health plan or group health insurance coverage can be applicable to an individual as a result of information relating to an individual's health status before the effective date of coverage, such as a condition identified as a result of a pre-enrollment questionnaire, a physical examination given to the individual, or review of medical records relating to the pre-enrollment period. Under Section 701 of ERISA, as created by HIPAA, an exclusion period for an individual's preexisting condition may be applied if medical advice, diagnosis, care, or treatment was recommended or received within the six months before the enrollment date in the plan. This exclusion from coverage cannot be for more than 12 months after an employee enrolls in a health plan (or 18 months for late enrollees). Further, this 12-month period must be reduced by the number of days that an individual has "creditable coverage," with no significant break in this coverage. A significant break is a 63-day continuous period in which the individual had no creditable coverage after the termination of prior health coverage and before the enrollment date of the new coverage. In other words, if an individual maintains certain creditable coverage, the individual cannot be subject to an exclusion period when moving from one group health plan to another. HIPAA prohibits plans and insurers from imposing preexisting condition exclusions under certain circumstances. For instance, pre-existing condition exclusion may not be imposed for any conditions relating to pregnancy. Similarly, newborns and adopted children cannot be subject to a preexisting condition exclusion if they were covered under "creditable coverage" within 30 days after birth or adoption, and there has not been a gap of more than 63 days in this coverage. HIPAA also requires health plans to provide a special enrollment opportunity to allow certain individuals to enroll in a health plan without waiting until the plan's next regular enrollment season. For example, special enrollment rights must be extended to a person who becomes a new dependent through marriage, birth, adoption or placement for adoption, or to an employee or dependent who loses other health coverage. Effective April 1, 2009, the Children's Health Insurance Program Reauthorization Act of 2009 amended ERISA to provide that group health plans must permit employees and dependents who are eligible for, but not enrolled in, coverage under the terms of the plan to enroll in two additional circumstances: (1) the employee's or dependent's coverage under Medicaid or SCHIP is terminated as a result of loss of eligibility, or (2) the employee or dependent becomes eligible for a financial assistance under Medicaid or SCHIP, and the employee requests coverage under the plan within 60 days after eligibility is determined. Under these two circumstances, an employee must request coverage within 60 days after termination of Medicaid or SCHIP coverage, or becoming eligible for this coverage. HIPAA also created ERISA Section 702, which provides that a group health plan or health insurance issuer may not base coverage eligibility rules on certain factors, including health status (physical or mental), claims experience, receipt of health care, medical history, genetic information, evidence of insurability, or disability. In addition, a health plan may not require an individual to pay a higher premium or contribution than another "similarly situated" participant, based on these health-related factors. The Genetic Information Nondiscrimination Act (GINA), passed in the 110 th Congress, amended Section 702 of ERISA to prevent certain types of genetic discrimination. Under this section, a health plan may not adjust premiums or contribution amounts for an entire group covered by the plan on the basis of genetic information. "Genetic information," as defined by the act, includes information about a genetic test of an individual or a family member of an individual, the manifestation of a disease or disorder in the family members of an individual, as well as request for, or receipt of, genetic services. GINA restricts a health plan from requiring or requesting an individual or a family member of an individual to undergo a genetic test. The act includes an exception to this provision, under which a health plan may request a genetic test for research purposes, but only if certain conditions are met. Further, GINA prohibits a plan from requesting, requiring, or purchasing genetic information for underwriting purposes or with respect to an individual prior to the individual's enrollment in the plan. The amendments made by GINA apply to health plans for plan years beginning after May 21, 2009. HIPAA also added Section 703 of ERISA, which provides that certain health plans covering multiple employers cannot deny an employer (whose employees are covered by the plan) coverage under the plan, except for certain reasons, such as an employer's failure to pay plan contributions. In 1996, Congress enacted the Mental Health Parity Act (MHPA), which added section 712 of ERISA to create certain requirements for mental health coverage, if this coverage was offered by a health plan. Under the MHPA, health plans are not required to offer mental health benefits. However, plans that choose to provide mental health benefits must not impose lower annual and lifetime dollar limits on these benefits than the limits placed on medical and surgical benefits. The MHPA allows a plan to decide what mental health benefits are to be offered; however, the parity requirements do not apply to substance abuse or chemical dependency treatment. Certain plans may be exempt from the MHPA. Plans covering employers with 50 or fewer employees are exempt from compliance. In addition, employers that experience an increase in claims costs of at least 1% as a result of MHPA compliance can apply for an exemption. Recently, Congress enacted legislation which expands the MHPA's requirements. The new requirements apply to group health plans for plan years beginning after October 3, 2009. These requirements, included as part of the Emergency Economic Stabilization Act of 2008, expand the parity requirements under the current version of the MHPA for mental health and substance use disorder coverage if such coverage is offered by a group health plan. In general, the act amends section 712 of ERISA, as well as other federal laws, to require parity between mental health/substance use disorder benefits and medical/surgical benefits in terms of the predominant (1) financial requirements and (2) treatment limitations imposed by a group health plan. As defined by the act, financial requirements include requirements such as deductibles, co-payments, co-insurance and out-of-pocket expenses; treatment limitations include limits on the frequency of treatment, number of visits, days of coverage, or any other limits on the duration or scope of treatment. The parity requirements of the act apply to mental health and substance use disorder benefits as defined by the health plan or applicable state law. Health plans may qualify for an exemption from the parity requirements if it is actuarially determined that the implementation of the act's requirements would cause a plan to experience an increase in actual total costs of coverage that exceed 2% of the actual total plan costs during the first plan year, or exceed 1% of the actual total plan costs each subsequent year. In 1996, Congress passed the Newborns' and Mothers' Health Protection Act (NMHPA), which amended ERISA and established minimum hospital stay requirements for mothers following the birth of a child. In general, the NMHPA prohibits a group health plan or health insurance issuer from limiting a hospital length of stay in connection with childbirth for the mother or newborn child to less than 48 hours, following a normal vaginal delivery, or to less than 96 hours, following a cesarean section. The Women's Health and Cancer Rights Act, enacted in 1998, amended ERISA to require group health plans providing mastectomy coverage to cover prosthetic devices and reconstructive surgery. Under section 713 of ERISA, this coverage must be provided in a manner determined in consultation between the attending physician and the patient. On October 9, 2008, President Bush signed legislation, known as "Michelle's Law," that extends the ability of dependents to remain on their parents' plan for a limited period of time during a medical leave from full-time student status. The act requires group health plans and health insurance issuers that provide group health coverage to continue coverage for a child dependent on a medically necessary leave of absence for a period of up to one year after the first day of the leave of absence or the date on which such coverage would otherwise terminate under the terms of the plan, whichever is earlier. A dependent child for purposes of the act is a dependent under the terms of the plan who was both enrolled in the plan on the first day of the medically necessary leave of absence and as a full-time student at a postsecondary education institution until the first day of the medically necessary leave of absence. Michelle's law applies to plan years beginning on or after October 9, 2009 (one year after enactment), and to medically necessary leaves of absence beginning during such plan years.

The Employee Retirement Income Security Act (ERISA) sets certain federal standards for the provision of health benefits under private-sector, employment-based health plans. These standards regulate the nature and content of health plans and include rules on health care continuation coverage as provided under the Consolidated Omnibus Budget Reconciliation Act (COBRA), guarantees on the availability and renewability of health care coverage for certain employees and individuals, limitations on exclusions from health care coverage based on preexisting conditions, and parity between medical/surgical benefits and mental health benefits. This report discusses these health benefit requirements under ERISA.

Since 1998 VA and DOD have been trying to achieve the capability to share patient health care data electronically. The original effort—the government computer-based patient record (GCPR) project—included the Indian Health Service (IHS) and was envisioned as an electronic interface that would allow physicians and other authorized users at VA, DOD, and IHS health facilities to access data from any of the other agencies’ health information systems. The interface was expected to compile requested patient information in a virtual record that could be displayed on a user’s computer screen. Our prior reviews of the GCPR project determined that the lack of a lead entity, clear mission, and detailed planning to achieve that mission made it difficult to monitor progress, identify project risks, and develop appropriate contingency plans. Accordingly, reporting on this project in April 2001 and again in June 2002, we made several recommendations to help strengthen the management and oversight of GCPR. Specifically, in 2001 we recommended that the participating agencies (1) designate a lead entity with final decision-making authority and establish a clear line of authority for the GCPR project, and (2) create comprehensive and coordinated plans that included an agreed-upon mission and clear goals, objectives, and performance measures, to ensure that the agencies could share comprehensive, meaningful, accurate, and secure patient health care data. In 2002, we recommended that the participating agencies revise the original goals and objectives of the project to align with their current strategy, commit the executive support necessary to adequately manage the project, and ensure that it followed sound project management principles. VA and DOD took specific measures in response to our recommendations for enhancing overall management and accountability of the project. By July 2002, VA and DOD had revised their strategy and had made some progress toward electronically sharing patient health data. The two departments had renamed the project the Federal Health Information Exchange (FHIE) program and, consistent with our prior recommendation, had finalized a memorandum of agreement designating VA as the lead entity for implementing the program. This agreement also established FHIE as a joint effort that would allow the exchange of health care information in two phases. The first phase, completed in mid-July 2002, enabled the one-way transfer of data from DOD’s existing health information system to a separate database that VA clinicians could access. A second phase, finalized this past March, completed VA’s and DOD’s efforts to add to the base of patient health information available to VA clinicians via this one-way sharing capability. The departments reported total GCPR/FHIE costs of about $85 million through fiscal year 2003. The revised strategy also envisioned the pursuit of a longer term, two-way exchange of health information between DOD and VA. Known as HealthePeople (Federal), this initiative is premised upon the departments’ development of a common health information architecture comprising standardized data, communications, security, and high-performance health information systems. The joint effort is expected to result in the secured sharing of health data required by VA’s and DOD’s health care providers between systems that each department is currently developing—DOD’s Composite Health Care System (CHCS) II and VA’s HealtheVet VistA. DOD began developing CHCS II in 1997 and has completed the development of its associated clinical data repository—a key component for the planned electronic interface. The department expects to complete deployment of all of its major system capabilities by September 2008. It reported expenditures of about $464 million for the system through fiscal year 2003. VA began work on HealtheVet VistA and its associated health data repository in 2001, and expects to complete all six initiatives comprising this system in 2012. VA reported spending about $120 million on HealtheVet VistA through fiscal year 2003. Under the HealthePeople (Federal) initiative, VA and DOD envision that, upon entering military service, a health record for the service member will be created and stored in DOD’s CHCS II clinical data repository. The record will be updated as the service member receives medical care. When the individual separates from active duty and, if eligible, seeks medical care at a VA facility, VA will then create a medical record for the individual, which will be stored in its health data repository. Upon viewing the medical record, the VA clinician would be alerted and provided access to the individual’s clinical information residing in DOD’s repository. In the same manner, when a veteran seeks medical care at a military treatment facility, the attending DOD clinician would be alerted and provided with access to the health information in VA’s repository. According to the departments, this planned approach would make virtual medical records displaying all available patient health information from the two repositories accessible to both departments’ clinicians. VA officials have stated that they anticipate being able to exchange some degree of health information through an interface of their health data repository with DOD’s clinical data repository by the end of calendar year 2005. While VA and DOD are making progress in agreeing to and adopting standards for clinical data, they continue to face significant challenges in providing a virtual medical record based on the two-way exchange of data as part of their HealthePeople (Federal) initiative. Specifically, VA and DOD do not have an explicit architecture that provides details on what specific technologies they will use to achieve the exchange capability; a fully established project management structure that will ensure the necessary day-to-day guidance of and accountability for the departments’ investment in and implementation of the exchange; and a project management plan describing the specific responsibilities of each department in developing, testing, and deploying the interface and addressing security requirements. VA’s and DOD’s ability to exchange data between their separate health information systems is crucial to achieving the goals of HealthePeople (Federal). Yet, successfully sharing health data between the departments via a secure electronic interface between each of their data repositories can be complex and challenging, and depends significantly on the departments’ having a clearly articulated architecture, or blueprint, defining how specific technologies will be used to achieve the interface. Developing, maintaining, and using an architecture is a best practice in engineering information systems and other technological solutions. An architecture would articulate, for example, the system requirements and design specifications, database descriptions, and software descriptions that define the manner in which the departments will electronically store, update, and transmit their data. VA and DOD lack an explicit architecture that provides details on what specific technologies they will use to achieve the exchange capability, or just what they will be able to exchange by the end of 2005—their projected date for having this capability operational. While VA officials stated that they recognize the importance of a clearly defined architecture, they acknowledged that the departments’ actions were continuing to be driven by the less specific, high-level strategy that has been in place since September 2002. Officials in both departments stated that a planned pharmacy prototype initiative, begun this past March in response to requirements of the National Defense Authorization Act of 2003, would assist them in defining the electronic interface technology needed to exchange patient health information. The act mandated that VA and DOD develop a real-time interface, data exchange, and capability to check prescription drug data for outpatients by October 1, 2004. In late February, VA hired a contractor to develop the planned prototype but the departments had not yet fully determined the approach or requirements for it. DOD officials stated that the contractor was expected to more fully define the technical requirements for the prototype. In late April, the departments reported approval of the contractor’s requirements and technical design for the prototype. While the pharmacy prototype may help define a technical solution for the two-way exchange of health information between the two departments’ existing systems, there is no assurance that this same solution can be used to interface the new systems under development. Because the departments’ new health information systems—major components of HealthePeople (Federal)—are scheduled for completion over the next 4 to 9 years, the prototype may only test the ability to exchange data in VA’s and DOD’s existing health systems. Thus, given the uncertainties regarding what capabilities the pharmacy prototype will demonstrate, it is difficult to predict how or whether the prototype initiative will contribute to defining the architecture and technological solution for the two-way exchange of patient health information for the HealthePeople (Federal) initiative. Industry best practices and information technology project management principles stress the importance of accountability and sound planning for any project, particularly an interagency effort of the magnitude and complexity of HealthePeople (Federal). Based on our past work, we have found that a project management structure should establish relationships between managing entities with each entity’s roles and responsibilities clearly articulated. Further, it is important to establish final decision- making authority with one entity. However, VA and DOD have not fully established a project management structure that will ensure the necessary day-to-day guidance of and accountability for the departments’ investment in and implementation of the two-way capability. According to officials in both departments a joint working group and oversight by the Joint Executive Council and VA/DOD Health Executive Council has provided the collaboration necessary for HealthePeople (Federal). However, this oversight by the executive councils is at a very high level, occurs either bimonthly or quarterly, and encompasses all of the joint coordination and sharing efforts for health services and resources. Since a lead entity has not been designated, neither department has had the authority to make final project decisions binding on the other. Further, the roles and responsibilities for each department have not been clearly articulated. Without a clearly defined project management structure, accountability and a means to monitor progress are difficult to establish. In early March, VA officials stated that the departments had designated a program manager for the planned pharmacy prototype and were establishing roles and responsibilities for managing the joint initiative to develop an electronic interface. Just this month, officials from both departments told us that this individual would be the program manager for the electronic interface. However, they had not yet designated a lead entity or provided documentation for the project management structure or their roles and responsibilities for the HealthePeople (Federal) initiative. An equally important component necessary for guiding the development of the electronic interface is a project management plan. Information technology project management principles and industry best practices emphasize that a project management plan is needed to define the technical and managerial processes necessary to satisfy project requirements. Specifically, the plan should include, among other things, the authority and responsibility of each organizational unit; a work breakdown structure for all of the tasks to be performed in developing, testing, and deploying the software, along with schedules associated with the tasks; and a security policy. However, the departments are currently operating without a project management plan for HealthePeople (Federal) that describes the specific responsibilities of each department in developing, testing, and deploying the interface and addressing security requirements. This month, officials from both departments stated that a pharmacy prototype project management plan that includes a work breakdown structure and schedule was developed in mid-March. They further stated that a work group that reports to the integrated project team has been given responsibility for the development of security and information assurance provisions. While these actions should prove useful in guiding the development of the prototype, they do not address the larger issue of how the departments will develop and implement an interface to exchange health care information between their systems by 2005. Without a project management plan, VA and DOD lack assurance that they can successfully develop and implement an electronic interface and the associated capability for exchanging health information within the time frames that they have established. VA and DOD officials stated that they have begun discussions to establish an overall project plan. Achieving an electronic interface that will enable VA and DOD to exchange patient medical records is an important goal, with substantial implications for improving the quality of health care and disability claims processing for the nation’s military members and veterans. In seeking a virtual medical record based on the two-way exchange of data between their separate health information systems, VA and DOD have chosen a complex and challenging approach that necessitates the highest levels of project discipline, including a well-defined architecture for describing the interface for a common health information exchange; an established project management structure to guide the investment in and implementation of this electronic capability; and a project management plan that defines the technical and managerial processes necessary to satisfy project requirements. These critical components are currently lacking; thus, the departments risk investing in a capability that could fall short of expectations. The continued absence of these components elevates concerns about exactly what capabilities VA and DOD will achieve—and when. To encourage significant progress on achieving the two-way exchange of health information, we recommend that the Secretaries of Veterans Affairs and Defense instruct the Acting Chief Information Officer for Health and the Chief Information Officer for the Military Health System, respectively, to develop an architecture for the electronic interface between their health systems that includes system requirements, design specifications, and software descriptions; select a lead entity with final decision-making authority for the initiative; establish a project management structure to provide day-to-day guidance of and accountability for their investments in and implementation of the interface capability; and create and implement a comprehensive and coordinated project management plan for the electronic interface that defines the technical and managerial processes necessary to satisfy project requirements and includes (1) the authority and responsibility of each organizational unit; (2) a work breakdown structure for all of the tasks to be performed in developing, testing, and implementing the software, along with schedules associated with the tasks; and (3) a security policy. The Secretary of Veterans Affairs provided written comments on a draft of this report and we received comments via e-mail from DOD’s Interagency Program Integration and External Liaison for Health Affairs; both concurred with the recommendations. Each department’s comments are reprinted in their entirety as appendixes I and II, respectively. In their comments, the officials also provided information on actions taken or underway that, in their view, address our recommendations. We are sending copies of this report to the Secretaries of Veterans Affairs and Defense and to the Director, Office of Management and Budget. Copies will also be available at no charge on GAO’s Web site at www.gao.gov. Should you have any question on matters contained in this report, please contact me at (202) 512-6240, or Barbara Oliver, Assistant Director, at (202) 512-9396. We can also be reached by e-mail at koontzl@gao.gov and oliverb@gao.gov, respectively. Other key contributors to this report were Michael P. Fruitman, Valerie C. Melvin, J. Michael Resser, and Eric L. Trout.

A critical element of the Department of Veterans Affairs' (VA) information technology program is its continuing work with the Department of Defense (DOD) to achieve the ability to exchange patient health care information and create electronic medical records for use by veterans, active-duty military personnel, and their health care providers. While VA and DOD continue to move forward in agreeing to and adopting standards for clinical data, they have made little progress since last winter toward defining how they intend to achieve an electronic medical record based on the two-way exchange of patient health data. The departments continue to face significant challenges in achieving this capability. VA and DOD lack an explicit architecture--a blueprint--that provides details on what specific technologies will be used to achieve the electronic medical record by the end of 2005. The departments have not fully implemented a project management structure that establishes lead decision-making authority and ensures the necessary day-to-day guidance of and accountability for their investment in and implementation of this project. They are operating without a project management plan describing the specific responsibilities of each department in developing, testing, and deploying the electronic interface. In seeking to provide a two-way exchange of health information between their separate health information systems, VA and DOD have chosen a complex and challenging approach--one that necessitates the highest levels of project discipline. Yet critical project components are currently lacking. As such, the departments risk investing in a capability that could fall short of what is expected and what is needed. Until a clear approach and sound planning are made integral parts of this initiative, concerns about exactly what capabilities VA and DOD will achieve--and when--will remain.

RS21689 -- Federal Pay - Status of January 2004 Adjustments: A Fact Sheet Updated January 24, 2004 Under 5 U.S.C. 5303, General Schedule basic salaries, and those of other related statutory systems, are to be adjusted the first pay periodbeginning on or after January 1 of each year (January 11, 2004). The adjustments are determined by the change inthe private sector element of the EmploymentCost Index (ECI) from September to September. The percentage of change, minus 0.5%, becomes the scheduledrate of adjustment. For January 2004, the rateof adjustment was scheduled at 2.7%. Locality-based payments are determined separately, based on wage surveydata from 32 geographicareas. Under 5 U.S.C. 5303 and 5 U.S.C. 5304, President George W. Bush sent forward an alternative plan in August 2003 that called for a 1.5%increase in General Schedule, and related systems, basic pay and an average of 0.5% in locality-based payments forJanuary 2004. Barring any action by Congress to establish a different rate or effective date, the President's alternative plan willgovern. Both the House and Senate voted to establish a 4.1% pay adjustment, effective January 2004. (2) With passage of the 4.1%, the basic pay adjustment will be the scheduled ECI adjustment of 2.7% and the locality pay adjustment willaverage 1.4%. For the Washington, DC, area, the net adjustment will be 4.41%. Under Section 704, P.L. 101-194 , the Ethics Reform Act of 1989, salaries of Members and officers of Congress, federal judges, andexecutive branch officials on the Executive Schedule (collectively referred to herein as "officials") are to be adjustedannually based on December-to-Decemberpercentage changes in the private sector element of the ECI, effective in the same month as the GSadjustments. The scheduled January 2004 pay adjustment, based on the ECI, is 2.2%. Section 704, as amended, stipulates that officials' pay adjustments cannot exceed the rate of adjustment for GS basicpay. P.L. 108-167 , as required under Section 140, P.L. 97-92 , permits the judges to receive the annual adjustment. GS pay adjustment in January 2004, pending presidential approval of the FY2004 Consolidated Appropriations Act, is limited to 1.5% forbasic pay and an average of 0.5% for locality. The net adjustment for the Washington, DC, area has been 2.12%(Executive Order 13322, 69 Federal Register 231). The pay adjustment for officials has been limited to 1.5%. Upon approval of the Consolidated Appropriations Act, 2004, GS pay will be adjusted to a total of 4.1%, retroactive to the first pay periodbeginning on or after January 1, 2004, with the rate of 2.7% for basic pay. Salaries of officials will increase to the2.2% rate,retroactively.

Federal pay adjustment rates going into effect in January 2004, under Executive Order13322 (69 Federal Register231) were less than those in the pending Consolidated Appropriations Act, 2004 (H.R. 2673). The GeneralSchedule (GS) and related salarysystems were limited to 2.0%, as opposed to the 4.1% subsequently passed. Salaries of officials in the threebranches were temporarily limited, due to the lowerGS rate, to 1.5%, rather than the scheduled 2.2%, which upon Presidential approval of H.R. 2673, will go into effectretroactively.

Cash flow financing (CFF) is a statutory provision in the Arms Export Control Act that enables presidentially authorized recipients of U.S. foreign military aid to pay for U.S. defense equipment in partial installments over time rather than all at once. Countries which are not authorized by the President to benefit from CFF must adhere to "full commitment financing" and reserve the total amount of a purchase upon reaching a contractual agreement with a U.S. supplier. Traditionally, the President has authorized CFF to select countries in order to demonstrate strong U.S. support for their continued security. CFF began as a benefit exclusively available to Israel in the mid-1970s, and the arrangement has since been expanded to other nations. Egypt has been authorized to benefit from CFF arrangements since 1979. Other countries, such as Turkey, Greece, and Portugal, have used CFF to finance purchases of the F-16 fighter jet. South Korea and Spain also have been authorized to benefit from CFF. However, as of May 2015, only Israel and Egypt are currently authorized to use cash flow financing for their purchases of U.S. weaponry. The Defense Security Cooperation Agency (DSCA) and the Defense Finance and Accounting Service (DFAS) administer foreign military sales using CFF. If a foreign government has insufficient U.S. military aid (which is nearly always Foreign Military Financing or FMF) to meet its CFF commitments for a given fiscal year (perhaps due to appropriations decisions by Congress), then the cash flow amount must be paid from the purchaser's national funds. If a foreign government cancels an existing CFF defense contract, funds may be provided to U.S. defense contractors from what is known as a "Termination Liability Reserve." Foreign governments must set aside a portion of their annual CFF funds to contribute to the reserve. Advocates of CFF have touted it for facilitating the sale of technologically advanced but high-cost U.S. weapons systems, particularly U.S. fighter aircraft, to friendly foreign nations. For example, presidential authorization of CFF for Israel has enabled Israel to purchase U.S. combat aircraft such as the F-15 and F-16, and more recently the F-35 Joint Strike Fighter, while still continuing purchases of other critical U.S.-supplied weapons. However, at times some lawmakers and observers have criticized the use of CFF, arguing that as a policy tool, it effectively commits Congress to future appropriations in order to pay for previously purchased, high-priced defense systems. Over 20 years ago, former Representative and House Appropriations Chairman David Obey remarked that, "It is, in fact, going to be virtually impossible for this committee to consider reductions in aid to that region [Middle East] over the next decade if those military contracts continue to be signed because of the principle of so-called cash flow financing." In the early 1980s, the then-General Accounting Office (now U.S. Government Accountability Office or GAO) published a report on U.S. foreign assistance to Israel in which it stated, "Cash flow financing implies a strong commitment by the United States to provide large amounts of credit in future years, limiting, in our view, the prerogatives of the Congress in authorizing the U.S. security assistance program." The 1979 Peace Treaty between Israel and Egypt led to a dramatic expansion in what had previously been limited amounts of U.S. foreign assistance to Egypt. In 1979, President Carter authorized CFF for Egypt, and the Reagan Administration and successive Administrations have continued the practice, though recent announcements by the Obama Administration (see below) indicate the practice will be discontinued in FY2018. According to the 1982 congressional hearing testimony of Frank Conahan, former Director of the International Division at the GAO: The decision to provide cash flow authorization to Egypt was made in 1979 at the time U.S. and Egypt were considering the types and amounts of military equipment Egypt would buy with the $1.5 billion credit authorization from the peace treaty. While the peace treaty credits were originally seen as a one-time payment, U.S. officials quickly realized that Egypt's needs would require much more financing over a longer period of time. Cash flow financing was seen as a way to allow Egypt to order larger quantities of equipment in the early years of its relationship with the United States. Without cash flow, Egypt could only order equipment with a total price of $1.5 billion. Under cash flow authorization, Egypt placed orders totaling $3.5 billion over the same time period. Although at the time there appeared to be significant congressional support for the 1979 Israel-Egypt peace treaty and expanded U.S. foreign assistance to both Israel and Egypt, some lawmakers did question whether the extension of CFF to Egypt ostensibly bound Congress to future appropriations in order to meet payment obligations for U.S. defense equipment. In one exchange between the late Senator Daniel Inouye and a State Department official at a congressional hearing, Senator Inouye asked if this method of financing "places considerable pressure on the Congress to continue providing substantial levels of credit" to Egypt. In response, the officials stated that the Reagan Administration had repeatedly told the Egyptian government that future appropriations are subject to the approval of Congress and "to the extent that pressure exists, it stems not from the cash flow system but from the importance of the relationship which the United States enjoys with Egypt ... any action on our part to curtail that support could only be interpreted by Egypt as reflecting a reassessment on our part of the basic relationship." As U.S. military assistance to Egypt has continued fairly steadily for over three decades, successive administrations have continued the practice of authorizing CFF for Egypt—until earlier this year. On March 31, 2015, after a phone call between President Obama and Egyptian President Abdelfattah al Sisi, the White House announced that, though the Administration was releasing the deliveries of select weapons system to Egypt that had been on hold since October 2013 (and pledged to continue seeking $1.3 billion in aid from Congress), "Beginning in fiscal year 2018, the President noted that we will channel U.S. security assistance for Egypt to four categories—counterterrorism, border security, Sinai security, and maritime security—and for sustainment of weapons systems already in Egypt's arsenal." In a separate National Security Council (NSC) press release, NSC Spokesperson Bernadette Meehan noted that At the same time, the President has decided to modernize the U.S.-Egypt military assistance relationship. First, beginning in fiscal year 2018, we will discontinue Egypt's use of cash flow financing (CFF)—the financial mechanism that enables Egypt to purchase equipment on credit. By ending CFF, we will have more flexibility to, in coordination with Egypt, tailor our military assistance as conditions and needs on the ground change. This announcement had come after the Administration's lengthy review of U.S. foreign assistance policy toward Egypt, a process that began immediately following the Egyptian military's ouster of former president Mohammed Morsi, a leading figure in the Muslim Brotherhood. These events triggered questions about the legality of continued assistance to Egypt's government given U.S. law prohibiting assistance to any government whose duly elected leader is deposed by military coup or decree, as well as questions about the advisability of such assistance given a number of considerations. During this review between 2013 and 2015, several lawmakers, outside experts, and media outlets called on the President to end the practice of authorizing Egypt for CFF. These include Senator Patrick Leahy in 2013, at the time the Chairman of the Senate Appropriations Subcommittee on the Department of State, Foreign Operations, and Related Programs: "It [CFF] has gotten us into a situation where we are mortgaged years into the future for expensive equipment.... It is not a sensible way to carry out U.S. policy toward a country of such importance, where circumstances have changed, our interests and needs change, our budget is under stress, and yet we've been stuck on autopilot for more than 25 years." A 2014 letter to President Obama signed by "The Working Group on Egypt," a bipartisan group of various foreign policy and Egypt experts: "Cash flow financing—the special arrangement for military aid that allows Egypt to make demands on U.S. public resources before they have been approved by our Congress—must come to an end so that U.S. policy is no longer handcuffed by contractual arrangements that narrow policy options." A 2014 op-ed in the New York Times : "First, Washington must stop allowing Egypt to place military hardware orders under a preferential system called cash flow finance. Available only to Israel and Egypt, the mechanism works much like a credit card, permitting the countries to place orders under the assumption that Congress will eventually appropriate enough funds to cover them. It will take years to wean Egypt off cash flow finance, since orders can take years to process, but doing so now will help untangle contractual and legislative knots in the future." The President's decision to phase out CFF to Egypt is perhaps part of a broader policy approach that may seek to balance national security interests and the promotion of democratic principles in dealing with the post-Morsi, military-backed Egyptian government. The March 31 White House announcement contemplates maintaining a modicum of security cooperation (e.g., ending weapons suspension and continuing $1.3 billion in aid) while moving the relationship away from its traditional military-to-military foundations (e.g., ending CFF and limiting future arms sales to specific defense categories). In practice, U.S. military aid to Egypt has not been used to finance purchases of new acquisitions of major defense equipment in recent years. The Defense Security Cooperation Agency (DSCA), which issues notifications of proposed sales of major defense equipment to Congress, has notified Congress of just one such new proposed sale to Egypt between 2011 and April 2015. Instead, cash-flow-financed FMF has been channeled toward paying for previous purchases. This is due to a number of factors, such as a large amount of Foreign Military Sales (FMS) cases that were agreed to between 2009 and 2011; the uncertain political environment that surrounded Egypt from 2011 to 2013; and congressionally mandated restrictions on FMF to Egypt in both the FY2014 and FY2015 Appropriations Acts ( P.L. 113-76 and P.L. 113-235 ) that partially limited the use of FMF obligations to existing sales only. Thus, the President's plan to eliminate CFF by 2018 seems to be in line with recent trends and congressional action. Moreover, since CFF has been used primarily to fund air power acquisitions for foreign militaries, it is entirely unclear whether the United States needs to extend credit to the Egyptian Air Force when Egypt, unlike Israel and Turkey, is not a partner in the new generation of technologically advanced platforms such as the F-35. Since Egypt is already the fourth-largest operator of F-16s in the world, U.S. defense officials may encourage Egypt to allocate a greater proportion of annual FMF grants to sustainment and upgrades of existing U.S.-origin systems rather than for procurement of new items. In order to phase out CFF, Congress could include in future legislation language from previous acts specifying that FMF to Egypt "shall only be made available at the minimum rate necessary to continue existing programs." However, unless Congress specifically prohibits Egypt from being eligible for CFF in law, the next President could conceivably reverse President Obama's pledge to end CFF. Conversely, Congress could legislate a continuation of CFF for Egypt, whether in deference to presidential determinations on the matter, under specified conditions in an annual appropriations bill, or by amending standing law such as the Arms Export Control Act. To date, there has been relatively muted public discussion of the President's proposed policy changes. According to Tamara Coffman Wittes of the Brookings Institution, "In Washington, Egypt's cash-flow financing had lost support from both parties and is not likely to be reinstated no matter who moves into the White House in 2017." Others have blamed President Obama for ending CFF and therefore hurting overall U.S. Egyptian-relations. According to Eric Trager of the Washington Institute for Near East Policy, "Ironically, President Obama may have thought his phone call to Cairo announcing the release of weapons would turn a new page in a rocky relationship. But by coupling that decision with the cancellation of a financing scheme that was a signal of Egypt's special relationship with Washington, Obama might have closed the book on any chance for closer U.S.-Egypt ties until a new president takes another look at this old alliance." Public response to the President's policy from the Egyptian government has also been limited. Overall, Egypt seems to be searching for new international partners in order to both diversify its military-to-military relationships and signal its displeasure with recent U.S. policy that has maintained a certain distance from the Sisi regime. The military has signed new arms agreements with Russia (S-300) and France (Rafale Fighters), while Saudi Arabia, Kuwait, and the United Arab Emirates continue to provide significant financial assistance to Egypt. Nevertheless, it is unclear whether Egypt's reliance on U.S. platforms for its key military capabilities is likely to change in the near term. Some longtime supporters of the U.S.-Egyptian relationship may lament the possibility of diminished U.S. influence in Egypt, while others may see a U.S.-Egyptian rebalancing, and particularly the proposed elimination of CFF, as necessary and ultimately healthier for both governments.

On March 31, 2015, after a phone call between President Obama and Egyptian President Abdelfattah al Sisi, the White House announced that beginning in FY2018, the United States would stop providing cash flow financing (CFF) to Egypt. Cash flow financing is the financial mechanism that enables foreign governments to pay for U.S. defense equipment in partial installments over time rather than all at once; successive Administrations have authorized CFF for Egypt since 1979. In recent years, as public scrutiny of U.S. military aid to Egypt has increased, some observers have criticized the provision of CFF to Egypt. Critics argue that the financing of expensive conventional weapons systems is based on an assumption of future appropriations from Congress. Others argue that as the Egyptian military combats terrorism in the Sinai Peninsula and elsewhere, now may not be the optimal time to alter U.S. military aid to Egypt. The Administration's proposed policy change comes after its lengthy review of U.S. foreign assistance policy toward Egypt, a process that began immediately following the Egyptian military's ouster of former president Mohammed Morsi, a leading figure in the Muslim Brotherhood. The House draft FY2016 Foreign Operations Appropriations bill specifies that the Secretary of State shall consult with the Committees on Appropriations on any plans to restructure military assistance for Egypt. This report analyzes this proposed change in U.S. foreign assistance to Egypt; it provides background on the history of CFF and reviews various issues for Congress. For more on U.S. policy toward Egypt, please see CRS Report RL33003, Egypt: Background and U.S. Relations, by [author name scrubbed].

Annual vaccination is the primary method for preventing influenza, which is associated with serious illness, hospitalizations, and even deaths among people at high risk for complications of the disease, such as pneumonia. Senior citizens are particularly at risk, as are individuals with chronic medical conditions. The Centers for Disease Control and Prevention (CDC) estimates that influenza epidemics contribute to approximately 20,000 deaths and 110,000 hospitalizations in the United States each year. Here in Oregon, and throughout the nation, influenza and pneumonia rank as the fifth leading cause of death among persons 65 years of age and older. Producing the influenza vaccine is a complex process that involves growing viruses in millions of fertilized chicken eggs. This process, which requires several steps, generally takes at least 6 to 8 months from January through August each year. Each year’s vaccine is made up of three different strains of influenza viruses, and, typically, each year one or two of the strains is changed to better protect against the strains that are likely to be circulating during the coming flu season. The Food and Drug Administration (FDA) and its advisory committee decide which strains to include based on CDC surveillance data, and FDA also licenses and regulates the manufacturers that produce the vaccine. Only three manufacturers—two in the United States and one in the United Kingdom—produced the vaccine used in the United States during the 2000-01 flu season. Like other pharmaceutical products, flu vaccine is sold to thousands of purchasers by manufacturers, numerous medical supply distributors, and other resellers such as pharmacies. These purchasers provide flu shots at physicians’ offices, public health clinics, nursing homes, and less traditional locations such as workplaces and various retail outlets. CDC has recommended October through mid-November as the best time to receive a flu shot because the flu season generally peaks from December through early March. However, if flu activity peaks late, as it has in 10 of the past 19 years, vaccination in January or later can still be beneficial. To address our study questions, we interviewed officials from the Department of Health and Human Services (HHS), including CDC, FDA, and the Health Care Financing Administration (HCFA), as well as flu vaccine manufacturers, distributors, physician associations, flu shot providers, and others. We surveyed 58 physician group practices nationwide to learn about their experiences and interviewed health department officials in all 50 states. Although the eventual supply of vaccine in the 2000-01 flu season was about the same as the previous year’s—about 78 million doses— production delays of about 6 to 8 weeks limited the amount that was available during the peak vaccination period. During the period when supply was limited and demand was higher, providers who wanted to purchase vaccine from distributors with available supplies often faced rapidly escalating prices. By December, as vaccine supply increased and demand dropped, prices declined. Last fall, fewer than 28 million doses were available by the end of October, compared with more than 70 million doses available by that date in 1999. Two main factors contributed to last year’s delay. The first was that two manufacturers had unanticipated problems growing one of the two new influenza strains introduced into the vaccine for the 2000-01 flu season. Because manufacturers must produce a vaccine that includes all three strains selected for the year, delivery was delayed until sufficient quantities of this difficult strain could be produced. The second factor was that two of the four manufacturers producing vaccine the previous season shut down parts of their facilities because of FDA concerns about compliance with good manufacturing practices, including issues related to safety and quality control. One of these manufacturers reopened its facilities and eventually shipped its vaccine, although much later than usual. The other, which had been expected to produce 12 to 14 million doses, announced in September 2000 that it would cease production altogether and, as a result, supplied no vaccine. These vaccine production and compliance problems did not affect every manufacturer to the same degree. Consequently, when a purchaser received vaccine depended to some extent on which manufacturer’s vaccine it had ordered. Purchasers that contracted only with the late- shipping manufacturers were in particular difficulty. For example, health departments and other public entities in 36 states, including Oregon, banded together under a group purchasing contract and ordered nearly 2.6 million doses from the manufacturer that, as it turned out, experienced the greatest delays from production difficulties. Some of these public entities, which ordered vaccine for high-risk people in nursing homes or clinics, did not receive most of their vaccine until December, according to state health officials. Because supply was limited during the usual vaccination period, distributors and others who had supplies of the vaccine had the ability— and the economic incentive—to sell their supplies to the highest bidders rather than filling lower-priced orders they had already received. Most of the physician groups and state health departments we contacted reported that they waited for delivery of their original lower-priced orders, which often arrived in several partial shipments from October through December or later. Those who purchased vaccine in the fall found themselves paying much higher prices. For example, one physicians’ practice in our survey ordered flu vaccine from a supplier in April 2000 at $2.87 per dose. When none of that vaccine had arrived by November 1, the practice placed three smaller orders in November with a different supplier at the escalating prices of $8.80, $10.80, and $12.80 per dose. On December 1, the practice ordered more vaccine from a third supplier at $10.80 per dose. The four more expensive orders were delivered immediately, before any vaccine had been received from the original April order. Demand for influenza vaccine dropped as additional vaccine became available after the prime period for vaccinations had passed. In all, roughly one-third of the total distribution was delivered in December or later. Part of this additional supply resulted from actions taken by CDC in September, when it appeared there could be a shortfall in production. At that point, CDC contracted with one of the manufacturers to extend production into late December for 9 million additional doses. Despite efforts by CDC and others to encourage people to seek flu shots later in the season, providers still reported a drop in demand in December. The unusually light flu season also probably contributed to the lack of interest. Had a flu epidemic hit in the fall or early winter, the demand for influenza vaccine would likely have remained high. As a result of the waning demand, manufacturers and distributors reported having more vaccine than they could sell. Manufacturers reported shipping about 9 percent less than in 1999, and more than 7 million of the 9 million additional doses produced under the CDC contract were never shipped at all. In addition, some physicians’ offices, employee health clinics, and other organizations that administered flu shots reported having unused doses in December and later. In a typical year, there is enough vaccine available in the fall to give a flu shot to anyone who wants one. However, when the supply is not sufficient, there is no mechanism currently in place to establish priorities and distribute flu vaccine first to high-risk individuals. Indeed last year, mass immunizations in nonmedical settings, normally undertaken to promote vaccinations, created considerable controversy as healthy persons received vaccine in advance of those at high risk. In addition, manufacturers and distributors that tried to prioritize their vaccine shipments encountered difficulties doing so. Flu shots are generally widely available in a variety of settings, ranging from the usual physicians’ offices, clinics, and hospitals to retail outlets such as drugstores and grocery stores, workplaces, and other convenience locations. Millions of individuals receive flu shots through mass immunization campaigns in nonmedical settings, where organizations, such as visiting nurse agencies under contract, administer the vaccine. The widespread availability of flu shots may help increase immunization rates overall, but it generally does not lend itself to targeting vaccine to high- priority groups. The timing of some of the mass immunization campaigns last fall generated a great deal of controversy. Some physicians and public health officials were upset when their local grocery stores, for example, were offering flu shots to everyone when they, the health care providers, were unable to obtain vaccine for their high-risk patients. Examples of these situations include the following: A radio station in Colorado sponsored a flu shot and a beer for $10 at a local restaurant and bar—at the same time that the public health department and the community health center did not have enough vaccine. One grocery store chain in Minnesota participated in a promotion offering a discounted flu shot for anyone who brought in three soup can labels. Flu shots were available for purchase to all fans attending a professional football game. CDC took some steps to try to manage the anticipated vaccine delay by issuing recommendations for vaccinating high-risk individuals first. In July 2000, CDC recommended that mass immunization campaigns, such as those open to the public or to employee groups, be delayed until early to mid-November. CDC issued more explicit voluntary guidelines in October 2000, which stated that vaccination efforts should be focused on persons aged 65 and older, pregnant women, those with chronic health conditions that place them at high risk, and health care workers. The October guidelines also stated that while efforts should be made to increase participation in mass immunization campaigns by high-risk persons and their household contacts, other persons should not be turned away. Some organizations that conducted mass immunizations said they generally did not screen individuals who came for flu shots in terms of their risk levels. Some said they tried to target high-risk individuals and provided information on who was at high risk, but they let each person decide whether to receive a shot. Their perspective was that the burden lies with the individual to determine his or her own level of risk, not with the provider. Moreover, they said that the convenience locations provide an important option for high-risk individuals as well as others. Health care providers in both traditional and nontraditional settings told us that it is difficult to turn someone away when he or she requests a flu shot. The manufacturers and distributors we interviewed reported that it was difficult to determine which of their purchasers should receive priority vaccine deliveries in response to CDC’s recommendations to vaccinate high-risk individuals first. They did not have plans in place to prioritize deliveries to target vaccine to high-risk individuals because there generally had been enough vaccine in previous years and thus there had been little practical need for this type of prioritization. When they did try to identify purchasers serving high-risk individuals, the manufacturers and distributors often found they lacked sufficient information about their customers to make such decisions, and they also were aware that all types of vaccine providers were likely to serve at least some high-risk individuals. As a result, manufacturers reported using various approaches in distributing their vaccine, including making partial shipments to all purchasers as a way to help ensure that more high-risk persons could be vaccinated. Others made efforts to ship vaccine first to nursing homes, where they could be identified, and to physicians’ offices. All of the manufacturers and distributors we talked to said that once they distributed the vaccine it would be up to the purchasers and health care providers to target the available vaccine to high-risk groups. Immunization statistics are not yet available to show how successful these ad hoc distribution strategies may have been in reaching high-risk groups, but there may be cause for concern. Some state health officials reported that nursing homes often purchase their flu vaccine from local pharmacies, and some distributors considered pharmacies to be lower priority for deliveries. In addition, many physicians reported that they felt they did not receive priority for vaccine delivery, even though nearly two- thirds of seniors—one of the largest high-risk groups—generally get their flu shots in medical offices. The experience of the 58 physicians’ practices we surveyed seemed consistent with this reported lack of priority: as a group, they received their shipments at about the same delayed rate that vaccine was generally available on the market. Ensuring an adequate and timely supply of vaccine, already a difficult task given the complex manufacturing process, has become even more difficult as the number of manufacturers has decreased. Now, a production delay or shortfall experienced by even one of the three remaining manufacturers can significantly affect overall vaccine availability. Looking back, we are fortunate that the 2000-01 flu season arrived late and was less severe than normal because we lacked the vaccine last October and November to prepare for it. Had the flu hit early with normal or greater severity, the consequences could have been serious for the millions of Americans who were unable to get their flu shots on time. This raises the question of what more can be done to better prepare for possible vaccine delays and shortages in the future. We need to recognize that flu vaccine production and distribution are private-sector responsibilities, and as such options are somewhat limited. HHS has no authority to directly control flu vaccine production and distribution, beyond FDA’s role in regulating good manufacturing practices and CDC’s role in encouraging appropriate public health actions. Working within these constraints, HHS undertook several initiatives in response to the problems experienced during the 2000-01 flu season. For example, the National Institutes of Health, working with FDA and CDC, conducted a clinical trial on the feasibility of using smaller doses of vaccine for healthy adults. If smaller doses offer acceptable levels of protection, this would be one way to stretch limited vaccine supplies. Final results from this work are expected in fall 2001. In addition, for the upcoming flu season CDC and its advisory committee extended the optimal period for getting a flu shot until the end of November, to encourage more people to get shots later in the season. HHS is also working to complete a plan for a national response to a severe worldwide influenza outbreak, called a pandemic. While the plan itself would likely be applied only in cases of public health emergencies, we believe that the advance preparations by manufacturers, distributors, physicians, and public health officials to implement the plan could provide a foundation to assist in dealing with less severe problems, such as those experienced last year. We believe it would be helpful for HHS agencies to take additional actions in three areas. Progress in these areas could prove valuable in managing future flu vaccine disruptions and targeting vaccine to high-risk individuals. First, because vaccine production and distribution are private- sector responsibilities, CDC needs to work with a wide range of private entities to prepare for potential problems in the future. CDC can take an ongoing leadership role in organizing and supporting efforts to bring together all interested parties to formulate voluntary guidelines for vaccine distribution in the event of a future vaccine delay or shortage. In March 2001, CDC co-sponsored a meeting with the American Medical Association that brought together public health officials, vaccine manufacturers, distributors, physicians, and other providers to discuss flu vaccine distribution, including ways to target vaccine to high-risk groups in the event of a future supply disruption. This meeting was a good first step, and continued efforts should be made to achieve consensus among the public- and private-sector entities involved in vaccine production, distribution, and administration.

Until the 2001 flu season, the production and distribution of influenza vaccine generally went smoothly. Last year, however, several people reported that they wanted but could not get flu shots. In addition, physicians and public health departments could not provide shots to high-risk patients in their medical offices and clinics because they had not received vaccine they ordered many months in advance, or because they were being asked to pay much higher prices for vaccine in order to get it right away. At the same time, there were reports that providers in other locations, even grocery stores and restaurants, were offering flu shots to everyone--including younger, healthier people who were not at high risk. This testimony discusses the delays in production, distribution, and pricing of the 2000-2001 flu vaccine. GAO found that manufacturing difficulties during the 2000-2001 flu season resulted in an overall delay of about six to eight weeks in shipping vaccine to most customers. This delay created an initial shortage and temporary price spikes. There is no system in place to ensure that high-risk people have priority for receiving flu shots when supply is short. Because vaccine purchases are mainly done in the private sector, federal actions to help mitigate any adverse effects of vaccine delays or shortages need to rely to a great extent on collaboration between the public and private sectors.

The federal role in assisting states and communities to clean up brownfields for productive use has been an ongoing issue for more than a decade. As defined by statute, brownfield sites are "real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant" (emphasis added). The Environmental Protection Agency (EPA) addresses environmental contamination primarily through the Superfund and Brownfields Programs. Although EPA's Superfund and Brownfields Programs are related, the programs are different in their objectives and the sites they address. The Superfund Program and its federal funding generally cover only the sites with the highest levels of contamination or those that present immediate risks. In contrast, EPA's Brownfields Program assists communities with the cleanup of abandoned, idled, or underutilized commercial and industrial properties. EPA estimates that there are more than 450,000 brownfields sites throughout the country. As the brownfields definition indicates, whether contamination is present at all of these sites is uncertain. The environmental contamination at a brownfield site, if it exists at all , is not as serious or threatening as the contamination at Superfund sites. Often, the mere perception of environmental contamination may hinder site reuse, because interested parties may be concerned they would face cleanup responsibilities. Thus, a primary objective of the Brownfields Program is site assessment. This report describes the scope and purpose of EPA's Brownfields Program, reviews appropriation levels for the program, and highlights considerations for policymakers. The Superfund and EPA Brownfields Programs are authorized by the same statute, but the programs were developed at different times and for different purposes. With the enactment of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA, 42 U.S.C. §§9601-9675), Congress established the Superfund Program. This is the federal government's principal program for cleaning up the nation's contaminated waste sites and protecting public health and the environment from releases of hazardous substances. Pursuant to the general response authorities of CERCLA, EPA developed the Brownfields Program in 1993. Initially, the program provided "seed money" in the form of grants and loans to communities to stimulate redevelopment and reuse of brownfield properties. Funding originally came from the Superfund Program appropriations. Between FY1998 and FY2001, the program received approximately $90 million each year, accounting for about 5% of annual Superfund appropriations. In 2002, Congress provided specific statutory authority for EPA to address brownfields with the enactment of the Small Business Liability Relief and Brownfields Revitalization Act ( P.L. 107-118 ). Among other things, the statute (hereinafter the "Brownfields Act") authorized a grant program, similar to the one EPA had established administratively under general CERCLA authority in the mid 1990s. The stated purpose of the 2002 act was "to promote the cleanup and reuse of brownfields, to provide financial assistance for brownfields revitalization, to enhance State response programs, and for other purpose." Section 201 of the Brownfields Act authorized $200 million annually for a grant program to support site assessment and cleanup activities at brownfield properties. Section 231 of the act authorized an additional grant program in the amount of $50 million annually to assist state and tribal cleanup programs. The funding authority for both grant programs expired at the end of FY2006; program authority is permanent unless repealed by subsequent legislation. Regardless of expired authorization, Congress has continued to provide a consistent funding level for both grant programs (provided in Table 1 , below). The grants awarded from EPA's Brownfields Program can be divided into two categories: (1) competitive grants awarded to communities, which are often referenced by the CERCLA section—Section 104(k)—that authorizes them; and (2) non-competitive grants—authorized by Section 128, and thus often described as Section 128 grants—awarded to states and Indian tribes to support their response programs. Section 104(k) grants comprise the core of EPA's Brownfields Program, receiving the bulk of the annual appropriation. In general, eligible grant recipients include state, local, and tribal governments, and certain quasi-governmental authorities. In some cases (identified below), other parties may receive grants. However, private persons and corporations are not eligible in any case. There are four types of competitive brownfields grants: Assessment grants provide funding for a grant recipient to inventory, assess, and conduct planning and community involvement related to brownfields sites. Site assessment is a primary component of the EPA Brownfields Program. The mere perception of contamination at brownfield sites often hinders redevelopment. Assessment grants help address these information gaps and determine whether cleanup may be needed to make a property suitable for its intended use. As required by statute, grants are limited to $200,000, but the statute allows EPA to waive that limitation and award a grant up to $350,000. In addition, eligible parties may apply for separate grants to address hazardous substances and petroleum at a brownfield site. Cleanup grants provide funding for remediation activities that may be needed to address contamination at a brownfields site. As directed by the statute, grants may be awarded for up to $200,000. Grant recipients must provide a 20% cost share, which may include money, labor, material, or services. In addition to the eligible entities listed above, nonprofit organizations are eligible for cleanup grants. Job training grants are available to certain educational and other nonprofit organizations, as well as the eligible entities above. EPA awards grants of up to $200,000 (a threshold not based on statutory limitations) to create local environmental job training programs. EPA maintains that the job training grants, which were first awarded under general CERCLA authority in 1997, complement the funding for brownfields sites by encouraging local citizens to take advantage of the growing market for environmental cleanup activities. Revolving Loan Fund (RLF) grants are awarded to state, local, or tribal governments to capitalize RLFs, which can provide no-interest or low-interest loans for brownfield cleanups. The statute limits these grants to $1 million. RLF grant recipients may also award cleanup subgrants, not requiring repayment, of up to $200,000 per site. Like the general cleanup grants, RLF cleanup subgrants may be awarded to nonprofit groups. The Brownfields Act added Section 128 to CERCLA. Subsection 128(a) created a non-competitive grant program to support state and tribal response programs. The funding authority for this program—authorized at $50 million annually from FY2002 through FY2006—is separate from the competitive grant program under Section 104(k). A 2004 Government Accountability Office (GAO) report found that all 50 states have some type of response (or cleanup program), although these programs vary considerably in scope and breadth. In general, these state programs address contaminated properties that are not covered by the federal Superfund Program. EPA states that Section 128 funding is not intended to supplant, but instead "supplement,"state or tribal funding for their response programs. However, the 2004 GAO report noted that in some states, their programs would not exist without EPA's funding. Section 128 identifies one general and two specific uses of funding. Regarding the former, the statute prescribes that funding can be used to "establish or enhance" a state or tribal response program. EPA interprets this phrase to include: developing legislation, regulations, procedures, or guidance; creating and maintaining relevant public records; and conducting limited site-specific activities, such as assessment or cleanup. The statute also identifies two specific uses of the Section 128 funding: financing a revolving loan fund for brownfield cleanups; and purchasing environmental insurance or developing an insurance mechanism to provide financing for cleanup actions under the program. Congress funds EPA's Brownfields Program with appropriations from two large accounts: the State and Tribal Assistance Grants (STAG) Account and EPA's Environmental Programs and Management Account. From within these large accounts, the Brownfields Program is funded by three line-items ( Table 1 ). The STAG account funds two line-items: Section 104(k) and Section 128 grant programs. The management account includes a line-item for the administrative expenses of the Brownfields Program. Since the enactment of the 2002 Brownfields Act, appropriations for the aggregate of these three brownfields line-items have been relatively consistent, with total funding ranging from $163 million to nearly $170 million ( Table 1 ). There appears to be broad consensus that a federal role in the cleanup and redevelopment of brownfields is desirable. However, issues regarding the degree of financial assistance and overall program effectiveness have been raised. Since the enactment of the Brownfields Act in 2002, Congress has funded the program below its initial authorized level. Total appropriations (in Table 1 ) represent approximately 66% of the initial funding authorization—$250 million each year, between FY2002 - FY2006. Some states and communities would argue that the demand for funding far exceeds what has been made available by Congress. On the other hand, the program has arguably struggled to demonstrate its effectiveness. What are federal funding levels achieving: environmental risk reduction, economic redevelopment, or some combination thereof? The 2004 GAO report found that "the agency has not yet developed measures to determine the extent to which the Brownfields Program helps reduce environmental risks." This concern raises the question as to whether the program should be evaluated by its ability to reduce threats to human health or whether the program should be assessed with different metrics, such as economic redevelopment. If this is the case, some may question whether EPA is the most appropriate agency to administer this program.

The federal role in assisting states and communities to clean up brownfield sites—real property affected by the potential presence of environmental contamination—has been an ongoing issue for more than a decade. With the enactment of the Small Business Liability Relief and Brownfields Revitalization Act ( P.L. 107-118 ) in 2002, Congress provided specific authority for EPA to address brownfield sites. In contrast to Superfund sites, environmental contamination present at brownfield sites is typically less of a risk to human health. With the primary motivation to aid cleanup efforts, the 2002 statute, among other things, authorized two grant programs: (1) a competitive grant program to address specific sites; and (2) a non-competitive grant program to support state cleanup programs. While there appears to be broad consensus that a federal role in the cleanup and redevelopment of brownfields is desirable, issues regarding the degree of financial assistance and overall program effectiveness have been raised.

The four federal programs we examined were established from 1969 through 2000 for various purposes. The Black Lung Program was established in 1969 as a temporary federal program to provide benefits to coal miners disabled because of pneumoconiosis (black lung disease), and their dependents, until adequate state programs could be established. It has been amended several times, effectively restructuring all major aspects of the program and making it an ongoing federal program. VICP was authorized in 1986 to provide compensation to individuals for vaccine-related injury or death. According to the Department of Health and Human Services (HHS), the agency that administers the program, it was established to help stabilize manufacturers’ costs and ensure an adequate supply of vaccines. Concerns expressed by various groups contributed to the program’s establishment, including concerns from parents about harmful side effects of certain vaccines, from vaccine producers and health care providers about liability, and from the public about shortages of vaccines. RECP was established in 1990 to make partial restitution to on-site participants, uranium miners, and nearby populations who (1) were exposed to radiation from atmospheric nuclear testing or as a result of their employment in the uranium mining industry and (2) developed certain related illnesses. EEOICP was established in 2000 to provide payments to nuclear weapons plant workers injured from exposure to radiation or toxic substances, or their survivors. Initially, some qualifying workers were paid federal benefits and others were provided assistance in obtaining benefits from state workers’ compensation programs. In 2004, the federal government assumed total responsibility for benefits paid under the program. The purpose of the four federal compensation programs we examined is similar in that they all were designed to compensate individuals injured by exposure to harmful substances. However, how the programs are structured varies significantly, including who administers the program, how they are funded, the benefits provided, and who is eligible for benefits. For example: Several federal agencies are responsible for the administration of the programs: the Department of Labor (DOL) administers the Black Lung Program and EEOICP; the Department of Justice (DOJ) administers RECP and shares administration of VICP with HHS and the Court of Federal Claims. In addition, the National Institute for Occupational Safety and Health and DOJ provide support to DOL in administering EEOICP. Responsibility for administering two of the programs has changed since their inception. Specifically, claims for the Black Lung Program were initially processed and paid by the Social Security Administration but, as designed, DOL began processing claims in 1973 and took over all Black Lung Program claims processing in 1997. In 2002, the Congress officially transferred all legal responsibility and funding for the program to DOL. In addition, administration of EEOICP was initially shared between the Departments of Energy and DOL but, in 2004, DOL was given full responsibility for administering the program and paying benefits. Funding of the four programs varies. Although initially funded through annual appropriations, the Black Lung Program is now funded by a trust fund established in 1978 that is financed by an excise tax on coal and supplemented with additional funds. The tax, however, has not been adequate to fund the program; at the time of our review, the fund had borrowed over $8.7 billion from the federal treasury. For the VICP, claims involving vaccines administered before October 1, 1988, were paid with funds appropriated annually through fiscal year 1999. Claims involving vaccines administered on or after October 1, 1988, are paid from a trust fund financed by a per dose excise tax on each vaccine. For example, the excise tax on the measles, mumps, and rubella vaccine at the time of our review was $2.25. EEOICP and RECP are completely federally funded. Although RECP was initially funded through an annual appropriation, in 2002 the Congress made funding for RECP mandatory and provided $655 million for fiscal years 2002 through 2011. EEOICP is funded through annual appropriations. Benefits also vary among the four programs. Some of the benefits they provide include lump sum compensation payments and payments for lost wages, medical and rehabilitation costs, and attorney’s fees. For example, at the time of our review, when claims were approved, VICP paid medical and related costs, lost earnings, legal expenses, and up to $250,000 for pain and suffering for claims involving injuries, and up to $250,000 for the deceased’s estate, plus legal expenses, for claims involving death. The Black Lung Program, in contrast, provided diagnostic testing for miners; monthly payments based on the federal salary scale for eligible miners or their survivors; medical treatment for eligible miners; and, in some cases, payment of claimants’ attorney fees. The groups who are eligible for benefits under the four federal programs and the proof of eligibility required for each program vary widely. The Black Lung Program covers coal miners who show that they developed black lung disease and are totally disabled as a result of their employment in coal mines, and their survivors. Claimants must show that the miner has or had black lung disease, the disease arose out of coal mine employment, and the disease is totally disabling or caused the miner’s death. VICP covers individuals who show that they were injured by certain vaccines and claimants must show, among other things, that they received a qualifying vaccine. RECP covers some workers in the uranium mining industry and others exposed to radiation during the government’s atmospheric nuclear testing who developed certain diseases. Claimants must show that they were physically present in certain geographic locations during specified time periods or that they participated on-site during an atmospheric nuclear detonation and developed certain medical conditions. Finally, EEOICP covers workers in nuclear weapons facilities during specified time periods who developed specific diseases. At the time of our review, total benefits paid for two of the programs—the Black Lung Program and RECP—significantly exceeded their initial estimates. An initial cost estimate was not available for VICP. The initial estimate of benefits for the Black Lung Program developed in 1969 was about $3 billion. Actual benefits paid through 1976—the date when the program was initially to have ended—totaled over $4.5 billion and benefits paid through fiscal year 2004 totaled over $41 billion. For RECP, the costs of benefits paid through fiscal year 2004 exceeded the initial estimate by about $247 million. Table 1 shows the initial program estimates and actual costs of benefits paid through fiscal year 2004 for the four programs. Actual costs for the Black Lung Program have significantly exceeded the initial estimate for several reasons, including (1) the program was initially set up to end in 1976 when state workers’ compensation programs were to have provided these benefits to coal miners and their dependents, and (2) the program has been expanded several times to increase benefits and add categories of claimants. The reasons the actual costs of RECP have exceeded the initial estimate include the fact that the original program was expanded to provide benefits to additional categories of claimants, including uranium miners who worked above ground, ore transporters, and mill workers. Although the costs of EEOICP benefits paid through fiscal year 2004 were close to the initial estimate, these costs were expected to rise substantially because of changes that were not anticipated at the time the estimate was developed. For example, payments that were originally supposed to have been made by state workers’ compensation programs are now paid by the federal government. In addition, at the time of our review, a large proportion of the claims filed (45 percent) had not been finalized. At the time of our review, the annual administrative costs of the four programs varied. For fiscal year 2004, they ranged from approximately $3.0 million for RECP to about $89.5 million for EEOICP (see table 2). The number of claims filed for the three programs for which initial estimates were available significantly exceeded the initial estimates and the structure of the programs, including the approval process and the extent to which the programs allow claimants and payers to appeal claims decisions in the courts, affected the amount of time it took to finalize claims and compensate eligible claimants. The number of claims filed through fiscal year 2004 ranged from about 10,900 for VICP to about 960,800 for the Black Lung Program. The agencies responsible for processing claims have, at various times, taken years to finalize some claims, resulting in some claimants waiting a long time to obtain compensation. Table 3 shows the initial estimates of the number of claims anticipated and the actual number of claims filed for each program through fiscal year 2004. Factors that affected the amount of time it took the agencies to finalize claims include statutory and regulatory requirements for determining eligibility, changes in eligibility criteria that increase the volume of claims, the agency’s level of experience in handling compensation claims, and the availability of funding. For example, in fiscal year 2000, when funds appropriated for RECP were not sufficient to pay all approved claims, DOJ ceased making payments until the following fiscal year when funds became available. The approval process and the extent to which programs allow claimants and payers to appeal claims decisions also affected the time it took to process claims. For example, it can take years to approve some EEOICP claims because of the lengthy process required for one of the agencies involved in the approval process to determine the levels of radiation to which claimants were exposed. In addition, claims for benefits provided by programs in which the claims can be appealed can take a long time to finalize. For example, claimants whose Black Lung Program claims are denied may appeal their claims in the courts. At the time of our review, a Department of Labor official told us that it took about 9 months to make an initial decision on a claim and at least 3 years to finalize claims that were appealed. The federal government has played an important and growing role in providing benefits to individuals injured by exposure to harmful substances. All four programs we reviewed have been expanded to provide eligibility to additional categories of claimants, cover more medical conditions, or provide additional benefits. As the programs changed and grew, so did their costs. Initial estimates for these programs were difficult to make for various reasons, including the difficulty of anticipating how they would change over time and likely increases in costs such as medical expenses. Decisions about how to structure compensation programs are critical because they ultimately affect the costs of the programs and how quickly and fairly claims are processed and paid. This concludes my prepared statement. I would be pleased to respond to any questions that you or the Members of the Subcommittees may have. For further information, please contact Anne-Marie Lasowski at (202) 512- 7215. Individuals making key contributions to this testimony include Revae Moran, Cady Panetta, Lise Levie, and Roger Thomas. 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 U.S. federal government has played an ever-increasing role in providing benefits to individuals injured as a result of exposure to harmful substances. Over the years, it has established several key compensation programs, including the Black Lung Program, the Vaccine Injury Compensation Program (VICP), the Radiation Exposure Compensation Program (RECP), and the Energy Employees Occupational Illness Compensation Program (EEOICP), which GAO has reviewed in prior work. Most recently, the Congress introduced legislation to expand the benefits provided by the September 11th Victim Compensation Fund of 2001. As these changes are considered, observations about other federal compensation programs may be useful. In that context, GAO's testimony today will focus on four federal compensation programs, including (1) the structure of the programs; (2) the cost of the programs through fiscal year 2004, including initial cost estimates and the actual costs of benefits paid, and administrative costs; and (3) the number of claims filed and factors that affect the length of time it takes to finalize claims and compensate eligible claimants. To address these issues, GAO relied on its 2005 report on four federal compensation programs. As part of that work, GAO did not review the September 11th Victim Compensation Fund of 2001. The four federal compensation programs GAO reviewed in 2005 were designed to compensate individuals injured by exposure to harmful substances. However, the structure of these programs differs significantly in key areas such as the agencies that administer them, their funding, benefits paid, and eligibility. For example, although initially funded through annual appropriations, the Black Lung Program is now funded by a trust fund established in 1978 financed by an excise tax on coal and supplemented with additional funds. In contrast, EEOICP and RECP are completely federally funded. Since the inception of the programs, the federal government's role has increased and all four programs have been expanded to provide eligibility to additional categories of claimants, cover more medical conditions, or provide additional benefits. As the federal role for these four programs has grown and eligibility has expanded, so have the costs. Total benefits paid through fiscal year 2004 for two of the programs--the Black Lung Program and RECP--significantly exceeded their initial estimates for various reasons. The initial estimate of benefits for the Black Lung Program developed in 1969 was about $3 billion. Actual benefits paid through 1976--the date when the program was initially to have ended--totaled over $4.5 billion and, benefits paid through fiscal year 2004 totaled over $41 billion. Actual costs for the Black Lung Program significantly exceeded the initial estimate for several reasons, including (1) the program was initially set up to end in 1976 when state workers' compensation programs were to have provided these benefits to coal miners and their dependents, and (2) the program has been expanded several times to increase benefits and add categories of claimants. For RECP, the costs of benefits paid through fiscal year 2004 exceeded the initial estimate by about $247 million, in part because the original program was expanded to include additional categories of claimants. In addition, the annual administrative costs for the programs varied, from approximately $3.0 million for RECP to about $89.5 million for EEOICP for fiscal year 2004. Finally, the number of claims filed for three of the programs significantly exceeded the initial estimates, and the structure of the programs affected the length of time it took to finalize claims and compensate eligible claimants. For the three programs for which initial estimates were available, the number of claims filed significantly exceeded the initial estimates. In addition, the way the programs were structured, including the approval process and the extent to which the programs allow claimants and payers to appeal claims decisions in the courts, affected how long it took to finalize the claims. Some of the claims have taken years to finalize. For example, it can take years to approve some EEOICP claims because of the lengthy process required for one of the agencies involved in the approval process to determine the levels of radiation to which claimants were exposed. In addition, claims for benefits provided by programs in which the claims can be appealed can take a long time to finalize.

97-86 -- Indian Tribes and Welfare Reform Updated September 28, 2004 Before enactment of TANF, American Indians or Alaska Natives (Indians, Inuit [Eskimos], or Aleuts) received family cash welfare on the same terms as other families in their state, with benefits and income eligibility rules ofthe program of Aid to Families with Dependent Children (AFDC) set by the state and costs shared by the state. The law had no provision for administration of cash aid by tribes. However, some Wisconsin tribessubcontracted with the state to provide AFDC independently on their reservations. In FY1994, 1.3% of thenational AFDC caseload (about 68,000 families) were American Indians and Alaska Natives. In addition, morethan 65,000 needy Indians who were not in categories eligible for AFDC received cash aid based on their state'sAFDC benefit standards, but paid by the Bureau of Indian Affairs (BIA). Under pre-TANF law, more than 80tribes and tribal organizations exercised an option to run their own work and training programs, called JobOpportunities and Basic Skills Training (JOBS) programs, with 100% federal funds. Under TANF, which provides fixed annual state grants through FY2002, numerous Indian tribes and Alaska Native Villages in 16 states (see Table 1) are operating their own tribal family assistanceprograms. Tribes thatoperated their own JOBS program also receive annual appropriations under TANF law of $7.6 million (theirFY1984 funding for JOBS) for work and training activities (renamed Native Employment Works -- NEW). Finally, $28.6 million in Welfare-to-Work (WtW) grants was awarded for FY1998 and 1999 by the LaborDepartment to Indian and Native American tribal governments (86 grantees in FY1998, 91 in FY1999). Standard TANF work participation rates and time limit rules do not apply to tribal assistance programs. Theirrules are set by the Health and Human Services (HHS) Secretary with tribal participation. Eligible for tribal assistance grants are the more than 330 federally recognized tribes in the contiguous 48 states and 13 Alaska entities. As of September 15, 2004, 45 tribal TANF grants were approved for 230 tribes plussome non-reservation Indians in Alaska, Arizona, California, Idaho, Minnesota, Montana, Nebraska, Nevada,New Mexico, Oklahoma, Oregon, South Dakota, Utah, Washington, Wisconsin, and Wyoming. Annual federalfunding, deducted from the basic TANF grant of their state(s), totals $134.2 million (for funding by tribal plan,see Table 1 ). Grantees estimated their monthly caseload at 33,510 families. According to thefifth annual TANFreport, the average number of Indian families served by state governments under regular TANF programs wasabout 35,000 in FY2000, down 50% from the corresponding FY1996 figure (a part of the decline representedpersons who moved from the regular state program to a tribal program). Some features of tribal programsfollow. Recognized tribes and tribal organizations may operate family assistance programs in their service areas. A tribe's TANF grant equals federal AFDC payments to the state for FY1994 attributable toIndians in its service area; the tribal grant is subtracted from the state's TANF grant. Tribal TANF plans are for three years (rather than 2, as for states) and contain many fewerrequired elements than state plans. However, regular TANF data collection and reporting rules apply to tribalplans. The HHS Secretary, with participation of the tribe, establishes work participation rules,time limits for benefits, and penalties for each tribal family assistance program. In general, Indian tribes inAlaska must operate plans in accordance with rules adopted by the state for TANF. (The National Congress ofAmerican Indians has asked for removal of this provision, and for the restrictive definition immediately below,saying that it wants Alaskan tribes to be treated like other tribes.) TANF law generally defines an Indian tribe as in Section 4 of the IndianSelf-Determination and Education Assistance Act, but it specifies that an "eligible Indian tribe" in Alaska means one of 12 specified regional nonprofit corporations plus a reservation. Tribal TANF regulations permit 35% of a tribal grant to be used for administrative costs inthe first year, 30% in the second year, and 25% thereafter. State TANF programs, however, generally may spentno more than 15% of their grants on administration. The state governor must certify equitable access from the TANF program to Indians noteligible for help from a tribal family assistance plan. The law gives explicit permission for state TANF programs to use money from the TANFloan fund for aid to Indian families that have moved out of the service area of a tribe with a tribal familyassistance plan. A special rule exempts from the 60-month TANF benefit time limit any month in which therecipient lives in Indian country or an Alaskan native village with an adult unemployment rate of at least50%. The law makes tribes eligible for TANF loans, but not for bonuses offered to states for highperformance or for cutting non-marital births. HHS has ruled that state funds contributed to an approved tribal assistance plan may becounted toward the spending level (maintenance-of-effort) that a state must achieve to qualify for a full TANFgrant. A 1999 amendment permits tribes, like states, to reserve TANF grants for assistance(ongoing needs and supportive services for the unemployed) in any future year. Since July 1, 2001, tribes alsohave been allowed to reserve unobligated NEW funds for assistance in any future year. The House-passed TANF reauthorization bill ( H.R. 4 ) and the Senate Finance Committee substitute version of H.R. 4 (PRIDE) renew tribal grants at their current level and make Indian tribalorganizations eligible for proposed marriage promotion grants and the proposed employment achievementbonus. Both bills require tribal family assistance plans to provide assurance that tribes have consulted with theirstate(s) regarding the plan's design. The Senate Committee bill also authorizes appropriation of $100 millionannually for five years for a tribal TANF improvement fund, which could be used to provide technical assistanceto tribes, fund competitive grants, and conduct research. The American Indian Welfare Reform Act( S. 751 / H.R. 2770 ) proposes many changes. They include federal payments to statesthat contribute (with TANF MOE funds) to costs of Indian tribal assistance programs, increased tribal fundingfrom the Child Care and Development Block Grant (CCDBG), authority for tribes to receive federal funds forfoster care and adoption assistance, and (on a demonstration basis) to determine eligibility for food stamps,Medicaid, and SCHIP. The 1996 law reserves between 1% and 2% of its child care funds for payments to Indian tribes and tribal organizations, to be subtracted from national totals. Previously no AFDC-related child care funds wereearmarked for Indians. In FY2002, $96 million was allocated to tribes, 2% each of mandatory and discretionaryfunds. (Discretionary funds are provided under the Child Care and Development Block Grant [CCDBG].) Thelaw also allows Indian tribes, subject to HHS approval, to use CCDBG funds for construction. The 1996 welfarelaw authorizes direct federal funding for child support operations to Indian tribes (and, again, Alaska Nativeorganizations) with approved child support plans. By regulation, tribes receive 90% federal funding for the firstthree years, 80% for later years. As of March, 2004, 9 tribes received direct federal funding and handled morethan 21,000 cases. Final regulations replaced interim rules in March. Data compiled by the Division of Tribal Services show that most tribal TANF plans have adopted the 60-month lifetime time limit for federally funded TANF to an adult. The two Oregon tribes (Klamath tribes andConfederated Tribes of Siletz Indians) adopted a limit of 24 months within an 84-month period (similar toOregon state plan limit). Work activities shown in most tribal plans are the same as those specified in TANFlaw, but several tribes make additions. Thus, two Washington tribes list as additional work activities: "teachingcultural activities" and "barrier removal, including counseling, and chemical dependency treatment." TheTanana Chiefs Conference, in Alaska, includes as work activities "approved subsistence hunting, fishing,gathering." Most two tribal plans limit the "service population" to Indians. However, the Red Cliff Band ofLake Superior Chippewa Indians in Wisconsin says it will serve all families, including non-Indians, on thereservation (and tribal member families in Bayfield County); and the White Mountain Apache Tribe in Arizonaalso says it will serve all families on the reservation. The Sisseton-Wahpeton Sioux Tribe serves only one-parentfamilies with its tribal plan; its 2-parent families are aided by BIA's General Assistance program. Table 1 shows that most of the tribal TANF plans have set work participation rates below the all-family rate of50% and the 2-parent family rate of 90% specified for state TANF programs in FY2002. The table also showsthat 36 of the 45 tribal grantees (including the Navajo Nation in Arizona and Utah) receive state funds --claimed as TANF MOE amounts -- to help pay for their programs. The tribes that do not receive state fundingare located in Wisconsin (8 tribes), South Dakota (1 tribe) and New Mexico (part of the Navajo Nation). Table 1. TANF Grants for Tribal Family Assistance Programs (as of September 15, 2004) and Their Work Rules a. These tribes also receive federal funds for the Native Employment Works (NEW) employment and training program. b. For FY2000 c. For FY2001 d. Increased progressively over the three years 2005-07.

The 1996 welfare law (P.L. 104-193) gives federally recognizedIndian tribes (defined to include certain Alaska Native organizations) the option to design and operate their owncash welfare programs for needy children with funds subtracted from their state's block grant for TemporaryAssistance to Needy Families (TANF). As of September 15, 2004, 45 tribal TANF plans were in operation in 16states. Their annual rate of federal funding totaled $134.2 million. The 1996 law also appropriated $7.6 millionannually for work and training activities to tribes in 24 states that operated a pre-TANF work and trainingprogram (now named Native Employment Works -- NEW), authorized direct federal funding to Indian tribes foroperation of child support enforcement programs, and set aside a share of child care funds for them. Theoriginal TANF law was scheduled to expire September 30, 2002, but Congress extended funding through severallaws, most recently through September 30, 2004. Pending are two major TANF reauthorization bills:H.R. 4, as passed by the House, and H.R. 4, as approved by the Senate FinanceCommittee. Both bills would renew tribal TANF grants through FY2008 and make tribal organizations eligiblefor new marriage promotion grants. In addition, the Senate Committee bill would authorize some new funding(tribal improvement fund). This report will be updated for significant developments.

Geriatric assessment, defined as the skillful gathering of information about an elderly person’s health, needs, and resources, is a potentially useful component of any program for frail elderly clients needing home and community-based long-term care. Such assessment is especially relevant to multiservice programs that pay for a wide variety of services, such as the Medicaid waiver programs found in 49 states. These programs are authorized by the Social Security Act, which allows for the waiver of certain Medicaid statutory requirements to enable states to cover home and community-based services as an alternative to client institutionalization. Such waivers, however, need not be statewide and can specifically target selected groups of individuals (for example, the elderly). The home and community-based services must be furnished in accordance with a plan of care aproved by the State Medicaid Agency. The instruments used to determine the level of care, the qualifications of those using these instruments, and the processes involved in assessment are systematically reviewed and must be approved by the administrative staff of the Medicaid program. These controls on the tools, personnel, and processes involved in establishing program eligibility are likely to benefit the care planning process. However, relatively little is known about the assessments used by waiver programs to develop care plans for the elderly, how they are used, what they cover, how they are administered, and the qualifications of those who administer them. The elderly clients who apply for home and community-based care usually undergo cycles of assessment. Depending upon each client’s assessment, the program determines the services that should be delivered to the client over a period of time, utilizing a clinical decision-making process that results in a plan of care. Care planning processes vary among and within the states, and there is no single agreed-upon way to translate the results of assessment into a care plan. However, without good care planning, even the best assessment may not be helpful in achieving the most appropriate services for clients. Starting from this plan, program personnel (or personnel contracted by the program) directly authorize appropriate services and, when services are not available through the waiver program, may provide information to the client on how those services might be obtained. As the client’s needs for services change or a specified period of time passes, program personnel reassess the needs and adjust the care plan accordingly. Each state Medicaid waiver program for the elderly has the freedom to develop and adopt its own assessment instrument with no specific federal guidelines for content or process of administration. Most of the information gathered by these instruments falls under one of six broad domains, which are recommended by experts in geriatric assessment and found in most of the published instruments developed to assess the frail elderly. They are: (1) physical health, (2) mental health, (3) functioning (problems with daily activities), (4) social resources, (5) economic resources, and (6) physical environment. To the extent that these domains are included, the instrument can be thought of as comprehensive. The completion of the assessment instrument is often based on one or more interviews between the client and the assessor. Information from other sources, such as medical records or interviews with family members, may also be included. Regardless of its formal elements, the entire assessment process must be skillfully coordinated by the assessor or assessors involved. This is necessary to maximize the useful information obtained within the limits set by the capacities of the elderly clients being served and their understandable preference to “tell their stories” as they choose. We conducted a literature review on assessment instruments; interviewed experts in geriatric assessment and state and local officials; and visited several state Medicaid programs (California, Oregon, and Florida). From the exhaustive literature review and interviews with the nationally recognized experts identified through the literature, we learned about good practices in geriatric assessment. (See appendix I for a list of experts.) From officials and visits to state programs, we learned about the goals, procedures, and difficulties of assessment in the field and gathered information to help inform our data collection. We then conducted a survey of all 50 states and the District of Columbia about their assessment instruments for the Medicaid waiver programs that provide the elderly with multiple services (in some places referred to as elderly and disabled waiver programs). We asked the head of each waiver program (or the most appropriate staff) to complete a questionnaire and send us a copy of their assessment instruments used to develop the care plans of elderly clients. The questionnaire requested two kinds of information: (1) general information about the program and (2) detailed information about the assessment instrument or instruments used to develop the clients’ care plans, the assessment and care planning processes, and training and educational requirements of the assessors. After an extensive developmental process, we pretested the questionnaire in two states and incorporated necessary changes suggested by state officials. We then mailed the questionnaire to all states and gathered information between July 1994 and January 1995. The District of Columbia and Pennsylvania indicated that they did not have Medicaid waiver programs for the elderly and, therefore, were excluded from our sample. The 49 states with Medicaid waiver programs all responded to our questionnaire. We conducted our work in accordance with generally accepted government auditing standards. All 49 states reported to us that they use an assessment instrument to determine the care plan for each client, including the identification of needed services available both through the waiver program and outside the program. In addition, 43 states use the assessment to determine an elderly person’s functional eligibility for the waiver program (level of care), and 31 states use part of the instrument as a preadmission screen for possible nursing home care. The programs rely upon several types of information to develop care plans, including client’s preference, clinical impression, assessment scores, caregiver’s preference, budgetary caps, and medical records. Most programs use the assessor’s clinical impression, based on the assessment interview, and any scores or ratings generated by the assessment process most or all of the time. (See table 1.) Forty-eight of the programs told us that they “almost always” or “most of the time” provide clients with information about providers from whom they can get services not offered by the waiver program; 45 states provide them with referrals to such services; 35 provide them with assistance in obtaining these services; and 34 of the programs follow up clients to verify that the nonwaiver services have been obtained. It should be noted that some of these nonwaiver services may also be Medicaid-funded, such as home health care provided by Medicaid. We found that although all instruments gather some information on the broad domains of physical health, mental health, and functioning, not all of them cover the other three domains of a comprehensive assessment of an elderly person (84 percent cover social resources, 69 percent cover economic resources, and 80 percent cover physical environment). Within each of the six domains, certain specific topics are covered by a number of instruments. We found that all state instruments consistently gather information on assistance with activities of daily living (for example, bathing, toileting, and dressing). Table 2 shows the relative frequency of occurrence of any coverage whatsoever for each domain and for each topic found in 10 percent or more of the instruments. This list of topics does not represent an accepted standard. Different topics within a domain may yield similar or equivalent information. There may be other topics, not listed, that can also contribute to comprehensive assessment, and for some clients, skillful probing by assessors may be needed to obtain important contextual information not listed on any assessment form. It should also be acknowledged that, in particular instances, selected topics missing from instruments do not imply that states are not informed about these topics. Such information may be available from other sources. Also, the nature of the program or characteristics of the population may make certain information less relevant. For example, the financial eligibility rules of some states may obviate the need to ask about all the topics in the economic resources domain. Such repetition of topics would make the assessment unreasonably burdensome for the clients as well as for those programs with relatively limited resources (staff, time, or money). Less comprehensive instruments should be evaluated in the context of their particular programs to determine if sufficient information is collected about the client’s physical and mental health, functional status, social and economic supports, and home environment to develop an appropriate care plan. We found that although most assessments are conducted as face-to-face interviews, only 35 percent of the instruments specify the wording of any of the interview questions that assessors ask the clients. Further, when the wording is not specified, it is often unclear in what order different elements of information are to be gathered. Instruments with specified wording, however, are usually designed to gather information in a particular order. This lack of uniformity in instrument administration may lead to unnecessary variation in how different clients perceive, and therefore respond to, requests for “the same information.” For example, some replies to questions about depression may differ depending on whether they are asked before or after questions about physical health. Also, questions about activities of daily living, such as bathing, may evoke different replies depending on whether the client is asked if he or she “can bathe” or “does bathe.” Although there may be no universally agreed-upon “correct” wording for such items, once such a wording is decided upon, there may be benefits to employing it consistently within a given program. We found that 53 percent of the programs using a single assessor mention a years-of-experience requirement, and 57 percent of the programs using a team of two assessors mention this requirement for their lead assessor (for the second assessor, it is 50 percent). Moreover, most states require assessors to possess specific professional credentials. Thus, programs attempt in various ways, such as by the adoption of hiring (or contracting) and training standards, to ensure that assessors perform their job competently. However, no particular background or training requirements can guarantee optimal assessment for all clients. We found that only 31 percent of the programs require training the assessor in how to use the instrument, although such training may be obtained without a requirement. Assessors who are not similarly trained in the use of the instrument, regardless of their credentials or other training, may not respond uniformly to common occurrences, such as a client’s fatigue or a request to clarify a question. Assessors may administer the same instrument differently, even with standardized order and wording of the questions, based on differences in clinical training or experience in other situations. In light of the observed variability in waiver program assessments—with respect to instrument content, instrument standardization, and assessor requirements—the experts we consulted and the literature in gerontology make the following suggestions for improvement: First, a number of topics, such as those listed in table 2, have proved useful in assessing the elderly. Programs that do not cover a wide variety of these can increase the comprehensiveness of their assessments by including more of these topics. Second, standardizing the wording and order of questions generally increases the comparability of the clients’ replies. Finally, another important element in achieving uniformity of instrument administration is assessor training in use of the instrument. We have drawn three conclusions about the assessment instruments and their administration. First, we found that although all states use assessment instruments to develop a care plan, there is variation in their level of comprehensiveness. Second, we found that although most assessments are conducted as face-to-face interviews, many state instruments do not have standardized wording. Third, we found that although training in the administration of the instrument may be important in achieving uniformity of administration, many states do not require such training. The Health Care Financing Administrator provided written comments on a draft of this report. (See appendix II.) The agency did not disagree with our findings, but listed some circumstances that help clarify variations across states. Specifically, they noted that waiver programs are frequently administered by different state agencies, which not only bring different perspectives to the assessments, but also use them for a variety of different purposes and may use more than one instrument. Through our state survey, we also found that some states use multiple assessment instruments, and some use them for multiple purposes. In oral comments on our draft report, responsible agency officials made some technical comments. We have incorporated these into the text where appropriate. As discussed with your office, we will be sending copies of this report to the Subcommittee Chairman, to other interested congressional committees and agencies, and to the Department of Health and Human Services and the Health Care Financing Administration. We will also send copies to others who request them. If you or your staff have any questions about this report, please call me or Sushil K. Sharma, Assistant Director, at (202) 512-3092. The major contributors to this report are listed in appendix III. Kathleen C. Buckwalter, Ph.D., University of Iowa Robert Butler, M.D., Mount Sinai Medical Center, N.Y. Donald M. Keller, Project Manager Venkareddy Chennareddy, Referencer We wish to acknowledge the assistance of R.E. Canjar in collecting and organizing the data and Richard C. Weston in ensuring data quality. The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. U.S. General Accounting Office P.O. Box 6015 Gaithersburg, MD 20884-6015 Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders may also be placed by calling (202) 512-6000 or by using fax number (301) 258-4066, or TDD (301) 413-0006. Each day, GAO issues a list of newly available reports and testimony. To receive facsimile copies of the daily list or any list from the past 30 days, please call (202) 512-6000 using a touchtone phone. A recorded menu will provide information on how to obtain these lists.

Pursuant to a congressional request, GAO reviewed how publicly funded programs assess the need for home and community-based long-term care services for the poor disabled elderly, focusing on the: (1) comprehensiveness of the assessment instruments; (2) uniformity of their administration; and (3) uniformity of training for staff who conduct the assessments. GAO found that: (1) all 49 states reviewed use an assessment instrument to determine the long-term care needs of the poor disabled elderly and some also use them for other eligibility determinations; (2) 48 of the programs provide information to their clients about services not covered and most give referrals and assistance to obtain those services; (3) all of the assessment instruments covered physical and mental health and functional abilities of the disabled elderly, but inclusion of their social resources, economic resources, and physical environment ranged from 69 percent to 84 percent; (4) dependence on assistance with daily living activities was the only specific topic included in all instruments; (5) most assessments use face-to-face interviews, but only a minority of them specify the wording of questions; (6) most programs have experience and professional credential requirements for their assessors, but most programs do not require standardized training; and (7) experts believe that assessment instruments could be improved by including more topics, standardizing the wording and order of questions, and training assessors in use of the instruments.

The Department of Veterans Affairs (VA) provides a range of benefits to veterans who meet specific eligibility rules. Benefits are provided through the Veterans Health Administration (VHA), the Veterans Benefits Administration (VBA), and the National Cemetery Administration (NCA). The focus of this report is travel benefits offered through VHA to assist veterans in accessing health care by providing reimbursements for some travel costs. In most cases, veterans must enroll to receive health benefits through VHA. All enrolled veterans are offered a standard medical benefits package ; additional health benefits may be available to veterans based on their veteran status, the presence of service-connected disabilities or exposures, income, and other factors, such as status as a former prisoner of war or receipt of a Purple Heart. In order to improve access to VA health care services, and because veterans may need to travel significant distances to reach VA medical centers or clinics, Congress authorized VA to reimburse some veterans for travel expenses related to medical appointments as part of the medical benefits package with the passage of P.L. 76-432 in 1940. Since its authorization, the Veterans Beneficiary Travel Program has undergone a number of significant legislative and regulatory changes affecting eligibility and the type of transportation covered, as well as the cost to VA for the benefit. Congress has changed mileage reimbursement rates and veteran deductible costs for this program. The most recent changes to the program were made by the Caregivers and Veterans Omnibus Health Services Act of 2010 ( P.L. 111-163 ). Appendix A provides a summary of legislative and regulatory changes to the program. Benefit changes have affected actual and projected program costs; details on program funding are included in Appendix B . Not all veterans are eligible for travel benefits, and not all travel costs are covered by the Veterans Beneficiary Travel Program. VA determines eligibility for Veterans Beneficiary Travel Program benefits based on the characteristics of the veteran, the type of medical appointment, or a combination of the two. Travel benefits are also provided for a limited group of non-veterans. Although the benefits are standardized nationally, specific mileage calculations and reimbursements are made individually at VA's 153 hospitals (medical centers) around the country through their business or travel offices. Time limits also apply for requesting reimbursement. Veterans can receive travel reimbursement if they meet certain criteria, generally related to service connection and income levels. "Service connection" refers to disabilities that veterans have incurred or aggravated in the line of duty in the active military, naval, or air service. Travel reimbursement is provided for veterans rated 30% or more service-connected for travel relating to any condition. Veterans who receive pensions or who would qualify to receive a pension based on income are also eligible for travel reimbursement. Veterans receiving VA pension benefits can receive travel benefits for appointments related to all conditions. Veterans who do not qualify for pensions (e.g., those who did not serve during a period of war), but with annual incomes below the maximum annual rate for VA pensions, can receive benefits for travel related to all conditions. Veterans who can present clear evidence that they are unable to defray the cost of travel can receive benefits for travel related to all conditions. For two categories of appointment, travel costs are covered for all veterans, without regard to income or service-connected disability status. All veterans who travel for Compensation and Pension (C&P) exams have all travel costs covered and do not pay a deductible for the travel. All veterans traveling to a transplant center for transplant care have travel costs covered. Veterans who are rated less than 30% service-connected are eligible for travel reimbursement for appointments that are related to their service-connected condition. A limited group of non-veterans is also eligible for reimbursement of some travel costs related to medical appointments at VA facilities: an attendant of a veteran, if a VA provider determines the attendant is required; donors or potential donors of tissue, organs, or parts to a veteran receiving VA-authorized care; veterans' immediate family members traveling for bereavement counseling related to the death of the veteran in the active line of duty; veterans' immediate family members, guardians, or those in whose home a veteran lives if traveling for consultation, counseling, training, or mental health services relating to a veteran receiving care for a service-connected disability; allied beneficiaries, if the travel and reimbursement have been authorized by the appropriate foreign government agency; and beneficiaries of other federal agencies, when authorized by that agency. Travel benefits are provided only for care that is being paid for by VA, and only for care that has been previously scheduled, unless it is emergency care. In general, for those eligible to receive benefits through the program as described above, VA will provide a per-mile payment for travel by car, reimbursement for "special mode" transportation when justified, and in some circumstances reimbursement for air travel. Veterans must submit requests for reimbursement within 30 days of the travel, although certain cost reimbursements must be requested before the travel takes place. Deductibles apply in most cases. Eligible veterans who drive in private cars to appointments are reimbursed at a per-mile rate for travel both to the appointment and back home. If two or more eligible beneficiaries are riding in the same car, only one mileage reimbursement will be made (i.e., the reimbursement is provided for costs actually incurred, not per person traveling). "Special mode" transportation refers to travel in an ambulance, wheelchair van, or other vehicle specially designed for transporting people with disabilities. Other types of transportation, such as subways, trains, airplanes, and privately owned vehicles, are not considered special mode even if they have been adapted or are capable of transporting people with disabilities. To receive benefits for special mode transportation, the veteran must be eligible for the benefit, as described above, and the special mode transportation must be medically required, as determined by a VA clinician. Reimbursement for special mode transportation must be requested prior to the trip, except in the case of medical emergencies. Special mode transportation from a VA facility to a community emergency facility and back is authorized for reimbursement if the transportation is required because the VA facility could not provide the needed care. Special mode transportation to an emergency facility for treatment can be retroactively authorized if the emergency episode of care is approved for VA payment. The Caregivers and Veterans Omnibus Health Services Act of 2010 clarified that "actual necessary expense of travel includes the reasonable costs of airfare if travel by air is the only practical way to reach a Department facility.'' The veteran's medical condition and any other impediments to the use of ground transportation should be considered in the evaluation of whether travel by air is practical. VA will reimburse for actual cost up to 50% of the government employee rate for meals and lodging when deemed appropriate by VA based on medical condition, distance required to travel, weather conditions, time of appointment, and other factors. Reimbursement for food and lodging should be requested in advance. Tolls, parking fees, luggage fees, and costs for travel by taxi or other hired vehicle may be reimbursed if receipts are offered. Travel benefits are distributed as reimbursements for actual costs incurred (with the exception noted above for meals and lodging capped at 50% of government employee rates), and a deductible applies in most cases. Deductible rates have varied in recent years (see Appendix A ). Current deductible rates are $3 for one-way travel and $6 for round-trip travel, with a monthly cap of $18 (six one-way trips or three round-trips). Deductible waivers are available for those receiving VA pensions or qualifying based on income, and for those traveling for C&P exams. Mileage rates have also changed several times in recent years (see Appendix A ). The current reimbursement rate is set at 41.5 cents per mile. Mileage rate calculation methods vary between VA facilities. Some facilities calculate mileage based on zip codes; others use online mapping tools, such as Mapquest, to determine miles traveled. Veterans are reimbursed based on their current place of residence, whether or not it is the address to which official mail is sent. Generally travel reimbursement is paid only from the place of current residence to the nearest facility that can provide the required care. Veterans are usually able to apply for travel reimbursement at the VA medical center in which their appointment was held, through a travel office or business office within the facility. Medical centers also establish procedures to provide benefits for eligible veterans traveling to Community Based Outpatient Clinics or other facilities under their jurisdiction. Claimants must apply in person or in writing within 30 calendar days of completing the travel. Special mode transportation must be preapproved for reimbursement. In cases of emergency that involved special mode transportation, applications for reimbursement must be made within 30 days. If a veteran does not qualify for travel reimbursement based on eligibility criteria, the veteran may be able to access other resources to assist in funding travel. VA facilities will provide reduced-fare request forms to veterans for submission to bus companies and other transportation providers. The transportation provider determines whether reduced fare will be offered to the veteran. Veterans may also be able to access transportation assistance or services from non-governmental veterans service organizations, such as the Disabled American Veterans' (DAV) Transportation Network. The only exceptions to the service-connected disability or income qualification eligibility criteria for the benefit are for those traveling for a C&P exam or those traveling to a transplant center for transplant care. Operation Enduring Freedom/Operation Iraqi Freedom/Operation New Dawn veterans, veterans with spinal cord injuries, and other "special groups" must meet standard eligibility criteria to receive the benefit. Only veterans receiving inpatient VA care and considered to be in a "terminal condition" (expected to live six months or less) are eligible to receive travel benefits to relocate to a health care facility that is not located in the area where they lived when they entered their current facility. VA will not pay return travel for a beneficiary who has been irregularly discharged. If a veteran arrives at a medical center for non-emergency services without an appointment and receives care or services, VA will approve payment only for return trip costs; if no services are provided, VA will not approve payment for travel. If a veteran has a travel claim denied, the veteran must be provided with written notice of the decision. Veterans have rights to appeal the decision, which can be filed with the Board of Veterans Appeals. Appendix A. Beneficiary Travel Program History Appendix B. Beneficiary Travel Program Funding According to the Department of Veterans Affairs, the costs associated with the Travel Beneficiary Program have risen in recent years due to the increased number of veterans claiming mileage reimbursement, a rise in the average number of claims per veteran, and higher costs per veteran claim. VA showed a 30% increase in the number of veterans claiming reimbursement (estimated at 450,000 in FY2008 and 586,000 in FY2009), and showed the average number of claims per veteran increased from 5.5 to 7.1 during that same period. As shown in Table B -1 , spending for the Beneficiary Travel Program increased by approximately 285% between FY2006 and FY2010. It is estimated that VA will spend approximately $798 million in FY2011. It should be noted that the funding for this program comes directly from the VA health care appropriation.

The Department of Veterans Affairs administers a Travel Beneficiary Program to help alleviate the costs of travel to medical appointments for eligible veterans. Travel benefit eligibility for veterans is based on either the characteristics of the veteran, the type of medical appointment, or a combination of the two. Certain people who are not veterans, including family members or others accompanying veterans to appointments and organ donors, are also eligible for the benefit. Travel costs are reimbursed to beneficiaries, usually after a deductible. Costs covered by the program include a per-mile rate for travel in private vehicles, "special mode" (e.g., ambulance) travel in certain circumstances, and in some cases airfare and meals and lodging. This report offers an overview of the benefit and includes a question-and-answer section with basic information about eligibility, the types of travel covered and how benefits are calculated, and how to apply for the benefit. The report also includes an appendix containing a review of major legislative and regulatory changes to the benefit since its inception in 1940 (P.L. 76-432) through the most recent changes enacted in 2010 (P.L. 111-163). Recent changes are primarily related to mileage reimbursement rates and deductibles. Another appendix details funding for the program between FY2006 and FY2011. Spending for the program has increased by 285% between FY2006 and FY2010, and the number of veterans claiming travel reimbursement has increased by 30% during that time.

This report provides summary data on the number of Senators and Members of the House who first entered Congress between the 64 th Congress (1915-1917) and the 114 th Congress (2015-2016). Since the convening of the 64 th Congress, 4,201 individuals have entered the House of Representatives for their first, or "freshman," terms as a Representative. An additional 28 have begun service as a Delegate or Resident Commissioner. During th e same period, 844 individuals began their first terms in the Senate. First-term membership is divided into two broad categories in each chamber: Members chosen prior to the convening of a Congress, and those chosen after a Congress convenes. The "pre-convening" category includes Members who were elected in the general election, and in any special elections held prior to the convening of a Congress. The 64 th Congress was chosen as the starting point for data collection because it was the first Congress for which Senators were chosen by direct popular election. This provides a single date upon which most Members in both chambers are chosen to serve prior to the convening of a Congress. In the Senate, the pre-convening category also includes any Senators who were appointed to the Senate prior to the convening of a new Congress. The "post-convening" category includes Members who joined either chamber after the convening of a Congress. Means by which seats may be filled by a post-convening Member in either chamber include special elections held after a Congress convenes or electoral challenges that result in a new Member being seated. In the Senate, a first-term Member may also join the chamber through appointment or special election. Members whose congressional service in one chamber is not consecutive are counted as first-term Members in the first instance of their service as a Member, if that term occurred between the 64 th and 114 th Congresses. For example, a Representative who served in the 87 th Congress (1961-1962), and 89 th Congress (1965-1966), but not the 88 th Congress (1963-1964), would be counted as a first-term Representative only for the 87 th Congress. Members with service in the House and Senate are listed in each capacity in which they served a first term, if those terms occurred between the 64 th and 114 th Congresses. The resulting data, combining pre-convening and post-convening first-term Members, provide a count of all Members who served a first term in the House or Senate. Data on pre-convening first-term Members provide partial insight into the extent of membership turnover in the House and Senate since 1915, and are discussed in greater detail below. Post-convening first-term Member data do not reveal clear patterns within individual Congresses, or over time. This is due in part to the wide range of reasons that a seat in the House and Senate may become vacant in the course of a Congress, and the circumstances under which it may be filled. Data describing the number and partisan breakdown of first-term membership in the Senate are provided in the " Data Tables " section in Table 6 . Data describing first-term Representatives are available in Table 7 . Table 8 in the same section provides information for Members of the House serving as a Delegate or Resident Commissioner. Data on pre-convening first-term Members provide insight into the extent of membership turnover in the House and Senate. Table 5 in the " Data Tables " section summarizes the number of pre-convening Members entering the House and Senate at the beginning of a new Congress, and as a percentage of the seats in each chamber. These data identify most of the turnover in each chamber, but they may not identify all of the changes in every Congress, since they only reflect the number of Members who served their first term in the chamber. Some Members who had prior service that is not consecutive may have been reelected to the House, or reelected or appointed to the Senate. In those circumstances, the data in Table 5 may understate the extent of change in some Congresses. Since the 64 th Congress, the average turnover in the House with each election has been 72 seats, or 16.57%. The election with the greatest change occurred in 1932, resulting in a turnover of 158 seats, or 36.32% of the Representatives between the 72 nd Congress (1931-1933) and the 73 rd Congress (1933-1934). The smallest pre-convening turnover among Representatives in the House occurred in the 101 st Congress (1989-1990), with a change in 30 seats, or 6.90%. Figure 1 provides a graphic representation of the percentage change in House membership between the 64 th Congress and the 114 th Congress. The data suggest that while there is no consistent pattern of change from Congress to Congress, the overall number of new, pre-convening, first-term Representatives has declined. This appears to be consistent with some academic findings that argue that the durations of Members' careers have been increasing in the past century. Table 1 provides data for the House on the number of seats and percentage change of the five Congresses that saw the greatest change in pre-convening Representatives between the 64 th and 114 th Congresses. With one exception, the 103 rd Congress (1993-1994), these changes occurred in Congresses convening prior to the 74 th Congress (1935-1936). Table 2 provides data on the number of seats and percentage change of the six Congresses that saw the least change between the 64 th and 114 th Congresses. The smallest pre-convening turnover among Representatives in the House occurred in the 101 st Congress (1989-1990), with a change in 30 seats, or 6.90%. All of the smallest changes occurred after the 89 th Congress (1965-1966). The distribution of greater changes occurring earlier in the period between the 64 th -114 th Congresses, and smaller changes happening in the later period may also support contentions regarding the duration of Representatives' careers. Data describing the number and partisan distribution of first-term Representatives are provided in Table 7 . Table 8 provides similar information for Members of the House serving as a Delegate or Resident Commissioner. As shown in Table 5 , in the " Data Tables " section, since the 64 th Congress, the average number of pre-convening first-term Senators each Congress has been 10. Table 6 shows that the 79 th Congress (1945-1946) produced the greatest change in membership with 33 new Senators, 34.38%, taking seats in the chamber in the course of the Congress. Figure 2 provides a graphic representation of the percentage change in first-term Senate membership between the 64 th Congress and the 114 th Congress. The data suggest that while there is no consistent pattern of change from Congress to Congress, the overall number of pre-convening, first-term Senators has declined since the 64 th Congress. Changes in Member career patterns in the Senate may explain some of the change. Table 3 provides data on the number of Senate seats and percentage change of the five Congresses that saw greatest change between the 64 th and 114 th Congresses. All of those Congresses occurred before the 87 th Congress (1961-1962). The smallest turnover of pre-convening Senators occurred in the 102 nd Congress (1991-1992), with a change of three seats. In the 73 rd Congress (1932-1933), a 15-seat change amounted to a percentage change of 15.63%, since the Senate had 96 seats. Table 4 provides data on the number of seats and percentage change of the seven Congresses that saw the least change between the 64 th and 114 th Congresses. Smaller changes appear to be more evenly distributed through the latter half of the Congresses observed. This may be explained in part by electoral patterns. While the entire House stands for election every two years, only one-third of the seats in the Senate are subject to election in the same period; barring change in membership for other reasons, this assures that two-thirds of Senate membership will remain unchanged. Data describing the first-term membership of the Senate are provided in Table 6 .

This report provides summary data on the number of Senators and Members of the House of Representatives who first entered Congress between the 64th Congress (1915-1917) and the 114th Congress (2015-2016). First-term membership is divided into two broad categories in each chamber: Members chosen prior to the convening of a Congress, and those chosen after a Congress convenes. The resulting data, combining pre-convening and post-convening first-term Members, provide a count of all Members who served a first term in the House or Senate. Since the convening of the 64th Congress, 4,201 individuals have entered the House of Representatives for their first, or "freshman," terms as Representatives. An additional 28 have begun service as Delegates or Resident Commissioners. During the same period, 844 individuals began their first terms in the Senate. Data on pre-convening first-term Members provide partial insight into the extent of membership turnover in the House and Senate since 1915. In both chambers, the data suggest that the overall number of first-term Members elected to Congress who take their seats at the convening of a new Congress has declined since the 64th Congress. This appears to be consistent with findings that argue that the duration of Members' careers has been increasing in the past century. Taken on their own, post-convening first-term Member data do not reveal clear patterns within individual Congresses, or over time. This is due in part to the wide range of reasons that a seat in the House and Senate may become vacant in the course of a Congress, and the circumstances under which it may be filled.

I n situations where a private-sector company goes out of business, questions may arise concerning how the company's pension plan may be terminated. The Employee Retirement Income Security Act of 1974 (ERISA), provides a comprehensive federal scheme for the regulation of pension and other employee benefit plans, and the Act includes a plan termination insurance program for defined benefit pension plans. Various types of pension plans are not covered by the insurance program, including defined contribution plans (individual account plans), government plans, and church plans. The insurance program distinguishes between single-employer plans and multiemployer plans (i.e., collectively bargained plans to which more than one company makes contributions). This report only discusses the termination of single-employer plans. The insurance program is administered by the Pension Benefit Guaranty Corporation (PBGC). The PBGC has two primary responsibilities. First, it oversees plan terminations, which is the focus of this report. Second, the PBGC pays certain guaranteed benefits under the plan, should the plan be terminated with insufficient funds to pay these benefits. For more information on the PBGC and its payment of benefits, see CRS Report 95-118, Pension Benefit Guaranty Corporation (PBGC): A Primer , by [author name scrubbed]. This report provides an overview of the three types of plan terminations and the PBGC's role in each type of termination. The report also provides a brief overview of the liability of an employer following a plan termination, enforcement and penalties relating to the plan termination provisions. ERISA provides for three types of single-employer plan terminations: standard, distress, and involuntary. The plan administrator initiates a standard or distress termination, whereas the PBGC initiates an involuntary termination. A standard termination occurs when a plan administrator decides to terminate a plan that has assets sufficient to meet its benefit liabilities. The plan administrator initiates the termination by giving written notice to each affected party of the intent to terminate the plan between 60 and 90 days in advance of the proposed termination date. He or she must then report information about the plan to the PBGC, including a certification by an enrolled actuary that the plan's assets are sufficient to meet all benefit liabilities. The plan administrator is also responsible for informing the plan participants and beneficiaries of the benefits due them, as well as information used in determining benefit liabilities. The PBGC's involvement in a standard termination is minimal, and its role is basically to confirm that the above requirements have been met. Upon receiving the plan information, the PBGC generally has 60 days to review it and either approve the termination or send out a notice of noncompliance. If the PBGC determines the requirements have been met, the termination proceeds. The plan administrator then distributes the plan's assets to participants and beneficiaries by purchasing annuities from a commercial insurer or by other permissible means. If there are missing participants, the plan administrator may, after a diligent search, purchase an annuity for these individuals or transfer their distributions to the PBGC, which will hold them until the participants are found. The plan administrator's final action is to certify to the PBGC that the assets have been distributed, and the plan is terminated. A distress termination occurs when a plan administrator seeks to terminate a plan that does not have sufficient assets to cover all the benefits owed to plan participants and beneficiaries. The plan may be terminated only if certain criteria are met, such as if its contributing sponsor, or a member of the sponsor's controlled group, (1) has filed (or has had filed against such person) a petition for liquidation or reorganization in bankruptcy or insolvency proceedings, and certain other requirements have been met, or (2) has demonstrated that termination is required to enable payment of debts while staying in business or to avoid unreasonably burdensome pension costs caused by a declining workforce. In order to initiate a distress termination, a plan administrator must give written notice of an intent to terminate the plan to each affected party, including the PBGC, at least 60 days and (except with PBGC approval) not more than 90 days before the proposed termination date. After the notice of intent is submitted to affected parties, the plan administrator must submit certain additional information to the PBGC, which may include a certification by an enrolled actuary regarding the amount of the current value of the assets of the plan, the actuarial present value of the benefit liabilities under the plan, and whether the plan is sufficient to pay benefit liabilities. Based on this information, the PBGC determines whether the distress termination criteria are met (or whether the PBGC is unable to make such a determination) and must notify the plan administrator of its finding as soon as practicable. If the distress criteria have not been met, the plan continues to operate. If the criteria are met, the PBGC must then determine whether the plan's assets are sufficient to pay the benefits guaranteed by the PBGC and/or meet all benefit liabilities. These amounts may be different because, as mentioned, the benefits guaranteed by the PBGC under the plan insurance termination program are subject to statutory limitations; therefore, the benefit liabilities owed under the plan may exceed the benefits guaranteed by the PBGC. If the PBGC determines that the plan's assets are sufficient to pay benefit liabilities, a plan administrator must carry out termination of the plan under the procedures of a standard termination, and take additional action if necessary. Similarly, if the PBGC determines that a plan has sufficient assets to cover guaranteed benefits, but not benefit liabilities, the plan administrator will be required to distribute plan assets as with a standard termination, certify to the PBGC that the distribution has occurred, and take other actions as necessary to terminate the plan. If the plan's assets are not sufficient to pay the guaranteed benefits, the PBGC must commence involuntary termination proceedings (discussed below). If the plan administrator discovers during the distribution that the plan's assets are not sufficient to cover benefits, he or she must notify the PBGC, which may then be required to initiate an involuntary termination. If there are missing participants, the plan administrator may purchase an annuity for these individuals, or transfer their distributions to the PBGC after a diligent search. An involuntary termination occurs when the PBGC decides a plan should be terminated. The PBGC must initiate termination proceedings once it determines a plan does not have assets available to pay benefits currently due. The PBGC may seek to terminate a plan if the plan has not met the minimum funding requirements or there has been notification from the Treasury Secretary that a notice of deficiency concerning the initial tax on a funding deficiency has been mailed; the plan will not be able to pay benefits when due; a distribution of at least $10,000 has been made to a participant who is a substantial owner of the sponsoring company and, immediately after the distribution, the plan has unfunded nonforfeitable benefits; or the long-run loss to the PBGC may reasonably be expected to increase unreasonably if the plan is not terminated. A trustee, who may be the PBGC, may be appointed to administer the plan until it is ordered to be terminated. The trustee may be appointed by a U.S. district court upon petition by the PBGC or plan administrator, or the PBGC and plan administrator may agree to the appointment without court involvement. Once appointed, the trustee is responsible for the plan's administration, including management of the plan's assets. After the PBGC has given notice to the plan administrator, the plan may be terminated in one of two ways. First, the PBGC may file a petition with the U.S. district court for a ruling that the plan must be terminated to protect the participants' interests, to avoid an unreasonable deterioration of the plan's financial condition, or to avoid an unreasonable increase in the PBGC's liability. If a trustee has been appointed, he or she may intervene in the proceeding. The PBGC may file the petition regardless of whether there is a pending proceeding (1) involving bankruptcy, mortgage foreclosure, or equity receivership; (2) to reorganize, conserve, or liquidate the plan or its property; or (3) to enforce a lien against the plan's property. Furthermore, the court may stay any pending proceedings that involve plan property. If the court agrees with the PBGC that the plan should be terminated, the court will then appoint a trustee, or authorize the existing trustee, to terminate the plan. Alternatively, the PBGC and plan administrator may agree to terminate the plan without court proceedings. There is no requirement under ERISA that plan participants and other interested parties receive notice or an opportunity to be heard prior to the PBGC and plan administrator coming to an agreement to terminate the plan. In a standard termination, the plan sponsor has no further liability to the PBGC or plan participants. The plan sponsor may be able to recapture any assets remaining after participants have received their share, which is known as a "reversion." A reversion may be subject to an excise tax at a 20% rate, which is increased to 50% if the plan sponsor does not take certain actions, such as establishing a qualified replacement plan. In a distress termination and an involuntary termination, the plan sponsor and members of its controlled group are jointly and severally liable to the PBGC for, among other things, the amount that the benefit liabilities exceed plan assets, with interest, at termination. The PBGC will have a claim to recover at least some of these amounts. If successful, the PBGC will pay some of the recovery to plan participants as additional benefits and will keep the remaining amount to help cover its losses. The employer's payment for the liability is due on the plan's termination date. The PBGC is authorized to make arrangements with the liable parties for the payments, and any amount in excess of 30% of the collective net worth of the sponsor and controlled group will be paid under commercially reasonable terms. In addition, the PBGC may claim a lien for up to 30% of the collective net worth of the sponsor and controlled group. The PBGC may bring a civil action in U.S. district court to enforce the lien, which generally must be filed within six years of the plan's termination date. The lien has the same priority as a federal tax lien in Section 6323 of the Internal Revenue Code and is treated as a federal tax lien in bankruptcy proceedings. If a company sells or transfers a business with an underfunded pension plan in order to evade liability and the plan is ended within five years of the sale or transfer, ERISA provides that the company can still be treated as a contributing sponsor at the plan's termination date. Thus, the company may be held liable for the unfunded liabilities. The PBGC is broadly authorized to make any investigation it deems necessary to enforce ERISA and may assess a penalty against anyone who fails to provide a required notice or other material information. The penalty is limited to $1,000 for each day the failure occurs. In addition, plan participants, beneficiaries, fiduciaries, and sponsors who are adversely affected by an action of another (other than the PBGC) that violates the termination provisions may file suit in U.S. district court to enjoin the action or obtain other equitable relief. Employee organizations representing affected participants and beneficiaries are also able to file a claim, and the PBGC has the right to intervene in any action.

Questions may arise regarding the pensions of private-sector workers and how pension plans may be terminated, particularly in instances where a company experiences financial difficulties. The Employee Retirement Income Security Act (ERISA) regulates plan terminations and provides for three types of single-employer plan terminations—standard, distress, and involuntary—and imposes different responsibilities on the Pension Benefit Guaranty Corporation (PBGC) for each type. A standard termination occurs when a plan administrator decides to terminate a plan that has assets sufficient to meet its benefit liabilities. The PBGC's involvement in a standard termination is minimal, with its role basically limited to confirming all legal requirements have been met. In a standard termination, the plan sponsor has no further liability to the PBGC or plan participants. The sponsor may be able to recapture any assets remaining after participants have received their share, although the reversion may be subject to tax. A distress termination occurs when a plan administrator seeks to terminate a plan that does not have sufficient assets to cover all the benefits owed to plan participants and beneficiaries. The PBGC is responsible for ensuring that all criteria for termination have been met, as well as for determining whether the plan's assets are sufficient to pay the guaranteed benefits and/or meet all benefit liabilities. Meanwhile, the plan sponsor and members of its controlled group are jointly and severally liable to the PBGC for the amount that the benefit liabilities exceed plan assets, with interest, at termination. An involuntary termination occurs when the PBGC decides a plan should be terminated. The agency must initiate termination proceedings once it determines a plan does not have assets available to pay benefits currently due. It may seek termination under certain circumstances, including the plan has not met the minimum funding requirements; the plan will not be able to pay benefits when due; or the long-run loss to the PBGC may be expected to increase unreasonably if the plan is not terminated. In an involuntary termination, the sponsor and controlled group are jointly and severally liable to the PBGC for the unfunded liabilities. The PBGC is broadly authorized to make any investigation it deems necessary to enforce ERISA and may assess a penalty against anyone who fails to provide a required notice or other material information. In addition, plan participants, beneficiaries, fiduciaries, and sponsors who are adversely affected by an action of another that violates the termination provisions may file suit in U.S. district court to enjoin the action or obtain other equitable relief. Employee organizations representing affected participants and beneficiaries are also able to file a claim, and the PBGC has the right to intervene in any action.

RS21868 -- U.S.-Dominican Republic Free-Trade Agreement Updated January 3, 2005 On August 5, 2004, representatives of the United States, the Dominican Republic, and five Central American countries signed a regional free-trade agreement(DR-CAFTA) among their countries. The United States first had concluded a free-trade agreement with the CentralAmerican countries (CAFTA) in January2004. Later, on March 15, 2004, the United States and the Dominican Republic announced that they had concludeda bilateral trade agreement that from theoutset of negotiations was intended to be integrated into (or "docked onto") CAFTA. (8) The USTR described the outcome at the time: "With its integration intothe CAFTA, the Dominican Republic has assumed the same set of obligations and commitments as Costa Rica,Honduras, El Salvador, Guatemala, andNicaragua. As with the Central American countries, individual market access schedules were negotiated with theDominican Republic for goods, agriculture,services, investment and government procurement." (9) Under the agreement reached with the Dominican Republic FTA, 80% of U.S. exports of non-agricultural products would become duty-free immediately, withremaining duties phased out over 10 years. (10) U.S.sectors that would have immediate duty-free access include information technology products, agriculturaland construction equipment, paper products, wood, pharmaceuticals, and medical and scientific equipment. U.S.autos and auto parts would be able to enterduty-free after five years. More than half of U.S. agricultural exports would receive duty-free treatment immediately, including corn, cotton, wheat, soybeans, many fruits and vegetables,and processed food products. Tariffs would be phased out on most agricultural products within 15 years and on allagricultural products by 20 years. Beef,pork, poultry, rice, and dairy products would become duty-free under tariff-rate quotas. Most U.S. agriculturalproducers support the agreement. For example,the U.S. Grains Council announced that, in partnership with the National Grain Sorghum Producers and the NationalCorn Growers Association, it"...applaud[s] the successful negotiations..." of the FTA. (11) An official with the Grocery Manufacturers of America said the Dominican Republic "'...is a greatmarket for food, agriculture, and beverage products,'...[and] an excellent potential market for U.S. beer, snack foods,pet food, nuts, and breakfast cereals." (12) The sugar provisions in the agreement with the Dominican Republic do not seem as controversial as those reached with the Central American countries. Thecontinuing precedent of market-opening, however, worries the U.S. sugar industry. The tariff-rate quota (TRQ) onsugar for the Dominican Republic wouldincrease by 10,000 metric tons the first year, increase by 2% annually for years 2-15, then increase by a smalleramount in perpetuity. The tariff on above-quotaimports would not change. Dale Hathaway, a senior fellow at the National Center for Food and Agriculture Policy,said the increase in the DominicanRepublic's cap on sugar was "not significant." (13) The U.S. Sugar Industry Group argued, however, that more imports from the Dominican Republic couldjeopardize the stability of domestic prices, which would help neither country. (14) Textiles and apparel from the Dominican Republic would become duty-free and quota-free immediately, if they met the agreement's rules of origin, whichinclude general rules for all signatories and specific rules for each country. As with the other CAFTA parties, theDominican Republic would be allowed to useinputs also from Mexico or Canada to meet cumulation requirements for apparel or clothing. The American TextileManufacturers Institute, which representsU.S. textile producers, said that CAFTA could lead to reduced U.S. employment in the textile industry. (15) The American Apparel and Footwear Association(AAFA), which represents the North American apparel industry and its suppliers, said however, "...because manyU.S. companies maintain production-sharingrelationships with the [Dominican Republic], swift implementation of the [FTA] will likely have a positiveeconomic impact in the United States...." (16) An unresolved issue would be apparel made under co-production arrangements with Haiti. CBTPA benefits expire the earlier of: (1) September 30, 2008; or(2) the date on which the FTAA or another FTA as specified enters into force between the United States and aCBTPA beneficiary country ( P.L. 106-200 ,Section 211). Thus, if the FTA between the Dominican Republic and the United States enters into force, articlesco-produced by Haiti and the DominicanRepublic might no longer qualify under CBTPA. The Administration said it would work with the Congress so thatHaiti could continue to be eligible underCBTPA for apparel with inputs from the Dominican Republic. (17) The Dominican Republic signed on to the principles and standards under CAFTA's chapter on intellectual property rights with its own transition periods formeeting certain obligations. In late 2003, the International Intellectual Property Alliance (IIPA), a coalition of tradeassociations representing copyrightindustries, called broadcast piracy in the Dominican Republic "...the worst in the entire hemisphere." (18) As part of the bilateral FTA, the DominicanRepublicsigned two side documents committing it to act against broadcast or cable piracy. U.S. industry advisors want theU.S. Government to monitor vigilantly theimplementation of the side documents and the agreement. (19) The USTR also expressed uncertainty, saying the FTA "...will require the Dominican Republic toupgrade considerably the level of intellectual property protection...." (20) On government procurement, cross-border trade in services, financial services, and investment, the Dominican Republic signed on to the general principles ofeach CAFTA chapter but negotiated its own list of specific concessions. For example, in the chapter on governmentprocurement, all signatories, including theDominican Republic, would accept general principles such as national treatment and transparency, but eachsignatory would observe these principles only withrespect to its own negotiated list of agencies and its own thresholds for contract amounts covered by the chapter. Similarly, the chapters on cross-border tradein services, financial services, and investment include general principles such as nondiscriminatory treatment, butthey have their own negotiated lists ofservices that are exempt from the general principles. The Dominican Republic acceded to almost all of the other provisions concluded in the CAFTA, including the chapters on labor and the environment. Underthose chapters, CAFTA parties agreed they would enforce their domestic labor and environmental laws but wouldretain the right to exercise discretionregarding investigations and related matters. They recognized that it is inappropriate to weaken labor andenvironmental laws to encourage trade, and agreed toensure access to judicial proceedings. The text would establish governmental labor and environmental committeesto oversee implementation, and other bodieswould do further cooperative work. The labor and environment chapters link to a dispute process under which, ifa party wins a labor or environmentalcomplaint, the losing party could be assessed monetary damages. The U.S. Trade Representative says that the FTA with the Dominican Republic "...will ensure effective enforcement of domestic labor laws, establish acooperative program to improve labor laws and enforcement, and build the capacity of the Dominican Republic tomonitor and enforce labor rights." (21) TheU.S. Department of State, however, has recognized that there have been widespread problems with putting workerrights into practice, even though theConstitution of the Dominican Republic and its 1992 Labor Code provide for broad worker rights. (22) Representatives of the AFL-CIO and theDominican laborgroup Consejo Nacional de Unidad Sindical (CNUS) have called for further reform of Dominican laws, effectiveenforcement provisions that allow for tradesanctions, and protection against trade law violations. (23) Human Rights Watch reports that women "...who become pregnant are routinely fired from jobsandshut out of employment in the Dominican Republic's export-processing sector," and such abuse of workers wouldbe allowed to continue, because CAFTAdoes not prohibit workplace discrimination. (24) Workers' groups also fear the loss of protections under current U.S. unilateral trade programs such as CBI. (25) The Dominican Republic also acceded to other chapters of CAFTA, including dispute settlement, trade remedies, electronic commerce, andtelecommunications. These chapters would establish a process for resolving disputes, set out rules for safeguards,keep transmission of digital productsduty-free, and ensure certain standards affecting suppliers of telecommunications services. There are also chapterson customs administration, technical barriersto trade, sanitary and phytosanitary measures, and transparency of laws and regulations. The Agreement wouldestablish a Committee on Trade CapacityBuilding. In the last months of 2004, a newly passed tax in the Dominican Republic made that country's participation in the FTA tenuous. In September 2004, theDominican Republic enacted a revenue measure to meet conditions for a loan by the International Monetary Fund. The revenue measure included a 25%increase in the tax on soft drinks with high-fructose corn syrup. U.S. trade officials warned that the 25% taxthreatened the FTA that the two countries justsigned. Senate Finance Committee Chairman Grassley warned that the tax would jeopardize Senate support for theagreement. (26) Representative Rangel,Ranking Member on the House Ways and Means Committee, however, called the Administration's threat to dropthe Dominican Republic from the tradeagreement "inappropriate and unfortunate." (27) TheDominican Republic responded to the opposition by repealing the 25% tax in the last days of 2004. It is uncertain when the Administration might submit implementing legislation for DR-CAFTA to the Congress. Regardless of when legislation might beintroduced, it is expected to be controversial.

On March 15, 2004, the United States and the Dominican Republic concluded a draftfree-trade agreement tointegrate the Dominican Republic into the earlier signed Central American Free-Trade Agreement (CAFTA). Thefinal agreement (DR-CAFTA) was signed byall parties on August 5, 2004. The Dominican Republic would have its own market access provisions, but wouldaccept the rest of the CAFTA framework. Legislation to implement DR-CAFTA might be considered in the 109th Congress. This report willbe updated as developments occur.

The Florida Everglades is a unique network of subtropical wetlands that is now half its original size. The federal government has had a long history of involvement in the Everglades, beginning in the 1940s with the U.S. Army Corps of Engineers constructing flood control projects that shunted water away from the Everglades. Many factors, including these flood control projects and agricultural and urban development, have contributed to the shrinking and altering of the wetlands ecosystem. Federal agencies began ecosystem restoration activities in the Everglades more than 15 years ago, but it was not until 2000 that the majority of restoration activities became coordinated under an integrated plan. With the Water Resources Development Act of 2000 (WRDA 2000; P.L. 106-541 ), Congress approved the Comprehensive Everglades Restoration Plan (CERP) as a framework for Everglades restoration. The legislation authorized $700 million for the federal share of appropriations for initial projects. According to the process established in WRDA 2000, additional Everglades projects are to be presented to Congress for authorization as their planning is completed. Once authorized, the projects will be eligible to receive federal appropriations, but must also receive appropriations from the State of Florida in order to be completed. In WRDA 2007 ( P.L. 110-114 ), three additional projects were authorized. Indirectly related to combined federal and state work under CERP is a subset of Everglades restoration projects being undertaken by the state. These projects may contribute to Everglades restoration, but are not formally credited toward non-federal requirements under CERP. The River of Grass acquisition by the State of Florida is the most recent of these "non-CERP" projects by the state. It involves a proposed land acquisition agreement by the South Florida Water Management District (SFWMD) to purchase large tracts of land south of Lake Okeechobee from the U.S. Sugar Corporation. The goal of the purchase is to acquire lands that will improve water quality and help regulate outflows from Lake Okeechobee. Under the plan, SFWMD would remove U.S. Sugar land from cultivation for sugarcane and citrus farming, and use it to move, store, and treat water flowing south to the Everglades. This proposal is of interest to Congress because it could affect the state's ability to contribute funding under CERP and, as a result, has the potential to alter the schedule of work on some CERP projects. The River of Grass land acquisition dates to mid-2008, and has been revised on multiple occasions since then. In June 2008, Florida Governor Charlie Crist and the U.S. Sugar Corporation announced that the State of Florida would pursue purchasing all of the firm's agricultural lands and assets (including 187,000 acres of farmland and additional associated sugar and citrus processing facilities) at a cost of $1.75 billion. The acquired sugarcane and citrus farmland around Lake Okeechobee would be used to store and treat water flowing south toward the Everglades and eventually into Florida Bay. Based on subsequent real estate evaluations, a slightly scaled-back version of the original proposal (180,000 acres) was approved by the SFWMD Governing Board in December 2008, at an estimated cost of $1.34 billion. The land acquisition would be financed by the sale of bonds issued by SFWMD, which would be repaid from a portion of the property taxes collected by the 16 counties that comprise SFWMD. Under Florida law, these bonds are subject to judicial review to determine whether they serve a "valid public purpose." In May 2009, SFWMD announced an amended proposal that further scaled back the original proposal. (See Table A-1 .) Under the amended proposal, SFWMD would purchase 40% of the lands originally envisioned (i.e., 73,000 acres) for $536 million. Notably, U.S. Sugar would lease back some of the land sold to SFWMD for a minimum of seven years, with provisions that would allow this arrangement to be extended for up to 20 years. SFWMD would have the option to acquire the other 107,000 acres included in the initial plan at a fixed price per acre during the first three years, and at the appraised market value during the next seven years. As a result of a combination of factors, including ongoing financial difficulties, SFWMD announced in August 2010 a second amended purchase agreement. This purchase, which proposes to scale down the River of Grass acquisition yet again, was approved by the SFWMD Governing Board on August 12, 2010. Under the revised agreement, SFWMD will purchase 26,800 acres immediately at a cost of $197 million. (See Figure A-2 .) The acreage consists primarily of sugarcane and citrus acreage in Hendry and Palm Beach Counties, and the majority of it will be leased back to U.S. Sugar Corporation until restoration projects can be fully designed. The remainder of the land from the initial proposed purchases (153,200 acres) would be available for optional purchases over a 10-year period. In contrast to previous versions of the acquisition, this land would be bought directly with SFWMD funds, and will not be funded through bonds. Since late 2008, opponents have filed objections in state court to the bonds initially issued by SFWMD. These opponents claim that SFWMD did not have authority to finance the transaction because the acquisition is not a "valid public purpose." A major sugar producing firm, Florida Crystals, has argued that the purchase gives an unfair advantage to its main competitor at taxpayer expense. Additionally, the Miccosukee Tribe of Indians, whose reservation lies south of U.S. Sugar lands, has argued that SFWMD is not financially able to meet the terms of the deal, which does not provide public benefits in the form of Everglades restoration. Supporters, including SFWMD and some environmental groups, argue that the land acquisition is in the public interest and will contribute significantly toward ecosystem restoration goals. On April 7, 2010, the Florida Supreme Court heard arguments from all sides on the opponents' appeal of an earlier court ruling that limits the amount of bonds the District could issue. The court's final decision could affect the latest version of the land acquisition, which will not be finalized until October 11, 2010. Several questions have been raised regarding previous versions of the proposed land acquisition by the State of Florida. Some questions center on the potential advantages and disadvantages of the land sale for restoring the Everglades, the effect of the land acquisition on Florida's role in implementing restoration projects under CERP, and the overall effect of the land acquisition on reducing excessive phosphorus in the ecosystem. Proponents of the land purchase point out several restoration benefits that they expect to result from the land acquisition. As currently proposed, the purchase would eventually take approximately 42 square miles of land in the Everglades Agricultural Area (EAA) out of production. This land was chosen for its high value and ability to contribute to other restoration goals. For instance, the 17,900 acres proposed for purchase in Hendry County are noted by SFWMD to be in the C-139 basin, an area with historically high phosphorus loads. Once this land is taken out of production, lower phosphorus inputs into the ecosystem are expected. Lands taken over by SFWMD could also be used to enlarge stormwater treatment areas that mitigate phosphorus outflows coming from Lake Okeechobee. If storage structures are built on this land at some point in the future, they could allow for increased flexibility to manage water during floods and droughts, as well as for ecosystem restoration. There are several concerns associated with the proposed land acquisition. These concerns range from the location and continuity of the land parcels to the timing and benefits of the purchase itself. Most of the remaining 26,800 acres that currently are planned for purchase are in two tracts south of Lake Okeechobee, with approximately 86% of the original acreage proposed for purchase in 2008 remaining under cultivation for the foreseeable future. (See Figure A-2 .) The fragmentation of land parcels may make it difficult to achieve some of the broader restoration objectives, including the original objective to restore a flow-way south to Everglades National Park that replicates the historical flow of the "River of Grass." Additionally, some contend that the land proposed for purchase is infested with canker (typically a microbial disease that affects the woody tissue of plants), rendering it useless for restoration. Some also note that potential benefits of the land purchase in restoring the Everglades are tempered by potential delays in land transfers and the initiation of actual restoration projects. Some have pointed out that under the terms of the deal proposed with U.S. Sugar, the majority of the land proposed for immediate purchase under the River of Grass acquisition will actually stay in production. Any delay in removing this land from cultivation and beginning restoration projects will lower the overall restoration value of the land, as the current effects of farming would continue. For example, a 10-year schedule could delay freeing up land for restoration projects until 2020, after most other restoration activities are expected to be well underway. Concerns about delays in restoration and a desire for near-term progress are shared by many stakeholders. According to the National Research Council (NRC), delays in restoring the Everglades are affecting the state of the ecosystem and closing opportunities for restoration. The NRC emphasized that "unless near-term progress is made, the Everglades ecosystem may experience irreversible losses to its character and function." Some question the effect of the proposed land acquisition on the implementation of CERP. The proposed acquisition by the State of Florida is not being carried out under CERP, and according to SFWMD, the purchase will not be credited toward the 50:50 state/federal cost share mandated under CERP. While SFWMD has publicly argued for the overall benefits of the land transfer for Everglades restoration, it has not directly linked the land purchase to any existing CERP projects, and it is unclear if the purchase is intended to benefit any future CERP projects. Some contend that the current purchase (and any future purchase of option lands) could affect other Everglades restoration projects, including those federal projects that require a non-federal cost-sharing partner under CERP. In 2008, the state suspended construction on the A-1 reservoir, a CERP storage reservoir in the EAA. The decision to abandon the project along with the announcement of the original proposed River of Grass purchase caused some to conclude that the River of Grass land acquisition was replacing a CERP project, and the suspension of construction on the reservoir was at issue in a recent lawsuit before the U.S. District Court in Miami. In his March 2010 ruling in this case, Judge Federico Moreno ordered that the A-1 reservoir project be reinstated. This ruling may further constrain financing for other restoration projects. Some also note that the land purchase could indirectly affect other CERP projects by creating a funding shortfall for these projects. State funding for all restoration activities, including CERP, is expected to decline in the coming years. In light of this, some have questioned whether the proposed funding for the land acquisition deal might be better spent on CERP projects. For instance, some have noted that the L-8 reservoir (a CERP project) may be a potential item for reduction. Significantly, state funding decisions for these projects will not be finalized until the end of the current fiscal year in September 2010. It is unknown whether the state will be able to fund its cost-share requirements for all ongoing CERP projects in FY2011. Some are concerned about the effect of the proposed land acquisition on phosphorus loading into the Everglades ecosystem. As discussed earlier, the proposed land acquisition has the potential to reduce phosphorus entering the Everglades ecosystem if stormwater treatment areas are constructed and sugar and citrus farms are taken out of production. The treatment areas would capture nutrient-rich outflow and runoff from agricultural areas and Lake Okeechobee itself, thereby reducing loads into other parts of the ecosystem. The state notes that some of the areas proposed for acquisition are known for previously having high nutrient loads. However, it is unclear if the 26,800 acres currently planned for purchase are strategically located to maximize phosphorus reduction. The ability of land to reduce phosphorus depends on its proximity to flows out of Lake Okeechobee, as well as other factors. Additionally, if purchasing the land delays other restoration projects intended to reduce phosphorus, phosphorus loads might not meet previously set targets. For example, the A-1 reservoir, discussed above, is intended to capture releases of water from Lake Okeechobee and reduce phosphorus input into the Everglades ecosystem. Delaying or abandoning this project could affect phosphorus mitigation. The proposed land acquisition is an investment in restoration that may be realized over a longer time horizon than many restoration projects that are currently planned or under construction, including federally authorized CERP projects. The impact of the land acquisition on other Everglades restoration projects will depend on budgetary decisions made in late September 2010, which could potentially reduce or delay state funding for some CERP projects. Near-term delays resulting from any funding reductions for CERP projects could affect the Everglades ecosystem, including those efforts pertaining to phosphorus mitigation and planned water storage capacity. Congress may have to decide whether currently planned CERP activities should be reconsidered in light of these circumstances.

The Florida Everglades is a unique network of subtropical wetlands that is now half its original size. The federal government has had a long history of involvement in the Everglades, beginning in the 1940s with the U.S. Army Corps of Engineers constructing flood control projects that shunted water away from the Everglades. Many factors, including these flood control projects and agricultural and urban development, have contributed to the shrinking and altering of the wetlands ecosystem. Federal agencies began ecosystem restoration activities in the Everglades more than 15 years ago, but it was not until 2000 that Congress integrated the majority of restoration activities under an integrated plan, known as the Comprehensive Everglades Restoration Plan (CERP). The River of Grass acquisition is a proposed land acquisition by the State of Florida, which has the potential to affect the implementation of CERP. The proposal is to purchase tracts of land south of Lake Okeechobee from the U.S. Sugar Corporation. The state argues that the purchase would reduce phosphorus loads and help restore the historic north-south flow of water from Lake Okeechobee to the Everglades. Initially, acquisition of 187,000 acres was announced by Florida Governor Charlie Crist and subsequently approved by the South Florida Water Management District (SFWMD) in December 2008. Since then, the original proposal has been downsized on multiple occasions, both in terms of the size of the purchase and the purchase price. Most recently, a revised land purchase agreement was announced and approved by the SFWMD in August 2010. SFWMD now proposes a direct cash purchase of 26,800 acres, or approximately 14% of the original purchase proposed by the governor in 2008. The purchase would cost SFWMD $197 million. Questions have been raised regarding the proposed acquisition. Some of these questions center on potential positive and negative consequences of the land purchase agreement. These include the effectiveness of the land acquisition in reducing nutrient loads that are detrimental to the Everglades and in restoring historic flows, as well as the effect of the initiative's funding requirements on Florida's other restoration projects, including projects with a non-federal cost share requirement under CERP. Since state funding for CERP activities is expected to decline in the coming years, some have questioned whether the proposed funding for the land acquisition deal might be better spent on CERP projects. The impact of the land acquisition on CERP and other Everglades restoration projects will depend in part on budgetary decisions to be made by the state in late September 2010, which could potentially reduce or delay state funding for some CERP projects. Near-term delays resulting from any funding reductions for CERP projects may be of interest to Congress, as they would affect the overall federal effort to restore the Everglades ecosystem under CERP.

NARA is the successor agency to the National Archives Establishment, which was created in 1934, then incorporated into the General Services Administration in 1949 and renamed the National Archives and Records Service. NARA became an independent executive branch agency in 1985 in a move designed to give the Archivist greater autonomy to focus resources on the primary mission of preserving the country’s documentary heritage. NARA’s mission is to make the permanently valuable records of the government – in all media – available to the public, the President, Congress, and the courts for reference and research. The Federal Records Act defines a record as all books, papers, maps, photographs, machine readable materials, or other documentary materials, regardless of physical form, made or received by an agency in connection with the transaction of public business as evidence of the organization, functions, policies, decisions, procedures, operations, or other activities of the government.As a result, NARA preserves billions of pages of textual documents and numerous maps, photographs, videos, and computer records. Under the Federal Records Act, both NARA and federal agencies have responsibilities for records management. NARA must provide guidance and assistance to federal agencies on the creation, maintenance, use, and disposition of government records. Federal agencies are then responsible for ensuring that their records are created and preserved in accordance with the act. NARA and agency staff work together to identify and inventory an agency’s records to appraise the value of the records and determine how long they should be kept and under what conditions. We found that NARA and federal agencies are confronted with many ERM challenges, particularly technological issues. NARA must be able to receive electronic records from agencies, store them, and retrieve them when needed. Agencies must be able to create electronic records, store them, properly dispose of them when appropriate, and send valuable electronic records to NARA for archival storage. All of this must be done in the context of the rapidly changing technological environment. data files. However, now NARA estimates that some federal agencies, such as the Department of State and Department of the Treasury, are individually generating 10 times that many electronic records annually just in E-mail – and many of those records may need to be preserved by NARA. In addition to increasing volume, NARA must address some definitional problems, such as what constitutes an electronic record. In addition, because agencies follow no uniform hardware or software standards, NARA must be capable of accepting various formats from agencies and maintaining a continued capability of reading those records. The long- term preservation and retention of those electronic records is a challenge because of the difficulty in providing continued access to archived records over many generations of systems, because the average life of a typical software product is 2 to 5 years. NARA is also concerned about the authenticity and reliability of records transferred to NARA. NARA is not alone in facing ERM challenges, the agencies also must meet Federal Records Act responsibilities. Records management is the initial responsibility of the staff member who creates the record, whether the record is paper or electronic. Preservation of and access to that record then also becomes the responsibility of agency managers and agency records officers. Agencies must incorporate NARA’s guidance into their own recordkeeping systems. Agencies’ responsibilities are complicated by the decentralized nature of electronic records creation and control. For example, agencies’ employees send huge volumes of E-mail, and any of those messages deemed to be an official record must be preserved. Agencies must assign records management responsibilities, control multiple versions, and archive the messages. Agencies’ reactions to the challenges I just mentioned are varied. On the basis of our discussions with NARA and some agency officials, we learned that some agencies are waiting for more specific guidance from NARA while others are moving forward by looking for ways to better manage their electronic records. However, there has been no recent governmentwide survey to determine the extent of agencies’ ERM programs and capabilities or their compliance with the Federal Records Act. for several years to develop DOD’s ERM software standard, which is intended to help DOD employees determine what are records and how to properly preserve them. NARA endorsed the DOD standard in November 1998 as a tool that other agencies could use as a model until a final policy is issued by NARA. NARA, however, did not mandate that agencies use the DOD standard. The DOD standard (1) sets forth baseline functional requirements for records management application software; (2) defines required system interfaces and search criteria; and (3) describes the minimum records management requirements that must be met, according to current NARA regulations. A number of companies have records management application products that have been certified by DOD for meeting this standard. Other agencies have also been testing ERM software applications for their electronic records. For example, the National Aeronautics and Space Administration (NASA) and the Department of the Treasury’s Office of Thrift Supervision (OTS) have both tested ERM software with mixed results. Even though NARA is aware of what some agencies are doing – such as DOD, NASA, OTS, and some others -- it does not have governmentwide data on the records management capabilities and programs of federal agencies. NARA had planned to do a baseline assessment survey to collect such data on all agencies by the end of fiscal year 2000. The survey would have identified best practices at agencies and collected data on (1) program management and records management infrastructure, (2) guidance and training, (3) scheduling and implementation, and (4) electronic recordkeeping. NARA had planned to determine how well agencies were complying with requirements for retention, maintenance, disposal, retrieval/accessibility, and inventorying of electronic records. The Archivist decided, however, to temporarily postpone doing this baseline survey because he accorded higher priority to such activities as reengineering NARA’s business processes. NARA’s BPR will address its internal processes as well as guidance and interactions with agencies. scheduled to take 18 to 24 months -- is completed. Conducting the baseline survey now could provide valuable information for the BPR effort while also accomplishing the survey’s intended purpose of providing baseline data on where agencies are with regards to records management programs. NARA would also be in a better position in later years to assess the impacts of its BPR effort. In response to our draft report and in a September 17, 1999, letter to the Comptroller General, the Archivist said that much of this baseline data would not be relevant to BPR and therefore NARA would not collect it at this time. However, NARA does have plans to collect limited information from a sample of agencies after starting BPR. We continue to believe that the baseline data is necessary to give NARA the proper starting point for proceeding with its BPR. Because agencies vary in their implementation of ERM programs, the baseline survey would provide much richer data than the limited information collection effort now planned by NARA. Even though NARA lacks governmentwide data on how agencies are implementing ERM, NARA has already begun revising its guidance to agencies. Historically, NARA’s ERM guidance has been geared toward mainframes and databases, not personal computers. NARA’s electronic records guidance to agencies, which establishes the basic requirements for creation, maintenance, use, and disposition of electronic records, is found in the Code of Federal Regulations. In 1972, before the widespread use of personal computers in the government workplace, NARA issued guidance – General Records Schedule (GRS) 20 – on the preservation of electronic records. Several revisions occurred prior to a 1995 version which provided that after electronic records were placed in any recordkeeping system, the records could be deleted. In December 1996, a public interest group filed a complaint in federal district court challenging the 1995 guidance. disposed of under a general schedule. Thus, the court ruled GRS 20 “null and void.” Following the court’s ruling, NARA established an Electronic Records Working Group in March 1998 with a specific time frame to propose alternatives to GRS 20. In a subsequent ruling, the court ordered the NARA working group to have an implementation plan to the Archivist by September 30, 1998. In response to the working group’s recommendations, NARA agreed in September 1998 to take several actions: It issued a revision in the general records schedules on December 21, 1998, to authorize agencies’ disposal of certain administrative records (such as personnel, travel, and procurement) regardless of physical format, after creation of an official recordkeeping copy. It initiated a follow-on study group (made up of NARA staff, agency officials, and consultants) in January 1999 – Fast Track Development Project – intended to answer the immediate questions of agencies about ERM that can be solved relatively quickly. It issued NARA Bulletin 99-04 on March 25, 1999, to guide agencies on scheduling how long to keep electronic records of their program activities and certain administrative functions formerly covered under GRS 20. It drafted a new general records schedule for certain administrative records to document the management of information technology. NARA has received comments from agencies on the draft, and the draft is still under review by NARA and the Office of Management and Budget. NARA hopes to have this guidance issued by the end of 1999. On August 6, 1999, the U.S. Court of Appeals reversed the lower court’s decision and held that GRS 20 is valid. That reversal was not appealed by the public interest group. In response to the court of appeals decision, the Archivist said that NARA would continue in an orderly way to develop practical, workable strategies and methods for managing and preserving records in the electronic age and ensuring access to them. He said that NARA remains committed to working aggressively toward that goal. Our review of the ERM activities in four states and three foreign governments showed that approaches to ERM differ. These entities often did things differently from each other and/or NARA. longer needed by the individual agencies but are of archival value. Two of the states also emphasized the use of the Internet as a mechanism that allows both the archivist and the general public to determine where records may be found. State officials indicated that state law and administrative rules that they issue guide their records management requirements, but they also interact with NARA and other states to assist in determining their states’ policies. Our review of public documents from three foreign governments (Australia, Canada, and the United Kingdom) showed that although these countries share common challenges, they each have taken somewhat different approaches to ERM decisions. For example, Australia has strong central authority and decentralized custody of records, and it maintains a governmentwide locator system. Canada issues “vision statements” rather than specific policies, and individual agencies maintain their own electronic records until they have no more operational need for them. The United Kingdom established broad guidelines, which are put into practice by its individual agencies in partnership arrangement with its national archives. Realizing the common problems faced by all countries, NARA is part of international initiatives that are to study and make recommendations regarding ERM. In conclusion, it is obvious that NARA and federal agencies are being challenged to effectively and efficiently manage electronic records in an environment of rapidly changing technology and increasing volume of electronic records. It is certainly not an easy task. Much remains for NARA and the agencies to do as they tackle the issues I have discussed. We believe that NARA is moving in the right direction. However, because of the variance of ERM programs and activities across the government, we continue to believe that the Archivist should conduct the baseline assessment survey as we recommended in our July 1999 report. This survey would produce valuable information for NARA’s use during its critical BPR effort. A well-planned and successful BPR should be a stepping-stone for NARA as it moves into the next phase of its management of all records, particularly electronic. As you know, Mr. Chairman, NARA has not had concerted congressional oversight as an independent agency. Such oversight is essential to help NARA ensure that the official records of our country are properly maintained and preserved. I commend the efforts of this Subcommittee for holding this hearing and bringing the issues surrounding government records into the spotlight. I look forward to future hearings in this area. 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. Contacts and Acknowledgement For further information regarding this testimony, please contact L. Nye Stevens or Michael Jarvis at (202) 512-8676. Alan Stapleton, Warren Smith, and James Rebbe also made key contributions to this testimony. 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. 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Pursuant to a congressional request, GAO discussed the challenges that face the National Archives and Records Administration (NARA) and federal agencies in their efforts to manage the rapidly increasing volume of electronic records. GAO noted that: (1) NARA and federal agencies are confronted with many electronic records management (ERM) challenges, particularly technological issues; (2) NARA must be able to receive electronic records from agencies, store them, and retrieve them when needed; (3) agencies must be able to create electronic records, store them, properly dispose of them when appropriate, and send valuable electronic records to NARA for archival storage; (4) NARA officials told GAO that NARA needs to expand its capacity to accept the increasing volume of electronic records from agencies; (5) in addition to increasing volume, NARA must address some definitional problems, such as what constitutes an electronic record; (6) in addition, because agencies follow no uniform hardware or software standards, NARA must be capable of accepting various formats from agencies and maintaining a continued capability of reading those records; (7) NARA is not alone in facing ERM challenges, the agencies also must meet Federal Records Act responsibilities; (8) agencies must incorporate NARA's guidance into their own recordkeeping systems; (9) agencies' reactions to ERM challenges are varied; (10) on the basis of GAO's discussions with NARA and some agency officials, GAO learned that some agencies are waiting for more specific guidance from NARA while others are moving forward by looking for ways to better manage their electronic records; (11) even though NARA is aware of what some agencies are doing, it does not have governmentwide data on records management capabilities and programs of federal agencies; (12) NARA had planned to do a baseline survey to collect such data on all agencies by the end of fiscal year 2000; (13) the Archivist decided, however, to temporarily postpone doing this baseline survey because he accorded higher priority to such activities as reengineering NARA's business processes; (14) GAO recommended that NARA do the baseline survey as part of its reengineering process; (15) the Archivist stated that the baseline data would not be relevant to its reengineering efforts and therefore NARA would not collect it at this time; (16) even though NARA lacks governmentwide data on how agencies are implementing ERM, NARA has already begun revising its guidance to agencies; (17) GAO's review of the ERM activities in four states and three foreign governments showed that approaches to ERM differ; and (18) these entities often did things differently from each other and NARA.

The U.S. Supreme Court recognized in 1803 that in order to maintain a society governed by laws, a legal remedy should accompany each legal right. Toward this end, courts apply various remedies to ensure effective enforcement of constitutional rights. For example, courts sometimes order retrials to remedy violations of defendants' trial-by-jury or assistance-of-counsel rights. A remedy that excludes impermissibly obtained evidence from use at a criminal trial—the "exclusionary rule"—similarly protects constitutional rights. The exclusionary rule typically applies in cases involving violations by law enforcement of rights guaranteed by the Fourth or Fifth Amendments to the U.S. Constitution. It differs from remedies such as retrial, because in addition to retrospectively redressing injustice, its major aim is prospective deterrence of government misconduct. In theory, although it only actually redresses violations when probative evidence is found, the exclusionary rule also protects innocent people by deterring unwarranted privacy intrusions. The rule operates to prohibit the introduction at trial of probative evidence that would be admissible if collected in a constitutionally permissible manner. Because the excluded evidence is frequently incriminating, many believe that its application aids criminals in escaping punishment. For this reason, the rule has long been controversial. In past cases, the Supreme Court has defended the rule as a necessary corollary to the constitutional rights it protects. More recently, a division has emerged. Some justices adhere to the view of the rule as constitutionally required. Other justices express concerns about the cost to society of freeing criminals who would likely be convicted if the excluded evidence was admitted. Over the past several decades, the Supreme Court has narrowed the scope of the exclusionary rule in Fourth Amendment cases—that is, in cases involving illegal searches or seizures. The Court's 2009 decision in Herring v. United States furthers this trend. Because Herring is the first Supreme Court decision that rejects the exclusionary rule in the context of police error regarding a warrant, the decision has made news headlines and prompted debate about whether the Herring decision appropriately limits the exclusionary rule's reach. The Fourth Amendment to the U.S. Constitution provides a right "of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures." As a general rule, "reasonableness" requires law enforcement officers to demonstrate "probable cause" and obtain a warrant (unless a recognized warrant exception applies) before conducting searches or seizures. For example, under the general rule, a police officer may not arrest a person unless a judicial magistrate has issued a warrant, based on evidence establishing sufficient probable cause, for that person's arrest. Likewise, a police officer typically may not search a person's belongings without first obtaining a warrant that describes, with sufficient particularity, the property for which sufficient evidence justifies a search. The Constitution does not explicitly provide a remedy that applies when governmental actors violate a citizen's Fourth Amendment right. To deter Fourth Amendment violations, courts apply the exclusionary rule, which "is often the only remedy effective to redress a Fourth Amendment violation." In the Fourth Amendment context, the exclusionary rule requires a trial court to forbid the prosecution's use of evidence obtained as a result of an unconstitutional search or seizure. For example, if a police officer arrests a person in violation of constitutionally mandated procedures (i.e., without a warrant or a warrant exception), then the exclusionary rule requires a trial court to suppress any contraband the officer discovered during the search incident to that arrest. Although the exclusionary rule protects constitutional rights, a question remains regarding its status—that is, is it constitutionally required in the Fourth Amendment context? In past Fourth Amendment cases, the Supreme Court has stated that the exclusionary rule is "of constitutional origin." In other cases, the Court has characterized the rule as a "judicially created remedy ... rather than a personal constitutional right." This distinction affects Congress's authority to alter the exclusionary rule statutorily. Congress may not reduce a constitutionally guaranteed remedy but could potentially alter a rule that lacks constitutional status. Regardless, the Court has narrowed the exclusionary rule's reach in Fourth Amendment cases throughout the past several decades. For example, it has barred courts' use of the rule in civil cases, grand jury proceedings, and parole revocation hearings. Arguably, the most important narrowing trend has been the Court's development of the good-faith exception. The Supreme Court introduced what has come to be known as the good-faith exception in United States v. Leon . In Leon , the Court held that the exclusionary rule does not apply when police officers act with "objectively reasonable reliance" on a search warrant later found to be invalid. Language in the opinion embraced a cautionary "balancing" approach to the exclusionary rule in which the benefits of exclusion (namely any deterrence effect on unconstitutional police action) must outweigh the costs (namely the risk that a guilty person will escape justice because evidence is excluded at trial) before the Court will apply the rule to new factual circumstances. Police officers in Leon , acting on a tip about drug activity in a particular home, investigated the license plate number and connections of a man who exited the home holding a small paper sack. The officers then observed people coming and going from the residences of several people connected to that man, including the home of Leon, the respondent in the case, whom the man had listed as his employer and who had a criminal record. Based on these observations, the officers obtained a warrant from a magistrate to search three homes and several automobiles. The subsequent search uncovered illegal drugs and other evidence. At trial, a federal district court held that the warrant was not supported by probable cause; thus, the search violated the Fourth Amendment. Applying the exclusionary rule remedy, the district court suppressed the evidence of drugs found in the homes and cars. On appeal, the Supreme Court held that suppression is inappropriate in cases, such as Leon , where the violation occurred despite a police officer's "objectively reasonable reliance"—for example, on a warrant that is actually invalid. By creating an exception to the exclusionary rule, the Leon court arguably opened the door to permitting evidence in cases involving multiple types of Fourth Amendment violations. However, the Leon decision itself addressed only the particular circumstance in which a warrant exists but was invalidly issued based on insufficient probable cause. The Leon opinion, including several exceptions to the good-faith exception articulated in the case, evidences a holding that only addresses that particular context. To justify its holding, the Leon court noted the logical inconsistency between exclusion in cases involving non-police errors and the rule's traditional deterrence rationale, stating: "Penalizing the officer for the magistrate's error, rather than his own, cannot logically contribute to the deterrence of Fourth Amendment violations." Based on the Court's reliance on this rationale, one might argue that the Court did not originally anticipate an extension of the good-faith exception to cases involving police error. The Supreme Court has extended the Leon good-faith exception in relatively minor ways over the past several decades. In a 1995 case, Illinois v. Krull , the Court applied the exception where police officers had searched an auto dealer's list of licenses pursuant to a statute that courts later struck down as unconstitutional. Several years later, in Arizona v. Evans , the Court applied Leon to evidence obtained after an arrest based on a facially valid warrant that the clerk of the court had neglected to show had been quashed seventeen days earlier. Until recently, these extensions had involved police reliance on errors made by actors—for example, the clerk of the court in Evans and the legislative branch in Krull — not the police themselves. Furthermore, in a 2004 case, Groh v. Ramirez , the Court seemed to draw an explicit line between police errors and errors made by other actors. Police officers in Groh searched a home where they suspected that the owners had stored illegal weaponry. The court of appeals held that the search warrant, which a magistrate had signed but the officers had themselves prepared, violated the constitutional requirement that property to be searched be described with particularity; thus, the officers' search violated the homeowners' Fourth Amendment rights. On appeal, the Supreme Court declined to apply the good-faith exception to the exclusionary rule, because it found that the officers' search pursuant to a warrant that failed to list property to be searched was not a "reasonable" mistake. In so holding, the Court stressed that the officer in Groh was himself responsible for the Fourth Amendment violation. However, only two years after Groh , the Court declined to find any distinction between police error and third-party errors. In Michigan v. Hudson , it held that police officers' violation of the "knock and announce" rule did not trigger the exclusionary rule. Knock and announce, an "ancient" procedure derived from common-law, constitutional, and statutory sources, protects occupants' privacy by requiring police officers to wait a short while after knocking and announcing their presence before entering a residence for which they have a warrant. The rule is viewed as a less stringent requirement than the warrant or probable cause requirements under the Fourth Amendment, and the Hudson court noted that it is "unnecessary" in various circumstances. Because the Court limited its opinion in Hudson to knock and announce violations, it was unclear after that case whether the Court would extend the good-faith exception to more serious police errors, such as those involving warrants or warrant exceptions. In Herring v. United States , a 2009 case, the Supreme Court for the first time applied the good-faith exception in a case involving police error regarding a warrant. Officers arrested the defendant, Bennie Dean Herring, outside of an impound lot where Herring had come to retrieve an item from his truck. An officer at the lot, recognizing Herring, called the county warrant clerk to determine whether an outstanding arrest warrant applied to him. The warrant clerk found no such warrant but agreed to inquire about warrants in a neighboring county. The clerk then identified as active an arrest warrant in the neighboring county, although it was in fact no longer active. After learning about the warrant, two officers followed Herring from the impound lot, arrested him, and performed a search incident to arrest. The officers discovered methamphetamine in Herring's pocket and an illegal pistol in his vehicle. Because the arrest warrant was actually invalid, both parties in Herring admitted that a Fourth Amendment violation had occurred. The disagreement in the case centered on whether the exclusionary rule should apply to suppress the evidence obtained as a result of the violation. Extending the good-faith exception, the Court held that the exclusionary rule should not apply. The Court also announced a new test for the exception: "To trigger the exclusionary rule," police conduct must be "sufficiently deliberate" and the police must be "sufficiently culpable." The Court emphasized that this "analysis of deliberateness and culpability" is objective: a court should ascertain not whether the police officer in question acted with good intentions, but rather "'whether a reasonably well trained officer would have known that the search was illegal' in light of 'all the circumstances.'" In rejecting the exclusionary rule in Herring , the Court appeared to embrace the view that it is not constitutionally required in the Fourth Amendment context. Quoting Hudson v. Michigan , the Court emphasized that the exclusionary rule is a "'last resort'" rather than a "necessary consequence of a Fourth Amendment violation." It then applied a cost-benefit analysis similar to the approach in Leon , stating that in order for the exclusionary rule to apply, "the benefits of deterrence must outweigh the costs." In contrast, dissenting justices in Herring cited cases in which the Court has viewed the exclusionary rule as "inseparable" from the Fourth Amendment, suggesting that the remedy of exclusion has constitutional status. Starting from this different philosophical foundation, the dissenters rejected the cost-benefit approach as inappropriate and would instead have applied the exclusionary rule in all cases where it has " any power to discourage" law enforcement misconduct. Dissenters also highlighted the substantive distinction between errors made by judicial branch personnel and errors made by police, noting three specific distinctions: (1) the exclusionary rule historically aims to deter police, rather than judicial, misconduct; (2) no evidence suggests that court employees are "inclined to subvert the Fourth Amendment"; and (3) because judicial officers have no stake in the outcome of particular criminal investigations, "there [is] 'no basis for believing that application of the exclusionary rule ... [would] have a significant effect on court employees.'" For those reasons, the four dissenting justices would not have extended the good-faith exception to situations involving police conduct regarding a warrant. Although the Herring decision broadens the good-faith exception to the exclusionary rule and has shifted the analysis to one of "deliberateness and culpability," the scope of its impact remains to be seen. For example, although it is perhaps difficult to imagine recordkeeping errors that would meet the Court's "deliberate and culpable" test, the Herring court suggested that "reckless[ness] in maintaining a warrant system," such as a recordkeeping system that routinely led to false arrests, could justify application of the exclusionary rule. Thus, although most recordkeeping and clerical errors made by police will no doubt fit within the relatively broad parameters of the good-faith exception as interpreted in Herring , lower courts will likely decline to apply Herring in situations where defendants demonstrate knowledge or ongoing patterns of wrongdoing by law enforcement officers. In addition to broadening the good-faith exception, the Herring decision appears to further the trend toward interpreting the exclusionary rule as lacking constitutional status. One important outcome of this might be greater congressional authority to legislate changes to the Fourth Amendment exclusionary rule. Congress has occasionally considered legislation that would expand or contract the exclusionary rule's reach. Because Congress may always guarantee a greater right than the Constitution demands as a minimum, Congress clearly may expand the remedy of exclusion. In contrast, whether Congress has the authority to restrict the remedy of exclusion depends upon the status of the remedy vis-à-vis the Constitution. If, as Herring appears to indicate, the exclusionary rule lacks constitutional status, then legislation restricting the right—for example, legislation expanding the Herring holding—is likely constitutionally permissible. If, on the other hand, the exclusionary rule is a constitutionally required remedy in Fourth Amendment cases, as the Herring dissenters suggested, then Congress would lack the authority to narrow the scope of the remedy.

The Fourth Amendment to the U.S. Constitution provides a right against "unreasonable searches and seizures." To deter the federal and state governments from violating this right, courts have developed an "exclusionary rule," which requires that evidence obtained as a result of an invalid search or seizure be excluded from use at trial. The Supreme Court has narrowed the scope of the exclusionary rule in several cases since the late 1970s. In United States v. Leon, the Court created the "good-faith" exception to the exclusionary rule. The good-faith exception applies when officers conduct a search or seizure with "objectively reasonable reliance" on, for example, a warrant that is not obviously invalid but that a judicial magistrate should not have signed. Until a 2006 case, Hudson v. Michigan, the Supreme Court had applied the good-faith exception only in cases in which the error creating the constitutional violation was caused by judicial or legislative actors, rather than by the police themselves. In Hudson, the Court applied the exception to a case in which police officers had violated the "knock and announce" rule by entering a home without waiting a sufficient period of time. In Herring v. United States, a 2009 decision, the Supreme Court for the first time applied the good-faith exception to bar application of the exclusionary rule in a case involving police error regarding a warrant. A police officer in the case mistakenly identified an arrest warrant for the defendant. The Court held that evidence discovered after the subsequent arrest was admissible at trial because the officer's error was not "deliberate" and the officers involved were not "culpable." In future cases, courts will apply the Herring "deliberate and culpable" test to determine whether to admit evidence obtained as a result of a search or seizure which is unconstitutional as a consequence of police error. A second impact of the Herring decision is a weaker constitutional footing for the exclusionary rule. Whereas judicially-created remedies have gained "constitutional status" in the context of some other constitutional rights, it appears that the exclusionary rule lacks such a grounding under the Court's current Fourth Amendment jurisprudence.

The U.S. Department of Veterans Affairs (VA) offers a broad range of benefits to veterans of the U.S. Armed Forces and to certain members of their families. Among these benefits are various types of financial assistance, including monthly cash payments to disabled veterans, health care, education, and housing. Certain criteria must be met to be eligible to receive any of the benefits administered by the VA. This report focuses on basic eligibility and entitlement requirements for former servicemembers for benefits administered by the VA. Certain VA benefits are available to current servicemembers, and the eligibility requirements for those benefits are not a component of this report. The VA uses a two-step process to evaluate claims for benefits. First, the claimant must demonstrate eligib i l ity for veterans' benefits in general. That is, the claimant must prove that he or she is a bona fide veteran and verify certain related matters. Second, the veteran must prove entitlement to the particular benefit being sought. To be eligible for most VA benefits, the claimant must be a veteran or, in some circumstances, the survivor or the dependent of a veteran. By statute, a veteran is defined as a "person who served in the active military, naval, or air service, and who was discharged or released therefrom under conditions other than dishonorable." In evaluating the evidence to determine whether the claimant is a veteran for the purposes of VA benefits, the VA relies upon military service records. The VA is bound by information that the service documents contain. Such records may include an original military service record; a copy issued by the military service with the certification that it is a true document; or a copy submitted by an accredited agent, attorney, or service representative with special training, who certifies that it is a copy of an original military service document or a copy of a copy of such a document. In addition, the document must contain data regarding the length, time, and character of the service, and the VA must believe that the document is genuine and accurate. If the claimant does not provide the requisite documentation or other evidence, or the submitted documentation does not meet the requirements, the VA must seek to verify the claimant's military service directly from the appropriate military service. A claimant must have "active military, naval, or air service" to be considered a veteran for most VA benefits. However, not all types of service are considered active military service for this purpose. In general, active service means full-time service, other than active duty for training, as a member of the Army, Navy, Air Force, Marine Corps, and Coast Guard; as a commissioned officer of the Public Health Service; or as a commissioned officer of the National Oceanic and Atmospheric Administration or its predecessors. Active service also includes a period of active duty for training during which the person was disabled or died from an injury or disease incurred or aggravated in the line of duty and any period of inactive duty for training during which the person was disabled or died from an injury incurred or aggravated in the line of duty or from certain health conditions incurred during the training. Additional circumstances of service, and whether they are deemed to be active military service, are set out in law. For example, if on authorized travel to and from the performance of active duty training or inactive duty for training, a person is disabled or dies, the duty will be considered to be active duty for training or inactive duty for training. The determination of whether a claimant has met the active service requirement may not be a simple process. The claimant and the VA may have to scrutinize the claimant's service records to determine whether the claimant's service fits into one of the many categories of active service, or whether an exception has been made for his or her service, so that it is considered to be active service for the purposes of veterans' benefits. In addition, a claimant may have more than one period of service, which may further complicate the determination. For people who enlisted prior to September 8, 1980, no minimum length of service is necessary to be considered a veteran for most VA benefits. However, certain minimum length of service requirements apply to people who enlisted on or after September 8, 1980. The general requirement is the "full period" for which the servicemember was called or ordered to active duty or, if less, 24 months of continuous active duty. Several exceptions exist to this rule. For example, service-connected disability compensation benefits are exempt from the length of service requirement. Thus, a veteran with a disease or injury incurred during active service generally may receive service-connected compensation for that disability. Other exceptions to the minimum service requirements include claims for VA life insurance benefits, hardship discharges, and persons retired or separated from service because of a service-related disability. If the former servicemember did not serve for the full period of active duty and served less than 24 months, and none of the statutory exceptions apply, then the veteran did not complete a minimum period of active duty and is "not eligible for any benefit under Title 38, United States Code or under any law administered by the Department of Veterans Affairs based on that period of active service." The statutory definition of veteran requires that the individual be discharged or released from military service "under conditions other than dishonorable." There are currently five types of discharges issued by the military services: 1. honorable discharge (HD), 2. discharge under honorable conditions (UHC) or general discharge (GD), 3. discharge under other than honorable conditions (UOTHC) or undesirable discharge (UD), 4. bad conduct discharge (BCD), and 5. dishonorable discharge (DD). The statutory definition of veteran does not precisely match those five categories of the discharges, and the VA often determines on a case-by-case basis whether the claimant's discharge qualifies as under conditions other than dishonorable. In most cases, the VA considers honorable discharges and discharges under honorable conditions (the first two of the five categories) to be conditions other than dishonorable and will usually qualify a claimant as a veteran under the first step of the eligibility test, which usually qualifies a veteran for most benefits. A bad conduct discharge from a special court-martial and other discharges made under other than honorable conditions do not always disqualify the claimant from being considered a veteran for purposes of benefits eligibility. In the case of such a discharge, the VA makes a special "character of service determination," based on the facts of the case. The VA reviews the entire period of the claimant's enlistment to assess the quality of the service and to determine whether it is sufficient to qualify the discharge as being under conditions other than dishonorable. If a claimant has served more than one period of enlistment, different discharge categories may be specified for each period. Dishonorable and bad conduct discharges issued by general courts-martial may bar VA benefits. Veterans in prison and parolees may be eligible for certain VA benefits and must contact the VA to determine eligibility. VA benefits are not provided to any veteran or dependent wanted for an outstanding felony warrant. Benefits are awarded in some cases even when the character of the discharge would ordinarily make the individual ineligible. For example, if the claimant is found to have been insane at the time of the offense leading to the discharge, VA benefits may be granted. There does not need to be a direct connection between the insanity and the misconduct. All military service is classified as either wartime or peacetime service. The type of service may affect eligibility for VA benefits. For example, only veterans with wartime service qualify for Improved Pension, which pays benefits to low-income veterans who are either elderly or non-service-connected disabled veterans. Periods considered "wartime" for the purposes of veterans' benefits are defined in law. Veterans who served during those periods are considered to have "served during wartime" by the VA, even if the service was not in a combat zone. Those time periods not designated by Congress as wartime are considered to be peacetime. If a veteran served partly during wartime and partly during peacetime, the veteran meets the wartime criteria if he or she served 90 consecutive days, at least one day of which occurred during a period designated as wartime. Congress has designated eight wartime periods: Indian Wars —January 1, 1817, through December 31, 1898; Spanish-American War —April 21, 1898, through July 4, 1902; Mexican Border Period —May 19, 1916, though April 5, 1917; World War I —in general, April 6, 1917, through November 11, 1918; extended to later dates under certain conditions; World War II —December 7, 1941, through December 31, 1946; extended through July 25, 1947, for veterans in service on December 31, 1946; Korean Conflict —June 27, 1950, through January 31, 1955; Vietnam Era —in general, August 5, 1964, through May 7, 1975, but the period begins on February 28, 1961, for veterans who served in the Republic of Vietnam during that period ; Persian Gulf War —August 2, 1990, through a date to be prescribed by presidential proclamation or law. To be eligible for VA benefits, members of the National Guard and the reserve components must meet the same standards as other claimants. In many cases, however, they do not meet the active duty standard or length of service standard and are therefore ineligible for VA benefits. Members of the National Guard and reserves who are never activated for federal active duty military service do not meet the active duty requirement. National Guard and reserve members who are called to active duty and serve the full period for which they are called meet both the active service and length of duty requirements. National Guard and reserve members also qualify as veterans for the purposes of VA benefits if they are disabled or die from a disease or injury incurred or aggravated in the line of duty. National Guard and reserve members may qualify as veterans for the purposes of VA benefits under other circumstances, which adds to the complexity of the eligibility determination. For example, under certain conditions Guard and reserve members may be eligible for education benefits (through the Reserve Educational Program or the Post-9/11 GI Bill) and home loans from the VA (with six years of service in the Selected Reserves or National Guard). Eligibility under these special cases is usually determined by the VA after reviewing the individual servicemember's military service records. Some groups of civilians who participated in World War I and World War II are also eligible for VA benefits. The GI Bill Improvement Act of 1977 ( P.L. 95-202 ) recognized the service of the Women's Air Forces Service Pilots, a civilian group, as active service for benefits administered by the VA. That law also provided that the Secretary of Defense could determine that service for the Armed Forces by a group of civilians or contractors be considered active service for benefits administered by the VA. Based on the provisions of P.L. 95-202 , the Secretary of Defense established that the Secretary of the Air Force would develop and maintain the process to determine if the wartime employment of certain groups of individuals is considered active duty military service for the purpose of receiving certain veterans' benefits. If these groups are considered to be active duty by the Secretary, they are eligible to receive certain benefits, including health care. Regulations implementing P.L. 95-202 specify which groups the Secretary has determined were employed in active duty service. The regulations also established the Department of Defense Civilian/Military Service Review Board and Advisory Panel to review each application for active duty status. Following its review, the board recommends to the Secretary whether the applicant group should be considered active duty for the purposes of the act; the Secretary makes the final decision. Changes and clarification to the regulations were implemented in 1989 in response to "a Federal Court determination [ Schumacher v. Aldridge ] that the Department of Defense had failed to clarify factors and criteria in their implementing directive concerning P.L. 95-202 ." To date, only certain groups who participated in World War I and World War II have been accorded active duty status under this procedure, including Women's Air Force Service Pilots (WASPs), Signal Corps Female Telephone Operators Unit (World War I), Engineer Field Clerks (World War I), Male Civilian Ferry Pilots (World War II), and other groups of employees with war-related occupations. Civilian groups granted veterans status pursuant to P.L. 95-202 are eligible for VA burial benefits including interment or inurnment in VA National Cemeteries. Pursuant to legislation enacted on May 20, 2016 ( P.L. 114-158 ), these veterans are eligible for inurnment in the Columbarium or Niche Wall at Arlington Cemetery but not ground burial. Merchant mariners are civilians who engage in certain maritime activities, such as the transportation of military equipment by sea, in support of the armed forces. In general, merchant mariners are not considered veterans for the purposes of any VA benefits. However, pursuant to regulations promulgated in accordance with P.L. 95-202 , the following groups of merchant mariners are considered veterans for purposes of eligibility for all programs administered by the VA: United States Merchant Seamen who served on blockships in support of Operation Mulberry in World War II; and American Merchant Marine personnel who served in oceangoing service during the period of armed conflict between December 7, 1941, and August 15, 1945. In addition, pursuant to Section 402 of the Veterans Programs Enhancement Act of 1998 ( P.L. 105-368 ), merchant mariners may qualify for interment or inurnment at a VA National Cemetery and VA burial benefits only if they were members of the United States Merchant Marine, Army Transport Service, or Naval Transport Service who served between August 16, 1945, and December 31, 1946.

The U.S. Department of Veterans Affairs (VA) offers a broad range of benefits to U.S. Armed Forces veterans and certain members of their families. Among these benefits are various types of financial assistance, including monthly cash payments to disabled veterans, health care, education, and housing. Basic criteria must be met to be eligible to receive any of the benefits administered by the VA. This report examines the basic eligibility criteria for VA administered veterans' benefits, including the issue of eligibility of members of the National Guard and reserve components. For a former servicemember to receive certain VA benefits, the person must have active U.S. military service for a minimum period of time, generally the lesser of the full period ordered to active duty or 24 months, and be discharged "under conditions other than dishonorable." Some members of the National Guard and reserve components have difficulty meeting the active duty and length of service requirements. However, a member of the National Guard or reserve components who is activated for federal military service and meets the length of service requirement is considered a veteran for purposes of VA benefits. The Secretary of Defense may determine that service for the Armed Forces by a group of civilians or contractors will be considered active service, allowing members of those groups to be considered veterans for purposes of VA benefits. Such determinations, authorized by the GI Bill Improvement Act of 1977 (P.L. 95-202), have been made only for groups involved in World War I and World War II.

Americans have long been of mixed mind about advertising. On the one hand, advertising is beneficial insofar as it provides information. On the other hand, advertising (be it private or governmental) often attempts to persuade individuals to alter their behaviors. Unease with advertising can be magnified if the advertiser is the government, especially if an advertisement conflicts with widely held beliefs about government. Many Americans believe that government was established to protect liberty, and that the essence of liberty is the freedom to think and live as one pleases (provided one does not harm others). Many individuals also believe that government should not needlessly or wantonly spend taxpayer money, and that citizens should be thrifty and self-reliant. In light of these beliefs, it is not surprising that controversies have arisen around government advertisements that have attempted to dissuade individuals from using marijuana, have promoted the use of social service programs, are viewed as overly expensive or wasteful, or are perceived as possibly misleading. However, not all government advertising is controversial. Few complain when the government advertises federal agency job openings, competitions for federal contracts, or the sale of surplus government property. These sorts of advertisements likely are viewed as part of government's duty to truthfully inform the public about its activities. As one of the Hoover Commission task forces wrote a half-century ago, Apart from his responsibility as spokesman, the department head has another obligation in a democracy: to keep the public informed about the activities of his agency. How far to go and what media to use in this effort present touchy issues of personal and administrative integrity. But of the basic obligation [to inform the public] there can be little doubt. Additionally, some government advertising has been mandated by law. For example, Congress established the National Youth Anti-Drug Media Campaign in a 1997 appropriations act ( P.L. 105-61 ; 111 Stat. 1272; 22 U.S.C. 1708). This statute directed the Office of National Drug Control Policy (ONDCP) to produce media campaigns to discourage illicit drug use. And not all advertisements that tell people what to do are ill regarded. Few have criticized government advertising campaigns that have encouraged citizens to buy war bonds or avoid inadvertently setting forest fires. The federal government's expenditures on advertising are difficult to ascertain. There are at least two reasons for this: (1) there is no government-wide definition of what constitutes advertising and (2) there is no central authority to which agencies are required to report advertising-related expenditures. Absent an agreed-upon definition of "advertising" or a government-wide reporting system for advertising expenses, agencies have had great discretion to budget their in-house advertising-related costs. The Government Accountability Office (GAO, then the General Accounting Office) brought this to congressional attention in 1977 after being asked to estimate government-wide advertising expenses: There is no requirement that agencies identify advertising costs within their budgets. Also, budgeting of these costs varies by agency. For example, military recruiting advertising is budgeted under Operations and Maintenance for each of the military departments, and Energy Research and Development Administration recruiting is budgeted under Program Direction, Program Support. Energy Research and Development Administration public information is budgeted under … Program Support. The challenges of defining advertising and, therefore, advertising expenses are significant. Hypothetical examples can be illustrative of the challenges. An agency's "communications specialist" draws up a press release touting his or her agency's policy achievements of the past year, e-mails copies of it to newspaper editors around the country, and holds subsequent telephone interviews with reporters. An agency hires a private advertising firm to help it work with Ad Council to produce a public service announcement that discourages dangerous behaviors that inflict large costs on society and the government. The announcement is run on radio and television stations at no cost to the agency, and the agency's head delivers public speeches on the subject in 10 cities throughout the United States. The questions these examples provoke include the following: Do these activities constitute advertising? Or might any of these examples be more accurately characterized as public notification, media relations, or public education activities? How should an agency account for the government employee time and agency resources (in-house expenses) related to these activities? In accounting for costs, should an agency also tabulate any benefits (or return on investment) of the communications? Despite these challenges, an estimate of the federal government's expenditures on contracts for advertising services can be derived from utilizing data from the Federal Procurement Data System (FPDS). The FPDS has some significant limitations as a data source for agency advertising expenditures. The FPDS does not include expenditures by the legislative or judicial branches or the U.S. Postal Service. Moreover, the FPDS does not include any agency in-house expenses related to advertising. Finally, without agreement among agencies over what constitutes advertising, any contracting data drawn from FPDS must be viewed with considerable caution. According to FPDS data, federal agencies spent $892.5 million on contracts for "advertising services" in FY2013. ( Figure 1 ) The five agencies that spent the most for advertising service contracts in FY2013 were the Department of Defense: $419.0 million; the Department of Health and Human Services: $197.4 million; the Department of Education: $128.8 million; the Department of Veterans Affairs: $61.8 million; and the Department of Transportation: $43.0 million. Generally speaking, there are few government-wide restrictions on government advertising. Furthermore, no single agency is charged with tracking and overseeing the advertising expenditures of federal agencies. Some restrictions on agencies' advertising expenditures may be found in annual appropriations acts, the U.S. Code , and the Code of Federal Regulations . For example, the Department of Defense has been prohibited from using appropriated funds to pay the costs of advertising by any defense contractor (10 U.S.C. 114 amendments); and 7 C.F.R. 12 contains guidelines for government advertisements promoting blueberries, honey, and mohair, among other agricultural products. For many decades, annual Treasury appropriations laws have contained prohibitions on the use of funds for the purpose of "publicity or propaganda purposes not authorized by the Congress." A fuller statement of the limitations on government advertising may be found in GAO's Principles of Federal Appropriations Law, Volume I . Though not an independent source of legal authority, Principles does provide some guidance as to what may be viewed as improper and/or illegal agency use of appropriated funds for agency activities that might be construed as advertising. Principles begins with the 1919 federal anti-lobbying law (18 U.S.C. 1913) that prohibits agencies from using government funds to pay for advertisements that are designed to sway Members of Congress. Principles also describes the prohibitions against "publicity and propaganda" included in appropriations acts since 1949, the limitations on informational activities by agencies, and the prohibition of government use of "publicity experts." Principles notes, Whether an agency's appropriations are available for advertising, like any other expenditure, depends on the agency's statutory authority. Whether to advertise and, if so, how far to go with it are determined by the precise terms of the agency's program authority in conjunction with the necessary expense doctrine and general restrictions on the use of public funds such as the various anti-lobbying statutes. Under the "necessary expense doctrine," an agency may use a general appropriation to pay any expense that is (1) necessary or incidental to the achievement of the underlying objectives of the appropriation, (2) not prohibited by law, and (3) not otherwise provided for by statute or appropriation. "Thus," GAO explains, "the Navy could exercise its statutory authorization to promote safety and accident prevention by procuring book matches with safety slogans printed on the covers and distributing them without charge at naval installations." The Department of Justice is responsible for prosecutions under the aforementioned 1919 anti-lobbying law. Otherwise, oversight, investigation, and enforcement of appropriate practices regarding government advertising falls to agencies' inspectors general, GAO, and Congress. It is unclear how vigorously the limits on government advertising are being enforced. It does not appear that the Department of Justice has indicted anyone for lobbying with appropriated funds. GAO has issued comptroller general opinions that fault agency use of appropriated funds for advertising. However, GAO reviews of agency advertising result only after congressional request, and its opinions are advisory—they do not have the force of law. Primary oversight of government agency advertising has been exercised by Congress. In recent years, it has examined some large advertising campaigns, often when some Members of Congress have perceived the advertisements as being overly promotional of a policy or program.

Government advertising can be controversial if it conflicts with citizens' views about the proper role of government. Yet some government advertising is accepted as a normal part of government information activities. It is difficult to calculate the amount of funds spent by the federal government on advertising each year. The reasons for this include (1) there is no government-wide definition of what constitutes advertising and (2) there is no central authority to which agencies are required to report advertising expenses. However, an estimate of the federal government's expenditures on contracts for advertising services can be derived from data in the Federal Procurement Data System. According to these data, federal agencies spent $892.5 million on advertising services in FY2013. Agencies' discretion to advertise is limited primarily by restrictions imposed by Congress in authorization and appropriations statutes and by the principles set forth in volume 1 of the Government Accountability Office's (GAO's) Principles of Federal Appropriations Law. Any oversight of government advertising expenditures rests with agencies' inspectors general, GAO, and Congress.

Long-term simulations can be useful for comparing potential outcomes of alternative policies within a common economic framework. Given the broad range of uncertainty about future economic changes, however, any simulations should not be interpreted as forecasts of the level of economic activity 30 years in the future. Instead, simulation results provide illustrations of the budget or economic outcomes associated with alternative policy paths. In our most recent work, we used a long-term economic growth model to simulate three of the many possible fiscal paths through the year 2025: a “no action” path that assumed the continuation of fiscal policies in effect at the end of fiscal year 1994; a “muddling through” path that assumed annual deficits of approximately 3 percent of gross domestic product (GDP); and a path that reaches balance in 2002 and sustains it. To suggest some of the trade-offs facing policymakers in choosing among fiscal policies, we examined some long-term economic and fiscal outcomes of these paths. We also simulated how some types of early action on the deficit, including early action on health care spending, might affect the long-term deficit outlook. Finally, we examined the prospects for sustaining balance over the long term. While we discuss the consequences of alternative fiscal paths, we do not suggest any particular course of action, since only the Congress can resolve the fundamental policy question of choosing the fiscal policy path and the composition of federal activity. In our simulations we employed a model originally developed by economists at the Federal Reserve Bank of New York (FRBNY) that relates long-term GDP growth to economic and budget factors. Details of that model and its assumptions can be found in our reports. As we noted in 1992 and 1995, important and compelling benefits can be gained from shifting to a new fiscal policy path. As illustrated in figure 1, chronic deficits have consumed an increasing share of a declining national savings pool, leaving that much less for private investment. Lower investment will ultimately show up in lower economic growth. Future generations of taxpayers will pay a steep price for this lower economic growth in terms of lower personal incomes and a generally lower standard of living at a time when they will face the burden of supporting an unprecedented number of retirees as the baby boom generation reaches retirement. The problem has been that the damage done by deficits is long-term, gradual, and cumulative in nature and may not be as visible as the short-term costs involved in reducing deficits. This has presented, and continues to present, a difficult challenge for public leaders who must mount a compelling case for deficit reduction—and for the steps required to achieve it—that can capture public support. The updated simulations we presented to you and Chairman Domenici last spring confirmed that the nation’s current fiscal policy path is unsustainable over the longer term. Specifically, a fiscal policy of “no action” on the deficit through 2025 implies federal spending of nearly 44 percent of GDP, and as figure 2 shows, a deficit over 23 percent of GDP. Let me explain these ominous trends. The increased spending is principally a function of escalating federal spending on health care and Social Security, which is driven by projected rising health care costs and the aging of our population. Spending on interest on our national debt also rises as annual deficits and accumulated public debt expand. Essentially, current commitments in these areas become progressively unaffordable for the nation over time. Without any significant changes in spending or revenues, such an expanding deficit would result in collapsing investment, declining capital stock, and, inevitably, a declining economy by 2025. As emphasized in both our 1992 and 1995 reports, we do not believe that such a scenario would take place. Rather, we believe that the prospect of economic decline would prompt action before the end of our simulation period. Nevertheless, this “no action” scenario, by illustrating the future logic of existing commitments, powerfully makes the case that we have no choice but to take action on the deficit. The questions that remain are when and how. Our 1995 simulations also confirm the long-term economic and fiscal benefits of deficit reduction. We assessed the long-term impacts of balancing the budget by 2002, as was contemplated in the fiscal year 1996 budget resolution and in the recent executive-congressional discussions over budget policy, and of sustaining such a posture through 2025. We also estimated the effects of following a path that we called “muddling through”—that is, running deficit of about 3 percent of GDP over the next 30 years. Although current policy is better than this in the near term, it is still a useful illustration. A fiscal policy of balance would yield a stronger economy in the long term than either a policy of no action or of muddling through. Table 1 shows that a budget balance reached in 2002 and sustained until 2025 would, over time, lead to increased investment, increased capital stock, a larger economy, and a much lower national debt than either of the other scenarios. This means that Americans could enjoy a higher standard of living than they might otherwise experience. Reaching and sustaining balance would also shrink the share of federal spending required to pay interest costs, thereby reducing the long-term programmatic sacrifice necessary to attain deficit reduction targets. Even “muddling through” with deficits of 3 percent of GDP would exact a price through higher interest costs and thus require progressively harder fiscal choices as time progresses. Under the balance path, debt per capita would decline from $13,500 in 1994 to $4,800 in 1995 dollars by 2025; debt as a percentage of the economy would drop from about 52 percent to 13 percent. Because of this shrinkage in the debt, by 2025 a balance path could bring interest costs down from about 12 percent in 1994 to less than 5 percent of our budget, compared to about 18 percent under “muddling through” and almost a third of our budget with no action. These differences are illustrated in figure 3. Alarming as these model results may appear, they are probably understated. Our model incorporates conservative assumptions about the relationship between savings, investment and GDP growth that tend to understate the differences between the economic outcomes associated with alternative fiscal politicize. Furthermore, budget projections for the near term and those assumed in our long-term model results may not tell the whole story. By convention, baseline budget projections do not include all the legitimate claims that may be made on the budget in the future. Rather, budget projections ignore many future claims and the costs of unmet needs unless they are the subject of policy proposals in the budget. Examples of such claims and needs would include the cost of cleaning up and restructuring the Department of Energy’s (DOE) nuclear weapons production complex, the cost of hazardous waste pollution clean-up at military facilities, and cost overruns in weapons systems. In short, most of the risks to future budgets seem to be on the side of worse-than-expected, rather than better-than-expected outcomes. I make this observation not to create despair but to underline the need to continue efforts at deficit reduction. Not all spending cuts have the same impact over the long run. Decisions about how to reduce the deficit will reflect—among other considerations—judgments about the role of the federal government and the effectiveness of individual programs. I would like to call attention today to two significant considerations in deficit reduction: (1) the importance of federal investment in infrastructure, human capital, and research and development (R&D), and (2) the importance of addressing the fast-growing programs in the budget. In our 1992 work, we drew particular attention to the importance of well-chosen federal investment in infrastructure, human capital, and R&D. A higher level of national savings is essential to the achievement of a higher rate of economic growth but, by itself, is not sufficient to assure that result. Certain other ingredients are necessary—including the basic stability with which this nation has been blessed in its social, political, and economic environment. In addition, however, economic growth depends on an efficient public infrastructure, an educated work force, an expanding base of knowledge, and a continuing infusion of innovations. In the past, the federal government, through its investments in these areas, has played an important role in providing an environment conducive to growth. Thus the composition of federal spending, as well as overall fiscal policy, can affect long-term economic growth in significant ways. The extent to which deficit reduction affects spending on fast-growing programs also matters. Although a dollar is a dollar in the first year it is cut—regardless of what programmatic changes it represents—cutbacks in the base of fast-growing programs generate greater savings in the future than those in slower-growing programs, assuming the specific cuts are not offset by increases in the growth rates of the programs. Figure 4 illustrates this point by comparing the long-run effects of a $50 billion cut in health spending with those of the same dollar amount cut from unspecified other programs. For both paths the cut occurs in 1996 and is assumed to be permanent but, after 1996, spending is assumed to continue at the same rates of growth as those shown in the “no action” simulation. We used the simple assumption that a reduction in either health or other programs would not alter the expected growth rates simply to illustrate the point that a cut in high-growth areas of spending will have a greater fiscal effect in the future than the same size cut in low-growth areas. A $50 billion cut in health spending in 1996 leads to a deficit in 2025 that is about 4 percent of GDP lower than would be the case from a $50 billion cut in a low-growth program. Further, our simulations show that even if a balanced budget is achieved early in the next century, deficits would reappear if we fail to contain future growth in health, interest, and social security costs. We conclude from these simulations that how and when deficit reduction occurs can have important long-term implications for the future economy and future budgets. As noted earlier, the benefits of deficit reduction in the long run may not seem as compelling as the short-term costs necessary to reduce the deficit. Nevertheless our work on the deficit reduction experiences in other nations shows that significant fiscal improvement is indeed possible in modern democracies, at least for a time. To reach fiscal balance or surplus, the governments we studied instituted often painful measures while generating and maintaining political support. Spending control proved the dominant policy tool used to achieve fiscal goals, although few programs were actually eliminated. Notably, however, several countries restrained social benefit commitments in their quest for savings. Government leaders sought to gain support or at least defuse potential opposition by bringing key interest groups that would be affected into the decision-making process. In addition, the design of the specific deficit-reducing strategies helped. Approaches such as reducing benefits instead of eliminating programs, targeting benefit cuts to higher-income beneficiaries, and deferring or shifting painful adjustments all helped maintain political support for spending reductions. The deficit reduction brought about in these governments provided significant fiscal benefits by slowing or reversing the growth of public debt, thereby slowing or reversing the growth of government interest costs. As we simulated in our long-term growth model, what was once a “vicious” circle of rising deficits, debt, and interest, which can in turn increase deficits, became a “virtuous” circle of falling deficits or rising surpluses, accrued even though most governments we studied did not sustain fiscal balance or surplus, possibly in part because public support for austerity was frequently linked to relatively short-run concerns. Despite this return to deficit, the increases in savings and investment resulting from deficit reduction may have boosted economic prospects for the long-term future, as well as provided fiscal benefits in the short run. Although the experiences of the nations in GAO’s study suggest that resolving deficits is possible in advanced democracies, they also indicate that sustaining fiscal discipline over the longer term is difficult. Thus, deficit reduction strategies designed to promote long-term fiscal progress may help ensure that future budgets are better positioned to withstand future economic and political pressures. For the United States, reaching budgetary balance in 2002 would indeed represent an achievement that by itself would bring about fiscal and economic benefits. Yet this achievement will not eliminate the need for future fiscal discipline. In fact, the needs of an aging society will be more easily met if fiscal balance—or even surplus—is both achieved and sustained for several years. In conclusion, Mr. Chairman, I would repeat our view that current policy is unsustainable. The question, therefore, is not whether to reduce the deficit but when and how. We believe those choices matter. Mr. Chairman, this concludes my written statement. I would be happy to answer any questions you or your colleagues might have. The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. U.S. General Accounting Office P.O. Box 6015 Gaithersburg, MD 20884-6015 Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders may also be placed by calling (202) 512-6000 or by using fax number (301) 258-4066, or TDD (301) 413-0006. Each day, GAO issues a list of newly available reports and testimony. To receive facsimile copies of the daily list or any list from the past 30 days, please call (202) 512-6000 using a touchtone phone. 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GAO discussed its work on the budget deficit and long-term economic growth. GAO noted that: (1) its long-term simulations show that unless the budget deficit is reduced or eliminated, economic growth, personal incomes, national investment, and the standard of living will be sharply reduced; (2) the nation's present fiscal policy is unsustainable in the long term; (3) reaching and sustaining a balanced budget would reduce federal spending on interest, a fast-growing segment of federal spending; (4) reductions in spending on fast-growing health, social security, and interest costs would be most beneficial and would have the most sustained effects; and (5) foreign governments' deficit reduction efforts have been painful but have provided significant fiscal benefits.

Mr. Chairman and Members of the Subcommittee: I am pleased to be here today to discuss our observations on the General Services Administration’s (GSA) strategic plan. This plan was prepared for submission to the Office of Management and Budget (OMB) and Congress on September 30, 1997, as required by the Government Performance and Results Act of 1993 (the Results Act). Building on our July 1997 report on GSA’s April draft plan, I will discuss the improvements GSA has made and areas where GSA’s strategic plan can be improved as it evolves over time. GSA’s April 28 draft strategic plan contained all the six components required by the Results Act. However, the draft plan generally lacked clarity, context, descriptive information, and linkages among the components. GSA has since made a number of improvements, and the six components better achieve the purposes of the Act. However, additional improvements would strengthen the September 30 plan as it evolves over time. The September 30 plan continues to have general goals and objectives that seem to be expressed in terms that may be challenging to translate into quantitative analysis. The strategies component is an improvement over the prior version but would benefit from a more detailed discussion of how each goal will actually be accomplished. Although the key external factors component in the September 30 plan is clearer and provides more context, the factors are not clearly linked to the general goals and objectives. The program evaluations component provides a listing of the various program evaluations that GSA used, but it does not include the required schedule of future evaluations. Although the plan does a much better job of setting forth GSA’s statutory authorities, this addition could be further improved by linking the different authorities to either the general goals and objectives or the performance goals. The plan also refers to three related areas—crosscutting issues, major management problems, and data reliability—but the discussion is limited and not as useful as it could be in trying to assess the impact of these factors on meeting and measuring the goals. This is especially true for major management and data reliability problems, which can have a negative impact on measuring progress and achieving the goals. In the 1990s, Congress put in place a statutory framework to address long-standing weaknesses in federal government operations, improve federal management practices, and provide greater accountability for achieving results. This framework included as its essential elements financial management reform legislation, information technology reform legislation, and the Results Act. In enacting this framework, Congress sought to create a more focused, results-oriented management and decisionmaking process within both Congress and the executive branch. These laws seek to improve federal management by responding to a need for accurate, reliable information for congressional and executive branch decisionmaking. This information has been badly lacking in the past, as much of our work has demonstrated. Implemented together, these laws provided a powerful framework for developing fully integrated information about agencies’ missions and strategic priorities, data to show whether or not the goals are achieved, the relationship of information technology investment to the achievement of those goals, and accurate and audited financial information about the costs of achieving mission results. The Results Act focuses on clarifying missions, setting goals, and measuring performance toward achieving those goals. It emphasizes managing for results and pinpointing opportunities for improved performance and increased accountability. Congress intended for the Act to improve the effectiveness of federal programs by fundamentally shifting the focus of management and decisionmaking away from a preoccupation with tasks and services to a broader focus on results of federal programs. strategies) to achieve the goals and objectives and the various resources needed; (4) a description of the relationship between the long-term goals/objectives and the annual performance plans required by the Act; (5) an identification of key factors, external to the agency and beyond its control, that could significantly affect achievement of the strategic goals; and (6) a description of how program evaluations were used to establish and revise strategic goals and a schedule for future program evaluations. We reported in July that the April 28 draft plan included the six components required by the Results Act and the general goals and objectives in the plan reflected GSA’s major statutory responsibilities. However, our analysis showed that the plan could have better met the purposes of the Act and related OMB guidance. Two of the required components—how goals and objectives were to be achieved and program evaluations—needed more descriptive information on how goals and objectives were to be achieved, how program evaluations were used in setting goals, and what the schedule would be for future evaluations to better achieve the purposes of the Act. The four other required components—mission statement, general goals and objectives, key external factors, and relating performance goals to general goals and objectives—were more responsive to the Act but needed greater clarity and context. We also noted that the general goals and objectives and the mission statement in the draft plan did not emphasize economy and efficiency, as a reflection of taxpayers’ interests. Also, the general goals and objectives seem to have been expressed in terms that may be challenging to translate into quantitative or measurable analysis, and there could have been better linkages between the various components of the plan. We also reported that the plan could have been made more useful to GSA, Congress, and other stakeholders by providing a fuller description of statutory authorities and an explicit discussion of crosscutting functions, major management problems, and the adequacy of data and systems. Although the plan reflected the major pieces of legislation that establish GSA’s mission and explained how GSA’s mission is linked to key statutes, we reported that GSA could provide other useful information, such as listing laws that broaden its responsibilities as a central management agency and which are reflected in the goals and objectives. accomplishment of goals and objectives. It also made no mention of whether GSA coordinated the plan with its stakeholders. The plan was also silent on the formidable management problems we have identified over the years—issues that are important because they could have a serious impact on whether GSA can achieve its strategic goals. Finally, the plan made no mention of how data limitations would affect its ability to measure performance and ultimately manage its programs. We reported that consideration of these areas would give GSA a better framework for developing and achieving its goals and help stakeholders better understand GSA’s operating constraints and environment. The September 30 plan reflects a number of the improvements that we suggested in our July 1997 report. The clarity of the September 30 plan is improved and it provides more context, descriptive information, and linkages within and among the six components that are required by the Act. Compared to the April 28 draft, the September 30 plan generally should provide stakeholders with a better understanding of GSA’s overall mission and strategic outlook. Our analysis of the final plan also showed that, in line with our suggestion, GSA placed more emphasis on economy and efficiency in the comprehensive mission statement and general goals and objectives components. The September 30 plan also generally described the operational processes, staff skills, and technology required, as well as the human, information, and other resources needed, to meet the goals and objectives. The strategic plan now contains a listing of program evaluations that GSA used to prepare the plan and a more comprehensive discussion of the major pieces of legislation that serve as a basis for its mission, reflecting additional suggestions we made in our July 1997 report. Furthermore, the September 30 plan’s overall improvement in clarity and context should help decisionmakers and other stakeholders better understand the crosscutting, governmentwide nature of GSA’s operations as a central management agency. The September 30 plan makes some reference to major management problems in the program evaluations component and also addresses the importance of data reliability in the general goals and objectives component. The improvements that GSA has made are a step in the right direction, and the six components better achieve the purposes of the Act. However, we believe that additional improvements, which are described in the following section, would strengthen the strategic plan as it evolves over time. As we discussed in our July 7, 1997, report on the draft plan, the September 30 plan continues to have general goals and objectives that seem to be expressed in terms that may be challenging to translate into quantitative or measurable analysis. This could make it difficult to determine whether they are actually being achieved. For example, the goal to “compete effectively for the federal market” has such objectives as “provide quality products and services at competitive prices and achieve significant savings” and “open GSA to marketplace competition where appropriate to reduce costs to the government and improve customer service.” However, this goal, its related objectives, and the related narrative do not state specifically how progress will be measured, such as the amount of savings GSA intends to achieve or the timetable for opening the GSA marketplace for competition. OMB Circular A-11 specifies that general goals and objectives should be stated in a manner that allows a future assessment to be made of whether the goals are being met. The OMB guidance states that general goals that are quantitative facilitate this determination, but it also recognizes that the goals need not be quantitative and that related performance goals can be used as a basis for future assessments. However, we observed that many of the performance goals that GSA included in the plan also were not expressed in terms that could easily enable quantitative analysis, which could make gauging progress difficult in future assessments. The strategies component—how the goals and objectives will be achieved—described the operational processes, human resources and skills, and information and technology needed to meet the general goals and objectives. This component is an improvement over the prior version we reviewed, and applicable performance goals are listed with each of these factors. Although GSA chose to discuss generally the factors that will affect its ability to achieve its performance goals, we believe that a more detailed discussion of how each goal will actually be accomplished would be more useful to decisionmakers. To illustrate with a specific example, the plan could discuss the approaches that GSA will use to meet the performance goals related to its general goal of promoting responsible asset management using operational processes, human resources and skills, information and technology, and capital/other resources. is achieving its goals and objectives. We also noted that the strategies component does not discuss priorities among the goals and objectives. Such a discussion would be helpful to decisionmakers in determining where to focus priorities in the event of a sudden change in funding or staffing. Finally, GSA deferred to the President’s budget its discussion about capital and other resources. We believe it seems reasonable to include in this component at least some general discussion of how capital and other resources will be used to meet each general goal. Although the external factors component in the September 30 plan is much clearer and provides more context than the draft version we reviewed, the factors are not clearly linked to the general goals and objectives. OMB Circular A-11 states that the plan should include this link, as well as describe how achieving the goals could be affected by the factors. This improvement would allow decisionmakers to better understand how the factors potentially will affect achievement of each general goal and objective. The program evaluations component in the September 30 plan provides a listing of the various program evaluations that GSA indicates were used in developing the plan. However, it still does not include a schedule of future evaluations. Instead, the plan states that the schedule for future program evaluations is under development and that GSA intends to use the remainder of the consultation process to obtain input from Congress and stakeholders concerning the issues that should be studied on a priority basis. However, OMB Circular A-11 indicates that the schedule should have been completed and included in the September 30 plan, together with an outline of the general methodology to be used and a discussion of the particular issues to be addressed. Although the plan does a much better job of setting forth GSA’s statutory authorities in the attachment, this description could be further improved if the different statutory authorities discussed therein were linked with either the general goals and objectives or the performance goals included in the plan. Further, the plan only makes limited reference to the other important areas we identified in our July 1997 report—crosscutting issues, major management problems, and data reliability. The plan’s improved clarity and context should help decisionmakers understand the crosscutting issues that affect GSA as a central management agency. However, explicit discussion of these issues is limited, and the September 30 plan makes no reference to the extent to which GSA coordinated with stakeholders. The September 30 plan references major management problems in the program evaluations component, but it does not explicitly discuss these problems or identify which problems could have an adverse impact on meeting the general goals and objectives. Our work has shown over the years that these types of problems have significantly hampered GSA’s and its stakeholder agencies’ abilities to accomplish their missions. For example, the plan could address how GSA will attempt to ensure that its information systems meet computer security requirements or how GSA plans to address the year 2000 problem in its computer hardware and software systems. The plan does reference data reliability in the general goals and objectives component. However, the discussion of data reliability, which is so critical for measuring progress and results, is limited and not as useful as it could be in attempting to assess the impact that data problems could have on meeting the general goals and objectives. We continue to believe that greater emphasis on how GSA plans to resolve management problems and on the importance of data reliability could improve the plan. Mr. Chairman, this concludes my prepared statement. I would be pleased to answer any questions. The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. U.S. General Accounting Office P.O. Box 37050 Washington, DC 20013 Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders may also be placed by calling (202) 512-6000 or by using fax number (202) 512-6061, or TDD (202) 512-2537. Each day, GAO issues a list of newly available reports and testimony. To receive facsimile copies of the daily list or any list from the past 30 days, please call (202) 512-6000 using a touchtone phone. A recorded menu will provide information on how to obtain these lists.

GAO discussed its observations on the General Services Administration's (GSA) September 30, 1997, strategic plan. GAO noted that: (1) GSA's April 1997 draft strategic plan contained all six components required by the Government Performance and Results Act; (2) however, the draft plan generally lacked clarity, context, descriptive information, and linkages among the components; (3) GSA has since made a number of improvements, and the six components now better achieve the purposes of the act; (4) however, additional improvements would strengthen the September 30 plan as it evolves over time; (5) the September 30 plan continues to have general goals and objectives that seem to be expressed in terms that may be challenging to translate into quantitative analysis; (6) the strategies component is an improvement over the prior version but would benefit from a more detailed discussion of how each goal will actually be accomplished; (7) although the external factors in the September 30 plan are clearer and provide more context, the factors are not clearly linked to the general goals and objectives; (8) the program evaluations component provides a listing of the various program evaluations that GSA used, but it does not include a required schedule of future evaluations; (9) although the plan does a much better job of setting forth GSA's statutory authorities, this addition could be further improved by linking the different authorities to either the general goals and objectives or the performance goals; (10) the plan also refers to three related areas--crosscutting issues, major management problems, and data reliability--but the discussion is limited and not as useful as it could be in articulating how these issues might affect successful accomplishment of goals and objectives; and (11) this is especially true for major management and data reliability problems, which can have a negative impact on measuring progress and achieving the goals.

According to the American Academy of Pediatrics, only about a quarter of all approved drugs marketed in the United States have had clinical trials performed involving pediatric patients. FDA’s January 2001 report to Congress on the pediatric exclusivity provision noted that evidence from several studies conducted since 1973 showed that between 71 and 81 percent of drugs were inadequately labeled for use in pediatric patients. According to the legislative history of FDAMA, several factors appear to have contributed to the lack of pediatric studies. Drug companies indicated that they had little incentive to perform pediatric studies on drugs they intended to market primarily to adults and that these drugs would provide little additional revenue from use in children. Companies also said they were concerned about liability and malpractice issues and the difficulty of attracting enough pediatric patients for studies because of the small number of children with a particular disease. Previous FDA efforts to address the problem of inadequate pediatric testing and drug labeling information had been unsuccessful. For example, in 1994 FDA tried to encourage sponsors to provide more pediatric information and conduct new studies. However, it did not require sponsors to conduct new pediatric studies, and pediatric use information did not substantially increase. In 1997, the Congress recognized the importance of learning more about how drugs work in children by including in FDAMA a financial incentive for pharmaceutical manufacturers and drug sponsors to conduct pediatric studies and submit the results to FDA. The pediatric exclusivity provision offered 6 months of additional marketing exclusivity for drugs tested by manufacturers and other sponsors for use in children. This provision also required FDA to develop, prioritize, and publish an annual list of approved drugs for which new pediatric information may produce health benefits in the pediatric population. FDA’s initial priority list, issued in May 1998, was developed based on recommendations from experts in pediatric research from the American Academy of Pediatrics, PhRMA, GPhA, the National Institutes of Health, the Pediatric Pharmacology Research Units Network,the U.S. Pharmacopoeia, and several others. To be included on FDA’s priority list, a drug had to meet one of the following criteria: The drug would be a significant improvement compared to marketed products labeled for use in the treatment, diagnosis, or prevention of a disease in the relevant pediatric population. The drug is widely used in the pediatric population, with at least 50,000 projected uses per year. The drug is in a class or for an indication for which additional therapeutic or diagnostic options are needed for pediatric patients. The process for obtaining the pediatric exclusivity extension usually begins when a sponsor submits a proposal to conduct pediatric studies to FDA. If FDA officials believe the studies will provide useful information, the agency issues a formal written request for sponsors to conduct the studies. FDA also issues written requests without sponsor proposals. The written request addresses, among other things, the type of studies to be performed, study design, appropriate study age groups, and clinical endpoints. The sponsor then decides whether to conduct studies requested by FDA. Once the sponsor submits the results of the studies to FDA, the agency generally has 90 days to determine whether the completed studies reported meet the terms of the written request and were conducted properly. If FDA officials determine that the sponsor’s efforts were sufficient, the 6-month marketing exclusivity extension is granted. There has been a substantial increase in pediatric drug research compared to the very limited amount of such research before enactment of FDAMA. As of April 1, 2001, FDA had issued 188 written requests covering 155 drugs already on the market and 33 new drugs not yet approved. About 73 percent of the written requests were for drugs that treat anti-inflammatory, cardiovascular, anti-viral, oncology, neurology, or endocrine diseases or conditions. A written request can ask for more than one study of a drug, and the 188 requests include 414 studies involving potentially more than 23,200 children as research subjects. Of the 414 studies requested, 33 percent were to examine drug safety and efficacy in pediatric patients, about 30 percent were to examine both a drug’s safety and its pharmacokinetics, or how it is absorbed, distributed, and eliminated from the body. Another 20 percent of the studies were to examine only a drug’s safety in pediatric patients, and about 9 percent were to study both pharmacokinetics and pharmacodynamics, or how different individuals, such as children at various stages of development, respond to a drug. Precise data on study costs is not publicly available. The estimates we were provided vary considerably. Officials at NICHD, which has conducted many pediatric drug studies, said costs vary depending on the number of children participating and type of drug being studied. They estimated that a safety and efficacy study may cost between $1 million and $7.5 million, while the cost of a pharmacokinetic study can range from $250,000 to $750,000 per age group. Limited data provided by PhRMA suggested higher study costs, ranging from under $5 million to more than $35 million. Another study indicated that, based on a survey of drug companies, the cost of pediatric studies averaged $3.87 million per written request. As of April 1, 2001, 28 drugs had been granted marketing extensions based on research conducted in accordance with FDA’s written requests. The drugs granted extensions treat a variety of diseases or conditions that afflict children. Table 1 provides some overall population information on the prevalence of diseases in pediatric patients that may be treated by some of the drugs granted market extensions. There has been some concern that exclusivity may be sought and granted primarily for drugs that generate substantial revenue. Our analysis found that sales revenue varied widely for the 155 approved drugs for which FDA has issued written requests. As shown in figure 1, while 7.7 percent of the drugs covered by written requests had sales exceeding $1 billion in 1999, 53.5 percent had sales under $120 million in 1999. Another 14.8 percent of the drugs had sales that were more than $120 million but less than $200 million. Research conducted under the pediatric exclusivity provision is providing new and useful information about whether and how drugs work in children. As of April 1, 2001, labels for 18 of the 28 drugs granted marketing extensions had been changed to incorporate findings from research conducted to obtain the extensions. Some of these label changes include new statements that the drug can be used for younger children or for a new use. Other label changes provide additional and more specific guidance regarding the effective dose or additional warnings about adverse events in children or information on related medications. In addition to making label changes, sponsors for three drugs developed new formulations that are easier to administer to children. A few examples will help illustrate the new information derived from these studies. Ibuprofen: this commonly used drug to reduce fever had no dosing information for children under 2 years of age. Studies in thousands of infants established a safe and effective dose in infants and children from 6 months to 2 years. Ranitidine: studies in neonates provided accurate dosing information for safer and more effective use of this drug in the management of reflux of stomach contents—a life-threatening event in seriously ill neonates—and the label now says the drug can be prescribed to newborns and 1-month- olds. Fluvoxamine: studies with this drug, used to treat children with obsessive compulsive disorder, indicated that the dose in adolescents may need to be as high as in adults but may need to be lower for girls ages 8 to 11 years. Etodolac: study results allowed for indication on the label that the drug can be used to treat juvenile rheumatoid arthritis in children 6 to 16 years old. Midazolam: studies with this drug, used as a sedative, led to a new oral formulation for use in infants and children. In addition, the study results showed that this drug has a high risk for an adverse event in children with congenital heart disease and pulmonary hypertension. Experts agree that, since FDAMA, there also has been significant growth in the infrastructure necessary to conduct pediatric studies. For example, NICHD has expanded the number of PPRUs from 7 to 13. These units, located in children’s hospitals and academic research centers specializing in pediatric research, have conducted an increasing number of pediatric drug studies. Prior to FDAMA, the PPRU Network had conducted 17 studies in collaboration with drug sponsors. By 2000, the PPRUs were conducting 73 pediatric drug studies in collaboration with drug sponsors. The pharmaceutical industry also has increased its capacity to conduct pediatric studies since enactment of FDAMA. According to a recent survey, contract research organizations, which conduct pediatric trials for drug sponsors, are working on over 100 pediatric studies involving 7,000 patients. In addition, two of the largest contract research groups have established pediatric-specific research ventures, which collectively can call on the services of 500 doctors with pediatric training and nearly 2000 investigators. While the new information generated by the increasing number of pediatric studies has resulted in a variety of benefits, the cost of granting additional market exclusivity can be very large. The cost to the public of providing the brand named drugs with an additional 6 months of market exclusivity presents a delay in consumer access to lower-cost generic drugs. Delaying access to lower cost generic drugs increases health care spending overall and may be particularly burdensome for those without prescription drug coverage that must pay for the drugs out-of-pocket. FDA estimates that the delay in availability of generic drugs could increase national drug spending by about one half of one percent, or on average about $695 million per year over a 20-year period. The Agency did not attempt to develop a quantitative estimate of cost savings from improved health outcomes at this time. While the pediatric exclusivity provision is working better than previous efforts to stimulate pediatric drug research, two important challenges remain. First, the law does not ensure that research results are incorporated into labels in a timely manner for drugs that are already on the market once marketing extensions have been granted. Second, the law provides no incentive to conduct pediatric research on drugs for which patents and marketing exclusivity have expired. The statute requires that FDA decide whether to grant the 6-month marketing exclusivity within 90 days of receiving research results. The decision must be based solely on whether the research meets the terms of the written request. The sponsor is required to submit proposed label changes with the study results, but the decision to grant the extension is not contingent on reaching agreement with FDA on label changes. Because it usually takes much longer than 90 days — often a year— to evaluate study results and negotiate label changes with manufacturers, drugs may be granted an additional 6 months of marketing exclusivity before appropriate label changes have been determined. We found that it took on average more than 9 months for FDA and sponsors to agree on label changes for the 18 drugs granted exclusivity that have had label changes. This is slightly faster than FDA’s goal of reviewing other, similar changes to approved drug labels within 10 to 12 months. FDA officials told us that five drugs have gone for more than a year without label changes after the sponsor was granted exclusivity extension. In some cases, FDA officials said they have had substantial difficulty in getting drug manufacturers to incorporate unfavorable pediatric research results into drug labels. We found a difference of opinion on whether a marketing extension should be contingent on label changes. Some officials we interviewed suggested that drug manufacturers should be required to incorporate results into label changes within 1 year. Others have suggested that the 6- month marketing extension be contingent on agreement on label changes based on the pediatric study results. PhRMA officials told us that the current requirement provides their members with a degree of certainty that they will receive an additional 6-months exclusivity when they successfully complete the pediatric studies requested by FDA. They have suggested some policy changes to ensure that label changes are agreed to more quickly after pediatric studies are completed.

Children fall ill with many of the same diseases as adults and are often treated with the same drugs. However, only about 25 percent of drugs used today have been labeled for pediatric patients. The lack of pediatric testing and labeling can place children at risk of under- or overdosing, and the lack of age-appropriate formulations, such as liquids or chewable tablets, can result in improper administration of drugs. The pediatric exclusivity provision of the Food and Drug Administration Modernization Act of 1997 has successfully encouraged drug sponsors to generate needed information on how drugs work in children. A wide range of drugs are being studied in many therapeutic areas. The infrastructure for conducting pediatric trials has also been greatly strengthened, which should help to support continued progress. Although several drug labels have been changed to incorporate findings from research done under the pediatric exclusivity provision, label changes typically occur long after the Food and Drug Administration has granted the extension of market exclusivity. In addition, there continues to be little incentive to conduct pediatric research on off-patent drugs.

Information about contracts and other award types related to Hurricanes Katrina and Rita is available from several sources, including: Federal Procurement Data System (FPDS), at https://www.fpds.gov . Department of Homeland Security (DHS), at http://www.dhs.gov/dhspublic/interapp/editorial/editorial_0729.xml . (Information about contracts awarded by the Federal Emergency Management Agency (FEMA) is available at this website.) U.S. Army Corps of Engineers (USACE), at http://www.usace.army.mil . U.S. Navy, Military Sealift Command (MSC), at http://www.procurement.msc.navy.mil/Contract/Welcome.jsp . (The Military Sealift Command is the agency that awarded four contracts for four cruise ships to house evacuees in the Gulf Region. ) The Federal Procurement Data System is a government database that contains detailed information about contracts that have been awarded; task, delivery, and purchase orders that have been issued; and purchases that have been made under blanket purchase agreements (BPAs). Three spreadsheets are available on the FPDS website: Hurricane Katrina contract information, Hurricane Rita contract information, and contract information for other disasters that occurred in 2005. Although agencies are required to submit information to FPDS about contracts and other types of awards that exceed $2,500 in value, it is likely, as noted at the beginning of the three spreadsheets available on the FPDS website, that not all contracting actions have been entered into FPDS yet. Nevertheless, with more than 2,500 contracting actions listed by late October from many different agencies, and the use of 50 FPDS data elements to describe the contracting actions, FPDS spreadsheets offer the most comprehensive picture of emergency contracting. Contracting information available from the other three sources—FEMA (via the DHS website), USACE, and MSC—is not included in the FPDS spreadsheets. As noted on the FPDS spreadsheets, some contracting officials may not have access to the necessary computer systems or may not have time to submit information to FPDS. This caveat may also apply to FEMA. In the case of USACE and MSC, the Department of Defense (DOD) has not completed its connections to FPDS, though it expects to do so sometime in FY2006. Thus, very few DOD contracting actions are listed on the Hurricane Katrina spreadsheet. While the information presented here applies to government procurements generally, the information is provided to aid specifically in understanding the FPDS spreadsheets. Information listed on the FPDS spreadsheets includes the date that a transaction was signed; the date that the parties (that is, the government and a company) agreed would be the starting date for the contract's requirements, which may be the same as the date signed; the current completion date, which is the completion date of the base contract plus any options that have been exercised; the dollar value of the contract or other award; and the name and location of the vendor. Although the definition of "current completion date" does not mention, for example, delivery orders (DOs), it seems likely that completion date entries for DOs indicate the date by which deliveries are to be completed. The type of award an agency makes for a particular procurement depends, at a minimum, on whether the required items or services are available from an existing contract, a federal supply schedule, or a blanket purchase agreement. A blanket purchase agreement (BPA) is a "charge account" with qualified sources of supply. Generally, BPAs are used by agencies to fill anticipated repetitive needs for supplies or services. A contract is a mutually binding legal relationship which obligates a vendor to provide goods or services and the government to pay for them. A delivery order or a task order (TO) is used to purchase supplies or services, respectively, from an established government contract or with government sources. When this procurement vehicle is used, it is said that the agency "placed a task (or delivery) order against a contract." A purchase order (PO) is an offer by the government to buy supplies or services, under specified terms and conditions and using simplified acquisition procedures, from a vendor. Several different types of contracts are available to contracting officers and contractors, and contracting officers have many factors to consider when selecting which type of contract to use for a particular procurement. Factors include type and complexity of the agency's requirement, urgency of the requirement, performance period, and the extent and nature of proposed subcontracting. The following contracts have different pricing arrangements: Fixed-price contracts "provide for a firm price or, in appropriate cases, an adjustable price.... A fixed-price contract with economic price adjustment provides for upward or downward revision of the stated contract price upon the occurrence of specified contingencies." Cost-reimbursement contracts "provide for payment of allowable incurred costs, to the extent prescribed in the contract." Time-and-materials contracts provide "for acquiring supplies or services on the basis of—(1) Direct labor hours at specified fixed hourly rates that include wages, overhead, general and administrative expenses, and profit; and (2) Materials at cost, including, if appropriate, material handling costs as part of material costs." Labor-hour contracts are "a variation of the time-and-materials contract, differing only in that materials are not supplied by the contractor." A fixed price or cost-reimbursement contract that includes an incentive may be referred to as an "incentive contract." Incentive contracts "are appropriate when ... the required supplies or services can be acquired at lower costs and, in certain instances, with improved delivery or technical performance, by relating the amount of profit or fee payable under the contract to the contractor's performance." Another variation is called the "indefinite-delivery contract," which is "used to acquire supplies and/or services when the exact times and/or exact quantities of future deliveries are not known at the time of contract award," and which is sometimes referred to as an "indefinite-delivery/indefinite-quantity (IDIQ) contract." For every contracting action reported to FPDS, the procuring agency must assign a unique identifier—a procurement instrument identifier (PIID). Agencies are responsible for developing their own PIID coding schemes, but they must use alphabetical characters in the first positions to indicate the agency; assign alphanumeric characters to identify the appropriate office or administrative subdivision; and, similar to the assignment of numbers sequentially to public laws, assign numbers sequentially to contracting actions. Agencies may add other information, such as fiscal year, to their PIIDs. The Federal Procurement Data Center is required to maintain a registry of agencies' coding schemes and validate their use in all transactions. Full and open competition, which "means that all responsible sources are permitted to compete," is the policy of the federal government. However, exceptions are permitted. One category of exceptions provides for full and open competition after exclusion of sources. Procurements that are set aside for certain types of small businesses belong to this category, because large businesses are excluded from competition. Other than full and open competition, which is popularly referred to as "no bid" or "sole source" contracting, is permitted under seven circumstances: only one responsible source exists, and no other supplies or services will satisfy agency requirements; an unusual and compelling urgency for supplies or services exists; the government needs to achieve industrial mobilization, establish or maintain an essential engineering or research and development capability, or obtain expert services; an international agreement or treaty precludes full and open competition; a statute authorizes or requires that supplies or services be procured through another agency or from a specified source; disclosure of an agency's needs could compromise national security; and it is in the public interest not to conduct a full and open competition. Two columns on the FPDS spreadsheets—"Extent Competed" and "Reason Not Competed"—provide competition information about each procurement. While some spreadsheet entries include the phrase "other than full and open competition" or "full and open after exclusion of sources" for the former column, and the appropriate reason why there was no or limited competition, other entries refer to other types of limitations on procurements. For example, an agency might indicate that a particular procurement was "not available for competition," and then, as the reason, cite the Javits-Wagner-O'Day (JWOD) Act, which mandates that organizations that employ individuals who are blind or severely disabled are a required source of supplies and services for federal agencies. The FPDS data dictionary provides descriptions for the different entries permitted in these two columns. The term "interagency contracting" has several meanings. Perhaps the best known example is when agencies purchase goods and services from a federal supply schedule that has been established and is maintained by another federal agency, such as the General Services Administration (GSA). Another type of interagency contracting occurs when agency A purchases goods or services on behalf of agency B, which funds the purchase. An examination of the FPDS spreadsheets indicate that numerous purchases were made using this method. The purchasing department, and agency or office, if applicable, are listed in columns A and B, respectively. The funding agency code is located in column M. Apparently, if there is no entry in column M for a particular procurement, the department identified in column A funded the procurement. Conversely, there are many procurements for which the entry in column M does not match the department and agency identified in columns A and B. For example, GSA purchased goods and services that were paid for by the Air Force, the Army, DHS, FEMA, the Navy, and an office within the Department of Health and Human Services. A useful feature of FPDS is that it allows agencies to identify a contractor by type of organization or business, such as tribal government, small disadvantaged business, educational institution, woman-owned business, veteran-owned business, and nonprofit organization. The three hurricane-related spreadsheets available at FPDS use this information to show what type of organization was involved in each procurement. The data provided through the FPDS website and the other websites listed above provide a degree of transparency in what is often a murky process and can be used to analyze hurricane-related recovery procurements.

Information about contracts and other types of government procurements made in support of hurricane recovery efforts may be obtained online from the Federal Procurement Data System (FPDS), the Department of Homeland Security, the U.S. Army Corps of Engineers, and the U.S. Navy's Military Sealift Command websites. The government-wide database, FPDS, provides the most comprehensive and detailed information, but the other three websites include contracts not currently listed in FPDS. Available information about government procurements includes, among other things, the type of award (for example, a contract or a delivery order), the type of contract, and the extent of competition.

In order to conduct foreign relations and promote the interests of their nationals located abroad, States (i.e., countries) require secure means of communicating with their diplomats (i.e., representatives of a government who conduct relations with another government on its behalf) and consular officers (i.e., representatives of a government who promote the government's commercial interests and provide assistance to its citizens located in another country) stationed in other States. To ensure that such channels of communication are preserved, States receiving foreign diplomats and consular officers have long accorded such persons with certain privileges and immunities on the basis of comity, reciprocity, and international agreement. As political and economic contacts between States have grown, customary practices regarding diplomatic and consular immunities have increasingly been codified via bilateral or multilateral agreement. These agreements not only describe the specific privileges and immunities to be accorded to foreign diplomats and consular officers by a receiving State, but also specify those privileges and immunities owed to other members of diplomatic and consular missions, as well as towards the family members of mission members. In recent decades, international organizations have been viewed as a means by which States may conduct multilateral relations and cooperate on issues which are transnational in scope. In order to ensure the autonomy of such organizations and prevent any member State from unreasonably interfering with organizational functions, many international organizations and their employees have been accorded certain privileges and immunities by their member States. These privileges and immunities are typically similar in scope to those accorded to foreign diplomatic missions. This report describes the privileges and immunities generally owed to foreign diplomatic, consular, and international organization personnel under U.S. law. It does not discuss certain exceptions to these immunities that may apply to U.S. citizens and legal permanent residents who are employed by international organizations or foreign embassies or consulates. The treaties and statutes discussed in this report are: the Vienna Convention on Diplomatic Relations (Diplomatic Convention); the Vienna Convention on Consular Relations (Consular Convention); the Agreement Regarding the Headquarters of the United Nations (Headquarters Agreement); the Convention on the Privileges and Immunities of the United Nations (U.N. Convention); and the International Organizations Immunities Act. This report contains charts detailing the privileges and immunities provided by the legal authorities mentioned above, along with the personnel to whom such privileges and immunities apply. It is important to note that the above-mentioned authorities are not exhaustive, and the scope of immunity due in any particular case may be governed in whole or in part by other instruments. For example, the United States is a party to many bilateral consular conventions that contain immunities provisions. In most instances, the other signatory is, along with the United States, a party to the Consular Convention. In these cases, the instrument affording greater protection to each State's consular officers is controlling. Some countries with which the United States has a consular treaty are not parties to the Consular Convention. The immunities accorded to consular personnel of such States are governed by the appropriate bilateral treaties, not by the authority discussed in this report. Furthermore, not all international organizations are covered by the International Organizations Immunities Act (IOIA), or, as is the case with the United Nations, are covered not only by the IOIA but also by a number of international agreements. Even where immunities are governed generally by the authorities cited in the relevant chart, individuals serving in similar positions for different countries may nevertheless enjoy different immunities. For example, the Diplomatic Relations Act, which effectively adopted the standards of the Diplomatic Convention for domestic application, provides that the President may, on the basis of reciprocal treatment, specify immunities for individual countries that are more or less favorable than those under the Convention. Both the Diplomatic Convention and the Consular Convention allow the United States to apply immunities restrictively where a particular country has applied immunity rules restrictively towards American representatives. Similarly, the IOIA conditions certain immunities on the basis of treatment of American representatives abroad. It must be emphasized that the immunities provided to foreign diplomats, consular officials, and employees of international organizations may be waived by the sending State or the appropriate international organization, with or without the consent of the individual involved. On the other hand, certain individual acts may lead to a waiver of immunity. For example, the initiation of civil proceedings by an otherwise exempt individual may preclude him from invoking immunity with regards to a directly-connected counterclaim. Another example of this type of personal waiver is the relinquishment of all immunity by consular employees and staff who undertake private gainful employment in the receiving State. Still another example is when a foreign person accorded immunity wishes to become a lawful permanent resident of the United States, in which case the person must waive the rights, privileges, immunities, and exemptions he would otherwise accrue on account of his occupational status. Finally, note that even where an individual enjoys immunity from jurisdiction, a person harmed by the immune individual nevertheless may have recourse to compensation under one of two statutes. First, the Diplomatic Relations Act requires that (1) each diplomatic mission in the United States (including otherwise immune missions to international organizations), (2) members of these missions and their families, and (3) high ranking United Nations officials all meet liability insurance requirements relating to the operation of motor vehicles in the United States. Second, the Foreign Sovereign Immunities Act provides that a foreign State shall not, with limited exception, be immune from suit for money damages being sought against it for harm occurring in the United States and caused by a wrongful nondiscretionary act of one of its officials or employees acting within the scope of duty. The following sections provide an overview of the statutes and agreements governing the privileges and immunities accorded to foreign diplomats, consular officials, employees of international organizations, and related personnel. Pursuant to its treaty obligations under the Vienna Convention on Diplomatic Relations (VCDR), ratified in 1972, the United States accords certain privileges and immunities to designated categories of persons employed by other Convention parties' diplomatic missions, along with the household family members of certain mission employees. Persons entitled to certain privileges and immunities under the Diplomatic Convention include diplomatic agents and their immediate household families, the mission's administrative and technical staff and the immediate household families of those staff members; the mission's service staff; and private servants of members of the mission. Under the Convention, the United States accords diplomatic agents (and members of their households) absolute immunity from its criminal jurisdiction and near-absolute immunity from U.S. civil and administrative jurisdiction. A diplomatic agent is also not obliged to give evidence as a witness. Below the rank of diplomat, the administrative, technical, and service staffs also are immune from criminal jurisdiction, but have more limited immunity from civil and administrative jurisdiction. The household family members of diplomatic agents and mission staff are also generally provided with the same privileges and immunities accorded to the diplomatic agent or mission staff member to which they are related. To varying degrees, persons covered by the Diplomatic Convention also receive immunity from taxes and customs duties, military and public service obligations, and alien registration requirements. Congress passed the Diplomatic Relations Act to grant the privileges and immunities accorded under the Diplomatic Convention to all foreign diplomatic missions, personnel, and the families of such personnel, regardless of whether the sending State is a party to the Convention. This extension is subject to the sending State's reciprocal treatment towards U.S. diplomatic missions, personnel, and families of such personnel, along with other terms and conditions the President deems appropriate. The Vienna Convention on Consular Relations (VCCR), which was ratified by the U.S. in 1969, accords certain privileges and immunities to consular officers (i.e., persons who exercise consular functions on behalf of the sending State, notably including the consular post) and their immediate household families; the post's administrative and technical staff and the immediate household families of those staff members; the post's service staff; and honorary consuls (i.e., consular officers other than career consular officers). These privileges and immunities are lesser in scope than those enjoyed by similarly-situated members of diplomatic missions and those members' household families. For example, while foreign diplomats and their family members receive full immunity from the criminal jurisdiction of the receiving State under the Diplomatic Convention, consular officers covered by the Consular Convention only receive immunity for actions they take in the course of their official functions, and their family members receive no immunity from the criminal jurisdiction of the receiving State. Family members of consular employees also receive no immunity from the receiving State's civil jurisdiction. Members of the consular post and their family members do receive varying degrees of immunity from the receiving State's taxes and custom duties, alien registration requirements, and military service obligations. The privileges and immunities owed under the Consular Convention only apply between Convention parties. The privileges and immunities owed by the U.S. to the consular personnel of non-Convention parties are governed by applicable bilateral treaty. In the case that the U.S. and another Convention party also have a bilateral treaty governing consular relations, the instrument providing broader coverage is controlling. The IOIA provides a significant number of privileges and immunities for international organizations designated by the President via executive order. Certain privileges and immunities are also accorded to employees, officials, and representatives to such organizations, along with members of their immediate families, though these are less than those accorded to the international organizations themselves. Officials, employees, and representatives to designated international organizations are accorded immunity pursuant to the IOIA following validated notification to the Secretary of State of their organizational position. The terms "official," "employee," and "representative" are not defined by the IOIA The United Nations was designated as an "international organization" for purposes of the IOIA immediately following the statute's enactment. Several dozen other international organizations have been designated as receiving coverage under the IOIA, including such organizations as the International Monetary Fund, the International Committee of the Red Cross, the Organization of American States, the World Health Organization, and the World Trade Organization. In the same year the IOIA was enacted, the U.N. General Assembly also adopted the Convention on the Privileges and Immunities of the United Nations, establishing de minimus standards for the immunities and privileges accorded to the United Nations and U.N. officials, Member State representatives, and experts working for U.N. missions. These immunities and privileges are largely similar to those accorded via the IOIA. The United States ratified the Convention in 1970. As with the IOIA, the U.N. Convention on Privileges and Immunities (UNCPI) does not define the term "employee" or "official," though this is perhaps of little concern because the U.N. Convention provides immunity only to those categories of U.N. officials (beyond the U.N. Secretary-General and all Assistant Secretary-Generals) designated by the Secretary-General to receive protection under the Convention. The Convention also does not define "experts on missions" who receive immunity under the U.N. Convention. However, an advisory decision by the International Court of Justice (which has ultimate authority to interpret the U.N. Convention), found that the category of experts on U.N. missions includes, inter alia , persons entrusted by the United Nations with mediating disputes, preparing reports and studies, conducting investigations, or finding and establishing facts on behalf of U.N. missions. The Convention defines "representatives" of U.N. Member States as including all delegates, advisors, and secretaries of Member State delegations. Besides granting an explicit set of privileges and immunities to designated persons, the U.N. Convention also specifies that certain designated individuals (i.e., U.N. representatives, the U.N. Secretary-General, all Assistant Secretary-Generals, and certain U.N. officials designated to receive protection under the Convention by the Secretary-General) are to receive most or all of the privileges and immunities accorded by a receiving State to diplomatic envoys. Accordingly, by reference to other statutes and treaties adopted by the receiving State, the U.N. Convention provides these U.N. officials and representatives with certain privileges and immunities beyond those explicitly described under the U.N. Convention. Generally speaking, the U.N. officials and representatives covered by the U.N. Convention are given the same privileges and immunities as those the U.S. accords to diplomats under the Diplomatic Convention. With respect to designated U.N. officials, however, Diplomatic Convention standards concerning immunity from criminal prosecution apparently are not so incorporated, as the U.N. Convention provides that such officials are immune only for official acts. In 1947, the United States entered the Headquarters Agreement with the United Nations. The U.N. Headquarters Agreement (UNHQA) primarily concerns the privileges and immunities accorded to the United Nations and its headquarters in New York. However, the Agreement also provides certain privileges and immunities for specified U.N. representatives and related personnel residing in the United States . The Headquarters Agreement provides such persons with the full protections accorded to diplomatic envoys—a broader scope of immunity than that provided under either the IOIA or the U.N. Convention. Representatives and related personnel of U.N. Member States whose governments are not recognized by the United States receive lesser privileges and immunities. The following charts list the major privileges and immunities accorded to persons working for foreign embassies, consulates, or international organizations (including, specifically, the United Nations). When a treaty or international agreement makes reference to covered personnel receiving the same immunities accorded to persons covered by other treaties, the nature of such immunities is explained. Thus, for example, because the U.N. Convention on Privileges and Immunities provides that certain U.N. personnel are to receive the same immunities as the receiving State accords diplomatic envoys, the chart detailing the immunities provided under the U.N. Convention occasionally makes references to immunities provided to diplomats under the Vienna Convention on Diplomatic Relations. It is important to note that the charts concerning the Vienna Convention on Diplomatic Relations and the Vienna Convention on Consular Relations only discuss those immunities accorded to persons who are not U.S. nationals or permanent residents. Diplomatic and consular officers working on behalf of a foreign State who are U.S. nationals or permanent residents only receive immunity for official acts performed in the exercise of their functions, while other diplomatic or consular personnel or members of their household families receive no immunities if they are U.S. nationals or permanent residents. Persons who are employed by international organizations or are foreign representatives to such organizations are provided with immunity regardless of whether they are U.S. nationals or permanent residents. The United Nations and specified officials, employees, and representatives to the organization are accorded a number of privileges and immunities by a series of interrelated statutes and treaties. In some cases, the immunities accorded to the organization and specified officials, employees, and U.N. representatives are explicit; in other cases, they are established via cross-reference to other sources of law. This chart details the scope of such immunities, as governed by the International Organizations Immunities Act, the U.N. Convention on Privileges and Immunities, the U.N. Headquarters Agreement, and, by cross-reference, the Vienna Convention on Diplomatic Relations. Where appropriate, immunities provided by related U.S. statutes are also listed.

To conduct foreign relations and promote the interests of their nationals located abroad, diplomatic and consular officers must be free to represent their respective States (i.e., countries) without hindrance by their hosts. Recognizing this, States receiving foreign diplomats and consular officers have long accorded such persons with certain privileges and immunities on the basis of comity, reciprocity, and international agreement. As international organizations have become increasingly important for multilateral relations and cooperation, representatives to and employees of such organizations have occasionally been granted privileges and immunities similar to those traditionally accorded to diplomats or consular officials. This report describes the privileges and immunities generally owed by the U.S. to foreign diplomatic, consular, and international organization personnel under treaties and statutes. It does not discuss certain exceptions to these immunities that may apply to U.S. citizens and legal permanent residents who are employed by international organizations or foreign embassies or consulates. Among the pertinent legal authorities are the Vienna Convention on Consular Relations, the Vienna Convention on Diplomatic Relations, the International Organizations Immunities Act, the Convention on the Privileges and Immunities of the United Nations, and the Agreement Regarding the Headquarters of the United Nations. Included are charts that detail the specific types of jurisdiction and obligations from which various categories of diplomatic and consular personnel are immune under each of these authorities.

Foreign assistance law requires Congress to authorize funding for programs before appropriated funds are spent. Through 1985, Congress regularly enacted new authorization legislation or amended the Foreign Assistance Act of 1961, the foundation of U.S. foreign aid policy, to update authorization time frames, and to incorporate newer programs and authorities. After 1986, however, Congress turned more frequently to enacting freestanding authorities that did not amend the 1961 Act, and waived the requirement to authorize funds before making them available in appropriations. The annual foreign operations appropriations bill funds foreign aid programs as they are defined and authorized in the Foreign Assistance Act of 1961, the Arms Export Control Act, and other related Acts. These annual measures, like all appropriations bills that fund executive branch programs and operations, include General Provisions to guide how funds may be spent. Over time, as enactment of foreign aid reauthorizations waned, the General Provisions of foreign operations appropriations measures increasingly have become a legislative option for Congress to assert its views on the role and use of U.S. foreign aid policy, put limits or conditions on assistance, or even authorize new programs. As a result, some contend, General Provisions have become more important. The greater likelihood—relative to authorization proposals, at least—that appropriations measures will be considered in committee, on the floor, in both chambers, and in conference also impacts the attractiveness of serving on an appropriations or authorization committee, and affects the relationship between authorizers and appropriators. This report identifies the legislative origins of General Provisions that pertain to foreign aid in current foreign operations appropriations: Department of State, Foreign Operations, and Related Programs Appropriations Act, 2010 (division F of the Consolidated Appropriations Act, 2010; P.L. 111-117 ; 123 Stat. 3034 at 3312), as continued for Fiscal Year 2011 by the Department of Defense and Full-Year Continuing Appropriations Act, 2011 ( P.L. 112-10 ; 125 Stat. 38; of which sec. 1101(a)(6) continues appropriations enacted in P.L. 111-117 , and division B, title XI, which provides further instruction for FY2011 foreign operations expenditures). The left column shows the General Provision section and heading, taken from P.L. 111-117 . The right column, in most instances, has two paragraphs per section. The first paragraph identifies in which section the intent or language of the General Provision first appeared, and is taken from annotations the Congressional Research Service prepares for the House Committee on Foreign Affairs and Senate Committee on Foreign Relations for their joint committee print, Legislation on Foreign Relations . The second paragraph establishes the more detailed legislative history of each provision—where and how it first appears that first year (reported out of committee, floor sponsor, or conference committee). Where available, report numbers are included. In some years, detailed information about sponsorship is not available: there is nearly no legislative history trail for new General Provisions introduced in FY2009, for example. Very few of the General Provisions are codified as notes in the U.S. Code. Very few of the General Provisions correspond with sections in the Foreign Assistance Act of 1961. When either condition occurs, it is noted in the right column. Most of the sections have changed over the years. The legislative histories in the right column document the introduction of the concept or intent of the General Provision, not the subsequent changes to that initial idea. Thus, an idea may be introduced and the right column identifies the committee or Member who brought the idea forward, but legislative maps of subsequent alterations, additions, changes in applicability, are not tracked. On occasion, an idea initially stated in a General Provision migrates and is incorporated into the funding titles: requirements of the Chief Executive Officer of the Millennium Challenge Corporation, for example, were first stated in General Provisions but in FY2010 appropriations those requirements were folded into the title III paragraph pertaining to that entity. The goal is solely to identify the emergence of the idea. Frequently, once enacted, a General Provision is continued annually in subsequent foreign operations appropriations measures. If some portion of a section is not carried forward annually, it is noted in the right column. The short titles or popular names of annual foreign operations appropriations have changed over time. In keeping with current jargon, the table refers to each annual measure as a "Foreign Operations Appropriations" with the fiscal year to which it applies. An appendix follows the table, which provides true short titles and popular names along with Public Law numbers. Mutual Security Appropriations Act, 1958 (P.L. 85-853; 72 Stat. 1100) Foreign Assistance and Related Agencies Appropriations Act, 1967 (P.L. 89-691; 80 Stat. 1018) Foreign Assistance and Related Programs Appropriation Act, 1974 (P.L. 93-240; 87 Stat. 1048) Foreign Assistance and Related Programs Appropriations Act, 1976 (P.L. 94-11; 89 Stat. 17) Foreign Assistance and Related Programs Appropriations Act, 1976 [transitional quarter] (P.L. 94-330; 90 Stat. 771) Foreign Assistance and Related Programs Appropriations Act, 1977 (P.L. 94-441; 90 Stat. 1465) Foreign Assistance and Related Programs Appropriations Act, 1978 (P.L. 95-148; 91 Stat. 1230) Foreign Assistance and Related Programs Appropriations Act, 1979 (P.L. 95-481; 92 Stat. 1591) Continuing Appropriations, 1980 (P.L. 96-86; 93 Stat. 656) Continuing Appropriations, 1981 (P.L. 96-536; 94 Stat. 3166) Foreign Assistance and Related Programs Appropriations Act of 1982 (P.L. 97-121; 95 Stat. 1647) Urgent Supplemental Appropriations Act of 1982 (P.L. 97-216; 96 Stat. 180) Further Continuing Appropriations Act, 1983 (P.L. 97-377; 96 Stat. 1830) Continuing Resolution, 1984 (P.L. 98-151; 97 Stat. 964) Foreign Assistance and Related Programs Appropriations Act, 1985 (in Continuing Appropriations Act, 1985) (P.L. 98-473; 98 Stat. 1837 at 1884) Foreign Assistance and Related Programs Appropriations Act, 1986 (in Continuing Appropriations Act, 1986) (P.L. 99-190; 99 Stat. 1185 at 1291) Foreign Assistance and Related Programs Appropriations Act, 1987 (in Continuing Appropriations, 1987) (P.L. 99-591; 100 Stat. 3341 at 3341-214) Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1988 (sec. 101(e)) in Continuing Appropriations, 1988) (P.L. 100-202; 101 Stat. 1329 at 1329-131) Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1989 (P.L. 100-461; 102 Stat. 2268) Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1990 (P.L. 101-167; 103 Stat. 1195 ) Foreign Operations, Export Financing, and Related Programs Appropriations Act 1991 (P.L. 101-513; 104 Stat. 1979) Continuing Appropriations, 1992 (P.L. 102-145; 105 Stat. 968) Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1993 (P.L. 102-391; 106 Stat. 1633) Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1994 (P.L. 103-87; 107 Stat. 931) Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1995 (P.L. 103-306; 108 Stat. 1608) Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1996 (P.L. 104-107; 110 Stat. 704) Foreign Operations, Export Financing, and Related Programs Supplemental Appropriations Act, 1997 (title I, sec. 101(c)) in Omnibus Consolidated Appropriations Act, 1997) (P.L. 104-208; 110 Stat. 3009 at 3009-121) Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1998 (P.L. 105-118; 111 Stat. 2386) Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1999 (in Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999) (P.L. 105-277; 112 Stat. 2681 at 2681-150) Foreign Operations, Export Financing, and Related Programs Appropriations Act, 2000 (H.R. 3422, enacted by reference in Consolidated Appropriations Act, 2000) (P.L. 106-113; 113 Stat. 1501) Foreign Operations, Export Financing, and Related Programs Appropriations Act, 2001 (P.L. 106-429) Kenneth M. Ludden Foreign Operations, Export Financing and Related Programs Appropriations Act, 2002 (P.L. 107-115; 115 Stat. 2118) Foreign Operations, Export Financing and Related Programs Appropriations Act, 2003 (division E in Consolidated Appropriations Act, 2003) (P.L. 108-7; 117 Stat. 11 at 159) Foreign Operations, Export Financing, and Related Programs Appropriations Act, 2004 (division D in Consolidated Appropriations Act, 2004) (P.L. 108-199; 118 Stat. 3 at 143) Foreign Operations, Export Financing, and Related Programs Appropriations Act, 2005 (division D in Consolidated Appropriations Act, 2005) (P.L. 108-447; 118 Stat. 2809 at 2968) Foreign Operations, Export Financing, and Related Programs Appropriations Act, 2006 (P.L. 109-102; 119 Stat. 2172) 2007: none (2006 continues) Foreign Operations, Export Financing, and Related Programs Appropriations Act, 2008 (division J in Consolidated Appropriations Act, 2008) (P.L. 110-161; 121 Stat. 1844 at 2277) Department of State, Foreign Operations, and Related Programs Appropriations Act, 2009 (division J in Omnibus Appropriations Act, 2009) (P.L. 111-8; 123 Stat. 524 at 831) Department of State, Foreign Operations, and Related Programs Appropriations Act, 2010 (division F in Consolidated Appropriations Act, 2010) (P.L. 111-117; 123 Stat. 3034 at 3312)

This report identifies the legislative origins of General Provisions that pertain to foreign aid in the current Department of State, Foreign Operations, and Related Programs Appropriations Act, 2010 (division F of the Consolidated Appropriations Act, 2010; P.L. 111-117; 123 Stat. 3034 at 3312), as continued for Fiscal Year 2011 by the Department of Defense and Full-Year Continuing Appropriations Act, 2011 (P.L. 112-10; 125 Stat. 38; of which sec. 1101(a)(6) continues appropriations enacted in P.L. 111-117, and division B, title XI, which provides further instruction for FY2011 foreign operations expenditures). Foreign assistance law requires Congress to authorize funding for programs before appropriated funds are spent. Through 1985, Congress regularly enacted new authorization legislation or amended the Foreign Assistance Act of 1961, the foundation of U.S. foreign aid policy, to update authorization time frames, and to incorporate newer programs and authorities. After 1986, however, Congress turned more frequently to enacting freestanding authorities that did not amend the 1961 Act, or included language in annual appropriations measures to waive the requirement to keep authorizations current. Over time, as enactment of foreign aid reauthorizations waned, the General Provisions of foreign operations appropriations measures increasingly became an important legislative place for Congress to assert its views on the role and use of U.S. foreign aid policy, put limits or conditions on assistance, or even authorize new programs.

In 1997, a new avian (bird) flu virus (H5N1) emerged in Asia and killed six people. It has since spread to Europe and Africa. The virus has infected more than 330 people, killing more than half of them. Health officials are concerned that it could change sufficiently to cause a global human pandemic. Beginning in FY2004, Congress has provided funding specifically for pandemic flu preparedness, through both regular and emergency supplemental appropriations. This report describes federal funding for pandemic flu, primarily to the Department of Health and Human Services (HHS). Federal funding to control the disease in birds is generally provided to the U.S. Department of Agriculture (USDA) for activities involving commercial poultry, and to the Department of the Interior for activities involving wildlife. The Departments of Homeland Security, Defense, State, and Veterans Affairs, and the U.S. Agency for International Development (USAID), have also received funds for global avian flu control. It is difficult to track federal funding for flu preparedness, for several reasons. First, funds designated specifically for pandemic flu do not reflect the sum of all relevant activities. For example, programs to improve health surveillance in general, or to streamline federal disaster response, are important for pandemic preparedness. Also, the President has called on all federal agencies to develop continuity plans for a flu pandemic, activities that are typically funded through general administrative accounts. Second, certain activities (e.g., the expansion of vaccine production capacity) address preparedness for both seasonal and pandemic flu, and may not be designated as pandemic spending, despite their relevance. Finally, federal agencies may not prepare budget information, such as the presentation of base funding or annual increases, in a consistent fashion. This report provides information on appropriations, primarily to HHS, that the Congress has specifically designated for pandemic flu preparedness. Appropriated amounts are presented in Tables 1 and 2 . Pandemic flu funding for HHS has generally been provided in the Public Health and Social Services Emergency Fund (PHSSEF), an account intended for one-time or short-term activities. This report will be updated. In February 2003, the Administration requested $100 million in FY2004 appropriations for activities to ensure an adequate supply of vaccine in the event of a pandemic. In P.L. 108-199 , the Consolidated Appropriations Act, 2004, Congress provided $50 million to HHS to enhance vaccine production capacity. Funding was used in part to award a $10 million contract to a domestic manufacturer of injectable flu vaccine to assure a year-round supply of eggs for vaccine production. In February 2004, the Administration requested $100 million in FY2005 appropriations, again for HHS to expand vaccine production capacity. In October 2004, while Congress was considering FY2005 appropriations, there was a production failure at a plant supplying half of the nation's supply of injectable seasonal flu vaccine. This resulted in a nationwide shortage, and focused attention on the frailty of the vaccine production system. At the same time, H5N1 avian flu was spreading through Asia. In December 2004, Congress passed P.L. 108-447 , the Consolidated Appropriations Act, 2005, providing HHS with the requested $100 million to bolster flu vaccine production capacity, including the purchase of flu vaccine. In May 2005, Congress passed P.L. 109-13 , the Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Tsunami Relief, 2005, providing $25 million to USAID for programs to control the global spread of avian flu, and stipulating that $15 million of it be transferred to the Centers for Disease Control and Prevention (CDC). The law also provided $58 million to CDC to purchase flu countermeasures (vaccines and antiviral drugs) for the Strategic National Stockpile, and $10 million to HHS for sewer improvements to support an expansion of the nation's only domestic production facility for injectable flu vaccine. In February 2005, the Administration requested $120 million for HHS for pandemic preparedness for FY2006, including ongoing work to expand vaccine production capacity. In July 2005, the Administration sought an additional $150 million to purchase and stockpile flu antiviral drugs and prototype H5N1 vaccines. In December 2005, Congress provided funding for pandemic flu in FY2006 emergency supplemental appropriations (discussed below), using this vehicle, rather than regular appropriations, to provide the bulk of pandemic funding for FY2006. Also in December 2005, Congress passed regular FY2006 appropriations for HHS in P.L. 109-149 , the Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act, 2006, providing $63.6 million to HHS for general public health preparedness activities, including efforts to bolster domestic flu vaccine production capacity and to stockpile vaccine. As Congress weighed regular appropriations for FY2006, H5N1 avian flu spread to Europe, and Hurricane Katrina raised concerns about the nation's general level of disaster readiness. In November 2005, the Administration requested $7.1 billion in emergency supplemental funds for avian and pandemic flu preparedness. This included $6.7 billion for HHS in amounts to be obligated over three years—$3.2 billion for FY2006, $2.3 billion for FY2007, and $1.2 billion for FY2008—and the remainder for FY2006 activities in several other departments and agencies. (See Table 2 .) The bulk of the amount requested for HHS was to support the expansion of domestic vaccine manufacturing capacity. In December 2005, Congress provided $3.8 billion in emergency supplemental appropriations, including $3.3 billion for HHS, in Division B, Title II of P.L. 109-148 , the Department of Defense, Emergency Supplemental Appropriations to Address Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act, 2006. The distribution of these funds to various federal departments and agencies is presented in Table 2 . Most of the difference between the $7.1 billion request and the $3.8 billion appropriation resulted because Congress did not fund the "out years" of the Administration's HHS request, i.e., the amounts for FY2007 and FY2008. In report language ( H.Rept. 109-359 ), conferees directed the Secretary of HHS to report to the appropriations committees on a semi-annual basis regarding the use of the $3.3 billion provided. HHS has submitted a report to congressional appropriators, and has published updates on these activities. In February 2006, in its FY2007 budget request, HHS repeated its November 2005 request for $2.3 billion in FY2007 emergency supplemental funds for pandemic flu, but sought the funds prior to the regular FY2007 appropriations cycle. (HHS called the $2.3 billion amount an "allowance." ) In June 2006, Congress provided $2.3 billion in supplemental funds to HHS in Title IV of P.L. 109-234 , the Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Hurricane Recovery, 2006. Congress authorized the Secretary of HHS to use most of the funds to further federal domestic preparedness activities, the vaccine initiative (including the construction or renovation of privately owned buildings), and stockpiling of antiviral drugs and medical supplies. Congress directed that $30 million be transferred to USAID for global disease control activities. No other departments or agencies received funds specifically for avian or pandemic flu in the act. (See Table 2 .) In February 2006, in addition to supplemental funds noted above, the Administration requested $352 million for HHS pandemic flu activities in regular FY2007 appropriations. Coincident with passage of the second FY2006 supplemental, the House and Senate Committees on Appropriations each recommended $78.9 million for the PHSSEF. The Senate committee recommended an additional $92 million for domestic and global pandemic flu activities at CDC. Similarly, the House passed Agriculture appropriations for FY2007, including $28.1 million for pandemic flu activities at the Food and Drug Administration (FDA), and the Senate committee reported Agriculture appropriations, including a $50.5 million increase for FDA pandemic flu activities, to make the FY2007 recommended total in excess of $60 million. The amounts recommended above were not subsequently enacted. In February 2007, Congress passed FY2007 appropriations for HHS in H.J.Res. 20 , the Revised Continuing Appropriations Resolution, 2007 ( P.L. 110-5 ). The law was not accompanied by a conference report. Except for amounts specified—including an amount for pandemic flu—the law provided that departments be funded through FY2007 at the FY2006 level, with certain rescissions and salary adjustments. P.L. 110-5 explicitly provided $100 million to the PHSSEF, to be transferred to CDC, for preparedness and response to pandemic flu and other emerging infectious diseases. It also rescinded $29.7 million from CDC regular appropriations for FY2006, intended for the purchase of annual bulk monovalent influenza vaccine (to bolster supplies of seasonal flu vaccine). It did not mention any additional HHS amounts for flu preparedness. Though it is possible that the Department funded additional pandemic flu activities with a portion of its overall appropriation for FY2007, specific amounts, if any, have not been published. Two FY2007 supplemental appropriations bills ( H.R. 1591 and P.L. 110-28 ) would have provided an appropriation to HHS for pandemic flu, but in neither case was the provision enacted. The conference report for H.R. 1591 , the U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007, which would have provided $625 million for pandemic flu to the PHSSEF, was vetoed by President Bush on May 1, 2007. H.R. 2206 , a bill with the same name that passed in the House, would also have provided $625 million to the PHSSEF, but the provision was removed before the bill's enactment as P.L. 110-28 . The law as enacted provided funds to USAID and the Department of the Interior for avian flu control. The Administration had opposed, among other things, the inclusion of funding for "avian flu preparedness" as emergency spending in H.R. 2206 , saying that it was adequately addressed in the FY2008 budget request. As discussed earlier, the Administration requested, in November 2005, $7.1 billion in supplemental funds for pandemic preparedness, of which $1.16 billion was to be available to HHS in FY2008. The supplemental amount requested for FY2008 has not been appropriated. In its budget proposal for FY2008, the Administration requested $1.19 billion in regular appropriations for pandemic flu, including $870 million for the PHSSEF to be available until expended, and $322 million for ongoing agency activities, principally at CDC, FDA and the National Institutes of Health (NIH). On November 13, 2007, President Bush vetoed H.R. 3043 , the Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act, 2008. The House failed to override the veto on November 15, 2007. The conference report would have provided $764 million to the PHSSEF for pandemic flu activities, of which $686 million was to be used for the development and purchase of vaccine, antiviral drugs, and other supplies. The conference report also included, for CDC, $37 million for immunization activities related to both seasonal and pandemic flu, and $69 million for global pandemic flu preparedness activities. Agriculture appropriations for FY2008, which may include pandemic preparedness funding for FDA, are also pending at this time.

The spread of H5N1 avian influenza ("flu"), and the human deaths it has caused, raise concern that the virus could morph and cause a global human pandemic. Congress has provided specific funding for pandemic flu preparedness since FY2004, including $6.1 billion in emergency supplemental appropriations for FY2006. These funds bolster related activities to prepare for public health threats, and to control seasonal flu. This report discusses appropriations for pandemic flu, primarily to the Department of Health and Human Services (HHS), and will be updated as needed.

Veterans may participate in the general employment and training programs open to everyone seeking jobs, or in certain programs targeted specifically to veterans. In addition, the federal government has a policy of assisting veterans in employment through the use of preferences in federal employment, and requirements for affirmative action in the hiring of veterans by federal contractors. This report will provide an overview of these federal employment and training programs targeted to veterans, and federal policies to assist veterans in obtaining federal employment. Part of the Servicemen's Readjustment Act of 1944 (The GI Bill, P.L. 78-346) provided a cash allowance for returning unemployed veterans. This was provided because, at the time, veterans were not eligible for unemployment compensation. However, because of a combination of factors, including the strong economic growth shortly after World War II and the GI Bill's education and training benefits, few veterans took advantage of the cash assistance program. There is currently no system to provide a cash allowance to veterans seeking civilian employment although veterans are eligible for unemployment compensation, which provides partial replacement of lost cash wages. The federal government operates programs to assist veterans seeking civilian employment and provides preferences in federal employment for veterans. Outlined below are the major federal programs and policies to assist veterans seeking civilian jobs. The Department of Labor (DOL), in cooperation with the Department of Defense (DOD) and the Department of Veterans Affairs (VA), operates the Transition Assistance Program (TAP) and Disabled Transition Assistance Program (DTAP). Both programs are designed to provide information on employment and training for servicemembers within 180 days of separation from military service, or retirement. TAP is a three-day workshop conducted at military installations that includes sessions on how to look for jobs, current market conditions (both labor market and occupation-specific information is provided), preparation of job search materials (including resumes), and interview techniques. DTAP adds additional hours to the three-day program focused on the special needs of disabled servicemembers. In addition to the employment assistance sessions, information is provided on veterans benefits administered by the VA. P.L. 112-56 makes the following changes to TAP: mandatory participation in TAP by all members of the Armed Forces eligible for the program with the following two exceptions: (1) those that the Secretaries of Defense and Homeland Security, in consultation with the VA Secretary and the DOL Secretary, determine are unlikely to face major readjustment, health care, employment, or other transition challenges; and (2) those with specialized skills needed for an imminent deployment. the DOL Secretary, in consultation with the VA and the DOD Secretaries, is to enter into a contract for a study to identify equivalences between military training, military occupational specialties (MOS), military experience, and civilian private employment. The study is to be transmitted to Congress and made publicly available on the Internet. the DOD Secretary is to ensure that each servicemember participating in TAP receives an individualized assessment of civilian private sector employment positions for which the servicemember may be qualified based on the servicemember's military skills, training, MOS, and the results of the contracted study. the VA Secretary is required to enter, before November 21, 2013, into a contract to provide, at each TAP location, the following services to participants: counseling, identifying and applying for employment and training opportunities, assessment of academic preparation for enrollment in education and training programs, and other related or appropriate services (as identified by the VA Secretary). the VA, DOD, DOL, and Homeland Security Secretaries may enter into contracts with private entities that have experience in assisting members of the Armed Forces to provide TAP instruction on private sector culture (including resume writing, networking, and job search training), academic readiness, and other relevant topics. the DOD Secretary and the Secretary of Homeland Security may permit a member of the Armed Forces eligible for the TAP program to participate in an apprenticeship program. Before November 21, 2013, the comptroller general shall conduct a review of the TAP and report to Congress on the results of the review and any recommendations to improve TAP. The DOL Veterans' Employment and Training Service (VETS) offers assistance to veterans seeking jobs through the Jobs for Veterans State Grants (JVSG) Program. Under the program, grants are used to fund Disabled Veterans' Outreach Program (DVOP) specialists and Local Veterans' Employment Representatives (LVER). These are state positions, funded by the federal government, that provide outreach and assistance to veterans seeking employment. DVOP staff in a state are involved in outreach efforts to disabled veterans with greater barriers to employment, who therefore need more intensive services for employment or training. LVER staff help veterans find employment and are involved in outreach to the business community to encourage the hiring of veterans (including disabled veterans). P.L. 112-56 provides that the DOL Secretary shall award grants, to no more than three organizations, and for no more than two years, to provide training and mentoring for veterans seeking employment. The grant recipients must collaborate with disabled veterans' outreach specialists and local veterans' employment representatives. The DOL Secretary must report to Congress within six months on the process for awarding grants and within 18 months on an assessment of the grant results. The grant program is authorized for $4.5 million for the FY2012-FY2013 period. The VETS office also operates the Veterans' Workforce Investment Program (VWIP), a grant program authorized under the Workforce Investment Act (WIA, P.L. 105-220 ). Grants may be made to fund programs operated by eligible state and local workforce investment boards, state or local agencies, or private non-profit organizations. The grants are intended to help reintegrate veterans into the civilian labor force; develop service delivery systems that address the needs of veterans entering the civilian workforce; enhance workforce investment activities related to veterans; and perform outreach or public information activities to promote employment of veterans. In addition to the JVSG Program and the VWIP program, the VETS office in DOL also provides grants under the Homeless Veterans Reintegration Program, and information to veterans and employers on re-employment rights under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA, P.L. 103-353 ). All VETS activities are required partners in the One-Stop Career Center system established by WIA. Any workforce development, job training, or placement program funded in part by DOL must provide a priority in services for veterans and eligible spouses. In general, persons covered under the priority of service (veterans and spouses) receive access to services and resources before non-covered persons. The federal government has four policies that provide a preference to veterans: (1) a system of point preference for hiring; (2) special appointment (hiring) authority; (3) affirmative action requirements for federal agencies; and (4) affirmative action requirements for contractors and subcontractors. Veterans are given a federal preference in hiring to prevent an individual from being penalized for having spent time in military federal service. A five-point preference is given to veterans with an honorable or general discharge who served on active duty (not active duty for training): during any war; during the period April 28, 1952, through July 1, 1955; for more than 180 consecutive days, any part of which occurred after January 31, 1955, and before October 15, 1976; during the Gulf War period beginning August 2, 1990, and ending January 2, 1992; for more than 180 consecutive days, any part of which occurred during the period beginning September 11, 2001, and ending on the date prescribed by presidential proclamation or by law as the last day of Operation Iraqi Freedom; or in a campaign or expedition for which a campaign medal has been authorized, such as El Salvador, Lebanon, Grenada, Panama, Southwest Asia, Somalia, and Haiti. To qualify for a five-point preference, medal holders and Gulf War veterans who originally enlisted after September 7, 1980, or entered on active duty on or after October 14, 1982, without having previously completed 24 months of continuous active duty, must have served continuously for 24 months or the full period called or ordered to active duty. As of October 1, 1980, military retirees at or above the rank of major or equivalent are not entitled to preference unless they qualify as disabled veterans. A 10-point preference is given to honorably separated veterans who qualify as disabled veterans because they have served on active duty in the Armed Forces at any time and have a present service-connected disability or are receiving compensation, disability retirement benefits, or pension from the military or the Department of Veterans Affairs; honorably separated veterans who are Purple Heart recipients; the spouse of a veteran unable to work because of a service-connected disability; the unmarried widow of certain deceased veterans; and certain mothers of veterans who died in service or who are permanently and totally disabled. P.L. 112-56 provides that a servicemember may be certified as a preference eligible for federal employment if he or she is within 120 days of separation from military service. There are three special appointment authorities available to federal government agencies related to veterans: (1) Veterans Recruitment Appointment (VRA); (2) Veterans Employment Opportunity Acts (VEOA); and (3) 30% or More Disabled Veteran (30%). The use of a VRA allows agencies to appoint an eligible veteran without competition. The VRA is an excepted appointment to a position that is otherwise in the competitive service. After two years of satisfactory service, the veteran may be converted to a career-conditional appointment in the competitive service. Once in federal employment, VRAs are treated like any other competitive service employee and may be promoted, reassigned, or transferred. VRA appointees with less than 15 years of education must complete a training program established by the agency. Veterans eligible for a VRA appointment are disabled veterans; veterans who served on active duty in the Armed Forces during a war, or in a campaign or expedition for which a campaign badge has been authorized; veterans who, while serving on active duty in the Armed Forces, participated in a U.S. military operation for which an Armed Forces service medal was awarded; or recently separated veterans. In addition to meeting the criteria above, veterans must have been separated under honorable conditions (i.e., the individual must have received either an honorable or general discharge). Federal agencies can recruit outside their own workforce, to all competitive service employees, in filling permanent competitive service openings. Veterans are eligible to apply for this type of open position even if not a current competitive service employee if the veteran is a preference eligible or has completed three or more years of active service. The federal government agency can then appoint the veteran using the VEOA appointment authority. The 30% or more disabled veteran authority allows a federal government agency to non-competitively appoint any veteran with a 30% or more service-connected disability to a permanent, temporary (one year or less), or term (one to four years) position in the competitive service. For permanent appointments, the veteran is placed in a time limited (60 days maximum) appointment and then converted to permanent at management's discretion. Federal agencies must have a separate affirmative action program for disabled veterans as part of agency efforts to hire, place, and advance persons with disabilities under the Rehabilitation Act of 1973 ( P.L. 93-112 ). Agencies are required to provide placement consideration under special noncompetitive hiring authorities for VRAs and veterans with a disability rating of 30% or more; ensure that all veterans are considered for employment and advancement under merit system rules; and establish an affirmative action plan for the hiring, placement, and advancement of disabled veterans. Contractors and subcontractors with federal contracts in excess of $100,000 must report to the DOL on efforts to hire veterans in specific categories: disabled veterans, other protected veterans, Armed Forces service medal veterans, and recently separated veterans. Contractors and subcontractors are required to post job openings through state job services or one stop offices, and may post job openings on the federal online service (USAJOBS). On November 9, 2009, President Obama issued Executive Order 13518, which established a Veterans Hiring Initiative and established a Council on Veterans Employment co-chaired by the Secretaries of DOL and VA. As part of the initiative, the Office of Personnel Management (OPM) established a new website— http://www.fedshirevets.gov —to provide information for veterans on federal government employment. One of the features of the website is an agency directory providing for each agency, the name, email address, and telephone number of the individual within each agency responsible for promoting veterans' employment within the agency. P.L. 112-56 provides that the OPM Director shall designate federal executive agencies that will be required to establish a program (coordinated with TAP) to provide employment assistance to separating servicemembers, including employment with the agency, and to promote the recruiting, hiring, training, development, and retention of servicemembers and veterans by the agency. The Department of Defense Appropriations Act, 2003 ( P.L. 107-248 ) authorized the DOD to transfer funds to the Center for Military Recruitment, Assessment, and Veterans Employment. The center is a 501(c)(6) organization supported by construction employers and building and trade organizations within the AFL-CIO to help veterans find employment in the construction industry, through operation of the "Helmets to Hardhats" program. The transfer of funds has been done each year since FY2003. The FY2010 transfer was $3.0 million as provided by the Department of Defense Appropriations Act ( P.L. 111-118 ). The Department of Education transfers funds to the DOD to provide funding for participants in the "Troops 2 Teachers" Program. The program can provide a stipend of up to $5,000 for eligible military personnel to obtain certification as an elementary, secondary, or vocational/technical teacher. Instead of the stipend for certification, the program may pay a bonus of up to $10,000 to participants who teach in a high-poverty school. For FY2010, the funding for the program was $14 million.

There are federal employment and training programs and policies specifically targeted to help veterans seeking employment in the civilian economy. Transition assistance programs are operated by the Department of Defense (DOD), the Department of Veterans Affairs (VA), and the Department of Labor (DOL) to assist servicemembers as they prepare to leave the military. DOL operates grant programs to states to provide outreach and assistance to veterans in finding civilian employment. In addition, the federal government has policies (including veterans preference) that assist veterans in obtaining jobs with the federal government and federal contractors. P.L. 112-56 makes several changes to the Transition Assistance Program (TAP) for separating servicemembers and permits a servicemember who is within 120 days of separation from military service to be certified as a preference eligible for federal employment. This report provides a brief overview of these federal programs and policies. This report will be updated as needed.

Justice Stevens's position on the death penalty has transformed during his tenure on the Court. Although Stevens initially supported the imposition of the death penalty in accordance with adequately protective state enacted guidelines, over the next 35 years the Justice has voted to narrow the application of the death penalty as he has become more skeptical of the punishment's underlying rationale and the states' ability to protect the rights of capital defendants. In 2008, Justice Stevens questioned the continuing constitutionality of the death penalty in his concurring opinion in Baze v. Rees . Shortly before Justice Stevens's appointment, the U.S. Supreme Court, in Furman v. Georgia , established what amounted to a moratorium on the imposition of the death penalty. The 1972 decision invalidated the capital punishment systems of Georgia and Texas along with the systems of "no less than 39 states and the District of Columbia," holding that the inherently arbitrary and discriminatory nature of the states' application of the death penalty violated both the prohibition against cruel and unusual punishment of the Eighth Amendment and the due process guarantees of the Fourteenth Amendment. Following the Furman case, capital punishment essentially ceased to exist anywhere in the United States. However, less than six months after Justice Stevens took his seat on the Supreme Court, and four years after Furman , Stevens cast an essential, if not deciding, vote in favor of reviving the death penalty. In the Gregg cases, the Supreme Court, in a series of decisions, upheld a number of re-enacted state capital punishment schemes that had been tailored to remedying the constitutional deficiencies identified in Furman . Greg g, and its companion cases issued that same day, have been characterized as representing the "resurrection" of capital punishment. At the time, Justice Stevens had confidence that the states could indeed provide adequate procedural safeguards—with guidance from a continued re-examination of capital sentencing procedures by the Court—that would successfully eliminate the constitutional concerns associated with the states' earlier use of the death penalty. In the decades following Gregg , Justice Stevens's death penalty jurisprudence was governed by his belief in "fundamental fairness" and the notion that the death penalty, as the ultimate punishment, must be treated differently from any other lesser form of punishment. The "qualitative difference" between death and any other form of punishment, wrote Justice Stevens, leads to a "corresponding difference in the need for reliability in the determination that death is the appropriate punishment in a specific case." In case after case, Stevens has voted to narrow the application of the death penalty through limiting the class of individuals that was eligible for the punishment, or by increasing procedural protections for capital defendants. Justice Stevens, often in dissent, has voted to prohibit judges from overriding a jury's decision on the imposition of the death penalty; limit the use of emotional victim impact statements; ensure adequate legal representation for capital defendants; prohibit the use of the death penalty on the mentally retarded; prohibit the use of the death penalty on minors; alter the composition of jury pools in capital cases to include those who object on moral grounds to the imposition of the death penalty; prohibit substantially delayed executions; overturn convictions that "present an unacceptable risk that race played a decisive role in [the defendant's] sentencing"; and prohibit states from punishing the crime of rape, or rape of a child, with the death penalty. Perhaps the opinion that is most representative of Justice Stevens's attempts at narrowing the application of the death penalty, and one in which Stevens was able to draw five other justices to his position, was his majority opinion in the 2002 case Atkins v. Virginia . A landmark case, Atkins v . Virginia highlights two key aspects of Justice Stevens's death penalty jurisprudence. The opinion illustrates the Justice's reliance on state-by-state trends in assessing societal views on what qualifies as "cruel and unusual." Additionally, the opinion discusses Stevens's growing skepticism of the accepted justifications for capital punishment. In Atkin s , the Court considered the constitutionality of imposing the death penalty on the mentally retarded. The mentally retarded defendant in the case had been found guilty of abduction, armed robbery, and capital murder and sentenced to death by a jury under Virginia law. Writing for the majority, Justice Stevens overturned the sentence on the grounds that the punishment was disproportionate to the crime and therefore in violation of the prohibition on cruel and unusual punishment of the Eighth Amendment. Justice Stevens began by summarizing the Court's Eighth Amendment jurisprudence, noting that at its core, the amendment's prohibition on excessive punishment demands that "punishment for crime should be graduated and proportioned to the offense." Known as the proportionality principle, whether a punishment is excessive in relation to the crime is judged not by the views that prevailed when the Bill of Rights was adopted, but by the "evolving standards of decency that mark the progress of a maturing society." Stevens went on to cite long-standing Court precedent in concluding that the "clearest and most reliable objective evidence of contemporary values is the legislation enacted by the country's legislature." The Court, both before and after Atkins , has utilized the actions of the state legislatures as a barometer of society's acceptance of the death penalty in a given scenario. In considering how state legislatures have approached the issue of imposing the death penalty on the mentally retarded, Justice Stevens identified a clear trend towards prohibiting the practice. Although a majority of states had not yet prohibited the use of capital punishment on the mentally retarded, Stevens noted "it is not so much the number of these states that is significant, but the consistency of the direction of change." After showing the clear trend among the states towards prohibiting the practice over the previous decade, Stevens concluded that imposing the death penalty on the mentally retarded had "become truly unusual, and it is fair to say that a national consensus has developed against it." As a Justice, Stevens typically placed greater weight on current trends, rather than simply deferring to the position adopted by a majority of state legislatures. Stevens's opinion also determined that the social purposes served by the death penalty—retribution and deterrence—were not adequate to justify the execution of a mentally retarded criminal. Retribution, argued Stevens, is directly associated with culpability. As the "severity of the appropriate punishment necessarily depends on the culpability of the defendant," the Court has reserved the imposition of the death penalty for only the most serious crimes and the most culpable defendants. Stevens concluded that the lesser degree of culpability, due to cognitive and behavioral impairments associated with the mentally retarded defendant, "surely does not merit that form of retribution." As to deterrence, Stevens noted that the diminished ability of the mentally retarded to "engage in logical reasoning, or to control impulses," defeated the purpose of creating a deterrent as it was less likely that mentally retarded individuals could "process the information of the possibility of execution as a penalty and, as a result, control their conduct based upon that information." Stevens then concisely summarized his "narrowing" view of the death penalty, developed over more than 30 years of experience on the Court, in concluding: "[T]hus pursuant to our narrowing jurisprudence, which seeks to ensure that only the most deserving of execution are put to death, an exclusion for the mentally retarded is appropriate." In 2008, Justice Stevens abandoned his three-decade endeavor of attaining a narrowed, fair, and non-discriminatory capital punishment system. Rather, Stevens's position on the death penalty came full circle in Baze v. Rees as he cited back to the Court's decision in Furman in asserting that capital punishment was "patently excessive and cruel and unusual punishment violative of the Eighth Amendment." In Baze , the Court heard an Eighth Amendment challenge to Kentucky's multi-drug lethal injection procedure. Although a majority of the Court voted to uphold Kentucky's method of execution, including Justice Stevens, it was Stevens's concurring opinion that drew the most attention. Picking up where he left off in Atkins , Stevens questioned the accepted rationales underlying the death penalty. His opinion openly attacked the legitimacy of the deterrence and retribution rationales, arguing that the value of both had dwindled and must now be "called into question." With respect to deterrence, Stevens noted that "despite 30 years of empirical research in the area, there remains no reliable statistical evidence that capital punishment in fact deters potential offenders." As to retribution, he pointed out that the relatively painless methods of execution required under the Eighth Amendment "actually undermine the very premise on which public approval of the retribution rationale is based"—that the offender suffer a punishment comparable to the suffering experienced by his victim. In confronting the Court's decisions, and his vote in the Greg g cases, Justice Stevens admitted that the Court "relied heavily on our belief that adequate procedures were in place that would avoid the danger of discriminatory application identified … in Furman ." Stevens then pointed to three key failures of the Court's death penalty jurisprudence. First, juries in capital cases do not represent a fair cross section of the community; rather, eliminating jurors who oppose the death penalty on moral grounds "is really a procedure that has the purpose and effect of obtaining a jury that is biased in favor of conviction." Second, the emotional impact of capital offenses and the often disturbing facts associated with those crimes leads to a greater risk of error in capital cases because "the interest in making sure the crime does not go unpunished may overcome residual doubt concerning the identity of the offender." Third, Justice Stevens highlighted the continued risk of a discriminatory application of the death penalty, noting that the Court has continued to allow race to play an "unacceptable role" in capital cases. Given what he considered the now unpersuasive rationales for the death penalty, and the inability of the Court and the states to cooperatively establish adequate procedural protections in capital cases, Justice Stevens, relying on his "own experience" and "extensive exposure" to death penalty cases, quoted the Court's decision in Furman in unequivocally concluding that the death penalty represents "the pointless and needless extinction of life with only marginal contributions to any discernible social or public purposes. A penalty with such negligible returns to the state [is] patently excessive and cruel and unusual punishment violative of the Eighth Amendment." Notwithstanding his clear position that the death penalty itself was unconstitutional, Stevens voted to uphold the Kentucky lethal injection statute. Citing a "respect [for] precedents that remain a part of our law," Stevens deferred to the Court's long-standing framework for evaluating the death penalty in light of the Eighth Amendment, and joined the Court in concluding that, under the existing framework, the evidence failed to show that the Kentucky statute was unconstitutional. From casting a vote that resurrected the use of the death penalty to becoming the only Justice thus far on the Roberts Court to formally question the death penalty's per se constitutionality, Justice Stevens's position on capital punishment has undergone significant changes during his tenure on the Court. However, his jurisprudence has been consistently guided by his belief in "fundamental fairness" and his recognition that, due to its special risks and irrevocable nature, "death is different." Although Stevens initially had hopes that the Court, working in cooperation with the states, could correct the imperfections of capital punishment, after more than 30 years of experience with death penalty cases, and a declining acceptance of the proffered justifications for the death penalty, Justice Stevens ultimately has questioned whether sentencing a defendant to death can ever be consistent with the Eighth Amendment's prohibition on "cruel and unusual" punishment. With his retirement imminent, the Court faces the loss of its most vocal death penalty opponent.

Justice Stevens's position on the death penalty has undergone a thorough transformation during his tenure on the Court. Although Stevens initially supported the imposition of the death penalty in accordance with adequately protective state enacted guidelines, over the next 35 years the Justice has voted to narrow the application of the death penalty as he has become more skeptical of the punishment's underlying rationale and the states' ability to protect the rights of capital defendants. In 2008, Justice Stevens's death penalty jurisprudence may have culminated with his concurring opinion in Baze v. Rees, in which the Justice unequivocally expressed his ultimate conclusion that the death penalty is itself unconstitutional.

In response to concern about the U.S. government's inability to close or consolidate unneeded military facilities, Congress in 1988, and again in 1990, enacted statutory provisions establishing a process intended to insulate base closings from the "political" considerations that are part of the regular lawmaking process. Pursuant to these provisions, in 1988, 1991, 1993, 1995, and 2005, an independent Defense Base Closure and Realignment (BRAC) Commission recommended the closure and realignment of more than 100 defense facilities throughout the United States. The Department of Defense (DOD) formally asked Congress to provide it with statutory authority to conduct another round of base closures and realignments in 2015, but no round was authorized. Under the BRAC process, the final recommendations of a bipartisan commission are submitted to Congress and automatically take effect unless Congress passes and the President signs legislation disapproving the recommendations within a stated time period. To ensure that Congress can promptly act if it so chooses, the BRAC procedure includes special "fast track" or expedited legislative procedures laying out the terms for House and Senate consideration of legislation striking down the BRAC Commission's report. Such "fast track" procedures have governed congressional consideration of the five previous rounds of base closures and are included in the DOD's recent request to Congress for authority to pursue a 2015 BRAC round. Under the parliamentary procedures laid out in the BRAC process, a package of suggested base closures and realignments is to be implemented by the Secretary of Defense unless Congress passes a joint resolution of disapproval rejecting the entire package within the 45-day period beginning on the date of the President's submission of the package to Congress or the sine die adjournment of the session, whichever occurs earlier. Congressional consideration of such a BRAC resolution of disapproval is governed not by the standing rules of the House and Senate but by special expedited parliamentary procedures laid out in the Defense Base Closure and Realignment Act of 1990, as amended ( P.L. 101-510 , 10 U.S.C. 2687 note). The procedures have the same force and effect as standing House and Senate rules and exempt the joint resolution of disapproval from many of the time-consuming steps and obstacles that apply to most measures Congress considers. For example, the procedure dictates when a joint resolution may be introduced, specifies its text, limits committee and floor consideration of the measure, prohibits amendments and other motions, and establishes an automatic "hook-up" of joint resolutions passed by both chambers. This report outlines the "fast track" parliamentary procedures that have governed congressional consideration of the recommendations of the BRAC commission in prior rounds and have been included in the DOD's recent requests for authority to conduct a BRAC round. This section describes the parliamentary procedures that have governed congressional consideration of recent BRAC Commission reports and were included in a legislative proposal DOD recently submitted to Congress requesting authority for a BRAC Commission round in 2015. Ordinarily, Members of the House and Senate may introduce legislation at any time that their chamber is in session during the two-year Congress. Under the BRAC procedure, however, a qualifying joint resolution of disapproval must be introduced within the 10-day period beginning on the date the President transmits a certified BRAC report to Congress. Such a joint disapproval resolution may be introduced by any Member in either chamber, and when it is, it is referred to the House or Senate Committee on Armed Services. There is no limit to the number of disapproval resolutions that can be introduced, and in prior rounds, multiple disapproval resolutions have been introduced, aimed at the same BRAC report. Provisions are included in the BRAC procedure specifying the text of the disapproval resolution. These are meant to make it clear exactly which legislation is eligible to be considered under the expedited procedures. The joint resolution of disapproval may not contain a preamble. The title of the measure is to read: "Joint resolution disapproving the recommendations of the Defense Base Closure and Realignment Commission." The text of the joint resolution after the resolving clause is to read: "That Congress disapproves the recommendations of the Defense Base Closure and Realignment Commission as submitted by the President on ______," with the appropriate date filled in the blank. With certain exceptions—for example, when time limits are placed on the sequential referral of a bill by the Speaker—Congress generally does not mandate that a committee act on a bill referred to it within a specified time frame or at all. The BRAC procedure, however, places deadlines on the Committees on Armed Services to act and creates a mechanism to take the resolution away from them if they do not. These expediting provisions are intended to make it impossible for a joint resolution of disapproval to be long delayed or blocked outright in committee. As noted, upon introduction, a joint resolution of disapproval is referred to the House or Senate Committee on Armed Services. The committee may choose to report such a resolution but may not amend it. If the committee does not report a joint resolution of disapproval by the end of a 20-day period beginning on the date the President transmits the BRAC report to Congress, the panel is automatically discharged from its further consideration, and the measure is placed directly on the House's Union Calendar or the Senate's Calendar of Business, as appropriate. Under the terms of the BRAC procedure, an Armed Services Committee must report just one resolution of disapproval; if multiple joint resolutions of disapproval are introduced by several Members and referred to committee, the panel must report only one resolution or a substitute for it within the 20-day time frame to forestall the automatic discharge of all of the others. On or after the third day following the day the House or Senate Armed Services Committee reports a joint resolution or is discharged from its consideration, any Member may move in chamber to proceed to the consideration of the joint resolution. The BRAC law stipulates, however, that a Member must first, on the preceding calendar day, have given notice of his or her intention to offer the motion to proceed. This notice can be avoided in the House of Representatives if the motion is being made at the direction of the committee of referral. The motion can be made even if the body has previously rejected an identical motion to the same effect. This provision serves as incentive for the chamber to get to a vote on the underlying joint resolution of disapproval; if a motion to proceed is defeated, supporters can simply re-offer it until it passes or force the chamber to expend time and energy disposing of repeated motions. Points of order against the resolution and its consideration are waived. In the Senate, under most circumstances, a motion to proceed to the consideration of a measure is debatable. Under the BRAC procedure, however, the motion to proceed to the consideration of the joint resolution of disapproval is not debatable in either chamber, and it cannot be amended or postponed. Appeals of the decision of the chair relating to consideration of the joint resolution are decided without debate. If the motion is adopted, the chamber immediately considers the joint resolution without intervening motion, order, or other business. Once a chamber has chosen to take up the joint resolution by adopting the motion to proceed, consideration of the measure is, in a sense, "locked in." It remains the unfinished business of the chamber until disposed of. Other business cannot intervene, the joint resolution cannot be laid aside, and it must be disposed of before other business can be taken up. In the absence of a special rule dictating otherwise, the standing rules of the House of Representatives generally call for measures to be debated in the House under the one-hour rule. In the Senate, debate is usually unlimited except by unanimous consent, by the invocation of cloture, or by some other special procedure, such as the statutory rules governing the consideration of budgetary legislation. In keeping with its "fast track" nature, floor consideration of a BRAC joint resolution of disapproval is limited in both houses. Debate in a chamber on the joint resolution, and all debatable motions and appeals connected with it, is limited to not more than two hours, equally divided. A non-debatable motion to further limit debate is also in order. The BRAC procedure limits Members' ability to delay consideration of a joint resolution of disapproval by barring amendments and motions that would ordinarily be permissible under the House and Senate's standing rules. Amendments to the measure, a motion to postpone its consideration, or motions to proceed to the consideration of other business are not permitted. A motion to recommit the joint resolution to committee is not in order, nor is a motion to reconsider the vote by which the joint resolution is agreed to or disagreed to. It is virtually impossible from a parliamentary standpoint to avoid a final vote on a joint disapproval resolution once a chamber has decided to take it up. At the conclusion of debate and after a single quorum call (if requested), without intervening motion, a chamber immediately votes on passage of the joint resolution of disapproval. Passage of the joint resolution is by simple majority in each chamber, although, in the likely event the disapproval resolution is subsequently vetoed by the President, a two-thirds vote in each chamber would then be required to override the veto. If, before voting upon a disapproval resolution, either chamber receives a joint resolution passed by the other chamber, that engrossed joint resolution is not referred to committee. Instead, the second chamber proceeds to consider its own joint resolution as laid out above up until the point of final disposition, when they will lay it aside, take up the joint resolution received from the first chamber, and vote on it. After the second chamber votes on the first chamber's joint resolution, it may no longer consider its own version. This provision is included to avoid the need to reconcile differences between the chambers' versions or expend time choosing whether ultimately to act upon the House or Senate joint resolution. For a joint resolution of disapproval to become law, it must be signed by the President or enacted over his veto. The BRAC procedure does not include expedited provisions governing House and Senate consideration of a joint disapproval resolution vetoed by the President. Such a veto message would be considered pursuant to the regular procedures of each house. The fact that an expedited legislative procedure is contained in statute does not mean that another law must be enacted to alter it. Article I, Section 5, of the Constitution gives each chamber of Congress the power to determine the rules of its proceedings; as a result, statutory expedited procedures such as those governing BRAC can (like all rules of the House or Senate) be set aside, altered, or amended by either chamber at any time. As several House Parliamentarians have observed, a chamber may "change or waive the rules governing its proceedings. This is so even with respect to rules enacted by statute." These changes can be accomplished, for example, by the adoption of a special rule from the House Committee on Rules, by suspension of the rules, or by unanimous consent agreement. Instances of this ability to "rewrite" expedited procedure statutes have occurred during consideration of base closure joint resolutions of disapproval. For example, in the 101 st Congress, Representative George E. Brown Jr. introduced H.J.Res. 165 , a joint resolution disapproving the recommendations of the 1988 Commission on Base Realignment and Closure. Under the terms of the 1988 BRAC statute, the House Committee on Armed Services had to report a joint disapproval resolution prior to March 15, 1989, or see it be automatically discharged of its further consideration. The statute further permitted any Member, at any time three days after this report or discharge, to make a motion to proceed to the immediate consideration of the resolution. The House, however, "rewrote" these statutory terms as they related to the consideration of H.J.Res. 165 . On March 21, 1989, Representative Les Aspin asked unanimous consent that, notwithstanding the provisions of the BRAC law, it not be in order to move to proceed to the consideration of H.J.Res. 165 prior to April 18, 1989. Still later, on April 11, 1989, a second unanimous consent request laid aside not only the terms of the BRAC expedited procedure statute but those of Representative Aspin's March 21 unanimous consent request as well. As noted above, the House again agreed to lay aside certain provisions of the BRAC statute that governed its consideration of the 2005 round of closures. On September 29, 2005, the House adopted H.Res. 469 , which stated that, despite the BRAC statute's provision permitting any Member to make a motion to proceed to the consideration of a joint resolution of disapproval, that motion "shall be in order only if offered by the Majority Leader or his designee." The Senate has also overridden the BRAC fast-track procedure by unanimous consent. On September 15, 1993, the Senate agreed to a unanimous consent agreement governing the subsequent consideration of S.J.Res. 114 , disapproving the recommendations of the 1993 BRAC Commission. This consent agreement limited debate on the disapproval resolution to one hour (instead of two as provided for in the statute) and permitted the Senate to consider separate legislation in the midst of its consideration of the joint disapproval resolution. In a sense, then, the expedited procedures in the BRAC statute establish a default set of parliamentary ground rules for consideration of a disapproval resolution; these provisions can be tailored by Members in either chamber to meet specific situations or for their convenience. Table 1 lists all joint resolutions of disapproval introduced in Congress relating to prior BRAC rounds and their disposition.

In 1988, 1991, 1993, 1995, and 2005, an independent Defense Base Closure and Realignment (BRAC) Commission was authorized by law to recommend the disposal of unneeded defense facilities throughout the United States. The Department of Defense (DOD) formally asked Congress to provide it with statutory authority to conduct another round of base closures and realignments in 2015, but no new round was authorized. Under the terms of the statutes that authorized these previous BRAC rounds, the BRAC Commission's recommendations automatically take effect unless, within a stated period after the recommendations are approved by the President and submitted to the House and Senate, a joint resolution of disapproval is enacted rejecting them in their entirety. Congressional consideration of this disapproval resolution was governed not by the standing rules of the House and Senate but by special expedited or "fast track" parliamentary procedures laid out in statute. This report describes these expedited parliamentary procedures and explains how they differ from the regular legislative processes of Congress. The report will be updated as needed.

Earmark disclosure rules in both the House and Senate were implemented with the stated intention of bringing more transparency to congressionally directed spending. The administrative responsibilities associated with these new rules vary by chamber. This report outlines the major administrative responsibilities of Senators and committees of the Senate associated with the chamber's earmark disclosure rules. Senate Rule XLIV prohibits a vote on a motion to proceed to consider a measure or a vote on adoption of a conference report, unless the chair of the committee or the majority leader (or designee) certifies that a complete list of earmarks and the name of each Senator requesting each earmark is available on a publicly accessible congressional website in a searchable form at least 48 hours before the vote. If a Senator proposes a floor amendment containing an additional earmark, those items must be printed in the Congressional Record as soon as "practicable." Rule XLIV, paragraph 5, explicitly defines congressionally directed spending item, limited tax benefit, and limited tariff benefit as follows: Congressionally directed spending item - a provision or report language included primarily at the request of a Senator providing, authorizing or recommending a specific amount of discretionary budget authority, credit authority, or other spending authority for a contract, loan, loan guarantee, grant, loan authority, or other expenditure with or to an entity, or targeted to a specific State, locality or congressional district, other than through a statutory or administrative formula driven or competitive award process. Limited tax benefit - any revenue provision that (A) provides a federal tax deduction, credit, exclusion, or preference to a particular beneficiary or limited group of beneficiaries under the Internal Revenue Code of 1986, and (B) contains eligibility criteria that are not uniform in application with respect to potential beneficiaries of such provision. Limited tariff benefit - a provision modifying the Harmonized Tariff Schedule of the United States in a manner that benefits 10 or fewer entities. If the earmark certification requirements have not been met, a point of order may lie against consideration of the measure or vote on the conference report. A point of order would not apply to floor amendments. Senate earmark disclosure rules apply to any congressional earmark included in either the text of the bill or the committee report accompanying the bill, as well as the conference report and joint explanatory statement. The disclosure requirements apply to items in authorizing legislation, appropriations legislation, and tax measures. Furthermore, they apply not only to measures reported by committees but also to unreported measures, amendments, House bills, and conference reports. Under Senate Rule XLIV, paragraph 6, a Senator requesting that a congressional earmark be included in a measure is required to provide a written statement to the chair and ranking minority member of the committee of jurisdiction that includes the Senator's name; the name and address of the intended earmark recipient (if there is no specific recipient, the location of the intended activity should be included); in the case of a limited tax or tariff benefit, identification of the individual or entities reasonably anticipated to benefit to the extent known to the Senator; the purpose of the earmark; and a certification that neither the Senator nor the Senator's immediate family has a financial interest in such an earmark. It is important to note that, when submitting earmark requests, individual committees and subcommittees often have their own additional administrative requirements beyond those required by Senate rules (e.g., prioritizing requests or submitting request forms electronically). The Senate Appropriations Committee, for example, has stated that it will require Members requesting earmarks to post information regarding their earmark requests on their personal website. This information must be posted at the time of the request and must include the purpose of the earmark and why it is a valuable use of taxpayer funds. The committees may also establish relevant policy requirements (e.g., requiring matching funds for earmark requests) or restrictions (e.g., not considering earmark requests for certain appropriations accounts or disallowing multi-year funding requests). In addition, committees and subcommittees often have deadlines, especially for earmark requests in appropriations legislation. For this reason, it is important to check with individual committees and subcommittees to learn of any supplemental earmark request requirements or restrictions. The committee of jurisdiction is responsible for identifying earmarks in the legislative text and any accompanying reports. Therefore, when it is not clear whether a senatorial request constitutes an earmark, the committee of jurisdiction may be able to provide guidance. When submitting an earmark request, it may be relevant whether the Senator wants the earmark to be included in the text of the bill or the committee report accompanying the bill. Committees may make an administrative distinction between these two categories in terms of the submission of earmark requests, and there may be policy implications of an earmark's placement in either the bill text or the committee report. For example, under Executive Order 13457, issued in January 2008, executive agencies are directed not to commit, obligate, or expend funds that were the result of an earmark included in non-statutory language, such as a committee report. If, during consideration of a measure, a Senator proposes an amendment that contains an additional earmark, the Senator shall ensure that a list of earmarks (and the name of any other Senator who submitted a request for each earmark included) is printed in the Congressional Record as soon as "practicable." Under the Senate rule, earmark disclosure responsibilities of Senate committees and conference committees fall into three major categories: (1) determining if a spending provision is an earmark; (2) compiling earmark requests for presentation, and (3) certifying that requirements under Rule XLIV have been met. Committees of jurisdiction may use their discretion to decide what constitutes an earmark. Definitions in Senate rules, as well as past earmark designations during the 110 th Congress, may provide guidance in determining if a certain provision constitutes an earmark. Senate Rule XLIV states that before consideration is in order on a measure or conference report, a list of included earmarks and their sponsors must be identified through lists, charts, or some means and made available on a publicly accessible congressional website for at least 48 hours. The Senate Appropriations Committee has stated that it will make earmark disclosure tables publicly available the same day that a subcommittee reports the bill. In the case of measures, the list of earmarks (and Senate sponsors) on the congressional website must be "searchable." Lists associated with conference reports should also be in a searchable format but only to the extent it is technically feasible. Senate rules state that a committee report containing a list of earmarks (and their sponsors) that is available online satisfies the disclosure requirement. The rule also requires the applicable committee to make the certifications of no financial interest available online. The rule does not specify how long after consideration any of these required materials must be maintained. The rule states that consideration of a measure or conference report is not in order until the applicable committee chair or the majority leader (or designee) "certifies" that the requirements stated above have been met. While the rule does not state what constitutes certification, it has been the practice of the committee chair to make a statement on the Senate floor or submit a written statement to be printed in the Congressional Record confirming compliance with Rule XLIV's disclosure requirements. An example of a certification letter is provided below.

Earmark disclosure rules in both the House and the Senate establish certain administrative responsibilities that vary by chamber. Under Senate rules, a Senator requesting that an earmark be included in legislation is responsible for providing specific written information, such as the purpose and recipient of the earmark, to the committee of jurisdiction. Further, Senate committees are responsible for compiling and presenting such information in accord with Senate rules. In the Senate, disclosure rules apply to any congressional earmark, limited tax benefit, or limited tariff benefit included in either the text of a bill or any report accompanying the measure, including a conference report and joint explanatory statement. The disclosure requirements apply to earmarks in appropriations legislation, authorizing legislation, and tax measures. Furthermore, they apply not only to measures reported by committees but also to measures not reported by committees, floor amendments, and conference reports. This report will be updated as needed.

Section 550 of the DHS appropriations act for fiscal year 2007 requires DHS to issue regulations establishing risk-based performance standards for the security of facilities that the Secretary determines to present high levels of security risk, among other things. The CFATS rule was published in April 2007 and Appendix A to the rule, published in November 2007, listed 322 chemicals of interest and the screening threshold quantities for each.including assessing potential risks and identifying high-risk chemical facilities, promoting effective security planning, and ensuring that final high- risk facilities meet the applicable risk-based performance standards through site security plans approved by DHS. ISCD is managed by a Director and a Deputy Director and operates five branches that are, among other things, responsible for information technology operations, policy and planning, and providing compliance and technical support. From fiscal years 2007 through 2012, DHS dedicated about $442 million to the CFATS program. During fiscal year 2012, ISCD was authorized 242 full-time- equivalent positions. For fiscal year 2013, DHS’s budget request for the CFATS program was $75 million and 242 positions. Our review of the ISCD memorandum and discussions with ISCD officials showed that the memorandum was developed during the latter part of 2011 and was developed primarily based on discussions with ISCD staff and the observations of the ISCD former Director in consultation with the former Deputy Director. In November 2011, the former Director and Deputy Director provided the Under Secretary with the ISCD memorandum entitled “Challenges Facing ISCD, and the Path Forward.” These officials stated that the memorandum was developed to inform leadership about the status of ISCD, the challenges it was facing, and the proposed solutions identified to date. In transmitting a copy of the memorandum to congressional stakeholders following the leak in December 2011, the NPPD Under Secretary discussed caveats about the memorandum, including that it had not undergone the normal review process by DHS’s Executive Secretariat and contained opinions and conclusions that did not reflect the position of DHS. The former ISCD Director stated that the memo was intended to begin a dialog about the program and challenges it faced. The former Director confirmed that she developed the memorandum by (1) surveying division staff to obtain their opinions on program strengths, challenges, and recommendations for improvement; (2) observing CFATS program operations, including the security plan review process; and (3) analyzing an internal DHS report on CFATS operations, which, according to the former Director served as a basis for identifying some administrative challenges and corrective action. The senior ISCD and NPPD officials we contacted said that they generally agreed with the material that they saw, but noted that they believed the memorandum was missing context and balance. For example, one NPPD official stated that that the tone of the memorandum was too negative and the problems it discussed were not supported by sound evaluation. However, the official expressed the view that the CFATS program is now on the right track. The ISCD memorandum discussed numerous challenges that, according to the former Director, pose a risk to the program. The former Director pointed out that, among other things, ISCD had not approved any site security plans or carried out any compliance inspections on regulated facilities. The former Director attributed this to various management challenges, including a lack of planning, poor internal controls, and a workforce whose skills were inadequate to fulfill the program’s mission, and highlighted several challenges that have had an impact on the progress of the program. In addition, the memorandum provided a detailed discussion of the issues or problems facing ISCD, grouped into three categories: (1) human capital management, such as poor staffing decisions; (2) mission issues, such as the lack of an established inspection process; and (3) administrative issues, such as a lack of infrastructure and support, both within ISCD and on the part of NPPD and IP. ISCD is using an action plan to track its progress addressing the challenges identified in the memorandum, and, according to senior division officials, the plan may be helping them address some legacy issues that staff were attempting to deal with before the memorandum was developed. The January 2012 version of the proposed action plan listed 91 actions to be taken categorized by issue—human capital management issues, mission issues, or administrative issues—that, according to the former ISCD Director, were developed to be consistent with the ISCD memorandum. However, the January 2012 version of the action plan did not provide information on when the action was started or to be finished. Eleven of the 12 ISCD managers (other than the former Director and Deputy Director) assigned to work as the coordinators of the individual action items told us that even though they were not given the opportunity to view the final version of the ISCD memorandum, the former Director provided them the sections of the action plan for which they were responsible to help them develop and implement any corrective actions. They said that they agreed that actions being taken in the plan were needed to resolve challenges facing ISCD. Our discussions with these officials also showed that about 39 percent (37 of 94) of the items in the March and June 2012 action plans addressed some legacy issues that were previously identified and, according to these officials, corrective actions were already underway for all 37 of these items. Our analysis of the June 2012 version of the ISCD action plan showed that 40 percent of the items in the plan (38 of 94) had been completed. The remaining 60 percent (56 of 94) were in progress. Of the 38 completed items, we determined that 32 were associated with human capital management and administrative issues, including those involving culture and human resources, contracting, and documentation. The remaining 6 of 38 action items categorized by ISCD as completed were associated with mission issues. Figure 1 shows the status of action items by each of the three categories as of June 2012. For the remaining 56 items that were in progress as of June 2012, 40 involved human capital management and administrative issues. According to ISCD officials, these 40 issues generally involved longer- term efforts—such as organizational realignment—or those that require approval or additional action on the part of IP or NPPD. Sixteen of 56 remaining actions items in progress covered mission issues that will likely also require long-term efforts to address. As of August 2012, ISCD reported that it had completed another 21 action items, of which 8 were to address mission-related issues. We did not verify ISCD’s efforts to complete actions since June 2012. However, we have recently begun a follow-up review of CFATS at the request of this and other committees, which will focus on DHS’s efforts to address mission-related issues. We expect to report the results of these efforts early in 2013. Our analysis of the April and June versions of the plan shows that the division had extended the estimated completion dates for nearly half of the action items. Estimated completion dates for 52 percent (48 of 93 items) either did not change (37 items) or the date displayed in the June 2012 plan was earlier than the date in the April 2012 version of the plan (11 items). Conversely, 48 percent (45 of 93) of the items in the June 2012 version of the plan had estimated completion dates that had been extended beyond the date in the April 2012 plan. Figure 2 shows the extent to which action plan items were completed earlier than planned, did not change, or were extended, from April 2012 through June 2012, for the human capital management, mission, and administrative issues identified in the plan. ISCD officials told us that estimated completion dates had been extended for various reasons. For example, one reason for moving these dates was that the work required to address some items was not fully defined when the plan was first developed and as the requirements were better defined, the estimated completion dates were revised and updated. In addition, ISCD officials also stated that timelines had been adversely affected for some action items because staff had been reassigned to work on higher priority responsibilities, such as reducing the backlog of security plans under review. ISCD, through its action plan, appears to be heading in the right direction towards addressing the challenges identified, but it is too early to tell if the action plan is having the desired effect because (1) the division had only recently completed some action items and continues to work on completing more than half of the others, some of which entail long-term changes, and (2) ISCD had not yet developed an approach for measuring the results of its efforts. ISCD officials told us that they had not yet begun to plan or develop any measures, metrics, or other documentation focused on measuring the impact of the action plan on overall CFATS implementation because they plan to wait until corrective action on all items has been completed before they can determine the impact of the plan on the CFATS program. For the near term, ISCD officials stated that they plan to assess at a high level the impact of the action plan on CFATS program implementation by comparing ISCD’s performance rates and metrics pre-action plan implementation and post-action plan implementation. However, because ISCD will not be completing some action items until 2014, it will be difficult for ISCD officials to obtain a complete understanding of the impact of the plan on the program using this comparison only. In our July 2012 statement, we recommended that ISCD look for opportunities, where practical, to measure results of their efforts to implement particular action items, and where performance measures can be developed, periodically monitor these measures and indicators to identify where corrective actions, if any, are needed. The agency concurred with our recommendation and developed a new action item (number 95) intended to develop metrics for measuring, where practical, results of efforts to implement action plan items, including processes for periodic monitoring and indicators for corrective actions. This action item is in progress. According to ISCD officials, almost half of the action items included in the June 2012 action plan either require ISCD to collaborate with NPPD and IP or require NPPD and IP to take action to address the challenges identified in the ISCD memorandum. NPPD, IP, and ISCD officials have been working together to identify solutions to the challenges the memorandum identified and to close pertinent action items. According to division officials, 46 of the 94 action items included in the June 2012 action plan required action either by NPPD and IP or collaboration with NPPD and IP. This includes collaborating with NPPD officials representing the NPPD human capital, facilities, and employee and labor relations offices, among others, and with IP’s Directorate of Management Office. As of June 2012, 13 of the 46 items that require action by or collaboration with NPPD or IP were complete; 33 of 46 were in progress. As of August 2012, ISCD reported that it had completed 8 more of these action items, such that 21 of the 46 were complete and 25 were in progress. We did not verify ISCD’s efforts to close these additional action items. Chairman Aderholt, Ranking Member Price, and members of the subcommittee, this completes my prepared statement. I would be happy to respond to any questions you may have at this time. For information about this statement please contact Steven L. Caldwell, Director, Homeland Security and Justice, at (202) 512-9610 or CaldwellS@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 making key contributions include John F. Mortin, Assistant Director; Ellen Wolfe, Analyst-in-Charge; Charles Bausell; Jose Cardenas; Andrew M. Curry; Michele Fejfar; Tracey King; Marvin McGill; Mona E. Nichols-Blake; and Jessica Orr. 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 events of September 11, 2001, triggered a national re-examination of the security of facilities that use or store hazardous chemicals in quantities that, in the event of a terrorist attack, could put large numbers of Americans at risk of serious injury or death. As required by statute, DHS issued regulations that establish standards for the security of high-risk chemical facilities. DHS established the CFATS program to assess the risk posed by these facilities and inspect them to ensure compliance with DHS standards. ISCD, a division of IP, manages the program. A November 2011 internal ISCD memorandum, prepared by ISCD senior managers, expressed concerns about the management of the program. This statement addresses (1) how the memorandum was developed and any challenges identified, (2) what actions are being taken in response to any challenges identified, and (3) the extent to which ISCD's proposed solutions require collaboration with NPPD or IP. GAO's comments are based on recently completed work analyzing the memorandum and related actions. GAO reviewed laws, regulations, DHS's internal memorandum and action plans, and related documents, and interviewed DHS officials. In a July 2012 report, GAO recommended that ISCD explore opportunities to develop measures, where practical, to determine where actual performance deviates from expected results. ISCD concurred and has taken action to address the recommendation. The November 2011 memorandum that discussed the management of the Chemical Facility Anti-Terrorism Standards (CFATS) program was prepared based primarily on the observations of the former Director of the Department of Homeland Security's (DHS) Infrastructure Security Compliance Division (ISCD), a division of the Office of Infrastructure Protection (IP) within the National Protection and Programs Directorate (NPPD). The memorandum was intended to highlight various challenges that have hindered ISCD efforts to implement the CFATS program. According to the former Director, the challenges facing ISCD included not having a fully developed direction and plan for implementing the program, hiring staff without establishing need, and inconsistent ISCD leadership--factors that the Director believed place the CFATS program at risk. These challenges centered on three main areas: (1) human capital issues, including problems hiring, training, and managing ISCD staff; (2) mission issues, including problems reviewing facility plans to mitigate security vulnerabilities; and (3) administrative issues, including concerns about NPPD and IP not supporting ISCD's management and administrative functions. ISCD has begun to take various actions intended to address the issues identified in the ISCD memorandum and has developed a 94-item action plan to track its progress. According to ISCD managers, the plan appears to be a catalyst for addressing some of the long-standing issues the memorandum identified. As of June 2012, ISCD reported that 40 percent (38 of 94) of the items in the plan had been completed. These include requiring ISCD managers to meet with staff to involve them in addressing challenges, clarifying priorities, and changing ISCD's culture; and developing a proposal to establish a quality control function over compliance activities. The remaining 60 percent (56 of 94) that were in progress include those requiring longer-term efforts--i.e., streamlining the process for reviewing facility security plans and developing facility inspection processes; those requiring completion of other items in the plan; or those awaiting action by others, such as approvals by ISCD leadership. ISCD appears to be heading in the right direction, but it is too early to tell if individual items are having their desired effect because ISCD is in the early stages of implementing them and has not yet established performance measures to assess results. According to ISCD officials, almost half of the action items included in the June 2012 action plan require ISCD collaboration with or action by NPPD and IP. The ISCD memorandum stated that IP and NPPD did not provide the support needed to manage the CFATS program when the program was first under development. ISCD, IP, and NPPD officials confirmed that IP and NPPD are now providing needed support and stated that the action plan prompted them to work together to address the various human capital and administrative issues identified.

Since assuming office in 2001, President Bush has been a strong supporter of free trade and trade liberalization. In numerous statements, he has touted the virtues of trade expansion. As he explained: "Our goal is to ignite a new era of economic growth through a world trading system that is dramatically more open and free." The President has promoted trade liberalization on multiple fronts: globally, regionally, and bilaterally. By pursuing multiple free trade initiatives, the Administration has tried to create "competition in liberalization" and more options. As explained by Robert Zoellick, President Bush's first U.S. Trade Representative, if free trade progress becomes stalled globally, then we can move ahead regionally and bilaterally. Globally, the Administration is now working to reach an agreement in the so-called Doha Round of multilateral trade talks being held among the 148 members of the World Trade Organization (WTO). Regionally, the administration is pursuing agreements with the countries of the Southern African Customs Union, Andean countries, and 34 countries of the Western Hemisphere to create a Free Trade Area of the Americas. Bilaterally, it is currently negotiating FTA's with Thailand, Panama, and the United Arab Emirates. The administration signed an FTA with Bahrain in 2004 and with Oman in 2005, and it is contemplating starting negotiations with a number of other countries. Possible new negotiating partners include Egypt, Malaysia, India and South Korea. The Bush Administration argues that these negotiations promote a host of U.S. domestic and foreign interests, both economic and political. At home, it views trade liberalization as providing substantial gains to American consumers and companies. Cuts in U.S. trade barriers can help American families to pay less for consumer goods and U.S. companies to lower their operating costs as a result of access to cheaper imported components. Increased competition in domestic markets also promotes innovation, increases in labor productivity, and long-term growth. Better access to foreign markets facilitates increases in U.S. exports, thereby increasing employment in sectors that may pay higher than average wages. U.S. investors can also benefit through rule changes and obligations that assure more dependable treatment by the host country. Trade liberalizing agreements, particularly FTAs, also promote the U.S. trade agenda and foreign interests in a number of ways. Some FTAs establish precedents or models that serve as catalysts for wider trade agreements. Many FTAs reward and support market reforms being undertaken by the negotiating partner. And still others help to strengthen U.S. ties with various countries and regions of the world. For example, by forging stronger economic ties with countries in the Middle East, such as Morocco, Jordan, and Bahrain, the U.S. hopes to strengthen its strategic position vis-a-vis all countries in the region by promoting economic prosperity and opportunity. At the same time, trade liberalizing agreements may carry economic and political costs. Increased foreign competition can lead to plant closings and job losses concentrated in certain regions and industries. Critics note that it may contribute to increased anxiety and wage pressures, as well as rising income inequality. Some of these concerns were central to the divisive debate in Congress this year over CAFTA—an agreement that became a proxy, in part, for more generalized concerns about America's standing in an increasingly globalized world economy. While CAFTA was approved by narrow margins in both houses, it is not clear how the outcome will affect the Administration's future free trade agreement program. The CAFTA was the most controversial free trade agreement vote taken by Congress since the North American Free Trade Agreement (NAFTA) implementing legislation was passed in 1993. The Senate passed the CAFTA implementing legislation on June 30, 2005 by a vote of 54 to 45 and House passed the legislation on July 28, 2005 by 217 to 215. Besides being the lowest margin of victory for any modern FTA agreement, the votes, particularly in the House, were highly partisan. Over 92% of House Democrats voted against the agreement, while over 88% of House Republicans voted in favor. In both the Senate and House debates, many proponents stressed a combination of economic and political arguments. Those in favor argued that, while imports from the CAFTA countries enter the U.S. virtually duty free, the agreement will level the playing field for U.S. commercial interests by eliminating 80% of the tariffs CAFTA countries impose on U.S. exports. As a result, they maintained the U.S. goes from one-way free trade toward a more reciprocal trading relationship that will increase U.S. exports and jobs. Others emphasized that the agreement would contribute to bolstering more market-oriented and democratic governments in the region, longstanding U.S. foreign policy interests. Many lawmakers who opposed the agreement cited provisions dealing with the treatment of labor and sensitive industries (sugar and textiles). In addition, the agreement clearly triggered more generalized anxieties concerning globalization's impact on the American economy and labor force. Future congressional consideration of similar trade accords are likely to raise similar controversies and challenges, thereby prompting the administration to address these issues as part of its trade liberalizing agenda. Labor issues in the agreement were controversial and may have been a major reason the vote divided largely along party lines. Disagreement revolved around whether the CAFTA countries had laws that complied with the U.S. or International Labor Organization (ILO) similar list of five internationally recognized worker rights (e.g. the right to organize unions and bargain collectively). Such standards have not been required by CAFTA, by trade promotion authority legislation outlining requirements for trade agreements, or by any other bilateral trade agreement. However, they have been required for decades by U.S. trade preference laws, which typically prohibit preferential treatment to countries which are not affording their workers internationally recognized worker rights. Therefore, these FTAs continue to be seen by may Democrats as a step backward from longstanding U.S. trade policy. Many Republicans argue that the agreement encourages these countries to improve their laws and enforcement as well. Moreover, they argued that the administration's commitment to earmark $40 million in appropriations for capacity building and enforcement over a four-year period would go a long way in strengthening these provisions. Further exacerbating partisan tensions was a long history over this issue. Some Democrats expressed clear annoyance that their support for stronger labor provisions was characterized by Bush Administration trade officials as being "economic isolationism." At the same time, many Republicans were upset that they were given little credit by the other side for the compromises they had made over the years in accommodating Democratic concerns. Partisan tensions were further exacerbated by different views on whether the process in producing the agreement and the implementing legislation was inclusive and consistent with consultation requirements provided under the Trade Promotion Authority statute. Following the CAFTA vote, U.S. Trade Representative Rob Portman has worked to narrow the gap on the divisive labor issue in both the Bahrain and Andean FTAs. House Democrats reportedly have been pleased by the Administration's efforts to obtain higher labor commitments and enforcement standards in the Bahrain agreement. But other reports suggest that the Administration and House Democrats remain far apart on how to handle the labor provisions in the Andean FTA. Thus, it remains unclear whether the FTA labor provisions will become a less divisive and partisan issue. A second contentious issue involved liberalization of U.S. restrictions in two industries—textiles and apparel, and sugar—that still benefit from protective barriers. The agreement as signed by the Bush Administration provided some small additional opening of these two still protected markets. These changes, in turn, were opposed vigorously by segments of both industries and by both Republicans and Democrats that had important constituent interests to defend. To gain support for the agreement, the Bush Administration made some commitments that, on balance, will reduce the commercial benefits of the agreement to CAFTA countries as originally negotiated. Some analysts believe that this action may send a very negative signal to future negotiating partners about U.S. willingness to negotiate reciprocal trade concessions. An underlying problem for the administration may be that the partisan divide in Congress over trade issues, particularly labor standards, provides defenders of protected industries with greater power than in previous eras. As one scholar opined, a partisan divide "renders the basic support margin narrow, making trade policy hostage to any protectionist interests that hold the decisive, marginal votes." This partisan divide could become a major hurdle for completing agreements that require the reduction and eventual removal of U.S. barriers to imports. In cases where liberalization of protected U.S. industries is necessary to get other countries to reduce their own barriers to U.S. exports, the Bush Administration may have two options. First, it can work to bridge the partisan divide that arguably provides these industries with heightened leverage. Second, it can alter the way it promotes the benefits of trade liberalization. Traditionally, trade liberalization has been pursued by focusing attention on gains associated with export expansion through a reduction of foreign trade barriers with little discussion of the gains that reduction of U.S. trade barriers can provide to U.S. companies and consumers. But by highlighting more the two-way gains from trade (both exports and imports), some analysts believe that greater political support can be built for the kinds of actions that are necessary to sustain a trade liberalization policy. The CAFTA debate in Congress also served as a proxy for public concerns and anxieties about the effects of trade and globalization on the American economy. Record U.S. trade deficits, the rise of China as a world manufacturing power, and India's growing attractiveness as a source for outsourcing of white collar jobs all raised questions about the effects of trade agreements on U.S. workers. Some Democrats, in part, may have opposed CAFTA because they believe that working class Americans suffer most from attempts to accelerate economic integration. Their opposition may have been buttressed by public opinion polls showing that more that 50% of U.S. households may oppose these trade initiatives if they are not given the tools and training to compete with workers from all around the world. To ease the anxieties of the American public on globalization and trade agreements that accelerate economic integration, some policymakers are calling for more robust programs that will help American workers obtain the skills that are necessary to compete in the global economy. While the longstanding Trade Adjustment Assistance Program provides retraining and income support for workers displaced by import competition, some argue that a more comprehensive program that would cover not only workers displaced by trade competition but also by technological change and foreign outsourcing is needed to deal with broad distributional costs of globalization and the rise of economic insecurity among American workers. Proponents argue that such a plan could include meaningful retraining, wage and health insurance, and job search aid. Two obstacles are often cited to moving in this direction—cost and ideology. One estimate of a comprehensive program that extends trade adjustment to all workers, provides a general two-year wage insurance program and adds on business tax incentives comes to $20 billion a year. While this cost could be considered modest compared to an estimated $1 trillion in benefits the U.S. economy gains from globalization (international openness) every year, it also could be considered very costly in the context of an economy experiencing record budget deficits, prompting calls for reductions in government spending. In addition, the fact that some policymakers take a dim view of the ability of these kinds of programs to achieve the intended results, combined with some sense that a growing market economy is the best antidote to adjustment, provide another hurdle. The Bush Administration is now actively negotiating a large number of trade liberalizing agreements. The broadest and most ambitious initiative being negotiated is the Doha Round of multilateral negotiations. Negotiations are also taking place with Panama, Thailand, three Andean countries (Colombia, Peru, and Ecuador), and the United Emirates. Assuming that the divisions over labor issues, industry protection, and globalization anxieties that were imbedded in the CAFTA debate persist, these potential agreements could encounter differential obstacles. An ambitious Doha agreement is the administration's highest priority. With 148 countries involved in the negotiation, this trade negotiation provides the largest potential benefits for U.S. firms, farmers, and consumers. Some analysts maintain that large gains or benefits accruing to a broad spectrum of American stakeholders are necessary to help mobilize political support to eliminate or reduce remaining U.S. restrictions on politically sensitive industries and products. This is based on a belief that an ambitious agreement would require large concessions from trading partners that open substantially new market access opportunities for U.S. companies, and that these potential gains would be too tempting for U.S. industry not to support strongly. While labor issues are not part of the Doha negotiations, any big commercial agreement would likely trigger globalization anxieties among some segments of the body politic. Whether an ambitious agreement that provides large economic benefits to the U.S. economy might provide some impetus and support for devising a comprehensive adjustment program remains problematic. In the past, implementing legislation for multilateral agreements has included the creation or expansion of adjustment programs. The FTA's being negotiated with Thailand, Panama, and the Andean countries might encounter some or all the obstacles raised in the CAFTA debate. Thailand's labor conditions and exports of import sensitive products such as sugar and rice could prove contentious. Given that Thailand is a larger trading partner than the five CAFTA countries combined, globalization anxieties could also play a role in this agreement as well. In the case of Panama and the Andean countries, their labor laws and exports of sugar could raise concerns among some Members of Congress. But given that they are both very small trading partners, globalization anxieties are less likely to play a key role. To date, CAFTA-related controversies appear to be playing a small role in the FTAs concluded with countries of the Middle East—Jordan, Morocco, Bahrain and Oman. These four agreements have received broad bipartisan support not only because they are viewed favorably for advancing U.S. security interests, but also because the countries in commercial terms provide little competitive threat to U.S. producers and workers.

Since taking office in January 2001, President Bush has supported trade liberalization through negotiations on multiple fronts: globally, regionally, and bilaterally. During this period, Congress has approved five free trade agreements (FTAs) that the Bush Administration has negotiated and signed. The FTAs are designed to promote broad economic and political objectives, both domestic and foreign. However, the debate in Congress over the last FTA approved—the Central American Free Trade Agreement (CAFTA)—was contentious, sparking concerns about how Congress might consider future trade liberalizing agreements. This report analyses some of the challenges that became apparent in the aftermath of a divisive trade debate and how they could affect consideration of future trade agreements. This report will not be updated.

Introduction Certain workers who have experienced job loss and retirees whose private pension plans were taken over by the Pension Benefit Guaranty Corporation (PBGC) may be eligible for the Health Coverage Tax Credit (HCTC). The tax credit's purpose is to make the purchase of health insurance more affordable for eligible individuals. The HCTC has a sunset date of January 1, 2020. This report describes the eligibility criteria for the HCTC and the types of health insurance to which the tax credit may be applied. It briefly describes the administration of the HCTC program and receipt of the credit by eligible taxpayers. The report concludes with a summary of the HCTC's statutory history. The HCTC covers 72.5% of the premium for certain types of health insurance purchased by an eligible taxpayer. The taxpayer is responsible for covering the remaining 27.5% of the premium. Eligible taxpayers are only allowed to use the HCTC toward the purchase of qualified health insurance (described below in the " Qualified Health Insurance " section). The HCTC is refundable, so taxpayers may claim the full credit amount even if they have little or no federal income tax liability. The credit also is advanceable, so taxpayers may receive the credit on a monthly basis to coincide with the payment of premiums. To claim the HCTC, taxpayers must be in one of two eligibility groups and not enrolled in (or sometimes even eligible for) certain types of health insurance. Other statutory limitations also apply. The two groups of taxpayers who are eligible to claim the HCTC are recipients of certain benefits under the Trade Adjustment Assistance (TAA) program and individuals between the ages of 55 and 64 who receive payments from the Pension Benefit Guaranty Corporation (PBGC). TAA is a program that provides assistance to workers who lose their jobs due to international trade. To qualify for TAA, a group of workers must petition the U.S. Department of Labor (DOL) to establish that their job loss was attributable to a qualified cause. If a DOL investigation confirms the workers' claim, the workers are certified as eligible for TAA benefits and services. TAA-certified workers are eligible for the HCTC on the basis of receipt of certain TAA benefits. Specifically, workers are eligible for the HCTC if they receive any of the following: Trade Readjustment Allowance (TRA) . TRA is a weekly cash payment for workers who are enrolled in TAA-sponsored training and have exhausted their eligibility for unemployment insurance (UI). TRA payments begin the week after a worker exhausts eligibility for UI. Workers may collect a maximum of 130 weeks of UI and TRA combined. Workers are eligible for the HCTC if they are collecting TRA or UI . Reemployment Trade Adjustment Assistance (RTAA) . RTAA is a wage supplement for workers aged 50 and older who were certified for TAA and subsequently secure qualified employment at a lower wage. RTAA pays 50% percent of the difference in wages for up to two years, up to a maximum total benefit of $10,000. Alternative Trade Adjustment Assistance (ATAA) . ATAA is a wage-insurance program similar to RTAA. ATAA existed prior to the most recent reauthorization of TAA, and a small number of workers may still be receiving benefits under ATAA. A worker is eligible for the HCTC on the first day of a month if the worker received an eligible TAA benefit "for any day in that month or the prior month." Notably, eligibility for the HCTC is limited to individuals who receive TRA, RTAA, or ATAA cash benefits. Workers who are certified as eligible for TAA but receive only other TAA benefits (such as job-search assistance) are not eligible for the HCTC. To receive a PBGC benefit, individuals must have worked for a firm whose defined-benefit pension plan was insured and then taken over by the PBGC. The agency assumes control of defined-benefit plans (pension plans that promise to pay a specific monthly benefit at retirement) when it determines that the plans must be terminated to protect the interests of participants (e.g., if benefits that were due could not be paid) or when employers demonstrate that they could not remain in business unless the plan were terminated. The PBGC uses plan assets and its own insurance reserves to pay the pensions (up to a guaranteed amount) to the former workers and their survivors. Individuals who receive PBGC-paid pensions are eligible for the HCTC, provided they are at least 55 years of age but not yet entitled to Medicare (which usually occurs at the age of 65). The HCTC program places several limitations on eligibility, even for those individuals in the two groups described above. Persons enrolled in the following are not eligible for the tax credit: a health plan maintained by the individual's employer or former employer (or by the employer or former employer of the individual's spouse) that pays 50% or more of the total premium; Medicare Part B; the Federal Employees Health Benefits Program (FEHBP); Medicaid; or the State Children's Health Insurance Program (CHIP). Similarly, to be eligible for the HCTC, individuals may not be eligible for the following: Medicare Part A; or coverage provided through the U.S. military health system (e.g., Tricare). In addition, individuals are not eligible for the HCTC if they are incarcerated or if they may be claimed as a dependent by another taxpayer. An eligible taxpayer may use the HCTC for health insurance that covers his or her spouse and any dependents who may be claimed on his or her tax return. For this purpose, children of divorced or separated parents are treated as dependents of the custodial parent. Qualifying family members face the same eligibility limitations as eligible taxpayers (i.e., they may not be enrolled in or eligible for the insurance described above). Family members may continue to receive the HCTC for up to two years after any of the following events: the qualified taxpayer becomes eligible for Medicare, the taxpayer and spouse divorce, or the taxpayer dies. An eligible taxpayer is only allowed to claim the HCTC to cover part of the premium for qualified health insurance. Statute limits qualified health insurance to 11 categories of coverage, identified as options (A) through (K). Individuals are not allowed to claim the tax credit for any other type of coverage. Four of the coverage categories are referred to as automatically qualified health plans. Individuals may elect these options without state involvement. These options (identified by their statutory letter designations) are as follows: A. Coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA; P.L. 99-272 ). I. Coverage under a group health plan available through a spouse's employer. J. Coverage under individual health insurance. K. Coverage funded by a voluntary employees' beneficiary association (VEBA). The other seven categories of coverage are known as state-qualified health plans . Individuals may choose these options only if their state has established these plans. These options (identified by their statutory letter designations) are as follows: B. State-based continuation coverage provided under a state law requiring such coverage. C. Coverage offered through a state high-risk pool (HRP). D. Coverage under a plan offered for state employees. E. Coverage under a state-based plan that is comparable to the plan offered to state employees. F. Coverage through an arrangement entered into by a state and a group health plan, an issuer of health insurance, an administrator, or an employer. G. Coverage through a state arrangement with a private-sector health care purchasing pool. H. Coverage under a state-operated plan that does not receive any federal financing. Coverage under state-qualified health plans is required to provide four consumer protections, specified in statute, to all qualifying individuals. Qualifying individuals are defined as HCTC-eligible individuals (as described above) who had three months of creditable coverage under another health plan prior to applying for a state-qualified plan and did not have a significant break in coverage (defined as 63 days or more without coverage). For such individuals, state-qualified health plans must provide the following four protections: 1. The plan must be guaranteed issue, meaning coverage may not be denied to any qualifying applicant. 2. Coverage may not be denied based on preexisting health conditions. 3. Premiums (without regard to subsidies) may not be greater for qualifying individuals than for other similar individuals. 4. Benefits for qualifying individuals must be the same as or substantially similar to benefits for others. Certain types of coverage are not considered qualified health insurance, even if they otherwise meet one of the categories listed above. Such coverage includes accident or disability income insurance, liability insurance, workers' compensation insurance, automobile medical payment insurance, credit-only insurance, coverage for on-site medical clinics, limited-scope dental or vision benefits, long-term care insurance, coverage for a specified disease or illness, hospital and other fixed indemnity insurance, and supplemental insurance. Although the Internal Revenue Service (IRS) administers the HCTC program, full implementation entails the participation of several federal and state agencies. The Department of the Treasury (Treasury) is primarily responsible for administering the advance payment system, by providing the HCTC on a monthly basis to coincide with payment of insurance premiums. In addition, the IRS reviews tax returns on which the credit is claimed. DOL and the PBGC are responsible for helping Treasury identify who may be eligible for the credit. DOL also coordinates the One-Stop Career Center system; these centers provide a wide range of services to assist job seekers, including providing information about available benefits such as the HCTC. State-level entities include state workforce agencies (SWAs)—DOL-funded agencies that administer unemployment and TAA benefits. Other relevant state entities include the departments of insurance and health agencies. DOL requests that SWAs mail HCTC information packets to all eligible TAA beneficiaries. Included with the information packet is an HCTC eligibility certificate, a document that identifies the individual as potentially eligible for the tax credit. Similarly, the PBGC identifies beneficiaries who are potentially eligible for the HCTC and provides the beneficiaries' relevant personal information to the IRS. The IRS mails program kits to persons whose names are included on the lists provided by the SWAs and the PBGC. Eligible taxpayers with qualified health insurance may claim the tax credit when they file their tax returns for the year, or they may receive advance payments for the credit, on a monthly basis, throughout the year. Some taxpayers may choose to receive a portion of the credit through advance payments and the remainder after they file their returns. Because the HCTC is refundable, taxpayers may receive the full amount for which they are eligible, even if they have little or no tax liability. Other tax credits for which individuals are eligible have no effect on their eligibility for the HCTC, nor does the HCTC affect other credits, with one key exception: a taxpayer who chooses to receive the HCTC is prohibited from being eligible for the premium tax credit established under the Patient Protection and Affordable Care Act ( P.L. 111-148 , as amended). The IRS published relevant summary statistics in its 2014 Statistics of Income (SOI) report. The most current SOI data about the HCTC is for tax year 2013, in which 13,693 tax returns claimed the HCTC, totaling to approximately $52.3 million. In addition, preliminary data for the 2016 filing season indicated the submission of 13,015 e-filed tax returns claiming the credit, as of March 10, 2016. Taxpayers who choose to claim the HCTC after the tax year ends must complete Form 8885 and attach it to their standard Form 1040. Taxpayers must include invoices and proof of payment for qualified health insurance. In this case, the credit amount would be used to reduce the amount of taxes owed for a given taxpayer. Because the HCTC is refundable, if the credit amount exceeds the amount of taxes owed, the excess amount is provided to the taxpayer in the form of a tax refund. To receive advance payments of the HCTC, individuals register with the HCTC program. They must be enrolled in a qualified health insurance plan when they register. The program confirms an applicant's eligibility and sends him or her an invoice for the taxpayer's share of the total monthly premium (which is 27.5% because the HCTC's subsidy rate is 72.5%). Individuals send payments for their share plus additional premium amounts for non-qualified family members (if applicable) to Treasury. Upon receipt of these premium payments, Treasury sends payment for 100% of the premium (comprised of 27.5% from the individual and 72.5% from Treasury) to the individuals' health insurance plans.

The Health Coverage Tax Credit (HCTC) subsidizes most of the cost of qualified health insurance for eligible taxpayers and their family members. Potential eligibility for the HCTC is limited to two groups of taxpayers. One group is comprised of individuals eligible for Trade Adjustment Assistance (TAA) allowances because they experienced qualifying job losses. The other group consists of individuals whose defined-benefit pension plans were taken over by the Pension Benefit Guaranty Corporation (PBGC) because of financial difficulties. HCTC-eligible individuals are allowed to receive the tax credit only if they either could not enroll in certain other health coverage (e.g., Medicaid) or are not eligible for other specified coverage (e.g., Medicare Part A). To claim the HCTC, eligible taxpayers must have qualified health insurance (specific categories of coverage, as specified in statute). Several of those categories, known as state-qualified health plans, are available only after being established by state action. The HCTC is refundable, so eligible taxpayers may receive the full credit amount even if they had little or no federal income tax liability. The credit is also advanceable, so taxpayers may receive the credit on a monthly basis to coincide with the payment of premiums. The HCTC has a sunset date of January 1, 2020.

Section 550 of the DHS appropriations act for fiscal year 2007 requires DHS to issue regulations establishing risk-based performance standards for the security of facilities that the Secretary determines to present high levels of security risk, among other things. The CFATS rule was published in April 2007 and Appendix A to the rule, published in November 2007, listed 322 chemicals of interest and the screening threshold quantities for each.implementing DHS’s CFATS rule, including assessing potential risks and identifying high-risk chemical facilities, promoting effective security planning, and ensuring that final high-risk facilities meet the applicable risk-based performance standards though site security plans approved by DHS. ISCD is managed by a Director and a Deputy Director and operates five branches that are, among other things, responsible for information technology operations, policy and planning, and providing compliance and technical support. From fiscal years 2007 through 2012, DHS dedicated about $442 million to the CFATS program. During fiscal year 2012, ISCD was authorized 242 full-time-equivalent positions. For fiscal year 2013, DHS’s budget request for the CFATS program was $75 million and 242 positions. Our review of the ISCD memorandum and discussions with ISCD officials showed that the memorandum was developed during the latter part of 2011 and was developed primarily based on discussions with ISCD staff and the observations of the ISCD former Director in consultation with the former Deputy Director. In November 2011, the former Director and Deputy Director provided the Under Secretary with the ISCD memorandum entitled “Challenges Facing ISCD, and the Path Forward.” These officials stated that the memorandum was developed to inform leadership about the status of ISCD, the challenges it was facing, and the proposed solutions identified to date. In transmitting a copy of the memorandum to congressional stakeholders following the leak in December 2011, the NPPD Under Secretary discussed caveats about the memorandum, including that it had not undergone the normal review process by DHS’s Executive Secretariat and contained opinions and conclusions that did not reflect the position of DHS. The former ISCD Director stated that the memo was intended to begin a dialog about the program and challenges it faced. The former Director confirmed that she developed the memorandum by (1) surveying division staff to obtain their opinions on program strengths, challenges, and recommendations for improvement; (2) observing CFATS program operations, including the security plan review process; and (3) analyzing an internal DHS report on CFATS operations, which, according to the former Director served as a basis for identifying some administrative challenges and corrective action. The senior ISCD and NPPD officials we contacted said that they generally agreed with the material that they saw, but noted that they believed the memorandum was missing context and balance. For example, one NPPD official stated that that the tone of the memorandum was too negative and the problems it discussed were not supported by sound evaluation. However, the official expressed the view that the CFATS program is now on the right track. The ISCD memorandum discussed numerous challenges that, according to the former Director, pose a risk to the program. The former Director pointed out that, among other things, ISCD had not approved any site security plans or carried out any compliance inspections on regulated facilities. The former Director attributed this to various management challenges, including a lack of planning, poor internal controls, and a workforce whose skills were inadequate to fulfill the program’s mission, and highlighted several challenges that have had an impact on the progress of the program. In addition, the memorandum provided a detailed discussion of the issues or problems facing ISCD, grouped into three categories: (1) human capital management, such as poor staffing decisions; (2) mission issues, such as the lack of an established inspection process; and (3) administrative issues, such as a lack of infrastructure and support, both within ISCD and on the part of NPPD and IP. ISCD is using an action plan to track its progress addressing the challenges identified in the memorandum, and, according to senior division officials, the plan may be helping them address some legacy issues that staff were attempting to deal with before the memorandum was developed. The January 2012 version of the proposed action plan listed 91 actions to be taken categorized by issue—human capital management issues, mission issues, or administrative issues—that, according to the former ISCD Director, were developed to be consistent with the ISCD memorandum. However, the January 2012 version of the action plan did not provide information on when the action was started or to be finished. Eleven of the 12 ISCD managers (other than the former Director and Deputy Director) assigned to work as the coordinators of the individual action items told us that even though they were not given the opportunity to view the final version of the ISCD memorandum, the former Director provided them the sections of the action plan for which they were responsible to help them develop and implement any corrective actions. They said that they agreed that actions being taken in the plan were needed to resolve challenges facing ISCD. Our discussions with these officials also showed that about 39 percent (37 of 94) of the items in the March and June 2012 action plans addressed some legacy issues that were previously identified and, according to these officials, corrective actions were already underway for all 37 of these items. Our analysis of the June 2012 version of the ISCD action plan showed that 40 percent of the items in the plan (38 of 94) had been completed. The remaining 60 percent (56 of 94) were in progress. Of the 38 completed items, we determined that 32 were associated with human capital management and administrative issues, including those involving culture and human resources, contracting, and documentation. The remaining 6 of 38 action items categorized by ISCD as completed were associated with mission issues. Figure 1 shows the status of action items by each of the three categories as of June 2012. For the remaining 56 items that were in progress as of June 2012, 40 involved human capital management and administrative issues. According to ISCD officials, these 40 issues generally involved longer- term efforts—such as organizational realignment—or those that require approval or additional action on the part of IP or NPPD. Sixteen of 56 remaining actions items in progress covered mission issues that will likely also require long-term efforts to address. As of August 2012, ISCD reported that it had completed another 21 action items, of which 8 were to address mission-related issues. We did not verify ISCD’s efforts to complete actions since June 2012. However, we have recently begun a follow-up review of CFATS at the request of this and other committees, which will focus on DHS’s efforts to address mission-related issues. We expect to report the results of these efforts early in 2013. Our analysis of the April and June versions of the plan shows that the division had extended the estimated completion dates for nearly half of the action items. Estimated completion dates for 52 percent (48 of 93 items) either did not change (37 items) or the date displayed in the June 2012 plan was earlier than the date in the April 2012 version of the plan (11 items). Conversely, 48 percent (45 of 93) of the items in the June 2012 version of the plan had estimated completion dates that had been extended beyond the date in the April 2012 plan. Figure 2 shows the extent to which action plan items were completed earlier than planned, did not change, or were extended, from April 2012 through June 2012, for the human capital management, mission, and administrative issues identified in the plan. ISCD officials told us that estimated completion dates had been extended for various reasons. For example, one reason for moving these dates was that the work required to address some items was not fully defined when the plan was first developed and as the requirements were better defined, the estimated completion dates were revised and updated. In addition, ISCD officials also stated that timelines had been adversely affected for some action items because staff had been reassigned to work on higher priority responsibilities, such as reducing the backlog of security plans under review. ISCD, through its action plan, appears to be heading in the right direction towards addressing the challenges identified, but it is too early to tell if the action plan is having the desired effect because (1) the division had only recently completed some action items and continues to work on completing more than half of the others, some of which entail long-term changes, and (2) ISCD had not yet developed an approach for measuring the results of its efforts. ISCD officials told us that they had not yet begun to plan or develop any measures, metrics, or other documentation focused on measuring the impact of the action plan on overall CFATS implementation because they plan to wait until corrective action on all items has been completed before they can determine the impact of the plan on the CFATS program. For the near term, ISCD officials stated that they plan to assess at a high level the impact of the action plan on CFATS program implementation by comparing ISCD’s performance rates and metrics pre-action plan implementation and post-action plan implementation. However, because ISCD will not be completing some action items until 2014, it will be difficult for ISCD officials to obtain a complete understanding of the impact of the plan on the program using this comparison only. In our July 2012 statement, we recommended that ISCD look for opportunities, where practical, to measure results of their efforts to implement particular action items, and where performance measures can be developed, periodically monitor these measures and indicators to identify where corrective actions, if any, are needed. The agency concurred with our recommendation and developed a new action item (number 95) intended to develop metrics for measuring, where practical, results of efforts to implement action plan items, including processes for periodic monitoring and indicators for corrective actions. This action item is in progress. According to ISCD officials, almost half of the action items included in the June 2012 action plan either require ISCD to collaborate with NPPD and IP or require NPPD and IP to take action to address the challenges identified in the ISCD memorandum. NPPD, IP, and ISCD officials have been working together to identify solutions to the challenges the memorandum identified and to close pertinent action items. According to division officials, 46 of the 94 action items included in the June 2012 action plan required action either by NPPD and IP or collaboration with NPPD and IP. This includes collaborating with NPPD officials representing the NPPD human capital, facilities, and employee and labor relations offices, among others, and with IP’s Directorate of Management Office. As of June 2012, 13 of the 46 items that require action by or collaboration with NPPD or IP were complete; 33 of 46 were in progress. As of August 2012, ISCD reported that it had completed 8 more of these action items, such that 21 of the 46 were complete and 25 were in progress. We did not verify ISCD’s efforts to close these additional action items. Chairman Shimkus, Ranking Member Green, and members of the subcommittee, this completes my prepared statement. I would be happy to respond to any questions you may have at this time. For information about this statement please contact Cathleen A. Berrick, Managing Director, Homeland Security and Justice, at (202) 512-8777 or BerrickC@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 making key contributions include Stephen L. Caldwell, Director; John F. Mortin, Assistant Director; Ellen Wolfe, Analyst-in-Charge; Charles Bausell; Jose Cardenas; Andrew M. Curry; Michele Fejfar; Tracey King; Marvin McGill; Mona E. Nichols-Blake; and Jessica Orr. 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. 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The events of September 11, 2001, triggered a national re-examination of the security of facilities that use or store hazardous chemicals in quantities that, in the event of a terrorist attack, could put large numbers of Americans at risk of serious injury or death. As required by statute, DHS issued regulations that establish standards for the security of high-risk chemical facilities. DHS established the CFATS program to assess the risk posed by these facilities and inspect them to ensure compliance with DHS standards. ISCD, a division of IP, manages the program. A November 2011 internal ISCD memorandum, prepared by ISCD senior managers, expressed concerns about the management of the program. This statement addresses (1) how the memorandum was developed and any challenges identified, (2) what actions are being taken in response to any challenges identified, and (3) the extent to which ISCD’s proposed solutions require collaboration with NPPD or IP. GAO’s comments are based on recently completed work analyzing the memorandum and related actions. GAO reviewed laws, regulations, DHS’s internal memorandum and action plans, and related documents, and interviewed DHS officials. In a July 2012 report, GAO recommended that ISCD explore opportunities to develop measures, where practical, to determine where actual performance deviates from expected results. ISCD concurred and has taken action to address the recommendation. The November 2011 memorandum that discussed the management of the Chemical Facility Anti-Terrorism Standards (CFATS) program was prepared based primarily on the observations of the former Director of the Department of Homeland Security’s (DHS) Infrastructure Security Compliance Division (ISCD), a division of the Office of Infrastructure Protection (IP) within the National Protection and Programs Directorate (NPPD). The memorandum was intended to highlight various challenges that have hindered ISCD efforts to implement the CFATS program. According to the former Director, the challenges facing ISCD included not having a fully developed direction and plan for implementing the program, hiring staff without establishing need, and inconsistent ISCD leadership—factors that the Director believed place the CFATS program at risk. These challenges centered on three main areas: (1) human capital issues, including problems hiring, training, and managing ISCD staff; (2) mission issues, including problems reviewing facility plans to mitigate security vulnerabilities; and (3) administrative issues, including concerns about NPPD and IP not supporting ISCD’s management and administrative functions. ISCD has begun to take various actions intended to address the issues identified in the ISCD memorandum and has developed a 94-item action plan to track its progress. According to ISCD managers, the plan appears to be a catalyst for addressing some of the long-standing issues the memorandum identified. As of June 2012, ISCD reported that 40 percent (38 of 94) of the items in the plan had been completed. These include directing ISCD managers to meet with staff to involve them in addressing challenges, clarifying priorities, and changing ISCD’s culture; and developing a proposal to establish a quality control function over compliance activities. The remaining 60 percent (56 of 94) that were in progress include those requiring longer-term efforts—i.e., streamlining the process for reviewing facility security plans and developing facility inspection processes; those requiring completion of other items in the plan; or those awaiting action by others, such as approvals by ISCD leadership. ISCD appears to be heading in the right direction, but it is too early to tell if corrective actions are having their desired effect because ISCD is in the early stages of implementing them and has not yet established performance measures to assess results. According to ISCD officials, almost half of the action items included in the June 2012 action plan require ISCD collaboration with or action by NPPD and IP. The ISCD memorandum stated that IP and NPPD did not provide the support needed to manage the CFATS program when the program was first under development. ISCD, IP, and NPPD officials confirmed that IP and NPPD are now providing needed support and stated that the action plan prompted them to work together to address the various human capital and administrative issues identified.

This report analyzes Division C of the Department of Defense Emergency Supplemental Appropriations, P.L. 109-148 , which was signed into law on December 30, 2005, and which limits liability with respect to pandemic flu and other public health countermeasures. Division C, which is titled the "Public Readiness and Emergency Preparedness Act," (PREP Act) created § 319F-3 of the Public Health Service Act, which provides that, except in one circumstance (discussed below under "New Federal Cause of Action"), a "covered person" would be immune from suit and liability for "all claims for loss caused by, arising out of, relating to, or resulting from the administration to or the use by an individual of a covered countermeasure if a declaration ... has been issued with respect to such countermeasure." The declaration referred to is a declaration by the Secretary of Health and Human Services (HHS) of a public health emergency or the credible risk of such emergency. Division C defines a "covered person" to include the United States and a (i) manufacturer, (ii) distributor, (iii) program planner, (iv) qualified person who prescribed, administered, or dispensed a covered countermeasure, or (v) official, agent, or employee of (i) through (iv). Under the Federal Tort Claims Act (FTCA), officials, agents, and employees of the United States are already immune from tort liability. Immunity is granted "to any claim for loss that has a causal relationship with the administration to or use by an individual of a covered countermeasure, including a causal relationship with the design, development, clinical testing or investigation, manufacture, labeling, distribution, formulation, packaging, marketing, promotion, sale, purchase, donation, dispensing, prescribing, administration, or use of such countermeasure." A "covered countermeasure" includes (A) "a qualified pandemic or epidemic product," (B) "a security countermeasure," or (C) a drug, biological product, or device that is authorized for emergency use in accordance with section 564 of the Federal, Food, Drug, and Cosmetic Act (FDCA). Each of the terms in (A), (B), and (C) is itself defined in Division C as follows: A. "Qualified pandemic or epidemic product" is defined as a drug, biological product, or device, as these three terms are defined in the FDCA, with the additional limitation that all three terms apply only to "a product manufactured, used, designed, developed, modified, licensed, or procured ... to diagnose, mitigate, prevent, treat, or cure a pandemic or epidemic," or "a serious or life-threatening disease or condition caused by [such] a product"—but only if such a product meets one of three other qualifications under the FDCA. B. "Security countermeasure" is defined in Division C as it is defined in § 319F-2(c)(1)(B) of the Public Health Service Act, as a drug, biological product, or device (as those terms are defined in the FDCA) that the Secretary of HHS approves as necessary to diagnose, mitigate, prevent, or treat harm from any biological, chemical, radiological, or nuclear agent. C. "Drug," "biological product," and "device" are all defined by the FDCA. On January 26, 2007, Secretary Michael O. Leavitt made the first such declaration "to provide targeted liability protections for pandemic countermeasures based on a credible risk that an avian influenza virus spreads and evolves into a strain capable of causing a pandemic of human influenza." Since then, the Secretary of HHS has issued additional declarations covering various countermeasures against anthrax, botulism, acute radiation syndrome, smallpox, and various strains of influenza. Most recently, in response to the H1N1 influenza pandemic, Secretary Kathleen Sebelius issued declarations limiting liability for harm arising from the use of certain influenza antivirals and vaccines. The single circumstance in which Division C allows a covered person to be held liable is when a "death or serious physical injury" was caused by the "willful misconduct" of a covered person. Division C defines "willful misconduct" as an act or omission that is taken "(i) intentionally to achieve a wrongful purpose; (ii) knowingly without legal or factual justification; and (iii) in disregard of a known or obvious risk that is so great as to make it highly probable that the harm will outweigh the benefit." In addition, the Secretary of HHS, in consultation with the Attorney General, "shall promulgate regulations ... that further restrict the scope of actions or omissions by a covered person that may qualify as 'willful misconduct.'" Furthermore, "the plaintiff shall have the burden of proving by clear and convincing evidence willful misconduct by each covered person sued and that such willful misconduct caused the death or serious physical injury." The "clear and convincing" standard is higher than the usual burden of proof in civil cases, which is proof by a "preponderance of the evidence." Finally, if an act or omission by a manufacturer or distributor is subject to regulation by Division C or by the FDCA, then such act or omission shall not constitute willful misconduct if neither the Secretary of HHS nor the Attorney General has initiated an enforcement action with respect to the act or omission, or if such an enforcement action has been initiated and the enforcement action has been terminated or finally resolved without a specified penalty imposed on the covered person. The proceeding in which an injured party may seek to prove that a covered person had engaged in willful misconduct is a new federal cause of action that Division C created; suits under state tort law are prohibited. Subsection (d) of the new § 319F-3 provides: "For purposes of section 2679(b)(2)(B) of title 28, United States Code, such a cause of action is not an action brought for violation of a statute of the United States under which an action against an individual is otherwise authorized." This apparently means that the new federal cause of action may not be brought against a federal employee. Division C provides that suits under the new federal cause of action may be brought only in the U.S. District Court for the District of Columbia, and that such court, with exceptions noted below, shall apply the substantive law, including choice of law principles, of the state in which the alleged willful misconduct occurred. The reference to "choice of law principles" means that the court will apply the law of the state in which the alleged willful misconduct occurred, but, if that state's law provides that a different state's law should apply, then the court will apply the other state's law. Although federal district court cases are usually heard by a single judge, cases under Division C's new federal cause of action will be "assigned initially to a panel of three judges. Such panel shall have jurisdiction over such action for purposes of considering motions to dismiss, motions for summary judgment, and matters related thereto. If such panel has denied such motions, or if the time for filing such motions has expired, such panel shall refer the action to the chief judge for assignment for further proceedings, including any trial." This suggests that the panel's jurisdiction is limited to pretrial motions, and that a single judge will run the trial, including ruling on motions to dismiss and motions for summary judgment that were made after the trial began. Under the new federal cause of action, certain matters are not governed by state law. Damage awards will be reduced by the amount of collateral source benefits, with "collateral source benefits" defined to include amounts the plaintiff is entitled to receive from any governmental program, workers' compensation law, health or disability insurance, and the like. Collateral sources will have no right of subrogation, which means that they could not recover, out of the damages the plaintiff recovers in a lawsuit brought under the new federal cause of action, benefits that they had paid the plaintiff. Under the new federal cause of action, noneconomic damages, which are damages for pain and suffering and other non-monetary losses, "may be awarded only in an amount directly proportional to the percentage of responsibility of a defendant for harm to the plaintiff." This means that, if two defendants are found liable for willful misconduct, then they will not be jointly and severally liable for noneconomic damages, which means that they will not each be liable for the full amount of the plaintiff's noneconomic damages. If, for example, one of the two defendants was 25% responsible for the harm and the other was 75% responsible for the harm, then the plaintiff may recover no more than 25% of his noneconomic damages from the first, even if the second is insolvent. With respect to economic damages, however, the plaintiff may recover up to 100% from either liable party, if the relevant state law provides for joint and several liability. Under the new federal cause of action, Rule 11 sanctions against attorneys, law firms, or parties, for filing frivolous claims or defenses or filing papers for improper purposes, are mandatory. Rule 11 currently makes sanctions discretionary on the part of the court. Division C also created a new section 319F-4 of the Public Health Service Act which, upon issuance by the Secretary of the declaration referred to in the first paragraph of this report, would establish in the Treasury the "Covered Countermeasure Process Fund." "[T]he Secretary shall, after amounts have by law been provided for the Fund under subsection (a) provide compensation to an eligible individual for a covered injury [i.e., serious physical injury or death] directly caused by the administration or use of a covered countermeasure pursuant to such declaration." Despite the "shall" quoted in the previous sentence, an eligible "individual has an election to accept the compensation or to bring an action under" the new federal cause of action, but may not do both. Compensation under this fund would be in the same amount as is prescribed by sections 264, 265, and 266 of the Public Service Health Act for persons injured as a result of the administration of certain countermeasures against smallpox. These three sections provide, respectively, medical benefits, compensation for lost employment income, and death benefits, but do not provide damages for pain and suffering. Congress has enacted other tort reform statutes to limit liability under state law. The rest of this report describes the broad categories into which these statutes may be placed, so that Division C can be compared with them. Some federal statutes have eliminated tort liability with no exceptions, and without providing an alternative means of compensation. Other federal statutes have eliminated tort liability for ordinary negligence but not for gross negligence or willful misconduct. Division C eliminated tort liability except for willful misconduct, and therefore falls in between these two categories. In addition, Division C would allow injured persons to recover compensation from the Covered Countermeasure Process Fund, if Congress appropriates money for it. More than 50 federal statutes provide total immunity to particular private parties, but make the U.S. government liable, under the Federal Tort Claims Act, in their stead. There are situations, however, in which the U.S. government may not be held liable under the FTCA, and, in those situations, victims may be left without a remedy. Even when the United States may be held liable under the FTCA, it may never be held liable for punitive damages, even in states that authorize punitive damages awards. Occasionally Congress immunizes private parties but establishes a federal compensation program. Examples include the Radiation Exposure Compensation Act, which immunizes government contractors who carried out atomic weapons testing programs from 1946 to 1962, as well as the National Childhood Vaccine Injury Compensation Act of 1986 and the September 11 th Victims Compensation Fund of 2001. Finally, some federal tort reform statutes do not eliminate the right to sue and do not establish alternative compensation mechanisms. Rather, they cap noneconomic and punitive damages, limit each defendant's share of the total liability to its share of responsibility for the plaintiff's injuries, or take other steps to limit recovery. Division C substitutes a federal cause of action for state causes of action, but continues to apply state law.

Division C of P.L. 109-148 (2005), 42 U.S.C. §§ 247d-6d, 247d-6e, also known as the Public Readiness and Emergency Preparedness Act (PREP Act), limits liability with respect to pandemic flu and other public health countermeasures. Specifically, upon a declaration by the Secretary of Health and Human Services of a public health emergency or the credible risk of such emergency, Division C would, with respect to a "covered countermeasure," eliminate liability, with one exception, for the United States, and for manufacturers, distributors, program planners, persons who prescribe, administer or dispense the countermeasure, and employees of any of the above. The exception to immunity from liability is that a defendant who engaged in willful misconduct would be subject to liability under a new federal cause of action, though not under state tort law, if death or serious injury results. Division C's limitation on liability is a more extensive restriction on victims' ability to recover than exists in most federal tort reform statutes. However, victims could, in lieu of suing, accept payment under a new "Covered Countermeasure Process Fund," if Congress appropriates money for this fund. The first PREP Act declaration was issued on January 26, 2007, to limit liability for the administration of the H5N1 influenza vaccine. Since then, declarations have been issued covering countermeasures against other strains of influenza (including H1N1), anthrax, botulism, small pox, and acute radiation syndrome.

Mr. Chairman and Members of the Subcommittee: I am pleased to be here today to share our observations on the principal methodological similarities and differences of three reports on bankruptcy debtors’ ability to pay their debts. These reports endeavor to address an important public policy issue—whether some proportion of debtors who file for personal bankruptcy have sufficient income, after expenses, to pay a “substantial” portion of their debts. The three reports were issued by the Credit Research Center (Credit Center), Ernst & Young, and Creighton University/American Bankruptcy Institute (ABI). Last year we reported on our analyses of the Credit Center and Ernst & Young reports. It is important to emphasize that our review of the ABI study is still underway. Consequently, it is too early for us to discuss the results of our analysis of the ABI report. Our objective in reviewing each of these reports has been the same—to assess the strengths and limitations, if any, of the report’s assumptions and methodology for determining debtors’ ability to pay and the amount of debt that debtors could potentially repay. We have used the same criteria to review each report. year repayment plan would successfully complete the plans—an assumption that historical experience suggests is unlikely. However, the reports have some methodological differences, including different (1) groupings of the types of debts that could be repaid; (2) gross income thresholds used to identify those debtors whose repayment capacity was analyzed, (3) assumptions about debtors’ allowable living expenses, (4) treatment of student loans that debtors had categorized as unsecured priority debts; and (5) and assumptions about administrative expenses. The remainder of my statement discusses in greater detail the similarities and differences in the findings and methodologies of the three reports. A summary of these similarities and differences is found in attachment I. Debtors who file for personal bankruptcy usually file under chapter 7 or chapter 13 of the bankruptcy code. Generally, debtors who file under chapter 7 of the bankruptcy code seek a discharge of their eligible dischargeable debts. Debtors who file under chapter 7 may voluntarily reaffirm—that is, voluntarily agree to repay—any of their eligible dischargeable debts. Debtors who file under chapter 13 submit a repayment plan, which must be confirmed by the bankruptcy court, for paying all or a portion of their debts over a period not to exceed 3 years unless for cause the court approved a period not to exceed 5 years. Personal bankruptcy filings have set new records in each of the past 3 years, although there is little agreement on the causes for such high bankruptcy filings in a period of relatively low unemployment, low inflation, and steady economic growth. Nor is there agreement on (1) the number of debtors who seek relief through the bankruptcy process who have the ability to pay at least some of their debts and (2) the amount of debt such debtors could repay. Several bills have been introduced in the 105th and 106th Congresses that would implement some form of “needs-based” bankruptcy. Each of these bills includes provisions for determining when a debtor could be required to file under chapter 13, rather than chapter 7. Currently, the debtor generally determines whether to file under chapter 7 or 13. Generally, these bills would establish a “needs-based” test, whose specific provisions vary among the bills. H.R. 3150, the bill used in the Ernst & Young and ABI analyses, would require a debtor whose gross monthly income met a specified income threshold to file under chapter 13 if the debtor’s net monthly income after allowable expenses was more than $50 and would be sufficient to pay 20 percent of the debtor’s unsecured nonpriority debt over a 5-year period. Debtors who did not meet these criteria would be permitted to file under chapter 7. Under the bankruptcy code, a debtor’s debts may be grouped into three general categories for the purposes of determining creditor payment priority: (1) secured debts, for which the debtor has pledged collateral, such as home mortgage or automobile loans; (2) unsecured priority debt, such as child support, alimony, and certain taxes; and (3) unsecured nonpriority debt, such as credit card debts. In analyzing debtors’ ability to pay, the three reports have focused principally on the percentage of total unsecured nonpriority debt that debtors could potentially repay. The Credit Center, Ernst & Young, and ABI reports have each attempted to estimate (1) how many debtors who filed under chapter 7 may have had sufficient income, after expenses, to repay a “substantial” portion of their debts, and (2) what proportion of their debts could potentially be repaid. Each of the reports used to some degree data from the financial schedules that debtors file with their bankruptcy petitions. Although these schedules are the only source of the detailed data needed for an analysis of debtors’ repayment capacity, the data in the schedules are of unknown accuracy and reliability. There are no empirical studies of the accuracy and reliability of the data debtors’ report in their financial schedules, and the National Bankruptcy Review Commission’s report recommended that these schedules be randomly audited. schedules, would remain unchanged over the 5-year repayment period. Historically, only about one-third of chapter 13 debtors have successfully completed their repayment plans, suggesting that for two-thirds of debtors something changed between the time the plans were confirmed by the bankruptcy court and the time the actual repayment plan was to be successfully completed. The three reports focus on the potential debt that debtors could repay should more debtors be required to file under chapter 13. However, should the number of debtors who file under chapter 13 increase, there would also be additional costs for bankruptcy judges and administrative support requirements that would be borne by the government. This is because bankruptcy judges would be involved in debtor screening to a greater extent than they are now and chapter 13 cases require more judicial time than chapter 7 cases do. None of the reports estimated these additional costs, although the ABI report acknowledges that such additional costs could accompany means-testing of bankruptcy debtors. In addition, the Religious Liberty and Charitable Donation Protection Act of 1998 permits chapter 13 bankruptcy debtors to include certain charitable deductions of up to 15 percent of their annual gross income in their allowable living expenses. The implementation of this statute could affect the estimates in each of the three reports. The potential effect could be to reduce (1) the number of bankruptcy debtors who could be required under the “needs- based” tests to file under chapter 13 or (2) the amount of debt repaid to unsecured nonpriority creditors by those debtors who are required to file under chapter 13. The act was enacted after the Credit Center and Ernst & Young issued their reports. The ABI report noted the act could effect the results of debtor means-testing, but did not attempt to apply the act to its sample of debtors. The reports differed in the types of debts that they estimated debtors could repay, their sampling methods, the calendar period from which each report’s sample cases were selected, and the assumptions used to estimate debtors’ allowable living expenses and debt repayments. The ABI report classified student loans differently than the other two reports. We have not analyzed the impact these differences may have had on each report’s findings and conclusions. The Credit Center report estimated the percentage of chapter 7 debtors who could repay a percentage of their “nonhousing, nonpriority debt.” These debts included secured nonhousing debt and unsecured nonprority debt. The Credit Center estimated that 30 percent of the chapter 7 debtors in its sample could repay at least 21 percent of their nonhousing, nonpriority debts, after deducting from their gross monthly income monthly mortgage payments and monthly living expenses. The Ernst & Young and ABI reports estimated the proportion of debtors who had sufficient income, after living expenses, to repay over a 5-year repayment period: • all of their nonhousing secured debt, such as automobile loans (debtors’ payments on home mortgage debt were included in the debtors’ living expenses); • all of their secured priority debts, such as back taxes, alimony, and child support (child support and alimony payments were assumed to continue for the full 5-year payment period unless otherwise noted in the debtors’ financial schedules); and • at least 20 percent of their unsecured nonpriority debts. The Ernst & Young and ABI reports estimated that 15 percent and 3.6 percent, respectively, of the chapter 7 debtors in their individual samples met all of these criteria. chapter 7 case filings from calendar year 1995 in 7 judgmentally selected districts. The Credit Center and ABI reports have one district—Northern Georgia—in common. It is possible that there are differences in each sample’s debtor characteristics that could affect each report’s estimate of debtor repayment capacity. The differences could result from the different time periods and the different sampling methods for selecting districts and filers within each district. Such differences, should they exist, could have affected each report’s estimate of the percentage of chapter 7 debtors who could potentially repay a substantial portion of their debts and how much they could repay. Both the Credit Center and Ernst & Young reports assumed that debtors would incur no additional debt during the 5-year repayment period. The ABI report assumed that debtors could potentially incur expenses for major repairs or replacement of automobiles during the course of the 5- year repayment plan, but that they would incur no other additional debt. The Credit Center report was completed before H.R. 3150 was introduced, and its repayment capacity analysis was not based on any specific proposed legislation. The Credit Center report analyzed the repayment capacity of all the chapter 7 debtors in its sample, regardless of their annual gross income. The Ernst & Young and ABI report used the “needs-based” provisions of different versions of H.R. 3150 as the basis for their analysis of debtor repayment capacity. H.R. 3150 passed the House in June 1998. Under the provisions of H.R. 3150 as introduced and as it passed the House, debtors must pass three tests to be required to file under chapter 13: • debtors must have monthly gross income that exceeds a set percentage of the national median income for households of comparable size (debtors below this threshold are presumed to be eligible to file under chapter 7); • debtors must have income of more than $50 per month after allowable living expenses and payments on secured and unsecured priority debts; and, • debtors could repay at least 20 percent of their unsecured nonpriority debts over a 5-year period if they used this remaining income for such payments. passed by the House of Representatives. The principal effect of using the two different versions of H.R. 3150 was that each report used a different threshold of gross annual income to screen debtors for further repayment analysis. In the Ernst & Young analysis, debtors whose gross annual income was 75 percent or less of the national median income for a household of comparable size were deemed eligible for chapter 7. Debtors whose gross annual income was more than 75 percent of the national median household income were subject to further analysis of their repayment capacity. In the ABI report’s analysis, debtors whose gross annual income was at least 100 percent of the national median income for households of comparable were subject to further repayment analysis. The three reports used different estimates of debtors’ allowable living expenses. The Credit Center report established its own criteria for debtors’ living expenses. Basically, the Credit Center’s analysis used the debtor’s living expenses as reported on the debtor’s schedule of estimated monthly living expenses. The Ernst & Young and ABI reports used the Internal Revenue Service’s (IRS) Financial Collection Standards, as specified in H.R. 3150. However, Ernst & Young and ABI interpreted them somewhat differently. The principal difference was for transportation expenses. Ernst & Young did not include an automobile ownership allowance for debtors who leased cars or whose cars were debt-free. ABI included an ownership allowance for leased cars and for debtors with debt-free cars. The ABI report noted that this difference in allowable transportation expenses accounted for “a substantial part” of the difference between the ABI and Ernst & Young estimates of the percentage of chapter 7 debtors who could potentially repay at least 20 percent of their unsecured nonpriority debt. ABI also deducted from the debtors’ total unsecured priority debt the value of any student loans and added the value of these loans to debtors total unsecured nonpriority debt. To the extent this was done, it had the effect of freeing debtor income to pay unsecured nonpriority debt. Finally, the ABI report assumed that administrative expenses, such as the trustee fee, would consume about 5.6 percent of debtors’ nonhousing payments to creditors under a 5-year repayment plan. The Credit Center and Ernst & Young reports assumed that none of the debtors’ payments would be used for administrative expenses, but that 100 percent of debtors’ payments would be used to pay creditors. the number of debtors who would be required to file under chapter 13 and the amount of debt that such debtors could potentially repay. However, the assumptions and data used in these reports lead to different estimates of debtors’ repayment capacity and require the reader to use caution in interpreting and comparing the results of each report. The actual number of chapter 7 debtors who could repay at least a portion of their nonhousing debt could be more or less than the estimates in these studies. Similarly, the amount of debt these debtors could potentially repay could also be more or less than the reports estimated. We agree that there are likely some debtors who file for bankruptcy under chapter 7 who have the financial ability to repay at least a portion of their debt, and that those who are able to repay their debts should do so. But we believe that more research is needed to verify and refine the estimates of debtors’ repayment capacity to better inform policymakers. Mr. Chairman, this concludes my prepared statement. I would be pleased to answer any questions that you or other Members of the Subcommittee may have.

Pursuant to a congressional request, GAO discussed the principal methodological similarities and differences of three reports on bankruptcy debtors' ability to pay their debts. The three reports were issued by the Credit Research Center, Ernst & Young, and Creighton University/American Bankruptcy Institute (ABI). GAO noted that: (1) the Credit Center report estimated that 30 percent of the chapter 7 debtors in its sample could pay at least 21 percent of their nonhousing, nonpriority debt, after deducting their mortgage debt payments and living expenses (exclusive of debt payments); (2) Ernst & Young and ABI estimated that 15 percent and 3.6 percent, respectively, of the debtors in their individual samples had sufficient income, after deducting allowable living expenses, to pay all of their nonhousing secured debts, all of their unsecured priority debts, and at least 20 percent of their unsecured nonpriority debts; (3) the reports have some characteristics in common, such as the use of debtor-prepared income, expense and debt schedules, the assumption that the debtor's income would remain stable over a 5-year repayment period, and the assumption that all debtors who entered a 5-year repayment plan would successfully complete the plans--an assumption that historical experience suggests is unlikely; (4) however, the reports have some methodological differences, including different: (a) groupings of the types of debts that could be repaid; (b) gross income thresholds used to identify those debtors whose repayment capacity was analyzed; (c) assumptions about debtors' allowable living expenses; (d) treatment of student loans that debtors had categorized as unsecured priority debts; and (e) assumptions about administrative expenses; and (5) these methodological differences contributed to the reports' different estimates of debtors' repayment capacity.

The Xinjiang-Uighur Autonomous Region is China's northwesternmost territory, making up one-sixth of the country's area. In addition to sharing its 3,350-mile border with Afghanistan, it also borders Mongolia, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, Pakistan, and India, including the disputed territory of Kashmir. Uighurs (pronounced WEE-gurs ), who are Turkic Muslims, comprise the dominant ethnic group in the region at 47% of the total population of 16.6 million. Since the 1950s, the PRC has moved into the XUAR sizeable numbers of ethnic (Han) Chinese, who make up nearly 92% of the PRC's total population, settling many of them into communities known as "Production and Construction Corps." The percentage of ethnic Chinese in Xinjiang subsequently has increased from around 6% in 1949 to 38% in 1999. The XUAR is also home to smaller populations of Kazakhs, Kyrgyz, Tajiks, Tatars, Uzbeks, Hui, Mongols, and other Turkic national minority groups. Historical interpretations of Xinjiang's distant past are controversial. Events of recent centuries are more widely documented but no less contentious. China established a military presence in the region in the eighteenth century and later named the area Xinjiang, "new territory." In the nineteenth century, as China became a battleground for competing European interests, Britain supported Chinese sovereignty over Xinjiang to forestall Russian efforts to dominate the region. Revolts in Xinjiang against Chinese rule took place in the 1860s and 1870s, leading to the declaration of an independent state. Parts of Xinjiang were briefly held by Russia until their return to Chinese control in the early 1880s. Chinese control of Xinjiang fluctuated in the first half of the twentieth century. Chinese warlords acknowledged the national Chinese government's sovereignty but maintained control over much of Xinjiang, while local non-Chinese residents established brief independent republics in the 1930s and 1940s. In 1949 the People's Liberation Army (PLA) entered Xinjiang and annexed it to the People's Republic of China (PRC). Xinjiang was designated as an autonomous region for ethnic minorities and became formally known as the Xinjiang Uighur Autonomous Region in 1955. The past decade has seen an increase in ethnic activities in the XUAR ranging from the more vigorous exercise of local cultural and religious practices, to expressions of discontent with the government, and to limited and at times violent efforts to establish an independent state or rebel against PRC rule. The PRC has been the target of bombings, sabotage, and other terrorist attacks, primarily thought to be committed by small groups of XUAR extremists. For years, there have been periodic unconfirmed reports that some Uighur activists may, in fact, be based in Afghanistan, receiving training from the Taliban. Beijing calls many of these activists "separatists," and charges them with trying to wrest the XUAR and other heavily Muslim areas from Chinese rule. Beijing has responded to these perceived threats by enhancing security measures in the XUAR. Many international organizations reporting a significant upsurge of human rights violations in the region allege that PRC policies in the XUAR unjustly target the majority of XUAR residents whose expressions of ethnicity and culture do not carry separatist connotations or threaten national security. Monitoring ethnic activities in the XUAR is complicated by conflicting descriptions of the region. Accounts from Uighur sources and international organizations identify human rights violations and unequal treatment as underlying causes of protest and turmoil in the region. The group Human Rights Watch notes that Communist Party officials, who tend to be ethnic Chinese, dominate local politics even though many top posts in the XUAR's local government are held by members of minority groups. Central Asian specialist Dru Gladney suggests that Chinese immigration to the XUAR is a main cause of discontent. According to the human rights group Amnesty International, a number of protests, including a 1995 demonstration in Hetian (Khotan) and a 1997 demonstration in Yining (Ghulja), have been in response to China's restrictions on religious activities and perceived discrimination against minority groups. Some ethnic movements in the XUAR are based strongly on nationalist ideas. Nationalist movements opposing PRC rule date back to 1949, when Uighur independence groups defeated by the PLA fled China and established an independence movement in Turkey. Activities with nationalist overtones have become more visible within the XUAR since the PRC began permitting greater freedom of expression in the 1980s, and in particular since the early 1990s, when Central Asian republics with ethnic ties to the XUAR's indigenous population declared independence from the Soviet Union. A number of organizations outside China support these nationalist aims. The Turkey-based East Turkistan Information Center states that it serves as an international association of Uighur groups located in Kazakhstan, Kyrgyzstan, Uzbekistan, Germany, Sweden, Australia, and the United States. According to XUAR dissidents in Turkey, a Uighur group in Kazakhstan was responsible for a bomb explosion on a Beijing bus in 1997 that followed massive arrests by PRC security officials in the aftermath of demonstrations in Yining (Ghulja). Ties may also exist between Uighur separatist groups and Islamic fundamentalist organizations in both Pakistan and Afghanistan. Although the PRC government has identified internal separatist threats, the extent to which separatist movements are led by organizations within the XUAR and the immediate threat of these movements are unclear. According to one report in 1999 by the U.S. Central Intelligence Agency, CIA analysts at that point did not foresee ethnic separatism resulting in the breakup of the PRC. Beijing stresses that the PRC's minority groups enjoy equal protection under the law. The PRC Constitution states: All ethnic groups in the People's Republic of China are equal. The state protects the lawful rights and interests of the ethnic minorities and upholds and develops a relationship of equality, unity, and mutual assistance among all of China's ethnic groups. Discrimination against and oppression of any ethnic group are prohibited. Beijing has often stated that current and past separatist incidents in the XUAR are isolated events initiated by foreign groups and abhorred by XUAR residents. The PRC government nonetheless has responded to events in the XUAR with heavy policing of the region, arrests and executions of alleged separatists, and, according to reports by human rights groups and exiled dissidents, torture of Uighur and other minority prisoners. A classified transcript of a March 19, 1996 meeting of the Standing Committee of the Chinese Communist Party Politburo, cited by Human Rights Watch, underscores PRC concerns with the XUAR. According to the transcript, the meeting identified "national separatism and illegal religious activity" as the "main threats to the stability of Xinjiang," and noted that counterrevolutionary organizations "led by the United States of America" are supporting separatist movements. The meeting also outlined a strategy for restricting illegal religious activity, encouraging immigration to the XUAR, regulating cultural exchanges with foreign countries, and tightening control of the media. In addition to taking strong measures domestically, PRC leaders appear particularly sensitive to the fact that Xinjiang's ethnic Muslim population have more in common with the populations of bordering states than with the rest of China. On April 26, 1996, coinciding with the beginning of China's anti-crime campaign and massive arrests in the XUAR, China signed a military confidence-building treaty with Russia and the Muslim states bordering Xinjiang – Kazakhstan, Tajikistan, and Kyrgyzstan – setting up a buffer zone between the signatory nations. On August 25, 1999, the five countries cosigned a declaration designed to decrease cross-border crime, separatism, and extremism. This group now includes Uzbekistan and is known as the Shanghai Cooperation Organization (SCO). On November 10, 1999, China and Uzbekistan agreed to a joint effort to fight terrorism and Islamic activity, and on November 23, 1999, China and Kazakhstan again pledged mutual cooperation in fighting separatism, terrorism, and religious extremism. Although social and economic reforms in the late 1970s and 1980s allowed new freedoms in the PRC, human rights organizations maintain that these freedoms have been curtailed in the past decade. China has signed or ratified several international human rights declarations, but Amnesty International and Human Rights Watch both report that severe human rights violations occur in the XUAR. Restrictions on religion and dissatisfaction with the government have helped fuel protest among XUAR residents. In 1996, the PRC initiated a "strike hard" campaign against crime which, in the XUAR, often focused on curbing ethnic and religious activities that are illegal under Chinese law. In an April 1999 report on human rights violations in the XUAR, Amnesty International described a pattern of arbitrary arrests, unfair trials, and summary executions, as well as reports of forced sterilization and abortions. The organization recorded 210 death sentences and 190 executions between 1997 and 1999, primarily of Uighurs charged with subversive activities. Several human rights organizations have tracked the August 1999 arrest of a prominent and wealthy Uighur businesswoman, Rebiya Kadeer. Detained by police while on her way to meet with a friend from a visiting U.S. congressional staff delegation, Kadeer was held on charges of "providing information to foreigners" and was charged on September 2, 1999, for "illegally offering state secrets across the border." According to the Information Center of Human Rights and Democratic Movements in China, in November 1999, Kadeer's son was sentenced without trial to two years in a labor camp on charges of aiding separatists. On March 9, 2000, the XUAR's Urumqi Intermediate Court sentenced Kadeer herself to 8 years for providing state secrets to foreigners. The XUAR has abundant resources, including cotton and oil, but lags behind many other regions in China in economic output. Xinjiang's half-year GDP growth rate for 1999 (6.8%) made it the fourth lowest region for GDP growth in China, 0.8 percentage point behind the national average and 5.1 percentage points behind Beijing. Chinese sources note, however, that the XUAR ranks second in China for border trade and is home to 699 enterprises funded by foreign sources. In recent years, Beijing has launched a "Go West" campaign to concentrate economic development efforts in central and western China. The government has announced a five-year development plan for Xinjiang that will focus on improving infrastructure in the region. A cornerstone of this effort is a plan to build a 4,212-kilometer pipeline from the XUAR to Shanghai. Beijing also announced plans to open a branch of the China Development Bank in Xinjiang's capital, Urumqi. According to the state-sponsored Xinjiang People's Broadcasting Station, Communist Party officials have encouraged local media to help create "a public opinion fav[o]rable to the implementation of the strategy on grand [economic] development of the western region." Some, however, fear that these and other western development projects may exacerbate ethnic tensions by bringing more ethnic Chinese into the region. According to some human rights groups, Chinese migration and economic disparities between Chinese and ethnic minorities in the XUAR have been a primary factor fueling discontent among minority groups. Critics of PRC development plans assert that Chinese, and not ethnic minorities, tend to reap the benefits of economic improvements in minority regions. Development projects funded by foreign groups, including the World Bank, have been controversial because of perceived advantages the projects give to Chinese. (See CRS Report RL30786, World Bank Lending: Issues Raised by China ' s Qinghai Resettlement Project. ) Events in the XUAR have far-reaching implications for U.S. policymakers, who in the past have had to juggle efforts to persuade the PRC to improve its human rights record – efforts the PRC government has strongly criticized – with attempts to uphold and enhance economic cooperation with China. In its September 2000 "Annual Report on International Religious Freedom for 2000: China," the U.S. Department of State referred to PRC police crackdowns on Muslim religious activity after an ongoing series of violent incidents in the XUAR beginning in 1997, including reported bombings in Xinjiang and other parts of the PRC attributed to Uighur activists. According to the report, the PRC continues to maintain restrictions on Muslim religious activity, particularly among the Uighur nationality. In the wake of the September 11, 2001 terrorist attacks against the United States, the potential for Sino-U.S. cooperation against global terrorism may bring changes in the policy calculations of U.S. officials, who may seek to downplay traditional U.S. concerns in the interest of assuring PRC cooperation. Despite shared Sino-U.S. interests against terrorism, it is not yet clear how much actual support the PRC will be willing or able to give the U.S.-led effort. A key problem for U.S. policymakers is that the PRC commonly makes no distinction between terrorists who perform violent acts and "separatists," even those advocates that are entirely peaceful. Also, the PRC strongly prefers that global efforts such as the anti-terrorism campaign be conducted through the auspices of the U.N. Security Council, where it has a voice, and not purely through a U.S. unilateral effort or a coalition of U.S. allies. Beijing officials also may be cautious about appearing too "pro-American," a political problem that working through U.N. auspices could mitigate. Also, PRC officials in the past have attempted to exact policy concessions from the United States – such as on Taiwan or Tibet – in exchange for their support for U.S. initiatives. The PRC may attempt to condition its future support for the global anti-terrorism campaign through these and other mechanisms – a linkage that would complicate U.S. policies toward Taiwan and the Dalai Lama's Tibetan community-in-exile.

Since 1996, officials of the People's Republic of China (PRC) have seen an increasing security threat in the activities of minority nationalities in its heavily Muslim Xinjiang Uighur Autonomous Region (XUAR), in China's far northwest. The PRC has been the target of bombings, sabotage, and other terrorist attacks, primarily thought to be committed by small groups of XUAR extremists (largely Uighurs). As a result, Beijing has increased police actions in the region, which many human rights organizations and Members of Congress allege have resulted in gross and increasing human rights violations. In the aftermath of the September 11, 2001 terrorist attacks in the United States, U.S. policymakers are faced with balancing these human rights concerns with what now appear to be common Sino-U.S. interests in combating fundamentalist global terrorism.

The Indian Health Service (IHS) within the Department of Health and Human Services (HHS) is the lead federal agency charged with improving the health of American Indians and Alaska Natives. IHS provides health care for approximately 2.2 million eligible American Indians/Alaska Natives through a system of programs and facilities located on or near Indian reservations, and through contractors in certain urban areas. IHS provides services to members of 573 federally recognized tribes. It provides services either directly or through facilities and programs operated by Indian tribes or tribal organizations through self-determination contracts and self-governance compacts authorized in the Indian Self-Determination and Education Assistance Act (ISDEAA). The Snyder Act of 1921 provides general statutory authority for IHS. In addition, specific IHS programs are authorized by two acts: the Indian Sanitation Facilities Act of 1959 and the Indian Health Care Improvement Act (IHCIA). The Indian Sanitation Facilities Act authorizes the IHS to construct sanitation facilities for Indian communities and homes. IHCIA authorizes programs such as urban health, health professions recruitment, and substance abuse and mental health treatment, and permits IHS to receive reimbursements from Medicare, Medicaid, the State Children's Health Insurance Program (CHIP), the Department of Veterans Affairs (VA), and third-party insurers. Finally, the Public Health Service Act provides funds for the Special Diabetes Program for Indians grants administered by IHS. The IHS has three major sources of funding, described here in order of magnitude: (1) discretionary appropriations, (2) collections, and (3) mandatory appropriations. Unlike most agencies within HHS, which receive their appropriations through the Labor, Health and Human Services, and Education appropriations act, the IHS receives its discretionary appropriations through the Interior/Environment appropriations act. IHS's discretionary appropriations are divided into three accounts: (1) Indian Health Services, (2) Contract Support Costs, and (3) Indian Health Facilities. As a second source of funding, IHS collects and expends funds received as payment for health services provided. IHS has the authority to receive payments from other federal programs such as Medicaid, Medicare, CHIP, and the Department of Veterans Affairs. IHS also receives payments from state programs (such as workers compensation) and from private insurance. IHS, under its IHCIA collection authority, is able to retain these payments to increase services available to its beneficiaries. In addition to these collections, IHS collects rent from facilities it owns. The third and smallest source of IHS funding is a mandatory appropriation of $150 million annually to support the Special Diabetes Program for Indians. This mandatory funding was extended through FY2019 in the Bipartisan Budget Act of 2018 (BBA 2018, P.L. 115-123 ). The President's budget request proposes to shift the FY2019 appropriation to discretionary funding. Table 1 presents IHS's funding from FY2014 through the proposed President's FY2019 budget submission. The table generally shows increases in both appropriated funds and funds collected by IHS through FY2018. The table presents IHS's three budget accounts—Indian Health Services, Contract Support Costs, and Indian Health Facilities—and the funds collected and allocated to programs under these accounts. Collections and proposed and actual mandatory funding are subtracted from program-level funding to show the agency's discretionary budget authority. Although appropriations for IHS have increased over time, the FY2018 appropriation represents a larger increase than in prior years. In particular, the FY2018 appropriation included increases for a number of programs funded under the Indian Health Facilities account, which includes maintenance and improvement and construction of new facilities. In addition, the FY2018 appropriation increased funding for mental health and alcohol and substance abuse services, provided new funding for the Indian Health Care Improvement Fund, and included language to require IHS to conduct an analysis of IHS locations and services relative to the IHS user population. The FY2019 President's request represents a decrease from FY2018 levels for a number of IHS programs and activities. However, final FY2018 appropriations had not been enacted during the period in which the FY2019 President's request was being formulated. While the total request for IHS represents a decrease from FY2018-enacted levels, it represents an increase from FY2017-enacted levels and the FY2018 annualized continuing resolution levels that were in place at the time the FY2018 request levels were being determined. IHS facilities collect payments from third-party payors for services provided to IHS beneficiaries who are also enrolled in other programs. These collections are an important source of IHS's clinical services (see Table 1 ). Medicaid is the largest source of IHS's collections—accounting for approximately 68% of all third-party collections in FY2017, the most recent year of final data available—followed by Medicare (21% in FY2017) and private insurance (9% in FY2017). Beginning in FY2014, IHS began receiving payments from the VA for services provided to IHS beneficiaries who were also enrolled in the VA (these payments were 2% of all of IHS's third-party collections in FY2017).

The Indian Health Service (IHS) within the Department of Health and Human Services (HHS) is the lead federal agency charged with improving the health of American Indians and Alaska Natives. IHS provides health care for approximately 2.2 million eligible American Indians/Alaska Natives through a system of programs and facilities located on or near Indian reservations, and through contractors in certain urban areas. IHS provides services to members of 573 federally recognized tribes. It provides services either directly or through facilities and programs operated by Indian tribes or tribal organizations through self-determination contracts and self-governance compacts authorized in the Indian Self-Determination and Education Assistance Act (ISDEAA). The IHS has three major sources of funding: (1) discretionary appropriations, (2) collections, and (3) mandatory appropriations. Unlike most agencies within HHS, which receive their appropriations through the Labor, Health and Human Services, and Education appropriations act, IHS receives its discretionary appropriations through the Interior/Environment appropriations act. IHS's discretionary appropriations are divided into three accounts: (1) Indian Health Services, (2) Contract Support Costs, and (3) Indian Health Facilities. IHS collects payments for the health services it provides. IHS, unlike other federal agencies, has the authority to receive payments from other federal programs such as Medicaid, Medicare, and the Department of Veterans Affairs for the health services it provides to IHS beneficiaries who are also enrolled in those programs. IHS also receives payments from state programs (such as workers' compensation) and from private insurance. In addition to these payments, IHS collects rent from facilities it owns. Since FY1998, IHS has received a mandatory appropriation each fiscal year to support the Special Diabetes Program for Indians. This funding source was most recently extended in the Bipartisan Budget Act of 2018 (P.L. 115-123), which provided mandatory appropriations for FY2018 and FY2019. The President's budget requests that these funds be moved to discretionary appropriations in FY2019. This fact sheet focuses on the funding that IHS has received between FY2014 and FY2019 (proposed).

Since the early 1990s, the explosion in computer interconnectivity, most notably growth in the use of the Internet, has revolutionized the way organizations conduct business, making communications faster and access to data easier. However, this widespread interconnectivity has increased the risks to computer systems and, more importantly, to the critical operations and infrastructures that these systems support, such as telecommunications, power distribution, national defense, and essential government services. Malicious attacks, in particular, are a growing concern. The National Security Agency has determined that foreign governments already have or are developing computer attack capabilities, and that potential adversaries are developing a body of knowledge about U.S. systems and methods to attack them. In addition, reported incidents have increased dramatically in recent years. Accordingly, there is a growing risk that terrorists or hostile foreign states could severely damage or disrupt national defense or vital public operations through computer-based attacks on the nation’s critical infrastructures. Since 1997, in reports to the Congress, we have designated information security a governmentwide high-risk area. Our most recent report in this regard, issued in January, noted that, while efforts to address the problem have gained momentum, federal assets and operations continue to be highly vulnerable to computer-based attacks. To develop a strategy to reduce such risks, in 1996, the President established a Commission on Critical Infrastructure Protection. In October 1997, the commission issued its report, stating that a comprehensive effort was needed, including “a system of surveillance, assessment, early warning, and response mechanisms to mitigate the potential for cyber threats.” The report said that the Federal Bureau of Investigation (FBI) had already begun to develop warning and threat analysis capabilities and urged it to continue in these efforts. In addition, the report noted that the FBI could serve as the preliminary national warning center for infrastructure attacks and provide law enforcement, intelligence, and other information needed to ensure the highest quality analysis possible. In May 1998, PDD 63 was issued in response to the commission’s report. The directive called for a range of actions intended to improve federal agency security programs, establish a partnership between the government and the private sector, and improve the nation’s ability to detect and respond to serious computer-based attacks. The directive established a National Coordinator for Security, Infrastructure Protection, and Counter-Terrorism under the Assistant to the President for National Security Affairs. Further, the directive designated lead agencies to work with private-sector entities in each of eight industry sectors and five special functions. For example, the Department of the Treasury is responsible for working with the banking and finance sector, and the Department of Energy is responsible for working with the electric power industry. PDD 63 also authorized the FBI to expand its NIPC, which had been originally established in February 1998. The directive specifically assigned the NIPC, within the FBI, responsibility for providing comprehensive analyses on threats, vulnerabilities, and attacks; issuing timely warnings on threats and attacks; facilitating and coordinating the government’s response to cyber incidents; providing law enforcement investigation and response; monitoring reconstitution of minimum required capabilities after an infrastructure attack; and promoting outreach and information sharing. PDD 63 assigns the NIPC responsibility for developing analytical capabilities to provide comprehensive information on changes in threat conditions and newly identified system vulnerabilities as well as timely warnings of potential and actual attacks. This responsibility requires obtaining and analyzing intelligence, law enforcement, and other information to identify patterns that may signal that an attack is underway or imminent. Since its establishment in 1998, the NIPC has issued a variety of analytical products, most of which have been tactical analyses pertaining to individual incidents. These analyses have included (1) situation reports related to law enforcement investigations, including denial-of-service attacks that affected numerous Internet-based entities, such as eBay and Yahoo and (2) analytical support of a counterintelligence investigation. In addition, the NIPC has issued a variety of publications, most of which were compilations of information previously reported by others with some NIPC analysis. Strategic analysis to determine the potential broader implications of individual incidents has been limited. Such analysis looks beyond one specific incident to consider a broader set of incidents or implications that may indicate a potential threat of national importance. Identifying such threats assists in proactively managing risk, including evaluating the risks associated with possible future incidents and effectively mitigating the impact of such incidents. Three factors have hindered the NIPC’s ability to develop strategic analytical capabilities. First, there is no generally accepted methodology for analyzing strategic cyber-based threats. For example, there is no standard terminology, no standard set of factors to consider, and no established thresholds for determining the sophistication of attack techniques. According to officials in the intelligence and national security community, developing such a methodology would require an intense interagency effort and dedication of resources. Second, the NIPC has sustained prolonged leadership vacancies and does not have adequate staff expertise, in part because other federal agencies have not provided the originally anticipated number of detailees. For example, as of the close of our review in February, the position of Chief of the Analysis and Warning Section, which was to be filled by the Central Intelligence Agency, had been vacant for about half of the NIPC’s 3-year existence. In addition, the NIPC had been operating with only 13 of the 24 analysts that NIPC officials estimate are needed to develop analytical capabilities. Third, the NIPC did not have industry-specific data on factors such as critical system components, known vulnerabilities, and interdependencies. Under PDD 63, such information is to be developed for each of eight industry segments by industry representatives and the designated federal lead agencies. However, at the close of our work in February, only three industry assessments had been partially completed, and none had been provided to the NIPC. To provide a warning capability, the NIPC established a Watch and Warning Unit that monitors the Internet and other media 24 hours a day to identify reports of computer-based attacks. As of February, the unit had issued 81 warnings and related products since 1998, many of which were posted on the NIPC’s Internet web site. While some warnings were issued in time to avert damage, most of the warnings, especially those related to viruses, pertained to attacks underway. The NIPC’s ability to issue warnings promptly is impeded because of (1) a lack of a comprehensive governmentwide or nationwide framework for promptly obtaining and analyzing information on imminent attacks, (2) a shortage of skilled staff, (3) the need to ensure that the NIPC does not raise undue alarm for insignificant incidents, and (4) the need to ensure that sensitive information is protected, especially when such information pertains to law enforcement investigations underway. However, I want to emphasize a more fundamental impediment. Specifically, evaluating the NIPC’s progress in developing analysis and warning capabilities is difficult because the federal government’s strategy and related plans for protecting the nation’s critical infrastructures from computer-based attacks, including the NIPC’s role, are still evolving. The entities involved in the government’s critical infrastructure protection efforts have not shared a common interpretation of the NIPC’s roles and responsibilities. Further, the relationships between the NIPC, the FBI, and the National Coordinator for Security, Infrastructure Protection, and Counter-Terrorism at the National Security Council have been unclear regarding who has direct authority for setting NIPC priorities and procedures and providing NIPC oversight. In addition, the NIPC’s own plans for further developing its analytical and warning capabilities were fragmented and incomplete. As a result, there were no specific priorities, milestones, or program performance measures to guide NIPC actions or provide a basis for evaluating its progress. The administration is currently reviewing the federal strategy for critical infrastructure protection that was originally outlined in PDD 63, including provisions related to developing analytical and warning capabilities that are currently assigned to the NIPC. On May 9, the White House issued a statement saying that it was working with federal agencies and private industry to prepare a new version of a “national plan for cyberspace security and critical infrastructure protection” and reviewing how the government is organized to deal with information security issues. In our report, we recommend that, as the administration proceeds, the Assistant to the President for National Security Affairs, in coordination with pertinent executive agencies, establish a capability for strategic analysis of computer-based threats, including developing related methodology, acquiring staff expertise, and obtaining infrastructure data; require development of a comprehensive data collection and analysis framework and ensure that national watch and warning operations for computer-based attacks are supported by sufficient staff and resources; and clearly define the role of the NIPC in relation to other government and private-sector entities. PDD 63 directed the NIPC to provide the principal means of facilitating and coordinating the federal government’s response to computer-based incidents. In response the NIPC undertook efforts in two major areas: providing coordination and technical support to FBI investigations and establishing crisis management capabilities. First, the NIPC provided valuable coordination and technical support to FBI field offices, which established special squads and teams and one regional task force in its field offices to address the growing number of computer crime cases. The NIPC supported these investigative efforts by (1) coordinating investigations among FBI field offices, thereby bringing a national perspective to individual cases, (2) providing technical support in the form of analyses, expert assistance for interviews, and tools for analyzing and mitigating computer-based attacks, and (3) providing administrative support to NIPC field agents. For example, the NIPC produced over 250 written technical reports during 1999 and 2000, developed analytical tools to assist in investigating and mitigating computer-based attacks, and managed the procurement and installation of hardware and software tools for the NIPC field squads and teams. While these efforts benefited investigative efforts, FBI and NIPC officials told us that increased computer capacity and data transmission capabilities would improve their ability to promptly analyze the extremely large amounts of data that are associated with some cases. In addition, FBI field offices were not yet providing the NIPC with the comprehensive information that NIPC officials say is needed to facilitate prompt identification and response to cyber incidents. According to field office officials, some information on unusual or suspicious computer-based activity had not been reported because it did not merit opening a case and was deemed to be insignificant. To address this problem, the NIPC established new performance measures related to reporting. Second, the NIPC developed crisis management capabilities to support a multiagency response to the most serious incidents from the FBI’s Washington, D.C., Strategic Information Operations Center. From 1998 through early 2001, seven crisis action teams had been activated to address potentially serious incidents and events, such as the Melissa virus in 1999 and the days surrounding the transition to the year 2000, and related procedures have been formalized. In addition, the NIPC coordinated development of an emergency law enforcement plan to guide the response of federal, state, and local entities. To help ensure an adequate response to the growing number of computer crimes, we recommend in our report that the Attorney General, the FBI Director, and the NIPC Director take steps to (1) ensure that the NIPC has access to needed computer and communications resources and (2) monitor implementation of new performance measures to ensure that field offices fully report information on potential computer crimes to the NIPC. Information sharing and coordination among private-sector and government organizations are essential for thoroughly understanding cyber threats and quickly identifying and mitigating attacks. However, as we testified in July 2000,establishing the trusted relationships and information-sharing protocols necessary to support such coordination can be difficult. NIPC success in this area has been mixed. For example, the InfraGard Program, which provides the FBI and the NIPC with a means of securely sharing information with individual companies, had grown to about 500 member organizations as of January 2001 and was viewed by the NIPC as an important element in building trust relationships with the private sector. NIPC officials recently told us that InfraGard membership has continued to increase. However, of the four information sharing and analysis centers that had been established as focal points for infrastructure sectors, a two-way, information-sharing partnership with the NIPC had developed with only one—the electric power industry. The NIPC’s dealings with two of the other three centers primarily consisted of providing information to the centers without receiving any in return, and no procedures had been developed for more interactive information sharing. The NIPC’s information-sharing relationship with the fourth center was not covered by our review because the center was not established until mid-January 2001, shortly before the close of our work. Similarly, the NIPC and the FBI have made only limited progress in developing a database of the most important components of the nation’s critical infrastructures—an effort referred to as the Key Asset Initiative. While FBI field offices had identified over 5,000 key assets, at the time of our review, the entities that own or control the assets generally had not been involved in identifying them. As a result, the key assets recorded may not be the ones that infrastructure owners consider to be the most important. Further, the Key Asset Initiative was not being coordinated with other similar federal efforts at the Departments of Defense and Commerce. In addition, the NIPC and other government entities had not developed fully productive information-sharing and cooperative relationships. For example, federal agencies have not routinely reported incident information to the NIPC, at least in part because guidance provided by the federal Chief Information Officers Council, which is chaired by the Office of Management and Budget, directs agencies to report such information to the General Services Administration’s Federal Computer Incident Response Capability. Further, NIPC and Defense officials agreed that their information-sharing procedures needed improvement, noting that protocols for reciprocal exchanges of information had not been established. In addition, the expertise of the U.S. Secret Service regarding computer crime had not been integrated into NIPC efforts. The NIPC has been more successful in providing training on investigating computer crime to government entities, which is an effort that it considers an important component of its outreach efforts. From 1998 through 2000, the NIPC trained about 300 individuals from federal, state, local, and international entities other than the FBI. In addition, the NIPC has advised several foreign governments that are establishing centers similar to the NIPC. To improve information sharing, we recommend in our report that the Assistant to the President for National Security Affairs direct federal agencies and encourage the private sector to better define the types of information necessary and appropriate to exchange in order to combat computer-based attacks and to develop procedures for performing such exchanges, initiate development of a strategy for identifying assets of national significance that includes coordinating efforts already underway, and resolve discrepancies in requirements regarding computer incident reporting by federal agencies. In our report, we also recommend that the Attorney General task the FBI Director to formalize information-sharing relationships between the NIPC and other federal entities and industry sectors and ensure that the Key Asset Initiative is integrated with other similar federal activities.

The National Infrastructure Protection Center (NIPC) is an important element of the U.S.' strategy to protect the nation's infrastructures from hostile attacks, especially computer-based attacks. This testimony discusses the key findings of a GAO report on NIPC's progress in developing national capabilities for analyzing cyber threats and vulnerability data and issuing warnings, enhancing its capabilities for responding to cyber attacks, and establishing information-sharing relationships with governments and private-sector entities. GAO found that progress in developing the analysis, warning, and information-sharing capabilities has been mixed. NIPC began various critical infrastructure protection efforts that have laid the foundation for future governmentwide efforts. NIPC has also provided valuable support and coordination related to investigating and otherwise responding to attacks on computers. However, the analytical and information-sharing capabilities that are needed to protect the nation's critical infrastructures have not yet been achieved, and NIPC has developed only limited warning capabilities. An underlying contributor to the slow progress is that the NIPC's roles and responsibilities have not been fully defined and are not consistently interpreted by other entities involved in the government's broader critical infrastructure protection strategy. This report summarized an April report (GAO-01-323).

The final medical privacy regulation requires that most providers obtain patient consent to use or disclose health information before engaging in treatment, payment, or health care operations. As defined in the regulation, health care operations include a variety of activities such as undertaking quality assessments and improvement initiatives, training future health care professionals, conducting medical reviews, and case management and care coordination programs. The consent form must alert patients to the provider’s notice of privacy practices (described in a separate document) and notify them of their right to request restrictions on the use and disclosure of their information for routine health care purposes. Providers are not required to treat patients who refuse to sign a consent form, nor are they required to agree to requested restrictions. The consent provision applies to all covered providers that have a direct treatment relationship with patients. The regulation also specifies several circumstances where such prior patient consent is not required. The privacy regulation does not require health plans to obtain written patient consent. This approach to patient consent for information disclosures differs from that in HHS’ proposed privacy regulation, issued for public comment November 3, 1999. The proposed regulation would have permitted providers to use and disclose information for treatment, payment, and health care operations without written consent. At the time, HHS stated that the existing consent process had not adequately informed patients of how their medical records could be used. Comments HHS received on this provision were mixed. Some groups approved of this approach, saying it would ensure that covered entities could share information to provide effective clinical care and operate efficiently, while not creating administrative requirements that would add little to individual privacy. However, others wrote that individuals should be able to control to whom, and under what circumstances, their individually identifiable health information would be disclosed, even for routine treatment, payment, or health care operations. The extent to which the privacy regulation’s consent requirement will be a departure from business as usual varies by type of provider. Under current practices, physicians and hospitals generally obtain consent to use patient data for processing insurance claims, but they obtain consent substantially less often for treatment or health care operations. Pharmacists, however, typically do not have consent procedures in place for any of the routine purposes included in the regulation. Specifically: Most, but not all, physicians get signed written consent to use patient data for health insurance payment. Exceptions to this practice include emergency situations and patients who choose to pay for their treatment “out of pocket” to avoid sharing sensitive information with an insurer. However, physicians do not typically seek approval to use patient data to carry out treatment or health care operations. Nearly all hospitals routinely obtain written consent at the time of admission, at least for release of information to insurance companies for payment purposes. A 1998 study of large hospitals found that 97 percent of patient consent forms sought release of information for payment, 50 percent addressed disclosure of records to other providers, and 45 percent requested consent for utilization review, peer review, quality assurance, or prospective review—the types of health care management activities considered health care operations in the federal privacy regulation. Pharmacies do not routinely obtain patient consent related to treatment (i.e., before filling a prescription), payment, or health care operations. However, industry representatives told us that pharmacies conducting disease management programs (specialized efforts to ensure appropriate pharmaceutical use by patients with certain chronic conditions) typically seek consent to share information with physicians about the patients’ condition, medical regimen, and progress. The new consent requirement makes several important changes to current practices that have implications for patients and providers. For patients, they will be made aware that their personal health information may be used or disclosed for a broad range of purposes including health care operations. Other provisions of the privacy regulation grant patients additional protections, including the right to access their records, to request that their records be amended, to obtain a history of disclosures, and to request restrictions on how their information is used. For providers directly treating patients, they will have a legal obligation to obtain prior written consent and to use a form that meets specific content requirements. Supporters of the consent requirement argue that the provision gives patients an opportunity to be actively involved in decisions about the use of their data. Yet, many groups recognize that signing a provider’s consent form does not, per se, better inform patients of how their information will be used or disclosed. In addition, most provider organizations we interviewed told us that the privacy regulation’s consent requirement will be a challenge to implement and may impede some health care operations. The American Medical Association (AMA), the Bazelon Center for Mental Health Law, and the Health Privacy Project (HPP) indicated that the consent process offers important benefits to patients. These groups view the process of signing a consent form as a critical tool in focusing patient attention on how personal health information is being used. They assert that only providing patients with a notice of privacy practices is not sufficient because most patients are not likely to understand its importance, much less read it. The patient advocacy groups told us that the act of signing the consent can help make patients aware of their ability to affect how their information is used. This heightened awareness, in turn, may make patients more likely to read the notice of privacy practices or to discuss privacy issues with their health care provider. HPP cited the process of signing consent as offering an “initial moment” in which patients have an opportunity to raise questions about privacy concerns and learn more about the options available to them. This opportunity may be especially valuable to patients seeking mental health and other sensitive health care services. In contrast, many groups we interviewed question the value of the consent form for patients. For example, the Medical Group Management Association (MGMA) and the American Hospital Association (AHA) assert that the process of signing a consent form may be perfunctory, at best, and confusing, at worst. To some extent, patient advocacy groups we spoke with agree. They say that patients will be under pressure to sign the form without reading the notice, as providers can condition treatment upon obtaining consent. They contend that many patients may not find the consent process meaningful. They maintain that nevertheless it should be required for the benefit it offers patients who may be particularly interested in having a say about how their health information will be used. Health plan and provider organizations we interviewed told us that the consent requirement poses implementation difficulties for patients and providers both during the regulation’s initial implementation and beyond. The extent of these challenges and their potential implications vary by type of provider. In general, these organizations do not favor written consents for routine uses of patient information, although they support the regulation’s requirement to provide patients with privacy notices. The consent requirement would require pharmacists to change their current practices. Under the regulation, a patient must sign a consent form before a pharmacist can begin filling the prescription. According to the American Pharmaceutical Association and the National Association of Chain Drug Stores, this requirement would result in delays and inconvenience for patients when they use a pharmacy for the first time.Also, pharmacies would not be able to use patient information currently in their systems to refill prescriptions or send out refill reminders before receiving patient consent to do so. In addition, patients who spent time in different parts of the country and were accustomed to transferring their prescriptions to out-of-state pharmacies would have to provide consent to one or more pharmacies before their prescriptions could be filled. Pharmacy and other organizations have suggested that the privacy regulation should recognize a physician-signed prescription as indicative of patient consent or that pharmacies could be considered indirect providers and thus not subject to the consent requirement. Hospital organizations also raised concern about disruption of current practice and some loss of efficiency. AHA and Allina Health System representatives stated that the consent requirement could impede the ability of hospitals to collect patient information prior to admission, thus creating administrative delays for hospitals and inconvenience for some patients. In advance of nonemergency admissions, hospitals often gather personal data needed for scheduling patient time in operating rooms, surgical staff assignments, and other hospital resources. If the regulation is interpreted to include such activities as part of treatment or health care operations, hospitals would be required to get the patient’s signed consent before setting the preadmissions process in motion. Either a form would have to be mailed or faxed to the patient and sent back, or the patient would have to travel to the hospital to sign it. Physician and hospital groups expressed concern that the requirement would hinder their ability to conduct health care management reviews using archived records. For example, AMA and AHA told us that the regulation will not permit them to use much of the patient data gathered under previous consent forms. While the regulation has a transition provision that allows providers to rely on consents acquired before the regulation takes effect, the continuing validity of those preexisting consents would be limited to the purposes specified on the consent form. In most cases, the purposes specified were either treatment or billing. This means that providers would not be able to draw on those data for other purposes, including common health care management functions, such as provider performance evaluations, outcome analyses, and other types of quality assessments. Moreover, they said that in many cases it might not be feasible to retroactively obtain consent from former patients. Some have suggested revising the regulation to allow providers to use, without consent, all health information created prior to the regulation’s effective date. All of the organizations representing providers and health plans anticipate an additional administrative burden associated with implementing the new consent procedures, but the magnitude of the potential burden is uncertain. For example, if the use of new forms elicits more questions from patients about medical records privacy, as the provision’s supporters expect will happen, providers will have to devote more staff time to explaining consent and discussing their information policies. Similarly, health plan and provider advocates contend that focusing patients’ attention on their right to request restrictions on how their information is used could result in many more patients seeking to exercise that right. This, some believe, would require increased staff time for considering, documenting, and tracking restrictions. The privacy regulation expands the scope of the consent process to include the use and disclosure of personal health information for a wide range of purposes. This may help some patients become aware of how their medical information may be used. However, in general, provider and health plan representatives believe that the consent requirement’s benefits are outweighed by its shortcomings, including delays in filling prescriptions, impediments to hospital preadmission procedures, and difficulty in using archived patient information. Regardless of the presence of the consent requirement, providers are obligated under the regulation to protect the confidentiality of patient information. Moreover, with or without the consent requirement, patients’ rights established by the privacy regulation—to see and amend their records, to learn of all authorized uses of their information, and to request restrictions on disclosures—remain unchanged. HHS provided written technical comments on a draft of this report. In them, HHS remarked on the consent requirement’s applicability to archived patient medical records. Agency officials explained that a consent for either treatment, payment, or health care operations acquired before the regulation’s compliance date would be valid for continued use or disclosure of those data for all three of these purposes after that date. Under this interpretation, for example, prior consents to disclose patient information for insurance claims would permit uses for the full range of health care operations as well, unless specifically excluded in the consent that the patient signed. In our view, a better understanding of the implications of this provision may emerge from any revisions to the final regulation. Referring to material in appendix I, the agency expressed concern that we overgeneralized current state consent laws, which have complex requirements and vary significantly from one to another. HHS pointed out that some state laws require written consent in some circumstances that would be considered treatment, payment, or health care operations. We recognize that state laws are complex and vary widely in the type of health care information that is protected and the stringency of those protections. While it is difficult to generalize about state laws, we found that the statutes in the 10 states we examined were fairly consistent in not requiring written consent for the full range of uses and disclosures of patient information for treatment, payment, and health care operations. The agency provided other technical comments that we incorporated where appropriate. We are sending copies of this report to the Honorable Tommy G. Thompson, Secretary of HHS, and others who are interested. We will also make copies available to others on request. If your or your staff have any questions, please call me at (312) 220-7600 or Rosamond Katz, Assistant Director, at (202) 512-7148. Other key contributors to this report were Jennifer Grover, Joel Hamilton, Eric Peterson, and Craig Winslow. To examine how state privacy laws address the issue of patient consent to use health information, we reviewed certain laws in 10 states (Hawaii, Maine, Maryland, Minnesota, Montana, Rhode Island, Texas, Virginia, Washington, and Wyoming). We found that none of these state privacy statutes include a consent requirement as broad as that found in the privacy regulation. Although they generally prohibit using or disclosing protected health information without the patient’s permission, they include significant exceptions not present in the federal regulation. Essentially, none of the state statutes we reviewed requires consent for the full range of uses and disclosures of patient information for treatment and health care operations. The Minnesota and Wyoming statutes require consent to use patient health information for payment purposes. Two states recently attempted to enhance patient control over their personal health information. In 1996, Minnesota enacted a law that placed stringent consent requirements on the use of patient data for research. It stipulated that patient records created since January 1, 1997, not be used for research without the patient’s written authorization. Because such authorization was not obtained at the start of treatment, researchers had to retroactively seek permission. They soon found that many patients did not respond to requests for such authorization, either to approve or to reject the use of their data. The law was amended to permit the use of records in cases where the patient had not responded to two requests for authorization mailed to the patient’s last known address. At one major research institution in Minnesota, the Mayo Clinic, that change decreased the percentage of patient records that the patient consent requirement made unavailable for studies from 20.7 percent to 3.2 percent. In late 1998, Maine enacted a comprehensive law requiring specific patient authorization for many types of disclosures and uses of health information. The law took effect January 1, 1999, but was soon suspended by the state legislature in response to numerous complaints from the public. Particularly problematic was that “hospital directory” information could not be released without the patient’s specific written authorization. Therefore, until routine paperwork was completed, hospitals could not disclose patients’ room or telephone numbers when friends, family, or clergy tried to contact or visit them. Based on this experience, the Maine legislature substantially modified the law, which became effective on February 1, 2000. Among other changes, the revised law allows a hospital to list current patients in a publicly available directory unless a patient specifically requests to be excluded.

The Department of Health and Human Services issued a final regulation in December 2000 that established rights for patients with respect to the use of their medical records. The regulation requires that most providers obtain patient consent to use or disclose health information before engaging in treatment, payment, or health care operations. The privacy regulation's consent requirement will be more of a departure from current practice for some providers than for others. Most health care providers, with the exception of pharmacists, obtain some type of consent from patients to release information to insurers for payment purposes. The new requirement obligates most providers to obtain consent before they can use and disclose patient information. It also broadens the scope of consent to include treatment and a range of health care management activities. Supporters of the requirement believe that the process of signing a consent form provides an opportunity to inform and focus patients on their privacy rights. Others, however, are skeptical and assert that most patients will simply sign the form with little thought. In addition, provider and other organizations interviewed are concerned that the new consent requirement poses implementation difficulties. They contend that it could cause delays in filling prescriptions for patients who do not have written consents on file with their pharmacies, impede the ability of hospitals to obtain patient information prior to admission, hamper efforts to assess health care quality by precluding the use of patient records from years past, and increase administrative burdens on providers.

Mine-Resistant, Ambush-Protected (MRAP) vehicles are a family of vehicles produced by a variety of domestic and international companies. They generally incorporate a "V"-shaped hull and armor plating designed to provide protection against mines and improvised explosive devices (IEDs). DOD originally intended to procure three types of MRAPs. These included Category I vehicles, capable of carrying up to 7 personnel and intended for urban operations; Category II vehicles, capable of carrying up to 11 personnel and intended for a variety of missions such as supporting security, convoy escort, troop or cargo transport, medical, explosive ordnance disposal, or combat engineer operations; and Category III vehicles, intended to be used primarily to clear mines and IEDs, capable of carrying up to 13 personnel. The Army and Marines first employed MRAPs in limited numbers in Iraq and Afghanistan in 2003, primarily for route clearance and explosive ordnance disposal (EOD) operations. These route clearance MRAPs quickly gained a reputation for providing superior protection for their crews, and some suggested that MRAPs might be a better alternative for transporting troops in combat than up-armored HMMWVs. DOD officials have stated that the casualty rate for MRAPs is 6%, making it "the most survivable vehicle we have in our arsenal." By comparison, the M-1 Abrams main battle tank was said to have a casualty rate of 15%, and the up-armored HMMWV, a 22% casualty rate. Ashton Carter, Under Secretary of Defense for Acquisition, Technology, and Logistics, has approved an acquisition objective of 25,700 MRAP vehicles for all services. Of this total, 8,100 will be the new MRAP-All Terrain Vehicle (M-ATV) designed to better handle the rugged terrain of Afghanistan. DOD officials have indicated that this requirement may increase depending upon the operational needs in Afghanistan. Reports in September 2010 suggested that DOD was actively discussing a new follow-on contract for additional M-ATVs over and above the original 8,100 and that new variants might also be developed. According to DOD, as of July 21, 2011, 14,749 MRAPs had been delivered to Afghanistan, including 6,980 M-ATVs. Reports suggest that many of the older model MRAPs deployed to Afghanistan are not used, as they are considered too large and bulky for tactical missions. As U.S. forces began drawing down in Iraq, the Army and Marines had planned to put the majority of the earlier versions of the MRAPs into prepositioned stocks at various overseas locations, ship a number back to the United States for training, and place a number into logistics and route clearance units. However, with the increase of U.S. forces deploying to Afghanistan and Secretary of Defense requirements to make better use of MRAPs, these plans have been adjusted. Currently, of the almost 15,000 Army MRAPs, according to a June 2010 Army briefing, about 5,750 will be assigned to infantry brigade combat teams, 1,700 to heavy brigade combat teams, and about 165 to Stryker brigades. Support units will be assigned about 5,350 vehicles, about 1,000 MRAPs will be used for home station and institutional training, and approximately 1,000 MRAPs will be assigned to war reserve stocks and be used to replace damaged or destroyed MRAPs. The Marines are reportedly still developing their ground vehicle strategy and have previously suggested that MRAPs have deployability limitations under the concept of a sea-based, expeditionary Marine force. In an interview with outgoing Secretary of Defense Robert Gates, it was suggested that MRAPs have proven to be 10 times safer than HMMWVs in protecting soldiers during IED attacks. The Pentagon's Joint Program Office for MRAPs also reportedly estimated that as many as 40,000 lives had been saved—10,000 in Iraq and 30,000 in Afghanistan—by MRAPs, based on estimates derived from numbers of attacks and troops inside of the vehicles. Some defense experts suggest that the Joint Program Office's estimates seem too high. Secretary Gates also noted the morale value of the MRAP to service members in terms of both soldier survival as well as knowing that the U.S. government would spare no expense in protecting them from IEDs. In the summer of 2008, DOD began to examine the possibility of developing and procuring a lighter-weight, all-terrain capable MRAP variant to address the poor roads and extreme terrain of Afghanistan. This new vehicle—designated the MRAP-All-Terrain Vehicle (M-ATV)—weighs 12 tons (as opposed to the 14 to 24 tons of the earlier MRAP variants) and has better off-road mobility, while providing adequate armor protection. While M-ATVs initially enjoyed success in Afghanistan, reports suggest that insurgents have increased the size of IEDs, thereby negating much of the protective value of M-ATVs, resulting in increased U.S. casualties. In response to the enhanced IED threat, two additional layers of Israeli-made armor plates are being installed to the M-ATV's underside and new padding and crew harnesses inside the vehicle, which reportedly will enable the M-ATVs to withstand explosions twice as large as their current classified capability. DOD reportedly concluded a $245 million dollar contract with Oshkosh—the M-ATV's developer—to acquire 5,100 sets of armor. Under Secretary of Defense for Acquisition, Technology & Logistics Ashton Carter supposedly intends to outfit all of the almost 7,000 M-ATVs in Afghanistan with these armor kits. While additional armor and interior improvements could improve M-ATV survivability up to a point, there are concerns that additional armor might have an adverse impact on vehicle mobility, which was the prime consideration for the development of the M-ATV. Prior year MRAP funding, including wartime supplemental and reprogramming, in billions: FY2006 and prior: $0.173 FY2007: $5.411 FY2008: $16.838 FY2009: $6.243 FY2010: $6.281 FY2011: $3.4 TOTAL: $38.346 Through FY2011, Congress appropriated $38.346 billion for all versions of the MRAP. The full FY2011 DOD budget request of $3.4 billion for the MRAP Vehicle Fund was authorized by the Ike Skelton National Defense Authorization Act for FY2011 ( P.L. 111-383 ). In the President's FY2012 DOD budget request, there was no request for procurement funds for the MRAP program. Citing an operational requirement for 27,344 MRAPS to support CENTCOM operations, DOD requested $3.195 for the MRAP vehicle program for FY2012, broken down as follows: $2.4 billion for operations and sustainment, repair parts, sustainment, battle damage repair and contractor logistics support and foe leased maintenance facilities in Kuwait; $.765 billion for survivability and mobility upgrades; and $.03 billion for automotive and ballistic testing. The House and Senate Armed Services Committees recommended fully funding the FY2012 OCO budget request. The House Committee on Appropriations recommended fully funding the FY2012 OCO budget request. As previously noted, many older MRAPs shipped to Afghanistan are reportedly not being used because their size and weight severely limit their effectiveness. If a large number of MRAPS are, in fact, not being used then a fundamental question is, why were they shipped to Afghanistan in the first place? Were these vehicles shipped to Afghanistan, as some say, for symbolic as opposed to operational reasons and, if so, what is the total cost for these unused vehicles to be shipped and maintained in theater? If these vehicles are not being used, is there a better use for them elsewhere or are they to be left in country after the eventual departure of U.S. forces? It was reported that Pentagon agreed to loan 300 MRAPs in Afghanistan for one year to 15 allied nations currently fighting in Afghanistan. Approximately 85 MRAPs are already out on loan to Poland, Romania, Georgia, and the Czech Republic. All countries that are loaned MRAPs can request an extension on the loan and the borrowing countries are responsible for the costs associated with maintaining these vehicles. Loaning unused MRAPs to coalition partners could not only help to reduce allied casualties but can also help to recoup some of the associated procurement costs of these vehicles. In August 2009 briefings to the House Armed Services Committee Air and Land Forces, and Seapower and Expeditionary Forces Subcommittees, the Government Accountability Office (GAO) noted that "the introduction of MRAP, M-ATV and eventually the JLTV creates a potential risk of unplanned overlap in capabilities; a risk that needs to be managed." Defense officials have also been asked if there is a need for the MRAP/M-ATV and JLTV programs, as these programs share as many as 250 requirements. While DOD leadership notes that there are 450 additional requirements that the MRAPs and M-ATVs cannot meet, thereby justifying the JLTV program, some analysts question the need for three distinct tactical wheeled vehicle programs, particularly in light of anticipated defense budget cuts. If the services continue to look for "the next best thing" in terms of tactical wheeled vehicles instead of committing to the M-ATV and JLTV programs, they could run the risk of significant redundancies and not being able to afford recapitalizing and replacing the HMMWV fleet. The use of larger and more lethal IEDs by Afghan insurgents has necessitated adding additional armor to M-ATVs. While this course of action is intended to provide additional protection for the vehicle's occupants, it might also result in a less maneuverable vehicle that might be too heavy for many Afghan roads (the main reason why many MRAPs deployed to Afghanistan are not in use) and perhaps more prone to roll over accidents. Congress might wish to explore the performance characteristics of these modified M-ATVs in greater detail with DOD to ensure that a proper balance between protection and operational utility is reached. Another consideration is whether unused MRAPs—even if less maneuverable than M-ATVs—might be used on certain Afghan routes that can accommodate their weight. Substituting MRAPs whenever operationally feasible might be a more timely and cost-effective option as opposed to DOD's plans to arbitrarily uparmor approximately 7,000 M-ATVs.

Congress has played a central role in the MRAP program, suggesting to defense and service officials that MRAPs would provide far superior protection for troops than the up-armored High Mobility, Multi-Wheeled Vehicles (HMMWVs ). Congressional support for MRAPs, as well as fully funding the program, has been credited with getting these vehicles to Iraq and Afghanistan in a relatively short timeframe, thereby helping to reduce casualties. Congress will likely continue to be interested in the MRAP program to ensure that the appropriate types and numbers are fielded, as well as to monitor the post-conflict disposition of these vehicles, as they represent a significant investment. In 2007, the Department of Defense (DOD) launched a major procurement initiative to replace most up-armored HMMWVs in Iraq with Mine-Resistant, Ambush-Protected (MRAP) vehicles. MRAPs have been described as providing significantly more protection against Improvised Explosive Devices (IEDs) than up-armored HMMWVs. Currently, DOD has approved an acquisition objective of 25,700 vehicles, of which 8,100 are the newer Military-All-Terrain Vehicle (M-ATV) version, designed to meet the challenges of Afghanistan's rugged terrain. DOD officials have indicated that this total may be increased depending on operational needs in Afghanistan. DOD reports that as of July 21, 2011, 14,749 MRAPs had been delivered to Afghanistan, including 6,980 M-ATVs. Many MRAPs deployed to Afghanistan are not in use because they have been deemed too heavy for some Afghan roads and do not have sufficient cross-country mobility. Afghan insurgents are employing larger improvised explosive devices (IEDs), resulting in increased casualties to M-ATV occupants. In response, DOD is installing additional armor to M-ATVs. While this armor is intended to provide additional protection to occupants, it might also result in operational restraints associated with a heavier and possibly less stable vehicle. Through FY2011, Congress appropriated $38.35 billion for all versions of the MRAP. In FY2012, there was no procurement funding requested for the MRAP program. The FY2012 MRAP Overseas Contingency Operations (OCO) budget request is for $3.195 billion to repair, sustain, and upgrade existing MRAPs. The House and Senate Armed Services Committees recommended fully funding the MRAP budget request, and the House Appropriations Committee has also recommended full funding. Among potential issues for congressional consideration are the status of older, unused MRAPS in Afghanistan that are reportedly not being used because of their size and weight; possible redundancies with the MRAP, M-ATV, and the Joint Light Tactical Vehicle (JLTV) programs; and the impact of adding additional armor to M-ATVs.

Since embarking on a road of free market reforms nearly three decades ago, China has been one of the world's fastest growing economies. The actual size of China's economy has been a subject of extensive debate among economists. China reports that its 2005 gross domestic product (GDP) was 18.4 trillion yuan. Using average annual nominal exchange rates (at 8.2 yuan per dollar) yields $2.2 trillion, equal to less than one-fifth the size of the U.S. economy. China's per capita GDP (a common measurement of living standards) in nominal dollars was $1,761, or 4.2% of U.S. levels. These data would indicate that China's economy and living standards in 2005 were vastly below U.S. levels. However, economists contend that these figures are very misleading. First, nominal exchange rates only reflect the price of currencies in international markets, which can vary greatly over time. Secondly, some exchange rate mechanisms, such as between the dollar and the Chinese yuan, may be significantly distorted by foreign government intervention. Finally, nominal GDP data fail to reflect differences in prices that exist across nations. Surveys indicate that prices in developing countries (such as China) are generally much lower than they are in developed countries (such as the United States and Japan), especially for non-traded goods and services. Thus, a measurement of a developing country's GDP expressed in nominal U.S. dollars will likely understate (often significantly) the actual level of goods and services that GDP can buy domestically. Economists have attempted to factor in national price differentials by using a purchasing power parity (PPP) measurement, which converts foreign currencies into a common currency (usually the U.S. dollar) on the basis of the actual purchasing power of those currencies (based on surveys of the prices of various goods and services) in each respective country. In other words, the PPP data attempt to determine how much local currency (yuan, for example) would be needed to purchase a comparable level of goods and services in the United States per U.S. dollar. This "PPP exchange rate" is then used to convert foreign economic data in national currencies into U.S. dollars. One of the largest PPP projects in the world is the International Comparison Program (ICP), which is coordinated by the World Bank. The ICP collects price data on more than 1,000 goods and services in 146 countries and territories (and makes estimates of 39 others). Prior to December 2007, data from the ICP and various private economic forecasting firms all seemed to agree that China's economy, measured on a PPP basis, was close to $9 trillion in 2005, ranking it as the world's second-largest economy, after the United States. Based on these estimates, and projections of continued rapid economic growth, many analysts predicted that China's economy would surpass that of the United States within a few years. Such projections helped fuel the growing debate over whether China posed an economic threat to the United States. However, newly revised PPP data released by the World Bank in December 2007 purport to show that China's economy in 2005 was 40% smaller than previously estimated. The ICP's previous 2005 PPP estimate of China's GDP (hereinafter referred to as ICP 1 ) at $8.8 trillion fell to $5.3 trillion (down by $3.3 trillion) under the ICP revision (hereinafter referred to as ICP 2 revision ). In addition, China's per capita GDP on a PPP basis dropped from $6,765 to $4,091 (see Table 1 ). The size of China's GDP relative to that of the United States fell from 71.3% under ICP 1 to 43.1% under ICP 2 revision , while per capita GDP relative to the United States dropped from 16.2% to 9.8%. Finally, the new revision decreased China's 2005 share of world GDP from 14.2% to 9.7% (the U.S. share rose from 20.5% to 22.5%). According to the ICP, the major difference between the old and new estimates of China's economy is that the latter reflects, for the first time, the inclusion of recent price survey data provided by China. Previously, the ICP estimated China's PPP data based on a 1986 comparative survey of prices in the United States and China and subsequent extrapolations of that data. ICP 2 revision significantly increased price level estimates within China's economy. The new data estimated that Chinese prices were on average 42% of U.S. levels (compared to 26% under the previous estimate), which is reflected in the change in the estimate of China's PPP exchange rate from 2.1 yuan to the dollar to 3.4. The revised data indicate it will likely take many more years than previously thought before China's GDP and living standards reach U.S. levels. Although China's access to assistance and loans from international development agencies may be unaltered by the ICP PPP revision, the data may directly or indirectly effect China's economic policies and its attitudes in international trade discussions. China may attempt to use the PPP revisions to boost its claim that it is a "poor" country and that, given its development needs and large numbers of people living in poverty, it should not be pressed to adopt economic reforms (such as changes to its currency policy) that could prove disruptive, or be expected to adopt policies that slow its economy, such as curtailing its energy use in response to international concerns over global climate change. As a recent article in The Economist put it, "China would probably be quite happy to see its GDP revised down, hoping that America might stop picking on a smaller, poorer economy." In February 2008, the World Bank stated that the ICP's revised estimate of China's PPP exchange rate data would affect its estimates of poverty levels in China, based on the daily cost of basic needs (estimated at roughly $1 PPP) and household surveys on consumption. The Bank estimates that the new PPP revisions would raise the estimated poverty rate in China in 2004 from 10% to 13-17%, or an increase from 130 million to between 169 to 221 million. Thus, previous estimates may have underestimated the number of Chinese living in poverty by up to 91 million people. Regardless of how China seeks to present the overall status of its economic development, commentators are speculating on the possible implications of the smaller GDP estimate of China for its socio-economic situation and policies, including: China ' s political stability may be weaker than previously thought —In the past, dissatisfaction with China's economic condition has lead to public unrest (e.g.—Spring 1989). The rising number of protests and demonstrations over the last few years may reflect, in part, the dissatisfaction of China's poor with their lack of economic progress. A 2005 article in People ' s Daily described China's growing income disparity as a "yellow alert" that could become a "red alert" in five years if the government failed to take proper actions. A 2005 United Nations report stated that the income gap between the urban and rural areas was among the highest in the world and warned that this gap threatened social stability. The report urged China to take greater steps to improve conditions for the rural poor, and bolster education, health care, and the social security system. The new PPP measurement may increase pressure within China to expand efforts to promote development in the rural areas where over 800 million people reside. According to a recent article in the Atlantic Monthly , some Chinese question why the government does not use its massive foreign exchange reserves to help alleviate poverty and respond to increasing income disparities across the country, rather than invest those funds overseas assets, such as in U.S. Treasuries. Such a reallocation of China's investment portfolio might have repercussions for the U.S. economy. Lower prospects for democracy —Prior to the release of the ICP revision report, some analysts had speculated that, once China reached a certain level of economic development and possessed a large and educated middle class, it would follow the examples of Taiwan and South Korea and begin to institute democratic reforms. The lower estimate of China's economy and living standards may dampen expectations in the West that China might soon move to adopt political reforms. Lower commitment to market reforms and trade liberalization —In an effort to reduce income disparities and improve conditions for China's poor, there may be a return to some of the "command economy" methods of the past. The recent decision to impose strict price controls on basic food items and other household necessities might be seen as a temporary retreat from market reforms. Finally, the ICP study may also alter how the U.S. government and the U.S. business community perceive China. The possible new view of China includes: Reevaluation of the Chinese government ' s budget —The PPP data may affect how U.S. policymakers evaluate China's spending levels on policies that affect U.S. policy. For example, the U.S. Defense Department's annual report on China's military spending includes conversions of China's budget data by the Chinese People's Liberation Army (PLA) from nominal U.S. dollars into PPP levels. The report estimated the PLA's 2003 budget in $30.6 billion in nominal dollars and $141 billion on a PPP basis. The World Banks's PPP revision could significantly decrease this estimate and other measurements of Chinese military spending as well as various public spending programs. Smaller export market potential —As a senior fellow at the Council on Foreign Relations wrote, "U.S. businesses and entrepreneurs hoping to crack the Chinese and Indian markets must come to terms with a middle class that is significantly smaller than thought. Companies with growth plans tied to the Indian and Chinese markets could face disappointing results." However, it is important to note the limitations of PPP estimates of GDP—and where and when they provide useful insight in economic analysis. Although the estimated size of China's economy decreases under the PPP revisions, other aspects on China's economy remain significantly large. For example, trade and international financial data are generally unaffected by the reduction in China's PPP GDP. It is estimated that in 2007, China overtook the United States to become the world's second-largest exporter (after the European Union). Similarly, in 2006 China was the world's fifth-largest recipient of foreign direct investment, the largest steel producer, the second-largest consumer of oil, and by some accounts, the largest emitter of carbon dioxide (CO2). In addition, since 2006, China has been the world's largest holder of foreign exchange reserves ($1.5 trillion at the end of 2007). Thus, despite the ICP results, China remains a major trade and economic power and a major potential global player in international finances and investment flows.

China's rapid economic growth since 1979 has transformed it into a major economic power. Over the past few years, many analysts have contended that China could soon overtake the United States to become the world's largest economy, based on estimates of China's economy on a "purchasing power parity" (PPP) basis, which attempts to factor in price differences across countries when estimating the size of a foreign economy in U.S. dollars. However, in December 2007, the World Bank issued a study that lowered its previous 2005 PPP estimate of the size of China's economy by 40%. If these new estimates are accurate, it will likely be many years before China's economy reaches U.S. levels. The new PPP data could also have an impact on U.S. and international perceptions over other aspects of China's economy, including its living standards, poverty levels, and government expenditures, such as on the military. This report will not be updated.

Congressional and consumer interest in passenger natural gas vehicles (NGVs) has grown in recent years, especially in response to higher gasoline prices, concerns over the environmental impact of petroleum consumption for transportation, and policy proposals such as the "Pickens Plan." Although natural gas passenger vehicles have been available for years, they have been used mostly in government and private fleets; very few have been purchased and used by consumers. Larger NGVs—mainly transit buses and delivery trucks—also play a role in the transportation sector, especially due to various federal, state, and local incentives for their use. However, high up-front costs for new NGVs, as well as concerns over vehicle performance and limited fuel infrastructure, have led to only marginal penetration of these vehicles into the personal transportation market. The Energy Information Administration (EIA) estimated that there were roughly 114,000 compressed natural gas (CNG) vehicles in the United States in 2009, and roughly 3,000 liquefied natural gas (LNG) vehicles. Roughly two-thirds of NGVs are light-duty (i.e., passenger) vehicles. This compares to roughly 235 million conventional (mostly gasoline) light-duty vehicles. Further, of the roughly 11.6 million new light-duty vehicles sold in 2009, only about 400 (0.004%) were NGVs. For model year (MY) 2012, only two passenger NGVs are available from original equipment manufacturers (OEMs) for purchase by consumers—the CNG-fueled Honda Civic GX and the Vehicle Production Group MV-1 —although some companies convert vehicles to CNG before they are sold (usually as fleet vehicles). While the current purchase prices for NGVs exceed those of conventional vehicles, much of this difference can be made up over the life of the vehicle in fuel cost savings. For example, the incremental price between a conventional Honda Civic EX and a natural gas-powered Honda Civic GX is over $5,000. Through 2010 some of this difference was made up through a tax credit for the purchase of new alternative fuel vehicles, but that tax credit has since expired. It should be noted that with higher production, this incremental cost should decrease, but the likely extent of that decrease is unclear. Since the number of natural gas refueling stations is limited—only about 400 publicly available nationwide, compared to roughly 120,000 retail gasoline stations —the purchaser of a new NGV might also choose to install a home refueling system. According to Consumer Reports and Natural Gas Vehicles for America (NGVAmerica), a FuelMaker Phill system costs between $3,400 and $4,500 plus installation. However, through the end of 2011 a taxpayer could offset $1,000 of this by claiming a tax credit for installing new alternative fuel refueling infrastructure. Offsetting the higher up-front costs are likely annual fuel savings in switching from gasoline to natural gas. Using average retail gasoline and residential natural gas prices from January 2011, annual fuel cost savings could be roughly $600. Assuming a 3% discount rate, the payback period for the CNG vehicle and home refueling system is more than 17 years. Given that this is roughly the median survival age for new passenger vehicles, this payback period may or may not be acceptable to that consumer. Assuming a smaller differential between natural gas and gasoline prices, or other factors (e.g., the expiration of tax incentives), can significantly increase this payback period; assuming a larger difference in fuel prices (as was the case in spring 2011), assuming a smaller discount rate, or assuming incremental natural gas vehicle prices decrease in the future, this payback period could be shorter. In addition to the life-cycle cost difference between CNG and conventional vehicles, there are other costs and benefits associated with NGVs that may not have a defined market price tag. For example, any reduction in petroleum dependence (beyond the per-gallon cost savings) is not represented in the above payback period estimate. Some consumers may place a value on displacing petroleum consumption, and thus imports. Further, NGVs in general have lower pollutant and greenhouse gas emissions than comparable gasoline vehicles, although this may or may not be true for specific vehicles and pollutants. A key potential benefit raised by proponents of NGVs is that while the United States imports the majority of the petroleum it uses, most natural gas is domestically produced. Further, domestic output is higher than once thought, mainly due to recent growth in unconventional natural gas sources (e.g., coal mine methane, shale gas). But there are also several potential and measurable drawbacks to NGVs, many related to vehicle performance and acceptability. For example, CNG engines tend to generate less power for the same size engine than gasoline engines. Thus NGVs tend to have slower acceleration and less power climbing hills. Also, because CNG has a lower energy density than gasoline, CNG vehicles tend to have a shorter range than comparable gasoline vehicles. In addition, for passenger vehicles, the larger natural gas storage tanks often occupy space that would otherwise be used for cargo—generally in the trunk of a sedan and in the bed of a pickup truck. Again, these considerations may or may not play into a individual purchaser's decision, but could affect the overall marketability of the vehicles. A key question raised by those interested in the expansion of natural gas for automobiles is whether existing vehicles can be converted to operate on natural gas. From a technical feasibility standpoint, there are few problems with converting a vehicle to operate on natural gas. Most existing engines can operate on the fuel, and most conversions involve changes to the fuel system, including a new fuel tank, new fuel lines, and modifications to the vehicle's electronic control unit. Until recently, when EPA reduced restrictions, converting an existing vehicle was more problematic from a practical standpoint. In the United States, NGV conversions—or any other fuel conversion—can potentially run afoul of the Clean Air Act (CAA). All new vehicles (gasoline or otherwise) must pass rigorous tests to prove they will meet emissions standards over the life of the vehicle. These tests tend to be very expensive, although the marginal cost spread over a full product run—thousands to hundreds of thousands of vehicles—is minimal. After a vehicle has been certified by the Environmental Protection Agency (EPA), any changes to the exhaust, engine, or fuel systems may be considered tampering under the CAA. Section 203(a)(3)(A) states that it is prohibited for any person to remove or render inoperative any device or element of design installed on or in a motor vehicle or motor vehicle engine in compliance with regulations under this title prior to its sale and delivery to the ultimate purchaser, or for any person knowingly to remove or render inoperative any such device or element of design after such sale and delivery to the ultimate purchaser. EPA generally interprets this to mean that any change to a vehicle's engine or fuel systems that leads to higher pollutant emissions constitutes "tampering" under Section 203. In 1974, EPA issued guidance ("Memorandum 1A") to automaker and auto parts suppliers on what constituted tampering in terms of replacement parts under routine maintenance. The guiding principle EPA has used in enforcing the anti-tampering provisions for alternative fuel conversions is that such changes are allowed as long as the dealer has "reasonable basis" to believe that emissions from the vehicle will not increase after the conversion. Instead of requiring all converted vehicles to undergo testing equivalent to new vehicle testing, EPA allowed vehicle converters flexibility in certifying their emissions. However, in the 1990s, EPA received data from the National Renewable Energy Lab that many vehicles converted to run on natural gas or liquefied petroleum gas (LPG) and certified under the flexibility provisions might be exceeding emissions standards. Therefore, in 1997 EPA issued an addendum to Memorandum 1A tightening the testing standards for these conversions. The original decision required compliance with new testing procedures starting in 1999. Subsequent revisions extended the deadline through March 2002. Under guidance from the 1990s and 2000s, certifying vehicle conversions could be very expensive for small producers, since each vehicle needed to be independently certified. For example, a converter needed to test the emissions of the conversion of specific "engine families" (e.g., MY2008 Ford Vehicles with 4.6L V8 engines). Each different engine/emissions system combination was tested independently (e.g., MY2009 vehicles, or vehicles with different engines). Therefore, the production and use of universal "conversion kits" was effectively prohibited under the EPA enforcement guidance. NGVAmerica estimated that it could cost as much as $200,000 to design, manufacture, and certify a conversion for a single engine family under the then-current guidance. On April 8, 2011, EPA issued final regulations on alternative fuel vehicle conversions. The regulations provide new flexibility for converters to certify that their conversions do not violate the CAA anti-tampering provisions. Most notably, while most requirements for conversions of "new and relatively-new" remain relatively unchanged—these vehicles must still generally go through all new vehicle testing—EPA has relaxed requirements for "intermediate age" vehicles and "outside of useful life" vehicles. EPA estimates that the total certification costs (emissions testing, administrative costs, etc.) will be reduced for all three classes of vehicles. Cost reductions for intermediate age and outside of useful life vehicles could be dramatic. For older vehicles, less detailed testing is required—much of the savings comes from minimal testing of the on-board diagnostic (OBD) system for older vehicles. Another key flexibility for all groups is that while EPA's certification expires after one year, EPA has determined that, assuming conditions do not change significantly (e.g., the conversion kit is not modified after the system is certified), EPA's waiver of the anti-tampering provisions remains in effect. There may be other issues with the expiration of the certification, but conversions would not run afoul of the CAA. Some have questioned whether a vehicle conversion would void the original manufacturer's warranty. However, only those vehicle systems directly modified by the conversion would raise warranty concerns. In those cases, the conversion manufacturer's warranty would cover the modified systems. For systems not affected by the conversion (e.g., suspension, climate control), the original manufacturer's warranty would still apply. Several bills have been introduced in recent years to promote NGVs and NGV infrastructure. Most notably in the 112 th Congress, the New Alternative Transportation to Give Americans Solutions Act (Nat Gas Act) of 2011 ( H.R. 1380 and S. 1863 ) would provide a wide range of incentives. The Nat Gas Act would reinstate the tax credit for the purchase of NGVs (which expired at the end of 2010), significantly expand the tax credit for the installation of natural gas refueling infrastructure, and extend both credits through 2016. The bill would also provide a tax credit to automakers who produce NGVs, and would authorize grants to those automakers to develop natural gas engines. Higher gasoline prices and concerns about U.S. oil dependence have raised interest in NGVs. Energy policy proposals such as the Pickens Plan have further raised interest in these vehicles. However, currently the number of new passenger vehicles capable of operating on natural gas is relatively low, and there are limited opportunities for converting existing gasoline vehicles to run on natural gas. The market for NGVs will likely remain limited unless the differential between natural gas and gasoline prices remains high in order to offset the higher purchase price for a natural gas vehicle or if new incentives are established to decrease the differential in initial vehicle purchase prices. New EPA regulations on NGV conversions could help promote the expansion of NGVs by lowering the cost of entry for conversion companies.

Higher gasoline prices in recent years and concerns over U.S. oil dependence have raised interest in natural gas vehicles (NGVs). Use of NGVs for personal transportation has focused on compressed natural gas (CNG) as an alternative to gasoline. Consumer interest has grown, both for new NGVs as well as for conversions of existing personal vehicles to run on CNG. This report finds that the market for natural gas passenger vehicles will likely remain limited unless the price for natural gas remains substantially lower than gasoline to offset the higher purchase price for an NGV. The Environmental Protection Agency (EPA) promulgated new regulations in April 2011 on alternative fuel vehicle conversions—including natural gas conversions. The new regulations allow greater flexibility for conversion companies to certify that their conversions do not lead to higher emissions—flexibility that could lead to significantly lower compliance costs. This could help spur the proliferation of natural gas conversions, especially for older vehicles.

Claims of asbestos-related injury have flooded the courts since the 1970s, but litigation has proven to be an inadequate means to resolving all the claims. The Supreme Court has twice struck down attempted global asbestos settlements, in both instances inviting Congress to craft a legislative solution. In an attempt to resolve this problem, Senator Arlen Specter introduced S. 852 , the Fairness in Asbestos Injury Resolution (FAIR) Act. The bill was reported out of the Senate Judiciary Committee on June 16 ( S.Rept. 109-97 ). The bill would establish within the Department of Labor the Office of Asbestos Disease Compensation, which would award damages to claimants on a no-fault basis according to their respective levels of injury and asbestos exposure. The Office would be headed by an Administrator, who would be appointed by the President—with the advice and consent of the Senate—to a five-year term and report directly to the Assistant Secretary of Labor for the Employment Standards Administration. The Office would pay awards from the privately funded Asbestos Injury Claims Resolution Fund ("the Fund"), discussed in greater detail below. New asbestos claims—and most pending ones—could no longer be pursued in federal or state court. Upon enactment of S. 852 , all pending asbestos claims (other than some individual actions at the evidentiary stage and actions with final verdicts, judgments, or orders) would be stayed. If, after nine months, the administrative process outlined in the bill is not up and running so that it can review and pay "exigent health claims"—i.e., claims by those suffering from mesothelioma or having a life expectancy of less than one year, or claims by relatives of those who died from asbestos-related conditions after enactment of the bill—at a reasonable rate, then those claims could be maintained in the same courts in which the claims were pending when the act was enacted. The comparable time period for all other asbestos claims (with the exception of the least serious claims) would be two years. Any individual who suffers from an asbestos-related disease or condition meeting the medical criteria listed in the bill (or, in the case of death or incompetence, that person's personal representative) could bring a claim under the administrative process outlined in the bill. An initial claim would have to be filed no later than five years after the claimant receives a medical diagnosis and medical test results that would make the claimant eligible for one of the bill's disease levels. For claimants who have asbestos claims pending in court, the statute of limitations would be five years from enactment of the bill. The Administrator would establish a claimant assistance program to, among other things, provide to claimants information and legal assistance. Attorneys representing claimants under the draft bill could charge their clients no more than five percent of the final award. The Administrator would be required to submit annual reports to Congress on the claims process and recommend changes if awards exceed or fall below predicted levels. Awards . In order to receive compensation, a claimant would have to show, by a preponderance of the evidence, that the claimant suffers from an eligible disease or condition. In addition, claimants would be required to demonstrate a minimum exposure to asbestos. Claimants would be compensated according to the tiered compensation scheme outlined in the bill. This scheme would set medical criteria and awards for nine levels of asbestos-related injury, with awards ranging from medical monitoring for claimants in Level I (asbestos-related non-malignant disease and five years occupational exposure to asbestos) to $1.1 million for claimants in Level IX (mesothelioma). The bill would also allow claimants suffering from asbestos-related injuries that cannot fit into one of the nine levels to seek compensation for their "exceptional medical claims." One of the more controversial aspects of the effort to reach a legislative solution to the asbestos problem has been the question of smoking. Levels VII and VIII of the tiered compensation scheme both deal with lung cancer, and some have expressed concern that smoking may have contributed to many of these claimants' conditions. As a result, the awards in Levels VII and VIII are pegged to each claimant's smoking history, in that non-smokers would get higher awards than ex-smokers, who would get higher awards than smokers. The Administrator would be required to provide to the claimant a proposed decision within ninety days of the filing of the claim. If unsatisfied with the proposed decision, the claimant would be entitled to seek review by a "representative of the Administrator," so long as the request is made within ninety days of the issuance of the proposed decision. After a review, or if no review is requested within ninety days, the Administrator would issue a final decision. A claimant would then have ninety days to seek judicial review of the final decision in the U.S. Court of Appeals for the circuit in which the claimant resides. Under the bill, a claimant would receive his or her award in structured payments over a three-to-four year period. The amount of the award would have to be reduced by the amount of collateral source compensation and most prior awards made pursuant to the administrative scheme. "Collateral source compensation," however would include only compensation paid by defendants, insurers of defendants, and compensation trusts pursuant to judgments and settlements; it apparently would not include payments from disability insurance, health insurance, medicare/medicaid, etc. Another sticking point in the debate over previous asbestos bills has been the effect any legislative resolution would have on so-called "mixed dust" (i.e., silica and asbestos) claims. Some have expressed concern that, if these claims are not included in the legislation (and therefore removed from the courts), asbestos claimants could avoid the administrative process by re-filing their claims in court as mixed dust claims. S. 852 would remove silica claims from the courts to the bill's administrative process unless those bringing such claims establish by a preponderance of the evidence that exposure to silica caused their impairments and that asbestos did not significantly contribute to their impairments, and submit specific supporting evidence (e.g., x-rays, history of asbestos exposure, etc.). The Fund would be paid for by contributions from defendants in asbestos suits – "defendant participants" – and their insurers – "insurer participants." Defendant participants would be required to contribute, in the aggregate, no more than $90 billion, while insurer participants would be required to contribute no more than $46.025 billion. The Administrator would be authorized to borrow to enhance the Fund's liquidity, to sue any participant for failure to pay any obligation imposed under the bill, and to monitor and take action against participant companies that attempt to transfer their assets through business transactions. Under the bill, if the Administrator determines that the Fund does not have sufficient resources, then the Fund would sunset and claimants with unresolved claims could return to federal or state court. From the date of termination onward, any asbestos or class action trust established to distribute funds pursuant to a final judgment or settlement would be required to adopt the bill's medical criteria. Defendant Participants. Defendant participants would be grouped into tiers and subtiers according to prior asbestos expenditures, except that one tier would be reserved for organizations that have filed for bankruptcy in the year preceding enactment of the bill. These tiers and subtiers would determine the exact amount of each defendant participant's required annual contribution to the Fund, ranging from $27.5 million down to $100,000. A defendant participant would be able to petition the Administrator for adjustments of its obligations in cases of severe financial hardship or "demonstrated inequity," or when the defendant participant can demonstrate that meeting its obligations under the bill would render the company insolvent. In addition, persons or businesses classified as "small business concerns" under section 3 of the Small Business Act would be exempt from these payment obligations. The aggregate annual payments to the Fund by defendant participants would have to be no less than $3 billion for the first thirty years of the Fund. The bill would provide for ten-percent reductions in this minimum amount following the tenth, fifteenth, twentieth, and twenty-fifth years after enactment, unless the Administrator finds that a reduction could endanger the Fund's ability to satisfy future obligations. Further, beginning ten years after enactment, the Administrator would be empowered to suspend all or part of the defendant participants' payments in a given year in which the Fund contains sufficient assets to satisfy that year's obligations. Insurer Participants . S. 852 would establish the Asbestos Insurers Commission—composed of five members appointed by the President with the advice and consent of the Senate—charged with instituting a methodology for determining the amount to be contributed to the Fund by each insurer participant. Insurer participants would be able to appeal such determinations to the D.C. Circuit. The aggregate annual payments to the Fund by insurer participants would be $2.7 billion for the first two years, $5.075 billion for years three through five, $1.147 billion for years six through twenty-seven, and $166 million for year twenty-eight. Beginning ten years after enactment, the Administrator would be empowered to suspend all or part of the insurer participants' payments in a given year in which the Fund contains sufficient assets to satisfy that year's obligations. The bill would require the Administrator to promulgate regulations prohibiting the manufacture, processing, or distribution in commerce of products containing asbestos. The Administrator would be empowered to grant exemptions where doing so would not unreasonably risk injury to the public health or the environment and those seeking the exemptions have made good faith, unsuccessful efforts to find minerals to substitute for asbestos in their products. The bill would specifically exempt from the prohibition: (1) asbestos-containing products necessary to the "critical functions" of the Defense Department or NASA; (2) asbestos diaphragms used in the manufacture of chlor-alkali and its derivatives; and (3) roofing cements, coatings, and mastics containing asbestos that is totally encapsulated by asphalt. The Administrator of the Environmental Protection Agency (EPA), however, would be required to review and possibly revoke this last exemption within eighteen months of enactment of the bill. Under S. 852 , the EPA Administrator would be required to study the exposure risks associated with naturally occurring asbestos, and to develop management guidelines, model state regulations, testing protocols, etc., for naturally occurring asbestos.

This report provides an overview of S. 852, the Fairness in Asbestos Injury Resolution (FAIR) Act of 2005. The bill would largely remove asbestos claims from the courts in favor of the no-fault administrative process set out in the bill. The bill would establish the Office of Asbestos Disease Compensation to award damages to asbestos claimants from the Asbestos Injury Claims Resolution Fund. Companies that have previously been sued for asbestos-related injuries—and insurers of such companies—would be required to make contributions totaling roughly $140 billion to this Fund.

The salaries of Members of Congress and certain high-level federal officials (those paid at EX Level II) have, until recently, generally been in parity since the Executive Schedule was established in 1964. The Member salaries were in parity with those of district judges from 1955 to 1969 and have been again since 1987. During the period 1969 to 1987, Member pay was often in parity with the pay of federal appellate judges. There is no constitutional or statutory requirement (other than the provision of law establishing the commission procedure discussed below) that the salaries of federal executive branch officials and federal Justices and judges be limited by the salaries of Members of Congress, or that Member pay be limited by the salaries of these federal executive and judicial officials. The Ethics Reform Act of 1989 includes two provisions under which pay rates for Members, the Vice President, federal officials paid under the EX, and certain federal Justices and judges can be set. The first of these provisions provides for a quadrennial review of the salaries of federal officials by a Citizens' Commission on Public Service and Compensation. The commission is to make recommendations to the President. The law requires the commission and the President to submit recommendations to Congress providing that the salaries of the Speaker of the House of Representatives, the Vice President of the United States, and the Chief Justice of the United States shall be equal; Majority and Minority Leaders of the House of Representatives and the Senate, the President pro tempore of the Senate, and Level I of the Executive Schedule (Cabinet officers) shall be equal; and Senators, Members of the House of Representatives, the Resident Commissioner from Puerto Rico, Delegates to the House, Judges of the U.S. District Courts, Judges of the United States Court of International Trade, and Level II (Deputy secretaries of departments, secretaries of military departments, and heads of major agencies) of the Executive Schedule shall be equal. Although the law establishes the salary parity stated above upon quadrennial review, it is unclear what effect, if any, the provision has, since the commission has never been activated. The commission was initially funded in the 1993 Treasury, Postal Service, and General Government Appropriations Act, but that appropriation was rescinded in the 1994 act. A second provision in the Ethics Reform Act establishes an annual salary adjustment procedure for the Members, the Vice President, federal officials paid under the EX, and federal Justices and judges. The adjustment is based on the percentage change in the wages and salaries (not seasonally adjusted) for the private industry workers element of the Employment Cost Index (ECI), minus 0.5% (December indicator). It becomes effective at the same time as, and at a rate no greater than, the annual base pay rate adjustment for federal white-collar civilian employees under the General Schedule (GS). The adjustment cannot, however, be less than zero or greater than 5%. While this provision of the Ethics Reform Act sets the rate of the judicial pay adjustment, a 1981 law provides that any salary increase for Justices and judges must be "specifically authorized by Act of Congress hereafter enacted." The Member pay raise becomes effective automatically unless Congress statutorily denies an increase or revises the adjustment, or the annual base pay adjustment for GS employees is established at a rate less than the scheduled increase for Members, in which case Members would be paid the lower rate. The pay adjustment for federal officials paid under the EX also takes effect automatically unless Congress takes similar action. Such congressional action has generally occurred during consideration of the appropriations bill that funds the Department of the Treasury and General Government. Most recently, this occurred in the 105 th Congress (1999) when Members voted to deny themselves and federal executive and judicial officials a pay adjustment. Similar action occurred in 1994, 1995, 1996, and 1997. There have been instances in which pay parity could have been, but was not, broken. In the 103 rd Congress, for example, the Representatives and Senators passed legislation to forgo their pay adjustment for 1994. Because base pay for the GS was not increased in 1994, the Members and federal executive and judicial officials did not receive a pay raise in January 1994. If GS base pay had been adjusted and these officials had received a pay adjustment in that year, pay parity would have been severed because of the action of the Members to deny themselves a pay increase. A provision to cut FY2000 spending across the board by 0.97% and to include Member pay in that reduction, if enacted in the 106 th Congress, would have resulted in lower salaries for Members, but not for federal executive and judicial officials. During the first session of the 109 th Congress, the Senate agreed to a provision that would have denied Members of Congress a pay adjustment in January 2006. On October 18, 2005, during consideration of H.R. 3058 , Transportation, Treasury, Housing and Urban Development, the Judiciary, the District of Columbia, and Independent Agencies Appropriations Act for FY2006, the Senate agreed, on a 92 to 6 vote (No. 256), to an amendment ( S.Amdt. 2062 ) offered by Senator Jon Kyl to forgo the Member pay adjustment. The House version of the bill did not include this provision and it was not included in the enacted legislation. The Members received the 1.9% pay adjustment granted to the executive and judicial officials in January 2006. In January 2007, however, while the Vice President and federal officials paid on the EX received a 1.7% pay increase, Members of Congress and Justices and judges did not receive the pay increase. Section 115 of P.L. 110-5 , the Revised Continuing Appropriations Resolution for FY2007, enacted on February 15, 2007, denied the Members a pay adjustment. Justices and judges did not receive a pay adjustment in 2007 because it was not authorized by Congress. S. 197 , to provide the authorization, passed the Senate by unanimous consent on January 8, 2007, and was referred to the House Committee on the Judiciary, but no further action occurred. Likewise, in January 2010, the Vice President and federal officials paid on the EX schedule received a 1.5% pay increase. Members of Congress and Justices and judges did not receive the pay increase. Section 103 of Division J of P.L. 111-8 , the Omnibus Appropriations Act for FY2009, denied the Members a pay adjustment in 2010. Justices and judges did not receive a pay adjustment because Congress did not authorize it as required by law. S. 1432 , to provide the 2010 authorization, was reported to the Senate by the Committee on Appropriations ( S.Rept. 111-43 ) on July 9, 2009, but no further action occurred. The pay adjustment for Members of Congress, federal officials paid on the EX schedule, and Justices and judges required under the Ethics Reform Act of 1989 would have been 0.9% in January 2011, the same as the January 2011 base pay adjustment required under the Federal Employees Pay Comparability Act of 1990, for federal civilian white-collar employees paid under the General Schedule (GS). P.L. 111-165 , enacted on May 14, 2010, denied Members of Congress a pay adjustment in FY2011. The Vice President, federal officials paid on the EX schedule, and Justices and judges also did not receive a pay adjustment in January 2011 because GS base pay was not adjusted. The Budget of the U.S. Government included President Barack Obama's order to freeze pay for senior political officials—the Vice President; individuals serving in Executive Schedule (EX) positions or in positions whose rate of pay is fixed by statute at an EX level and serving at the pleasure of the President or other appointing official; a chief of mission or ambassador at large; a noncareer appointee in the Senior Executive Service; any employee whose rate of basic pay (including locality payments) is at or above EX level IV who serves at the pleasure of the appointing official; and senior White House staff with salaries of more than $100,000. The budget also reiterated that the policy prohibiting political appointees from receiving bonuses continued. The pay adjustment for Members of Congress, federal officials paid on the EX schedule, and Justices and judges required under the Ethics Reform Act of 1989 would have been 1.3%. This adjustment would have been limited to 1.1%, the January 2012 base pay adjustment required under the Federal Employees Pay Comparability Act of 1990 for federal civilian white-collar employees paid under the GS. Under Title I, Section 1(a)(2) of P.L. 111-322 , enacted on December 22, 2010, GS base pay is frozen through December 31, 2012, so Members of Congress, the Vice President, federal officials paid on the EX schedule, and Justices and judges will not receive a pay adjustment in January 2012, as any pay increase for these officials cannot be at a rate that is greater than the annual base pay rate adjustment for federal white-collar civilian employees under the GS. Several reports over the last few years have recommended that salary adjustments for Members and federal executive and judicial officials be determined separately. For example, the 2000 annual report on the federal judiciary recommended a 9.6% adjustment in judicial salaries, disengagement from the Member salary adjustment, and automatic pay adjustments under the Ethics Reform Act. Chief Justice William H. Rehnquist stated that "because Judges are appointed for life and expected to remain on the bench, increases in judicial compensation should not be tied to increases for non-career public servants." In a 2003 report, the National Commission on the Public Service, citing "the compelling need to recruit and retain the best people possible" to serve as executive branch officials and on the federal judiciary, also recommended separate salary adjustments. As an interim step toward implementation of its recommendations, the commission stated that "Congress should grant an immediate and significant increase in judicial, executive, and legislative salaries to ensure a reasonable relationship with other professional opportunities," and "Its first priority in doing so should be an immediate and substantial increase in judicial salaries." Chief Justice John G. Roberts, Jr., reiterated the commission's recommendations in the 2005 annual report on the federal judiciary. His 2006 annual report focused solely on the issue of judicial pay. Discussing the effects of inadequate salaries (increased by "only occasional and modest cost-of-living adjustments") on the federal judiciary, the Chief Justice stated these concerns: An important change is taking place in where judges come from—particularly trial judges. In the Eisenhower Administration, roughly 65% came from the practicing bar, with 35% from the private sector. Today the numbers are about reversed—roughly 60% from the private sector, less than 40% from private practice. It changes the nature of the federal judiciary when judges are no longer drawn primarily from among the best lawyers in the practicing bar. Inadequate compensation directly threatens the viability of life tenure, and if tenure in office is made uncertain, the strength and independence judges need to uphold the rule of law—even when it is unpopular to do so—will be seriously eroded. The dramatic erosion of judicial compensation will inevitably result in a decline in the quality of persons willing to accept a lifetime appointment as a federal judge. Our judiciary will not properly serve its constitutional role if it is restricted to (1) persons so wealthy that they can afford to be indifferent to the level of judicial compensation, or (2) people for whom the judicial salary represents a pay increase.... a judiciary drawn more and more from only those categories would not be the sort of judiciary on which we have historically depended to protect the rule of law in this country. The Federal Judicial Fairness Act of 2009, S. 2725 , was introduced, but saw no further action, in the 111 th Congress. Introduced by Senator Dianne Feinstein on November 3, 2009, and referred to the Senate Committee on the Judiciary, the bill would have repealed the provision of law, codified at 28 U.S.C. §461 note, that requires Congress to specifically authorize any salary increases for Justices and judges. It also would have amended 28 U.S.C. §461(a) to provide that Justices and judges would receive the same overall average percentage pay adjustment as is authorized each year for the General Schedule (GS), the pay schedule that covers federal white-collar civilian employees in pay grades GS-1 through GS-15.

The salaries of Members of Congress, certain high-level federal officials (those paid at Level II of the Executive Schedule (EX)), and certain federal Justices and judges have, until recently, generally been in parity for many years. The Ethics Reform Act of 1989 provides for annual pay adjustments to be established for the Members, the Vice President, federal officials paid under the EX Schedule, and federal Justices and judges. The act also requires a Citizens' Commission on Public Service and Compensation and the President to recommend salaries in parity for these federal government positions. The commission has never been activated, and, thus, such recommendations have never been made. This report will be updated as events dictate.

Under the Social Security Act, disabled individuals qualify for benefits only if they are determined to be unable to engage in "substantial gainful activity" (SGA). Under Section 223(d) of the Social Security Act, the Commissioner of Social Security is given the authority to promulgate regulations prescribing the criteria for determining when earnings demonstrate an individual's ability to engage in SGA. Since July 1999, the SGA amount has been adjusted annually to reflect the growth in average wages. In 2014, this amount is $1,070 a month. However, the same section of the law specifies that a different definition of SGA applies to individuals disabled by blindness. These individuals are considered to be engaging in SGA if their earnings exceed 1,800 a month (this amount is also adjusted annually to reflect growth in average wages). This different treatment for the blind began with enactment of P.L. 95 - 216 in 1977. During consideration of H.R. 9346 , the Social Security Financing Amendments of 1977, the Senate adopted by a voice vote an amendment by Senator Birch Bayh that provided disability benefits for blind individuals regardless of their ability to work or the amount of money they actually earned. The amendment was identical to S. 753 , a bill introduced by Senator Hubert Humphrey earlier in the year. Speaking in support of this amendment on the Senate floor, Senator Bayh stated, Social security disability insurance was designed to partially replace income loss due to a disability. Congress has previously recognized blindness as a distinct and unique condition. Certain economic consequences predictably follow the disability of blindness. It is comparable with the social security insurance concept to protect the blind from these adverse effects. If persons with a high earning capacity can return to work at all after becoming blind, they do so, almost without exception, at a much lower salary, and continue to suffer an adverse impact on their earning power. Moreover, working in a society adapted to vision entails extra costs for supportive services and special devices. The House-passed version of H.R. 9346 contained no similar provision. In conference, it was agreed that the House would recede with an amendment that struck the provisions of the Senate amendment but provided that the amount of earnings under the test of SGA that would terminate a blind individual's benefits would be increased to the monthly exempt amount for persons at or above the full retirement age (FRA) under the Social Security earnings test. The conferees stated that they were aware that this established a different test of SGA for blind persons than is applied administratively for persons with other disabilities. They went on to say that they did not intend that the new SGA level established for the blind should be applied to other types of disabilities. When the provision became effective in 1978, the SGA for non-blind recipients was $260 a month; for the blind, it was $334 a month, a difference of about 28% (see Figure A-1 in the Appendix). In subsequent years, the different SGA amounts occasionally became subject to debate. In 1988, the Social Security Advisory Council found that the preferential treatment for the blind was inappropriate and recommended that for new applicants the SGA level be lowered to that for all other disabled recipients. The council also recommended that the SGA level for blind persons already on the rolls be frozen at the then-current level ($700 a month). In 1992, the United States District Court for the District of Wyoming found that the higher SGA amount for the blind was unconstitutional because it violated the guarantee of equal protection under the law. The United States Court of Appeals for the 10 th Circuit overturned the district court's ruling, saying that there was a rational basis for Congress to place preferences for blind persons in the law. The Supreme Court refused to review the appeals court's decision. In 1996, when Congress enacted the Contract with America Advancement Act of 1996 ( P.L. 104 - 121 ) to substantially increase the earnings test limit for those who have attained retirement age over a period of five years, reaching $30,000 in 2002, it removed the linkage between the SGA level of the blind and the exempt amount for individuals who have attained the FRA. Instead their SGA level continued as before (i.e., adjusted annually to reflect growth in average wages). During deliberation of the bill, advocates of the blind sought to have the link maintained. During the mark-up of the bill in the Ways and Means Subcommittee on Social Security, an amendment was offered to do so. However, the amendment was rejected. On April 7, 2000, President William Clinton signed into law H.R. 5 , the Senior Citizens' Freedom to Work Act ( P.L. 106-182 ), which eliminated the Social Security earnings test for recipients who have reached the FRA (effective in 2000). P.L. 106 - 182 permanently continued the severance between the earnings test and the SGA level of the blind enacted in P.L. 104 - 121 . In 1996, the General Accounting Office (GAO, now known as the Government Accountability Office) was asked to examine whether the legislative rationale for an earnings limit for the blind that was higher than for individuals who have other disabilities was warranted. It concluded that the legislative rationale was based on the assumption that adverse employment experiences, including high job-related costs and unemployment, were greater for the blind than for persons who have other disabilities. However, GAO found that such experiences do not appear to be unique to the blind compared to other disabled recipients. GAO repeated this conclusion in a hearing on the topic held by the Social Security Subcommittee of the House Committee on Ways and Means on March 23, 2000. Proponents of liberalizing the SGA limit for the blind maintain that the reasons given in 1977 to provide a different limit for the blind are just as valid today. Blindness is still a distinct and special condition, and they believe that the blind still merit being singled out for compensatory help. They point out that Congress has recognized the special nature of blindness by writing into law different disability criteria for the blind in regard to (1) insured status, (2) continued eligibility for benefits beyond the age of 54 regardless of the level of work activity, and (3) the use of functional capacity as part of the test of meeting the definition of disability. Proponents say that what Congress established then was that the "retirement test" (as the earnings test is sometimes called) for older workers should be applied to the blind, and therefore that they should be treated just like retired older workers whenever Congress makes changes to the retirement test. They say that if any change is made to lessen or eliminate the difference in SGA amounts, it should be to raise the SGA limits of the non-blind. Opponents of liberalizing the SGA limit for the blind maintain that the blind already receive enough preferential treatment and that to expand it further would be inequitable. Many of them think that even current law is too generous, because they see no logical reason that a particular group of disabled individuals should receive advantages over another. In their view, many other impairments could just as easily be viewed as needing special compensatory relief (e.g., quadriplegia and cancer). They dispute that the blind suffer higher rates of unemployment or work-related expenses. Opponents point out that the very definition of disability is that a person is unable to perform substantial work, and that the purpose of the SGA limit is to determine if, regardless of a person's medical condition, he or she demonstrates by work that he or she is not in fact disabled. From their perspective, if the SGA for the blind were further liberalized, especially to the point where it would approach or exceed the average wage of all workers, the concept of disability would become meaningless and weaken the basic concept of the disability program as a whole.

In the Social Security disability program, the level of earnings that constitute "substantial gainful activity" (SGA), and therefore disqualifies a person from receiving benefits, is set by regulation at $1,070 a month for 2014. However, the law provides a different SGA level for the blind at $1,800 a month for 2014, which is adjusted annually to reflect growth in average wages. This report discusses the reasons for these differing amounts and proposals to change them. The appendix section of the report charts the difference between the two amounts from 1975 to 2014.

RS20995 -- India and Pakistan: U.S. Economic Sanctions Updated February 3, 2003 In May 1998, India and Pakistan each conducted tests of nuclear explosive devices, triggering sweeping U.S. economic sanctions as required by the ArmsExport Control Act (AECA) and the Export-Import Bank Act. (2) Prior to the tests, for international treaty purposes, the two countries were classified asnon-nuclear-weapon states; the tests put each country in jeopardy of world condemnation and sanctions. In theUnited States, the law required the President toimpose the following restrictions or prohibitions on U.S. relations with both India and Pakistan: termination of U.S.foreign assistance other than humanitarianor food assistance; termination of U.S. government sales of defense articles and services, design and constructionservices, licenses for exporting U.S.Munitions List (USML) items; termination of foreign military financing; denial of most U.S. government-backedcredit or financial assistance; U.S. oppositionto loans or assistance from any international financial institution; prohibition of most U.S. bank-backed loans orcredits; prohibition on licensing exports of"specific goods and technology"; and denial of credit or other Export-Import Bank support for exports to eithercountry. Since 1990, Pakistan had been under a sanctions regime that was mandated by another provision of U.S. law pertaining to U.S. foreign assistance. The Pressleramendment, added in 1985 to the Foreign Assistance Act of 1961, requires the President to determine that Pakistandoes not possess a nuclear explosive deviceand that any proposed U.S. assistance would reduce the risk of obtaining such a device. (3) President Reagan and President Bush issued determinations each yearuntil 1990, when then-President Bush did not make the finding required to make assistance available. In 1995, thisrequirement was changed to apply only tomilitary assistance to Pakistan, making the country eligible for other foreign assistance. During the Clinton Administration. Almost immediately after the 1998 imposition of sanctions on India andPakistan required in the Arms Export Control Act, Congress intervened on behalf of U.S. wheat growers by passingthe Agriculture Export Relief Act, signedinto law on July 14, 1998. (4) The Act amended theAECA to exempt various Department of Agriculture-backed funding from sanctions applied pursuant tosection 102 of that Act. This freed up U.S. wheat farmers to participate in auctions in which Pakistan was asubstantial buyer. Congress later passed theIndia-Pakistan Relief Act of 1998, signed into law by the President on October 21, 1998. (5) This Act authorized the President to waive, for a period of one year,the application of sanctions relating to U.S. foreign assistance, U.S. government nonmilitary transactions, the U.S.position on loans or assistance byinternational financial institutions, and U.S. commercial bank transactions. President Clinton quickly made use ofhis new authority, announcing on November7, 1998, that certain transactions and support would be restored. The authority granted to the President in each of these 1998 laws, however, was limited to a one-year period. Additional legislation was required to make theauthority permanent. Congress provided permanent waiver authority in the Department of Defense AppropriationsAct, FY2000, signed into law on October25, 1999. (6) This Act gave the President the authorityto waive all the economic sanctions imposed against India and Pakistan in response to the nuclear tests,including for the first time those sanctions related to military assistance, USML licenses, and exports to hightechnology entities. To waive those sanctionspertaining to the sales of defense articles, defense services, design or construction services, foreign militaryfinancing, or export licenses for specific goods andtechnology (the sanctions related to, or with possible, military applications), current law requires the President todetermine and certify to Congress "that theapplication of the restriction would not be in the national security interests of the United States." President Clintonexercised this authority on October 27,1999, when he waived the applicability of nonmilitary restrictions for India, on Export-Import Bank loans andcredits, Overseas Private Investment Corporation(OPIC) funding, Trade and Development Agency (TDA) export support, International Military Education andTraining (IMET) programs, U.S. commercialbanks transactions and loans, Department of Agriculture (USDA) export credits, and specific conservation-orientedassistance. For Pakistan, he waived therestrictions on USDA credits and U.S. commercial bank loans and transactions. During the Bush Administration. Throughout the first eight months of 2001, the Bush administration hadhinted that the United States would like to remove the sanctions imposed against India and, to a lesser extent,Pakistan. (7) India's foreign and defense ministervisited Washington in April; Chairman of the Joint Chiefs of State, General Shelton visited India in May to discussmilitary-to-military relations. In May, 2001,and again in August, Deputy Secretary of State Richard Armitage visited India and publically stated the UnitedStates' interests in fully normalizing relationswith the country. In August 2001, U.S. Trade Representative Robert Zoellick visited India to promote global tradetalks. Regarding Pakistan, Secretary of State Powell met with its foreign minister in Washington in June. They reportedly discussed Afghanistan and the Taliban,terrorism, democracy, nuclear proliferation, and sanctions. (8) After the terrorist attack on the United States on September 11, 2001, because of Pakistan's unique position - both geographic and political - vis-a-visAfghanistan, policymakers recognized the urgency by which U.S.-Pakistan relations had to be mended. At the sametime, parity had to be maintained in termsof India. As a result, the President exercised the authority granted him in the Defense Appropriations Act, FY2000,on September 22, 2001, when he lifted allnuclear test-related economic sanctions against the two countries after finding that denying export licenses andassistance was not in the national securityinterests of the United States. (9) Today, the solevestige of the nuclear sanctions is the listing of four Indian and 20 Pakistani entities (and their subsidiaries) onthe Commerce Department's list of entities for which export licenses are required. By comparison, restricted entitiesnumbered in the hundreds in the wake ofthe 1998 nuclear tests. (10) Pakistan continued to be ineligible for most forms of U.S. foreign assistance under a provision of the annual foreign assistance appropriations act that bansforeign assistance "to any country whose duly elected head of government is deposed by military coup or decree." Pakistan's current leader, General PervezMusharraf seized power and overthrew a democratically elected government in October 1999. He declared himselfPresident on June 20, 2001. Pakistan wasalso denied most U.S. foreign assistance for falling into arrears in servicing its debt to the United States. (11) Pakistan was found to be in arrears under termsofthe Foreign Assistance Act in September 2000, and under terms of the Foreign Operations Appropriations Act inMarch 2001. (12) At the end of 1999, Pakistan'sinternational debt was $30.7 billion, of which $2.38 billion was owed to the United States ($1.14 billion in AIDloans, $981 million in food aid, $139 million inExport Import Bank loans, and $119 million in military loans). Two steps were taken to relieve the prohibition on U.S. foreign aid. First, on September 24, 2001, the U.S. Ambassador to Pakistan signed an agreement inPakistan to reschedule $379 million of its debt to the United States, enough to cancel the arrearage. (13) Then Congress passed a bill to exempt Pakistanfrom thesections of law that prohibit making foreign assistance available to any country governed by a military thatoverthrew a democratically elected regime. ThePresident signed S. 1465 into law on October 27, 2001; its authority to waive the sanctions related to bothdemocracy and debt arrearage remainsavailable through FY2003, provided the President determines that making foreign assistance available "facilitatesthe transition to democratic rule in Pakistan"and "is important to United States efforts to respond to, deter, or prevent acts of international terrorism." (14) Prior to the passage of S. 1465 , President Bush invoked the authority granted him in sec. 614 of the Foreign Assistance Act of 1961 (22 U.S.C.2364) to provide $50 million in Economic Support Funds to Pakistan on September 28, 2001, without regard torestrictions in that Act or the ForeignOperations Act that are applicable to Pakistan. The President made another $50 million available under the sameauthority on October 16, 2001. These twodisbursements were part of the Administration's proposed $600 million package of assistance to Pakistan. ThePresident also released $25 million inEmergency Migration and Refugee Funds to Pakistan around the same time. (15) Funding derived from the 2001 Emergency Supplemental AppropriationsActincludes the balance of the President's package to Pakistan ($500 million), and another $73 million for bordersecurity between Pakistan and Afghanistan. (16) On October 5, the President made another $100 million available for management of the emerging Afghan refugeecrisis - $50 million in food assistance toAfghanistan and neighboring countries, and $50 million in Migration and Refugee Assistance to be administeredthrough the United Nations and associatednongovernmental organizations tending to the Pakistan-Afghanistan border. None of these recent fund releases wassubject to sanctions. And on September 26,2001, the International Monetary Fund determined that Pakistan had met the requirements to become eligible for$135 million, to complete disbursement of a$600 million loan. (17) Any lingering doubts about the repair of U.S. relations with India and Pakistan were dispelled in the President's FY2003 budget proposal, shown below. (18) INDIA PAKISTAN

In 1998, India and Pakistan each conducted tests of nuclear explosive devices, drawingworld condemnation. TheUnited States and a number of India's and Pakistan's major trading partners imposed economic sanctions in response. Most U.S. economic sanctions werelifted or eased within a few months of their imposition, however, and Congress gave the President the authority toremove all remaining restrictions in 1999. The sanctions were lifted incrementally. President Bush issued a final determination on September 22, 2001,to remove the remaining restrictions, finding that denying export licenses and assistance was not in the national security interests of the United States. Today, four Indian and 20 Pakistani entities (and their subsidiaries) remain on the Commerce Department's listof entities for which export licenses arerequired. By comparison, restricted entities numbered in the hundreds in the wake of the 1998 nuclear tests. Anexport license is still required to ship missiletechnology-controlled or nuclear proliferation-controlled items to users in either country, but the Department ofCommerce no longer views such licenseapplications with a presumption of denying their issuance. Apart from the sanctions imposed following the nuclear tests, the United States prohibited foreign aid toPakistan when that country fell into arrears in servicingits debt to the United States in late 1998, a prohibition reenforced when Pakistan's military forces overthrew thedemocratic government in late 1999. Post-September 11 cooperation between the United States and Pakistan included a rescheduling of the debt and newlegislation to waive the so-calleddemocracy sanctions. Pakistan thus became eligible to receive U.S. foreign assistance through FY2003 when, unlessit holds free and fair elections, restrictionson foreign aid could be reimposed.

In the wake of the tragedy of September 11, 2001, the U.S. Congress decided that enhancing the security of the United States' borders was a vitally important component of preventing future terrorist attacks. Before September 11, 2001, border security fell piecemeal under the mandate of many diverse federal departments, including but not limited to the Department of Justice (the Immigration and Naturalization Service); the Department of the Treasury (the Customs Service); the Department of Agriculture (the Animal and Plant Health Inspection Service); and the Department of Transportation (the Coast Guard). The Homeland Security Act of 2002 ( P.L. 107-296 ) consolidated most federal agencies operating along the U.S. borders within the newly formed DHS. Most of these agencies were located in the Directorate of Border and Transportation Security (BTS), which was charged with securing the borders; territorial waters; terminals; waterways; and air, land, and sea transportation systems of the United States; and managing the nation's ports of entry. The lone exception is the U.S. Coast Guard, which remained a standalone division within DHS. The BTS was composed of three main agencies: (1) the CBP, which is charged with overseeing commercial operations, inspections, and land border patrol functions, (2) ICE, which oversees investigations, alien detentions and removals, air/marine drug interdiction operations, and federal protective services, and (3) the TSA, which is charged with protecting the nation's air, land, and rail transportation systems against all forms of attack to ensure freedom of movement for people and commerce. On July 13, 2005, the Secretary of DHS, Michael Chertoff, announced the results of the months-long Second Stage Review (2SR) that he undertook upon being confirmed as DHS Secretary. One of Secretary Chertoff's main recommendations, which was agreed to by the DHS Appropriations Conferees, was the elimination of the BTS Directorate. The Secretary announced the creation of a new Office of Policy, which, among other things, assumed the policy coordination responsibilities of the BTS Directorate. The operational agencies that comprised BTS (CBP, ICE, TSA) now report directly to the Secretary and Deputy Secretary of DHS. The goal of this reorganization was to streamline the policy creation process and ensure that DHS policies and regulations are consistent across the department. Additionally, the Federal Air Marshals program was moved out of ICE and back into TSA to increase operational coordination between all aviation security entities in the department. Conceptually speaking, CBP provides the front line responders to immigrations and customs violations and serves as the law enforcement arm of DHS, while ICE serves as the investigative branch. TSA is charged with securing the nation's transportation systems, whereas the U.S. Coast Guard also serves an important border security function by patrolling the nation's territorial and adjacent international waters against foreign threats. Combined FY2010 appropriations for the border security agencies of DHS equaled $30.96 billion, and the combined full time equivalent (FTE) manpower totaled approximately 180,142 employees. CBP combined portions of the previous border law enforcement agencies under one administrative umbrella. This involved absorbing employees from the Immigration and Naturalization Service (INS), the Border Patrol, the Customs Service, and the Department of Agriculture. CBP's mission is to prevent terrorists and terrorist weapons from entering the country, provide security at U.S. borders and ports of entry, apprehend illegal immigrants, stem the flow of illegal drugs, and protect American agricultural and economic interests from harmful pests and diseases. As it performs its official missions, CBP maintains two overarching and sometimes conflicting goals: increasing security while facilitating legitimate trade and travel. In FY2010, CBP's appropriated net budget authority totaled $10.13 billion and manpower totaled approximately 58,105 FTE. Between official ports of entry, the U.S. Border Patrol (USBP)—a component of CBP—enforces U.S. immigration law and other federal laws along the border. As currently comprised, the USBP is the uniformed law enforcement arm of the Department of Homeland Security. Its primary mission is to detect and prevent the entry of terrorists, weapons of mass destruction, and unauthorized aliens into the country, and to interdict drug smugglers and other criminals. In the course of discharging its duties the USBP patrols over 8,000 miles of our international borders with Mexico and Canada and the coastal waters around Florida and Puerto Rico. At official ports of entry, CBP officers are responsible for conducting immigrations, customs, and agricultural inspections on entering aliens. As a result of the "one face at the border" initiative, CBP inspectors are being cross-trained to perform all three types of inspections in order to streamline the border crossing process. This initiative unifies the prior inspections processes, providing entering aliens with one primary inspector who is trained to determine whether a more detailed secondary inspection is required. CBP inspectors enforce immigration law by examining and verifying the travel documents of incoming international travelers to ensure they have a legal right to enter the country. On the customs side, CBP inspectors ensure that all imports and exports comply with U.S. laws and regulations, collect and protect U.S. revenues, and guard against the smuggling of contraband. Additionally, CBP is responsible for conducting agricultural inspections at ports of entry in order to enforce a wide array of animal and plant protection laws. In order to carry out these varied functions, CBP inspectors have a broad range of powers to inspect all persons, vehicles, conveyances, merchandise, and baggage entering the United States from a foreign country. ICE merged the investigative functions of the former INS and the Customs Service, the INS detention and removal functions, most INS intelligence operations, and the Federal Protective Service (FPS). This makes ICE the principal investigative arm for DHS. ICE's mission is to detect and prevent terrorist and criminal acts by targeting the people, money, and materials that support terrorist and criminal networks. As such they are an important component of our nation's border security network even though their main focus is on interior enforcement. In FY2010, ICE appropriations totaled $5.44 billion, and the agency had approximately 20,134 FTE employees. Unlike CBP, whose jurisdiction is confined to law enforcement activities along the border, ICE special agents investigate immigrations and customs violations in the interior of the United States. ICE's mandate includes uncovering national security threats such as weapons of mass destruction or potential terrorists, identifying criminal aliens for removal, probing immigration-related document and benefit fraud, investigating work-site immigration violations, exposing alien and contraband smuggling operations, interdicting narcotics shipments, and detaining illegal immigrants and ensuring their departure (or removal) from the United States. ICE is also responsible for the collection, analysis and dissemination of strategic and tactical intelligence data pertaining to homeland security, infrastructure protection, and the illegal movement of people, money, and cargo within the United States. The Coast Guard was incorporated into DHS as a standalone agency by P.L. 107-296 . The Coast Guard's overall mission is to protect the public, the environment, and U.S. economic interests in maritime regions—at the nation's ports and waterways, along the coast, and in international waters. The Coast Guard is thus the nation's principal maritime law enforcement authority and the lead federal agency for the maritime component of homeland security, including port security. Among other things, the Coast Guard is responsible for evaluating, boarding, and inspecting commercial ships as they approach U.S. waters; countering terrorist threats in U.S. ports; and for helping to protect U.S. Navy ships in U.S. ports. A high-ranking Coast Guard officer in each port area serves as the Captain of the Port and is the lead federal official responsible for the security and safety of the vessels and waterways in their geographic zone. In FY2010, Coast Guard appropriated budget authority totaled $10.14 billion, and the agency had approximately 49,954 FTE military and civilian employees. As part of Operation Noble Eagle (military operations in homeland defense and civil support to U.S. federal, state and local agencies), the Coast Guard is at a heightened state of alert protecting more than 361 ports and 95,000 miles of coastline. The Coast Guard's homeland security role includes protecting ports, the flow of commerce, and the marine transportation system from terrorism; maintaining maritime border security against illegal drugs, illegal aliens, firearms, and weapons of mass destruction; ensuring that the U.S. can rapidly deploy and resupply military assets by maintaining the Coast Guard at a high state of readiness as well as by keeping marine transportation open for the other military services; protecting against illegal fishing and indiscriminate destruction of living marine resources; preventing and responding to oil and hazardous material spills; and coordinating efforts and intelligence with federal, state, and local agencies. The TSA was created as a direct result of the events of September 11 and is charged with protecting the United States' air, land, and rail transportation systems to ensure freedom of movement for people and commerce. The Aviation and Transportation Security Act (ATSA, P.L. 107-71 ) created the TSA and included provisions that established a federal baggage screener workforce, required checked baggage to be screened by explosive detection systems, and significantly expanded FAMS. In 2002, TSA was transferred to the newly formed DHS from the Department of Transportation; as previously noted, in 2003 the Federal Air Marshal program was taken out of TSA and transferred to ICE. In FY2006, the program was transferred back to TSA. In FY2010, TSA appropriations totaled $5.26 billion, and the agency had approximately 51,949 FTE employees. To achieve its mission of securing the nation's aviation, TSA assumed responsibility for screening air passengers and baggage—a function that had previously resided with the air carriers. TSA is also charged with ensuring the security of air cargo and overseeing security measures at airports to limit access to restricted areas, secure airport perimeters, and conduct background checks for airport personnel with access to secure areas, among other things. However, an opt out provision in ATSA will permit every airport with federal screeners to request a switch to private screeners commencing in November 2004. Additionally, as a result of the 2SR, the Federal Air Marshals program has been transferred back to TSA. FAMS is responsible for detecting, deterring and defeating hostile acts targeting U.S. air carriers, airports, passengers and crews by placing undercover armed agents in airports and on flights. This report has briefly outlined the roles and responsibilities of the four main agencies within the DHS charged with securing our nation's borders: the CBP, ICE, the U.S. Coast Guard, and the TSA. It should be noted, however, that although the Homeland Security Act of 2002 consolidated all the agencies with primary border security roles in DHS, many other federal agencies are involved in the difficult task of securing our nation's borders. Although border security may not be in their central mission, they nevertheless provide important border security functions. These agencies include, but are not limited to the U.S. Citizenship and Immigrations Services within DHS, which processes permanent residency and citizenship applications, as well as asylum and refugee processing; the Department of State, which is responsible for visa issuances overseas; the Department of Agriculture, which establishes the agricultural policies that CBP Inspectors execute; the Department of Justice, whose law enforcement branches (the Federal Bureau of Investigation and Drug Enforcement Agency) coordinate with CBP and ICE agents when their investigations involve border or customs violations; the Department of Health and Human Services, through the Food and Drug Administration and the Center for Disease Control; the Department of Transportation, whose Federal Aviation Administration monitors all airplanes entering American air space from abroad; the Treasury Department, whose Bureau of Alcohol, Tobacco, and Firearms investigates the smuggling of guns into the country; and lastly the Central Intelligence Agency, which is an important player in the efforts to keep terrorists and other foreign agents from entering the country. Additionally, due to their location, state and local responders from jurisdictions along the Canadian and Mexican borders also play a significant role in the efforts to secure our nation's borders.

After the massive reorganization of federal agencies precipitated by the creation of the Department of Homeland Security (DHS), there are now four main federal agencies charged with securing the United States' borders: the U.S. Customs and Border Protection (CBP), which patrols the border and conducts immigrations, customs, and agricultural inspections at ports of entry; the U.S. Immigrations and Customs Enforcement (ICE), which investigates immigrations and customs violations in the interior of the country; the United States Coast Guard, which provides maritime and port security; and the Transportation Security Administration (TSA), which is responsible for securing the nation's land, rail, and air transportation networks. This report is meant to serve as a primer on the key federal agencies charged with border security; as such it will briefly describe each agency's role in securing our nation's borders. This report will be updated as needed.

Prior to World War II, each United States (U.S.) military service organization procured and distributed its own food. Right after World War II, Congress mandated that a commission (ultimately called the Hoover Commission) study the logistical management of military food and supplies, and recommended a more centralized management of perishable foods, preferably in one organization. This effort resulted in the establishment of a joint Army-Navy-Air Force Support Center; for the first time, all military services bought, stored, and issued military items using a common system. In addition to food items, DOD and the military services defined other materiel that would be managed by this system as "consumables," or "commodities," meaning supplies that are not repairable or are consumed in normal use. In the mid-1950s, the structure for the procurement of food and consumable items changed. Each military service acted as a single manager for various categories of consumables issued by all four services; each single manager would buy items, store and issue supplies, manage inventories, and forecast future requirements. For example, the U.S. Army bought and managed all military food and clothing; the Navy managed all medical supplies, petroleum, and industrial parts; and the Air Force managed all electronic items. The single manager system reduced costs by centralizing wholesale stocks, simplifying the supply chain, and persuading each military service to adopt the same standard items. However, the single manager concept was only partially successful because it did not provide uniform procedures among the services. In 1961, then Secretary of Defense Robert McNamara ordered that the single-manager agencies be consolidated into one agency, resulting in the establishment of the Defense Supply Agency, the forerunner to the Defense Logistics Agency (DLA). In 1986, the Goldwater-Nichols Act identified DLA as a combat support agency. DLA is an agency under the Department of Defense, Office of the Under Secretary of Defense for Acquisition, Technology and Logistics. DLA is DOD's largest logistics, combat support agency. Today DLA provides worldwide logistics support in both peacetime and wartime to the military services, civilian agencies, and foreign countries. DLA supplies almost every consumable item America's military services need to operate, from groceries to jet fuel. DLA supported every major war and contingency operation of the past four decades, from the Vietnam War to Operation Iraqi Freedom. The subsistence acquisition mission is carried out by DLA Troop Support, formerly Defense Supply Center, Philadelphia (DSCP); a field activity within DLA. According to DLA, the DLA Director has been designated by the Deputy Secretary of Defense as the Executive Agent (EA) for Subsistence, Bulk Fuels, Construction and Barrier Materials, and Medical Materiel. As described on DLA's website: As DLA Executive Agent, the Director of DLA is the focal point for providing continuous, sustainable and global end-to-end supply chain support as required by end users. The DOD EA ensures effective support throughout operations by developing coordinated processes and support plans for transition from peacetime to wartime and/or contingency operations. Under DLA, DLA Troop Support is responsible for nearly all of the food, clothing, and medical supplies used by the military. DLA Troop Support is comprised of the following business areas: (1) Clothing & Textiles; (2) Construction & Equipment; (3) Weapon Systems Detachments; (4) Medical; (5) Subsistence; and (6) Customer Operations. Under Subsistence, DLA Troop Support has developed a new approach to industrial base preparedness, through the development of an "Industrial Base Preparedness Toolbox." DLA Troop Support operates as a Defense Working Capital Fund activity; all operating costs must be charged back to the individual customer on a break-even basis. Military food items are procured in accordance with the provisions of the Berry Amendment and the Buy American Act (BAA). The Berry Amendment [Title 10, United States Code (U.S.C.), Section 2533a] requires DOD to give preference to the procurement of domestically produced, manufactured, or home grown products, notably food, clothing, and fabrics. The Berry Amendment is referenced in the Defense Federal Acquisition Regulation Supplement (DFARS), Part 225.7002, as described below. Unless a specific exception in law applies, the products, components, or materials listed below must be grown, reprocessed, reused, or produced in the United States if they are purchased with funds made available (not necessarily appropriated) to DOD. Except for manufactured or processed food, and chemical warfare protection clothing as explained in DFARS 225.7002-2 "Exceptions," this applies to prime contractors and subcontractors at any tier. The various stages of the military food acquisition process are described below: From the customer's perspective, the acquisition process begins with the generation of a product need or requirement. The customer receives an introductory presentation about the Prime Vendor Program and identifies their organization's ongoing, new, or anticipated requirements. DLA Troop Services gathers the data and develops a formal solicitation package to meet the requirement. At the same time, a DLA Troop Services specialist prepares a formal solicitation which incorporates federal laws, regulations, and guidelines for the acquisition of subsistence items. The solicitation is prepared based on what represents the best value to the federal government, and is amended and modified as more information is received. A broad range of potential vendors are invited to participate in an industry forum to learn more about requirements and resolve or clarify questions about the solicitation. The solicitation is announced and remains open for bids for approximately 50 days; meanwhile a pre-proposal conference is also held. Prospective vendors may contact the DLA Troop Services specialist to raise questions, offer suggestions, and to discuss and review all elements of the solicitation; further charges to the solicitation may occur, based on the feedback received from potential vendors. Based on the pre-proposal conference findings, any additional amendments to the solicitation must be issued to all prospective vendors on the mailing list. The evaluation phase begins; each technical proposal is received from prospective vendors and individually evaluated to identify its strengths and weaknesses. The evaluation is conducted by a team of subject matter experts. Each technical proposal must demonstrate that the prospective vendor can meet the requirements as set forth in the solicitation, in accordance with "Best Value" selection criteria. At the conclusion of the evaluation phase, the contract award decision is made and a contract award decision is announced. The contract becomes effective usually between 30 to 60 days after the award announcement. The DOD regional manager arranges a post-award conference at the selected vendor's facility, typically within two weeks after the announcement. During the post-award conference, which is jointly conducted by the DLA Troop Services specialist and the vendor, all issues involving the structure and execution of the contract are discussed. At the conclusion of the post-award conference, the installation, vendor, and DLA Troop Services specialist will develop a catalogue of the vendor's product line. This step ensures that all of the items required by the customer are properly coded and contained in the catalogue. The Subsistence Directorate is divided into the following business units: Food Services, Operational Rations, Produce, Food Safety Office, and Supplier Support. A description of the work of each business unit follows. Under Food Services, the Subsistence Prime Vendor Program (SPV) has replaced the former depot stock distribution system with an electronic order and receipt system. Through the use of electronic data interchange (EDI) orders are transmitted and received at the vendor's plants within minutes, allowing for reduced local inventory levels. EDI enhances the accuracy and timeliness of orders as well as the quality of the products; as a result, both the inventory and associated overhead costs are reduced, and the goal for the maximum turnaround time (from order to delivery) is 48 hours. According to DLA, there are about 50 prime vendors who manage and supply food in regions around the world. The Operational Rations Unit provides the managerial and logistical support for supplying meals for the military, including individual rations, group rations, survival rations, ultra high temperature milk, emergency and sterile drinking water, humanitarian daily rations, and field feeding equipment. While the "Meal, Ready-to-Eat (MRE)" is the core individual combat ration for the military, the military services also consider the special dietary needs of the soldiers (including vegetarian and kosher needs). The Produce Unit provides fresh fruits and vegetables to the military services, the Defense Commissary Agency, Military Exchanges, Morale, Welfare and Recreation facilities, Job Corps Centers, Veterans Administration hospitals, federal prisons, as well as DOD schools and Indian reservations. Under the Produce Unit, the DOD Fresh Program is a partnership between the U.S. Department of Agriculture's Food and Nutrition Service, and the Produce Division, whereby DLA Troop Services buys and distributes fresh fruits and vegetables to schools using the USDA's federal commodity entitlement dollars. The Farm Security and Rural Investment Act of 2002 contained statutory language that sets aside $50 million annually for DLA Troop Services to continue to support school lunches. The Produce Unit distributes over 300 different produce items to schools. The Food Safety Office is responsible for food safety and quality assurance policies for the services, DOD agencies, and components, in partnership with the U.S. Army's Research Development and Engineering Command, a division of the U.S. Army Soldier Systems Center; the U.S. Army Veterinary Command, the Food and Drug Administration, and the USDA. The Supplier Support Division supports the supplier operations within the subsistence supply chain by providing a wide variety of administrative and logistical support.

Military food items, also known as subsistence items, are generally procured under the auspices of the Defense Logistics Agency (DLA), an agency of the Department of Defense (DOD) which provides worldwide logistics support for the U.S. military services. Under DLA, DLA Troop Services (formerly the Defense Supply Center Philadelphia) is the inventory control point for food, clothing, textiles, medicines, medical equipment, general and industrial supplies, and services for the military, their eligible dependents, and other non-DOD customers worldwide. DLA Troop Services buys and manages about $13.4 billion worth of food, clothing, textiles, and other products. Under DLA Troop Services, the Subsistence Directorate serves as the operational manager for all food operations. These items are procured in accordance with the provisions of the Berry Amendment and the Buy American Act (BAA). The Berry Amendment requires DOD to give preference to the procurement of domestically produced, manufactured, or home grown products, notably food, clothing, and fabrics. This report will describe the origin, authority, and policy in the procurement of food for the military.

According to the National Institute on Deafness and Other Communication Disorders, exposure to loud sounds is responsible for hearing impairment in 10 million of the nearly 30 million people with hearing loss in the United States, and another 30 million people are daily exposed to dangerous noise levels. Many individuals are also regularly exposed to sound levels that may not lead to hearing loss, but can be intrusive and impair one's quality of life. Several federal laws require the federal government to maintain standards for various sources of noise. However, the standards do vary in stringency among individual sources. Although there is some variance among the standards, all of them limit sound levels at least to a degree that would prevent human hearing loss. The responsibility for setting and enforcing noise control standards is divided among multiple federal agencies. In the past, the Environmental Protection Agency (EPA) coordinated all federal noise control activities through its Office of Noise Abatement and Control. However, Congress phased out the office's funding in FY1983 as part of a shift in federal noise control policy to transfer the primary responsibility for regulating noise to state and local governments. Although EPA no longer plays a prominent role in regulating noise, its past standards and regulations remain in effect, and other federal agencies continue to set and enforce noise standards for sources within their regulatory jurisdiction. Public interest in the federal regulation of noise and the adequacy of existing standards continues to be strong, especially among communities where sources of noise have proliferated, and as residential development has resulted in people living closer to sources of noise. Considering that existing standards generally are protective against hearing loss, the primary concern among the public has been whether the standards should be tightened to protect the quality of life in communities where sound levels may be perceived as annoying or intrusive, but not necessarily harmful to human hearing. Potential effects of various sound levels, and the roles of federal, state, and local governments in regulating individual sources of noise, are discussed below. Sound is measured in units of decibels (dbA), and an increase of 10 dbA represents sounds that are perceived to be twice as loud. There is broad consensus among regulators in the United States that constant or repeated exposure to sound levels in the vicinity of 90 dbA and higher can lead to hearing loss. Exposure to sounds significantly below these levels are generally not considered harmful to human hearing. However, most individuals perceive unwanted sound above 65 dbA to be intrusive, which can impair one's quality of life, depending on the sensitivity of the individual and the frequency and duration of exposure. Some also argue that persistent exposure to intrusive sound may have certain physiological effects, such as headaches or nausea, even though one's hearing ability may not be impaired. There also have been some questions about the vibration-induced effects of low frequency sound, which can be felt but not heard. The Noise Control Act of 1972 (P.L. 92-574) and several other federal laws require the federal government to set and enforce noise standards for aircraft and airports, interstate motor carriers and railroads, workplace activities, engines and certain types of equipment, federally funded highway projects, and federally funded housing projects. The Noise Control Act also requires federal agencies to comply with all federal, state, and local noise requirements. Various federal laws and regulations governing the administration of park and recreational lands owned by the federal government also provide authorities for agencies to regulate noise that would be generated from human activities on, and in the vicinity of, these lands. Most federal noise standards focus on preventing hearing loss by limiting exposure to sounds of 90 dbA and higher. Some federal standards are stricter and focus on limiting exposure to lower levels of around 65 dbA to protect quality of life. Whether "quality-of-life" standards should be tightened has been an ongoing issue, particularly among communities located near transportation sources such as airports and highways, where exposure to noise is a daily or routine occurrence. As noted above, there also have been some questions about the effects of low frequency sound, but so far, noise standards in the United States have not regulated low frequency sound below the threshold of human hearing. Major existing federal standards that regulate human exposure to noise, and the agencies responsible for setting and enforcing them, are discussed below. The Aircraft Noise Abatement Act of 1968 (P.L. 90-411) requires the Federal Aviation Administration (FAA) to develop and enforce standards for aircraft noise. In developing these standards, the FAA generally follows noise limits recommended by the International Civil Aviation Organization (ICAO). Federal noise regulations define aircraft according to four noise classes: Stage 1, Stage 2, Stage 3, and Stage 4. Stage 1 aircraft are the loudest, and Stage 4 are the quietest. All Stage 1 aircraft have been phased out of commercial operation, and all unmodified Stage 2 aircraft over 75,000 pounds were phased out by December 31, 1999, as required by the Airport Noise and Capacity Act of 1990 ( P.L. 101-508 , Title IX, Subtitle D). Stage 3 aircraft must meet separate standards for runway takeoffs, landings, and sidelines, ranging from 89 to 106 dbA depending on the aircraft's weight and its number of engines. Stage 4 standards are stricter and require a further reduction of 10 dbA overall relative to Stage 3 standards. The Stage 4 standards are relatively new and are based on standards that the ICAO adopted in June 2001 (referred to as "Chapter 4" in ICAO parlance). The FAA finalized these standards in July 2005, adopting the ICAO standards by reference. The Stage 4 standards apply to newly manufactured subsonic jet airplanes, and subsonic transport category large airplanes, for which a new design is submitted for airworthiness certification on or after January 1, 2006. As the majority of jet aircraft designed in recent years are already quiet enough to attain the Stage 4 standards, some have commented that the impact of the stricter standards on most aircraft manufacturers may be less significant than otherwise. The ICAO also had recommended separate standards for propeller-driven, small airplanes. The FAA finalized these standards in January 2006. They apply to newly manufactured, propeller-driven, small aircraft for which a new design is submitted for airworthiness certification on or after February 3, 2006. In addition to aircraft certification standards, airports receiving federal funds are required to meet noise control standards for their operation. The standards range from 65 dbA for airports adjacent to residential areas to over 85 dbA for those adjacent to lands used for agricultural and transportation purposes. The Airport and Airway Improvement Act of 1982 ( P.L. 97-248 ) established the Airport Improvement Program (AIP) to provide federal assistance for airport construction projects and to award grants for mitigating noise resulting from the expansion of airport capacity. Airport operators applying for such grants must design noise exposure maps and develop mitigation programs to ensure that noise levels are compatible with adjacent land uses. The Noise Control Act required EPA to develop noise standards for motor carriers engaged in interstate commerce, and it authorized the Federal Highway Administration to enforce them. All commercial vehicles over 10,000 pounds are subject to standards for highway travel and stationary operation, but the standards do not apply to sounds from horns or sirens when operated as warning devices for safety purposes. For highway travel, the standards range from 81 to 93 dbA, depending on the speed of the vehicle and the distance from which the sound is measured. The standards for stationary operation are similar and range from 83 to 91 dbA, depending on the distance from the vehicle. The standards apply at any time or condition of highway grade, vehicle load, acceleration, or deceleration. The Noise Control Act required EPA to establish noise standards for trains and railway stations engaged in interstate commerce, and the law authorized the Federal Railroad Administration (FRA) to enforce those standards. There are separate standards for locomotives, railway cars, and railway station activities such as car coupling. For locomotives built before 1980, noise is limited to 73 dbA in stationary operation and at idle speeds, and is limited to 96 dbA at cruising speeds. The standards for locomotives built after 1979 are stricter, and limit noise in stationary operation and at idle speeds to 70 dbA and at cruising speeds to 90 dbA. Noise from railway cars must not exceed 88 dbA at speeds of 45 miles per hour (mph) or less, and must not surpass 93 dbA at speeds greater than 45 mph. Noise from car coupling activities at railway stations is limited to 92 dbA. There are no uniform noise standards that control sounds from locomotive horns, whistles, or bells when they are operated as warning devices for safety purposes. However, in response to concerns about noise from horns in communities located near railways, the FRA finalized regulations in 2005, and modified them in 2006, allowing such communities to designate "quiet zones." Within these zones, communities could prohibit the routine sounding of locomotive horns. Designation of these zones is subject to certain conditions, including that there would be no significant risk of loss of life or risk of serious personal injury resulting from the lack of a horn sounding. The Occupational Safety and Health Act of 1970 (P.L. 91-596) required the Occupational Safety and Health Administration (OSHA) to develop and enforce safety and health standards for workplace activities. To protect workers, OSHA established standards which specify the duration of time that employees can safely be exposed to specific sound levels. At a minimum, constant noise exposure must not exceed 90 dbA over 8 hours. The highest sound level to which workers can constantly be exposed is 115 dbA, and exposure to this level must not exceed 15 minutes within an 8-hour period. The standards limit instantaneous exposure, such as impact noise, to 140 dbA. If noise levels exceed these standards, employers are required to provide hearing protection equipment to workers in order to reduce sound exposure to acceptable limits. In April 2007, the Department of Labor proposed regulations that would require minors to wear hearing protection devices when working with wood processing machinery. The Noise Control Act directed EPA to set and enforce noise standards for motors and engines, and transportation, construction, and electrical equipment. With this authority, EPA established standards for motorcycles and mopeds, medium and heavy-duty trucks over 10,000 pounds, and portable air compressors. The standards for motorcycles only apply to those manufactured after 1982 and range from 80 to 86 dbA, depending on the model year and whether the motorcycle is designed for street or off-road use. Noise from mopeds is limited to 70 dbA. The standards for trucks over 10,000 pounds only apply to those manufactured after 1978 and range from 80 to 83 dbA depending on the model year. These standards are separate from those for interstate motor carriers. Noise from portable air compressors is limited to 76 dbA. The Federal-Aid Highway Act of 1970 (P.L. 91-605) required the Federal Highway Administration (FHWA) to develop standards for highway noise levels that are compatible with adjacent land uses. The law prohibits the approval of federal funding for highway projects that do not incorporate measures to attain these standards, which range from 52 to 75 dbA depending on adjacent land use. Among the most common method to attain these standards is to erect a physical barrier (i.e., a noise wall) between the highway and the adjacent land. Under general authorities provided by the Housing and Urban Development Act of 1968 (P.L. 90-448), the Department of Housing and Urban Development (HUD) has established standards for federally funded housing projects located in noise-exposed areas. The standards limit interior noise to a daily average of 65 dbA. Possible methods to mitigate noise in housing include the installation of doors and windows designed to diminish the transmission of sound, the insertion of noise-blocking insulation within walls, and the use of thicker walls and floors in new construction. Various federal laws and regulations governing the administration of park and recreational lands owned by the federal government also provide authorities for agencies to regulate noise that would be generated from human activities on, and in the vicinity of, these lands. For example, the National Park Service has included noise standards in its regulations governing the operation of vessels on waters within all National Parks. Certain regulations also govern noise from specific sources in particular parks and recreational areas. For example, the FAA has promulgated regulations limiting noise from aircraft operations in the vicinity of Grand Canyon National Park. These and other restrictions have been motivated by rising interest among recreational users in maintaining the serene qualities of public lands for their enjoyment. However, there have been conflicting desires between recreational users who seek a quieter environment and those users whose preferred recreational activities would be restricted because of the noise those activities would generate. The federal government also is responsible for rating consumer devices designed to be worn by individuals to reduce exposure to potentially harmful or intrusive sound levels. The Noise Control Act authorized EPA to require labels for products that reduce noise. Under this authority, EPA established Noise Reduction Ratings for noise reduction devices, such as head gear and ear plugs. Manufacturers are required to use these ratings to identify the reduction of sound in decibels that the user would experience when wearing these devices. The federal role in regulating noise is primarily limited to transportation, workplace activities, certain types of equipment, and human activities on public lands owned by the federal government. State and local governments determine the extent to which other sources of noise are controlled, and regulations for such sources can vary widely among localities. Further, some states do not directly regulate noise, but allow local governments to play the primary role. Sources of noise commonly regulated at the state and local level include commercial, industrial, and residential activities. Regulations for such sources typically control the public's exposure to noise by limiting certain activities to specific times, such as construction noise only during business hours. Public concern about differing state and local control of noise has led some to suggest that the federal role should be expanded to regulate a greater variety of sources uniformly across the country.

Community perceptions of increasing exposure to noise from a wide array of sources have raised questions about the role of the federal government in regulating noise, and the adequacy of existing standards. The role of the federal government in regulating noise has remained fairly constant overall since the enactment of the Noise Control Act in 1972 (P.L. 92-574). With authorities under this and other related statutes, the federal government has established, and enforces, standards for maximum sound levels generated from aircraft and airports, federally funded highways, interstate motor carriers and railroads, medium- and heavy-duty trucks, motorcycles and mopeds, workplace activities, and portable air compressors. The federal government also regulates human exposure to noise in federally funded housing. In more recent years, the federal role has expanded to include regulation of noise generated by human activities on public lands, including National Parks. State and local governments determine the extent to which other sources of noise are regulated, including commercial, industrial, and residential activities. Although noise standards generally provide a level of protection sufficient to prevent human hearing loss, they vary among individual sources in terms of what level of sound is permissible. This report explains potential effects of various sound levels, describes the role of the federal government in regulating noise, characterizes existing federal standards, discusses the role of state and local governments, and examines relevant issues.

In 2011 the Navy received approval from DOD to begin planning for a UCLASS acquisition program to address a capability gap in sea-based surveillance and to enhance the Navy’s ability to operate in highly contested environments defended by measures such as integrated air defenses or anti-ship missiles. The Navy analyzed the potential of several alternative systems to provide these capabilities. In 2012 the JROC—the requirements validation authority for major defense acquisition programs—issued a memorandum providing direction and guidance for the Navy to focus its efforts on delivering a timely, affordable system to meet the sea-based surveillance requirements. At that time the systems that would be needed to operate in a highly contested environment were deemed unaffordable. As a result, the Navy updated its analysis of alternatives to include more affordable and feasible systems. Navy leadership approved a draft set of requirements in April 2013 that emphasized affordability, timely fielding, and endurance, while deemphasizing the need to operate in highly contested environments. DOD policy provides that the JROC, as the validation authority for major defense acquisition programs, will validate the requirements document— known as the capability development document—prior to releasing requests for proposals for development contracts and the decision review that initiates a system development program, known as a Milestone B review. The JROC has not yet validated these requirements. In September 2013, we found that the Navy had taken some positive steps to scale back requirements to match available resources. Our primary concern at the time was that the program planned to develop, manufacture and field operational UCLASS systems before holding a Milestone B review, which would defer key oversight mechanisms, such as the establishment of an acquisition program baseline, for these program activities until after they were over. Without a baseline and regular reporting on progress, it would be difficult for Congress to hold the Navy accountable for achieving cost, schedule, and performance goals. As a result, we recommended that the Navy hold a Milestone B review sooner than its then-scheduled fiscal year 2020 date in order to provide for increased oversight and accountability. At the time, the Navy disagreed, believing that its approved strategy was compliant with acquisition regulations and laws. Congress subsequently placed limitations on the number of UCLASS air vehicles that DOD could acquire prior to receiving Milestone B approval.acquisition strategy was otherwise consistent with the DOD acquisition process that applies to most weapon system programs, as well as with a knowledge-based acquisition approach. Since our last review in September 2013, the system’s intended mission and required capabilities have come into question, delaying the Navy’s UCLASS schedule. DOD has decided to conduct a review of its airborne surveillance systems and the future of the carrier air wing, and has as a result adjusted the program’s schedule. The Navy’s fiscal year 2016 budget documents reflect these changes, with award of the air system contract now expected to occur in fiscal year 2017, a delay of around 3 years. In addition the Navy now expects to achieve early operational capability—a UCLASS system on at least one aircraft carrier—no earlier than fiscal year 2022, a delay of around 2 years. Figure 1 shows delays in dates for several other key program events. Congress, DOD, and the Navy continue to debate the primary role of the UCLASS system. The main options are a largely surveillance role with limited strike operating in less contested environments, or a largely strike role with limited surveillance operating in highly contested environments. Congress has raised concerns about whether UCLASS will be armed and survivable enough to support U.S. power projection in areas in which access and freedom to operate are challenged. In addition, Congress has heard testimony from former DOD and Navy officials expressing concerns about the ability of UCLASS to help counter the defenses of adversaries trying to deny U.S. access. Congress has also directed the Navy to confirm that the program’s key performance parameters—that is, its most critical requirements—have been validated by the JROC before issuing the UCLASS development request for proposals, and prohibited the air system development contract award until after DOD completes a requirements review.program while DOD conducts airborne surveillance systems and carrier air wing reviews further indicates that the anticipated role of UCLASS is not yet settled. The resolution of the debate over UCLASS requirements could have significant design and cost implications, which will determine the resources the Navy needs and how much knowledge from the Navy’s previous assessments and estimates can still be applied. In September 2013, we concluded that the UCLASS program should demonstrate that it has an executable business case that reflects high levels of knowledge and a match between requirements and available resources before holding a Milestone B review, establishing an acquisition program baseline, and initiating system development. Our past work has found that while a match is eventually achieved on most weapon system programs, a key distinction between successful programs—which perform as expected and are developed within estimated resources—and problematic programs is when this match is achieved. When the match occurs before system development begins, the weapon system is more likely to meet objectives. The current uncertainty about UCLASS requirements underscores the need for the program to demonstrate an executable business case, establish an acquisition program baseline, and hold a Milestone B review, prior to starting a system development program. At this point, if more demanding requirements add technical risk, the Navy would likely need to conduct additional systems engineering work before it could establish an executable business case and a program baseline. As such, the Navy would need to revisit its understanding of available resources in the areas of design knowledge, funding, and technologies as detailed below: Knowledge gained through preliminary design reviews may no longer be applicable: During the four preliminary design reviews that ended in May 2014, the Navy evaluated contractor designs against a set of performance specifications issued in July 2013. Those specifications reflected the requirements that had been approved by Navy leadership just three months earlier and focused on the need to conduct mainly surveillance missions in less contested environments while emphasizing affordability, timely fielding, and endurance. If the program pursues and the JROC validates requirements that focus on a strike role and emphasize the need for the air system to operate in highly contested environments, increase internal weapons payload capacity, or change how long the air system needs to remain airborne without refueling, the contractors may have to adjust or redesign their proposals. This would increase design risk since no preliminary design reviews have been completed based on these potentially more demanding requirements. As a result, the Navy may need to conduct more systems engineering work and update or repeat entirely the preliminary design review process. Program cost estimates and funding needs depend on final requirements: We found in September 2013, that UCLASS development cost estimates were varied and uncertain, even at a time when requirements had been scaled back and appeared to be relatively stable. As the debate about requirements has progressed, the uncertainty about the program’s cost has increased. DOD and contractor officials have noted that if requirements become more demanding, for example increasing the air system’s weapons payload or the need for it to operate in a highly contested environment, then the estimated development costs could increase significantly. Until requirements are firm, the Navy will not have the knowledge it needs to develop and present an executable business case or program baseline containing reliable cost and funding estimates. Because requirements are still under debate, the Navy reduced the UCLASS fiscal year 2016 budget from almost $670 million to $135 million. Despite this near term reduction, annual development funding levels are projected to reach nearly $850 million in fiscal year 2020, as shown in figure 2. The projected funding, however, does not reflect the level of funding that may be needed if the program pursues more demanding requirements, which some officials in the Office of the Secretary of Defense believe could be substantially higher. Program may need to develop and mature additional technologies: If the program pursues and the JROC validates a more demanding set of requirements the contractors may need to develop and mature additional technologies. Navy officials believe that the critical technologies for UCLASS are mature based on their experience with a demonstration program for a carrier-launched unmanned aircraft, known as the Unmanned Combat Air System Demonstration. However, if the validated program requirements lead to the need for new technologies, then the program will likely need additional time to mature those technologies before beginning system development. Scheduling for UCLASS is particularly complicated as the program needs to synchronize its test planning with availability of aircraft carriers that have had UCLASS modifications installed. Carriers are periodically unavailable due to scheduled maintenance needs, and thus air system schedule delays could cause the program to miss opportunities for testing. The Navy also has the opportunity to decide whether to add requirements and technologies in a single step or to add them incrementally using an evolutionary acquisition approach. Firm and achievable requirements should form the basis of a business case for any major weapon system investment. A substantive debate about the intended mission and required capabilities of UCLASS is taking place before DOD makes a major resource commitment and holds a Milestone B review to formally initiate a system development program. This is a good development, because it will likely help ensure that the Navy’s UCLASS business case provides a sound foundation for an acquisition program baseline that is rooted in firm and achievable requirements at the outset. DOD policy requires the Navy to finalize UCLASS requirements, with validation by the JROC, before issuing the request for proposals for the development contract. Once the requirements are finalized and before a development contract is signed, the Navy will need to demonstrate that it has adequate resources—including design knowledge, funding, and technologies—available to meet those requirements. Unsettled requirements will hinder the Navy’s ability to develop and present a business case with realistic cost and schedule estimates, and establish an acquisition program baseline. The final requirements and how similar or different they are to those used for the past preliminary design reviews, will determine the extent to which the knowledge the Navy gained is still applicable at this key juncture in the program. Once the JROC has validated UCLASS requirements, and in order to ensure that the Navy has a sound and executable business case and establishes an acquisition program baseline before awarding a development contract and committing significant resources, we recommend that the Secretary of Defense direct the Secretary of the Navy to provide a report to the congressional defense committees and the Secretary of Defense demonstrating that the Navy has the resources available and a strategy to deliver those required UCLASS capabilities. At a minimum this report should include: An updated cost estimate; A schedule for holding a Milestone B review and establishing an acquisition program baseline before initiating system development; Plans for new preliminary design reviews and technology maturation if more demanding requirements are validated; and What consideration is being given to adopting an evolutionary acquisition approach. We provided a draft of this product to DOD for comment. On behalf of DOD, the Navy partially agreed with our recommendation. The Navy’s written comments are reproduced in appendix I. The Navy also provided technical comments that were incorporated, as appropriate. The Navy agreed that if the JROC validates a more demanding set of requirements, it will be necessary to revisit the UCLASS schedule to allow for potential development and maturation of new technologies, in addition to planning of preliminary design reviews. However, the Navy also expressed concerns that the content of the recommended report would duplicate elements of existing statutory provisions such as certifications associated with milestone reviews and reporting requirements contained in the Carl Levin and Howard P. “Buck” McKeon National Defense Authorization Act for Fiscal Year 2015. If the Navy holds a Milestone B review before awarding the development contract for the UCLASS air system and receives the certifications required by statute and DOD policy at that point in time, as well as meeting the reporting requirements in the National Defense Authorization Act for Fiscal Year 2015, we agree that it will satisfy the basic intent of our recommendation, and thus no separate report would be required. However, the current UCLASS schedule does not include a Milestone B review prior to the air system development contract award. If a Milestone B is not held prior to the contract award—thus not triggering the requisite statutory certification requirements—the Navy should still be required to provide assurance that it has a sound, executable business case and establish an acquisition program baseline before committing significant resources. In this case, we believe that providing the recommended report would address this need. We are sending copies of this report to the appropriate congressional committees, the Secretary of Defense, and the Secretary of the Navy. In addition, the report is available at no charge on the GAO website at http://www.gao.gov. If you have any questions about this report or need additional information, please contact me at (202) 512-4841 or sullivanm@gao.gov. Contact points for our Offices 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, key contributors to this report were Travis J. Masters, Assistant Director; Scott M. Bruckner; Robert P. Bullock; Laura Greifner; Marie P. Ahearn; Timothy M. Persons; and Roxanna T. Sun.

The Navy expects to have invested at least $3 billion through fiscal year 2020 in the development of the UCLASS system, which includes air system, aircraft carrier, and control system and connectivity segments. It is expected to enhance the intelligence, surveillance, reconnaissance, targeting, and strike capabilities of the Navy's aircraft carrier fleet. In August 2013, the Navy awarded contracts worth $15 million each to four competing contractors to develop and deliver preliminary designs for the air system, which were assessed by the Navy in May 2014. The next anticipated steps for the program will be to solicit proposals and award the contract for air system development. The National Defense Authorization Act for Fiscal Year 2014 included a provision that GAO review the status of the UCLASS acquisition program annually. This report assesses (1) the current status of the program, and (2) the extent to which the Navy has the knowledge about resources it needs to develop the UCLASS system. GAO applied best practice standards, analyzed program documentation, and interviewed Department of Defense (DOD) and contractor officials. Since our last review in September 2013, the intended mission and required capabilities of the Navy's Unmanned Carrier-Launched Airborne Surveillance and Strike (UCLASS) system have come into question. Ongoing debate about whether the primary role of the UCLASS system should be mainly surveillance with limited strike or mainly strike with limited surveillance has delayed the program, as shown in the figure. Requirements emphasizing a strike role with limited surveillance could be more demanding and costly. a Early operational capability is currently not anticipated before fiscal year 2022 and could occur as late as fiscal year 2023. The knowledge the Navy has obtained about the resources needed to develop the UCLASS system may no longer be applicable depending on what requirements are finally chosen. GAO's prior best practices work has found that before initiating system development, a program should present an executable business case that demonstrates that it has a high level of knowledge and a match between requirements and available resources. If the final UCLASS requirements emphasize a strike role with limited surveillance, the Navy will likely need to revisit its understanding of available resources in the areas of design knowledge, funding, and technologies before awarding an air system development contract. GAO recommends that before committing significant resources the Navy should ensure that it has an executable business case for UCLASS development that matches available resources to required capabilities. On behalf of DOD, the Navy generally agreed with the recommendation.

RS21510 -- NATO's Decision-Making Procedure Updated March 8, 2004 In February 2003, the United States asked that NATO begin planning to provide Turkey with defensive systems in the event of an attack by Iraq during theimpending war with Saddam Hussein's regime. The request also asked that NATO members backfill for some U.S.forces in the Balkans, needed for thepossible conflict with Iraq. France, Germany, and Belgium objected in the North Atlantic Council (NAC), NATO'ssupreme political body. They contendedthat granting the request would be the equivalent of acknowledging that Iraq had impeded U.N. weaponsinspections, as yet unproven in the view of the threegovernments, and be a pretext for war. NATO Secretary General Robertson at that point invoked the "silenceprocedure," under which any membergovernment objecting to the request must send him a formal letter stating its opposition. The three governmentssent such a letter in the stated time frame,stymieing the U.S. request. Turkey itself then asked for consultations concerning its defense needs under ArticleIV of the North Atlantic Treaty. The United States asked that Turkey's request for assistance be discussed in the Defense Planning Committee (DPC), where France is not a member. TheGerman government was willing to grant the request for assistance to Turkey, and dropped its opposition. TheBelgian government, now isolated, dropped itsobjection. The DPC then granted the request for defense planning, which resulted in the deployment of AWACS,Patriot missiles, and other defensive systemsto protect Turkey. Consensus in the NAC is generally sought when allied governments must formulate policy on an important strategic issue. Examples include approval ofNATO's Strategic Concept (NATO's document that serves as a strategic guideline), relations with Partnership forPeace countries, the NATO budget,deployment of forces for peace operations, and invocation of Article V. Consensus is clearly differentiated from"unanimity," which NATO does not seek. Unanimity would require an actively stated vote in favor of a measure. Structure and Process. NATO has a civil and a military structure. The supreme political decision-makingbody, the North Atlantic Council (NAC), sits in Brussels, and is chaired by the Secretary General. Each of the 19member states has a representative on theNAC. Key proposals for military decisions are made by the Military Committee (MC). A senior European military officer chairs the Military Committee. The MChas 18 members because France withdrew from the alliance's integrated military structure in 1966. France sendsan observer, without a vote, to the MC. France has full representation on the NAC, however, as Paris did not withdraw from NATO's politicaldecision-making structure. The NAC has the authorityto approve all key MC documents. Normally, any government may have two opportunities to influence a major NATO decision. For example, the MC established a working group at the level ofcolonel to work out the deployment and responsibilities of NATO member state forces to be sent to Bosnia for peaceoperations in the 1990s. The 18representatives on the working group met for eight months, and eventually drafted a document that was approvedby the MC. The MC then sent the documentto the NAC's international staff. Ultimately, all 19 representatives on the NAC refined the document's language,and approved it. Reaching consensus is therefore a process in which member governments have ample opportunity to provide language to NATO documents and decisions thatreflect national governments' individual views. The North Atlantic Council (NAC). The NAC achieves consensus through a process in which nogovernment states its objection. A formal vote in which governments state their position is not taken. During theKosovo conflict, for example, it was clear toall governments that Greece was uncomfortable with a decision to go to war. NATO does not require a governmentto vote in favor of a conflict, but rather toobject explicitly if it opposes such a decision. Athens chose not to object, knowing its allies wished to take militaryaction against Serbia. In contrast toNATO, the EU seeks unanimity on key issues. Unanimity characterizes EU decision-making when, for example,new members are invited to join, or revisionsto the Union's governing treaties must be adopted. At NATO, the "silence procedure" may be used for any decision requiring a consensus. At times, the procedure allows governments in opposition to a measureto avoid confronting other allies around the table during a session of the NAC. The procedure can also providecover for a government from unwanted pressreporting that might characterize its policy as out of step with other allies. By not sending a letter to the SecretaryGeneral within a specified time period, agovernment can avoid the step of stating its explicit objection to a policy if it believes other allies are set on a courseof action. This procedure failed in theeffort to begin defense planning for Turkey when three governments were in opposition. The procedure can be moresuccessful if only one government is put inthe position of having to take the formal step of sending a letter of opposition to the Secretary General, and mayrefrain from doing so to avoid being isolated. NATO uses the same principle of consensus in the DPC, where 18 members make proposals on such matters as force structure. Normally, the DPC's proposalsare sent to the Military Committee or to the NAC for approval. When France withdrew from the MilitaryCommittee in 1966, it also surrendered its seat on theDPC. NATO in the past has made important preliminary decisions on military operations in the DPC. However,in 1992, when NATO decided to enforce thearms embargo in the Adriatic Sea against the countries of the disintegrating Yugoslavia, France wished to participatein the decision and to send forces as partof the operation. For this reason, NATO transferred the decision to the NAC, where France could play a role. Thispractice set a precedent for subsequentNATO military operations. The NAC made the decisions to establish SFOR, approve the plan for OperationAllied Force in Kosovo, and establish KFOR inthe conflict's aftermath, each time because France wished to participate in these operations. When France (andBelgium and Germany) objected in February2003 to military assistance to Turkey, however, the United States was instrumental in the maneuver to move outof the NAC and back to the DPC to approveAnkara's request for assistance under Article IV. The maneuver raised the question of whether the United States,and other allies, were attempting to avoid orweaken the principle of consensus. Within the U.S. government and in allied governments, there is varied support for preserving decision-making by consensus. Most senior U.S. officialsassociated with NATO affairs contend that they support the principle of consensus, although some acknowledgethat forging consensus in an era when NATOmay go out-of-area is likely to be difficult. Support for preserving the principle of consensus centers upon a desire to maintain political solidarity for controversial measures. In this view, the consent of19 sovereign governments, each taking an independent decision to work with other governments, is a formidableexpression of solidarity. At the same time,there can be political costs due to the sparring and the time involved in reaching consensus. NATO's decision togo to war against Serbia in 1999 was anexample of such an instance. Military action against Serbia had been postponed for a number of days, whilecivilians were losing their lives in Kosovo. Theallies first made an effort to achieve legitimization for the operation in the U.N., but did not submit the requisiteresolution when Russia signalled that it wouldcast a veto. The allies decided to debate in the NAC the issue of going to war without such a resolution, in the enddeciding that 19 governments consenting tothe use of military force supplied a measure of political legitimacy. Officials involved in that NAC debate say thatthe need for obtaining consensus outweighedthe need for acting quickly. The Kosovo conflict illustrated some of the difficulties involved in maintaining consensus. Some critics of management of the conflict, including someMembers of Congress, criticized the target-selection process. Press reports indicated that all governments in theNAC had to approve NATO's individualtargets for Serbia. France, in particular, was singled out in press reports for criticism for objecting to specifictargets. In fact, NATO was following a verydifferent procedure for target selection. Member governments, including the United States, wished to be carefulto avoid civilian casualties, particularly in theabsence of a U.N. resolution that might be cited to legitimize the ends used to compel the Milosevic governmentto cease ethnic cleansing. They made adecision before the conflict began, after an initial operational plan produced by the MC, to attack targets in threephases. Each phase marked an escalation overthe previous one; stepping up to the next phase - and not individual targets - required consent from the NAC. PhaseI targets were indisputably militarytargets, such as air defense systems, airfields, and troop concentrations, and there was strong agreement that thesemust be struck. Phase II targets wereinfrastructure, such as bridges and petroleum depots, that might serve both civilian and military usage, and weretherefore more controversial. Phase III targetswere "the more significant targets associated with Serb repression," such as police headquarters involved in ethniccleansing, often located in urban centers suchas Belgrade. According to then SACEUR General Wesley Clark, and to sources interviewed, it was the Pentagonand the White House, as well as the Britishgovernment, that above all raised barriers and sought delays before attacking Phase II and III targets, with Franceand other governments raising occasionalobjections. (2) The Kosovo conflict underscores the political pressure placed on the NAC in maintaining consensus when military action comes into play, and the fact that theFrench government has often been singled out when disagreements arise. Different governments place varyingdegrees of emphasis on civilian control of themilitary, and on the reactions of their own populations when there are civilian casualties. The United Statesgovernment tends to have more confidence in itsarmed forces in target selection and in making decisions on the battlefield than do most allied governments. Someallies, given the recent history of theirmilitaries stepping into political affairs or using excessive force against civilians, place greater restraints on theirarmed forces. In France, the effort by armyofficers to overthrow President de Gaulle's government in 1960-62, and in Germany, excesses of the Wehrmacht and the Gestapo in the Second World War, arewithin the memory of many leaders and populations, and affect how these governments seek to manage militaryconflict. The diversity of viewpoints in theNAC means that constant negotiation is necessary in providing authority to the SACEUR to plan and execute amilitary operation. Wrangling over precisephrasing of a document can be a means to provide clarity for decision-makers; in contrast, it can also be meant toprovide vagueness that gives political cover toa member government that may give its own interpretation to its populace about the purpose of a NATO decision. Altering or abandoning the principle of consensus at a moment when NATO may accept new members poses other problems. For candidate state governments,the prospect of such a change raises the question of whether the United States and other current members lackconfidence in the candidates to participate in thefull range of allied decision-making. Representatives of some of these governments also express displeasure withthe tendency of some Administration officialsto divide the continent into an "old" and "new" Europe, even if the characterization is meant to favor them. Sucha division suggests a possible marginalizationof France and Germany, and of an alliance where member states are set against each other, implicit for some in anyabandonment of the consensus principle. Some officials view any prospective effort by the United States to move away from the consensus principle as aversion of U.S. "unilateralism," in whichWashington might pressure weaker or small-state governments to follow its lead, an issue raised when the BushAdministration sought support of several alliedgovernments in the coalition against Iraq. The political complexities inherent in NAC and MC debates mean that there is no simple fix to improve NATO decision-making. At the same time, some U.S.officials believe that the growing necessity for out-of-area missions indicates a clear need to develop a new processto permit participation under NATOauspices by willing allies in such operations. (3) Some U.S. officials, without enthusiasm, suggest an EU model, where member states' votes are weighted, based on their populations. This form of "qualifiedmajority voting" (QMV) gives greater influence to the largest countries, but small states may still band together toblock an initiative. Critics of adopting suchan approach for NATO point out that the alliance is a mutual defense organization, where supreme national interestssuch as the survival of a country and thelives of a government's soldiers are at issue. In such circumstances, they believe that the EU's mechanistic approachto decision-making over less momentousissues is inappropriate for NATO. The EU is different in nature from NATO. The EU must grapple with issuesinvolving the sharing of national sovereignty ona wide range of issues. As a result, extensive deal-making has been part of the EU (earlier, the EuropeanCommunity) since its origins, but has not beenprevalent in NATO. Nonetheless, QMV in NATO could lead, as it often does in the EU, to faction-building orextended horse-trading. However, one system used in elements of EU decision-making is drawing interest from those in NATO who support coalitions of the willing and capable. Forissues that involve only selected governments, the EU has devised "committees of contributors." In this concept,governments that wish to participate in aproject receive general approval from a principal EU governing body to proceed among themselves, while the othergovernments take a general interest and aresponsibility that might involve oversight. An element of the concept involves "constructive abstention," in whichgovernments with interests not directlyaffected stand aside and permit action by those with interests that are directly in play. A "committee of contributors" in NATO might follow a similar outline, and might appeal especially to governments that are both NATO and EU members. Countries on the committee for a military operation, for example, would be those willing to contribute troops andother assets. The committee would formulatea general plan for operations, and submit it to the NAC for a "blessing." The NAC might allow the committee touse NATO assets, such as AWACS and theplanning staff. The NAC, in effect, would endorse the right of committee members to act in their own interests, butnot specifically endorse the operation itself. Committee members among themselves could then make key decisions, possibly based on consensus, such as howmuch authority to delegate to SACEUR forcontingency planning and target selection. The committee would keep the NAC informed on a regular basis. Shouldthe NATO Response Force (NRF),comprised of 25,000 troops, be fully developed for "expeditionary" operations beyond the Treaty area, "committeesof contributors" could be a means tostreamline decision-making and keep it within the ken of interested governments. Such committees could serve to avoid the recent maneuver of having to go to the DPC, since that step is effective only for sidelining France. France, after all,has been involved in virtually all key NATO military operations, and might in the future wish to participate inmissions. France's forces constitute a largecomponent of the Eurocorps, one of the high-value multinational military formations available to NATO. France,with Britain, has the only other continental"expeditionary" military able to serve in high-intensity conflicts. The "committees of contributors" might isolatesmall countries such as Belgium, which inrecent times has increasingly criticized NATO as a "toolbox" of U.S. policy, and opposed out-of-area operations,but has only minimal military capability tocontribute in any event. Some officials who have served at NATO make a contrary argument to the possible usefulness of "committees of contributors." They believe that smallcountries such as Belgium might insist that any out-of-area mission be decided by the NAC as a whole, since assets(AWACS, intelligence) being used wouldbelong to NATO as a whole, and would thus be assets for which, in part, each country pays.

This report provides a brief analysis of NATO's decision-making procedures, withseveral examples of how theallies have handled sensitive issues in the past. It describes the February 2003 dispute over providing NATO defenseplanning and equipment to Turkey, andanalyzes the debate over the decision-making process, including possible alterations of that process. This reportwill be periodically updated. See also CRS Report RS21354, The NATO Summit at Prague, 2002.

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 our current 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 committee 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.

To address the threat of dirty bombs and other nuclear material, the federal government has programs in place that regulate the transportation of radioactive sources and to prevent illegal transport of radioactive sources across our nation's borders. The Department of Homeland Security through the U.S. Customs and Border Protection (CBP) uses radiation detection equipment at ports of entry to prevent such illicit entry of radioactive sources. The goal of CBP's inspection program is to "...thwart the operations of terrorist organizations by detecting, disrupting, and preventing the cross-border travel of terrorists, terrorist funding, and terrorist implements, including Weapons of Mass Destruction and their precursors." Deploying radiation detection equipment is part of CBP's strategy for thwarting radiological terrorism and CBP is using a range of such equipment to meet its goal of screening all cargo, vehicles, and individuals coming into the United States. Most travelers enter the United States through the nation's 154 land border ports of entry. 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. Our investigation was conducted at Congressional request as a result of widespread congressional and public interest in the security of our nation's borders, given today's unprecedented terrorism threat environment. Our investigation was conducted under the premise that given today's security environment, our nation's borders must be protected from the smuggling of radioactive sources by terrorists. For the purposes of this undercover investigation, we purchased a small amount of radioactive sources and one container used to store and transport the material from a commercial source over the telephone. One of our 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 a 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 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, our investigators were able to enter the United States with enough radioactive sources to make two dirty bombs using counterfeit documents. Specifically, they were able to successfully represent themselves as employees of a fictitious company and 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.

As was the case when we reported to this Subcommittee in July 1997, we again found that INS had not identified all potentially deportable imprisoned criminal aliens. As a result, INS did not fully comply with the legal requirements that it (1) place criminal aliens who had committed aggravated felonies in removal proceedings while they are incarcerated or (2) take those aggravated felons into custody upon their release from prison. In 1995, INS’ database of deportable aliens did not have records on about 34 percent (5,884 of 17,320) of the released inmates included in our analysis who had been identified by the states and BOP as foreign born. About 32 percent of these (1,899) were subsequently determined by INS’ Law Enforcement Support Center (LESC) to be potentially deportable criminal aliens. In 1997, INS had no records on 36 percent of such aliens (7,144 of 19,639), of whom 27 percent (1,903) were determined by LESC to be potentially deportable criminal aliens. Although some of these inmates were citizens and some were ordered removed through means other than IHP, a substantial number were aliens on whom INS did not have records. In 1995, about 33 percent (635) of these potentially deportable criminal aliens for whom INS did not have records were aggravated felons at the time of the analysis, as determined by LESC. In our analysis of 1997 data, 63 percent (1,198) of the potentially deportable criminal aliens for whom INS did not have records were identified by LESC as being aggravated felons. According to INS, this increase may be due to the additional crimes classified as aggravated felonies in the 1996 Act. This is important because federal law requires INS to initiate removal proceedings for aggravated felons while they are incarcerated and, to the extent possible, complete deportation proceedings for these felons before their release from prison. According to the INS and EOIR databases, none of the 1,903 potentially deportable criminal aliens had been in removal proceedings while they were in prison or afterward, had been taken into INS custody, or had been deported. LESC provided information on the post-release criminal activities of the 1,198 aggravated felons as follows: 80 of the 1,198 criminal aliens were rearrested, 19 of the 80 aliens were charged with committing additional felonies, and 15 of the 19 were convicted of the felony charges. We asked LESC to provide us with information on the nature of the crimes for which the 80 criminal aliens were rearrested. These included crimes such as assault, robbery, and drug offenses. The types of felonies for which the 15 aliens were convicted included crimes mostly involving drug possession, burglary, theft, and robbery. Our analysis of data from the first 6 months of 1997 revealed that 12,495 released inmates were, according to INS and EOIR databases, potentially deportable. We found that about 45 percent of these inmates were released from prison with a final deportation order (having completed the IHP), about 3 percent were released from prison without a deportation order but with INS’ having completed the removal hearing process, and about 36 percent were released from prison before INS completed the process. For the remaining 15 percent of inmates, there was no indication that hearings were completed either before or after prison release. In comparison, our analysis of data for a 6-month period in 1995 revealed that 40 percent of 11,436 potentially deportable released inmates completed the IHP with a final deportation order, 3 percent completed the IHP with no deportation order, and 41 percent were released from prison before INS completed the process. There was no evidence of hearings being completed for the remaining 16 percent. Not completing removal proceedings during incarceration means that INS has to use its limited detention space to house released criminal aliens rather than using the space to detain other aliens. INS has acknowledged that it incurs detention costs for housing these aliens; costs that our analyses showed could be avoided. Our analysis of fiscal year 1995 data showed that detention costs of about $37 million could have been avoided for criminal aliens who completed the hearing process after prison release and were deported within 9 months of release. Our analysis of fiscal year 1997 data showed that INS could have avoided over $40 million in detention costs for such cases. At least some of the savings in detention costs that INS could realize by processing more criminal aliens through the IHP would be offset by any additional funding that might be required to provide additional resources for the IHP. At the 1997 hearing, the Chairman urged INS to fully implement GAO’s recommendations for improving the IHP. As of July 1998, INS had made limited progress in doing so. We stated in our July 1997 testimony that INS needed better information about prison inmates--more specifically, information about which inmates are eligible for the IHP and which of these inmates have been and have not been included in the program. Our work at that time showed that INS’ databases did not contain complete and current information on the IHP status of individual foreign-born inmates at any given point in time. INS could use this information to determine which of the released foreign-born inmates had been screened for the IHP, identified as deportable, or placed in the hearing process. We recommended that the Commissioner of INS establish a nationwide data system containing the universe of foreign-born inmates reported to INS by BOP and the state departments of corrections and use this system to track the IHP status of each inmate. As of September 1998, INS had begun to establish an automated system for tracking potentially deportable criminal aliens in BOP facilities, but it had not determined whether it will be able to use this system to track potentially deportable criminal aliens in state prison systems. The law requires INS to take certain actions regarding criminal aliens who have been convicted of aggravated felonies beyond those actions required for other criminal aliens. As previously mentioned, INS is required by law to initiate and, to the extent possible, complete removal proceedings against aggravated felons while they are incarcerated and to take these felons into custody upon their release. Our work shows, as it did in July 1997, that INS had not complied fully with the required provisions of the law. In 1997, we recommended that the Commissioner of INS give priority to aliens serving time for aggravated felonies by establishing controls to ensure that these aliens (1) are identified from among the universe of foreign-born inmates provided by BOP and the states, (2) are placed into removal proceedings while in prison, and (3) are taken into custody upon their release. By September 1998, INS had not taken specific actions to ensure that aggravated felons are placed in removal proceedings while they are incarcerated and then taken into custody upon their release from prison. In its May 1998 performance review, INS stated that priority is given to aliens with early release dates—as opposed to aggravated felons—to ensure that deportable aliens are not released into the community. We previously reported to this Subcommittee that INS had established IHP performance goals without having a systematic basis for determining the performance results it could accomplish with various resource levels. We reported that INS had not developed a uniform method for projecting the resources it would need--taking into consideration the level of cooperation from BOP and the states--to achieve its overall goal of completing removal proceedings for every eligible foreign-born inmate before release from prison. We recommended that the Commissioner of INS (1) develop a workload analysis model to identify the IHP resources needed in any period to achieve overall program goals and the portion of those goals that would be achievable with alternative levels of resources and (2) use the model to support its IHP funding and staffing requests. Such a model was to consider several factors, including the number of foreign-born inmates, number of prisons that must be visited, number and types of IHP staff, length of time to process cases, and travel time and costs. We also reported in our July 1997 testimony that INS had a 30-percent attrition rate for immigration agents, which was significantly higher than the 11-percent average attrition rate for all INS staff. We recommended that the Commissioner identify the causes of immigration agent attrition and take steps to ensure that staffing was adequate to achieve IHP program goals. INS completed a draft workload analysis model in June 1998 that IHP managers intend to use to determine what resources are needed to accomplish program goals. INS had not resolved the problem of high attrition among immigration agents, who are considered the backbone of the IHP. We reported to this Subcommittee in July 1997 that INS’ top management (1) had not formally communicated to the district directors how additional staff (e.g., newly hired immigration agents) should be used in the IHP, (2) did not ensure that specific operational goals were established for each INS district director with IHP responsibilities, and (3) did not respond with specific corrective actions when it became apparent that the program would not achieve its goals for fiscal year 1996. Therefore, we recommended that INS establish and effectively communicate a clear policy on the role of special agents in the IHP (e.g., whether immigration agents were replacements for or supplements to special agents). We also said that INS should use a workload analysis model to set IHP goals for district directors with IHP responsibilities. Furthermore, we said that if it appeared that IHP goals would not be met, INS should document actions taken to correct the problem. However, our work last year showed that INS had not (1) clarified whether immigration agents were replacements for or supplements to special agents in doing IHP work, (2) set IHP goals for district directors in either fiscal years 1997 or 1998 and for regional directors in fiscal year 1998, and (3) specifically addressed the recommendation to document actions taken by the agency when it appeared that the IHP goals would not be met. Despite its assertions at last year’s hearing, INS generally showed limited improvement in its IHP performance based on our analysis of INS’ 1997 program performance. This, coupled with INS’ slow response to our recommendations, suggests that INS still does not know whether it has identified all potentially deportable criminal aliens in the BOP and state prison systems. More importantly, INS still is not doing all it should to ensure that it is initiating removal proceedings for aggravated felons and taking them into custody upon their release from prison. We continue to believe that the recommendations we made in our 1997 testimony are valid and that INS should fully implement them as soon as possible. Mr. Chairman, this completes my statement. I would be happy to respond to your questions 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. 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 discussed the Immigration and Naturalization Service's (INS) efforts to initiate and complete removal proceedings for criminal aliens in state and federal prisons through its Institutional Hearing Program (IHP). GAO noted that: (1) the IHP is a cooperative program involving the INS, the Executive Office of Immigration Review (EOIR), and federal and state correctional agencies; (2) it was formally established in 1988 to enable INS and EOIR to complete removal proceedings for criminal aliens while they were still serving their sentences, thus eliminating the need for INS agents to locate aliens after their release, and freeing up INS detention space for other cases; (3) with the proceedings complete, expeditious removal of criminal aliens upon completion of their sentences can occur; (4) federal law requires the Attorney General to initiate and, to the extent possible, complete removal proceedings for aggravated felons before their release from incarceration; (5) INS has been delegated the authority to enforce immigration laws; (6) in 1997, GAO reported that INS needed to improve its efforts to identify potentially deportable criminal aliens in federal and state prisons and complete the IHP for the aliens before they were released; (7) this conclusion is based on GAO's analysis of data provided by the Federal Bureau of Prisons and five states on foreign-born inmates who were released from prison between April and September, 1995; (8) INS' Executive Associate Commissioner for Programs told the House Committee on the Judiciary, Subcommittee on Immigration and claims that INS had improved program operations since 1995; (9) in response, the Subcommittee asked GAO to review program performance during 1997; (10) although GAO's results indicated that INS' performance had shown some improvement, GAO continues to have the same concerns about the IHP; (11) in 1997, INS still had not identified many potentially deportable aliens while they were in prison; (12) the majority of these released criminal aliens were aggravated felons, some of whom were reconvicted for new felonies; (13) INS completed the IHP for about half of the released criminal aliens it identified as potentially deportable while they were in prison; (14) because INS had to detain aliens who did not complete the hearing process in prison, INS incurred approximately $40 million in avoidable detention costs; and (15) in addition, INS had not fully implemented the recommendations GAO made in the 1997 report to improve the IHP.

RS20786 -- Hong Kong-U.S. Economic Relations Updated January 27, 2005 With a population of 6.8 million, Hong Kong is one of the world's most vibrant economies and a major center forinternational banking and foreign trade. It is utilized by many foreign companies as a gateway to markets inmainlandChina. With a per capita GDP of $27,700 on a purchasing power parity basis in 2003, Hong Kong maintains thesecond highest standard of living in Asia (after Japan); it is higher than that of many West European nations,includingGermany and the United Kingdom. Hong Kong is a member of a variety of multilateral economic organizations,suchas the World Trade Organization (WTO) and the Asia Pacific Economic Cooperation (APEC) forum. Hong Kong's economy is heavily dependent on trade. (3) In 2004, Hong Kong's merchandise exports and imports were$259 billion and $271 billion, respectively. A large share of Hong Kong's trade consists of entrepot and processingtrade, much of it involving China. (4) About 30% ofChina's trade passes through Hong Kong. Taiwan, which does notmaintain direct commercial links with China, ships most of its exports to, and imports from, China via Hong Kong. Alarge share of China's exports also pass through Hong Kong before being re-exported to other destinations. Someofthis trade consists of products made by Hong Kong firms in the Mainland, which are sent to Hong Kong for furtherprocessing before being re-exported elsewhere. Hong Kong has transferred a large share of its manufacturing basetothe Mainland. In the Pearl River Delta region (Guangdong Province, China), 50,000 Hong Kong firms employabout 6million Chinese workers, 20 times the size of Hong Kong's manufacturing workforce. As a result, the importanceofmanufacturing to Hong Kong's economy has diminished in recent years, while that of services (especially thoserelating to trade, such as banking and financial services) has increased sharply. In 2004, services exports andimportswere estimated to total $65 billion and $36 billion, respectively. Hong Kong has enjoyed relatively healthy growth over the past several years. However, in 1997 Hong Kong's economy was hit by the Asian financial crisis. Beginning in July 1997, speculative pressures on the Hong Kongdollar(which has been pegged to the U.S. dollar since 1983) caused the Hong Kong Monetary Authority (HKMA) to spend$1 billion to prop up the currency. These pressures continued, leading the HKMA in October 1997 to raise interestrates (to stop capital flight), which subsequently led to a nearly one-quarter drop in the Hong Kong stock market(theHang Seng Index) over a four-day period. In late August 1998, the Hong Kong government intervened in the stockmarket's decline by spending $15 billion to purchase shares from 33 blue-chip companies that make up the HangSengIndex, which helped raise the value of the shares by 24%. Several analysts criticized the government's intervention,arguing that it violated Hong Kong's free market principles by increasing the government's role over the economy. The Hong Kong government maintained that its intervention was a one-time event, intended to halt speculation andstabilize the stock market. (5) The effects of the Asian economic crisis on Hong Kong were significant. The economy fell into a major recession in1998: real GDP fell by 5.0%, the unemployment rate rose from 2.2% to 4.7%, and exports and imports declinedsharply. The Hong Kong economy recovered somewhat in 1999 and 2000, but was negatively affected by theterroristattacks against the United States in 2001 and by the outbreak and spread of a new and deadly virus called SevereAcuteRespiratory Syndrome (SARS) in 2003. Hong Kong was one of the areas hardest hit areas by SARS, whichdrasticallyreduced tourism and domestic demand. By the end of June 2003, the unemployment rate rose to a record high 8.7%. Hong Kong's economy picked up sharply in 2004, due to rising exports and strong domestic demand. Real GDP grewby an estimated 7.7%; however, unemployment remained stubbornly high (see Table 1 ) Table 1. Selected Economic Data for Hong Kong, 1997-2004* *Data for 2004 are estimates. Date on unemployment is average of the last three months ending in November 2004. Sources: Hong Kong Trade Development Council, Hong Kong Census and StatisticsDepartment, the EconomistIntelligence Unit, and Global Insight. The United States is one of Hong Kong's most important economic partners. In 2003, the United States was HongKong's largest market for domestic exports (i.e., products made in Hong Kong) and its fourth-largest supplier ofimports. There are over 1,000 U.S. businesses represented in Hong Kong, including more than 400 regionaloperations; more than 50,000 U.S. citizens reside in Hong Kong. Cumulative U.S. foreign direct investment (FDI)inHong Kong at the end of 2003 was $44.3 billion. (6) Many U.S. firms and investors seeking to do business in Chinahave used Hong Kong as a base for their operations, frequently relying on Hong Kong partners to obtain the"guanxi"(connections) that are often needed to gain access to China's markets. In 2004, it is estimated that Hong Kong was the thirteenth-largest purchaser of U.S. exports ($16.0 billion) and thetwenty-seventh-largest supplier of U.S. imports ($9.3 billion). The top three U.S. exports to Hong Kong in 2005wereelectrical and electronic machinery and parts (mainly electronic integrated circuits, micro-assemblies, andsemiconductors), non-electrical machinery (such as computers and computer parts), and miscellaneous manufactureditems (mainly diamonds and jewelry). The top three U.S. imports from Hong Kong were apparel and clothing,miscellaneous manufactured commodities, and telecommunications and sound equipment (see Table2 ). Table 2. Major U.S.-Hong Kong Trade Commodities, 2000-2004 ($ in billions) SITC Classification, two-digit level. Source : U.S. Commerce Department. Date for 2004 estimated based on actual data forJan.-Nov. 2004. The United States continues to treat Hong Kong as a separate economic territory for such purposes as trade dataandexport controls. U.S. officials continue to work with Hong Kong officials to ensure that Hong Kong is not used byChina to illegally circumvent U.S. controls on exports of dual-use and other high technology products and to combatviolations of U.S. intellectual property rights (IPR) in Hong Kong. (7) Export Controls. The United States seeks to control exports of dual-use technologies for a variety of national security and foreign policy purposes through a complex regulatorysystem of export license requirements. Despite the reversion of Hong Kong to Chinese sovereignty, the UnitedStatescontinues to treat Hong Kong separately from the Mainland for export control purposes (i.e., controls of U.S. exportsof dual-use items to Hong Kong are far less restrictive than those to China). Some Members of Congress haveraisedconcern that China may be using Hong Kong to acquire dual-use items that cannot be obtained directly from theUnited States, and have called for tighter controls on U.S. exports to Hong Kong. The United States-Hong Kong Policy Act of 1992 ( P.L. 102-383 ) requires the U.S. State Department to report periodically to Congress on conditions in Hong Kong and its relations with the United States, including cooperationinthe area of export controls. In its most recent report (April 2004), the State Department stated that "Hong Kong maintains an effective, highly autonomous, and transparent export control regime that the U.S. government hasencouraged others to emulate." However, the report stated that the growing economic integration between ChinaandHong Kong has presented new challenges to ensure effective compliance with export control regimes, and notedthatover the past two years, inspections have uncovered an increase in instances of illegal re-exports of U.S. dual-usetechnology to China. Hong Kong and U.S. officials have agreed to boost cooperation on the sharing of licensingandenforcement information and to education the Hong Kong public of export control laws. (8) IPR Protection. Over the past few years, the United States has pressed Hong Kong to improve its IPR protection regime. From April 1997 to February 1999, Hong Kong wasdesignated by U.S. Trade Representative (USTR) under Special 301 , (a provision of U.S. trade lawdealing withcountries that violate U.S. IPR) as a watch list country due to the widespread distribution and retail salein Hong Kongof pirated compact discs. (9) Hong Kong was removedfrom the Special 301 watch list after the USTR determined thatHong Kong had made significant improvements to its legal regime and enforcement efforts. The 2001 and 2002Special 301 reports listed Hong Kong as one of several trading partners in which progress in protection of IPR hadbeen made. The USTR's 2003 IPR report praised the Hong Kong government for requiring government agenciestouse only legitimate software and for its commitment to halt optical media piracy. The 2003 State Department reportstated that Hong Kong had "shut down virtually all large-scale illicit manufacturing lines," but noted deficienciesintwo areas: commercial end-use piracy and patent projection for pharmaceuticals. (10) Several international economic forecasting organizations contend that the long-term prospects for Hong Kong's economic future remain relatively positive, provided that it continues to employ free trade, market-oriented policies,and maintains its autonomy from mainland China. (11) The Economist Intelligence Unit projects that Hong Kong'seconomy will grow by 4.7% in 2005 and 3.6% in 2005, while Global Insight projects real GDP growthat 4.9% and4.4%, respectively. (12) China's accession to the WTO (which occurred in December 2001) poses both opportunities and challenges to HongKong's economy. On the one hand, the removal of trade and investment barriers by China will likely significantlyboost Hong Kong trade with, and investment in, the Mainland. Hong Kong is already by far the largest investor inChina (and China is the largest investor in Hong Kong), and hence is likely to be in the best position to takeadvantageof a more open Chinese market. In addition, China's WTO accession is expected to sharply increase its trade flows,and much of that increased trade will likely take place via Hong Kong. (13) On the other hand, a more open Chinesemarket could diminish Hong Kong's role as a middleman for foreign firms wanting to do business with theMainland,especially if foreign investors believe that the rule of law, rather than "connections," will be the primary factorgoverning business relations in China. Hong Kong's economy could also be negatively affected if China and Taiwandecide to establish direct trade links, which would likely reduce the level of trade that takes place via Hong Kong. (14)

Hong Kong is described by many observers as having the world's freesteconomy due to its low tax, free trade, and strong rule of law policies. Hong Kong is an important U.S. tradingpartnerand serves as a gateway for many U.S. companies doing business in China. For those reasons, the continuedeconomicautonomy of Hong Kong is of concern to Congress, as are a variety of trade issues such as the effectiveness of HongKong's export control regime on dual-use technologies, and protection of U.S. intellectual property rights. China. This report will be updated as events warrant.

RS21727 -- Sensitive Security Information (SSI) and Transportation Security: Background andControversies February 5, 2004 On November 16, 2001, 63 days after the attacks on the World Trade Center and the Pentagon, Congress passed the Aviation andTransportation Security Act (ATSA); and the President signed it into law on November 19, 2001. (1) Congress enacted ATSA toincrease aviation security after the September 11 terrorist attacks. Under ATSA, Congress created theTransportation SecurityAdministration (TSA) and authorized the agency to make improvements in the country's transportation security. (2) Based on thisauthority, the Under Secretary of Transportation for Security transferred authority for the existing Federal AviationAdministrationregulations, (3) which include SSI, to the TransportationSecurity Administration (4) on February 22, 2002. (5) The TSA incorporatedthese regulations into its Transportation Security Regulations (TSRs). The TSRs contain rules on administration, procedure, and security for air, land, and maritime transportation. Subchapter A, titled"Administrative and Procedural Rules," contains Part 1520, which addresses Sensitive Security Information (SSI). The FederalRegister notice on the regulations describes or defines SSI as including "information about security programs,vulnerabilityassessments, technical specifications of certain screening equipment and objects used to test screening equipment... and otherinformation." (6) This definition is spelled out in moredetail in 49 C.F.R. 1520.7, which is summarized below. Section 1520.7(a) protects any security program "that relates to United States mail to be transported byair." Section 1520.7(b) through (d) covers security directives and information circulars, selection criteriaused in thesecurity screening process, and security contingency plans and/or instructions pertaining to those plans. Section 1520.7(e) through (g) relates to any technical specification of any device or equipment usedfor securitycommunications, screening, or "detecting deadly or dangerous weapons," including an "explosive, incendiary, ordestructivesubstance." Section 1520.7(h) covers the release of information that TSA "has determined may reveal a systemicvulnerability of the aviation system, or a vulnerability of aviation facilities, to attack." Section 1520.7(i) protects "information [released by TSA] concerning threats againsttransportation." Section 1520.7(j) protects "details of aviation security measures." Section 1520.7(k) and (l) relates to any "information" TSA has prohibited from disclosure under thecriteria of49 U.S.C. 40119, or any draft, proposed, or recommended change to the information or records identified in thissection. Section 1520.7(m) through (p) covers locations, tests, and scores of tests on all screening methods orequipment. Section 1520.7(q) protects "images and descriptions of threat images for threat projectionsystems." Section 1520.7(r) relates to all Department of Transportation information on "vulnerability assessment...irrespective of mode of transportation." Section 1520.5 specifies that all airport operators, aircraft operators, foreign air carriers, indirect air carriers, applicants, and otherpersons who receive SSI must protect that information from disclosure. SSI may be exempted from disclosure underthe Freedom ofInformation Act. (7) The regulations are intended to reduce the risk of vital security information reaching the wrong hands and resulting in another terroristattack. The regulations governing SSI, however, have raised a number of concerns about the management of suchinformation and theaccountability of governmental agencies. This section highlights four cases that have surfaced over the last twoyears, in which theSSI regulations were applied to withhold information. The cases deal with airport security procedures, employeeaccountability,passenger screening, and airport secrecy agreements. In January 2003, the Dallas/Fort Worth Airport experienced an early controversy involving TSA security procedures. The incidentinvolved a federal screener who permitted a man to pass through security after his luggage tested positive for anexplosive. Theairport was closed for over an hour while TSA and law enforcement authorities searched for the individual. Afterthe incident, a TSAspokesman stated that the agency was "not going to be issuing any kind of report because anything beyond the mostgeneral ofcomments would lead us into areas which concern sensitive security information." (8) The use of SSI rules to prevent the release ofinformation has raised the concerns of some experts. For example, Jane E. Kirtley, director of The Silha Center forthe Study ofMedia Ethics and Law at the School of Journalism and Mass Communication at the University of Minnesota hasstated, "The publichas a burning interest in knowing how secure the nation's airports are. It is not satisfactory in a democracy to saywhen an incidenthappens that we're taking care of the problems." (9) On the other hand, some have argued that the release of certain information couldharm the public. The TSA has stated "if [SSI] information were to fall into the wrong hands it could be used toattack thetransportation system." (10) A second controversy arose when the U.S. attorney's office in Miami dropped a criminal case against a former federal baggagescreener who was charged with stealing from passengers in November 2003. (11) The U.S. attorney's office withdrew the chargesbecause a federal judge determined that the defense could cross-examine the prosecution's witnesses, which couldraise the possiblyof disclosing SSI about TSA's security and training procedures. The problem with the decision of the JusticeDepartment accordingto a TSA spokeswoman, is that "future prosecutions of dishonest agency employees would be hamstrung by thesame dilemma thatled to the dismissal of the indictment." (12) Thepublic defender in the case suggested that "prosecutors could have drop[ped] the partof the conspiracy charge relating to the sensitive security information ... and [moved] forward with the other twounderlying offenses-- breaking into baggage and stealing their contents." (13) The U.S. attorney's office and TSA, however, decided the risk of releasingSSI was too great. A third controversy involves the Computer Assisted Passenger Pre-Screening system (CAPPS). In the summer of 2004, TSA plans toupdate the system and call it CAPPS II. (14) Theoriginal CAPPS system attempted to screen passengers by "focusing primarily ontravel patterns and financial transactions." (15) Thenew system, in addition to monitoring travel records, will check various personalrecords of passengers trying to make reservations. These records, combined with "CIA, FBI, and other intelligencedatabases", willbe used to select certain travelers for additional screening. Then-TSA Administrator Loy stated, "I don't think thereis a single projectthat will do more potential good for aviation security." The system will be able "to trace would-be terrorists, evenif they leadapparently unremarkable lives." (16) Some do notagree the system will function as TSA believes. (17) David Sobel of the ElectronicPrivacy Information Center thinks that CAPPS II is a "Catch-22" that will "present enormous challenges for clearingnames -- andan enormous temptation for misuse." For example, if a person is flagged by the system, Sobel says they "are goingto want to know,'Why am I pulled aside every time I take a flight?'" Since the system will contain SSI, the answer will be "Sorry, wecan't tell you." (18) TSA officials point out that "a passenger advocate and appeals process" will be available when the system goesonline. (19) A fourth SSI controversy involves a security agreement between airport administrations, local police departments, and TSA officials. The agreements prohibit the local police from commenting on any incident involving SSI that has occurred onairport propertywithout authorization by the proper TSA officials. Failure to comply with the agreement may mean the loss offinancial aid forairport security. (20) A partial copy of one of theagreements contains the following two sections. A copy of any summons, complaint, subpoena or other legal document served upon alocal law enforcement organization that is related to a local proceeding that seeks records or testimony containingsensitive securityinformation shall be promptly forwarded to the ... Transportation Security Administration fieldcounsel. All media releases and other contact with or by media specific to the security directive, ...the airport security program, or other subsequent or superceding regulations or documents regarding lawenforcement services foraviation security shall be coordinated with the federal security director or the federal security director's designee. All media releasesand other contact with or by media on the terms and conditions of this reimbursement agreement shall becoordinated with thecontracting officer. (21) When these agreements were initially designed, many local officials reportedly were not sure of the exact level of compliance theyrequired. For example, police officials in Des Moines, IA, thought that they might be prevented from discussingwith the public "abomb or shooting incident at the airport." The local police chief, William McCarthy, reasoned that the "agreementmay even preventofficers from 'reporting the arrest of a drunk at the airport'" or testifying in court without clearance from TSA. (22) Only after Iowa Senators Charles Grassley and Tom Harkin became involved in the matter was the agreement clarified. In a letter toSenator Grassley, TSA Administrator James Loy explained that the agreement was not a "gag order" for local police,but wasintended to inform TSA officials about incidents that occur on airport property. In addition, Loy stated "that lawenforcement officerswho are asked to testify about purely factual matters that do not reveal sensitive [security] information may do sowithout consultationwith the federal government." The TSA letter also explained that copies of the agreement could be made publicexcept for parts withsensitive security information, such as "Appendix A, which concerns the amount of airport security." (23) Currently, the Des Moines issue has been resolved between TSA and local police. Lt. David Huberty of the Des Moines policedepartment has stated that, since the clarification of the agreement, SSI has not been an issue. In fact, local policeand TSA officialshave a good working relationship. The close interaction between local and federal authorities in Des Moines,according to Lt.Huberty, has provided the airport-assigned police officers with a working understanding of SSI. (24) For example, incidents that occuron airport grounds outside the terminal are not generally reported to TSA officials since local police understand thatthey do notinvolve SSI. Incidents that do occur within the terminal or at checkpoints, however, are treated differently in thatTSA officials areinvolved and local police will write up more generalized descriptions of the incident so that SSI is not revealed. (25) In addition, a TSAattorney will provide a training seminar for the Des Moines police department to better understand the SSIregulation. (26) The implementation of SSI regulations has created a number of controversies for TSA. The agency has worked to alleviate theseconcerns, but some experts are not convinced. They are still alarmed that SSI is currently "muzzling debate ofsecurity measures," (27) and although they acknowledge that some information should be kept secret, "the refusal to release otherinformation seemsoverzealous." For example, according to Paul S. Hudson of the Aviation Consumer Action Project, at a recentlyheld aviationmeeting, information in one report was labeled SSI and prevented participants from having "any exchange ofviews." (28) For some,the issue being raised is the need for security versus the public's right to know. This issue, Kirtley contends, comesdown to whether"our openness was what made us so vulnerable." (29) SSI justifications are not made on those grounds, but the TSA warns that SSIwould "be damaging to the security of the [airline] industry and could well be damaging to the security of the UnitedStates were it tobe publicly disclosed." (30) SSI will continually bediscussed in a post 9/11 environment where the TSA has to weigh its duty toprovide air, land, and maritime security against the need to keep the public informed and maintain constitutionalrights andsafeguards.

In November 2003, the U.S. attorney's office in Miami dropped a criminal case againstaformer federal baggage screener charged with stealing from a passenger's luggage. The case was dropped becauseprosecutors fearedthat sensitive security information (SSI) would have to be disclosed. At issue is the ability of the TransportationSecurityAdministration (TSA) to prosecute other dishonest agency employees in the future. Will the same dilemma that ledto the dismissalof this particular case occur again? In recent months, this and other important issues relating to SSI have beenraised. This reportprovides a brief background on SSI regulation, an overview of the current policy issues, and a description of thecriticism of, andsupport for, SSI policy. This report will be updated as events warrant.

Although the advent of digital technology has brought about higher quality for audio and video content, creators of such content and policy makers are concerned that, without adequate content protection measures, unlawful digital copying and distribution of copyrighted material may endanger the viability of the motion picture, television, and music industries. As a result, technological measures have been proposed that are aimed at protecting copyrighted media from, among other things, unauthorized reproduction, distribution, and performance. One of these content protection schemes is the Audio Protection Flag (APF or "audio flag"), which would protect the content of digital radio transmissions against unauthorized dissemination and reproduction. To understand digital audio, an explanation of how analog and digital technology differ is helpful. Analog technology is characterized by an output system where the signal output is always proportional to the signal input. Because the outputs are analogous, the word "analog" is used. An analog mechanism is one where data is represented by continuously variable physical quantities like sound waves or electricity. Analog audio technologies include traditional radio (AM/FM radio), audio cassettes, and vinyl record albums. These technologies may deliver imprecise signals and background noise. Thus, the duplication of analog audio often erodes in quality over time or through "serial copying" (the making of a copy from copies). The term "digital" derives from the word "digit," as in a counting device. Digital audio technologies represent audio data in a "binary" fashion (using 1s and 0s). Rather than using a physical quantity, a digital audio signal employs an informational stream of code. Consequently, the code from a digital audio source can be played back or duplicated nearly infinitely and without any degradation of quality. Digital audio technologies include digital radio broadcasts (such as high-definition radio, or "HD Radio"), satellite radio, Internet radio, compact discs, and MP3-format music files. With the advent of digital technology, content providers have been interested in using content security measures to prevent unauthorized distribution and reproduction of copyrighted works. These technology-based measures are generally referred to as "digital rights management," or DRM. As the name suggests, DRM applies only to digital media (which would include analog transmissions converted into digital format). Examples of DRM include Internet video streaming protections, encrypted transmissions, and Content Scrambling Systems (CSS) on DVD media. In 1998, Congress passed the Digital Millennium Copyright Act (DMCA). The DMCA added a new chapter 12 to the Copyright Act, 17 U.S.C. §§ 1201-1205, entitled "Copyright Protection and Management Systems." Section 1201(a)(1) prohibits any person from circumventing a technological measure that effectively controls access to a copyrighted work. This newly created right of "access" granted to copyright holders makes the act of gaining access to copyrighted material by circumventing DRM security measures, itself, a violation of the Copyright Act. Prohibited conduct includes descrambling a scrambled work, decrypting an encrypted work, and avoiding, bypassing, removing, deactivating, or impairing a technological measure without the authority of the copyright owner. In addition, the DMCA prohibits the selling of products or services that circumvent access-control measures, as well as trafficking in devices that circumvent "technological measures" protecting "a right" of the copyright owner. In contrast to copyright infringement, which concerns the unauthorized or unexcused use of copyrighted material, the anti-circumvention provisions of the Copyright Act prohibit the design, manufacture, import, offer to the public, or trafficking in technology produced to circumvent copyright encryption programs, regardless of the actual existence or absence of copyright infringement. One form of DRM technology that may be used to protect the content of digital audio transmissions from unauthorized distribution and reproduction is the "audio flag." The flag has two primary aspects: a physical component and rules and standards that define how devices communicate with flagged content transmitted from digital audio sources. For instance, a satellite digital audio radio stream of a particular broadcast music program could contain an audio flag (the mechanism) that prohibits any reproduction or further dissemination of the broadcast (the standard). The audio flag, according to its proponents, would operate in a similar manner as the broadcast video flag that has been proposed for digital television transmissions. Functionally, the audio flag system would work by embedding a special signal within transmitted digital audio data, informing the receiving device of certain copyright restrictions on the use of the content by the listener—for example, limiting the number of copies of a recording that the user may make. Those advocating the use of an audio flag for digital radio programming include musicians, songwriters, record labels, and other providers of audio content that could be broadcast to the public through digital transmissions. The Copyright Act bestows several exclusive rights upon the creator of a work (or the individual having a legal interest in the work) that permit the copyright holder to control the use of the protected material. These statutory rights allow a copyright holder to do or to authorize, among other things, reproducing the work, distributing copies or phonorecords of the work, and publicly performing the work. Parties holding a copyright interest in content transmitted through digital radio services are interested in ensuring that such content is protected from unauthorized reproduction and distribution by the broadcast recipient; the audio flag, in their view, is an effective way to achieve this objective and enforce their rights. Proponents of audio flag technology also suggest that it would help prevent certain digital radio services (like satellite radio) from becoming a music download service through the creation of recording and storage devices that allow for further reproduction and distribution of audio broadcasts. Some copyright holders argue that these broadcasters must either pay additional royalties for the privilege of offering what appears to be a music download service, or comply with an audio flag regime that will effectively prevent broadcasters from allowing the recording in the first place. Critics of the audio flag proposal raise concerns that such a government-mandated measure may stifle technological innovation and restrict the rights of consumers to record broadcast radio—conduct that, according to audio flag opponents, is protected by the Audio Home Recording Act of 1992, as well as "fair use" principles in copyright law. The introduction of the Digital Audio Tape (DAT) by Sony and Philips in the mid-1980s prompted passage of the Audio Home Recording Act (AHRA) in 1992. A DAT recorder can record CD-quality sound onto a specialized digital cassette tape. Through the Recording Industry Association of America (RIAA), sound recording copyright holders turned to Congress for legislation in response to this technology, fearing that a consumer's ability to make near-perfect digital copies of music would displace sales of sound recordings in the marketplace. The AHRA requires manufacturers of certain types of digital audio recording devices to incorporate into each device copyright protection technology—a form of DRM called the Serial Copying Management System (SCMS), which allows the copying of an original digital work, but prevents "serial copying" (making a copy from a copy). In exchange, the AHRA exempts consumers from copyright infringement liability for private, noncommercial home recordings of music for personal use. Manufacturers of audio equipment, sellers of digital recording devices, and marketers of blank recordable media are also protected from contributory infringement liability upon payment of a statutory royalty fee—royalties that are distributed to the music industry. Opponents of the audio flag contend that the AHRA created a "right" for consumers to make digital recordings, a practice that might be limited or even effectively revoked by audio flag mandates. The doctrine of "fair use" in copyright law recognizes the right of the public to make reasonable use of copyrighted material, in certain instances, without the copyright holder's consent. Because the language of the fair use statute is illustrative, determinations of fair use are often difficult to make in advance—it calls for a "case-by-case" analysis by the courts. However, the statute recognizes fair use "for purposes such as criticism, comment, news reporting, teaching, scholarship, or research." A determination of fair use by a court considers four factors: (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work. In the context of digital music downloads and transmissions, some alleged copyright infringers have attempted to use the doctrine of fair use to avoid liability for activities such as sampling, "space shifting," and peer-to-peer (P2P) file sharing. These attempts have not been very successful, as several federal appellate courts have ruled against the applicability of the fair use doctrine for these purposes. No litigation has yet settled the extent to which home recording of an audio broadcast (whether transmitted through digital or analog means) is a legitimate fair use. Critics of the audio flag also suggest that it places technological, financial, and regulatory burdens that may stifle the innovation behind digital audio technologies. They argue that the audio flag may limit the functionality of digital audio transmissions in favor of analog transmissions—thereby negatively affecting the digital audio marketplace. Legislation that expressly delegates authority to the FCC to mandate audio flags for digital radio transmissions would appear to be necessary before the FCC could take such steps, in the wake of a decision by the U.S. Court of Appeals for the District of Columbia Circuit in 2005 that vacated an FCC order requiring digital televisions to be manufactured with the capability to prevent unauthorized redistributions of digital video content. The court ruled that the FCC lacked the statutory authority to establish such a broadcast video flag system for digital television under the Communications Act of 1934. Two bills were introduced in the 109 th Congress that would have delegated such authority; these may represent legislative approaches that could be taken in the 110 th Congress. This bill would have empowered the FCC to promulgate regulations governing the licensing of "all technologies necessary to make transmission and reception devices" for digital broadcast and satellite radio. The bill directed that any such digital audio regulation shall prohibit unauthorized copying and redistribution of transmitted content through the use of a broadcast flag or similar technology, "in a manner generally consistent with the purposes of other applicable law." Title IV, Subtitle C of S. 2686 would have granted the FCC the authority to issue "regulations governing the indiscriminate redistribution of audio content with respect to—digital radio broadcasts, satellite digital radio transmissions, and digital radios." It also directed the FCC to establish an advisory committee known as the "Digital Audio Review Board," composed of representatives from several industries, including information technology, software, consumer electronics, radio and satellite broadcasting, audio recording, music publishing, performing rights societies, and public interest groups. The Board would have been responsible for drafting a proposed regulation that reflects a consensus of the members of the Board and that is "consistent with fair use principles," although the bill did not define whether such "fair use" has the same connotation as that used in the copyright law.

Protecting audio content broadcasted by digital and satellite radios from unauthorized dissemination and reproduction is a priority for producers and owners of those copyrighted works. One technological measure that has been discussed is the Audio Protection Flag (APF or "audio flag"). The audio flag is a special signal that would be imbedded into digital audio radio transmissions, permitting only authorized devices to play back copyrighted audio transmissions or allowing only limited copying and retention of the content. Several bills introduced in the 109th Congress would have granted the Federal Communications Commission (FCC) authority to promulgate regulations to implement the audio flag. The parties most likely affected by any audio flag regime (including music copyright owners, digital radio broadcasters, stereo equipment manufacturers, and consumers) are divided as to the anticipated degree and scope of the impact that a government-mandated copyright protection scheme would have on the "fair use" rights of consumers to engage in private, noncommercial home recording. Critics of the audio flag proposal are concerned about its effect on technological innovation. However, proponents of the audio flag feel that such digital rights management (DRM) technology is needed to thwart piracy or infringement of intellectual property rights in music, sports commentary and coverage, and other types of copyrighted content that is transmitted to the public by emerging high-definition digital radio services (HD Radio) and satellite radio broadcasters. This report provides a brief explanation of the audio flag and its relationship to digital audio radio broadcasts, and summarizes legislative proposals considered by the 109th Congress, including H.R. 4861 (Audio Broadcast Flag Licensing Act of 2006) and S. 2686 (Digital Content Protection Act of 2006), that would have authorized its adoption. Although not enacted, these two bills represent approaches that may be taken in the 110th Congress to authorize the use of an audio flag for protecting broadcast digital audio content.

The Conservation Reserve Program began in 1985 as a program designed to remove highly erodible croplands from current crop production. It was established by the Food Security Act of 1985 and has been expanded and extended by subsequent legislation. The program provides for "annual rental payments" to land owners or operators who agree to enroll their qualifying land in the program. Enrollment requires them to remove land from production and, generally, refrain from using the land commercially. They must also follow an approved conservation plan. In return, they receive annual payments. These payments are referred to as "rent" in the statute, regulations, and contracts. However, from the beginning, the Internal Revenue Service (IRS) has treated this income as self-employment income for those who continued to farm other land connected to the CRP land. Although the IRS initially treated the payments as rental income for those not otherwise engaged in farming, and, therefore, not subject to self-employment tax, that treatment has changed over the years. In 2006, the IRS issued a proposed revenue ruling that would treat virtually all CRP annual payments as self-employment income. Net self-employment income is subject to a 15.3% self-employment tax. Since CRP annual payments are also subject to income tax, the total tax an individual must pay on CRP payments is generally between about 25% and 56% of the total received if the CRP payments are subject to self-employment tax. Several bills have been introduced in recent Congresses to completely exclude CRP payments from self-employment income. Most were simply referred to committee, and no hearings were held. During the first session of the 110 th Congress, two similar bills were introduced. Again, they were referred to committee. However, in S. 2242 , the Heartland, Habitat, Harvest, and Horticulture Act of 2007, the issue was approached in a different manner. This approach has been adopted in H.R. 2419 —the "Farm Bill." Rather than exempting all CRP payments from self-employment tax, while still including them for income tax, the Farm Bill provides two alternatives that would provide some relief to taxpayers. The first offers an optional tax credit in lieu of CRP payments. The second explicitly exempts CRP payments from self-employment tax for certain taxpayers. CRP annual payments would remain subject to income tax for all recipients. The credit would be subject to neither income nor self-employment taxes. As proposed in the Farm Bill, participants in the CRP could elect to receive an annual tax credit rather than receiving the annual rental payments. This credit would be subject to neither income nor self-employment tax. Those who did not elect to receive the credit would continue to receive the annual rental payments. The amount of the credit would be the same as the amount of the annual rental payment each electing participant would otherwise have received. The credit could be used to offset current year's taxes, but would not be refundable. However, any excess could be carried forward and used against tax in future years. The credit would not be allowed as either an original credit or as a carryforward in any fiscal year after FY2012. Early termination of a CRP contract generally involves repayment of all payments received from the program since the beginning of the contract. The proposed credit would be treated differently—it would be recaptured only on a prorated basis for the fiscal year in which the contract was terminated and the credit allowed. The Farm Bill would exclude CRP payments from self-employment income for those receiving regular retirement benefits from Social Security as well as those receiving Social Security disability benefits. It is silent as to the treatment of CRP payments received by all others. Given the current position of the IRS, it seems likely that this silence would result in these payments being considered self-employment income for all others. The committee report for the Heartland, Habitat, Harvest, and Horticulture Act of 2007, in addressing that act's identical provision, stated, "The treatment of conservation reserve program payments received by other entities is not changed." A tax credit reduces taxes dollar-for-dollar. Most tax credits are not refundable and no current tax credit is subject to federal income tax or self-employment tax. In this regard, the proposed credit is no different. It is different than most credits, however, because it can be carried forward to a subsequent tax year if not used in full in the current one. Those opposing the proposed credit may argue that it is regressive in nature in that it will provide the most benefit to those whose income is highest. This benefit could occur in two different ways. Since the credit would not be subject to either income or self-employment taxes, those in the higher tax brackets would receive a greater tax benefit from nontaxability than would those in lower tax brackets. Additionally, those with higher income would be more likely to have tax liabilities that equal or exceed the credit amount. Because of the time value of money, those who are able to fully use the credit will receive a greater value from the credit than those who must carry part of the credit forward to a subsequent year. Those in favor of the credit may point out that no one is forced to take the credit and no one is prevented from doing so. This allows all parties to examine their own situations and determine whether the credit is more beneficial to them than is the direct annual payment. Arguably, even those who cannot use the credit in full in the first year may still derive more net benefit from the credit than they would from the direct payment since they would have to pay income tax on that direct payment and in many cases would also have to pay self-employment tax. Thus, even those in the 10% marginal tax bracket could realize greater benefit from the credit than direct payment if they were able to use at least 75% of the credit in the initial year. Other arguments in favor of the credit may come from those who believe that the IRS's treatment of CRP payments as self-employment income is wrong or has been expanded too far. They may also argue that the credit provides an incentive needed to encourage enrollment in the CRP. The committee report indicates that the reason for the change in the law is to provide additional incentives "to encourage eligible producers to establish long-term, resource conserving covers on eligible farmland." On the other hand, the effect on the credit if a contract is terminated early is rather mild when compared to the total repayment requirement for regular CRP payments; so it is arguable that the credit might encourage people to enroll, but might not encourage them to remain enrolled long term. Some may argue that there is no need for further incentives since there has been a competitive bidding process under which applicants have tried to assure acceptance of their bids by offering their land in return for annual payments below the allowed rental values. However, rising commodity prices may reduce interest in participating in the CRP. Unlike earlier proposed legislation that would have excluded all CRP payments from self-employment income, the Farm Bill would exclude only those payments received by retirees and the disabled. Even these would be limited to those individuals who were receiving benefits from either regular retirement or disability under the Social Security Act. Both regular retirement benefits and disability benefits received from Social Security have links to other "earned income" received. In the case of regular retirement benefits received prior to reaching "full retirement" age, the benefits are reduced by $1 for every $2 by which the recipient's earned income exceeds a statutory annual limit. Receipt of disability benefits from Social Security is predicated on a disability that prevents the recipient from any work that would result in earned income. If CRP payments were excluded from the definition of income subject to self-employment tax for those receiving regular Social Security retirement benefits, some might argue that many recipients would receive a double benefit: they would not be required to pay self-employment tax on the income, and the income would not reduce their benefits. A further argument might be made that those receiving Social Security disability benefits would also be receiving a double benefit: they would not be required to pay self-employment tax on the income and the income could not be considered evidence of an ability to engage in substantial gainful activity. In each case, Social Security beneficiaries would be exempt from funding the program under which they receive benefits. Others may argue that excluding CRP payments from self-employment income for Social Security beneficiaries complies with the rationale behind the IRS's position in an early private letter ruling —those who are retired are not in the trade or business of farming simply by virtue of having land enrolled in the CRP. The committee report sheds no light on the considerations behind this provision in the Farm Bill. It says only that "[t]he Committee believes that the correct measurement of income for [self-employment tax] purposes in the cases of retired or disabled individuals does not include conservation reserve program payments." The report does not explain why the payments are specifically excluded only for retirees and the disabled, nor does it explain why they are specifically excluded only for those receiving benefits from Social Security. For FY2008 through FY2012, this provision, if enacted, would assure CRP participants of a choice in the taxation of their CRP benefits. They could choose the nonrefundable credit and shield their benefits from both income and self-employment tax, but potentially postpone or even eliminate some of the benefit if their tax liability does not equal or exceed their credit. They could choose to receive full payment benefits each year, pay income and self-employment tax on those benefits, and possibly generate future Social Security benefits. The bill does not, however, assure participants a similar choice beyond 2012, nor does it clarify whether CRP annual payments generally should be treated as self-employment income—an issue that has not yet been addressed by Congress.

The Internal Revenue Service considers payments received under the Conservation Reserve Program (CRP) self-employment income even though they are called "annual rental payments," and rental income from real property is generally excluded from self-employment income. Bills have been repeatedly introduced before Congress to statutorily exclude the CRP payments from self-employment tax, but these bills generally have died in committee. In the 110 th Congress, the Senate passed H.R. 2419 , which contains a provision that would exclude the payments from self-employment income in some, but not all, cases. Unlike most previously introduced legislation, it would also provide a tax credit as an optional alternative to the current annual rental payments. This credit would be subject to neither income tax nor self-employment tax.

Twelve western states assess royalties on the hardrock mining operations on state lands. In addition, each of these states, except Oregon, assesses taxes that function like a royalty, which we refer to as functional royalties, on the hardrock mining operations on private, state, and federal lands. To aid in the understanding of royalties, including functional royalties, the royalties are grouped as follows: Unit-based is typically assessed as a dollar rate per quantity or weight of mineral produced or extracted, and does not allow for deductions of mining costs. Gross revenue is typically assessed as a percentage of the value of the mineral extracted and does not allow for deductions of mining costs. Net smelter returns is assessed as a percentage of the value of the mineral, but with deductions allowed for costs associated with transporting and processing the mineral (typically referred to as mill, smelter, or treatment costs); however, costs associated with extraction of the mineral are not deductible. Net proceeds is assessed as a percentage of the net proceeds (or net profit) of the sale of the mineral with deductions for a broad set of mining costs. The particular deductions allowed vary widely from state to state, but may include extraction costs, processing costs, transportation costs, and administrative costs, such as for capital, marketing, and insurance. Royalties, including functional royalties, often differ depending on land ownership and the mineral being extracted, as the following illustrates: For private mining operations conducted on federal, state, or private lands, Arizona assesses a net proceeds functional royalty of 1.25 percent on gold mining operations, and an additional gross revenue royalty of at least 2 percent for gold mining operations on state lands. Nine of the 12 states assess different types of royalties for different types of minerals. For example, Wyoming employs three different functional royalties for all lands: (1) net smelter returns for uranium, (2) a different net smelter returns for trona—a mineral used in the production of glass, and (3) gross revenue for all other minerals. Furthermore, the royalties the states assess often differ in the allowable exclusions, deductions, and limitations. For example, in Colorado, a functional royalty on metallic mining excludes gross incomes below $19 million, whereas in Montana a functional royalty on metallic mining is applied on all mining operations after the first $250,000 of revenue. Finally, the actual amount assessed for a particular mine may depend not only on the type of royalty, its rate, and exclusions, but also on such factors as the mineral’s processing requirements, mineral markets, mine efficiency, and mine location relative to markets, among other factors. Table 1 shows the types of royalties, including functional royalties, that the 12 western states assess on all lands, including federal, state, and private lands, as well as the royalties assessed only on state lands. It has been difficult to determine the number of abandoned hardrock mine sites in the 12 western states, and South Dakota, in part because there is no generally accepted definition for a hardrock mine site. The six studies we reviewed relied on the different definitions that the states used, and estimates varied widely from study to study. Furthermore, BLM and the Forest Service have had difficulty determining the number of abandoned hardrock mines on their lands. In September 2007, the agencies reported an estimated 100,000 abandoned mine sites, but we found problems with this estimate. For example, the Forest Service had reported that it had approximately 39,000 abandoned hardrock mine sites on its lands. However, this estimate includes a substantial number of non-hardrock mines, such as coal mines, and sites that are not on Forest Service land. At our request, the Forest Service provided a revised estimate of the number of abandoned hardrock mine sites on its lands, excluding coal or other non-hardrock sites. According to this estimate, the Forest Service may have about 29,000 abandoned hardrock mine sites on its lands. That said, we still have concerns about the accuracy of the Forest Service’s recent estimate because it identified a large number of sites with “undetermined” ownership, and therefore these sites may not all be on Forest Service lands. BLM has also acknowledged that its estimate of abandoned hardrock mine sites on its lands may not be accurate because it includes sites on its lands that are of unknown or mixed ownership (state, private, and federal) and a few coal sites. In addition, BLM officials said that the agency’s field offices used a variety of methods to identify sites in the early 1980s, and the extent and quality of these efforts varied greatly. For example, they estimated that only about 20 percent of BLM land has been surveyed in Arizona. Furthermore, BLM officials said that the agency focuses more on identifying sites closer to human habitation and recreational areas than on identifying more remote sites, such as in the desert. Table 2 shows the Forest Service’s and BLM’s most recent available estimates of abandoned mine sites on their lands. To estimate abandoned hardrock mine sites in the 12 western states and South Dakota, we developed a standard definition for these mine sites. In developing this definition, we consulted with mining experts at the National Association of Abandoned Mine Land Programs; the Interstate Mining Compact Commission; and the Colorado Department of Natural Resources, Division of Reclamation, Mining and Safety, Office of Active and Inactive Mines. We defined an abandoned hardrock mine site as a site that includes all associated facilities, structures, improvements, and disturbances at a distinct location associated with activities to support a past operation, including prospecting, exploration, uncovering, drilling, discovery, mine development, excavation, extraction, or processing of mineral deposits locatable under the general mining laws. We also asked the states to estimate the number of features at these sites that pose physical safety hazards and the number of sites with environmental degradation. Using this definition, states reported to us the number of abandoned sites in their states, and we calculated that there are at least 161,000 abandoned hardrock mine sites in their states. At these sites, on the basis of state data, we estimated that at least 332,000 features may pose physical safety hazards, such as open shafts or unstable or decayed mine structures. Furthermore, we estimated that at least 33,000 sites have degraded the environment, by, for example, contaminating surface and ground water or leaving arsenic- contaminated tailings piles. Table 3 shows our estimate of the number of abandoned hardrock mine sites in the 12 western states and South Dakota, the number of features that pose significant public health and safety hazards, and the number of sites with environmental degradation. As of November 2007, hardrock mining operators had provided financial assurances valued at approximately $982 million to guarantee the reclamation cost for 1,463 hardrock mining operations on BLM land in 11 western states, according to BLM’s Bond Review Report. The report also indicates that 52 of the 1,463 hardrock mining operations had inadequate financial assurances—about $28 million less than needed to fully cover estimated reclamation costs. We determined, however, that the financial assurances for these 52 operations should be more accurately reported as about $61 million less than needed to fully cover estimated reclamation costs. Table 4 shows total operations by state, the number of operations with inadequate financial assurances, the financial assurances required, BLM’s calculation of the shortfall in assurances, and our estimate of the shortfall, as of November 2007. The $33 million difference between our estimated shortfall of nearly $61 million and BLM’s estimated shortfall of nearly $28 million occurs because BLM calculated its shortfall by comparing the total value of financial assurances in place with the total estimated reclamation costs. This calculation approach has the effect of offsetting the shortfalls in some operations with the greater than required financial assurances of other operations. However, the financial assurances that are greater than the amount required for an operation cannot be transferred to an operation with inadequate financial assurances. In contrast, we totaled the difference between the financial assurance in place for an operation and the financial assurances needed for that operation to determine the actual shortfall for each of the 52 operations for which BLM had determined that financial assurances were inadequate. BLM’s approach to determining the adequacy of financial assurances is not useful because it does not clearly lay out the extent to which financial assurances are inadequate. For example, in California, BLM reported that, statewide, the financial assurances in place were $1.5 million greater than required as of November 2007, suggesting reclamation costs are being more than fully covered. However, according to our analysis of only those California operations with inadequate financial assurances, the financial assurances in place were nearly $440,000 less than needed to fully cover reclamations costs. BLM officials agreed that it would be valuable for the Bond Review Report to report the dollar value of the difference between financial assurances in place and required for those operations where financial assurances are inadequate and have taken steps to modify LR2000. BLM officials said that financial assurances may appear inadequate in the Bond Review Report when expansions or other changes in the operation have occurred, thus requiring an increase in the amount of the financial assurance; BLM’s estimate of reclamation costs has increased and there is a delay between when BLM enters the new estimate into LR2000 and when the operator provides the additional bond amount; and BLM has delayed updating its case records in LR2000. Conversely, hardrock mining operators may have financial assurances greater than required for a number of reasons; for example, they may increase their financial assurances because they anticipate expanding their hardrock operations. In addition, according to the Bond Review Report, there are about 2.4 times as many notice-level operations—generally, operations that cause surface disturbance on 5 acres or less—as there are plan-level operations on BLM land—generally operations that disturb more than 5 acres (1,033 notice-level operations and 430 plan-level operations). However, about 99 percent of the value of financial assurances is for plan-level operations, while 1 percent of the value is for notice-level operations. While financial assurances were inadequate for both notice- and plan-level operations, a greater percentage of plan-level operations had inadequate financial assurances than did notice-level operations—6.7 percent and 2.2 percent, respectively. Finally, over one-third of the number of all hardrock operations and about 84 percent of the value of all financial assurances are for hardrock mining operations located in Nevada. Mr. Chairman, this concludes my prepared statement. I would be happy to respond to any questions that you or Members of the Committee may have. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this testimony. For further information about this testimony, please contact Robin M. Nazzaro, Director, Natural Resources and Environment (202) 512-3841 or Nazzaror@gao.gov. Key contributors to this testimony were Andrea Wamstad Brown (Assistant Director); Elizabeth Beardsley; Casey L. Brown; Kristen Sullivan Massey; Rebecca Shea; and Carol Herrnstadt Shulman. 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 General Mining Act of 1872 helped open the West by allowing individuals to obtain exclusive rights to mine billions of dollars worth of gold, silver, and other hardrock (locatable) minerals from federal lands without having to pay a federal royalty. However, western states charge royalties so that they share in the proceeds from various hardrock minerals extracted from their lands. For years, some mining operators did not reclaim land used in their mining operations, creating environmental and physical safety hazards. To curb further growth in the number of abandoned hardrock mines on federal lands, in 1981, the Department of the Interior's Bureau of Land Management (BLM) began requiring mining operators to reclaim BLM land disturbed by these operations, and in 2001 began requiring operators to provide financial assurances to cover reclamation costs before they began exploration or mining operations. This testimony focuses on the (1) royalties states charge, (2) number of abandoned hardrock mine sites and hazards, and (3) value and coverage of financial assurances operators use to guarantee reclamation costs. It is based on two GAO reports: Hardrock Mining: Information on Abandoned Mines and Value and Coverage of Financial Assurances on BLM Land, GAO-08-574T (Mar. 12, 2008) and Hardrock Mining: Information on State Royalties and Trends in Imports and Exports, GAO-08-849R (July 21, 2008). Twelve western states, including Alaska, that GAO reviewed assess royalties on hardrock mining operations on state lands. In addition, each of these states, except Oregon, assesses taxes that function like a royalty, which GAO refers to as functional royalties, on the hardrock mining operations on private, state, and federal lands. The royalties the states assess often differ depending on land ownership and the mineral being extracted. For example, for private mining operations conducted on federal, state, or private land, Arizona assesses a functional royalty of 1.25 percent of net revenue on gold mining operations, and an additional royalty of at least 2 percent of gross value for gold mining operations on state lands. The actual amount assessed for a particular mine may depend not only on the type of royalty, its rate, and exclusions, but also on other factors, such as the mine's location relative to markets. Over the past 10 years, estimates of the number of abandoned hardrock mine sites in the 12 western states reviewed, as well as South Dakota, have varied widely, in part because there is no generally accepted definition for a hardrock mine site. Using a consistent definition that GAO provided, these states reported the number of abandoned sites in their states. On the basis of these data, GAO estimated that there are at least 161,000 abandoned hardrock mine sites in these states, and these sites have at least 332,000 features that may pose physical safety hazards and at least 33,000 sites that have degraded the environment. According to BLM data, as of November 2007, hardrock mining operators had provided financial assurances worth approximately $982 million to guarantee reclamation costs for 1,463 hardrock mining operations on BLM land and 52 of these operations had financial assurances valued at about $28 million less than needed to fully cover estimated reclamation costs. However, GAO determined that the assurances for these 52 operations should be more accurately reported as about $61 million less than needed for full coverage. The $33 million difference between GAO's and BLM's estimated shortfalls occurs because BLM calculated its shortfall by comparing the total value of financial assurances in place with the total estimated reclamation costs. This approach effectively offsets the shortfalls in some operations with the higher than needed financial assurances of others. However, the financial assurances that are greater than the amount required for an operation cannot be transferred to an operation with inadequate financial assurances. In contrast, GAO totaled the difference between the financial assurances in place for an operation and the financial assurances needed for that operation to determine the actual shortfall for each of the 52 operations for which BLM had determined that financial assurances were inadequate. BLM has taken steps to correct the reporting problem GAO identified.

In general, there is no single, accepted, and specific definition of the term earmark for thecongressional appropriations process, nor is there a standard practice for earmarks. (1) However, for fundingprovided by Energy and Water Development (E&W) Appropriations laws to the Department ofEnergy (DOE), this report defines an earmark as "funds set aside within an account for individualprojects, locations, or institutions." In the FY2006 E&W appropriation law, earmarks were labeledas "congressionally directed projects" (2) and most often appeared in the joint explanatory statement of theconference report. (3) Accordingly, DOE budget request documents usually refer to earmarks as "congressionally directedactivities" and often report on them in separate account lines under the functional energy area towhich the earmarks are applied. (4) There is a general debate in Congress over earmarks, in which a key concern is thetransparency of earmark activities in the deliberative process. Critics of the current earmarkingprocess argue that it is not the subject of open debate and that the number of earmarks has grownrapidly. A "dear colleague letter" that seeks to change the process says, We believe the process of earmarking undermines theconfidence of the American public in Congress because the practice is not open, fair, or competitiveand tends to reward the politically well-connected. (5) Opponents further contend, as noted in the letter above, that it is wrong to take an earmark provisionthat survives neither the House or the Senate version of a bill and, nevertheless, have it inserted intoa conference report. This, they say, "stifles debate" and unfairly empowers well-financed lobbyists. Supporters of earmarking generally agree on the need for more transparency, but theycounter-argue that earmarks are not inherently wrong, nor should they be forbidden by rules ofcongressional process. At a February 2006 hearing on the subject, one proponent said, [The Constitution] placed the responsibility for makingspending decisions, not in the Executive Branch, but in the Congress.... Congress has always had thefinal say on that issue. Some would say that the earmarking process has been abused in recent yearsand I would agree, especially in cases where earmarks are inserted into Conference Reports that havenot been scrutinized by either body. (6) In general, proponents agree that some modification of the process may be needed, but otherwisecontend that earmarking is legitimate under the Constitution and is justified because elected officialsare better able to make decisions about funding for local needs than program managers in theexecutive branch. (7) In a review of the FY2006 DOE budget, the American Academy for the Advancement ofScience (AAAS) examined earmarks for DOE energy research and development (R&D) programsand found that ... earmarks eat up whatever increases there are for mostenergy programs and cut deeply into core R&D programs. Energy R&D earmarks total $266 millionin 2006, more than double the previous record from last year, and make up one out of every fiveR&D dollars. But they are especially concentrated in some areas, including biomass R&D wherethey make up more than 50% of total program funds, hydrogen (27%), and wind energy (33%), ratiosfar higher than in previous years. As a result, there will be enormous cuts to competitively awardedR&D grants in those areas. (8) Table 1 , below, shows the funding trends for earmarks under programs in DOE's Office ofEnergy Efficiency and Renewable Energy (EERE) and DOE's Office of Electricity Delivery andEnergy Reliability (OE). These trends are illustrated in Figure 1 , at the end of this report. The tableshows that EERE funding earmarks have more than tripled, from $46.0 million in FY2003 to $159.0million in FY2006. Table 1: Earmark Funding Trends for EERE andOE ($ millions) Sources: DOE Budget Requests FY2005, FY2006, and FY2007 and H. Rept. 109-275 . For FY2006, Table 3 (below) shows a $30.7 million increase in renewable energy R&Dearmarks, including increases of $16.4 million for Biomass & Biorefinery, $8.3 million for WindEnergy, and $4.1 million for Solar Energy. Of the $42.5 million increase for energy efficiency R&Dearmarks, nearly half ($20.3 million) was for Vehicle Technologies. Also, Table 3 shows a $28.8million increase for Electricity R&D earmarks under the Office of Electricity (OE). In early February 2006, the National Renewable Energy Laboratory (NREL) issued a pressrelease stating that FY2006 earmarks for EERE programs had left it with a $28 million gap in itsoperating funds, forcing NREL to cut 32 staff positions in hydrogen, biomass, and basic researchprograms. (9) The FY2007DOE Budget Request shows that the EERE share of NREL's budget was reduced from $182.5million in FY2005 to $161.6 million in FY2006, a $21 million (or 13%) reduction. (10) However, in late February 2006, DOE announced that an additional $5 million had been sentto NREL to immediately restore all 32 positions. DOE transferred the funding from other accountsand announced that it was working with Congress to restore funds to those accounts through severalmeans, including the "deobligation of funds provided to several congressionally directed projects in2001 and 2002 that have failed to make progress." DOE further noted, "Should Congress fully fundthe President's FY2007 request, unencumbered by earmarks, NREL should be able to maintain avibrant and stable workforce in the future." (11) In the State of the Union Speech given in January 2006, President Bush announced the launchof the American Competitiveness Initiative (ACI), which would increase support for R&D andtechnological innovation, including certain energy initiatives, (12) to help stimulate economicgrowth. The Administration's ACI document expresses concern about the potential for earmarks toimpede the proposed initiatives. Consistent with the previously noted definition, it defines earmarksas "the assignment of science funding through the legislative process for use by a specificorganization or project." It says, ... the practice signals to potential researchers that thereare acceptable alternatives to creating quality research proposals for merit-based consideration,including the use of political influence or appeals to parochial interests. The rapidly growing levelof legislatively directed funds undermines America's research productivity. (13) ACI contends that this type of funding is "rarely the most effective use of taxpayer funds." On the other hand, some proponents argue that R&D earmarks help spread the researchmoney to states and institutions that would receive less research funding through other means. Also,some supporters of earmarking contend that earmarks provide a means for funding unique projectsthat would not be recognized by the conventional peer-review system. (14) A key component of ACI, the Advanced Energy Initiative (AEI), proposes new initiatives forseveral energy technologies. (15) In particular, it embraces key initiatives (16) for hydrogen,biomass/biorefinery, and solar energy (17) that are reflected in the FY2007 DOE budget request as majorfunding increases for corresponding host programs under the Office of Energy Efficiency andRenewable Energy (EERE). (18) Table 2 shows the FY2006 funding earmarks for the Hydrogen, Biomass/Biorefinery, andSolar Energy programs at EERE. It also shows the proposed FY2007 funding increases for AEI'shydrogen, biomass/biorefinery, and solar energy initiatives under those programs. The table showsthat the FY2006 earmarks are nearly equal to the proposed increases for the hydrogen andbiomass/biorefinery initiatives; for the solar energy program, however, the total earmark is muchsmaller than the proposed AEI increase. Table 2. Earmark Funding Compared with AEIProposals ($ millions) Sources: DOE Budget Requests FY2005, FY2006, and FY2007 and H.Rept. 109-275 . Do the EERE earmarks seriously weaken R&D programs, as some opponentscontend, or do they merely provide a more equitable, although perhaps more decentralized,distribution of R&D funding, as some proponents argue? If renewable energy earmarks under EERE continue at the same or higherlevels in FY2007, would they lead to new cuts in staff positions at NREL? If Congress were to approve the Administration's requested increases for theAEI renewable energy initiatives, would earmarks continued at the same or higher levels act to diluteor otherwise erase some of the technological stimulation that the AEI aims to generate for itshydrogen, biomass/biorefinery, and solar energy goals? Table 3. DOE EERE and OE Earmarks,FY2005-FY2006 ($ millions, current) Sources: DOE, FY2007 Budget Request , vol. 3; H.Rept. 109-275 , pp. 143-145; and personalcommunication with Mr. Randy Steer, DOE/EERE, Feb. 23, 2006. Figure 1. DOE Earmark Funding for Renewable, Energy Efficiency, and Electricity

Appropriations earmarks for the Department of Energy's (DOE's) Energy Efficiency andRenewable Energy (EERE) programs have tripled from FY2003 to FY2006. According to theExecutive Office of the President and the private American Association for the Advancement ofScience (AAAS), this affects the conduct of programs and may delay the achievement of goals. Further, the Administration has proposed new funding for hydrogen, biomass/biorefinery, and solarenergy initiatives proposed under the American Competitiveness Initiative/Advanced EnergyInitiative (AEI). The report discusses the potential impact of congressional earmarks on EERE research anddevelopment (R&D) programs and, in particular, whether continued high levels of earmarks couldlead to new cuts in staff and dilute the desired impact of the AEI initiatives under EERE, shouldCongress decide to fund them. The congressional debate over earmarks centers on the transparency of the process, with afocus on earmarks not initially approved in either chamber that appear in a bill's conference report. Opponents contend that the earmarking process is not open, fair, or competitive. Proponents say itis a legitimate practice and is justified by policymakers' knowledge of local needs, as it spreadsresearch money to deserving states and institutions. The appropriation figures cited as "earmarks" in this report are those labeled by DOE budgetrequests as "congressionally directed activities" and, for FY2006, appear to be completely consistentwith figures in the FY2006 Energy and Water Development (E&W) conference report that arelabeled as "congressionally directed projects." In this regard, the earmark figures in this reportappear consistent with the definition of a congressional appropriations earmark as "funds set asidewithin an account for individual projects, locations, or institutions." This report will be updated as events warrant.

In general, drug abuse is defined by the level and pattern of drug consumption and the severity of resulting functional problems. People who are dependent on drugs often use multiple drugs and have substantial health and social problems, including mental health disorders. One of the many challenges to providing effective treatment for addiction is the complicated nature of the disorder. Unlike other chronic diseases, drug addiction extends beyond physiological influence to include significant behavioral and psychological aspects. For example, specific environmental cues that a drug abuser associates with drug use can trigger craving and precipitate relapse, even after long periods of abstinence. Therefore, drug abusers may enter treatment a number of times, often reducing drug use incrementally with each treatment episode. Despite the potential for relapse to drug use, not all drug users require treatment to discontinue use. For those who require treatment, services are provided in either outpatient or inpatient settings and via two major approaches—pharmacotherapy and behavioral therapy—with many programs combining elements of both. Although abstinence from illicit drug use is the central goal of all drug abuse treatment, researchers and program staff commonly accept reductions in drug use and criminal behavior as realistic, interim goals. these funds support services provided by state and local grantees, which are given broad discretion in how best to use them. In numerous large-scale studies examining the outcomes of drug abuse treatment provided in a variety of settings, researchers have concluded that treatment is beneficial. Clients receiving treatment report reductions in drug use and criminal activity as well as other positive outcomes. The studies have also demonstrated that better treatment outcomes are associated with longer treatment periods but have found that retaining clients in treatment programs is problematic. Comprehensive analyses of the effectiveness of drug abuse treatment have been conducted by several major, federally funded studies over a period of nearly 30 years: the Drug Abuse Treatment Outcome Study (DATOS), the National Treatment Improvement Evaluation Study (NTIES), the Treatment Outcome Prospective Study (TOPS), and the Drug Abuse Reporting Program (DARP). These large, multisite studies—conducted by research organizations independent of the groups operating the treatment programs being assessed—were designed to measure people’s involvement in illicit drug and criminal activity before, during, and after treatment. Although the studies report on reductions in drug use from the year prior to treatment to the year after, most also track a subset of treatment clients for followup interviews over longer time periods. For example, DARP followed clients for as long as 12 years, TOPS for 3 to 5 years following treatment, and DATOS researchers are planning additional followup to determine long-term outcomes. These studies are generally considered by the research community to be the major evaluations of drug abuse treatment effectiveness, and much of what is known about “typical” drug abuse treatment outcomes comes from these studies. or outpatient methadone maintenance—regardless of the drug and client type. DATOS found that, of the individuals in long-term residential treatment, 66 percent reported weekly or more frequent cocaine use in the year prior to treatment, while 22 percent reported regular cocaine use in the year following treatment. Also, 41 percent of this same group reported engaging in predatory illegal activity in the year prior to treatment, while 16 percent reported such activity in the year after treatment. Previous studies found similar reductions in drug use and criminal activity. For example, researchers from the 1980s TOPS study found that across all types of drug abuse treatment, 40 to 50 percent of regular heroin and cocaine users who spent at least 3 months in treatment reported near abstinence during the year after treatment, and an additional 30 percent reported reducing their use. Only 17 percent of NTIES clients reported arrests in the year following treatment—down from 48 percent during the year before treatment. Another finding across these studies is that clients who stay in treatment longer report better outcomes. For the DATOS clients that reported drug use when entering treatment, fewer of those in treatment for more than 3 months reported continuing drug use than those in treatment for less than 3 months. DATOS researchers also found that the most positive outcomes for clients in methadone maintenance were for those who remained in treatment for at least 12 months. Earlier studies reported similar results. Both DARP and TOPS found that reports of drug use were reduced most for clients who stayed in treatment at least 3 months, regardless of the treatment setting. recommended at least 6 months in treatment; for both program types, the median treatment episode was 3 months. Because all of the effectiveness studies relied on information reported by the clients, the level of treatment benefit reported may be overstated. Typically, drug abusers were interviewed before they entered treatment and again following treatment and asked about their use of illicit drugs, their involvement in criminal activity, and other drug-related behaviors.Although this data collection method is commonly used in national surveys and drug abuse treatment evaluations, recent questions about the validity of self-reported drug use raise concerns about this approach. In general, self-reporting is least valid for (1) the more stigmatized drugs, such as cocaine; (2) recent use; and (3) those involved with the criminal justice system. A recent National Institute on Drug Abuse (NIDA) review of current research on the validity of self-reported drug use highlights the limitations of data collected in this manner. According to this review, recent studies conducted with criminal justice clients (such as people on parole, on probation, or awaiting trail) and former treatment clients suggest that 50 percent or fewer current users accurately report their drug use in confidential interviews. As questions have developed about the accuracy of self-reported data,researchers have begun using more objective means, such as urinalysis, to validate such data. For example, NTIES researchers found that 20 percent of those in a validation group acknowledged cocaine use within the past 30 days, but urinalysis revealed recent cocaine use by 29 percent. TOPS researchers reported that only 40 percent of the individuals testing positive for cocaine 24 months after treatment had reported using the drug in the previous 3 days. Because results from the major studies of treatment effectiveness were not adjusted for the likelihood of underreported drug use, reductions in drug use found may be overstated. However, researchers emphasize that client reporting on use of illicit drugs during the previous year (the outcome measure used in most effectiveness evaluations) has been shown to be more accurate than client reporting on current drug use (the measure used to assess the validity of self-reported data). Therefore, they believe that the overall findings of treatment benefits are still valid. Although supplementary data collection, such as hair analysis or urinalysis, can help validate the accuracy of self-reported data, these tools also have limitations. Urine tests can accurately detect illicit drugs for about 48 hours following drug use but do not provide any information about drug use during the previous year. In addition, individual differences in metabolism rates can affect the outcomes of urinalysis tests. Hair analysis has received attention because it can detect drug use over a longer time—up to several months. However, unresolved issues in hair testing include variability across drugs in the accuracy of detection, the potential for passive contamination, and the relative effect of different hair color or type on cocaine accumulation in the hair. We have reported on the limitations of using self-reported data in estimating the prevalence of drug use and concluded that hair testing merited further evaluation as a means of confirming self-reported drug use. Using federal treatment dollars most effectively requires an understanding of which approaches work best for different groups of drug abusers, but on this subject, research findings are less definitive. Although strong evidence supports methadone maintenance as the most effective treatment for heroin addiction, less is known about the best ways to provide treatment services to cocaine users or adolescents. treatment or psychiatric status, can significantly affect the patient’s performance in treatment. Current research generally does not account for these factors in evaluating the effectiveness of alternative approaches for specific groups of drug abusers. Methadone maintenance is the most commonly used treatment for heroin addiction, and numerous studies have shown that those receiving methadone maintenance treatment have better outcomes than those who go untreated or use other treatment approaches. Methadone maintenance reduces heroin use and criminal activity and improves social functioning. HIV risk is also minimized, since needle usage is reduced. As we have previously reported, outcomes among methadone programs have varied greatly, in part because of the substantial differences in treatment practices across the nation. For example, in 1990, we found that many methadone clinics routinely provided clients dosage levels that were lower than optimum—or even subthreshold—and discontinued treatment too soon. In late 1997, a National Institutes of Health consensus panel concluded that people who are addicted to heroin or other opiates should have broader access to methadone maintenance treatment programs and recommended that federal regulations allow additional physicians and pharmacies to prescribe and dispense methadone. Similarly, several studies conducted over the past decade show that when counseling, psychotherapy, health care, and social services are provided along with methadone maintenance, treatment outcomes improve significantly. However, the recent findings from DATOS suggest that the provision of these ancillary services—both the number and variety—has eroded considerably during the past 2 decades across all treatment settings. DATOS researchers also noted that the percentage of clients reporting unmet needs was higher than the percentage in previous studies. researchers have relied on cognitive-behavioral therapies to treat cocaine addiction. Studies have shown that clients receiving cognitive-behavioral therapy have achieved long periods of abstinence and have been successful at staying in treatment. The cognitive-behavioral therapies are based largely on counseling and education. One approach, relapse prevention, focuses on teaching clients how to identify and manage high-risk, or “trigger,” situations that contribute to drug relapse. A study of this approach showed cocaine-dependent clients were able to remain abstinent at least 70 percent of the time while in treatment. Another technique, community reinforcement/contingency management, establishes a link between behavior and consequence by rewarding abstinence and reprimanding drug use. A program using this approach found that 42 percent of the participating cocaine-dependent clients were able to achieve nearly 4 months of continuous abstinence. A third approach, neurobehavioral therapy, addresses a client’s behavioral, emotional, cognitive, and relational problems at each stage of recovery. One neurobehavioral program showed that 38 percent of the clients were abstinent at the 6-month followup. Drug use among teenagers is a growing concern. It is estimated that 9 percent of teenagers were current drug users in 1996—up from 5.3 percent in 1992. Unfortunately, no one method has been shown to be consistently superior to others in achieving better treatment outcomes for this group. Rather, studies show that success in treatment for adolescents seems to be linked to the characteristics of program staff, the availability of special services, and family participation. poor parent supervision—have been identified as risk factors for the development of substance abuse among adolescents. However, NIDA acknowledged in a recently published article that further research is needed to identify the best approach to treating adolescent drug abusers.Similarly, the American Academy of Child and Adolescent Psychiatry acknowledged in its 1997 treatment practice parameters that research on drug abuse treatment for adolescents has failed to demonstrate the superiority of one treatment approach over another. With an annual expenditure of more than $3 billion—20 percent of the federal drug control budget—the federal government provides significant support for drug abuse treatment activities. Monitoring the performance of treatment programs can help ensure that we are making progress to achieve the nation’s drug control goals. Research on the effectiveness of drug abuse treatment, however, is problematic given the methodological challenges and numerous factors that influence the results of treatment. Although studies conducted over nearly 3 decades consistently show that treatment reduces drug use and crime, current data collection techniques do not allow accurate measurement of the extent to which treatment reduces the use of illicit drugs. Mr. Chairman, this concludes my prepared statement. I will be happy to answer any questions you and other members of the Subcommittee may have. The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. U.S. General Accounting Office P.O. Box 37050 Washington, DC 20013 Room 1100 700 4th St. NW (corner of 4th and G Sts. 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Pursuant to a congressional request, GAO discussed its recent report on drug abuse treatment research findings, focusing on: (1) the overall effectiveness of drug abuse treatment; (2) the methodological issues affecting drug abuse treatment evaluations; and (3) what is known about the effectiveness of specific treatments for heroin, cocaine, and adolescent drug addiction. GAO noted that: (1) it found that large, multisite, longitudinal studies have produced considerable evidence that drug abuse treatment is beneficial to the individual undergoing treatment and to society; (2) the studies have consistently found that a substantial proportion of clients being studied report reductions in drug use and criminal activity following treatment; (3) the studies also show that clients who stay in treatment for longer periods report better outcomes; (4) however, drug abuse treatment research is complicated by a number of methodological challenges that make it difficult to accurately measure the extent to which treatment reduces drug use; (5) in particular, growing concerns about the validity of self-reported data, which are used routinely in the major evaluations of drug abuse treatment, suggest that the treatment benefit reported by these studies may be somewhat overstated; (6) in addition, the research evidence to support the relative effectiveness of specific treatment approaches or settings for particular groups of drug abusers is limited; and (7) while one specific treatment approach--methadone maintenance--has been shown to be the most effective treatment for heroin addiction, research on the best treatment approach or setting for cocaine addiction or adolescent drug users is less definitive.

In the nearly 17 years since Latvia gained independence, the country's political scene has been characterized by the creation and dissolution of numerous parties and shifting alliances among them. Latvia has had 14 governments since independence, none of them serving out a full parliamentary term. Many of the parties lack a clear ideological profile and have shallow roots in society. Critics assert that the parties are in large part interest groups struggling for the narrow, business interests of their members and financial backers. High-level corruption remains a significant problem in Latvia, as elsewhere in the region. Nevertheless, due to a broad policy consensus among the elites and in society at large, Latvia has followed a consistent general course—building democratic institutions, strengthening the rule of law, establishing a free-market economy, and integrating into NATO and the European Union (EU). Latvia's current government is led by Prime Minister Ivars Godmanis of the First Party-Latvia's Way (LPP-LC). It was formed in December 2007, after the fall of the previous government. Aside from the LPP-LC, the government consists of the People's Party, the Union of Greens and Farmers (ZZS), and the nationalist For Fatherland and Freedom-Latvian National Independence Movement (TB-LNNK). The coalition holds a slender 53-seat majority in the 101-member Saeima (parliament). In September 2007, the previous Prime Minister, Aigars Kalvitis, heading a government composed of the same parties as the current government, tried to fire Aleksejs Loskutovs, the head of Latvia's independent Corruption Monitoring and Prevention Bureau, allegedly for financial irregularities. The move was widely viewed in Latvia as an effort to quash high-profile corruption investigations against powerful supporters of the government. Street demonstrations forced the parliament to drop the effort and the government fell in December 2007. Latvia last held parliamentary elections in October 2006. New elections do not have to be held until 2010, but the thin and shrinking majority of the government may force an earlier vote. The Loskutovs affair has underlined Latvia's ongoing corruption problem, and, more generally, the tendency for key decisions in Latvia to be made non-transparently by a small number of self-interested insiders. Latvian President Valdis Zatlers was elected by the Saeima in July 2007. Zatlers is an orthopedic surgeon and was the director of the Latvian Traumatology and Orthopedics Center. He had no prior political affiliation or experience before his election. His election was a surprise to many Latvians. He was reportedly a compromise choice of the ruling coalition when they could not agree on other candidates. Although the Latvian presidency has few powers in Latvia's parliamentary system, the president plays an important rule in representing Latvia abroad and symbolizing the state's moral principles rather than narrow party interests. His predecessor, Vaira Vike-Freiberga, was widely believed to have fulfilled these functions very well, and was Latvia's most popular politician until term limits forced her retirement. Zatlers's reputation suffered a blow shortly after his election, when it emerged that he had taken gratuities from his patients and had not paid taxes on those payments. He said that he had forgotten to report the income and paid the taxes. However, he may have recovered his position somewhat by criticizing the government during the Loskutovs affair. Latvia has experienced rapid economic growth in recent years, with Gross Domestic Product increasing by 12.2% in 2006 and 10.3% in 2007. However, growth slowed sharply in the last quarter of 2007 and is expected to decelerate during 2008, in line with other economies in the region. Inflation remains a serious problem. Average annual inflation in 2007 was 10.1%, and inflation in March 2008 was 16.8% on a year-on-year basis. These increases are in part due to higher food and energy costs. Latvia has maintained a prudent fiscal policy; the government projects a budget surplus of 1% for 2008. Latvia suffered from a large current account deficit of 22.8% of GDP in 2007. However, the deficit is declining as economic growth slows. After reestablishing its independence in 1991, Latvia's key foreign policy goals were to join NATO and the European Union. It joined both of them in 2004. Latvia continues to try to bring its armed forces up to NATO standards, spending the 2% of GDP recommended by NATO. Latvia lags behind most EU members in many areas, and receives substantial EU funding to address such issues as border security, public infrastructure, and the environment. Latvia has had to put off plans to adopt the euro as its currency until at least 2012 or 2013, due to an inflation rate well above the EU's strict criteria for euro zone membership. Latvia enjoys a close relationship with its Baltic neighbors and the Nordic countries. It has acted as an advocate for democratic and pro-Western forces in Belarus, Ukraine, Moldova, Georgia, and other countries bordering Russia. Latvia supported the unsuccessful efforts of Ukraine and Georgia to receive a Membership Action Plan at the April 2008 NATO summit in Bucharest. It supported the summit communique's commitment to eventual Ukrainian and Georgian membership in NATO. Latvia and Russia have had sometimes difficult relations. Russia has expressed irritation at NATO's role in patrolling the airspace of Latvia and the other two Baltic states, and the non-participation of Latvia and the other Baltic states in the Conventional Forces in Europe (CFE) treaty, which Moscow claims could lead to the deployment of large NATO forces on its northwest border. In December 2007, Russia suspended its implementation of the CFE treaty. Russia claims that Latvia violates the human rights of its ethnic Russian minority, which, along with other Russian-speaking groups, make up 37.5% of the country's population. While international organizations have generally rejected these charges, many Russian-speakers are poorly integrated into Latvian society. When Latvian independence was restored in 1991, only those persons who has been citizens when the Soviet Union took over the country in 1940 or their descendants were recognized as Latvian citizens. This policy excluded most Russian-speakers. In part due to naturalization (which requires passing a Latvian language test), 57.5% of ethnic Russians living in Latvia now have Latvian citizenship. The others remain stateless or hold Russian citizenship. Over 18% of Latvia's permanent residents lack Latvian citizenship. Noncitizens cannot hold public office or vote in elections. Russia has also criticized laws that demand Latvian-language competency for many jobs and require that most secondary education take place in the Latvian language. Latvia has expressed concern about Russia's use of its energy exports for political purposes. Latvia is virtually entirely dependent on Russia for oil and natural gas. Latvia and the United States are concerned about the North European Gas Pipeline project, which will transit the Baltic Sea floor between Russia and Germany, bypassing central European countries. Latvian and U.S. officials have called for the establishment of a variety of energy supply routes between the Caspian Sea region and Europe, in order to provide greater energy security to Latvia and other countries in the region. Russia has reduced the role of Latvia in its oil transit trade. The Russian-government controlled Transneft oil pipeline company cut off all oil shipments to the Latvian oil terminal at the port of Ventspils, after having decreased shipments in late 2002. The move was a blow to Latvia, as Ventspils has been important to its economy. Transneft diverted the oil shipments to its own Baltic Pipeline System and the Russian port of Primorsk, which it controls. Transneft claims that there is no demand for using Ventspils, a claim viewed with skepticism by outside observers. Most saw the move as a power play by Transneft to secure a controlling share of the firm Ventspils Nafta, which operates the oil terminal. However, Russian-Latvian relations have improved in some areas. In December 2007, a Russian-Latvian border treaty entered into force. Latvian business interests have reportedly benefitted from an increase in transit business from Russia in the past year, as Russian traffic has declined with neighboring Estonia due to deteriorating relations between Moscow and Tallinn. The United States and Latvia have enjoyed excellent relations. The United States refused to recognize the Soviet annexation of Latvia in 1940 and hailed the restoration of the country's independence in 1991. The United States strongly supported Latvia's membership in NATO and the EU. The two countries have cooperated in Iraq and Afghanistan. From May 2003 until June 2007 (when the last 120 of its combat troops were withdrawn), a total of 1,153 soldiers had served in the country, in a number of rotations. Three Latvian soldiers died in Iraq. After withdrawing from Iraq, Latvia boosted its contribution to the ISAF peacekeeping force in Afghanistan from 35 to its current level of 100 men. There are 19 Latvian troops in Kosovo as part of NATO-led peacekeeping force KFOR. Latvia receives a modest amount of security assistance from the United States to help it improve its capabilities within NATO, including its deployment in Afghanistan. In FY2008, Latvia is expected to receive $2.55 million in U.S. aid, including $1.5 million in Foreign Military Financing and $1.05 million in IMET military training assistance. For FY2009, the Administration requested $4.05 million in military aid, $3 million in FMF and $1.05 in IMET. There have been a few controversies in U.S.-Latvian relations. Perhaps the most sensitive issue is Latvia's strong desire to join the U.S. Visa Waiver program. Latvia and many other central and eastern European countries in the same position are upset that their citizens are required to seek visas for U.S. travel, despite the fact that visas are not required for most EU countries in western Europe. Brussels has also demanded equal treatment for all EU countries. In March 2008, the United States and Latvia signed a memorandum of understanding on steps Latvia has taken and needs to take to join the Visa Waiver Program. U.S. officials say Latvia could join the program by the end of this year. Another controversy concerned speeches in October 2007 by outgoing U.S. Ambassador to Latvia Catherine Todd Bailey that were interpreted in Latvia as frank criticisms of corruption and the state of democratic development of Latvia, in the wake of the Loskutovs affair. The move raised eyebrows among some commentators in the Latvian press, although Bailey received backing from State Department officials. The current U.S. ambassador, Charles Lawson, has also mentioned strengthening Latvia's democracy as a key U.S. goal in Latvia.

After restoration of its independence in 1991 following decades of Soviet rule, Latvia made rapid strides toward establishing a democratic political system and a dynamic, free market economy. It achieved two key foreign policy goals when it joined NATO and the European Union in 2004. However, relations with Russia remain strained over such issues as the country's Russian-speaking minority and energy relations. Latvia and the United States have excellent relations. Latvia has deployed troops to Iraq and Afghanistan, and plays a significant role in efforts to encourage democracy and a pro-Western orientation among post-Soviet countries. This report will be updated as needed.

As of February 11, 2009, a total of 240 persons have served for 30 years or more in the United States Congress as Representative or Senator. That number is only 2% of the 11,893 men and women who have represented their states and congressional districts since the First Congress convened on March 4, 1789. Of the 240 Members serving 30 years or more, 139 served only in the House of Representatives; 29 served only in the Senate; and 72 served in both chambers. Four of the 240 Members are women, three of whom have served in the House and Senate. Over time, the number of Members serving 30 years or more has grown. Only two Members with over 30 years of service began serving in Congress in the 18 th century: Nathaniel Macon began his service in 1791; Samuel Smith, in 1793. Seven served entirely during the 19 th century. By 1967 (90 th Congress), a total of 100 Members had served 30 years or more. As of February 11, 2009, (111 th Congress) that number had risen to 240. Among Members of the 111 th Congress, 16 incumbent Senators and 18 incumbent Representatives have served 30 years or longer. Table 1 lists Members who have served 30 years or longer in descending order of the length of their congressional service, as measured in days. For each Member, the table presents the Member's party and state represented; dates of the Member's first and last day of service, by chamber; days of service in each chamber; and total days of congressional service. Total service is also presented in years and fractions of years. Calculations of days of service varied according to the pattern of a Member's service. For example— Clarence A. Cannon of Missouri served in one continuous period from 3/4/1923 through 5/12/1964. The elapsed time from one date to the other was 15,045, but because Representative Cannon served for each of the elapsed days and on the first day, we add one day to the elapsed time for a total of 15,046 days. Justin Morrill served in both the House and the Senate, continuously from 3/4/1855 to 3/3/1867 in the House (4,383 days) and from 3/4/1867 to 12/28/1898 in the Senate (11,623 days). Morrill's total congressional service was the sum of those two periods, 16,006 days. Henry Jackson of Washington also served continuously in both the House and the Senate, but because of a statutory change there is an overlap of one day in his official dates of service. Jackson served in the House from 1/3/1941 through 1/3/1953, but his first day in the Senate was also on 1/3/1953. If we simply added his House service (4,384 days) and his Senate service (11,199 days), we would double-count 1/3/1953; so we add the days of service in each chamber (15,583 days) and subtract one day from that sum for Jackson's total days of congressional service (15,582 days). Alternately, we could simply count the days from when his House service started through the date of the day when his Senate service ended. Samuel Smith served in the House, then in the Senate, then again in the House, and then once again in the Senate. His first period of service (in the House) did not overlap with the second (in the Senate). There was a break between his first period of Senate service and his second period of House service, but there is an overlapping day (12/17/1822) when he moved finally from the House again to the Senate. Accordingly, we add the days of each period of service and subtract one day from the sum for a total of 14,276 days of congressional service. Table 1 draws the dates of congressional service from the Biographical Directory of the United States Congress, 1774-Present ; the "Table of United States Senators" in U.S. Congress, Senate, Senate Manual , S. Doc. 104-1; and various editions of the Congressional Directory (Washington: GPO). When a date in the Biographical Directory was unclear, CRS consulted other sources for clarification, as shown in notes to Table 1 .

This report identifies the 240 Members of Congress who have served in Congress for at least 30 years, as of February 11, 2009. Those 240 Members are only 2% of the 11,893 individuals who have represented their states and congressional districts in Congress since 1789. Of the 240 Members with at least 30 years of congressional service, 139 have spent all of their congressional careers in the House; 29 have spent all of their careers in the Senate; and 72 have had combined service in the House and Senate. Among Members of the 111th Congress, 16 Senators and 18 Representatives have served 30 years or more. This report supercedes CRS Report RL30370, by [author name scrubbed], Specialist in American National Government. This report will not be updated.

After Members of the House or Senate leave office, they are afforded certain courtesies and privileges. Some are derived from law and chamber rules, but others are courtesies that have been extended as a matter of custom. Some of these privileges and courtesies include the following: access to the floor of the chamber in which a former Member served. short-term franking privileges. Former Members of Congress are authorized to use the frank for 90 days immediately after they leave office, only for official matters relating to the closing of their offices. access to parking facilities and athletic or wellness facilities, subject to some restrictions. access to House or Senate administrative services and dining facilities. access to materials through the Congressional Research Service (CRS) and the Library of Congress. Former Members of the House are entitled to admission to the floor of the House while it is in session. A former Member of the House is not entitled to the privilege of the House floor if he or she (1) becomes a registered lobbyist or the agent of a foreign principal as defined by the House; (2) has any direct personal or pecuniary interest in any legislative measure pending before the House or reported by any committee of the House; (3) or is employed for the purpose of influencing, directly or indirectly, the passage, defeat, or amendment of any legislative proposal. The Speaker may promulgate regulations that exempt ceremonial or educational functions from these restrictions. Former Members of the House may have access, for a fee, to Member exercise facilities, including the Members' wellness facility. Any former Member who is a registered lobbyist or agent of a foreign principal, or who is employed or retained for the purpose of influencing legislation, is not entitled to this courtesy. Other privileges and courtesies extended to former Members of the House include the following: parking in House parking facilities, as space is available; assistance with retirement and other benefits from the Office of Members' Services; membership in the Wright Patman Congressional Federal Credit Union; permanent House of Representatives ID card from the Clerk of the House; use of the collections in the House Legislative Resource Center and Senate Library without borrowing privileges; use of the House Document Room; seating in the House restaurant facilities and Members' dining room; and membership in the U.S. Association of Former Members of Congress. Former Senators are entitled to admission to the floor of the Senate while it is in session. A former Senator who becomes a registered lobbyist, agent of a foreign principal, or is employed to influence legislation, is denied floor privileges except for ceremonial functions and events designated by the majority leader and minority leader, pursuant to regulations promulgated by the Committee on Rules and Administration. Former Senators may obtain a permit allowing them to park in outdoor lots controlled by the Senate. For a fee, former Senators are allowed to use the Senate athletic facilities. Any former Senator who is a registered lobbyist or agent of a foreign principal, or who is employed or retained for the purpose of influencing legislation, is not entitled to these courtesies. Other privileges and courtesies extended to former Senators include the following: services from the Senate Disbursing Office, including check cashing privileges and assistance with retirement and other benefits; use of the Senate Credit Union; permanent ID from the Senate Sergeant at Arms; limited use of the Senate Dining Room; use of the Senate Library, including borrowing privileges; documents from the Senate document room upon personal request of the former Senator; purchasing privileges in the Senate Stationery Room; and membership in the U.S. Association of Former Members of Congress.

After Members of the House or Senate leave office, they are afforded certain courtesies and privileges. Some are derived from law and chamber rules, but others are courtesies that have been extended as a matter of custom. Some of these privileges and courtesies include the following: access to the floor of the chamber in which a former Member served; short-term franking privileges; access to parking facilities and athletic or wellness facilities; access to House or Senate administrative services and dining facilities; and access to materials through the Congressional Research Service (CRS) and the Library of Congress.

Foreign Policy Budget for FY2002 RS20855 -- Foreign Policy Budget for FY2002 Updated April 12, 2001 President Bush seeks $23.85 billion in discretionary budget authority for U.S. foreign policy activities in FY2002,representing a nominal increase of 5.3% over levels enacted for FY2001. Administration officials, includingSecretaryPowell, have characterized the proposal as a "responsible increase" for international affairs programs within thecontext ofoverall budget constraints in which discretionary budget authority for all federal programs will rise by just 4% underthePresident's plan. They further emphasize that their highest priorities - State Department personnel, security, andtechnology needs - would grow by 18.6% above current spending. The proposal has met with a largely favorable reception in Congress. In the FY2002 budget resolution ( H.Con.Res. 83 ), the House approved the full $23.9 billion for international affairs. The Senate added $200million for HIV/AIDS and $50 million for global climate change programs beyond what President Bush requested. Callsfor higher international affairs spending have been fueled in recent years not only by appeals from theAdministration, butalso by the recommendations of numerous "expert" commissions that have cited inadequate resources anddysfunctionalorganizational structures as major impediments to the conduct of U.S. foreign policy. (1) PDF version In real terms, taking into account the effects of inflation, international affairs resources proposed for next year are2.6%more than for FY2001 (Figure 1). While higher than any year between FY1995 and FY1998, the FY2002 proposalwouldfall 4.8% and 2.8% short of FYs1999 and 2000, respectively. (2) Although the overall size of foreign policy resources would grow in FY2002, most of the increase is concentrated in thearea of State Department operations, with much smaller growth projected for foreign assistance programs andreductionssought for export promotion activities. Congress approves the bulk of international affairs resources in twoappropriationbills: Foreign Operations, which includes foreign aid and export programs, and Commerce, Justice, StateDepartments,which finances diplomatic, international organization payments, and educational exchange activities. (3) As seen in Table 1,Foreign Operations would receive an increase of 1.9%, in nominal terms, while State Department programs, funded intheDepartments of Commerce, Justice, and State appropriations, would grow by about 14%. Table 1. Foreign Policy Budget by Major Appropriation Components (discretionary budget authority in millions of dollars) a FY2000 includes $1 billion for Plan Colombia counternarcotics initiative. Source: Department of State. Two trade promotion programs - the Export-Import Bank and the Overseas Private Investment Corporation (OPIC) - arescheduled for reductions in FY2002, representing the only policy-based budget cut within the International Affairsaccount. The 25% reduced appropriation for the Export-Import Bank is the result of lower lending risks assumed for FY2002plus aneffort to concentrate Bank support on American exporters who cannot access private financing. OPIC, accordingtoAdministration estimates, will have sufficient unspent resources from prior years to continue operations at currentlevelswithout the need for new appropriations in FY2002. Both Eximbank and OPIC have been the target in recent yearsof somecongressional critics who believe that these export promotion activities generally benefit only a few, wealthybusinessesand represent the equivalent of "corporate welfare." Pro-business activists, however, are likely to challenge thebudgetrecommendation, arguing that export subsidies are necessary for American firms to compete with foreign-backedtradesubsidies. (4) Funding for nearly all foreign aid programs are included in annual Foreign Operations spending bills for which the BushAdministration seeks a 4% nominal increase (after adjusting for export promotion programs). Major programs andpotential issues for Congress contained in this sector of the foreign policy budget include: Multilateral Development Bank (MDB) contributions. The FY2002 budget proposes $1.21 billionfor U.S. payments to the World Bank and other regional MDBs, a 5.8% increase over current levels. This amountwill fullyfund all U.S. scheduled contributions for next year, but it will not include resources to clear any of the approximate$450million American arrears owed to the Global Environment Fund, the Inter-American Development Bank'sMultilateralInvestment Fund, the Asian Development Fund, and other institutions. Bilateral development assistance. Congress funds development aid activities, aimed at reducingpoverty, improving health care and education, protecting the environment, and promoting good governance indevelopingnations, through two primary Foreign Operations accounts: Child Survival and Diseases and DevelopmentAssistance. Combined, these accounts would grow by $73 million, or 3.2% in nominal terms. But over two-thirds of theincrease willfund two priorities: HIV/AIDS (+$30 million) and basic education (+$20 million) The request for HIV/AIDS, anareawhere resources doubled in FY2001, increases resources by 10% to $330 million in FY2002. Most otherdevelopment aidprogram sectors will remain at approximate current levels. Population aid will receive the same $425 millionallocation asin FY2001, but remains a highly controversial issue due to President Bush's decision to re-impose restrictions oninternational family planning. (5) The Bush Administration is also proposingto reorient U.S. development aid strategiesaround three "spheres of emphasis" - Global Health, Economic Growth and Agriculture, and Conflict PreventionandDevelopment Relief. USAID will also introduce a Global Development Alliance, an initiative designed to forgeapublic/private partnership, with about $160 million in USAID resources, to promote a leverage sound developmentprograms. Debt reduction and the Heavily Indebted Poor Country (HIPC) initiative. Although the FY2002request cuts by nearly half - to $224 million - FY2001 spending on HIPC debt reduction, the proposal will fulfillallcurrent U.S. commitments to the multi-year HIPC initiative. Nevertheless, some debt relief proponents continueto pressthe United States and other major creditors to enhance and accelerate HIPC terms, actions which would requireadditionalresources. Counternarcotics activities. The largest foreign aid increase sought by the Bush Administrationwould supplement and broaden the $1 billion Colombia counternarcotics program funded in FY2000 with a new$731million Andean regional initiative. The objective is to address drug production and trafficking problems that may havemigrated from Colombia to surrounding states. It further differs from the FY2000 initiative by providing morefunding foralternative development programs. Security assistance. Strategic-oriented economic assistance, provided through the Economic SupportFund (ESF), non-proliferation, and military assistance accounts are heavily concentrated in the Middle East, asituation thatwill continue in FY2002. Military aid for Israel will grow by $60 million, but overall security assistance to Egyptand Israelwill decline by $100 million as part of a ten-year plan to reduce aid to these two countries. Nevertheless, Israel andEgyptwill remain the largest recipients of American aid, with amounts totaling about $2.76 billion and $1.96 billion,respectively. Due to the net aid cuts for Israel and Egypt, plus a small increase overall for security assistance, ESF and militaryaid wouldgain about $230 million in FY2002 that could be allocated for new members of NATO and selected recipients inLatinAmerica and Asia. Secretary of State Colin Powell told the House International Relations Committee on March 15, "If we think it's importantfor our fighting men in the Pentagon to go into battle with the best weapons and equipment and tools we can givethem,then we owe the same thing to the wonderful men and women of the Foreign Service, the Civil Service, and theForeignService Nationals, who are in the front line of combat in this new world." The FY2002 budget places specialemphasis onfour aspects of State Department operations. Personnel. The FY2002 budget request would provide a 17% increase in State'sDiplomatic andConsular Affairs account which provides for salaries and expenses of the Department's personnel. This increaseisintended to"reinvigorate" a Foreign and Civil Service that has failed to attract or retain the "best and the brightest"in recentyears. State Department officials assert that the agency currently has a shortfall of about 1,100 people. TheAdministrationis proposing a multi-year program (for which the FY2002 budget request would provide an initial tranche) to fillthe currentgap in personnel, enhance retention and training, and provide for a float allowing personnel to take leaves of absencefortraining, without leaving a position empty. Initially, the State Department seeks to hire 360 personnel (both inForeign andCivil Service), 186 security professionals, and some FSN replacements. This hiring, according to State Departmentbudgetofficials, would be separate from filling positions due to attrition. Information technology. In recent years, State Department technology acquisition has not kept pacewith its needs and with technology advancements. This condition was exacerbated by the October 1999 merger ofthe U.S.Information Agency (USIA)-an agency whose mission includes providing information and outreach to foreignpublics-intothe Department of State where classified communication and information is required. The Capital Investment Fund(CIF),established by the Foreign Relations Authorization Act of FY1994/95 ( P.L. 103-236 ), provides funding for theDepartment's information technology and capital equipment. As recently as FY1997 the CIF appropriation was$24.6million but grew by FY2000 to $96 million. The Bush Administration is requesting $250 million to connect StateDepartment offices worldwide with classified local area network (LAN) capabilities as well as providing everydesktopwith unclassified internet capabilities. Security. Since the August 1998 bombing of two U.S. embassies in Africa, State has made personneland information security a top priority. The Administration is requesting $1.3 billion, an increase of 22% over theFY2001enacted $1.07 billion. Of the total security request, $665 million would be for construction of secure embassies,$211million for the continuation of perimeter security program, and $424 million for an ongoing security readinessprogram. State is requesting security funding within the Diplomatic and Consular Programs account, as well as the EmbassySecurityConstruction and Maintenance account. Embassy Infrastructure. The Bush Administration's FY2002 budget includes $60 million foroverseas infrastructure needs, such as replacing obsolete equipment, aging motor vehicles, and improvingmaintenancearound the embassies. State Department officials say these needs have been underfunded and have accumulatedover theyears.

The Bush Administration seeks a $23.85 billion foreign policy budget forFY2002, representing a nominal increase of 5.3% over FY2001 (2.3% in real terms when the effects of inflationare takeninto account). Most of the additional resources are concentrated in a few areas, especially for State Departmentoperationsand a new regional Andean counternarcotics initiative. The budget further proposes to cut funding for theExport-ImportBank by 25%. This report analyzes the FY2002 international affairs funding submission, compares it with recentlyenactedforeign policy budgets, identifies major priorities and recommended reductions, and discusses potentialcongressionalissues. It will be revised as the Administration provides further details in April and May about the FY2002 budget.

The Comptroller General recognized that he needed to shift the emphasis of the then Office of Civil Rights from a reactive, complaint processing focus to a more proactive, integrated approach. He wanted to create a work environment where differences are valued and all employees are offered the opportunity to reach their full potential and maximize their contributions to the agency’s mission. In 2001, the Comptroller General changed the name of the Office of Civil Rights to the Office of Opportunity and Inclusiveness and gave the office responsibility for creating a fair and inclusive work environment by incorporating diversity principles in GAO’s strategic plan and throughout our human capital policies. Along with this new strategic mission, the Comptroller General changed organizational alignment of the Office of Opportunity and Inclusiveness by having the office report directly to him. Also, in 2001, I was selected as the first Managing Director of the Office of Opportunity and Inclusiveness. The Office of Opportunity and Inclusiveness (O&I) is the principal adviser to the Comptroller General on diversity and equal opportunity matters. The office manages GAO’s Equal Employment Opportunity (EEO) program, including informal precomplaint counseling, and GAO’s formal discrimination complaint process. We also operate the agency’s early resolution and mediation program by helping managers and employees resolve workplace disputes and EEO concerns without resorting to the formal process. In addition, O&I monitors the implementation of GAO’s disability policy and oversees the management of GAO’s interpreting service for our deaf and hard-of-hearing employees. But effective efforts to create a diverse, fair, and inclusive work place require much more. In furtherance of a more proactive approach, O&I monitors, evaluates, and recommends changes to GAO’s major human capital policies and processes including those related to recruiting, hiring, performance management, promotion, awards, and training. These reviews are generally conducted before final decisions are made in an effort to provide reasonable assurance that GAO’s human capital processes and practices promote fairness and support a diverse workforce. Throughout the year, O&I actively promotes diversity throughout GAO. For example, last year we met with the summer interns to discuss their experiences and to provide guidance on steps that interns can take to enhance their chances for successful conversion to permanent employment at GAO. We also took steps to increase retention of our entry- level staff by counseling our Professional Development Program advisers on the importance of consistent and appropriate training opportunities and job assignments that afford all staff the opportunity to demonstrate all of GAO’s competencies. I also made several presentations that reinforced the agency’s strategic commitment to diversity, including a panel discussion on diversity in the workforce, a presentation to new Band II analysts on the importance of promoting an environment that is fair and unbiased and that values opportunity and inclusiveness for all staff, and a presentation to Senior Executive Service (SES) managers on leading practices for maintaining diversity, focusing on top leadership commitment and ways that managers can communicate that commitment and hold staff accountable for results. This proactive and integrated approach to promoting inclusiveness and addressing diversity issues differs from my experience as Director of the Office of Civil Rights at a major executive branch agency. As Director of that office, a position I held immediately before coming to GAO, I had little direct authority to affect human capital decisions before they were implemented, even though those decisions could adversely affect protected groups within the agency. For the most part, my role was to focus on the required barrier analysis and planning process. The problem with this approach is that agencies generally make just enough of an effort to meet the minimal requirements of the plan developed by this process. In addition to these plans, diversity principles should be built into every major human capital initiative, along with effective monitoring and oversight functions. The war for talent, especially given increasing competition with the private sector, has made it more competitive for GAO and other federal agencies to attract and retain top talent. Graduates of color from our nation’s top colleges and universities have an ever increasing array of career options. In response to this challenge, GAO has taken a variety of steps to attract a diverse pool of top candidates. We have identified a group of colleges and universities that have demonstrated overall superior academic quality, and either have a particular program or a high concentration of minority students. They include several Historically Black Colleges and Universities, Hispanic-serving institutions, and institutions with a significant portion of Asian-American students. In addition, GAO has established partnerships with professional organizations and associations with members from groups that traditionally have been underrepresented in the federal workforce, such as the American Association of Hispanic CPAs, the National Association of Black Accountants, the Federal Asian Pacific American Council, the Association of Latino Professionals in Finance and Accounting, and the American Association of Women Accountants. GAO’s recruiting materials reflect the diversity of our workforce, and we annually train our campus recruiters on the best practices for identifying a broad spectrum of diverse candidates. GAO’s student intern program serves as a critically important pipeline for attracting high-quality candidates to GAO. In order to maximize the diversity of our summer interns, O&I reviews all preliminary student intern offers to ensure that the intern hiring is consistent with the agency’s strategic commitment to maintaining a diverse workforce. O&I also meets with a significant percentage of our interns in order to get their perspectives on the fairness of GAO’s work environment. Moreover, our office recently analyzed the operation of the summer intern program and the conversion process and identified areas for improvement. GAO is implementing changes to address these areas, including taking steps to better ensure consistency in the interns’ experiences and to improve the processes for evaluating their performance and making decisions about permanent job offers. Competency-based performance management systems are extremely complex. It is important to implement safeguards to monitor implementation of such systems. As a way to ensure accountability and promote transparency, the Comptroller General made an unprecedented decision to disseminate performance rating and promotion data. Over some objections, the Comptroller General agreed to place appraisal and promotion data by race, gender, age, disability, veteran status, location, and pay band on the GAO intranet and made this information available to all GAO staff. This approach allows all managers and staff to monitor the implementation of our competency-based performance management systems and serves as an important safeguard in relation to the processes. As far as I am aware, no other federal agency has ever done this, nor am I aware of any major corporation in America that has taken such an action. The Comptroller General rejected the argument that an increased litigation risk should drive the agency away from disseminating this information. Instead he stood by his position that the principles of accountability and transparency dictated that we should make this data available to all GAO employees. In addition to making this data available to all GAO staff, O&I and the Human Capital Office conduct separate and independent reviews of each performance appraisal and promotion cycle before ratings and promotions are final. In conducting its review of performance appraisals, O&I uses a two-part approach; we review statistical data on performance ratings by demographic group within each unit, and where appropriate, we conduct assessments of individual ratings. In conducting the individual assessments we (a) examine each individual rating within the specific protected group; (b) review the adequacy of any written justification; (c) determine whether GAO’s guidance on applying the standards for each of the performance competencies has been consistently followed, to the extent possible; and (d) compare the rating with the self-assessment to identify the extent to which there are differences. I meet with team managing directors to resolve any concerns we have after our review. In some instances ratings are changed, and in other cases we obtain additional information that addresses our concerns. Our promotion process review entails analyzing all recommended best- qualified (BQ) lists. We review each applicant’s performance ratings for the last three years. In addition, we also review each applicant’s supervisory experience. I discuss concerns about an applicant’s placement with the relevant panel chair. I then meet with the Chief Operating Officer and the Chief Administrative Officer to discuss any continuing concerns. A similar process is used regarding managing director’s selection decisions. In addition to these independent reviews, GAO provides employees with several avenues to raise specific concerns regarding their individual performance ratings. The agency has an administrative grievance process that permits employees to receive expedited reviews of performance appraisal matters. Moreover, employees have access to early resolution efforts and a formal complaint process with O&I and at the Personnel Appeals Board. Despite our continuing efforts to ensure a level playing field at GAO, more needs to be done. The data show that for 2002 to 2005 the most significant differences in average appraisal ratings were among African-Americans at all bands for most years compared with Caucasian analysts. Furthermore, the rating data for entry level staff show a difference in ratings for African- Americans in comparison to Caucasian staff at the entry-level from the first rating, with the gap widening in subsequent ratings. These differences are inconsistent with the concerted effort to hire analysts with very similar qualifications, educational backgrounds, and skill sets. In June 2006, we held an SES off-site meeting specifically focusing on concerns regarding the performance ratings of our African-American staff. Shortly thereafter, the Comptroller General decided that in view of the importance of this issue, GAO should undertake an independent, objective, third-party assessment of the factors influencing the average rating differences between African-Americans and Caucasians. I agree with this decision. We should approach our concern about appraisal ratings for African- Americans with the same analytical rigor and independence that we use when approaching any engagement. We must also be prepared to implement recommendations coming out of this review. While we continue to have a major challenge regarding the average performance ratings of African-Americans, the percentages of African- Americans in senior management positions at GAO have increased in the last several years. I believe that the O&I monitoring reviews, direct access to top GAO management, and the other safeguards have played a significant role in these improvements. Specifically, from fiscal year 2000 to fiscal year 2007, the percentage of African-American staff in the SES/Senior Level (SL) increased from 7.1 percent to 11.6 percent, and at the Band III level the percentages increased from 6.7 percent to 10.8 percent. The following table shows the change in representation of African-American staff at the SES/SL and Band III levels for each year. Furthermore, the percentages of African-Americans in senior management positions at GAO compare favorably to the governmentwide percentages. While the percentage of African-Americans at the SES/SL level at GAO was lower than the governmentwide percentage in 2000, by September 2006, the GAO percentage had increased and exceeded the governmentwide percentage. At the Band III/GS-15 level, the percentage of African- American staff at GAO exceeded the governmentwide percentage in 2000 as well as in 2006. Table 2 lists the GAO and governmentwide percentages. Nonetheless, as an agency that leads by example, additional steps should be taken. We must continue to improve our expectation-setting and feedback process so that it is more timely and specific. We need additional individualized training for designated staff, and we need to provide training for all supervisors on having candid conversations about performance. We also need to improve transparency in assigning supervisory roles, ensure that all staff have similar opportunities to perform key competencies, and hold managers accountable for results. Finally, we will implement an agencywide mentoring program this summer. We expect that this program will help all participants enhance job performance and career development opportunities. Overall, GAO is making progress toward improving its processes and implementing various program changes that will help address important issues. I believe there are two compelling diversity challenges confronting GAO and the federal government. First, is the continuing challenge of implementing sufficiently specific merit-based policies, safeguards, and training in order to minimize the ability of individual biases to adversely affect the outcome of those policies. Second, is the challenge of having managers that can communicate with diverse groups of staff, respecting their differences and effectively using their creativity to develop a more dynamic and productive work environment. For many people, the workplace is the most diverse place they encounter during the course of their day. We owe it to our employees and to the future of our country to improve our understanding of our differences, and to work toward a fairer and more inclusive workplace. Chairman Akaka, Chairman Davis, and members of the subcommittees, this concludes my prepared statement. At this time I would be pleased to answer any questions that you or other members of the subcommittees may have. 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.

Vigorous enforcement of anti-discrimination laws remains an essential responsibility of government. Moreover, diversity in the federal government can be a key component for executing agency missions and achieving results. Not only is it the right thing to do, but an inclusive work environment can improve retention, reduce turnover, increase our ability to recruit, and improve overall organizational effectiveness. In 2001, the Comptroller General changed the name of the Office of Civil Rights to the Office of Opportunity and Inclusiveness and gave the office responsibility for creating a fair and inclusive work environment by incorporating diversity principles in GAO's strategic plan and throughout our human capital policies. Along with this new strategic mission, the Comptroller General changed organizational alignment of the Office of Opportunity and Inclusiveness (O&I) by having the office report directly to him. Despite our continuing efforts to ensure a level playing field at GAO, more needs to be done. The data show that for 2002 to 2005 the most significant differences in average appraisal ratings were among African-Americans at all bands for most years compared with Caucasian analysts. Furthermore, the rating data for entry level staff show a difference in ratings for African-Americans in comparison to Caucasian staff at the entry-level from the first rating, with the gap widening in subsequent ratings. These differences are inconsistent with the concerted effort to hire analysts with very similar qualifications, educational backgrounds, and skill sets. In June 2006, we held an Senior Executive Service (SES) off-site meeting specifically focusing on concerns regarding the performance ratings of our African-American staff. Shortly thereafter, the Comptroller General decided that in view of the importance of this issue, GAO should undertake an independent, objective, third-party assessment of the factors influencing the average rating differences between African-Americans and Caucasians. We should approach our concern about appraisal ratings for African-Americans with the same analytical rigor and independence that we use when approaching any engagement. We must also be prepared to implement recommendations coming out of this review. Additional Efforts to Enhance Diversity Are Needed and Planned While we continue to have a major challenge regarding the average performance ratings of African-Americans, the percentages of African-Americans in senior management positions at GAO have increased in the last several years. GAO believes that the O&I monitoring reviews, direct access to top GAO management, and the other safeguards have played a significant role in these improvements. Specifically, from fiscal year 2000 to fiscal year 2007, the percentage of African-American staff in the SES/Senior Level (SL) increased from 7.1 percent to 11.6 percent, and at the Band III level the percentages increased from 6.7 percent to 10.8 percent. Furthermore, the percentages of African-Americans in senior management positions at GAO compare favorably to the governmentwide percentages. While the percentage of African-Americans at the SES/SL level at GAO was lower than the governmentwide percentage in 2000, by September 2006, the GAO percentage had increased and exceeded the governmentwide percentage. At the Band III/GS-15 level, the percentage of African-American staff at GAO exceeded the governmentwide percentage in 2000 as well as in 2006. Nonetheless, as an agency that leads by example, additional steps should be taken.

The 2010 NPR report described the administration’s approach to maintaining the U.S. nuclear deterrent capability while pursuing further reductions in nuclear weapons. The 2010 NPR was the third comprehensive assessment of U.S. nuclear policy and strategy conducted by the United States since the end of the Cold War; previous reviews were completed in 1994 and 2001. The Office of the Secretary of Defense and the Joint Staff led the effort in consultation with the Departments of State and Energy. Other organizations participated, including the military departments, the combatant commands, the Departments of Homeland Security and Treasury, the Office of the Director of National Intelligence, and the National Security Council and its supporting interagency bodies. The 2010 NPR report focused on five objectives: 1. preventing nuclear proliferation and nuclear terrorism; 2. reducing the role of U.S. nuclear weapons in the U.S. national security 3. maintaining strategic deterrence and stability at lower nuclear force 4. strengthening regional deterrence and reassuring U.S. allies and 5. sustaining a safe, secure, and effective nuclear arsenal. The third of these objectives—maintaining strategic deterrence and stability at reduced nuclear force levels—emphasizes the importance of bilateral and verifiable reductions in strategic nuclear weapons in coordination with Russia. In support of this objective, the United States signed a new Strategic Arms Reduction Treaty with Russia—known as New START—on April 8, 2010, which entered into force on February 5, 2011. New START gives Russia and the United States 7 years to reduce their strategic delivery vehicles and strategic nuclear warheads—under the counting rules outlined in the treaty—and will remain in force for 10 years. According to DOD’s April 2014 report on its plan to implement New START, DOD plans to maintain 400 deployed intercontinental ballistic missiles; 240 deployed submarine-launched ballistic missiles; and 60 deployed heavy bombers. The 60 heavy bombers consist of B-52s and B-2s. Taken together, these add up to 700 deployed delivery vehicles and fall within the New START limits that go into force in 2018. DOD and military service officials told us these numbers reflect DOD’s current planned strategic force structure for implementing New START. Figure 1 shows DOD’s planned deployed strategic force structure for implementing New START, including the number of delivery vehicles for each leg of the triad. In 2011, the President directed DOD to conduct a follow-on analysis to the NPR, which reviewed U.S. nuclear deterrence requirements. The review resulted in the development of the President’s nuclear employment guidance and a DOD report on this nuclear employment guidance, which was completed in June 2013. The review was led by DOD and included senior-level participation by the Office of the Secretary of Defense, the Joint Chiefs of Staff, Strategic Command, the Department of State, the Department of Energy, the Office of the Director of National Intelligence, and the National Security Staff (now known as the National Security Council). As indicated in DOD’s 2013 report on the President’s nuclear employment guidance, the review assessed what changes to nuclear employment strategy could best support the five key objectives of the 2010 NPR and a sixth objective: achieve U.S. and allied objectives if deterrence fails. In June 2013, DOD completed a Strategic Choices Management Review, which, according to DOD officials, considered reductions in nuclear forces, among other things. According to the Secretary of Defense, the purpose of the Strategic Choices Management Review was to understand the effect that further budget reductions would have on the department and to develop options to deal with these reductions. Figure 2 shows a timeline of events and reviews related to DOD’s assessment of U.S. nuclear forces from 2010 through 2014. DOD assessed the need for each leg of the strategic triad in support of the 2010 NPR and considered other reductions to nuclear forces in subsequent reviews. The department identified advantages of each leg of the triad and concluded that retaining all three would help maintain strategic deterrence and stability. The 2010 NPR report states that the administration considered various options for U.S. nuclear force structure, including options in which the United States would eliminate one leg of the triad. DOD officials also told us that the department had assessed nuclear force reductions as part of subsequent reviews, including during the development of the President’s nuclear employment guidance, the 2013 Strategic Choices Management Review, and the development of DOD’s plan to implement New START. The 2010 NPR report identified advantages of each leg of the triad that DOD decided warrant retaining all three, even in light of the planned reductions under New START. These advantages—including the survivability of the sea-based leg; the intercontinental ballistic missiles’ contribution to stability; and the ability of the nuclear-capable bombers to visibly forward deploy—are further described in Navy and Air Force acquisition documents completed both before and after the 2010 NPR, from 2008 through 2014. These acquisition documents do not include an assessment of the strategic triad as a whole but help define and clarify the advantages that are identified in the 2010 NPR report. In addition to identifying the advantages of each leg, the 2010 NPR report indicates that retaining all three legs best maintains strategic stability at reasonable cost while reducing risk against potential technical problems or vulnerabilities. The 2010 NPR report states that for the planned reductions under New START, DOD considered force structure options in which the department would eliminate a leg of the triad. DOD officials told us that in senior-level force structure meetings in support of the NPR, DOD and key stakeholders discussed and considered alternatives to a triad for U.S. strategic force structure. DOD officials were unable to provide us documentation of the NPR’s analysis of the strategic force structure options that were considered; officials from the Office of the Secretary of Defense, Joint Staff, and Strategic Command told us that much of the NPR analysis on the consideration of different strategic force structure options was discussed in senior-level meetings and was not documented. In addition to the discussions and analysis of options for alternative strategic force structures that occurred during the development of the 2010 NPR, Strategic Command, Air Force, and Navy officials told us that they had also analyzed alternative strategic force structures in advance of the NPR discussions. We reviewed examples of Air Force and Strategic Command analyses and reported on these in our classified report. DOD’s 2013 unclassified report on the President’s nuclear employment guidance states that DOD also assessed potential reductions in U.S. nuclear forces in the follow-on review to the NPR that led to the development of the 2013 Presidential nuclear employment guidance. The report says that, in that review, the President determined that the United States can safely pursue up to a one-third reduction in deployed nuclear weapons from the level established in New START, while still ensuring the security of the United States and U.S. allies and partners and maintaining a strong and credible strategic deterrent. DOD officials told us that to avoid large disparities in nuclear capabilities, the report also stated the administration’s intent to seek negotiated cuts with Russia. However, such negotiations have not yet begun as of August 2016. DOD officials told us that, in the June 2013 Strategic Choices Management Review—which supported the department’s budget review—the department considered cutting nuclear forces and capabilities. The purpose of the Strategic Choices Management Review was to examine the potential effect of additional anticipated budget reductions on the department and generally review how DOD would allocate resources when executing its fiscal year 2014 budget and preparing its fiscal years 2014 through 2019 budget plans. According to DOD officials, the administration and the department ultimately decided against the options to reduce nuclear forces that were considered in the 2013 Strategic Choices Management Review. As we have previously reported, DOD considered alternatives to its strategic force structure in senior-level meetings for implementing New START. According to DOD officials, in these senior-level meetings— which were organized by the Joint Staff and led by the Office of the Under Secretary of Defense for Policy—DOD finalized its recommendations to the National Security Council for the strategic force structure to implement the treaty. DOD officials told us that, during these meetings, DOD participants considered options to comply with the treaty. They also told us that DOD ultimately recommended maintaining 400 deployed intercontinental ballistic missiles, 240 deployed submarine-launched ballistic missiles, 60 deployed heavy bombers, 54 nondeployed intercontinental ballistic missile silos, 40 nondeployed submarine- launched ballistic missile launch tubes, and 6 nondeployed nuclear- capable heavy bombers. According to officials, the National Security Council approved this recommendation, which is reflected in DOD’s April 2014 report on its plan to implement New START. We provided a draft of the classified version of this report to DOD for review and comment. In response to that draft report, DOD provided technical comments that we have incorporated as appropriate. We are providing copies of this report to the appropriate congressional committees, the Secretary of Defense, the Secretary of the Air Force, the Secretary of the Navy, the Secretary of the Army, the Joint Staff, and the Under Secretary of Defense for Policy. In addition, this report is available at no charge on the GAO website at http://www.gao.gov. If you or your staff have any questions about this report, please contact me at (202) 512-9971 or kirschbaumj@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. Key contributors to this report are listed in the appendix. Joseph W. Kirschbaum, (202) 512-9971 or kirschbaumj@gao.gov. In addition to the contact named above, Penney Harwell Caramia (Assistant Director), Scott Fletcher, Jonathan Gill, Joanne Landesman, Amie Lesser, Brian Mazanec, Timothy Persons, Steven Putansu, Michael Shaughnessy, and Sam Wilson made key contributions to this report.

Since the 1960s, the United States has deployed nuclear weapons on three types of strategic delivery vehicles collectively known as the strategic triad. The triad comprises the sea-based leg (submarine-launched ballistic missiles), ground-based leg (intercontinental ballistic missiles), and airborne leg (nuclear-capable heavy bombers). As a result of arms control agreements and strategic policies, the number of U.S. nuclear weapons and strategic delivery vehicles has been reduced substantially; however, the strategic triad has remained intact. DOD and the Department of Energy are planning to invest significant resources to recapitalize and modernize the strategic triad in the coming decades. The departments projected in 2015 that the costs of maintaining U.S. nuclear forces for fiscal years 2016 through 2025 would total $319.8 billion, and DOD expects recapitalization and modernization efforts to extend into the 2030s. GAO was asked to review DOD's analysis of the decision to retain all three legs of the strategic triad. This report describes the processes DOD used in supporting that decision. GAO reviewed documentation and interviewed officials from DOD and the military services on the key reviews DOD carried out from 2009 to 2014— including the 2010 Nuclear Posture Review—in analyzing its strategic force structure. The Department of Defense (DOD) assessed the need for each leg of the strategic triad in support of the 2010 Nuclear Posture Review and considered other reductions to nuclear forces in subsequent reviews. The department identified advantages of each leg of the triad and concluded that retaining all three would help maintain strategic deterrence and stability. The advantages DOD identified include the survivability of the sea-based leg, the intercontinental ballistic missiles' contribution to stability, and the ability of the nuclear-capable bombers to visibly forward deploy. The 2010 Nuclear Posture Review Report states—and DOD officials also told GAO—that the administration has considered various options for the U.S. nuclear force structure, including options in which DOD would eliminate one leg of the triad. For example, Strategic Command, Air Force, and Navy officials told GAO that they had analyzed alternative strategic force structures in preparation for the 2010 Nuclear Posture Review. DOD officials also told GAO that the department had assessed nuclear force reductions as part of reviews conducted after the Nuclear Posture Review, including during the development of the President's 2013 nuclear employment guidance, the 2013 Strategic Choices Management Review, and DOD's 2014 plan to implement the New Strategic Arms Reduction Treaty (New START) with Russia. The figure shows DOD's current planned strategic force structure for implementing New START, including the number of delivery vehicles that would be retained for each leg of the triad. This is a public version of a classified report GAO issued in May 2016. It excludes classified information on warhead levels, the specific advantages of each leg of the triad, and some of the analyses of alternatives that were considered. GAO is not making any recommendations in this report. DOD provided technical comments, which were incorporated as appropriate.

Congress, and this Subcommittee in particular, has demonstrated a sustained interest in working with the District government to ensure that a sound performance management system is in place. After holding hearings on the District’s performance in serving its residents, Congress enacted the “Federal Payment Reauthorization Act of 1994,” which required the District to implement an annual performance assessment process. Specifically, the law requires the District to develop and submit to Congress a performance plan for each fiscal year, including a statement of measurable, objective performance goals for all of the government’s significant activities. After each fiscal year, the District is to develop and submit a performance report that includes (1) the level of performance achieved in relation to each of the goals in the performance plan, (2) the title of the management employee most directly responsible for the achievement of each goal and the title of the employee’s immediate supervisor or superior, and (3) the status of any applicable court orders and the steps taken to comply with such orders. This law’s general approach of establishing performance goals and reporting on performance is similar to the requirements for executive branch federal agencies under the Government Performance and Results Act of 1993 (GPRA). Our extensive work on federal agencies’ implementation of GPRA has shown that it takes time and continuous effort to transform the culture of an organization and adopt a more results- oriented and customer-focused approach to performance management. Last year, on two occasions, we highlighted the challenges faced and progress made by the District to implement a sound performance management system. In April 2000, we reported that the District’s first performance report, covering fiscal year 1999, lacked some of the required information. Specifically, the report did not contain (1) performance data for most of its goals, (2) the titles of managers and their supervisors responsible for each of the goals, and (3) information on any of the court orders applicable to the District government during fiscal year 1999. In October 2000, we testified before the Subcommittee on Oversight of Government Management, Restructuring, and the District of Columbia, Senate Committee on Governmental Affairs, that the District had made progress in defining clear goals and desired outcomes through its strategic planning efforts. However, we said there were still opportunities to more fully integrate various aspects of its planning process and to ensure that performance information was sufficiently credible for decision-making and accountability. Since then, the District has taken a number of actions to implement a performance management process, and Congress has continued to provide oversight directed at strengthening the District’s ability to efficiently and effectively deliver results to its taxpayers. The District’s fiscal year 2000 performance report, issued on March 22 of this year, included several initiatives to address issues raised in congressional hearings on the District’s management and performance. Within the next few weeks, we will issue our detailed assessment of the fiscal year 2000 performance report. However, we are far enough along in our assessment that I can provide an overview of our key findings. Performance management remains very much a work in progress for the District, and the performance report reflects that fact. The District’s goals and measures were in a state of flux during fiscal year 2000, changing as the District introduced new plans, goals, and measures into its performance management process. These changes were part of its ongoing efforts to further develop and improve the performance management process. Nevertheless, these significant and continuing revisions to the District’s performance goals limit the usefulness of the performance report for oversight, transparency, accountability, and decision-making. For example, the goals in the annual plan submitted to Congress were revised extensively to become a final set three-quarters of the way through the assessment period. About 54 percent of the goals established in the annual plan were not addressed in the final goals for the fiscal year. For example, the Department of Motor Vehicles’ goal to seek out regular feedback on the level and quality of service was not used as a final fiscal year 2000 goal. Although the District developed several final goals related to improving customer service such as wait times for vehicle registration, it did not continue the goal to obtain feedback directly from its customers. No explanation was provided in the report to explain why the goal was dropped or whether it had been achieved. Many of the remaining 46 percent of the original goals were significantly revised by the time the District issued its report, making it difficult to determine the degree to which the original goal was achieved. A District official responsible for coordinating the performance report said that information about revisions to goals was only available from the District’s individual agencies and was not centrally collected. Although changing goals to reflect changing circumstances and better understandings of how to improve performance is appropriate, the District’s report does not identify why specific goals were altered during the year or describe the decisionmaking and accountability implications of the change. In our reviews of federal agencies’ performance management efforts under GPRA, we have noted that such information is important to Congress and other decisionmakers so that they can have confidence in the usefulness of the performance report. In the absence of such information, the extensive revisions to the goals and the fact that they were revised during the fiscal year raise concerns about the validity and completeness of the reported performance data. In addition, the District’s performance management process did not cover all significant District activities. Therefore, the performance report does not provide a comprehensive snapshot of the District government’s activities. For example, the report does not cover the performance of the District’s public schools, which accounts for more than 15 percent of the District’s budget. More important, the schools are responsible for a core local government function—providing primary education. On the other hand, the fiscal year 2000 performance report addressed other key legislatively mandated reporting requirements that were not met in the fiscal year 1999 report. Specifically, the District provided the titles of the officials responsible for the goals it finally used in fiscal year 2000. In another improvement over its first year’s report, the District complied with the requirement that it provide information on the status and actions taken to address court orders affecting the District of Columbia government. District officials recognize that much work remains in its goal setting, performance measurement, and accountability efforts and, as I have noted, they have important initiatives underway. In that regard, we believe that two actions will be particularly important as the District continues to move forward. First, the District needs to accelerate efforts to settle upon a set of results-oriented goals that are more consistently reflected in its various planning, reporting, and accountability efforts. In addition and more specifically, the District can improve transparency and thereby assist Congress, District citizens, and city managers in using its performance reports by providing specific information for each goal and measure that changed including a description of how, when, and why the change occurred. Also, the District should identify the impact of the change on the performance assessment itself, including data collection and measurement for the reporting period. Overall, we have a very constructive relationship with the District on these issues and look forward to continuing to work with District officials as they seek to instill a model, results-oriented management system for the city government. The District is now in its fourth year of implementing its new financial management system. However, as we reported recently, essential elements of the system are not operational. For example, two components of its new core general ledger System of Accounting and Reporting, or “SOAR,” have not been fully implemented. Specifically, we found that the SOAR budget module was on hold and the fixed assets module was incomplete. Further, the implementation of personnel and payroll, procurement, and tax systems that feed into SOAR are incomplete and lack electronic interfaces with SOAR. Also, the personnel and payroll system, which the District estimates has cost about $13 million so far, may be abandoned. As of April 2001, the District had no timetable or comprehensive plan for fully implementing its financial management system. Because the financial management system is incomplete, much of the District’s financial management and budget information is produced through cumbersome, manual processes and the extraordinary efforts of a few key staff. For example, the District does not have a formal budget execution process to ensure that planned spending is carried out as envisioned. Instead, it relies on an error-prone manual process to periodically compare actual spending to planned budget limits. Therefore, the District cannot reliably and regularly report on whether it has spent its budget as intended for targeted city services, nor can it report on the cost of those services. The District is continuing to conduct business process reengineering for its budget process before making any decisions about implementing a budget system. The District recently received its fourth consecutive unqualified or “clean” opinion on its financial statements for fiscal year 2000. However, the District’s unqualified opinions on its financial statements are primarily the result of the tremendous amount of effort expended by a few key individuals who were able to accomplish this yearly task despite the serious weaknesses of the city’s financial management system. Such a situation cannot be sustained without significant costs to the District. One of the reasons that the District finds itself in this situation is that it has not employed the necessary disciplined system development processes to develop and implement its financial management system. In addition, the District has not conducted a comprehensive assessment of its human capital needs for financial management functions. Such an assessment would help to ensure that the District’s financial professionals are equipped to meet the challenges of successfully implementing its financial management system to support the District’s mission and goals.Reflecting the current overall status of implementation, officials from the District’s five pilot agencies have indicated that the experience of their agencies with SOAR, as it is currently implemented, does not meet the expectations originally set forth for the new system, and that old deficiencies have still not been remedied. In our earlier work, which addressed the District’s need for a new financial management system, we reported that experience studying the success and failure of hundreds of information systems has shown that hardware and software do little to improve financial management unless they are part of an overall assessment of the processes, personnel, and equipment that make up the entire system. In each of our reports leading up to the September 1997 system acquisition contract and since the acquisition, we have emphasized the need to implement a disciplined system development effort, including requirements management, project planning, project tracking and oversight, quality assurance, configuration management, and risk management. In implementing SOAR, the District proceeded with an ambitious implementation schedule that abbreviated and eliminated key steps in a disciplined process. As our latest report indicates, SOAR implementation had been plagued by delays and increasing costs. Almost 6 years after we began reviewing the system and started making recommendations, the District’s financial management system now serves as yet another cautionary example of the risks entities run when they choose to shortcut a structured, disciplined approach to the planning, acquisition, and management of a new financial management system. The District has completed action on very few of the recommendations we have made in reports dating back to 1995. In our recent report, we made seven recommendations that focus on the District’s need to apply a structured, disciplined approach to completing the implementation of SOAR and related financial management systems to ensure that the entire financial management system is properly, expeditiously, and fully implemented. The Chief Financial Officer (CFO) of the District, in responding to our report, agreed with our recommendations. The CFO also stated that the District is taking action on the recommendations made in our prior reports. The CFO also noted that the District had taken the initial step in conducting a human capital assessment for financial management. The District is also in the process of implementing a new, intensive training program for its users of SOAR. The CFO also stated that the District had an updated timetable and comprehensive plan for fully implementing the SOAR system; however, at the time we finalized our report, the District was not able to provide us with a copy of the plan. We will follow up on the status of our recommendations to the District as part of our regular, semi-annual process for updating the status of GAO recommendations. The District of Columbia Appropriations Act for fiscal year 2001 provided a $250,000 payment to the District Mayor for a contract “for the study and development of a plan to simplify the compensation systems, schedules, and work rules applicable to employees of the District government.” However, the act placed several conditions on the appropriation. First, the plan developed pursuant to the contract was required to include, at a minimum, (1) a review of the current compensation systems, schedules, and work rules applicable to DC government employees, (2) a review of the best practices of state and local governments and other appropriate organizations regarding compensation systems, schedules, and work rules, (3) a proposal for simplifying the systems, schedules, and rules applicable to DC government employees, and (4) the development of strategies for implementing the proposal, including the identification of any statutory, contractual, or other barriers to implementing the proposal and an estimated time frame for implementing the proposal. Second, the Appropriations Act required the contractor to submit the plan to the Mayor and to the committees on appropriations of the House of Representatives and the Senate. Third, the act required the Mayor to develop a proposed solicitation within 90 days after enactment and submit a copy of the proposed solicitation to the Comptroller General at least 90 days before its issuance. Fourth, the act provided that within 45 days after receipt of the proposed solicitation, the Comptroller General must review the solicitation to ensure that it adequately addresses all of the required elements and report on the results to the committees on appropriations of the House and the Senate. The conference report for the Appropriations Act indicated that the conferees expected the District government to supplement the $250,000 appropriated, if necessary, with local funds. Initially, officials from the District’s Office of Personnel told us that the District government did not plan to develop a new solicitation. Instead, they said the District planned to use the funds to help pay the costs associated with existing contracts related to human resources reform initiatives that had been started before the Appropriations Act was passed. They said the District began to rethink its civil service classification and compensation systems in 1999, and that the language in the Appropriations Act was based on an assumption that nothing was being done to improve the condition of the District’s human resource management system. They also said the $250,000 had been deposited in a general fund account controlled by the Mayor, but that no federal money had been spent under the existing contracts.

The District of Columbia has taken various steps to implement a performance management process, and Congress has continued to provide oversight to strengthen the District's ability to efficiently and effectively deliver results to its taxpayers. This testimony discusses GAO's (1) ongoing review of the District's fiscal year 2000 performance report; (2) report issued in April 2001 on the implementation of the District's new financial management system; and (3) report being issued in May 2001 on the District's decision not to use money that Congress provided to help simplify the District's compensation systems, schedules, and work rules. GAO found that although the fiscal year 2000 report more fully met statutory requirements than did the 1999 report, performance planning, measurement and reporting is still a work in progress in the District. The District continues to face significant challenges in its efforts to put in place a financial management framework that ensures timely and reliable data on the cost of the District's operations. Finally, the District no longer plans to use the $250,000 appropriated by Congress for reform of the District's classification and compensation systems because doing so would delay their reform effort. This testimony summarizes two GAO reports ( GAO-01-489 and GAO-01-690R).

Since 1995, legislation that would guarantee collective bargaining rights for state and local public safety officers has been introduced in Congress. The Public Safety Employer-Employee Cooperation Act (PSEECA)—introduced in the 111 th Congress as H.R. 413 by Representative Dale E. Kildee, S. 1611 by Senator Judd Gregg, and S. 3194 and S. 3991 by Senator Harry Reid—would recognize such rights by requiring compliance with federal regulations and procedures if these rights are not provided under state law. Supporters of the measure maintain that strong partnerships between public safety officers and the cities and states they serve are not only vital to public safety, but are built on bargaining relationships. Opponents argue, however, that the bill infringes on an area that has traditionally been within state control. This report reviews the PSEECA and discusses the possible impact of the legislation. The report also identifies existing state laws that recognize collective bargaining rights for public safety employees, and considers the constitutional concerns raised by the measure. Under the PSEECA, the Federal Labor Relations Authority (FLRA) would be required to determine whether a state substantially provides for specified labor-management rights within 180 days of the measures enactment. If the FLRA determines that a state does not substantially provide for such rights, the state would be subject to regulations and procedures prescribed by the FLRA. The FLRAs regulations and procedures would be consistent with the labor-management rights identified in the PSEECA. These rights include granting public safety officers the right to form and join a labor organization that is, or seeks to be, recognized as the exclusive bargaining representative of such employees; requiring public safety employers to recognize the employees labor organization (freely chosen by a majority of the employees), to agree to bargain with the labor organization, and to commit any agreements to writing in a contract or memorandum of understanding; providing for bargaining over hours, wages, and terms and conditions of employment; making available an interest impasse resolution mechanism, such as fact-finding, mediation, arbitration, or comparable procedures; and requiring the enforcement of all rights, responsibilities, and protections provided by state law and any written contract or memorandum of understanding in state courts. The FLRA would have one year from the date of enactment of the PSEECA to issue regulations that establish these rights for public safety officers in states that do not substantially provide them. The new regulations would become applicable in noncomplying states either two years after the date of enactment of the PSEECA or on the date of the end of the first regular session of the states legislature that begins after the date of enactment of the PSEECA, whichever is later. The PSEECA defines the term public safety officer to include law enforcement officers, firefighters, and emergency medical services personnel. An employer, for purposes of the act, includes any state, political subdivision of a state, the District of Columbia, and any territory or possession of the United States that employs public safety officers. A political subdivision of a state that has a population of less than 5,000 or that employs fewer than 25 full time employees, however, may be exempted from the acts requirements. The sponsors of the PSEECA appear to rely on the Commerce Clause of the U.S. Constitution for the authority to enact the measure. Section 2(5) of the PSEECA states, The potential absence of adequate cooperation between public safety employers and employees has implications for the security of employees, impacts the upgrading of police and fire services of local communities, the health and well-being of public safety officers, and the morale of the fire and police departments, and can affect interstate and intrastate commerce. During the 110 th Congress, the House Committee on Education and Labor further observed that there is "little question that public safety employees [sic] and their role in homeland security affects interstate commerce.... The economic impact of terrorism and natural disasters is not limited to the locality where these events occur. Rather, such events have regional and economic impacts for which the federal government must be responsive." Whether the Commerce Clause provides sufficient authority to support the PSEECA, however, may not be entirely certain. Although the U.S. Supreme Court has found that the Fair Labor Standards Act, a statute enacted pursuant to Congresss authority under the Commerce Clause, can be applied to employees of a public mass-transit authority, more recent decisions involving the Commerce Clause suggest that the regulation of labor-management relations for public safety officers may not be sufficiently related to commerce and may be invalidated, if challenged. In United States v. Lopez , a 1995 case involving the Gun-Free School Zones Act of 1990 and Congresss authority under the Commerce Clause, the Court identified three broad categories of activity that Congress may regulate pursuant to its commerce power: First, Congress may regulate the use of channels of interstate commerce.... Second, Congress is empowered to regulate and protect the instrumentalities of interstate commerce, or persons or things in interstate commerce, even though the threat may come only from intrastate activities.... Finally, Congress commerce authority includes the power to regulate those activities having a substantial relation to interstate commerce ... i.e. , those activities that substantially affect interstate commerce. The Lopez Court concluded that the act, which prohibited any individual from possessing a firearm at a place the individual knew or had reasonable cause to believe was a school zone, exceeded Congresss authority under the Commerce Clause because the possession of a gun in a local school zone did not have a substantial effect on interstate commerce. The Court maintained that upholding the act would require the Court to "pile inference upon inference in a manner that would bid fair to convert congressional authority under the Commerce Clause to a general police power of the sort retained by the States." Similarly, in United States v. Morrison , a 2000 case involving Congresss commerce power and a section of the Violence Against Women Act, the Court found that Congress exceeded its authority because gender-motivated crimes of violence occurring within a state have no substantial effect on interstate commerce. The Court maintained that its cases upholding federal regulation of intrastate activity all involve activity that reflects some form of economic endeavor. The Court noted that the regulation and punishment of intrastate violence that is "not directed at the instrumentalities, channels, or goods involved in interstate commerce has [sic] always been the province of the States." Most recently, in Gonzales v. Raich , the Court upheld the Controlled Substances Act (CSA) as a valid exercise of Congresss commerce authority. The CSA was challenged by two users of medical marijuana that was locally grown and prescribed in accordance with California law. They argued that Congress lacked the authority to prohibit the intrastate manufacture and possession of marijuana for medical purposes. Citing its decision in Wickard v. Filburn , a 1942 case that recognized Congresss authority under the Commerce Clause to regulate intrastate activities, the Court reiterated that even if an activity is "local and ... may not be regarded as commerce, it may still, whatever its nature, be reached by Congress if it exerts a substantial economic effect on interstate commerce." The Court maintained that the production of a commodity has a substantial effect on supply and demand in the national market for that commodity, and observed that there was a likelihood that the high demand in the interstate market would draw marijuana grown for home consumption into that market. The Court distinguished Raich from Lopez and Morrison by noting that the CSA, unlike the Gun-Free School Zones Act and the Violence Against Women Act, regulates activities that are "quintessentially economic." The Court indicated that "[t]he CSA is a statute that regulates the production, distribution, and consumption of commodities for which there is an established, and lucrative, interstate market. Prohibiting the interstate possession or manufacture of an article of commerce is a rational (and commonly utilized) means of regulating commerce in that product." While the PSEECA would not seem to regulate the channels or instrumentalities of interstate commerce, it has been argued that it would regulate an activity that substantially affects interstate commerce. By "improving the cohesiveness and effectiveness of public safety employers and their employees," it is believed that the PSEECA would minimize the costs associated with terrorism and natural disasters. During the 110 th Congress, the House Committee on Education and Labor noted, "The economic impact of terrorism and natural disasters is not limited to the locality where these events occur. Rather, such events have regional and national economic impacts for which the federal government must be responsive." Some maintain, however, that public safety employment is not an economic activity that may be regulated pursuant to Congresss commerce authority. In light of the Courts decisions in Lopez , Morrison , and Raich , it has been argued that police work, firefighting, and emergency medical services are not economic enterprises or activities related to commercial transactions. Rather, such duties are public services provided by states and localities to their citizens. Moreover, the PSEECA would not be regulating the production, distribution, or consumption of a commodity for which there is an interstate market by requiring collective bargaining rights for public safety officers. While the PSEECA would seem to raise questions involving Congresss authority under the Commerce Clause, it does not appear to present concerns over the commandeering of state or local regulatory processes in violation of the Tenth Amendment. In New York v. United States , a 1992 case involving a federal requirement that gave states a choice between taking title to radioactive waste or regulating in accordance with congressional directives, the Court indicated that "Congress may not simply 'commandee[r] the legislative processes of the States by directly compelling them to enact and enforce a federal regulatory program.'" Unlike the provision at issue in New York , the PSEECA would not seem to direct states to legislate collective bargaining for public safety officers. Instead, states would be given the option of either enacting legislation that satisfies the federal standards or becoming subject to the FLRAs regulations. One might also contend that the measure does not appear to require state or local governments to implement a federal regulatory program. Rather, a federal collective bargaining scheme for public safety officers would be implemented by the FLRA only if a state chose not to enact a program of its own. The PSEECA has generated strong reactions from both the business and organized labor communities, with the former generally opposing the measure and the latter supporting it. Critics of the act emphasize the administrative and personnel costs that would likely be expended to comply with the measure. Because of the difficulty in predicting how many workers may organize or what terms and conditions would be negotiated, the cost of the measure for state and local governments was not estimated by the Congressional Budget Office (CBO) when earlier versions of the legislation were considered. CBO did estimate, however, that the FLRA would need to spend an additional $3 million to develop regulations, to determine whether states were in compliance with the law, and to respond to judicial review of its determinations. Indeed, some have maintained that the PSEECA could increase demands on the FLRA, either by stretching its resources or requiring new staff. Although subsequent costs are difficult to predict because states may respond differently and, once given the right, public safety officers may or may not unionize, CBO estimated that the FLRA would spend about $10 million annually to administer the act. Opponents of the PSEECA have also argued that the measure could raise the cost of public safety because of potentially higher wages and benefits, as well as the cost of negotiating and administering collective bargaining agreements. Supporters of the PSEECA contend that the measure would give many public safety workers the right to organize and bargain collectively—rights that they may not currently have. The arguments in support of the act are generally based on what proponents maintain are the benefits of collective bargaining. For example, collective bargaining may improve the hours, pay, benefits, and working conditions of public safety workers. Higher pay and better working conditions may reduce turnover. Arguably, lower turnover could reduce the cost of hiring and training new workers. Supporters also argue that the PSEECA would give workers a "voice" in the workplace. They maintain that unions provide workers an additional way to communicate with management. Instead of expressing their dissatisfaction by quitting, workers can use formal procedures to resolve issues relating to working conditions or other matters. Thus, according to supporters, the PSEECA would give labor and management a way to work together to resolve differences. Therefore, supporters further maintain that, by improving labor-management relations, the measure would improve public safety.

Since 1995, legislation that would guarantee collective bargaining rights for state and local public safety officers has been introduced in Congress. The Public Safety Employer-Employee Cooperation Act (PSEECA)—introduced in the 111th Congress as H.R. 413 by Representative Dale E. Kildee, S. 1611 by Senator Judd Gregg, and S. 3194 and S. 3991 by Senator Harry Reid—would recognize such rights by requiring compliance with federal regulations and procedures if these rights are not provided under state law. Supporters of the measure maintain that strong partnerships between public safety officers and the cities and states they serve are not only vital to public safety, but are built on bargaining relationships. Opponents argue, however, that the bill infringes on an area that has traditionally been within state control. This report reviews the PSEECA and discusses the possible impact of the legislation. The report also identifies existing state laws that recognize collective bargaining rights for public safety employees, and considers the constitutional concerns raised by the measure.

RS21324 -- Iraq: A Compilation of Legislation Enacted and Resolutions Adopted by Congress, 1990-2003 Updated March 27, 2003 House H.J.Res. 658 Supported the actions taken by the President with respect to Iraqi aggression against Kuwait and confirmed United States resolve. Passed in the House: October 1, 1990 H.Con.Res. 382 Expressed the sense of the Congress that the crisis created by Iraq's invasion and occupation of Kuwait must be addressed and resolved on its own terms separately from otherconflicts in the region. Passed in the House: October 23, 1990 Senate S.Res. 318 Commended the President for his actions taken against Iraq and called for the withdrawal of Iraqi forces from Kuwait, the freezing of Iraqi assets, the cessation of all armsshipments to Iraq, and the imposition of sanctions against Iraq. Passed in the Senate: August 2, 1990 Public Laws P.L. 101-509 ( H.R. 5241 ). Treasury, Postal Service, and General Government Appropriations Act FY1991 (Section 630). Urged the President to ensure that coalition allies were sharing theburden of collective defense and contributing financially to the war effort. Became public law: November 5, 1990 P.L. 101-510 ( H.R. 4739 ). Defense Authorization Act FY1991 (Section 1458). Empowered the President to prohibit any and all products of a foreign nation which has violated the economicsanctions against Iraq. Became public law: November 5, 1990 P.L. 101-513 ( H.R. 5114 ). The Iraq Sanctions Act of 1990 (Section 586). Imposed a trade embargo on Iraq and called for the imposition and enforcement of multilateral sanctions inaccordance with United Nations Security Council Resolutions. Became public law: November 5, 1990 P.L. 101-515 ( H.R. 5021 ). Department of Commerce, Justice, and State Appropriations Act FY1991 (Section 608 a & b). Restricted the use of funds to approve the licensing for export of anysupercomputer to any country whose government is assisting Iraq develop its ballistic missile program, or chemical,biological, and nuclear weapons capability. Became public law: November 5, 1990 Public Laws P.L. 102-1 ( H.J.Res. 77 ). Authorization for Use of Military Force Against Iraq Resolution . Gave congressional authorization to expel Iraq from Kuwait in accordance with United NationsSecurity Council Resolution 678, which called for the implementation of eleven previous Security CouncilResolutions. Became public law: January 12, 1991 P.L. 102-138 ( H.R. 1415 ). The Foreign Relations Authorization Act for FY1992 (Section 301). Stated that the President should propose to the Security Council that members of the Iraqiregime be put on trial for war crimes. Became public law: October 28, 1991 P.L. 102-190 ( H.R. 2100 ). Defense Authorization Act for FY1992 (Section 1095). Supported the use of "all necessary means to achieve the goals of United Nations Security CouncilResolution 687 as being consistent with the Authorization for Use of Military Force Against Iraq Resolution ( P.L.102-1 )." Became public law: December 5, 1991 Public Laws P.L. 103-160 ( H.R. 2401 ). Defense Authorization Act FY1994 (Section 1164). Denied defectors of the Iraqi military entry into the United States unless those persons had assisted U.S. orcoalition forces and had not committed any war crimes. Became public law: November 30, 1993 P.L. 103-236 ( H.R. 2333 ). Foreign Relations Authorization Act FY1994, 1995 (Section 507). Expressed the sense of Congress that the United States should continue to advocate themaintenance of Iraq's territorial integrity and the transition to a unified, democratic Iraq. Became public law: April 30, 1994 House H.Res. 120 Urged the President to take "all appropriate action" to secure the release and safe exit from Iraq of American citizens William Barloon and David Daliberti, who had mistakenlycrossed Iraq's border and were detained. Passed in the House: April 3, 1995 Senate S.Res. 288 Commended the military action taken by the United States following U.S. air strikes in northern Iraq against Iraqi radar and air defense installations. This action was taken duringthe brief Kurdish civil war in 1996. Passed in the Senate: September 5, 1996 House H.Res. 322 Supported the pursuit of peaceful and diplomatic efforts in seeking Iraqi compliance with United Nations Security Council Resolutions regarding the destruction of Iraq'scapability to deliver and produce weapons of mass destruction. However, if such efforts fail, "multilateral militaryaction or unilateral military action should be taken." Passed in the House: November 13,1997 H.Con.Res.137 Expressed concern for the urgent need of a criminal tribunal to try members of the Iraqi regime for war crimes. Passed in the House: January 27, 1998 H.Res. 612 Reaffirmed that it should be the policy of the United States to support efforts to remove the regime of Saddam Hussein in Iraq and to promote the emergence of a democraticgovernment to replace that regime. Passed in the House: December 17, 1998 Senate S.Con.Res. 78 Called for the indictment of Saddam Hussein for war crimes. Passed in the Senate: March 13, 1998 Public Laws P.L. 105-174 ( H.R. 3579 ). 1998 Supplemental Appropriations and Rescissions Act (Section 17). Expressed the sense of Congress that none of the funds appropriated or otherwise madeavailable by this act be used for the conduct of offensive operations by the United States Armed Forces against Iraqfor the purpose of enforcing compliance with United Nations Security CouncilResolutions, unless such operations are specifically authorized by a law enacted after the date of the enactment ofthis act. Became public law: May 1, 1998 P.L. 105-235 ( S.J.Res. 54 ). Iraqi Breach of International Obligations . Declared that by evicting weapons inspectors, Iraq was in "material breach" of its cease-fire agreement. Urged thePresident to take "appropriate action in accordance with the Constitution and relevant laws of the United States, tobring Iraq into compliance with its international obligations." Became public law:August 14, 1998 P.L. 105-338 ( H.R. 4655 ). Iraq Liberation Act of 1988 (Section 586). Declared that it should be the policy of the United States to "support efforts" to remove Saddam Hussein from power inIraq and replace him with a democratic government. Authorized the President to provide the Iraqi democraticopposition with assistance for radio and television broadcasting, defense articles and militarytraining, and humanitarian assistance. Became public law: October 31, 1998 House H.J.Res. 75 Stated that Iraq's refusal to allow weapons inspectors was a material breach of its international obligations and constituted "a mounting threat to the United States, its friends andallies, and international peace and security." Passed in the House: December 20, 2001 Public Laws P.L. 107-243 ( H.J.Res. 114 ). To Authorize the Use of United States Armed Forces against Iraq . Authorized the President to use armed force to defend the national security of the United Statesagainst the threat posed by Iraq and to enforce all relevant U.N. resolutions regarding Iraq. Became public law:October 16, 2002 House H.Con.Res. 104 Expresses the unequivocal support and appreciation of the nation (1) to the President as Commander-in-Chief for his firm leadership and decisive action in the conduct ofmilitary operations in Iraq as part of the on-going Global War on Terrorism; (2) to the members of the U.S. armedforces serving in Operation Iraqi Freedom, who are carrying out their missions withexcellence, patriotism, and bravery; and (3) to the families of the U.S. military personnel serving in Operation IraqiFreedom, who are providing support and prayers for their loved ones currently engagedin military operations in Iraq. Passed in the House: March 21, 2003. Senate S.Res. 95 Commends and supports the efforts and leadership of the President, as Commander in Chief, in the conflict against Iraq. Commends, and expresses the gratitude of the nation to allmembers of the U.S. armed forces (whether on active duty, in the National Guard, or in the Reserves) and thecivilian employees who support their efforts, as well as the men and women of civiliannational security agencies who are participating in the military operations in the Persian Gulf region, for theirprofessional excellence, dedicated patriotism, and exemplary bravery. Expresses the deepcondolences of the Senate to the families of brave Americans who have lost their lives in this noble undertaking,over many years, against Iraq. Expresses sincere gratitude to British Prime Minister TonyBlair and his government for their courageous and steadfast support, as well as gratitude to other allied nations fortheir military support, logistical support, and other assistance in the campaign againstSaddam Hussein's regime. Passed in the Senate: March 20, 2003. For a complete list of 108th legislation related to Iraq that has been proposed in either the House or the Senate, please see Iraq - U.S. Confrontation: Legislation in the 108th Congress (3) available online at http://www.crs.gov/products/browse/iraqleg.shtml .

This report is a compilation of legislation on Iraq from 1990 to the present. The list is composed of resolutions and public laws relating to military action ordiplomatic pressure to be taken against Iraq. (1) Thelist does not include foreign aid appropriations bills passed since FY1994 that deny U.S. funds to any nation inviolation of the United Nations sanctionsregime against Iraq. (2) Also, measures that were not passed only in either the House or the Senate are not included (with the exceptionof the proposals in the 108th Congress and several relevant concurrentand joint resolutions from previous Congresses ). For a more in-depth analysis of U.S. action against Iraq, see CRS Issue Brief IB92117, Iraq, Compliance, Sanctions and U.S. Policy. This report will beupdated periodically.

M ore than half of business income is generated by sole proprietorships, partnerships, and S corporations. Businesses that choose one of these organizational forms are often referred to as "pass-throughs" because the income they earn passes through the company to its owners without triggering a business-level tax. Pass-through owners then pay taxes on their share of the business's income according to the individual income tax rates. In contrast, the income of C corporations is taxed once at the corporate level according to the corporate tax system, and then a second time at the individual-shareholder level. The fact that pass-throughs are responsible for more than half of business income is important because recent tax reform discussions have included the possibility of lowering the tax burden on these businesses. Proponents suggest that lowering taxes on pass-throughs may increase investment, output, and employment. On the other hand, lower taxes on pass-throughs could have important consequences on the income distribution and progressivity of the tax system, incentives to characterize labor income as business income, and federal tax revenues. This report uses a nationally representative sample of individual tax returns to analyze who earns pass-through income. The report begins with examining who earns pass-through income generally. The analysis then summarizes the distribution of pass-through income for each type of organization. Recent tax reform proposals are then presented, followed by a review of several considerations that Congress may find useful as it continues to debate tax reform. Approximately 28.7 million (or one in five) taxpayers reported pass-through business income (or loss) totaling more than $687 billion in 2011. Among those earning pass-through income, the average amount reported was $26,011. These figures exclude capital gains income from pass-throughs and farming income. This section analyzes the distribution of pass-through income by adjusted gross income (AGI). When useful and possible, the analysis also distinguishes between sole proprietorship, partnership, and S corporation income, as well as active and passive income. Figure 1 shows the distribution of pass-through income by several AGI groups. A more detailed distribution, along with the distribution of tax returns reporting pass-through income, may be found in Table A-1 of the Appendix . Taxpayers with an AGI of $100,000 or greater earned 84% of pass-through income, while accounting for roughly 23% of returns reporting pass-through income. Conversely, taxpayers with AGI less than $100,000 earned about 16% of pass-through income, but accounted for 77% of returns with pass-through income. A significant proportion of pass-through income was concentrated among upper-income earners. Taxpayers with an AGI over $250,000, for example, received 63% of pass-through income, but accounted for just over 6% of returns reporting such income. Those with an AGI in excess of $1 million earned about 32% of pass-through income, while filing roughly 1% of all returns reporting pass-through income. Table 1 displays the distribution of pass-through income by business type. The distribution shows that sole proprietorship income was more evenly distributed across income groups than partnership and S corporation income. Partnership net income was more concentrated among upper income individuals with nearly all of it accruing to taxpayers with AGI in excess of $100,000, including nearly 48% accruing to those with AGI over $1 million. Nearly all of S corporation income was also earned by taxpayers with an AGI over $100,000, but a greater share of S corporation income than partnership income was earned by those with an AGI over $1 million—about 52%. Table 1 also shows a concentration of net losses for partnerships and S corporations at the lower end of the income distribution. Pass-through income and losses are one component of AGI. Thus, if a taxpayer relies primarily on a partnership or S corporation for income, and the business realizes losses, the taxpayer's AGI will likely be negative. There are several scenarios which could explain the losses. A portion of these losses may be due to start-up businesses that are experiencing losses. It is also possible that a portion of these losses are due to failing businesses, both new and old. Lastly, some of the losses may be attributable to temporary business disruptions experienced at particular firms. Without more detailed data on the businesses associated with these losses, however, it is difficult to know for certain. Partnership and S corporation income can be separated into active and passive income. The distinction between the two can be important because passive activity loss rules generally prevent passive losses from offsetting active income. Additionally, active income is exempt from the 3.8% net investment tax that was enacted as part of health care reform, but not imposed until the 2013 tax year. Active income is income resulting from active participation in a business, whereas passive income is income from a business in which the taxpayer did not materially participate. A business partner involved in the day to day management and operations of the business, for example, would earn active income, while a silent partner who has no involvement in the business outside of possibly financial commitments would earn passive income. Sole proprietorship income is not distinguished in the data used in this analysis. Most sole proprietors, however, will be actively involved in their business (since they are sole owner) suggesting that the overwhelming majority of sole proprietor income is active. Figure 2 displays the distribution of active and passive income for partnerships and S corporations. Active income accounts for 76% of partnership income and 90% of S corporation income. Conversely, 24% of partnership income and 10% of S corporation income is passive. A significant share of passive income from either business type is concentrated among higher income individuals (see Table A-2 in the Appendix ). Recent tax reform discussions have included lowering the tax rates and tax burden on pass-through income. Most recently, the majority party leaders of the House and Senate, along with the Trump Administration, issued the "Unified Framework for Fixing Our Broken Tax Code" on September 27, 2017, which proposes limiting the maximum tax rate on pass-through income to 25%. The House Republican Conference's "Better Way" tax reform blueprint, released on June 24, 2016, also proposes limiting the tax rate to 25%, but indicates that the lower rate will only apply to active pass-through income. Both proposals also include other changes that could potentially affect pass-throughs, such as the tax treatment of depreciable assets and business interest, as well as the restriction or repeal of other business deductions and credits. Because there is a great deal of uncertainty over exactly how these other changes may be implemented, the considerations presented below are reviewed within the context of reducing the tax rates and the general tax burden on pass-through income. Attention thus far appears to be primarily focused on the effect reducing taxes on pass-through income could have on the economy's performance, both in the short-run and long-run, the progressivity of the tax system, and small businesses. However, tax experts have also pointed out that the rate reduction could change the incentive for individuals to characterize labor income as business income. Additionally, there is the longer standing question of why the tax code treats businesses differently based on whether they are organized as a pass-through or C corporation, and what effect that has on the complexity of the tax system. This section discusses each of these issues in turn. Lowering the maximum statutory tax rate on pass-through income would likely stimulate investment in the short-run. The rate reduction, however, may not stimulate as much new investment as other changes that have been discussed as part of tax reform. For example, both the Unified Framework and the Better Way propose allowing businesses to expense new investments. Expensing may be more stimulative, or at least better targeted, than a rate reduction since expensing would benefit new investments relatively more than rate reductions. A rate reduction would benefit all pass-through income and thus provide a windfall gain for old investments. The longer-run effect on the economy from a rate reduction is less clear. This is particularly true if deficits are predicted to increase. Increased deficits may lead to higher future interest rates as the government competes with the private sector for financing. Additionally, policymakers in the future may grow concerned over the sustainability of deficits and raise taxes in response. A rise in interest rates or taxes could curtail or offset any positive effect from a tax rate reduction for pass-throughs or tax reform more generally. Still, without more details about the overall reform, it is difficult to determine more precisely what the impact would be in the short-run or the long-run from any changes. While lowering the tax burden on pass-through income could potentially stimulate the economy, particularly in the short-run, it may also reduce the progressivity of the tax code. As previously stated, 62% of pass-through income was earned by taxpayers with an AGI over $250,000, and 32% was earned by individuals with an AGI in excess of $1 million. The distributions of partnership and S corporation income were more heavily skewed to the upper end of the income distribution. As a result, the benefit from lowering taxes on pass-through income is likely to accrue predominately to upper-income individuals. This would cause the tax system to become less progressive, all else equal. Reducing the tax burden on pass-throughs seems to be partly driven by the assumption that pass-throughs and small business are synonymous. The data show that this is not the case; the majority of all businesses are small. For example, in 2011, more than 99% of both pass-throughs and C corporations had less than 500 employees, which is the most common employment-based threshold used by the Small Business Administration. Additionally, large firms are responsible for a non-trivial share of pass-through employment. About 24% of employees at pass-throughs worked at firms with more than 500 employees in 2011, which is more than the share who were employed at firms with 10 or fewer employees. If the goal of a particular tax policy is to assist small businesses, then basing the policy on a measure of firm size rather than legal form of organization may enhance its effectiveness. Tax professionals have expressed concern that lowering the tax rate on pass-through business income may encourage some individuals to recharacterize the nature of their income to reduce their taxes. The Unified Framework and the Better Way both propose a maximum tax rate of 25% on pass-through business income. However, the Unified Framework would tax labor income at a maximum rate of at least 35%, and the Better Way would tax labor income at rate up to 33%. By taxing business income at a lower rate than labor income, employee-owners of pass-throughs may characterize labor income as business income to take advantage of the lower tax rate. Additionally, some individuals may create pass-through businesses through which to direct their compensation so as to benefit from the lower tax rate. The Unified Framework and Better Way plan recognize this potential challenge but do not lay out detailed steps that would be taken to prevent the recharacterization of income. Arguably, a comprehensive tax reform would address the discrepancy that exists in the taxation of corporate and non-corporate businesses. It is well known that this is not an easy task, but reducing the tax burden on pass-through income alone would not address this discrepancy or the inequity and inefficiencies that exist because two otherwise identical businesses are taxed differently because of their legal structure. Additionally, a rate reduction on pass-through (or corporate) income by itself does little to simplify the tax treatment of businesses. The majority of the complexity in the tax system is the result of special tax incentives such as exclusions, credits, and deductions. While policymakers have expressed a desire to pare back business tax incentives in exchange for a rate reduction there have not been any detailed proposals to do so during the most recent round of tax reform debates. The Joint Committee on Taxation (JCT) has not provided official revenue estimates for the Unified Framework or Better Way proposals as of the date of this writing. The Tax Policy Center (TPC), however, has conducted a preliminary analysis of the Unified Framework. The TPC has estimated that the proposal to limit the tax rate on pass-through income to 25% would generate a revenue loss of $769.6 billion over ten years. The TPC has also estimated that the rate reduction contained in the Better Way proposal would lose $412.8 billion over ten years. The difference in estimates is explained in part by the fact that the TPC assumed that under the Better Way proposal, characterization of labor income as pass-through income would not occur, whereas it did not make such an assumption for their analysis of the Unified Framework. The Tax Foundation also analyzed the Better Way plan and found that the rate reduction on pass-through income would cost $515 billion over ten years using a "static" modeling approach, and $388 billion over ten years using a "dynamic" modeling approach. Dynamic revenue estimates incorporate economic feedback effects that can result in a portion of a tax rate reduction's static cost being offset by greater economic activity and thus greater tax revenues. The TPC also constructed a dynamic estimate for the Better Way plan, but not for individual provisions. As the date of this writing the Tax Foundation had not estimated the cost of the Unified Framework nor has the TPC conducted a dynamic analysis. It is important to emphasize that with any estimates made thus far by outside groups they must be interpreted with caution. Because detailed legislative language has not been released, estimators made assumptions about missing details needed to estimate the draft proposals. Changing these assumptions to reflect currently unavailable plan details would likely change revenue estimates, perhaps significantly.

Pass-through businesses—sole proprietorships, partnerships, and S corporations—generate more than half of all business income in the United States. Pass-through income is, in general, taxed only once at the individual income tax rates when it is distributed to its owners. In contrast, the income of C corporations is taxed twice; once at the corporate level according to corporate tax rates, and then a second time at the individual tax rates when shareholders receive dividend payments or realize capital gains. This leads to the so-called "double taxation" of corporate profits. This report analyzes individual tax return data to determine who earns pass-through business income. The analysis finds that in 2011 over 82% of net pass-through income was earned by individuals with an adjusted gross income (AGI) over $100,000, although these taxpayers accounted for just 23% of individual returns with pass-through income. A significant fraction of pass-through income is concentrated among upper-income earners. Taxpayers with an AGI over $250,000, for example, received 62% of pass-through income, but accounted for just over 6% of returns with pass-through income. Individuals with an AGI in excess of $1 million earned about 32% of pass-through income, while filing roughly 1% of all returns with pass-through income The findings change slightly when the data for each organizational type are analyzed separately. Nearly half of sole proprietorship income was earned by individuals with an AGI of $100,000 or less. Taxpayers with an AGI between $100,000 and $500,000 earned 39% of sole proprietor income. Individuals with an AGI in excess of $1 million earned 6% of sole proprietor income. Partnership net income was more concentrated among upper-income individuals with nearly all of it accruing to taxpayers with AGI in excess of $100,000, including nearly 48% accruing to those with an AGI over $1 million. Nearly all of S corporation income was also earned by taxpayers with an AGI over $100,000, but a greater share of S corporation income than partnership income was earned by those with an AGI over $1 million—about 52%. Who earns pass-through income may have important implications for tax reform. Recent tax reform discussions have included taxing pass-through income at a lower rate than the current rate. While lowering the tax burden on pass-through income could potentially stimulate the economy, particularly in the short-run, it could also reduce the progressivity of the tax code given the share of pass-through income that is attributable to the upper end of the income distribution. Tax reform could also result in pass-through income being taxed at lower rates than labor income. This could lead some taxpayers to characterize labor income as business income to minimize taxes. Additionally, a tax rate reduction on pass-through (or corporate) income does little to simplify the tax treatment of businesses. The majority of the complexity in the tax system is the result of special tax incentives such as exclusions, credits, and deductions, formally known as "tax expenditures." Finally, reducing taxes on pass-through businesses could have important budgetary and revenue impacts.

Since August, four major storms have directly struck or passed close to Haiti, killing hundreds and affecting hundreds of thousands of people. The storms have caused flooding in all ten of the country's departments. Tropical Storm Fay struck Haiti on August 16 while Hurricane Gustav struck on August 26 with heavy rains and winds. In the first days of September, Tropical Storm Hanna brought more torrential rain, causing floods as deep as almost ten feet in Gonaives. Hurricane Ike did not directly strike Haiti, but significantly increased water levels in areas that were already flooded. Overall, almost 500 people have died. Haiti was already experiencing a food crisis; the impact of the storms has greatly exacerbated the problem, mainly due to flooding. The storms destroyed approximately one-third of the country's rice crop. Haiti's rice crop is essentially used for domestic consumption, and reportedly is a lifeline for many Haitians. Livestock, other crops, seeds, and farm equipment were destroyed as well. The storms hit during harvest season, meaning that farmers will not have capital from this crop to reinvest in future crops. Some observers worry that additional food shortages and price increases could again lead to riots, like the ones in April of this year that killed several people and contributed to the dismissal of the Prime Minister. Nearly 70% of the internally displaced persons living in shelters in the wake of the storms were in the Department of Artibonite, known as Haiti's rice bowl. In the departmental capital of Gonaives, at least 80% of the city's 300,000 residents were affected. Nearly half of those affected by the storm are reportedly children. Almost half of the shelters across the country are located in schools. The Haitian Ministry of Education is working with international organizations to clean and rehabilitate schools and find alternative shelters. The number of internally displaced people living in shelters dropped from just over 111,000 in mid-September to an estimated 35,000 to 40,000 in mid-October. Nonetheless, some schools will share their space with displaced people until they are able to return to their homes. Moreover, many families who have lost their homes and possessions will not be able to afford school costs for their children. Even though damage to schools delayed the start of the school year by over a month, the UN World Food Program has already resumed school feeding programs throughout most of the country. Prior to the storms, the Haitian Office for Disaster Preparedness issued warnings through radio and television, although not all citizens have access to those media. After the storms, the Haitian government declared eight departments to be under a state of emergency, allowing for the release of extra funding from the national budget for relief efforts in those areas. The government is coordinating emergency response through the Civilian Protection Unit of the Ministry of the Interior. The Ministry of the Interior is coordinating the distribution of relief assistance, working with the United Nations Stabilization Mission in Haiti (MINUSTAH), the Red Cross, and a U.S. ship with hospital capability, the USS Kearsarge, all of which are providing helicopters for delivering food and water aid to remote and inaccessible areas. The Minister of Finance has lifted regulations on incoming aid for several months so that disaster relief assistance will not be subject to the usual customs delays. All government ministers were dispatched around the country to help assess needs and compose lists of assistance requirements for international donors. The U.S. Ambassador to Haiti, Janet Sanderson, issued a disaster declaration on September 2, 2008, in response to the flooding throughout the country caused by Hurricane Gustav. Subsequently, U.S. officials from the State Department, USAID, and the Department of Defense (DOD) met with Haitian President René Préval, who said that infrastructure and transportation were key priorities; many roads and bridges were washed away or heavily damaged by the storms. Préval also requested general assistance for the next six months. As of October 21, 2008, the U.S. government has either provided or pledged over $31 million in humanitarian assistance to affected Haitian populations in response to the storms. This includes: $10 million, USAID/Office of U.S. Foreign Disaster Assistance (OFDA), including support to the American Red Cross, the International Organization for Migration, the U.N. Office for the Coordination of Humanitarian Affairs (OCHA), and the Pan American Health Organization; $14 million, USAID/Food for Peace (FFP) assistance provided through the U.N. World Food Program; $5 million, USAID/Haiti assistance, re-directing regular U.S. foreign aid funding toward food and other humanitarian assistance; $2.6 million, Department of Defense assistance (helicopter transport); and (still to be determined), Department of Homeland Security, for Coast Guard transportation and logistics. USAID's OFDA also authorized the deployment of a three-member support team to Haiti to supplement a U.N. disaster team based in the city of Gonaives. The USS Kearsarge has delivered almost 2 million pounds of supplies, with supplies ferried by helicopters and boats to affected areas. OFDA has been providing assistance in disaster preparedness and mitigation, including training in disaster management, to the Caribbean since 1991. From FY2005 to FY2007, OFDA worked in conjunction with the UN Development Program to reduce the risks faced by vulnerable Haitian populations due to natural hazards. A number of observers, including some Members of Congress, are calling for significantly more assistance to help Haiti in its recovery and reconstruction efforts. Representative Maxine Waters has called for at least $300 million in appropriations in assistance for Haiti. The FY2009 continuing resolution signed into law on September 30, 2008 ( P.L. 110 - 329 ) provides not less than $100 million for hurricane relief and reconstruction assistance for Haiti and other Caribbean countries subject to prior consultation with, and the regular notification procedures of, the Committees on Appropriations. At a hearing of the House Subcommittee on the Western Hemisphere on "Hurricanes in Haiti: Disaster and Recovery" on September 23, 2008, several Members of Congress called for the Administration to grant Temporary Protected Status (TPS) to Haitians living in the United States to give Haiti time to deal with the effects of the recent hurricanes. Haiti's Ambassador to the United States, Raymond Joseph, maintains that his country is ill-prepared to receive deportees. Bureau of Western Hemisphere Affairs Deputy Assistant Secretary Kirsten Madison said the State Department had not made a recommendation, but did not wish to encourage an exodus of Haitians from the island to the U.S. by granting TPS, saying that could create another humanitarian disaster. The State Department also noted that the final decision lies with the Department of Homeland Security. Members expressed concerns that the devastation from the storms, if insufficiently addressed, could lead to famine and widespread waterborne diseases, which in turn could contribute to an increase in the number of Haitians fleeing their country. Haitian Ambassador Joseph stated at a Capitol Hill forum on September 18 that Haiti would need $400 million over the next 18 months for hurricane recovery and reconstruction, and that so far the international community had committed $145 million. It is unclear how much of the $400 million reflects short-term humanitarian needs as opposed to longer-term development needs. At the request of the Haitian government, the World Bank and other international partners are conducting a Post-Disaster Needs Assessment that will be the basis for early recovery and strategic planning for Haiti. In the aftermath of the hurricanes, the U.N. OCHA issued an international flash appeal for $108 million for Haiti's recovery. As of October 23, contributions and commitments of funds amounted to almost $25 million, while another $16.9 million has been pledged, but not yet committed, by the United States, the European Union, and 12 other countries—Canada, Japan, the United Kingdom, Switzerland, Norway, Austria, Luxembourg, Ireland, Greece, Andorra, Italy, and the Netherlands. The aid is channeled through a variety of U.N. agencies such as the Food and Agriculture Organization (FAO), the International Organization for Migration (IOM), U.N. Development Program (UNDP), and the United Nations Children's Fund (UNICEF). The U.S. contribution equals 42.8% of that funding. MINUSTAH is also helping to coordinate disaster assistance, providing support for relief deliveries, and has been involved in rescuing Haitians from the floods. In addition to assistance contributed to the flash appeal, OCHA reports that another $25 million in humanitarian assistance has been pledged or provided by the United States and other countries and international organizations. P.L. 110 - 329 ( H.R. 2638 ). Consolidated Security, Disaster Assistance, and Continuing Appropriations Act, 2009. Provides not less than $100 million for hurricane relief and reconstruction assistance for Haiti and other Caribbean countries subject to prior consultation with, and the regular notification procedures of, the Committees on Appropriations. Introduced June 8, 2007, signed into law September 30, 2008. H.R. 522 (Hastings). Would require the Secretary of Homeland Security to designate Haiti as a country whose qualifying nationals may be eligible for temporary protected status for an initial 18-month period. Introduced January17, 2007, referred to House Judiciary Committee's Subcommittee on Immigration, Citizenship, Refugees, Border Security, and International Law February2, 2007. H.Con.Res. 438 (Lee). Expressing the sense of Congress with regard to providing humanitarian assistance to countries of the Caribbean devastated by Hurricanes Gustav and Ike and Tropical Storms Fay and Hanna. Introduced and referred to the House Committee on Foreign Affairs September 27, 2008.

In August and September 2008, four major storms directly hit or passed close to Haiti, causing widespread devastation. As of early October, 2008, the U.S. government has either provided or pledged just over $30 million in humanitarian assistance to affected Haitian populations in response to the hurricanes in Haiti. Congress provided not less than $100 million for hurricane relief and reconstruction assistance for Haiti and other Caribbean countries in the FY2009 continuing appropriations resolution (P.L. 110-329) signed into law September 30, 2008. The Haitian government says it needs $400 million over the next 18 months for hurricane recovery and reconstruction, and that so far the international community has committed $145 million. For more information, see CRS Report RL34687, The Haitian Economy and the HOPE Act, by [author name scrubbed]; CRS Report RS22879, Haiti: Legislative Responses to the Food Crisis and Related Development Challenges, by [author name scrubbed] and [author name scrubbed]; CRS Report RS21349, U.S. Immigration Policy on Haitian Migrants, by [author name scrubbed]; and CRS Report RS20844, Temporary Protected Status: Current Immigration Policy and Issues, by [author name scrubbed] and [author name scrubbed].

Money laundering, which is the disguising or concealing of illicit income in order to make it appear legitimate, is a problem of international proportions. Federal law enforcement officials estimate that between $100 billion and $300 billion in U.S. currency is laundered each year. Numerous U.S. agencies play a role in combating money laundering. Law enforcement agencies within the Departments of Justice and the Treasury have the greatest involvement in domestic and international money-laundering investigations. FRB and OCC have the primary responsibility for examining and supervising the overseas branches of U.S. banks to ascertain the adequacy of the branches’ anti-money-laundering controls. FinCEN provides governmentwide intelligence and analysis that federal, state, local, and foreign law enforcement agencies can use to aid in the detection, investigation, and prosecution of domestic and international money laundering and other financial crimes. In addition, other U.S. agencies play a role, including the State Department, which provides information on international money laundering through its annual assessment of narcotics and money-laundering problems worldwide. Until recently, U.S. banking regulators’ anti-money-laundering efforts relied heavily on regulations requiring financial institutions to routinely report currency transactions that exceed $10,000, primarily through filing currency transaction reports (CTR) with the IRS. U.S. banking regulators have also relied on approaches in which financial institutions report financial transactions involving known or suspected money laundering.According to a senior Treasury official, U.S. regulators’ anti-money-laundering efforts in coming years are expected to rely more on the reporting of financial transactions involving known or suspected money laundering. U.S. regulators will also be expected to continue relying on CTRs, but to a lesser extent. Most U.S. banks have adopted so-called “know your customer” policies over the past few years to help them improve their identification of financial transactions involving known or suspected money laundering, according to the American Bankers Association. Under these know your customer policies, which are currently voluntary but which the Treasury plans to make mandatory in 1996, financial institutions are to verify the business of a new account holder and report any activity that is inconsistent with that type of business. According to the American Bankers Association, these policies are among the most effective means of combating money laundering, and the majority of banks have already adopted such policies. The seven European countries we visited have tended to model their anti-money-laundering measures after a 1991 European Union (EU)Directive that established requirements for financial institutions similar to those that financial institutions conducting business in the United States must follow. However, instead of relying on the routine reports of currency transactions that the United States has traditionally emphasized, European countries have tended to rely more on suspicious transaction reports and on know your customer policies. These know your customer policies are somewhat more comprehensive than comparable U.S. ones, according to European bank and regulatory officials. While Hungary and Poland have adopted anti-money-laundering measures following the EU Directive, banking and government officials in these two countries told us that the implementation and enforcement of their anti-money-laundering measures have been hindered. They attributed problems to such factors as resource shortages, inexperience in detection and prevention, and in Poland, conflicts between bank secrecy laws and recently adopted anti-money-laundering statutes. FinCEN and INTERPOL have recently initiated Project Eastwash, to attempt to assess money laundering in 20 to 30 countries throughout East and Central Europe and the former Soviet Union. According to FinCEN officials, as of late 1995 on-site visits had been made to five countries to assess the law enforcement, regulatory, legislative, and financial industry environment in each nation. Information from these visits is to be used for policy guidance and resource planning purposes for both the countries assessed and U.S. and international anti-money-laundering organizations, according to these officials. U.S. banks had over 380 overseas branches located in 68 countries as of August 1995. These branches, which are a direct extension of U.S. banks, are subject to host countries’ anti-money-laundering laws rather than U.S. anti-money-laundering laws, according to OCC and FRB officials. In some cases, U.S. banking regulators have not been allowed to perform on-site reviews of these branches’ anti-money-laundering controls. According to U.S. banking regulators, bank privacy and data protection laws in some countries serve to prevent U.S. regulators from examining U.S. bank branches located within their borders. Of the seven European countries we visited, U.S. regulators were not allowed to enter Switzerland and France to examine branches of U.S. banks because of these countries’ strict bank secrecy and data protection laws. U.S. regulators, however, have other means besides on-site examinations for obtaining information on U.S. overseas branches’ anti-money-laundering controls, according to FRB and OCC officials. For example, U.S. regulators can and do exchange information—excluding information requested for law enforcement purposes—with foreign banking regulators on their respective examinations of one another’s foreign-based branches. In addition, FRB can deny a bank’s application to open a branch in a country with strict bank secrecy laws if it does not receive assurance that the branch will have sufficient anti-money-laundering controls in place, according to FRB officials. OCC and FRB officials said that in countries that allow them to examine anti-money-laundering controls at overseas branches of U.S. banks, such examinations are of a much narrower scope than those of branches located in the United States. One reason is that host country anti-money laundering measures may not be as stringent as U.S. anti-money-laundering requirements and, thus, may not provide the necessary information for U.S. examiners. OCC and FRB officials also said that the expense of sending examiners overseas limits the amount of time examiners can spend reviewing the anti-money-laundering controls of the bank. However, according to these officials less time is needed to conduct an anti-money-laundering examination at some overseas branches because of the small volume of currency transactions. FRB officials told us that they have recently developed money-laundering examination procedures to be used by its examiners to address the uniqueness of overseas branches’ operations and to fit within the short time frames of these examinations. Although these procedures have been tested, they have not been implemented and, thus, we have not had the chance to review them. Responsibilities for investigating both domestic and international crimes involving money-laundering are assigned to numerous U.S. law enforcement agencies, including DEA, FBI, IRS, and the Customs Service. While European law enforcement officials acknowledged the important role U.S. law enforcement agencies play in criminal investigations involving money laundering, some commented about the difficulties of dealing with multiple agencies. Some British and Swiss law enforcement officials we spoke with said that too many U.S. agencies are involved in money-laundering inquiries. This overlap makes it difficult, in some money-laundering inquiries, to determine which U.S. agency they should coordinate with. These European officials indicated that designating a single U.S. office to serve as a liaison on these money-laundering cases would improve coordination. According to U.S. law enforcement agency officials, however, designating a single U.S. law enforcement agency as a focal point on overseas money-laundering cases could pose a jurisdictional problem because money-laundering cases are usually part of an overall investigation of another crime, such as drug trafficking or financial fraud. Nevertheless, U.S. law enforcement agencies have taken recent steps to address overseas money-laundering coordination. In particular, a number of U.S. agencies adopted a Memorandum of Understanding (MOU) in July 1994 on how to assign responsibility for international drug money-laundering investigations. Law enforcement officials were optimistic that the MOU, which was signed by representatives of the Secretary of the Treasury, the Attorney General, and the Postmaster General, would improve overseas anti-money-laundering coordination. Although law enforcement is optimistic about improvements in coordination, we have not assessed how well U.S. international investigations are being coordinated. The United States works with other countries through multilateral and bilateral treaties and arrangements to establish global anti-money-laundering policies, enhance cooperation, and facilitate the exchange of information on money-laundering investigations. The United States’ multilateral efforts to establish global anti-money-laundering policies occur mainly through FATF, an organization established at the 1989 economic summit meeting in Paris of major industrialized countries. The United States, through the Treasury Under Secretary for Enforcement, assumed the presidency of FATF in July 1995 for a one-year term. FATF has worked to persuade both member and nonmember countries to institute effective anti-money-laundering measures and controls. In 1990, FATF developed 40 recommendations that describe measures that countries should adopt to control money laundering through financial institutions and improve international cooperation in money-laundering investigations. During 1995, FATF completed its first round of mutual evaluations of its members’ progress on implementing the 40 recommendations. FATF found that most member countries have made satisfactory progress in carrying out the recommendations, especially in the area of establishing money-laundering controls at financial institutions. FATF has also continued to identify global money-laundering trends and techniques, including conducting surveys of Russia’s organized crime and Central and East European countries’ anti-money-laundering efforts. In addition, FATF has expanded its outreach efforts by cooperating with other international organizations, such as the International Monetary Fund, and by attempting to involve nonmember countries in Asia, South America, Russia, and other parts of the world. A more recent multilateral effort involved the United States and other countries in the Western Hemisphere. On December 9-11, 1994, the 34 democratically elected leaders of the Western Hemisphere met at the Summit of the Americas in Miami, Florida. At the summit, the leaders signed a Declaration of Principles that included a commitment to fight drug trafficking and money laundering. The summit documents also included a detailed plan of action to which the leaders affirmed their commitment. One action item called for a working-level conference on money laundering, to be followed by a ministerial conference, to study and agree on a coordinated hemispheric response to combat money laundering. The ministerial conference, held on December 1-2, 1995, at Buenos Aires, Argentina, represented the beginning of a series of actions each country committed to undertake in the legal, regulatory, and law enforcement areas. U.S. Department of Justice officials told us that these actions are designed to establish an effective anti-money-laundering program to combat money laundering on a hemispheric basis. Further, the officials told us that the conference created an awareness that money laundering is not only a law enforcement issue, but also a financial and economic issue, requiring a coordinated interagency approach. As part of another multilateral effort, FinCEN is working with other countries to develop and implement Financial Information Units (FIU) modeled, in large part, on FinCEN operations, according to FinCEN officials. FinCEN has also met with officials from other countries’ FIUs to discuss issues common to FIUs worldwide. The most recent meeting was held in Paris in November 1995, during which issue-specific working groups were created to address common concerns such as use of technology and legal matters on exchanging intelligence information. U.S. Treasury officials said that in recent years, the United States has relied on bilateral agreements to improve cooperation in international investigations, prosecutions, and forfeiture actions involving money laundering. These bilateral agreements, consisting of mutual legal assistance treaties, financial information exchange agreements, and customs mutual assistance agreements with individual countries, also help to facilitate information exchanges on criminal investigations that may involve money laundering. However, the State Department’s 1995 annual report on global narcotics crime concluded that many countries still refuse to share with other governments information about financial transactions that could facilitate global money-laundering investigations. Mr. Chairman, this concludes my prepared statement. I would be pleased to try to answer any questions you or the Committee 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. 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GAO discussed U.S. efforts to combat money laundering abroad. GAO noted that: (1) U.S. bank regulators rely on financial institutions' reporting currency transactions that exceed $10,000, involve known or suspected money laundering, or are inconsistent with the account holder's stated business; (2) European countries focus their anti-laundering efforts less on routine currency transaction reports and more on reports of suspicious activities; (3) host countries' anti-laundering and bank privacy and protection laws, to which overseas branches of U.S. banks must adhere, sometimes hinder U.S. bank regulators' reviews of overseas branches, and examinations of overseas banks tend to be more narrowly scoped; (4) while European law enforcement officials acknowledged the important role of several U.S. law enforcement agencies in anti-laundering activities, they also indicated that it was difficult to determine which U.S. agency they should coordinate efforts with; and (5) the United States works with other countries through multilateral and bilateral treaties and arrangements to establish global anti-laundering policies, enhance cooperation, and facilitate the exchange of information on money-laundering investigations.

Throughout the Cold War, end strength of the U.S. active duty force never dropped below 2.0 million personnel and peaked at over 3.5 million during the Korean and Vietnam Wars. From 1989 to 1999, end strength dropped steadily from 2.1 million to 1.4 million, where it has remained. Force structure dropped even more with active Army divisions, for example, going from 18 to 10. Expectations that military requirements would diminish, however, were not realized; U.S. forces deployed to new missions in such places as the Persian Gulf, Somalia, Haiti, the Balkans, and, with the recent advent of the GWOT, Afghanistan and other far-flung places. The most recent experience of Operation Iraqi Freedom indicates that U.S. ground forces are stretched thin. Concerns about increased requirements for a smaller force surfaced over 10 years ago, initially focused on readiness. A 1994 Defense Science Board report found "pockets of unreadiness" attributed to turbulence in the armed forces. The House Armed Services Committee discerned problems in the field and challenged Administration assertions that readiness remained high; by 1997 they asserted that "The post-Cold War defense drawdown and the expanding demands of manpower intensive peacekeeping and humanitarian operations ... are placing at risk the decisive military edge that this nation enjoyed at the end of the Cold War ..." Other studies highlighted problems stemming from the operating tempo of units (OPTEMPO) and personnel (PERSTEMPO). Various solutions were proposed. Many suggested fewer overseas commitments, but no Administration stemmed demands for U.S. forces. Congress mandated the Department of Defense (DOD) to compensate soldiers who were deployed too long or too often, but September 11, 2001, caused that law to be waived. Technological advances made transforming U.S. forces more combat effective against conventional forces, but could not substitute for manpower needed in the unconventional and asymmetric environments of "stability" operations. In contrast, some charged that the Army, in particular, was resisting such "constabulary" operations and therefore managed its personnel inefficiently. The combat phase of the 2003 Iraq War was won quickly with fewer forces than many analysts expected. The occupation phase, however, soon involved some 220,000 troops. At the first anniversary of combat, DOD staged the "largest troop rotation since World War II." All active Army divisions were involved. Indicators that forces were stretched thin included Reserve Component and Marine Corps units committed for over a year (shorter tours had been the norm); many personnel came under "stop-loss" orders that kept them from leaving service, were extended in their tours, or were ordered to multiple combat tours. Ceremonial companies from The Old Guard in Arlington, VA, were deployed to Djibouti, and no Army division was available as a strategic reserve (air and naval forces were shifted to cover key contingencies). A House bill was introduced to increase the Armed Forces by 83,700 personnel for five years. Various Senators proposed either adding one Army and one Marine division or permanently increasing the Army by 10,000 soldiers. No decreases to end strength have been proposed. Whether from internal or external pressure, in January 2004, DOD responded. Before the House Armed Services Committee on January 28, 2004, Chief of Staff of the Army, General Peter Schoomaker, testified that he had been authorized by the Secretary of Defense to increase end strength of the Army by 30,000 personnel on a temporary, emergency basis. He argued that a permanent, legislated increase would be unwise and unnecessary. He asserted that a permanent increase would create a burden on planned defense budgets in the out years, citing $1.2 billion annually for each increase of 10,000 troops. Some ongoing programs were presented as, over time, providing a more efficient and usable force structure within current Army end strength. General Schoomaker began making organizational changes shortly after he became Chief of Staff in August 2003. He ordered divisions to create more combat "modules" by forming four new brigades from their existing three brigades and divisional support forces. Once implemented, this would provide 10 additional brigade-equivalent maneuver elements for the rotation base. Including planned Stryker brigades could eventually raise the number of brigades available from 33 to 48. He is pursuing a "unit manning" policy, rather than rotating individuals to deployed units. He would also shift from the "Cold-war" mix of combat capabilities to one geared to the less technologically-advanced enemies, joint operations, and stability-type operations now faced. Examples included reducing air defense, artillery, and ordnance unit strength and increasing military police, civil affairs, and transportation capabilities. The Army and DOD also sought other ways to glean manpower efficiencies. General Schoomaker noted that 5,000 soldier positions were converted to civilian in 2003—making more soldiers available for deployment—and he anticipated finding 5,000 positions in 2004. This raised issues about the numbers of civilians and contractors needed by the Services. Another organizational initiative has been "re-balancing" the mix of Active Duty and Reserve Component forces to increase fairness and flexibility in deploying the total force and to allow initial deployments with fewer reserve forces. Other measures may have potential to reduce military manpower requirements over time, such as reposturing U.S. forces overseas and base closings and realignments mandated by the 2005 BRAC round. Other than the above measures, Secretary Rumsfeld resisted any efforts to increase the overall size of U.S. military forces—even as the Iraq War lengthened beyond three years and sustainment of adequate forces there remained difficult. No other major war has been prosecuted by the United States without an increase in force size. Shortly after Secretary Rumsfeld's resignation, however, President Bush said, "he plans to expand the overall size of the "stressed" U.S. armed forces to meet the challenges of a long-term global struggle against terrorists." On January 19, 2007, after having resisted previous congressional calls to permanently increase the end strengths of the Army and Marine Corps, the Department of Defense announced that it would seek approval to increase the permanent end strengths of the active Army by 65,000 and the active Marine Corps by 27,000. This increase in troop strength is intended to eventually ease the significant strains that have been placed on the Army and Marine Corps that have been at war in Afghanistan since 2001 and in Iraq since 2003. The Army plans to create six additional brigade combat teams (BCTs) and two additional Patriot missile battalions, and the Marines plan to create an additional regimental combat team (RCT) from the increased end strength. These additional troops will also permit both services to fill shortages in existing organizations and create other smaller units that are in high demand. P.L. 110-181 , the National Defense Authorization Act for Fiscal Year 2008, authorizes this permanent end strength increase. Various considerations could influence the future debate. The "right" size and composition for the military addresses military requirements now and in the future. The Administration acknowledged stresses on the force, but long interpreted the situation as a "spike" in requirements that would return to a lower, more manageable "plateau." Critics counter that the war on terrorism and occupation of Iraq could endure for many years and that the continuing potential for sudden, major crises, such as in Korea, requires a robust U.S. military force. One's view of the future determines one's idea of acceptable risk. Other considerations may also influence the debate. Predicted federal deficits may create pressures to restrain the overall budget, and competition between sectors may call forth "guns versus butter" tensions. Within DOD, competition for funding will continue; many will argue that personnel costs must be constrained so that research and procurement for the transformational weapons of the future will be adequate. Some may be influenced by implications of the end strength debate for particular military installations and defense industry employers. Another consideration is can we "grow the force" to create the additional Army and Marine units that the Administration has been authorized. While the Army and Marine Corps are currently meeting their recruitment goals, it has been reported that many young, promising Army officers are leaving at an increasing rate and that significant junior officer and non-commissioned officer (NCO) shortages are likely in the future. Without these junior officers and NCOs, the Army may not be able to stand up the six additional infantry BCTs and support units that it has been authorized to create. Specific types of forces needed will be defined by perceptions of future requirements, recent experiences, and response to current stresses. Congress influences the type of forces to be acquired by allocating end strength among the four Services. Further refinements occur as specific weapons systems and materiel are developed and procured, and through the oversight process. Substantial ground combat forces will likely be needed, as efforts in Afghanistan and Iraq have no defined end point and other nations of concern, such as Iran, Syria, and North Korea, retain a potential for future armed confrontation. Combat campaigns in both Afghanistan and Iraq demonstrated the value of U.S. Special Operations Forces (SOF). SOF strength is being increased and is particularly important to the War on Terrorism, but that strength is accounted for within the Services that contribute their personnel to SOF units. In Iraq the ability of U.S. mechanized infantry and armored forces to survive and prevail against both regular and nonconventional enemy forces, even in urban areas, was striking. To reinforce success, some advocate maintaining and increasing units armed with Abrams tanks and Bradley fighting vehicles. There have been a number of recent proposals to create specialized units to meet the operational challenges of counterinsurgency, stabilization, and training/advisory operations, but the Army insists that its current force structure is adequate to meet these challenges, and that the dynamic and unpredictable nature of the conflicts in Iraq and Afghanistan precludes the effective use of these specialized units. The Marines have recently established a Marine Corps Training and Advisory Group (MCTAG) to "coordinate, form, train, and equip Marine Corps advisor and training teams for current and projected operations." Debate continues inside and outside of DOD if forces should continue to be responsible of a "full spectrum" of military operations or if specialist units should be created to address an increasingly complex global security environment? Section 941 of the Conference Report for H.R. 1585 , the Fiscal Year 2008 National Defense Authorization Act, ( P.L. 110-181 ) establishes a requirement for DOD to conduct a quadrennial review of its roles and missions beginning in 2008. While this review is foremost a means to identify core mission areas and service capabilities, it may also examine force requirements, particularly forces applicable to counterinsurgency, stabilization, and training and advisory missions. The review might also recommend joint or service-specific actions to better address these potential core mission areas—to include the formation of units specifically designed to address these mission areas or change the current "mix" of forces that are needed for a current and potential future operations.

For several years, some Members of Congress and many military analysts have argued that the U.S. Armed Forces are too small to adequately meet all the requirements arising after the Cold War, particularly with the advent of the Global War on Terrorism (GWOT). In January 2004, the Department of Defense acknowledged a problem by temporarily adding 30,000 troops to the authorized active duty end strength of the Army. Congress addressed the issue by raising ground force statutory end strengths in the FY2005 defense authorization bill ( P.L. 108-375 ), the FY2006 bill ( P.L. 109-163 ), and again in FY2007 ( P.L. 109-364 ). In FY2007, the Administration requested a permanent end strength increase—65,000 for the Army and 27,000 for the Marine Corps—and P.L. 110-181 ) the FY2008 defense authorization bill approved the increase. This report describes the background of these actions, current Administration planning, and assesses potential issues for the 110 th Congress. This report will be updated.

Section 103(a) of the Patent Act provides one of the statutory bars for patentability of inventions: a patent claim will be considered invalid if "the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains." In other words, for the subject matter of an alleged invention or discovery to be patentable, it must be "nonobvious" at the time of its creation. The nonobviousness requirement is met if the subject matter claimed in a patent application is beyond the ordinary abilities of a person of ordinary skill in the art in the appropriate field. In the landmark 1966 case Graham v. John Deere Co . of Kansas City, the Supreme Court established an analytic framework for courts to determine "nonobviousness." The so-called Graham test describes several factors that must be assessed: While the ultimate question of patent validity is one of law ... the § 103 condition, which is but one of three conditions, each of which must be satisfied, lends itself to several basic factual inquiries. Under § 103, the scope and content of the prior art are to be determined; differences between the prior art and the claims at issue are to be ascertained; and the level of ordinary skill in the pertinent art resolved. Against this background, the obviousness or nonobviousness of the subject matter is determined. Such secondary considerations as commercial success, long felt but unsolved needs, failure of others, etc., might be utilized to give light to the circumstances surrounding the origin of the subject matter sought to be patented. As indicia of obviousness or nonobviousness, these inquiries may have relevancy. While a single prior art reference could form the basis of a finding of nonobviousness, multiple prior art references are often involved in the analysis. In such a situation, the U.S. Court of Appeals for the Federal Circuit (Federal Circuit) had developed an approach in which an invention would be considered obvious only if there was an explicit or implicit "teaching, suggestion, or motivation" that would lead a person of ordinary skill to combine multiple prior art references to produce an invention. Such a "teaching, suggestion, or motivation" (TSM) could have come from either (1) the references themselves, (2) knowledge of those skilled in the art, or (3) the nature of a problem to be solved, leading inventors to look to references relating to possible solutions to that problem. Because § 103 of the Patent Act requires that an invention's obviousness be determined from the standpoint of a person having ordinary skill in the art "at the time the invention was made," the TSM test was designed, in part, to defend against "the subtle but powerful attraction of a hindsight-based obviousness analysis." The patents at issue in KSR International v. Teleflex pertain to an adjustable pedal system (APS) for use with automobiles having electronic throttle-controlled engines. Teleflex Inc. holds an exclusive license for the patent on this device that allows a driver to adjust the location of a car's gas and break pedal so that it may reach the driver's foot. KSR International Co. also manufactures an adjustable pedal assembly. Initially, KSR supplied APS for cars with engines that use cable-actuated throttle controls; thus, the APS that KSR manufactured included cable-attachment arms. In mid-2000, KSR designed its APS to incorporate an electronic pedal position sensor in order for it to work with electronically controlled engines, which are being increasingly used in automobiles. In 2002, Teleflex filed a patent infringement lawsuit against KSR after KSR had refused to enter into a royalty arrangement, asserting that this new design came within the scope of its patent claims. In defense, KSR argued that Teleflex's patents were invalid because they were obvious under § 103(a) of the Patent Act—that someone with ordinary skill in the art of designing pedal systems would have found it obvious to combine an adjustable pedal system with an electronic pedal position sensor for it to work with electronically controlled engines. The U.S. District Court for the Eastern District of Michigan agreed with KSR that the patent was invalid for obviousness, granting summary judgment in favor of KSR. The court determined that there was "little difference between the teachings of the prior art and claims of the patent-in-suit." Furthermore, the court opined that "it was inevitable" that APS would be combined with an electronic device to work with electronically controlled engines. Teleflex appealed the decision to the Federal Circuit. The appellate court vacated the district court's ruling, after finding that the district court had made errors in its obviousness determination. Specifically, the Federal Circuit noted that the district court had improperly applied the TSM test by not adhering to it more strictly—the district court had reached its obviousness ruling "without making findings as to the specific understanding or principle within the knowledge of a skilled artisan that would have motivated one with no knowledge of [the] invention to make the combination in the manner claimed." The Federal Circuit explained that district courts are "required" to make such specific findings pursuant to Federal Circuit case law establishing the TSM standard. In regard to the patent in the case, the appellate court found that the prior art in adjustable pedal design had been focused on solving the "constant ratio problem" (described as when "the force required to depress the pedal remains constant irrespective of the position of the pedal on the assembly"); whereas the motivation behind the patented invention licensed to Teleflex was "to design a smaller, less complex, and less expensive electronic pedal assembly." In the Federal Circuit's view, unless the "prior art references address the precise problem that the patentee was trying to solve," the problem would not motivate a person of ordinary skill in the art to combine the prior art teachings—here, the placement of an electronic sensor on an adjustable pedal. The Supreme Court granted certiorari on June 26, 2006, to review the KSR case, in which the central question before the Court was whether the Federal Circuit had erred in crafting TSM as the sole test for obviousness under § 103(a) of the Patent Act. On April 30, 2007, the Court unanimously reversed the Federal Circuit's judgment, holding that the TSM test for obviousness was incompatible with § 103 and Supreme Court precedents. Associate Justice Anthony Kennedy, delivering the opinion of the Court, explained that the proper framework for a court or patent examiner to employ when determining an invention's obviousness is that set forth in the Court's 1966 opinion Graham v. John Deere Co. of Kansas City. That analytical framework provides "an expansive and flexible approach" to the question of obviousness that the "rigid" and "mandatory" TSM formula does not offer. Justice Kennedy observed that the Graham approach, as further developed in three subsequent Supreme Court cases decided within ten years of that case, is based on several instructive principles for determining the validity of a patent based on the combination of elements found in the prior art: When a work is available in one field of endeavor, design incentives and other market forces can prompt variations of it, either in the same field or a different one. If a person of ordinary skill can implement a predictable variation, it is likely obvious under § 103 and unpatentable. If a technique has been used to improve one device, and a person of ordinary skill in the art would recognize that it would improve similar devices in the same way, using the technique is obvious unless its actual application is beyond his or her skill. Justice Kennedy then provided additional guidance for courts in following these principles. To determine whether there was an apparent reason to combine the known elements in the manner claimed by the patent at issue, courts should explicitly engage in an analysis that considers the following elements: the interrelated teachings of multiple patents, the effects of demands known to the design community or present in the marketplace, and the background knowledge possessed by a person having ordinary skill in the art. He further explained that a court should not solely take into account the "precise teachings" of the prior art, but rather can consider the "inferences and creative steps" that a person of ordinary skill in the art would likely use. The Federal Circuit's TSM test, and its mandatory application, is contrary to Graham and its progeny because it limits the obviousness analysis and is too formalistic, Justice Kennedy argued. In addition, he believed that the TSM test hindered the ability of courts and patent examiners to rely upon "common sense." In dicta, the Court's opinion appears to imply that the TSM test could have contributed to issued patents or unsuccessful challenges to the validity of certain patents that do not reflect true innovation: "Granting patent protection to advances that would occur in the ordinary course without real innovation retards progress and may, for patents combining previously known elements, deprive prior inventions of their value or utility." Finally, Justice Kennedy criticized the Federal Circuit for "overemphasizing the importance of published articles and the explicit content of issued patents." However, Justice Kennedy allowed that TSM provides "a helpful insight"—that a patent comprised of several elements is not obvious just because each of those elements was, independently, known in the prior art. This "essence" of the TSM test is not necessarily inconsistent with the Graham analysis, and thus he predicted that the Federal Circuit has likely applied the TSM test on many occasions in ways that accord with the Graham principles. It is the Federal Circuit's rigid application of its TSM rule, however, that the Court deemed was problematic in this case. Justice Kennedy identified four specific legal errors committed by the Federal Circuit. First, the appellate court had held that courts and patent examiners should look only to the problem the patentee was trying to solve, rather than other problems addressed by the patent's subject matter. Second, the appellate court had assumed that a person of ordinary skill trying to solve a particular problem will be led only to those elements of prior art designed to solve the same problem; however, "common sense teaches ... that familiar items may have obvious uses beyond their primary purposes, and in many cases a person of ordinary skill will be able to fit the teachings of multiple patents together like pieces of a puzzle." The third error of the lower court was its erroneous conclusion that a patent claim cannot be proved obvious by showing that the combination of elements was "obvious to try"; instead, Justice Kennedy noted, "the fact that a combination was obvious to try might show that it was obvious under § 103." The final error was the Federal Circuit's adherence to "rigid preventative rules" to avoid the risk of hindsight bias on the part of courts and patent examiners, because such rules "deny factfinders recourse to common sense." As to the specific patent claim at issue in this case, the Court adopted the obviousness analysis of the district court and expressly held that the claim "must be found obvious" in light of the prior art. The KSR decision potentially may generate litigation over the validity of some patents issued and upheld under the Federal Circuit's TSM standard; the uncertainty over the enforceability of certain patents thus has ramifications for lawsuits between alleged patent infringers and patent holders, as well as between patentees and their licensees (for example, a patent licensee may want to challenge the validity of the patent to avoid paying royalties or even the imposition of an injunction). While the KSR Court rejected TSM as the sole test for obviousness, the Court did not expressly invalidate it either. Instead, the Supreme Court explained that courts and patent examiners, in evaluating a patent's claimed subject matter for obviousness under § 103, must use common sense, ordinary skill, and ordinary creativity in applying the Graham factors and principles to the specific facts of the case.

The Patent Act provides protection for processes, machines, manufactures, and compositions of matter that are useful, novel, and nonobvious. Of these three statutory requirements, the nonobviousness of an invention is often the most difficult to establish. To help courts and patent examiners make the determination, the U.S. Court of Appeals for the Federal Circuit developed a test called "teaching, suggestion, or motivation" (TSM). This test provided that a patent claim is only proved obvious if the prior art, the nature of the problem to be solved, or the knowledge of those skilled in the art, reveals some motivation or suggestion to combine the prior art teachings. In KSR International Co. v. Teleflex Inc. (550 U.S. ___ , No. 04-1350, decided April 30, 2007), the U.S. Supreme Court held that the TSM test, if it is applied by district courts and patent examiners as the sole means to determine the obviousness of an invention, is contrary to Section 103 of the Patent Act and to Supreme Court precedents that call for an expansive and flexible inquiry, including Graham v. John Deere Co. of Kansas City, 383 U.S. 1 (1966).

Microelectronics focuses on the study and manufacture of micro devices, such as silicon integrated circuits, which are fabricated in submicron dimensions and form the basis of all electronic products. In DOD research, microelectronics extends beyond silicon integrated circuits and cuts across scientific disciplines such as biological sciences, materials sciences, quantum physics, and photonics. DOD research also covers many different types of materials, devices, and processes. For example, DOD service laboratories conduct research in materials other than silicon, such as gallium nitride, indium arsenide, and silicon carbide—materials that could provide higher performing or more reliable devices to meet DOD needs. DOD’s overall budget authority for fiscal year 2005 was approximately $400 billion. About $69 billion, or 17 percent of the overall budget, was directed toward research and development activities. The vast majority of this funding goes to development programs for major systems such as the Joint Strike Fighter and the Space Based Infrared System High. About $5.2 billion, or about 1.3 percent of the overall budget, was directed toward research (see fig. 1). Because DOD tracks funding by funding category, not by specific technology area, the microelectronics portion of this funding category cannot be broken out. DOD research and technology development is conducted by universities, DOD laboratories, industry, and other organizations. Universities and DOD laboratories are primarily involved in research. Once a new device is proven and has potential application for DOD, the technology is transferred to industry to further develop and ultimately produce and integrate into defense systems. These organizations may collaborate on microelectronics projects through various arrangements, such as cooperative research and development agreements and collaborative technology alliances. Figure 2 shows the distribution of DOD research and advanced technology development funding by performing organizations. Microelectronics production and research prototyping require specialized equipment and facilities. To prevent flaws in production, microelectronic devices are produced in clean rooms where the air is constantly filtered, and temperature, humidity, and pressure may be regulated. Clean rooms are rated according to a federal standard. For example, a class 1000 clean room has no more than 1000 particles larger than 0.5 microns in a cubic foot of air, while a class 100 clean room has no more than 100 particles. The people who work in clean rooms wear special protective clothing that prevents workers from contaminating the room (see fig. 3). The equipment found at research facilities and at production facilities are similar but are used for different purposes. Because research facilities focus on developing new device concepts, materials, and processes, the equipment is set up for flexibility because it is used for different experiments to prove concepts and validate theories. Once a technology is sufficiently developed, a small quantity is prototyped in a production environment to prove the design. Production facilities are set up to produce higher volumes of microelectronics and have more automation and multiple sets of equipment to increase productivity. At the time of our review, eight DOD and FFRDC facilities that received funding from DOD were involved in microelectronics research prototyping or production. Three military facilities focused solely on research; three primarily focused on research but had limited production capabilities; and two focused solely on production (see fig. 4). The three military facilities provide basic and applied research covering a wide spectrum of microelectronic devices and materials. For example, the Naval Research Laboratory facility is conducting basic research on the potential application of nonsilicon materials in microelectronic devices. Through its applied research, the Air Force Research Laboratory facility developed a process to improve the performance and reliability of microwave devices needed for military radar and communications systems. This technology was ultimately transferred from the Air Force to various contractors and used in a number of systems, including the Joint Strike Fighter. The Army Research Laboratory facility conducts both basic and applied research, primarily on multifunction radiofrequency, optoelectronics, and power conversion. Three other facilities also conduct research but can produce prototypes or limited numbers of devices if commercial sources are not available. For example, the Lincoln Laboratory’s facility—which primarily focuses on applied research in sensing and signal processing technologies—has developed components for the space-based visible sensor because no commercial source was available to meet this DOD need. Sandia’s facility primarily focuses on research and design of radiation hardened microelectronics. However, because the number of commercial producers able to meet the radiation requirements of the Department of Energy and DOD has dwindled to two suppliers, Sandia maintains limited in-house production capability to fill near-term critical needs. According to Sandia officials, they have not been called upon to produce microelectronics for DOD in recent years. The SPAWAR facility, which recently closed, primarily conducted research on radiation-hardened microelectronics, but at one time produced these devices for the Navy’s Trident missile system. When production of these devices was transferred to a commercial supplier, the facility maintained capability to produce microelectronics as a back-up to the commercial supplier. Two facilities focused only on production—one on leading edge technology and one on lagging edge technology. NSA’s microelectronics facility focuses on producing cryptographic microelectronics—devices not readily obtainable on the commercial market because of their unique and highly classified requirements. DMEA fills a unique role within DOD by providing solutions to microelectronics that are no longer commercially available. DMEA acquires process lines that commercial firms are abandoning and, through reverse-engineering and prototyping, provides DOD with these abandoned devices. In some cases, DMEA may produce the device. The type and complexity of research conducted or device produced largely determines a facility’s clean room class and size and its equipment replacement costs. For example, to produce cryptographic electronics, NSA has a 20,000 square foot class 10 clean room facility. In contrast, the Naval Research Laboratory conducts research in a 5,000 square foot class 100 clean room facility, with some class 10 modules where greater cleanliness is required. In general, research does not require state-of-the- art equipment to prove concepts, and tools can be purchased one at a time and are often second-hand or donated. Table 1 summarizes the eight facilities’ microelectronics focus, clean room class and size, and equipment replacement costs. Since we began our review, the SPAWAR facility closed on October 31, 2004, making Sandia the only backup to the two remaining commercial radiation-hardened suppliers to DOD. Officials from the facility told us that without funds from the Trident program, operating the facility became cost prohibitive. Further, NSA’s microelectronics facility is slated for closure in 2006. NSA estimated that it would cost $1.7 billion to upgrade its equipment and facility to produce the next generation of integrated circuits. NSA is contracting with IBM to take over production of the microelectronic devices produced at its facility. Part of the contract costs includes security requirements for IBM to produce classified circuits. There may be changes to other facilities pending the review of the Base Realignment and Closure Commission for 2005. As a result of prior commission recommendations, the Army constructed a new facility to consolidate Army specialized electronics research into one location. DOD has several mechanisms in place aimed at coordinating and planning research conducted by the Air Force, Army, Navy, and defense agencies. In electronics and microelectronics research, DOD works with industry to review special technology areas and make recommendations about future research. DOD’s Defense Reliance process provides the Department with a framework to look across science and technology (S&T) efforts of the Defense Advanced Research Projects Agency, Defense Threat Reduction Agency, and the Missile Defense Agency as well as the Army, Navy, and Air Force. Each service and defense agency updates its own S&T plans with the needs of each organization in mind. The Defense Reliance process is intended to improve coordination and determine if the overall DOD S&T vision and strategy are being met. The Defense Science and Technology Strategy document is updated periodically to provide a high-level description of what the science and technology programs aim to accomplish. The Defense Reliance process includes the development of three planning documents, which taken together provide a near-, mid-, and long-term look at DOD specific research needs (see table 2). The planning documents present the DOD S&T vision, strategy, plan, and objectives for the planners, programmers, and performers of defense S&T and guide the annual preparation of the defense program and budget. Figure 5 illustrates the relationship between the planning documents and overall reliance process. Science and technology efforts are planned and funded through service and defense agency plans. To obtain a perspective across DOD, a portion of the service and agency efforts are represented in the various Defense Reliance planning documents. DOD’s goal is to have about half of the investment in service and agency efforts represented in defense technology objectives. According to DOD officials, this goal is aimed at balancing flexibility—which services and defense agencies need to pursue research that is important to their organizations—with oversight and coordination. DOD officials stated that looking at a portion of the efforts provide an adequate perspective of the S&T research across the services and defense agencies to help ensure the goals of DOD’s S&T strategy are being met. These projects are generally considered high priority, joint efforts, or both. Two key components in the Defense Reliance process are the defense technology objectives and technology area review and assessments. Defense technology objectives are intended to guide the focus of DOD’s science and technology investments by identifying the following objectives, the specific technology advancements that will be developed or payoffs, the specific benefits to the warfighter resulting from the challenges, the technical barriers to be overcome; milestones, planned dates for technical accomplishments, including the anticipated date of technology availability; metrics, a measurement of anticipated results; customers sponsoring the research; and funding that DOD estimates is needed to achieve the technology advancements. Both the Joint Warfighting and Defense Technology Area plans are comprised of defense technology objectives that are updated annually. In its 2004 update, DOD identified 392 defense technology objectives —130 in the Joint Warfighting Science and Technology Plan across five joint capabilities, and 262 in the Defense Technology Area Plan across 12 technology areas. Microelectronics falls within the sensors, electronics, and electronic warfare area. There are 40 defense technology objectives in this area; five were identified as microelectronics (see fig. 6). However, according to DOD officials, research relating to microelectronics is not limited to these five defense technology objectives because microelectronics is an enabling technology found in many other research areas. For example, research in electronic warfare is highly dependent on microelectronics. To provide an independent assessment of the planned research, DOD uses Technology Area Review and Assessment panels. DOD strives to have a majority of the Technology Area Review and Assessment team members from outside DOD, including other government agencies, FFRDCs, universities, and industry. Most team members are recognized experts in their respective research fields. The Technology Area Review and Assessment panels assess DOD programs against S&T planning guidance, defense technology objectives, affordability, service-unique needs, and technology opportunities; and provide their assessments and recommendations to the Defense Science and Technology Advisory Group. For the electronics research area, additional industry and university insight is obtained through the Advisory Group on Electron Devices. DOD established this advisory group to help formulate a research investment strategy by providing ongoing reviews and assessments of government- sponsored programs in electronics, including microelectronics. The advisory group is comprised of experts representing the government, industry, and universities, who provide DOD with current knowledge on the content and objectives of various programs under way at industry, university, and government laboratories. Periodically, the advisory group conducts special technology area reviews to evaluate the status of an electronics technology for defense applications. The advisory group also serves as a bridge between electronic system and component developers within DOD by establishing regular, periodic interactions with system program offices, industry system developers, and government and industry components developers. We provided a draft of this report to DOD for review. In its response, DOD did not provide specific written or technical comments (see app. II). We are sending copies of this report to interested congressional committees; the Secretary of Defense; and the Director, Office of Management and Budget. We will make copies available to others upon request. In addition, this report will be available at no charge on the GAO Web site at http://www.gao.gov. Please contact me at (202) 512-4841 if you or your staff has any questions concerning this report. Major contributors to this report are listed in appendix III. To identify and describe DOD and FFRDC facilities that receive funding from DOD for microelectronics production or research prototyping, we visited all eight facilities identified by DOD as having capability to produce or prototype microelectronics. Using a set of structured questions, we interviewed officials at each facility to determine their microelectronics focus, clean-room and equipment characteristics, and types of research, production and/or research prototyping the facility provides. We also obtained and analyzed supporting documents and toured the facilities. We did not include in our scope universities or commercial firms that also conduct DOD research and have microelectronics facilities. Because microelectronics is a part of a much broader area of research, we looked at DOD’s overall research coordination in addition to microelectronics-specific areas. To determine how DOD coordinates its research investments, we interviewed officials from the Executive Staff of the Defense Science and Technology Reliance process; the Office of the Deputy Under Secretary of Defense for Science and Technology (Space and Sensor Technology); and the Advisory Group on Electron Devices. We also obtained and reviewed DOD’s defense research planning- documents—including the Basic Research Plan, the Defense Technology Area Plan, Joint Warfighting Science and Technology Plan, and the Defense Technology Objectives document. We also met with Defense Advanced Research Projects Agency officials to discuss their role in sponsoring DOD research and development activities. In addition, at the DOD service laboratories that we visited, we obtained information on microelectronics related research projects. We performed our review from November 2003 to January 2005 in accordance with generally accepted government auditing standards. In addition to the individual named above, Bradley Terry, Lisa Gardner, Karen Sloan, Hai Tran, Brian Eddington, and Steven Pedigo made key contributions to this report.

The Department of Defense's (DOD) ability to provide superior capabilities to the warfighter is dependent on its ability to incorporate rapidly evolving, cutting-edge microelectronic devices into its defense systems. While many commercial microelectronics advances apply to defense systems, DOD has some unique microelectronics needs not met by industry. Therefore, to maintain military superiority, DOD has the challenge of exploiting state-of-the-art commercial microelectronics technology and focusing its research investments in areas with the highest potential return for defense systems. Given the importance of advanced microelectronics to defense systems and the rapid changes in these technologies, Congress asked GAO to (1) identify and describe DOD and federally funded research and development center (FFRDC) facilities that receive funding from DOD for microelectronics production or research prototyping and (2) describe how DOD coordinates investments in microelectronics research. At the time of our review, eight DOD and FFRDC facilities that received funding from DOD were involved in microelectronics research prototyping or production. Three of these facilities focused solely on research; three primarily focused on research but had limited production capabilities; and two focused solely on production. The research conducted ranged from exploring potential applications of new materials in microelectronic devices to developing a process to improve the performance and reliability of microwave devices. Production efforts generally focus on devices that are used in defense systems but not readily obtainable on the commercial market, either because DOD's requirements are unique and highly classified or because they are no longer commercially produced. For example, one of the two facilities that focuses solely on production acquires process lines that commercial firms are abandoning and, through reverse-engineering and prototyping, provides DOD with these abandoned devices. During the course of GAO's review, one facility, which produced microelectronic circuits for DOD's Trident program, closed. Officials from the facility told us that without Trident program funds, operating the facility became cost prohibitive. These circuits are now provided by a commercial supplier. Another facility is slated for closure in 2006 due to exorbitant costs for producing the next generation of circuits. The classified integrated circuits produced by this facility will also be supplied by a commercial supplier. DOD has several mechanisms in place aimed at coordinating and planning research conducted by the military services and defense agencies. One key mechanism is identifying defense technology objectives--the specific technology advancements that will be developed or demonstrated across multiple joint capabilities and technology areas. As of February 2004, there were almost 400 defense technology objectives; five of these were identified as microelectronics. DOD also collaborates with industry to review and assess special technology areas and make recommendations about future electronics and microelectronics research.

The growth of China and India as large consumers of energy, coupled with an inability to develop reliable and affordable alternatives to oil and natural gas, has led to the belief that the power to ensure access to international energy resources has shifted from energy consumers to energy producers. Since 2005 Russia has several times drastically raised the price of its natural gas supplies to European countries as a means to squeeze them economically and politically. These actions also underscored the shift towards the ability of energy producers to exert pressure on countries dependent upon them for supplies. The United States and its European allies are discussing the appropriate institutions and policies for ensuring energy security. The Bush Administration introduced a discussion of energy security at NATO in February 2006, with the support of key allies. At the same time, EU governments view energy security in a broad manner, and most believe that political and economic measures are the first steps to ensure access to energy resources. Most EU members are also members of NATO, and the two organizations may handle energy security in a complementary manner. Most European countries are heavily reliant upon imported energy. Today, EU countries as a whole import 50% of their energy needs, a figure expected to rise to 70% by 2030. Russia is a key supplier of oil and natural gas. Germany imports 32% of its energy from Russia. Poland imports two-thirds of its natural gas needs from Russia, and 97% of its oil. As a whole, EU countries import 25% of their energy needs from Russia. In one estimate, by 2030 EU countries will import 40% of their gas needs from Russia, and 45% of their oil from the Middle East. In addition, oil in particular is found largely in unstable areas of the world such as the Middle East, a factor in U.S. and European concerns over energy security. European governments view energy security primarily in an economic and political context. The EU floated a proposal meant to build interdependence between EU members and Russia to secure reliable energy supplies from Russia. The EU has discussed with Russia a structured arrangement in which Russia would sell energy not only to its principal customers in central and eastern Europe, but to more distant customers in western Europe. In return, the EU is asking Moscow to allow European companies to develop Russian energy reserves. But Russia has rejected key elements of this proposal. Moscow for the most part has not allowed foreign ownership of its pipelines, and has squeezed out some foreign companies that were developing its energy reserves. At the same time, it has secured access to some European markets, for example, through agreements to sell gas to Hungary and France. Russia has taken steps to build its leverage in European energy markets. In December 2007, Russia, Turkmenistan, and Kazakhstan signed an agreement to build a new gas pipeline around the Caspian Sea. The new pipeline would send Central Asian natural gas to the Russian energy grid; Russia has repriced such gas, from another pipeline, twofold before selling it to European customers. The United States and some EU governments have sought instead a trans-Caspian Sea pipeline that would bypass the Russian grid, and provide natural gas more cheaply to Europe, thereby diminishing as well greater potential Russian leverage tied to the supply of energy. Russia has also discussed linking its natural gas supply grid to that of Algeria, which also supplies gas to Europe. EU energy commissioner Andris Piebalgs has charged that the two governments may be planning to develop an energy cartel that would further weaken competitive pricing. To prevent impediments to competition and to improve energy security, the EU Commission is urging new infrastructure, including terminals to receive liquified natural gas; construction of new pipelines from the Caspian region and North Africa; and single European energy grids for continental electricity and natural gas markets to challenge the grip of national energy firms on their national markets. The Commission has also recommended that companies producing raw energy not be allowed to own distribution networks, a step intended to encourage competition. Some EU governments, such as France, have large public entities that own both the sources of energy and the distribution network, and oppose this proposal. Should the EU eventually adopt the Commission's proposal, Russian efforts to buy parts of the European energy grid might be set back. Few observers believe that Moscow's pricing agreements for its gas exports to its neighbors indicate that the market process is working successfully. Some EU officials contend that Russia needs European (and other) firms' good will and continued investment in its decaying energy infrastructure to maintain existing production and develop its oil and gas reserves to sell energy products abroad. Some European and U.S. officials believe that Germany may become too reliant on Russian energy supplies and move away from its EU partners and the United States. East European states in particular, once in Moscow's sphere, believe that they could find themselves unable to ensure reliable and affordable energy supplies from Gazprom, the powerful state-controlled Russian energy company. They point to the former Schroeder government's deal with Gazprom to involve German companies in the development of a Russian-German gas pipeline under the Baltic Sea as a special arrangement that appears to promise a supply to Germany that other states might not enjoy. Some governments believe that Russia has little interest in market forces in the energy sector. In this view, Russia seeks high energy prices to maximize profits. These governments note that the Russian government has a prevailing control over Gazprom, hardly a model of capitalist entrepreneurship, and that Gazprom was behaving like a monopoly in ratcheting up the price of natural gas to its neighbors. Knowing that Ukraine, for example, had no reliable alternatives for gas supply, Gazprom raised prices threefold and threatened a sixfold rise. Gazprom also controls the transit of non-Russian energy supplies to Ukraine, and threatened rapid rises in transit fees as well. Russia has temporarily followed similar policies towards Georgia, Lithuania, and Belarus. Political motives seem apparent in such policies. In 2003, Putin himself said that Gazprom is a "powerful political and economic lever of influence over the rest of the world." In December 2007, Putin designated Dimitri Medvedev, the president of Gazprom, as his successor as Russian president, a move that could signal continuation of Russia's aggressive energy policy. Some U.S. officials believe that NATO could play a role in building international political solidarity in the event of a deliberate disruption of energy flows. NATO's military capability could be severely limited should Russia or other suppliers cut European energy supplies in a crisis. To counter such a move, NATO might coordinate policies among member states and with non-member partner governments to share resources and to bring an end to an energy disruption. NATO might also provide security for infrastructure in energy-producing states facing unrest. Iran has threatened to use its energy reserves to attain political objectives. In response to possible sanctions due to its refusal to comply with requirements by the International Atomic Energy Agency on its nuclear program, Iran has threatened to cut off or limit its energy supplies to buyers. Beyond deliberate policies affecting energy security, there are many countries in Central Asia and the Middle East that are unstable, have a need for new energy infrastructure investment, and have insecure transportation systems due to political unrest. Some of these countries are in NATO's Partnership for Peace program, or desire a closer association with NATO. NATO member states increasingly believe that the alliance must be a global player with global partners. This trend is evident in Afghanistan, for example, where Australia and New Zealand are expending resources to bring stability through NATO's International Security Assistance Force, even though the two countries are not NATO members. NATO's role in energy security could be complementary to the EU's effort to strengthen market forces and interdependence in the international energy sector. U.S. officials agree with their EU counterparts that market forces can lead to greater energy security. Diversification of supply, for example, through building more pipelines that are secure, is one course of action. Turkey could play a major role, as key pipelines under discussion originating in the Caspian region may cross its territory, thereby avoiding the Russian energy grid. Joint investment efforts to build such pipelines in and with energy producers such as Kazakhstan and Azerbaijan could be an important step in this direction. Both countries are members of NATO's Partnership for Peace program, and are seeking closer relations with the United States and its allies. Development of more liquified natural gas (LNG) transport and reception facilities from distant suppliers, such as Nigeria, into Europe could be another course of action. Coupled with the development of new oil and gas pipelines could be an offer from NATO (and/or EU) members to provide security for energy infrastructure in periods of unrest or conflict in supplier and transit countries. NATO governments (although not NATO as a whole) have already been involved in military efforts to secure energy resources. The first Gulf War, while not a NATO operation, involved key member states such as the United States, France, Britain, and Italy that sought not only to liberate Kuwait but also to ensure that Iraq did not control Kuwaiti oil and threaten Saudi Arabia and other Gulf producers. NATO governments also took part in a military operation in the 1980s explicitly designed to secure the supply of oil. Operation Earnest Will was an effort, primarily by NATO states, to protect tanker traffic in the Gulf during the Iran-Iraq War (1980-1988). Beginning in 1984, Iran first, and then Iraq, attacked neutral oil tankers to cut off the other's means of financial support. Iran attacked Kuwaiti and Saudi tankers in those two countries' own waters to ensure that all Gulf states understood that none was secure. The Soviet Union, followed shortly thereafter by the United States, made offers to the Kuwaitis, who lost the most tankers, to reflag their vessels under the USSR and the U.S. flags, an offer that was accepted. After Iraqi aircraft attacked the USS Stark in 1987, killing 37 sailors, the Reagan Administration formed a coalition of like-minded states, above all from NATO, to protect tanker traffic in the Gulf. Britain, France, and the Netherlands were important participants in Operation Earnest Will . The allies captured Iranian vessels mining shipping lanes in the Gulf, and engaged in firefights with Iranian troops using oil platforms to fire on ships. In February 2006, NATO governments discussed a range of potential actions in the event of future disruption of oil supplies caused by military action. Some member states reportedly raised the possibility of protecting tanker traffic and oil platforms in periods of conflict, and using satellites to monitor developments in areas where energy resources come under threat. The 110 th Congress has shown strong interest in energy security. Congress passed the Energy Independence and Security Act of 2007 ( P.L. 110-140 ), which will raise vehicle fuel efficiency standards and require increased use of alternative fuels, both means to ensure greater energy security. In November 2006 Senator Lugar gave a speech in which he urged that energy security be raised to an Article V, or mutual security, issue. House and Senate committees are expected to hold hearings on energy security, with attention to NATO's possible role, in the second session of the 110 th Congress. NATO is attempting to become a global security organization, concentrating on protection of the interests of the United States and its Canadian and European partners, but also engaging non-member states as global partners. NATO's role in energy security remains uncertain, however, as some individual members may prefer a greater role for the EU. A political role in energy security for NATO seems most likely in the near future. Under NATO's Istanbul Cooperation Initiative of 2004, the allies have begun discussions with Bahrain, Qatar, Kuwait, and the United Arab Emirates to build practical cooperation in the security field, including the fight against terrorism. Some Middle Eastern governments are concerned about terrorist attacks on their oil facilities, but it is not publicly known whether NATO has discussed this issue with the four governments. Partnership for Peace countries, such as Kazakhstan and Azerbaijan, that are important energy producers often seek ways to associate themselves more closely with NATO, in part to diminish Russian influence on their soil, in part to develop reliable partners in an unstable region. It is possible that NATO will seek ways to provide security for the energy infrastructure of such countries. At the same time, the EU may encourage its member states to invest more heavily in that infrastructure. There is division in the EU over management of the Union's growing dependence on Russian oil and gas. Several states, led by Poland, wish to engage NATO more fully in ensuring energy security in this relationship. While in the early stages of discussion, Poland is exploring a role for NATO and the United States, perhaps only diplomatically, in which U.S. leverage on Moscow could be an element for encouraging responsible Russian behavior and deflecting any Russian attempt to divide the Europeans. Most EU governments clearly prefer that market forces secure access to energy. A well-structured commercial partnership with Russia might be one mark of such a policy. Another would be the effort of the EU3 (Germany, France, and Britain) and the United States to curtail Iran's nuclear program. The EU3 desire completion of that effort in the UN before there is any discussion of a military organization like NATO assuming responsibility for a broader policy of energy security. In addition, some NATO partner governments in Central Asia and the Middle East might be reluctant to accept allied assistance in securing the resource that is central to their survival. The belief is widespread in the Middle East that the United States invaded Iraq in part to secure access to its oil. There might be popular opposition to any NATO effort to secure energy infrastructure in some of these countries. Moreover, the United States has been unable to provide full security to pipelines in Iraq, and NATO might have similar difficulties in partnership countries. Russia is also a factor. Turkmenistan and Kazakhstan depend upon Russia as a transit country for their pipeline shipments to the west, and could be subject to Moscow's pressure to spurn NATO proposals of assistance.

Energy security is of increasing importance to the United States and its European allies, as some energy producers are using oil and gas for political leverage. Although most European allies believe that a market solution exists to ensure security of energy supplies, NATO has begun to discuss the issue as an allied concern. This report will be updated periodically. See also CRS Report RL33636, The European Union ' s Energy Security Challenges , by [author name scrubbed]. (Note: this study was originally a memorandum for Senator Richard Lugar and is printed as a CRS report with his permission.)

Hamas, a U.S. State Department-designated Foreign Terrorist Organization, surprised most observers by winning a majority of seats in the Palestinian legislative election in January 2006. The election was judged by international observers to be competitive and "genuinely democratic." Hamas had boycotted previous Palestinian national elections because they were held under the terms of the Oslo Accords, which the group rejected. Immediately after the election, the Middle East Quartet (the United States, Russia, the European Union (EU), and the United Nations) indicated that assistance to the PA would only continue if Hamas renounced violence, recognized Israel, and accepted previous Israeli-Palestinian agreements, which Hamas refused to do. In March 2006, Hamas formed a government without Fatah, the secular party that had dominated Palestinian politics for decades, which refused to join a Hamas-led coalition. On April 7, 2006, the United States and the EU announced they were halting assistance to the Hamas-led PA government but that humanitarian aid would continue to flow through international and non-governmental organizations (NGOs). The EU has been the PA's largest donor since it was created in 1996 under the Oslo peace accords. At the same time, Israel began withholding about $50 million in monthly tax and customs receipts that it collects for the PA. In 2005, international assistance and the Israeli-collected revenues together accounted for about two-thirds of PA revenues. In addition, the PA lost access to banking services and loans as banks around the world refused to deal with the it for fear of running afoul of U.S. anti-terrorism laws and being cut off from the U.S. banking system. The resulting fiscal crisis left the Hamas-led government unable to pay wages regularly and deepened poverty levels in the Palestinian territories. The Hamas-led government was forced to rely on shrinking domestic tax revenues and cash that Hamas officials carried back from overseas. Press reports indicate that much of this cash emanated from Iran. By the end of 2006, tensions in the West Bank and Gaza Strip were rising as living conditions deteriorated and PA employees, including members of the security forces, went unpaid for weeks or months. Armed supporters of Fatah and Hamas clashed repeatedly, trading accusations of blame, settling scores, and drifting into lawlessness. More than 100 Palestinians were killed in the violence. After months of intermittent talks, on February 8, 2007, Fatah and Hamas signed an agreement to form a national unity government aimed at ending both the spasm of violence and the international aid embargo that followed the formation of the initial Hamas-led government. The accord was signed by PA President and Fatah leader Mahmud Abbas and Hamas political leader Khalid Mish'al in Mecca, Saudi Arabia, after two days of talks under the auspices of Saudi King Abdullah. Under the agreement, Ismail Haniyeh of Hamas remains prime minister. In the new government, Hamas controls nine ministries and Fatah six, with independents and smaller parties heading the remainder. Among the independents are Finance Minister Salam Fayyad, an internationally respected economist, and Foreign Minister Ziad Abu Amr, a reformer and ally of President Mahmud Abbas. Demonstrating the differing priorities of Fatah and Hamas, the new government's platform calls for establishment of a Palestinian state "on all the lands that were occupied in 1967 with Jerusalem as its capital," and at the same time affirms the Palestinians' right to "resistance in all its forms" and to "defend themselves against any ongoing Israeli aggression." The new government commits to "respect" previous agreements signed by the Palestine Liberation Organization (PLO) but does not explicitly renounce violence or recognize Israel. The government platform states that any peace agreement reached will be submitted for approval to either the Palestine National Council (the PLO legislature) or directly to the Palestinian people in a referendum. The Bush Administration expressed disappointment with the unity government platform and said that Prime Minister Haniyeh of Hamas had "failed to step up to international standards." The Administration, however, is keeping open the option of meeting with non-Hamas members of the new government. A spokeswoman for the U.S. Consulate in Jerusalem said "We won't rule out contact with certain individuals with whom we have had contact before. We will evaluate the situation as we go along." On March 20, U.S. Consul General in Jerusalem Jacob Walles met with Palestinian Finance Minister Fayyad in Ramallah, the first diplomatic contact between the United States and the Palestinians in a year. On April 17, Secretary of State Condoleezza Rice held a half-hour meeting with Fayyad at the State Department. According to press reports, Fayyad separately controls accounts held by the PLO, and U.S. officials are examining regulatory ways to allow donor funds from Arab and European countries—but not from the United States—to flow to those accounts without violating U.S. law. The Administration also has sought to redirect some assistance to PA President Abbas. In late 2006, the State Department notified Congress of the President's intent to reprogram up to $86 million in prior-year funding to support efforts to reform and rehabilitate Palestinian civil security forces loyal to Abbas. However, the House Appropriations Committee placed a hold on these funds, seeking more information on where and why the money was to be spent. After the Palestinians reached agreement on the Fatah-Hamas power sharing arrangement, other Members of Congress reportedly expressed further doubts about where the money was going, fearing it may end up with Hamas. In March 2007, Secretary Rice told a House Appropriations subcommittee that the Administration was now seeking $59 million for Abbas ($43 million for training and non-lethal assistance to the Palestinian Presidential Guard and $16 million for improvements at the Karni crossing, the main terminal for goods moving in and out of Gaza). No holds were placed on this request. The EU's reaction to the Palestinian unity government has tracked closely with the United States thus far. EU officials have begun meeting with non-Hamas members of the PA government, but left in place the ban on direct aid. The EU has had some success in forging consensus on its approach to the Israeli-Palestinian conflict over the last few years. The EU views resolving the Israeli-Palestinian conflict as key to reshaping the Middle East and promoting stability on Europe's periphery. Moreover, EU member states are committed to maintaining a common EU policy on this issue to boost the credibility of the Union's evolving Common Foreign and Security Policy. Still, differences persist among member states. According to some press reports, France, Spain, and Italy may be more inclined to resume direct aid to the PA in the near term while other EU members, such as the UK and Germany, are more wary. A Quartet statement after the unity government was formed said it will be measured not only on the basis of its composition and platform, "but also its actions." Some observers saw this as a softening of the Quartet position, which could allow for a possible resumption of direct aid. European officials reportedly argued for more flexibility, saying the government should not be judged purely on the semantics of its official platform but on the future actions of Hamas. Many European policy makers hope that this strategy will encourage a further moderation of Hamas' position and facilitate forward movement in the peace process. Defying the EU policy, 10 European Parliament members met with Hamas Prime Minister Haniyeh in Gaza on May 1. An EU spokesman said there had been no change in the EU policy. Norway, which is not a member of the EU, has gone the farthest among European states by normalizing relations with the Palestinian government and announcing it was prepared to resume direct aid to the PA. Norwegian Foreign Minister Jonas Gahr Stoere met with Prime Minister Haniyeh in March. Although a member of the Quartet, Russia has taken a different approach to the Hamas government from the beginning by maintaining contact with Hamas officials and recently arguing to lift the aid embargo. Hamas political leader Khalid Mish'al has twice visited Moscow since Hamas took power, most recently in February 2007. Foreign Minister Sergey Lavrov has urged Hamas leaders to meet the Quartet conditions, but without success. Russian officials prefer to keep lines of communication open with all parties as they seek to position themselves as a mediator between Arabs and Israelis. This in turn would serve their larger ambition of reestablishing Moscow as a significant player in the region. Nonetheless, the Russians continue to see the Quartet as a useful and necessary mechanism and are unlikely to break ranks with it completely. Neither the U.N. Security Council nor the U.N. General Assembly have adopted resolutions or taken a position in response to the formation of the unity government. U.N. officials continue to stress the necessity for the Palestinian government to meet the three Quartet conditions. Secretary-General Ban Ki-Moon declined to meet Hamas officials on a March visit to the region. After meeting with PA President Abbas, Ban welcomed the new government's formation, but said that "the atmosphere is not fully right" for talks with Hamas. After brokering the Mecca Accord, the Saudis continued their diplomatic push at the Arab League summit in Riyadh in March. During a speech at the summit, Saudi King Abdullah called for an end to the international boycott of the PA in light of the agreement between Fatah and Hamas to form a unity government. In addition, the summit communiqué relaunched the Arab Peace Initiative of 2002, which calls for full Israeli withdrawal from the territories occupied in 1967, creation of an independent Palestinian state with East Jerusalem as its capital, and a just, agreed upon solution to the refugee problem in exchange for an end-of-conflict agreement in which all Arab states would enter into peace agreements and establish normal relations with Israel. Analysts speculate that the recent Saudi diplomatic drive has several purposes. First is to end the intra-Palestinian violence and resume long-stalled peace negotiations with Israel. Second, by securing Arab and perhaps international recognition of a government that includes Hamas and then relaunching peace talks with full Arab backing, the Saudis hope to bring Hamas into the Arab consensus, moderate its anti-Israeli ideology, and ultimately get it to accept a two-state solution. Finally, by creating momentum toward peace, the Saudis are seeking to undermine the regional influence of Iran and rejectionist groups like Hezbollah. Some observers also note that Saudi efforts to gain acceptance of the unity government and restart Israeli-Palestinian peace talks may be an effort to set the price for Saudi cooperation on other U.S. policies in the region, notably toward Iran. Among the Arab states, only Libya refused to attend the Riyadh summit and join the call to back the new Palestinian government and the Arab peace initiative. The Arab League subsequently appointed Jordan and Egypt to promote the initiative with Israel and persuade it to accept the plan as the basis for peace talks. Jordan's King Abdullah II has been the most outspoken Arab leader on the need to seize the Arab peace initiative as a way to restart Israeli-Palestinian peace talks. In March 2007, speaking to a joint meeting of Congress, he urged renewed international, and especially U.S., engagement to move the process forward. In April, he told a group of visiting Israeli Knesset (parliament) members that the initiative was a historic opportunity for Israel to gain recognition by the Arab states and true integration into the region. The Israeli government is maintaining a complete ban on meetings with Palestinian ministers, including non-Hamas ministers, and continues to withhold tax and customs revenues that it collects on behalf of the PA. Israel is unwilling to enter into direct talks with a Palestinian government that includes Hamas, which has killed hundreds of Israelis in terrorist attacks and whose charter calls for an Islamic state in all of the former British mandate of Palestine. However, Prime Minister Ehud Olmert meets regularly with PA President Abbas and in mid-April the two reportedly discussed economic aspects of a future Palestinian state. Olmert has also spoken of "positive aspects" of the Arab peace initiative and stated his willingness to meet any Arab leader to discuss it. Since the early 1990s, Iran has supplied cash, arms, and training to Hamas, but most observers say the relationship has been an uneasy one. Iran has sought a foothold in the Palestinian territories, while Hamas jealousy guards its political and operational independence. The relationship has been relatively unaffected by the widening rift between Sunni and Shiite Islam, although Hamas protested the December 2006 execution of Saddam Hussein by the pro-Iranian government of Iraq. Since the aid boycott was enacted, Iran has increased its assistance to Hamas. Hamas officials visiting Tehran in the past year often returned carrying large sums of cash, according to press reports. The International Monetary Fund (IMF) estimates that in 2006 some $70 million in cash was carried into the territories, most of it thought to be from Iran. After a visit to Iran in December 2006, Prime Minister Haniyeh said Iran had agreed to provide $120 million in assistance in 2007 and up to $250 million in total. Israeli security officials have warned of growing Iranian influence in Gaza. The head of the Israel Defense Force Southern Command, Maj. Gen. Yoav Galant, said in April 2007 he believes a large number of "Iranian terror and guerrilla experts" are operating in the Gaza Strip, training Palestinian terrorists. On December 21, 2006, President Bush signed into law P.L. 109-446 , the Senate version of the Palestinian Anti-Terrorism Act of 2006, which bars aid to the Hamas-led Palestinian government unless, among other things, it acknowledges Israel's right to exist and adheres to all previous international agreements and understandings. It exempts funds for humanitarian aid and democracy promotion. It also provides $20 million to establish a fund promoting Palestinian democracy and Israeli-Palestinian peace. The law limits the PA's representation in the United States as well as U.S. contact with Palestinian officials. In a signing statement, the President asserted that these and several other provisions of the bill impinge on the executive branch's constitutional authority to conduct foreign policy and he therefore viewed them as "advisory" rather than "mandatory." The original House version of the bill ( H.R. 4681 , passed on June 23, 2006) had been seen by many observers as more stringent as it would have made the provision of U.S. aid to the PA more difficult even if Hamas relinquishes power. In March 2007, Representative Ileana Ros-Lehtinen introduced H.R. 1856 , the Palestinian Anti-Terrorism Act Amendments of 2007, which would amend the original Act to further restrict contact with and assistance to the PA.

The new Palestinian unity government established in March 2007 complicates U.S. policy toward the Palestinian Authority (PA) and the peace process. When Hamas took power last year, the Bush Administration, along with its Quartet partners and Israel, responded by cutting off contact with and halting assistance to the PA. The Administration sought to isolate and remove Hamas while supporting moderates in Fatah, led by President Mahmud Abbas. The international sanctions have not driven Hamas from power, and instead, some assert they may have provided an opening for Iran to increase its influence among Palestinians by filling the void. Now that Hamas and Fatah are sharing power, it will be harder to isolate Hamas. The United States and European countries have held meetings with non-Hamas members of the new government, while Israel continues to rule out all contact with PA ministers. Arab states, led by Saudi Arabia, are pressing for recognition of the new government and an end to the international boycott. Some observers believe Saudi efforts to gain acceptance of the unity government and restart Israeli-Palestinian peace talks may be an effort to set the price for Saudi cooperation on other U.S. policies in the region. In 2006, Congress passed P.L. 109-446 , the Palestinian Anti-Terrorism Act of 2006, to tighten existing restrictions on aid to the Palestinians. In 2007, Representative Ileana Ros-Lehtinen introduced H.R. 1856 , which would amend the original Act to further restrict contact with and assistance to the PA. This report will be updated as events warrant.

BPCA was enacted on January 4, 2002, to encourage drug sponsors to conduct pediatric drug studies. BPCA allows FDA to grant drug sponsors pediatric exclusivity—6 months of additional market exclusivity—in exchange for conducting and reporting on pediatric drug studies. BPCA also provides mechanisms for pediatric drug studies that drug sponsors decline to conduct. The process for initiating pediatric drug studies under BPCA formally begins when FDA issues a written request to a drug sponsor to conduct pediatric drug studies for a particular drug. When a drug sponsor accepts the written request and completes the pediatric drug studies, it submits to FDA reports describing the studies and the study results. BPCA specifies that FDA generally has 90 days to review the study reports to determine whether the pediatric drug studies met the conditions outlined in the written request. If FDA determines that the pediatric drug studies conducted by the drug sponsor were responsive to the written request, it will grant a drug pediatric exclusivity regardless of the study findings. Figure 1 illustrates the process under BPCA. BPCA includes two provisions to further the study of drugs when drug sponsors decline written requests. FDA cannot extend pediatric exclusivity in response to written requests for any drugs for which the drug sponsors declined to conduct the requested pediatric drug studies. First, when drug sponsors decline written requests for studies of on-patent drugs, BPCA provides for FDA to refer the study of those drugs to FNIH for funding. FNIH, which is a nonprofit corporation and independent of NIH, supports the mission of NIH and advances research by linking private sector donors and partners to NIH programs. FNIH and NIH collaborate to fund certain projects. As of December 2005, FNIH had raised $4.13 million to fund pediatric drug studies under BPCA. Second, to further the study of off-patent drugs, NIH—in consultation with FDA and experts in pediatric research—develops a list of drugs, including off-patent drugs, which the agency believes need to be studied in children. NIH lists these drugs annually in the Federal Register. FDA may issue written requests for those drugs on the list that it determines to be most in need of study. If the drug sponsor declines or fails to respond to the written request, NIH can contract for, and fund, the pediatric drug studies. Drug sponsors generally decline written requests for off-patent drugs because the financial incentives are considerably limited. Pediatric drug studies often reveal new information about the safety or effectiveness of a drug, which could indicate the need for a change to its labeling. Generally, the labeling includes important information for health care providers, including proper uses of the drug, proper dosing, and possible adverse events that could result from taking the drug. FDA may determine that the drug is not approved for use by children, which would then be reflected in any labeling changes. The agency refers to its review to determine the need for labeling changes as its scientific review. BPCA specifies that study results submitted as a supplemental new drug application—which, according to FDA officials, most are—are subject to FDA’s general performance goals for a scientific review, which in this case is 180 days. FDA’s process for reviewing study results submitted under BPCA for consideration of labeling changes is not unique to BPCA. FDA’s action can include approving the application, determining that the application is approvable, or determining that the application is not approvable. A determination that an application is approvable may require that drug sponsors conduct additional analyses. Each time FDA takes action on the application, a review cycle is ended. Most of the on-patent drugs for which FDA requested pediatric drug studies under BPCA were being studied, but no studies have resulted when the requests were declined by drug sponsors. From January 2002 through December 2005, FDA issued 214 written requests for on-patent drugs to be studied under BPCA, and drug sponsors agreed to conduct pediatric drug studies for 173 (81 percent) of those. The remaining 41 written requests were declined. Of these 41, FDA referred 9 written requests to FNIH for funding and FNIH had not funded any of those studies as of December 2005. Drug sponsors completed pediatric drug studies for 59 of the 173 accepted written requests—studies for the remaining 114 written requests were ongoing—and FDA made pediatric exclusivity determinations for 55 of those through December 2005. Of those 55 written requests, 52 (95 percent) resulted in FDA granting pediatric exclusivity. Figure 2 shows the status of written requests issued under BPCA for the study of on- patent drugs, from January 2002 through December 2005. Drugs were studied under BPCA for their safety and effectiveness in treating children for a wide range of diseases, including some that are common—such as asthma and allergies— and serious or life threatening in children—such as cancer, HIV, and hypertension. We found that the drugs studied under BPCA represented more than 17 broad categories of disease. The category that had the most drugs studied under BPCA was cancer, with 28 drugs. In addition, there were 26 drugs studied for neurological and psychiatric disorders, 19 for endocrine and metabolic disorders, 18 related to cardiovascular disease—including drugs related to hypertension—and 17 related to viral infections. Analyses of two national databases shows that about half of the 10 most frequently prescribed drugs for children were studied under BPCA. Through December 2005, drug sponsors declined written requests issued under BPCA for 41 on-patent drugs. FDA referred 9 of these 41 written requests (22 percent) to FNIH for funding, but as of December 2005, FNIH had not funded the study of any of these drugs. NIH has estimated that the cost of studying these 9 drugs would exceed $43 million, but FNIH had raised only $4.13 million for pediatric drug studies under BPCA. Few off-patent drugs identified by NIH as in need of study for pediatric use have been studied. By 2005, NIH had identified 40 off-patent drugs that it believed should be studied for pediatric use. Through 2005, FDA issued written requests for 16 of these drugs. All but 1 of these written requests were declined by drug sponsors. NIH funded pediatric drug studies for 7 of the remaining 15 written requests declined by drug sponsors through December 2005. NIH provided several reasons why it has not pursued the study of some off-patent drugs that drug sponsors declined to study. Concerns about the incidence of the disease that the drugs were developed to treat, the feasibility of study design, drug safety, and changes in the drugs’ patent status have caused the agency to reconsider the merit of studying some of the drugs it identified as important for study in children. For example, in one case NIH issued a request for proposals to study a drug but received no responses. In other cases, NIH is awaiting consultation with pediatric experts to determine the potential for study. Further, NIH has not received appropriations specifically for funding pediatric drug studies under BPCA. NIH anticipates spending an estimated $52.5 million for pediatric drug studies associated with 7 written requests issued by FDA from January 2002 through December 2005. Most drugs that have been granted pediatric exclusivity under BPCA— about 87 percent—have had labeling changes as a result of the pediatric drug studies conducted under BPCA. Pediatric drug studies conducted under BPCA showed that children may have been exposed to ineffective drugs, ineffective dosing, overdosing, or side effects that were previously unknown. However, the process for reviewing study results and completing labeling changes was sometimes lengthy, particularly when FDA required additional information from drug sponsors to support the changes. Of the 52 drugs studied and granted pediatric exclusivity under BPCA from January 2002 through December 2005, 45 (about 87 percent) had labeling changes as a result of the pediatric drug studies. In addition, 3 other drugs had labeling changes prior to FDA making a decision on granting pediatric exclusivity. FDA officials said that the pediatric drug studies conducted up to that time provided important safety information that should be reflected in the labeling without waiting until the full study results were submitted or pediatric exclusivity determined. Pediatric drug studies conducted under BPCA have shown that the way that some drugs were being administered to children potentially exposed them to an ineffective therapy, ineffective dosing, overdosing, or previously unknown side effects—including some that affect growth and development. The labeling for these drugs was changed to reflect these study results. For example, studies of the drug Sumatriptan, which is used to treat migraines, showed that there was no benefit derived from this drug when it was used in children. There were also certain serious adverse events associated with its use in children, such as vision loss and stroke, so the labeling was changed to reflect that the drug is not recommended for children under 18 years old. Other drugs have had labeling changes indicating that the drugs may be used safely and effectively by children in certain dosages or forms. Typically, this resulted in the drug labeling being changed to indicate that the drug was approved for use by children younger than those for whom it had previously been approved. In other cases, the changes reflected a new formulation of a drug, such as a syrup that was developed for pediatric use, or new directions for preparing the drug for pediatric use were identified in the pediatric drug studies conducted under BPCA. Although FDA generally completed its first scientific review of study results—including consideration of labeling changes—within its 180-day goal, the process for completing the review, including obtaining sufficient information to support and approve labeling changes, sometimes took longer. For the 45 drugs granted pediatric exclusivity that had labeling changes, it took an average of almost 9 months after study results were first submitted to FDA for the sponsor to submit and the agency to review all of the information it required and approve labeling changes. For 13 drugs (about 29 percent), FDA completed this scientific review process and approved labeling changes within 180 days. It took from 181 to 187 days for the scientific review process to be completed and labeling changes to be approved for 14 drugs (about 31 percent). For the remaining 18 drugs (about 40 percent), FDA took from 238 to 1,055 days to complete the scientific review process and approve labeling changes. For 7 of those drugs, it took more than a year to complete the scientific review process and approve labeling changes. While the first scientific reviews were generally completed within 180 days, it took 238 days or more for 18 drugs. For those 18 drugs, FDA determined that it needed additional information from the drug sponsors in order to be able to approve the drugs for pediatric use. This often required that the drug sponsor conduct additional analyses or pediatric drug studies. FDA officials said they could not approve any changes to drug labeling until the drug sponsor provided this information. Drug sponsors sometimes took as long as 1 year to gather the additional necessary data and respond to FDA’s request. Mr. Chairman, this concludes my prepared remarks. I would be pleased to respond to any questions that you or other members of the Subcommittee may have. For further information regarding this testimony, please contact Marcia Crosse at (202) 512-7119 or crossem@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this testimony. Thomas Conahan, Assistant Director; Carolyn Feis Korman; and Cathleen Hamann made key contributions to this statement. This is a work of the U.S. government and is not subject to copyright protection in the United States. 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.

About two-thirds of drugs that are prescribed for children have not been studied and labeled for pediatric use, placing children at risk of being exposed to ineffective treatment or incorrect dosing. The Best Pharmaceuticals for Children Act (BPCA), enacted in 2002, encourages the manufacturers, or sponsors, of drugs that still have marketing exclusivity--that is, are on-patent--to conduct pediatric drug studies, as requested by the Food and Drug Administration (FDA). If they do so, FDA may extend for 6 months the period during which no equivalent generic drugs can be marketed. This is referred to as pediatric exclusivity. BPCA also provides for the study of off-patent drugs. GAO was asked to testify on the study and labeling of drugs for pediatric use under BPCA. This testimony is based on Pediatric Drug Research: Studies Conducted under Best Pharmaceuticals for Children Act, GAO-07-557 (Mar. 22, 2007). GAO assessed (1) the extent to which pediatric drug studies were being conducted under BPCA for on-patent drugs, (2) the extent to which pediatric drug studies were being conducted under BPCA for off-patent drugs, and (3) the impact of BPCA on the labeling of drugs for pediatric use and the process by which the labeling was changed. GAO examined data about the drugs for which FDA requested studies under BPCA from 2002 through 2005 and interviewed relevant federal officials. Drug sponsors have initiated pediatric drug studies for most of the on-patent drugs for which FDA has requested such studies under BPCA, but no drugs were studied when sponsors declined these requests. Sponsors agreed to 173 of the 214 written requests for pediatric studies of on-patent drugs. In cases where drug sponsors decline to study the drugs, BPCA provides for FDA to refer the study of these drugs to the Foundation for the National Institutes of Health (FNIH), a nonprofit corporation. FNIH had not funded studies for any of the nine drugs that FDA referred as of December 2005. Few off-patent drugs identified by the National Institutes of Health (NIH) that need to be studied for pediatric use have been studied. BPCA provides for NIH to fund studies when drug sponsors decline written requests for off-patent drugs. While 40 such off-patent drugs were identified by 2005, FDA had issued written requests for 16. One written request was accepted by the drug sponsor. Of the remaining 15, NIH funded studies for 7 through December 2005. Most drugs granted pediatric exclusivity under BPCA (about 87 percent) had labeling changes--often because the pediatric drug studies found that children may have been exposed to ineffective drugs, ineffective dosing, overdosing, or previously unknown side effects. However, the process for approving labeling changes was often lengthy. For 18 drugs that required labeling changes (about 40 percent), it took from 238 to 1,055 days for information to be reviewed and labeling changes to be approved.

Many Members of Congress see continued tension between "free speech" decisions of the Supreme Court, which protect flag desecration as expressive conduct under the First Amendment, and the symbolic significance of the United States flag. Consequently, every Congress that has convened since those decisions were issued has considered measures to permit the punishment of those who engage in flag desecration. This report is divided into two parts. The first gives a brief history of the flag protection issue, from the enactment of the Flag Protection Act in 1968 through current consideration of a constitutional amendment. The second part briefly summarizes the two decisions of the United States Supreme Court, Texas v. Johnson and United States v. Eichman , that struck down the state and federal flag protection statutes as applied in the context punishing expressive conduct. In 1968, in the midst of the Vietnam conflict, Congress enacted the first Federal Flag Protection Act of general applicability. The law was occasioned by the numerous public flag burnings in protest of the war. For the next 20 years, the lower courts upheld the constitutionality of the federal statute and the Supreme Court declined to review these decisions. However, during the 20-year period between enactment of the Flag Protection Act and its Johnson decision, the Supreme Court did visit the flag issue three times. Each time the Court found a way to rule in favor of the protestor and overturn a state conviction on very narrow grounds, avoiding a definitive ruling on the constitutionality of convictions for politically inspired destruction or alteration of the American flag. In Street v. New York , the Court overturned a state conviction for flag-burning, holding that the flag-burner was prosecuted for his words rather than his acts. In 1974, the Court overturned a prosecution by finding that the state statute was vague. In Spence v. Washington , the Court held that the taping of a peace symbol to a flag was expressive conduct and thus protected by the First Amendment. In both of these later cases the Court expressly referred to the federal statute in a positive manner. It was against this background that the Supreme Court took the Johnson case. In 1984, during the Republican National Convention in Dallas, TX, Johnson had participated in a demonstration protesting the policies of the Reagan Administration. In front of the city hall, Johnson unfurled an American flag, which another member of the demonstration had taken from a flag pole and had given to him, doused it with kerosene, and set it on fire. He was charged with the desecration of a venerated object in violation of a Texas statute. Johnson was tried, convicted, and sentenced to one year in prison and fined $2,000. The conviction was upheld by the Court of Appeals of the Fifth District of Texas at Dallas. The Texas Court of Criminal Appeals reversed. In a 5 to 4 decision, the U.S. Supreme Court affirmed this reversal on June 21, 1989, thus, in effect, holding that the flag protection statutes of 47 states and the federal statute could not be applied to a flag burning that was part of a public demonstration. In response to this decision, Congress enacted the Flag Protection Act of 1989. The act changed the focus of the protection granted the flag from protecting it against desecration, which the Court had ruled unconstitutional, to protecting its physical integrity. The primary purpose of amending the federal desecration statute was to remove any language which the courts might find made the statute one that was aimed at suppressing a certain type of expression. If the statute was neutral as to expression—for instance, if it proscribed all burning of flags—then, its proponents argued, the statute's prohibitions might be judged under the constitutional test enunciated by the Court in United States v. O ' Brien. Under the O ' Brien test, which is less strict than First Amendment standards applied in expression cases, the government need only show that the statute furthers an important or substantial governmental interest, and that the restriction on First Amendment freedoms is no greater than is essential to the furtherance of that interest. All of the opinions in Johnson had recognized a governmental interest in protecting the physical integrity of the flag to some degree. Therefore, it was at least arguable that such a neutral statute would meet the second part of the test. The new statute made criminal intentionally mutilating, defacing, physically defiling, burning, maintaining on the floor or ground, or trampling upon the flag of the United States. Exemption was given for conduct consisting of disposal of a worn or soiled flag. The term "flag of the United States" was defined to mean any flag of the United States, or any part thereof, made of any substance, of any size, in a form that is commonly displayed. Provision was made for expedited Supreme Court review of the constitutionality of the act. The Flag Protection Act of 1989 became effective on October 28, 1989. On that date protesters in Seattle, WA, and Washington, DC, were arrested for violation of the new act. These cases were dismissed upon findings that the act was unconstitutional as applied to their burning a United States flag in a protest context. The D.C. and Seattle cases were appealed to the Supreme Court under the act's expedited review provision. On June 11, 1990, the Court announced its ruling. In another 5 to 4 decision, the Court held that the Flag Protection Act of 1989 could not be constitutionally applied to a burning of the flag in the context of a public protest. In the summer of 1990, both houses of Congress considered and failed to pass by the required two-thirds vote an amendment to the Constitution which would have empowered Congress to enact legislation to protect the physical integrity of the flag. In six of the last eight Congresses, the House passed proposed constitutional amendments which would have authorized Congress to enact legislation to protect the flag from physical desecration. In the 104 th Congress, the Senate considered a "flag" amendment, but came three votes short of passing it. In the 106 th Congress, S.J.Res. 14 failed, by a vote of 63-37, to receive the necessary two-thirds vote in the Senate. In the 109 th Congress, S.J.Res. 12 failed by a vote of 66 to 34 (one vote short of the necessary two-thirds required for passage). There were no "flag" amendment votes in the Senate in the 105 th , 107 th , 108 th ,110 th , , or 111 th Congresses. In the 112 th Congress, an amendment to the Constitution of the United States to prohibit desecration of the flag has been introduced in both the House and the Senate. H.J.Res. 13 proposes an amendment to the Constitution of the United States which would authorize the Congress to prohibit the physical desecration of the flag of the United States. On Flag Day of 2011, Senator Hatch introduced an identical bill, S.J.Res. 19 , in the Senate. Should Congress approve a proposed flag protection amendment by the required two-thirds majority of each house, the amendment would only become effective upon ratification by the legislatures of three-fourths of the states. In Texas v. Johnson , the majority of the Court held that Johnson's conviction for flag desecration, under a Texas statute, was inconsistent with the First Amendment and affirmed the decision of the Texas Court of Criminal Appeals that held that Johnson could not be punished for burning the flag as part of a public demonstration. The opinion outlined the questions to be addressed in a case where First Amendment protection is sought for conduct rather than pure speech. First, the Court must determine if the conduct in question is expressive conduct. If the answer is yes, then the First Amendment may be invoked, and the second question must be answered. The second question is whether the state regulation of the conduct is related to the suppression of expression. The answer to this question determines the standard which will be utilized in judging the appropriateness of the state regulation. The test of whether conduct is deemed expressive conduct sufficient to bring the First Amendment into play is whether an intent to convey a particularized message was present, and whether the likelihood was great that the message would be understood by those who viewed it. The opinion emphasized the communicative nature of flags as previously recognized by the Court, but stated that not all action taken with respect to the flag is automatically expressive. The context in which the conduct occurred must be examined. The majority found that Johnson's conduct met this test. The burning of the flag was the culmination of a political demonstration. It was intentionally expressive, and its meaning was overwhelmingly apparent. In these circumstances the burning of the flag was conduct "sufficiently imbued with elements of communication" to implicate the First Amendment. The finding that burning the flag in this circumstance was expressive conduct required the Court next to look at the statute involved to see if it was directly aimed at suppressing expression or if the governmental interest to be protected by the statute was unrelated to the suppression of free expression. If the statute were of the latter type, the government would need only show that it furthered an important or substantial governmental interest, and that the restriction on First Amendment freedoms was no greater than is essential to the furtherance of that interest. If the statute was aimed at suppression of expression, then it could be upheld only if it passed the most exacting scrutiny. Texas offered two state interests which it sought to protect with this statute: prevention of breaches of the peace; and preservation of the flag as a symbol of nationhood and national unity. The majority rejected the first of these interests as not being implicated in the facts of this case. No disturbance of the peace actually occurred or was threatened. The opinion also pointed out that Texas had a statute specifically prohibiting breaches of the peace, which tended to confirm that flag desecration need not be punished to keep the peace. The second governmental interest, that of preserving the flag as a symbol of national unity, was found by the majority to be directly related to expression in the context of activity. The Texas law did not cover all burning of flags. Rather it was designed to protect the flag only against abuse that would be offensive to others. Whether Johnson's treatment of the flag was proscribed by the statute could only be determined by the content of his expression. Therefore, an exacting scrutiny standard of review had to be applied to the statute. The majority held that the Texas statute could not withstand this level of scrutiny. There is no separate constitutional category for the American flag. The government may not prohibit expression of an idea merely because society finds the idea offensive, even when the flag is involved. Nor may a state limit the use of designated symbols to communicate only certain messages. The Court, in reviewing the Flag Protection Act of 1989 in United States v. Eichman , expressly declined the invitation to reconsider Johnson and its rejection of the contention that flag-burning as a mode of expression, like obscenity or "fighting words," does not enjoy the full protection of the First Amendment. The only question not addressed in Johnson , and therefore the only question the majority felt necessary to address, was "whether the Flag Protection Act is sufficiently distinct from the Texas statute that it may constitutionally be applied to proscribe appellees' expressive conduct." The government argued that the governmental interest served by the act was protection of the physical integrity of the flag. This interest, it was asserted, was not related to the suppression of expression, and the act contained no explicit content-based limitations on the scope of the prohibited conduct. Therefore the government should only need to show that the statute furthers an important or substantial governmental interest, and that the restriction on First Amendment freedoms is no greater than is essential to the furtherance of that interest. The majority, while accepting that the act contained no explicit content-based limitations, rejected the claim that the governmental interest was unrelated to the suppression of expression. The Court stated: The Government's interest in protecting the "physical integrity" of a privately owned flag rests upon a perceived need to preserve the flag's status as a symbol of our Nation and certain national ideals. But the mere destruction or disfigurement of a particular physical manifestation of the symbol, without more, does not diminish or otherwise affect the symbol itself in any way. For example, the secret destruction of a flag in one's own basement would not threaten the flag's recognized meaning. Rather, the Government's desire to preserve the flag as a symbol for certain national ideals is implicated "only when a person's treatment of the flag communicates [a] message" to others that is inconsistent with those ideals. In essence the Court said that the interest protected by the act was the same interest which had been put forth to support the Texas statute and rejected in Johnson . The opinion went on to analyze the language of the act itself. Again, while there was no explicit limitation found in this language, the majority found that each of the specified terms, with the possible exception of "burns," unmistakably connoted disrespectful treatment of the flag and thus could not be viewed as neutral as to expression. Therefore, although the act was "somewhat broader" than the Texas statute, it still suffered from the same fundamental flaw, namely it suppressed expression out of concern for its likely communicative impact. This being the case, the majority found that the O ' Brien test was inapplicable and the act must be subject to "the most exacting scrutiny." As in Johnson , the statute in question could not withstand this level of scrutiny.

This report is divided into two parts. The first gives a brief history of the flag protection issue, from the enactment of the Flag Protection Act in 1968 through current consideration of a constitutional amendment. The second part briefly summarizes the two decisions of the United States Supreme Court, Texas v. Johnson and United States v. Eichman, that struck down the state and federal flag protection statutes as applied in the context punishing expressive conduct. In 1968, Congress reacted to the numerous public flag burnings in protest of the Vietnam conflict by passing the first federal flag protection act of general applicability. For the next 20 years, the lower courts upheld the constitutionality of this statute and the Supreme Court declined to review these decisions. However, in Texas v. Johnson, the majority of the Court held that a conviction for flag desecration under a Texas statute was inconsistent with the First Amendment and affirmed a decision of the Texas Court of Criminal Appeals that barred punishment for burning the flag as part of a public demonstration. In response to Johnson, Congress passed the Flag Protection Act of 1989. But, in reviewing this act in United States v. Eichman, the Supreme Court expressly declined the invitation to reconsider Johnson and its rejection of the contention that flag-burning, like obscenity or "fighting words," does not enjoy the full protection of the First Amendment as a mode of expression. The only question not addressed in Johnson, and therefore the only question the majority felt necessary to address, was "whether the Flag Protection Act is sufficiently distinct from the Texas statute that it may constitutionally be applied to proscribe appellees' expressive conduct." The majority of the Court held that it was not. Many Members of Congress see continued tension between "free speech" decisions of the Supreme Court, which protect flag desecration as expressive conduct under the First Amendment, and the symbolic importance of the United States flag. Consequently, every Congress that has convened since those decisions were issued has considered proposals that would permit punishment of those who engage in flag desecration. In six of the last eight Congresses, the House passed proposed constitutional amendments which would have authorized Congress to enact legislation to protect the flag from physical desecration. In the 104th Congress, the Senate considered a "flag" amendment, but came three votes short of passing it. In the 106th Congress, S.J.Res. 14 failed, by a vote of 63-37, to receive the necessary two-thirds vote in the Senate. In the 109th Congress, S.J.Res. 12 failed by a vote of 66 to 34 (one vote short of the necessary two-thirds required for passage). There were no "flag" amendment votes in the Senate in the 105th, 107th, 108th, 110th, or 111th Congresses. In the 112th Congress, an amendment to the Constitution of the United States to prohibit desecration of the flag has been introduced in both the House and the Senate. H.J.Res. 13 proposes an amendment to the Constitution of the United States which would authorize Congress to prohibit the physical desecration of the flag of the United States. An identical bill, S.J.Res. 19, has been introduced in the Senate.

Under current statute, the President generally is required keep the congressional intelligence committees fully and currently informed of all covert actions and that any covert action "finding" shall be reported to the committees as soon as possible after such approval and before the initiation of the covert action authorized by the finding. If, however, the President determines that it is essential to limit access to a covert action finding in order to "meet extraordinary circumstances affecting vital interests of the United States," then rather than providing advanced notification to the full congressional intelligence committees, as is generally required, the President may limit such notification to the "Gang of Eight," and any other congressional leaders he may choose to inform. The statute defines the "Gang of Eight" as being comprised of the chairmen and ranking Members of the two congressional intelligence committees and the House and Senate majority and minority leadership. In addition to having to determine that vital interests are implicated, the President must comply with four additional statutory conditions in notifying the Gang of Eight. First, the President is required to provide a statement setting out the reasons for limiting notification to the Gang of Eight, rather than the full intelligence committees. The two intelligence committee chairmen, both Gang of Eight Members, also must be provided signed copies of the covert action finding in question. Third, the President is required to provide the Gang of Eight advance notice of the covert action in question. And, lastly, Gang of Eight Members must be notified of any significant changes in a previously approved covert action, or any significant undertaking pursuant to a previously approved finding. In report language accompanying the 1980 enactment, Congress established its intent to preserve the secrecy necessary for very sensitive covert actions, while providing the President with a process for consulting in advance with congressional leaders, including the intelligence committee chairmen and ranking minority Members, "who have special expertise and responsibility in intelligence matters." Such consultation, according to Congress, would ensure strong oversight, while at the same time, "share the President's burden on difficult decisions concerning significant activities." In 1991, following the Iran-Contra Affair, Intelligence Conference Committee Conferees more specifically stated that Gang of Eight notifications should be used only when "the President is faced with a covert action of such extraordinary sensitivity or risk to life that knowledge of the covert action should be restricted to as few individuals as possible." Congressional Conferees also indicated that they expected the executive branch to hold itself to the same standard by similarly limiting knowledge of such sensitive covert actions within the executive. Congress approved several changes to the Gang of Eight notification procedures as part of the FY2010 Intelligence Authorization Act ( P.L. 111-259 ). First, it required that a written statement now be provided outlining the reasons for a presidential decision to limit notification of a covert action or significant change or undertaking in a previously approved finding. Previously, such a statement was required, but there was no explicit requirement that it be written. Second, the President is now required no later than 180 days after such a statement of reasons for limiting access is submitted, to ensure that all members of the congressional intelligence committees are provided access to the finding or notification, or a statement of reasons, submitted to all committee members, as to why it remains essential to continue to limited notification. Finally, Congress required that the President now ensure that the Gang of Eight be notified in writing of any significant change in a previously approved covert action, and stipulated further that the president, in determining whether an activity constitutes a significant undertaking, shall consider whether the activity: involved significant risk of loss of life; requires an expansion of existing authorities, including authorities relating to research, development, or operations; results in the expenditure of significant funds or other resources; requires notification under Section 504 [50 USCS §414]; gives rise to a significant risk of disclosing intelligence sources or methods; presents a reasonably foreseeable risk of serious damage to the diplomatic relations of the United States if such activity were disclosed without authorization. The unclassified version of the FY2011 Intelligence Authorization Act ( P.L. 112-72 ), enacted June 8, 2011, contained no further changes to the Gang of Eight notification procedure. Although the statute requires that the President provide the Gang of Eight advance notice of certain covert actions, it also recognizes the President's constitutional authority to withhold such prior notice altogether by imposing certain additional conditions on the President should the decision be made to withhold. If prior notice is withheld, the President must "fully inform" the congressional intelligence committees in a "timely fashion" after the commencement of the covert action. The President also is required to provide a statement of the reasons for withholding prior notice to the Gang of Eight. In other words, a decision by the executive branch to withhold prior notice from the Gang of Eight would appear to effectively prevent the executive branch from limiting an-after-the-fact notification to the Gang of Eight, even if the President had determined initially that the covert action in question warranted Gang of Eight treatment. Rather, barring prior notice to the Gang of Eight, the executive branch would then be required to inform the full intelligence committees of the covert action in "timely fashion." In doing so, Congress appeared to envision a covert action, the initiation of which would require a short-term period of heightened operational security. During the Senate's 1980 debate of the Gang of Eight provision, congressional sponsors said their intent was that the Gang of Eight would reserve the right to determine the appropriate time to inform the full intelligence committees of the covert action of which they had been notified. The position of sponsors that the Gang of Eight would determine when to notify the full intelligence committees underscores the point that while the statute provides the President this limited notification option, it appears to be largely silent on what happens after the President exercises this particular option. Sponsors thus made it clear that they expected the intelligence committees to establish certain procedures to govern how the Gang of Eight was to notify the full intelligence committees. Senator Walter Huddleston, Senate floor manager for the legislation, said "the intent is that the full oversight committees will be fully informed at such time the eight leaders determine is appropriate. The committees will establish the procedures for the discharge of this responsibility." Senator Huddleston's comments referred to Section 501(c) of Title V of the National Security Act which stipulates that "The President and the congressional intelligence committees shall each establish such procedures as may be necessary to carry out the provisions of this title." With regard to Section 501(c), Senate report language stated: The authority for procedures established by the Select Committees is based on the current practices of the committees in establishing their own rules. One or both committees may, for example, adopt procedures under which designated members are assigned responsibility on behalf of the committee to receive information in particular types of circumstances, such as when all members cannot attend a meeting or when certain highly sensitive information is involved. Congressional intent thus appeared to be that the collective membership of each intelligence committee, rather than the committee leadership, would develop such procedures. Moreover, the rules that each committee have subsequently adopted, while they deal in detail as to how the committees are to conduct their business, do not appear to address any procedures that might guide Gang of Eight notifications generally. Rather, to the extent that any such procedures have been adopted, those procedures appear to have been put into place at the executive branch's insistence, according to congressional participants. Congress approved the Gang of Eight notification provision in 1980 as part of a broader package of statutory intelligence oversight measures generally aimed at tightening intelligence oversight while also providing the Central Intelligence Agency (CIA) greater leeway to carry out covert operations, following a failed covert operation to rescue American embassy hostages in Iran. Congressional approval came after President Jimmy Carter decided not to notify the intelligence committees of the operation in advance because of concerns over operational security and the risk of disclosure. Director of Central Intelligence Stansfield Turner briefed the congressional intelligence committees only after the operations had been conducted. Although most members reportedly expressed their understanding of the demands for secrecy and thus the Administration's decision to withhold prior notification, Senate Intelligence Committee Chairman Birch Bayh expressed concern that the executive branch's action reflected a distrust of the committees. He suggested that future administrations could address disclosure concerns by notifying a more limited number of Members "so that at least somebody in the oversight mechanism would know.... If oversight is to function better, you first need it to function [at all]." Such sentiments appear to have contributed to the subsequent decision by Congress to permit the executive branch to notify the Gang of Eight in such cases. Even with statutory arrangements governing covert action, including Gang of Eight covert actions, Congress does not have the authority under statute to veto outright a covert action. Indeed, former Senator Howard Baker successfully pushed the inclusion in the 1980 legislative package of a provision making clear that Congress did not have approval authority over the initiation of any particular covert action. Nonetheless, the Gang of Eight Members, as do the intelligence committees, arguably have the authority to influence whether and how such covert actions are conducted over time. For example, Members could express opposition to the initiation of a particular covert action. Some observers assert that in the absence of Members' agreement to the initiation of the covert action involved, barring such agreement, an administration would have to think carefully before proceeding with such a covert action as planned. The Gang of Eight over time could also influence funding for such operations. Initial funding for a covert action generally comes from the CIA's Reserve for Contingency Fund, for which Congress provides an annual appropriation. Once appropriated, the CIA can fund a covert action using money from this fund, without having to seek congressional approval. But the executive branch generally must seek additional funds to replenish the reserve on an annual basis. If the Gang of Eight, including the two committee chairmen and ranking Members, were to agree not to continue funding for a certain covert action, they arguably could impress on the membership of the two committees not to replenish the reserve fund, providing they informed the committees of the covert action, a decision which the congressional sponsors said they intended to be left to the discretion of the Gang of Eight in any case. Thus, the Gang of Eight could influence the intelligence committees to increase, decrease or eliminate authorized funding of a particular covert action. Some observers point out, however, that the leaders' overall effectiveness in influencing a particular covert action turns at least as much on their capability to conduct effective oversight of covert action as it does on their legal authority. The impact of Gang of Eight notifications on the effectiveness of congressional intelligence oversight continues to be debated. Supporters of the Gang of Eight process contend that such notifications continue to serve their original purpose, which, they assert, is to protect operational security of particularly sensitive covert actions that involve vital U.S. interests while still involving Congress in oversight. Further, they point out that although Members receiving these notifications may be constrained in sharing detailed information about the notifications with other intelligence committee members and staff, these same Members can raise concerns directly with the President and the congressional leadership and thereby seek to have any concerns addressed. Supporters also argue that Members receiving these restricted briefings have at their disposal a number of legislative remedies if they decide to oppose a particular covert action program, including the capability to use the appropriations process to withhold funding until the executive branch behaves according to Congress's will. Critics counter with the following points. First, they say, Gang of Eight notifications do not provide for effective congressional oversight because participating Members "cannot take notes, seek the advice of their counsel, or even discuss the issues raised with their committee colleagues." Second, they contend that Gang of Eight notifications have been "overused." Third, they assert that, in certain instances, the executive branch did not provide an opportunity to Gang of Eight Members to approve or disapprove of the program being briefed to them. And fourth, they contend that the "limited information provided Congress was so overly restricted that it prevented members of Congress from conducting meaningful oversight." Notwithstanding the continuing debate over the merits of such notifications, what remains less clear is the historic record of compliance with Gang of Eight provisions set out in statute. Questions include: have such notifications generally been limited to covert actions, ones that conform to congressional intent that such covert actions be highly sensitive and involve the risk to life? When prior notification is limited to the Gang of Eight, has the executive branch provided an explanatory statement as to why it limited notification to the Gang of Eight? If the Gang of Eight is not provided prior notice, has the executive branch then informed the intelligence committees at a later date and provided a reason why prior notification was not provided? Has the Gang of Eight, once notified, ever then made a determination to notify the intelligence committees, a prerogative envisioned by its congressional sponsors? Have the congressional intelligence committees, at any time since they were established, attempted to develop procedures to guide Gang of Eight notifications, as envisioned by the sponsors of the Gang of Eight provision? Striking the proper balance between effective oversight and security remains a challenge to Congress and the executive. Doing so in cases involving particularly sensitive covert actions presents a special challenge. Success turns on a number of factors, not the least of which is the degree of comity and trust that defines the relationship between the legislative and executive branches. More trust can lead to greater flexibility in notification procedures. When trust in the relationship is lacking, however, the legislative branch may see a need to tighten and make more precise the notification architecture, so as to assure what it views as being an appropriate flow of information, thus enabling effective oversight.

Legislation enacted in 1980 gave the executive branch authority to limit advance notification of especially sensitive covert actions to eight Members of Congress—the "Gang of Eight"—when the President determines that it is essential to limit prior notice in order to meet extraordinary circumstances affecting U.S. vital interests. In such cases, the executive branch is permitted by statute to limit notification to the chairmen and ranking minority Members of the two congressional intelligence committees, the Speaker and minority leader of the House, and Senate majority and minority leaders, rather than to notify the full intelligence committees, as is required in cases involving covert actions determined to be less sensitive. Congress, in approving this new procedure in 1980, during the Iran hostage crisis, said it intended to preserve operational secrecy in those "rare" cases involving especially sensitive covert actions while providing the President with advance consultation with the leaders in Congress and the leadership of the intelligence committees who have special expertise and responsibility in intelligence matters. The intent appeared to some to be to provide the President, on a short-term basis, a greater degree of operational security as long as sensitive operations were underway. In 1991, in a further elaboration of congressional intent following the Iran-Contra Affair, congressional report language stated that limiting notification to the Gang of Eight should occur only in situations involving covert actions of such extraordinary sensitivity or risk to life that knowledge of such activity should be restricted to as few individuals as possible. In its mark-up of H.R. 2701, the FY2010 Intelligence Authorization Act, the House Permanent Select Committee on Intelligence (HPSCI) replaced the Gang of Eight statutory provision, adopting in its place a statutory requirement that each of the intelligence committees establish written procedures as may be necessary to govern such notifications. According to committee report language, the adopted provision vests the authority to limit such briefings with the committees, rather than the President. On July 8, 2009, the executive branch issued a Statement of Administration Policy (SAP) in which it stated that it strongly objected to the House Committee's action to replace the Gang of Eight statutory provision, and that the President's senior advisors would recommend that the President veto the FY2010 Intelligence Authorization Act if the committee's language was retained in the final bill. The Senate Intelligence Committee, in its version of the FY2010 Intelligence Authorization Act, left unchanged the Gang of Eight statutory structure, but approved several changes that would tighten certain aspects of current covert action reporting requirements. Ultimately, the House accepted the Senate's proposals, which the President signed into law as part of the FY2010 Intelligence Authorization Act (P.L. 111-259). Both the House and Senate Intelligence Committees did not make any further changes to the Gang of Eight notification procedure when both committees approved respective versions of the 2011 Intelligence Authorization Act (P.L. 112-72) enacted on June 8, 2011. This report describes the statutory provision authorizing Gang of Eight notifications, reviews the legislative history of the provision, and examines the impact of such notifications on congressional oversight. Contents

RS21619 -- Nuclear Weapons and U.S. National Security: A Need for New Weapons Programs? September 15, 2003 Throughout the Cold War, the United States maintained nuclear weapons to deter nuclear and conventional attacks by the Soviet Union and its allies against theUnited States and its allies. At its extreme, such a conflict could have led to a global nuclear war. But the UnitedStates also did not rule out the possible use ofnuclear weapons in smaller conflicts or to achieve goals other than deterrence. However, because U.S. forces weresized to meet the Soviet threat, other nationsand other threats to U.S. security were viewed as "lesser included cases." The Bush Administration has emphasized that, even with the demise of the Soviet Union, nuclear weapons "continue to be essential to our security, and that ofour friends and allies." (3) Furthermore, it hasidentified a role for nuclear weapons that it asserts is both more comprehensive than the Cold War concept ofdeterrence and more integrated with the rest of the U.S. military establishment. The Administration has argued thatnuclear weapons, along with missiledefenses and U.S. conventional forces, not only deter adversaries from attacking the United Statesduring a conflict or crisis by promising an unacceptableamount of damage in response to an adversary's attack, they can also assure allies and friends of the U.S.commitment to their security, dissuade potentialadversaries from challenging the United States during a crisis with nuclear weapons or other "asymmetrical threats,"and defeat enemies by holding at risk thosetargets that could not be destroyed with other types of weapons. (4) Many analysts see little difference between these goals and those the United States pursuedduring the Cold War. Nevertheless, according to the Bush Administration, to support this broader array ofobjectives, the United States may need nuclearweapons that are different, in both numbers and capabilities, from the weapons remaining in the U.S. arsenal afterthe Cold War. During the Cold War, the United States maintained the numbers and types of nuclear weapons that it believed it needed to threaten the full range of potentialtargets in the Soviet Union. The Bush Administration has referred to this as "threat-based" targeting because it islinked to the "Soviet threat." TheAdministration has stated that the United States will no longer use this model to calculate its nuclear requirements. Instead, the United States would "look moreat a broad range of capabilities and contingencies that the United States may confront" and tailor U.S. militarycapabilities to address this wide spectrum ofpossible contingencies. (5) Specifically, the UnitedStates would identify potential conflicts, review the capabilities of its possible adversaries, identify thosenuclear capabilities that the United States might need to attack or threaten the adversary, and develop a force postureand nuclear weapons employment strategythat would allow it to attack those capabilities. For most possible contingencies, such as those against North Koreaor other rogue nations, the numbers ofrequired nuclear weapons is likely to be very small. But, according to the Administration, Russia presents a"potential contingency" that could emerge if therelationship between the two nations were to change. Most analysts believe that this "potential" is the source of theAdministration's interest in retainingseveral thousand nuclear weapons in the U.S. arsenal. The Bush Administration has not described the specific capabilities it will target with this new strategy. During the Cold War, the United States sought to targetmilitary, industrial, and leadership facilities in the former Soviet Union. Similar facilities are likely to be includedon the list of "capabilities" that the UnitedStates would want to threaten in some contingencies with other nations because, by destroying these capabilities,the United States could expect to achieve itswar objectives. The Bush Administration has specifically highlighted hardened and deeply buried targets andfacilities housing nuclear, chemical, or biologicalweapons as potential capabilities that it might want to threaten. These types of targets are not new to U.S. war plansbecause the Soviet Union had manyhardened and deeply buried targets, such as missile silos and command posts, and it had storage depots that housedchemical weapons. The United Statespresumably planned to attack and destroy these facilities in a conflict with the Soviet Union. According to the Administration, however, the United States cannot be certain where these threats will appear in the future. Therefore, it must plan for known,potential, and unexpected contingencies. (6) Further,to deter potential and unexpected contingencies, the United States would need the capability to crediblythreaten targets in nations that it may not be able to identify ahead of time. It also must have the intelligence toidentify these targets and the rapid targeting andresponse capabilities to address these contingencies as they come up. Hence, the difficulties with this approach stemfrom more than just a requirement toattack hardened and deeply buried targets. The Bush Administration is attempting to integrate the nuclear weapons infrastructure into its new concept of deterrence. According to the Administration, an infrastructure that allows the United States to sustain its forces and adapt them to meet emerging needs would"provide the United States with the means torespond to new, unexpected, or emerging threats in a timely manner." Furthermore, the "ability to innovate andproduce small builds of special purposeweapons would convince an adversary that it could not expect to negate U.S. nuclear weapons capabilities." (7) The Administration has also linked themodernization of the nuclear weapons complex to its plans to reduce the size of the U.S. nuclear arsenal. Theplanned reductions will occur in parallel withimprovements in the weapons complex to ensure that the reductions did not get ahead of the U.S. ability to maintainand modernize its remaining weapons. The Administration has identified several specific tasks that the infrastructure must accomplish over the next decade. Many are associated with the efforts tomaintain and refurbish existing nuclear weapons. But the Administration has also outlined plans to establish small"advanced warhead concepts teams" toevaluate evolving military requirements and assess options for new or modified warheads. (8) The Administration notes that this effort will not only prepare theUnited States to respond to emerging threats, but will also help train the next generation of weapons scientists. TheAdministration has also requested fundingfor a study on the conversion of an existing nuclear weapon into a "robust nuclear earth-penetrator" and for a studythat will explore options for the design of anew low-yield nuclear weapon. The Administration argues that this research will not inevitably lead to the design,development, and production of newweapons. Nevertheless, many analysts fear that the United States will eventually produce new weapons to supportan enhanced warfighting role for nuclearweapons. Battlefield Nuclear Weapons. During the Cold War, the U.S. nuclear arsenal contained many types ofdelivery vehicles for nuclear weapons, including short-range missiles and artillery for use on the battlefield,medium-range land-based and sea-based missilesand aircraft, long-range missiles based on U.S. territory and submarines, and heavy bombers that could threatenSoviet targets from their bases in the UnitedStates. In the early 1990s, the United States withdrew from deployment and eliminated almost all of its shorter- andmedium-range nuclear weapons, leaving aforce consisting of mostly longer-range strategic weapons. The United States concluded that the shorter rangesystems had little utility after the demise of theSoviet Union and the virtual elimination of the threat of a ground war in Europe or Asia. Under thesecircumstances, the United States no longer needed tothreaten targets, such as troop concentrations or support and logistics facilities, on the battlefield. If it deploys the new types of nuclear weapons under consideration by the Bush Administration, the United States could return to a nuclear posture that includesbattlefield nuclear weapons. Unlike during the Cold War, when battlefield weapons were deployed near theirtargets, the United States might use long-range orintercontinental missiles or aircraft to deliver these weapons. But they would, like the shorter-range weapons of theCold War era, seek to achieve preciseobjectives on the battlefield, assuming, of course, that the United States had the intelligence and targetingcapabilities to identify these targets. Many analystsconsider these weapons more useful for war-fighting than deterrence, and many have questioned whether the BushAdministration, in pursuing these weapons,might be moving the United States towards a posture where it would be more likely to use nuclear weapons in aconflict. Credible Deterrence vs. Likelihood of Use. The debate over whether the new nuclear weapons concepts arebetter suited to warfighting or deterrence follows from a more fundamental debate over how to make deterrencecredible. This debate surfaced frequentlyduring the Cold War, when the United States sought to deter not only a Soviet nuclear attack on the United Statesbut also a conventional attack by the SovietUnion or its allies against U.S. allies. Many analysts consider this issue to be even more relevant now, when theUnited States might seek to use its nucleardeterrent in contingencies with more specific and limited goals against an adversary who possesses few or nonuclear weapons. The Bush Administration plansto develop a more focused nuclear war-fighting capability for the United States, one that includes an improvedability to destroy hardened and deeply buriedtargets and other capabilities in a number of nations that might threaten the United States. It has stated that theseplans and capabilities would make nuclear use less likely because it would make the U.S. deterrent more credible and robust. (9) Critics of the Administration's policy question this contention. Many analysts doubt that leaders of smaller, non-nuclear countries will view any U.S. threat touse nuclear weapons as credible, regardless of the yield or capability of U.S. nuclear weapons. If they do not believethe United States will strike with nuclearweapons, then they would not be deterred by the threat. Others argue that the United States can credibly threatenany nation, and therefore deter or defeat thatnation, with its conventional forces. They believe this eliminates any requirement for new and improved nuclearweapons. And some analysts questionwhether nuclear threats against specific, and possibly remote facilities, will deter leaders in smaller, rogue nations. These leaders may believe they can absorb asmall nuclear strike from the United States and still achieve their war aims. Critics of the Administration's policy, therefore, fear that by developing nuclear weapons for battlefield uses, the United States may be more likely to use thesesystems in a conflict. They worry that this would be particularly true if the adversary could not strike back againstthe United States with nuclear weapons, asthe Soviet Union could. These analysts fear that, as time passes, as the memories of the horrors of nuclear use fadeand as concerns about the horrors ofchemical and biological weapons increase, U.S. officials may begin to believe that the unilateral use of nuclearweapons by the United States represents the lesshorrible outcome for the United States than the alternative where an adversary uses chemical or biological weaponsagainst U.S. interests. The Bush Administration has stated that nuclear weapons will play a role in U.S. security policy for the foreseeable future. But, under the1968 NuclearNon-proliferation Treaty, the United States has pledged to reduce the role of nuclear weapons in U.S. securitypolicy. The Administration claims that these twogoals do not conflict; nuclear weapons will play a smaller, albeit important role in U.S. policy than they did duringthe Cold War era. Critics, however, arguethat the U.S. approach may undermine U.S. efforts to discourage nuclear proliferation. Some believe that it wouldbe difficult for the United States to urgerestraint on nations that may be close to acquiring nuclear weapons if it demonstrates, with its own nuclear posture,that nuclear weapons are critical to nationalsecurity. Some analysts have also noted that, if potential adversaries were to acquire nuclear weapons, the threatthey pose to U.S. security could growdramatically. Consequently, these critics argue, the United States should seek to "marginalize as much as possiblethe role that nuclear weapons play in U.S.defense and foreign policy." (10) Others, however, argue that U.S. nuclear policy is not likely to affect U.S. nonproliferation policy because countries seeking nuclear weapons do so becausethey have concerns about their relationships with regional adversaries, not because the United States has nuclearweapons. In addition, the Bush Administrationhas argued that the U.S. development of nuclear weapons that can defeat hardened and deeply buried targets or candestroy stocks of chemical and biologicalweapons are a part of the U.S. effort to discourage other nations from acquiring and threatening to use WMD. Regardless of the implications, the United States has clearly begun to pursue research, and possibly the development, of new nuclear weapons. Although it isunlikely to resolve the theoretical controversies, Congress may review and debate the merits and particulars of theseprograms -- and their broader implications-- in the coming months.

In the 2001 Nuclear Posture Review, the Bush Administration outlined a new role forU.S. nuclear weapons thatgoes beyond the concept of deterrence from the Cold War. It also identified a new targeting strategy that would seekto threaten specific capabilities inadversary nations. Furthermore, the Administration has pledged to restore and enhance the U.S. nuclear weaponsinfrastructure, as part of the U.S. effort todeter the emergence of new threats in the future. In implementing the NPR, the Administration has requestedfunding for studies on new types of nuclearweapons. The Administration claims these projects, if they eventually produce new weapons, would enhancedeterrence; critics claim they will make nuclearuse more likely and undermine U.S. nonproliferation goals. This report will be updated as needed.

Since the inception of a national currency in 1862, the authority to determine the form and tenor of currency has been vested in the Secretary of the Treasury. This includes the current currency, Federal Reserve notes, which are issued under the authority of the Federal Reserve Act of 1913, by the 12 Federal Reserve Banks. All U.S. currency is produced by the Bureau of Engraving and Printing, an operating bureau of the U.S. Treasury Department. Only portraits of a deceased individual may appear on U.S. currency and each bill has the inscription "In God We Trust." In addition, the notes all have a letter and serial number. The current individuals on U.S. currency were determined by a citizens panel in the late 1920s. Currently, seven denominations are issued: $1, $2, $5, $10, $20, $50, and $100. The notes have the portraits of George Washington, Thomas Jefferson, Abraham Lincoln, Alexander Hamilton, Andrew Jackson, Ulysses Grant, and Benjamin Franklin respectively. Four denominations have not been printed since 1946: the $500 (William McKinley), $1,000 (Grover Cleveland), $5,000 (James Madison), and $10,000 (Salmon Chase). The Secretary of the Treasury has the authority to change the design of Federal Reserve notes with the exception of the dollar bill. The Treasury Department has initiated several currency design changes since 1996 as part of an ongoing effort to deter counterfeiting but the individuals chosen in the 1920s have remained on the notes. The Coinage Act of 1792 established the United States Mint, adopted the dollar as the standard monetary unit, and authorized U.S. coins. The mix, composition, and design of U.S. coins have changed over time. The design, composition, weight, and fineness of U.S. coins are determined by statute. The Secretary of the Treasury is authorized to change the design of an existing coin only after 25 years from the adoption of the design for that coin. The Mint, an operating bureau of the Treasury Department, makes all U.S. coins. Six denominations are currently minted. All carry the inscription "In God We Trust," and, with the exception of one version of the dollar coin, all portray the image of a past U.S. President. The Abraham Lincoln penny (one cent) was introduced in 1909, the Thomas Jefferson nickel (five cents) was introduced in 1938, the Franklin D. Roosevelt dime (10 cents) was introduced in 1946, the George Washington quarter (25 cents) was introduced in 1932, the John F. Kennedy half-dollar (50 cents) was introduced in 1964, the Sacagawea dollar was introduced in 2000, and the Presidential dollar coin series began in 2007. There have been several recent coinage design changes, but only the dollar coin has experienced a change in the individual portrayed. All of the portrait changes were authorized by law. The redesigns were undertaken as part of an effort to revitalize the circulating dollar coin. The Susan B. Anthony dollar coin was authorized by P.L. 95-447 , enacted on October 10, 1978. The 2000 Sacagawea Golden Dollar was authorized by P.L. 105-124 , enacted on December 1, 1997. The new one-dollar coin was a major redesign of the Susan B. Anthony dollar minted in 1979-1981 and 1999. The Susan B. Anthony dollar was not popular with the public and was never widely used. A major criticism of the Anthony dollar was that it resembled the quarter too closely in size, appearance, and color. The Sacagawea dollar is golden in color and has a distinctive edge. The Presidential $1 Coin Act ( P.L. 109-145 ) was enacted on December 22, 2005, to promote additional public interest in dollar coins. The act authorized the minting of four coins each year (beginning in 2007) featuring the images of the nation's Presidents in the order they served. The Sacagawea coin will continue to be minted. During the 20 th century, three Presidents, Roosevelt, Eisenhower, and Kennedy, were honored shortly after their deaths by their images being placed on circulating U.S. coins. Each circumstance was different. Franklin Delano Roosevelt was the nation's only President elected to four terms. He was first elected in 1932. President Roosevelt died while serving his fourth term on April 12, 1945. The second World War was coming to an end. Congress and the American public wanted a memorial to the President. Before Congress acted with legislation, the Treasury Department announced plans to place Roosevelt's image on the dime. The image on the obverse side of the dime at that time was a winged liberty head "Mercury." The Mercury dime was first issued in 1916, so the 25-year requirement had been met and the Treasury could act without legislation. The dime was chosen as a tribute because President Roosevelt had helped to establish the "March of Dimes" fundraising campaign to combat polio. The President had himself suffered from polio. The new design was completed and the new dime was minted by January 30, 1946, the late President's birthday and the date for the kick off of the 1946 March of Dimes campaign. President John Fitzgerald Kennedy was elected to office in 1960. On November 22, 1963, the President was assassinated. Many memorials and tributes to President Kennedy were planned after his death; the idea to place his likeness on a coin was an early suggestion. In December of 1963, President Johnson sent a message to Congress requesting legislation to authorize the minting of 50-cent coins with the image of President Kennedy. The image on the obverse side of the half dollar at that time was of Benjamin Franklin. The likeness of Benjamin Franklin had been on the coin since 1948, so the 25-year requirement had not been met. There was some debate in Congress about removing Benjamin Franklin's image and whether more time should pass before the decision was made to put President Kennedy's image on a coin. Nevertheless, legislation ( H.R. 9413 ) was quickly passed in both the House and Senate. On December 30, 1963, P.L. 88-256 was enacted authorizing the coinage of the Kennedy half dollar. President Dwight D. Eisenhower was a two-term President first elected in 1952. President Eisenhower had been the commanding general of the victorious forces in Europe during World War II. The President died on March 28, 1969. At the time of his death, there was no circulating dollar coin. The previous dollar coin was minted between 1921 and 1935. It was called the Peace dollar; the obverse side had the image of the Statue of Liberty's head. Legislation (H.R. 14127) to place the likeness of President Eisenhower on a dollar coin was introduced in the fall of 1969. The legislation was passed as Title II of the omnibus Bank Holding Company Act, P.L. 91-607, enacted on December 31, 1970. Debate about the coin addressed its composition and specifically whether to include any silver. Old silver dollars were taken out of circulation because their metal value had become greater than their face value. Title II provided for the coinage of completely silverless coins for all circulating denominations. It did permit the minting of silver-clad coins for sale to collectors. Many tributes and memorials have been proposed to honor President Reagan. Several years before his death, a private group (the Ronald Reagan Legacy Project) was formed to honor the legacy of President Reagan. One goal of the project is to name "significant public landmarks" after the 40 th President in more than 3,000 counties nationwide. Some of the landmarks already named required federal legislation to re-name them. The project is in favor of redesigning circulating currency to incorporate the likeness of the late President. Legislation introduced in previous Congresses did not pass. Legislation introduced in the 111 th Congress, H.R. 4705 , would change the $50 note. H.R. 4705 , the President Ronald Reagan $50 Bill Act, was introduced on February 25, 2010, by Representative Patrick T. McHenry and others, and referred to the House Committee on Financial Services. The bill would redesign the $50 note by replacing the portrait of President Ulysses S. Grant with the image of President Reagan. President Grant was a two-term Republican President first elected in 1868. President Grant is best known as the Union general who lead the North to victory over the Confederate South during the American Civil War. To date hearings have not been held on the current legislation. The Secretary of the Treasury has the authority to make the proposed change without federal legislation. Several issues have been raised in the past concerning the proposals to redesign currency to commemorate President Reagan and these concerns are likely to be raised again. Some may characterize the legislation as premature. Placing the image of President Reagan on currency might invite a partisan fight. In addition, because the portraits on the U.S. currency have been consistent since the 1920s, there may be concern that a Reagan note would cause confusion and be assumed to be counterfeit. Finally, President Reagan's image will eventually be on the dollar coin as part of the ongoing Presidential dollar coin series.

President Ronald W. Reagan, the 40th President of the United States, died on June 5, 2004. Since President Reagan's death, there have been several attempts to pass legislation that would place the likeness of President Reagan on U.S. coin or currency. Similar action was taken after the death of Presidents Franklin D. Roosevelt, Dwight D. Eisenhower, and John F. Kennedy. The portrait of President Roosevelt was placed on the dime, President Kennedy's portrait was placed on the half dollar, and President Eisenhower's portrait was placed on a dollar coin. Current legislation (H.R. 4705, the President Ronald Reagan $50 Bill Act) would place the likeness of President Ronald W. Reagan on the circulating $50. This report discusses the history of the current design of the circulating coin and currency and the statutory requirements for the designs and portrait changes. It reviews what was done after the deaths of the three other Presidents. It concludes with a discussion of the current proposal and describes possible issues raised by the legislation. This report will be updated as warranted by events.

This report provides war casualty statistics. It includes data tables containing the number of fatalities and the number of wounded among American military personnel who served in principal wars and combat actions from 1775 to the present. It also includes information such as race and ethnicity, gender, branch of service, and, in some cases, detailed information on types of casualties and causes of death. Casualty statistics for wars that ended long ago are updated periodically, sometimes yearly. These updates almost always reflect the identification of remains of persons previously listed as missing in action and the reclassification of those persons as dead. Other reasons, much less frequent, include the discovery of errors in casualty records for individuals or categories such as race and ethnicity. U.S. casualty statistics are information on war fighters who have fallen in global or regional conflicts involving the United States. The data are gathered on deceased, wounded, ill, or injured active duty U.S. military personnel and Guard/Reservists. The Defense Casualty Analysis System (DCAS) is maintained by the Defense Manpower Data Center (DMDC). Casualty statistics for conflicts prior to the Persian Gulf War (Desert Shield and Desert Storm) are updated periodically by the DCAS of the DMDC. Casualty figures for Operation Enduring Freedom (OEF), Operation Iraqi Freedom (OIF), Operation New Dawn (OND), Operation Inherent Resolve (OIR), and Operation Freedom's Sentinel (OFS) are updated daily. Links to the sources for casualty figures appear below each table in this report. Table 1 lists casualty statistics for battles, attacks, or operations for which the Congressional Research Service (CRS) receives numerous requests. Tables 9 through 11 provide casualty statistics for OEF, which began on October 7, 2001, and was primarily conducted in Afghanistan. U.S. combat operations in Afghanistan ended on December 31, 2014. Data for OEF are updated on a daily basis. Daily casualty summaries are available at DOD's website: http://www.defense.gov/news/casualty.pdf . Tables 10, 11, 13, 14, 16 , and 17 provide ethnicity statistics for OEF, OIF, and OND. A U.S. Office of Management and Budget mandate, Directive No. 15, requires all federal record keeping and data presentation to use race and ethnicity categories. For further explanation, see Revisions to the Standards for the Classification of Federal Data on Race and Ethnicity at https://www.gpo.gov/fdsys/pkg/FR-1997-10-30/pdf/97-28653.pdf . Tables 12 through 14 provide casualty statistics for OIF, which began on March 20, 2003. Major combat operations ended on September 1, 2010. These statistics include casualties that occurred between March 19, 2003, and August 31, 2010, in the Arabian Sea, Bahrain, Gulf of Aden, Gulf of Oman, Iraq, Kuwait, Oman, Persian Gulf, Qatar, Red Sea, Saudi Arabia, and United Arab Emirates. Prior to March 19, 2003, casualties in these countries were considered OEF. Personnel injured in OIF who died after September 1, 2010, will be included in OIF statistics. Tables 15 through 17 provide casualty statistics for Operation New Dawn (OND). Following the end of combat operations in Iraq (OIF) on September 1, 2010, use of the term Operation New Dawn began on the same day. Casualties occurred between September 1, 2010, and December 31, 2011, in the Arabian Sea, Bahrain, Gulf of Aden, Gulf of Oman, Iraq, Kuwait, Oman, Persian Gulf, Qatar, Red Sea, Saudi Arabia, and United Arab Emirates. Personnel injured in OND who die after December 31, 2011, will be included in OND statistics. Table 18 lists casualties published by the U.S. Coast Guard (USCG) Historian's Office. In response to congressional requests, CRS includes Coast Guard casualty data as provided by USCG in addition to DOD data. The USCG, although an armed service, was an agency under the jurisdiction of several federal agencies, including the U.S. Department of Transportation (USDOT). The Coast Guard remained under USDOT until February 2003, when it was placed within the Department of Homeland Security (DHS). In an address to the American people on September 10, 2014, President Barack Obama described a four-part strategy to defeat the Islamic State of Iraq and the Levant (ISIL). Subsequently, on September 22, 2014, the President authorized U.S. Central Command to carry out military actions against the ISIL terrorists. Tables 19 through 21 provide casualty statistics for Operation Inherent Resolve (OIR). Casualties include those that occurred in Bahrain, Cyprus, Egypt, Iraq, Israel, Jordan, Kuwait, Lebanon, Qatar, Saudi Arabia, Syria, Turkey, United Arab Emirates, the Mediterranean Sea east of 25° longitude, the Persian Gulf, and the Red Sea. In a press statement released by the U.S. Department of Defense (DOD) on December 28, 2014, then-Defense Secretary Chuck Hagel announced that the United States had officially concluded Operation Enduring Freedom and added that the follow-on mission, Operation Freedom's Sentinel (OFS), would begin on January 1, 2015. As part of OFS, U.S. forces would remain in Afghanistan to participate in a coalition mission to advise, train, and assist local forces and to conduct counterterrorism operations against the remnants of Al Qaeda. Tables 22 through 24 provide casualty statistics for OFS. This section provides total casualty statistics for fallen U.S. servicemembers by conflict (WWI to Global War on Terror) and by state and territory.  The data on World War I are taken from Warfare and Armed Conflicts: A Statistical Encyclopedia of Casualty and Other Figures, 1492-2015, by Michael Clidfelter, 4th ed. (Jefferson, NC: McFarland & Company, Inc., 2017), p. 433. The data on World War II, the Korean War and the Vietnam War, respectfully, are taken from the U.S. National Archives. The Persian Gulf War data are provided by the U.S. Department of Defense, and are current as of June 2017.  The data for Operation Enduring Freedom (OEF); Operation Iraqi Freedom (OIF); Operation New Dawn (OND); Operation Inherent Resolve (OIR); and Operation Freedom's Sentinel (OFS), respectively, are available from the Defense Casualty Analysis System website at https://dcas.dmdc.osd.mil/dcas/pages/casualties.xhtml . This section provides information on authoritative sources for statistics; demographic indicators by conflict; websites for additional sources of research; and other publications including related CRS reports. The Defense Manpower Data Center (DMDC) provides detailed historical tables as well as annual statistics on active duty military deaths. DMDC also lists names of the fallen for Operation Iraqi Freedom, Operation New Dawn, Operation Enduring Freedom, Operation Inherent Resolve, and Operation Freedom's Sentinel. https://dcas.dmdc.osd.mil/dcas/pages/casualties.xhtml The Office of the Historian, U.S. Coast Guard, provides a historical table listing the number of U.S. Coast Guardsmen who served and the number of casualties incurred in conflicts from the War of 1812 to Operation Iraqi Freedom. Click on "What wars & other conflicts did the Coast Guard participate in?" https://www.history.uscg.mil/Frequently-As ked-Questions/ The Congressional Research Service receives many requests for lists of war dead. Names of the fallen are often engraved on memorials, mentioned in tributes, or used for other ceremonial purposes. The names of U.S. military personnel killed in major wars and other combat actions are published in the following sources: Soldiers of the Great War, Volume 1-3 from the collection of the Harvard University Library. Available through the Internet Archive at https://archive.org/details/SoldiersOfTheGreatWarV1 . The American Battle Monuments Commission's (ABMC's) "Burials and Memorializations" webpage lists the names of servicemembers buried or memorialized in ABMC cemeteries overseas. The database allows searching by name, conflict (beginning with World War I), branch of service, unit number, state of entry, cemetery or memorial, and date of death. http://www.abmc.gov/database-search The National Archives' Online Public Access catalog allows the public to search the archives' military personnel casualty lists. The site may be accessed by clicking on "Military Personnel" under the heading for "Genealogy/Personal History" at https://aad.archives.gov/aad/ . ABMC's "Burials and Memorializations" webpage lists the names of servicemembers buried or memorialized in ABMC cemeteries overseas. The database allows searching by name, conflict (beginning with World War I), branch of service, unit number, state of entry, cemetery or memorial, and date of death. http://www.abmc.gov/database-search The National Archives publishes casualty lists that may be searched by home state of record. http://www.archives.gov/research/military/korean-war/casualty-lists/state-level-alpha.html ABMC's "Burials and Memorializations" webpage lists the names of servicemembers buried or memorialized in ABMC cemeteries overseas. The database allows searching by name, conflict (beginning with World War I), branch of service, unit number, state of entry, cemetery or memorial, and date of death. http://www.abmc.gov/database-search The National Archives publishes casualty lists that may be searched by home state of record. http://www.archives.gov/research/military/vietnam-war/casualty-lists/state-level-alpha.html ABMC's "Burials and Memorializations" webpage lists the names of servicemembers buried or memorialized in ABMC cemeteries overseas. The database allows searching by name, conflict (beginning with World War I), branch of service, unit number, state of entry, cemetery or memorial, and date of death. http://www.abmc.gov/database-search The National Archives publishes casualty lists that may be searched by home state of record. http://aad.archives.gov/aad/display-partial-records.jsp?f=4773&mtch=385&q=persian+gulf+war&cat=GP21&dt=2514&tf=F&bc=sl The National Archives publishes casualty lists that may be searched by home state of record. http://aad.archives.gov/aad/display-partial-records.jsp?s=4772&dt=2514&tf=F&bc=%2Csl%2Cfd&q=Operation+Enduring+Freedom&btnSearch=Search&as_alq=&as_anq=&as_epq=&as_woq= The National Archives publishes casualty lists that may be searched by home state of record. http://aad.archives.gov/aad/display-partial-records.jsp?s=4772&dt=2514&tf=F&bc=%2Csl%2Cfd&q=Operation+Iraqi+Freedom&btnSearch=Search&as_alq=&as_anq=&as_epq=&as_woq= DPAA's mission is to "Provide the fullest possible accounting for our missing personnel to their families and the nation" by locating the remains, repatriating, or determining the whereabouts of missing Americans. Currently, 82,708 Americans are missing from World War II, the Korean War, the Cold War, Vietnam, and the Iraq and other conflicts. Names of those who have been accounted for can be found on the DPAA's "Recently Accounted For" webpage at http://www.dpaa.mil/Our-Missing/Recently-Accounted-For/ . Lists of casualties that are not available from a central source may in some cases be available at the state level from each state's or commonwealth's adjutant general's office or from military history detachments, military museums, state libraries, or archives. The National Guard Association, at https://www.ngaus.org/states-territories/state-association-directory , provides links to contacts for National Guard information in all 50 states as well as District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands. U.S. Casualty Status is a daily update of casualties published by DOD for OEF, OIF, OND, OIR, and OFS. http://www.defense.gov/casualty.pdf DOD News Releases contain daily news, including military personnel fatalities by name under the heading "Casualty Releases." The archive located on the right sidebar dates to October 1994. http://www.defense.gov/releases/ CRS Report R41084, Afghanistan Casualties: Military Forces and Civilians , by [author name scrubbed]. CRS Report RS22452, A Guide to U.S. Military Casualty Statistics: Operation Freedom's Sentinel, Operation Inherent Resolve, Operation New Dawn, Operation Iraqi Freedom, and Operation Enduring Freedom , by [author name scrubbed]. CRS Report R42738, Instances of Use of United States Armed Forces Abroad, 1798-2017 , by [author name scrubbed]. CRS Report RS21405, U.S. Periods of War and Dates of Recent Conflicts , by [author name scrubbed].

This report provides U.S. war casualty statistics. It includes data tables containing the number of casualties among American military personnel who served in principal wars and combat operations from 1775 to the present. It also includes data on those wounded in action and information such as race and ethnicity, gender, branch of service, and cause of death. The tables are compiled from various Department of Defense (DOD) sources. Wars covered include the Revolutionary War, the War of 1812, the Mexican War, the Civil War, the Spanish-American War, World War I, World War II, the Korean War, the Vietnam Conflict, and the Persian Gulf War. Military operations covered include the Iranian Hostage Rescue Mission; Lebanon Peacekeeping; Urgent Fury in Grenada; Just Cause in Panama; Desert Shield and Desert Storm; Restore Hope in Somalia; Uphold Democracy in Haiti; Operation Enduring Freedom (OEF); Operation Iraqi Freedom (OIF); Operation New Dawn (OND); Operation Inherent Resolve (OIR); and Operation Freedom's Sentinel (OFS). Starting with the Korean War and the more recent conflicts, this report includes additional detailed information on types of casualties and, when available, demographics. It also cites a number of resources for further information, including sources of historical statistics on active duty military deaths, published lists of military personnel killed in combat actions, data on demographic indicators among U.S. military personnel, related websites, and relevant Congressional Research Service (CRS) reports.

Before 2006, companies choosing to participate in the Medicare Advantage program were required to annually submit an ACRP to CMS for review and approval for each plan they intended to offer. The ACRP consisted of two parts—a plan benefit package and the adjusted community rate (ACR). The plan benefit package contained a detailed description of the benefits offered, and the ACR contained a detailed description of the estimated costs to provide the package of benefits to an enrolled Medicare beneficiary. These costs were to be calculated based on how much a plan would charge a commercial customer to provide the same benefit package if its members had the same expected use of services as Medicare beneficiaries. CMS made payments to the companies monthly in advance of rendering services. In 2003, Congress enacted the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA). MMA included provisions that established a bid submission process to replace the ACRP submission process, as well as a new prescription drug benefit, both effective for 2006. Under the bid process, an organization choosing to participate in Medicare Advantage is required to annually submit a bid for review and approval for each plan they intend to offer. The bid submission includes the organization’s estimate of the cost of delivering services (submitted on a bid form) to an enrolled Medicare beneficiary and a plan benefit package that provides a detailed description of the benefits offered. In addition, each MA organization and prescription drug plan that offers prescription drug benefits under Part D is required to submit a separate prescription drug bid form, a formulary, and a plan benefit package to CMS for its review and approval. On the bid forms, MA organizations include an estimate of the per-person cost of providing Medicare-covered services. BBA requires CMS to annually audit the submissions of one-third of MA organizations. In defining what constituted an organization for the purpose of selecting one-third for audit, CMS officials explained that they determined the number of participating organizations based on the number of contracts they awarded. Under each contract, an organization can offer multiple plans. Further, an organization like Humana Inc. can have multiple contracts. CMS contracts with accounting and actuarial firms to perform these audits. For audits of the contract year 2006 bid forms, CMS contracted in September 2005 with six firms. CMS gave the auditors guidance. It is important to note that the audit guidance includes procedures to verify information used in the projection or estimation of costs submitted in the bids, not actual results or costs each year, as the bids do not report actual costs. According to our analysis of available CMS data, CMS did not meet the statutory requirement to audit the financial records of at least one-third of the participating MA organizations for contract years 2001 through 2005, nor has it done so yet for the 2006 bid submissions. We performed an analysis to determine whether CMS had met the requirement because CMS could not provide documentation to support the method it used to select the ACRs and bids for audit, nor did CMS document whether or how it met the one-third requirement for contract years 2001 through 2006. Our analysis shows that between 18.6 and 23.6 percent, or fewer than one- third, of the MA organizations (as defined by the number of contracts each year) for contract years 2001 through 2005 were audited each year. Similarly, we determined that only 13.9 percent of the MA organizations and prescription drug plans with approved bids for 2006 were audited, as of the end of our review. Table 1 summarizes our results. As stated earlier, CMS selects organizations to meet the one-third audit requirement based on the number of contracts awarded and not the total number of plans offered under each contract. However, to present additional perspective, we also analyzed the percentage of plans audited of the total number of plans offered by each audited organization. Our analysis shows that with the exception of contract year 2002, the level of audit coverage achieved by CMS audits has progressively decreased in terms of the percentage of plans audited for those organizations that were audited. Audit coverage has also decreased in terms of the percentage of plans audited of all plans offered by participating organizations each contract year. In contract year 2006, a large increase in the number of bid submissions meant that the 159 plans audited reflected only 3.2 percent of all the plans offered. Table 2 summarizes our analysis. Regarding contract years 2001 through 2004, CMS officials told us that they did not know how the MA organizations were selected for audit, and the documentation supporting the selections was either not created or not retained. For contract year 2005 audits, CMS officials told us that the selection criteria included several factors. They said that the criteria considered included whether the MA organization had been audited previously and whether it had significant issues. With respect to contract year 2006, CMS officials acknowledged the one- third requirement, but they stated that they did not intend for the audits of the 2006 bid submissions to meet the one-third audit requirement. They explained that they plan to conduct other reviews of the financial records of MA organizations and prescription drug plans to meet the requirement for 2006. In September 2006, CMS hired a contractor to develop the agency’s overall approach to conducting reviews to meet the one-third requirement. Draft audit procedures prepared by the contractor in May 2007, indicate that CMS plans to review solvency, risk scores, related parties, direct medical and administrative costs, and, where relevant, regional preferred provider organizations’ (RPPO) cost reconciliation reports for MA bids. For Part D bids, CMS indicated it also plans to review other areas, including beneficiaries’ true out-of-pocket costs. However, when our review ended, CMS had not yet clearly laid out how these reviews will be conducted to meet the one-third requirement. Further, CMS is not likely to complete these other financial reviews until almost 3 years after the bid submission date (see figure 1) for each contract year, in part because it must first reconcile payment data that prescription drug plans are not required to submit to CMS until 6 months after the contract year is over. Such an extended cycle for conducting these reviews greatly limits their usefulness to CMS and hinders CMS’ ability to recommend and implement timely actions to address identified deficiencies in the MA organizations’ and prescription drug plans’ bid processes. In its audits for contract years 2001-2005, CMS did not consistently ensure that the audit process provided information needed for assessing the potential impact of errors on beneficiaries’ benefits or payments to the MA organizations. The auditors reported findings ranging from lack of supporting documentation to overstating or understating certain costs, but did not identify how the errors affected beneficiary benefits, copayments, or premiums. In addition, although the auditors categorized their results as findings and observations, with findings being more significant, depending on their materiality to the average payment rate reported in the ACR, the distinction between findings and observations, was based on judgment, and therefore varied among the different auditors. In our 2001 report, we reported that CMS planned to require auditors, where applicable, to quantify in their audit reports the overall impact of errors. Further, during the work for the 2001 report, CMS officials stated that they were in the process of determining the impact on beneficiaries and crafting a strategy for audit follow-up and resolution. CMS did not initiate any actions to attempt to determine such impact until after the contract year 2003 audits were completed. CMS took steps to determine such impact and identified a net of about $35 million from the contract year 2003 audits that beneficiaries could have received in additional benefits. The only audit follow-up action that CMS has taken regarding the ACR audits was to provide copies of the audit reports to the MA organizations and instruct them to take action in subsequent ACR filings. In CMS’ audits of the 2006 bid submissions, 18 (or about 23 percent) of the 80 organizations audited had material findings that have an impact on beneficiaries or plan payments approved in bids. CMS defined material findings as those that would result in changes in the total bid amount of 1 percent or more or in the estimate for the costs per member per month of 10 percent or more for any bid element. CMS officials told us that they will use the results of the bid audits to help organizations improve their methods in preparing bids in subsequent years and to help improve the overall bid process. Specifically, they told us they could improve the bid forms, bid instructions, training, and bid review process. CMS’ audit follow-up process has not involved pursuing financial recoveries from Medicare Advantage organizations based on audit results even when information was available on deficiencies or errors that could impact beneficiaries. CMS officials told us they do not plan to pursue financial recoveries from MA organizations based on the results of ACR or bid audits because the agency does not have the legal authority to do so. According to our assessment of the statutes, CMS has the authority to pursue financial recoveries, but its rights under contracts for 2001 through 2005 are limited because its implementing regulations did not require that each contract include provisions to inform organizations about the audits and about the steps that CMS would take to address identified deficiencies, including pursuit of financial recoveries. Regarding the bid process that began in 2006, our assessment of the statutes is that CMS has the authority to include terms in bid contracts that would allow it to pursue financial recoveries based on bid audit results. CMS also has the authority to sanction organizations, but it has not. CMS officials believe the bid audits provide a “sentinel or deterrent effect” for organizations to properly prepare their bids because they do not know when the bids may be selected for a detailed audit. Given the current audit coverage, CMS is unlikely to achieve significant deterrent effect, however, because only 13.9 percent of participating organizations for contract 2006 have been audited. Appropriate oversight and accountability mechanisms are key to protecting the federal government’s interests in using taxpayer resources prudently. When CMS falls short in meeting the statutory audit requirements and in a timely manner resolving the findings arising from those audits, the intended oversight is not achieved and opportunities are lost to determine whether organizations have reasonably estimated the costs to provide benefits to Medicare enrollees. Inaction or untimely audit resolution also undermines the presumed deterrent effect of audit efforts. While the statutory audit requirement does not expressly state the objective of the audits or how CMS should address the results of the audits, the statute does not preclude CMS from including terms in its contracts that allow it to pursue financial recoveries based on audit results. If CMS maintains the view that statute does not allow it to take certain actions, the utility of CMS’ efforts is of limited value. In our recent report, we made several recommendations to the CMS Administrator to improve processes and procedures related to its meeting the one-third audit requirement and audit follow-up. We also recommended that CMS amend its implementing regulations for the Medicare Advantage Program and Prescription Drug Program to provide that all contracts CMS enters into with MA organizations and prescription drug plan sponsors include terms that inform these organizations of the audits and give CMS authority to address identified deficiencies, including pursuit of financial recoveries. We further recommended that if CMS does not believe it has the authority to amend its implementing regulations for these purposes, it should ask Congress for express authority to do so. In response to our report, CMS concurred with our recommendations and stated it is in the process of implementing some of our recommendations. For information about this statement, please contact Jeanette Franzel, Director, Financial Management and Assurance, at (202) 512-9471 or franzelj@gao.gov or James Cosgrove, Acting Director, Health Care, at (202) 512-7029 or cosgrovej@gao.gov. Individuals who made key contributions to this testimony include Kimberly Brooks (Assistant Director), Christine Brudevold, Paul Caban, Abe Dymond, Jason Kirwan, and Diane Morris. 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 Centers for Medicare & Medicaid Services (CMS) estimated it spent over $51 billion on the Medicare Advantage program, which serves as an alternative to the traditional feefor- service program. Under the Medicare Advantage program, CMS approves private companies to offer health plan options to Medicare enrollees that include all Medicare-covered services. Many plans also provide supplemental benefits. The Balanced Budget Act (BBA) of 1997 requires CMS to annually audit the financial records supporting the submissions (i.e., adjusted community rate proposals (ACRP) or bids) of at least onethird of participating organizations. BBA also requires that GAO monitor the audits. This testimony provides information on (1) the ACRP and bid process and related audit requirement, (2) CMS' efforts related to complying with the audit requirement, and (3) factors that cause CMS' audit process to be of limited value. Before 2006, companies choosing to participate in the Medicare Advantage program were annually required to submit an ACRP to CMS for review and approval. In 2006, a bid submission process replaced the ACRP process. The ACRPs and bids identify the health services the company will provide to Medicare members and the estimated cost for providing those services. CMS contracted with accounting and actuarial firms to perform the required audits. According to our analysis, CMS did not meet the requirement for auditing the financial records of at least one-third of the participating Medicare Advantage organizations for contract years 2001-2005. CMS is planning to conduct other financial reviews of organizations to meet the audit requirement for contract year 2006. However, CMS does not plan to complete the financial reviews until almost 3 years after the bid submission date each contract year, which will affect its ability to address any identified deficiencies in a timely manner. CMS did not consistently ensure that the audit process for contract years 2001-2005 provided information to assess the impact on beneficiaries. After contract year 2003 audits were completed, CMS took steps to determine such impact and identified an impact on beneficiaries of about $35 million. CMS audited contract year 2006 bids for 80 organizations, and 18 had a material finding that affected amounts in approved bids. CMS officials took limited action to follow up on contract year 2006 findings. CMS officials told us they do not plan to sanction or pursue financial recoveries based on these audits because the agency does not have the legal authority to do so. According to our assessment of the statutes, CMS had the authority to pursue financial recoveries, but its rights under contracts for 2001-2005 were limited because its implementing regulations did not require that each contract include provisions to inform organizations about the audits and about the steps that CMS would take to address identified deficiencies. Further, our assessment of the statute is that CMS has the authority to include terms in bid contracts that would allow it to pursue financial recoveries. Without changes in its procedures, CMS will continue to invest resources in audits that will likely provide limited value.

In our review of the 240 visa revocations, we found examples where information on visa revocations did not flow between the State Department and appropriate units overseas and within INS and the FBI. State Department officials from the Visa Office told us that when they revoke a visa in Washington, they are supposed to take the following steps: (1) notify consular officers at all overseas posts that the individual is a suspected terrorist by entering a lookout on the person into State’s watch list, the Consular Lookout and Support System, known as CLASS; (2) notify the INS Lookout Unit via a faxed copy of the revocation certificate so that the unit can enter the individual into its watch list and notify officials at ports of entry; and (3) notify the issuing post via cable so that the post can attempt to contact the individual to physically cancel his visa. Information-only copies of these cables are also sent to INS’s and FBI’s main communications enters. State officials told us they rely on INS and FBI internal distribution mechanisms to ensure that these cables are routed to appropriate units within the agencies. Figure 1 demonstrates gaps that we identified in the flow of information from State to INS and the FBI, and within these agencies, as well as the resulting inconsistencies in the posting of lookouts to the agencies’ respective watch lists. The top arrow in the diagram shows the extent of communication on visa revocations between the State Department’s Bureau of Consular Affairs and State’s overseas consular posts. We found that State had not consistently followed its informal policy of entering a lookout into its CLASS lookout system at the time of the revocation. State officials said that they post lookouts on individuals with revoked visas in CLASS so that, if the individual attempts to get a new visa, consular officers at overseas posts will know that the applicant has had a previous visa revoked and that a security advisory opinion on the individual is required before issuing a new visa. Without a lookout, it is possible that a new visa could be issued without additional security screening. We reviewed CLASS records on all 240 individuals whose visas were revoked and found that the State Department did not post lookouts within a 2-week period of the revocation on 64 of these individuals. The second arrow depicts the information flow on revocations between State and the INS Lookout Unit, which is the inspections unit that posts lookouts on INS’s watch list to prevent terrorists (and other inadmissible aliens) from entering the United States. Officials from the INS Lookout Unit told us they had not received any notice of the revocations from State in 43 of the 240 cases. In another 47 cases, the INS Lookout Unit received the revocation notice only via a cable; however, these cables took, on average, 12 days to reach the Lookout Unit, although in one case it took 29 days. An official from the INS communications center told us that, because State’s cables were marked “information only,” they were routed through the Inspections division first, which was then supposed to forward them to the Lookout Unit. He told us that if the cables had been marked as “action” or “urgent,” they would have been sent immediately to the Lookout Unit. In cases where the INS Lookout Unit could document that it received a notification, it generally posted information on these revocations in its lookout database within one day of receiving the notice. When it did not receive notification, it could not post information on these individuals in its lookout database, precluding INS inspectors at ports of entry from knowing that these individuals had had their visas revoked. The third arrow on the diagram shows the communication between State and INS’s National Security Unit that is responsible for investigations. This broken arrow shows that the State Department did not send copies of the faxed revocation certificates or cables to the unit. Further, in cases where the INS Lookout Unit received the revocation notification from State, INS Lookout Unit officials said that they did not routinely check to see whether these individuals had already entered the United States or notify investigators in the National Security Unit of the visa revocations. Without this notification, the National Security Unit would have no independent basis to begin an investigation. In May 2003, an official from the Lookout Unit said that her unit recently established a procedure in which, upon receiving notification of a revocation, she will query the Interagency Border Inspection System to determine if the individual recently entered the country. She will then give this information to investigators in the National Security Unit, which is now part of the Bureau of Immigration and Customs Enforcement. The bottom arrow on the diagram shows the information flow on visa revocations from State to the FBI’s Counterterrorism units. We found that that these units did not consistently receive information on visa revocations. FBI officials said that the agency’s main communications center received the notifications but the officials could not confirm if the notifications were then distributed internally to the appropriate investigative units at the FBI or to the agency’s watch list unit, known as the Terrorist Watch and Warning Unit. The Department of Justice said that to add a person to its watch list, additional information must be provided to the FBI, such as the person’s full name, complete date of birth, physical descriptors, and watch list-specific classification information. The revocation notifications did not include most of this information. Our analysis shows that thirty individuals with revoked visas have entered the United States and may still remain in the country. Twenty-nine of these individuals entered before State revoked their visas. An additional person who may still be in the country entered after his visa was revoked. INS inspectors allowed at least three other people to enter the country even though their visas had already been revoked, largely due to breakdowns in the notification system. These three people have left the country. Despite these problems, we noted cases where the visa revocation process prevented possible terrorists from entering the country or cleared individuals whose visas had been revoked. For example, INS inspectors successfully prevented at least 14 of the 240 individuals from entering the country because the INS watch list included information on the revocation action or had other lookouts on them. In addition, State records showed that a small number of people reapplied for a new visa after the revocation. State used the visa issuance process to fully screen these individuals and determined that they did not pose a security threat. The INS and the FBI did not routinely attempt to investigate or locate any of the individuals whose visas were revoked and who may be in the country. Due to congressional interest in specific cases, INS investigators located four of the persons in the United States but did not attempt to locate other revoked visa holders who may have entered the country. INS officials told us that they generally do not investigate these cases because it would be challenging to remove these individuals unless they were in violation of their immigration status even if the agency could locate them. A visa revocation by itself is not a stated grounds for removal under the Immigration and Nationality Act (INA). Investigators from INS’s National Security Unit said they could investigate individuals to determine if they were violating the terms of their admission, for example by overstaying the amount of time they were granted to remain in the United States, but they believed that under the INA, the visa revocation itself does not affect the alien’s legal status in the United States—even though the revocation was for terrorism reasons. They and other Homeland Security officials raised a number of legal issues associated with removing an individual from the country after the person’s visa has been revoked. Our report discusses these issues in detail. FBI officials told us that they did not routinely attempt to investigate and locate individuals with revoked visas who may have entered the United States. They said that State’s method of notifying them did not clearly indicate that visas had been revoked because the visa holder may pose terrorism concerns. Further, the notifications were sent as “information only” and did not request specific follow-up action by the FBI. Moreover, State did not attempt to make other contact with the FBI that would indicate any urgency in the matter. The weaknesses I have outlined above resulted from the U.S. government’s limited policy guidance on the visa revocation process. Our analysis indicates that the U.S. government has no specific policy on the use of visa revocations as an antiterrorism tool and no written procedures to guide State in notifying the relevant agencies of visa revocations on terrorism grounds. State and INS have written procedures that guide some types of visa revocations; however, neither they nor the FBI has written internal procedures for notifying their appropriate personnel to take specific actions on visas revoked by State Department headquarters officials, as was the case for all the revoked visas covered in our review. While State and INS officials told us they use the visa revocation process to prevent suspected terrorists from entering the United States, neither they nor FBI officials had policies or procedures that covered investigating, locating, and taking appropriate action in cases where the visa holder had already entered the country. In conclusion, Mr. Chairman, the visa process could be an important tool to keep potential terrorists from entering the United States. Ideally, information on suspected terrorists would reach the State Department before it decides to issue a visa. However, there will always be some cases when the information arrives too late and State has already issued a visa. Revoking a visa can mitigate this problem, but only if State promptly notifies appropriate border control and law enforcement agencies and if these agencies act quickly to (1) notify border control agents and immigration inspectors to deny entry to persons with a revoked visa, and (2) investigate persons with revoked visas who have entered the country. Currently there are major gaps in the notification and investigation processes. One reason for this is that there are no specific written policies and procedures on how notification of a visa revocation should take place and what agencies should do when they are notified. As a result, there is heightened risk that suspected terrorists could enter the country with a revoked visa or be allowed to remain after their visa is revoked without undergoing investigation or monitoring. State has emphasized that it revoked the visas as a precautionary measure and that the 240 persons are not necessarily terrorists or suspected terrorists. State cited the uncertain nature of the information it receives from the intelligence and law enforcement communities on which it must base its decision to revoke an individual’s visa. We recognize that the visas were revoked as a precautionary measure and that the persons whose visas were revoked may not be terrorists. However, the State Department determined that there was enough derogatory information to revoke visas for these persons because of terrorism concerns. Our recommendations, which are discussed below, are designed to ensure that persons whose visas have been revoked because of potential terrorism concerns be denied entry to the United States and those who may already be in the United States be investigated to determine if they pose a security threat. To remedy the systemic weaknesses in the visa revocation process, we are recommending that the Secretary of Homeland Security, who is now responsible for issuing regulations and administering and enforcing provisions of U.S. immigration law relating to visa issuance, work in conjunction with the Secretary of State and the Attorney General to: develop specific policies and procedures for the interagency visa revocation process to ensure that notification of visa revocations for suspected terrorists and relevant supporting information are transmitted from State to immigration and law enforcement agencies, and their respective inspection and investigation units, in a timely manner; develop a specific policy on actions that immigration and law enforcement agencies should take to investigate and locate individuals whose visas have been revoked for terrorism concerns and who remain in the United States after revocation; and determine if any persons with visas revoked on terrorism grounds are in the United States and, if so, whether they pose a security threat. In commenting on our report, Homeland Security agreed that the visa revocation process should be strengthened as an antiterrorism tool. State and Justice did not comment on our recommendations. I would be happy to answer any questions you or other members of the subcommittee may have. For future contacts regarding this testimony, please call Jess Ford or John Brummet at (202) 512-4128. Individuals making key contributions to this testimony included Judy McCloskey, Kate Brentzel, Mary Moutsos, and Janey Cohen. This is a work of the U.S. government and is not subject to copyright protection in the United States. It may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately.

The National Strategy for Homeland Security calls for preventing the entry of foreign terrorists into our country and using all legal means to identify; halt; and where appropriate, prosecute or bring immigration or other civil charges against terrorists in the United States. GAO reported in October 2002 that the Department of State had revoked visas of certain persons after it learned they might be suspected terrorists, raising concerns that some of these individuals may have entered the United States before or after State's action. Congressional requesters asked GAO to (1) assess the effectiveness of the visa revocation process and (2) identify the policies and procedures of State, the Immigration and Naturalization Service (INS), and the Federal Bureau of Investigation (FBI) that govern their respective actions in the process. Our analysis shows that the visa revocation process was not being fully utilized as an antiterrorism tool. The visa revocation process broke down when information on individuals with revoked visas was not shared between State and appropriate immigration and law enforcement offices. It broke down even further when individuals had already entered the United States prior to revocation. INS and the FBI were not routinely taking actions to investigate, locate, or resolve the cases of individuals who remained in the United States after their visas were revoked. In our review of 240 visa revocations, we found that (1) appropriate units within INS and the FBI did not always receive notifications of all the revocations; (2) names were not consistently posted to the agencies' watch lists of suspected terrorists; (3) 30 individuals whose visas were revoked on terrorism grounds had entered the United States and may still remain; and (4) INS and the FBI were not routinely taking actions to investigate, locate, or resolve the cases of individuals who remained in the United States after their visas were revoked. These weaknesses resulted from the U.S. government's limited policy guidance on the process. None of the agencies have specific, written policies on using the visa revocation process as an antiterrorism tool.