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Successive U.S. Congresses have endorsed close U.S.-Georgia ties and have supported Georgia's continued sovereignty and independence. Congressional engagement has included humanitarian and other assistance to address economic problems in the 1990s, as well as remediation support in the aftermath of the August 2008 Russia-Georgia conflict. Through appropriations, hearings, and other legislation and oversight, Congress has strongly supported the goals of the 2009 U.S.-Georgia Charter on Strategic Partnership, which pledges boosted U.S. defense and security, trade, energy, and democratization cooperation with Georgia. Among these U.S. interests, NATO and the United States have received significant troop support from Georgia for military operations in Iraq and Afghanistan, and Georgia serves as a land, sea, and air route for the transit of personnel and cargoes to and from Afghanistan along the "Northern Distribution Network." Georgia's strategic location astride east-west and north-south trade and transit routes also is exemplified by its role as part of the "Southern Corridor" for gas and oil pipelines from the Caspian region to European and other international markets. Georgia's October 27, 2013, presidential election--won by Georgia Dream (GD) party coalition candidate Giorgi Margvelashvili--occurred one year after a highly contentious legislative election resulted in a shift of power from the ruling United National Movement (UNM) party, led by President Mikheil Saakashvili, to the (then-opposition) GD, led by businessman Bidzina Ivanishvili. After the change in the majority in the legislature, Saakashvili had voluntarily cooperated with Ivanishvili on many issues formally under presidential purview, including accepting Ivanishvili's elevation as prime minister, his formation of a cabinet government, and other GD policies. However, Saakashvili opposed several GD actions, in particular investigations and arrests of many former government and other UNM officials and the release of many prisoners formerly sentenced for major crimes, including spying for Russia. Many in Georgia and internationally urged the president and prime minister to "co-habit," or seek to tone down rhetoric and cooperate on major issues, during the period between the legislative and presidential elections. The October 2013 presidential election marked Saakashvili's retirement after completing a constitutionally limited two terms in office and heralded a major shift in constitutional power in Georgia. Amendments to the constitution approved in 2010 came into force after the 2013 election to transfer significant executive powers from the president to the prime minister and legislature. While previously the president had nominated the prime minister, the majority party in the legislature now has the right of choice and the legislature is tasked with approving the nominee, his cabinet selectees, and his policy program. Powers that are shifted to the prime minister include appointing local governors and nominating ambassadors (after consultation with the president), and countersigning presidential decrees. The president is directed to consult with the prime minister on such issues as concluding international treaties and to seek legislative approval soon after declaring a state of emergency. The president no longer can dismiss the prime minister or submit bills to the legislature. Perhaps a source of future friction, the president and the prime minister share some security and foreign policy powers. Some observers have suggested that the constitutional changes had been designed to permit Saakashvili to become a powerful prime minister after stepping down as president, but any such plan was mooted by the GD's legislative win in 2012. The Organization for Security and Cooperation in Europe (OSCE) praised the legal framework for Georgia's presidential elections as comprehensive and conducive to democracy. Amendments to Georgia's electoral code were adopted a few months before the election to improve the electoral climate, including by strengthening provisions banning the use of government resources to back a selected candidate and requiring that presidential candidates resign from sensitive government posts. Most observers considered the nomination process for presidential candidates to be inclusive and transparent. Twenty-three presidential candidates were registered by the Central Election Commission (CEC) out of 54 who applied. Most individuals who were refused registration failed to properly gather the necessary 26,530 signatures, although five were rejected for holding dual citizenship, including Salome Zurabishvili, the former foreign minister. The campaign officially began on July 4, 2013, and ended on October 25. According to most polls, the campaign was a face-off between the GD and UNM candidates. The GD nominee was Giorgi Margvelashvili, who prior to the campaign had served as Minister of Education and Deputy Prime Minister. Prime Minister Ivanishvili often campaigned with Margvelashvili and stated on election day that he had voted for him (perhaps constituting a violation of electoral law, according to some observers). The UNM candidate was Davit Bakradze, the leader of the UNM faction in the legislature and a former foreign minister and legislative speaker. According to polls taken before the election, other notable candidates included Nino Burjanadze, the head of the pro-Russian Democratic Movement-United Georgia Party and the former legislative speaker; Giorgi Targamadze, head of the pro-Western and socially conservative Christian Democratic Movement; and Shalva Natelashvili, head of the populist Labor Party. Most observers characterized the campaigning as low-key, with only a half-dozen of the candidates campaigning actively throughout the country. At least some of the candidates may have viewed the campaign as a means to publicize themselves in preparation for local elections in mid-2014. The major events of the campaign included Ivanishvili's announcement in late September that he would allocate $1 billion of his personal fortune to a private equity fund to attract foreign investment and spur economic growth in Georgia. Opposition parties and civil society organizations expressed the view that this blurred the lines between Mr. Ivanishvili's roles as prime minister, GD campaigner, and private citizen. The other major campaign event was Ivanishvili's pledge to step down as prime minister soon after the election of the new president. Margvelashvili and Bakradze attacked each other's policies but mostly avoided most personal attacks, while the campaigns of some other candidates witnessed greater vilification of opponents. Margvelashvili stressed that by voting for a GD candidate, the tension currently existing between the presidency (held by the UNM) and the prime ministership (held by GD) would be eliminated. He seconded GD's stance favoring Georgia's future membership in NATO and the EU, as well as supporting improved relations with Russia. Bakradze called for his election so that the presidency could continue to check the power of the GD-led government. Burjanadze urged voting for someone who would work on rapprochement with Russia and pursue "justice" against former UNM officials. The media environment was judged by many observers to be more balanced than previously. Ivanishvili closed down the family-owned TV9 television station, claiming that it might give an unfair advantage to GD (and also because he stated he could not find a buyer). The Rustavi-2 television station, formerly strongly pro-UNM, also was viewed as providing more balanced coverage. Georgia's Central Electoral Commission (CEC) reported that 46.6% of about 3.54 million registered voters turned out and that Margvelashvili received enough votes (over 50%) to avoid a legally mandated second round of voting for the top two candidates. Margvelashvili won handily, receiving over 62% of the vote, with Bakradze coming in second with about 22% of the vote (see Preliminary Presidential Election Results). Some observers suggested that the relatively low turnout, compared to past elections, could be attributable to the lesser constitutional powers to be wielded by the new president, public sentiment against fundamental political change, and the lack of charismatic UNM and GD candidates. Shortly after the polls closed, Bakradze congratulated Margvelashvili on his victory, pledged to work with him, and asserted that the poll results underlined that the UNM was the premier opposition party. Outgoing President Saakashvili stated that the election demonstrated Georgia's continued democratization and that the results should be respected, but averred that he viewed Margvelashvili's win and the policies of GD a temporary "regress" of Georgia's prospects. He asserted that Bakradze's poll results were very good, given the alleged intimidation that kept many UNM supporters at home, and that the party would be a strong opposition contender in future elections. A preliminary report by observers from the OSCE, the Parliamentary Assembly of the Council of Europe (PACE), the European Parliament (EP), and the NATO Parliamentary Assembly judged that the election was efficiently administered, with voting, counting, and tabulation viewed generally positively. The rights of expression, movement, and assembly were respected by the government and participants during the campaign, so that voters were able to express their choice freely on election day. Compared to the 2012 legislative elections, media were less polarized and many media presented more balanced coverage. The involvement of a large number of citizen observers and groups throughout the electoral process reportedly enhanced transparency. The monitors reported a few "isolated" instances of harassment of party activists by rival supporters and other violence during the campaign period. They evaluated the voting process as good or very good in the overwhelming majority of 1,467 polling stations where voting was observed. The voting process was viewed less positively in 44 polling stations where citizen observers and candidate and party representatives were reported to have interfered in the work of the polling places, and in 190 polling stations where the voting result form (protocol) was not filled in properly. Vote counting was assessed positively in 92 of 102 polling stations observed. The tabulation of voting protocols was viewed as good or very good in the great majority of 65 district electoral commissions observed. An observer group from the National Democratic Institute (NDI), a U.S. non-governmental organization, judged the election as evidence that the country was making further progress in democratization. It pointed out some problems, but judged that they did not appear to have a material impact on the outcome of the election. These included some violence against party workers gathering signatures for nominees or campaigning in various localities, and campaign rhetoric by some candidates that was weighted toward vilification of opponents as "criminals" and "traitors," or which claimed that the electoral process was fraudulent, eroding public trust. NDI warned that such problems could harm future democratization efforts (see also below). The International Society for Fair Elections and Democracy, the largest Georgian domestic election observer group, assessed the campaign as calmer, experiencing only about one-fifth the number of campaign violations as in 2012. It viewed the voting process as procedurally sound in the vast majority of polling places. The presidential election was the first peaceful transfer of presidential power in Georgia, following the first peaceful transfer of legislative power a year previously. The election ended the period of tension that existed between the presidency, held by UNM leader Saakashvili, and the cabinet government and legislature, controlled by GD (termed "co-habitation" by Georgian political observers). In a victory speech a day after the election, Margvelashvili hailed the end of "co-habitation" and the beginning of an era of comity among the presidency, cabinet, and legislature in formulating and implementing GD policies. The election was widely viewed as a popular re-affirmation of last year's shift of governmental power to GD. Although a few polls have appeared to indicate some increased dissatisfaction in recent months with some aspects of GD's stewardship, particularly related to employment and other economic issues, Prime Minister Ivanishvili has remained popular. UNM activists claim that the election showed that the party was supported by a greater percentage of the population than supported it in late 2012, indicating that UNM will survive and recover. They also argue that arrests and investigations of UNM officials, including the Secretary General of the UNM and former prime minister Vano Merabishvili, were unsuccessful in crippling the party in the run-up to the election. Prime Minister Ivanishvili stated that the support given to Bakradze was "surprisingly" higher than he had anticipated and represented a lack of "political culture" in Georgia, and he blamed Bakradze's showing on a low turnout by GD supporters. Some observers argue that Nino Burjanadze's third place finish shows that most Georgians had a cautious view of her plans for improving ties with Russia or for stepped-up prosecutions against former UNM officials. Burjanadze claimed that the vote was fraudulent because of an uneven playing field for the candidates. Nonetheless, she reportedly indicated that she would not oppose the outcome by launching protests. Fourth place finisher Shalva Natelashvili claimed that he had placed second in the election and should have faced Margvelashvili in a second round, but that GD had reassigned many of the ballots, and he demanded a recount. He and his supporters held some protest actions. Some observers regard the relative peacefulness of the election campaign (compared to the October 2012 legislative election violence) as a positive sign that democratization might be consolidating in Georgia. These observers suggest that since elections have become an effective means to change political power in Georgia, the impetus for mass demonstrations and a disruption of the democratic process has been reduced. On the other hand, some observers have raised concerns that with Saakashvili's exit from the presidency and Ivanishvili's intended resignation, a period of political instability could emerge if these former leaders eschew substantial political involvement. Such instability might include the fracture of the UNM or the GD coalition and intense competition or even violence between UNM and GD supporters during local elections in mid-2014. NDI has highlighted a number of trends in Georgian politics over the past year that could harm future democratization progress. These trends include coercion by GD supporters against directly or indirectly elected local executive and legislative officials (who are UNM members) to force them to resign or switch parties; politically motivated harassment of religious, ethnic, political, and sexual minorities and inadequate government responses to such harassment; and a continuing atmosphere of political polarization between UNM and GD. A major question for many Georgians during the election campaign was whether Ivanishvili would follow through on his statements that he would step down as prime minister soon after Margvelashvili's election. On November 2, 2013, Ivanishvili proposed that Interior Minister Irakli Garibashvili be confirmed by the legislature as the new prime minister. Ivanishvili indicated that Garibashvili already had been accepted by the leadership of GD and the legislative majority. Under the constitution, after the legislative majority approves Garibashvili as its candidate, he will be formally designated as the nominee by the president (in this case, soon after Margvelishvili's inauguration on November 17, 2013). The nominee will propose a cabinet and program, which will then be voted on by the legislature. Ivanishvili has stated that he will "move to the civil sector," but will maintain a "big influence" over decision-making processes in the country after leaving office. Observers who predict that Ivanishvili aims to play an influential role in future politics point to various statements, such as his intention to suggest a candidate for the planned 2014 Tbilisi mayoral election. A few observers assert that Margvelashvili's win, and the apparent support by GD for Garibashvili's elevation as prime minister, represents the consolidation of Ivanishvili's power over the political system. Garibashvili, in particular, has had a long career working for Ivanishvili and has pledged, if confirmed as prime minister, to continue Ivanishvili's policies. If Ivanishvili--whose personal wealth rivals Georgia's total GDP--continues to dominate Georgian politics, albeit informally, Georgia may come to more closely resemble other plutocratic developing countries, they suggest. Others dismiss such concerns, pointing to Ivanishvili's philanthropy and his intention to move to the private sector, and argue that Georgian democratization ultimately will be strengthened by the retirement of the "strongman." Some observers have raised concerns about a Georgian political environment in which both former leaders (Ivanishvili and Saakashvili) may wield influence without being formally accountable to the public as officeholders. Saakashvili was re-confirmed as the head of the UNM in August 2013, and has indicated that he will remain interested in politics and perhaps will enter business. Ivanishvili has appeared to make various statements about Saakashvili's possible future prosecution. On the one hand, he reportedly has indicated that he would forgive and reconcile with the former president. On the other hand, he has stated that Saakashvili might be arrested if it is established that crimes may have been committed, and has suggested that the prosecutions undertaken against his former ministers may be signs of Saakashvili's criminal culpability. London's Financial Times has raised concerns that if Saakashvili is soon arrested, the European Union (EU) may postpone or otherwise reconsider initialing an association agreement with Georgia at the late November 2013 Vilnius summit. As one of his last official acts, on October 30, 2013, President Saakashvili issued pardons for nearly 250 UNM officials and activists under arrest or investigation. Since many of the individuals had not yet been charged, Saakashvili may have anticipated a new wave of prosecutions after he steps down. Perhaps indicating continuing prosecutions, former defense minister Bacho Akhalaia was convicted on October 28 to nearly four years in prison on charges of abuse of office. A few days later, he was pardoned by outgoing President Saakashvili, but remains in detention pending trial on other charges. The Russian Foreign Ministry welcomed Margelashvili's election, and raised the hope that he would work to re-establish Georgia's diplomatic relations with Russia. In his victory speech on October 28, Margvelashvili averred that despite difficulties, Georgia-Russia relations had improved in the economic sphere with the opening of some trade, and called for a continuation of talks in Geneva on the return of refugees to Georgia's breakaway regions of Abkhazia and South Ossetia. At the same time, he asserted that Georgia would continue to oppose the recognition of the independence of the breakaway regions. He called for the UNM bloc in the legislature to support GD in the non-recognition policy and other foreign policies. Within a few days of the election, Russian officials affirmed continuing support for the Geneva settlement talks (from which they earlier had threatened to walk out), raised the possibility of a Georgia-Russia meeting at the end of November on improving ties, and approved added Georgian wine imports. On October 28, 2013, in what he termed a farewell address, President Saakashvili apologized "to everyone who became victims of injustice and humiliation," and expressed regret that he was overly trusting of officials in the Interior Ministry and prosecutor's office. He stated that he often was too hasty in pushing through reforms before reaching agreement with stakeholders, and that other reforms in the judicial and education systems lagged. At the same time, he pointed to what he viewed as his accomplishments in combating organized crime and corruption and bolstering national security. On October 28, 2013, the U.S. State Department praised the Georgian presidential election as generally democratic and expressing the will of the people, and as demonstrating Georgia's continuing commitment to Euro-Atlantic integration. The State Department called for all Georgian political forces to work together to ensure Georgia's political stability and stated that the United States looked forward to building upon the strong bilateral strategic partnership and Georgia's Euro-Atlantic aspirations. In his victory speech on October 28, Margvelashvili reaffirmed Georgia's Euro-Atlantic foreign policy orientation, including the pursuit of Georgia's membership in NATO and the EU. He stated that Georgia intended to participate in the EU's Eastern Partnership summit in Vilnius in late November 2013 and to initial association and free trade agreements as a confirmation of GD's "European choice." At the same time, he reiterated that GD would continue to pursue the normalization of ties with Russia. Successive U.S. Congresses have endorsed close U.S.-Georgia ties and have supported Georgia's continued sovereignty and independence. Through appropriations, hearings, and other legislation and oversight, Congress has strongly supported the goals of the 2009 U.S.-Georgia Charter on Strategic Partnership, which pledges boosted U.S. defense and security, trade, energy, and democratization cooperation with Georgia. Marking ongoing congressional concern over democratization trends in Georgia, several Members and staff have observed elections, including the October 2012 legislative and October 2013 presidential elections. Those who observed the latest election include Representative John Shimkus as well as staffers from other offices. Several Members have raised concerns about arrests and investigations launched against former Georgian officials and the implications for democracy and human rights. These concerns have been expressed during meetings with visiting President Saakashvili in May 2013, with visiting Foreign Minister Panjikidze in June and July 2013, and with other visiting GD officials and legislators. H.R. 1960 , the National Defense Authorization Act for Fiscal Year 2014, approved by the House on June 14, 2013, contains language introduced by Representative Michael Turner (SS1244) raising concerns that arrests and other violence against former officials and UNM members in Georgia call into question Georgia's progress in democratization and respect for human rights, and threaten to negatively impact U.S.-Georgian political, economic, and security cooperation. Senator John McCain congratulated Margvelashvili on winning what by all accounts was a free and fair election that showed progress in the maturation and institutionalization of democracy. He also applauded outgoing President Saakashvili for his role as a transformational leader and for shepherding a peaceful transition of power through his statesmanship. Senator McCain stated that he hoped to work with the new president to enhance the U.S.-Georgia strategic partnership, including by reaching a free trade agreement, strengthening defense cooperation, deepening Georgia's Euro-Atlantic integration, and supporting Georgia's reclamation of its occupied territories. Senator Jim Risch hailed the election as a peaceful transition of power and called for strengthening the rule of law and institutions in the run-up to the 2014 local elections. He voiced appreciation for Saakashvili's "remarkable" stewardship of Georgia, and hope for a deepening U.S.-Georgia strategic partnership and for Georgia's Euro-Atlantic integration. Representative William Keating congratulated president-elect Margvelashvili and the people of Georgia on a successful election that demonstrated the growing maturity of Georgia's democracy and served as a sign that Georgia is ready to initial an association agreement with the EU in late November 2013. Other U.S. interests include the significant support the United States and NATO have received from Georgia for military operations in Afghanistan, and Georgia's role as a transit route for personnel and cargoes entering and exiting Afghanistan. Georgia also serves as a transit route for gas and oil pipelines from the Caspian region to European and other international markets. Outgoing President Saakashvili and other observers have raised concerns that GD's policy of seeking rapprochement with Russia could jeopardize Georgia's sovereignty and independence and relations with the West. These analysts have argued that Russia's recent signing of security and arms sales agreements with Armenia and Azerbaijan are indicative of Russian attempts to block increased South Caucasian regional security cooperation with the United States and NATO. Georgia's GD-led government has rejected such concerns and insisted that such rapprochement with Russia will not be permitted to jeopardize Tbilisi's commitment to integration with Western institutions such as NATO and the EU. As noted above, U.S. policymakers have generally viewed the Georgian presidential election as evidence of the country's continuing democratization and Euro-Atlantic orientation. They also have indicated that the United States hopes to continue to build ties with Georgia's GD-led government and to deepen the bilateral strategic partnership on defense and security, trade, energy, democracy, and human rights issues.

This report discusses Georgia's October 27, 2013, presidential election and its implications for U.S. interests. The election took place one year after a legislative election that witnessed the mostly peaceful shift of legislative and ministerial power from the ruling party, the United National Movement (UNM), to the Georgia Dream (GD) coalition bloc. The newly elected president, Giorgi Margvelashvili of the GD, will have fewer powers under recently approved constitutional changes. Most observers have viewed the 2013 presidential election as marking Georgia's further progress in democratization, including a peaceful shift of presidential power from UNM head Mikheil Saakashvili to GD official Margvelashvili. Some analysts, however, have raised concerns over ongoing tensions between the UNM and GD, as well as Prime Minister and GD head Bidzini Ivanishvili's announcement on November 2, 2013, that he will step down as the premier. In his victory speech on October 28, Margvelashvili reaffirmed Georgia's Euro-Atlantic foreign policy orientation, including the pursuit of Georgia's future membership in NATO and the EU. At the same time, he reiterated that GD would continue to pursue the normalization of ties with Russia. On October 28, 2013, the U.S. State Department praised the Georgian presidential election as generally democratic and expressing the will of the people, and as demonstrating Georgia's continuing commitment to Euro-Atlantic integration. The State Department called for all Georgian political forces to work together to ensure Georgia's political stability and stated that the United States looked forward to building upon the strong bilateral strategic partnership and Georgia's Euro-Atlantic aspirations. Successive U.S. Congresses have endorsed close U.S.-Georgia ties and have supported Georgia's continued sovereignty and independence. Congressional engagement has included humanitarian and other assistance to address economic problems in the 1990s and remediation support in the aftermath of the August 2008 Russia-Georgia conflict. Through appropriations, hearings, and other legislation and oversight, Congress has strongly supported the goals of the 2009 U.S.-Georgia Charter on Strategic Partnership, which pledges boosted U.S. defense and security, trade, energy, and democratization cooperation with Georgia. Among U.S. interests, NATO and the United States have received significant troop support from Georgia for military operations in Iraq and Afghanistan, and Georgia serves as a land, sea, and air route for the transit of personnel and cargoes to and from Afghanistan along the "Northern Distribution Network." Georgia's strategic location astride east-west and north-south trade and transit routes also is exemplified by its role as part of the "Southern Corridor" for gas and oil pipelines from the Caspian region to European and other international markets.

Electronic waste (e-waste) is a term that is used loosely to refer to obsolete, broken, or irreparable electronic devices like televisions, computer central processing units (CPUs), computer monitors (flat screen and cathode ray tubes), laptops, printers, scanners, and associated wiring. Rapid technology changes have led to increasingly large e-waste surpluses. Electronic devices, particularly older units in use today or in storage, contain a host of hazardous constituents such as lead, mercury, or chromium, as well as plastics treated with brominated flame retardants. The presence of these constituents has led to end-of-life (EOL) management concerns from state and federal environmental agencies, environmental organizations, and some Members of Congress. E-waste is essentially unregulated at the federal level--meaning it can be disposed of with common household garbage in municipal solid waste landfills (the primary disposal method) or incinerators. The Environmental Protection Agency (EPA) has stated that landfill disposal of e-waste is safe. However, EPA's preferred method of EOL management is reuse or recycling. Further, state and local waste management agencies have expressed concerns regarding the potential cumulative impact to human health and the environment of landfilling millions of pounds of e-waste. As a result, individual states have begun to enact their own e-waste management requirements. To date, 23 states and New York City have enacted some form of e-waste management law. Those laws include provisions such as restrictions on landfill disposal of certain e-wastes and the establishment of mandatory recycling programs, generally paid for by electronics manufacturers. In the coming years, it is likely that more states will enact similar laws. New state requirements, mixed with increased consumer awareness regarding potential problems with landfilling e-waste, have led to an increase in recycling. With that increase have come new questions about e-waste EOL management. Instead of questions only about the potential impacts associated with e-waste disposal , questions have arisen regarding the potential danger associated with e-waste recycling . Because e-waste recycling is largely unregulated, virtually no data are available to track its fate. Accurate data regarding how much is generated, how it is managed, and where it is processed (either domestically or abroad) are largely unavailable. What is known is that e-waste recycling may involve costly, complex processes and that there is an insufficient, though growing, national recycling infrastructure to enable the United States to fully manage its own e-waste. It also is known that markets for e-waste (either for reuse or recycling for scrap) are largely overseas. As a result, the majority of e-waste collected for recycling appears to be exported for processing. Although it is difficult to know exactly how much e-waste collected for recycling is exported, it appears that India or developing countries in Asia or Africa are most likely to receive it. Those countries are more likely to have electronics manufacturing plants that can cheaply repair or refurbish e-waste for reuse. Also, developing countries are more likely to value e-waste more highly than developed countries for its potential to recycle for scrap. While some exports may be sent to facilities that manage e-waste in a way that protects workers and the environment, a significant amount is likely sent to countries that have few if any protections for workers or the environment, or that have regulations that are not enforced. The result is that recycling operations in those countries may pose a significant risk to human health and the environment. Increasingly, environmental organizations, university researchers, and the media have documented contamination to air, soil, and water, and health impacts to the people working and living near these operations--particularly to children (these issues are discussed in more detail in the section " Impacts of E-Waste Exports "). Concerns regarding the potential impact of exporting e-waste for processing in developing countries have led to increased scrutiny from members of the public and environmental organizations, as well as some Members of Congress. On May 21, 2009, Representative Gene Green introduced H.R. 2595 , a bill that would amend the Solid Waste Disposal Act (42 U.S.C. 6921) to establish certain e-waste export restrictions. There have also been several congressional hearings on issues associated with e-waste management, one of which specifically addressed issues associated with e-waste exports. There are various issues of concern with regard to e-waste disposal and recycling. This report looks at issues specifically related to its export for recycling. Particularly, it discusses documented impacts to human health and the environment that have been tied to unsafe recycling practices in developing countries. It provides an overview of various factors necessary to understand why e-waste disposal has become a concern in the United States. Specifically, the report discusses issues that have motivated certain stakeholders to divert e-waste from landfill disposal and, hence, increase recycling. It also discusses waste management requirements in the United States, to illustrate how e-waste disposal and recycling are essentially unregulated; and why processing e-waste in undeveloped countries has, and will likely continue to have, a predominant role in the recycling process. It is difficult to determine how much e-waste is exported from the United States to developing countries. It is further difficult to determine how much of the waste that is exported is sent to facilities that will manage it safely as opposed to those that use disassembly and disposal methods that will expose workers to toxic chemicals with little, if any, protection. It is also difficult to determine how much e-waste may be sent to countries that have a limited regulatory framework to protect the local environment--potentially exposing the surrounding communities to resulting contamination. What is becoming easier to document is the impact that e-waste exports are having on less developed nations. With increased exports have come increased media attention on the improper handling of e-waste in those areas and its resulting impacts. Various reports have graphically documented health and safety threats to workers and environmental contamination from e-waste recovery practices in developing countries. It is difficult to document all e-waste recycling hubs, but popular destinations for e-waste exported from the United States (and other developed countries) are waste processing operations in Guiyu in the Shantou region of China, Delhi and Bangalore in India, and the Agbogbloshie site near Accra, Ghana. Multiple studies have documented environmental and health effects of uncontrolled waste processing activities. Environmental impacts include contamination of all local environmental media--soil, air, surface water, and ground water. For example, a June 2009 study found that the primary hazardous recycling operations in Guiyu involve metal recovery that involves open burning of wires to obtain steel and copper, cathode ray tube (CRT) cracking to obtain copper-laden yokes, desoldering and burning of circuit boards to remove solder and chips, and acid stripping chips for gold; plastic recycling through chipping and melting; and dumping of materials that cannot be further processed (such as leaded CRT glass and burned circuit boards) and residues from recycling operations (such as ashes from open burn operations, spent acid baths, and sludges). It was observed that burning circuit board plastics treated with brominated flame retardants emitted harmful heavy metals, dioxins, and aromatic hydrocarbons. Further, heavy metal contamination in surface water and sediments was found that could be attributed to the direct effects of e-waste recycling operations in Guiyu. Copper from surface water was found to be 2.4 to 131 times the reference background concentrations, and sediment samples were 3.2 to 429 times the reference levels. The study also found severe levels of contamination for lead, cadmium, mercury, and arsenic in sediment and surface water as a result of recycling operations. In addition to environmental contamination, impacts on humans have been observed. In a 2007 study, children from one to six years old in Guiyu were compared to those living in a neighboring town where no e-waste processing was done. Children in Guiyu were found to have blood lead levels (BLL) that were significantly higher than those in the neighboring village. The study concluded that elevated BLLs in Guiyu children were common as a result of exposure to lead contamination caused by primitive e-waste recycling activities. To understand why e-waste is exported, it is helpful to understand why landfill disposal has become a concern to certain stakeholders in the United States. Those concerns center largely around the waste's increasing volume and the hazardous constituents, such as lead and mercury, it likely contains (particularly in older electronic devices). Increased awareness has encouraged state waste management and water resources agencies to consider the potential impacts to human health and the environment associated with e-waste and has led to increased efforts to divert e-waste from landfill disposal. The proliferation of and increasingly rapid technological advances in electronics mean that the volume of e-waste generated in the United States is large and growing. Data regarding electronic products sold, stored, recycled, and disposed of are limited. However, in 2008, EPA completed a study that attempted to gather more current data. According to that study, in 2007, of the 2.25 million tons of televisions, cell phones and computer products ready for end-of-life (EOL) management, 18% (414,000 tons) were collected for recycling and 82% (1.84 million tons) were disposed of, primarily in landfills. Further, EPA estimated that approximately 235 million units sold between 1980 and 2007 were obsolete and in storage, awaiting some method of EOL management. Although EPA estimates that e-waste comprises about 2% of the municipal solid waste stream, it is anticipated that this percentage will grow as consumers continue to replace old and outdated electronic equipment and discard equipment in storage. Electronic devices may contain any of a host of hazardous constituents. Cathode ray tubes (CRTs) found in televisions and computer monitors and printed circuit boards (PCBs, also referred to as printed wire boards, or PWBs), often contain significant amounts of lead. CRTs contain an average of four pounds of lead but may contain more, depending on the size, age, and make of the device. Although high lead levels in CRTs and PWBs often get the most attention from federal and state waste regulators, electronic devices such as personal and laptop computers, keyboards, and computer mice may contain toxic constituents such as arsenic, cadmium, chromium, or mercury. In addition to potentially toxic constituents, plastics used in electronic devices often contain brominated flame retardants (BFRs). BFRs are widely used in plastic cases and cables for fire retardancy. Plastics containing BFRs cannot be recycled as easily as plastics such as those used in plastic bottles or other containers. While an individual electronic device may not have dangerously high levels of a given toxic material, the cumulative impact of large volumes of e-waste being disposed of in a municipal solid waste landfill has become troubling to many state waste management agencies. Broadly speaking, discarded e-waste has two potential fates--it may be disposed of (most likely in a landfill) or it may be recycled. Once the device is in the hands of the recycler, it may be resold and reused "as is" or it may undergo some degree of refurbishing. Products that cannot be reused or refurbished are either dismantled or shredded, with the resulting material separated into secondary material streams and at least partially recovered. The resale of electronic devices for reuse or material recovery may occur domestically or abroad. Regardless of whether an electronic device is disposed of or recycled, there are virtually no federal environmental regulatory requirements applicable to its management. Factors specific to e-waste that affect the lack of regulation are useful in understanding the challenges associated with addressing e-waste management issues. Federal standards regarding waste management are specified under provisions of the Resource Conservation and Recovery Act (RCRA, 42 U.S.C. SS6901 et seq.). RCRA establishes criteria for managing both "solid" and "hazardous" waste. All regulatory requirements arising from the act stem from the initial determination of whether an item is actually a "waste" and, further, if that waste is "hazardous." Solid waste is defined under the law as "any garbage, refuse ... or other discarded material." Subtitle D of RCRA establishes state and local governments as the primary planning, regulating, and implementing entities for the management of nonhazardous solid waste, such as household garbage and nonhazardous industrial solid waste. Landfills that collect household garbage are predominately regulated by state and local governments. EPA has, however, established minimum criteria that certain types of landfills must meet in order to stay open. Also under Subtitle D, states are encouraged (but not required by regulation) to develop comprehensive plans to manage nonhazardous industrial solid waste and municipal solid waste. Under Subtitle C of RCRA, EPA has established regulations on the transport, treatment, storage, and disposal of "hazardous wastes." For a material to meet the regulatory definition of hazardous waste, it must first meet the definition of "solid waste." Further, for waste to be considered hazardous, it must either be listed specifically or exhibit any of four hazardous characteristics: ignitability, corrosivity, reactivity, and toxicity. E-waste would most likely exhibit toxicity characteristics, meaning it would be harmful or fatal when ingested or absorbed (because it contains toxic substances such as mercury or lead). When toxic wastes are disposed of on land, contaminated liquid may drain (leach) from the waste and pollute ground water. A common test method to determine the toxicity level of a waste is the Toxicity Characteristic Leaching Procedure (TCLP). The TCLP test is intended to simulate conditions that would likely occur in a landfill, and measures the potential for toxic constituents to seep or "leach" into groundwater. EPA has determined that CRTs and printed circuit boards meet the regulatory definition of hazardous waste, but has not determined if other electronic devices and components would consistently fail TCLP (i.e., exceed toxicity limits). Studies have determined that devices such as personal computer central processing units (CPUs), laptop computers, printers, computer mice, and keyboards have the potential to exceed toxicity limits, but it has not been determined that entire classes of electronic devices will always be toxic. Toxicity levels would likely vary by manufacturer, make, and model. Even if a device meets the definition of hazardous waste, that does not necessarily mean that the device must be disposed of in accordance with RCRA's hazardous waste regulations. EPA regulations have established many exclusions and exemptions to its hazardous waste disposal requirements. Implementing exclusions or exemptions is often used as a mechanism to facilitate recycling. Examples of e-wastes that are excluded or exempt from the definition of hazardous waste are: Any electronic devices discarded by household consumers . Devices that can be reused . Scrap metal, processed scrap metal, precious metals, whole circuit boards, shredded circuit boards, processed CRT glass, intact CRTs, and partially processed CRTs sent for recycling . RCRA establishes certain minimum waste management standards that states must meet, but states have the option to implement requirements that are more stringent than those specified under RCRA. To date, 23 states and New York City have opted to regulate e-waste more strictly. Although the specific requirements vary somewhat from state to state, all have the same goal--to avoid landfill disposal and incineration of certain types of e-waste. Most state laws have certain broad elements in common, such as specifying the electronic devices covered under the law; how a collection and recycling program will be financed; collection and recycling criteria that must be met to minimize the impact to human health and the environment; and restrictions or requirements that products must meet to be sold in the state. EPA's stated policy on e-waste management is to encourage equipment reuse, recycling, and then disposal, in that order. Further, EPA has acknowledged that e-waste can be safely disposed of in municipal solid waste landfills. However, that is not its preferred management option. There are no federal laws that require e-waste recycling by commercial entities or households. Also, as with e-waste disposal, there are few federal environmental regulatory requirements applicable to recycling operations themselves (including the export of e-waste for recycling or reuse). The term "recycler" broadly refers to a company that may engage in any of a number of activities including collecting, sorting, demanufacturing, or processing of waste. E-waste recycling can be a labor-intensive process (see " Factors Influencing E-Waste Exporting ," below). Any federal regulation applicable to recycling operations would likely address human impacts associated with the disassembly process and apply to workplace health and safety operations. Any environmental regulations applicable to a recycling operation would likely apply to the management of residual waste generated during the recycling process. Exporting e-waste is generally considered a potential element of the recycling process, wherein electronic devices are sent for reuse, refurbishment, or materials recovery. As with disposal and other elements of the recycling process, there are no requirements applicable to e-waste exporting as a whole. However, there are export notification requirements that apply to certain CRTs. Those requirements are stipulated under EPA's 2007 "CRT Rule." Export notification requirements under the CRT Rule are summarized in Table 1 , below. High demand for used electronic products can facilitate illegal export--at least with respect to CRTs. Export notification requirements do not apply to CRTs exported for reuse. A recycler can export CRTs without notification by claiming such a purpose. In 2008, the Government Accountability Office (GAO) determined that EPA was not sufficiently enforcing the export notification requirements specified under the CRT Rule. Since then, EPA has initiated enforcement actions against several recyclers for not submitting the proper notifications. In addition to a lack of regulatory restrictions on recycling activities, there are currently no consistently applied industry standards applicable to e-waste recyclers. This can actually pose a problem to recyclers that limit their exports. A recycler that removes hazardous constituents from e-waste, sorts and disassembles its e-waste, and exports the waste to a responsible recycler or confirms that devices are in working order before exporting them for reuse, will likely offer its services at a significantly higher rate than a recycler that simply ships unsorted e-waste abroad. The recycler that ships unsorted e-waste can still make the claim that it is operating in a "green" way because it diverts the waste from landfill disposal. A recycler can also claim that it does not export its waste, but that is a claim that would be very hard for the average consumer (or even a state or charitable organization using the recycler) to confirm. Various electronics manufacturers have adopted company polices that address issues associated with exports to developing countries. For example, Hewlett-Packard (HP) and Dell have adopted company policies that ban exports of nonworking electronics to developing countries. Also, since 2008, voluntary recycler certification programs have been developed by environmental organizations, the recycling industry, and EPA. Certification programs implemented by environmental organizations, such as the Basel Action Network's "E-Stewards" program, would prohibit certain e-waste exports. EPA's "Responsible Recycling (R2) Practices" program specifies that a recycler exporting e-waste must obtain "assurances from downstream vendors both domestically and internationally ... [that] show that the materials are being handled properly and legally by downstream vendors throughout the recycling chain." Any impact these voluntary certification programs may have has yet to be seen. At this point, it is difficult to determine how effectively voluntary certification programs may be enforced. It is also difficult to determine if voluntary programs will have an effect on companies willing to make false or misleading claims about the environmental attributes of their recycling services. Since e-waste recycling is largely unregulated, accurate data regarding the end markets, both domestic and abroad, are not publicly available. Therefore, it is difficult to know how much e-waste that is collected for recycling is actually exported for processing. However, in a 2008 report, EPA consulted an industry expert to develop a "best estimate" of the end markets for CRT-containing devices (televisions and computer monitors). According to that estimate, between 77% and 89% of those end markets were outside the United States. EPA acknowledged that such data are fluid--market conditions change rapidly. Also, since this estimate only applies only to CRTs, it is not possible to apply those estimates to all e-waste. Still, it can be estimated that the majority of e-waste collected for recycling is processed, at least to some extent, abroad. There are various reasons why recyclers export e-waste instead of recycling it domestically. Most reasons relate to the high costs of processing the waste domestically and the lower costs and higher demand for the material abroad. E-waste collected for recycling may be reused or processed for parts or components. Before it can be determined which of those two fates it may meet, the device will require a certain level of sorting, inspection, and testing. If a product is ultimately processed for parts or components, it would have to go through various processing activities. Unlike recyclable products that contain essentially a single component, like plastic bottles or newspaper, electronic devices contain a host of mixed materials that may not be easily separated or extracted. Before the device can be recycled it may go through any of a number of steps, including some or all of the following: D emanufacturing into subassemblies and components --involves a worker manually disassembling a device or component to recover value from working and nonworking components (e.g., video cards, circuit boards, cables, wiring, plastic or metal housing). D epollution --the removal and separation of certain materials to allow them to be handled separately to minimize impacts to human health and the environment (e.g., batteries, fluorescent lamps, CRTs, or plastics embedded with brominated flame retardants). M aterials separation --manually separating and preparing material for further processing. At this stage, materials that have already been disassembled would be sorted into material categories. Me chanical processing of similar materials --generally involves processing compatible plastic resins, metals, or CRT glass to generate market-grade commodities. M echanical processing of mixed materials --generally involves processing whole units, after depollution, followed by a series of separation technologies. M etal refining/smelting --after being sorted into components or into shredded streams, metals can be sent to refiners or smelters. At this stage, thermal and chemical management processes are used to extract metals of many types. Many of the processes described above must be done by hand and can be labor intensive. This can be a costly operation. Depending on the value of the commodities being extracted, among other factors, a recycler may find it more profitable simply to send all of the e-waste it collects abroad, where labor is less costly but health and safety practices may not be implemented when extracting hazardous materials or precious metals. If an e-waste collector or recycler offers its services for free, it likely ships whole units abroad. Limits on domestic recycling apply to both the infrastructure (the network of waste collection, transportation, and sorting activities) and the actual processing of the waste. Compared to paper, glass, and plastic recycling, electronic recycling has a short history. An e-waste recycling infrastructure is still being developed. E-waste may be collected at state- or locally-sponsored household hazardous waste collection sites or events (meaning, it is not collected on an on-going basis, but may be collected semi-monthly or semi-annually). E-waste may also be collected at manufacturer or retailer sponsored events. Regardless of where it is collected or who is responsible for collecting it--consumers will likely be required to drop off their e-waste. According to the Government Accountability Office (GAO), cost and inconvenience inhibit consumers from recycling used electronics. Most stakeholders agree that if e-waste is to be recycled, it must be as easy for consumers to recycle electronics as it is to buy them. Many local and state agencies, retailers, and electronics manufacturers have worked with EPA to sponsor pilot programs providing convenient, free recycling services to consumers. Although such events often collect large amounts of e-waste, it is difficult to determine what happens to the waste after collection. The extent to which e-waste may be processed domestically after collection is also limited. A company that operates as a "recycler" may actually be a waste consolidator that sends the waste to another vendor to sort or process it in some way. Those downstream vendors may separate the units for reuse, ship whole units abroad for processing, or process it domestically to some degree (see the list of potential steps in recycling under " Costly and Complex Domestic Recycling Processes ," above). However, once a unit has been broken down into its component parts, the presence of recycling facilities with the ability and capacity to recycle those components is limited, and varies from region to region. For example, there are few facilities in the United States capable of processing CRT glass. There are also limited opportunities in the United States for copper and precious metal recovery from circuit boards or for processing flame retardant-containing plastic. Further, most consumer electronics manufacturers (who provide the market for materials recovered from recycled electronics) have manufacturing operations overseas. For example, almost all glass manufacturers that may reuse CRT glass are located overseas. Demand abroad is high in both recycling and reuse markets. When U.S. consumers discard electronic products, they are not necessarily broken. In developing countries, there is high demand for electronics that American consumers may deem "waste." According to EPA estimates, in 2005, 61% of CRTs collected for recycling were refurbished or remanufactured into new televisions abroad. Also, a study specific to exports to Peru found that 85% of used personal computers (PCs) imported by Peru were reused rather than recycled. The study concluded that decisions regarding the end-of-life management of computers were driven by reuse as opposed to recycling. Further, in 2008, GAO reported that there is significant demand for used electronics in developing countries. In particular, GAO reported: In a search of one Internet e-commerce site, we observed brokers from around the world place 2,234 requests to purchase liquid-crystal display (LCD) screens. On the same site, we found 430 requests for central processing units and 665 requests for used computers. In an extensive search of two Internet e-commerce sites over a 3-month period, we observed brokers in developing countries make 230 requests for about 7.5 million used CRTs. Brokers in developing countries represented over 60 percent of all requests we observed. Developing countries also have a high demand for scrap. Demand for plastics for recycling is almost entirely overseas. An unintended consequence of avoiding potential negative impacts of domestic e-waste disposal has been a contribution to actual environmental contamination and human health impacts to some communities in developing countries. If environmentally preferable management of e-waste is the goal, is recycling it preferable to landfill disposal if recycling means exporting the waste to developing countries? Determining how to address this issue--that is, take into consideration concerns regarding domestic e-waste disposal and the negative impacts of recycling abroad--involves many factors. One significant factor is the lack of timely, accurate data needed to help fully understand the scope of the potential problem. It is almost impossible to know exactly how much e-waste is generated, to what extent it is processed domestically (e.g., to what degree it is sorted or disassembled by domestic recyclers), how much is exported, and, of the waste that is exported, how much is actually reusable or sent to a facility that will manage it properly. That is not to say that all or even the majority of e-waste that is exported is managed improperly. It is simply impossible to know using existing data. Electronics manufacturers are currently driven by various forces to make their products more easily recyclable and with fewer hazardous constituents. Any future changes to electronic devices have no impact, however, on the hundreds of millions of devices currently in use or obsolete devices currently in storage. Eventually those devices will make their way to the disposal or recycling markets. The high cost of domestic recycling, high demand for exports, and a lack of barriers to export will continue to drive reuse and recycling markets abroad. As stated previously, the current regulatory structure involves no or very limited prohibition on exports and limited options for reuse or recycling (although, those options will likely increase as e-waste collection increases). As long as there are legitimate reuse markets and recycling operations in developing countries, an outright prohibition on exports would be problematic, particularly when limited opportunities for recycling exist in the United States. This presents policy-makers with multiple challenges: principal among them are how to address the obstacles that limit domestic recycling, and how one might establish export controls that facilitate reuse and recycling but prohibit delivery of e-waste to operations that do not protect workers or their environment.

Electronic waste (e-waste) is a term that is used loosely to refer to obsolete, broken, or irreparable electronic devices like televisions, computer central processing units (CPUs), computer monitors (flat screen and cathode ray tubes), laptops, printers, scanners, and associated wiring. E-waste has become a concern in the United States due to the high volumes in which it is generated, the hazardous constituents it often contains (such as lead, mercury, and chromium), and the lack of regulations applicable to its disposal or recycling. Under most circumstances, e-waste can legally be disposed of in a municipal solid waste landfill or recycled with few environmental regulatory requirements. Concerns about e-waste landfill disposal have led federal and state environmental agencies to encourage recycling. To date, 23 states have enacted some form of mandatory e-waste recycling program. These state requirements, mixed with increased consumer awareness regarding potential problems with landfilling e-waste, have led to an increase in recycling. With that increase have come new questions about e-waste management. Instead of questions only about the potential impacts associated with e-waste disposal, questions have arisen regarding the potential danger associated with e-waste recycling--particularly when recycling involves the export of e-waste to developing countries where there are few requirements to protect workers or the environment. Answering questions about both e-waste disposal and recycling involves a host of challenges. For example, little information is available to allow a complete assessment of how e-waste is ultimately managed. General estimates have been made about the management of cathode ray tubes (CRTs, the only devices where disposal is federally regulated), but little reliable information is available regarding other categories of e-waste. For example, accurate data regarding how much is generated, how it is managed (through disposal or recycling), and where it is processed (domestically or abroad) are largely unknown. Further, little information is available regarding the total amount of functioning electronics exported to developing countries for legitimate reuse. What is known is that e-waste recycling involves complex processes and it is more costly to recycle e-waste in the United States. It also is known that most consumer electronics manufacturers (who provide the market for material recovery from recycled electronics) have moved overseas. As a result, the majority of e-waste collected for recycling (either for reuse or recycling) appears to be exported for processing. Although there may be limited data regarding how e-waste is managed, the consequences of export to developing countries that manage it improperly are becoming increasingly evident. In particular, various reports and studies (by the mainstream media, environmental organizations, and university researchers) have found primitive waste management practices in India and various countries in Africa and Asia. Operations in Guiyu in the Shantou region of China have gained particular attention. Observed recycling operations involve burning the plastic coverings of materials to extract metals for scrap, openly burning circuit boards to remove solder or soaking them in acid baths to strip them for gold or other metals. Acid baths are then dumped into surface water. Among other impacts to those areas have been elevated blood lead levels in children and soil and water contaminated with heavy metals. The impacts associated with e-waste exports have led to concerns from environmental organizations, members of the public, and some Members of Congress.

In 2013, then-Secretary of Defense Leon Panetta warned that "budget uncertainty could prompt the most significant military readiness crisis in more than a decade." Four years later, observers are debating whether a readiness crisis has indeed come to pass, disagreeing on how ready the U.S. military currently is, and debating what steps should be taken to improve military readiness. Little consensus has emerged, partly because the term readiness is not used in the same way by all observers or participants in the debate. Recently, DOD has made readiness a central justification for increased funding as necessary to address "immediate and serious readiness challenges." DOD's funding request for FY2017 favors preparations that improve the military's capability in future years, like buying new equipment, whereas the FY2018 budget request favors more immediate training and maintenance shortfalls. In both cases, however, the request is justified in terms of improving readiness, contributing to the confusion by using the term readiness in different ways. As these examples show, "readiness" is used both in a narrow sense to discuss the military's current level of training and the status of its maintenance, and in a broader sense to describe the military's overall capability, which includes how large the force should be and what kinds of weapons it should have, even if those changes will not take effect for several years. To help Congress understand the different uses of the term readiness, this report explores these two common uses of the term with examples, attempts to clarify the two uses, and discusses why it is so difficult to define the term. It also provides historical examples of when the two uses of the term readiness received different priorities than they do today. The report then considers how the different uses of the term readiness inform how Congress might evaluate certain issues: Is there a readiness crisis? What should the U.S. military be ready for? How should readiness be measured? How does the FY2018 budget request affect the U.S. military's readiness? While this report discusses how differing uses of the term readiness affect the debate, it does not evaluate the current state of the U.S. military's readiness or provide a conclusive definition of readiness. Despite many definitions of readiness, CRS has identified two principal uses of the term. One, readiness has been used to refer in a broad sense to whether U.S. military forces are able to do what the nation asks of them. In this sense, readiness encompasses almost every aspect of the military. For example, Lieutenant General Joseph Anderson of the U.S. Army testified Readiness is the capability of our forces to conduct a full range of military operations to defeat all enemies, regardless of the threats that they pose. It is generated through manning, training and equipping our units and leader development. Similarly, in 2014, retired General Gordon Sullivan used readiness in this broad sense, tying readiness largely to the size of the force: More than 100 years ago, the siren song of reductions in defense manpower was luring the unsuspecting onto the shoals of unpreparedness for future conflict ... This cycle of readiness followed by unpreparedness has repeated itself all too often throughout our history. Two, readiness has also been cast more narrowly as only one component of what makes military forces capable. In this sense, readiness is parallel with other aspects of the military, like force structure and modernization (which usually refer, respectively, to the size of the military and the sophistication of its weaponry). For example, General Stephen Wilson of the U.S. Air Force, in testimony, used readiness in the latter sense: ...current budget levels require the Air Force to continue making difficult tradeoffs between force structure, readiness , and modernization. Two years earlier, General Norton Schwartz, then-Chief of Staff of the Air Force, also used readiness in its narrow sense, parallel with other components: When we speak of operational effectiveness, we are talking about securing the appropriate balance of three separate but very closely related dimensions-- readiness , modernization, and force structure--that mutually affect each other, and must be carefully integrated together. For other uses of the term beyond these, see the Appendix . Speakers often seek to clarify in which of the two principal uses they are describing readiness by applying a variety of adjectives. Richard Betts in his 1995 book on readiness distinguished them by calling the broader use "structural readiness," and the narrower conception "operational readiness." More recently, General Glenn Walters of the U.S. Marine Corps used "institutional readiness" to invoke the broader use and "unit readiness" to invoke the narrower use: Marine Corps institutional readiness is built upon five pillars: Unit Readiness ; Capability and Capacity to Meet Joint Force Requirements; High Quality People; Installation Capability; and Equipment Modernization. Brad Carson and Morgan Plummer, former DOD officials, distinguished the two uses in the following terms: [A] ... more limited meaning that might be called ' strategic readiness ' : the ability of the military to accomplish the tasks demanded by the national command authority. This is the implicit definition used regularly in congressional testimony and public commentary. ... [Another] definition of readiness, still more parsimonious, might be called ' force readiness ' : the resource ratings of units, their ability to perform generic combat tasks, and, to a lesser extent, the ability of combatant commands to execute set-piece operational plans. These attempts to clarify the term "readiness" acknowledge that both uses embody accepted concepts: the broader use capturing the military's ability to accomplish its overall goals and the narrower use capturing the military's ability when its size and type of weaponry are held steady. These attempts also highlight that the two concepts are interdependent, as illustrated by DOD's official definition of readiness. DOD's official doctrinal definition of readiness is The ability of military forces to fight and meet the demands of assigned missions. This definition, however, does not resolve the confusing use of the term. If "military forces" is assumed to hold the size and composition of the forces steady, this definition would imply the narrow use of readiness. Since one can posit military forces changing in size and composition to "meet the demands of assigned missions," however, the definition does not rule out the broader use. DOD also doctrinally defines "operational readiness" as The capability of a unit/formation, ship, weapon system, or equipment to perform the missions or functions for which it is organized or designed. The two DOD definitions seemingly follow the two principal uses of readiness: the broader and the narrower. But as shown by the examples above, many users do not consistently follow the doctrinal definitions, invoking the word readiness , unmodified, for both senses of the term. The two uses do not lend themselves to strict definition because they are interdependent: greater readiness in the narrow sense, such as better trained personnel, may offset the disadvantages of a smaller or a less technologically sophisticated force, depending on what task the military is executing. Alternatively, the military could be ready in the broader sense because its size and the sophistication of its weapons make up for shortfalls in such areas as training or how often a unit has used its equipment before experiencing combat. These difficulties extend to what budget lines support "readiness." No authoritative list exists. If, however, readiness is used in the narrow sense--as one piece of what makes the military able--it can be contrasted against other pieces, such as buying new equipment. In this sense, the operations and maintenance (O&M) appropriations title, which must be spent sooner than other parts of the budget, can be considered a proxy for narrow readiness funding as opposed to other appropriations such as the procurement appropriations title, which can be spent over multiple years. O&M as an entire appropriations title, however, may not be the best way to measure readiness in the narrow sense. The full title includes funding for activities often not associated with readiness, even a narrow sense, like funding Junior ROTC for high school students, real estate management, and enterprise communications networks. A potentially better way to capture the narrow concept of readiness is to focus on Budget Activity 1, Operating Forces, which includes only the O&M funding for operational units of the military services. Tables displayed later in this report will show all three categories. While these accounts provide rough proxies for readiness in the narrower and broader sense, they are not exclusive to either sense, thus preventing any absolute judgments. How the term readiness is used is important to Congress because DOD has made readiness central in its justifications for increased funding. The Trump Administration released a National Security Presidential Memorandum on January 27, 2017 directing DOD to conduct a 30-day readiness review and concurrently to develop a FY2017 budget amendment for military readiness and other subjects. Secretary of Defense Mattis then issued a memorandum on January 31, 2017 stating the Administration's priorities in "strengthening the U.S. Armed Forces" would be approached "in a campaign of three phases:" First, addressing "immediate and serious readiness challenges" in a FY2017 budget amendment request; Second, refining and improving the FY2018 budget request to "focus on balancing the program, addressing pressing programmatic shortfalls, while continuing to rebuild readiness;" and Third, preparing the FY2019 budget request and five-year defense program throughout calendar year 2017. The FY2019 request is to be informed by the 2018 National Defense Strategy, which DOD was to begin in spring 2017, and "inform our targets for force structure growth." The Secretary's memorandum also emphasized enhancing lethality against high-end competitors and effectiveness against a broad spectrum of potential threats. The third phase did not mention readiness. DOD fulfilled phase one of its approach when it released its request for additional FY2017 appropriations on March 16, 2017. The FY2017 budget amendment seems to blur the first two phases of the DOD Secretary's memorandum by invoking both the broader and narrower uses of "readiness." It states "[t]he first step in rebuilding the U.S. Armed Forces is increasing readiness," but goes on to state "[t]his request also begins to address future warfighting readiness by filling programmatic holes that were created by previous budget cuts." The overview acknowledges this second category does not address immediate challenges, as listed in the memorandum: While these investments will not achieve full readiness in FY2017, they are vital to growing and maintaining a higher state of warfighting readiness in the future. These types of investments such as new planes and new ground vehicles, which will not be delivered to the troops this year but that, if not purchased, will create a capability gap in the future. Despite invoking both uses of the term readiness, the requested funding seemed most concerned about broader readiness, preparing for the future, more than immediate, narrower concerns. Table 1 shows the percentage change proposed in the budget amendment for O&M and procurement for each military department. Given that the military departments requested larger increases in procurement than O&M, the budget amendment does not seem to give priority to readiness in the narrow sense. Two of the military departments did request greater percentage increases for the more limited budget activity, operating forces, than for the entire O&M title. However, these departments still requested a smaller increase for this activity than for procurement funding. If, on the other hand, readiness is used in the broader sense, the budget amendment may support greater readiness because of its greater investments in procurement funding as well as O&M related to operating forces. By investing in future equipment, the amendment can be understood as preparing the military for future tasks. In the Consolidated Appropriations Act, 2017 ( H.R. 244 , enacted as P.L. 115-31 ), Congress mostly supported the Trump Administration's approach, albeit at lower funding levels. The explanatory statement emphasized addressing readiness in the narrow sense: The agreement provides additional readiness funds for the Services within the operation and maintenance accounts. This funding shall be used only to improve military readiness, including increased training, depot maintenance, and base operations support. The funding provided in Title X, "Department of Defense--Additional Appropriations" of Division C, however, follows the same pattern as the requested additional appropriations: greater relative increases for operating forces O&M than overall O&M, but even greater relative increases for procurement. The one exception is Navy procurement, which received a smaller increase than Navy O&M did. Much of that difference stems from the appropriations act already including 11% more Navy procurement funding in its base amount than DOD requested. Table 2 displays the increases in additional appropriations Congress provided relative to the omnibus's base funding. The appropriations act provided $12.5 billion in additional appropriations compared to DOD's request for $24.7 billion. This difference is reflected in the lower overall percentage increases in Table 2 than Table 1 . Nevertheless, the pattern of funding increases remains much the same. Though both the request and the appropriations emphasize the need to address readiness in the narrow sense, immediately funding by percentage favors concerns about broader readiness by prioritizing equipment that will be fielded further in the future. Today, when someone uses readiness in the broad sense they usually also assume it is good to maintain high levels of readiness in the narrow sense. Few in the contemporary debate argue for forces--no matter how large--that are not ready in the narrow sense. In earlier eras, however, observers argued readiness in the narrow sense came at the expense of other, more important goals, which could leave the military less ready in the broader sense. Three eras stand out. In the first era, the time between World War I and World War II, most observers assumed the size of the military forces needed to fight a war would be many times larger than those the United States would maintain during peacetime. Almost everyone assumed the U.S. military was not and would not be ready in the narrow sense. The Army Chief of Staff, General of the Armies John Pershing, explicitly argued to maintain standing forces at a lower level of readiness in the narrow sense in order to be ready in the broader sense: Had the United States in the Spring of 1917 possessed twenty-five or thirty divisions completely organized and equipped, but only sufficiently trained to meet the requirements of the 'national position in readiness' above outlined, each of these divisions would have been advanced many months as compared with the entirely new divisions that it was necessary to create. In the second era, the early Cold War, President Eisenhower came to office in 1953 believing the Soviet Union posed a long-term threat that had to be met not just with military strength but economic power. To maintain U.S. economic competitiveness and readiness in the broad sense, he was willing to accept less ready forces in the narrow sense: [Eisenhower] underscored his administration's recognition 'that the time has clearly come when the United States must take conclusive account, not only of the external threat posed by the Soviets, but also of the internal threat posed by the long continuance and magnitude of Federal spending.'... [Eisenhower] went on, Truman's quest to build up America's military strength 'to a state of readiness on a specified D-day' had 'largely overlooked or totally ignored the length of time over which this costly level of preparedness would have to be maintained.' In the third era, following the collapse of the Soviet Union in 1991, some observers expected a lengthy respite from international military conflict. As a result, they argued U.S. defense resources should be devoted to developing leap-ahead technologies, which would better ready the U.S. military for future challenges. They argued this future readiness in the broad sense made sacrificing current readiness, in the narrow sense, worthwhile: The 'Transformation Approach' is based on the belief that the United States should accept greater short-term risk by limiting global engagement, canceling procurement of current or next-generation weapons systems, selectively lowering current readiness and operational tempo, cutting some force structure, and shrinking the defense infrastructure in order to accelerate the development and adoption of advanced systems, concepts, and organizations . In all three eras, some officials were willing to sacrifice readiness in the narrow sense, usually because of how they prioritized the contingencies for which the military should be ready and at what point in time the force needed to be ready. These past views suggest that broader readiness need not require readiness in the narrow sense, although most observers assume so today. Whether observers see a readiness crisis often depends on whether they are using readiness in its broad or narrow sense. For example, in arguing there is a readiness crisis, Gary Schmitt of the American Enterprise Institute explicitly says the narrower use of readiness--in his terms "operational readiness"--is not important compared to the broader use of readiness, "operational capability:" Operational 'readiness' without operational capability is meaningless--in fact, it is dangerous. In contrast, former DOD Comptroller Robert Hale explicitly called for skepticism about broader readiness concerns even as he acknowledged narrow readiness issues, which he calls "small 'r' readiness": We've heard strong concerns expressed recently by the service [Vice Chiefs of Staff] on readiness... So I think we got to be a little skeptical... So I mean, a little skepticism, but realize there is a small 'r' readiness problem. Carter Ham of the Association of the U.S. Army captures both uses in responding to a Wall Street Journal opinion piece: That ['America's fighting forces remain ready for battle'] is largely true today with respect to the current fight against ISIL and other terrorist organizations, but it may not be true tomorrow. These different uses also often imply different actions Congress could take. Whether one uses readiness in its broad or narrow sense often signals whether the steps being suggested for Congress are expanding the military and procuring new equipment or prioritizing funding for immediate purposes. Justin Johnson of the Heritage Foundation sees a crisis when he uses the term in its broad sense; therefore, he argues the military should be increased in size and provided new equipment: Today's men and women in uniform put their lives on the line for our country, but they are doing so with less training, worn out equipment, and fewer brothers and sisters in arms to back them up. With threats rising across the globe, all Americans should be concerned about the troubling state of the U.S. military. In contrast, Todd Harrison of the Center for Strategic and International Studies refers to readiness only in its narrow sense; he therefore argues expanding the military is the wrong step to take: This is not evidence of a readiness crisis as much as it is evidence of a force structure crisis. The readiness shortfalls cited by the Services are due to insufficient funding to support the number of brigades, flying squadrons, and ships in the force today... But the solution some are proposing is to increase the size of the military, which will just exacerbate existing problems rather than resolve them. The two uses, however, are not the only reasons observers disagree over whether there is a readiness crisis. In the article that prompted most of the commentary above, former Director of the Central Intelligence Agency and General David Petraeus and Michael O'Hanlon of the Brookings Institution dismissed concerns of a readiness crisis altogether while still arguing for expanding the military's size and procuring certain types of equipment. Another issue for Congress is what the U.S. military should be ready for. The two identified uses of readiness complicate the debate. The Army Chief of Staff, General Mark Milley, illustrated this difficulty in testimony: On the high military risk, to be clear, we have sufficient capacity, and capability and readiness to fight counterinsurgency and counterterrorism. My high military risk refers specifically to what I see as emerging threats and potential for great power conflict.... Here, General Milley uses readiness in the narrow sense, as a component--along with capacity, usually describing the size of the force, and capability, usually describing the sophistication of the force's weapons--of whether the military can succeed at counterinsurgency and counterterrorism. In doing so, he implies the U.S. Army is ready in the broad sense to fight counterinsurgency and counterterrorism. However, he goes on to say the U.S. Army is at high military risk of not being ready for great power conflict. In the passage, therefore, General Milley assesses the U.S. Army as ready in the narrow sense even as he expresses concern it is not ready in the broad sense. Whether the military is ready in the broad sense depends on what the military should be ready for, and cannot be answered by describing readiness in the narrow sense. For more information on the range of missions the U.S. military may need to be prepared for, see CRS Report R44023, The 2015 National Security Strategy: Authorities, Changes, Issues for Congress , coordinated by Nathan J. Lucas and CRS Report R43838, A Shift in the International Security Environment: Potential Implications for Defense--Issues for Congress , by Ronald O'Rourke. A recurring issue for Congress is how to measure readiness given the two identified uses of the term. Measuring readiness may become even more pressing given a report that DOD is newly classifying information regarding the military's readiness, which could cause some observers to discount DOD's assessments. Since 1996, Congress has required the Secretary of Defense to submit a quarterly report regarding the readiness of the active and reserve components. These reports were built on internal DOD readiness reporting dating back to 1957. In 1999, Congress also required DOD to establish a "comprehensive readiness reporting system." DOD answered this congressional direction by instituting a new readiness reporting system in 2002, the Defense Readiness Reporting System (DRRS). DRRS is based on the older readiness reporting system, Status of Resources and Training System (SORTS). SORTS reported four resource areas: personnel, equipment, supplies, and training. The SORTS data showed how actual resource levels compared to targeted resource levels, with the lowest creating the C-rating, or the overall unit assessment. However, a commander can change the C-rating to ensure the report reflects his or her judgment of the unit's readiness regardless of the quantitative measures. DRRS keeps the underlying SORTS data, though it uses a finer scale for the quantitative metrics, and then asks commanders to supply a subjective mission assessment of how well their unit can execute the following missions: core, the missions for which the unit was designed; and assigned, the mission the unit is tasked if assigned to an existing war plan; or the mission the unit is conducting in real-world operations if a certain percentage of the unit is deployed. The unit's mission assessment and its C-ratings should correlate. The commander can still change the C-rating to ensure they do. This readiness reporting system combines the two uses of the term readiness at the unit level. As a summary of what is on hand, the quantitative metrics correspond to the narrow sense of readiness. The C-rating and mission assessment correspond to the broader sense of readiness. DRRS allows commanders to adjust the implications of the quantitative metrics to match their broader assessment. These unit assessments are then rolled-up through the military hierarchy to create overviews of larger units' readiness. By entwining the two senses of readiness, DRRS limits the accuracy in measuring either. Because commanders can overrule the quantitative measures of readiness in a narrow sense, the reporting becomes subjective and influenced by senior leaders. By using the same ratings regardless of which mission the commander is assessing, the reporting can distort how many units are ready in the broader sense. For example, the Army directs its Brigade Combat Teams to be rated as less ready when trained and deployed to an operational mission that is not the same as its "core" mission. That means the reporting system can label a unit as "not ready" even when it is operationally deployed conducting a mission directed by the president. Whether the unit should be rated against the mission it is conducting or the mission it was designed for becomes a question of what the U.S. military should be ready to do. DOD's readiness reporting system has neither clarified the use of the term readiness nor resolved the recurring debate on whether there is a readiness crisis, as described in 2013 by the Government Accountability Office (GAO): Furthermore, unless DOD provides guidance to the services on the amount and types of information to be included in the quarterly reports, including requirements to provide contextual information such as criteria or benchmarks for distinguishing between acceptable and unacceptable levels in the data reported, DOD is likely to continue to be limited in its ability to provide Congress with complete, consistent, and useful information. In response, Congress has regularly directed changes to the readiness reporting system and the quarterly reports. Congress has amended the required content of the quarterly report seven times, including in three of the last four National Defense Authorization Acts. Two of these provisions required greater detail on what data the reports will provide, while another changed the report's frequency from monthly to quarterly and another required an independent study of the report. Three other provisions expanded what topics the report would cover, including the National Guard's ability to support civil authorities, prepositioned stocks, Cyber Command, major exercises and cannibalization rates. The FY2017 provision, however, eliminated the requirement for reporting on prepositioned stocks and the National Guard's ability to support civil authorities. Congress has also directed modifying the reporting system another two times, mandating the system measure the rates at which equipment was cannibalized and whether DOD's contracting system could support wartime missions. These continuing flaws have meant Congress is unable to use the readiness reporting system to evaluate the U.S. military in the broader sense of readiness. For example, in 2016, GAO found that neither the formal DRRS nor other reports could measure the military services' progress in recent years to recover readiness after the drawdown of the wars in Iraq and Afghanistan: The Office of the Secretary of Defense, the Joint Chiefs of Staff, the combatant commands, and the military services assess and report, through various means and using various criteria, the readiness of forces to execute their tasks and missions. Some key reporting mechanisms include the Defense Readiness Reporting System, the Joint Forces Readiness Review, and the Quarterly Readiness Report to Congress. These processes provide snapshots of how ready the force is at a given point in time... Specifically, while most of the services continue to monitor overall operational readiness through the Defense Readiness Reporting System, they have not fully developed metrics to measure progress toward achieving their readiness recovery goals. The difficulties experienced by GAO prevent Congress from finding commonly agreed standards to discuss readiness. Another issue for Congress is evaluating how DOD's FY2018 budget request may affect readiness and how Congress might respond to the request. DOD released its FY2018 budget request on May 23, 2017. It reiterated the Defense Secretary's three phase plan: addressing immediate challenges to readiness in the FY2017 budget amendment; continuing focus on readiness and filling programmatic holes in the FY2018 budget request; and implementing a new National Defense Strategy in the FY2019 budget request. In contrast to the FY2017 budget amendment and final FY2017 appropriations, the FY2018 budget request seems to favor funding for narrow over broad readiness. The budget requests double-digit percentage increases for O&M accounts for the Departments of Army and Navy, as shown in Table 3 . The budget requests even greater relative increases for O&M Budget Activity 1, which funds the operating forces. The request provides smaller percentage increases for procurement accounts. The greater increases for the daily operations accounts than the procurement accounts are seen to characterize the budget request as focused on narrow readiness. Some observers, however, have suggested that the budget fails to fulfill the Administration's promise to rebuild the armed services, essentially invoking readiness in the broader sense. The Chairman of the Senate Armed Services Committee, Senator John McCain, called the defense budget request "inadequate to the challenges we face." In response to such concerns, DOD's acting comptroller emphasized the FY2018 budget request was not designed to enlarge the military: You will not see a growth in force structure ... You will not see a growth in the shipbuilding plan. You will not see a robust modernization program. As with the FY2017 budgets, assessing whether the FY2018 budget request improves readiness depends on whether one is using readiness in the broader or narrower sense. The Trump Administration has made readiness a central justification for its request for increased defense spending. At the same time, readiness is used in differing ways that cloud the debate on how ready the military is and what steps would make it more ready. Clarifying how readiness is used in particular cases may assist Congress to determine what steps and what level of spending are needed to maintain readiness or redress any identified shortfalls. The term readiness is frequently used for more particular cases than the two principal uses described in the section " Two Principal Uses ." Common examples include the following: medical readiness: "a healthy and fit fighting force that is medically prepared to provide the Military Departments with the maximum ability to accomplish their deployment missions throughout the spectrum of military operations;" dental readiness: whether servicemembers have dental issues, particularly issues that might affect whether the servicemember can deploy; family readiness: "support to the individual Service Member and their family to successfully balance life, career and mission events;" financial readiness: focused on servicemembers' personal finances, including indebtedness, consumer advocacy and protection, money management, credit, financial planning, insurance and consumer issues; physical readiness: usually called physical fitness; equipment readiness: how maintenance and parts availability affect equipment's operating status; logistics readiness: whether units and bases have supplies and equipment on-hand or can access them in a timely manner; and contingency contracting readiness: evaluating whether officers approved to sign contracts are prepared to deploy in support of military operations. These uses of the term differ from the two principal uses largely because they are not mission-specific (arguably excepting medical readiness). Servicemembers are fit or not regardless of what tasks they are performing. Servicemembers' families are making sound financial choices or not regardless of the servicemember's role in the military. Equipment has its needed parts or not regardless of the unit's mission. Readiness in these senses may help determine whether the force is ready both in the narrow or broader sense of the two principal uses of readiness. A military is not likely to win a war, if most of its servicemembers are sick or most of its equipment is missing parts. Only in extreme cases will being ready in one of these areas offset disadvantages in other areas. Healthier servicemembers will not likely compensate for missing parts for equipment. In contrast, better training in the narrow sense of readiness may compensate for less effective weapons (thus affecting the broader sense of readiness). Used in these even-narrower senses, the term readiness invokes operational need without identifying the specific operation for which it is intended. Medical Readiness Medical readiness can be an exception. When used as above, medical readiness is an example of an even-narrower use of readiness. Medical readiness, often called individual medical readiness, equals whether servicemembers are cleared as healthy or not regardless of what they are deploying to do. Medical readiness is also sometimes used to describe whether the military medical force is able to support tasks the military is asked to accomplish, as in the below statement: Our medical forces must stay ready through their roles in patient-centered, full tempo healthcare services that ensure competence, currency, satisfaction of practice, while fostering innovation. We can't separate care from home--care at home from readiness, as what we do and how we practice at home every day translates into the care we provide when we deploy. Used this way--describing the readiness of the medical forces themselves--medical readiness is still a sub-component of the narrow sense of readiness, but one that is interdependent with other components of the broader sense of readiness. If the military is operating where injured personnel have access to peacetime medical infrastructure, medical readiness may not affect the military's broader readiness. If the military is operating with no access to peacetime medical infrastructure and suffering casualties, medical readiness may be the most important factor in the force's broader readiness. The interdependence is further complicated by the military medical establishment's dual mission to provide care for military beneficiaries and to provide medical care to military servicemembers during wartime or contingency operations. By being more ready to provide medical care in war, the military medical establishment may be less ready to provide beneficiary care and vice versa.

Many defense observers and government officials, including some Members of Congress, are concerned that the U.S. military faces a readiness crisis. The Department of Defense has used readiness as a central justification for its FY2017 and FY2018 funding requests. Yet what makes the U.S. military ready is debated. This report explains how differing uses of the term readiness cloud the debate on whether a readiness crisis exists and, if so, what funding effort would best address it. CRS has identified two principal uses of the term readiness. One, readiness is used in a broad sense to describe whether military forces are able to do what the nation asks of them. In this sense, readiness encompasses almost every aspect of the military. Two, readiness is used more narrowly to mean only one component of what makes military forces able. In this second sense, readiness is parallel to other military considerations, like force structure and modernization, which usually refer to the size of the military and the sophistication of its weaponry. Both uses embody accepted concepts: the broader use capturing the military's ability to accomplish its overall goals and the narrower use capturing the military's ability when its size and type of weaponry are held steady. These two senses of the term are interdependent. Today, most observers assume the military should be as ready as possible in the narrow sense, but in past eras some favored accepting lower readiness in a narrow sense in order to redirect resources in ways they felt improved the military's readiness in the broad sense (to include funding a larger force or newer equipment). Use of either sense of readiness affects Congress's evaluation of certain key issues: Is there a readiness crisis? Most observers who see a crisis tend to use readiness in a broad sense, asserting the U.S. military is not prepared for the challenges it faces largely because of its size or the sophistication of its weapons. Most observers who do not see a crisis tend to use readiness in a narrow sense, assessing only the state of training and the status of current equipment. For what scenarios, contingencies, and threats should the U.S. military be ready? Some senior officials express confidence in the military's readiness for the missions it is executing today--although other observers are not as confident--but express concern over the military's readiness for potential missions in the future. How is readiness measured? Because of the two uses of the term, measuring readiness is difficult; despite ongoing efforts, many observers do not find DOD's readiness reporting useful. How might DOD's FY2018 budget request improve readiness? DOD's request increases operating accounts more than procurement accounts. If readiness is used in a narrow sense, these funding increases may be the best way to improve the military's readiness. If readiness is used in a broader sense, that funding may not be sufficient, or at least the best way to improve readiness.

Omnibus appropriations acts have become a significant feature of the legislative process in recent years as Congress and the President have resorted more frequently to their use to bring action on the regular appropriations cycle to a close. Following a discussion of pertinent background information, this report reviews the recent use of such measures and briefly addresses several issues that their use raises. Each year, Congress and the President may enact discretionary spending in the form of regular appropriations acts, as well as continuing and supplemental appropriations acts. The number of regular appropriations bills had been fixed at 13 for several decades, but a realignment of the House and Senate Appropriations subcommittees at the beginning of the 109 th Congress reduced the number of regular appropriations bills normally considered each year to 11 (starting with the FY2006 cycle). The number of regular appropriations bills was increased to 12 at the beginning of the 110 th Congress (starting with the FY2008 cycle) due to further subcommittee realignment and has remained at that level through the date of this report. If action is not completed on all of the regular appropriations acts toward the end of a congressional session, Congress will sometimes combine the unfinished regular appropriations into an omnibus measure. In some instances, action on the unfinished acts carries over into the following session. An omnibus act may set forth the full text of each of the regular appropriations acts included therein, or it may enact them individually by cross-reference. The House and Senate consider annual appropriations acts (and other budgetary legislation) within constraints established in a yearly budget resolution required by the Congressional Budget Act of 1974, as amended. Budget resolution policies are enforced by points of order that may be raised during House and Senate consideration of spending, revenue, and debt limit legislation. On occasion, budget policies may be modified by agreements reached between congressional leaders and the President; such modifications may be accommodated during legislative action through the use of waivers of points of order, emergency spending designations, and other budgetary or procedural devices. Discretionary spending has also been subject to statutory limits. These were first implemented between FY1991 and FY2002 by the Budget Enforcement Act (BEA) of 1990, as amended. Under this statutory mechanism, separate discretionary spending limits were applied to two different measurements of spending: budget authority and outlays. The discretionary spending limits were enforced by the sequestration process, which involved automatic, largely across-the-board reductions in discretionary spending in order to eliminate any breach of the limits. Pursuant to the Budget Control Act of 2011 ( P.L. 112-25 ), discretionary budget authority for FY2012-FY2021, with some exceptions, is again subject to statutory spending limits on defense and non-defense spending. For nearly two centuries, regular appropriations bills were considered by the House and Senate as individual measures and enacted by the President as standalone laws. In 1950, the House and Senate undertook a one-time experiment in improving legislative efficiency by considering all of the regular appropriations acts for FY1951 in a single bill, the Omnibus Appropriations Act of 1950 (81 st Congress, P.L. 759, September 6, 1950). The following year, the House and Senate returned to the practice of considering the regular appropriations acts individually. Over the past few decades, however, the House and Senate on several occasions have combined multiple regular appropriations acts into "consolidated" appropriations measures, sometimes enacting individual bills by cross-reference. Beginning in the late 1970s, certain omnibus acts have also sometimes been titled by Congress as "continuing appropriations acts," despite the fact that these acts generally incorporate the texts of multiple regular appropriations acts for full-year funding or enact such texts by reference. This is in contrast to the usual form of continuing appropriations, which provides funding at a rate with anomalies. This report includes only the former type of "continuing appropriations act" in its account of omnibus appropriations acts. During the 31-year period covering FY1986-FY2016, 22 different omnibus measures were enacted for 19 different fiscal years. (Two separate omnibus appropriations acts were enacted for FY2001, FY2009, and FY2012. ) The 22 omnibus appropriations acts covered a total of 170 regular appropriations acts. Each of the omnibus acts funded between two and 13 regular appropriations acts, on average funding almost eight (7.7) of them. Eighteen of the omnibus measures were bills or joint resolutions carrying the designation "omnibus," "consolidated," or "omnibus consolidated" appropriations in the title; seven were titled as continuing appropriations acts (FY1986, FY1987, FY1988, the first ones for FY2009 and FY2012, FY2013; and FY2015); and one was the VA-HUD Appropriations Act for FY2001, which also included the Energy and Water Development Appropriations Act for FY2001 (see Table 1 , and, at the end of the report, Table 3 ). During this period, a total of 390 regular appropriations acts were enacted or covered by full-year continuing appropriations. Of these, 191 (48.9%) were enacted as standalone measures, 158 (43.6%) were enacted in omnibus measures, and 29 (6.9%) were enacted in other forms (largely full-year continuing appropriations acts). Each year, a median of six regular appropriations acts were enacted as standalone measures, and 5.5 were enacted in omnibus measures. Sixty-five (16.7%) of the 390 regular appropriations acts were enacted on or before October 1, the start of the fiscal year. Nine of these bills were included in omnibus measures (six in FY1997 and three in FY2009), and the rest were enacted as standalone measures. On average, about two (2.1) regular appropriations bills per year were enacted before the start of the fiscal year during this period. Ten of the 18 omnibus appropriations acts bearing the designation "omnibus," "consolidated," or "omnibus consolidated" in their title originated in the House as a regular appropriations bill and were expanded in coverage (and their titles redesignated) at the stage of resolving House-Senate differences. These included the appropriations acts for Defense ( H.R. 3610 ) in FY1997; Transportation ( H.R. 4328 ) in FY1999; District of Columbia ( H.R. 3194 ) in FY2000; Labor-HHS-Education ( H.R. 4577 ) in FY2001; Agriculture ( H.R. 2673 ) in FY2004; Foreign Operations ( H.R. 4818 ) in FY2005; State-Foreign Operations ( H.R. 2764 ) in FY2008; Transportation, Housing and Urban Development ( H.R. 3288 ) in FY2010; Agriculture ( H.R. 2112 ) and Military Construction-VA ( H.R. 2055 ) in FY2012 and Military Construction-VA ( H.R. 2029 ) in FY2016. In the case of the FY1997, FY1999, FY2000, FY2001, FY2004, FY2005, FY2010, and the second FY2012 omnibus appropriations acts, the transformation from a regular appropriations bill into a consolidated appropriations measure occurred as part of the conference proceedings between the House and Senate. For the first FY2012 omnibus, the additional appropriations acts were added as a Senate floor amendment to a House-passed regular appropriations bill before conference occurred. For FY2008, conference procedures were not used and the transformation occurred in connection with an exchange of amendments between the two chambers. The acts for FY2000 and FY2001 enacted regular appropriations measures by cross-reference instead of including their full text (except for FY2000 appropriations for the District of Columbia). None of the other seven omnibus appropriations acts bearing such designations involved the transformation of a regular appropriations act. Four of the acts (one for FY1996, two for FY2009, and one for FY2013) originated as omnibus measures and retained this status throughout consideration. In FY2003, the omnibus measure originated in the House as a simple continuing resolution ( H.J.Res. 2 ) but was expanded in coverage and redesignated during Senate floor action. Most recently, the vehicles for the FY2014 and FY2015 omnibus acts were originally non-appropriations measures ( H.R. 3547 and H.R. 83 , respectively) that were amended to include omnibus appropriations. Several issues pertaining to the use of omnibus appropriations have been the focus of debate in recent years. These issues include the extent to which regular appropriations that are enacted in omnibus measures have been passed by the House and Senate prior to final congressional action, the use of across-the-board rescissions, and the inclusion of legislative provisions. One of the chief concerns regarding the use of omnibus appropriations acts is that it reduces the opportunities for Members to debate and amend the regular appropriations acts that are incorporated therein. This concern may be lessened if the regular appropriations acts incorporated into omnibus measures have been previously passed by the House and Senate before action on a final version. During the FY1986-FY2016 period, the House was more likely than the Senate to have passed the regular appropriations on initial consideration that were eventually incorporated into omnibus acts, with the House passing 116 out of the 170 regular appropriations bills, while the Senate passed 72 (see Table 2 ). For both the House and the Senate, between FY1986 and FY2001, the majority of appropriations acts that were ultimately included in omnibus measures were previously passed by the House and Senate each fiscal year. However, during certain fiscal years between FY2003 and FY2016, one or both chambers passed fewer than half of the regular appropriations bills that were ultimately enacted in omnibus form. For the House, this occurred in five different instances over four fiscal years: FY2003, FY2009, FY2012, and FY2014. For the Senate, this occurred in eight different instances over six fiscal years: FY2005, FY2009, and FY2012-FY2016. To adhere to restraints imposed by congressional budget resolutions, the discretionary spending limits, and ad hoc budget agreements between congressional leaders and the President (or to meet other purposes), Congress and the President from time to time incorporate across-the-board rescissions in discretionary budget authority into annual appropriations acts. During the 15 fiscal years covering FY2000-FY2016, six government-wide, across-the-board rescissions were included in omnibus appropriations acts. The government-wide across-the-board rescissions included in omnibus appropriations acts ranged in size from 0.032% to 0.80% of covered appropriations: 0.38% rescission for FY2000 in P.L. 106-113 ; 0.22% rescission for FY2001 in P.L. 106-554 ; 0.65% rescission for FY2003 in P.L. 108-7 ; 0.59% rescission for FY2004 in P.L. 108-199 ; 0.80% rescission for FY2005 in P.L. 108-447 ; and 0.032% rescission for security budget authority and 0.2% rescission for nonsecurity budget authority for FY2013 in P.L. 113-6 . Omnibus appropriations acts sometimes include other across-the-board rescissions that apply to individual appropriations acts as set forth in separate divisions of the measure. P.L. 108-199 , for example, included two requirements for uniform spending cuts in nondefense programs: (1) a 0.465% rescission of budget authority in the Commerce-Justice-State Appropriations division; and (2) a rescission of $50 million in administrative expenses for the Departments of Labor, Health and Human Services, and Education. Further, P.L. 108-447 included three other provisions requiring across-the-board rescissions focused on particular divisions of the act: (1) a 0.54% rescission in the Commerce-Justice-State Appropriations division, (2) a 0.594% rescission in the Interior Appropriations division, and (3) a rescission of $18 million in the Labor-HHS-Education Appropriations division, applicable to administrative and related expenses for departmental management (except for the Food and Drug Administration and the Indian Health Service). More recently, Section 3001 of P.L. 113-6 provided across-the-board rescissions that were applicable to various projects and activities in certain divisions of the act. For security discretionary budget authority in Divisions A through E, 0.1% was rescinded. For nonsecurity discretionary budget authority, 2.513% was rescinded in Divisions A and E, and 1.877% was rescinded in Division B. The significance of these across-the-board rescissions has differed with regard to budget enforcement. The FY2000 and FY2013 rescissions were an integral component of the plan that successfully avoided a sequester at the end of the session. The FY2001 rescission contributed to overall discretionary spending being below the statutory limits, but the across-the-board rescission proved to be unnecessary in avoiding a sequester. With regard to the FY2003 rescission, the House and Senate did not reach agreement on a budget resolution and the statutory discretionary limits had expired the fiscal year before; nonetheless, the across-the-board rescission was used to adhere to an informal limit reached between congressional leaders and President Bush and to avoid a veto of the omnibus appropriations act. Similarly, the FY2004, FY2005, and FY2008 rescissions were used to keep the costs of the measures under overall limits acceptable to the President. Although House and Senate rules and practices over the decades have promoted the separate consideration of legislation and appropriations, this separation was created to serve congressional purposes and has not always been ironclad. In many instances, during the routine operation of the annual appropriations process, minor provisions are included in appropriations acts that technically might be regarded under the precedents as legislative in nature but arguably do not significantly undermine the distinction between legislation and appropriations. At other times, however, the legislative provisions included in annual appropriations acts--especially omnibus appropriations acts--have been much more substantial and have represented a deliberate suspension of the usual procedural boundaries. Both House and Senate rules prohibit the inclusion of legislation in appropriations bills in specified circumstances. Clauses 2(b) and 2(c) of House Rule XXI prohibit the inclusion of legislative provisions on regular appropriations bills reported by the committee or added during the floor process. However, continuing resolutions are not considered by House rules to be regular appropriations bills and thus do not fall under the purview of these restrictions. In the Senate, Rule XVI prohibits the inclusion of legislative provisions in general appropriations legislation but allows exceptions in specified circumstances. The rules in the House and Senate barring the inclusion of legislation in appropriations are not self-enforcing, can be waived, and allow some exceptions. Thus, omnibus appropriations acts have sometimes been used as vehicles to address substantive legislative concerns. Over the past two decades, there are some instances of the incorporation of significant legislative provisions within omnibus appropriations acts. For example, the Consolidated Appropriations Resolution for FY2003 ( P.L. 108-7 ) included the Agricultural Assistance Act of 2003, amendments to the Price-Anderson Act and the Homeland Security Act, and provisions dealing with the U.S.-China Economic and Security Review Commission, among other legislative matters. The Consolidated Appropriations Act for FY2008 ( P.L. 110-161 ) included such items as the Emergency Steel Loan Guarantee Act of 1999 Amendments, the Harmful Algal Bloom and Hypoxia Research and Control Act of 1998 Amendments, the ED 1.0 Act, and the Kids in Disasters Well-being, Safety, and Health Act of 2007. Most recently, Divisions M through P of the Consolidated Appropriations Act, 2016 ( P.L. 114-113 ) contained the texts of a number of significant legislative provisions, reauthorizations, and new laws, including: the Intelligence Authorization Act for Fiscal Year 2016; the Cybersecurity Act of 2015; and the James Zadroga 9/11 Victim Compensation Reauthorization.

Omnibus appropriations acts have become a significant feature of the legislative process in recent years as Congress and the President have used them more frequently to bring action on the regular appropriations cycle to a close. Following a discussion of pertinent background information, this report reviews the recent enactment of such measures and briefly addresses several issues raised by their use. For nearly two centuries, regular appropriations acts were considered by the House and Senate as individual measures and enacted as standalone laws. In 1950, the House and Senate undertook a one-time experiment in improving legislative efficiency by considering all of the regular appropriations acts for FY1951 in a single bill, the Omnibus Appropriations Act of 1950. The following year, the House and Senate returned to the practice of considering the regular appropriations acts individually. During the 31-fiscal year period covering FY1986-FY2016, a total of 390 regular appropriations acts were enacted or covered by full-year continuing appropriations. Of these, 191 (48.9%) were enacted as standalone measures, 170 (43.6%) were enacted in omnibus measures, and 29 (6.9%) were enacted in other forms (largely full-year continuing appropriations acts). Each year, a median of six regular appropriations acts were enacted as standalone measures, and 5.5 were enacted in omnibus measures. During this period, 22 different omnibus measures were enacted for 19 different fiscal years. (Two separate omnibus appropriations acts were enacted for FY2001, FY2009, and FY2012.) Each of the omnibus acts funded between two and 13 regular appropriations acts (7.5 median). Eighteen of the omnibus measures were bills or joint resolutions carrying the designation "omnibus," "consolidated," or "omnibus consolidated" appropriations in the title; seven were titled as continuing appropriations acts (FY1986, FY1987, FY1988, FY2009, the first for FY2012, FY2013; and FY2015); and one was the VA-HUD Appropriations Act for FY2001, which also included the Energy and Water Development Appropriations Act for FY2001. In addition to the customary concern--of sacrificing the opportunity for debate and amendment for greater legislative efficiency--that arises whenever complex legislation is considered under time constraints, the use of omnibus appropriations acts has generated controversy for other reasons. These include whether adequate consideration was given to regular appropriations acts prior to their incorporation into omnibus appropriations legislation, the use of across-the-board rescissions, and the inclusion of significant legislative (rather than funding) provisions. This report will be updated at the conclusion of the annual appropriations process.

The 114 th Congress is likely to face numerous water resource issues as it conducts oversight and deliberates on authorizations and appropriations related to federal water resource development, management, and protection. Such issues include how to make investment decisions in the face of fiscal constraints; how to maintain and reinvest in an aging portfolio of federal infrastructure (e.g., dams, locks, and levees); how to effectively respond to and prepare for flood and drought emergencies; and how to distribute investment between activities to meet new demands for water supplies, navigation, flood management, and aquatic ecosystem restoration and protection. These issues often arise at the regional level but have a federal connection. For example, Congress may be faced with responding to various water-related crises, such as extreme drought or flooding issues (e.g., California drought in 2014 and coastal flooding issues associated with Hurricane Sandy or other storms). More broadly, Congress may be faced with addressing navigation challenges due to drought-induced low river flows or floods and water supply needs of farm and urban communities while also protecting threatened and endangered species. The crux of many of these challenges is how to balance competing demands for water and river management, including how to cope with the growing budget limitations and the effect of federal project operations on the environment. This report first discusses recent congressional activity and possible topics for the 114 th Congress. Next, it provides an overview of the federal role in water resources development, management, and protection, including a discussion of the two major federal water resources agencies--the U.S. Army Corps of Engineers (Corps) and the Bureau of Reclamation (Reclamation)--and related legislation. The report then provides an overview of overarching policy issues, including flood and drought preparedness and response, project funding and authorization priorities, and aquatic ecosystem restoration. The water resource issues of the 114 th Congress are shaped in part by the actions of past Congresses. Legislative activity often is specific to the federal water resource management agencies, such as the U.S. Army Corps of Engineers in the Department of Defense and the Department of the Interior's Bureau of Reclamation, or it is specific to water use by particular sectors, such as energy, agriculture, navigation, recreation, and municipal and industrial use. Occasionally, Congress takes up broader water resource policy issues, such as coordination of federal water resource activities and programs. Legislation enacted for both the Corps and Reclamation during the 113 th Congress was less than in prior Congresses, in large part due to congressional earmark policies, which may limit authorization of and appropriations for site-specific projects; however, some broad legislation was enacted for both agencies. The 113 th Congress enacted an omnibus Corps authorization bill, the Water Resources Reform and Development Act of 2014 (WRRDA 2014, P.L. 113-121 ). Congress also included in separate legislation ( P.L. 113-295 ) a provision increasing the fuel tax on commercial barges on federal inland waterways. In addition, the 113 th Congress provided regular and supplemental appropriations for the Corps to conduct its work and performed oversight on its flood and drought management and navigation actions, among other activities. The 113 th Congress also provided appropriations for Reclamation to conduct its ongoing activities. Energy and environmental policy affect water resources management and development. Two bills intending to facilitate the development of nonfederal hydropower were enacted in the 113 th Congress: a small conduit hydropower development bill to facilitate nonfederal hydropower development at Reclamation facilities ( P.L. 113-24 ) and a separate bill making alterations to the Federal Energy Regulatory Commission licensing process for certain projects ( P.L. 113-23 ). Several provisions related to water management in California were included in enactment of the FY2014 Consolidated Appropriations Act ( P.L. 113-76 , H.R. 3547 ) in January 2014. Also included in P.L. 113-76 was a one-year extension of the CALFED authorization (SS207), and reauthorization of the Reclamation States Emergency Drought Relief Act of 1991 (extended through 2017; SS206). The 113 th Congress also reauthorized the National Integrated Drought Information System (NIDIS, P.L. 113-86 ), which, among other research, produces various Drought Monitor products. The 113 th Congress also enacted a farm bill ( P.L. 113-79 ). In addition to providing support for farmers and crop production, farm bills provide support for agricultural water conservation and efficiency measures, conservation programs in priority watersheds, and groundwater protection and recharge, as well as water resource and infrastructure needs associated with soil and water conservation. The 2014 farm bill also amended and added to existing drought and flood disaster assistance for agricultural producers. The 113 th Congress considered but did not enact legislation to augment developed water supplies (e.g., water storage, water reuse), settle Indian water rights claims, lift restrictions on firearms at Army Corps projects, and provide direction for individual water projects and facilities. Several bills also would have authorized various regional aquatic ecosystem restoration efforts. These bills generally addressed issues related to the construction of projects for water quality and habitat restoration, as well as governance and reporting for ongoing federal restoration actions. Several bills related to aquatic ecosystem restoration throughout the country were considered in the 113 th Congress and were pending at its conclusion. These bills generally addressed issues related to water quality and habitat restoration, as well as project construction for restoration and water supply allocation among users and the environment. Bills authorizing comprehensive ecosystem restoration initiatives were introduced for the Great Lakes (e.g., H.R. 2773 and S. 1232 ), Long Island Sound ( H.R. 2174 and S. 1080 ), and Lake Tahoe ( H.R. 3390 and S. 1451 ). These bills addressed governance of ecosystem restoration initiatives and the reauthorization of funding to continue restoration efforts, among other things. Other bills addressed specific aspects of ongoing restoration initiatives, such as expediting restoration project approval in the Everglades ecosystem. H.R. 5764 did pass the House, but was not voted on in the Senate. H.R. 5764 would have authorized the Great Lakes Restoration Initiative and $300 million in appropriations annually from FY2015 to FY2019. The 113 th Congress also considered several different versions of California drought legislation, as well as other legislation to augment water supplies or deal with low water supplies on a broader level. The House twice passed legislation aimed at addressing operation of the federal Central Valley Project (CVP) in California ( H.R. 3964 and H.R. 5781 ) and the Senate also passed legislation to address CVP operations in times of drought emergencies ( S. 2198 ). However, House and Senate negotiators did not come to agreement on bill language prior to the end of the 113 th Congress. The 113 th Congress also considered water research and development legislation targeted at specific programs or issues, such as research related to desalination (e.g., H.R. 745 ) and state water resources research institutes ( S. 970 ). Similarly, the 113 th Congress considered legislation ( H.R. 5189 and S. 1971 ) to coordinate federal research and technologies to better understand and decrease the risks from the interdependencies of the energy (e.g., water use for oil and gas production and power plant cooling) and water sectors (e.g., energy for water transport and treatment). Unlike the 112 th Congress ( H.R. 5826 ), the 113 th Congress did not consider legislation addressing the broad federal water science and research portfolio. Water science and research is spread across more than 20 federal agencies. No single water research strategy or formal coordination or prioritization mechanism exists. Some stakeholders are concerned that current research is insufficient to prepare the United States to confront domestic and international water challenges. The 114 th Congress may address some measures left pending at the end of the 113 th Congress, and may consider other proposals as well. Because of recent water conditions (e.g., drought in portions of the West and Southwest), disasters, or legal or agency developments, certain basin issues are likely to receive congressional attention. These include the operation of federal reservoirs on the Sacramento and San Joaquin rivers (Central Valley Project in California) and on the Missouri River and its tributaries. Other river basins that may receive attention in the 114 th Congress include the Colorado, Klamath, and Rio Grande river basins. Additionally, future operation of Corps facilities on the Columbia River and its tributaries is central to discussions that are underway regarding modification of the Columbia River Treaty with Canada. Because of recent drought conditions in California and much of the West, Congress might again address drought assistance, planning, and preparedness through oversight hearings and/or legislation, including through Energy and Water Development Appropriations. (See " Drought and Flood Preparedness and Response " section below.) The 114 th Congress may conduct oversight of restoration activities, including those in the Chesapeake Bay, Everglades, Gulf Coast, Great Lakes, San Joaquin River, and Sacramento and San Joaquin Rivers Delta and its confluence with San Francisco Bay (Bay-Delta). Common themes in regional restoration efforts include demand for new project services (e.g., improved or new flood control, water supply, and navigation facilities), protection of threatened and endangered species, drought and flood management, and water quality concerns. The 114 th Congress also may react to efforts by the Administration to implement updated planning guidance for federal water resources projects and to guide federal investment in floodplains. Similarly, Congress may respond to Administration-wide efforts to incorporate climate change adaptation into agency plans and actions, including those being developed by the Corps and Reclamation. The 114 th Congress also may engage in discussion of how threatened and endangered species designations and related critical habitat and environmental mitigation requirements affect water resource project construction and operations. The federal government has long been involved in efforts to facilitate navigation, expand irrigation, and reduce flood and drought losses. For example, nearly every large river basin in the country--from the Columbia, Sacramento, and Colorado rivers in the West to the Missouri, Mississippi, and Delaware rivers--contains one or more federal dam or navigation projects. These projects have largely been constructed by the Corps and Reclamation. More recently, federal involvement has expanded to include municipal water supply development and efforts to protect water-related resources such as fish and wildlife. Increasing pressures on the quality and quantity of available water supplies have resulted in heightened local and regional water use conflicts throughout the country, particularly in the West and Southeast. Pressures include population growth, environmental regulation, in-stream species and ecosystem needs, water source contamination, agricultural and energy water demands, climate change and variability, and changing public interests, such as heightened demand for in-stream recreation. Congress historically has played a major role in water resources through authorization of and appropriations for regional and site-specific activities; however, numerous responsibilities are split or shared with state, local, and tribal governments, particularly related to water allocation and resource planning and management. Congress also establishes the policies that define the federal role in planning for federal water resource projects, and provides direction for construction, maintenance, inspection, and support of federal projects. Congress makes these decisions within the context of multiple and often conflicting objectives, competing legal decisions, long-established institutional mechanisms (e.g., century-old water rights, and contractual obligations), and in response to events such as floods, droughts, and structural failures. Federal water resource construction activities shrank during the last decades of the 20 th century, marking the end of earlier expansionist policies that had supported large federal investments in dams and hydropower facilities, navigation locks and channels, irrigation diversions, and flood control levees, as well as basin-wide planning and development efforts. Fiscal constraints, changes in national priorities and local needs, few remaining prime construction locations, and environmental and species impacts of construction and operation of federal projects all contributed to this shift. Although these forces are still active, there are proposals for renewed federal financial and technical assistance to address growing pressures on developed water supplies, to manage regional water resources to meet demands of multiple water uses, and to address the aging stock of water resources infrastructure. Recent drought conditions in the West and Southwest on top of extended and widespread drought in 2012, coastal flooding due to Hurricane Sandy and Hurricane Katrina, and Midwest floods of 2011 have raised other questions about the federal role in water resources. In particular, disasters have brought attention to the trade-offs in approaches to distributing federal appropriations among competing water resources projects, to risk management in water resources, and to the trade-offs in benefits, costs, and risks of the current division of responsibilities among local, state, and federal entities. Most of the large dams and water diversion structures in the United States were built by, or with the assistance of, Reclamation or the Corps. Historically, Reclamation projects were designed principally to provide reliable supplies of water for irrigation and some municipal and industrial uses. Corps projects were planned principally to improve navigation and reduce flood damages, with power generation, water supply, and recreation being incidental benefits. Reclamation currently manages hundreds of dams and reservoirs in 17 western states, providing water to approximately 10 million acres of farmland and 31 million people, as well as 58 power plants capable of producing 40 billion kilowatt-hours of electricity annually (enough for approximately 3.5 million homes), and which generate more than $1 billion in revenues annually. The Corps operates nationwide, and its activities are diverse. The Corps has constructed thousands of flood damage reduction and navigation projects throughout the country, including nearly 12,000 miles of commercially active waterways, nearly 1,000 harbors, and 600 dam and reservoir projects (with 75 hydroelectric plants generating 68 billion kilowatt-hours annually). Additionally, the Corps constructed, usually with nonfederal participation, roughly 9,000 miles of the estimated 100,000 miles of the nation's levees, but the agency only maintains 900 miles. The remaining levees are operated by nonfederal entities, often local governments or special districts. The Natural Resources Conservation Service (NRCS) in the U.S. Department of Agriculture also facilitates water resources development, primarily for flood control in small watersheds and for soil and water conservation purposes. For more information on USDA conservation programs and policies, see CRS Report R40763, Agricultural Conservation: A Guide to Programs , by [author name scrubbed]. Many other federal agencies have water-related programs (e.g., the Environmental Protection Agency, the U.S. Geological Survey, the National Oceanographic and Atmospheric Administration, National Aeronautics and Space Administration, Federal Emergency Management Agency, and energy-related agencies such as the Federal Energy Regulatory Commission and Power Marketing Administrations). However, the remainder of this report focuses on the projects, programs, and policies of the Corps and Reclamation. For more information on federal water projects and programs--including types of financing and financial assistance--see CRS Report RL30478, Federally Supported Water Supply and Wastewater Treatment Programs , coordinated by [author name scrubbed]. For more information on other federal water activities, see CRS Report R42653, Selected Federal Water Activities: Agencies, Authorities, and Congressional Committees , by [author name scrubbed] et al. During most years, the Corps responds to needs arising from flood and drought events, as well as performing its regular activities of constructing and operating and maintaining navigation, flood control, and ecosystem restoration projects and issuing permits for activities that may affect navigable waters and wetlands. As previously noted, Congress authorizes Corps water resources activities and makes changes to the agency's policies generally in an omnibus authorization bill, often titled as a Water Resources Development Act (WRDA). Although WRDA enactment is usually attempted on a biennial schedule, enactment is less regular in part because of multiple and conflicting stakeholder interests and tensions over potential changes in Corps policies. Also, the bill is not a reauthorization bill, per se--rather, it is largely an authorization bill, since few Corps authorities expire. The most recent WRDAs were enacted in 2000, 2007, and 2014. Congress typically appropriates funds for these activities in annual Energy and Water Development Appropriations acts, and, at times, it uses supplemental appropriations bills to fund Corps emergency activities. Hurricane Sandy in 2012 and Midwest flooding in 2011 raised many questions that the 114 th Congress may pursue, including those related to national flood risk and federal actions to reduce that risk. In many cases, Corps facilities and their operations are central to debates over multi-purpose river management, especially during drought and flood conditions. For example, reservoir management by the Corps, such as in the Apalachicola-Chattahoochee-Flint basin (which provides much of the water supply for Atlanta, Georgia), often is controversial and has been challenged in the courts. Likewise, Corps operation of dams on the Missouri River and its effect on downstream navigation, flood control, species, and upstream water supplies also remain controversial. Such controversies stem from conflicts over the various authorized uses and purposes for multipurpose projects. Since the early 1900s, Reclamation has constructed and operated many large, multi-purpose water projects, such as Hoover Dam on the Colorado River and Grand Coulee Dam on the Columbia River. Water supplies from these projects have been primarily for irrigation; however, some municipalities also receive water from Reclamation projects. Many of the largest facilities also produce hydropower. Construction authorizations slowed during the 1970s and 1980s due to several factors. In 1987, Reclamation announced a new mission recognizing the agency's transition from a water resources development and construction organization to one primarily occupied with managing water resources, including managing water and related resources in an environmentally and economically sound manner. Since then, increased population, prolonged drought, fiscal constraints, and water demands for fish and wildlife, recreation, and scenic enjoyment have resulted in increased pressure to alter operation of many Reclamation projects. Such changes have been controversial, however, as water rights, contractual obligations, and the potential economic effects of altering project operations complicate any change in water allocation, delivery, or project operations. In contrast to the Corps, there is no tradition of a regularly scheduled authorization vehicle (e.g., a WRDA) for Reclamation projects. Instead, Reclamation projects are generally considered individually; however, occasionally individual project authorizations are rolled into an omnibus bill, such as P.L. 111-11 enacted in in the 111 th Congress or P.L. 102-575 enacted in the 102 nd Congress. Because project authorizations are typically enacted in stand-alone legislation, project authorizations and Reclamation bills in general have slowed considerably since the 112 th Congress and the onset of congressional earmark moratoria. As with the Corps, Reclamation river and reservoir management in the face of drought conditions and climate change may also receive congressional attention. In many cases, Reclamation facilities and their operation are central to debates over multi-purpose river management, particularly during times of drought or years of lower than normal precipitation and runoff. For example, controversies associated with Reclamation water resources management in the Sacramento and San Joaquin river watersheds (CA), the Colorado River Basin, and the Klamath River Basin (CA and OR) have often been exacerbated by low water flows and have also been the subject of extended litigation--sometimes even in normal water years. Likewise, ongoing issues associated with Reclamation's operation of pumps in the San Francisco Bay/San Joaquin and Sacramento Rivers Delta (Bay-Delta) and their effect on water users and threatened and endangered species also are quite controversial. This situation also has been exacerbated by low water conditions in some years, including 2014--the third-driest water year on record for California and one of the most extreme drought years on record. Drought and resultant low water supplies are again projected for California and other western areas for the 2015 water year. Examples of Reclamation-related water project and management issues that may be considered during the 114 th Congress include the following: response to drought, and operations of federal reservoirs and water delivery; regulatory impediments to new water storage projects; status of Reclamation's Safety of Dams program; authorization, appropriations, and reporting to address aging infrastructure; Sacramento-San Joaquin Valley water reliability and species concerns (e.g., Bay-Delta Conservation Plan, CALFED reauthorization, and proposals to address Central Valley Project water supplies); miscellaneous project adjustments; Klamath River Basin restoration and Klamath project management; Colorado River water management; San Joaquin River restoration settlement funding and oversight. A broader issue that could receive attention from Congress is oversight of Reclamation's mission and its future role in western water supply and water resource management generally. As public demands and concerns have changed, so has legislation affecting Reclamation. For example, some project sponsors are considering new partnerships in project development, with project construction largely to be undertaken by nonfederal sponsors. In part, this has developed due to project sponsor frustration in delays over new project studies. Some are pursuing independent nonfederal financing of water resources infrastructure (see section on " Changing Federal Partnerships ," below). Further, many in Congress have questioned Reclamation's shift in focus from a water resources development agency to a water resources management agency and believe Reclamation is not doing enough to develop new water storage. Others argue for increased funds and attention to augment water supplies in the West through water reuse, recycling, aquifer storage and recovery, and desalination technologies. Some also have expressed frustration with regulatory hurdles facing project development and expansions. On the other hand, some groups contend Reclamation has not done enough to protect species and the environment generally. In addition to issues related to federal projects, the 114 th Congress faces a number of overarching water resources issues, including flood and drought management and response; project funding and authorization priorities; and aquatic ecosystem restoration. Congress is often faced with reacting to natural disasters such as droughts and floods. Drought conditions in California and elsewhere in the West and Southwest, and widespread drought in 2012, have left many areas vulnerable to drought-induced impacts, such as water supply and use limitations, reduced agricultural and power production, and degraded fish and wildlife habitat. Responsibilities for drought planning and response are split among various levels of government and involve many different federal agencies. Although Congress has enacted legislation to coordinate drought information through the National Integrated Drought Information System (NIDIS), there is no overarching national drought policy. In addition to NIDIS reauthorization ( P.L. 113-86 ) and drought-related provisions of the 2014 farm bill, the 113 th Congress enacted legislation ( P.L. 113-121 ) that authorized the Corps to assess its reservoir operations during drought and expanded EPA loan and loan guarantee opportunities and eligibility for water supply systems, as discussed in CRS Report R43298, Water Resources Reform and Development Act of 2014: Comparison of Select Provisions . Multiple bills in the 113 th Congress addressed drought operations of Reclamation facilities (e.g., H.R. 3964 , H.R. 4239 , and S. 2198 ). Others addressed water efficiency, conservation, and alternative supplies (e.g., H.R. 5363 , S. 2771 ); several would have facilitated federal or nonfederal water storage projects (e.g., H.R. 3980 , H.R. 5412 ). Additionally, some bills (e.g., S. 2016 ) proposed changes to the Stafford Act, an emergency assistance act. The majority of these bills consisted of authorizations, with many provisions' implementation contingent upon appropriations; a few bills proposed appropriations to address the western U.S. drought (e.g., H.R. 4039 , S. 2016 ). Because of ongoing drought conditions in much of the West, Congress might again address drought planning and preparedness through oversight hearings and/or specific legislation. For more information on drought impacts and congressional response, see CRS Report R43407, Drought in the United States: Causes and Current Understanding , by [author name scrubbed] and [author name scrubbed]; CRS Report IF00058, Drought Policy, Response, and Preparedness (In Focus) (pdf), by [author name scrubbed] and [author name scrubbed]; CRS Report RS21212, Agricultural Disaster Assistance , by [author name scrubbed]; and CRS Report R42854, Emergency Assistance for Agricultural Land Rehabilitation , by [author name scrubbed]. Periodic but intense flooding also garners attention from Congress. For example, Hurricane Sandy flooding in 2012 and Midwest floods in 2011 tested the nation's emergency response system and resulted in billions of dollars in damages. Although the Corps is the principal flood-fighting agency, other agencies also play a role in flood response and mitigation, such as FEMA's disaster assistance, flood insurance, and pre-disaster mitigation programs. Additionally, responsibilities for flood damage reduction are spread among federal, state, local, and tribal governments. States and local governments in many ways play a primary role in floodplain management because of their jurisdiction over land use decisions and local zoning ordinances--deciding where and how development may occur. The 113 th Congress was engaged in some aspects of flood policy: policies affecting FEMA's National Flood Insurance Program, flood damage reduction program and project authorizations in WRRDA 2014, and oversight recovery for areas recently affected by floods. Given the magnitude of the nation's flood risk (e.g., over $10.6 trillion in insured properties in coastal counties on the East Coast and along the Gulf of Mexico) and how the nation's flood risk is increasing, the 114 th Congress may consider additional ways to reduce flood risk, such as by improving infrastructure and protecting natural flood mitigation, removing disincentives to improved floodplain management, or promoting more pre-disaster recovery plans for highly vulnerable areas. U.S. water infrastructure is aging; the majority of the nation's dams, locks, and levees are more than 50 years old. Failure of these structures could have significant effects on local communities as well as regional and national impacts. Major capital investments in these structures have been limited in recent years and repairing these facilities would cost billions of dollars. Congressional funding has largely been at the project level and has remained essentially flat, while funding needs have increased over time. To date, no comprehensive reporting or funding solutions to these issues has been enacted. Some propose funding mechanisms that might be more conducive to major capital investments in these projects, such as authorization of loan programs for some infrastructure types, or else including water resource infrastructure among the eligible recipients of funding from an infrastructure bank (such as that proposed in H.R. 2553 in the 113 th Congress). Others have proposed utilizing revenues from project beneficiaries (e.g., hydropower revenues, increased user fees) to fund project repairs and upgrades, or even deauthorizing and/or transferring projects to nonfederal entities, such as state or local governments. Still others think that Congress requires more uniform information on the extent of this issue before it considers major funding solutions. In the 113 th Congress, the Senate held a hearing on this topic and enacted legislation that would require increased reporting by Reclamation on its aging infrastructure backlog ( S. 1800 ). (See also discussion below on " Changing Federal Partnerships .") Some have expressed frustration with the pace of authorization for federal water resource projects, and this has resulted in some local sponsors pursuing projects with limited federal partnership or support, or with expectations of future federal reimbursement or credit. An example is the potential construction of Sites Reservoir in California--an off-stream water storage project associated with the federal Central Valley Project (CA). Language authorizing nonfederal construction of proposed federal projects (as long as no federal funding is used) was included in H.R. 1837 and H.R. 6247 in the 112 th Congress and H.R. 3964 in the 113 th Congress. The FY2014 Consolidated Appropriations Act ( P.L. 113-76 , H.R. 3547 ) included a provision authorizing the Secretary of the Interior to partner with local joint power authorities to advance authorized planning and feasibility studies, among other things, including providing grants for such purpose (SS208). The 113 th Congress (e.g., P.L. 113-121 ) expanded the ability for nonfederal entities to advance funding for federal projects to spur project construction. Such proposals, however, raise the question of whether federal investment is needed if local sponsors can finance the projects on their own, whether the federal government will be able to meet the expectations for reimbursement, and whether the nonfederal sponsors with available financing will determine which projects get reimbursed from limited federal water resources infrastructure funds. Another approach was initiated in the 113 th Congress through its authorization of Title X of WRRDA 2014, the Water Infrastructure Finance and Innovation Act (WIFIA). The title authorized a pilot program, to be administered by the Corps and the Environmental Protection Agency, for loans and loan guarantees for certain flood damage reduction, public water supply, and wastewater projects. WIFIA was modeled after a similar program that assists transportation projects, the Transportation Infrastructure Finance and Innovation Act, or TIFIA, program. Water resource project funding is often a part of the debate on congressionally directed spending, or "earmarks." Although water resource project development has historically been directed by Congress, the site-specific nature of the authorizations and appropriations process resulted in projects being subject to earmark disclosure rules and earmark moratoria beginning in the 112 th Congress. Earmark moratoria appear to be altering the makeup of Corps and Reclamation appropriations in particular by reducing the congressional additions of specific projects to the budget, and by Congress funding broad categories of activities rather than specific projects. As a result, some projects that have historically benefitted from congressional support have received less (or no) funding in recent enacted appropriations bills. In addition to funding impacts, earmark moratoria have also influenced consideration of site-specific authorizations of water resource projects. The 114 th Congress may consider the status and priority of major federal efforts to restore aquatic ecosystems that have been altered or impaired by development, habitat loss, and federal water resource projects. Some of these restoration initiatives include those in the Everglades, California Bay-Delta, Great Lakes, Gulf Coast, Chesapeake Bay, Klamath Basin, and elsewhere. The 114 th Congress may consider a number of issues pertaining to these ecosystems. For example, Congress may consider legislation to authorize a framework for governance and a comprehensive restoration plan for the Great Lakes and might conduct oversight over the implementation of restoration efforts in the Gulf Coast region. Further, lack of congressional authorization for new construction projects in the Everglades, such as the Central Everglades Planning Project (CEPP), has caused concern that the initiative could be delayed. Congress might consider policies that would streamline authorizations to allow for more projects to be implemented. Funding for existing and new restoration initiatives might generate controversy and could face challenges in the 114 th Congress. Deliberations over FY2016 appropriations could also address ecosystem restoration initiatives in various appropriations bills.

The 114th Congress faces many water resource development, management, and protection issues. Congressional actions shape reinvestment in aging federal infrastructure (e.g., dams, locks, and levees) and federal and nonfederal investment in new infrastructure, such as water supply augmentation, hydropower projects, navigation improvements, and efforts to restore aquatic ecosystems. These issues often arise at the regional or local levels but frequently have a federal connection. Ongoing issues include competition over water, drought and flood responses and policies, competitiveness and efficiency of U.S. harbors and waterways, and innovative and alternative financing approaches. The 114th Congress also may continue oversight of operations of federal infrastructure during drought and low-flow conditions, past large-scale flooding issues (e.g., Hurricane Sandy, Hurricane Katrina, Missouri and Mississippi River floods), and balancing hydropower generation, recreational use, and protection of threatened and endangered species. In addition to oversight, each Congress also provides appropriations for major federal water resource agencies, such as the U.S. Army Corps of Engineers (Corps) and the Bureau of Reclamation (Reclamation). The issues before the 114th Congress are shaped in part by what earlier Congresses chose to enact and consider. Measures considered but not enacted by the 113th Congress include California drought legislation, various drought policy and water efficiency and conservation measures, regional restoration legislation (e.g., Klamath Basin, Great Lakes, Chesapeake Bay), actions to expedite water storage projects and permits, settlement of Indian water rights claims, and a lifting of restrictions on firearms at Army Corps projects. Because of recent water conditions, disasters, or legal or agency developments, certain river basin issues are particularly likely to receive congressional attention during the 114th Congress. The Columbia River, Missouri River, and Sacramento and San Joaquin River (Central Valley Project) basins fall into this category. Other potential topics of congressional interest include emergency drought or flood legislation, private and public hydropower, water research and science investment and coordination, aging infrastructure, and environmental policy. The 113th Congress enacted an omnibus Corps authorization bill, the Water Resources Reform and Development Act of 2014 (WRRDA 2014, P.L. 113-121). In addition to authorizing new programs (e.g., Water Infrastructure Finance and Innovation Act) and Corps construction projects, the legislation also established new processes that may shape how subsequent Corps project authorizations are identified. A Corps authorization bill often is considered by each Congress; enactment, however, has been less regular, with the most recent bills enacted in 2014, 2007, and 2000. The 113th Congress also enacted legislation to facilitate small conduit hydropower development (P.L. 113-23 and P.L. 113-24). This report discusses recent congressional activity and possible topics for the 114th Congress. It provides an overview of the federal role in water resources development, management, and protection, with a focus on projects of the two major federal water resources agencies--Reclamation and the U.S. Army Corps--and related legislation. It also discusses overarching policy issues, such as drought and flood management and response, project funding and authorization priorities, and aquatic ecosystem restoration.

On February 11, 2013, NASA launched Landsat 8, a remote sensing satellite jointly operated by the U.S. Geological Survey and NASA. Landsat 8 is the latest in a series of Earth-observing satellites that began on July 23, 1972, with the launch of Landsat 1. Landsat has been used in a wide variety of applications, including land use planning, agriculture, forestry, natural resources management, public safety, homeland security, climate research, and natural disaster management, among others. In the current partnership, NASA develops the satellite and the instruments, launches the spacecraft, and checks its performance. Then the U.S. Geological Survey (USGS) takes over satellite operations, and manages and distributes the data. All Landsat data held in USGS archives are available for download with no charge and no restrictions. (See text box below for more details about the satellites and remote sensing instruments.) Landsat satellites have collected remotely sensed imagery of the Earth's surface at moderate resolution for over 40 years. ( Table 1 shows a comparison of the spatial resolution for high, moderate, and low resolution land imaging satellites.) At present two satellites, Landsat 7 (launched in 1999) and Landsat 8, are in orbit and supplying images and data for many users. Landsat 5--launched in 1984--was also operating until late 2011; however, in November 2011 USGS announced that it had stopped acquiring data from Landsat 5 because of deteriorating electronic components. The Landsat Data Continuity Mission (LDCM, now called Landsat 8) was initially planned for launch in July 2011 and would have filled the data gap in Landsat coverage after USGS stopped collecting data from Landsat 5, but because of schedule delays it was not placed in orbit until February 2013, when it was renamed Landsat 8. On May 30, 2013, data from Landsat 8 became available. Users of Landsat imagery and data cover a broad spectrum. A 2011 survey and analysis determined that the predominant sector using Landsat was academia (33%), followed by private business (18%), federal government (17%), state government (16%), local government (10%), nonprofit institutions (4%), and tribes or nations (less than 1%). Within this user community as determined by the study, the majority of survey respondents used Landsat imagery to answer questions and solve problems (91%), processed the imagery for themselves or others (62%), and made decisions based on the imagery (57%). Of the respondents, 19% used Landsat imagery to develop algorithms, 12% provided or sold imagery or value-added products, and 2% developed commercial software. With the 2013 launch of Landsat 8, a question that arises for Congress is whether there should be a Landsat 9. More generally, should Congress support the development of another moderate resolution land-imaging satellite, and what are the alternatives? This report describes aspects of Landsat's history and discusses potential alternatives to a fully federally supported satellite system, such as commercialization, privatization, and other possible arrangements that would provide continuity beyond the 42-year record of Landsat remote imaging. These other arrangements could include alternative sources of multispectral and thermal imaging, such as partnerships, or procurement of data from other, foreign, moderate resolution satellite systems. A key part of any future congressional debate on Landsat is the satellite's use and value. These issues are discussed below in the context of the 2014 White House National Plan for Civil Earth Observations and an ongoing NASA/USGS Sustainable Land Imaging Architecture Study Team project. Some congressional views on a future U.S. land imaging program are also explored. Most proponents agree that Landsat 8's 30-meter resolution--its ability to capture images with its Operational Land Imager (OLI) instrument at the scale of about a baseball diamond--renders it a valuable tool for characterizing human-scale processes such as urban growth, agricultural irrigation, and deforestation. They also note that the consistent and continuous collection of imagery from the succession of Landsat satellites since 1972 makes it possible to document land changes because images are comparable. This comparability is possible despite changes in the satellites and the onboard instruments over 42 years. Some also argue that the current policy of making all Landsat imagery available at no cost is a prime value of the program. The current no-cost policy, however, does not reflect the varied history of the program and earlier attempts to commercialize Landsat. During previous deliberations, Congress considered commercializing the Landsat system until passage of Land Remote Sensing Policy Act of 1992 ( P.L. 102-555 ). The attributes just discussed--imagery at a 30-meter scale, continuous and comparable imagery and data of the Earth's surface for 42 years, and the no-cost policy for Landsat data--all could factor in a future discussion about whether Landsat would be amenable to commercialization now, over 20 years since Congress last debated a commercialization option. The following discussion traces earlier efforts to commercialize Landsat and may provide some context for congressional discussion about Landsat's future. Almost since the beginning of satellite launches, including both land imaging and weather satellites, privatization of satellite systems has been discussed. Efforts to privatize Landsat began during the Carter Administration and accelerated during the Reagan Administration. The Carter Administration decided that Landsat was mature enough to move from a research land remote sensing system under NASA to an operational system under the National Oceanic and Atmospheric Administration (NOAA), which had successfully managed geostationary and polar orbiting weather satellites. The Carter Administration also asserted that under NOAA management, the user base for Landsat data would eventually grow. Private companies would assume responsibility for their own remote sensing systems, and would provide data for government and private customers. In a policy shift to more rapid privatization of operational satellite systems, the Reagan Administration in March 1983 proposed to shift both Landsat and weather satellite system operations, as well as future ocean-observing satellite systems, from the federal government to the private sector. Congress raised concerns that the Reagan Administration was moving too quickly toward privatizing weather satellites without congressional involvement. The opposition from Congress and other stakeholders to privatizing NOAA weather satellites led to Congress enacting language prohibiting their sale in the FY1984 appropriations act funding the Department of Commerce ( P.L. 98-166 ). In deliberations leading up to that prohibition, the House Science and Technology Committee suggested that pursuing the sale of the weather satellites distracted from the more important issue--maintaining global leadership in land remote sensing (i.e., Landsat). In fact, the committee urged that the debate shift back to its original track--namely, how to best accomplish a transfer of land remote sensing capability to the U.S. private sector. Ultimately, the issues of whether and how to privatize the system, which federal agency should be responsible, and how public and private funding and operations should be combined were resolved in the Land Remote Sensing Policy Act of 1992 ( P.L. 102-555 ). The act transferred Landsat program management from Commerce to NASA and the Department of the Interior (DOI). Differing views of the Landsat program's nature--namely, whether the satellites served public or private interests--shaped the outcome of the privatization effort. Evolving views over the public or private nature of the program were influenced by factors other than funding. One observer identified four factors: 1. Landsat data proved important in planning U.S. military operations in the 1992 Gulf War. 2. Other countries had launched similar land remote sensing satellites, and these spacecraft--particularly the French SPOT satellite--were perceived as possible challenges to the U.S. stake in the international market for remote sensing data. 3. Growing interest in global climate change and its effects on the Earth's surface led scientists to increasingly value time-series data from a consistent platform in space for identifying environmental changes. 4. The difficulties of commercializing the Landsat system became clear, and federal agencies perceived that private companies might not be able to provide equivalent data at the scale the agencies required. These and other factors led Congress to accept the idea of Landsat as a public good and to enact P.L. 102-555 . One other factor, for example, was the cost of Landsat images. P.L. 102-555 found that "the cost of Landsat data has impeded the use of such data for scientific purposes, such as for global environmental change research, as well as for other public sector applications." Consequently, the act established, with some restrictions, that unenhanced data from Landsat should be made available "at the cost of fulfilling user requests," or COFUR. USGS extended the COFUR policy to all Landsat data products in its Landsat Data Distribution Policy, which also stated that pricing would not be based on the recovery of capital costs of satellites, ground systems, or other capital assets previously paid for by the U.S. government. The current USGS policy is to make all Landsat imagery and data freely available for downloading. The Appendix provides further details about the efforts to privatize Landsat in the 1980s and early 1990s. Other types of remote sensing imagery and data, both public and commercial, are available from satellites that provide different spatial resolutions as well as different frequencies of coverage over the same location. (See Table 1 .) High-resolution, narrow-coverage imagery might be considered more marketable than moderate-resolution Landsat imagery. Arguably, data from low-resolution weather satellite images of cloud cover that can show the same location within one or two days might also be more marketable, although Congress decided against privatizing U.S. weather satellite data in the 1980s (see discussion above). Marketability issues aside, it may be useful for policy makers to consider some views of the value of Landsat imagery and data as a context for congressional deliberation on the future of the program. The National Plan for Civil Earth Observations is intended "to provide strategic guidance for a balanced portfolio of Earth observations and observing systems." The plan was developed following enactment of the NASA Authorization Act of 2010 ( P.L. 111-267 , Section 702), which tasked the Office of Science and Technology Policy (OSTP) with developing a mechanism to ensure greater coordination of research, operations, and activities for civilian Earth observations, including development of a strategic implementation plan. The statute requires that OSTP update the strategic implementation plan every three years. The National Plan stated that President Obama's FY2015 budget request provided support for federal agencies to "maintain a sustained, space-based, land-imaging program while ensuring the continuity of 42 years of multispectral information and 36 years of thermal-infrared land-surface information from space, which are unique sources of terrestrial data for understanding land coverage." Although the Landsat system was not specified by name, this seemed to refer to the Landsat observational record. The National Plan classified federal programs based on the duration of the federal commitment to making Earth observations. Programs could involve "sustained observations"--generally those measurements requiring a federal commitment of seven years or more--or "experimental observations"--measurements that are time-limited. The report placed a priority on sustained observations, and further subdivided and ranked the supporting action required by the federal government as (1) continuity of sustained observations for public services, and (2) continuity of sustained observations for Earth system research. The National Plan provided specific direction to the federal agencies to carry out sustained observations. It stated that NASA, together with the Secretary of the Interior, will implement a 25-year program of sustained land imaging for routine monitoring of land-cover characteristics, naturally occurring and human-induced land-cover change, and water resources, among other uses. The National Plan further directed the agencies to "ensure that future land-imaging data will be fully compatible with the 42-year record of Landsat observations." Moreover, the National Plan listed agency responsibilities, which match the currently described shared responsibilities between NASA and USGS. NASA would be responsible for satellite development, launch, and commissioning, and USGS would be responsible for user requirements, development and operation of ground systems, operational control once in orbit, and processing, archiving, and distributing data and products. It appears that the National Plan ranked the value of Landsat-type observations relatively high, and called for the continuation of similar types of space-based observations. The National Plan included a ranking of high-impact observation systems--based on a study called the Earth-Observation Assessment (EOA)--which placed Landsat as the third-highest-ranked observing system out of 145 ranked systems, behind only global positioning satellites (GPS) and Next Generation Weather Radar (NEXRAD). In a footnote to its stated requirement for the NASA and USGS to implement a 25-year program of sustained land imaging, the National Plan noted that a robust land-imaging program would also include other types of data to supplement the optical imagery that is collected by Landsat. The other types of data (not collected by Landsat) would include radar, LIDAR, and gravity measurements, as well as others that would be needed to measure changes in topography, biomass, ecosystem flux, soil moisture, land subsidence, water resources, and glaciers. The footnote suggests that the envisioned 25-year program might include a broader array of observations, from different instruments and platforms both space- and airborne, than the types of instruments currently aboard Landsats 7 and 8. The Administration is examining a future land imaging program that may depart from the current Landsat "model"--namely a dedicated satellite pair each with a moderate-resolution multispectral scanner and a thermal imager. NASA and USGS are crafting a post Landsat-8 strategy via the Sustainable Land Imaging Architecture Study Team (AST), which appears to be following the broad guidelines laid out in the National Plan, discussed above. Continuity of the data record is a key theme in the AST, but according to NASA "this does not necessarily mean the imagery per se, but the usable products that define the utility of the data record." Sustainability is another key theme, and according to NASA a sustainable program would provide data products for the "long haul, without extraordinary infusions of funds, within the budget guidance provided." NASA identifies reliability as a third key theme, and specifies that sustainable land imaging data sets "should be able to draw on equivalent or near equivalent deliverables from data sources to provide the data for the highest priority land imaging data products." Notably, NASA adds that reliability also means that loss of a single satellite or instrument should not "cripple the program or significantly impact users, and the program will exhibit graceful degradation." In previous discussions about pending gaps in Landsat coverage (when Landsat 5 was anticipated to fail before Landsat 8 could be placed in orbit), some Landsat product users suggested that moderate resolution optical imaging satellites of other nations might supply data to fill the Landsat gap. A 2007 report indicated that the global coverage of the Landsat orbiters and their ground-based receivers could not be duplicated by foreign moderate resolution satellites, but they could provide a partial, short-term fix to limit losses of some Landsat data and imagery. In 2005, a Landsat Data Gap Study team formed by USGS and NASA found that no international satellite program, current or planned, has the onboard recording capacity, the direct receiving station network, and the data production systems to routinely perform the full Landsat mission. The Data Gap Study team did conclude, however, that capturing and archiving data from comparable systems could reduce the impact of a data gap. The AST will likely revisit this option and reassess the foreign satellite alternative, given that nearly 10 years has passed and the availability of moderate resolution satellite data from non-U.S. sources has changed. In the current Landsat partnership, NASA develops the satellite and the instruments, launches the spacecraft, and checks its performance. Then USGS takes over satellite operations, and manages and distributes the data. In its FY2015 congressional budget justification, USGS states that Department of the Interior (DOI) bureaus rely on Landsat as a data source on wildfires, consumptive water use, land cover change, rangeland status, and wildlife habitat, as well as other departmental responsibilities. USGS proposes to increase funding for Landsat-related activities under its Climate and Land Use Change organizational division, and would allocate $1 million for land remote sensing and $500,000 for land change science. In addition to creating a set of Landsat-based products that would assist natural resource managers at DOI, the budget request states that funding for Landsat-related activities would help develop essential climate variables (ECVs) and climate data records (CDRs). CDRs are long-term time-series measurements that support a variety of ECVs such as surface temperatures, fire disturbance, snow cover, glaciers, ice caps, permafrost, surface water extent, land cover, and biomass. In the budget justification, USGS describes its participation in the NASA/USGS Sustainable Land Imaging Architecture Study Team, examining long-term operational alternatives to meet "Congressional and Administration directives to devise an aerospace architecture designed to ensure 20 years of sustained land imaging that will provide data compatible with the past 41 years of Landsat data." The AST architecture plan for agency responsibilities matches that described in the National Plan, namely that NASA would develop Landsat-compatible land-imaging capabilities, and USGS would continue to fund ground system development, post-launch operations, data processing, archiving, and distribution. USGS adds that the AST will consider new instruments and satellites, as well as international partnerships. Neither the Senate nor the House had acted upon the DOI appropriations legislation for USGS prior to September 30, 2014, the end of the fiscal year. The House Committee on Appropriations reported H.R. 5171 , the DOI appropriations bill, on July 23 together with an accompanying report. In the report, the committee supported the requested increases for USGS Landsat science products for climate and natural resources assessments, under the Climate and Land Use Change line item, as described above. In its FY2015 congressional budget justification, NASA states that Landsat is "the only satellite system that is designed and operated to observe repeatedly the global land surface at moderate resolution. Landsat data are available at no cost to those who work in agriculture, geology, forestry, regional planning, education, mapping, and global climate change research." As with USGS, NASA describes its participation in the AST, and states that its "near-term activities will focus on studies to define the scope, measurement approaches, cost, and risk of a viable long-term land imaging system that will achieve national objectives." According to both NASA and USGS budget justifications, the Administration would use the results of the AST study to craft a proposal for a system to follow Landsat 8. However, NASA is already committing funding for a satellite system to succeed Landsat 8. For FY2015, NASA proposed $64.1 million for Land Imaging, an increase from the FY2014 enacted amount of $30 million. If enacted, these funds would total nearly $100 million for NASA's first steps toward the successor to Landsat 8. Some of the complexity and challenges to a Landsat 8 follow-on mission were revealed in remarks by the NASA Earth Science Division director at a May 28, 2014, meeting, according to one report. One challenge for policy makers includes providing observational continuity with Landsat 8 and its predecessors, yet keeping costs low--lower than costs for Landsat 8. At the meeting, the NASA Earth Science Division director noted that the Administration wants NASA to explore all options to achieve this goal, including options like a hosted payload and international partnerships, as opposed to a stand-alone payload and launch vehicle and an entirely U.S.-based project. Another challenge is to reconcile the Administration directive with congressional perspectives, one of which is skeptical of both the hosted payload strategy and an international partnership. Congress's perspective is likely in agreement with the Administration about the need to keep costs low (discussed in the next section). Senate appropriators have been critical of the Administration's current approach to continuing a Landsat-type moderate-resolution Earth observing system. In its report accompanying S. 2437 , the Commerce, Justice, Science, and Related Agencies appropriations bill for FY2015, appropriators stated that "the Committee does not concur with various administration efforts to develop alternative 'out of the box' approaches to this data collection--whether they are dependent on commercial or independent partners." In the report, the committee emphasized its concerns over a potential data gap should Landsat 7 fail before a successor satellite was launched: such a failure would mean that instead of 8 days for continuous terrestrial coverage with two satellites, it would take 16 days with just Landsat 8. With these concerns, the committee stated that NASA "should proceed with an acquisition in fiscal year 2015 for a mission to launch a follow on to Landsat 8 by not later than 2020." However, the committee also stressed the need to keep costs low, specifically below $650 million, while at the same time noting that NASA was $100 million below what was needed--in a notional FY2016 budget--for a 2020 launch. In the report, appropriators noted that they expected NASA to present a FY2016 budget "to reflect resources necessary to meet that [2020] launch date." For FY2015, Senate appropriators recommended $68.1 million for Landsat Data Continuity, $4 million above the President's request. The committee's views in its FY2015 report echo remarks a year earlier in the report accompanying the Commerce, Justice, Science, and Related Agencies appropriations bill for FY2014. In that report, appropriators stated that they were "highly skeptical of either a hosted payload or international partner concept for Landsat 9." The committee noted that these alternate approaches have already been considered on multiple occasions over the past 40 years, and "have only distracted and delayed the inherently governmental role in preserving the continuity of Landsat data." In the FY2014 report language, appropriators chided NASA for unrealistic expectations that a Landsat 9 would cost $1 billion, and capped spending at $650 million, noting that the lower figure was substantially below that required for Landsat 8. Senate appropriators recommended $30 million for Land Imaging activities, matching the Administration's request for FY2014. In their FY2014 report accompanying H.R. 2787 , the Commerce, Justice, Science, and Related Agencies Appropriations Bill, 2014, House appropriators (majority) objected to NASA's budget request for new projects "that solely or primarily support the requirements of other agencies, including the United States Geological Survey." The report stated that such projects would have significant and undefined outyear costs and "crowd out long term investments in NASA's own scientific priorities." Accordingly, report language instructed that "no funds should be spent in pursuit of a new land imaging system for USGS." In the "Minority Views" section of the report, appropriators expressed disappointment in the elimination of "funding for several upcoming climate satellite programs, including: (1) NASA's Landsat, which provides valuable data in support of agriculture, forestry, and regional planning." In the FY2014 Omnibus Appropriations bill, enacted as P.L. 113-76 , the Senate view was adopted, and $30 million was provided for Land Imaging at NASA for the next Landsat-like mission after Landsat 8. House appropriators made no mention of Landsat or Land Imaging spending in the FY2015 appropriations bill ( H.R. 4660 ) that passed the House or in the accompanying report ( H.Rept. 113-448 ). Earlier objections--expressed in the FY2014 House appropriations bill report--to a Landsat-like land imaging satellite as not aligning with the NASA mission were not voiced in the FY2015 appropriations bill. That earlier objection was likely part of a debate regarding the mission focus of NASA, and whether it should be responsible for funding satellites that are turned over to other federal agencies to operate, such as Landsat (operated by USGS) and the nation's civilian weather satellites (operated by NOAA). Senate appropriators had also raised concerns about a joint satellite program--civilian weather satellites--between NASA and NOAA in the FY2013 budget process, but with the opposite recommendation from that of the House. As with the joint-agency Landsat program, NASA acquires the weather satellites and their instruments, launches them into orbit, and then hands over operations to another agency, in this case NOAA. In contrast with Landsat, however, Congress appropriates funds directly to NOAA for procuring the weather satellites; NOAA then transfers funds to NASA for satellite and instrument acquisition. In the report accompanying the FY2013 appropriations bill for Commerce and Justice, Science, and Related Agencies, Senate appropriators chose to transfer funding and responsibility for procuring NOAA's operational satellites to NASA. Their decision was not based on a debate over respective agency missions, which seemed to be the case for House majority appropriators in the FY2014 appropriations process, but was based on the view by Senate appropriators that NOAA was mismanaging the satellite procurement process and NASA could do a better job. The weather satellite procurement issue illustrates the different views held by House versus Senate appropriators over the role of NASA in satellite procurement for joint-agency satellite programs. These different views may be a subject of congressional debate when Administration budget requests for the next Landsat ramp up in the next few years. Although a congressional debate over the next phase of the Landsat legacy is in its early stages, the discussion above notes potentially divergent opinions among the Administration and Congress. Congress is likely to discuss a range of views regarding the future of satellite-based land imaging. Some in Congress may wish to revisit options of privatization or commercialization, which has a long and well-documented history (see discussion above). Others, such as some members of the Senate Appropriations Subcommittee on Commerce, Justice, Science, and Related Agencies, have consistently expressed the view that preserving data continuity from the Landsat satellites is an inherently governmental role. Some members of the House Appropriations Subcommittee on Commerce, Justice, Science, and Related Agencies have recently questioned if the multiagency Landsat program aligns within the fundamental mission of NASA, since NASA acquires and launches Landsat, but a different agency, USGS, assumes operational responsibility, and manages and distributes Landsat data. A common theme likely to be expressed by both the House and Senate majorities and minorities will be the need to keep costs under control and at least below the amount appropriated for Landsat 8. In addition to a unified admonition to keep the cost of a Landsat successor low, Congress may also exert pressure on the Administration to move forward on the next land imaging mission and reduce the chances of a data gap if Landsat 7 or 8 fails before the next satellite is placed in orbit. However, what a data gap actually means may be in question depending on the results of the AST study, and the resulting implementation strategy. If, for example, the Administration determines that data from non-U.S. satellites suffice to offset some or most of the data loss from a Landsat 7 or 8 failure, then Congress would likely revisit the needs, capabilities, and timeline for developing the next U.S. land-imaging satellite. The broad themes outlined by the AST of continuity , reliability , and sustainability will likely not face congressional opposition. However, Congress may debate what those themes actually mean in terms of more detailed program requirements, and particularly how much funding should be appropriated to meet those requirements. In contrast to its opposition to the privatization of NOAA weather satellites, Congress in 1983 did not oppose Reagan Administration efforts to transition Landsat to the private sector. The Carter Administration initiated the move toward privatization when it released Presidential Directive 54 in 1979, which recommended transfer of Landsat operations from NASA to NOAA to convert Landsat from a research to an operational program. The directive also recommended development of a plan for eventual transition of Landsat to a private-sector operation. It was recognized at the time that the market for Landsat products was small, and the customer base grew smaller each time the price of Landsat data rose. The price of a Landsat image rose 300% in 1981, when the Office of Management and Budget directed that operating costs would be recovered by data sales. Sales shrank again when NOAA took over full responsibility for the program in 1983, and raised prices for Landsat data to cover its costs and to prepare customers for commercial prices. Despite these indicators that the commercial market for Landsat data was not robust, Congress gave its support to privatization by passing the Land Remote Sensing Commercialization Act of 1984 ( P.L. 98-365 ). The law established the broad policy and financial requirements for the transfer, and authorized the Department of Commerce to license private remote sensing space systems that complied with provisions of the act. The law required that operators make unenhanced Landsat data available to all users on a nondiscriminatory basis; no preference could be given to one class of data buyers over another. Landsat proponents supported the move to privatization, in part because of fears that the Reagan Administration would cancel the program altogether. Proponents were also concerned that uncertainty over the program's future would forestall investment in hardware and software necessary to process Landsat data. Landsat supporters also argued that privatization would ensure continuity of the data--an important feature of time-series observational data from satellites generally, allowing data users to analyze changes over time. Supporters argued that privatization would eventually result in a lower price for Landsat data. The larger context for the future of Landsat was, in part, a dispute over whether the satellite served primarily public or private interests. Landsat provided the government with data for scientific research, managing federal lands, and carrying out other responsibilities. It also provided data with direct economic value for managing private lands, or for exploration for oil, gas, and minerals. The argument over Landsat's future concerned which use was more important. Government Subsidies and Problems on the Path to Privatization Because the market for remote sensing data was considered underdeveloped in 1984, the federal government decided to provide a $250 million subsidy to the Earth Observation Satellite Company (EOSAT), which was selected by NOAA to operate the Landsat system. The subsidy would be used by EOSAT in addition to its capital to develop two new spacecraft, Landsat 6 and Landsat 7, that would replace the then-operating Landsat 4 and Landsat 5. In addition to the $250 million subsidy, the federal government would also pay launch costs for the two new satellites, and would continue to cover operational costs for the Landsat program through the expected lifetimes of Landsats 4 and 5. The Reagan Administration decided not to fulfill the original funding obligation to EOSAT, and several years of dispute ensued between the Administration and Congress over Landsat funding. Ultimately, the contract was revised to require the development of only Landsat 6, despite earlier agreement that two satellites would be needed to ensure data continuity. The funding dispute led to further debates over the future of the Landsat program. Complicating the debate were different views about which launch vehicle should carry the next Landsats into orbit. EOSAT proposed that the satellite be designed for the space shuttle. However, the Reagan Administration disagreed, and NOAA instructed EOSAT to prepare the spacecraft for launch on an expendable rocket. Outcome The Land Remote Sensing Policy Act of 1992 ( P.L. 102-555 ) transferred Landsat program management from Commerce to NASA and the Department of the Interior (DOI), which effectively ended nearly a decade of debate over privatizing Landsat. Whereas weather satellites were quickly identified as a public good during the 1983 debate, Landsat proved more difficult to categorize. One distinction is that NOAA has had a clear mandate to provide satellite data for weather services. In contrast, NOAA was selected to manage the Landsat program because of the agency's success with operating the weather satellites, and as an interim step en route to privatizing Landsat. The relatively unclear mandate for collecting land surface remote sensing data at NOAA may also have eroded customer confidence in the Landsat system, and in the agency's commitment to developing infrastructure, training personnel, and making other investments that would have bolstered the market for Landsat products. Although the Land Remote Sensing Policy Act of 1992 reversed the privatization track for Landsat and returned the satellite system to the federal government, the act also authorized the Secretary of Commerce to license operators of private remote sensing space systems. It allowed the operators to use their data as they wish, including choosing their customers and offering their data at prices that vary by customer. Some analysts regard this licensing provision under Subtitle VI of the act as perhaps the most important provision for fostering commercial remote sensing prospects in the United States. Further, the development of technology to download, store, and distribute remotely sensed data contributed to the ability of commercial interests to add value to satellite data. The advent and rapid growth of geospatial information systems (GIS) has spurred an explosion of interest in the use of geospatial information, which typically includes land remote sensing data from space (e.g., Google Earth).

On February 11, 2013, NASA launched Landsat 8, a remote sensing satellite jointly operated by the U.S. Geological Survey and NASA. Landsat 8 is the latest in a series of Earth-observing satellites that began on July 23, 1972, with the launch of Landsat 1. Landsat has been used in a wide variety of applications, including land use planning, agriculture, forestry, natural resources management, public safety, homeland security, climate research, and natural disaster management, among others. A question for Congress is, should there be a Landsat 9? More generally, should Congress support the development of another moderate resolution land-imaging satellite, and what are the alternatives? Landsat 8's 30-meter resolution--its ability to capture images at the scale of about a baseball diamond--renders it a valuable tool for characterizing human-scale processes such as urban growth, agricultural irrigation, and deforestation. Landsat supporters also would contend that the consistent and continuous collection of imagery from the succession of Landsat satellites since 1972 makes it possible to document land changes, because images are comparable over that 42-year time period. In congressional deliberations about the future of Landsat, it is likely that the topics of privatization and commercialization will be revisited as one alternative to the current arrangement. Landsat's 30-meter resolution, the continuous and comparable 42-year record of data, and the current policy of making all Landsat data available for no cost would factor into a discussion about commercialization. Efforts to commercialize Landsat in the 1980s and early 1990s culminated with passage of the Land Remote Sensing Policy Act of 1992, which reversed the privatization track for Landsat and restored management of the satellite system back to the federal government. Although a congressional debate over the next phase of the Landsat legacy is in its early stages, there are potentially divergent opinions among the Administration and Congress. The Administration is examining a future land imaging program that may depart from what might be considered the current Landsat "model"--namely, a dedicated satellite pair, each with the same or similar instruments as those aboard Landsats 7 and 8, the two currently orbiting satellites. For example, the Administration is directing NASA to explore options like a hosted payload and international partnerships, as opposed to a stand-alone payload and launch vehicle and an entirely U.S. project. The Administration, through NASA and the U.S. Geological Survey, is crafting a post-Landsat 8 strategy via the Sustainable Land Imaging Architecture Study Team, which broadly follows guidelines laid out in the White House National Plan for Civil Earth Observations. Senate appropriators have been critical of the Administration's current approach to continuing a Landsat-type moderate-resolution Earth-observing system, namely one that may depart from the current Landsat model. In addition, the committee has emphasized its concerns over a potential data gap should Landsat 7 fail before a successor satellite was launched, leaving just one satellite--Landsat 8--operational. Some members of the House Appropriations Committee have recently questioned if the multiagency Landsat program aligns within the fundamental mission of NASA. A common theme likely to be expressed by both the House and Senate will be the need to keep costs under control and at least below the amount appropriated for Landsat 8. In addition, Congress will also likely exert pressure on the Administration to move forward on the next land imaging mission and reduce the chances of a data gap if Landsat 7 or 8 fails before the next satellite is placed in orbit. What a data gap actually means, however, may be in question, depending on the results of the Sustainable Land Imaging Architecture Study Team study and the resulting implementation strategy for the next land remote sensing satellite.

In the past, Congress has regularly acted to extend expired or expiring temporary tax provisions. Collectively, these temporary tax provisions are often referred to as "tax extenders." Of the 33 temporary tax provisions that had expired at the end of 2016 and extended retroactively through 2017, three are individual income tax provisions. The three individual provisions that expired at the end of 2017 have been included in recent tax extenders packages. The above-the-line deduction for certain higher-education expenses, including qualified tuition and related expenses, was first added as a temporary provision in the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA; P.L. 107-16 ), but has regularly been extended since. The other two individual extender provisions are housing related. The provision allowing homeowners to deduct mortgage insurance premiums was first enacted in 2006 (effective for 2007). The provision allowing qualified canceled mortgage debt income associated with a primary residence to be excluded from income was first enacted in 2007. Both provisions were temporary when first enacted, but in recent years have been extended as part of the tax extenders. In recent years, Congress has chosen to extend most, if not all, recently expired or expiring provisions as part of "tax extender" legislation. The most recent tax extender package is the Bipartisan Budget Act of 2018 (BBA18; P.L. 115-123 ). Information on costs associated with extending individual income tax expired provisions is provided in Table 1 . The provisions that were extended in the BBA18 were extended for one year, retroactive for 2017. The estimated cost to make expired provisions permanent is reported by the Joint Committee on Taxation (JCT). The JCT reports estimated deficit effects of extending expired and expiring tax provisions through the 10-year budget window (2018-2027). Historically, when all or part of a taxpayer's mortgage debt has been forgiven, the amount canceled has been included in the taxpayer's gross income. This income is typically referred to as canceled mortgage debt income. Canceled (or forgiven) mortgage debt is common with a "short sale." In a short sale, a homeowner agrees to sell their house and transfer the proceeds to the lender in exchange for the lender relieving the homeowner from repaying any debt in excess of the sale proceeds. For example, in a short sale, a homeowner with a $300,000 mortgage may be able to sell their house for only $250,000. The lender would receive the $250,000 from the home sale and forgive the remaining $50,000 in mortgage debt. Lenders report the canceled debt to the Internal Revenue Service (IRS) using Form 1099-C. A copy of the 1099-C is also sent to the borrower, who in general must include the amount listed in his or her gross income in the year of discharge. It may be helpful to explain why forgiven debt is viewed as income from an economic perspective in order to understand why it has historically been taxable. Income is a measure of the increase in an individual's purchasing power over a designated period of time. When individuals experience a reduction in their debts, their purchasing power has increased (because they no longer have to make payments). Effectively, their disposable income has increased. From an economic standpoint, it is irrelevant whether a person's debt was reduced via a direct transfer of money to the borrower (e.g., wage income) that was then used to pay down the debt, or whether it was reduced because the lender forgave a portion of the outstanding balance. Both have the same effect, and thus both are subject to taxation. The Mortgage Forgiveness Debt Relief Act of 2007 ( P.L. 110-142 ), signed into law on December 20, 2007, temporarily excluded qualified canceled mortgage debt income that is associated with a primary residence from taxation. Thus, the act allowed taxpayers who did not qualify for one of several existing exceptions to exclude canceled mortgage debt from gross income. The provision was originally effective for debt discharged before January 1, 2010. The Emergency Economic Stabilization Act of 2008 (Division A of P.L. 110-343 ) extended the exclusion of qualified mortgage debt for debt discharged before January 1, 2013. The American Taxpayer Relief Act of 2012 ( P.L. 112-240 ) subsequently extended the exclusion through the end of 2013. The Tax Increase Prevention Act of 2014 (Division A of P.L. 113-295 ) extended the exclusion through the end of 2014. The Protecting Americans from Tax Hikes Act of 2015 (PATH Act), enacted as Division Q of the Consolidated Appropriations Act, 2016 ( P.L. 114-113 ) extended the exclusion through the end of 2016. The act also allowed for debt discharged after 2016 to be excluded from income if the taxpayer had entered into a binding written agreement to sell his or her house before January 1, 2017. Most recently, the BBA18 ( P.L. 115-123 ) extended the exclusion through the end of 2017. The rationales for extending the exclusion are to minimize hardship for households in distress and lessen the risk that nontax homeowner retention efforts are thwarted by tax policy. It may also be argued that extending the exclusion would continue to assist the recoveries of the housing market and overall economy. Opponents of the exclusion may argue that extending the provision would make debt forgiveness more attractive for homeowners, which could encourage homeowners to be less responsible about fulfilling debt obligations. The exclusion may also be viewed by some as unfair, as its benefits depend on whether a homeowner is able to negotiate a debt cancelation, the income tax bracket of the taxpayer, and whether the taxpayer retains ownership of the house following the debt cancellation. The JCT estimated the one-year extension included in the BBA18 would result in a 10-year revenue loss of $2.4 billion (see Table 1 ). Traditionally, homeowners have been able to deduct the interest paid on their mortgage, as well as any property taxes they pay as long as they itemize their tax deductions. Beginning in 2007, homeowners could also deduct qualifying mortgage insurance premiums as a result of the Tax Relief and Health Care Act of 2006 ( P.L. 109-432 ). Specifically, homeowners could effectively treat qualifying mortgage insurance premiums as mortgage interest, thus making the premiums deductible if the homeowner itemized, and if the homeowner's adjusted gross income was below a certain threshold ($55,000 for single, and $110,000 for married filing jointly). Originally, the deduction was only to be available for 2007, but it was extended through 2010 by the Mortgage Forgiveness Debt Relief Act of 2007 ( P.L. 110-142 ). The deduction was extended again through 2011 by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 ( P.L. 111-312 ), through the end of 2013 by the American Taxpayer Relief Act of 2012 ( P.L. 112-240 ), and through the end of 2014 by the Tax Increase Prevention Act of 2014 (Division A of P.L. 113-295 ). The Protecting Americans from Tax Hikes Act of 2015 (PATH Act), enacted as Division Q of the Consolidated Appropriations Act, 2016 ( P.L. 114-113 ), extended the deduction through the end of 2016. Most recently, the BBA18 ( P.L. 115-123 ) extended the exclusion through the end of 2017. A justification for allowing the deduction of mortgage insurance premiums is the promotion of homeownership and, relatedly, the recovery of the housing market following the Great Recession (the Great Recession began in December 2007 and lasted to June 2009). Homeownership is often argued to bestow certain benefits to society as a whole, such as higher property values, lower crime, and higher civic participation, among others. Homeownership may also promote a more even distribution of income and wealth, as well as establish greater individual financial security. Last, homeownership may have a positive effect on living conditions, which can lead to a healthier population. With regard to the first justification, it is not clear that the deduction for mortgage insurance premiums has an effect on the homeownership rate. Economists have identified the high transaction costs associated with a home purchase--mostly resulting from the downpayment requirement, but also closing costs--as the primary barrier to homeownership. The ability to deduct insurance premiums does not lower this barrier--most lenders will require mortgage insurance if the borrower's downpayment is less than 20% regardless of whether the premiums are deductible. The deduction may allow buyers to borrow more, however, because they can deduct the higher associated premiums and therefore afford a higher housing payment. Concerning the second justification, it is also not clear that the deduction for mortgage insurance premiums is still needed to assist in the recovery of the housing market. Based on the S&P CoreLogic Case-Shiller U.S. National Composite Index, home prices have generally increased since the bottom of the market following the Great Recession. In addition, the available housing inventory is now slightly below its historical level. Both of these indicators suggest that the market as a whole is stronger than when the provision was enacted, and that it may no longer be warranted. Economists have noted that owner-occupied housing is already heavily subsidized via tax and nontax programs. To the degree that owner-occupied housing is oversubsidized, extending the deduction for mortgage insurance premiums would lead to a greater misallocation of resources that are directed toward the housing industry. The JCT estimated the one-year extension included in the BBA18 would result in a 10-year revenue loss of $1.1 billion (see Table 1 ). The BBA18 extended the above-the-line deduction for qualified tuition and related expenses through the 2017 tax year. This provision allows taxpayers to deduct up to $4,000 of qualified tuition and related expenses for postsecondary education (both undergraduate and graduate) from their gross income. Expenses that qualify for this deduction include tuition payments and any fees required for enrollment at an eligible education institution. Other expenses, including room and board expenses, are generally not qualifying expenses for this deduction. The deduction is "above-the-line," that is, it is not restricted to itemizers. Individuals who could be claimed as dependents, married persons filing separately, and nonresident aliens who do not elect to be treated as resident aliens do not qualify for the deduction, in part to avoid multiple claims on a single set of expenses. The deduction is reduced by any grants, scholarships, Pell Grants, employer-provided educational assistance, and veterans' educational assistance. The maximum deduction taxpayers can claim depends on their income level. Taxpayers can deduct up to $4,000 if their income is $65,000 or less ($130,000 or less if married filing jointly); or $2,000 if their income is between $65,000 and $80,000 ($130,000 and $160,000 if married filing jointly). Taxpayers with income above $80,000 ($160,000 for married joint filers) are ineligible for the deduction. These income limits are not adjusted for inflation. One criticism of education tax benefits is that the taxpayer is faced with a confusing choice of deductions and credits and tax-favored education savings plans, and that these benefits should be consolidated. Tax reform proposals have consolidated these benefits into a single education credit in some cases. Taxpayers may use this deduction instead of education tax credits for the same student. These credits include permanent tax credits: the Hope Credit and Lifetime Learning Credit. The Hope Credit has been expanded into the American Opportunity Tax Credit, a formerly temporary provision that was made permanent by the PATH Act. The American Opportunity Tax Credit and the Hope Credit are directed at undergraduate education and have a limited number of years of coverage (two for the Hope Credit and four for the American Opportunity Tax Credit). The Lifetime Learning Credit (20% of up to $10,000) is not limited in years of coverage. These credits are generally more advantageous than the deduction, except for higher-income taxpayers, in part because the credits are phased out at lower levels of income than the deduction. For example, for single taxpayers, the Lifetime Learning Credit begins phasing out at $56,000 for 2017. The deduction benefits taxpayers according to their marginal tax rate. Students usually have relatively low incomes, but they may be part of families in higher tax brackets. The maximum amount of deductible expenses limits the tax benefit's impact on individuals attending schools with comparatively high tuitions and fees. Because the income limits are not adjusted for inflation, the deduction might be available to fewer taxpayers over time if extended in its current form. The distribution of the deduction in Table 2 indicates that some of the benefit is concentrated in the income range where the Lifetime Learning Credit has phased out, but also significant deductions are claimed at lower income levels. Because the Lifetime Learning Credit is preferable to the deduction at lower income levels, it seems likely that confusion about the education benefits may have caused taxpayers not to choose the optimal education benefit. The JCT estimated the one-year extension included in the PATH Act would result in a 10-year revenue loss of $0.4 billion (see Table 1 ). Table A-1 provides information on key policy staff available to answer questions with respect to specific provisions or policy areas.

Three individual temporary tax provisions expired in 2017. In the past, Congress has regularly acted to extend expired or expiring temporary tax provisions. Collectively, these temporary tax provisions are often referred to as "tax extenders." Most recently, Congress addressed tax extenders in the Bipartisan Budget Act of 2018 (BBA18; P.L. 115-123). Three of the four individual income tax provisions that had expired at the end of 2016 were extended in the BBA18, retroactive to 2017. These include the Tax Exclusion for Canceled Mortgage Debt, Mortgage Insurance Premium Deductibility, and Above-the-Line Deduction for Qualified Tuition and Related Expenses. Brief background information on these provisions is provided in this report. The other individual income tax provision that expired at the end of 2016, the medical expense deduction adjusted gross income (AGI) floor of 7.5% for individuals aged 65 and over, was expanded to all taxpayers through 2017 and 2018 in the December 2017 tax legislation (P.L. 115-97). Options related to expired tax provisions in the 115th Congress include (1) extending all or some of the provisions that expired at the end of 2017 or (2) allowing expired provisions to remain expired. This report provides background information on individual income tax provisions that expired in 2017. For information on other tax provisions that expired at the end of 2016, see CRS Report R44677, Tax Provisions that Expired in 2016 ("Tax Extenders"), by [author name scrubbed]. See also CRS Report R44990, Energy Tax Provisions That Expired in 2017 ("Tax Extenders"), by [author name scrubbed], [author name scrubbed], and [author name scrubbed]; and CRS Report R44930, Business Tax Provisions that Expired in 2017 ("Tax Extenders"), coordinated by [author name scrubbed].

O n December 15, 2016, USDA published in the Federal Register a final rule, "Enhancing Retailer Standards in the Supplemental Nutrition Assistance Program (SNAP)." This final rule followed USDA-FNS's proposed rule earlier in the year: On February 17, 2016, the U.S. Department of Agriculture's (USDA's) Food and Nutrition Service (USDA-FNS) published the proposed rule. On April 5, 2016, USDA-FNS published a clarification of the proposed rule and extended the comment period to May 18, 2016 . SNAP, the largest of USDA's domestic food assistance programs, provides benefits to eligible participants; these benefits are redeemable for SNAP-eligible foods at SNAP-authorized retailers. SNAP-authorized retailers are stores and other food sellers that are allowed to accept SNAP benefits. In FY2015, SNAP had an average monthly participation of 45.8 million individuals, $74.0 billion was obligated for the program (most of the funding is for benefits themselves), and nearly 259,000 firms were authorized to accept benefits. The final rule implements provisions of the Agriculture Act of 2014 ("2014 farm bill," P.L. 113-79 ) that made changes to inventory requirements for SNAP-authorized retailers and also addressed other USDA-FNS policy objectives. The proposed rule had been controversial, particularly the provisions not explicitly required by the farm bill. Changes in retailer authorization policy can impact a range of SNAP program stakeholders--not only retailers, but also food manufacturers and program participants. Driving the debate over these changes has been the potential impact on smaller retailers. This report will present a brief background on SNAP retailer authorization and related administrative data, a summary of prior regulations, the statutory changes enacted in the 2014 farm bill, and the final rule's changes to the current regulations (including comparisons to the proposed rule). SNAP benefits may be redeemed only for eligible foods at authorized retailers. The SNAP program authorizes retailers based, in part, on the retailer's inventory or sales. In order to be authorized, a retailer is generally required to (1) apply for authorization , and (2) pass a USDA-FNS administered inspection and authorization process. A wide range of retailers are authorized to accept SNAP, including supermarkets, farmers' markets, and convenience stores. Inventory requirements for SNAP retailers are based on stock or sales of "staple foods," defined in statute as four categories: (1) meat, poultry, or fish; (2) bread or cereals; (3) vegetables or fruits; and (4) dairy products. Although SNAP participants can buy foods that are not in staple food categories, required staple food inventory or sales is one of the bases for authorizing a retailer to accept SNAP benefits. Though many different types of retailers are authorized to accept benefits, data show that the majority of SNAP benefits are redeemed at supermarkets and superstores. In FY2015, approximately 82% of benefits were redeemed in supermarkets and superstores. Although convenience stores make up over 41% of SNAP-authorized retailers, they redeemed approximately 5% of SNAP benefits in FY2015. Figure 1 displays the share of SNAP benefits redeemed by different categories of retailers, with further detail on authorizations and redemptions shown in Table 1 . Retailer data also indicate that smaller retailers (convenience stores, small grocery stores, medium grocery stores) received the bulk of sanctions from USDA-FNS in FY2015; sanctions include time-limited or permanent disqualifications from SNAP. This section summarizes standards for SNAP retailer authorization prior to the final rule ("prior regulations"). Under the prior regulations, a SNAP-eligible retailer had to meet one of two tests: criterion A (based on store inventory) or criterion B (based on store sales). These rules are displayed in Table 2 . Specialty stores, such as fruit and vegetable or seafood markets, tend to apply under criterion B because they carry a limited number of staple food categories. As noted above, SNAP's authorizing law defines "staple foods" as foods in the following categories: meat, poultry, or fish; bread or cereals; vegetables or fruits; and dairy products. The law further provides that staple foods "do not include accessory food items, such as coffee, tea, cocoa, carbonated and uncarbonated drinks, candy, condiments, and spices." Under prior regulations, foods with multiple ingredients were counted in a staple food group based on the "main ingredient" as determined by USDA-FNS. For example, a box of macaroni and cheese might be classified as a variety within a staple food category but in the bread or cereal category (despite containing dairy). Prior regulation also defined perishable staple food items as "items which are either frozen staple food items or fresh, unrefrigerated or refrigerated staple food items that will spoil or suffer significant deterioration in quality within 2-3 weeks." Regulation specified that a "variety" of qualifying foods in a particular category means different types of foods, not different brands, different nutrient values, different varieties of packaging, or different package sizes; the example was given that apples, cabbage, and tomatoes are varieties in the fruit or vegetable staple food category. Although retailers must offer these particular types of foods to qualify as a SNAP-eligible retailer, SNAP participants may redeem their benefits for generally any foods for home preparation and consumption whether they are staple foods or not. SNAP benefits may not be redeemed for alcohol; tobacco; or hot, prepared foods intended for immediate consumption (e.g., a rotisserie chicken). Prior regulations also made ineligible "firms that are considered to be restaurants, that is, firms that have more than 50 percent of their total gross retail sales in hot and/or cold prepared foods not intended for home preparation and consumption." Restaurants authorized to participate under certain states' restaurant option (an option to assist homeless, elderly, and disabled individuals who may have difficulty preparing food) are an exception to this 50% rule. The 2014 farm bill (enacted February 7, 2014) amended many different aspects of SNAP law, including changes to the authorization of SNAP retailers. Section 4002 of P.L. 113-79 required that retailers seeking authorization based on inventory (i.e., criterion A) will have to increase their variety of stock. Namely, the law was amended to require stores to stock at least seven varieties of staple foods in each of the four staple food categories and to stock perishable foods in at least three categories. Section 4002, which includes other requirements for retailers, also amended the authorizing law to require a review of retailer applications to consider "whether the [retailer] applicant is located in an area with significantly limited access to food." The law's conference report included further information on the decision to craft this policy change. In a March 2014 policy memorandum, USDA-FNS said that the 2014 farm bill changes to inventory requirements would require rulemaking to implement. This section summarizes the USDA-FNS final rule's changes to prior regulations and includes comparison to the proposed rule. This section has also been amended to reflect changes made by the FY2017 appropriations law, which limits some of the final rule's provisions. As a basis for rulemaking, in the February 2016 proposed rule, USDA-FNS explained that the proposed rule was "the result of two separate developments": (1) the 2014 farm bill's statutory changes, and (2) "the effort initiated by FNS in 2013 to look at enhancing the eligibility standards for SNAP retailers to better enforce the intent of the [Food and Nutrition Act of 2008] to permit low-income individuals to purchase more nutritious foods for home preparation and consumption." Related to the latter development, USDA-FNS cited findings from an August 2013 Request for Information (RFI) , which posed 14 questions to the public on SNAP retailer eligibility and authorization. USDA-FNS stated that they received from the RFI over 200 comments "from a diverse group, including retailers, academics, trade associations, policy advocates, professional associations, government entities, and the general public." The agency also cited related listening sessions. Before issuing the final rule, FNS reviewed 1,260 germane, nonduplicative comments on the proposed rule. About 72% of comments came from retail food store representatives, owners, managers, or employees, most of whom submitted template or form letters. Some Members of Congress and other stakeholders had voiced strong opposition to aspects of the proposed rule. As the proposed rule would have, the final rule made changes to 7 C.F.R. Part 271 and Part 278 in five areas of retailer authorization policy: (1) sales of hot, prepared foods; (2) definition of staple foods; (3) inventory and depth of stock; (4) access-related exceptions to the rules; and (5) disclosures of retailer information. The final rule's ultimate changes in some ways vary notably from those in the proposed rule. These areas are briefly discussed in the sections to follow. The final rule is presented "at-a-glance"--as compared to the proposed rule and the prior regulations--in Table 4 at the end of this section. Throughout the proposed and final rules, USDA-FNS expressed the objectives of improving access to healthy foods and preserving the integrity of the program. The statute as amended by the farm bill explicitly requires an increase in the minimum number of food varieties and perishable varieties for retailers authorized under criteria A (discussed further below in " Inventory "); and access-related exceptions to retailer authorization (discussed further below in " Access-Related Exceptions to the Rules "). USDA-FNS acknowledged throughout the final rule's preamble that the regulatory changes in other areas are discretionary. Subsequent to the promulgation of this final rule, Congress passed the FY2017 Consolidated Appropriations Act ( P.L. 115-31 , enacted May 5, 2017), which directed USDA to change substantially its implementation of the final rule, particularly variety and breadth of stock requirements. Section 765 of Title VII, the General Provisions for the Department of Agriculture appropriation, in P.L. 115-31 (referred to throughout the remainder of this report as Section 765) required USDA to change how "variety" is defined in the final rule and to implement the "acceptable varieties and breadth of stock" that were in place prior to enactment of the 2014 farm bill until such regulatory amendments are made. For the most current information on the implementation of retailer standards, see USDA-FNS's website, "Enhancing Retailer Standards in the Supplemental Nutrition Assistance Program (SNAP)," https://www.fns.usda.gov/snap/enhancing-retailer-standards-supplemental-nutrition-assistance-program-snap . As published, the effective date for the final rule was January 17, 2017, but most aspects of the rule were to take effect in subsequent months. Since enactment of P.L. 115-31 , USDA-FNS has changed some effective dates from those published in the final rule. The sections that follow note effective dates published on the USDA-FNS website (as of the date of this report). Hot, prepared foods are not eligible for purchase with SNAP benefits, and prior regulations required Criteria A and B retailers to have no more than 50% of their sales in hot or cold prepared foods. Ultimately, the final rule kept this 50% threshold in place but specified that it applies to "foods cooked or heated on-site by the retailer before or after purchase." Under prior regulations, there had been a loophole apparently exploited by some retailers who sell uncooked foods for SNAP purchase and then offer to heat or cook those foods for customers (for free or for a small fee). The final rule did not adopt the proposed rule's proposal to require that at least 85% of an authorized entity's total food sales must be for items that are not cooked or heated on site before or after purchase . (In other words, the proposed rule would have required that no more than 15% of total food sales may be from these foods cooked or heated on-site.) In the final rule's preamble, USDA-FNS expressed particular concern that comments and data subsequently reviewed showed that the 85/15% threshold would make most convenience stores ineligible for SNAP authorization. The proposed rule also would have added measures aimed at preventing one business from splitting into two to circumvent these restaurant-related SNAP rules. In the final rule, USDA-FNS clarified that it will consider separate businesses to be one if the colocated businesses share ownership, sale of similar or same food products, and inventory. Implementation of the final rule's hot, prepared foods provisions will take effect for all retailers beginning on October 16, 2017. Section 765 did not otherwise change the implementation of this policy. The final rule changed the regulatory definition of staple foods in several respects. Under prior regulation, accessory foods were not counted as staple foods. This is maintained and expanded in the final rule. Prior regulations had been interpreted by USDA-FNS to define "accessory foods" as the specific foods listed in the statute: "coffee, tea, cocoa, carbonated and un-carbonated drinks, candy, condiments, and spices." The final rule expanded this regulatory definition, but in a way that is more narrowly tailored than the proposed rule's approach. The final rule expanded the list of accessory food items as follows: Accessory food items include foods that are generally considered snacks or desserts such as, but not limited to, chips, ice cream, crackers, cupcakes, cookies, popcorn, pastries, and candy, and food items that complement or supplement meals such as, but not limited to, coffee, tea, cocoa, carbonated and uncarbonated drinks, condiments, spices, salt, and sugar. The final rule also established that "[i]tems shall not be classified as accessory food exclusively based on packaging size," and "[a] food product containing an accessory food item as its main ingredient shall be considered an accessory food item." In addition, the final rule's preamble, as guidance, included a list of accessory food items, beyond the list above. Section 765 did not change the implementation of this policy. Per the USDA-FNS website, the accessory food changes will take effect for all stores on January 17, 2018. Under prior regulation, foods with multiple ingredients were only counted in one staple food category based on the item's main ingredient. For example, as mentioned above, a box of macaroni and cheese, with pasta as the main ingredient, would be counted as "bread or cereal" for retailer authorization purposes. In the final rule, USDA-FNS maintained this multiple ingredient policy, taking into account many related comments on the proposed rule. The final rule rejected the proposed rule's policy that commercially processed foods and prepared mixtures would not have been counted in any staple food category for retailer authorization. For example, inventory of TV dinners, macaroni and cheese, and canned soups would not have counted toward a store's inventory (or sales) requirements for authorization under the proposed rule. (Such foods would have remained eligible for SNAP purchase.) However, due to changes in the definition of accessory foods in the final rule, if the first ingredient of a multi-ingredient food is an accessory food, the food will not be considered a staple food in the retailer authorization process. Section 765 did not change the implementation of the final rule's multi-ingredient policy, and, per the USDA-FNS website, will take effect for all stores on January 17, 2018. Criterion A authorization is based, in part, on a retailer's stocking a certain number of varieties in each staple food category. The 2014 farm bill required an increase in varieties offered (implementation discussed in " Inventory "). The final rule included increased flexibility to help stock the required number of varieties. In particular, the regulations were amended to count plant-based sources as varieties for the "meat, poultry, or fish" and "dairy products" staple food groups. For instance, nuts, seeds, and beans can now be varieties of "meat, poultry, and fish." In addition, the final rule's preamble, as guidance, includes a list of examples of varieties in each staple food category. Due to the requirements of Section 765, USDA-FNS will not implement the final rule's broader variety definition (e.g., inclusion of plant-based proteins). Section 765 impacted implementation of the farm bill's inventory provisions, but not the depth of stock changes proposed. The final rule codified in the regulations the 2014 farm bill's mandatory changes for retailers applying for authorization under criterion A (inventory-based) by increasing the required minimum variety of foods in each staple food category from three to seven varieties, and increasing the perishable foods requirement from two staple food categories to three staple food categories. The final rule also added specifications on the depth of stock; that is, how many of each item are for sale. Under prior regulations, a retailer could be authorized with a minimum stock of at least 12 food items (one item each of three varieties in each of the four staple food categories, including perishable requirements); proposed and final rules sought to change that. Incorporating the requirements of Section 765, at this time USDA-FNS is neither requiring retailers to increase the number of varieties in each staple food category nor requiring them to increase the categories of perishable foods. The final rule not only implemented the farm bill's staple food changes to 28 varieties (seven varieties in each of the four categories, including perishable requirements), but it added a numeric depth of stock requirement of three stocking units per variety. Under this requirement, a store is required to keep in stock a minimum of 84 staple food items. In the final rule, USDA-FNS halved the proposed rule's depth of stock policy, which would have required six-item depth of stock, requiring a minimum of 168 items. The final rule also added some language to specify that documentation may be provided in cases where it is not clear that the sufficient stocking requirement has been met. While Section 765 required USDA-FNS to maintain three varieties per staple food category, the USDA-FNS rule's change to three stocking units per variety stands. Table 3 summarizes the inventory requirements for criterion A retailers under prior, proposed, and final regulations and implementation under the requirements of Section 765. Prior to the 2014 farm bill, a community's access to a SNAP-authorized retailer was not a consideration in granting or denying a retailer's application for authorization. Implementing the 2014 farm bill language, the proposed rule, as described in its preamble, would have allowed USDA-FNS to consider need for access "when a retailer does not meet all of the requirements for SNAP authorization." USDA-FNS proposed a list of factors that they may consider in making this access determination. The final rule implemented the access-related exceptions with some additional details. It included a more inclusive list of factors to be considered: "access factors such as, but not limited to, the distance from the applicant firm to the nearest currently SNAP authorized firm and transportation options ... FNS will also consider factors such as, but not limited to, the extent of the applicant firm's stocking deficiencies in meeting Criterion A and Criterion B and whether the store furthers the purposes of the Program." The final rule also clarified that FNS's considerations will occur during the application process. Section 765 of P.L. 115-31 did not change the implementation of this policy; it will go into effect starting January 17, 2018. The final rule allowed USDA-FNS to disclose to the public specific information about retailers that have been disqualified or otherwise sanctioned for SNAP violations. The agency argued, in the proposed rule, that this information would assist in the agency's efforts "to combat SNAP fraud by providing an additional deterrent" and would "provide the public with valuable information about the integrity of these businesses and individuals for future dealings." The final rule clarifies that disclosure of these sanctions will only be for the duration of the sanction. This policy took effect on January 17, 2017. As with the proposed rule, within the final rule's preamble, USDA-FNS included a summary of its Regulatory Impact Analysis (RIA). The RIA included qualitative benefits of the final rule such as improving SNAP recipients' access to a variety of healthy food options and authorizing retailers in a way that is consistent with the purposes of SNAP. The analysis estimated that the total cost to the federal government for the agency's increased store inspections would be approximately $3.7 million in FY2018 and $15 million over five years. Under the agency's Regulatory Flexibility Act (RFA) analysis, also referenced in the RIA, USDA-FNS focused on the impacts for small businesses. As USDA-FNS acknowledged in the final rule's preamble, some of the opposition to the proposed rule criticized the agency's analysis, arguing that the analysis had underestimated the financial impact on small retailers. The final rule's RIA and RFA analysis reflect a revised methodology (that now includes opportunity costs and administrative costs) and the final rule's differing policy. The analysis estimated that the inventory changes in the final rule would impact approximately 187,000 smaller retailers (this is 70% of all SNAP-authorized retailers in July 2016). Based on a sample of small SNAP retailers' inventory checklists, USDA-FNS estimated an average cost per retailer of $245 in the first year and about $620 over five years. The analysis estimated that over 87% of the currently participating small retailers would not meet the increased variety requirements, but that most would meet the new perishable requirements. (Under the requirements of Section 765, retailers do not currently face this full burden.) With the final rule's December 2016 publication, implementation of the 2014 farm bill provisions appeared imminent. However, following the May 2017 enactment of the appropriations law policy provision, implementation of new variety and breadth of stock requirements may see further rulemaking. During the 115 th Congress, SNAP retailers will be implementing some new requirements while waiting for others to be proposed and implemented. Because the variety-related requirements originate from a 2014 change in authorizing law, Congress may have an interest in changing the statute again, and related issues may come up in the formulation of the next farm bill.

The Supplemental Nutrition Assistance Program (SNAP), the largest of the U.S Department of Agriculture's (USDA's) domestic food assistance programs, provides benefits to eligible participants; these benefits are redeemable for SNAP-eligible foods at SNAP-authorized retailers. SNAP-authorized retailers are stores and other food sellers that are allowed to accept SNAP benefits. In FY2015, the vast majority of benefits were redeemed at "super stores" and supermarkets. On December 15, 2016, USDA's Food and Nutrition Service (FNS) published in the Federal Register a final rule, "Enhancing Retailer Standards in the Supplemental Nutrition Assistance Program (SNAP)." The final rule implements provisions of the Agriculture Act of 2014 ("2014 farm bill," P.L. 113-79) that increase inventory requirements for SNAP-authorized retailers. In addition, the rule addresses other USDA-FNS policy objectives. Like the proposed rule, the final rule makes changes to 7 C.F.R. Part 271 and Part 278 in five areas of retailer authorization policy: (1) sales of hot, prepared foods; (2) definition of staple foods; (3) inventory and depth of stock; (4) access-related exceptions to the rules; and (5) disclosures of retailer information. The effective date for the final rule is January 17, 2017, but most aspects of the rule take effect on subsequent dates. The final rule responds to many of the comments and concerns raised about the proposed rule. The proposed rule had been controversial, particularly due to the provisions not explicitly required by the farm bill and due to the potential impact of changed inventory requirements on smaller retailers. This report focuses on the final rule as published December 15, 2016. However, a number of the changes in the rule will not go into effect due to provisions in the FY2017 appropriations law (P.L. 115-31, enacted May 5, 2017), which directed USDA to change substantially its implementation of the final rule, particularly retailer inventory requirements. This report currently reflects USDA-FNS plans to implement the final rule as of August 4, 2017. However, the report may not reflect policy developments that have occurred since then. For the most current information on the implementation of retailer standards, see USDA-FNS's website, "Enhancing Retailer Standards in the Supplemental Nutrition Assistance Program (SNAP)," https://www.fns.usda.gov/snap/enhancing-retailer-standards-supplemental-nutrition-assistance-program-snap.

In March 2014, a regional director of the National Labor Relations Board (NLRB or Board) ruled that scholarship football players at Northwestern University are employees for purposes of the National Labor Relations Act (NLRA), and ordered an election to determine support for the College Athletes Players Association (CAPA), a newly created labor organization. Although the full five-member NLRB agreed to review the regional director's decision, an election was held on April 25, 2014, with the ballots impounded until after a final decision is issued in the case. If the decision is upheld and a majority of players have voted to be represented by CAPA, the players are expected to negotiate with the university over various terms and conditions of employment. This report provides an overview of the NLRA, and reviews the decision by the NLRB's regional director. The report also examines the concerns raised by Northwestern and CAPA. The report ends with a brief discussion of other developments that could affect unionization efforts by athletes at private colleges and universities. The NLRA, as amended, establishes the basic framework governing labor-management relations in the private sector. The act provides workers the right to join or form a labor union and to bargain collectively over wages, hours, and other conditions of employment. Under the act, workers also have the right to not join a union. The act requires an employer to bargain in good faith with a union chosen by a majority of employees. To protect the rights of employers and workers, the act identifies certain activities as unfair labor practices. The NLRA covers most, but not all, private sector workers in the United States. It does not cover agricultural workers, family domestic workers, supervisors, or independent contractors. The act does not apply to railroad or airline employees, who are covered by the Railway Labor Act (RLA). The NLRA does not cover federal, state, or local government employees. Most federal employees are covered by the Federal Service Labor-Management Relations Statute (FSLMRS). Employees of state and local governments, including employees of public colleges and universities, are covered by state or local laws. In a majority of states, public employees have the right to engage in some form of collective bargaining. This right may be limited, however, to only some employees (e.g., to public safety workers). The NLRA is administered and enforced by the NLRB, an independent federal agency that consists of a five-member Board and a General Counsel. The Board resolves objections and challenges to secret ballot elections, decides questions about the composition of bargaining units, and hears appeals of unfair labor practices. The General Counsel's office conducts secret ballot elections, investigates complaints of unfair labor practices, issues unfair labor practice charges, and supervises the NLRB's regional and other field offices. The Board and General Counsel are appointed by the President and confirmed by the Senate. Traditionally, the Board is comprised of two Democrats, two Republicans, and a fifth member who belongs to the same party as the President. The NLRA states that a union may be "designated or selected for the purposes of collective bargaining by the majority of the employees in a unit appropriate for such purposes.... " A union that is selected by a majority of employees in an election conducted by the NLRB is certified as the bargaining representative of employees in the bargaining unit. An employer may also voluntarily recognize a union if a majority of employees in a bargaining unit have signed authorization cards. The NLRB conducts a secret ballot election when a petition is filed requesting one. A petition can be filed by a union, worker, or employer. Workers or a union may request an election if at least 30% of workers have signed authorization cards (i.e., cards authorizing a union to represent them). After a petition is filed with the NLRB requesting an election, the employer and union may agree on the time and place for the election and on the composition of the bargaining unit. If an agreement is not reached between the employer and union, a hearing may be held in the relevant regional office of the NLRB. The regional director may then direct the holding of an election. Under specified circumstances, the regional director's decision may be appealed to the full Board. A union is certified by the NLRB as the exclusive bargaining representative of the employees if a majority of employees who vote (i.e., not a majority of employees in the bargaining unit) choose to be represented by a union. Under the so-called "election bar," if the NLRB conducts an election and a majority of employees do not choose to be represented by a union, another representation election cannot be held for at least 12 months. The NLRB also conducts elections to decertify a union that has previously been certified or recognized. A decertification petition may be filed by employees or a union acting on behalf of employees. A decertification petition must be signed by at least 30% of the employees in the bargaining unit represented by the union. Under the so-called "certification bar," a union that is certified after winning a secret ballot election is protected for a year from a decertification petition and from an election petition filed by another union. A secret ballot election is required for decertification. If a union wins an NLRB election, the employer is required to bargain in good faith for a year. The NLRA does not require the parties to reach an agreement on a contract. After one year, if an employer and a certified union have not reached a contract agreement, the employer may withdraw recognition of the union if both parties have engaged in good faith bargaining and the employer doubts, on the basis of objective information (e.g., a petition signed by a majority of employees and given to the employer), that a majority of employees continue to support the union. If a union has been voluntarily recognized by an employer and no agreement has been reached after a reasonable period of time, an employer may withdraw recognition if the employer doubts, on the basis of objective information, that a majority of employees support the union. The NLRB and courts have divided bargaining subjects into three categories: mandatory, permissive, and illegal subjects. Mandatory subjects of bargaining include "wages, hours, and other terms and conditions of employment." At the request of either the employer or union, both parties must bargain over mandatory subjects. Both the employer and the union must bargain in good faith with respect to wages, hours, and other working conditions. "Wages" include basic pay, overtime pay, merit pay increases, bonuses that are compensation for services provided, profit-sharing plans, and paid vacations and holidays. Mandatory bargaining subjects also include certain benefits, such as group health insurance and pension benefits for current employees. The term "hours" has been interpreted to include daily and weekly work schedules. "Other conditions of employment" include changes in work assignments, procedures for layoffs and recalls, rules to discipline or discharge employees, policies for promotions and seniority, grievance procedures and arbitration, and no-strike or no-lockout clauses. An employer code of ethics is a mandatory subject of bargaining if a violation of the code subjects an employee to discipline. Drug or alcohol testing of current employees is also a mandatory subject of bargaining. Permissive subjects of bargaining are those that either party may propose to be included in a collective bargaining agreement. One party may request bargaining on a permissive subject, but the other party is not required to bargain. Permissive subjects include the definition of a bargaining unit, the selection of bargaining representatives, and the parties involved in collective bargaining. Pre-employment drug or alcohol testing of job applicants is a permissive subject. An employer and union cannot bargain over illegal subjects. If the parties should reach an agreement on an illegal subject, the agreement is not enforceable. Examples of illegal subjects of bargaining include clauses that would treat employees differently because of race or gender, a provision giving preferences to union members in hiring, or a clause that would allow an employer to discharge an employee for union activity. The NLRA identifies certain activities as unfair labor practices that are prohibited. For example, employers have the right to campaign against unionization, but they cannot interfere with, restrain, or coerce employees in their right to form or join a union. An employer cannot threaten employees with the loss of their jobs or benefits if they vote for a union or join a union. An employer cannot threaten to close a plant should employees choose to be represented by a union. An employer cannot raise wages to discourage workers from joining or forming a union. An employer cannot discriminate against employees with respect to their conditions of employment (e.g., fire, demote, or give unfavorable work assignments) because of union activities. Employees have the right to organize and bargain collectively. However, a union cannot restrain or coerce employees to join or not join a union. A union cannot threaten employees with the loss of their jobs if they do not support unionization. A union cannot cause an employer to discriminate against employees with respect to their conditions of employment. A union is also prohibited from boycotting or striking an employer that is a customer of or supplier to an employer that the union is trying to organize. An unfair labor practice charge may be filed by an employee, employer, labor union, or any other person. After a charge is filed, a regional office of the NLRB investigates to determine whether there is reason to believe that the law has been violated. If no violation is found, the charge is dismissed or withdrawn. If a charge has merit, the regional director first seeks a voluntary settlement. If this effort fails, the case is heard by an NLRB administrative law judge. Decisions by administrative law judges can be appealed to the Board. When a union and employer cannot reach an agreement on a collective bargaining agreement, the dispute is called an impasse. An impasse may lead to a strike by workers or a lockout of employees by the employer. Instead of resorting to a strike or lockout, a union and employer may use a neutral third party to help them reach a contract agreement, whether the agreement is on an initial contract or a successor contract. The consequences of a bargaining impasse depend on the type of bargaining subject at issue. If an employer and union cannot reach an agreement over a mandatory bargaining subject, the union may strike or the employer may lock out employees. A union cannot strike and an employer cannot lock out employees if the parties cannot agree on a permissive bargaining subject. Neither an employer nor a union can make a change in a mandatory subject without the consent of the other party. Instead, the employer or union must first notify the other party of the proposed change. Both parties must then bargain over the change. If an agreement cannot be reached, the parties may go to impasse. If the parties reach an agreement on a permissive subject and include it in the collective bargaining agreement, the agreement is binding on both parties. Once a contract has expired, either party may make a unilateral change in an agreement on a permissive subject, without notifying the other party. The purpose of the NLRA is not to punish employers, unions, or individuals, but to remedy violations of the law. The Board can issue orders in representation cases and unfair labor practice cases, but it does not have the authority to compel compliance with such orders. If an employer or union does not comply with an order, the Board can seek enforcement by a U.S. court of appeals. Judicial review of Board decisions in representation cases is generally limited. In unfair labor practice cases, however, a Board decision can be appealed to a U.S. court of appeals, with review by the U.S. Supreme Court available. A U.S. appeals court could potentially review a Board decision in a representation case if an employer refuses to bargain with a union and challenges the union's certification in an unfair labor practice case brought against the employer. Only final orders of the Board may be subject to judicial review. Thus, a decision by the NLRB's General Counsel to not issue an unfair labor practice complaint may not be reviewed. If the Board finds that an unfair labor practice has been committed, it can order the party to cease and desist from the unfair labor practice. The Board can also order the reinstatement of fired employees, with or without back pay. Finally, the President may take emergency action if a strike or lockout that affects an industry, or a substantial part of it, could endanger national health or safety. In late January 2014, a group of students who play football for Northwestern University filed a representation petition with the NLRB. The students are seeking to be represented by CAPA, which contends that college football and basketball players, particularly those who compete in Division I of the National Collegiate Athletic Association (NCAA), are essentially employees given the amount of time they commit to athletics, the revenue they generate for their schools, and their receipt of compensation in the form of scholarships. It has been reported that the organizing effort is supported by a majority of Northwestern's football players. The NCAA has maintained, however, that the players are "student-athletes" and not employees, and that their participation in college sports is voluntary. Whether the Northwestern players may be considered employees for purposes of the NLRA is a threshold question that will likely determine their collective bargaining rights. In general, the NLRB has been guided by common law principles to evaluate an individual's employment status. The Board has considered, for example, the degree of control exercised by an employer over an alleged employee. The NLRB has also examined the economic realities of a situation, that is, the degree to which an alleged employee is dependent on an employer. In 2004, the Board also considered congressional intent to determine whether graduate student assistants should be considered employees for purposes of the NLRA. In Brown University , the Board noted that "[t]he issue of employee status under the Act turns on whether Congress intended to cover the individual in question. The issue is not to be decided purely on the basis of older common law concepts." Ultimately, the NLRB concluded that "it simply does not effectuate the national labor policy" to recognize collective bargaining rights for graduate student assistants because they are primarily students. Northwestern cited the NLRB's decision in Brown University to support its position that the football players are not employees. On March 26, 2014, however, the regional director of the NLRB's Region 13 in Chicago concluded that the players are employees for purposes of the NLRA. Citing the common law definition for the term employee, the regional director maintained that an individual is an employee if he "performs services for another under a contract for hire, subject to the other's control or right of control, and in return for payment." After reviewing how the Northwestern players were recruited and treated by the school and its coaches, the regional director found that the players met the common law definition. In this case, the "tender" that must be signed by the players before each scholarship period was found to serve as an employment contract, providing "detailed information concerning the duration and conditions under which the compensation will be provided to [the players]." With regard to the control exercised by the school and its coaches, the regional director cited the daily itineraries that are provided to the players "which set forth, hour by hour, what football related activities the players are to engage in from as early as 5:45 a.m. until 10:30 p.m., when they are expected to be in bed." As for payment, the regional director stated simply: "[I]t is clear that the scholarships that players receive are in exchange for the athletic services being performed." The regional director declined to view the Northwestern players as similar to the graduate assistants in Brown University . The regional director explained that the players' football-related duties "are unrelated to their academic studies unlike the graduate assistants whose teaching and research duties were inextricably related to their graduate degree requirements [.]" On April 9, 2014, Northwestern requested a review of the regional director's decision. Northwestern argued that the decision should be reviewed because the players' petition presents a unique and novel issue, because the regional director misapplied and departed from Board precedent, and because the regional director's findings on substantial factual issues are clearly erroneous on the record and prejudicially affect the university's rights. On April 24, 2014, the Board agreed to review the regional director's decision. If CAPA becomes the players' exclusive representative, the union has indicated that it will bargain over health and safety issues, additional financial support for the players, and health insurance. CAPA has said that it will bargain with the university within the existing NCAA rules and will not bargain for terms that are prohibited by the NCAA. CAPA has also said that it will "speak for the Players as the NCAA landscape continues to evolve." Northwestern believes that CAPA would bargain over pay and other economic benefits, if it is certified as the players' exclusive representative. If CAPA does attempt such negotiations, and the university declines to bargain over these mandatory subjects of bargaining, it could be subject to an unfair labor practice charge. At the same time, however, the negotiation of economic benefits could lead to possible NCAA sanctions. Northwestern has explained that it cannot offer scholarships greater than the amount allowed by the NCAA. According to the university, if it did, the NCAA could prevent it from playing football. The university also argues that, because they are subject to NCAA rules, it could not bargain over the sale by players of their images or likenesses, the types of leases allowed for players living off-campus, the types of outside employment, or random player drug testing. If the Board and federal courts determine that Northwestern University football players are employees for purposes of collective bargaining, other developments may affect unionization efforts by athletes at private colleges and universities. Under NCAA rules, a Division I student-athlete cannot receive financial aid that exceeds the cost of attendance at an institution. A student-athlete may receive financial aid up to a full "grant-in-aid." Except for possible changes described below, a full grant-in-aid at Division I schools covers the institution's cost of tuition and fees, room and board, and the cost of required books. The cost of attendance may, however, include other costs that are not included in a full grant-in-aid (e.g., the cost of supplies, transportation, or other expenses). Thus, the cost of attendance is generally greater than a full grant-in-aid. In addition to a full grant-in-aid, a student-athlete might receive other financial assistance up to the cost of attendance. Pursuant to a federal district court decision issued on August 8, 2014, the NCAA Division I Football Bowl Subdivision (FBS) and Division I basketball schools can use revenue from the use of player's names, images, or likenesses to provide financial aid up to the cost of attendance. These schools may also provide up to $5,000 annually to current, former, and prospective players for the licensing or use of their names, images, or likenesses. The latter amounts would be paid when the players leave school or when their eligibility for athletic aid expires. The decision applies to student-athletes at both private and public colleges and universities. The NCAA has said that it will appeal the ruling. Also, on August 7, 2014, the NCAA Division I Board of Directors adopted a new governing structure for Division I colleges and universities. Among other changes, five conferences--consisting of 65 private and public colleges and universities--will be allowed to adopt new rules affecting student athletes. The five conferences are the Atlantic Coast Conference (ACC), Big Ten, Big 12, Pac-12, and Southeastern Conference (SEC). (Northwestern University is a member of the Big Ten Conference.) Under new authority, the conferences will be allowed to increase the maximum grant-in-aid up to the full cost of attendance. The conferences will also be allowed to provide student-athletes with multi-year scholarships, offer health insurance coverage, pay for disability insurance, cover the cost of transportation for high school students and their parents to visit campus, change the limits on the amount of time devoted to sports, increase the amount of academic support, or allow athletes to earn money from activities not related to sports. To vote for a rule change, each of the 65 schools will have one vote. In addition, 15 student-athlete representatives--three from each of the five conferences--will be able to cast votes. The first votes on rule changes could be held in January 2015. The NCAA could reconsider the rule changes if at least 75 Division I schools request a vote to override the changes. The rule changes could be suspended if at least 125 schools request a vote on the changes. Schools must request a vote within 60 days of the date that the rule changes were adopted by the Board of Directors. College sports teams that bring in more in revenues than it costs to run the program, the "revenue sports" teams, help support "non-revenue sports," such as golf, tennis, swimming, baseball, softball, and others. The principal revenue sports are football and men's basketball. Division I football is divided into two subdivisions. The Football Bowl Subdivision (FBS) has 128 teams; the Football Championship Subdivision (FCS) has 126 teams. Northwestern University is one of 17 private, four-year colleges and universities in the FBS. Another 46 private colleges and universities participate in the FCS. Both the FBS and FCS are further divided into different conferences, leagues, or associations. Division I men's basketball has 346 teams. 115 schools that compete in Division I men's basketball are private four-year colleges or universities. The 128 FBS schools must support at least 16 varsity sports teams. The schools can award financial aid to as many as 85 football players, with each player able to receive up to a full scholarship. The 126 FCS schools must sponsor at least 14 varsity sports teams and can award up to the equivalent of 63 full football scholarships, divided among no more than 85 players. FBS schools participate in bowl games, while the FCS uses a playoff system to determine a champion. Table A-1 lists the 17 FBS football schools that are private four-year schools; the 46 FCS football schools that are private; and the 115 Division I men's basketball schools that are private.

In late January 2014, a group of students who play football for Northwestern University filed a representation petition with the National Labor Relations Board (NLRB). The students are seeking to be represented by the College Athletes Players Association (CAPA), a newly created labor organization. CAPA contends that college football and basketball players, particularly those who compete in Division I of the National Collegiate Athletic Association (NCAA), are essentially employees given the amount of time they commit to athletics, the revenue they generate for their schools, and their receipt of compensation in the form of scholarships. If the Northwestern players are found to be employees for purposes of the National Labor Relations Act (NLRA), they will be permitted to engage in collective bargaining over the terms and conditions of their employment. This report provides an overview of the NLRA, and reviews the March 2014 decision by the NLRB's regional director, which concluded that the Northwestern players are employees under the act. The report examines the concerns raised by both the university and CAPA. The report also discusses other developments that could affect unionization efforts by athletes at private colleges and universities. In August 2014, the NCAA Division I Board of Directors gave new authority to five conferences--consisting of 65 public and private colleges and universities--to provide greater financial support to student-athletes. Also, an August 2014 U.S. District Court decision will allow NCAA Division I Football Bowl Subdivision (FBS) and basketball schools to use revenue from the use of players' names, images, or likenesses to provide greater financial support to athletes.

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

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

Waste discharges from municipal sewage treatment plants into rivers and streams, lakes, and estuaries and coastal waters are a significant source of water quality problems throughout the country. States report that municipal discharges are the second leading source of water quality impairment in all of the nation's waters. Pollutants associated with municipal discharges include nutrients (which can stimulate growth of algae that deplete dissolved oxygen, a process that harms aquatic ecosystems, since most fish and other aquatic organisms "breathe" oxygen dissolved in the water column), bacteria and other pathogens (which may impair drinking water supplies and recreation uses), and metals and toxic chemicals from industrial and commercial activities and households. The Clean Water Act (CWA) prescribes performance levels to be attained by municipal sewage treatment plants in order to prevent the discharge of harmful quantities of waste into surface waters, and to ensure that residual sewage sludge meets environmental quality standards. It requires secondary treatment of sewage (equivalent to removing 85% of raw wastes), or treatment more stringent than secondary where needed to achieve water quality standards necessary for recreational and other uses of a river, stream, or lake. In addition to prescribing municipal treatment requirements, the CWA authorizes the principal federal program to aid wastewater treatment plant construction. Congress established this program in the Federal Water Pollution Control Act Amendments of 1972 (P.L. 92-500), significantly enhancing what previously had been a modest grant program. Since then, Congress has appropriated more than $92 billion to assist cities in complying with the act and achieving the overall objectives of the act: restoring and maintaining the chemical, physical, and biological integrity of the nation's waters (see Table 1 ). Title II of P.L. 92-500 authorized grants to states for wastewater treatment plant construction under a program administered by the Environmental Protection Agency (EPA). Federal funds are provided through annual appropriations under a state-by-state allocation formula contained in the act; the formula (which has been modified several times since 1972) is based on states' financial needs for treatment plant construction and population. States used their allotments to make grants to cities to build or upgrade categories of wastewater treatment projects including treatment plants, related interceptor sewers, correction of infiltration/inflow of sewer lines, and sewer rehabilitation. Amendments enacted in 1987 ( P.L. 100-4 ) initiated a new program to support, or capitalize, State Water Pollution Control Revolving Funds (SRFs). States continue to receive federal grants, but now they provide a 20% match and use the combined funds to make loans to communities. Monies used for construction are repaid to states to create a "revolving" source of assistance for other communities. The SRF program replaced the previous Title II program in FY1991. Federal contributions to SRFs were intended to assist a transition to full state and local financing by FY1995; SRFs were to be sustained through repayment of loans made from the fund after that date. The intention was that states would have greater flexibility to set priorities and administer funding in exchange for an end to federal aid after 1994, when the original CWA authorizations expired. However, although most states believe that the SRF is working well today, early funding and administrative problems, plus remaining funding needs (discussed below), delayed the anticipated shift to full state responsibility. Congress has continued to appropriate funds to assist wastewater construction activities, as shown in Table 1 . (This table excludes appropriations for congressionally earmarked water infrastructure grants in individual communities and regions, which totaled $7.5 billion from FY1989 through FY2015.) When the SRF program was created, it represented a major shift in how the nation finances wastewater treatment needs. In contrast to the Title II construction grants program, which provided grants directly to localities, SRFs are loan programs. States use their SRFs to provide several types of loan assistance to communities, including project construction loans made at or below market rates, refinancing of local debt obligations, and providing loan guarantees or purchasing insurance. States also may provide additional subsidization of a loan (including forgiveness of principal and negative interest loans) in certain instances. Loans are to be repaid to the SRF within 30 years, beginning within one year after project completion, and the locality must dedicate a revenue stream (from user fees or other sources) to repay the loan to the state. States must agree to use SRF monies first to ensure that wastewater treatment facilities are in compliance with deadlines, goals, and requirements of the act. After meeting this "first use" requirement, states may also use the funds to support other types of water quality programs specified in the law, such as those dealing with nonpoint source pollution and protection of estuaries. The law identifies a number of types of projects as eligible for SRF assistance, including wastewater treatment plant construction, stormwater treatment and management, energy-efficiency improvements at treatment works, reuse and recycling of wastewater or stormwater, and security improvements at treatment works. States also must agree to ensure that communities meet several specifications (such as requiring that locally prevailing wages be paid for wastewater treatment plant construction, pursuant to the Davis-Bacon Act). In addition, SRF recipients must use American-made iron and steel products in their projects. As under the previous Title II program, decisions on which projects will receive assistance are made by states using a priority ranking system that typically considers the severity of local water pollution problems, among other factors. Financial considerations of the loan agreement (interest rate, repayment schedule, the recipient's dedicated source of repayment) are also evaluated by states under the SRF program. All states have established the legal and procedural mechanisms to administer the loan program and are eligible to receive SRF capitalization grants. Some with prior experience using similar financing programs moved quickly, while others had difficulty in making a transition from the previous grants program to one that requires greater financial management expertise for all concerned. More than half of the states currently leverage their funds by using federal capital grants and state matching funds as collateral to borrow in the public bond market for purposes of increasing the pool of available funds for project lending. Cumulatively since 1988, leveraged bonds have comprised about 48% of total SRF funds available for projects; loan repayments comprise about 20%. Small communities and states with large rural populations had the largest problems with the SRF program. Many small towns did not participate in the previous grants program and were more likely to require major projects to achieve compliance with the law. Yet many have limited financial, technical, and legal resources and encountered difficulties in qualifying for and repaying SRF loans. These communities often lack an industrial tax base and thus face the prospect of very high per capita user fees to repay a loan for the full capital cost of sewage treatment projects. Compared with larger cities, many are unable to benefit from economies of scale which can affect project costs. Still, small communities have been participating in the SRF program: since 1989, nationally, 67%% of all loans and other assistance (comprising 23% of total funds loaned) have gone to assist towns and cities with less than 10,000 population. While the Clean Water Act is the principal federal program of this type, some other assistance is available. For example, the Department of Agriculture (USDA) operates grant and loan programs for water supply and wastewater facilities in rural areas, defined as areas of not more than 10,000 persons. Funds available for these programs as a result of FY2015 appropriations for water and waste disposal grants and loans are $347 million. Two other programs are: The Community Development Block Grant (CDBG) program administered by the Department of Housing and Urban Development (HUD). For FY2015, Congress provided $3.0 billion for CDBG funds, of which approximately $900 million is available for smaller communities. Water and waste disposal projects compete with many other funded public activities and are estimated by HUD to account for less than 20% of CDBG obligations. The Economic Development Administration (EDA) of the Department of Commerce. EDA provides project grants for construction of public facilities, including but not limited to water and sewer systems, as part of approved overall economic development programs in areas of lagging economic growth. For FY2015, EDA's public works and economic development program is funded at $99 million. The federal government directly funds only a small portion of the nation's annual wastewater treatment capital investment. State and local governments provide the majority of needed funds. Local governments have primary responsibility for wastewater treatment; they own and operate 16,000 treatment plants and 24,000 collection systems nationwide. Construction of these facilities has historically been financed with revenues from federal grants, state grants to supplement federal aid, and broad-based local taxes (property tax, retail sales tax, or in some cases, local income tax). Where grants are unavailable--and especially since SRFs were established--local governments often seek financing by issuing bonds and then levy fees or charges on users of public services to repay the bonds in order to cover all or a portion of local capital costs. Almost all such projects are debt-financed (not financed on a pay-as-you-go basis from ongoing revenues to the utility). The principal financing tool that local governments use is issuance of tax-exempt municipal bonds--at least 70% of U.S. water utilities rely on municipal bonds and other debt to some degree to finance capital investments. Shifting the Clean Water Act aid program from categorical grants to the SRF loan program had the practical effect of making localities ultimately responsible for 100% of project costs, rather than less than 50% of costs. This has occurred concurrently with other financing challenges, including the need to fund other environmental services, such as drinking water and solid waste management; and increased operating costs (new facilities with more complex treatment processes are more costly to operate). Options that localities face, if intergovernmental aid is not available, include raising additional local funds (through bond issuance, increased user fees, developer charges, general or dedicated taxes), reallocating funds from other local programs, or failing to comply with federal standards. Each option carries with it certain practical, legal, and political problems. Over the past 40-plus years since the CWA was enacted, the nation has made considerable progress in controlling and reducing certain kinds of chemical pollution of rivers, lakes, and streams, much of it because of investments in wastewater treatment. Between 1968 and 1995, biological oxygen demand (BOD) pollutant loadings discharged from sewage treatment plants declined by 45%, despite increased industrial activity and a 35% growth in population. EPA and others argue that without continued infrastructure improvements, future population growth will erode many of the CWA achievements made to date in pollution reduction. The total population served by sewage treatment plants that provide a minimum of secondary treatment increased from 85 million in 1972 to 223 million in 2008, representing 72% of the U.S. population. However, about 3.8 million people are served by facilities that provide less than secondary treatment, which is the basic requirement of federal law. About 79 million people are served by on-site septic systems and not by centralized municipal treatment facilities. Despite improvements, other water quality problems related to municipalities remain to be addressed. A key concern is "wet weather" pollution: overflows from combined sewers (from sewers that carry sanitary and industrial wastewater, groundwater infiltration, and stormwater runoff which may discharge untreated wastes into streams) and separate stormwater sewers (sewers that carry only sanitary waste). Untreated discharges from these sewers, which typically occur during rainfall events, can cause serious public health and environmental problems, yet costs to control wet weather problems are high in many cases. In addition, toxic wastes discharged from industries and households to sewage treatment plants cause water quality impairments, operational upsets, and contamination of sewage sludge. Although more than $91 billion in CWA assistance has been provided since 1972, funding needs remain very high: an additional $298 billion, according to the most recent Needs Survey estimate by EPA and the states, released in 2010, a 17% increase above the estimate reported four years earlier. This current estimate includes $187.9 billion for wastewater treatment and collection systems ($26.7 billion more than the previous report), which represent more than 60% of all needs; $63.6 billion for combined sewer overflow corrections ($1.4 billion less than the previous estimate); $42.3 billion for stormwater management ($17 billion more than the previous estimate); and $4.4 billion to build systems to distribute recycled water ($700 million less than the previous estimate). These estimates do not include potential costs, largely unknown, to upgrade physical protection of wastewater facilities against possible terrorist attacks that could threaten water infrastructure systems, an issue of great interest since September 11, 2001. Needs for small communities represent about 8% of the total. The largest needs in small communities are for pipe repair and new sewer pipes, improved wastewater treatment, and correction of combined sewer overflows. Seven states accounted for 50% of the small community needs (Pennsylvania, New York, Iowa, Utah, Illinois, West Virginia, and Ohio). In 2002, EPA released a study called the Gap Analysis that assessed the difference between current spending for wastewater infrastructure and total funding needs (both capital and operation and maintenance). EPA estimated that, over the next two decades, the United States needs to spend nearly $390 billion to replace existing wastewater systems (including for some projects not eligible for CWA funding, such as system replacement) and to build new ones. According to the Gap Analysis, if there is no increase in investment, there will be about a $6 billion annual gap between current capital expenditures for wastewater treatment and projected spending needs. The study also estimated that, if wastewater spending increases by 3% annually, the gap would shrink by nearly 90%. Although that study is now more than a decade old, the analysis is still recognized as a strong indicator of the gap between water infrastructure investment and perceived needs. At issue has been what should the federal role be in assisting states and cities, especially in view of such high projected funding needs. Authorizations for SRF capitalization grants expired in FY1994, making this an issue of congressional interest. (Appropriations have continued, as shown in Table 1 .) In the 104 th Congress, the House passed a comprehensive reauthorization bill ( H.R. 961 ), which included SRF provisions to address problems that have arisen since 1987, including assistance for small and disadvantaged communities and expansion of projects and activities eligible for SRF assistance. However, no legislation was enacted, because of controversies over other parts of the bill. One recent focus has been on projects needed to control wet weather water pollution, overflows from combined and separate stormwater sewer systems. Funding needs for projects to address these types of projects are estimated to be nearly $106 billion. The 106 th Congress passed a bill authorizing $1.5 billion of CWA grant funding specifically for wet weather sewerage projects (in P.L. 106-554 ), because under the SRF program, "wet weather" projects compete with other types of eligible projects for available funds. However, authorization for these "wet weather" project grants expired in FY2003 and has not been renewed. No funds were appropriated. In several Congresses since the 107 th , House and Senate committees have approved bills to extend the act's SRF program and increase authorization of appropriations for SRF capitalization grants, but no legislation other than appropriations has been enacted until recently. Issues debated in connection with these bills included extending SRF assistance to help states and cities meet the estimated $298 billion in funding needs; modifying the program to assist small and economically disadvantaged communities; and enhancing the SRF program to address a number of water quality priorities beyond traditional treatment plant construction, particularly the management of wet weather pollutant runoff from numerous sources, which is the leading cause of stream and lake impairment nationally. Congress did enact certain changes to the SRF provisions of the CWA in 2014 ( P.L. 113-121 ). These amendments addressed several issues, including extending loan repayment terms from 20 years to 30 years, expanding the list of SRF-eligible projects to include energy- and water-efficiency, increasing assistance to Indian tribes, and imposing "Buy American" requirements on SRF recipients. However, the amendments did not address other long-standing or controversial issues, such as: authorization of appropriations for SRF capitalization grants, which expired in FY1994; state-by-state allocation of capitalization grants; and applicability of prevailing wage requirements under the Davis-Bacon Act, which currently apply to use of SRF monies. This legislation also includes provisions authorizing a five-year pilot program for a new type of financing, a Water Infrastructure Finance and Innovation Act (WIFIA) program, authorizing federal loans and loan guarantees for wastewater and public water supply projects. This new program is intended to assist large water infrastructure projects, especially projects of regional and national significance, and to supplement but not replace other types of financial assistance, such as SRFs. Congress has recently focused extensively on reducing federal spending, making it a challenge for legislators to provide federal assistance for water infrastructure programs. Although interest in meeting the nation's water infrastructure needs is strong and likely to continue, policy makers will balance proposals to assist local communities with policies to achieve greater fiscal discipline. Unclear for now is how infrastructure programs will fare in these debates.

The Clean Water Act prescribes performance levels to be attained by municipal sewage treatment plants in order to prevent the discharge of harmful wastes into surface waters. The act also provides financial assistance so that communities can construct treatment facilities to comply with the law. The availability of funding for this purpose continues to be a major concern of states and local governments. This report provides background on municipal wastewater treatment issues, federal treatment requirements and funding, and recent legislative activity. Meeting the nation's wastewater infrastructure needs efficiently and effectively is likely to remain an issue of considerable interest to policy makers.

The Office of Management and Budget traces its origin to 1921. Established as the Bureau of the Budget (BOB) within the Treasury Department by the Budget and Accounting Act, 1921 (42 Stat. 20), it functioned under the supervision of the President. Reorganization Plan No. 1 of 1939 (53 Stat. 1423) transferred the bureau to the newly created Executive Office of the President (EOP). Subsequently, BOB was designated as the Office of Management and Budget (OMB) by Reorganization Plan No. 2 of 1970 (84 Stat. 2085). Concern about OMB's accountability prompted Congress to make the director and deputy director subject to Senate confirmation in 1974 (88 Stat. 11). Congress also established four statutory offices within OMB to oversee several cross-cutting processes and management matters. The Office of Federal Procurement Policy Act (88 Stat. 796) established the Office of Federal Procurement Policy (OFPP) in 1974. The Paperwork Reduction Act of 1980 (94 Stat. 2812; later recodified as the Paperwork Reduction Act of 1995, 109 Stat. 163) established the Office of Information and Regulatory Affairs (OIRA). The Chief Financial Officers (CFO) Act of 1990 (104 Stat. 2838) established the Office of Federal Financial Management (OFFM). The E-Government Act of 2002 (116 Stat. 2899) established the Office of Electronic Government (E-Gov Office). The current profile of OMB's leadership and organizational structure is available on the agency's website. In addition to OMB's leadership and their support staff, OMB has three major types of offices: (1) resource management offices; (2) statutory offices; and (3) OMB-wide support offices. Each of OMB's four resource management offices (RMOs) focuses on a cluster of related agencies and issues (e.g., natural resource programs) to examine budget requests and make funding recommendations. In addition, RMOs are tasked with integrating management, budget, and policy perspectives in their work as a result of OMB's latest major reorganization in 1994. Politically appointed program associate directors (PADs) lead the RMOs. Below the PAD level, RMO staff are almost always career civil servants, and are organized into divisions and branches. Each RMO branch covers a cabinet department or collection of smaller agencies and is led by a career member of the Senior Executive Service (SES). OMB's program examiners staff each RMO branch. Three of the statutory offices focus on management areas: financial management (OFFM), procurement policy (OFPP), and information technology (E-Gov Office, shared with OIRA). The fourth office, OIRA, has a broad portfolio of responsibilities, including regulation, information policy and technology, paperwork reduction, statistical policy, and privacy. Analysts in the statutory offices develop policy, coordinate implementation, and work with the RMOs on agency-specific issues. OMB's seven support offices also play key roles. For example, the Budget Review Division (BRD) coordinates the process for preparing the President's annual budget proposal to Congress. The Legislative Reference Division (LRD) coordinates review of agencies' draft bills, congressional testimony, and correspondence to ensure compliance with the President's policy agenda. OMB's Economic Policy Office works with the President's Council of Economic Advisers (CEA) and the Treasury Department to develop economic assumptions. The other support offices are general counsel, legislative affairs, communications, and administration. OMB had 484 full-time equivalent (FTE) positions in FY2005 and estimated 500 for FY2006. OMB typically has a total of 20-25 political appointees and staff, while the rest are career civil servants. OMB's director, deputy director, and deputy director for management are presidentially appointed with Senate confirmation (PAS). The heads of OFPP, OFFM, and OIRA are also PAS officials. In contrast, the administrator of the E-Gov Office is presidentially appointed (PA). Figure 1 shows OMB's historical staffing. OMB's budget is driven mainly by personnel costs. Compensation and benefits were 88% of OMB's $67.8 million in total obligations for FY2005. The remainder chiefly covered contractual services (8%). Among OMB's offices, 51% of FY2005 funding went to the RMOs, 31% to the OMB-wide support offices (including the E-Gov Office), and 18% to the statutory offices. Figure 2 shows OMB's budget history. OMB's budget has fluctuated in recent years due to reallocations of funding, related to the "enterprise services program," among budget accounts in the EOP. For FY2003, Congress reallocated $8.3 million from OMB to the EOP's Office of Administration (OA) for central procurement of goods and services, reducing OMB's appropriation compared to the prior fiscal year. The President subsequently requested for both FY2004 and FY2005 that similar, though slightly reduced, funding be shifted back to OMB, but Congress continued a similar reallocation in both years. For FY2006, the President requested that the reallocation to OA continue, but Congress shifted $7 million, for rent and health unit costs, from OA back to OMB, and appropriated $76.2 million (after rescission) to OMB. For FY2007, the President proposed $68.8 million for OMB (9.7% lower than the FY2006 level) and $7.9 million (related to OMB's rent, health unit, transit subsidy, and flexible spending account costs) for OA. Including the $7.9 million proposed for OA that otherwise might be in OMB's budget, the FY2007 OMB proposal is a 0.6% increase in nominal dollars compared to FY2006, and a 1.7% decrease in constant dollars. As a primary support agency for the President, OMB has important and varied responsibilities. A 1986 study identified 95 statutes, 58 executive orders, five regulations, and 51 circulars that reflected OMB's operational authorities at the time. Most observers include as "major functions" of OMB those listed below. The Budget and Accounting Act, 1921, as amended and recodified, requires the President to submit each year a consolidated budget proposal for Congress's consideration. In this "formulation phase," OMB sends budget guidance to agencies via its Circular No. A-11 , which is updated each year to reflect the President's budget and management priorities. Agency heads then forward their formal budget requests to OMB, where the RMOs and E-Gov Office (for information technology initiatives) assemble options and analysis for decisions by OMB and the White House. After an opportunity for agency appeals, OMB's BRD coordinates production of the President's budget. When Congress completes action on appropriations bills and they are signed into law, the "execution phase" begins. The Antideficiency Act (which includes 31 U.S.C. SSSS 1511-1514) requires OMB to "apportion" appropriated funds (usually quarterly) to prevent agencies from spending at a rate that would exhaust their appropriations before the end of the fiscal year. OMB plays a key role in coordinating the President's legislative activities. Under Circular No. A-19 , OMB's LRD coordinates executive branch review and clearance of congressional testimony and correspondence and agencies' draft bills to ensure compliance with the President's policy agenda, make known the Administration's views on legislation, and allow affected agencies to provide input during intra-executive branch policy development. For non-appropriations legislation, LRD plays a coordination role in preparing "Statements of Administration Policy" (SAPs) for Congress, and memoranda to advise the President on enrolled bills (e.g., recommending signature or veto, or contents for signing statements). BRD performs similar duties for appropriations legislation. OMB exercises considerable influence over agency regulations. Under Executive Order 12866, OIRA works with OMB's RMOs to review agency rules and cost-benefit analyses. In addition, other OIRA policy and oversight responsibilities include statistical policy; paperwork reduction; government use of personal information under the Privacy Act (5 U.S.C. SS 552a); information technology investment under the Clinger-Cohen Act ( P.L. 104-106 , 110 Stat. 679); and information security. OIRA shares some responsibilities with the E-Gov Office. OMB has responsibility for overseeing management in the executive branch. OMB is responsible for clearing and approving proposed executive orders (EOs) and many proclamations. OMB's deputy director for management (DDM) is charged with overall responsibility for general management policies in the executive branch, including the domains of the statutory offices, plus human resources management. The statutory offices also develop policy and coordinate implementation in the areas of financial management (OFFM), procurement policy (OFPP), and information policy and technology (OIRA and E-Gov Office). OMB's RMOs are tasked with integrating budget, policy, and management issues for specific agencies in cooperation with the statutory offices. Observers disagree as to how well OMB has fulfilled these management responsibilities. Some have argued that the "M" in OMB is more mirage than real, because budget responsibilities crowd out attention to management issues, while others have argued that budget and management responsibilities cannot realistically be separated. OMB leads implementation of the George W. Bush Administration's Program Assessment Rating Tool (PART) and President's Management Agenda (PMA). The PART, which OMB uses to rate the "overall effectiveness" of programs, has been used to help justify the President's budget proposals. The PMA includes, among other things, five government-wide initiatives and quarterly evaluation of agencies on a "scorecard" with red, yellow, or green "stoplight scores" for each of the initiatives, based on published "standards for success." As an agency, OMB's scorecard ratings for December 31, 2005, were two yellow and three red for "status" and, for "progress," four green and one yellow.

The Office of Management and Budget (OMB) is located within the Executive Office of the President (EOP). As a staff agency to the President, OMB acts on the President's behalf in preparing the President's annual budget proposal, overseeing the executive branch, and helping steer the President's policy actions and agenda. In doing so, OMB interacts extensively with Congress in ways that are both visible and hidden from view. This report provides a concise overview of OMB and its major functions, and highlights a number of issues influenced by OMB in matters of policy, budget, management, and OMB's internal operations. This report will be updated annually.

The dollar amounts allocated to health care in the budget of the Department of Defense (DOD) have more than doubled since FY2001, growing from about $17 billion to over $44.8 billion in FY2009. DOD projections for health care indicate that even further growth can be realistically anticipated, perhaps reaching $64 billion in FY2015. In 1990, according to DOD estimates, health-care expenses constituted 4.5% of DOD's budget; by 2015 they could reach over 12%. This growth in health-care costs could have a substantial effect on spending for other defense programs. The Defense health system, which is open to some 9.3 million potential beneficiaries, is large and complicated, but, in brief, DOD provides varying kinds of care to different elements of the eligible population: (1) a complete medical-care benefit to active duty personnel and dependents; (2) a choice of several benefit programs to most retired military personnel and their dependents who are not eligible for Medicare; (3) a program for those retirees who are eligible for Medicare (and enrolled in Medicare Part B), known as Tricare for Life (TFL), that covers almost all costs that Medicare does not cover (and is funded with an accrual fund that is considered part of the defense budget); and (4) a premium-based health care benefit for reservists and their families known as Tricare Reserve Select. Military retirees aged 65 and above also remain eligible for treatment in military medical facilities on a space or service-available basis. As of 2007, 36% of Tricare beneficiaries were retirees under age 65 and their dependents, approximately 20% were TFL retirees (generally age 65 and older), and 44% were active duty personnel and their dependents. Care is delivered through one of four plans. The first is Tricare Prime, a health maintenance organization (HMO), which is required for active duty personnel and open to dependents and many retirees. Two other plans are Tricare Extra, a preferred provider option in which beneficiaries seek care from providers who have agreed to an established fee structure, and Tricare Standard (formerly CHAMPUS) in which beneficiaries can seek care from any licensed provider and obtain partial reimbursement. A fourth plan, TFL, serves as a supplemental payer to Medicare for care by licensed providers. Prescriptions are available from military pharmacies at no cost; they can also be obtained from civilian pharmacies linked to DOD or by mail order with relatively low co-payments (e.g., $3 for a generic prescription; $9 for a brand; $22 for a non-formulary prescription). Special versions of these plans for beneficiaries in overseas and remote areas are also available. Several factors associated with these plans have led to current and projected cost growth. First, increases in costs of delivering medical services and of prescriptions reflect trends in medical care delivery throughout the civilian economy. Pharmacy costs have seen the fastest rate of growth in DOD health care spending, with annual per beneficiary prescription drug costs increasing 11 percent from FY2006 to FY2008. Second, the establishment of TFL in the FY2001 Floyd D. Spence National Defense Authorization Act ( P.L. 106 - 398 ) greatly increased costs by extending a significant medical benefit to millions of Medicare-eligible retirees and their dependents. Third, expanded access to defense health care for non-active duty reservists was provided in the John Warner National Defense Authorization Act for FY2007 ( P.L. 109 - 364 ). In addition, co-payments in Tricare Prime have been eliminated and the catastrophic cap for retirees has been lowered from $7,500 to $3,000, increasing costs to DOD. Several additional factors have contributed to concerns about the costs of defense health care. In comparison to other plans, including those available to civil servants under the Federal Employees Health Benefits Plan (FEHBP), DOD provides a generous benefit with limited contributions and co-payments required of beneficiaries. Observers also point out that most defense health care is not directly related to treating combat injuries. In recent decades, the multi-billion dollar system has been directed towards care of dependents, especially in the areas of obstetrics and pediatrics, and to the care of retirees at stages of their lives when medical needs tend to increase. Even with the need to care for injuries resulting from the U.S. commitment to Operation Iraqi Freedom, the bulk of DOD medical care is currently provided to dependents and retirees--not to the operating forces. Tricare beneficiaries, both active duty and retired, tend to make greater use of professional care than other sectors of the population. In FY2004, according to one estimate, in Tricare Prime the outpatient utilization rate was 44% higher than in civilian HMOs; the inpatient utilization rate was 60% higher. Health-care analysts tend to ascribe this to lower out-of-pocket costs for DOD beneficiaries. Low cost to beneficiaries and increases in the quality and efficiency of Defense health care in recent years have reportedly led many retirees with civilian jobs to choose Tricare rather than plans available through their civilian employers. Special supplements by employers for Tricare beneficiaries are illegal (see 10 U.S.C. 1097c). In the FY2007 budget request, DOD first proposed changes to constrain the costs of health care by focusing on care for retirees and their dependents who are not Medicare-eligible. For these beneficiaries, DOD proposed charging, for the first time, annual enrollment fees for Tricare Standard, and also significantly increased annual enrollment fees for Tricare Prime. Annual deductibles would have also been increased. No initiatives were proposed that would affect active duty military and their dependents, nor were changes proposed for health-care benefits available to retirees eligible for Medicare (those aged 65 and over along with a much smaller number of disabled retirees) who are covered by TFL. The TFL-eligible beneficiaries have been required to make somewhat higher co-payments for some prescriptions. DOD strongly urged that, in the future, cost shares be adjusted annually for inflation. The fact that enrollment fees for Tricare Prime were set at $230 (for individuals) and $460 (for individuals and their dependents) in 1995 and not subsequently adjusted has been viewed as an important contributing factor to the current budgetary situation. The Bush Administration's FY2008 budget submission was based on the assumption of $1.8 billion in proposed assumed savings to be derived from unspecified benefit reforms. For the FY2009 budget submission, the Bush Administration endorsed the recommendations of the Task Force on the Future of Military Health Care mandated by the Defense Authorization Act for FY2007 ( P.L. 109 - 364 ) (see below) and assumed $1.2 billion in savings from the increased Tricare premiums and co-payments. In July, 2008, the presidentially directed 10 th Quadrennial Review of Military Compensation (QRMC) issued its report on deferred and noncash compensation for members of the uniformed services. The QRMC recommended that Tricare Prime premiums for single retirees under age 65 be set at 40% of Medicare Part B premiums (which vary by the enrollee's adjusted gross income). Tricare Standard/Extra premiums for single retirees would be set at 15% of Part B premiums. Family rates would be set at twice the single rate regardless of family size. Tricare deductibles would be linked to Medicare rates with copayments waived for preventive care and prescription drug payments limited to no more than two thirds of the average copayment faced by civilians at retail pharmacies. In addition, the QRMC recommended that health care for retirees under age 65 be financed through accrual accounting in order to illuminate how current staffing decisions will affect future costs. In January 2009, DOD issued a report in response to the recommendations of the Task Force on the Future of Military Health Care as well as those made by the QRMC. This report endorsed many but not all of these recommendations. Of particular interest, the report states that DOD "will continue to ask for congressional authority to change fees and co-pays in an effort to maintain both a generous health care benefit and a fair and reasonable cost-sharing arrangement between beneficiaries and DOD." The 2010 Budget submitted by the Obama Administration does not contain legislative proposals to increase Tricare fees and the funding levels requested for the Defense Health Program do not assume savings from such proposals. Secretary Gates recently expressed his concern about the impact of increasing Tricare costs on the rest of the DOD budget and was quoted as saying "Health care is eating the department alive. Part of the problem is, we cannot get any relief from the Congress in terms of increasing either co-pays or the premiums." The DOD FY2010 Budget Summary Justification offers a similar message: Military Healthcare: The Department remains concerned with the cost of providing healthcare to its military forces - active duty and retirees. Total healthcare funding included in the FY2010 Base budget request is $47.4 billion. Projections indicate that military healthcare costs will increase by 5 to 7 percent per year through FY2015 if no changes are made to the current healthcare program fee and benefit structure. This continued growth is largely due to: - Increasing use of the healthcare benefit by eligible beneficiaries who previously elected not to use it; - Healthcare inflation and higher utilization of healthcare services; and - Expanded benefits authorized by Congress, such as TRICARE for Reservists. As these costs increase, more of the Department's budget is likely to be spent on healthcare and less on warfighting capabilities and readiness. Other unnamed DOD officials have been reported as saying that DOD's strategy is to link weapons cuts to health care costs and a need for fee increases: Instead of proposing an increase, Pentagon officials plan to highlight the cancellation or delay of weapons systems and other large cuts in military spending and make an argument that the inability to hold down soaring health care costs is part of the reason for those cuts. The idea, defense officials said, is that Congress may decide on its own that it is time to increase Tricare fees, which have not changed since the Tricare system was introduced in the mid-1990s. It remains to be seen how Congress will respond to this strategy. The FY2007, FY2008, and FY2009 defense authorization acts prohibited DOD from increasing premiums, deductibles, co-payments, and other charges through September 30, 2009 (See section 704 and 708 of P.L. 109 - 364 , sections 701 and 702 of P.L. 110 - 181 , and sections 701 and 702 of P.L. 110 - 417 ). Provisions were also enacted in 2006 (see section 707 of P.L. 109 - 364 ) to prohibit most civilian employers (including state and local governments) from actively encouraging or offering incentives to employees who are retired servicemembers to rely on Tricare. The FY2007 national defense authorization (see section 711 of P.L. 109 - 364 ) also required the establishment of a DOD Task Force on the Future of Military Health Care, composed of military and civilian officials with experience in health-care budget issues, to examine and report on efforts to improve and sustain defense health care over the long term including the "beneficiary and Government cost sharing structure required to sustain military health benefits." Another provision of the same act (section 713) required the Government Accountability Office (GAO) in cooperation with the Congressional Budget Office (CBO) to prepare an audit of the costs of health care to both DOD and beneficiaries between 1995 and 2005. The Task Force on the Future of Military Health Care submitted its final report in December 2007 (available at http://www.dodfuturehealthcare.net/images/103-06-2-Home-Task_Force_FINAL_REPORT_122007.pdf ). It recommended phased-in changes in enrollment fees and deductibles that would restore cost-sharing relationships that existed when Tricare was created. For instance, this would mean that average enrollment fees for the average under-65 retiree family would gradually rise from $460 per year to $1,100 per year. GAO released its report, Military Health Care: TRICARE Cost-Sharing Proposals Would Help Offset Increasing Health Care Spending, but Projected Savings Are Likely Overestimated (GAO-07-647, available at http://www.gao.gov/new.items/d07647.pdf ) in May 2007. GAO concluded that DOD had overestimated savings that would result from higher cost-shares, however, DOD's proposed fee and deductible increases would save at least $2.3 billion over five years. As part of the FY2009 budget request DOD asked for authority to implement the recommendations of the Task Force on the Future of Military Health Care. DOD's budget submission assumed savings of $1.2 billion from the additional fees charged as well as reductions in use of services by military retirees. Although the Congress rejected the proposed fee increases for FY2009, it did address the cost containment issue in another way by enacting a number of preventive health measures intended to reduce usage at some point in the future. The preventive care measures included the following. Waiver of copayments for non-Medicare eligible Tricare beneficiaries for preventive services including cancer screening, annual physical examinations, and vaccinations (section 711 of P.L. 110-417 ). A three-year military health risk management demonstration project to evaluate the efficacy of providing incentives to encourage healthy behaviors (section 712). A smoking cessation program for non-Medicare eligible Tricare beneficiaries (section 713). A preventive health allowance demonstration project running through December 31, 2011, in which not more than 1,500 members each of the Army, Navy, Air Force, and Marine Corps annually would receive $500 if without dependents or $1,000 with dependents in order to increase the use of preventive health services (section 714). Additional authority for studies and demonstration projects relating to delivery of health and medical care (section 715). Reporting requirements were included and the results of these projects may be useful in informing future policy decisions. However, the Congressional Budget Office (CBO) cost estimate does not project any savings and suggests that if DOD were to carry out each of the programs authorized by section 712 alone, the cost would be about $50 million per year over a period of three years, based on costs for other demonstration projects. The fact that both armed services committees called for extensive outside reviews of military health-care financing suggests that Congress may revisit proposals for fee increases at some point as part of more comprehensive changes in defense health-care budgeting. Different approaches have already been suggested. One option mentioned by CBO, would provide an opportunity for retirees to forego defense health care until they turn 65 in exchange for a lump-sum payment. The size of the payment would be adjusted to a level that would be less costly to DOD over the longer term than current programs. The acceptability of this approach to retirees is uncertain; the number of retirees who would take such a payout is unknown and might be very limited given the attractiveness of Tricare. Another approach would be to offer beneficiaries a "cafeteria plan" under which they would receive an annual cash allowance for health care. Using this allowance they could then select a Tricare plan, a new option involving lower enrollment fees and higher co-payments and deductibles, or apply some of the funds against premiums for civilian health insurance. This could in effect allow retirees to establish health savings accounts (HSAs) for themselves and their dependents. CBO estimates that such an approach could reduce DOD's outlays by 25% not including the cost of the cash allowance. However, HSAs are controversial and making them available to military retirees could raise concerns among both beneficiaries and others with an interest in government health programs. Still another option would be to readjust budgetary categories to remove health-care spending for retirees--both for those not yet eligible for Medicare and the accrual fund for TFL--from defense appropriation acts. Some have argued that this approach would encourage more meaningful analyses of current defense issues by removing the need to consider trade-offs with retiree health care. Others have countered that such a maneuver would undermine analysis by obscuring the true costs of decisions affecting military manpower. The Obama Administration has chosen to not propose any Tricare user fee increases for FY2010. However, the FY2010 budget submission does propose to reduce spending for several high profile weapons acquisitions. To the extent that legislators wish to restore funding for those proposed cuts, it can be anticipated that cost savings in the Tricare program may be offered as a potential source for those funds. During the Bush Administration, the DOD maintained that there is a need to adjust fees to make up for frozen fee structures over the past decade and that the proposed rates are still much lower than the fee structures of civilian plans including those in the FEHBP. Retiree organizations have continued to argue that proposed raises in enrollment fees and co-payments are unfair, that the requirements of military service are unique and extraordinary and that health-care premiums have been paid in service and sacrifice. Some further argue that fee hikes are especially inappropriate for retiring servicemembers who have borne the costs of the fighting in Iraq and Afghanistan during the past several years. There are complex considerations with regard to any of the various approaches to dealing with the growth of military medical spending. In the case of retired servicemembers and their dependents, most recognize a special responsibility inasmuch as health care after retirement is viewed as an important incentive to follow a difficult and often dangerous career. Other observers argue that competing requirements for defense funds do exist and that funds for medical care should not be seen as unlimited. These issues have been present ever since DOD proposed fee increases in 2006 and are not expected to disappear in the near future.

The Obama Administration's Fiscal Year 2010 budget submission does not include any proposals to increase fees or copayments for Tricare beneficiaries. Previously, the FY2007, FY2008, and FY2009 budget submissions had proposed increases in Tricare enrollment fees, deductibles, and pharmacy co-payments for retired beneficiaries not yet eligible for Medicare. These actions were justified by DOD as necessary to constrain the growth of health care spending as an increasing proportion of the overall defense budget in the next decade. Congress passed legislation each year to prohibit the proposed fee increases. Defense health care spending remains a significant issue for the DOD. A DOD report published in January, 2009, stated that DOD "will continue to ask for congressional authority to change fees and copays in an effort to maintain both a generous health care benefit and a fair and reasonable cost-sharing arrangement between beneficiaries and DoD." However, DOD's strategy for FY2010 seems to highlight the cancellation or delay of weapons systems and other large cuts in military spending. These cuts, it may be argued, can be attributed to the growing percentage of the DOD budget devoted to medical care, an estimated 8.7%in FY2009. This cost growth, may in turn, be attributed in part to Tricare fee levels, which have not changed since the Tricare system was implemented in 1995.

I n United States v. Windsor , the U.S. Supreme Court held that Section 3 of the Defense of Marriage Act (DOMA) was unconstitutional, finding, in part, that it violated the Constitution's equal protection and substantive due process guarantees. Section 3 had required that marriage be defined as the union of one man and one woman for the purpose of federal enactments, rendering individuals in a same-sex marriage ineligible for spousal Social Security benefits. After the Windsor decision, the Social Security Administration (SSA) started processing Old-Age, Survivors, and Disability Insurance (OASDI) applications for some claimants in a same-sex marriage. Under the Social Security Act, eligibility for spousal benefits depends on the applicant's marital status as defined by the state in which the Number Holder is domiciled. ("Number Holder" simply refers to the person on whose work record benefits are based.) However, until Obergefell v. Hodges , the legality of some same-sex marriages remained in flux as state legislatures and courts changed and interpreted state marriage laws. Because the Social Security Act determines marital status by considering the laws of the state in which the Number Holder is domiciled, SSA could only process spousal benefits for some same-sex couples whose domicile state would recognize their marriage, even if they were married legally in another state. In Obergefell , the U.S. Supreme Court held that the Fourteenth Amendment requires a state to permit a marriage between two people of the same sex and to recognize a marriage between two people of the same sex when their marriage was lawfully licensed and performed out of state. Thus, because same-sex couples may now marry in all states, individuals in a same-sex marriage are eligible for spousal Social Security benefits, if they have met other statutory requirements. This report addresses eligibility for Social Security spousal benefits for individuals in a same-sex marriage. The report begins with an overview of the Social Security program, followed by a discussion of the marital requirements regarding eligibility for Social Security spousal benefits. The report concludes by analyzing how the recent Supreme Court cases have impacted Social Security eligibility for same-sex couples. Social Security is a federally administered, work-related entitlement program authorized by Title II of the Social Security Act. The program is financed primarily by payroll taxes paid by individuals who work in Social Security-covered employment and their employers. Employees and their employers each pay 6.2% of covered earnings, up to an annual limit on taxable earnings; self-employed individuals pay 12.4% of net self-employment income, up to an annual limit on taxable earnings. The program is also credited with federal income taxes that some beneficiaries pay on a portion of their benefits; reimbursements from the general fund of the Treasury for a variety of purposes; and interest income from the Treasury on the investment of Social Security revenues in special federal government obligations. The program provides monthly cash benefits to eligible retired or disabled workers and their family members, and to the family members of deceased workers. To be eligible for a retired-worker benefit, a worker needs a minimum of 10 years of covered employment, among other requirements. Fewer years of covered employment are needed to qualify for a disabled-worker benefit, depending on the age of the worker when he or she becomes disabled. As of September 2015, there were nearly 60 million Social Security beneficiaries: 43 million retired workers and their family members (72%); 11 million disabled workers and their family members (18%); and 6 million survivors of deceased workers (10%). A worker becomes eligible for Social Security benefits by working in Social Security-covered employment for a specified period, among other requirements. To be eligible for a retired-worker benefit, a worker needs a minimum of 40 earnings credits (10 years of covered employment). Fewer credits are needed to qualify for a disabled-worker benefit if the worker is under age 62. The number of credits needed varies, depending on the age of the worker when he or she becomes disabled. For example, a worker who becomes disabled before age 24 needs six credits (1 1/2 years of covered employment) in the three years before the onset of the disability. For Social Security purposes, disability is defined as the inability to engage in substantial gainful activity (SGA) by reason of a medically determinable physical or mental impairment that is expected to last for at least 12 months or result in death. Generally, the worker must be unable to do any kind of substantial work that exists in the national economy, taking into account age, education, and work experience. A worker is eligible to receive a retirement benefit as early as age 62. However, if a worker begins receiving a retirement benefit before the full retirement age (FRA), his or her benefit is permanently reduced to take into account early retirement and the longer period of expected benefit receipt. The FRA ranges from age 65 to age 67, depending on the worker's year of birth. As of September 2015, retired workers accounted for 67% of the beneficiary population, and disabled workers accounted for 15% of all beneficiaries. A worker's monthly Social Security benefit is based on his or her career-average earnings in covered employment. Specifically, a worker's primary insurance amount (PIA) is his or her monthly benefit payable at the FRA. The PIA is determined based on the following steps: (1) the worker's annual earnings in covered employment are indexed to historical wage growth, to bring past earnings up to near-current wage levels; (2) the highest 35 years of indexed earnings are summed to get the total earnings; (3) the total earnings are divided by 420 months (35 years x 12 months) to get the amount of average indexed monthly earnings (AIME) over the worker's career in covered employment; and finally, (4) a progressive benefit formula is applied to the worker's AIME (the progressive benefit formula is designed to provide a higher replacement rate for lower-wage workers compared to higher-wage workers). The monthly benefit that is payable to a worker may be less than or greater than his or her PIA, depending on circumstances. For example, a worker's benefit is permanently reduced if he or she claims retirement benefits before the full retirement age, to take into account the longer period of expected benefit receipt (based on average life expectancy). Similarly, a worker's benefit is permanently increased if he or she claims retirement benefits after the full retirement age (up to age 70), to take into account the shorter period of expected benefit receipt. In addition to benefit adjustments based on a worker's age at the time of entitlement, benefits may be adjusted for other reasons. For example, under the r etirement e arnings t est , benefits are temporarily reduced if a beneficiary is below the FRA and has earnings above specified thresholds. As of September 2015, the average monthly benefit was $1,338 among retired workers and $1,165 among disabled workers. In addition to qualifying for Social Security benefits based on one's own work record, a person may qualify for benefits based on another person's work record as an eligible family member. Benefits are payable to the spouse, divorced spouse, or child of a retired or disabled worker. Benefits are also payable to the widow(er), divorced widow(er), child, or dependent parent of a deceased worker. In addition, a mother's/father's benefit is payable to a young widow(er) who is caring for a deceased worker's child, if the child is under the age of 16 or disabled and the child is entitled to benefits. Table A-1 in the Appendix to this report provides a summary of Social Security benefits payable to family members based on the worker's record, including the basic eligibility requirements and benefit amounts for each type of benefit. If a person becomes simultaneously entitled to benefits based on his or her own work record and the work record of another person as an eligible family member, the person does not receive both benefits in full. Rather, under the dual entitlement rule , the person receives (1) his or her own benefit, plus (2) the benefit based on another person's work record (the auxiliary benefit) after it has been reduced by the amount of the person's own benefit (in some cases, the auxiliary benefit may be reduced to zero). In effect, the person receives the higher of the two benefit amounts. Other adjustments to auxiliary benefits may apply. For example, auxiliary benefits are reduced if total benefits payable based on the worker's record exceed the maximum family benefit . As of September 2015, dependents and survivors of retired, disabled, or deceased workers accounted for 18% of the beneficiary population. Sections 216(a) through (g) of the Social Security Act define the terms spouse, surviving spouse, wife, widow, divorced spouse, child, husband, and widower for purposes of qualifying for benefits as an eligible family member of the worker. In order to qualify for these benefits as one of these family members, the applicant must meet the relationship requirements to the Number Holder (also referred to as the insured) as set out in these provisions. (As noted previously, the Number Holder is the worker on whose record benefits are claimed.) Section 216(h) of the Social Security Act ( Determination of Family Status ) references the use of state law in the determination of entitlement to Social Security benefits as a spouse, surviving spouse, child, or parent of the worker. While state law does not affect a person's entitlement to benefits as a retired or disabled worker, it does affect a person's entitlement to benefits as a family member of a retired, disabled, or deceased worker. In determining family relationship for purposes of a person's application for benefits as a spouse or surviving spouse , SSA looks to the laws of the state--as interpreted by the courts of that state--where the Number Holder is domiciled at the time of the application, or at the time of the Number Holder's death, as specified in Section 216(h)(1)(A) of the Social Security Act. SSA has interpreted "domiciled" in this context to mean the "true and fixed home (legal domicile) of a person ... to which a person intends to return whenever he or she is absent." The relationship requirement is met if the applicant and the Number Holder were validly married under state law as interpreted by the courts of that state at the time of application for spousal benefits, or at the time of the Number Holder's death in the case of an application for surviving spouse benefits. Alternatively, the relationship requirement is met if, under state intestate law, the applicant would be able to inherit a wife's, husband's, widow's, or widower's share of the Number Holder's personal property if the Number Holder were to die without leaving a will. The Uniform Probate Code, which serves as a guideline for the intestate laws of some states, does not explicitly define "spouse" or "marriage." For the purposes of defining marriage in intestate law, the Uniform Probate Code instead directs state legislatures to incorporate that state's particular legal definition of marriage. If a relationship by marriage cannot be established under state law, the applicant may be eligible for benefits as the wife, husband, widow, or widower of the Number Holder under other circumstances (i.e., based upon a deemed valid marriage), as specified in Section 216(h)(1)(B) of the Social Security Act. For example, the regulations state, in part: You will be deemed to be the wife, husband, widow, or widower of the insured if, in good faith, you went through a marriage ceremony with the insured that would have resulted in a valid marriage except for a legal impediment. A legal impediment includes only an impediment which results because a previous marriage had not ended at the time of the ceremony or because there was a defect in the procedure followed in connection with the intended marriage. Same-sex couples were not always eligible for Social Security spousal benefits, as Section 3 of the Defense of Marriage Act (DOMA) had required that marriage be defined as the union of one man and one woman for the purpose of federal enactments. Under the Social Security Act as discussed above, SSA looks to the laws of the state in which the Number Holder is domiciled to determine whether the applicant and Number Holder are married for the purposes of spousal benefit eligibility. Changes in the state laws and the Supreme Court decisions in U.S. v. Windsor and Obergefell v. Hodges have impacted SSA's processing of spousal benefit claims for applicants in a same-sex relationship. The following sections analyze the changes in Social Security eligibility for individuals in same-sex marriages by tracking the recent Supreme Court cases and their impact on state marital laws. On June 26, 2013, in United States v. Windsor , the Supreme Court held that Section 3 of the Defense of Marriage Act (DOMA) is unconstitutional, finding, in part, that it violated the Constitution's equal protection and substantive due process guarantees. Section 3 had required that marriage be defined as the union of one man and one woman for the purpose of federal enactments. According to the Court, federal statutes that refer to a marriage for federal purposes should be interpreted as applying equally to legally married same-sex couples. The Court did not address Section 2 of DOMA, which allows individual states to refuse recognition of same-sex marriages. In response to the Windsor decision, SSA started processing Social Security (OASDI) applications for some claimants in same-sex marriages. Because eligibility for spousal Social Security benefits depends on the applicant meeting the relationship requirement to the Number Holder, as outlined in 216(h), some but not all applicants in a same-sex marriage were eligible for these benefits during the period between the Windsor and Obergefell decisions. As discussed in the previous section, the Social Security Act's Section 216(h) states that when determining family relationship for purposes of a person's application for benefits as a spouse or surviving spouse , SSA looks to the laws of the state--as interpreted by the courts of that state--where the Number Holder is domiciled at the time of the application, or at the time of the Number Holder's death. Thus, in order for SSA to have recognized a same-sex couple as married during this period of time, the couple must have had a valid marriage and the Number Holder must have been domiciled in a state that recognized such marriage at the time of the application. For example, an applicant in a same-sex marriage was eligible for spousal benefits if the couple married and lived in a state that recognized same-sex marriage. However, an applicant in a same-sex marriage was not eligible for spousal benefits if the couple legally married in one state and then, at the time the applicant filed the application, the Number Holder moved to another state that did not recognize same-sex marriage. For applicants in a same-sex domestic partnership or civil union, SSA generally determined eligibility for spousal benefits by looking at whether the domicile state would grant inheritance rights to the applicant. When considering these types of relationships, SSA first determined whether the nonmarital legal relationship was valid in the place it was established and whether the relationship qualified as a marital relationship under the laws of the state of the Number Holder's domicile. SSA determined whether a nonmarital legal relationship qualified as a marital relationship using the intestate laws of the Number Holder's domicile. If under such a state's intestate laws, an applicant could inherit a spouse's share of the Number Holder's personal property if the Number Holder died without a will, then SSA would have considered the same-sex couple's relationship as a marital relationship for the purposes of determining entitlement to Social Security benefits. If the Number Holder's domicile-state at the time of application did not recognize the nonmarital legal relationship for same-sex couples or does not grant that type of relationship with the rights to inherit under intestate law, then SSA would not have considered that marriage as valid for the purposes of determining entitlement to benefits. On June 26, 2015, in a 5-4 decision, the Supreme Court struck down state same-sex marriage bans in Obergefell v. Hodges. The Court held that the fundamental right to marry includes the right of same-sex couples to marry under the Fourteenth Amendment's due process and equal protection guarantees. Under the Court's decision, all states must both permit same-sex couples to marry in their respective states and recognize same-sex marriages that were celebrated in other states. Because eligibility for Social Security spousal benefits depends on whether the state would recognize the applicant's marriage to the Number Holder at the time of the application, individuals in a same-sex marriage are now eligible for spousal Social Security benefits, if they have met other statutory requirements. Following the Obergefell decision, SSA noted that "more same-sex couples will be recognized as married for purposes of determining entitlement to Social Security benefits." With respect to policy guidance concerning the processing of applications for same-sex couples who may have been ineligible for benefits before Obergefell , SSA further stated: "We are working with the Department of Justice to analyze the [ Obergefell ] decision and provide instructions for processing claims." The agency indicates that new information regarding implementation of the Obergefell decision will be posted to its website as it becomes available. The following table shows the dates when states and U.S. territories permitted or recognized same-sex marriage. The dates are considered, for example, when establishing whether a same-sex marriage is valid and the duration-of-marriage requirement is met for purposes of determining entitlement to Social Security benefits. In some cases, the specified dates are consistent with the recent Supreme Court decisions affecting Social Security eligibility for same-sex couples: United States v. Windsor (June 26, 2013) and Obergefell v. Hodges (June 26, 2015). Table A-1 summarizes the different types of Social Security benefits payable to eligible family members based on a worker's record, including basic eligibility requirements and basic benefit amounts before any applicable adjustments. Benefits payable to family members may be subject to adjustments for a variety of reasons. For example, if a person becomes simultaneously entitled to benefits based on his or her own work record (a worker benefit) and the work record of another person as an eligible family member (an auxiliary benefit), the auxiliary benefit is reduced by the amount of the person's own worker benefit under the dual entitlement rule . In effect, the person receives the higher of the two benefit amounts (not both benefits in full). In other examples, auxiliary benefits are reduced if the person becomes entitled to auxiliary benefits before attaining the FRA; total benefits payable based on the worker's record exceed the maximum family benefit ; the auxiliary beneficiary receives a pension from work that was not covered by Social Security (under the government pension offset ); or the auxiliary beneficiary is below the FRA and has current earnings above specified thresholds (under the retirement earnings test ).

This report addresses eligibility for Social Security spousal benefits for individuals in a same-sex marriage. Key Takeaways Under the Social Security Act, eligibility for spousal benefits depends on the applicant's marital status as defined by the laws of the state as interpreted by the courts of that state in which the Number Holder, the person on whose work record the benefit is based, is domiciled. Section 3 of the Defense of Marriage Act (DOMA) had required that marriage be defined as the union of one man and one woman for the purpose of federal enactments, rendering individuals in a same-sex marriage ineligible for spousal Social Security benefits. In United States v. Windsor, the U.S. Supreme Court held that Section 3 of the Defense of Marriage Act (DOMA) was unconstitutional, finding, in part, that it violated the Constitution's equal protection and substantive due process guarantees. In response to the Windsor decision, the Social Security Administration (SSA) has started processing Old-Age, Survivors, and Disability Insurance (OASDI) applications for some claimants in same-sex marriages. However, until Obergefell v. Hodges, the legality of some same-sex marriages remained in flux as state legislatures and courts changed and interpreted state marriage laws. Because the Social Security Act determines marital status by considering the laws of the state in which the Number Holder is domiciled, the Social Security Administration could only process spousal benefits for some same-sex couples whose domicile state would recognize their marriage, even if they were married legally in another state. In Obergefell v. Hodges (June 26, 2015), the U.S. Supreme Court held that the Fourteenth Amendment requires a state to permit a marriage between two people of the same sex and to recognize a marriage between two people of the same sex when their marriage was lawfully licensed and performed out of state. Thus, because same-sex couples may now marry in all states, individuals in a same-sex marriage are eligible for spousal Social Security benefits, if they have met other statutory requirements. With respect to policy guidance concerning the processing of applications for applicants in same-sex marriages who may have been ineligible for benefits before Obergefell, SSA has stated that it is working with the Department of Justice to analyze the Obergefell decision in order to provide instructions for processing claims. The agency has indicated that new information regarding implementation of the Obergefell decision will be posted to its website as it becomes available.

T he House of Representatives has several different parliamentary procedures through which it can bring legislation to the chamber floor. Which will be used in a given situation depends on many factors, including the type of measure being considered, its cost, the amount of political or policy controversy surrounding it, and the degree to which Members want to debate it and propose amendments. According to the Legislative Information System of the U.S. Congress (LIS), in the 114 th Congress (2015-2016), 1,200 pieces of legislation received House floor action. This report provides a statistical snapshot of the forms, origins, and party sponsorship of these measures and of the parliamentary procedures used to bring them to the chamber floor during their initial consideration. Legislation is introduced in the House or Senate in one of four forms: the bill (H.R./S.), the joint resolution (H.J.Res./S.J.Res.), the concurrent resolution (H.Con.Res./S.Con.Res.), and the simple resolution (H.Res./S.Res.). Bills and joint resolutions can become law, but simple and concurrent resolutions cannot; they are used instead for internal organizational or procedural matters or to express the sentiment of one or both chambers. In the 114 th Congress, 1,200 pieces of legislation received floor action in the House of Representatives. Of these, 907 (76%) were bills or joint resolutions, and 293 (24%) were simple or concurrent resolutions. Of the 1,200 measures receiving initial House floor action in the 114 th Congress, 1,068 originated in the House, and 132 originated in the Senate. It is generally accepted that the House considers more legislation sponsored by majority party Members than measures introduced by minority party Members. This was borne out in practice in the 114 th Congress. As is reflected in Table 1 , 78% of all measures receiving initial House floor action in the last Congress were sponsored by Members of the Republican Party, which had a majority of seats in the House. When only lawmaking forms of legislation are considered, 76% of measures receiving House floor action in the 114 th Congress were sponsored by Republicans, 24% by Democrats, and none by political independents. The ratio of majority to minority party sponsorship of measures receiving initial House floor action in the 114 th Congress varied widely based on the parliamentary procedure used to call up the legislation on the House floor. As noted in Table 2 , 69% of the measures considered under the Suspension of the Rules procedure were sponsored by Republicans, 31% by Democrats, and none by political independents. That measures introduced by Members of both parties were considered under Suspension is unsurprising in that (as discussed below) Suspension of the Rules is generally used to process non-controversial measures for which there is wide bipartisan support. In addition, passage of a measure under the Suspension of the Rules procedure, in practice, usually requires the affirmative votes of at least some minority party Members. The ratio of party sponsorship on measures initially brought to the floor under the terms of a special rule reported by the House Committee on Rules and adopted by the House was far wider. Of the 172 measures the Congressional Research Service identified as being initially brought to the floor under the terms of a special rule in the 114 th Congress, all but one were sponsored by majority party Members. The breakdown in party sponsorship on measures initially raised on the House floor by unanimous consent was uneven, with majority party Members sponsoring 76% of the measures brought up in this manner. The following section documents the parliamentary mechanisms that the House used to bring legislation to the floor for initial consideration during the 114 th Congress. In doing so, it does not make distinctions about the privileged status such business technically enjoys under House rules. Most appropriations measures, for example, are considered "privileged business" under clause 5 of House Rule XIII (as detailed in the section on " Privileged Business " below). As such, they do not need a special rule from the Rules Committee to be adopted for them to have floor access. In actual practice, however, in the 114 th Congress the House universally provided for the consideration of these measures by means of a special rule, which, in general, could also provide for debate to be structured, amendments to be regulated, and points of order against the bills to be waived. Thus, appropriations measures considered in the 114 th Congress are counted in this analysis as being raised by special rule, notwithstanding their status as "privileged business." In recent Congresses, most legislation has been brought up on the House floor by Suspension of the Rules, a parliamentary device authorized by clause 1 of House Rule XV that waives the chamber's rules to enable the House to act quickly on legislation that enjoys widespread (even if not necessarily unanimous) support. The main features of the Suspension of the Rules procedure include (1) a 40-minute limit on debate, (2) a prohibition against floor amendments and points of order, and (3) a two-thirds vote of Members present and voting for passage. The suspension procedure is in order in the House on the calendar days of Monday, Tuesday, and Wednesday; during the final six days of a congressional session; and at other times by unanimous consent or special order. In the 112 th Congress (2011-2012), the House leadership announced additional policies that restrict the procedure for certain "honorific" legislation, generally require measures considered under Suspension to have been available for three days prior to their consideration, and require the sponsor of the measure to be on the floor at the time of a measure's consideration. These policies continued in force in the 114 th Congress (2015-2016). In the 114 th Congress, 743 measures, representing 62% of all legislation receiving House floor action, were initially brought up using the Suspension of the Rules procedure. This includes 703 bills or joint resolutions and 40 simple or concurrent resolutions. When only lawmaking forms of legislation are counted, 78% of bills and joint resolutions receiving floor action in the 114 th Congress came up by Suspension of the Rules. Eighty-nine percent of measures brought up by Suspension of the Rules originated in the House. The remaining 11% were Senate-passed measures. House rules and precedents place certain types of legislation in a special "privileged" category, which allows measures to be called up for consideration when the House is not considering another matter. Bills and resolutions falling into this category that saw floor action in the 114 th Congress include the following: Order of b usiness r esolutions. Procedural resolutions reported by the House Committee on Rules affecting the "rules, joint rules, and the order of business of the House" are themselves privileged for consideration under clause 5 of House Rule XIII. Order of business resolutions are commonly known as "special rules" and are discussed below in more detail. Committee a ssignment r esolutions. Under clause 5 of House Rule X and the precedents of the House, a resolution assigning Members to standing committees is privileged if offered by direction of the party caucus or conference involved. Providing for a djournment. Under Article I, Section 5, clause 4, of the Constitution, neither house can adjourn for more than three days without the consent of the other. Concurrent resolutions providing for such an adjournment of one or both chambers are called up as privileged. Questions of the p rivileges of the House. Under clause 2 of House Rule IX, resolutions raising a question of the privileges of the House affecting "the rights of the House collectively, its safety, dignity, and the integrity of its proceedings" are privileged under specific parliamentary circumstances described in the rule. Such resolutions would include the constitutional right of the House to originate revenue measures and resolutions impeaching government officials. Bereavement r esolutions. Resolutions expressing the condolences of the House of Representatives over the death of a Representative, President, or former President have been treated as privileged. Measures r elated to House o rganization. Certain organizational business of the House--such as resolutions traditionally adopted at the beginning of a session to notify the President that the House has assembled and to elect House officers, as well as concurrent resolutions providing for a joint session of Congress--have been treated as privileged business. Correcting e nrollments. Under clause 5 of House Rule XIII, resolutions reported by the Committee on House Administration correcting errors in the enrollment of a bill are privileged. In the 114 th Congress, 197 measures, representing 16% of the measures receiving floor action, came before the House on their initial consideration by virtue of their status as "privileged business." All of these 197 measures were simple or concurrent resolutions. The most common type of measure brought up in the House as "privileged business" during the 114 th Congress was special orders of business (special rules) reported by the Rules Committee, followed by resolutions assigning Representatives to committees. A special rule is a simple resolution that regulates the House's consideration of legislation identified in the resolution. Such resolutions, as noted above, are sometimes called "order of business resolutions" or "special orders," although most Members and staff simply refer to them as "rules." Special rules enable the House to consider a specified measure and establish the terms for its consideration--for example, how long the legislation will be debated, what (if any) amendments may be offered to it, and whether points of order against the measure or any amendments to it are waived. Under clause 1(m) of House Rule X, the Committee on Rules has jurisdiction over the "order of business" of the House, and it reports such procedural resolutions to the chamber for consideration. In current practice, although a relatively small percentage of legislation comes before the House via special rule, most measures that might be characterized as significant, complicated, or controversial are brought up in this way. In the 114 th Congress, 172 measures, or 14% of all legislation receiving House floor action, were initially brought before the chamber under the terms of a special rule reported by the Rules Committee and agreed to by the House. Of these, 163 (95%) were bills or joint resolutions, and nine (5%) were simple or concurrent resolutions. When only lawmaking forms of legislation are counted, 18% of bills and joint resolutions receiving floor action in the 114 th Congress came up by special rule. Ninety-one percent of the measures considered under a special rule during the 114 th Congress originated in the House, 9% being Senate legislation. As noted above, all but one measure--a Senate bill--brought before the House using this parliamentary mechanism were sponsored by majority party Members. In current practice, legislation is sometimes brought before the House of Representatives for consideration by the unanimous consent of its Members. Long-standing policies announced by Speakers of both parties regulate unanimous consent requests for this purpose. Among other things, the Speaker will recognize a Member to propound a unanimous consent request to call up an unreported bill or resolution only if that request has been cleared in advance with both party floor leaders and with the bipartisan leadership of the committee of jurisdiction. In the 114 th Congress, 87 measures, or 7% of all legislation identified by LIS as receiving House floor action, were initially considered by unanimous consent. Of these, 41 (47%) were bills or joint resolutions, and 46 (53%) were simple or concurrent resolutions. When only lawmaking forms of legislation are counted, 5% of bills and joint resolutions receiving floor action in the 114 th Congress came up by unanimous consent. Of the measures initially considered by unanimous consent during the 114 th Congress, 66% originated in the House. House Rule XV, clause 2 (sometimes called the "discharge rule"), establishes a means by which a majority of the House can bring to the floor for consideration a bill or resolution that has not been reported from House committee. Discharging a committee in this manner is a lengthy, multi-step process that is rarely successful. If a measure has been referred and pending in committee for at least 30 legislative days, any Member may submit a petition to discharge the committee of its further consideration. If 218 Members--a majority of the House--sign such a petition, a motion to discharge the committee of consideration of the measure may then be offered on the floor. This discharge motion can be made only on a second or fourth Monday that occurs after the petition is filed, and such a motion may not be made in the last six days of a congressional session. The motion to discharge is debatable for 20 minutes, and if it is adopted, a Member may then move that the House consider the legislation in question. In modern practice, it has become common for Members to introduce a special rule establishing unique terms of debate and amendment for an unreported measure and then file a discharge petition on that resolution after it has been pending before the Rules Committee for at least seven legislative days. In the 114 th Congress, one measure--a special rule introduced by a majority party Member providing for the consideration of an unreported bill--was brought to the House floor by the procedures contained in the discharge rule. The House of Representatives has established special parliamentary procedures to bring private legislation to the chamber floor and consider legislation dealing with the business of the District of Columbia. It has also created the Calendar Wednesday procedure, where the standing committees are recognized in turn to call up measures that have been reported but not granted a rule by the Rules Committee. These procedures are infrequently used, and no legislation was brought before the House in the 114 th Congress by any of these three parliamentary mechanisms.

The House of Representatives has several different parliamentary procedures through which it can bring legislation to the chamber floor. Which of these will be used in a given situation depends on many factors, including the type of measure being considered, its cost, the amount of political or policy controversy surrounding it, and the degree to which Members want to debate it and propose amendments. This report provides a snapshot of the forms and origins of measures that, according to the Legislative Information System of the U.S. Congress, received action on the House floor in the 114th Congress (2015-2016) and the parliamentary procedures used to bring them up for initial House consideration. In the 114th Congress, 1,200 pieces of legislation received floor action in the House of Representatives. Of these, 907 (76%) were bills or joint resolutions, and 293 (24%) were simple or concurrent resolutions. Of these 1,200 measures, 1,068 originated in the House, and 132 originated in the Senate. During the same period, 62% of all measures receiving initial House floor action came before the chamber under the Suspension of the Rules procedure, 16% came to the floor as business "privileged" under House rules and precedents, 14% were raised by a special rule reported by the Committee on Rules and adopted by the House, and 7% came up by the unanimous consent of Members. One measure was processed under the procedures associated with clause 2 of Rule XV, the House Discharge Rule. When only lawmaking forms of legislation (bills and joint resolutions) are counted, 78% of measures receiving initial House floor action in the 114th Congresses came before the chamber under the Suspension of the Rules procedure, 18% were raised by a special rule reported by the Committee on Rules and adopted by the House, and 5% came up by unanimous consent. No lawmaking forms of legislation received House floor action via the Discharge Rule or by virtue of being "privileged" under House rules. The party sponsorship of legislation receiving initial floor action in the 114th Congress varied based on the procedure used to raise the legislation on the chamber floor. Sixty-nine percent of the measures considered under the Suspension of the Rules procedure were sponsored by majority party Members. All but one of the 172 measures brought before the House under the terms of a special rule reported by the House Committee on Rules and adopted by the House were sponsored by majority party Members.

RS21558 -- Genetically Engineered Soybeans: Acceptance and Intellectual Property Rights Issues in SouthAmerica Updated October 17, 2003 The United States is the world's leading producer and exporter of soybeans. However, South American soybean production and tradehas expanded rapidly during the past 15 years, greatly increasing the competitiveness of international oilseedmarkets. Together, theUnited States, Argentina, and Brazil are expected to produce nearly 83% of the world's soybeans in 2002/03, andto account for over90% of all soybeans traded on international markets. (1) Given a highly competitive international soybean market and growinginternational debate over the nature of production and trade in genetically- engineered (GE) crops, controversy hasemerged in recentyears over the growing pirated use of Roundup Ready (RR) soybeans, a GE variety, by producers in Argentina andBrazil. (2) Thispractice appears to provide a competitive advantage to Argentine and Brazilian soybean exports, and to be aviolation of theintellectual property rights (IPR) of the RR technology producer, Monsanto. Roundup Ready (RR) soybeans are genetically engineered to be resistant to the herbicide glyphosate. Glyphosate also was developedby Monsanto and is marketed under the brand name Roundup. RR soybeans are patented in the United States byMonsanto. (3) Monsanto licenses the RR technology to seed companies, which incorporate it into their conventional soybeanvarieties and sell theGE seeds to farmers. Among other things, the patent gives Monsanto and those companies to whom it has licensedthe technologymore control in setting prices and restricting the product's use. For example, U.S. farmers pay a technology feeestimated at $7.44 oneach 50-pound bag of RR planting seed. (4) In addition,as part of a signed purchase agreement, U.S. farmers are prohibited fromsaving seed from harvest for future planting or for resale to other farmers. Despite the additional cost andrestrictions, RR soybeansare favored over traditional varieties because they significantly lower production costs, offer more flexibility in cropmanagement, andin many cases increase yields. According to USDA's March 31, 2003, Planting Intentions Report , 80%of the soybeans planted in theUnited States in 2003 will be RR varieties. The Monsanto company is based in St. Louis, Missouri, but has offices throughout the world where its seeks to market its technologyto agricultural producers. Since 1960, a total of 30 countries have approved Monsanto's RR soybean technologyfor import orplanting. (5) However, Monsanto has been unable toobtain patent protection in either Argentina or Brazil. In 1995, Monsanto'sapplication for a patent for RR soybeans in Argentina was rejected. Subsequent applications have not succeeded. (6) In Brazil, thecommercial status of GE soybeans (and GE crops in general) remains in dispute in the courts and no patents on RRtechnology havebeen issued. The status of GE soybeans in Brazil is particularly important to international oilseed markets sinceBrazil representsessentially the last potential major source for non-GE soybeans to world markets. Although RR soybean seeds are not patented in Argentina, Monsanto has agreements with other seed firms in Argentina allowingthem to use the RR technology in their seeds. As a result, Argentine farmers have access to and have increasinglyswitched to RRsoybean varieties. In 2001, about 90% of Argentina's soybean crop was planted to RR varieties. (7) The RR share of the 2003 crop isnearly 100%, according to news reports. An Argentine seed law (Act No. 20247; 1973) requires that all seeds must be certified for commercial use. However, Argentinefarmers have reportedly ignored this law and routinely save RR soybean seeds for planting or resale. Since thegovernment does notenforce this law, a large black market for RR soybeans in Argentina has developed that keeps seed prices low anddiscourages anyattempts by Monsanto or licensed companies to assess technology fees on RR soybeans. According to Monsanto,it is not feasible tocharge a technology fee on soybean seeds in Argentina without patent protection. (8) As a result, Argentine farmers save about $8 to $9per metric ton on the technology fee. (9) This is aconsiderable cost advantage over U.S. soybeans in a highly competitive internationalsoybean market. (10) In September 1998, the Brazilian Biosafety Commission (CTNBio), acting under government authority, approved the commercialplanting of RR soybeans. Two major groups opposed to the use of GE crops -- Greenpeace and the BrazilianConsumer DefenseInstitute -- immediately filed lawsuits in Brazilian courts challenging the CTNBio approval. In 1999 a lower courtissued aninjunction suspending the CTNBio approval of commercial planting of RR soybeans before any approvedcommercial plantingactually occurred. The case was appealed to a three-judge panel of the Brasilia Appeals Court, where it haslanguished. In February2002, the lead judge of the three-judge Appellate Court publicly announced in favor of commercial planting of RRsoybeans. However, a majority of the three-judge panel has yet to render a decision on the commercial use of RR soybeans. As a result, itremains illegal to plant GE soybeans in Brazil. However, Brazilian farmers are aware of the benefits of RRsoybeans and havereportedly smuggled seeds into Brazil from Argentina's black market. Despite the lack of government approval,80% of the crop inthe southernmost state of Rio Grande do Sul is estimated to be planted to RR soybean varieties. (11) USDA estimates that 10 to 20% ofBrazil's total soybean crop may be planted to RR soybean varieties (trade estimates range as high as 30%). (12) As in Argentina, notechnology fees are paid by RR soybean growers in Brazil. (13) The American Soybean Association (ASA) claims that the technologyfee savings for Brazilian growers ranges from $9.30 to $15.50 per acre depending on yields. (14) More recently, other international events have forced the Brazilian government to temporarily alter its official position on GEsoybeans. In June 2001, China -- the world's leading importer of soybeans -- issued controversial rules governingthe use, sale, andimportation of GE soybeans. Under the rulings, China will only accept GE soybeans that have been approved forexport by the sourcecountry, along with certain other conditions. On January 10, 2003, China rejected Brazil's initial application toexport GE soybeans,in part because Brazil does not officially recognize the domestic production and export of GE soybeans. In lateMarch 2003, underpressure from producer groups, the Brazilian government announced temporary Regulation 113 (R113) as an interimmeasureallowing official sales of RR soybeans from the 2002-03 (April-March) crop for both domestic uses and export. R113 expires inMarch 2004, after which Brazilian growers are expected to comply with the current law. Because Brazil's courts have been unable to resolve the crisis prior to this year's October-December planting period, the Lulagovernment has been forced to issue a second temporary reprieve from the GE planting ban. Temporary Regulation130 (R130),signed into law on September 25, 2003, approves the planting of GE soybeans for the 2003-04 growing season andextends thepossible sale period of RR soybeans through December 2004. In an attempt to curb black market trade in RRtechnology, farmersseeking to sell GE soybeans during this period must sign a document pledging not to buy seeds of untraced originin the future. (15) Inaddition, Brazilian soybean farmers are limited to planting GE seed stocks already on hand because R130 containsno provision forimporting or selling GE seeds in Brazil. Also, lack of any labeling protocol for GE crops is likely to complicatedomestic marketing. The Lula government states that it is preparing a comprehensive "bio-safety law" to address these regulatory gaps,but this legislationhas been slow to emerge. The Lula government remains split on this issue. The Minister of Agriculture favorsprompt legalization,while the Minister of Environment is opposed and has asked for an environmental impact study beforecommercialization isallowed. (16) Both ministers agree that rigidenforcement of existing regulations would mean the incineration of all GE crops and theimprisonment of growers for 1 to 3 years at great cost to the country's agricultural sector. Within Brazil, two principal camps argue against legalizing GE soybeans, but for very different reasons. Some consumer andenvironmental groups argue that, because the risks associated with GE crops are unknown, they should not belegalized. Peasantgroups such as the Landless Workers Movement (MST), on the other hand, are not against GE crops per se, butargue that legalizingGE crops will accelerate large-scale farming and give control over Brazil's agriculture to multinational corporationssuch asMonsanto. (17) Brazilian producer groups claim that lack of access to RR technology would place them at a competitive disadvantage in internationalmarkets. To date, no significant market premium for non-GE soybeans has emerged in either domestic orinternational marketssufficient to offset the cost advantages of adopting GE varieties. Given the rapid growth and widespread use of GEsoybeans,legalizing their commercial use may be the only viable solution for Brazil's government. GE Labeling in Brazil. Brazil's food labeling regulation for products containingGE ingredients took effect on December 31, 2001. (18) The law mandates the labeling of all foods for human consumption when morethan 4% of the ingredients are derived from GE commodities. R113, the first temporary regulation allowing GEsoybean planting, hasimposed stricter GE labeling conditions on Brazil's food marketing system. Under R113, non-GE soybeans are tobe segregated witha 0% tolerance level from GE soybeans. (19) Inaddition, labeling is required on all shipments into or out of Brazil with a GE soybeanpresence in excess of 1%. (20) Since improperlabeling is subject to a severe fine, and since Brazil's marketing system is not set up tohandle such strict segregation requirements, it is likely that all soybeans passing through Brazil's marketing systemwill have to belabeled as having GE content. It is reported that Brazil's National Agriculture Federation (NAF) estimates the costof testing thecurrent 2002/03 crop for GE content at about $277 million. The NAF says that passing this cost on to consumerswould make itimpossible for Brazil to remain competitive in the global soybean market. (21) International Market Implications. According to many market analysts, thedecision on the status of GE crops in Brazil will have significant market implications, especially for global soybeanmarkets. First, ifBrazil permanently legalizes GE soybeans, nearly all (about 90%) of the world's internationally traded soybeans willbe of GEvarieties. Second, a decision in favor of GE crops will be nearly irreversible because of mixing in the distributionand transportationsystems. Some analysts suggest that the current widespread planting of GE crops in Brazil is already irreversible. In short, a decisionin favor of GE soybeans by Brazil could do much to moot the debate about whether or not GE soybeans should belabeled or eventraded because there simply would not be any major international supplier of non-GE soybeans left. According to the U.S. Trade Representative, the U.S. is committed to a policy of promoting increased intellectual property protection,both through the negotiation of free trade agreements that strengthen existing international laws and through useof U.S. statutorytools as appropriate. (22) The U.S. Administration'sposition regarding GE crops is that, not only are food products made from GEcrops as safe as their conventional counterparts, but their production has the potential to spur agriculturalproductivity whilebenefitting the environment. (23) Congress hasgenerally supported this position. For example, both the Senate ( S.Res. 154 ) and the House ( H.Res. 252 ) have passed resolutions in support of the Administration's dispute settlementcase atthe World Trade Organization (WTO) brought against the European Union's ban on imports of GE crops. In hearings by the Senate Foreign Relations Subcommittee on Western Hemisphere, Peace Corps, and Narcotics Affairs on May 20,2003, to discuss opportunities for U.S. agriculture in agricultural trade negotiations in the Western Hemisphere, theIPR issue of RRsoybean piracy in Brazil was raised in testimony given by the ASA and Monsanto. (24) In the absence of patent protection in Argentinaor Brazil, accusations of IPR violation may be difficult to sustain in a court of law. However, both Argentina andBrazil are membersof the WTO and, as such, have agreed to abide by the WTO agreement on Trade-Related Aspects of IntellectualProperty Rights(TRIPS Agreement). As a result, if Monsanto were able to eventually obtain patent protection for the RRtechnology in eitherArgentina or Brazil, Monsanto could then seek recourse for IPR infringement via the legal systems of thosecountries perrequirements of the WTO TRIPS agreement.

U.S. soybean growers and trade officials charge that Argentina and Brazil -- the UnitedStates' two major export competitors in international soybean markets -- gain an unfair trade advantage by routinelysavinggenetically-engineered (GE), Roundup Ready (RR) soybean seeds from the previous harvest (a practice prohibitedin the UnitedStates) for planting in subsequent years. These groups also argue that South American farmers pay no royalty feeson the saved seed,unlike U.S. farmers who are subject to a technology fee when they purchase new seeds each year. The cost savingto South Americansoybean growers on the technology fee alone nets out to about $8 to $9 per metric ton -- a considerable costadvantage over U.S.soybeans in the highly competitive international soybean market. This practice also raises concerns about theintellectual propertyrights (IPR) of Monsanto (the developer of RR technology). Commercial use of RR soybeans in Brazil remains illegal despite apparent widespread planting. A 1998government approval of theircommercial use remains suspended by court injunction, and resolution over their commercial legality is beingconsidered by anappellate court. However, two recent Presidential decrees have given temporary reprieve to the ban on planting andmarketing GEsoybeans through December 2004. The eventual outcome on commercial legalization of GE crops in Brazil mayhave importantconsequences for intellectual property rights, as well as for international trade in GE crops. This report will beupdated as needed.

Technological advancement and the proliferation of the smartphone have reshaped the commercial landscape, providing consumers new ways to access the retail marketplace. On-demand companies are one such innovation, and underpinning on-demand commerce is the gig economy , the collection of markets that match service providers to consumers of on-demand services on a gig (or job) basis. Flagship on-demand companies such as Uber (driver services) and Handy (home cleaners and household services) have garnered significant media attention both for their market success and recent legal challenges, particularly concerning the classification of gig workers. Broader questions about the pros and cons of the gig economy have emerged as on-demand markets grow and the gig economy expands into new sectors. By some accounts, workers' willingness to participate in the gig economy provides evidence that gig work is a beneficial arrangement. Indeed, gig jobs may yield benefits relative to traditional employment in terms of the ease of finding employment and greater flexibility to choose jobs and hours. The gig economy may facilitate bridge employment (e.g., temporary employment between career jobs or between full-time work and retirement) or provide opportunities to generate income when circumstances do not accommodate traditional full-time, full-year employment. At the same time, however, the potential lack of labor protections for gig workers and the precarious nature of gig work have been met with some concern. The nationwide reach of gig work and its potential to impact large groups of workers, and their livelihoods, have attracted the attention of some Members of Congress. These Members have raised questions about the size and composition of the gig workforce, the proper classification of gig workers (i.e., as employees or independent contractors), the potential for gig work to create work opportunities for unemployed or underemployed workers, and implications of gig work for worker protections and access to traditional employment-based benefits. In support of these policy considerations, this report provides an overview of the gig economy and identifies legal and policy questions relevant to its workforce. The gig economy is the collection of markets that match providers to consumers on a gig (or job) basis in support of on-demand commerce. In the basic model, gig workers enter into formal agreements with on-demand companies to provide services to the company's clients. Prospective clients request services through an Internet-based technological platform or smartphone application that allows them to search for providers or to specify jobs. Providers (i.e., gig workers) engaged by the on-demand company provide the requested services and are compensated for the jobs. Business models vary across companies that control tech platforms and their associated brands. Some companies allow providers to set prices or select the jobs that they take on (or both), whereas others maintain control over price-setting and assignment decisions. Some operate in local markets (e.g., select cities) while others serve a global client base. Although driver services (e.g., Lyft, Uber) and personal and household services (e.g., TaskRabbit, Handy) are perhaps best known, the gig economy operates in many sectors, including business services (e.g., Freelancer, Upwork), delivery services (e.g., Instacart, Postmates), and medical care (e.g., Heal, Pager). With some exceptions, on-demand companies view providers as independent contractors--not employees--using their platforms to obtain referrals and transact with clients. This designation is frequently made explicit in the formal agreement that establishes the terms of the provider-company relationship. In addition, many on-demand companies give providers some (or absolute) ability to select or refuse jobs, set their hours and level of participation, and control other aspects of their work. In some ways, then, the gig economy can be viewed as an expansion of traditional freelance work (i.e., self-employed workers who generate income through a series of jobs and projects). However, gig jobs may differ from traditional freelance jobs in a few ways. The established storefront and brand built by the tech-platform company reduces entry costs for providers and may bring in groups of workers with different demographic, skill, and career characteristics. Because gig workers do not need to invest in establishing a company and marketing to a consumer base, operating costs may be lower and allow workers' participation to be more transitory in the gig market (i.e., they have greater flexibility around the number of hours worked and scheduling). In addition, a few commonly held characteristics of the provider-company relationship, when taken together, set gig work apart from the traditional freelance worker model. On-Demand Com panies Collect a Portion of Job Earnings. On-demand companies collect commissions from providers for jobs solicited through the company platform. Commissions often take the form of a flat percentage rate applied to job earnings, but some companies employ more sophisticated models. For example, in 2014, Lyft announced that it would return a portion of its 20% commission on rides as a bonus to certain high-activity drivers. On-Demand Companies Control the Brand. On-demand companies rely on the jobs brokered through their platform to generate revenue, and therefore have a clear stake in attracting and retaining clients. Consequently, and to varying degrees, these companies are selective about who can operate under their brand. Some on-demand businesses condition provider participation on a background check and credentials (e.g., some require past work experience, licenses, or asset ownership), and some reserve the right to terminate the relationship if the work delivered does not meet company-defined standards of quality and professionalism. On-Demand Companies Control the Provider-Client Relationship. Some on-demand companies discourage or bar providers from accepting work outside the platform from clients who use the company's platform. The provider agreement for business-services company Upwork, for example, includes a noncircumvention clause that prohibits providers from working with any client that identified the provider through the Upwork site for 24 months. Likewise, "service professionals" working with the on-demand home-services company Handy must agree that they will "not affirmatively solicit [clients] originally referred through the Handy Platform to book jobs through any means other than the Handy Platform." This is a potentially important difference between gig work and traditional freelance work, because it curtails the provider's ability to build a client base or operate outside the platform. Currently, the federal government does not publish statistics on the gig economy workforce. Instead, most of what is known about the number and characteristics of gig workers is drawn from related labor and tax entity statistics or comes from private-sector studies and academic research. Measuring and characterizing the gig economy workforce are challenging tasks for several reasons. A first necessary step to measuring gig workers is establishing a precise and measurable statistical definition of the gig economy, a complicated task given the relative newness of the concept, and its broad and evolving application. A second and closely related challenge is designing a survey that identifies individuals--through self-reported information--who meet this definition. This challenge requires carefully formulated survey questions that account for how workers perceive their gig economy activity and a data collection strategy that aligns with the potential for seasonal or otherwise dynamic participation. In addition to survey design issues, the relative infrequency of gig work in the overall population may create additional challenges to obtaining reliable estimates of these workers' characteristics and work patterns. Finally, modifying existing labor force survey instruments to measure these new labor force areas may require significant time and funding. While not measuring gig work specifically, federal statistics on self-employment, nonemployer establishments (i.e., business owners who are subject to federal income tax and have no paid employees), and nontraditional work arrangements may provide insight into the size and growth of the gig workforce. Existing large-scale labor force survey data on nontraditional work arrangements and self-employment may provide some insights, but are imperfect proxy measures of contemporary gig economy participants. Notably, in 1995, 1997, 1999, 2001, and 2005, the Bureau of Labor Statistics (BLS) funded the collection of data on the number and characteristics of contingent workers (i.e., those who did not expect their jobs to last) and workers in alternative employment arrangements (i.e., independent contractors, on-call workers, temporary help agency workers, and workers employed by contract firms). These data--collected through the Contingent Worker Supplement (CWS) to the Current Population Survey--establish that temporary workers and independent contractors represented a nonnegligible share of the workforce in 2005 and are not new phenomena. However, they are likely to have limited value to analyses of the gig economy workforce today, because these data predate the launch of the Apple iPhone, and the creation of Uber, Lyft, and other gig economy tech-platform companies. New CWS data collection is planned for 2017 and is expected to result in an important source of information on the size and characteristics of the gig workforce. In January 2016, then-Labor Secretary Tom Perez announced plans to rerun an expanded version of the CWS in May 2017 that specifically seeks to measure gig work. In particular, the BLS plans to include new questions in the 2017 CWS that "explore whether individuals obtain customers or online tasks through companies that electronically match them, often through mobile apps, and examine whether work obtained through electronic matching platforms is a source of secondary earnings." How workers participating in the gig economy should be classified--independent contractors or employees--is an open legal question (see section " Are Workers Within the Gig Economy Employees or Independent Contractors? "); nonetheless, self-employment data may provide some value to analyses of this workforce. The Current Population Survey (CPS), the instrument used by the BLS to produce its monthly unemployment rate estimates, routinely collects data on self-employment. Figure 1 shows the average number of unincorporated self-employed workers working each month in the United States from 2002 to 2016 and traces a gradual decline in self-employment from 2006 to 2011, after which growth has been relatively flat, with modest positive growth (approximately 1.3% annualized growth) between 2014 and 2016. Recent trends in self-employment--as illustrated in Figure 1 --do not appear to support a rapidly growing segment of independent contractors operating in the gig economy. However, due to methodological challenges associated with measuring self-employed workers and with capturing gig workers in survey data, it is possible that official self-employment numbers are missing groups of gig workers. CPS asks workers whether they are self-employed and the industry and occupation of their work, but it does not ask if the worker--self-employed or otherwise--uses a tech-based intermediary to find and transact with clients. This could complicate interpretation of self-employment trends because it is not possible to decompose the data into self-employed work in the gig economy and more traditional work that does not include a tech-based intermediary. Another complicating factor to using self-employment data to infer trends in the gig economy workforce is that CPS data are self-reported. This means that how workers are classified in the data is heavily influenced by how workers see themselves (e.g., as an employee or as a self-employed person). Lastly, some gig economy workers are bona fide employees (e.g., Hello Alfred, Managed by Q), and these individuals will not be captured by self-employment statistics. Trends in gig work may be reflected in Census Bureau statistics on nonemployers, business owners who are subject to federal income tax and have no paid employees. Figure 2 plots annual estimates of the number of nonemployer establishments and their receipts from 2002 to 2014. Both the number of establishments and their receipts rose steadily over this period, with temporary declines seen only during the 2007-2009 recession. Figure 1 and Figure 2 tell somewhat different stories about the size and trends in self-employment. Where Census data show a steady rise in nonemployer businesses--most of which are "self-employed individuals operating very small unincorporated businesses" by Census's description--BLS data show that self-employment has declined or experienced modest growth over a similar period. What explains these differences is a matter for further investigation, but some have suggested that they may be related to how survey respondents view their activity. Although individuals recognize (and report to the Internal Revenue Service) that they earn income, they may not view the activities that generate the income as "work," and hence they are not captured in labor force data BLS uses to produce its self-employment estimates. Another possibility is that IRS data reveal self-employed individuals with multiple nonemployer businesses (i.e., IRS data count individual self-employed workers multiple times). A small but growing literature examines data collected from individual companies operating in the gig economy or pockets of gig economy workers. These analyses provide information about worker characteristics, their attitudes toward work in a given company or work arrangement, and earnings. However, with few exceptions, they do not profile the gig economy as a whole; instead, they can be viewed as snapshots of certain groups of gig workers. Together, this body of research suggests that gig workers make up a small share of total workers at a given point in time. Estimates vary, but gig workers constitute less than 1% of total employment in major studies. There is some evidence that workers' participation in the gig economy is transitory (i.e., high rates of worker entry and exit) and that many workers use gig work as a strategy for supplementing income. In 2015, economists Lawrence Katz and Alan Krueger collaborated with the RAND Corporation to administer an augmented version of the BLS Contingent Worker Supplement (CWS) to the RAND American Life Panel; notably, the modified CWS survey instrument used by Katz and Krueger included new questions aimed at identifying work in the gig economy. A primary goal of the project was to obtain current estimates of the number of workers engaged in alternative work arrangements (a work er group that encompasses but is broader than gig work), and the survey revealed that this number increased markedly from 10.7% in 2005 to 15.8% in 2015. Regarding gig work specifically, they estimate that approximately 0.5% of workers operated through an online intermediary in 2015. JPMorgan Chase (JPMC) Institute researchers used data on JPMC primary checking account holders between 2012 and 2016 to estimate the number of adults participating in the gig economy over that time period. They identified gig workers (called "labor platform participants" in the JPMC Institute studies) by observing checking deposits (income) from a selection of on-demand platforms. While there are some issues with the representativeness of the underlying data, the study produces some interesting findings that are consistent with other work in this area. Namely, they found that the share of adult checking account holders who received a checking deposit from a labor platform provider (i.e., received income from such a company) increased between October 2012 and June 2016, with a slowdown in the pace of growth since December 2015. In June 2016, 0.5% of adults with a JPMC checking account received income from a labor platform. A month-to-month analysis of participation (i.e., receipt of income) indicates significant movement into and out of gig work. JPMC Institute researchers estimate that in June 2016, 16% of gig workers were new entrants. Further, among workers who earned income through the gig economy between October 2012 and August 2014, 52% ended their gig careers (i.e., did not receive gig economy income in their JPMC checking accounts) within 12 months. The study also provides some evidence that workers use gig work to supplement income from other sources. Other organizations have used a variety of methods to arrive at nationwide estimates of the gig economy workforce. These vary considerably in magnitude and appear to be sensitive to the estimation methodology (e.g., how the data are collected, assumptions about how trends move together, and who is included in the definition of gig workers). For example, Harris and Krueger calculate a rough estimate of 600,000 gig workers in 2015 (i.e., approximately 0.4% of U.S. employment) using administrative data on Uber drivers from 2014 and "Google Trends" data that record the number of times Uber and other on-demand companies' names were searched for using the Google search engine. McKinsey Global Institute estimates that "less than 1%" of the U.S. working-age population are contingent workers operating through "digital marketplaces for services." Uber Technologies partnered with economist Alan Krueger to analyze data collected from a sample of 601 Uber drivers in December 2014 and 632 drivers in November 2015, and aggregate administrative data collected by the company from 2012 to 2015. Administrative data reveal that 464,681 drivers were actively partnered with Uber in December 2015, a significant increase over the 162,037 active Uber drivers in December 2014. This growth in the number of Uber drivers is remarkable, but may not be indicative of long-term trends; Uber and other driver-service companies are exploring the feasibility of driverless car technology, which may eventually curtail the companies' demand for drivers. Survey data indicate that the majority of Uber drivers were male, more than half were between the ages of 30 and 49, and 47.7% had at least a college degree (in December 2014). Many drivers did not use Uber as their sole source of earned income; in both years studied, more than 60% of drivers held another job. The authors interpret these survey data to show that the flexibility in work hours provided by Uber is a primary draw for drivers. For several years, the consulting firm MBO Partners has conducted an annual profiling survey of independent workers. It collects information on demographic characteristics, income earned, and recently whether workers use an "on-demand economy platform or marketplace as a source of work or income." MBO is careful to flag an important caveat: their sample comprises 1,100 individuals who report that they "regularly work as independents in an average work week. Those who work as independents in the on-demand economy occasionally or sporadically--for example drive for Uber once a month, do web design as a side gig a few times a quarter, or rent out a room on Airbnb 3 times a year--are not included." MBO Partners estimate that in 2014 approximately 900,000 individuals who self-identified as independent contractors used "online talent marketplaces such as Freelancer.com" (i.e., labor only), and 500,000 workers used tech platforms that involve the use of a provider-owned asset (e.g., Uber, Lyft, Airbnb). Whether a worker in the gig economy may be considered an employee rather than an independent contractor is significant for purposes of various federal labor and employment laws. In general, employees enjoy the protections and benefits provided by such laws, whereas independent contractors are not covered. Two laws, in particular, have drawn recent attention. The Fair Labor Standards Act (FLSA) generally requires the payment of a minimum wage and overtime compensation for hours worked in excess of a 40-hour workweek. The National Labor Relations Act (NLRA) recognizes a right to engage in collective bargaining for most employees in the private sector. The FLSA applies only to employees and does not regulate the use of independent contractors. Whether an individual is an employee is often a threshold question that must be answered to determine whether the FLSA's requirements apply. Courts have generally concluded that the economic reality of a working relationship will determine whether an individual is actually employed by an employer. To evaluate the economic reality of such a relationship, courts will examine all of the circumstances of the work activity and not just an isolated factor. Among the factors a reviewing court will consider to determine employee status are the nature and degree of the alleged employer's control over the individual; the individual's opportunity for profit or loss; the individual's investment in equipment or materials required for his task; whether the service rendered requires a special skill; the degree of permanency and the duration of the working relationship; and the extent to which the service rendered is an integral part of the alleged employer's business. In July 2015, a Lyft driver in Florida filed a complaint with a federal district court in Tampa alleging a violation of the FLSA. The driver maintained that Lyft controls the manner and means by which all drivers accomplish their work, controls all rates of pay for its drivers, retains the right to discipline drivers at its sole discretion, and restricts drivers' ability to work by permitting them to work only certain hours each day. In December 2015, however, Lyft and the driver entered an agreement to dismiss the case. Several Uber drivers have also alleged violations of the FLSA. In Suarez v. Uber Technologies, Inc ., for example, a group of drivers alleged that they had not been paid (1) for all of the hours they actually worked, (2) the federal minimum wage for each hour worked, and (3) overtime compensation for hours worked in excess of 40 hours in one week. Uber sought to compel arbitration for the drivers' claims based on its services agreement, which includes a provision that requires arbitration for all disputes related to the agreement and the employment relationship between the company and its drivers. Concluding that the arbitration provision was not unconscionable, the court in Suarez ordered the drivers to submit their claims to arbitration. The enforcement of the arbitration provision in Uber's services agreement has resulted in little case law on the FLSA's application to the company's drivers. Uber drivers have also alleged violations of state worker protection laws. Resolution of these claims would also appear to require a determination about whether the individuals at issue are employees and not independent contractors. In June 2015, California's labor commissioner concluded that a former Uber driver was an employee for purposes of the state's worker protection laws based on the company's control over its drivers. In Berwick v. Uber Technologies , the former driver sought unpaid wages, reimbursement related to the use of her own vehicle, liquidated damages, and penalties associated with the failure to pay prompt wages. After considering various factors, similar to those used to determine employee status under the FLSA, the commissioner maintained, "Defendants hold themselves out as nothing more than a neutral technological platform, designed simply to enable drivers and passengers to transact the business of transportation. The reality, however, is that Defendants are involved in every aspect of the operation." The commissioner awarded the former driver amounts reflecting mileage for the use of her car and interest on her unpaid balance of expenses, but dismissed her claims for wages, liquidated damages, and penalties. The commissioner noted that the former driver had, in fact, been paid, and that she lacked sufficient evidence to support her claim for additional wages. The former driver's claims for liquidated damages and penalties appear to have been tied to her claim for unpaid wages. Although Uber initially appealed the commissioner's order, the case now appears to be part of a larger settlement effort by the company. In August 2016, a federal district court denied preliminary approval for a proposed settlement that would have included an $84 million payment to Uber drivers in California and Massachusetts. The court maintained that the settlement, which also provided for nonmonetary relief, was "as a whole ... not fair, adequate, and reasonable." The court's rejection of the proposed settlement was based largely on the settlement of the drivers' claim under California's Private Attorneys General Act, which creates a cause of action for private plaintiffs to recover civil penalties that are otherwise only recoverable by the state. Under the proposed settlement, the drivers would have received just $1 million from the company when the potential verdict value of the claim was over $1 billion. In March 2017, a California court rejected a proposed settlement in a separate case involving Uber's alleged failure to comply with the state's minimum wage and overtime requirements. The settlement was reportedly opposed by the court because it would provide little relief to drivers, with the majority of the settlement being given to the state and paying administrative costs and attorneys' fees. Section 7 of the NLRA states, "Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.... " The NLRA requires an employer to negotiate in good faith with a labor organization that becomes the exclusive representative for a bargaining unit of employees. Independent contractors are specifically excluded from the NLRA's definition for the term employee . Thus, the NLRA does not require an employer to negotiate with independent contractors over the terms and conditions of their employment. In light of the exclusion of independent contractors from coverage under the NLRA and a desire to provide collective bargaining rights to at least some gig workers, the city of Seattle has considered legislation that would allow "for-hire vehicle drivers" to be represented by an "exclusive driver representative." Under legislation passed recently by the Seattle City Council, the exclusive driver representative would negotiate with the driver coordinator over various subjects, including minimum hours of work, vehicle equipment standards, and conditions of work. Some, however, have questioned the legitimacy of the measure. At least one commentator has interpreted the NLRA's explicit exclusion of independent contractors as preempting state or local legislation that would restore collective bargaining rights to such individuals. Individuals working in the gig economy may gain potential benefits in the form of easier entry into and exit from work and greater flexibility to choose jobs and hours. In contrast, as discussed above, many of the typical labor protections provided by federal legislation, such as those in the FLSA, center on the concepts of employee and employer. In the case of the FLSA, approximately 128.5 million, or 89%, of the nation's 144.2 million wage and salary workers are covered by its provisions. As discussed, the FLSA protections, including minimum wage and overtime provisions, are generally not extended to independent contractors. In a traditional employment relationship, an individual is economically dependent on an employer, and thus not in control of various aspects of work life (e.g., working hours, choice of work tasks). That economic dependency, however, often comes in exchange for some measure of economic security through benefits and protections. Below is a partial list of labor standards and related provisions that are likely affected by the absence of a traditional employment relationship: Minimum Wage. Most workers covered by the FLSA are entitled to a minimum hourly wage, which is currently $7.25 per hour. In addition, more than half of the states currently have minimum wage rates for FLSA-covered workers that are above the federal rate. In contrast, for workers not covered by the FLSA, a category mainly consisting of independent contractors, there is no guaranteed minimum wage rate. Overtime Compensation. The FLSA does not limit work hours; rather, it requires additional payment for hours worked in excess of 40 per workweek. Most workers covered by the FLSA must be compensated at one-and-a-half times their regular rate of pay for each hour worked over 40 hours in a workweek. Workers not covered by the FLSA are not entitled to additional compensation for hours worked in excess of 40 per workweek. Unemployment Compensation. The cornerstone of the income support for unemployed workers is the federal-state Unemployment Compensation (UC) program, which is generally financed by employer taxes. Whereas the specifics of UC benefits are determined by each state, generally eligibility is based on attaining qualifying wages and employment in covered work and typically does not include independent contractors. Family and Medical Leave. The Family and Medical Leave Act (FMLA) entitles eligible employees to unpaid, job-protected leave for qualifying family and medical reasons. Because eligibility for FMLA benefits is tied to an individual's work history with an employer and uses the FLSA concept of employment, independent contractors are not entitled to FMLA provisions. Employer Payroll Taxes. In a traditional employment relationship, an employer is responsible for paying the employer's share of Social Security and Medicare taxes (payroll or FICA taxes) and for withholding the employee's share of these same taxes. Independent contractors, however, are responsible for paying self-employment taxes (i.e., the employer and employee shares of FICA taxes). Beyond federally mandated labor standards, certain other benefits often associated with traditional employment relationships may not be available in the same form to workers in the gig economy. In many cases, employers may offer a combination of benefit access and subsidies to employees. The information in Table 1 includes rates of access, participation, and take-up that civilian employees have to various benefits. These data are intended to show the relatively high prevalence of certain employer-based benefits that independent contractors, by definition, do not have access to through employers. For each benefit type below, the percentage of workers with access by work status is provided to demonstrate the higher proportion of access for full-time workers. Table 1 data indicate that for some of the major benefit categories, such as health, retirement, and life insurance, a majority of employees have access to these benefits through their employers, with correspondingly high take-up rates for these benefits. The difference between access rates for full-time and part-time workers likewise shows an increasing likelihood of having access to benefits through traditional, full-time employment compared with other work arrangements. To the extent that gig employment more closely resembles part-time employment, it is likely that workers in this segment of the economy might also have relatively lower access to the traditional employment-related benefits. These sorts of benefits have traditionally been provided by employers due to cost (e.g., economies of scale) and administrative efficiency, and are voluntary. This list of possible employer-assisted benefits above does not mean that independent contractors have no access to such benefits. Rather, these benefits, which are more common for traditional, full-time employees, would have to be accessible through another means, such as a spouse's employer or a market mechanism (e.g., health insurance exchange). As shown in previous sections of this report, the gig economy, and the labor and regulatory issues associated with it, is not well understood. There is considerable uncertainty, for example, about the number of workers in the gig economy and whether gig work is a primary or secondary source of income for the workers involved. In addition, some are concerned that gig workers lack access to benefits and protections associated with traditional employment relationships, such as those discussed in " Employee Protections " and listed in Table 1 . Although it is unclear how access to benefits for independent contractors in the gig economy or in general may differ from traditional employment, it is clear that these benefits would likely have to be provided through a nonemployer mechanism, because by definition independent contractors are not employees. If the availability of benefits and protections for independent contractors in the gig economy continues to draw congressional attention, and to the extent that gig workers seek access to benefits traditionally associated with employed workers, several relevant policy-related considerations may arise as to the best approach to resolve these issues. These include the following considerations: Which, if any, protections and benefits should be available to workers in the gig economy? Many of the federal labor protections listed in " Employee Protections " apply to employees but often exclude bona fide independent contractors. This exclusion is often undergirded by assumptions that independent contractors have either sufficient market power or a preference for independence from any employer, such that these workers do not need or prefer the level of protection afforded to traditional employees. If these assumptions do not hold for workers in the gig economy, consideration may be given to which benefits are essential or fundamental for these workers. One recent proposal in this area would provide for the establishment of a third employment category for workers--called independent workers--who are not traditional employees, but who should not be considered independent contractors. Per this proposal, workers in the gig economy who are deemed independent workers would qualify for benefits associated with a more traditional employment relationship (e.g., insurance, tax withholding) but not labor protections that are based on the number of hours worked (e.g., minimum wage and overtime), given the inherent difficulty of tracking hours in gig employment. If protections and benefits are extended to more workers in the gig economy, who is responsible for enforcing protections or providing benefits ? A possible consideration regarding benefits and protections for workers in the gig economy is that individuals may work for multiple businesses. To the extent this occurs and benefits are provided through and protections are enforced by an employer, consideration may be given to determining which of the multiple employers is responsible for providing access or enforcement of labor standards. This could result in determining a primary employer for an individual or determining some shared responsibility across employers. If benefits are accessible outside of a traditional employment relationship, how might access be structured? Rather than employers providing these benefits, intermediaries (e.g., nonprofits) might facilitate the administration and purchasing of various benefits. A recent letter from interested parties in the on-demand economy, for example, urged policymakers to consider creating models that would allow on-demand workers to pay into a common fund that provides health, retirement, unemployment, and other benefits that are not tied to a single employer. New mechanisms, such as portable benefits or risk-pooling, may serve to provide benefits to workers in the on-demand or gig economy.

The gig economy is the collection of markets that match providers to consumers on a gig (or job) basis in support of on-demand commerce. In the basic model, gig workers enter into formal agreements with on-demand companies (e.g., Uber, TaskRabbit) to provide services to the company's clients. Prospective clients request services through an Internet-based technological platform or smartphone application that allows them to search for providers or to specify jobs. Providers (i.e., gig workers) engaged by the on-demand company provide the requested service and are compensated for the jobs. Recent trends in on-demand commerce suggest that gig workers may represent a growing segment of the U.S. labor market. In response, some Members of Congress have raised questions, for example, about the size of the gig workforce, how workers are using gig work, and the implications of the gig economy for labor standards and livelihoods more generally. With some exceptions, on-demand companies view providers as independent contractors (i.e., not employees) using the companies' platforms to obtain referrals and transact with clients. This designation is frequently made explicit in the formal agreement that establishes the terms of the provider-company relationship. In some ways, the gig economy can be viewed as an expansion of traditional freelance work (i.e., self-employed workers who generate income through a series of jobs and projects). However, gig jobs may differ from traditional freelance jobs in a few ways. For example, coordination of jobs through an on-demand company reduces entry and operating costs for providers and allows workers' participation to be more transitory in gig markets (i.e., they have greater flexibility around work hours). The terms placed around providers' use of some tech platforms may further set gig work apart. For example, some on-demand companies discourage providers from accepting work outside the platform from certain clients. This is a potentially important difference between gig work and traditional freelance work because it may limit the provider's ability to build a client base and operate outside the platform. Characterizing the gig economy workforce (i.e., those providing services brokered through tech-based platforms) is challenging along several fronts. To date, no large-scale official data have been collected, and there remains considerable uncertainty about how to best measure this segment of the labor force. Existing large-scale labor force survey data from the Bureau of Labor Statistics (BLS) and the U.S. Census Bureau may provide some insights, but are imperfect proxy measures of contemporary gig economy participants. A small literature examines data collected by individual companies operating in the gig economy or from pockets of gig-economy workers. As such, these analyses can be viewed as snapshots of certain gig workers, but they are not necessarily representative of the full market. The apparent availability of gig jobs and the flexibility they seem to provide workers are frequently touted features of the gig economy. However, to the extent that gig-economy workers are viewed as independent contractors, gig jobs differ from traditional employment in notable ways. First, whether a worker in the gig economy may be considered an employee rather than an independent contractor is significant for purposes of various federal labor and employment laws. In general, employees enjoy the protections and benefits provided by such laws, whereas independent contractors are not covered. Two laws, in particular, the Fair Labor Standards Act and the National Labor Relations Act, have drawn recent attention. In addition, certain other benefits (e.g., paid sick leave, health insurance, retirement benefits) that are often associated with traditional employment relationships may not be available in the same form to workers in the gig economy. Should Congress choose to consider ways of increasing access to such benefits for nontraditional employees, new mechanisms, such as portable benefits or risk-pooling, could serve to provide benefits to workers in the gig economy.

T he North American Free Trade Agreement (NAFTA) entered into force on January 1, 1994, establishing a free trade area as part of a comprehensive economic and trade agreement among the United States, Canada, and Mexico. Currently, the United States is renegotiating the agreement. However, repeated threats from President Trump to abandon NAFTA and other actions by the Administration as part of ongoing efforts to "modernize" NAFTA have raised concerns that the United States could withdraw from the agreement altogether. Although some U.S. agricultural industries support NAFTA renegotiation and efforts to address certain outstanding trade disputes--especially regarding milk, potatoes, some fruits and vegetables, cheese, and wine--many continue to express strong support for NAFTA and oppose outright withdrawal. Possible disruptions in U.S. export markets and general uncertainty in U.S. trade policy also continue to be a concern for U.S. food and agricultural producers. Similar concerns have been raised by some in Congress who have oversight authority on industry and trade activities and who continue to monitor the ongoing NAFTA renegotiations. This report examines some of the potential consequences to U.S. agricultural markets of a U.S. withdrawal from NAFTA, focusing on the possibility that higher tariffs could be imposed on U.S. imports and exports. In particular, under a NAFTA withdrawal, it is likely that most-favored-nation (MFN) tariffs would be imposed on agricultural products traded among the NAFTA countries instead of the current zero tariff (i.e., duty-free trade) for most agricultural products. In general , MFN tariffs on U.S. agricultural imports would likely raise prices both to U.S. consumers and other end users, such as manufacturers of value-added food products. Applying general principles of supply and demand, it is possible to anticipate the effect that sustained higher prices due to higher MFN tariffs could have on the volume (quantity) of goods traded. Specifically, as prices increase, the quantity demanded for a product tends to decrease. Assuming MFN tariffs could apply in the event of a U.S. NAFTA withdrawal, imported products could become more expensive, which could lower the demand for some U.S. agricultural imports. Similarly, if higher MFN tariffs were applied to U.S. goods exported to Canada and Mexico, this could make some U.S. agricultural products more costly to buyers in those markets, which could lower U.S. exports--such as meat products, grains and feed, and processed foods. As part of a formal free trade agreement (FTA) negotiation, the Office of the United States Trade Representative (USTR) will often request a "probable economic effects" study of a trade agreement, which is usually conducted by the United States International Trade Commission (USITC). The Administration has asked USITC to conduct only an investigation into the probable economic effect of eliminating tariffs on certain dutiable NAFTA imports currently under a tariff rate quota (TRQ). This analysis was expected to have been completed in August 2017 but is confidential and not publicly available. USTR has confirmed that, to date, a comprehensive review of a possible U.S. withdrawal from NAFTA has not yet been conducted. Comprehensive analysis of a possible U.S. NAFTA withdrawal focused exclusively on agricultural markets is also not available. Researchers at the U.S. Department of Agriculture (USDA) have not yet conducted such an analysis. University researchers often also contribute to studies of the effects of a range of market and trade policy actions. CRS communications with researchers that typically conduct such studies indicate that an assessment of a possible U.S. NAFTA withdrawal on agricultural markets has not been initiated at this time. An extensive amount of data would be needed to conduct such an analysis, including quantity produced and traded for a wide range of products, domestic and international prices, production costs and inputs, measures of price response by product and market, and other modeling data. The text box below provides a qualitative summary of some of the potential ways that U.S. agricultural markets could be affected if the United States were to withdraw from NAFTA. A recent economy-wide study by a private research firm, ImpactECON, concluded that a "NAFTA reversal" would likely raise U.S. tariffs on Canada and Mexico imported products to current MFN rates, which could cause all NAFTA parties to experience declines in real gross domestic product (GDP), trade, investment, and employment. The study examined trade and economic changes assuming both reciprocation and no reciprocation in terms of Canada's and Mexico's applied tariffs. According to the study, if Canada and Mexico were to also impose higher MFN tariffs, this could result in additional overall trade declines among the NAFTA countries, resulting in the loss of 256,000 low-wage workers in the short term (three to five years) as well as additional relocation of workers throughout the United States. The ImpactECON study concluded that a NAFTA reversal could especially impact the meat, food, textiles, auto, and services sectors. Impacts are likely to be greatest for those industries where production is highly integrated. The ImpactECON study and its conclusions regarding the potential impacts to the food and agricultural sectors have been highly commended and cited by some agricultural economists. For example, Dermot Hayes of Iowa State University notes that imposing MFN duties will have a price effect on traded goods that will lead to eventual market adjustment, forcing the United States to seek alternative export markets or be forced to downsize the domestic industry. For example, he estimates that MFN duties of 20% on U.S. pork exports to Mexico could cause a 5% contraction of the U.S. pork sector and stimulate additional production in Mexico and/or require Mexican buyers to find additional suppliers outside the United States. Contraction in the U.S. pork industry would result in a loss of U.S. jobs and have a disproportionate effect on specific counties that are dependent on farming, input markets, and value-added production in the sector. Trade under NAFTA underpins an important market for U.S. food and agricultural producers. Canada and Mexico are the United States' two largest trading partners, accounting for 28% of the total value of U.S. agricultural exports and 39% of its imports in 2016. Over the past 25 years under NAFTA, the value of U.S. agricultural trade with Canada and Mexico has increased sharply. Exports rose from $8.7 billion in 1992 to $38.1 billion in 2016 ( Figure 1 ), while imports rose from $6.5 billion to $44.5 billion over the same period ( Figure 2 ). Adjusted for inflation, the value of agricultural exports and imports between the United States and its NAFTA partners has increased roughly threefold since 1990, growing at an average rate of about 5%-6% annually. This growth resulted in a $6.4 billion trade deficit for U.S. agricultural products in 2016, reversing the trend in previous years when there was a trade surplus. In 2016, U.S. agricultural exports to Canada were valued at $20.2 billion. The leading exports were grains and feed, animal products, fruits and vegetables and related products, nuts and other horticultural products, sweeteners, oilseeds, beverages (excluding fruit juice), and essential oils. U.S. agricultural exports to Mexico were valued at $17.8 billion in 2016. The leading exports were animal products, grains and feed, oilseeds, sweeteners, fruits and vegetables and related products, nuts and other horticultural products, cotton, seeds, and nursery crops. Mexico is also the largest or second-largest market for U.S. beef, pork, poultry, dairy, wheat, and corn exports. For more information about U.S. agricultural trade under NAFTA, see CRS Report R44875, The North American Free Trade Agreement (NAFTA) and U.S. Agriculture , and CRS In Focus IF10682, NAFTA Renegotiation: Issues for U.S. Agriculture . Under NAFTA, tariffs and quantitative restrictions were eliminated on most agricultural products, with the exception of some that may be subject to TRQs and high out-of-quota tariff rates. Under NAFTA, Canada excludes dairy, poultry, and eggs for tariff elimination. The United States excludes dairy, sugar, cotton, tobacco, peanuts, and peanut butter. Because Canada was able to exclude certain products from tariff elimination in NAFTA, Canada is able to limit imports through restrictive TRQs. For example, according to USTR, imports of U.S. products above quota levels may be subject to out-of-quota tariffs as high as 245% for cheese and 298% for butter under NAFTA. Aside from these exempted products, most agricultural products are traded duty-free (i.e., zero tariff) and receive other types of trade preferences intended to facilitate trade. Under an FTA, preferential tariffs are charged to member countries and are lower than a country's MFN tariff rates. MFN rates generally reflect the highest (most restrictive) rates that World Trade Organization (WTO) members can charge each other on imported goods and services. The text box below describes the different types of tariffs. Trade data presented here are by selected agricultural commodity groupings, as defined by USDA. In some cases, trade data are grouped according to tariff chapters under the Harmonized Commodity Description and Coding System (HS). The HS refers to a hierarchical structure for describing all goods in trade for duty, quota, and statistical purposes. The primary two-digit HS product categories are further subdivided into four-digit HS product categories. The first 24 chapters of most tariff schedules worldwide cover most agricultural and fisheries products. Product groupings by HS chapter exclude some agricultural commodities including cotton, essential oils, starches, hides, and skins. MFN tariffs presented here for all NAFTA countries were compiled by CRS from WTO's database and summarize available country tariff information at the HS-2 and HS-4 levels. WTO's tariff database includes MFN tariffs for products at the HS-2, HS-4, and HS-6 levels for all traded goods for most countries. This database documents both ad valorem (AV) tariffs--or the rate charged as a percentage of the price--and non-AV tariffs, such as specific tariffs. WTO's database does not extend beyond the HS-6 level. Average MFN tariffs reported by the WTO include tariffs expressed as AV. Tariffs expressed in terms of AV facilitate a comparison across different countries and are also useful for interpreting potential economic effects. For example, in general, a 10% tariff on a traded product roughly translates into a 10% price increase for that product, often paid for by the buyer of that product. However, average MFN tariff rates reported by the WTO do not include non-AV tariffs, such as specific tariffs or tariffs charged as a fixed amount per unit of quantity (e.g., $7 per 100 kg). It is important to note that the WTO tariff database does not translate non-AV tariffs to an ad valorem equivalent (AVE) basis. Accordingly, non-AV tariffs are not included as part of the WTO database's calculation of average AV tariff rates. This may exclude tariffs for certain agricultural products under a TRQ or where seasonal tariffs might apply (e.g., higher import tariffs for certain fruits and vegetables imported during U.S. peak season). Tariffs for agricultural products under a TRQ or where seasonal tariffs apply are often expressed as specific tariffs and/or at the HS-6 level or higher (HS-8 or HS-10 level) and are excluded from most reported average tariff rates. For reasons described in the text box below, WTO-reported average AV tariffs may therefore provide an incomplete picture of MFN duties for certain types of agricultural products. Despite these data limitations, tariff data provided in this report cover the WTO-reported average AV duties for each of the NAFTA partner countries at the HS-4 level only. As this provides for a subset of all MFN tariffs for agricultural products--excluding non-AV rates for some products--it provides an incomplete picture of actual tariff rates for some agricultural imports. Since average AV tariffs for agricultural products may be lower than actual applied rates, tariff rates discussed in this report likely understate actual applied rates for some agricultural imports. Accordingly, MFN rates described in this report are intended to provide an initial glimpse of the types of potential impacts in the event of a possible U.S. NAFTA withdrawal. Figure 3 summarizes the agricultural and fisheries tariffs by country for each of the 24 HS chapters at the HS-2 level. Figure 3 shows the minimum and maximum AV MFN tariffs (gray bar) and the average AV MFN tariff (red marker) for selected products (expressed at the HS-2 level) for the United States, Canada, and Mexico. Appendix A provides more detailed tariff information at the HS-2 level for each of the three NAFTA countries. Appendix B summarizes nearly 200 categories of agricultural and fisheries tariffs at the HS 4- level for each of the three countries. Additional analysis is needed to fully capture the full extent of the potential market impacts of possibly higher MFN tariffs rates, especially for products under a TRQ or seasonal tariff. Ideally, such an analysis would be conducted in conjunction with economic modeling to simulate potential changes of higher tariffs on the quantity of products traded among the NAFTA countries under different scenarios. Such an analysis would also need to fully account for all other non-AV tariff rates that have not been converted to AVE. Calculating AVE rates for each of the roughly 2,700 individual tariff lines at the HS-6 level for each of the NAFTA partner countries is beyond the scope of this analysis due to time and resource constraints. Complete tariff information is further not readily available to calculate AVE tariffs for each of the individual tariff lines for products at the HS-8 and HS-10 levels for each country. Following is a discussion of possible tariff changes to both U.S. agricultural imports and exports in the event of a possible U.S. NAFTA withdrawal. With few exceptions, under NAFTA, agricultural products are imported duty-free (zero tariff), and U.S. agricultural products also generally face zero tariffs when exported to Canada and Mexico. In lieu of preferential trade policies under NAFTA, tariffs charged on U.S. imports and exports could revert to generally higher MFN tariffs. Other types of trade effects are not examined, such as the effects of trade on the possible removal of other types of NAFTA-related trade preferences (e.g., policies regarding SPS measures, customs charges, permits, quotas, trade regulations, import licenses, and border restrictions). Figure 3 shows MFN tariffs on U.S. agricultural imports. As shown, while the minimum MFN tariff on U.S. imports can be zero for many agricultural products, the maximum AV tariff varies widely and can be prohibitively high for some products, such as tobacco, oilseeds, and some processed fruit and vegetable products. As noted previously, in general, higher MFN tariffs on U.S. agricultural imports would likely raise prices both to U.S. consumers and other end users, such as manufacturers of value-added food products. Accordingly, if higher MFN tariffs apply, some U.S. imports could become more costly to U.S. end users. For example, the maximum MFN tariff is 29.8% for certain tropical fruit imports, which could raise the cost of some products to U.S. consumers ( Appendix B , see HS 0804). Applying MFN tariff rates could also raise the cost to food processors who import cereal flours for use in further value-added food production. The maximum MFN tariff is 12.8% on cereal flour imports to the United States ( Appendix B , see HS 1102). Alternatively, some U.S. imports that currently compete with U.S.-produced products might experience a reduction in trade as imported products drop in response to higher U.S. tariffs. This could create a competitive advantage for U.S. producers as potential domestic suppliers. For example, tariffs for U.S. melon and watermelon imports carry a relatively high maximum MFN tariff of 29.8% ( Appendix B , see HS 0807), suggesting that imports could slow given higher prices due to possible prohibitive tariff rates, thus giving U.S. producers a competitive advantage. However, not all imported products would face higher tariffs if MFN tariffs were imposed. Some produce imported from Mexico that has been of concern to U.S. producers --such as tomatoes (HS 0702) and berries (HS 0810)--carries a zero to low MFN tariff ( Appendix B ). In this case, a possible NAFTA withdrawal might not slow imports from Canada and Mexico on the basis of price changes based on changes in import tariffs. Figure 3 shows MFN tariffs on Canadian and Mexican agricultural imports that could be charged on U.S. products if these countries were to reciprocate and charge MFN tariffs in the event of a possible NAFTA withdrawal. Similar to in the United States, while the minimum MFN tariff on imports to these countries can be zero or low for many agricultural products, the maximum AV tariff varies widely and can be prohibitively high for some products. For example, in Canada, the maximum AV tariff is 27% for some meat products and 95% for some imported grains. In Mexico, the maximum AV tariff is 75% for some meat products and 20% for some imported grains. Again, the maximum AV tariff varies widely depending on the product ( Figure 3 ). As noted previously, in general, the imposition of higher MFN tariffs on U.S. agricultural exports would likely make U.S. products in those markets less price-competitive and more costly to foreign buyers, which could result in reduced quantities sold. Accordingly, if higher MFN tariffs apply, some U.S. products could become more costly to Canadian and Mexican end users. For example, Mexico's maximum MFN tariffs on its corn (maize) imports can be as high as 20% ( Appendix B , see HS 1005). This suggests that certain U.S. corn exports to Mexico could become up to 20% more expensive for buyers in that market. This could give other global corn suppliers an opportunity to gain additional import share in Mexico. Similarly, the maximum MFN tariff for pork meat imports to Mexico could raise tariffs on some pork products from current duty-free levels under NAFTA to a maximum MFN tariff of 20% ( Appendix B , see HS 0203). This could give an advantage to other global suppliers. MFN tariffs on U.S. corn and pork meat imports would remain duty-free (i.e., zero tariff). As higher MFN tariffs in Canada and Mexico could make U.S. agricultural products relatively more costly compared to other competing global suppliers, this could impact U.S. market share for some agricultural products in these two markets. Figure 4 and Figure 5 illustrate the importance of Canada and Mexico to U.S. agricultural trade for selected agricultural commodity groupings, as defined by USDA. Figure 6 and Figure 7 illustrate the importance of products from the United States to Canada's and Mexico's agricultural markets. Figure 4 shows selected U.S. agricultural exports to Canada and Mexico compared to exports to all other non-NAFTA countries in 2016. While Canada and Mexico accounted for 28% of the value of total U.S. agricultural exports, NAFTA countries accounted for a larger share of some U.S. exports--for example, 62% of U.S. sugar and tropical products and 51% of fresh and processed vegetables. Figure 5 shows selected U.S. agricultural imports from Canada and Mexico compared to imports from all other non-NAFTA countries in 2016. As shown, while Canada and Mexico accounted for 39% of total U.S. agricultural imports, NAFTA country suppliers account for a larger share of total imports for some commodities--for example, 58% of U.S. grains and feeds and 70% of fresh and processed vegetables. Figure 6 shows the U.S. market share of Canada's agricultural imports as a share of the value of total imports from all countries. In 2016, U.S. agricultural products accounted for 59% of the value of all Canadian agricultural imports. Some U.S. products, such as grains/feed and meat products, account for a larger share of total imports (more than 70%, on average). Figure 7 shows the U.S. market share of Mexico's agricultural imports in 2016 as a share of total imports from all countries. In 2016, U.S. agricultural products account for 72% of the value of all of Mexico's agricultural imports. Some U.S. product categories, however, account for an even greater share of total imports, such as grains and feed, meat products, sugar and related products, and processed foods, which accounted for more than 80% of the total value of Mexico's imports in 2016. These market share data highlight those U.S. agricultural products that may be considered more heavily reliant on NAFTA trade, suggesting the importance of the agreement to U.S. sales of grains and feed, oilseeds, meat and dairy products, processed foods, fresh and processed fruits and vegetables, tree nuts, and sugar products. These market share data--together with MFN tariff information--further suggest that these products may become more costly and less competitive in these markets as higher tariffs, mostly duty-free access, and other types of trade preferences are removed under a possible U.S. NAFTA withdrawal. When President Trump announced in April 2017 that he was considering withdrawing the United States from NAFTA, many U.S. agricultural groups expressed strong opposition to withdrawal. Many in Congress also voiced opposition to outright withdrawal from NAFTA. The National Pork Producers Council stated that NAFTA withdrawal could be "cataclysmic" and "financially devastating" to U.S. pork producers. The National Corn Growers Association said that "withdrawing from NAFTA would be disastrous for American agriculture" and would disrupt trade with the sector's top trading partners. The American Soybean Association said withdrawing from NAFTA is a "terrible idea" and would hamper ongoing recovery in the sector. The U.S. Grains Council highlighted that withdrawal would have an "immediate effect on sales to Mexico." The National Association of Wheat Growers (NAWG) noted that Mexico is the largest U.S. wheat buyer and claimed that NAFTA withdrawal would be a "terrible blow to the U.S. wheat industry and its Mexican customers." Cargill, Inc., a major privately held U.S. grain distributor and global agricultural supplier, claims that sales to Canada and Mexico account for an estimated 10% of the company's annual revenues. Most fruit and vegetable growers did not support NAFTA withdrawal, citing the benefit of exports to Mexico. The Administration did not withdraw from NAFTA at that time, deciding instead to formally renegotiate and "modernize" NAFTA. Although many in Congress and in the U.S. agricultural sectors support NAFTA renegotiation and efforts to address certain outstanding trade disputes--such as disputes involving milk, potatoes, some fruits and vegetables, cheese, and wine--most U.S. agricultural groups are unified in their opposition to outright NAFTA withdrawal. An October 2017 letter from nearly 90 farm and agriculture groups states that "NAFTA withdrawal would cause immediate, substantial harm to American food and agriculture industries and to the U.S. economy as a whole." Agriculture groups also remain concerned about growing uncertainty in U.S. trade policy and its potential to disrupt U.S. export markets. Some also worry that the Administration is actively seeking to exit NAFTA. Among the concerns of U.S. agricultural groups related to a withdrawal is fear that the nation's NAFTA trading partners could seek alternative markets for U.S. corn, soybean, dairy, pork, beef, and rice. For example, media reports indicate that Mexico is looking to find alternative suppliers for some imported products, such as rice (which could be supplied by Vietnam and Thailand), corn and soybeans (Argentina and Brazil), wheat (Argentina and the Baltic States), and dairy products (New Zealand and Europe). The U.S. pork industry continues to claim that a NAFTA withdrawal would be catastrophic to the sector. Meanwhile, reports also indicate that Mexico is not worried about finding alternative consumer markets for some of its exported products, such as avocados, which are now mostly sold to the United States. Other reports suggest that Mexico's efforts to diversify its agricultural suppliers and markets may be in retaliation for certain U.S. proposals tabled during the NAFTA renegotiation. Others suggest that the general tone of the ongoing renegotiation has had a negative impact on the relations among the NAFTA partners. An economy-wide survey of investors by the industry-supported Trade Leadership Coalition reports that 72% of agricultural investors surveyed believe that the near-term (one to two years) business impacts of ending NAFTA would be negative (56% of businesses surveyed) or very negative (16%). Also, 78% of agricultural investors surveyed believe that the risks of NAFTA withdrawal have not been fully priced into stock valuations. Members of the International Chamber of Commerce have also warned that U.S. withdrawal from NAFTA or other critical changes to the agreement would "greatly restrict, rather than enhance, cross-border commerce." The Trump Administration has generally downplayed these types of concerns. However, USDA is reportedly developing a contingency plan to protect against potential agricultural losses if the United States withdraws from NAFTA. Again, in August 2017, President Trump and other Administration officials suggested the United States would likely withdraw from the agreement. Most states continue to express their support for NAFTA. The National Association of State Departments of Agriculture and the American Farm Bureau Federation, among other industry coalition groups, also continue to emphasize the importance of NAFTA to the U.S. agricultural sectors and the need to maintain a preferential trade relationship with Canada and Mexico. Many in Congress representing states with agricultural interests continue to express opposition to NAFTA withdrawal. In November 2017, the leadership of the House Agriculture Committee, Chairman K. Michael Conaway and Ranking Member Collin C. Peterson, joined several U.S. agriculture groups in opposing withdrawal and supporting a quick end to the ongoing NAFTA renegotiations. In October, 2017 Chairman Pat Roberts of the Senate Agriculture Committee expressed support for NAFTA and emphasized the need for industry leaders to present their support to the Administration. Senator Debbie Stabenow, Ranking Member of the Senate Agriculture Committee, has also expressed support for NAFTA. Reportedly, some agricultural groups believe that Congress has the ability to intervene, if President Trump withdraws the United States from NAFTA. Congress maintains oversight authority on industry and trade activities and has continued to monitor and conduct hearings on the ongoing NAFTA renegotiations. For additional information on the role of Congress in the ongoing negotiation, see CRS Report R44981, NAFTA Renegotiation and Modernization . For additional information on the legal aspects of congressional action in this area, see CRS Legal Sidebar WSLG1724, Renegotiation of the North American Free Trade Agreement (NAFTA): What Actions Do Not Require Congressional Approval? Appendix A. Most-Favored-Nation (MFN) Tariff, HS-2, Agricultural and Fisheries Products (United States, Canada, Mexico) Appendix B. Most-Favored-Nation (MFN) Tariff, HS-4, Agricultural and Fisheries Products (United States, Canada, Mexico)

The North American Free Trade Agreement (NAFTA) entered into force on January 1, 1994, establishing a free trade area as part of a comprehensive economic and trade agreement among the United States, Canada, and Mexico. Currently, the United States is renegotiating the agreement. However, repeated threats by President Trump to abandon NAFTA and other actions by the Administration as part of ongoing efforts to "modernize" NAFTA have raised concerns that the United States could withdraw from NAFTA. Although some U.S. agricultural sectors support NAFTA renegotiation and efforts to address certain outstanding trade disputes--regarding milk and dairy products, potatoes, some fruits and vegetables, and wine--many continue to express strong support for NAFTA and oppose outright withdrawal. Possible disruptions in U.S. export markets and general uncertainty in U.S. trade policy also continue to be a concern for U.S. food and agricultural producers. Similar concerns have been raised by some in Congress who have oversight authority on industry and trade activities and who continue to monitor and conduct hearings on the ongoing NAFTA renegotiations. Trade under NAFTA provides an important market for U.S. agricultural producers and a broader choice of food products for U.S. food processors and consumers. Canada and Mexico are the two largest U.S. agricultural trading partners (combining imports and exports), accounting for 28% of the total value of U.S. agricultural exports and 39% of U.S. imports in 2016. Under NAFTA, U.S. agricultural trade with Canada and Mexico has increased significantly. Agricultural exports rose from $8.7 billion in 1992 to $38.1 billion in 2016, while imports rose from $6.5 billion to $44.5 billion over the same period. Adjusted for inflation, growth in the value of total U.S. agricultural exports and imports with its NAFTA partners has increased roughly threefold, growing at an average rate of 5%-6% annually. To date, comprehensive quantitative analysis of a possible U.S. NAFTA withdrawal focused exclusively on agricultural markets is not yet available. This report looks at the potential economic effects to agricultural markets of a possible U.S. NAFTA withdrawal assuming the application of most-favored-nation (MFN) tariffs on traded agricultural products instead of the current zero tariff (i.e., duty-free trade) for selected agricultural products. MFN rates generally reflect the highest (most restrictive) rates that World Trade Organization (WTO) members can charge each other on imported goods and services. In general, the application of MFN tariffs on U.S. agricultural imports would likely raise prices both to U.S. consumers and other end users, such as manufacturers of value-added food products. MFN tariffs on U.S. agricultural exports would, in turn, likely make U.S. products in those markets less price-competitive and more costly to foreign buyers, which could result in reduced quantities sold. Given that certain agricultural products dominate U.S. trade with Canada and Mexico--such as meat products, grains and feed, and processed foods--these products could become more costly and less competitive as MFN tariffs are imposed and other trade preferences are removed under a NAFTA withdrawal. This could result in reduced market share for U.S. products in these markets. This report looks at a subset of MFN tariffs for certain products that could impact U.S. agricultural markets in the event of a possible U.S. NAFTA withdrawal. Other potential trade impacts under a U.S. withdrawal from NAFTA could include (but are not limited to) higher prices for imported products from Canada and Mexico, reductions in agricultural imports that compete with U.S. products, disruption of integrated supply chains, general market disruption and uncertainty, economic impacts to some agricultural-producing states (both positive and negative), and a decrease of future negotiating leverage of the United States (e.g., to review and resolve disputes regarding a range of non-tariff barriers to trade).

The potential outcome of the resignation of long-time Egyptian President Hosni Mubarak is unknown and any ramifications for the oil and natural gas sectors are uncertain. This paper examines the impact of a disruption of Egypt's oil and natural gas sector or a complete halt to exports of either oil or natural gas and closure of the Suez Canal and the Suez-Mediterranean (SUMED) oil pipeline, and the impact of those actions on world oil and natural gas markets. It is important to keep in mind that even the most nationalistic, isolationist, or anti-Western government would most likely not undertake all these measures. Oil, natural gas, and transit generate large amounts of revenue for Egypt and taking these measures could precipitate outside intervention, particularly closing the Suez Canal. Additionally, the timing of these actions would also change the impact on oil and natural gas markets, i.e., whether they occurred during the summer driving season or the winter heating season. An additional factor mitigating the impact on world oil and natural gas markets is that in 2009, Egypt consumed much of the energy it produced and had to import coal, highlighting the limited importance of Egypt as a global energy producer; see Figure 2 . Closing the Suez Canal would be one of the most visible actions a new government could take, particularly for the oil and natural gas industry. Although it would probably take only several weeks to re-route and re-size oil and natural gas tankers along with a possible drawdown of inventories, a closure of the canal would cause an immediate and most likely short-lived rise in global oil prices. Despite there being adequate spare production capacity in the world, oil prices tend to react quickly to market disruptions before settling back to their pre-existing price range. However, if the canal remained closed indefinitely, shipping costs would likely increase, adding upward pressure on oil prices. The same would likely be true for liquefied natural gas (LNG), but the effect would be less. Most LNG is sold under long-term contract, and there is currently a glut of LNG around the world to make up for any disruption. In 2009, an estimated 1.8 million barrels per day of oil (Mb/d) (of the world's roughly 80 Mb/d of production) moved through the canal--almost 1 Mb/d northbound and 0.85 Mb/d southbound. This is down from 2.4 Mb/d in 2008. The decline is mostly attributed to lower global demand for oil; production cuts by the Organization of the Petroleum Exporting Countries (OPEC), particularly from the Persian Gulf producing countries; and piracy. More oil is also flowing to Asia from the Middle East, while more West African oil is going to Europe and North America, and does not have to traverse the canal. 2010 data shows an increase in cargos, but is incomplete for the year. The last time the canal was closed, in 1967 until 1975, approximately 60% of Europe's oil supplies had been passing through the canal. Currently, only about 15% is shipped through the canal. Similar to the decrease in cargos through the canal, the SUMED oil pipeline--which is owned through state companies by Egypt (50%), Saudi Arabia (15%), the United Arab Emirates (15%), Kuwait (15%), and Qatar (5%)--is operating below its capacity of 2.5 Mb/d. In 2009, approximately 1.1 Mb/d moved through the pipeline, a decrease of about 50% compared to 2008. The reduction resulted from many of the same causes as the canal's drop-off in oil transportation. In 2009, 331 billion cubic feet (bcf) of LNG traversed the canal, which represents 4% of global LNG trade and less than 1% of natural gas consumed globally. Unlike oil, LNG cargos through the Suez Canal have been steadily rising. Between 2008 and 2009, the volume of LNG passing through the Suez Canal increased over 40%, more than doubling northbound cargos. Data for the first 10 months of 2010 show a 66% increase in LNG shipments through the canal compared to the 2009 total. The rise in LNG cargos is mostly attributable to the large increase in Qatar LNG exports. Nevertheless, there is ample supply of LNG in the global market, and rerouting LNG cargos to demand centers could be accomplished in a relatively short time frame. While Egypt is a relatively small player in the global natural gas industry, it can have a larger impact on regional natural gas supply. Egypt produces all the natural gas consumed in Lebanon, almost all the natural gas consumed in Jordan, and more than half the natural gas consumed in Israel. On a world scale, Egypt accounted for only 2.1% of global natural gas production and 2.1% of global natural gas trade in 2009. Egypt holds 77 trillion cubic feet or 1.2% of the world's proved gas reserves. Egypt exports natural gas through two pipelines and two LNG facilities. Currently, the Arab Gas Pipeline connects Egypt to Jordan, Lebanon, and Syria. There are plans to expand the pipeline further, enabling Egypt to export natural gas through Turkey to Europe. In 2008, Egypt opened an export pipeline to Israel. There was an explosion in early February that shut down both pipelines for a short time although the damage was primarily to the Arab Gas Pipeline. Egypt has almost 600 bcf of LNG export capacity, with one facility in Damietta and one in Idku. Egypt accounted for approximately 5% of global LNG trade last year, with most cargos going to Europe. At the end of April 2011 the natural gas terminal near El-Arish in Egypt (see Figure 1 above) was attacked for the second time since protests erupted in that country in January. Natural gas from the terminal supplies the Arab Gas Pipeline to Jordan, Syria, and Lebanon, and a separate pipeline to Israel. There is no estimate for how long natural gas will not be exported. The pipeline was also attacked and disabled in February causing natural gas supplies to be stopped for about a month. The terminal has been a target for Bedouins who feel neglected and oppressed by Cairo. Aside from its role as a transit center, withdrawal of Egypt's own oil production from the global market would likely have limited impact on world oil prices. In 2010, Egypt was a small net importer of oil, producing approximately 0.66 Mb/d while consuming close to 0.71 Mb/d. Egypt's oil production has been in decline since the early 1990s, a trend not likely to be reversed. The country--which has the largest refining capacity in Africa, with 975,000 barrels of processing capacity--did export some refined products, such as naptha, but imported others. Cutting off exports of naptha, an oil product that can be used in making petrochemicals and gasoline, could put minor upward pressure on European prices, which is a main market for Egyptian exports. Global oil prices have already reacted to the unrest in Egypt despite no disruption to Egyptian production. The reaction comes from two concerns: (1) the near-term risk that any disruption to oil transit through Egypt could delay oil shipments for several weeks (as they are rerouted around the Cape of Good Hope, adding extra shipping time) and (2) the more significant concern that political unrest could spread to other, more important energy exporters in the region, such as Saudi Arabia, Iraq, or Kuwait. There has been some upward pressure on natural gas prices as companies scramble to hedge against a disruption of Egyptian exports, but the benchmark natural gas price in the United Kingdom is actually down. Should the scenario described above come to pass, there would likely be little impact on the global oil and natural gas market in the long term. Both industries will take some time to recalibrate flows, but should be able to accomplish that with minor or no disruptions. Additionally, the strategic petroleum reserves of member countries of the International Energy Agency, which are mostly from the Organization for Economic Cooperation and Development (OECD), could also be utilized to bridge any gap in oil flows should a disruption prove to be significant.

The change in Egypt's government will likely not have a significant direct impact on the global oil and natural gas markets. There may be some short-term movements in price, mostly caused by perceived instability in the marketplace, but these would most likely be temporary. However, prolonged instability that raises the specter of spreading to other oil and natural gas producers in the region would likely add to upward price pressures. Although Egypt is considered an energy producer or net exporter overall, its oil and natural gas exports are not large enough to affect regional or global prices. The most serious impact would be on regional recipients of its natural gas exports. Egypt's main influence on energy markets is its control of the Suez Canal and the Suez-Mediterranean oil pipeline (SUMED). The current low utilization of these two pieces of infrastructure would likely limit any effect of their closure in the near term. Both the oil and natural gas industry would, over time, find alternative routes to circumvent the canal and pipeline if necessary.

A question of the privileges of the House is a formal declaration by a Member of the House asserting that a situation has arisen that affects "the rights of the House collectively, its safety, dignity, and the integrity of its proceedings." When making the declaration, the Member submits a resolution providing detail on the situation and typically urging action of some sort. A question of privilege has been held to take precedence over all questions except a motion to adjourn. In explaining this unique privilege, House Speaker Thomas Reed said: The rights and privileges of all the Members of the House, in the discharge of their functions, are sacred, and the House can undertake no higher duty than the conservation of all those rights and privileges intact. And even if the case arises under dubious circumstances, it is proper for the House to pause and give suitable heed to any question which any Member raises with regard to his rights and privileges as a Member. It is for the House alone to determine what they are. Once a question of the privileges of the House is raised, the Speaker must, at some point, entertain the question and rule on its validity. The Speaker makes a ruling regarding whether a question constitutes a valid question of the privileges of the House with guidance from the House Parliamentarian based on House Rule IX and House precedent. If valid, a question of the privileges of the House will be considered on the House floor. The first section of this report provides information on raising and considering such questions to provide assistance in anticipating potential House action. Information is provided on restrictions governing when a question can be raised and when the Speaker must rule on the question's validity. Further information is provided on actions the House may take after the Speaker's ruling on the question's validity, including how the House may consider and dispose of a valid question. Appendix A provides scripts of parliamentary language used on the House floor when such a question is raised. The second section of this report focuses on the content of questions in an effort to provide guidance as to what the Speaker may determine constitutes a valid question. It includes information on, and examples of, types of questions that have been ruled valid and not valid. Appendix B provides a list of all valid questions offered in the past two decades. The final section of the report provides extensive data on questions raised in the past two decades, such as the number of valid questions raised per Congress and the proportion of questions offered by the minority party. In addition, this section provides data on how valid questions were disposed of, which varied significantly depending on whether the Member offering the question belonged to the majority or the minority party. This section also includes information on the categories of questions offered, as well as the categories of questions ultimately agreed to by the House. House Rule IX states that under most circumstances, a Member must give notice of his or her intention to raise a question of the privileges of the House. Within two legislative days of giving such notice, the Member will be recognized to offer the resolution. In practice, the Member will be notified of the date and time when he or she should rise to offer the resolution after having given notice. Under specific circumstances, however, a question of the privileges of the House has precedence to interrupt the daily flow of business. In these situations, the Speaker will make an immediate ruling as to the validity of the question, and if valid, the question is privileged for immediate floor consideration. The three circumstances comprise: 1. A resolution that has been reported from committee; 2. A resolution that has been offered on the floor by the majority leader or the minority leader; or 3. A resolution that has been offered as privileged under the Origination Clause, which is the House's constitutional right to originate all revenue measures (Article I, Section 7, clause 1, of the Constitution). Despite this privilege, under House precedent some restrictions govern when a question can be raised on the floor. For example, a question of the privileges of the House cannot be raised in Committee of the Whole. Also, a Member rising to a question of privilege is not permitted to take the floor from another Member who has already been recognized for debate. Likewise, a question of privilege may not interrupt a roll call or yea-or-nay vote, and a Member may not rise to a question of privileges during a call of the House in the absence of a quorum unless it relates to the immediate proceedings. Moreover, in the event that a question of privilege is pending, another Member will not be recognized to raise a different question of the privileges of the House. If the Speaker rules that the question does not qualify as a valid question of the privileges of the House, the House may move to different business. Any Member who disagrees with the ruling, however, may appeal, allowing the House to decide if the decision of the Speaker will stand as the judgment of the House. If the appeal is successful, the House would consider the question of the privileges of the House. Very often, however, a motion is made to table the appeal, and the House votes instead on the motion to table. In the event that a question has been ruled not valid, a Member may attempt to introduce a different resolution that may meet the criteria of a valid question of the privileges of the House. Alternatively, the Member may instead use other means of communicating concern, such as periods designated for non-legislative debate (special order speeches, one-minute speeches, and morning hour debate). Information on the content of questions ruled valid and not valid can be found below. Once the Speaker rules the question to be valid (or the House overrules the Speaker's ruling that the resolution is not valid), the House may take any number of actions on the resolution, either immediately or after debate occurs. A question of the privileges of the House is considered under the "hour rule," which means generally that a maximum of one hour of debate may occur on the resolution. Debate time is divided between (a) the proponent of the resolution and (b) the majority leader, the minority leader, or a designee, as determined by the Speaker. Each controls 30 minutes of time and may yield portions of that time to Members wishing to speak on the resolution. Members must confine remarks in debate to the question raised. While uncommon, during consideration of the resolution, amendments may be offered but only (1) if the amendment is offered by the Member raising the question of privilege, (2) if the Member raising the question yields to a Member for the purpose of offering an amendment, or (3) in the event that the previous question (described below) is not successful. At the end of the hour (or before), a Member may "move the previous question," which is a non-debatable motion that seeks to bring debate on the resolution to a close. If the House defeats the previous question, another hour of debate would occur, and amendments could be offered. If the House votes to agree to the previous question, a vote on agreeing to the resolution typically follows. To prevent further consideration of the resolution and/or a vote on agreement, a Member may make a motion to lay the resolution on the table. While the motion to table may be offered while the resolution is under debate, it is often made immediately after consideration begins. While tabling a resolution is considered a final adverse disposition of that particular resolution, the question may be rephrased and presented anew on a subsequent day. Instead of voting on the resolution, the House may choose to refer the resolution to a committee. A Member may offer this motion, which is debatable for up to an hour, in an attempt to send the resolution to committee for further work or consideration and may even include specific instructions to the underlying committee. The motion may refer the resolution to one or more standing committees without regard to the usual rules governing committee jurisdiction, or it may seek to refer to a committee that is established pursuant to the motion. A Member could make a motion to postpone consideration of the resolution, although this is uncommon for questions of the privileges of the House in the modern Congress. A motion to postpone is debatable for up to an hour. If agreed to by the House, a motion to postpone the resolution would suspend consideration of the measure either indefinitely or until a specific time, depending on the language used in the motion. Additionally, a sponsor may choose to withdraw a resolution after it has been offered. This does not require unanimous consent; the Member has the right to withdraw the resolution offered even after debate has occurred. By their nature, questions of the privileges of the House address perceived threats to the dignity or integrity of the chamber that have the potential to be controversial and contentious. House rules and precedents require that decorum be maintained during debate. Rule XVII, clause 1(b) states that remarks in debate shall be confined to the question under debate. The Speaker often states that Members should refrain from references in debate to conduct of other sitting Members and, in addition, specifies that indecent language either against the proceedings of the House or its membership is out of order. When a question of the privileges of the House is raised, the prohibition on debate referencing the conduct of a Member or the House may become complicated. Because of this, the Speaker often states that an exception to the general rule is in order but that it is closely limited. Specifically, the Speaker states that, while a wide range of discussion is permitted during debate on such a resolution, the rule still "prohibits the use of language which is personally abusive." The Speaker states that this extends to language that is "profane, vulgar, or obscene and to comportment which constitutes a breach of decorum." Once a question of the privileges of the House is no longer pending, the House prohibition against references in debate to the official conduct of other Members where such conduct is not under consideration is restored, and the prohibition applies to debate that includes reciting the content of a resolution raising a question of the privileges of the House that is no longer pending. Debate on questions of the privileges of the House has sometimes become more raucous than is typical on the House floor. One example occurred during debate on a question of privileges of the House related to the actions of a committee chairman who had requested that the Capitol Police remove minority-party committee Members from a committee room. A Member objected to the remarks of another Member and demanded that the "words be taken down" because they violated the House's rules on decorum. The offending Member then asked unanimous consent to withdraw his remarks. Another example occurred in the 113 th Congress when a Member raised a question condemning the behavior of a committee chairman during a hearing. Dozens of Members gathered behind the Member raising the question, holding electronic devices displaying pictures of the specified committee chairman during the hearing. The presiding officer suspended consideration several times, informing Members that consideration would be delayed until Members lowered their displays and decorum was restored, and he reminded Members that under House precedent, Members may not stage an exhibition. House precedent states, "The tradition of Anglo-American parliamentary procedure recognizes the privileged status of questions related to the honor and security of a deliberate body and its Members." While the notion of questions of privilege predates Congress, the House demonstrated a historical reluctance to define such a question as early as 1795. The principle was not articulated in House rules until 1880, and even then, it was only to restrict the process of considering such questions. According to the House rules manual, the rule governing questions of the privileges of the House was adopted to "codify long established practice that the House had hitherto been unwilling to define." The manual goes on to say that the rule "was adopted 'to prevent the large consumption of time which resulted from Members getting the floor for all kinds of speeches under the pretext of raising a question of the privileges of the House.'" House Rule IX states simply that valid questions shall be those "affecting the rights of the House collectively, its safety, dignity, and the integrity of its proceedings." House precedent can provide guidance as to what the Speaker may determine constitutes a valid question of the privileges of the House, and several categories of examples are provided below to assist in determining what may be ruled valid. This information may be helpful when crafting a resolution or when anticipating whether questions noticed might be ruled valid. The Office of the Parliamentarian of the House should be consulted for specific and authoritative guidance. At the outset, it is important to note a few general requirements for valid questions of the House. To begin with, when presenting a matter, the text in the resolution must "show on its face an invasion of those rights" articulated in the House rule and so presumably may not rely on argument made verbally. Second, the situation that has affected the rights of the House must be actual events and not potential forthcoming events. Listed below in the section Categories of Questions Held N ot to B e Valid are general categories of questions that have historically been found not to be valid. Questions may relate to the organization of the House and the rights of Members to their seats or their leadership positions. For example, a resolution providing for an investigation into the election of a Member presented a question of privilege, as did a resolution proposing the exclusion of a delegate from his seat. Valid questions have also included a resolution declaring a vacancy in the House because a Member-elect is unable to take the oath of office or to expressly resign because of an incapacitating illness, as well as questions dismissing an election contest. Questions have also related to removal of a committee chairman pending an investigation. Matters related to the House's constitutionally granted powers have been recognized as valid questions of the privileges of the House. Often, Members raise questions related to the Origination Clause (which requires that revenue bills originate in the House) and typically state that the Senate has infringed on the House's privilege to originate revenue measures. Such questions are typically presented by the chairman of the Ways and Means Committee (since that committee has jurisdiction over revenue measures). Questions have also involved constitutional functions such as impeachment, as well as the power to expel Members. The House merely having a constitutional power or duty, however, does not allow any matter related to those duties to be raised as a question of the privileges of the House. For example, a question of the privileges of the House raised in 1996, stating that the House ought to pass an adjustment to the public debt limit, was found not to be valid. The presiding officer quoted an earlier ruling that a resolution presenting a legislative proposition as a question of constitutional privilege under the 14 th Amendment did not qualify as a question of the privileges of the House and stated: It is a strained construction to say that because the Constitution gives a mandate that a thing shall be done, it therefore follows that any Member can insist that it shall be brought up at some particular time and in the particular way which he chooses. If there is a constitutional mandate, the House ought by its rules to provide for the proper enforcement of that, but it is still a question for the House how and when and under what procedure it shall be done. Certain questions relating to the conduct of Members, officers, and employees have been held to be valid. For example, a proposition to remove an officer of the House for misconduct has been recognized as a valid question, as have resolutions directing investigations into Member misconduct such as illegal solicitation of political contributions in the House office building by unnamed sitting Members and improper conduct by a former Member with regard to the House page program and insufficient response thereto by the House leadership. Questions also commonly seek the release of information gathered by the House Committee on Ethics during a pending or completed investigation into Member or staff conduct. Questions of the privileges of the House have included matters related to the integrity of the legislative process, both in committee and on the House floor. Questions related to alleged improprieties in committee procedure have dealt with the use of an allegedly forged document at a committee hearing, as well as the unilateral release of committee records in violation of its adopted rules. A question was ruled valid that condemned a committee chairman for adjourning a hearing before allowing the ranking Member to make a statement or ask questions. While a charge of unfair and improper action on the part of a committee has been held to involve a question of privilege, this does not extend to any committee action considered objectionable. For example, an allegation that a committee had refused either to give hearings or to allow petitions to be read before it was not considered a valid question of the privileges of the House. Questions addressing improprieties on the House floor have dealt with the presence on the floor of unauthorized persons, the conduct of those in the press gallery, and the integrity and regularity of an electronic vote. These have also extended to the integrity and accuracy of House documents and messages, as well as entries in the Journal and the Congressional Record . For example, a resolution providing for the correction in the Congressional Record of an exchange between two Members was considered valid. A question alleging factual inaccuracy in the contents of a speech recorded in the Congressional Record (without alleging an error in the Congressional Record , however) was not recognized as a valid question. Certain matters related to the comfort and conveniences of Members have constituted valid questions of the privileges of the House. A proposition concerning the comfort and convenience of Members in relation to the construction of an elevator for the House, as well as a proposal for the removal of desks from the hall, were held to be valid. A resolution directing that the clerk employ additional laborers in the bathroom, however, was not recognized as a valid question, nor was a resolution relating to a new House restaurant. Matters relating to Members' physical safety have constituted valid questions, such as resolutions directing investigations into structural deficiencies in the Capitol, the ceiling in the hall, and alleged fire safety deficiencies. This category of Members' safety expands beyond physical safety to cybersecurity. For example, a resolution alleging that computers were compromised directed the Sergeant at Arms to ensure that House personnel be alerted to the dangers of electronic security breaches. House precedent demonstrates that certain categories of questions have been held not to constitute valid questions of the privileges of the House. A motion to amend the rules of the House does not present a question of privilege. For example, a resolution to permit the delegate of the District of Columbia to vote on a specific legislative matter was held to be tantamount to a change in the rules and therefore determined not to constitute a question of the privileges of the House. Also, a question of the privileges of the House may not be invoked to alter or prescribe a special order of business for the House (also referred to as a special rule). For example, in 2010 the presiding officer ruled that a resolution prescribing House consideration of specific legislation was not a valid question of the privileges of the House: Under such an approach, each individual Member of the House could constitute himself or herself as a virtual Rules Committee. Any Member would be able to place before the House at any time whatever proposed order of business he or she might deem advisable, simply by alleging an insult to dignity or integrity secondary to some action or inaction. In such an environment, anything could be privileged, so nothing would enjoy true privilege. A resolution that alleges the failure of the House to take specified legislative actions brings it discredit, impairs its dignity and the integrity of its proceedings, and lowers it in public esteem does not present a question of the privileges of the House. The presiding officer stated: To rule that a question of the privileges of the House under rule IX may be raised by allegations of perceived discredit brought upon the House by legislative action or inaction, would permit any Member to allege an impact on the dignity of the House based upon virtually any legislative action or inaction. A resolution expressing legislative sentiment does not present a question of the privileges of the House. In response to such a resolution, the presiding officer stated: A resolution expressing the legislative sentiment that the President should take specified action to achieve desired public policy end does not present the question affecting the rights of the House, collectively, its safety, dignity, or integrity of its proceedings as required under rule IX. Similarly, in response to a question raised that made several assertions about a governor and called upon that governor and others to take action, the presiding officer stated: A resolution merely asserting the position of the House with regard to an external issue cannot be the basis of a question of privilege.... According privilege to such a resolution would allow any Member to place before the House at any time whatever topic he or she might deem advisable. In such an environment, anything could be privileged, so nothing would enjoy true privilege. From the 104 th Congress through the 113 th Congress (1995-2014), Members offered 140 questions of the privileges of the House. Of the total number offered, 102 of the questions (73%) were ruled valid and were therefore considered by the House. The number of valid questions offered each Congress varied significantly, with some Congresses considering as few as two and others considering more than 20. The minority party offered 72% of the total number of valid questions, and the proportion of questions offered by the minority remained consistent during most of the period, as illustrated in Figure 1 . How valid questions were disposed of varied significantly depending on whether the Member offering the question belonged to the majority or the minority party. Of the questions offered by majority Members, 69% were agreed to, 14% were referred to committee, 10% were tabled, and 7% were withdrawn. All questions offered by the majority party that were voted on were agreed to, perhaps suggesting that in some cases if a majority party resolution was not likely to receive an affirmative vote, it did not receive a vote but was disposed of alternatively (e.g., by referring the resolution to committee). Of the valid questions offered by the minority party, a large majority (82%) were tabled, meaning that the House chose to dispose of the resolution adversely but without taking a vote on the resolution. This may be done to avoid either political or practical situations that are inopportune for the majority party. For example, it prevents a vote that might be used by the minority as a "messaging vote." Also, a motion to table may be made in order to stop consideration of the resolution so that the House may engage in the business previously planned by the majority party. Of the other questions offered by the minority, 12% were referred to committee, 4% were agreed to, and 2% were not agreed to. As mentioned above, from the 104 th Congress through the 113 th Congress (1995-2014), Members offered 102 questions that were ruled valid. As displayed in Figure 4 , the greatest number of questions related to conduct (39%) and to the House's constitutional prerogatives (23%), followed by questions related to the integrity of proceedings (19%) and questions relating to organization (17%). One question dealt with comfort, convenience, and safety, and two did not fit into any of these general categories. Of the 102 questions considered by the House in the period between the 104 th Congress and the 113 th Congress, 23 of those were agreed to by the House, as shown in Figure 5 . Of those 23 questions, 18 (78%) related to the House's constitutional prerogatives. (Thirteen related to the House's constitutional authority to originate revenue measures, four dealt with impeachment, and one was to expel a Member.) Two of the measures agreed to were related to conduct, two related to integrity of proceedings, and one related to comfort, convenience, and safety. An examination of questions of the privileges of the House illuminates several characteristics of their use, content, and consideration. Questions possess several distinctive features. The notion of questions of privilege predates Congress. The House, however, demonstrated a historical reluctance to define such a question for over a century until the chamber found it necessary to create a definition as part of a rule that would "prevent the large consumption of time which resulted from Members getting the floor for all kinds of speeches under the pretext of raising a question of the privileges of the House." Despite the creation of the rule, raising a question of the privileges of the House allows any Member to be recognized and to have a resolution read on the floor, even if the question is later ruled not to be valid. This represents an uncommon opportunity, particularly for Members of the minority party, to draw attention to a specific matter in a chamber where the majority party leadership characteristically sets the floor agenda. Also unique is that, by their nature, questions of the privileges of the House allow potentially controversial assertions to be read on the floor, such as criticisms of another Member's conduct. The combination of these characteristics (the question's potential use by any Member, its reading requirement, and the subject matter's potentially controversial nature) make such resolutions exceptional in the House. There is a contrast between the types of questions raised and the types of questions agreed to. The ratios of the types of questions offered and the types of questions agreed to by the House varied. As displayed in Figure 4 , the greatest number of questions raised related to conduct (39%) and to the House's constitutional prerogatives (23%). Of the resolutions agreed to, however, most (78%) related to the House's constitutional prerogatives, while a relative few (9%) related to conduct. This might reflect a general disinclination to agree to conduct-related resolutions. Consideration of questions reflect the roles and relations of the majority and the minority. An examination of questions of the privileges of the House might offer insights into the roles and relationship of the majority party and the minority party in the House. First, recall that the minority party offered a majority (72%) of the total number of valid questions, and the proportion of questions offered by the minority remained consistent during most of the period, as illustrated in Figure 1 . Second, the manner in which questions were disposed of varied significantly depending on whether the Member offering the question belonged to the majority or the minority party. Of the questions offered by majority Members, a majority (69%) were agreed to. In fact, all questions offered by the majority party that were voted on were agreed to, perhaps suggesting that if a majority party resolution was not likely to receive an affirmative vote, it did not receive a vote but was disposed of alternatively (e.g., by referring the resolution to committee). Of the questions offered by the minority party, a large majority (82%) were tabled, meaning that the House chose to dispose of the resolution adversely but without taking a vote on the resolution. This may be done to avoid political and/or practical situations that are inopportune for the majority party. For example, a motion to table prevents a vote that might be used by the minority as a messaging vote and, in addition, halts consideration of the resolution so that the House may engage in the business previously planned by the majority party. Appendix A. Scripts of Parliamentary Language Used on the Floor Parliamentary Language Used When a Member Gives Notice of a Resolution In most cases, a Member (other than the majority leader of minority leader) must first give notice of his or her intention to offer the resolution. The parliamentary language used in such situations is generally some variation of the following: Member: Mr. Speaker, pursuant to clause 2(a)(1) of Rule IX, I rise to give notice of my intent to raise a question of the privileges of the House. The form of my resolution is as follows: ( At this point, the Member reads the resolution in its entirety, although he or she may also ask unanimous consent to dispense with the reading . ) Speaker: Under Rule IX, a resolution offered from the floor by a Member other than the majority leader or the minority leader as a question of the privileges of the House has immediate precedence only at a time designated by the chair within two legislative days after the resolution is properly noticed. Pending that designation, the form of the resolution noticed by the gentlelady (or gentleman) from (Member's home state) will appear in the Record at this point. The chair will not at this point determine whether the resolution constitutes a question of privilege. That determination will be made at the time designated for consideration of the resolution. ( W ithin two legislative days the Member will be notified of the date and time when he or she should rise to offer the resolution.) Parliamentary Language Used When a Member Offers the Resolution When the resolution is offered, the parliamentary language used in such situations is generally some variation of the following: Member: Mr. Speaker, I rise to a question of the privileges of the House and offer the resolution previously noticed. Speaker: The Clerk will report the resolution. ( The C lerk reads the resolution. ) Does the gentlelady (or gentleman) from (Member's home state) wish to present argument on the parliamentary question whether the resolution presents a question of the privileges of the House? Member: Yes. Speaker: The gentlelady (or gentleman) from (Member's home state) is recognized for that purpose. Member: I rise today to ... ( In the event that a Member's remarks deviate from the subject of a question of the privileges of the House, the Speaker pro tempore will remind the Member to confine his or her remarks to the question .) Speaker: Are there any other Members that want to be heard on this point? Speaker: The resolution does not qualify ( with explanation ). --or-- Speaker: The resolution qualifies. The Clerk will report the resolution. ( T he Clerk reads the resolution . ) The resolution presents a question of the privileges of the House. Pursuant to clause 2 of Rule IX, the gentlelady (or gentleman) from (Member's home state) and the gentlelady (or gentleman) from (Member's home state) each will control 30 minutes. The chair recognizes the gentlelady (or gentleman) from (Member's home state). Appendix B. Questions of the Privileges of the House (105 th Congress-113 th Congress [1995-2014])

A question of the privileges of the House is a formal declaration by a Member of the House asserting that a situation has arisen affecting "the rights of the House collectively, its safety, dignity and the integrity of its proceedings." Once a question of the privileges of the House is raised, the Speaker must, at some point, entertain the question and rule on its validity. The Speaker makes such a ruling with guidance from the House Parliamentarian based on House rule and precedent. If it is ruled to be valid, a question of the privileges of the House will be considered and possibly voted on by the House. The notion of questions of privilege predates Congress, but the House demonstrated a reluctance to define such a question for over a century. The chamber eventually found it necessary to create a definition as part of a rule that would prevent Members from consuming floor time under the pretext of raising a question of the privileges of the House. Despite the creation of the rule, however, raising a question of the privileges of the House continues to allow any Member to be recognized and to have a resolution read on the floor, even if the question is later ruled not to be valid. Questions recognized as valid comprise several categories, such as: questions related to the organization of the House and the rights of Members to their seats or leadership positions, questions related to the House's constitutional prerogatives, such as their power to originate revenue legislation, questions related to the conduct of Members, officers, and employees of the House, questions related to the integrity of the legislative process, both in committee and on the House floor, and questions related to the comfort, convenience, and safety of Members. Certain categories of questions have been held not to constitute valid questions of the privileges of the House, such as questions that are tantamount to a change in House rules, questions that seek to alter or prescribe a special rule reported from the House Rules Committee, and questions expressing legislative sentiment. From the 104th Congress through the 113th Congress, Members offered 140 questions of the privileges of the House, 73% of which were ruled valid. The number of valid questions offered each Congress varied significantly, with some Congresses considering as few as two and others considering more than 20. The minority party offered 72% of the total number of valid questions, and the proportion of questions offered by the minority remained consistent during most of the period. How valid questions were disposed of during this time period varied significantly depending on whether the Member offering the question belonged to the majority or the minority party. A majority of questions offered by the majority party were agreed to, while a majority of the questions offered by the minority party were tabled, meaning that the House chose to dispose of the resolution adversely but without taking a vote on the resolution. A contrast exists between the types of questions raised and the types of questions agreed to by the House. The greatest number of valid questions raised related to the conduct of Members, officers, and employees of the House (39%) and to the House's constitutional prerogatives, such as their power to originate revenue legislation (23%). Of the resolutions agreed to, however, most (78%) related to the House's constitutional prerogatives, while a relative few (9%) related to conduct.

With a population of 105 million people, Mexico is the most populous Spanish-speakingcountry in the world, and the third most populous country in the Western Hemisphere (after theUnited States and Brazil). This gives it a diplomatic weight in the hemisphere as a leader of LatinAmerican countries, and in the world as a leader of developing countries. With an estimated GrossDomestic Product (GDP) for 2005 of $660 billion, and estimated worldwide turnover trade (exportsand imports) for 2005 of $455 billion, Mexico is an active member of the World Trade Organization(WTO) and a leading trader in the world, principally through its partnership with Canada and theUnited States in the North American Free Trade Agreement (NAFTA). (1) Sharing a 2,000-mile border and extensive interconnections through the Gulf of Mexico, theUnited States and Mexico are so intricately linked together in an enormous number of ways thatPresident George W. Bush and other U.S. officials have stated that no country is more important tothe United States than Mexico. At the same time, Mexican President Vicente Fox (2000-2006), thefirst president to be elected from an opposition party in 71 years, has sought to strengthen thebilateral relationship through what some have called a "grand bargain." (2) Under this proposed bargain,the United States would regularize the status of undocumented Mexican workers in the United Statesand economically assist the less developed partner in the North American Free Trade Agreement(NAFTA) while Mexico would be more cooperative in border security and in controlling the illegaltraffic of drugs, people, and goods into the United States. Mexico is linked with the United States through trade and investment, migration and tourism,environment and health concerns, and family and cultural relationships. Mexico is the second mostimportant trading partner of the United States, and this trade is critical to many U.S. industries andborder communities. Mexican descendants constitute 64% (or 24 million) of the growing Hispanicpopulation of 37.4 million people in the United States, with a significant presence in California andTexas and other states. Moreover, Mexico is the largest source of legal migrants to the United States(21% of the total in 2002) and by far the largest source of undocumented migrants (57% of the totalin 2004, according to estimates). It also is the principal transit or source country for illicit drugs andit is a possible avenue for the entry of terrorists into the United States. As a result, cooperation withMexico is essential in dealing with migration, drug trafficking, and border, terrorism, health,environment, and energy issues. (3) In large part because of the United States, NAFTA is the world's largest free trade area, withabout one-third of the world's total GDP, accounting for about 19% of global exports and 25% ofglobal imports. Based on the volume of trade, Mexico is generally viewed as the least importantmember of NAFTA, although its population of over 100 million is more than three times that ofCanada (32 million), and its GDP is nearly equal to that of Canada ($757 billion). About 37% ofthe United States' trade with NAFTA countries is with Mexico, and 63% is with Canada. Under NAFTA, Mexico's estimated total turnover trade (exports and imports) with the UnitedStates for 2005 was $289 billion, making it the second most important trading partner of the UnitedStates (following Canada), while the United States is Mexico's most important partner by far,providing the market for 88% of Mexico's exports and supplying 62% of Mexico's imports. SinceNAFTA entered into force in 1994, total trilateral trade has more than doubled to $621 billion in2004, while Mexico-U.S. trade more than tripled from $82 billion to $266 billion, although theUnited States has experienced a generally growing trade deficit. U.S. foreign direct investment wasencouraged by NAFTA as well, although in recent years the amount and proportion of U.S.investment flows has declined from $20.4 billion (77% of total investment) in 2001 to $10.7 billion(56% of total) in 2003 as total worldwide investment declined. (4) As one of the major countries in the region, Mexico has historically played an important rolein Latin America and the Caribbean as a strong defender of the principles of non-intervention andself determination, particularly in the hemispheric Organization of American States (OAS). Thisstance put it at odds with the United States on policies toward Cuba since the 1960s and towardNicaragua in the 1980s, although it cooperated fully with the United States in the Summits of theAmericas process in the 1990s. Under President Fox, Mexico has sought to strengthen hemisphericrelations. The President has promoted the so-called Puebla-Panama Plan, which promotescooperative development efforts among the Central American countries and the southeastern statesof Mexico. He has revived the G-3 group (Colombia, Venezuela, and Mexico), has indicated theintent to become an associate member of the Southern Common Market (Mercosur) countries inSouth America, and is implementing free trade agreements with 10 countries in Central and SouthAmerica. In the OAS context, Mexico has been a strong advocate for the Inter-AmericanConvention Against the Illicit Manufacturing of and Trafficking in Firearms, the MultilateralEvaluation Mechanism of the Inter-American Drug Abuse Control Commission (CICAD), and therevision and updating of hemispheric security concepts after it formally withdrew from the RioTreaty collective security mechanism. In October 2003, it hosted a Hemispheric Security Conferencein Mexico City that adopted a new multi-dimensional approach, and in January 2004 it hosted aSpecial Summit of the Americas in Monterrey with emphasis on democracy and social issues. (5) While Mexico is strongly linked to the United States and to Latin America, it has importantties to Europe and Asia as well, and has been a member of the Organization of EconomicCooperation and Development (OECD) and the Asia-Pacific Economic Cooperation (APEC) forumsince the early 1990s. In addition, it is a regular participant in the Rio Group, the Ibero-AmericanConference, and the Latin America and Caribbean-European Union summits. Particularly underPresident Fox, Mexico has pursued an even more activist global foreign policy, with greater involvement in United Nations (U.N.) and Organization of American States (OAS) activities. Mexican officials are seeking to expand trade with the European Union under the EU-Mexico FreeTrade Agreement that went into effect in July 2000, and they signed a free trade agreement withJapan in 2004. Mexico held a temporary seat on the U.N. Security Council in 2002 and 2003 andexpressed support for continuing diplomatic efforts under United Nations auspices to achieve thedisarmament of Iraq, leading to expressions of disappointment from the Bush Administration andsome tension in the bilateral relationship. Under Fox, the country has been open to internationalhuman rights monitors and has played a stronger role in the United Nations Human RightsCommission, at times voting for resolutions critical of Cuba. On December 1, 2004, MexicanForeign Minister Derbez launched a bid for Mexico to have a permanent seat on the U.N. SecurityCouncil, placing it in competition with Brazil to represent Latin America in a still-to-be-approvedenlarged Security Council. In recent years, Mexico has hosted a number of important U.N. and OAS meetings. In March2002, it hosted the U.N. Conference on Financing and Development in Monterrey where PresidentBush announced the Millennium Challenge Account. In September 2003, Mexico hosted the WTOMinisterial in Cancun that collapsed without agreement despite the efforts of Foreign MinisterDerbez to achieve consensus between developing and developed countries to advance the DohaRound of global trade talks. In October 2003, it hosted a Hemispheric Security Conference inMexico City that adopted a multi-dimensional approach to transnational threats, and in January 2004it hosted a Special Summit of the Americas in Monterrey to refocus the Summit process on theadvancement of democracy and economic growth and the reduction of poverty and inequality in theregion. The United States and Mexico have developed a variety of mechanisms for consultation andcooperation on the wide variety of issues on which they interact, with some overlapping in thefunctioning of the various fora. Grouped together to some extent by function and longevity, thesemechanisms include (1) periodic presidential meetings; (2) annual cabinet-level BinationalCommission meetings with 10 Working Groups; (3) annual meetings of congressional delegationsin the Mexico-United States Interparliamentary Group Conferences; (4) NAFTA-related trilateralmeetings under various groups; (5) bilateral border area cooperation meetings hosted by such entitiesas the Border Environment Cooperation Commission (BECC) and the United States-Mexico BorderHealth Commission; and (6) trilateral meetings under the Security and Prosperity Partnership (SPP)of North America, launched in March 2005. Presidents Bush and Fox have met on a regular basis and have discussed a range of issues,at times in specially arranged bilateral meetings and state visits, and at other times at the margins ofmultilateral meetings. In 2001, the Presidents met in mid-February in Guanajuato, Mexico atPresident Fox's ranch where they launched bilateral immigration talks; in mid-April in Quebec,Canada during a Summit of the Americas meeting; in early May in Washington, D.C., in earlySeptember in the Washington, D.C. on an official state visit where migration issues figuredprominently again; and in early October in New York when President Fox expressed solidarity withthe United States following the terrorist attacks. In 2002, the Presidents met in March in Monterrey,Mexico, following the U.N. Conference on Financing and Development; and in October in LosCabos, Mexico, at the APEC summit. In 2003, the Presidents met in October, in Bangkok,Thailand, at the APEC summit, where they reaffirmed the desire to continue bilateral immigrationtalks. In 2004, the Presidents met in January, in Monterrey, Mexico, at the time of the SpecialSummit of the Americas; in March at President Bush's ranch in Crawford, Texas, where theydiscussed President Bush's January 2004 immigration proposal; and in late November in Santiago,Chile at another APEC summit following President Bush's re-election, where immigration issueswere broached again. In 2005, the Presidents met in March in Texas, along with Prime MinisterMartin of Canada, and launched the trilateral "Security and Prosperity Partnership (SPP) of NorthAmerica." (6) Functioning since 1981, the United States-Mexico Binational Commission, with practicallyunparalleled cabinet-level participation, meets yearly, alternating between Mexico and the UnitedStates, with high level consultation on the full range of bilateral topics through a number ofassociated Working Groups. The Binational Commission meeting scheduled for October 2005 wascancelled because Mexican officials were dealing with Hurricane Wilma in the Yucatan region ofMexico, but Mexican Foreign Minister Derbez visited Washington, D.C. on October 26, 2005, forofficial meetings. Many of the relevant agencies in both countries had been interacting with eachother in the context of the March 2005 launch of the trilateral "Security and Prosperity Partnershipof North America," and the June 2005 reports to the three North American leaders on the initialaccomplishments and plans for the trilateral partnership. At the Binational Commission meeting held in November 2004, in Mexico City, theWorking Groups reviewed regular activities throughout the year and announced agreements. (7) The Working Groups (withagency representatives indicated) as then constituted were: (1) Foreign Policy (U.S. Department ofState and Mexican Ministry of Foreign Affairs); (8) (2) Migration and Consular Affairs (U.S. Departments of State andHomeland Security and Mexican Ministries of Foreign Affairs and Government); (3) HomelandSecurity and Border Cooperation (U.S. Departments of State and Homeland Security and MexicanMinistries of Foreign Affairs and Government); (4) Law Enforcement and Counter-Narcotics (Chaired by U.S. and Mexican Attorneys General) with reference to the more frequent Senior LawEnforcement Plenary (SLEP) meetings; (5) Trade and Agriculture (U.S. and Mexican Ministries ofTrade and Agriculture); (6) Labor (U.S. and Mexican Ministries of Labor); (7) Education (U.S. andMexican Ministries of Education); (8) Environment (U.S. Environmental Protection Agency (EPA)and Mexican Ministry of Environment and Natural Resources (SEMARNAT); (8) Housing (U.S.Department of Housing and Urban Development and Mexican Commission of Housing); (9) Transportation (U.S. Department of Transportation and Mexican Ministry of Communication andTransportation); and (10) Energy (U.S. and Mexican Ministries of Energy) that met in the summer. A report on the related public-private Partnership for Prosperity (P4P) launched by Presidents Bushand Fox in September 2001 to promote development in Mexico, particularly in areas with highout-migration rates, was also made at the meeting. At the conclusion of the November 2004 Binational Commission meetings, Secretary of StateColin Powell, summarizing the accomplishments, emphasized the growing bilateral cooperation oncounter-narcotics and border security matters between the countries, including the creation of a newWorking Group on Cyber-Security. He also noted the conclusion of educational agreements that willadvance Mexican competitiveness, housing agreements to strengthen the local mortgage market,agricultural agreements to advance cooperation on rural development programs, and environmentalagreements to promote environmental conservation. With regard to the accomplishments of the Partnership for Prosperity (P4P), Secretary Powellnoted that these programs had lowered the fees for transferring funds from the United States toMexico, brought together more than 1400 business and government leaders from both countries, anddeveloped innovative methods to finance infrastructure projects. Other accomplishments were theestablishment for the first time of a Peace Corps program in Mexico, and the recent establishmentof the Overseas Private Investment Corporation (OPIC) in Mexico that is expected to provide over$600 million in financing and insurance to U.S. businesses in Mexico. (9) Beginning in 1961, legislators from Mexico and the United States have met once a year todiscuss the full range of bilateral topics, alternating between Mexico and the United States. (10) During the latestinterparliamentary meeting, the 44th in the long series, in early June 2005, in Newport, Rhode Island,the delegates focused on immigration and security, commerce and competitiveness, criminal justice,and the new trilateral "Security and Prosperity Partnership of North America." Mexican delegatesurged U.S. enactment of a comprehensive immigration reform and action to strengthen Mexico'seconomy, while pointing out that Mexican policymakers were increasingly recognizing the migrationphenomenon as a two way street and were adopting measures like the "3 for 1" program under whichcommunity contributions from Mexicans abroad are matched by the federal, state, and municipalgovernments to encourage their return to Mexico. U.S. delegates urged the Mexican legislators tostrengthen their agricultural sector and to open their energy sector to investment to promotedevelopment and to create jobs for Mexicans within the country. They also called upon Mexicanpolicymakers to better control their southern border with Guatemala, and to extradite suspectswanted for murdering U.S. police officers. Delegates from both countries praised the trilateral"Security and Prosperity Partnership (SPP) of North America" launched in March 2005 to advanceregional cooperation and competitiveness. Functioning since 1994 when the North American Free Trade Agreement (NAFTA) betweenCanada, Mexico, and the United States went into effect, these trilateral institutions provide themechanisms for interaction on trade and trade-related issues. NAFTA Commissions, Secretariat, and WorkingGroups. The NAFTA agreement of 1993 established a variety of commissions andworking groups. The central institution is the NAFTA Free Trade Commission, consisting of thetrade ministers of each county, which meets annually or when required. For the United States, theappropriate representative is the United States Trade Representative (USTR). Implementation ofNAFTA is carried out by more that 25 committees, with representation from the Departments ofState, Agriculture, Commerce, Justice, Transportation, and Treasury as well as agencies such as theSmall Business Administration (SBA) and the Environmental Protection Agency (EPA), dependingon the issue. The NAFTA agreement required each of the countries to have a permanent NAFTASecretariat to assist the NAFTA Commission and to administer the NAFTA dispute resolutionprocedures. In the case of the United States, the NAFTA Secretariat is located in the Departmentof Commerce's International Trade Administration. (11) At the most recent meeting of the NAFTA Free Trade Commission in San Antonio, Texas,on July 16, 2004, the three trade ministers issued a joint statement hailing "a decade of achievement"under NAFTA, and committing to "deepening economic integration in North America." They alsopledged to achieve meaningful progress on the WTO Doha Development Agenda, and on Free TradeArea of the Americas (FTAA) talks. (12) Commission for Environmental Cooperation(CEC). Established by the trilateral North American Agreement on EnvironmentalCooperation (NAAEC) of 1993, a companion side agreement to NAFTA, the Commission wasformed to strengthen environmental cooperation between the United States, Mexico, and Canada,and to consider complaints of non-compliance with environmental law brought by variousnon-governmental groups. The Commission is governed by a Council composed of the environmentministers (or alternative representatives ) from each of the three countries, who receive outside inputfrom National Advisory Committees, Governmental Advisory Committees and the Joint PublicAdvisory Committee (JPAC). At the most recent Commission meeting, on June 22, 2005, theMinisters adopted the Strategic Plan 2005-2010 for cooperating on environmental protection matters. More recently, the Commission, in November 2005, issued the first ever trinational conservationplans for six wildlife species, and in December 2005, made public the factual record developed inresponse to a Mexican non-governmental organization's complaint that Mexico was failing toenforce environmental laws in the Sierra Tarahumara. (13) Commission for Labor Cooperation (CLC). Created by the trilateral North American Agreement on Labor Cooperation (NAALC) of 1993,another NAFTA side agreement, the Commission was established to encourage cooperation on labormatters and to consider complaints of non-compliance with labor law lodged by non-governmentalorganizations. The Commission is governed by a Council of Ministers composed of the ministersof labor of each of the countries, with assistance from a trinational Secretariat and independentEvaluation Committees of Experts. The agreement requires each government to establish its ownNational Administrative Office (NAO), which in the case of the United States is located in theDepartment of Labor. At the Seventh Ministerial Meeting in November 2003, the ministers praisedthe cooperative advances in the labor area and announced the release of a major report on NorthAmerican labor markets and a guide to the rights of migrant workers. (14) In other recent action, inNovember 2004 the Mexican Secretary of Labor agreed to ministerial consultation with the U.S.Secretary of Labor following a hearing and report on a non-governmental complaint of failure toenforce labor rights in two garment factories in Puebla, Mexico. In 2005, non-governmental groupsalso filed submissions alleging violation of the labor rights of Mexican pilots and Mexican textileworkers in the state of Hidalgo. (15) North American Energy Working Group(NAEWG). Created in the spring of 2001 by the energy ministers of Canada,Mexico, and the United States, the mission of the trilateral NAEWG is to foster communication andcooperation among the governments and energy sectors of the three countries on energy-relatedmatters, and to enhance energy trade between the countries while respecting domestic jurisdictions. Working Group experts have issued four reports, the first on the general energy picture in June 2002,the second on energy efficiency standards in December 2002, the third on regulation of internationalelectricity trade in December 2002, and the fourth on the North American Natural Gas Vision inJanuary 2005. (16) Working in conjunction with the Working Group on Law Enforcement andCounter-Narcotics Matters of the Binational Commission (see above), the Senior Law EnforcementPlenary (SLEP) is an annual meeting of senior law enforcement officials from both countries wherethey discuss cooperation on law enforcement and counter-narcotics matters. The SLEP andBinational Commission meetings are supplemented by regular meetings between the U.S. andMexican Attorneys General, and by cooperation among the border states Attorneys General. WhenU.S. Attorney General Alberto Gonzales met with Mexican Attorney General Daniel Cabeza de Vacaon October 13, 2005, in San Antonio, Texas, they announced training and intelligence sharinginitiatives to combat narcotics-related violence on the border, particularly in the area of NuevoLaredo, Mexico. (17) A wide variety of Mexico-United States binational organizations meet on a regular basis todeal primarily with the problems of the areas on both sides of the common border. International Boundary and Water Commission(IBWC). Created by treaties of 1889 and 1944, the International Boundary andWater Commission is a binational governmental organization charged with the task of identifyingand solving boundary and water problems arising along the 2,000 mile border between Mexico andthe United States. There is a U.S. section of the Commission in El Paso, Texas, and a Mexicansection in Ciudad Juarez, Chihuahua, with each side funding its own section. In recent action, inNovember 2005, the IBWC sponsored a binational summit of stakeholders to developrecommendations for the sustainable development of the Rio Grande Basin, and in December 2005,the U.S. section adopted an Environmental Management System to ensure the integration ofenvironmental considerations into day-to-day decisions. (18) Border Environment Cooperation Commission(BECC). Established under the North American Free Trade Agreement of 1993,the Border Environment Cooperation Commission is a joint U.S.-Mexico international organizationwith a mandate to assist border communities in developing environmental infrastructure projects,and to certify the feasibility of these projects for the purpose of receiving loans from the sisterinstitution, the North American Development Bank (NADBank). The BECC is governed by a Boardof Directors, with members from U.S. and Mexican public and private sectors, and is located inCiudad Juarez, Chihuahua. In 2004, the mandate of the BECC and NADBank were expanded toinclude communities in Mexico up to 300 kilometers from the border, and to establish a joint Boardof Directors for both institutions. Funding for the U.S. side comes from the InternationalCommissions section of the Department of State appropriation in the Commerce, State, JusticeAppropriations. The BECC has also received funds directly from the U.S. Environmental ProtectionAgency (EPA) and Mexico's Ministry of Social Development (SEDESOL), and has provided morethan $30.2 million to aid in the development of 230 water, sewage, and municipal waste projects in131 communities on both sides of the border. Since the establishment of the BECC, it has certified105 environmental infrastructure projects for funding in Mexico and the United States worth $2.4billion. (19) North American Development Bank (NADBank). Established under the North American Free Trade Agreement of 1993, the North AmericanDevelopment Bank is an international financial institution established and capitalized in equal partsby the United States and Mexico for the purpose of financing environmental projects along theborder. It is located in San Antonio, Texas. As indicated above, in 2004, the geographical mandateof the NADBank was expanded to cover Mexican communities up to 300 kilometers from theborder. U.S. funding for the NADBank comes from the Multilateral Development Banks section ofthe Foreign Operations Appropriations. By the end of FY2005, the NADBank had authorized 24loans for border environmental projects totaling $105 million. The NADBank also administers theBorder Environment Infrastructure Fund (BEIF) with funds directly from the EPA's Border Fund. By the end of FY2005, $516 million in BEIF grants have been committed for 54 water andwastewater projects along the border. (20) United States-Mexico Border Health Commission(USMBHC). Created as a binational health commission by an agreement in July2000 by the ministers of health in each country, the commission members include the federalsecretaries of health, the chief health officers of the six border states in Mexico and the four borderstates in the United States, and prominent health professionals from both countries. TheCommission seeks to provide a mechanism for coordinated action to improve health and the qualityof life at the border. The Commission receives funding from the United States and Mexico, with theU.S. contribution coming from appropriations for the Office of Global Health Affairs, Departmentof Health and Human Services. In March 2001, the Commission established a ten-year binationalagenda of health promotion and disease prevention known as Healthy Border 2010 with 20objectives in 11 focus areas. The 11 focus areas include seeking to improve access to health careand immunization, and seeking to reduce the incidence of cancer, diabetes, asthma, HIV/AIDS, andsuicide. (21) U.S.-Mexico Border Environmental Program -- Border2012. Following up on the La Paz agreement in 1983, the Border XXI program in1996, and the New Border Vision in 1997 and 1998, Border 2012 is a 10-year set of binational goalsto protect and advance public health and environmental conditions in the U.S.-Mexico border region. It brings together EPA, HHS, Mexico's environment and health ministries, the U.S. border tribes,and the environmental agencies from each of the ten U.S.-Mexico border states. EPA takes the leadin Border 2012, but the initiative is said to emphasize a bottom-up approach, with four regionallyfocused workgroups to maximize the participation of local communities in efforts to reduce air, land,and water pollution. (22) Participants in Border 2012 efforts work closely with the International Boundary and WaterCommission (IBSC), the North American Commission for Environmental Cooperation (CEC), theBorder Environment Cooperation Commission (BECC) and the North American Development Bank(NADBank). (23) Mexico-U.S. Border Partnership. The bilateralBorder Partnership ("Smart Border") Agreement was launched in March 2002, with the stated goalof balancing security enhancement with transit enhancement. It sought to utilize advancedtechnology to strengthen screening infrastructure at the border in order to facilitate the transit ofpeople and goods across the border. When Mexico's Secretary of Government Santiago Creel metwith Secretary of Homeland Security Michael Chertoff in May 2005 to assess progress under thepartnership, they focused on the six new Secure Electronic Network for Traveler's Rapid Inspection(SENTRI) lanes for pre-screened, low-risk individuals, and the eight new Free and Secure Trade(FAST) lanes for pre-cleared cargo. They also focused on the coming repatriation of Mexicannationals in accordance with the 2004 U.S.-Mexico Action Plan for Cooperation and Border Safetyand the joint 2004 Memorandum of Understanding on the secure, orderly, dignified, and humanerepatriation of Mexican nationals. (24) Border Liaison Mechanisms (BLMs). Developedin recent years, the BLMs are regularly scheduled meetings that are held in each of the ten clustersof "sister cities" along the Mexico-U.S. border, with chairmanship of the meeting alternatingbetween the U.S. and Mexican Consul Generals. The purpose of the meetings is to exchange viewsand develop solutions to pressing border problems, including transportation, law enforcement, andpublic safety issues, with those attending the meetings including representatives from relevantfederal, state, and local agencies from both countries. In August 2005, for example, U.S. officialsmet with Mexican officials in the BLM for the New Mexico-Chihuahua region. (25) Binational Group on Bridges and BorderCrossings. This binational group was created in 1983, but since 1989 it has oftenbeen held as part of the Binational Commission meetings. It is generally attended by representativesof the ministries responsible for foreign affairs, treasury, transportation, immigration, and security,including officials in charge of the bridges and border crossings. Interested citizens and businessmenoften attend as well. The 35th meeting of the binational group met May 2-4, 2005, in Reynosa,Mexico, and agreed to advance cooperation to modernize the bridges and crossing points in that areain keeping with the Border Partnership announced by Presidents Fox and Bush in March 2002 andthe commitments during the Binational Commission meetings in November 2004. (26) Border States Conferences. Operating since1980, the Border Governors Conference brings together on an annual basis the governors of the tenborder states (six Mexican states and four U.S. states) to discuss the many issues affecting theborder. (27) In additionto this comprehensive conference, there are direct state-to-state versions: (1) the Cuatro Caminos(Four Paths) Conference between Texas and neighboring states (Tamaulipas, Nuevo Leon, Coahuilaand Chihuahua); (2) the Commission of the Californias (California and Baja California); (3) theSonora-Arizona Commission; and (4) the Chihuahua-New Mexico Commission. Gulf of Mexico States Accord. Established in1995, this is an agreement among the eleven U.S. and Mexican states (six Mexican states and fiveU.S. states) bordering the Gulf of Mexico that is facilitating trade and cooperation between the twocountries. This organization views the Gulf of Mexico as a "trade superhighway," as a "borderwithout bridges," that promoted, for example, the shipment of Daimler-Chrysler vehiclesmanufactured in Mexico from Tampico, Mexico, to Tampa, Florida in less time than using landroutes. Other initiatives include promoting environmental standards in the Gulf area, encouragingbinational university exchanges, and advancing private sector cooperation under the Gulf of MexicoPartnership. (28) On March 23, 2005, President Bush hosted a meeting in Texas with President Fox and PrimeMinister Martin, in which the leaders established the trilateral "Security and Prosperity Partnership(SPP) of North America." The new partnership seeks to advance the security and prosperity of thecountries, under a conception that is trilateral, but that will allow any two countries to move forwardon an issue, and create a path for the third country to join later. The initiative is to complement, notreplace, existing bilateral and trilateral fora. To implement this partnership the leaders establishedMinisterial-led working groups that were instructed to develop measurable and achievable goals topromote security and prosperity and to report back to the leaders within 90 days and semi-annuallythereafter. For the United States, the Department of Homeland Security is the lead agency on theworking group on security, and the Department of Commerce is the lead agency on the workinggroup on prosperity, along with representation by the Department of State. (29) On June 27, 2005, Secretary of Homeland Security Chertoff and Secretary of CommerceGutierrez met with their Canadian and Mexican counterparts in Ottawa, Canada, and released aReport to Leaders with initial results and proposed initiatives for the future under the Security andProsperity Partnership (SPP) of North America. (30) In the security area, the report discussed efforts to establish common approaches to securityto protect against external and internal threats and to further streamline legitimate trade and travel. Among these efforts, the countries would implement common border security and bioprotectionstrategies, enhance infrastructure protection and emergency response plans, improve aviation andmaritime security and intelligence cooperation against transnational threats, and continue to facilitatethe legitimate flow of people and cargo at the borders. In the press conference, the ministershighlighted the agreement to develop and implement common methods of screening individuals andcargo, development of a unified trusted traveler program to expand upon the SENTRI and FASTprograms, and development of a collective approach to protecting infrastructure and responding tovarious incidents. In the prosperity area, the report discussed efforts to enhance North Americancompetitiveness and to improve the quality of life. To achieve this, the countries would improveproductivity through regulatory cooperation and harmonization; enhance cross-border cooperationon health, food safety, and environmental protection projects; promote sectoral collaboration inenergy, transportation, and financial services; and reduce the costs of trade by increasing theefficiency of the cross-border operations. In press statements, the ministers cited agreement oncommon principles for electronic commerce, liberalization of the rules of origin on householdappliances and machinery, streamlining and harmonizing regulatory processes, and collaboration inthe steel, automotive and energy sectors to enhance competitiveness.

This report provides information on the importance of Mexico to U.S. interests andcatalogues the many ways Mexico and the United States interact. The report is a snapshot of thebilateral relationship at the beginning of 2006. It will not be updated on a regular basis. Sharing a 2,000-mile border and extensive interconnections through the Gulf of Mexico, theUnited States and Mexico are so intricately linked together in an enormous multiplicity of ways thatPresident George W. Bush and other U.S. officials have stated that no country is more important tothe United States than Mexico. At the same time, Mexican President Vicente Fox (2000-2006), thefirst president to be elected from an opposition party in 71 years, has sought to strengthen therelationship with the United States through what some have called a "grand bargain." Under thisproposed bargain, the United States would regularize the status of undocumented Mexican workersin the United States and economically assist the less developed partner in the North American FreeTrade Agreement (NAFTA), while Mexico would be more cooperative in efforts to control theillegal traffic of drugs, people, and goods into the United States. The southern neighbor is linked with the United States through trade and investment,migration and tourism, environment and health concerns, and family and cultural relationships. Itis the second most important trading partner of the United States, and this trade is critical to manyU.S. industries and border communities. It is a major source of undocumented migrants and illicitdrugs and a possible avenue for the entry of terrorists into the United States. As a result, cooperationwith Mexico is essential to deal effectively with migration, drug trafficking, and border, terrorism,health, environment, and energy issues. The United States and Mexico have developed a wide variety of mechanisms for consultationand cooperation on the range of issues in which the countries interact. These include (1) periodicalpresidential meetings; (2) annual cabinet-level Binational Commission meetings with 10 WorkingGroups on major issues; (3) annual meetings of congressional delegations in the Mexico-UnitedStates Interparliamentary Group Conferences; (4) NAFTA-related trilateral trade meetings undervarious groups; (5) regular meetings of the Attorneys General and the Senior Law EnforcementPlenary to deal with law enforcement and counter-narcotics matters; (6) a wide variety of bilateralborder area cooperation meetings dealing with environment, health, transportation, and bordercrossing issues; and (7) trilateral meetings under the "Security and Prosperity Partnership (SPP) ofNorth America" launched in Waco, Texas, in March 2005.

Despite measles having been declared eliminated in the United States 15 years ago, there have continued to be occasional outbreaks of the virus that have raised questions about the virus itself, the medications available to prevent its transmission, and the federal government's role in ensuring that vaccine-preventable diseases, such as measles, do not reestablish themselves in the United States. This report presents basic information about this infectious disease, its history in the United States, available treatments to prevent individuals from contracting measles, and the federal role in combatting measles--from funding, to research, to the authority of the federal government in requiring mandatory childhood vaccinations. According to the U.S. Centers for Disease Control and Prevention (CDC), "measles is a highly contagious virus that lives in the nose and throat mucus of an infected person." It is transmitted through coughing and sneezing, and it can live for up to two hours on a surface or in an airspace where the infected person coughed or sneezed. Someone who is not immunized against measles and comes into contact with the virus has a 9-in-10 chance of becoming infected. Symptoms associated with the measles start to appear approximately 7 to 14 days after a person is infected. Symptoms usually consist of high fever, cough, runny nose, and red/watery eyes. Two to three days after the onset of symptoms, small white spots may appear inside the mouth; a rash typically follows three to five days after symptoms begin. The most common complications from measles include inflammation of the middle ear, pneumonia, and diarrhea. Measles can cause serious illness resulting in hospitalization, and 1 in every 1,000 measles cases may develop acute encephalitis (inflammation of the brain), which could lead to permanent brain damage. Between 1 and 2 of every 1,000 children with measles will die from respiratory and neurologic complications. Those who are most at risk for severe illness and complications from the measles include infants and children younger than 5 years old, adults older than 20 years old, pregnant women, and people with compromised immune systems (e.g., HIV infection, cancer patients). Diagnosed cases of measles were first required to be reported by health care officials in the United States approximately 100 years ago; about 6,000 measles-related deaths were reported each year for the first decade of reporting. In the decade prior to the introduction of the first measles vaccine in 1963, most children got measles while growing up. Each year, approximately 3-4 million people in the United States caught the infection, an estimated 400 to 500 people died, and 48,000 were hospitalized. As recently as 2013, the World Health Organization estimated 145,700 deaths globally from measles. In 1954, John F. Enders and Dr. Thomas C. Peebles collected blood samples from several ill students during a measles outbreak in Boston, MA, in an attempt to create a measles vaccine. By 1963, Enders and colleagues had successfully created a measles vaccine and licensed it in the United States. Today, the measles vaccine is combined with mumps and rubella (MMR) or with mumps, rubella and varicella (MMRV). The Advisory Committee on Immunization Practices (ACIP) and CDC recommend that all children receive two doses of MMR vaccine, the first dose at 12 to 15 months of age, and the second at 4 to 6 years of age. Adults who do not have evidence of immunity (e.g., written documentation of vaccination, laboratory confirmation of measles) are recommended to receive at least one dose of the measles vaccine. Those who should not get the vaccine include anyone who has ever had a life-threatening allergic reaction (e.g., anaphylactic shock) to the antibiotic neomycin or to prior doses of the MMR or MMRV vaccine, pregnant women, and individuals with any type of cancer, HIV/AIDS, or other immune system disease. According to the CDC, the risks associated with the MMR vaccine "causing serious harm, or death, is extremely small" and receiving the vaccine "is much safer than getting measles, mumps, or rubella." However, as is the case with every medication, the MMR/MMRV vaccine is not 100% safe. It can result in what CDC characterizes as "mild problems," such as fever (1 out of 6 people) or mild rash (1 out of 20 people); "moderate problems," such as seizure caused by fever (1 out of 3,000 doses) or temporary joint stiffness or pain, mostly in teenage or adult women (up to 1 out of 4); and "severe problems," such as serious allergic reaction (less than 1 out a million doses) or deafness. The rarity of these severe problems makes it difficult to ascertain whether they are caused by the vaccine. It should be noted that among the issues that has resulted in pockets of lower rates of MMR/MMRV vaccination have been concerns over the safety of the measles vaccine itself, in particular concerns that the vaccine may cause autism. While the perception is real and may be influencing some parent's decisions to vaccinate their children, the scientific link between autism and the MMR vaccine has been studied extensively and has overwhelmingly been found to be unsubstantiated. According to data published in CDC's Morbidity and Mortality Weekly Report (MMWR), in 2013 (the year for which most recent data are available) "the overall national coverage for MMR vaccine among children aged 19 - 35 months was 91.9%." However, MMR vaccine coverage levels vary by state. According to the CDC, "in 10 states, 95% of the children aged 19-35 months in 2013 had received at least one dose of MMR vaccine, while in 17 other states, less than 90% of these children were vaccinated against measles." The MMWR article also observes that "pockets of unvaccinated people can exist in states with high vaccination coverage, underscoring considerable measles susceptibility at some local levels." CDC has noted that MMR vaccination rates among children 19 - 35 months have exceeded 90% since 1996. What has changed in recent years is the number of measles importations into the U.S. due to the continued high rates of measles in some parts of the world combined with pockets within the U.S. where vaccination rates are low. In tandem, despite an overall high rate of immunization, these trends continue to put individuals who cannot or will not get vaccinated at greater risk for the disease. The President's FY2016 budget request for the CDC reports that "from January 1 to November 29, 2014, CDC received reports of 610 measles cases from 24 states in the United States. This is the highest number of cases reported in the United States, including the largest single measles outbreak, since the Vaccines for Children (VFC) Program was established in 1994." Thus far in 2015 (through January 30), CDC has received reports of 102 measles cases located in 14 states. Most of the 102 cases--81 people from California and 13 from six other states--are considered to be part of a large, ongoing outbreak linked to an amusement park in California, and about half the patients were unvaccinated or did not know their vaccination status. At present, only one company is licensed to sell measles vaccine in the United States: Merck & Co., Inc., based in Whitehouse Station, NJ. According to the U.S. Food and Drug Administration, Merck is licensed and approved to sell two vaccines that contain the measles vaccine--one is the Measles, Mumps and Rubella Virus Vaccine, Live (known as MMR II), and the second is Measles, Mumps, Rubella, and Varicella Virus Vaccine Live (known as ProQuad). According to Merck's financial filings with the U.S. Securities and Exchange Commission, global revenue from the sale of ProQuad in 2013 (the most recent year for which annual sales data are available) was $314 million; revenue from the sale of MMR II was $307 million for the same year. For the first nine months of 2014, revenue from the sale of ProQuad was reported to be $278 million and revenue from the sale of MMR II was $249 million. The role of the federal government in vaccine policy, particularly in the development of guidelines for when to administer specific vaccines (and when not to) and to what populations is extensive. The federal government also has a major role in the purchase and distribution of vaccines, particularly childhood vaccines. However, the role of the federal government is much more limited and constrained in its ability to mandate the use of specific vaccines by individuals--this responsibility rests primarily with state and local officials. As mentioned earlier, the federal government's role in making evidence-based recommendations and guidance on the use of vaccines by different population groups is significant. The CDC's ACIP is the main group within the federal government charged with developing "recommendations on how to use vaccines to control diseases." The federal government has a robust capacity for monitoring vaccine usage, particularly the potential for adverse events. The system in place for this task is the Vaccine Adverse Event Reporting System (VAERS), operated jointly by the CDC and the FDA. Both vaccine manufacturers and healthcare providers must report adverse events through the VAERS system, whereas others (e.g., consumers) may do so voluntarily. The President's FY2016 budget request included $4.1 billion for the Vaccines for Children Program (VCP), which provides "vaccines to children whose parents or guardians may not be able to afford them," including vaccination against the measles. Funding for the program is allocated through the Centers for Medicare & Medicaid Services to the CDC. In addition to the VCP is CDC's Section 317 immunization program, which is funded by annual discretionary appropriations and provides grants to states, territories, commonwealth trusts, and several cities for vaccine purchase and programs (e.g., outreach and disease surveillance). The President's FY2016 budget request includes a projected $560.5 million for the Section 317 program. According to CDC, in calendar year 2014, the VCP and Section 317 programs spent $38.3 million on the purchase of MMR vaccine for children. The National Institutes of Health reports that in FY2015, it plans to spend an estimated $1.65 billion on vaccine-related research, focusing on issues ranging from HIV/AID to biodefense. The preservation of public health has traditionally been regarded as primarily the responsibility of state and local governments, and the authority to enact laws relevant to the protection of the public health derives from the states' general police powers. With regard to communicable disease outbreaks, these powers may include the enactment of mandatory vaccination laws. The Supreme Court has upheld the power of states to institute a mandatory vaccination program as an exercise of its police powers. In Jacobson v. Commonwealth of Massachusetts , the Supreme Court upheld a state law that gave municipal boards of health the authority to require the vaccination of persons over the age of 21 against smallpox, and determined that the vaccination program had "a real and substantial relation to the protection of the public health and safety." In upholding the law, the Court noted that "the police power of a State must be held to embrace, at least, such reasonable regulations established directly by legislative enactment as will protect the public health and the public safety." Likewise, the Court has recognized state and local power to require students to be vaccinated. In Zucht v. King , the Supreme Court upheld a local ordinance requiring vaccinations for schoolchildren. The Court invoked Jacobson for the principle that states may use their police power to require vaccinations, and noted that the ordinance did not bestow "arbitrary power, but only that broad discretion required for the protection of the public health." In turn, lower courts have given considerable deference to the use of the states' police power to require immunizations to protect the public health. For example, West Virginia does not offer a religious exemption from school vaccination requirements, but the U.S. Court of Appeals for the Fourth Circuit has rejected free exercise, equal protection, and substantive due process challenges to the law. Similarly, New York permits religious exemptions only if a parent holds "genuine and sincere religious beliefs" against vaccination, and permits school districts to bar unvaccinated children from school during an outbreak. The U.S. Court of Appeals for the Second Circuit has upheld the law against substantive due process, free exercise, and equal protection claims. Many states also have laws providing for mandatory vaccinations during a public health emergency or outbreak of a communicable disease. Generally, the power to order such actions rests with the governor of the state or with a state health officer. For example, a governor may have the power to supplement the state's existing compulsory vaccination programs and institute additional programs in the event of a civil defense emergency period. Or, a state health officer may, upon declaration of a public health emergency, order an individual to be vaccinated "for communicable diseases that have significant morbidity or mortality and present a severe danger to public health." In addition, exemptions may be provided for medical reasons or where objections are based on religion or conscience. However, if a person refuses to be vaccinated, he or she may be quarantined during the public health emergency giving rise to the vaccination order. State statutes may also provide additional authority to permit specified groups of persons to be trained to administer vaccines during an emergency in the event insufficient health care professionals are available for vaccine administration. Although states have traditionally exercised the bulk of authority in this area, the federal government does have jurisdiction over public health matters. The Commerce Clause states that Congress shall have the power "[t]o regulate Commerce with foreign Nations, and among the several States." Accordingly, under the Public Health Service Act, the Secretary of the Department of Health and Human Services has authority to make and enforce regulations necessary "to prevent the introduction, transmission, or spread of communicable diseases from foreign countries into the States or possessions, or from one State or possession into any other State or possession." Regulations issued pursuant to this authority include quarantine and isolation measures to halt the spread of certain communicable diseases. However, no mandatory vaccination programs are specifically authorized, nor do there appear to be any regulations regarding the implementation of a mandatory vaccination program at the federal level during a public health emergency. With regard to foreign countries, the Secretary has the power to restrict the entry of groups of aliens for public health reasons. This power includes the authority to issue vaccination requirements for immigrants seeking entry into the United States. Currently, certain vaccines specified in statute, and other vaccines recommended by the ACIP for the general U.S. population, are required for immigrants who seek permanent residence in the United States, and for people currently living in the United States who seek to adjust their status to become permanent residents. CDC has determined that two diseases for which vaccines are recommended for routine use by the ACIP--for human papillomavirus (HPV) and zoster (shingles)--do not have the potential to cause outbreaks, and are therefore not required for admission. Vaccination requirements may be waived when the foreign national receives the vaccination, if the civil surgeon or panel physician certifies that the vaccination would not be medically appropriate, or if the vaccination would be contrary to the foreign national's religious or moral beliefs. Likewise, the military has broad authority in dealing with its personnel, both military and civilian, including the protection of their health. Military regulations require U.S. troops to be immunized against a number of diseases, including tetanus, diphtheria, influenza, hepatitis A, measles, mumps, rubella, polio, and yellow fever. Inoculations begin upon entry into military service, and later vaccines depend upon troop specialties or assignments to different geographic areas of the world. Courts have upheld the legality of military mandatory vaccination orders. American Academy of Pediatrics/Measles Outbreak Update 2015: http://www2.aap.org/immunization/illnesses/mmr/measles.html ; http://www.aap.org/en-us/about-the-aap/aap-press-room/Pages/American-Academy-of-Pediatrics-Urges-Parents-to-Vaccinate-Children-to-Protect-Against-Measles.aspxCDC/Epidemiology and Prevention of Vaccine-Preventable Diseases: http://www.cdc.gov/vaccines/pubs/pinkbook/meas.html#vaccinesCDC/Measles Cases and Outbreaks: http://www.cdc.gov/measles/cases-outbreaks.htmlCDC/Advisory Committee on Immunization Practices: http://www.cdc.gov/vaccines/acip/index.html ; http://www.cdc.gov/vaccines/hcp/acip-recs/vacc-specific/mmr.html ; http://www.cdc.gov/vaccines/hcp/acip-recs/vacc-specific/mmrv.htmlCDC/Ten Great Public Health Achievements in the 20 th Century: http://www.cdc.gov/about/history/tengpha.htmInstitute of Medicine/On the U.S. Measles Outbreak: http://notes.nap.edu/2015/01/28/the-institute-of-medicine-on-the-us-measles-outbreak/#.VNEIIC43m7MWorld Health Organization/Measles Fact Sheet: http://www.who.int/mediacentre/factsheets/fs286/en/

The earliest accounts of measles date back over 1,000 years. This report presents basic information about this infectious disease, its history in the United States, available treatments to prevent individuals from contracting measles, and the federal role in combatting measles--from funding, to research, to the authority of the federal government in requiring mandatory childhood vaccinations. The report provides additional resources for information on measles and recommendations for vaccination against the disease. According to the U.S. Centers for Disease Control and Prevention (CDC), "measles is a highly contagious virus that lives in the nose and throat mucus of an infected person." It is transmitted through coughing and sneezing, and it can live for up to two hours on a surface or in an airspace where an infected person coughed or sneezed. Someone who is not immunized against measles and comes into contact with the virus has a 90% chance of becoming infected. According to the CDC, in 2013 (the most recent year in which data are available) "the overall national coverage for MMR vaccine among children aged 19-35 months was 91.9%." However, MMR (measles, mumps, rubella) vaccine coverage levels continue to vary by state, with 10 states reporting 95% of children aged 19-35 months receiving at least one dose of MMR vaccine, while in 17 other states, less than 90% were vaccinated. The President's FY2016 budget request for the CDC reports that "from January 1 to November 29, 2014, CDC received reports of 610 measles cases from 24 states in the United States. This is the highest number of cases reported in the United States, including the largest single measles outbreak, since the Vaccines for Children (VFC) Program was established in 1994." Thus far in 2015 (through January 30), CDC has received reports of 102 measles cases located in 14 states. While the overall U.S. MMR annual vaccination rate has exceeded 90% since 1996, the increased number of imported measles cases, combined with pockets of unvaccinated individuals, has resulted in a larger number of outbreaks in recent years. The role of the federal government in vaccine policy, particularly in the development of guidelines for when to administer specific vaccines (and when not to) and to what populations is extensive. The federal government also has a major role in the purchase and distribution of vaccines, particularly childhood vaccines. However, the role of the federal government is much more limited and constrained in its ability to mandate the use of specific vaccines by individuals--this responsibility rests primarily with state and local officials.

The Department of Veterans Affairs (VA) provides a range of benefits and services to veterans who meet certain eligibility rules; these benefits include medical care, disability compensation and pensions, education, vocational rehabilitation and employment services, assistance to homeless veterans, home loan guarantees, administration of life insurance as well as traumatic injury protection insurance for servicemembers, and death benefits that cover burial expenses. The VA carries out its programs nationwide through three administrations and the Board of Veterans Appeals (BVA). The Veterans Benefits Administration (VBA) is responsible for, among other things, providing compensation, pensions, and education assistance. The National Cemetery Administration (NCA) is responsible for maintaining national veterans' cemeteries; providing grants to states for establishing, expanding, or improving state veterans' cemeteries; and providing headstones and markers for the graves of eligible persons, among other things. The Veterans Health Administration (VHA) is responsible for health care services and medical and prosthetic research programs. The VHA is primarily a direct service provider of primary care, specialized care, and related medical and social support services to veterans through the nation's largest integrated health care system. Inpatient and outpatient care are also provided in the private sector to eligible dependents of veterans under the Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA). The VHA is also a provider of health care education and training for physician residents and other health care trainees. The other statutory missions of VHA are to serve as a contingency backup to the Department of Defense (DOD) medical system during a national security emergency, and to provide support to the National Disaster Medical System and the Department of Health and Human Services as necessary. In general, eligibility for VA health care is based on previous military service, presence of service-connected disabilities, and/or other factors. Veterans generally must enroll in the VA health care system to receive medical care. Once enrolled, veterans are assigned to one of eight categories (see Appendix ). It should be noted that in any given year, not all enrolled veterans obtain their health care services from the VA. While some veterans may rely solely on the VA for their care, others may receive the majority of their health care services from other sources, such as Medicare, Medicaid, private health insurance, and the military health system (TRICARE). VA-enrolled veterans do not pay premiums or enrollment fees to receive care from the VA; however, they may incur out-of-pocket costs for VA care related to conditions that are not service-connected. In FY2013, approximately 8.9 million of the 22.2 million living veterans in the nation were estimated to be enrolled in the VA health care system (see Table 1 ). From FY2010 through FY2013 the total number of enrollees has increased by 6.6%. Of the total number of enrolled veterans in FY2013, VA anticipated treating approximately 5.75 million unique veteran patients (see Table 2 ). For FY2014, VHA estimates that it will treat about 5.8 million unique veteran patients, and of these, VA anticipates treating more than 674,000 Operation Enduring Freedom (OEF), Operation Iraqi Freedom (OIF), and Operation New Dawn (OND) veterans. In FY2014, OEF, OIF, and OND patients would represent approximately10.4% of the overall patients served by the VA. VHA also provides medical care to certain non-veterans; in FY2014 this population is expected to increase by almost 18,000 patients over the FY2013 level. In total, including non-veterans, it is estimated the VHA will treat nearly 6.5 million patients in 2014, a slight increase of 1.3% over the number of patients treated in FY2013 (see Table 2 ). Between FY2010 and FY2013, the number of patients treated by VA has grown by 7.1%. The total number of outpatient visits, including visits to Vet Centers, reached 88.7 million during FY2012 and is projected to increase to approximately 92.2 million in FY2013 and 95.5 million in FY2014. The rest of this report focuses on appropriations for VHA. It begins with a brief overview of VA's budget as a whole for FY2013 and the President's request for FY2014. It then presents a brief overview of VHA's budget formulation, a description of the accounts that fund the VHA, and a summary of the FY2013 VHA budget. The report ends with a section discussing recent legislative developments pertaining to the FY2014 VHA budget. In order to understand annual appropriations for the Veterans Health Administration (VHA), it is essential to understand the role of advance appropriations. In 2009, Congress enacted the Veterans Health Care Budget Reform and Transparency Act of 2009 ( P.L. 111-81 ) authorizing advance appropriations for three of the four accounts that comprise VHA: medical services, medical support and compliance, and medical facilities. The fourth account, the medical and prosthetic research account, is not funded with an advance appropriation. P.L. 111-81 also required the Department of Veterans Affairs to submit a request for advance appropriations for VHA with its budget request each year. Congress first provided advance appropriations for the three VHA accounts in the FY2010 appropriations cycle; the Consolidated Appropriations Act, 2010 ( P.L. 111-117 ), provided advance appropriations for FY2011. Subsequently, each successive appropriation measure has provided advance appropriations for the VHA accounts: the Department of Defense and Full-Year Continuing Appropriations Act, 2011 ( P.L. 112-10 ), provided advance appropriations for FY2012; the Consolidated Appropriations Act, 2012 ( P.L. 112-74 ), provided advance appropriations for FY2013; the Consolidated and Further Continuing Appropriations Act, 2013 ( P.L. 113-6 ), provided advance appropriations for FY2014; and the Consolidated Appropriations Act, 2014 ( P.L. 113-76 ), provided advance appropriations for FY2015. Under current budget scoring guidelines, advance appropriations of budget authority are scored as new budget authority in the fiscal year in which the funds become newly available for obligation, and not in the fiscal year the appropriations are enacted. Therefore, throughout the funding tables of this report, advance appropriations numbers are shown under the label "memorandum" and in the corresponding fiscal year column. For example, advance appropriations for FY2013 authorized by the Consolidated Appropriations Act, 2012 ( P.L. 112-74 ), are shown under a separate memorandum and in the FY2013 column. However, it should be noted that budget authority for FY2013 refers to the budget authority authorized in P.L. 112-74 and augmented by supplemental funding provided by the Disaster Relief Appropriations Act, 2013 ( P.L. 113-2 ), and by additional funding provided by Division E of the Consolidated and Further Continuing Appropriations Act, 2013 ( P.L. 113-6 ), which included funding for the medical and prosthetic research account (the account that is not funded as advance appropriations). Funding shown for FY2013 does not include advance appropriations provided in FY2013 by P.L. 113-6 for use in FY2014. Instead, the advance appropriation provided in FY2013 for use in FY2014 is shown in the memorandum in the FY2014 column. Similarly, funding shown for FY2014 does not include advance appropriations provided in FY2014 for use in FY2015. The VA budget includes both mandatory and discretionary funding. Mandatory accounts fund disability compensation, pensions, vocational rehabilitation and employment, education, life insurance, housing, and burial benefits (such as graveliners, outer burial receptacles, and headstones), among other benefits and services. Discretionary accounts fund medical care, medical research, construction programs, information technology, and general operating expenses, among other things. Figure 1 provides a breakdown of FY2013 budget allocations for both mandatory and discretionary programs (see also Table 5 ). In FY2013, the total VA budget authority was approximately $134.1 billion; discretionary budget authority accounted for about 46% ($61.2 billion) of the total, with about 87% ($53.3 billion) of this discretionary funding going toward supporting VA health care programs, including medical and prosthetic research. The VA's mandatory budget authority accounted for about 54% ($72.9 billion) of the total VA budget authority, with about 83% ($60.63 billion) of this mandatory funding going toward disability compensation and pension programs. Figure 2 provides a breakdown of the FY2014 President's budget request for both mandatory and discretionary programs (also see Table 7 ). For FY2014, the Administration requested approximately $147.9 billion. This includes approximately $63.5 billion in discretionary funding and $84.5 billion in mandatory funding. Similar to most federal agencies, the VA begins formulating its budget request approximately 10 months before the President submits the budget to Congress, generally in early February. VHA's budget request to Congress begins with the formulations of the budget based on the Enrollee Health Care Projection Model (EHCPM). The model estimates the amount of budgetary resources VHA will need to meet the expected demand for most of the health care services it provides. The EHCPM's estimates are based on three basic components: the projected number of veterans who will be enrolled in VA health care, the projected utilization of VA's health care services--that is, the quantity of health care services enrollees are expected to use--and the projected unit cost of providing these services. Each component is subject to a number of adjustments to account for the characteristics of VA health care and the veterans who access VA's health care services. The EHCPM makes projections three or four years into the future. Each year, VHA updates the EHCPM estimates to "incorporate the most recent data on health care utilization rates, actual program experience, and other factors, such as economic trends in unemployment and inflation." For instance, in 2012, VHA used data from FY2011 to develop its health care budget estimate for the FY2014 request, including the advance appropriations request for FY2015. Table 3 provides a detailed timeline for formulating the FY2014 budget request and the FY2015 advance appropriations request. As noted previously, VHA is funded through four appropriations accounts. These are supplemented by other sources of revenue. Although the appropriations account structure has been subject to change from year to year, the appropriation accounts used to support the VHA traditionally include medical care, medical and prosthetic research, and medical administration. Congress also appropriates funds for construction of medical facilities through a larger appropriations account for construction for all VA facilities. In FY2004, "to provide better oversight and [to] receive a more accurate accounting of funds," Congress changed the VHA's appropriations structure. Specifically, the Department of Veterans Affairs and Housing and Urban Development and Independent Agencies Appropriations Act, 2004 ( P.L. 108-199 , H.Rept. 108-401 ), funded VHA through four accounts: (1) medical services, (2) medical administration (currently known as medical support and compliance), (3) medical facilities, and (4) medical and prosthetic research. Brief descriptions of these accounts are provided below. The medical services account covers expenses for furnishing inpatient and outpatient care and treatment of veterans and certain dependents, including care and treatment in non-VA facilities; outpatient care on a fee basis; medical supplies and equipment; salaries and expenses of employees hired under Title 38, United States Code (U.S.C.); cost of hospital food service operations; aid to state veterans' homes; and assistance and support services for family caregivers of veterans authorized by the Caregivers and Veterans Omnibus Health Services Act of 2010 ( P.L. 111-163 ). For FY2013, the President's budget request proposed the transfer of funding for biomedical engineering services from the medical facilities account to this account. The Consolidated and Further Continuing Appropriations Act, 2013 ( P.L. 113-6 ), approved this transfer. The President's budget request for FY2014 proposed to continue funding for biomedical engineering services in the medical services account. The Military Construction and Veterans Affairs, and Related Agencies Appropriations bill for FY2014 ( H.R. 2216 ; H.Rept. 113-90 ) that was passed by the House of Representatives June 4, 2013, and the Senate Appropriations Committee reported version of H.R. 2216 ( S.Rept. 113-48 ) continued this transfer for FY2014. This account provides for expenses related to the management, security, and administration of the VA health care system through the operation of VA medical centers, and other medical facilities such as community-based outpatient clinics (CBOCs) and Vet Centers. It also funds 21 Veterans Integrated Service Network (VISN) offices and facility director offices; chief of staff operations; public health and environmental hazard programs; quality and performance management programs; medical inspection; human research oversight; training programs and continuing education; security; volunteer operations; and human resources management. The medical facilities account funds expenses pertaining to the operations and maintenance of the VHA's capital infrastructure. These expenses include utilities and administrative expenses related to planning, designing, and executing construction or renovation projects at VHA facilities. It also funds leases, laundry services, grounds maintenance, trash removal, housekeeping, fire protection, pest management, and property disposition and acquisition. As required by law, the medical and prosthetic research program (medical research) focuses on research into the special health care needs of veterans. This account provides funding for many types of research, such as investigator-initiated research; mentored research; large-scale, multi-site clinical trials; and centers of excellence. VA researchers receive funding not only through this account but also from the Department of Defense (DOD), the National Institutes of Health (NIH), and private sources. In general, VA's research program is intramural; that is, research is performed by VA investigators at VA facilities and approved off-site locations. Unlike other federal agencies, such as NIH and DOD, VA does not have the statutory authority to make research grants to colleges and universities, cities and states, or any other non-VA entities. In addition to the appropriations accounts mentioned above, the Committees on Appropriations include medical care cost recovery collections when considering funding for the VHA. Congress has provided VHA the authority to bill some veterans and most health care insurers for nonservice-connected care provided to veterans enrolled in the VA health care system, to help defray the cost of delivering medical services to veterans. Funds collected from first and third party (copayments and insurance) bills are retained by the VA health care facility that provided the care for the veteran. Table 4 provides details of MCCF collections from FY2009 through FY2014. In its FY2014 congressional budget submission, the Administration is proposing two legislative proposals to increase collections in FY2014. The first proposal would amend 38 U.S.C. Section 7332(b) and allow the VHA to disclose the veteran's patient records, including the identity, diagnosis, prognosis, or treatment of a patient relating to drug abuse, alcoholism or alcohol abuse, infection with the human immunodeficiency virus (HIV), or sickle cell anemia to the veteran's private health insurance plans for the purpose of VHA obtaining reimbursement for nonservice-connected care. The second proposal would provide authority for VHA to be considered a participating provider whether or not an agreement is in place with a veteran's private health insurance plan. This would allow VHA to collect charges for treatment of a veteran's nonservice-connected conditions. The President's FY2013 budget request was submitted to Congress on February 13, 2012. The President's budget requested $135.8 billion in budget authority for the VA as a whole (see Table 5 ). This included approximately $75 billion in mandatory funding and $61 billion in discretionary funding. For FY2013, the Administration requested $53.3 billion for VHA. This included $41.5 billion for the medical services account, $5.7 billion for the medical support and compliance account, $5.4 billion for the medical facilities account, and nearly $583 million for the medical and prosthetic research account (see Table 6 ). The total requested amount for VHA represented a 4.1% increase over the FY2012-enacted appropriations. Furthermore, as required by the Veterans Health Care Budget Reform and Transparency Act of 2009 ( P.L. 111-81 ), the President's budget requested $54.5 billion in advance appropriations for the three medical care accounts (medical services, medical support and compliance, and medical facilities) for FY2014. On December 7, 2012, the President submitted a $236.6 million supplemental request for VA for costs associated with Hurricane Sandy, which included $27 million for VHA. Congress did not enact a regular Military Construction and Veterans Affairs and Related Agencies Appropriations bill for FY2013 (MILCON-VA Appropriations bill) prior to the beginning of FY2013, and funded most of the VA (excluding the three medical care accounts: medical services, medical support and compliance, and medical facilities) through a six-month government-wide continuing resolution ( P.L. 112-175 ). On January 29, 2013, the Disaster Relief Appropriations Act, 2013, was enacted as P.L. 113-2 . This act provided the approximately $236.6 million in supplemental funding requested by the President for the VA, which included $27 million for VHA. On March 6, 2013, the House passed the Department of Defense, Military Construction and Veterans Affairs, and Full-Year Continuing Appropriations Act, 2013 ( H.R. 933 ). The Senate passed an amended version of the bill on March 20, 2013, and the House agreed to the amended version the next day. The Consolidated and Further Continuing Appropriations Act, 2013 ( H.R. 933 ; P.L. 113-6 ), was signed into law by the President on March 26, 2013. Division E of P.L. 113-6 contained funding for the VA. P.L. 113-6 provided $133.9 billion in budget authority for the VA as a whole (excluding the Hurricane Sandy Funding Needs supplemental funding provided in P.L. 113-2 ). This includes approximately $72.9 billion in mandatory funding and $61 billion in discretionary funding. For FY2013, funding for VHA is $53.3 billion (excluding the Hurricane Sandy Funding Needs supplemental funding provided in P.L. 113-2 ). Furthermore, as required by the Veterans Health Care Budget Reform and Transparency Act of 2009 ( P.L. 111-81 ), P.L. 113-6 provides $54.5 billion in advance appropriations for the three medical care accounts (medical services, medical support and compliance, and medical facilities) for FY2014. The Consolidated and Further Continuing Appropriations Act, 2013 ( P.L. 113-6 ), required across-the-board rescissions for all discretionary accounts including those of the VA. Section 3001 in Division G of the act required a 0.1% across-the-board rescission for discretionary VA accounts appropriated in FY2013. Section 3004 in Division G of P.L. 113-6 was intended to eliminate any amount by which the new budget authority provided in the act exceeded the FY2013 discretionary spending limits in Section 251(c)(2) of the Balanced Budget and Emergency Deficit Control Act, as amended by the Budget Control Act of 2011 and the American Taxpayer Relief Act of 2012. Subsequent to the enactment of P.L. 113-6 , the Office of Management and Budget (OMB) calculated that additional rescissions of 0.032% of security budget authority, and 0.2% of nonsecurity budget authority, would be required. Table 5 and Table 6 shows the FY2013 amounts (based on OMB calculations) following the 0.1% and 0.032% across-the-board rescissions. Additionally, Table 5 and Table 6 shows the Hurricane Sandy Funding Needs supplemental funding provided in P.L. 113-2 . The President submitted his FY2014 budget request to Congress on April 10, 2013. The FY2014 President's Budget is requesting $147.9 billion for the VA as a whole (see Table 7 ). For VA medical services, the Administration's budget is requesting $157.5 million in additional funding above the FY2014 advance appropriations of $43.6 billion provided in FY2013. According to the VA, the increased funding levels requested for FY2014 reflect the increased costs of medical care requirements resulting from the implementation of the Caregivers and Veterans Omnibus Health Services Act of 2010 ( P.L. 111-163 ) and the Honoring America's Veterans and Caring for Camp Lejeune Families Act of 2012 ( P.L. 112-154 ). In total, the President is requesting $55.2 billion for VHA for FY2014. This includes $43.7 billion for the medical services account, $6.0 billion for the medical support and compliance account, $4.9 billion for the medical facilities account, and nearly $586 million for the medical and prosthetic research account (see Table 8 ). As required by the Veterans Health Care Budget Reform and Transparency Act of 2009 ( P.L. 111-81 ), the President's budget is requesting $55.6 billion in advance appropriations for the three medical care appropriations (medical services, medical support and compliance, and medical facilities) for FY2015 (see Table 8 ). On March 13, 2013, the House Budget Committee reported a budget resolution ( H.Con.Res. 25 H.Con.Res. 25, 113 th Congress), and the budget resolution was agreed to by the House on March 21, 2013. According to the committee report that accompanied H.Con.Res. 25 ( H.Rept. 113-17 ): The resolution calls for $145.7 billion in budget authority and $145.4 billion in outlays in fiscal year 2014 [for Veterans Benefits and Services]. Discretionary spending is $63.3 billion in budget authority and $63.1 billion in outlays in fiscal year 2014. This in an increase of 3.1 percent from last year's discretionary level. Mandatory spending in 2014 is $82.4 billion in budget authority and $82.3 billion in outlays. The ten-year totals for budget authority and outlays are $1.7 trillion and $1.7 trillion, respectively. This resolution also authorizes up to $55.483 billion for fiscal year 2015 in advance appropriations for medical care, consistent with the Veterans Health Care Budget and Reform Transparency Act of 2009. Since the President has yet to submit a budget request this year, the VA's request for veterans-medical-care advance appropriations for fiscal year 2015 is unavailable as of the writing of this concurrent resolution. The amount authorized in this resolution reflects the amount requested in the administration's fiscal year 2013 request for fiscal year 2015 and is the most up-to-date estimate on veterans' health-care needs requested by the Department of Veterans Affairs. On March 14, 2013, the Senate Budget Committee reported a budget resolution ( S.Con.Res. 8 , 113 th Congress), and the budget resolution was agreed to by the Senate on March 23, 2013. According to the committee print that accompanied S.Con.Res. 8 ( S.Rept. 113-12 ): The budget resolution sets fiscal year 2014 levels at $145.5 billion for budget authority [BA] and $145.3 billion for outlays for [Veterans Benefits and Services]. Over the FY 2014-2018 period, BA totals $779.5 billion, with $776.4 billion in outlays. From FY 2014-2023, the [Veterans Benefits and Services] function totals $1.688 trillion in BA and $1.68 trillion in outlays. For discretionary spending, the resolution calls for FY 2014 levels of $63.1 billion in BA and $62.9 billion in outlays. BA totals $336.3 billion and outlays equal $333.6 billion over five years. From FY 2014-2023, the discretionary total for [Veterans Benefits and Services] is $730.9 billion in BA and $723.8 billion in outlays. On May 15, 2013, the House Military Construction and Veterans Affairs Subcommittee approved its version of a Military Construction and Veterans Affairs and Related Agencies Appropriations bill for FY2014 (MILCON-VA Appropriations bill). The full House Appropriations Committee voted to report the measure on May 21, 2013, and the House passed H.R. 2216 on June 4, 2013. The MILCON-VA Appropriations bill for FY2014 ( H.R. 2216 ; H.Rept. 113-90 ) proposes a total of $147.6 billion for the VA (see Table 7 ). The total includes $84.5 billion for mandatory programs, and $63.1 billion for discretionary programs (see Table 7 ). H.R. 2216 ( H.Rept. 113-90 ) (see Table 7 ) as passed by the House proposes $54.9 billion for VHA for FY2014, which comprises four accounts: medical services, medical support and compliance, medical facilities, and medical and prosthetic research. The House-passed measure does not include the additional funding amount of $157.5 million (above the FY2014 advance appropriations) for the medical services account that was requested by the President for FY2014, and proposes to rescind $156.0 million from the FY2014 VHA amount that was provided as an advance appropriation in FY2013, giving the Secretary the discretion to allocate these reductions across VHA accounts. H.R. 2216 proposes $55.6 billion in advance FY2015 funding for the medical services, medical support and compliance, and medical facilities accounts--the same level included in the House-passed Budget Resolution, and the President's request (see Table 8 ). On June 18, 2013, the Senate Military Construction, Veterans Affairs, and Related Agencies Subcommittee approved its version of the MILCON-VA Appropriations bill. The full Senate Appropriations Committee marked up the bill and voted to report the measure on June 20, 2013. The MILCON-VA Appropriations bill for FY2014 ( H.R. 2216 ; S.Rept. 113-48 ) proposes a total of $147.9 billion for the VA for FY2014. The total includes $84.5 billion for mandatory programs, $63.5 billion for discretionary programs. The Senate Appropriations Committee approved measure does not include the full additional funding amount of $157.5 million (above the FY2014 advance appropriations) for the medical services account that was requested by the President for FY2014, and instead proposes a $25 million increase for the medical services account (see Table 8 ). The committee notes that The justification accompanying the budget request provides few details regarding the data and assumptions that were modified in the updated actuarial model projection. Absent this data, the Committee cannot accurately assess the merits of an additional request. The Committee also notes that the Department routinely carries forward significant funds from one fiscal year to the next and directs that any of funding carried forward from fiscal year [FY] 2013 be applied to unanticipated needs. Furthermore, the Senate Appropriations Committee approved measure ( H.R. 2216 ; S.Rept. 113-48 ) proposes an additional $100 million for the medical facilities account for FY2014 for nonrecurring maintenance projects (see Table 8 ). Congress was unable to complete action on any of the FY2014 appropriation acts prior to the beginning of the new fiscal year. Lawmakers also failed to agree on language in a FY2014 continuing resolution (CR). With no agreement in place on October 1, 2013, the resulting lapse in funding led to a partial shutdown of government operations. Congress finally reached agreement on a temporary CR on October 16, 2013, and the President signed the Continuing Appropriations Act, 2014 ( P.L. 113-46 ), the following day to reopen the government. That CR (P.L. 113-46) funded most of the VA (excluding the three medical care accounts: medical services, medical support and compliance, and medical facilities) through January 15, 2014. P.L. 113-73 extended the CR through January 18, allowing extra time for legislative consideration of an omnibus appropriation bill. On January 17, 2014, the President signed into law the Consolidated Appropriations Act, 2014 ( P.L. 113-76 ). Division J of this act included the Military Construction and Veterans Affairs, and Related Agencies Appropriations Act, 2014 (MILCON-VA Appropriations Act, 2014). In total the MILCON-VA Appropriations Act, 2014 provides a total of $147.9 billion in budget authority for VA programs in FY2014. Of this amount, $55.1 billion is provided for VHA, which comprises four accounts: medical services, medical support and compliance, medical facilities, and medical and prosthetic research accounts. P.L. 113-76 provides $40 million for FY2014 for the medical services account in addition to the advance appropriation of $43.6 billion that was provided in P.L. 113-6 (see Table 8 ). Furthermore, the MILCON-VA Appropriations Act, 2014, provides $85 million for FY2014 for the medical facilities account in addition to the advance appropriation of $4.9 billion provided in P.L. 113-6. This additional funding will be used to address the backlog of non-recurring maintenance needs at existing VA hospitals and clinics. As required by the Veterans Health Care Budget Reform and Transparency Act of 2009 (P.L. 111-81), the MILCON-VA Appropriations Act, 2014, provides advance appropriations of $55.6 billion for FY2015 for three VHA accounts (medical services, medical support and compliance, and medical facilities). Furthermore, P.L. 113-76 rescinds $50 million from the FY2014 VHA accounts (see Table 8 ).

The Department of Veterans Affairs (VA) provides benefits to veterans who meet certain eligibility criteria. Benefits to veterans range from disability compensation and pensions to hospital and medical care. The VA provides these benefits through three major operating units: the Veterans Health Administration (VHA), the Veterans Benefits Administration (VBA), and the National Cemetery Administration (NCA). This report focuses on funding for the VHA. The VHA is primarily a direct service provider of primary care, specialized care, and related medical and social support services to veterans through the nation's largest integrated health care system. Eligibility for VA health care is based primarily on previous military service, disability, and income. The President's FY2014 budget request was submitted to Congress on April 10, 2013. The President's budget requested $147.9 billion in budget authority for the VA as a whole. For FY2014, the Administration requested $55.2 billion for VHA. This included $43.7 billion for the medical services account, $6.0 billion for the medical support and compliance account, $4.9 billion for the medical facilities account, and nearly $586 million for the medical and prosthetic research account. Furthermore, as required by the Veterans Health Care Budget Reform and Transparency Act of 2009 (P.L. 111-81), the President's budget requested $55.6 billion in advance appropriations for the three medical care accounts (medical services, medical support and compliance, and medical facilities) for FY2015. On May 15, 2013, the House Military Construction and Veterans Affairs Subcommittee approved its version of a Military Construction and Veterans Affairs and Related Agencies Appropriations bill for FY2014 (MILCON-VA Appropriations bill). The full House Appropriations Committee voted to report the measure on May 21, 2013, and the House passed H.R. 2216 on June 4, 2013. The MILCON-VA Appropriations bill for FY2014 (H.R. 2216; H.Rept. 113-90) proposed a total of $147.6 billion for the VA as whole. For FY2014, H.R. 2216 proposed $54.9 billion for VHA. H.R. 2216 also included $55.6 billion in advance FY2015 funding for the medical services, medical support and compliance, and medical facilities accounts--the same level included in the House-passed FY2014 Budget Resolution, and the President's request. On June 18, 2013, the Senate Military Construction, Veterans Affairs, and Related Agencies Subcommittee approved its version of the MILCON-VA Appropriations bill. The full Senate Appropriations Committee voted to report the measure (H.R. 2216; S.Rept. 113-48) on June 20. H.R. 2216 (S.Rept. 113-48) proposed appropriations totaling $147.9 billion for FY2014 for the functions of the VA as a whole and $55.2 billion for VHA. Similar to the House version, the Senate committee-approved version included $55.6 billion in advance FY2015 funding for the medical services, medical support and compliance, and medical facilities accounts. Neither a MILCON-VA Appropriations bill, nor a continuing appropriations resolution (CR), including FY2014 funding for most of the VA (excluding the three medical care accounts: medical services, medical support and compliance, and medical facilities), was enacted prior to the beginning of FY2014. A funding gap resulted in a partial government shutdown. The funding gap was terminated by the enactment of a CR (P.L. 113-46) on October 17, 2013. The Consolidated Appropriations Act, 2014 (P.L. 113-76), was enacted on January 17, 2014, providing appropriations totaling $147.9 billion for FY2014 for the functions of the VA as a whole and $55.1 billion for VHA. P.L. 113-76 includes $55.6 billion in advance FY2015 funding for the medical services, medical support and compliance, and medical facilities accounts.

Border and Transportation Security (BTS) is a pivotal function in protecting the American people from terrorists and their instruments of destruction. The issue for Congress is how to achieve desired levels of security, while not compromising other important values in the process. In a series of three reports, a strategic approach to BTS using a variety of frameworks to clarify objectives and help identify policy options is discussed. This final report builds on the analysis presented in the first two reports, and explores possible new directions and policy options that spring directly from the analytical frameworks contained in those reports. Before doing so, however, it is useful to place this set of activities in the broader context of overall Homeland Security efforts and to review the development of congressional concern and policy approaches up to this point. The homeland security effort can be seen as a series of concentric circles or screens, with the outer screen being that of preventive efforts launched outside the country. The continuum of activities to provide homeland security then moves through progressively smaller circles starting from more distant efforts to closer and more localized measures. Thus, the process starts with prevention abroad and ends with emergency preparedness and response at home: Discovery and preventive intervention of terrorist actions emanating from abroad before reaching the United States; Interdiction of dangerous people or things at the U.S. border and in the interior transportation sector; Defense against catastrophic terrorism inside the United States through law enforcement and domestic intelligence efforts; Protection of critical infrastructure and the population ; and Emergency Preparedness and response . Congressional concern with terrorism and border security was manifested early, following a series of terrorist attacks in the 1990s. The congressional response began with inquiries as to the nature of the terrorist threat and the commissioning of several studies, and was followed by specific, targeted measures to protect the nation following the events of 9/11. Congressional interest, however, continues in broader, more comprehensive approaches including efforts in the 108 th Congress to respond to the report of the 9/11 Commission embodied in the Intelligence Reform and Terrorism Prevention Act of 2004 (IRTPA, P.L. 108-458 ). Congressional policy actions are summarized briefly below: Broad efforts to understand the terrorist threat . Starting in 1998, Congress stimulated the creation of three commissions to better understand the nature of the terrorist threat facing the nation. These included the Gilmore Commission, the Bremer Commission, and the Hart-Rudman Commission. Highly specific actions to protect against immediate threats . Immediately following the airplane-based attacks of 9/11, early legislative action focused on airline security, visa and border security, and then moved on to maritime security. Structural and procedural changes to provide an effective framework for action . Following the 9/11 attacks, Congress enacted legislation to create the Department of Homeland Security to provide a structural framework for subsequent action, and the USA PATRIOT Act to provide the tools needed for the new challenge to national security. Interest in broader, more comprehensive substantive approaches . As evidenced in oversight hearings, Congress has been frustrated by the failure to more aggressively address other border and transportation security threats (including the need to create integrated terrorist watch-lists, and measures to address other modes of transportation--rail and mass transit, air cargo, trucking, and buses). These concerns were given a strong impetus by the Final Report of the 9/11 Commission, which highlighted the need for more strategic approaches to the terrorist threat, and are now expressed in legislative form in P.L. 108-458 . The evolution of congressional concern (moving from general to specific and back to broader concerns) makes this an opportune time to consider some possible policy frameworks that might shed additional light on the nature of the problem and possible new or enhanced policy choices. The next section of the report briefly summarizes the two earlier reports in the series that address the complexity of the challenge, as well as the programs and policies developed thus far to contribute to border and transportation security. The third section explores the idea of using a "layered" approach to protecting the nation--relying on multiple and overlapping policy actions on a number of fronts to increase the probability of interdicting bad people or bad things. The final section explores some ideas for possible new directions and policy options that spring directly from the analytical frameworks used in the report. The task of providing border and transportation security is complex both because of its scale and possible conflicts with other important national goals. The magnitude of the task is substantial--covering thousands of miles of land borders, millions of passengers, hundreds of airports and seaports, and millions of individual motor vehicles, rail cars, and cargo containers. The first possible goal conflict springs from the demands of security confronting the need for facilitating the essential travel and trade that are at the heart of continued economic growth. This reality leads to a redefinition of the task from one of pitting security vs. economic well-being to that of good border management. Good border management requires facilitating (and even expediting) the flow of desirable goods and people across our borders, while screening out dangerous people and material. The process of doing that is made more manageable if the border is envisioned not merely as a physical boundary but rather as a flexible concept that allows for the possibility that the border begins at the point where goods or people commence their U.S.-bound journey. The result of such a broader perspective is a significantly wider array of options for good border management. A companion report presents several graphical images of how this process might be envisioned. (See CRS Report RL32839, Border Security: The Complexity of the Challenge , by [author name scrubbed].) That report blends the geographic dimension of the problem with the challenge of screening people, goods, and documents. It starts by identifying the paths that may be followed in moving from the source country to the United States, and then overlays the various points at which people, goods, and documents face the possibility of interception en route to the ultimate destination (the final destination inside the United States). The results are portrayed in Figure 1 . The figure should be viewed from left to right, moving from the foreign port of exit (FPOE) through a transit zone (illustrating the case where some goods or people might move through one or more intermediate countries en route), to the domestic port of entry (DPOE)--the final destination in the United States. In the process, exported goods may be handled by multiple intermediaries, people will follow several processes, and the necessary travel documents will pass through many hands. While designed to illustrate the multiple points where bad things can happen, the illustration also suggests that the multiple points of vulnerability in the shipping or travel process can also be seen as opportunities for interception--and, if exploited, can actually increase the probability of interdiction of the bad things and bad people that we seek to intercept before they arrive at their intended targets. The current programs designed to accomplish this interception are discussed more fully in the second report in this series: CRS Report RL32840, Border and Transportation Security: Selected Programs and Policies , by Lisa M. Seghetti, [author name scrubbed], and [author name scrubbed]. These efforts can be summarized by using an analytical framework that highlights generic strategies that might be used to achieve greater border and transportation security: Pushing the border outwards to intercept unwanted people or goods before they reach the United States (as in the Container Security Initiative and passenger pre-screening); Hardening the border through the use of technology (e.g., X-ray machines for examining cargo without opening the containers, radiation and explosives detectors, and unmanned aerial vehicles to monitor remote areas at the border); Making the border more accessible for legitimate trade and travel (faster passage for trusted travelers and cargo conveyors); Strengthening the border inspection process through more effective use of intelligence (terrorist screening data bases); and Multiplying effectiveness of interdiction programs through the engagement of other actors in the enforcement effort (including engaging Canada, Mexico, state and local law enforcement resources, and the private sector). The realization that multiple points of vulnerability might be turned into expanded opportunities for interdiction has given rise to the notion of a "layered" approach to security. The basic idea of layering is that multiple and overlapping measures applied at key points in the border security environment could succeed where only more targeted measures might fail because of their rising expense, increasing conflict with other goals, or inability to cover all conceivable risks arising from opportunistic terrorist tactics. The concept of a layered approach to border and transportation security is gaining currency in policy discussions. The idea was cited in a security context in the so-called Gore Commission Report on aviation safety and security in early 1997. The commission stated the belief that "aviation security should be a system of systems, layered, integrated, and working together to produce the highest levels of protection." An important pre-9/11 reference to "layering" was found in the Hart-Rudman Commission Report in 2001. The commission stated: "We believe that homeland security can best be assured through a comprehensive strategy of 'layered defense' that focuses first on prevention, second on protection, and third on response...." This report discusses the concept of layered protection as applied specifically to border security, and offers a definition that is intended to translate the concept into something more concrete--with the goal of making it possible to be applied to actual programs and policy actions. The most recent advocacy of a layered approach comes from the 9/11 Commission Report issued in July 2004. Addressing the importance of passenger screening, the commission states: "The FAA set and enforced security rules, which airlines and airports were required to implement. The rules were supposed to produce a 'layered' system of defense. This meant that the failure of any one layer of security would not be fatal, because additional layers would provide backup security." Later, the commission introduced a footnote specifically endorsing such a "layered" approach, and refers the reader to Dr. Stephen Flynn's latest work in which he uses a household-based example of what layering would look like in a residential setting: The simple act of locking a door with a conventional lock will deter most amateur thieves.... Returning to our case of securing a home, we might consider some additional ways to ward off burglars without trying to make conventional doors and windows burglar-proof. Since thefts often occur at night, we could consider installing automatic lights that are triggered when people approach. A dog on the premises will provide another measure of security. Add to this a sign posted on the front lawn that indicates the home is monitored by a security company. Finally the community could form neighborhood watch groups and post signs on the streets advertising this fact. Any of these measures might work only 60% of the time. But statistically, five 60% measures when placed in combination will raise the overall probability of preventing a burglary to 99%. In many instances, it may well be that the cost of all these measures is less expensive than trying to bolster any one or even two measures. A truly operational definition would be applicable to the entire environment of border and transportation security, and would suggest specific action points and measures for added protection. The following is a provisional attempt to address that need: A "layered" approach to border and transportation security is a comprehensive strategy that identifies key points of vulnerability wherever they exist (including travelers, staff, cargo, vehicles, processes, documents, and locations) and turns them into targets of opportunity for interdiction. It provides a series of interdependent, overlapping, and reinforcing redundancies, designed to raise the odds that terrorist activity could be intercepted--also raising the risks and costs to terrorists, and serving both an interception and deterrence function. Layering speaks to three dilemmas of policy design in border and transportation security: The law of diminishing returns--i.e, at some point, the unit costs of any single measure become increasingly high as we attempt to push to higher levels of security; Heightened goal conflict--as tightened security begins to impede the legitimate flow of desired people and goods, as well as resulting in possible incursions on privacy and civil liberties; and The opportunistic nature of terrorism--i.e, the more we harden one target, the more likely that terrorists will shift their attention to a softer target and/or use different means. To reduce cost and risk of operations, terrorists desire to use targets and methods that have been used successfully before, can be easily taught and replicated, and have a high probability of success and impact. Frustrating any or all of these goals could lead to abandoning the operation. Figure 1 illustrates that the security of people and cargo destined for the United States requires a complex set of policies that engage actors from each of the geographic zones (foreign governments, private sector actors, and U.S. government agencies). These relationships and policies must also take into consideration requirements unique to the different modes of transportation (air, vessel, truck, and rail). Policies could, for example, encompass the entire journey from the source zone to the destination zone; or policies could focus distinctly on a particular zone/place/actor in the journey. Or, as noted above, a layered approach may be employed that involves nearly all of the constructs identified in Figure 1 (e.g., people, conveyances, cargo, places, routes, etc.) To pursue a layered approach to border and transportation security would mean applying some measures of security effort to each of the following points of vulnerability/opportunity: Staff authentication --focusing on any staff involved with the transportation of people or shipment of goods; Passengers --screening anyone traveling on any of the conveyances of concern; Conveyances (passenger or cargo)--monitoring the vessel, car, truck, plane, train used in conveying travelers or goods--including concern for the physical security of the conveyance itself; Access control --implementing a system to achieve and maintain control of the physical space where the conveyances or cargo are either stored, staged, maintained, repaired, loaded, or inspected. Cargo and baggage --screening whatever is placed on the conveyance, including cargo, as well as baggage associated with passengers; Ports (points of departure, transit, and entry)--encompassing all kinds of ports (airport, land port, sea port, rail yard/crossing), and involving physical security of the port itself, access control, and some kind of monitoring systems; and Security en route --maintaining the highest level of security throughout the system/between ports--reflecting that whatever security is achieved in the initial stages before or during the time when people or cargo leave the foreign port, must be maintained until the conveyance safely reaches the domestic port of entry and the intended recipient. Looking at each of these targets of vulnerability and seeing them as opportunities suggest some possibilities for further policy exploration. The following are offered as brief illustrations of areas that might warrant further consideration based on the framework set out above. In many cases, actions have already begun, and the option would relate to acceleration or enhancements. In others, where new beginnings are envisioned, the options might entail further research or exploration. However, it should be noted that action in any of these areas would need to be weighed against prevailing resource constraints and possible conflicts with other important societal goals (such as facilitating the legitimate flow of people and goods, and avoiding infringements on civil liberties and rights). With these qualifications, the following options might be explored as part of a layered approach to border and transportation security. One early interception opportunity in the transportation process is to ensure that all transportation staff are whom they claim to be, and that terrorists do not gain access to, or gain control of, any part of the transportation system. The options below address this point of vulnerability/opportunity. Accelerate implementation of the experimental program for development of a Transportation Workers' Identification Credential (TWIC), with enhancement of the screening process. In spring of 2005, prototype versions of the TWIC were being tested in a variety of sites, involving 2,000-3,000 truck drivers, longshoremen, and other workers at the Ports of Los Angeles and Long Beach as well as at 33 other locations. The pilot program tests three different types of biometric identification (iris scans, fingerprints, and hand geometry). The plan is to apply a single standard to an estimated 5 million transportation industry workers at seaports, airports, chemical plants, and other protected facilities in the United States. Next steps could include acceleration of the implementation of TWIC (particularly to maritime workers) and possible expansion to workers in all areas of transportation. Through international agreement, it may be possible to consider expanding secure identification to transportation workers from other countries. An option would be some level of screening for staff at all levels and points in the process, including office workers along the entire supply and shipping chain. In this sense, even clerks in shipping houses may represent some level of vulnerability, since they have the capacity to alter documents that disguise the real contents of shipments. Another key point in the process is to ensure that terrorists do not gain access to transportation systems and cross our borders and/or perpetrate an act of terrorism while on board. To add this layer of defense might involve the following. Undertake improvements in terrorist screening databases. The 9/11 Commission recommends that "Every stage of our border and immigration system should have as part of its operations the detection of terrorist indicators on travel documents. Information systems able to authenticate travel documents and detect potential terrorist indicators should be used at consulates, at primary border inspection lines, in immigration services offices, and in intelligence and enforcement units." This effort would start with expansion of intelligence efforts feeding into the databases, and would be enhanced by more sophisticated name recognition software (to reduce the number of false positive identifications). Finally, the entire effort could benefit from better integration of databases and other technical improvements for greater ease and speed of use at the border and by other immigration and law enforcement personnel. The enhanced screening effort would also involve improved training for border security staff (see section on training, below). One of the key recommendations of the 9/11 Commission was to expand the use of biometric identifiers as one of the more secure forms of identity authentication. The Commission noted that when people travel, they usually move through defined channels or portals: They may seek to acquire a passport. They may apply for a visa. They stop at ticket counters, gates, and exit controls at airports and seaports. Upon arrival, they pass through inspection points. They may transit to another gate to get on an airplane. Once inside the country, they may seek another form of identification and try to enter a government or private facility. They may seek to change immigration status in order to remain. Each of these checkpoints or portals is a screening--a chance to establish that people are who they say they are and seeking access for their stated purpose, to intercept identifiable suspects, and to take effective action. This effort would include continued research into the most effective biometric identifiers, assessment of their relative cost and feasibility of use, and the development of appropriate standards. It could also include research and investment in readers to increase the accuracy, speed, and efficiency of use at multiple portals. Explore feasible and effective methods of screening for rail and transit passengers. While early passenger screening efforts understandably focused on air transportation passengers, the 9/11 Commission urged that efforts be made to expand coverage to other modes--especially passengers on rail and mass transit systems. Referring to major vulnerabilities that still exist in cargo and general aviation security, the commission stated that "Opportunities to do harm are as great, or greater, in maritime or surface transportation." Because of the need to maintain the free flow of people that is an essential feature in the effective functioning of these modes, passenger screening in this setting would require additional research and creative experimentation. But, given the threat made manifest in the 3/11 train bombings in Madrid in 2003, many experts believe further exploration of feasible screening methods is merited. The Intelligence Reform and Terrorism Prevention Act of 2004 [ P.L. 108-458 ] also extended some form of screening to cruise ships and larger charter airplanes. Provide better training for border inspectors, in conjunction with augmented research on terrorist travel methods and document falsification techniques. This was an area highlighted in the 9/11 Commission final report (and especially in its supplementary volume on terrorist travel): We found that as many as 15 of the 19 hijackers were potentially vulnerable to interception by border authorities. Analyzing their characteristic travel documents and travel patterns could have allowed authorities to intercept four to 15 hijackers and more effective use of information available in U.S. government databases could have identified up to three hijackers. According to the commission, there were clear signs and markings on the travel documents used by most of the terrorists that would have linked them to terrorism, but that these telltale marks were the results of recent research and were not part of routine inspector training at the time. Explore ways to deny internal travel to those terrorists who have already entered the country--whether legally or illegally. The commission asserted that: Targeting travel is at least as powerful a weapon against terrorism as targeting their money. The United States should combine terrorist travel intelligence, operations, and law enforcement in a strategy to intercept terrorists, find terrorist travel facilitators, and constrain terrorist mobility. The 9/11 Commission report suggests setting national standards for state-issued documents--including birth and death certificates, driver's licenses, etc. That proposal was addressed in part in the Intelligence Reform and Terrorism Prevention Act of 2004, and has also been the subject of further legislation in the 109 th Congress ( H.R. 418 ). ( H.R. 418 was passed in the House of Representatives on February 10, 2005). As part of the layering effort, attention could also be given to the actual means of transportation to ensure their safety and integrity. These steps could include: Provide regular inspection of all transportation conveyances and their environments for possible terrorist tampering and/or planting of explosive devices. These inspections could include some strategic risk targeting, but would also benefit from random inspections as well (as discussed further below). Pay special attention to trucks in the inspection process, especially those carrying hazardous material. Trucks were used in the Embassy bombings in Africa, and remain a favorite delivery mechanism for large-scale explosives (whether using imported materials, transporting hazardous material, or modifying domestic materials as in the case of Oklahoma City or the first World Trade Center attack in 1993). Steven Flynn also notes a weakness in the overall transportation system for short-haul (drayage) truckers, where there is a high-turnover rate, and consequent difficulty in providing adequate security clearances. Flynn goes on to recommend the use of transponders to track the location and route of those vehicles transporting hazardous material. Some have gone beyond that to propose an automatic shutoff device for large rigs hauling such material. California has considered such a plan in the past, and may be re-examining the concept. According to a report on research being done at the Lawrence Livermore National Laboratory, truck-stopping devices are being designed that could be used by road-side law enforcement officers to activate the air-brakes of a truck carrying hazardous cargo to bring it to a quick stop if it was thought to represent a terrorist threat. Ensuring the safety of transportation vehicles themselves is an essential step in the security process, but an important stage of this effort is to protect the environment of the protected vehicles. This is especially problematic for rail and transit systems, which have long exposed open stretches along rail tracks. Some reasonable steps, might include: Explore protective steps like more guards, fencing, cameras, and sensors in places where transportation vehicles are based or through which they transit. It could also include hardware and software that basically replace the traditional key to sensitive areas with an intelligent credential (badge or plastic card) which could be verified specifically to the user through a biometric check. Such enhanced access control could also provide a number of useful by-products, including a record of movement that could capture every instance of request for entry, grant of entry, denial of entry and other data; a record of personnel movement; asset protection; and flexible security. Aside from screening passengers, cargo and baggage have been significant sources of concern and the focus of many policy actions and additional proposals. Some additional measures to consider include: Enhance the focus on shipping containers. Many analysts have identified containers as an area of particularly high-risk. While only about 5% of these large containers are being screened, there are serious obstacles to detailed container screening. As a result, enhancement might be considered for existing processes of advanced targeting of those especially high-risk containers, screening early in the process (before the container is loaded onto the ship), scanning devices to detect contraband and radiation without opening the box, and smart-container technology to detect and note when the box is opened, and possibly using Global Positioning System (GPS) technology to track container location at any given point in time. Such proposals respond at least in part to the vulnerability of cargo while in the transit zone (illustrated in Figure 1 ). Increase attention given to air cargo inspection. Stephen Flynn provides a provocative statement on this topic: "Nevertheless, while the flying public is busy shedding shoes and bags at X-ray check-in points, the tons of air freight being loaded in the belly of most commercial airliners continues to fly the American skies virtually uninspected." This concern led the 9/11 Commission to recommend that TSA require that each airliner have at least one hardened container in which to place any suspicious cargo. Others suggest better oversight of and industry-wide standards for the "known shipper" program to ensure that the supply chain is truly secure, and that more random checks would be a useful supplement. Congress required an immediate tripling of cargo inspections for cargo on airline passenger planes in the FY2005 Appropriations Bill approved for the Department of Homeland Security. None of these efforts approaches the stringency of the 100% inspection proposal of Congressman Ed Markey (D-MA) in the 108 th Congress. Expand use of fixed and mobile portal screening devices for explosives and radiation detection, as well as random inspections for other hazardous material. Flynn and others recommend a review of all rail routes that would take hazardous cargo through heavily populated areas, and re-routing them as necessary. Recently, the City Council for the District of Columbia, passed a 90-day ban on shipments of hazardous materials through the nation's capital--the first such action by a local government. "Vehicles at rest are vehicles at risk." While not completely safe while en route, transportation vehicles are most vulnerable when entering, leaving, or at rest in ports. Enhance and expand maritime domain awareness efforts. Domain awareness makes use of radar, sonar, cameras, and direct observation to track all vessels entering or leaving the harbor on an integrated computer display, and link the vessels with cargoes and crews for possible inspection targeting and/or interception. It is also used to protect incoming and outgoing vessels from threats within the harbor or when approaching or departing. While well-developed in several ports, maritime domain awareness efforts might productively be expanded to more ports and improved--especially in light of the related concern about the potential threats posed by large shipping containers and large liquid natural gas conveyances. Strengthen security at rail and transit terminals. As noted earlier by the 9/11 Commission Report: "Surface transportation systems such as railroads and mass transit remain hard to protect because they are so accessible." Yet, the "3/11" attacks on the Madrid rail system in 2003 and the Aum Shinrikyo sarin gas subway attack in Tokyo on March 20, 1995 should leave no doubts as to the capabilities or the intent of terrorists to strike these targets. For passenger travel and transit systems, where accessibility and openness are prime goals, various analysts have suggested more extensive use of non-intrusive inspection (NII) technologies such as portal screening devices, "puffer" type explosive screening for passengers (recently tested in the New Carrollton station in the Washington metropolitan area and New York's John F. Kennedy airport), sensors for chemical and biological materials, bomb-sniffing dogs, frequent traveler IDs, and random checks of passengers and baggage en route. Explore ways to strengthen security at the nexus points for multi-modal shipping as cargo moves from one conveyance to another (truck to container to ship to train to truck to delivery). This could include security for smaller pallets of goods (which fall short of constituting a full container) to ensure no tampering as cargo goes through the consolidation and de-consolidation phases. Explore the concept of using port design to build security into the on-going processes of the port in a seamless manner. New designs could facilitate such essential security steps as in-line baggage screening, inspection at rail sidings, and easier access in areas of heavy traffic and bottlenecks (e.g., the Ambassador Bridge at the Detroit-Windsor connection, and other congested land-border ports). The challenge is often to make better use of very limited space, and it may take re-design efforts to achieve higher levels of security effectiveness. A design initiative could involve all kinds of ports and terminals (airport, seaport, rail and transit). Total system security requires maintaining the high levels of security at each stage of the journey, through intermediate ports of call, and throughout the system until the destination is reached and the goods or people safely reach the intended destination. Consider the adoption of special efforts to assure security of passengers and cargo as they move through the highly porous--and vulnerable "transit zone." (See Figure 1 .) One possibility is exploring the use of multi-modal security devices for cargo, including "smart containers" and transponders. There are a number of potential actions that would cut across modes of transportation and/or points of vulnerability or opportunity. The following policy options present the potential for multiple payoffs in terms of security. Explore methods for better targeting of both passengers and cargo. This could involve a blend of sophisticated and directed targeting, with an additional complementary component of random inspections. The goal would be to achieve the greatest level of confidence concerning the contents of a container or the identity of the individual seeking entry, in order to isolate and interdict high-risk people and goods. The ability to intercept high-risk people may be dependent on a combination of biometric identifiers, accelerated implementation of the US-VISIT program, better integration of terrorist watch lists, better training of border inspectors, and use of screening at several points in the transportation process. The ability to successfully target high-risk containers is dependent upon similar needs, with the crucial addition of information regarding which containers are most likely to contain contraband. Both of these processes require better use of intelligence. They also require an attempt to avoid predictability in whatever we do to make it less likely that terrorists can take evasive actions based on second-guessing our targeting system. (See below). Make systematic use of random changes in inspection targets and procedures. Random changes and random inspections are useful supplement to targeting, in order to determine what you don't know--in terms of identifying gaps in present algorithms for setting targets. It also increases risks for terrorists, who may be studying the inspection process carefully in order to exploit any predictable patterns to avoid interdiction. A good example of using random principles is found at the land border port between Mexico and the United States at the Douglas, AZ port. This port uses sophisticated (and automated) algorithms to randomly switch inspectors from one lane to another, as well as change targets for inspection--and does so at random intervals, using a secure communication system for the inspectors. Consider the expanded use of "Red Teams" and war-gaming. These concepts are borrowed from both the national security and intelligence fields, and are related functionally. The use of Red Teams involves gathering experts in the security field and various potentially vulnerable sectors to creatively explore vulnerabilities and suggest ways in which attacks might be feasible. War games involve taking the scenarios developed by the Red Teams and determining ways to defeat the attack efforts. This path was cited approvingly by the 9/11 Commission in the following graphic example. The commission noted that such techniques have been used by the military for many years, revealing that the North American Aerospace Defense Command (NORAD) had run an exercise that "postulated a hijacked airliner coming from overseas and crashing into the Pentagon." The exercise was terminated because of the exigencies of the Korean War . The commission identified the four elements common to this type of contingency planning as "(1) think about how surprise attacks might be launched; (2) identify telltale indicators connected to the most dangerous possibilities; (3) where feasible, collect intelligence on these indicators; and (4) adopt defenses to deflect the most dangerous possibilities or at least trigger an early warning." The first step represents the Red Team portion of the process, and the fourth step is the war-gaming phase. The intervening stages are used to target intelligence to inform the entire response process. The notion of "Red Teams" was specifically endorsed in the Bush Administration's National Strategy for Homeland Security. More recently, the Red Team technique was also endorsed by the 9/11 staff group charged with aviation and transportation security, in an early version of its draft report to the commission. Expand research and development efforts to develop better and more flexible detection devices for radiation and explosives that are capable of working across transportation systems. In terms of explosives detection, the ability to use NII technology to detect explosives carried by a passenger at a distance could have a very high payoff in the crowded setting of rail and transit terminals. The 9/11 Commission stated that "The most powerful investments may be for improvements in technologies with application across the transportation modes, such as scanning technologies designed to screen containers that can be transported by plane, ship, truck or rail. Though such technologies are becoming available now, widespread deployment is still years away." As noted above, this is not intended as a comprehensive inventory of all steps that could be considered, nor is it a series of recommendations. The examples cited here flow directly from the frameworks used above and offer a few illustrative options that might be worth further exploration. The goal is to find more effective ways to promote better border management. This effort is complicated by the many potential goal conflicts that can arise in seeking greater security, while at the same time trying to pursue other important national goals like promoting economic growth, assuring freedom of movement to law-abiding citizens and allies, and protecting privacy and civil liberties. Pushing too hard on any one of these goals may make it too expensive, both in terms of resource costs, but also in losses imposed on other important social goals. One possible path to facilitate this delicate balancing act is to pursue the "layered" approach recommended by the 9/11 Commission and other BTS analysts over the years. Such an approach would mitigate over-reliance on any one policy action, yet holds out the possibility of achieving a higher level of security cumulatively by spreading actions over many areas to enhance the odds of either interdicting or deterring terrorist activity wherever it may occur. It also addresses the dilemma of terrorist opportunism, which afflicts preventive efforts that are more concentrated. As fast as we secure one area through a concentration of resources, the terrorists have shown themselves to be remarkably adaptable in seeking other softer targets (in effect, finding the weakest link in the defensive chain and attacking it, instead of the newly hardened target). Whether policymakers wish to follow the layering strategy discussed above, or pursue a more targeted approach, the options identified above may constitute a useful point of departure for possible actions to consider. Under any circumstances, the following criteria (in the form of policy questions) may be useful in evaluating how far to take any single action: What are the relative priorities for action in the near term? Does the action yield security benefits that outweigh possible social or economic costs? Is the step being taken in the least intrusive manner consistent with achieving the objective? Are incursions on privacy and civil liberties taken into account, minimized, and accompanied by appeals processes for any violations? In what ways will the steps under consideration interact with others in the security process to provide higher cumulative security?

There is consensus that Border and Transportation Security (BTS) is a pivotal function in protecting the American people from terrorists and their instruments of destruction. The issue for Congress is how to achieve desired levels of security, while not compromising other important values in the process. This report addresses possible new approaches and policy options that might be explored by Congress to attain these goals. It is one of three CRS reports in a series that make use of analytical frameworks to better understand complex problems in BTS and to facilitate consideration of alternative policies and practices. (The first report in the series, CRS Report RL32839, Border Security: The Complexity of the Challenge, by [author name scrubbed], analyzes the reasons why BTS is so difficult to achieve. The second report CRS Report RL32840, Border and Transportation Security: Selected Programs and Policies, by Lisa M. Seghetti, [author name scrubbed], and [author name scrubbed], discusses programs now in place. This report is the last in the series). BTS plays an important role in the broader function of providing homeland security. The overall homeland security effort can be seen as a series of concentric circles or screens, with the outer screen being that of preventive efforts launched outside the country--before terrorists or their weapons can reach the country. The next screen is interdiction efforts at the border and in the transportation system. The continuum of activities then moves through progressively smaller circles ending with emergency preparedness and response. Congressional concern over homeland security began with broad-gauged efforts to learn more about the nature of the terrorist threat, and then moved to much more specific actions following the events of 9/11. Congressional interest in broader, more strategic approaches continues--which makes this review of possible new directions and policy options timely. Both the complexity of the challenges at the border, and the realization that multiple points of vulnerability might be turned into expanded opportunities for interdiction, have given rise to the notion of a "layered" approach to security. The basic idea of layering is that multiple and overlapping measures applied at several points in the border security environment could be more successful than more targeted measures alone. The problem in hardening a few selected targets is the rising expense of unit costs, increasing conflict with other goals, and/or inability to cover all conceivable risks posed by the shifting and opportunistic nature of terrorist tactics. To pursue a layered approach to border and transportation security would mean applying some measure of security effort to each of the following points of vulnerability/opportunity: transportation staff, passengers, conveyances, access control, cargo and baggage, ports, and security en route. Several possible policy options are presented that flow directly from the framework presented in the three-part series of CRS reports. Before action is contemplated in any of these areas, however, it would be important to assess the priority of each step, its relative cost-effectiveness, and the level of intrusiveness and possible conflicts with other important social goals (e.g., privacy and civil liberties). This report will not be updated.

Businesses that are incorporated in foreign countries and conduct a large portion of their operations outside of the territorial jurisdiction of the United States may nevertheless cause injury to U.S. persons. For example, a foreign company might manufacture in its home country a machine that another company later distributes in the United States, ultimately resulting in an injury to a U.S. consumer. As a further example, a foreign subsidiary of a U.S. corporation might make a product that allegedly causes the death of U.S. persons traveling in a foreign country, but that subsidiary might otherwise have no significant connection to the United States. Although foreign companies may engage in actions or omissions that injure U.S. persons--or even foreign plaintiffs --such injured persons may face various procedural challenges in obtaining judicial relief from a foreign company defendant in U.S. courts. One potential obstacle to such civil lawsuits is the doctrine of personal jurisdiction. The Supreme Court has long interpreted the Due Process Clause of the Fourteenth Amendment to limit the power of state courts to render judgments affecting the personal rights of defendants who do not reside within the state's territory. And the Federal Rules of Civil Procedure give federal district courts power to assert personal jurisdiction over a defendant to the same extent that a state court in which the federal district court is located may assert that power, meaning the same limits on personal jurisdiction generally apply to federal courts. In this vein, the Court has, for instance, held that a New York company that sells a car to a New York resident is not subject to a products-liability lawsuit in Oklahoma solely because the car was involved in an accident there. Questions over personal jurisdiction are among the most frequent constitutional issues resolved by lower federal courts, and are the basis for a dismissal of complaint in a considerable number of cases lodged in both federal and state court. This report broadly traces the evolution of the doctrine of personal jurisdiction through more than a century of Supreme Court rulings. In particular, it highlights recent developments in the doctrine, which have generally given a more limited view of when a court can exercise personal jurisdiction over a given defendant. The report concludes with a brief discussion of the debate over the Court's most recent rulings in this area of law, and addresses one possible action Congress might take to address any concerns with the Court's recent decisions on personal jurisdiction: authorizing federal courts to exercise nationwide personal jurisdiction over foreign companies that have minimum contacts with the United States as a whole rather than with an individual state. In 1877, the Supreme Court decided an important case addressing the constitutional limits on state courts' exercise of personal jurisdiction over nonresident defendants. In Pennoyer v. Neff , the Court indicated that, absent a defendant's consent, a state court's jurisdiction generally extends only to persons or property within its territory. The Court grounded this "physical presence" approach in principles of federalism: each state of the union is a coequal and independent sovereign in the federal system, and thus possesses exclusive authority over persons and property within its domain. Although the Court's decision in Pennoyer addressed personal jurisdiction over natural persons, the Court's early jurisprudence following the 1877 case established that state courts could potentially exercise jurisdiction over foreign corporations doing business in the state based on the legal fiction that those corporations had implicitly consented to personal jurisdiction, or could be deemed "present" within the state, based on their in-state activities. The Pennoyer Court's "physical presence" test established the constitutional foundation for strict limits on state courts' authority to exercise in personam jurisdiction over a nonresident defendant--that is, to render judgments concerning that defendant's personal rights and obligations. Thus, for example, service upon a defendant by publishing notice of the lawsuit in a newspaper circulating in the forum state was insufficient to confer jurisdiction on a court to adjudicate the personal liability of a defendant who had left the state and did not intend to return. Nevertheless, even in the absence of a nonresident defendant's physical presence or consent, courts could still attain jurisdiction over the defendant indirectly through the attachment (i.e., seizure) of the defendant's property interests within the forum and the provision of notice to the defendant. In particular, a state court could exercise in rem jurisdiction over a nonresident defendant's property interest in the state in order to adjudicate all of the rights or claims in a piece of property. It could also exercise quasi in rem jurisdiction over a nonresident defendant by adjudicating a plaintiff's claim to the property in relation to the defendant or to satisfy the claims of its own citizens against the defendant personally. However, judgments resting upon the exercise of in rem or quasi in rem jurisdiction would not personally bind the defendant to an extent greater than the value of the property. Although Pennoyer 's physical presence test informed the Supreme Court's jurisprudence related to jurisdiction for several decades, a significant expansion of the U.S. economy in the mid-20 th century altered that focus. As commerce and travel among the states and between the states and foreign countries increased, corporations expanded the geographical scope of their activities. A more interconnected, global economy meant that a corporation's activities had greater potential to cause harm in distant jurisdictions, but also meant that businesses could more easily defend lawsuits arising from that harm in distant fora. Faced with these new realities, the Court reconsidered the nature of the due process limitations on the jurisdiction of state courts over nonresident individuals and corporations that conducted activities in the states. In the 1945 case International Shoe Co. v. Washington , the Court explained its rejection of a strict adherence to the physical presence test, holding that a state could authorize its courts to subject an out-of-state entity to in personam jurisdiction, consistent with due process, and thus require it to defend a lawsuit, if that entity had "certain minimum contacts" with the forum state "such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." The Court rested its holding in part on the notion that an entity conducting activities in a state benefits from the protections of state law, and thus should have to respond to legal complaints arising out of its actions in the forum even if it is not "physically present" in the state. Thus, the Supreme Court's opinions in International Shoe and subsequent cases have established a more flexible two-part test for determining when exercise of personal jurisdiction over each nonresident defendant sued by a plaintiff comports with due process: (1) the defendant has established minimum contacts with the forum state that demonstrate an intent to avail itself of the benefits and protections of state law; and (2) it is reasonable to require the defendant to defend the lawsuit in the forum. Nevertheless, as noted, the Court has confirmed that several traditional bases for the exercise of judicial power over a nonresident defendant for claims against him continue to enjoy a presumption of constitutionality without requiring an independent inquiry into the contacts among the defendant, the forum, and the litigation. Specifically, the traditional bases for jurisdiction include if: (1) the defendant is domiciled in the forum state (e.g., a defendant who is a natural person intends to establish a permanent home in the forum or a corporation intends to establish a permanent headquarters); (2) the defendant has consented to jurisdiction; or (3) a defendant who is a natural person is served with process while he is physically present--even temporarily--within the forum. The Court has also indicated that a state court may adjudicate the personal status of a plaintiff in relation to the defendant (e.g., marital status) without considering whether personal jurisdiction over the defendant is constitutionally valid. Over the years, the Supreme Court has offered three main justifications for the constitutional constraints on a court's assertion of personal jurisdiction over nonresident persons and corporations. First, each state's status as a "co-equal sovereign" in a federal system of government implies at least some limits on the power of its courts to render judgments affecting the rights of entities outside of that state's boundaries. Second, constitutional limits on personal jurisdiction attempt to address concerns about the unfairness of subjecting defendants to litigation in a distant or inconvenient forum. Finally, constitutional limits on the exercise of personal jurisdiction recognize that the Due Process Clause protects defendants from being deprived of life, liberty, or property by a tribunal without lawful power. Since its 1945 decision in International Shoe , the Supreme Court has elaborated on the nature and quality of the minimum contacts that a defendant must have with the forum in order for a court to subject him or her to personal jurisdiction in that forum consistent with due process. When determining whether a defendant has minimum contacts with the forum, the Court has distinguished the types of contacts sufficient for a court's exercise of "general" personal jurisdiction over the defendant from those contacts sufficient for its exercise, alternatively, of "specific" jurisdiction. A court's exercise of specific jurisdiction may be constitutional when the defendant has contacts with the forum that give rise to, or are related to, the plaintiff's cause of action (e.g., an act or occurrence caused by the defendant that takes place in the forum or has an impact there). However, when there is "no such connection [between the forum and the particular claims at issue], specific jurisdiction is lacking regardless of the extent of a defendant's unconnected activities in the State." By contrast, a court's exercise of general jurisdiction over a nonresident defendant for any claim--even if all the incidents underlying the claim occurred in a different state--may be constitutional when the defendant's activities in the forum state are so substantial that it is reasonable to require it to defend a lawsuit that did not arise out of its activities in the forum state and is unrelated to those activities. Perhaps in order to ensure greater predictability for defendants attempting to discern where they may be subject to suit on claims arising anywhere in the world, in more recent years, the Court has significantly limited the types of activities or affiliations of the defendant in the forum state sufficient for general jurisdiction, holding that those contacts must be so substantial as to render the defendant "essentially at home" in the forum state. The Court has clarified that, absent exceptional circumstances, a corporate defendant is "at home" when it is incorporated in the forum state or maintains its principal place of business there. Insubstantial in-state business, in and of itself, does not suffice to permit an assertion of jurisdiction over claims that are unrelated to any activity occurring in a state. Although the Court has rarely addressed the scope of general personal jurisdiction, it has decided several cases elaborating on the quality and nature of the defendant's contacts with the forum and litigation necessary for a court's exercise of specific jurisdiction over the defendant. A common theme throughout many of these decisions is that "unilateral activity" in the forum state by a person who has some family, business, or other relationship with a nonresident defendant will not suffice to establish a defendant's minimum contacts with the forum. In other words, jurisdiction is not proper merely because the defendant could have foreseen that a third party with which it has a family or business relationship (e.g., a defendant's family member or customer of a defendant corporation) would have contacts with the forum. Rather, the defendant must "purposefully avail" itself "of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." The defendant must have reasonably anticipated being haled into court there--a standard that potentially allows a defendant to predict where it will be subject to suit and plan the geographic scope of its activities or ensure against the risk of being sued in a distant forum accordingly. The Court has also emphasized that the minimum contacts inquiry should not focus on the location of the resulting injury to the plaintiff; instead, the proper question is whether the defendant's conduct connects him to the forum in a meaningful way. Many of the Supreme Court's decisions on the minimum contacts test address specific categories of contacts between the defendant and forum, such as the alleged tortious conduct of the defendant in the forum state; a contract between the defendant and an entity in the forum state; a business relationship between the defendant and a party in the forum state; and property interests of the defendant in the forum state. For example, in cases in which the plaintiff alleged that a nonresident had committed the tort of libel causing harm in the forum state, the Court upheld the exercise of specific personal jurisdiction over a defendant that intentionally targeted the state with publication of allegedly libelous material. The Court determined that regularly publishing a widely circulated magazine with knowledge that harm could occur to the state's residents amounted to a sufficient contact between the defendant, the forum, and the litigation. As a result, the Court has recognized that, provided there is a sufficient connection between the defendant and the forum, states have a "significant interest" in permitting their courts to exercise jurisdiction over defendants in order to redress harm that occurs within state boundaries. In the past, there has been disagreement among the Supreme Court Justices, however, as to when a nonresident corporation whose product causes injury within the forum state has "purposefully availed" itself of the privilege of conducting business within the state, and should therefore be subject to personal jurisdiction in that state in a tort action for products liability. In the 1987 case Asahi Metal Industry v. Superior Court , four Justices agreed that a nonresident defendant's awareness that a product it manufactured would end up in the forum state through its intentional placement of the product in the stream of commerce outside of the forum did not by itself constitute an act directed at the forum sufficient for specific personal jurisdiction. Writing for a plurality of the Court, Justice O'Connor maintained that a tribunal lacked the authority to exercise personal jurisdiction over a defendant that had not performed additional actions in the forum state that demonstrated an intent to serve that state's market. According to her plurality opinion, because the defendant did not have clear notice that it could be subject to suit in California, it would have been unfair to subject the defendant to suit there. However, another four Justices would have held that the defendant's intentional placement of a product into the stream of commerce by itself was sufficient for personal jurisdiction because the defendant could foresee being sued in any state in which the product was regularly sold and marketed. Those Justices would have grounded this result in the benefits that defendants derive from the regular retail sale of their products in the forum and the protections of state law. This disagreement appears to remain unresolved after a 2011 case, J. McIntyre Machinery, Ltd. v. Nicastro , in which a plurality of the Court indicated that a foreign manufacturer of a product cannot be subject to the jurisdiction of a state court based on its mere expectation that the products it ships to an independent U.S. distributor might be distributed in the forum state. Instead, according to the plurality written by Justice Kennedy, the defendant must have directly targeted the individual state with its goods, thereby "purposefully availing" itself of the privilege of conducting in-state business. However, the plurality's view did not command a majority of the Court, and a narrower concurring opinion would have found jurisdiction lacking under any of the various tests for personal jurisdiction articulated in the Justices' opinions in Asahi because the shipment of products into, or their sale in, the forum state did not occur regularly, and there was no additional sales-related conduct (e.g., marketing) by the defendant in the forum. In addition to addressing cases involving a defendant's alleged tortious conduct, the Supreme Court has also addressed minimum contacts in the context of out-of-state defendants reaching out to a forum state to establish a continuing business relationship in that state. For example, the Court upheld a California court's exercise of specific personal jurisdiction over a Texas mail order insurance company that had no office or agent in California because the Texas company mailed an offer of insurance to the plaintiff's son in California. The son accepted the offer and continued to send the company premium payments through the mail to Texas from California until the son died in California. The Court noted that the suit arose from a contract that had a "substantial connection" with California, holding that the state had a significant interest in providing redress for its residents in cases in which insurance companies refuse to pay claims. Similarly, when a nonresident defendant establishes an office in a state to conduct business through agents in the state, he may have to answer a lawsuit related to those business activities when an agent is served in the forum, regardless of whether he consented to service of process through his agent. Another context in which the Supreme Court has addressed the minimum contacts test involves contractual disputes between the parties to a lawsuit. Thus, when a franchisor headquartered in Florida brought suit in a local federal court against Michigan franchisees for the alleged breach of a franchise agreement to make required payments in Florida, the Court held that specific jurisdiction over defendants was proper based on the specific circumstances surrounding the contractual relationship. The Court stated that a contract between an out-of-state party and an individual in the forum state is insufficient by itself to establish personal jurisdiction if the contract lacks a substantial connection to the state as established by, among other things, an (1) examination of the parties' prior negotiations (e.g., whether the defendant reached into the forum to negotiate the contract); (2) the terms of the contract (e.g., where payments were to be made and which state's law was to govern); and (3) the course of dealing (e.g., whether the defendant established a "substantial and continuing relationship" in the forum state). The Court has also opined on when a defendant's property interests in the forum may serve as a contact for purposes of personal jurisdiction. In Shaffer v. Heitner , the Supreme Court held that a state court could not exercise quasi in rem jurisdiction over a nonresident defendant by attaching the defendant's property interests in the state without inquiring separately into whether these property interests and any other connections between the defendant, forum, and litigation established sufficient minimum contacts to satisfy the first prong of the International Shoe test. Thus, a Delaware court could not subject nonresident officers and directors of a Delaware corporation to personal jurisdiction for the alleged breach of duties to the corporation based solely on the court's attachment of their stock and stock options in the corporation. The Court noted that jurisdiction over property must in fact have a direct effect on the interests of the defendant in that property and therefore affect its personal rights. However, the Shaffer Court also noted that in some cases, such as cases establishing title to real property, ownership of the property itself may establish sufficient contacts among the defendant, forum, and litigation. Even if a nonresident defendant has minimum contacts with the forum, the Supreme Court has, at times, considered whether a state court's exercise of personal jurisdiction over him would comport with due process by examining the reasonableness of the exercise of jurisdiction. In International Shoe and its subsequent opinions, the Court has established a multi-factor test that seeks to ensure that the maintenance of the suit does not offend "traditional notions of fair play and substantial justice." The Court has subsequently clarified that in applying this test to evaluate the reasonableness of the exercise of jurisdiction in light of the defendant's contacts with the forum and litigation, it will examine several factors, including: (1) "the burden on the defendant"; (2) "the forum State's interest in adjudicating the dispute"; (3) "the plaintiff's interest in obtaining convenient and effective relief"; (4) "the interstate judicial system's interest in obtaining the most efficient resolution of controversies"; (5) and "the shared interest of the several States in furthering fundamental substantive social policies." Although the Supreme Court has had few occasions to address the reasonableness prong of the International Shoe test for personal jurisdiction, it has provided some guidance as to when courts may deem it reasonable to subject a defendant to suit. Thus, the Justices have, for example, suggested that courts should remain cautious about exercising personal jurisdiction over corporations domiciled abroad, particularly when most of the conduct at issue occurred overseas. Courts may therefore evaluate the risks that subjecting a foreign corporation to suit in the United States for overseas conduct would have on international relations between the United States and its trading partners. In a case involving the exercise of personal jurisdiction over a foreign corporation, moreover, the policies of other nations are relevant and must be carefully considered. In addition, when considering the burden on the defendant, the Court may consider it a heavy burden for a company domiciled abroad to travel from its foreign headquarters to have a dispute with another foreign corporation litigated in U.S. courts. This concern may stem in part from the notion that the interests of the plaintiff and forum are minimal when the claim is based on overseas transactions, the plaintiff is not a resident of the United States, and the allegedly tortious conduct could be deterred by subjecting companies over which the court has lawful judicial power to suit. Recent Supreme Court rulings have limited the circumstances in which U.S. courts may exercise personal jurisdiction over certain corporate defendants. In particular, the cases have limited the availability of U.S. courts as forums for lawsuits against foreign companies for claims arising from their conduct overseas. These decisions have required substantial contacts between the foreign defendant, the U.S. forum, and the litigation. For example, a plurality of the Court held in a 2011 case that a foreign company that manufactures a machine in a foreign country cannot be subject to the specific jurisdiction of a state court based on its mere expectation that the products it ships to an independent U.S. distributor might be distributed in the forum state. Instead, according to the plurality, the defendant must have directly targeted the individual state with its goods, thereby "purposefully availing" itself of the privilege of conducting in-state business. In addition to narrowing the scope of activities that may constitute minimum contacts between the defendant and the forum sufficient for a court's exercise of specific jurisdiction, the Court has significantly limited the types of activities or affiliations of the defendant in the forum state sufficient for general jurisdiction, holding that those contacts must be so substantial as to render the defendant "essentially at home" in the forum state. The Court has clarified that, absent exceptional circumstances, a corporate defendant is "at home" when it is incorporated in the forum state or maintains its principal place of business there. For example, the Court held in BNSF Railway Co. v. Tyrrell that Montana courts could not exercise general jurisdiction over a railroad company that had over 2,000 miles of track and more than 2,000 employees in the state because the company was not incorporated or headquartered in Montana and the overall activity of the company in Montana was not "so substantial" as compared to its activities throughout all of the jurisdictions in which it conducted business so as to render the corporation "at home" in the state. The Supreme Court's recent expansion of the personal jurisdiction defense has led to considerable debate, with several commentators criticizing the decision as being too solicitous toward corporate defendants. On the other hand, other commentators have defended the recent change in the Court's decisions, asserting that it will bring more clarity and cohesion to the doctrine of personal jurisdiction and reduce unfairness to defendants. If Congress disagrees with the Court's recent jurisprudence that has generally made it more difficult for plaintiffs to sue foreign companies in U.S. courts and obtain judicial relief for their injuries, it might consider legislative options to address such concerns. One action that Congress might take to address any concerns with the Court's recent decisions on personal jurisdiction is to functionally override the Federal Rules of Civil Procedure and authorize federal courts to exercise nationwide personal jurisdiction over certain defendants, such as foreign companies, that have, in the aggregate, minimum contacts with the United States as a whole rather than with an individual state. Congress could then amend federal statutes addressing venue (i.e., the district or county where a lawsuit may be brought) to address any concerns with fairness to foreign defendants. Currently, the venue statute (28 U.S.C. SS 1391) provides as a fallback venue "any judicial district in which any defendant is subject to the court's personal jurisdiction with respect to such action." Presumably, Congress would need to amend this provision if it wanted to authorize nationwide personal jurisdiction; otherwise, venue would lie in any federal judicial district. Of course, any legislation authorizing nationwide personal jurisdiction would still have to comport with the demands of constitutional due process. The Supreme Court has specifically declined to address whether the Due Process Clause of the Fifth Amendment may limit the federal courts' exercise of personal jurisdiction. Authorizing federal courts to exercise nationwide personal jurisdiction over foreign defendants who have, in the aggregate, substantial contacts with the United States might satisfy the Court's due process-related concern that a U.S. tribunal possess lawful power over a defendant. However, such a proposal may still raise concerns about unfairness to foreign defendants that may result from requiring them to defend a lawsuit in a distant forum, particularly when the lawsuit does not arise out of the defendant's activity in the United States. Such fairness concerns may be particularly important in light of suggestions from the Supreme Court that the courts should consider several specific factors when evaluating the reasonableness of subjecting a foreign defendant to suit, including the burden on the foreign defendant, the policies of other nations, and the potential effect of such lawsuits on international relations between the United States and its trading partners. In this regard, the Court's personal jurisdiction jurisprudence that generally limits the powers of states may provide insight into the limits on Congress's power to expand the personal jurisdiction of federal courts.

Businesses that are incorporated in foreign countries and conduct a large portion of their operations outside of the territorial jurisdiction of the United States may nevertheless cause injury to U.S. persons. For example, a foreign company might manufacture in its home country a machine that another company later distributes in the United States, ultimately resulting in an injury to a U.S. consumer. Although foreign companies may engage in actions or omissions that injure U.S. persons, such injured persons may face various procedural challenges in obtaining judicial relief from a foreign company defendant in U.S. courts. One potential obstacle to such civil lawsuits is the doctrine of personal jurisdiction. The Supreme Court has long interpreted the Due Process Clause of the Fourteenth Amendment to limit the power of state courts to render judgments affecting the personal rights of defendants who do not reside within the state's territory. And the Federal Rules of Civil Procedure give federal district courts power to assert personal jurisdiction over a defendant to the same extent that a state court in which the federal district court is located may assert that power, meaning the same limits on personal jurisdiction generally apply to federal courts. The Court has offered several justifications for the constitutional constraints on a court's assertion of personal jurisdiction over nonresident persons and corporations, including concerns about state sovereignty and fairness to defendants. The Supreme Court's jurisprudence addressing the doctrine of personal jurisdiction spans a period of American history that has witnessed a significant expansion of interstate and global commerce, as well as major technological advancements in transportation and communication. These changes produced a fundamental shift in the Court's views concerning the doctrine. Although the Court initially considered the defendant's physical presence within the forum state to be the touchstone of the exercise of personal jurisdiction over him or her, it later rejected strict adherence to this rule in favor of a more flexible standard that examines a nonresident defendant's contacts with the forum state to determine whether those contacts make it reasonable to require him to respond to a lawsuit there. The Supreme Court's opinions in International Shoe Co. v. Washington and subsequent cases have established a more flexible two-part test for determining when exercise of personal jurisdiction over each nonresident defendant sued by a plaintiff comports with due process: (1) the defendant must establish minimum contacts with the forum state that demonstrate an intent to avail itself of the benefits and protections of state law; and (2) it must be reasonable to require the defendant to defend the lawsuit in the forum. Recent Supreme Court rulings have limited the circumstances in which U.S. courts may exercise personal jurisdiction. This report discusses the evolution of the doctrine of personal jurisdiction as elucidated by the Supreme Court in its opinions. It concludes by examining the implications of recent developments in the doctrine of personal jurisdiction for Congress, as well as options that Congress might have to address these developments.

The federal legislative framework for cybersecurity is complex, with more than 50 statutes addressing various aspects of it either directly or indirectly. Many observers have expressed doubt that the current statutory framework is sufficient to address the growing concerns about the security of cyberspace in the United States, especially with respect to critical infrastructure (CI). Several legislative proposals were made in recent Congresses to address those concerns. While a few cybersecurity bills were enacted in the 113 th Congress, they addressed only the security of federal information systems ( S. 2521 ) and workforce issues ( H.R. 2952 and S. 1691 ) and information-sharing activities ( S. 2519 ) at the Department of Homeland Security (DHS). Within the executive branch, both the George W. Bush and Obama Administrations have focused on improving the cybersecurity of critical infrastructure. The Bush Administration created the classified Comprehensive National Cybersecurity Initiative (the CNCI) in 2008. The Obama Administration performed an interagency review of federal cybersecurity initiatives in 2009, culminating in the release of its Cyberspace Policy Review and the creation of the White House position of Cybersecurity Coordinator. In the absence of enacted legislation, the Obama Administration began drafting a cybersecurity executive order in 2012. The development involved input from both federal agencies and stakeholders in the private sector. On February 12, 2013, President Obama issued Executive Order 13636, Improving Critical Infrastructure Cybersecurity , along with Presidential Policy Directive 21 (PPD 21), Critical Infrastructure Security and Resilience . The issuance of the executive order in the absence of congressional action raises several questions that are addressed in this report: What are the kinds of threats to the national security and economic interests of the United States that the executive order is intended to address? What steps does it take to address those threats, what is the status of their implementation, and what issues do they raise? What is the legislative and constitutional authority for the executive order? How do its provisions relate to those in legislative proposals in the 112 th and 113 th Congresses? What has been the reaction of stakeholders to the order and what issues does it raise? Repeated cyber intrusions into critical infrastructure demonstrate the need for improved cybersecurity. The cyber threat to critical infrastructure continues to grow and represents one of the most serious national security challenges we must confront. The national and economic security of the United States depends on the reliable functioning of the Nation's critical infrastructure in the face of such threats. Cyberthreats to U.S. infrastructure and other assets are a growing concern to policy makers. Information and communications technology (ICT) is ubiquitous and relied upon for government services, corporate business processes, and individual professional and personal pursuits--almost every facet of modern life. Many ICT devices and other components are interdependent, and disruption of one component may have a negative, cascading effect on others. A denial of service, theft or manipulation of data, or damage to critical infrastructure through a cyber-based attack could have significant impacts on national security, the economy, and the livelihood and safety of individual citizens. Cyber-based technologies are now ubiquitous around the globe. The vast majority of users pursue lawful professional and personal objectives. However, criminals, terrorists, and spies also rely heavily on cyber-based technologies to support their objectives. These malefactors may access cyber-based technologies in order to deny service, steal or manipulate data, or use a device to launch an attack against itself or another piece of equipment. Entities using cyber-based technologies for illegal purposes take many forms and pursue a variety of actions counter to U.S. global security and economic interests. While E.O. 13636 discusses in general terms cyber-based threats directed at the nation's critical infrastructure, it does not identify the types of cyber-actors and possible consequences of a successful attack. Commonly recognized cyber-aggressors discussed below, along with representative examples of the harm they can inflict, include cyberterrorists, cyberspies, cyberthieves, cyberwarriors, and cyberhacktivists. Cyberterrorists are state-sponsored and non-state actors who engage in cyberattacks as a form of warfare. Transnational terrorist organizations, insurgents, and jihadists have used the Internet as a tool for planning attacks, radicalization and recruitment, a method of propaganda distribution, and a means of communication. While no unclassified reports have been published regarding a terrorist-initiated cyberattack on U.S. critical infrastructure (CI), the vulnerability of essential components of that infrastructure to access and even destruction via the Internet has been demonstrated. In 2009, the Department of Homeland Security (DHS) conducted an experiment that revealed some of the vulnerabilities to the nation's control systems that manage power generators and grids. The experiment, known as the Aurora Project, entailed a computer-based attack on a power generator's control system that caused operations to cease and the equipment to be destroyed. Cyberspies are individuals who steal classified or proprietary information used by governments or private corporations to gain a competitive strategic, security, financial, or political advantage. These individuals often work at the behest of, and take direction from, foreign government entities. For example, a 2011 FBI report noted, "a company was the victim of an intrusion and had lost 10 years' worth of research and development data--valued at $1 billion--virtually overnight." Likewise, in 2008 the Department of Defense's (DOD's) classified computer network system was unlawfully accessed and "the computer code, placed there by a foreign intelligence agency, uploaded itself undetected onto both classified and unclassified systems from which data could be transferred to servers under foreign control." The U.S. intelligence community recently completed a classified National Intelligence Estimate (NIE) focused on cyberspying against U.S. targets. Reportedly, the NIE "concluded that the United States is the target of a massive, sustained cyber-espionage campaign that is threatening the country's economic competitiveness." Media reports suggest that the NIE also assessed that Russia, Israel, and France also engage in illegal accessing of United States entities for economic intelligence purposes but notes that "cyber-espionage by those countries pales in comparison with China's effort." A February 2013 report of an investigation by a private-sector security firm of intrusions against more than 100 targets over the past seven years states that the attacks were performed by a single Chinese group that appears to be linked to the People's Liberation Army. Cyberthieves are individuals who engage in illegal cyberattacks for monetary gain. Examples include an organization or individual who illegally accesses a technology system to steal and use or sell credit card numbers and someone who deceives a victim into providing access to a financial account. Cybercrime is widely regarded as lucrative and relatively low-risk for criminals and costly for victims, with some estimates placing the annual global cost to individuals as high as hundreds of billions of dollars. However, making accurate estimates of such aggregate costs is problematic, and there does not appear to be any publicly available, comprehensive, reliable assessment of the overall costs of cyberattacks. Cyberwarriors are agents or quasi-agents of nation-states who develop capabilities and undertake cyberattacks in support of a country's strategic objectives. These entities may or may not be acting on behalf of the government with respect to target selection, timing of the attack, and type(s) of cyberattack and are often blamed by the host country when accusations are levied by the nation that has been attacked. Often, when a foreign government is provided evidence that a cyberattack is emanating from its country, the nation that has been attacked is informed that the perpetrators acted of their own volition and not at the behest of the government. In August 2012 a series of cyberattacks were directed against Saudi Aramco, the world's largest oil and gas producer and most valuable company. The attacks compromised 30,000 of the company's computers and the code was apparently designed to disrupt or halt the production oil. Some security officials have suggested that Iran may have supported this attack. However, other observers suggest that the perpetrator of the attack was an employee of Saudi Aramco. Cyberhacktivists are individuals who perform cyberattacks for pleasure, or for philosophical or other nonmonetary reasons. Examples include someone who attacks a technology system as a personal challenge (who might be termed a "classic" hacker), and a "hacktivist" such as a member of the cyber-group Anonymous who undertakes an attack for political reasons. The activities of these groups can range from simple nuisance-related denial of service attacks to disrupting government and private corporation business processes. These different kinds of cyber-aggressors and the types of attacks they can pursue are not mutually exclusive. For example, a hacker targeting the intellectual property of a corporation may be categorized as both a cyberthief and a cyberspy, and possibly a cyberwarrior if the activity is conducted by a military enterprise, as has been claimed for some such attacks. A cyberterrorist and cyberwarrior may be employing different technological capabilities in support of a nation's security and political objectives. Ascertaining information about the aggressor and its capabilities and intentions is very difficult. The threats posed by these aggressors, coupled with the United States' proclivity to be an early adopter of emerging technologies, which often contain unrecognized vulnerabilities and are introduced into existing computer networks, make for a complex environment when considering operational responses, policies, and legislation designed to safeguard the nation's strategic economic and security interests. E.O. 13636 discusses the nation's reliance on cyber-based technologies and identifies activities and reporting requirements to be addressed by numerous federal government departments and agencies. The federal role in what is now called cybersecurity has been debated for more than a decade. Much of the recent debate has focused on two issues: sharing of cybersecurity-related information within and across sectors, and the cybersecurity of CI sectors, including federal systems. E.O. 13636 attempts to address both of those issues, as well as others. It uses existing statutory and constitutional authority to expand information sharing and collaboration between the government and the private sector, including sharing classified information by broadening a program developed for the defense industrial base to other CI sectors; develop a voluntary framework of cybersecurity standards and best practices for protecting CI, through a public/private effort; establish a consultative process for improving CI cybersecurity; identify CI with especially high priority for protection, using the consultative process; establish a program with incentives for voluntary adoption of the framework by CI owners and operators; review cybersecurity regulatory requirements to determine if they are sufficient and appropriate; and incorporate privacy and civil liberties protections in activities under the order. The information-sharing and framework provisions in particular have received significant public attention. Improved sharing of information on cybersecurity threats, vulnerabilities, attacks, prevention, and response both within and across sectors, including government, is thought by most experts to be critical to improving cybersecurity but fraught with barriers and uncertainties, relating especially to privacy, liability, reputation costs, protection of proprietary information, antitrust law, and misuse of shared information. A few sectors are subject to federal notification requirements, but most such information sharing is voluntary, often through sector-specific Information Sharing and Analysis Centers (ISACs) or programs under the auspices of the Department of Homeland Security (DHS) or sector-specific agencies. A key question is how to balance the need for better, more timely cybersecurity information with other needs such as protection of privacy and civil rights as well as legitimate business and economic interests. To improve information sharing, the order builds on a voluntary effort established in May 2011. That program, known as the DIB Cyber Pilot, involved several defense industry partners, the National Security Agency (NSA), and DOD in sharing classified threat-vector information among stakeholders. One aspect was sharing by the NSA of threat signatures obtained through its computer monitoring activities. In May 2012, DOD established the DIB Cybersecurity/Information Assurance (CS/IA) Program, making it broadly available to all eligible DIB partners. Under the program, DOD provides defense contractors with classified and unclassified cyberthreat information and cybersecurity best practices, while DIB participants report cyber-incidents, coordinate on mitigation strategies, and participate in cyber intrusion damage assessments if DOD information is compromised. Participating companies may also join an optional classified-information sharing subprogram, known as the DIB Cybersecurity Enhancement Program (DECS)--the former DIB Cyber Pilot --by meeting specified security requirements. To expand the program beyond the DIB sector, DHS established the Joint Cybersecurity Services Pilot (JCSP) in January 2012, the first phase of which focused on the DECS program and shifted operational relationships with participating commercial service providers (CSPs) to DHS. DHS made the program permanent in July 2012. In January 2013, the department named the program Enhanced Cybersecurity Services (ECS) and expanded it to all CI sectors, including the federal sector, as well as nonfederal government entities. In this program, DHS does not share threat indicators with CI entities directly but rather with participating CSPs (see Figure 1 ). DOD still serves as the point of contact for participating DIB contractors. The executive order builds on such established programs by requiring the Secretary of Homeland Security to expand ECS to all CI sectors; expedite processing of security clearances to appropriate CI personnel; and expand programs to place relevant private-sector experts in federal agencies on a temporary basis. It also requires the Secretary of Homeland Security and the Attorney General to expedite collection of threat indicators and dissemination of them to targeted entities. The increasing potential for attacks that might cripple components of CI or otherwise damage the national economy, as discussed above, has led to debate about the best ways to protect those sectors beyond improvements in information sharing. Some CI sectors are subject to federal regulation with respect to cybersecurity, while the protection of others relies largely on voluntary efforts. The efficacy of that mix of voluntary and regulatory efforts has been a prominent issue in the ongoing debate about federal cybersecurity legislation. Proponents of additional regulation argue that the voluntary approach has not provided sufficient protection and that regulation has been effective in sectors such as electricity and financial services. Opponents argue that expanding federal requirements would be costly and ineffective and may impede innovation. Also, there has appeared to be some uncertainty about the extent to which existing statutory authority would permit new cybersecurity requirements in some sectors. E.O. 13636 builds on the involvement of the National Institute of Standards and Technology (NIST) in the development of cybersecurity technical standards and its statutory responsibilities to work with both government and private entities on various aspects of standards and technology. The order requires the following: NIST --lead the development of the Cybersecurity Framework, an effort that uses an open, consultative process to reduce cybersecurity risks to CI; focuses on cross-sector, voluntary consensus standards and business best practices; is technology-neutral; identifies areas for improvement; and is reviewed and updated as necessary. Secretary of Homeland Security --set performance goals for the framework, establish a voluntary program to support its adoption, and coordinate establishment of incentives for adoption. Sector-specific agencies --coordinate review of the framework and development of sector-specific guidance, and report annually to the President on participation by CI sectors. CI regulatory agencies --engage in consultative review of the framework, determine whether existing cybersecurity requirements are adequate, and report to the President whether the agencies have authority to establish requirements that sufficiently address the risks (it does not state that the agencies must establish such requirements, however), propose additional authority where required, and identify and recommend remedies for ineffective, conflicting, or excessively burdensome cybersecurity requirements. The executive order stipulates that it provides no authority for regulating critical infrastructure in addition to that under existing law, and it does not alter existing authority. The development of the framework is arguably the most innovative and labor-intensive requirement in the executive order. None of the major legislative proposals in the 111 th and 112 th Congresses had proposed using NIST to coordinate an effort led by the private sector to develop a framework for cybersecurity, such as was envisioned by the executive order. Hundreds of entities have been involved in NIST's efforts, which led to release of the first version of the framework in February 2014. The framework is intended to provide broad guidance on cybersecurity using a risk-based approach that can be adapted to the needs of different CI sectors. It consists of three parts: The core is a common set of activities and outcomes applicable to all CI sectors It is organized into five functions-- identify, protect, detect, respond, and recover -- that are widely recognized components of any cybersecurity management lifecycle, along with associated programmatic and technical outcomes, for example, "access control" and "data-at-rest is protected." The profile describes an entity's current and target cybersecurity postures, based on business needs identified by considering the relevant core components. It can be used to support prioritization of action and measurement of progress. The current profile lists outcomes that are being achieved, while the target profile lists the outcomes needed to achieve desired cybersecurity goals. The implementation tiers characterize an entity's current and intended practices, which can range from "informal, reactive responses" (Tier 1) to "agile and risk-informed " approaches (Tier 4). The framework is not intended to be static but will be updated as required. Areas that NIST has already identified for improvement include authentication, automated sharing of indicators, assessment of the degree of conformity to risk-management requirements, cybersecurity workforce needs, data analytics, supply-chain risk management, technical standards relating to privacy, alignment of the framework with federal agency cybersecurity requirements, and international aspects and implications. Several of those are broadly recognized as key issues in cybersecurity. To assist in adoption and implementation of the framework by CI entities, DHS has developed the Critical Infrastructure Cyber Community C3 Voluntary Program. Its goals are to help CI entities understand and use the framework and obtain feedback from them on improvements. The executive order contains several additional provisions on CI cybersecurity: Acquisition and Contracting . The Secretary of Defense and the Administrator of General Services must make recommendations to the President on incorporating security standards in acquisition and contracting processes, including harmonization of cybersecurity requirements. Consultative Process. The Secretary of Homeland Security is required to establish a broad consultative process to coordinate improvements in the cybersecurity of critical infrastructure. Cybersecurity Workforce. The Secretary of Homeland Security is required to coordinate technical assistance to critical-infrastructure regulatory agencies on development of their cybersecurity workforce and programs. High- Risk Critical Infrastructure . The order requires the Secretary of Homeland Security to use consistent and objective criteria, the consultative process established under the order, and information from relevant stakeholders to identify and update annually a list of critical infrastructure for which a cyberattack could have catastrophic regional or national impact, but not including commercial information technology products or consumer information technology services. The Secretary must confidentially notify owners and operators of critical infrastructure that is so identified of its designation and provide a process to request reconsideration. Privacy and Civil Liberties. The order requires agencies to ensure incorporation of privacy and civil liberties protections in agency activities under the order, including protection from disclosure of information submitted by private entities, as permitted by law. The DHS Chief Privacy Officer and Officer for Civil Rights and Civil Liberties must assess risks to privacy and civil liberties of DHS activities under the order and recommend methods of mitigation to the Secretary in a public report. Agency privacy and civil liberties officials must provide assessments of agency activities to DHS. The order contains several requirements with deadlines, and other requirements with no associated dates. In March 2013, DHS announced that it had formed a task force with eight working groups focused on the various deliverables for which it is responsible. Several deliverables have specific associated dates: Instructions for producing unclassified threat reports (Secretary of Homeland Security, Attorney General, Director of National Intelligence) (Sec. 4(a)). Procedures for expansion of the Enhanced Cybersecurity Services Program (Secretary of Homeland Security) (Sec. 4(c)). Recommendations to the President on incentives to participate in the framework (Secretaries of Homeland Security, Commerce, and the Treasury) (Sec. 8(d)). Recommendations to the President on acquisitions and contracts (Secretary of Defense, Administrator of General Services) (Sec. 8(e)). Designation of critical infrastructure at greatest risk (Secretary of Homeland Security) (Sec. 9(a)). Publication of preliminary Cybersecurity Framework (Director of the National Institute of Standards and Technology) (Sec. 7(e)). Report on privacy and civil liberties, preceded by consultations (Chief Privacy Officer and Officer for Civil Rights and Civil Liberties of DHS) (Sec. 5(b)). Publication of final Cybersecurity Framework (Director of the National Institute of Standards and Technology) (Sec. 7(e)). Reports to the President on review of regulatory requirements (agencies with regulatory responsibilities for critical infrastructure) (Sec. 10(a)). Proposed additional risk mitigation actions (agencies with regulatory responsibilities for critical infrastructure) (Sec. 10(b)). Reports to the Office of Management and Budget on ineffective, conflicting, or burdensome requirements (agencies with regulatory responsibilities for critical infrastructure) (Sec. 10(c)). The order also includes more than 20 actions for which no specific date is provided. Some of the deliverables have been made publicly available, largely in accordance with the deadlines in the order, as noted above in the footnotes. Some provisions appeared to have had some effect soon after the order was issued. For example, the provision on expedited security clearances was apparently used to facilitate communication by the FBI with banks in response to a cyberattack in the spring of 2013 on several banks. The assessments of regulatory requirements and proposed actions focused on three agencies: DHS, the Environmental Protection Agency (EPA), and the Department of Health and Human Services (HHS). The Administration concluded that "existing regulatory requirements, when complemented with strong voluntary partnerships, are capable of mitigating cyber risks to our critical systems and information." Presidential Policy Directive 21 (PPD 21), Critical Infrastructure Security and Resilience , on protection of critical infrastructure, was released in tandem with Executive Order 13636. PPD 21 supersedes Homeland Security Presidential Directive 7 (HSPD 7), Critical Infrastructure Identification, Prioritization, and Protection, released December 17, 2003. The PPD seeks to strengthen both the cyber- and physical security and resilience of critical infrastructure by clarifying functional relationships among federal agencies, including the establishment of separate DHS operational centers for physical and cyber-infrastructure; identifying baseline requirements for information sharing, to facilitate timely and efficient information exchange between government and critical-infrastructure entities while respecting privacy and civil liberties; applying integration and analysis capabilities in DHS to prioritize and manage risks and impacts, recommend preventive and responsive actions, and support incident management and restoration efforts for critical infrastructure; and organizing research and development (R&D) to enable secure and resilient critical infrastructure, enhance impact-modeling capabilities, and support strategic DHS guidance. Description of functional relationships within DHS and across other federal agencies relating to critical infrastructure security and resilience (Secretary of Homeland Security). Analysis of public-private partnership models with recommended improvements (Secretary of Homeland Security). Convening of experts to identify baseline information and intelligence exchange requirements (Secretary of Homeland Security). Demonstration of "near real-time" situational-awareness capability for critical infrastructure (Secretary of Homeland Security). Updated National Infrastructure Protection Plan that addresses implementation of the directive (Secretary of Homeland Security). First quadrennial National Critical Infrastructure Security and Resilience R&D Plan (Secretary of Homeland Security). In addition to DHS, the directive describes specific responsibilities for the Departments of Commerce, Interior, Justice, and State, the Intelligence Community, the General Services Administration, the Federal Communications Commission, the sector-specific agencies, and all federal departments and agencies. E.O. 13636 was issued in the wake of the lack of enactment of cybersecurity legislation in the 112 th Congress, apparently at least in part as a response to that. That raises questions about what authority the President has to act on this matter through an executive order. That issue is discussed below. The issuance of an executive order frequently raises questions about whether the order exceeds the scope of the President's authority, in relation to the constitutional separation of powers and validly enacted legislation. Since the latter half of the 20 th century, these questions have typically been evaluated using the tripartite framework set forth by U.S. Supreme Court Justice Jackson in his concurring opinion in the case of Youngstown Sheet & Tube Company v. Sawyer . First, if the President has acted according to an express or implied grant of congressional authority, presidential "authority is at its maximum." Second, in situations where Congress has neither granted nor denied authority to the President, the President acts in reliance only "upon his own independent powers, but there is a zone of twilight in which he and Congress may have concurrent authority, or in which its distribution is uncertain." Third, in instances where presidential action is "incompatible with the express or implied will of Congress," the power of the President is at its minimum. In such a circumstance, presidential action must rest upon an exclusive Article II power. As an example of the first category, Congress has previously provided explicit statutory authority for the executive to regulate the security of private entities. For example, chemical facilities are subject to chemical facility anti-terrorism standards (CFATS) promulgated by the Department of Homeland Security (DHS), which include provisions requiring chemical facilities to take measures to protect against cyberthreats. Similarly, the Maritime Transportation Security Act (MTSA) gives the Coast Guard the authority to regulate the security of maritime facilities and vessels, including requiring security plans that contain provisions for the security of communications systems used in those facilities. In these and other situations where Congress has provided explicit regulatory authority to the executive branch related to cybersecurity, the President's authority to direct sector-specific agencies to coordinate, evaluate, develop, or implement appropriate cybersecurity standards pursuant to the executive order would appear to be at its maximum. In other cases, where there may only be congressional silence regarding the President's authority to direct action on cybersecurity issues, an argument could be made that the issuance of such an executive order falls within the "zone of twilight," assuming that the action could be concurrently justified under some explicit or implied power granted to the President by the Constitution. For example, Section 9 of E.O. 13636 directs the Secretary of Homeland Security to use a risk-based approach to identify critical infrastructure where a cybersecurity incident could result in catastrophic effects. While such identification is arguably authorized under the Homeland Security Act of 2002, it might alternatively be justified under the President's constitutional authority to request written opinions from the heads of executive departments. However, some past legislative proposals may be beyond the reach of unilateral executive action. For example, prior proposals to regulate the cybersecurity of critical infrastructure have also proposed limits on liability or safe harbors for regulated entities that comply with the regulatory schemes, because the creation of a regulatory scheme can have an adverse effect on the exposure of regulated entities to civil liability. The scope of such proposed limits has ranged from complete immunity, to lesser restrictions such as prohibitions against the awarding of punitive damages. Such limits on liability may also be made dependent upon an entity's satisfaction of its regulatory obligations, in order to create a further incentive for compliance. The abrogation of civil claims under common law or contract law without explicit congressional authorization may be difficult to justify on the executive's constitutional powers alone. Notably, the executive order does not purport to provide any similar liability safe harbors for private entities that comply with cybersecurity standards developed pursuant to the executive order. While it does direct the Secretary of Homeland Security to coordinate the establishment of a set of incentives to promote voluntary participation in the critical infrastructure program, it also acknowledges that some incentives may require legislation affirmatively authorizing such limitations. This is not to say that the executive order will have no impact on liability. The publication of recommendations or risk assessments, as provided under the executive order, may be used by litigants as evidence of the appropriate standard of care to apply in tort litigation resulting from a cybersecurity incident, even if such standards are not controlling. Similarly, it may not be possible for an executive order to authorize telecommunications providers to engage in more aggressive monitoring of communications networks to help identify cyber threats or attacks in real-time. Such an executive action would contravene current federal laws protecting electronic communications, and would be evaluated in the third category of Justice Jackson's Youngstown framework, where the President's power is at its minimum. Such an executive order would not be effective, unless such action fell within a power exclusively granted to the executive by the Constitution. Consistent with this analysis, E.O. 13636 does not purport to provide any authority for private telecommunications providers to engage in monitoring of their networks. While E.O. 13636 does not purport to create new authorities, there are commonalities between some of its provisions and some of the cybersecurity proposals from the 112 th and 113 th Congresses. A comparison of a selection of the issues covered by those proposals and the executive order is below. Several comprehensive legislative proposals on cybersecurity in the 112 th Congress received considerable attention, including a Senate bill, a set of bill proposals by the Obama Administration, and a report with recommendations from a House Republican task force, which informed several House bills. The various proposals differed both in some of the issues they addressed and in how they approached them. Among the issues addressed were the following: Cybersecurity workforce authorities and programs, Cybersecurity R&D, Data-breach notification, DHS authorities for protection of federal systems, FISMA reform, Information sharing, Penalties for cybercrime, Protection of privately held CI, including public/private sector collaboration and regulation of privately held CI, Public awareness about cybersecurity, and Supply-chain vulnerabilities. E.O. 13636 mainly addresses two of those topics: information sharing and protection of privately held CI. With respect to information sharing, the executive order does not provide exemptions from liability stemming from information sharing, which would require changes to current law. Several of the legislative proposals included such changes. Also, some proposals included the creation of new entities for information sharing, whereas the executive order uses existing mechanisms. With respect to protection of critical infrastructure, the provisions on designation of CI and identification of relevant regulations are related to those in some legislative proposals in the 112 th Congress. The role of NIST in developing the Cybersecurity Framework was not in the legislative proposals from that Congress, although several would have expanded the agency's role in cybersecurity. In the 113 th Congress, H.R. 624 and S. 2588 would address information sharing, and H.R. 3696 and S. 1353 would require NIST to lead a public/private effort similar to the process by which the Cybersecurity Framework is being developed. Both House bills passed in the House, H.R. 694 in April 2013 and H.R. 3696 in July 2014, but some provisions in each were controversial. Given the absence of enacted comprehensive cybersecurity legislation, some security observers have contended that the executive order is a necessary step in securing vital assets against cyberthreats. Proponents of the framework point to its ability to alleviate the problems created by a lack of understanding about cybersecurity issues and practices among different classes of stakeholders. They claim that the framework provides a common, nontechnical basis for developing consensus on how best to approach cybersecurity needs. Other observers, however, have raised concerns. Common themes by such critics have included the following claims: The order offers little more than do existing processes. Such critics point out that, for example, the Enhanced Cybersecurity Services program was in place before the release of the order, and that a variety of efforts have been underway to develop and adopt voluntary standards and best practices in cybersecurity for many years. Proponents of the order argue that it lays out and clarifies Obama Administration goals, requires specific deliverables and timelines, and that the framework and other provisions are in fact new with the executive order. The order could make enactment of legislation less likely. These critics express concern that Congress might decide to wait until the major provisions of the order have been fully implemented before considering legislation. Proponents state that immediate action was necessary in the absence of legislation, and that changes in current law are necessary no matter how successful the executive order might be, to provide liability protections for information sharing and to meet other needs. The process for developing the framework is either too slow or too rushed . Some observers believe that some actions to protect critical infrastructure are well-established and should be taken immediately, given the nature and extent of the current threat. They state that the year-long process to develop the framework may have delayed implementation of needed security measures, creating unnecessary and unacceptable risks. Others counter that widespread adoption of the framework requires consensus, which takes time to achieve, and that the one-year timeframe may be insufficient, given that the process for developing and updating consensus standards often takes several years. In fact, some CI entities have reportedly delayed implementation while waiting for additional federal guidance. Some also state that the framework process does not preclude entities from adopting established security measures immediately. The framework risks becoming a form of de facto regulation, or alternatively, its voluntary nature makes it insufficiently enforceable. Another concern of some is that the executive order could lead to government intrusiveness into private-sector activities, for example through increased regulation under existing statutory authority, while others contend that voluntary measures have a poor history of success. Some others, however, have argued that changes in the business environment--such as the advent of continuous monitoring, more powerful analytical tools, and a better prepared workforce--improve the likelihood that a voluntary approach can be successful. The order could lead to overclassification or underclassification of high-risk critical infrastructure by DHS. Some observers have expressed concern that the requirement in the order for DHS to designate high-risk critical infrastructure may be insufficiently clear and could lead to either harmfully expansive designations or inappropriate exclusions of entities. This might be particularly a problem if the criteria are not sufficiently validated. It appears to be too early in the implementation of the executive order to determine how effectively the concerns described above will be addressed and whether the responses will satisfy critics and skeptics. Overall, however, response to the order from the private sector--including critical-infrastructure entities, trade associations, and cybersecurity practitioners--appears to be largely positive. Some organizations and experts have urged adoption of the framework by CI entities. In August 2014, NIST requested public comments on implementation of the framework and posted more than 60 it received from various companies, trade associations, and other organizations. The responses demonstrate a range of understanding and implementation both across and within sectors and generally support the contention that additional experience will be necessary before the success of the framework at improving CI cybersecurity can be adequately assessed.

The federal role in cybersecurity has been a topic of discussion and debate for over a decade. Despite significant legislative efforts in the 112th Congress on bills designed to improve the cybersecurity of U.S. critical infrastructure (CI), no legislation on that issue was enacted in that Congress. In an effort to address the issue in the absence of enacted legislation, the White House issued an executive order in February 2013. Citing repeated cyber-intrusions into critical infrastructure and growing cyberthreats, Executive Order 13636, Improving Critical Infrastructure Cybersecurity, was an attempt to enhance security and resiliency of CI through voluntary, collaborative efforts involving federal agencies and owners and operators of privately owned CI, as well as use of existing federal regulatory authorities. Entities posing a significant threat to the cybersecurity of CI assets include cyberterrorists, cyberspies, cyberthieves, cyberwarriors, and cyberhacktivists. E.O. 13636 has attempted to address such threats by, among other things, expanding to other CI sectors an existing Department of Homeland Security (DHS) program for information sharing and collaboration between the government and the private sector; establishing a broadly consultative process for identifying CI with especially high priority for protection; requiring the National Institute of Standards and Technology (NIST) to lead in developing a cybersecurity framework of standards and best practices for protecting CI; and directing regulatory agencies to determine the adequacy of existing requirements and their authority to establish additional ones to address the risks. Among the major issues covered by the unenacted legislative proposals in the 112th Congress, E.O. 13636 mainly addresses two: information sharing and protection of privately held critical infrastructure. It does not provide exemptions from liability stemming from information sharing, which would require changes to current law. Several of the legislative proposals included such changes. With respect to protection of critical infrastructure, the provisions on designation of CI and identification of relevant regulations are related to those in some legislative proposals. In the 113th Congress, some bills would provide explicit statutory authority for information-sharing along the lines of some bills in the 112th Congress. Others would authorize activities on developing a cybersecurity framework similar to those in the executive order. The issuance of E.O. 13636, as with many other executive orders, raises questions about whether the order exceeds the scope of the President's authority, in relation to the constitutional separation of powers and validly enacted legislation. While answers to those questions are complex, the executive order specifies that implementation will be consistent with applicable law and that nothing in the order provides regulatory authority to an agency beyond that under existing law. Overall, response to the executive order has been optimistic. Given the absence of comprehensive cybersecurity legislation, some security observers contend that the order is a necessary step in securing vital assets against cyberthreats. Others have argued, in contrast, that it offers little more than do existing processes, that it could make enactment of a bill less likely, or that it could lead to government intrusiveness into private-sector activities, for example through increased regulation under existing statutory authority. Despite considerable progress in meeting the specific objectives in the executive order, especially the NIST Framework, it still appears to be too early in the implementation of the order to determine whether such concerns will be addressed to the satisfaction of critics and skeptics.

The President is responsible for appointing individuals to positions throughout the federal government. In some instances, the President makes these appointments using authorities granted to the President alone. Other appointments, generally referred to with the abbreviation PAS, are made by the President with the advice and consent of the Senate via the nomination and confirmation process. This report identifies, for the 112 th Congress, all nominations submitted to the Senate for full-time positions on 34 regulatory and other collegial boards and commissions. This report includes a profile on the leadership structure of each of these 34 boards and commissions as well as a pair of tables presenting information on each body's membership and appointment activity as of the end of the 112 th Congress. The profiles discuss the statutory requirements for the appointed positions, including the number of members on each board or commission, their terms of office, whether they may continue in their positions after their terms expire, whether political balance is required, and the method for selecting the chair. The first table in each pair provides information on full-time positions requiring Senate confirmation as of the end of the 112 th Congress and the pay levels of those positions. The second table for each board or commission tracks appointment activity within the 112 th Congress by the Senate (confirmations, rejections, returns to the President, and elapsed time between nomination and confirmation) as well as further related presidential activity (including withdrawals and recess appointments). In some instances, no appointment action occurred within a board or commission during the 112 th Congress. Information for this report was compiled using the Senate nominations database of the Legislative Information System (LIS) at http://www.lis.gov/nomis/ , the Congressional Record (daily edition), the Weekly Compilation of Presidential Documents , telephone discussions with agency officials, agency websites, the United States Code , and the 2012 Plum Book ( United States Government Policy and Supporting Positions ). Related Congressional Research Service (CRS) reports regarding the presidential appointments process, nomination activity for other executive branch positions, recess appointments, and other appointments-related matters may be found at http://www.crs.gov . Federal executive branch boards and commissions discussed in this report share, among other characteristics, the following: (1) they are independent executive branch bodies located, with four exceptions, outside executive departments; (2) several board or commission members head each entity, and at least one of these members serves full time; (3) the members are appointed by the President with the advice and consent of the Senate; and (4) the members serve fixed terms of office and, except in a few bodies, the President's power to remove them is restricted. For most of the boards and commissions included in this report, the fixed terms of office for member positions have set beginning and end dates, irrespective of whether the posts are filled or when appointments are made. In contrast, for a few agencies, such as the Chemical Safety and Hazard Investigation Board, the full term begins when an appointee takes office and expires after the incumbent has held the post for the requisite period of time. The end dates of the fixed terms of a board's members are staggered so that the terms do not expire all at once. The use of terms with fixed beginning and end dates is intended to minimize the occurrence of simultaneous board member departures and thereby increase leadership continuity. Under such an arrangement, an individual is nominated to a particular position and a particular term of office. An individual may be nominated and confirmed for a position for the remainder of an unexpired term to replace an appointee who has resigned (or died). Alternatively, an individual might be nominated for an upcoming term with the expectation that the new term will be under way by the time of confirmation. Occasionally, when the unexpired term has been for a relatively short period, the President has submitted two nominations of the same person simultaneously--the first to complete the unexpired term and the second to complete the entire succeeding term of office. On some commissions, the chair is subject to Senate confirmation and must be appointed from among the incumbent commissioners. If the President wishes to appoint, as chair, someone who is not on the commission, the President simultaneously submits two nominations for the nominee--one for member and the other for chair. As independent entities with staggered membership, executive branch boards and commissions have more political independence from the President than do executive departments. Nonetheless, the President can sometimes exercise significant influence over the composition of a board or commission's membership when he designates the chair or has the opportunity to fill a number of vacancies at once. For example, President George W. Bush had the chance to shape the Securities and Exchange Commission during the first two years of his presidency because of existing vacancies, resignations, and the death of a member. Likewise, during the same time period, President Bush was able to submit nominations for all of the positions on the National Labor Relations Board because of existing vacancies, expiring recess appointments, and resignations. Simultaneous turnover of board or commission membership may result from coincidence, but it also may be the result of a buildup of vacancies after extended periods of time in which the President fails to nominate, or the Senate fails to confirm, members. Two other notable characteristics apply to appointments to some of the boards and commissions. First, for 26 of the bodies in this report, the law limits the number of appointed members who may belong to the same political party, usually to no more than a simple majority of the appointed members (e.g., two of three or three of five). Second, advice and consent requirements also apply to inspector general appointments in four of these organizations and general counsel appointments in three. During the 112 th Congress, President Barack H. Obama submitted nominations to the Senate for 63 of the 149 full-time positions on 34 regulatory and other boards and commissions (most of the remaining positions were not vacant during that time). He submitted a total of 76 nominations for these positions, of which 45 were confirmed, 8 were withdrawn, and 23 were returned to the President. The number of nominations exceeded the number of positions because the President submitted multiple nominations for some positions. In some cases, for example, the President submitted one nomination for the end of a term in progress and a second nomination of the same person to the same position for the succeeding term. In other cases, the President submitted a second nomination after his first choice failed to be confirmed. The President also submitted "extra" nominations for the three individuals to whom he had given recess appointments to comply with a law affecting the payment of those appointees. Table 1 summarizes the appointment activity for the 112 th Congress. At the end of the Congress, 26 incumbents were serving past the expiration of their terms. In addition, there were 20 vacancies among the 149 positions. The length of time a given nomination may be pending in the Senate has varied widely. Some nominations have been confirmed within a few days, others have been confirmed within several months, and some have never been confirmed. In the board and commission profiles, this report provides, for each board or commission nomination that was confirmed in the 112 th Congress, the number of days between nomination and confirmation ( days to confirm ). For those nominations that were confirmed, a mean (average) of 156.0 days elapsed between nomination and confirmation. The median number of days elapsed was 130.0. The difference between these two numbers suggests the mean was pulled upward by a small number of unusually high numbers. Each of the 34 board or commission profiles in this report is organized into three parts: a paragraph discussing the body's leadership structure, a table identifying its membership as of the end of the 112 th Congress, and a table listing nominations and appointments to its vacant positions during the 112 th Congress. The leadership structure sections discuss the statutory requirements for the appointed positions, including the number of members on each board or commission, their terms of office, whether these members may continue in their positions after their terms expire, whether political balance is required, and the method for selecting the chair. Data on appointment actions during the 112 th Congress appear under both the "Membership as of the End of the 112 th Congress" and the "Appointment Action in the 112 th Congress" sections. The former identify the agencies' positions requiring Senate confirmation and the incumbents in those positions as of the end of the 112 th Congress. Incumbents whose terms have expired are italicized. Most incumbents serve fixed terms of office and are removable only for specified causes. They generally remain in office when a new administration assumes office following a presidential election. For those agencies requiring political balance among their members, the party affiliation of an incumbent is listed as Democrat (D), Republican (R), or Independent (I). These sections also include the pay levels of each position. For presidentially appointed positions requiring Senate confirmation, the pay levels fall under the Executive Schedule, which ranges from level I, for Cabinet-level offices, to level V, for the lowest-ranked positions. Most of the chair positions are at level III, and most of the other positions are at level IV. For each board or commission, the "Appointment Action" section provides information about each nomination, in chronological order, including the name of the nominee, the position to which he or she was nominated, the date of submission, the date of confirmation (if any), and the number of days that elapsed between submission and confirmation. It also notes actions other than confirmation (i.e., nominations rejected by the Senate, nominations returned to or withdrawn by the President, and recess appointments). Occasionally, where a position was vacant and the unexpired term of office was to end within a number of weeks or months, the President submitted two nominations for the same nominee: the first to complete the unexpired term, and the second for a full term following completion of the expired term. In addition, in the three instances during the 112 th Congress in which the President recess appointed a nominee for a position covered by this report while the nomination was awaiting Senate action, he submitted a second, follow-up nomination to comply with the requirements of 5 U.S.C. SS5503(b). Tables that show more than one confirmed nomination provide the mean number of days to confirm a nomination. This figure was determined by calculating the number of days between the nomination and confirmation dates, adding these numbers for all confirmed nominations, and dividing the result by the number of nominations confirmed. For tables with instances of one individual being confirmed more than once (to be a chair and a member, for example), the mean was calculated by averaging all values in the "Days to Confirm" column, including the values for both confirmations. Appendix A provides two tables. Table A-1 includes information on each of the nominations and appointments to regulatory and other collegial boards and commissions during the 112 th Congress, alphabetically organized and following a similar format to that of the "Appointment Action" sections discussed above. It identifies the board or commission involved and the dates of nomination and confirmation. The appendix also indicates if a nomination was withdrawn, returned, or rejected or if a recess appointment was made. In addition, it provides the mean and median number of days taken to confirm a nomination. Table A-2 contains summary information on appointments and nominations by organization. For each of the 34 independent boards and commissions discussed in this report, the appendix provides the number of positions, vacancies, incumbents whose term had expired, nominations, individual nominees, positions to which nominations were made, confirmations, nominations returned to the President, nominations withdrawn, and recess appointments. A list of organization abbreviations can be found in Appendix B . The Chemical Safety and Hazard Investigation Board is an independent agency consisting of five members (no political balance is required), including a chair, who serve five-year terms. The President appoints the members, including the chair, with the advice and consent of the Senate. When a term expires, the incumbent must leave office. (42 U.S.C. SS7412(r)(6)) The Commodity Futures Trading Commission consists of five members (no more than three may be from the same political party) who serve five-year terms. At the end of a term, a member may remain in office, unless replaced, until the end of the next session of Congress. The chair is also appointed by the President, with the advice and consent of the Senate. (7 U.S.C. SS2(a)(2)) The statute establishing the Consumer Product Safety Commission calls for five members who serve seven-year terms. No more than three members may be from the same political party. A member may remain in office for one year at the end of a term, unless replaced. The chair is also appointed by the President, with the advice and consent of the Senate. (15 U.S.C. SS2053) The Defense Nuclear Facilities Safety Board consists of five members (no more than three may be from the same political party) who serve five-year terms. After a term expires, a member may continue to serve until a successor takes office. The President designates the chair and vice chair. (42 U.S.C. SS2286) The Election Assistance Commission consists of four members (no more than two may be from the same political party) who serve four-year terms. After a term expires, a member may continue to serve until a successor takes office. The chair and vice chair, from different political parties and designated by the commission, change each year. (52 U.S.C. SS20923) The Equal Employment Opportunity Commission consists of five members (no more than three may be from the same political party) who serve five-year terms. An incumbent whose term has expired may continue to serve until a successor is appointed, except that no such member may continue to serve (1) for more than 60 days when Congress is in session, unless a successor has been nominated or (2) after the adjournment of the session of the Senate in which the successor's nomination was submitted. The President designates the chair and the vice chair. The President also appoints the general counsel, with the advice and consent of the Senate. (42 U.S.C. SS2000e-4) The Export-Import Bank Board of Directors comprises the bank president, who serves as chair; the bank first vice president, who serves as vice chair; and three other members (no more than three of these five may be from the same political party). All five members are appointed by the President, with the advice and consent of the Senate, and serve for terms of up to four years. An incumbent whose term has expired may continue to serve until a successor is qualified, or until six months after the term expires--whichever occurs earlier (12 U.S.C. SS635a). The President also appoints an inspector general, with the advice and consent of the Senate. (5 U.S.C. App., Inspector General Act of 1978, SS3) The Farm Credit Administration consists of three members (no more than two may be from the same political party) who serve six-year terms. A member may not succeed himself or herself unless he or she was first appointed to complete an unexpired term of three years or less. A member whose term expires may continue to serve until a successor takes office. One member is designated to serve as chair for the duration of the member's term. (12 U.S.C. SS2242) The Federal Communications Commission consists of five members (no more than three may be from the same political party) who serve five-year terms. When a term expires, a member may continue to serve until the end of the next session of Congress, unless a successor is appointed before that time. The President designates the chair. (47 U.S.C. SS154) The Federal Deposit Insurance Corporation Board of Directors consists of five members, of whom two--the comptroller of the currency and the director of the Consumer Financial Protection Bureau--are ex officio. The three appointed members serve six-year terms. An appointed member may continue to serve after the expiration of a term until a successor is appointed. Not more than three members of the board may be from the same political party. The President appoints the chair and the vice chair, with the advice and consent of the Senate, from among the appointed members. The chair is appointed for a term of five years (12 U.S.C. SS1812). The President also appoints the inspector general, with the advice and consent of the Senate. (5 U.S.C. App., Inspector General Act of 1978, SS3) The Federal Election Commission consists of six members (no more than three may be from the same political party) who may serve for a single term of six years. When a term expires, a member may continue to serve until a successor takes office. The chair and vice chair, from different political parties and elected by the commission, change each year. Generally, the vice chair succeeds the chair. (52 U.S.C. SS30106) The Federal Energy Regulatory Commission, an independent agency within the Department of Energy, consists of five members (no more than three may be from the same political party) who serve five-year terms. When a term expires, a member may continue to serve until a successor takes office, except that such commissioner may not serve beyond the end of the session of the Congress in which his or her term expires. The President designates the chair. (42 U.S.C. SS7171) The Federal Labor Relations Authority consists of three members (no more than two may be from the same political party) who serve five-year terms. After the date on which a five-year term would expire, a member may continue to serve until the end of the next Congress, unless a successor is appointed before that time. The President designates the chair. The President also appoints the general counsel, with the advice and consent of the Senate. (5 U.S.C. SS7104) The Federal Maritime Commission consists of five members (no more than three may be from the same political party) who serve five-year terms. When a term expires, a member may continue to serve until a successor takes office. The President designates the chair. (46 U.S.C. SS301) The Federal Mine Safety and Health Review Commission consists of five members (no political balance is required) who serve six-year terms. When a term expires, the member must leave office. The President designates the chair. (30 U.S.C. SS823) The Federal Reserve System Board of Governors consists of 7 members (no political balance is required) who serve 14-year terms. When a term expires, a member may continue to serve until a successor takes office. The President appoints the chair and vice chair, who are separately appointed as members, for 4-year terms, with the advice and consent of the Senate. (12 U.S.C. SSSS241-242.) The Federal Trade Commission consists of five members (no more than three may be from the same political party) who serve seven-year terms. When a term expires, the member may continue to serve until a successor takes office. The President designates the chair. (15 U.S.C. SS41) The Financial Stability Oversight Council consists of 10 voting members and 5 nonvoting members, and is chaired by the Secretary of the Treasury. Of the 10 voting members, 9 serve ex officio, by virtue of their positions as leaders of other agencies. The remaining voting member is appointed by the President with the advice and consent of the Senate and serves full time for a term of six years. Of the five nonvoting members, two serve ex officio. The remaining three nonvoting members are designated through a process determined by the constituencies they represent, and they serve for terms of two years. The council is not required to have a balance of political party representation. (12 U.S.C. SS5321) The Foreign Claims Settlement Commission, located in the Department of Justice, consists of three members (political balance is not required) who serve three-year terms. When a term expires, the member may continue to serve until a successor takes office. Only the chair, who is appointed by the President with the advice and consent of the Senate, serves full time. (22 U.S.C. SSSS1622, 1622c) The Merit Systems Protection Board consists of three members (no more than two may be from the same political party) who serve seven-year terms. A member who has been appointed to a full seven-year term may not be reappointed to any following term. When a term expires, the member may continue to serve for one year, unless a successor is appointed before that time. The President appoints the chair, with the advice and consent of the Senate, and designates the vice chair. (5 U.S.C. SSSS1201-1203) The National Credit Union Administration Board of Directors consists of three members (no more than two members may be from the same political party) who serve six-year terms. When a term expires, a member may continue to serve until a successor takes office. The President designates the chair. (12 U.S.C. SS1752a) The National Labor Relations Board consists of five members who serve five-year terms. Political balance is not required, but, by tradition, no more than three members are from the same political party. When a term expires, the member must leave office. The President designates the chair. The President also appoints the general counsel, with the advice and consent of the Senate. (29 U.S.C. SS153) The National Mediation Board consists of three members (no more than two may be from the same political party) who serve three-year terms. When a term expires, the member may continue to serve until a successor takes office. The board annually designates a chair. (45 U.S.C. SS154) The National Transportation Safety Board consists of five members (no more than three may be from the same political party) who serve five-year terms. When a term expires, a member may continue to serve until a successor takes office. The President appoints the chair from among the members for a two-year term, with the advice and consent of the Senate, and designates the vice chair. (49 U.S.C. SS1111) The Nuclear Regulatory Commission consists of five members (no more than three may be from the same political party) who serve five-year terms. When a term expires, the member must leave office. The President designates the chair. The President also appoints the inspector general, with the advice and consent of the Senate. (42 U.S.C. SS5841 and 5 U.S.C. App., Inspector General Act of 1978, SS3) The Occupational Safety and Health Review Commission consists of three members (political balance is not required) who serve six-year terms. When a term expires, the member must leave office. The President designates the chair. (29 U.S.C. SS661) The Postal Regulatory Commission consists of five members (no more than three may be from the same political party) who serve six-year terms. After a term expires, a member may continue to serve until his or her successor takes office, but the member may not continue to serve for more than one year after the date upon which his or her term otherwise would expire. The President designates the chair, and the members select the vice chair. (39 U.S.C. SS502) The Privacy and Civil Liberties Oversight Board consists of five members (no more than three may be from the same political party) who serve six-year terms. When a term expires, the member may continue to serve until a successor takes office. Only the chair, who is appointed by the President with the advice and consent of the Senate, serves full time. (42 U.S.C. SS2000ee) The Implementing Recommendations of the 9/11 Commission Act of 2007, P.L. 110-53 , Title VIII, Section 801 (121 Stat. 352) established the Privacy and Civil Liberties Oversight Board. As of the end of the 112 th Congress, four nominees were confirmed to the four part-time positions on the Board. Previously, the Privacy and Civil Liberties Oversight Board functioned as part of the White House Office in the Executive Office of the President. That board ceased functioning on January 30, 2008. The Railroad Retirement Board consists of three members (political balance is not required) who serve five-year terms. When a term expires, the member may continue to serve until a successor takes office. The President appoints the chair and an inspector general with the advice and consent of the Senate. (45 U.S.C. SS231f and 5 U.S.C. App., Inspector General Act of 1978, SSSS3, 12) The Securities and Exchange Commission consists of five members (no more than three may be from the same political party) who serve five-year terms. When a term expires, the member may continue to serve until the end of the next session of Congress, unless a successor is appointed before that time. The President designates the chair. (15 U.S.C. SS78d) The Surface Transportation Board, located within the Department of Transportation, consists of three members (no more than two may be from the same political party) who serve five-year terms. When a term expires, the member may continue to serve until a successor takes office but not for more than one year after expiration. The President designates the chair. (49 U.S.C. SS701) The United States International Trade Commission consists of six members (no more than three may be from the same political party) who serve nine-year terms. A member of the commission who has served for more than five years is ineligible for reappointment. When a term expires, a member may continue to serve until a successor takes office. The President designates the chair and vice chair for two-year terms of office, but they may not belong to the same political party. The President may not designate a chair with less than one year of continuous service as a member. This restriction does not apply to the vice chair. (19 U.S.C. SS1330) The United States Parole Commission is an independent agency in the Department of Justice. The commission consists of five commissioners (political balance is not required) who serve for six-year terms. When a term expires, a member may continue to serve until a successor takes office. In most cases, a commissioner may serve no more than 12 years. However, Section 11017(c) of P.L. 110-273 , enacted on November 2, 2002, provides that this limitation does not "apply to a person serving as Commissioner" when the act took effect. The President designates the chair (18 U.S.C. SS4202). The commission was previously scheduled to be phased out, but Congress has extended its life several times. Under P.L. 112-44 , Section 2 (125 Stat. 532), it was extended until November 1, 2013. (18 U.S.C. SS3551) The United States Sentencing Commission is a judicial branch agency that consists of seven voting members who are appointed to six-year terms and two nonvoting members. The seven voting members are appointed by the President, with the advice and consent of the Senate. Only the chair and three vice chairs, selected from among the members, serve full time. The President appoints the chair, with the advice and consent of the Senate, and designates the vice chairs. At least three members must be federal judges. No more than four members may be of the same political party. No more than two vice chairs may be of the same political party. No voting member may serve more than two full terms. When a term expires, an incumbent may continue to serve until he or she is reappointed, a successor takes office, or Congress adjourns sine die at the end of the session that commences after the expiration of the term, whichever is earliest. The Attorney General (or designee) serves ex officio as a nonvoting member (28 U.S.C. SSSS991-992). The chair of the United State Parole Commission also is an ex officio nonvoting member of the commission. (18 U.S.C. SS3551 note) Appendix A. Summary of All Nominations and Appointments to Collegial Boards and Commissions Appendix B. Board and Commission Abbreviations

The President makes appointments to positions within the federal government, either using authorities granted to the President alone or with the advice and consent of the Senate. There are some 149 full-time leadership positions on 34 federal regulatory and other collegial boards and commissions for which the Senate provides advice and consent. This report identifies all nominations submitted to the Senate for full-time positions on these 34 boards and commissions during the 112th Congress. Information for each board and commission is presented in profiles and tables. The profiles provide information on leadership structures and statutory requirements (such as term limits and party balance requirements). The tables include full-time positions confirmed by the Senate, pay levels for these positions, incumbents as of the end of the 112th Congress, incumbents' parties (where balance is required), and appointment action within each executive department. Additional summary information across all 34 boards and commissions appears in the appendix. During the 112th Congress, the President submitted 76 nominations to the Senate for full-time positions on regulatory boards and commissions (most of the remaining positions on these boards and commissions were not vacant during that time). Of these 76 nominations, 45 were confirmed, 8 were withdrawn, and 23 were returned to the President. The President also made three recess appointments to full-time positions on a regulatory board. At the end of the 112th Congress, 26 incumbents were serving past the expiration of their terms. In addition, there were 20 vacancies among the 149 positions. Information for this report was compiled using the Senate nominations database of the Legislative Information System (LIS) at http://www.lis.gov/nomis/, the Congressional Record (daily edition), the Weekly Compilation of Presidential Documents, telephone discussions with agency officials, agency websites, the United States Code, and the 2012 Plum Book (United States Government Policy and Supporting Positions). This report will not be updated.

RS21685 -- Coup in Georgia [Republic]: Recent Developments and Implications Updated December 4, 2003 (1) Former President Eduard Shevardnadze had led Georgia since 1972, except for 1985-1992, during which he primarily served as the pro-Western foreignminister of the Soviet Union. Shevardnadze's constitutional limit of two terms in office expired in 2005, whichmade the November 2, 2003, legislativeelection a critical bell-weather of who might succeed him. Nine party blocs and twelve parties contested 150legislative seats in a party list vote, and another 75seats were contested in single constituencies. Shevardnadze's party, the Citizens' Union of Georgia (CUG), had become deeply unpopular as economic conditions failed to noticeably improve. Tostrengthen its chances in the election, in April 2003 the CUG formed an alliance termed "For a New Georgia" (FNG)with other pro-Shevardnadze parties. Three opposition parties that had split from the CUG contested for seats: the National Movement (led by formerJustice Minister Mikhail Saakashvili); theUnited Democrats (led by former Speaker Zurab Zhvania and Speaker Nino Burjanadze); and the businessmen-ledNew Right Party. Other major partiesincluded the Revival Party (led by Ajaria's regional leader Aslan Abashidze), and the populist Labor Party. Campaigning tended to focus on personal attacksrather than ideology or platforms. Saakashvili called for forcing Shevardnadze to resign, raising pensions andwages, taxing the rich, and fighting corruption. Abashidze also criticized Shevardnadze's policies, but some observers speculated that Revival and FNG had covertlyformed an alliance (Center for Strategicand International Studies, Caucasus Election Watch , Oct. 27). The pro-Shevardnadze and oppositioncamps both appealed to nationalism by accusing eachother of selling out Georgia's sovereignty to Russia. The observer mission of the Organization for Security and Cooperation in Europe (OSCE) reported on November 3 that the electoral processes appearedsomewhat more democratic than in the past, but still did not meet the standards of a free and fair election. It mainlyfocused on problems with voters' lists, butalso mentioned ballot box-stuffing in Ajaria and some districts. It also raised concerns that pro-government partymembers dominated district and precinctelectoral commissions and that Ajaria carried out its own electoral processes virtually independently and blockedmost opposition party campaigning in theregion. Ajaria's announcement on November 6 of its large vote for Revival seemed to overwhelm and marginalize the partial vote counts being announced for theopposition parties, galvanizing their resistance to Shevardnadze. Voter turnout in Ajaria was reportedly 98%, ofwhom 95% endorsed the Revival Party. These results meant that Revival would be a major force in the legislature, which was unacceptable to those whofelt that Ajaria's vote tally was a sham. TheDutch ambassador to the OSCE reportedly stated later that the "gross manipulation" of the vote in Ajaria was theworst of the irregularities in the election ( AP ,Nov. 26). Opposition leaders broke off negotiations with Shevardnadze on November 9, after he refused theirdemand to hold a new election. To displaysupposed mass support for the election results, the next day he traveled to Ajaria to address an assembled crowdof ostensible supporters, and Abashidze senthundreds of police and other supporters to Tbilisi to march in support of the election. Final electoral results were announced on November 20. The FNG bloc won the highest percentage of the party list vote, 21.3%, and Revival the secondhighest, 18.8%, prospectively giving the pro-Shevardnadze forces the largest share of seats. The NationalMovement received 18.8% of the party list vote, theLabor Party 12%, the United Democrats 8.8% and the New Right 7.8% of the vote. In single constituencies,FNG-affiliated or independent (but probablypro-presidential) candidates won the largest number of seats. Unlike the other opposition parties, New Right didnot challenge the electoral returns and did notjoin opposition street protests. The crisis deepened in Georgia following the announcement of final vote counts, with major demonstrations in the capital by pro-presidential Ajarian policeand opposition supporters prominently led by Saakishvili, who demanded Shevardnadze's resignation and newelections. Protestors were galvanized by pollsbefore and during the election (conducted with the guidance of U.S. and British NGOs) that indicated that theNational Movement and the United Democratscould each expect over 20% of the vote. Georgians also were motivated by extensive coverage of the election bythe independent Rustavi-2 television station. Saakashvili eschewed violence, urging his followers to emulate the peaceful protesters who helped oust formerYugoslav dictator Slobodan Milosevic in 2000. Georgian activists over the past few months had closely conferred with democracy advocates in Serbia on campaignand demonstration tactics ( WashingtonPost , Nov. 25). Although many in Georgia at first viewed Shevardnadze's role in the suspect vote count as uncertain, they saw his bid for support from Abashidze and defenseof the results as indicating that he at least condoned, if not orchestrated, the suspect tally ( FBIS , Nov.22, Doc. No. CEP-16). Shevardnadze hurriedly convenedthe rump legislature on November 22 (National Movement and the United Democrats boycotted the session), buthe was chased from the podium whendemonstrators broke into the chamber. Burjanadze announced that she was assuming the presidency pendingelections. Shevardnadze declared emergency rule,but cautioned his security forces not to use force. In an ultimatum delivered to the protestors the next day,Shevardnadze insisted that the new legislature hadconvened, replacing the old, and was now the supreme representative body. However, he seemingly offered todiscuss moving up the date for new legislativeand presidential elections. Shevardnadze's Ouster. Russian Foreign Minister Igor Ivanov mediated between opposition leaders andShevardnadze on the evening of November 23 in the face of Saakashvili's threat to storm the president's residence. Reportedly with U.S. concurrence, Ivanovstressed to Shevardnadze that he should not risk civil war by resorting to force against the opposition, but shouldnegotiate a settlement, presumably to includenew legislative elections ( Washington Post , Nov. 25; see below for an alternative explanation). Alsocritical to Shevardnadze's decision to resign were reportsthat top defense, security, and internal (police) officials -- whom Shevardnadze stated he would rely on to suppressthe protests -- told him that they would notaccept such orders. Faced with this lack of support, Shevardnadze and the opposition leaders reached agreementon his resignation. Saakashvili hailed thiscoup a "rose revolution" to signify that it had not been violent. In a speech to the country on November 24, acting president Burjanadze called for order to be re-established and for presidential elections within aconstitutionally-mandated 45 days. She directed that the prorogued 1999 legislature would resume its work untilnew legislative elections could be held. Shequickly met with security officials, and Tedo Japaridze (who broke with Shevardnadze during the crisis) wasconfirmed as secretary of the presidential SecurityCouncil (composed of the heads of the security ministries). He later was named foreign minister. She also declaredthat Georgia would continue its existingforeign policy aimed at integration with Europe and NATO. The Georgian Constitutional Court the next day lentsome legitimacy to the coup and plans fornew elections by ruling that the November 2 election was a fraud. On November 26, the three opposition leaders announced their plans for sharing power, with Burjanadze stating that her party would back Saakashvili forpresident. She appointed Zhvania the minister of state (the top executive branch office under the president), butrecommended that the constitution be changedto give the office more power. Saakashvili, in turn, stated that the opposition hoped to sweep both the presidentialand legislative elections, and that Burjanadzewould top the party list, perhaps assuring that she would become the speaker of a new legislature. Perhaps toalleviate some concerns raised among many ofShevardnadze's supporters by a statement by Burjanadze that investigations were being opened into electoralirregularities and that the guilty would bepunished, Saakashvili called for a unity government that would include all progressive Georgians of all parties, andpledged that no one in the old governmentwould be prosecuted. He called for the police to maintain order and for the military to suppress possible dissidentelements in its ranks. The Central Electoral Commission announced on December 2 that fifteen people had applied to gather signatures for the January presidential election. OSCEforeign ministers met in early December and pledged up to $6 million to help administer presidential and legislativeelections (OSCE, Press Release , Dec. 2). According to most observers, the legislative race marked an extraordinarily determined struggle for power as a prelude to the presidential election in 2005. Ensconced and corrupt officials were determined to gain dominant legislative influence in order to maintain theirpower and to control the prospectivepresidential race, and the opposition parties were determined to block these efforts, in this view ( FBIS ,Nov. 25, Doc. No. CEP-274; Transitions Online , Nov.3). It was anticipated that the new pro-presidential legislature would elect a kindred politician as speaker, a crucialpost in the run-up to the 2005 presidentialrace. The speaker becomes the interim head of state in case the president resigns or dies. According to thisspeculation, Abashidze, with tacit Russian militarybacking, aimed to assume the speakership and perhaps later the presidency. All the political players in the crisis seemed intent on avoiding a repeat of the bloody 1992 coup that toppled independent Georgia's first president. The threeprincipal opposition leaders agreed on power-sharing and quickly moved to reaffirm or appoint able individuals tothe critical finance, foreign, and defenseministries. Nonetheless, some observers warn that there is no pre-eminent political figure behind which the countrycan rally, so factional disputes couldeventually lead to violence. Some observers argue that Saakashvili's personal volatility may not make him apresident able to unify and bring stability toGeorgia (Institute for Advanced Strategic and Political Studies, Policy Briefings , Nov. 19; TheDaily Telegraph , Nov. 24). Some observers warn thatindependent Georgia has witnessed frequent violence and uprisings by military and paramilitary groups. Saakashvili, concerned about rumors that reactionarygroups might be mobilizing, on November 28 urged the avoidance of bloodshed but also threatened that "we willdeal with [armed attacks] mercilessly" ( FBIS ,Nov. 28, Doc. No. CEP-282). If the prospective government receives a solid mandate as expected at the polls, it may receive the legitimacy and time it needs to implement changes that mightotherwise tax an impatient populace. The prospective government faces widespread poverty, official corruption,and separatism in its Abkhazia and SouthOssetia regions. Among the immediate domestic problems it must address are a budget deficit and rising crime. The new government also will need to carryout confidence-building with Ajaria, Abkhazia, and South Ossetia. Abashidze has asserted that Ajaria will notaccept orders from the interim government. Atthe same time, however, he has firmly stated that Ajaria will not formally secede. South Ossetia has re-emphasizedthat it wants to join Russia. The prospective government must also reassure its neighbors. Azerbaijan's President Ilkham Aliyev, who had just won a controversial election himself,supported Shevardnadze during the crisis and has appeared cool toward the interim leadership. Japaridze met withAliyev in late November to pledge thatexisting cooperation would continue. Armenia, which depends on energy from Russia that transits Georgia, calledfor peaceful elections and economic reformsthat would bolster regional trade. Russia's Ivanov made clear that Russia was not happy that the coup had occurred,but accepted it and would pursue closestrategic ties with Georgia. He also stated that Russia was concerned that "outside pressure" had contributed to thecoup ( ITAR-TASS, Nov 25; Nov. 26). According to some observers, Putin was critical of the coup because it appeared to negate the added influence thatRussia would have gained throughAbashidze's increased power. But he also accused Shevardnadze of bringing on his own downfall by failing tomaintain "traditional" close ties to Russia or toprotect, he seemed to imply, the legacy of Soviet-style economic and political rule ( FBIS , Nov. 24, Doc.No. CEP-252; Nov. 25, Doc. No. CEP-141). Ivanovmet with several CIS foreign ministers on November 25, and they seemed to accept the change of government inGeorgia, but pointedly called fornoninterference by "outside powers" (seemingly referring to U.S. interests) in Georgia's domestic affairs( ITAR-TASS , Nov. 25). According to the State Department, "Georgia plays a key role in furthering U.S. interests" in the Caspian region. Georgia cooperates in the war on terrorismand is a "key conduit" for Caspian oil and gas pipelines to Western markets, thereby increasing the diversity of worldenergy suppliers. The United States seeksto strengthen civil society and the rule of law in Georgia, and provides military assistance to combat terrorism,secure borders, and enhance participation inNATO's Partnership for Peace and interoperability with U.S. and coalition forces ( Congressional BudgetJustification for FY2004 ). Congress has earmarked orallocated $1.1 billion in aid to Georgia (among the highest for Eurasia in per capita terms) over the period1992-2002 to buttress these goals. The StateDepartment on November 21 indicated that the Administration had spent $2.4 million to support a democraticelection on November 2. Most of the Georgianparties running in the November election endorsed cooperation with the United States on these goals, and the leadersof the acting government have reaffirmedthese goals. The Administration's assessment of the November election became more negative after the final results were announced. The U.S. State Department issuedstatements on November 20-21, 2003, expressing deep disappointment that "massive vote fraud" had taken place,and in the face of rising protests in Georgia,called for all sides to abjure violence. Secretary of State Colin Powell on November 22 encouraged Shevardnadzeto peacefully resolve the crisis, but did noturge him to resign or hold new elections, according to the State Department. After Shevardnadze resigned, Powellcalled to thank him for peacefully resolvingthe crisis and the State Department issued a statement praising Shevardnadze as a "towering figure in Georgia'shistory and a close friend of the United States,"and as contributing to freeing millions from Soviet communism. The United States quickly recognized Burjanadze as interim president, with Secretary Powell reportedly telephoning her on November 23 to offer U.S. supportand to urge that new elections be free and fair. Burjanadze reported that she talked with President Bush onNovember 26 and that he offered electoral aid andthat the United States "will guarantee Georgia's safety if the country is threatened." He also asked for and receivedassurances about Shevardnandze's personalsafety ( FBIS , Nov. 26, Doc. No. CEP-309). The European Union on November 24 also expressedsupport for the interim government and called for democraticelections. U.S. strategic interests in stability in Georgia seemed underlined by State Department spokesman Richard Boucher on November 25, when he announced thatseveral U.S. agencies would send advisors to the interim government to discuss aid for the upcoming elections andhelp in democratization. The next day, theWhite House announced that President Bush in his phone call to Burjanadze pledged continued U.S. support forGeorgia's sovereignty, independence, territorialintegrity, and democratic and economic reforms. On November 28, Burjanadze met with the head of the AzerbaijanInternational Oil Consortium (a group ofU.S. and other international energy firms that are developing Caspian offshore oilfields) and reassured him that theinterim government backed the completionof the pipeline. Georgia's interim government also has indicated that its peacekeepers will remain on duty withNATO in Kosovo and with the U.S.-ledcoalition in Iraq. The backgrounds of several of the new officials, including Saakashvili, who was educated in theUnited States, and Japaridze, the formerambassador to the United States, also appeared reassuring to many U.S. observers. Many oppositionists in Georgia hailed the U.S. censure of the November election as a major contribution to Shevardnadze's decision to resign. Otherscriticized the United States for not sending a top emissary to Georgia and instead depending on Russia to defusethe crisis. Some also were critical of what theyviewed as long-term U.S. efforts to prop up Shevardnadze's rule. Some pro-Shevardnadze supporters were highlycritical of what they viewed as U.S.indifference to -- if not active support for -- Shevardnadze's ouster. Shevardnadze lent credence to this view onNovember 26 when he ruefully questionedthe U.S. role, stating that "I was one of the biggest supporters of U.S. policy" ( The Daily Telegraph, Nov. 27; FBIS , Nov. 25, Doc. No. CEP-227; and Nov. 24,Doc. No. CEP-358). Some observers supposed that different U.S. groups may have operated at cross-purposes, withsome supporting the Shevardnadzegovernment and others the opposition parties ( FBIS , Nov. 24, Doc. No. CEP-142). Russian FederationCouncil head Mikhail Margelev on November 22seemed to suggest that the United States had criticized the election results without fathoming that this couldencourage Shevardnadze's overthrow ( Interfax ,Nov. 22; FBIS , Nov 22, Doc. No. CEP-148). Commentators varied widely on whether Shevardnadze's resignation would bolster U.S. or Russian influence in Georgia. Some viewed Shevardnadze'sputative "tilt" toward Russia as a feint to spur the United States to rush to his aid. One advocate of this view statedthat the coup amounted to the replacementof one pro-U.S. government by another that would be even more pro-American ( FBIS , Nov. 25, Doc.No. CEP-259). Such a government could press harder formore U.S. aid and for integration into Western institutions, including admission into NATO (Alexander Rahr, FBIS , Nov. 24, Doc. No. CEP-287). Othersargued that Shevardnadze's alliance with Abashidze threatened a strategic tilt toward Russia (Center for Strategicand International Studies, Caucasus ElectionWatch , Nov. 18). Supporting this view, a German analyst concluded that Russia was playing an increasingrole in Georgia that the West would have toaccommodate ( Hamburg Financial Times , Nov. 25). A third view is expressed by those who suggestthat both U.S. and Russian interests in Georgia couldsuffer if it becomes a harbor for terrorism or otherwise becomes more unstable, so that U.S.-Russian cooperationthere is essential (Dmitriy Trenin, FBIS , Nov.24, Doc. No. CEP-287). On November 27, Saakashvili appeared to endorse this perspective, arguing that Georgiashould seek security and economicassistance from both Russia and the United States. Zhvania too has argued for economic ties with both the UnitedStates and Russia.

This report examines the ouster of Georgia's President Eduard Shevardnadze in thewake of a legislative electionthat many Georgians viewed as not free and fair. Implications for Georgia and U.S. interests are discussed. Thisreport may be updated as events warrant. Seealso CRS Report 97-727, Georgia; and CRS Issue Brief IB95024, Armenia, Azerbaijan, andGeorgia, updated regularly.

Congress addresses numerous water issues annually. Issues range from responding to natural disasters, such as droughts and floods, to improving the nation's water resource and water quality infrastructure, and protecting fish, wildlife, and other aquatic resources. Many congressional committees address these issues and are involved in legislating, funding, and overseeing the water-related activities of numerous federal agencies. More than two centuries of such involvement have resulted in a complex web of federal activities related to water. As a result, Congress often faces challenges related to overlap and gaps in federal water resource activities and in coordination and consistency among federal programs. Further, many federal authorities are discretionary or funded by discretionary appropriations. Consequently, there can be a significant difference between what federal agencies are authorized to do and what they are doing, and no one committee in Congress oversees this dichotomy. The responsibility for development, management, protection, and allocation of the nation's water resources is spread among federal, state, local, tribal, and private interests. Despite multiple calls for the coordination of federal water-related activities, observers seldom focus on the origins of laws and policies authorizing myriad federal activities. The purpose of this report is to provide insight into the congressional involvement in establishing, overseeing, and funding federal water-related activities. Thus, the report focuses on the complexity of federal activities related to water. It aims to serve as a guide to federal water-related activities, including the administering agency (or agencies), the primary or overarching authorities for such activities, and House and Senate committee jurisdictions. In most cases, the primary authorities listed are authorizing statutes and accompanying U.S. Code citations; in some instances, constitutional or other authorities are provided. This analysis does not cover every aspect of federal water policy. Instead, the authors have attempted to address the major federal activities authorized by Congress that affect water resource development, management, protection, and use in the United States. Similarly, this analysis does not cover every aspect of House and Senate committee jurisdiction affecting water issues. For definitive evaluation of committee jurisdictions related to water, the views of the House and Senate Parliamentarian Offices are official. Lastly, programs known to have expired and for which reauthorization legislation is pending may be noted; however, given the breadth of the report and constant executive and legislative branch activity, it is not possible to provide comprehensive status reports for all entries. The federal government has been involved in water resources development since the earliest days of the nation's creation. Congress first directed water resource improvements to facilitate navigation, then to reduce flood damages and expand irrigation in the West. For much of the 20 th century, the federal government was called upon to assist and pay for a multitude of water resource development projects--large-scale dams such as Hoover and Grand Coulee, as well as navigation locks throughout the country's largest rivers. In recent decades, Congress has enacted legislation to regulate water quality; protect fish, wildlife, and threatened and endangered species; manage floodplain development; conduct research; and facilitate water supply augmentation via support for water reclamation and reuse facilities and desalination. Congress maintains an active role in overseeing implementation of this legislation, as well as enacting new laws and appropriating funding for water resources activities. Specific federal water laws have been enacted for the diverse purposes noted above. Development and implementation of these laws have involved the action of numerous congressional committees and federal agencies. At the congressional level, this action has resulted in a set of diverse and sometimes overlapping committee jurisdictions dealing with various aspects of water policy and addressing the interests of differing constituencies. At the executive branch level, this has resulted in many agencies and organizations being involved in different and sometimes overlapping aspects of federal water policy. The activities identified in this report fall into the jurisdiction of numerous congressional standing committees (and generally exclude appropriations and other committees in the relevant chambers that deal with banking, taxes, and finance issues.) Similarly, the activities identified in this report are addressed in some form by many federal executive branch agencies. The following tables describe federal water-related activities and programs in the United States and identify the primary administering federal agency(ies), primary authorities, and examples of congressional committees of jurisdiction for each agency activity or program. The tables are arranged under broad areas, subtopics, and topic terms. The four areas covered by the report are as follows: Water Resources Development, Management, and Use ; Water Quality, Protection, and Restoration ; Water Rights and Allocation ; and Research and Planning . Each thematic area begins with a brief introduction and is followed by a table(s) of relevant agencies, activities and programs, and House and Senate committees of jurisdiction. Each table covers more focused areas of water issues--subtopics--based on agency function and the historical development of federal water programs. In organizing these tables, a series of topic terms was developed under which both members of the general public and those more familiar with water policy might categorize federal water-related activities. These topic terms were determined by the CRS analysts and legislative attorneys involved in developing the report. The "Water Resources Development, Management, and Use" theme includes subtopics that relate to supply and reservoir development, drought and flood management, hydropower, and navigation. The "Water Quality, Protection, and Restoration" theme addresses issues relating to water quality and aquatic resources protection and management, including selected regional aquatic ecosystem restoration authorities. The "Water Rights and Allocation" theme addresses water allocation and interstate compacts, river basin commissions, federal reserved water rights, and tribal water rights. The "Research and Planning" theme includes subtopics related to research and data collection, such as water cycle and climate change research, water-related technologies, and watershed planning. Significant overlaps occur both within and among the different categories. This analysis generally excludes marine or ocean issues and international and boundary water issues, except for jointly managed dams at the U.S.-Mexican border and Environmental Protection Agency (EPA) programs along the U.S.-Mexican border. Additionally, Congress has established various economic development programs that include water supply and/or treatment projects among the categories of purposes eligible for federal assistance; however, this report does not include programs for which water-related activities are not the major focus. Also excluded are broad environmental remediation or waste management statutes, such as the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and the Solid Waste Disposal Act. Water activities affecting Indian tribes are also not uniformly addressed in the accompanying tables but instead are covered where they are known to interact with broader federal agency water-related programs and activities, such as water supply development and water quality infrastructure. Because federal environmental laws, such as the Endangered Species Act and the National Environmental Policy Act, apply to all federal agencies, federal agency activities under those laws are not identified in this report. Appendix A discusses considerations in determining House and Senate committee jurisdictions and provides an example of the complexity in water topics and jurisdictional coverage. Appendix B and Appendix C present the official language from House Rule X and Senate Rule XXV, respectively, as indicators of congressional jurisdiction over water resources. Both the House and the Senate tables also address subcommittee jurisdiction, and the Senate table provides information on executive branch nominations handled by Senate committees. Appendix D provides a glossary of abbreviations for federal agencies and House and Senate committees. Program abbreviations generally are spelled out where they first occur in each table. In sum, the nine tables that make up the body of the report define water based on the topic terms determined by CRS. These tables underscore the intricacy of the federal programs affecting water resource development, management, protection, and use in the United States. As apparent throughout the tables, numerous standing committees in the House and Senate have jurisdiction over various components of federal water policy; moreover, committees listed here generally exclude the extensive responsibilities of the appropriations committees in both chambers, as well as the direct and indirect activities of other committees in the relevant chambers that deal with banking, taxes, and finance issues. Historically, the federal government played a large role in development of the nation's water resources--in particular constructing large water resource infrastructure projects (e.g., canals, locks, levees, and dams)--for navigation, flood damage reduction, and irrigation water supply in the West. The largest federal dams typically serve multiple purposes, including those noted above, as well as producing hydropower and providing water supplies for municipal and industrial uses. More recently, Congress has authorized activities and programs to augment water supplies via water conservation programs, including groundwater recharge (aquifer storage and recovery), and water reclamation and reuse programs, including desalination. This section focuses on federal activities related to water resource development, management, and use and includes three tables: Table 1 lists activities related to water supply and reservoir development and includes topic areas such as dams and dam safety; general water supply development; groundwater supply; irrigation assistance; rural water supply; water conservation; and water reclamation, reuse and desalination. Table 2 lists activities related to drought and flood management and includes topic areas such as drought planning, mitigation, and response; emergency flood response; flood damage reduction; and flood mitigation. Table 3 lists activities related to hydropower and navigation and includes topic areas such as federal hydropower development; nonfederal hydropower development; and navigation. Federal efforts to protect and improve water quality and water resources range from technical and financial assistance programs to help communities build sewage treatment and drinking water treatment works, to regulatory programs for preventing or controlling water pollution. Most federal programs focus on surface water quality, while states have a dominant role in matters related to groundwater protection. One exception is where Congress has authorized EPA to regulate the underground injection of fluids to protect underground sources of drinking water. In addition to protecting and improving water quality, Congress has enacted numerous bills to manage, protect, and restore aquatic ecosystems--including estuaries, and wetlands. Over the last 30 years, the United States has provided billions of dollars toward restoring some specific large aquatic ecosystems such as the Chesapeake Bay, the California Bay-Delta, the Everglades, and the Great Lakes. These ecosystems cover large areas and affect millions of people. Ecosystem restoration in a policy context has gone beyond just restoring the natural environment, and now encompasses other objectives such as improving water supply and conveyance, improving navigation, managing natural resources, and implementing watershed management plans. Ecosystem restoration legislation can be intricate and involve several agencies, and therefore involve multiple committees. Fisheries management and oversight of aquaculture also involve many committees. Generally, Congress has acted where interstate issues arose (e.g., pollution of rivers), where significant gaps in protection existed among the states (drinking water quality), where funding needs were related to federal mandates (various water infrastructure funding programs), or where other national interests were perceived (e.g., conservation of agricultural lands and fisheries, and preservation of wild and scenic rivers). This section focuses on federal activities related to water quality in general, and regional aquatic resource protection and restoration efforts. The section includes two tables: Table 4 lists activities related to surface water quality, drinking water quality, groundwater quality, source water protection, nonpoint source pollution, and wastewater and drinking water quality infrastructure. Table 5 lists activities related to aquaculture, aquatic ecosystem protection and restoration, coastal zones and estuaries, fisheries, invasive species, wetlands, and wild and scenic rivers. Although water rights and allocation traditionally are issues that are regulated by states, the federal government retains significant authority related to federal water resources management and federal water rights. Congress has broad authority under the Commerce Clause of the U.S. Constitution to regulate interstate waterways and promote navigation throughout the nation's waterways. Accordingly, though rarely exercised, Congress may allocate interstate waters directly. Alternatively, Congress may defer to states to reach an agreement (i.e., interstate compact) on the allocation of water in an interstate dispute, but Congress generally must provide its consent to such a compact before it may take effect. Congress also has provided for the establishment of river basin commissions, which typically include representatives from basin states and any relevant federal agencies. In 1908, the U.S. Supreme Court recognized the creation of federal reserved water rights. The Court explained that when Congress creates an Indian reservation, it also implicitly reserves the water necessary to fulfill the purposes for which the reservation was established. These rights, sometimes referred to as tribal water rights, are often senior to other water users' rights but typically are not quantified, which may lead to extensive litigation between tribes and other water users or settlement agreements that must be approved by Congress. The Court later held that the principle of reserved rights extended not only to reservations for tribal land but also to reservations for other federal purposes, including national forests, wildlife refuges, national parks, wild and scenic rivers, etc. Thus, congressional proposals to make additions to these systems implicate federal authority related to water resources. Many federal laws also indirectly affect water allocation and use. For example, the development of dam and diversion facilities over time has favored certain purposes or uses over others. Such development has sometimes resulted in unintended consequences, including in some cases, over allocation of water supplies. Implementation of laws aimed at addressing water quality and threatened and endangered species (e.g., the federal Clean Water Act and Endangered Species Act ) may indirectly or directly affect water allocation. However, because such laws--like many other federal laws--are primarily related to federal project operations, they are not included in this section. Table 6 lists activities related to water allocation and includes such topic areas as water allocation generally and river basin commissions. Table 7 lists activities related to water rights and includes such topic areas as federal reserved water rights and tribal water rights. Federal water research and planning authorities are spread across numerous federal agencies, and the congressional committees with oversight roles and responsibilities are also numerous. This division derives in part from the distinct roles that water plays in relation to each of these agencies' missions and the committees' jurisdictions. The evolution of federal water research authorities and planning activities generally mirrors the development of the water-related agencies and authorities discussed in earlier sections of this report. Federal water research and planning began largely to support the development of navigation, flood control, and storage of water for irrigation. The 1960s saw federal research and planning expand to include reducing pollution problems. Efforts to coordinate water research and planning in the 1960s and 1970s were undertaken as part of broader efforts to coordinate federal water activities. Administrations of the 1980's and 1990's asserted a more limited federal role in water research and planning. Federal water planning was scaled back primarily to support federal projects and activities. Federal research funds were focused on topics closely connected to helping federal agencies meet their missions and to address problems beyond the scope of the states and private sector. One result has been that federal research in recent decades has principally supported regulatory activities (e.g., water quality research and monitoring of aquatic ecosystem and species), while federal research promoting economic growth through water development has decreased. In the last two decades, new technologies and data (e.g., water-related satellite and radar data) and concerns (e.g., climate trends, species decline, ecosystem health) have prompted both the involvement of new agencies and programs in federal water research and the expansion of authorities and topics covered by traditional water agencies. This section focuses on federal authorities related to water research and planning and includes two tables: Table 8 lists authorities related to general water research; research on use, supply augmentation, efficiency, and engineering works; monitoring, data, and mapping; water resource assessments; water cycle, drought, and climate change; and water quality and treatment. Table 9 lists authorities related to planning for water development projects, watersheds, and water quality. While these two tables are not exhaustive, they represent the cross-section of federal research and planning authorities. Appendix A. Committee Jurisdiction Determining Committee Jurisdiction Committee jurisdiction is determined by a variety of factors. Paramount are House Rule X and Senate Rule XXV, which designate the subject matter within the purview of each standing committee. House Rule X and Senate Rule XXV, however, are both broadly written and the product of an era in which governmental activity was not as extensive, and relations among policies not as common or intertwined as now. Due to topic omissions and a lack of clarity, as well as overlaps among committees in areas of jurisdiction, the formal provision of the rules is supplemented by an intricate series of precedents and informal agreements governing the referral of legislation. In general, once a measure has been referred to a given committee, it remains the responsibility of that committee; if the measure is enacted into law, amendments to the law are presumed to be within the originating committee's responsibility. Relatedly, bills which are more comprehensive than the measure they amend or supersede are presumed to be within the jurisdiction of the committee reporting the more comprehensive measure. The resultant accretions of subject responsibility greatly broaden the range or shift the scope of jurisdictional subjects assigned to each committee. Several other factors also should be considered in determining committee jurisdiction, although these are not formal or even acknowledged in rules or precedents. These factors may include the expertise of a measure's sponsor, the timing of a bill, or the appropriations subcommittee that considers appropriations requests for the program authorized. Subcommittees are not officially authorized in either the rules of the House or the Senate. Subcommittees are creatures of the full committee that established them. Accordingly, determining official subcommittee jurisdictions is imprecise. Therefore, although some information regarding subcommittee jurisdiction is included in Appendix B and Appendix C , information on subcommittee jurisdiction is not uniformly provided in this report. The subcommittees listed in Appendix B and Appendix C reflect the framework established for the 115 th Congress. House Referral In 1974, with the adoption of the Committee Reform Amendments, the House authorized the Speaker to refer measures to more than one committee, in a joint, split, or sequential manner. In 1995, with the rules changes adopted in the 104 th Congress, the Speaker could no longer refer measures jointly; he was authorized instead to designate a primary committee. Split and sequential referrals were still allowed. Further, the Speaker could impose time limitations on any committee receiving a referral. In 2003, with the rules changes adopted in the 108 th Congress, the Speaker was authorized to refer measures to more than one committee without designation of a primary committee under "exceptional circumstances." Senate Referral A measure introduced in the Senate, or passed by the House and sent to the Senate, will likely be referred to a Senate committee. Measures are referred to Senate committees in accordance with their official jurisdictions in Senate Rule XXV, and precedents established by prior referrals. A series of formal agreements among committees over time also can supplement Rule XXV, and generally are regarded as setting precedent for future referrals. Ad hoc agreements may be made to govern the consideration of particular measures, but these are not binding on future referrals. Referral of measures is formally the responsibility of the presiding officer of the Senate, but in practice the Senate parliamentarian advises on bill referrals. Under Senate Rule XVII, in general each measure is referred to a single committee based on "the subject matter which predominates" in the legislation. Predominance usually is determined by the extent to which a measure deals with a subject. However, there appear to be exceptions; most notably, a measure containing revenue provisions is likely to be referred to the Committee on Finance, even where the subject does not appear to predominate. Individual Jurisdictional Issues This section briefly discusses an example of water issues that are either within the jurisdiction of more than one committee or contested among committees. If the issue is clearly within the purview of one panel, it is not addressed in this section. Jurisdiction over Dams and Land Necessary for their Development House Rule X identifies several committees to which bills authorizing federal dam construction might be referred. The Natural Resources Committee has jurisdiction over "irrigation and reclamation, including water supply for reclamation projects, and easements of public lands for irrigation projects, and acquisition of private lands when necessary to complete irrigation projects." As such, it has jurisdiction over most activities of the Bureau of Reclamation (Department of the Interior). The Committee on Transportation and Infrastructure is responsible for "flood control and improvement of rivers and harbors ... public works for the benefit of navigation, including bridges and dams (other than international bridges and dams) ... water power." Consequently, most activities of the Army Corps of Engineers fall under the jurisdiction of the House Transportation and Infrastructure Committee. The Committee on Agriculture has jurisdiction over "water conservation related to activities of the Department of Agriculture." Senate Rule XXV also identifies several committees for which bills authorizing federal dam construction might be referred. The Energy and Natural Resources Committee has jurisdiction over "hydroelectric power, irrigation, and reclamation projects," and, hence, most activities of the Bureau of Reclamation; whereas, the Environment and Public Works Committee (EPW) has jurisdiction over "public works, bridges, and dams" and "flood control." Consequently, EPW has jurisdiction over most activities of the Army Corps of Engineers. Additionally, the Agriculture, Nutrition and Forestry Committee has jurisdiction over "soil conservation ... food from fresh waters ... rural development, rural electrification, and watersheds." As is shown in Table 1 , multiple committees in each chamber are principally involved in jurisdiction over dams, which is not readily apparent from perusal of the rules language alone. Private dams must be licensed by the Federal Energy Regulatory Commission, which is under the jurisdiction of the House Energy and Commerce and the Senate Energy and Natural Resources committees. Further, several different executive branch departments and agencies are responsible for implementing the laws under the jurisdiction of these committees. This arrangement complicates management of river systems and resources comprising large watershed areas where multiple federal dams are present, such as the Columbia and Colorado River Basins, and the Sacramento and San Joaquin Rivers' delta confluence with San Francisco Bay, and even smaller systems, especially where anadromous fisheries (fish that live in both freshwater and marine environments) are found. Appendix B. House Rule X Language Table B-1 includes official excerpts from House Rule X. Appendix C. Senate Rule XXV Language Table C-1 includes official excerpts from Senate Rule XXV. Appendix D. Glossary of Abbreviations

Congress addresses numerous issues related to the nation's water resources annually, and over time it has enacted hundreds of water-related federal laws. These laws--many of which are independent statutes--have been enacted at different points in the nation's history and during various economic climates. They were developed by multiple congressional committees with varying jurisdictions. Such committees are involved in legislating, funding, and overseeing the water-related activities of numerous federal agencies. These activities include responding to natural disasters such as droughts and floods, conducting oversight over federal water supply management, improving water resource and water quality infrastructure, and protecting fish and wildlife. More than two centuries of federal water resource activity have resulted in a complex web of federal involvement in water resource development, management, protection, and use. As a result, Congress faces challenges related to overlap and gaps in federal water resource activities and in coordination and consistency among federal programs. Further, many federal authorities are discretionary or funded by discretionary appropriations. Consequently, there can be a significant difference between what federal agencies are authorized to do and what they are actually doing, and no one committee in Congress oversees this dichotomy. Although the responsibility for development, management, protection, and allocation of the nation's water resources is spread among federal, state, local, tribal, and private interests, this report focuses on federal activities related to water and the congressional committees that authorize and oversee these activities. The report covers multiple topics and individual water-related subtopics ranging from water supply and water quality infrastructure to fisheries management and water rights. The report is not exhaustive; instead, the authors have attempted to cover the major federal activities authorized by Congress that affect water resource development, management, protection, and use in the United States. Similarly, the analysis does not cover every aspect of House and Senate committee jurisdiction affecting water issues. For definitive evaluation of committee jurisdictions related to water, the views of the House and Senate Parliamentarian Offices are official. The report covers four general areas, or themes: (1) "Water Resources Development, Management, and Use"; (2) "Water Quality, Protection, and Restoration"; (3) "Water Rights and Allocation"; and (4) "Research and Planning." The sections addressing these themes are further divided into tables that list topic areas and individual water-related subtopics. For each subtopic, CRS has identified selected federal agencies and activities related to the subtopic, authorities for such activities, and relevant House and Senate committee jurisdictions, as specified in House and Senate rules. Appendixes address considerations in determining House and Senate committee jurisdictions and present the official language from House Rule X and Senate Rule XXV, respectively, which are indicators of congressional jurisdiction over water resources. The report also includes a glossary of abbreviations for federal agencies and House and Senate committees. The nine tables that make up the body of this report underscore the complexity of federal activities affecting water resource development, management, protection, and use in the United States. As apparent throughout these tables, numerous standing committees in the House and the Senate have jurisdiction over various components of federal water policy. The wide range of federal executive responsibilities for water resources reflects comparably complex congressional legislative responsibilities and directives.

C hief Justice Marshall of the U.S. Supreme Court defined a presidential pardon as "an act of grace, proceeding from the power entrusted with the execution of laws, which exempts the individual, on whom it is bestowed, from the punishment the law inflicts for a crime he has committed." Indeed, the President's power to pardon is descended from authority that had been vested in English kings since at least the eighth century, and has been described as a power "exercised from time immemorial by the executive of that nation whose language is our language and to whose judicial institutions ours bear a close resemblance." The exercise of executive clemency is an extraordinary remedy, as several thousand petitions are submitted each year to the President and few are granted. This report briefly reviews the historical underpinnings of the text of the Pardon Clause of the U.S. Constitution before delving into the types of pardons the clemency power includes, when pardons may be issued, and how pardons are granted. The remainder of the report analyzes the effect of a presidential pardon on collateral consequences, which are generally considered the post-sentence civil penalties or disqualifications that flow from a federal conviction. Because full presidential pardons are not often granted, also discussed in the report are some alternative ways in which a former federal felon may have his or her civil rights restored and certain legal disabilities removed absent a pardon. Lastly, the report covers what role, if any, Congress may play in defining the scope of the pardon power and its effect on collateral consequences. Article II, Section 2, Clause 1 of the Constitution provides the following: "The President ... shall have Power to Grant Reprieves and Pardons for Offences against the United States, except in Cases of Impeachment." The language of the clause explicitly sets forth the limits of the federal pardon power. First, the pardon power is limited to "Offences against the United States," which prevents the President from intruding upon state criminal or civil proceedings. Second, the pardon power does not extend to "Cases of Impeachment," which prevents the President from interfering with Congress's power to impeach. The establishment of the pardon power in the Constitution was derived from English custom and the view of the Framers that "there may be instances where, though a man offends against the letter of the law ... peculiar circumstances in his case may entitle him to mercy." Moreover, this power was properly vested in the President, according to Alexander Hamilton, as "it is not to be doubted that a single man of prudence and good sense, is better fitted, in delicate conjunctures, to balance the motives, which may plead for and against the remission of the punishment, than any numerous body whatever." In determining that the President should exercise the pardon power, the Framers further decided that minimal limitations should be placed on the power. For instance, the Framers rejected a proposal that the Senate have consent power over pardons, as well as Edmund Randolph's amendment that treason should be excepted from the pardon power. But for the limitations articulated in the Constitution, the President's authority to grant pardons for federal offenses is essentially unfettered. The clemency power conferred upon the President gives him "plenary authority ... to 'forgive' the convicted person in part or entirely, to reduce a penalty in terms of a specified number of years, or to alter it with conditions which are in themselves constitutionally unobjectionable." There are five specific types of clemency recognized under American law: (1) pardon; (2) amnesty; (3) commutation, or the substitution of a milder punishment for the one imposed by the court; (4) remission of criminal fines and forfeiture; and (5) reprieve or the temporary postponement of punishment. Pardon and amnesty are the broadest forms of clemency, and carry virtually identical effects under American law. Commutations are occasionally referred to as conditional pardons, but they do not have the same legal effect of a full pardon. As described by one court: "'Pardon' exempts from punishment, bears no relation to term of punishment and must be accepted or it is nugatory; while 'commutation' merely substitutes lighter for heavier punishment, removes no stain, restores no privilege, and may be effected without consent and against the will of the prisoner." With the exception of the section " How Pardons Are Granted ," which includes a discussion of standards for commuting sentences, this report discusses only full pardons, which may be unconditional or have conditions attached, as mentioned below. The Supreme Court has stated that the pardon power "may be exercised at any time after [the commission of an offense], either before legal proceedings are taken, or during their pendency, or after conviction and judgment." Indeed, Presidents have exercised the pardon power quite freely, granting pardons to specific offenders for a broad range of crimes, some of which may stem from a series of related events. For example, President Jefferson pardoned all those convicted under the Alien and Sedition Acts. Presidents Lincoln and Johnson, after the Civil War, granted amnesty to anyone who assisted the Confederacy, on the condition that such recipients voluntarily take an oath to uphold the Constitution. In the modern era, President Ford issued a pardon to President Nixon "for all offenses ... which he ... has committed or may have committed or taken part in," precluding any prosecution of President Nixon related to the Watergate Scandal. Likewise, President George H. W. Bush granted "full, complete, and unconditional pardons" to several high-ranking officials who had either pleaded guilty, been convicted, or were facing trial for having made false statements to Congress in relation to the Iran-Contra affair. As a practical aid to the consideration of requests for presidential clemency, the Office of the Pardon Attorney within the Department of Justice (DOJ) is charged with accepting and reviewing applications for clemency, and preparing recommendations as to the appropriate disposition of applications. DOJ has issued regulations that set forth the process for persons "seeking executive clemency by pardon, reprieve, commutation of sentence, or remission of fine." The regulations provide that a petition for a pardon should not be filed "until the expiration of a waiting period of at least five years after the date of the release of the petitioner from confinement or, in case no prison sentence was imposed, until the expiration of a period of at least five years after the date of the conviction." After a petition for executive clemency is received, the Pardon Attorney conducts an investigation by employing the services of appropriate governmental agencies such as the Federal Bureau of Investigation (FBI). Subsequently, the Pardon Attorney presents the petition and related material to the Attorney General via the Deputy Attorney General, along with a recommendation as to the proper disposition of the petition. From there, the Attorney General reviews the petition and all related information, and makes the final decision as to whether the petition merits approval or disapproval by the President. A written recommendation is submitted to the President. Notably, DOJ's regulations on considering pardon petitions do not appear to impose rigid restrictions on the Pardon Attorney, but, rather, are identified as being advisory in nature. Courts have stated that these regulations are "primarily intended for the internal guidance" of DOJ personnel. Moreover, the process established by the aforementioned regulations does not have any binding effect, does not create any legally enforceable rights in persons applying for clemency, and does not circumscribe the President's "plenary power under the Constitution to grant pardons and reprieves" to any individual he deems fit, irrespective of whether an application has been filed with the Office of the Pardon Attorney. DOJ has articulated its standards for reviewing pardon petitions. Factors taken into consideration include (1) post-conviction conduct, character, and reputation; (2) seriousness and relative recentness of the offense; (3) acceptance of responsibility, remorse and atonement; (4) need for relief; and (5) official recommendations and reports. With respect to reviewing petitions related to a commutation of sentence, DOJ's traditional position has been that it is an "extraordinary remedy that is rarely granted." Factors for commutation of sentence include "disparity or undue severity of sentence, critical illness or old age, and meritorious service rendered to the government by the petitioner, e.g., cooperation with investigative or prosecutive efforts that has not been adequately rewarded by other official action." Also taken into consideration is "the amount of time already served and the availability of other remedies (such as parole) are taken into account in deciding whether to recommend clemency." In April 2014, however, DOJ announced a new clemency initiative, where it announced six criteria the Department would consider when reviewing clemency applications for commutation of sentence. The Department announced that it would prioritize the clemency applications of federal inmates who meet the six factors. These factors are that the applicant (1) is currently serving a federal sentence in prison and, by operation of law, likely would have received a substantially lower sentence if convicted of the same offense(s) today; (2) is a nonviolent, low-level offender without significant ties to large-scale criminal organizations, gangs, or cartels; (3) has served at least 10 years of his or her prison sentence; (4) does not have a significant criminal history; (5) has demonstrated good conduct in prison; and (6) has no history of violence prior to or during his or her current term of imprisonment. An applicant who does not meet these criteria may still apply for commutation of sentence, but will be considered under the "standard principles" described above. Under this initiative, according to DOJ, President Obama appears to have received more petitions for commutation than his predecessors. For a pardon to become legally effective, it appears that a warrant of pardon must be physically delivered to the recipient. In United States v. Wilson , Chief Justice Marshall declared that a " pardon is a deed, to the validity of which delivery is essential, and delivery is not complete without acceptance." A recipient may reject the pardon , and if it is rejected, the court has no power to force it on him. Moreover, a pardon is a private act "and not officially communicated to the court." A warrant of pardon must be pleaded like any other private instrument before any court may take judicial notice thereof. The Court re emphasized the notion of delivery and acceptance in Burdick v. United States , where it upheld the petitioner's right to refuse a pardon and instead assert his constitutional right against self-incrimination. The Burdick Court stressed that it had already rejected the contention that pardons have automatic effect by their "mere issue , " and stated that the petitioner could refuse the pardon because i ts acceptance may involve "consequences of even greater disgrace than those from which it purports to relieve." Under the current DOJ regulations, a warrant of pardon is mailed to the petitioner. A warrant of pardon may also be revoked at any time prior to acceptance and delivery. In In re De Puy , a federal district court addressed a situation where a pardon issued by President Andrew Johnson on March 3, 1869, was revoked on March 6, 1869 , by incoming President Ulysses S. Grant. The court held that the pardon had been properly withdrawn, as it had not yet been delivered to the grantee, a person on his behalf, or to the official with exclusive custody and control over him. In an analogous situation, President George W. Bush sent a master warrant of clemency to the Pardon Attorney on December 23, 2008, for 19 individuals. One day later, the President "directed the Pardon Attorney not to execute and deliver" a pardon to one of the individuals, Isaac R. Toussie, a real estate developer who had ple a d ed guilty to mail fraud and using false documents to recei ve government-insured mortgages. It had been disclosed that Mr. Toussie's relatives had contributed significant sums of money to various politicians before his clemency petition was filed with the White House. Because Mr. Toussie's clemency application had only been reviewed and rec ommended by White House Counsel , the President directed that Mr. Toussie's application should be reviewed by the Pardon Attorney pursuant to the DOJ guidelines, discussed above, before making a decision on whether to grant clemency. The Supreme Court in the 19 th century had an expansive view of the nature and effect of a pardon. In Ex parte Garland , the Court, when considering the effect of a full pardon, stated the following: A pardon reaches both the punishment prescribed for the offence and the guilt of the offender; and when the pardon is full, it releases the punishment and blots out of existence the guilt, so that in the eye of the law the offender is as innocent as if he had never committed the offence. If granted before conviction, it prevents any of the penalties and disabilities consequent upon conviction from attaching; if granted after conviction, it removes the penalties and disabilities, and restores him to all civil rights; it makes him, as it were, a new man, and gives him a new credit and capacity. Despite this broad view, the Court stated that a pardon "does not restore offices forfeited, or property or interests vested in others in consequences of the conviction and judgment." The Court in Knote v. United States reiterated that a pardon " releases the offender from all disabilities [i]mposed by the offence, and restores to him all his civil rights. In contemplation of law, it so far blots out the offence, that afterwards it cannot be imputed to him to prevent the assertion of his legal rights." Since Garland and Knote , courts have consistently opined that a full par don restores basic civil rights such as the right to vote, serve on juries, and the right to work in certain professions. In other words, a pardon should generally remove any collateral consequences that may legally attach to a person as a result of the commission or conviction of the pardoned offense. However, as discussed below, the recipient of a pardon may still be unable to exercise certain rights or engage in certain activities , depending on the qualifications imposed under state or federal law. This may be due, in part, to the fact that the Court, in the 20 th century, appears to have backed away from its position in Garland , that a pardon wip es away the existence of guilt. In 1915, the Court, in Burdick v. United States , affirmed that the full pardon, had the petitioner accepted, would have "absolv[ed] him from the consequences of every such criminal act." In allowing the petitioner to refuse the pardon and instead assert his constitutional right against self-incrimination, the Burdick Court had acknowledged that a "confession of guilt [is] implied in the acceptance of a pardon." Similarly, in Carlesi v. New York , the Court concluded that a presidential pardon for a federal offense did not prevent the state from considering the pardoned offense under a state statute that permits enhanced sentencing upon the commission of a second offense. The Carlesi Court reasoned that the state's action "was not in any degree a punishment for the prior crime," and that the state's action could not be constitutionally void because it did not "destroy[] or circumscrib[e] the effect" of a presidential pardon. In 1974, the Court decided Schick v. Reed , in which it affirmed the President's authority to commute a sentence upon the condition that the prisoner not be paroled. The Court emphasized the President's plenary authority under the pardon power to reduce or alter a penalty, but the Court did not address whether such power includes erasing the underlying guilt or the conviction itself. At least one scholar has opined that these cases, from the early 20 th century to the present, demonstrate the Court's implicit shift away from its broad declaration in Garland regarding the effect of a pardon, now "suggest[ing] that a pardon does not wipe away all guilt from its recipient." Notably, Schick examined the commutation of a sentence, in which it may have been unnecessary for the Court to discuss whether the altered sentence erased the recipient's underlying guilt, as it may have been clear that the commutation did not. As one court noted, there are three prevailing views regarding the effect of a presidential pardon. The first view, following Garland , "holds that a pardon obliterates both conviction and guilt which places the offender in a position as if he or she had not committed the offense in the first place." The second view "is that the conviction is obliterated but guilt remains." In deciding the effect of pardons issued by the President or a state governor, many courts appear to adhere to this second view, as discussed below. The third view "is that neither the conviction nor guilt is obliterated." Two decisions stemming from the pardon of high-ranking officials involved in the Iran-Contra Affair illustrate the courts' adoption of the second, hybrid view of a pardon's effect. In In re North , the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) reviewed whether the recipient of a pardon, a former Central Intelligence Agency official, could claim attorneys' fees under the Ethics in Government Act. The act authorizes a court to award certain attorneys' fees incurred by the subject of an independent counsel investigation, but only if no indictment is brought against that person. The petitioner, citing Garland , argued that the full pardon he received from President George H.W. Bush entitled him to petition for attorneys' fees under the act, notwithstanding the return of an indictment against him during the investigation. The D.C. Circuit, noting that four Justices dissented in Garland , opined that the Court "implicitly rejected" the dictum in Garland when it decided Burdick , where it had "recognized that the acceptance of a pardon implies a confession of guilt." Applying Burdick , the D.C. Circuit concluded that "[b]ecause a pardon does not blot out guilt ..., one can conclude that a pardon does not blot out probable cause of guilt or expunge an indictment." Accordingly, the court held that a pardon did not nullify the indictment against the petitioner, thereby precluding his recovery of attorneys' fees under the act. A similar result was reached in In re Abrams , where the Court of Appeals for the District of Columbia, sitting en banc, reviewed whether the recipient of a pardon, a former official with the Department of State, could be disciplined under the District of Columbia Rules of Professional Conduct, which prohibit a lawyer from engaging in criminal acts of "dishonesty, fraud, deceit, or misrepresentation." The petitioner argued that Garland prevented the court "from considering the wrongful conduct in assessing his moral character for the purpose of bar discipline." The court, following "the virtually unanimous weight of authority," held that though the pardon set aside the petitioner's convictions and the consequences the law attached to his convictions, "it could not and did not require the court to close its eyes to the fact that Abrams did what he did." Accordingly, the court ordered the petitioner be publicly censured, as it determined that the commission of his pardoned offense could be used to assess his moral character. Though there may be underlying debate as to whether a pardon eliminates an individual's guilt for having committed the pardoned offense, courts generally agree that a full presidential pardon restores federal as well as state civil rights to remove consequences that legally attach as a result of a federal conviction (i.e., legal disabilities). For instance, if an individual is prevented under state and federal law from possessing a firearm due to a felony conviction, a full and unconditional pardon for the federal conviction would remove the firearm disability. Federal firearms laws, unlike other federal laws that impose collateral consequences upon conviction, specifically provide that a person shall not be considered a convicted felon for purposes of the statute if such person "has been pardoned or has had civil rights restored," unless the pardon, expungement, or restoration of civil rights expressly provides that one may not possess or receive firearms. It appears that only a handful of federal laws specifically address the effect of a pardon on one's eligibility. Yet such express provisions may not be warranted because of the long-standing principle, affirmed by the courts, that a pardon removes legal disabilities that attach as a result of one's conviction. Moreover, as discussed later, there appears to be no general federal statutory process whereby civil rights lost as a result of a federal conviction may be restored or "judicial records of an adult federal criminal conviction expunged." Therefore, a presidential pardon is essentially the only method for restoring rights under federal law, although eligibility may be regained after a defined passage of time, as discussed below. Nevertheless, the courts' reasoning in cases such as In re North and In re Abrams demonstrates that a pardon will not preclude a court or other entity from considering the pardoned offense for certain eligibility purposes, especially where an individual's character may be reflected by the mere commission of an offense (irrespective of whether there had been a conviction). For example, a federal court of appeals upheld the Commodity Futures Trading Commission's (CFTC's) denial of an individual's post-pardon application for registration as a floor broker. The court determined that the CFTC could consider the conduct underlying the pardoned conviction in ascertaining whether the applicant would be fit to act as a floor broker. In upholding the agency's action, the court also concluded that the CFTC's denial did not violate the pardon power because its action did not further punish the applicant based on his pardoned conviction alone. Likewise, federal law authorizes the Attorney General to consider past drug-related convictions as a factor in her decision to issue a license to a manufacturer of controlled substances. Were an applicant to receive a presidential pardon for a federal drug offense, the Attorney General still could consider the pardoned offense in issuing the license because its commission may be related to the applicant's suitability for the license. If the Attorney General denied a license, it is probable that this would not violate the pardon power because the denial likely would not be construed as a further punitive legal consequence that would have otherwise stemmed from the conviction of the pardoned offense. Along similar lines, courts have held that consideration of a pardoned offense for purposes of sentencing enhancement does not violate the pardon power because such use does not undermine the effect of that pardon, nor does it "constitute separate punishment for the pardoned conviction." Accordingly, even if the recipient of a pardon were to regain eligibility for a position or program from which he was originally barred due to his conviction, it is possible that he may still be disqualified if one's character is a necessary qualification for eligibility purposes. Given that many petitions for presidential pardons are denied, this section briefly discusses expungements and other avenues by which federal felons could potentially have some civil rights, affected by their federal criminal convictions restored absent a pardon. As discussed, a pardon recipient may still encounter hurdles when character is a factor of eligibility because a pardon does not eliminate underlying guilt or the commission of the offense itself. T he reason it is possible for a third party to know of and consider a pardon recipient's conviction is that, according to the Office of the Pardon Attorney, a presidential pardon "does not erase or expunge the records of a conviction." Rather, the Office of the Pardon Attorney notifies, among others, the FBI so that the pardoned individual's criminal history record will reflect the grant of a pardon. As such, the conviction for which one is pardoned, along with a notation of the pardon, will continue to be reported when a background check is conducted on the pardoned individual. The continued presence of a conviction on a person's record, notwithstanding a pardon, could still raise barriers with respect to such person's suitability. In the employment context, for example, the recipient of a pardon could face employment challenges in jurisdictions where employers are permitted to inquire into an applicant's criminal history. As a result of interpretations of the pardon power, it is possible that an employer could disqualify a person on the basis of her pardoned offense because the person's commission of the underlying offense may be considered a reflection of the applicant's character and suitability for the position. However, an expungement of one's records generally appears to go a step beyond the effect of a pardon and remove s the record of the conviction as well as the underlying guilt. Absent a pardon, s eeking an expungement may be an alternative method for poten tially re gaining civil rights or legal privileges lost as a result of a federal conviction , as an expungement would preclude the conviction from being reported on a background check and therefore potentially eliminate the barriers that a pardon recipient would face even after receiving a pardon. Notably, there may be some circumstances where an expungement of one's records may be the only way for a legal disability to be removed despite receiving a pardon. For instance, Utah provides the following: "A person who has been convicted of a felony which has not been expunged is not competent to serve as a juror." This provision appears to indicate that even if a person residing in Utah has received a pardon, he is still barred from serving as a juror unless he has obtained an expungement of his records. As discussed above, i t is generally acknowledged that a pardon does not compel an expungement of related criminal and judicial records. At least one fe deral court has addressed this issue, declaring: "[N] o proclamation of the executive has the power and authority ... to order expunction of court records under the aegis of restoring to the pardoned person 'full ... other rights.'" Unlike states, many of which outline the circumstances under which a person may petition for an expungement of records, there is no general federal statutory procedure addressing how a federal felon can seek an expungement. Moreover, the courts have described expunction as an extraordinary remedy. A former federal felon may be able to regain certain rights, such as the ability to vote or serve on a jury, under a state's process or laws addressing the restoration of rights. This will, however, likely vary from state to state because many state laws dealing with restoration of rights do not always expressly address how state legal disabilities that attach as a result of a federal offense may be regained, absent a federal pardon. For example, state laws determine voter qualifications for both federal and state elections, including the circumstances under which a felony conviction disqualifies a person from voting . Laws on voter qualifications range from those that impose no restriction on the right to vote--that is, permitting felons to vote from prison by absentee ballot--to those that impose permanent disenfranchisement, unless restored by executive pardon. The processes for restoring voting rights, absent a pardon, likewise vary by state, though several automatically restore voting rights upon completion of one's sentence. For example, Utah provides that a right to vote for a convicted state or federal felon is restored when (1) the felon is sentenced to probation; (2) the felon is granted parole; or (3) the felon has successfully completed the term of incarceration to which the felon was sentenced. State juror qualifications also vary by state, and the right to jury service is sometimes described as the most difficult right to regain. Many states generally indicate that a pardon will restore one's competency to be a juror. Absent a pardon, however, some states either permit ex-felons to serve on a jury upon completion of a sentence, either automatically or after a defined period of time, or require them to individually apply to the governor for restoration of rights. Notably, there are limited circumstances under federal law where a person may regain eligibility after a certain amount of time. For example, a student receiving a federal grant, loan, or work assistance under Title 20 of the United States Code will have his eligibility suspended if convicted under federal or state law for the possession or sale of a controlled substance. However, the suspension terminates and a student may regain eligibility after a prescribed amount of time if the student meets certain conditions, such as successful participation in a drug rehabilitation program. Alternatively, federal law sometimes permits an official to grant a waiver allowing a person to be eligible notwithstanding his disqualifying conviction. For example, individuals who have committed felonies are generally ineligible to enlist in the military, except that the Secretary of the affected branch "may authorize exceptions, in meritorious cases, for the enlistment of ... persons convicted of felonies." Under these circumstances, a person who would otherwise be prohibited from participation need not have a presidential pardon in order to regain eligibility. The Court has consistently held that the President's pardon power may not be circumscribed by Congress. In Garland , the Court held that the pardon power "is not subject to legislative control. Congress can neither limit the effect of his pardon, nor exclude from its exercise any class of offenders. The benign prerogative of mercy reposed in him cannot be fettered by any legislative restrictions." In United States v. Klein , the Court found unconstitutional a congressional provision that purported to limit the use and effect of the President's pardon. In finding that the congressional provision infringed on the President's pardon power, the Court stated: "[T] he legislature cannot change the effect of such a pardon any more than the executive can change a law." Likewise, the Court in Schick declared that the President's pardon power "flows from the Constitution alone, not any legislative enactments," and it "cannot be modified, abridged, or diminished by Congress." These judicial pronouncements appear to indicate that Congress can take no action that would limit the effect or use of a presidential pardon, nor can Congress direct how or when the President may exercise his pardon authority. Generally, Members of Congress have turned to introducing resolutions expressing the sense of Congress that the President either should or should not grant pardons to certain individuals or groups of individuals. It is unclear, however, whether a reviewing court would reach the same conclusion were Congress to pass a measure that expanded the effect of a presidential pardon. Notably, some states have passed legislation that clarifies the effect of a state pardon. Colorado, for example, provides the following: "A pardon issued by the governor shall waive all collateral consequences associated with each conviction for which the person received a pardon unless the pardon limits the scope of the pardon regarding collateral consequences." "Collateral consequences" are defined as "a penalty, prohibition, bar, disadvantage, or disqualification, however denominated, imposed on an individual as a result of the individual's conviction of an offense, which penalty, prohibition, bar, or disadvantage applies by operation of law regardless of whether the penalty, prohibition, bar, or disadvantage is included in the judgment or sentence." Similarly, Congress could enact a provision that reaffirms the existing principle that a presidential pardon restores civil rights and removes collateral consequences imposed under federal or state law as a result of a federal conviction, unless otherwise provided for by the pardon or by the state (with respect to state-imposed legal disabilities). However, if a congressional measure specified collateral consequences to be restored, this could be construed as limiting the effect of the pardon. By expressly reinstating some rights over others, a reviewing court could view such a measure as modifying or abridging the effect of a presidential pardon. Moreover, it may be possible for Congress to change the current judicial interpretation by providing that a presidential pardon erases both the underlying guilt and the existence of the federal offense itself. Although the issuance of a pardon does not automatically grant an expungement of criminal records, at least one federal court has noted: "The President's power, if any, to issue an order of expunction of a criminal record must stem from an act of Congress or from the Constitution itself." As it has done with simple drug possession, Congress could require, upon application of a presidential pardon recipient, a federal court to enter an expungement order. In this way, a pardon recipient could avoid the current hurdles he or she may face when a background check is conducted or when the commission of the offense itself may be used to evaluate such person's eligibility. Another possibility for Congress, without addressing the effect of a pardon, could be to mirror states that have passed so-called "ban the box" or "fair chance" legislation. Such measures remove the conviction history question on job applications, thereby preventing covered employers (either public or private) from considering one's criminal history until later in the hiring process. In November 2015, President Obama announced that he had directed the Office of Personnel Management (OPM) to "take action where it can by modifying its rules to delay inquiries into criminal history until later in the hiring process." OPM issued a proposed rule in May 2016 that would specify to federal agencies that "unless an exception has been requested by a hiring agency and granted by OPM, agencies cannot begin collecting background information unless the hiring agency has made a conditional offer of employment to an applicant." In the 114 th Congress, bills have been introduced that would prohibit federal agencies and federal contractors from requesting that an applicant disclose his or her criminal history record before receiving a conditional offer.

Article II of the U.S. Constitution vests the President with the power "to Grant Reprieves and Pardons for Offences against the United States, except in Cases of Impeachment." The President's pardon power, which derives from English custom, is an extraordinary remedy that is sought by many but received by few. The President may use his clemency authority only for criminal penalties, not civil. Moreover, he may use his clemency authority to pardon federal offenses but not state offenses. Typically, individuals receive either a pardon or a commutation of sentence, each of which is a type of executive clemency with different legal effects. The Department of Justice in 2014 announced a clemency initiative to prioritize the applications of federal inmates seeking a commutation of sentence, which has reportedly led to an influx of petitions. A commutation of sentence generally results in a reduced sentence, either totally or partially, but such individual will still likely face collateral consequences, that is post-sentence civil penalties or disqualifications that flow from a federal conviction. In contrast, a pardon is the President's forgiveness for commission of the offense, which removes civil disabilities and collateral consequences. However, given the evolution of jurisprudence on the President's pardon power, some recipients of a pardon may still face legal consequences from a criminal conviction despite receiving a pardon. This report reviews the text and jurisprudence of the Pardon Clause of the U.S. Constitution, as well as the types of pardons the clemency power includes, when pardons may be issued, and how pardons are granted. The remainder of the report analyzes the effect of a presidential pardon on collateral consequences. Also discussed in the report are some alternative ways in which a former federal felon may have his or her civil rights restored and certain legal disabilities removed absent a pardon. Lastly, the report covers what role, if any, Congress may play in defining the scope of the pardon power and its effect on collateral consequences.

State and federal governments have long regulated safety practices at chemical facilities because of the potential harm that a large, sudden release of hazardous chemicals could cause to nearby people. Even before the terrorist attacks of 2001, congressional policy makers expressed concern about the security vulnerabilities of these facilities, which historically engaged in security activities on a voluntary basis. After the 2001 attacks and the decision by several states to begin regulating security at chemical facilities, Congress again considered requiring federal security regulations to mitigate risks. In 2006, the 109 th Congress passed legislation providing the Department of Homeland Security (DHS) with statutory authority to regulate chemical facilities for security purposes. The statute explicitly identified some DHS authorities and left other aspects to the discretion of the Secretary of Homeland Security. The Secretary exercised that discretion when implementing this authority through regulations called the Chemical Facility Anti-Terrorism Standards (CFATS). The statute contains a "sunset provision" that causes the statutory authority to expire. Subsequent Congresses have extended the termination date of this authority to October 4, 2014. Advocacy groups, industry stakeholders, and policy makers have called for Congress to reauthorize this authority, though they disagree about the preferred approach. Members of Congress have introduced bills taking several different approaches to the issue of reauthorization in the current and previous Congresses. Congress may extend the existing authority, revise the existing authority to resolve potentially contentious issues, or allow the authority to lapse. In the 113 th Congress, Members have introduced several proposals in the House and the Senate that would extend the statutory termination date, modify the underlying statutory authority, or both. The House of Representatives passed H.R. 4007 , the Chemical Facility Anti-Terrorism Standards Program Authorization and Accountability Act of 2014, on July 8, 2014. The House Committee on Homeland Security had amended the bill as forwarded by its Subcommittee on Cybersecurity, Infrastructure Protection, and Security Technologies and reported it to the House of Representatives with a favorable recommendation, as amended. This report compares H.R. 4007 , as passed by the House, to the existing statutory authority. It provides a brief overview of H.R. 4007 , as passed by the House; identifies select differences for comparison; analyzes each section of H.R. 4007 , as passed by the House, in the context of the existing statutory authority; and discusses several policy issues raised by the Obama Administration in the context of chemical facility security legislation. H.R. 4007 has both similarities and differences with the existing statute. H.R. 4007 , as passed by the House, incorporates much of the language in the existing statutory authority. Consequently, its authorities would generally encompass the existing authorities, and its implementation by DHS may retain a similar regulatory structure. Indeed, the bill expressly would allow DHS to use existing CFATS regulations to implement its provisions. In contrast with the existing statute, H.R. 4007 , as passed by the House, would amend the Homeland Security Act of 2002 ( P.L. 107-296 , as amended). It would create a new title, Title XXI, called Chemical Facility Anti-Terrorism Standards. Another key difference between H.R. 4007 , as passed by the House, and the existing statute is the absence of a statutory termination date. The statutory authority would be permanent, though H.R. 4007 , as passed by the House, explicitly authorizes appropriations for three years. H.R. 4007 , as passed by the House, contains additional legislative language that would add to the Secretary's responsibilities. For example, H.R. 4007 , as passed by the House, would require certain outreach to chemical facilities, assistance to regulated small chemical facilities, and reporting by DHS and the Government Accountability Office (GAO) on program performance. Finally, H.R. 4007 , as passed by the House, would modify the discretion of the Secretary of Homeland Security in various areas. The Secretary's existing discretion to establish criteria for risk-based performance standards would be maintained. H.R. 4007 , as passed by the House, would limit the Secretary's discretion when it expressly requires DHS to accept alternative security programs with respect to site security plans, mandate specific approaches with respect to personnel surety, and restrict the Secretary's ability to require covered chemical facilities to submit information to DHS about personnel at the facility. Finally, H.R. 4007 , as passed by the House, would expand the discretion of the Secretary by no longer limiting application of the statutory authority to high-risk facilities. Some experts might argue that modifying the Secretary's discretion might lead to a less efficient regulatory program. Other experts might argue that the Secretary's discretion might need further modification in order to reflect congressional intent. Table 1 below highlights selected differences between H.R. 4007 , as passed by the House, and P.L. 109-295 , Section 550, as amended. For a fuller comparison of legislative text, see Table A-1 in the Appendix . This section of the report discusses each section of H.R. 4007 , as passed by the House, and provides policy analysis regarding selected provisions in the context of the existing statutory authority and CFATS regulation. For a direct comparison of the bill language and the existing statutory authority, see Table A-1 . H.R. 4007 , as passed by the House, contains three sections. Section 1 of H.R. 4007 , as passed by the House, contains the act's short title. The existing authority has no comparable provision. Section 2 of H.R. 4007 , as passed by the House, consists of amendments to the Homeland Security Act of 2002 and contains four subsections. Subsection 2(a) would create a new title, Title XXI, called Chemical Facility Anti-Terrorism Standards, in the Homeland Security Act. This new title would have ten sections as described below. Section 2101 of the new title has six subsections that are analyzed below. Subsection 2101(a) of the new title would establish a Chemical Facility Anti-Terrorism Standards Program and direct the Secretary to establish risk-based performance standards under that program. These standards would be designed to protect chemical facilities that the Secretary determines are either a "covered chemical facility" or a "chemical facility of interest" from acts of terrorism and other security risks. Later provisions would define a "chemical facility of interest" as a facility that holds certain chemicals above a certain quantity as determined by the Secretary and a "covered chemical facility" as a chemical facility of interest that the Secretary determines meets certain security risk criteria. This subsection would also require both chemical facilities of interest and covered chemical facilities to submit security vulnerability assessments and develop and implement site security plans. The existing statutory authority specifically directs the Secretary to issue regulations establishing risk-based performance standards for the security of chemical facilities. These regulations are to apply only to chemical facilities that the Secretary determines present high levels of security risk. The regulations are to require vulnerability assessments and the development and implementation of site security plans from these high-risk chemical facilities. The vulnerability assessment and site security plan requirements of Subsection 2101(a) of the new title would likely affect more chemical facilities than the existing statutory requirements. Under the current CFATS regulation, DHS does not require all chemical facilities with greater than screening threshold quantities of chemicals of interest to submit vulnerability assessments and site security plans. Only those facilities identified by DHS as high-risk must submit vulnerability assessments and site security plans. Approximately 36,000 facilities have reported possessing a chemical of interest above a screening threshold quantity, while DHS regulates approximately 4,000 of these facilities as high risk. The Subsection 2101(a) requirement that a chemical facility of interest must submit a vulnerability assessment and site security plan may lead to DHS receiving such documents from the approximately 36,000 facilities. Subsection 2101(b) of the new title would, like the existing statutory authority, allow a facility to use layered security measures in its site security plan to address the security vulnerability assessment and the risk-based performance standards. Subsection 2101(c) of the new title contains four provisions regarding approval and disapproval of site security plans. The first would, like the existing statute, require the Secretary to review and approve each security vulnerability assessment and site security plan and prohibit the Secretary from requiring the presence or absence of a particular security measure to obtain approval. The Secretary would be allowed to disapprove a site security plan that fails to satisfy the risk-based performance standards. The second provision would allow the Secretary to approve alternative private or governmental security programs that meet the Secretary's requirements. This provision would also explicitly allow a covered chemical facility to meet the site security plan requirement by adopting an alternative security program reviewed and approved by the Secretary. The existing statute permits the Secretary to approve an alternative security program, but does not provide explicit approval for a facility to use such a program to meet the site security plan requirement. The current CFATS regulation allows all regulated entities to meet the site security planning requirement through submission of an alternative security program. Consequently, some analysts may view this language as making the current regulatory approach explicit in statute. The third provision would require the Secretary to employ risk assessment policies and procedures developed under the new title when approving or disapproving a site security plan. However, it would prohibit the Secretary from requiring resubmission of site security information from a covered chemical facility that had received approval prior to the enactment of the new title, if the sole reason for resubmission was that enactment. The fourth provision would allow DHS to consult with GAO regarding the applicability of a third-party accreditation program. This provision is not present in the current statute. Subsection 2101(d) of the new title addresses compliance and contains five provisions. The first provision addresses audits and inspections. Like the existing statute, it requires the Secretary to audit and inspect covered chemical facilities. It differs from the existing statute in that it would expressly allow the Secretary to use non-DHS and nongovernmental inspectors in the inspection process. This subsection would also establish a reporting structure and certain standards and requirements for non-DHS and nongovernmental personnel who conduct such audits or inspections. In addition, it would require the Secretary to prescribe certain standards for training and retraining of auditors and inspectors employed by DHS. In 2007, during comment on the CFATS interim final rule, some stakeholders expressed concerns about DHS use of third-party inspectors. As described by DHS, these concerns included: potential conflicts of interest among third-party inspectors and members of the regulated community; potential disclosure of facility business and security information; potential inconsistency in training and inspection standards between federal and third-party inspectors; and the need for DHS to establish necessary qualifications, certification, and indemnification for third-party inspectors. Also, some stakeholders asserted that DHS might increase the rate of site security plan approvals through the use of third-party inspectors. The DHS itself raised questions about the appropriateness of DHS use of third-party auditors and if so, what their standards and requirements would be. The express authorization for DHS to use and set standards for non-DHS and nongovernmental inspectors as included in Subsection 2101(d) would likely resolve DHS questions regarding appropriateness of use and establishment of standards. The second provision in Subsection 2101(d) addresses noncompliance by a covered chemical facility. Like the existing statute, it would require the Secretary, upon discovering noncompliance, to provide the owner or operator of the facility with written notification, including an explanation of any deficiency; provide opportunity for consultation; and issue an order to comply by a specified date. If noncompliance continues, the Secretary would be allowed to issue an order for the facility to cease operation. Unlike the existing statute, this provision would require that written notification must occur no later than 14 days after a determination of noncompliance; would direct that consultation following a written notification of a facility be with "the Secretary or the Secretary's designee"; and would allow the Secretary to issue an order to cease operation only if noncompliance exists "after the date specified" in such an order to comply. The existing statute only requires written notification and identification of an opportunity for unspecified consultation. It does not expressly limit the Secretary's ability to issue an order to cease operation. It instead states that such an order may be issued in the case of an owner or operator continuing to be noncompliant. The third provision, which has no comparable provision in the existing statute, addresses personnel surety. It would direct the Secretary to establish a personnel surety program that would require submission of information only once, provide participating facilities with feedback about individuals submitted for vetting, and provide redress to individuals who believe the submitted information was inaccurate. It would allow a covered chemical facility to use any federal screening program that periodically vets individuals against the terrorist screening database to satisfy its obligation under a personnel surety performance standard. It would prohibit the Secretary from requiring a covered chemical facility to submit any information about an individual unless the individual is vetted under the DHS personnel surety program (in contrast to another federal screening program) or has been identified by the Secretary as presenting a terrorism security risk. Finally, it would require the DHS Security Screening Coordination Office to expedite the development of a common credential and would require DHS to report annually on progress toward this requirement. The use of other federal screening programs to meet a CFATS personnel surety requirement has been an issue of contention. The DHS has issued an information collection request proposing a personnel surety program. The personnel surety proposal issued by DHS would accept credentials that are vetted recurrently against the terrorist screening database and have their validity verified on a continuing basis by electronic or other means. The DHS has stated that it would not accept, in lieu of its own program, other personnel surety programs that vet individuals on a different schedule. This position would appear to conflict with the requirements in Subsection 2101(d). The fourth provision of the subsection addresses facility access. It would generally prohibit the Secretary from requiring a facility to submit any information about an individual who has been granted facility access. The DHS may require information submission only if DHS has vetted the individual under its personnel surety program or identified the individual as presenting a terrorism security risk. The DHS, under its proposed personnel surety program information collection request, would require facilities to submit information on personnel with access to the regulated areas of a facility. This submission would generally be regardless of credential possession, unless the facility installs electronic readers able to query an approved credential. Facilities would submit different information for individuals with recurrently vetted credentials than for other individuals. This provision would appear to prohibit a requirement to submit this information to DHS to obtain access to a facility. The fifth provision is not present in the current statutory authority. This provision would require the Secretary to share with the owner or operator of a covered chemical facility such information as the owner or operator needs to comply with Section 2101. The provision may raise questions such as whether the Secretary or the owner or operator determines what information is needed, how such information should be protected, and how such information should be requested and provided. This provision also affirmatively requires the Secretary to share information with owners or operators. A later provision that addresses information sharing with states and local government does not make such an affirmative requirement, but rather permits the Secretary to share as the Secretary deems appropriate. Subsection 2101(e) of the new title identifies certain responsibilities of the Secretary and contains three provisions: one on identifying chemical facilities of interest, one on risk assessment, and one on changes in facility tiering. None of these provisions are present in the existing statutory authority. The first provision would require the Secretary to consult with the heads of other federal agencies, states and political subdivisions thereof, and relevant business associations to identify all chemical facilities of interest. The second would require the Secretary to develop a risk assessment approach and corresponding tiering methodology incorporating all relevant elements of risk, including threat, vulnerability, and consequence. It would further require that the criteria for determining a facility's security risk include the relevant threat information, the potential economic consequences of a terrorism incident at the facility and the potential loss of human life, and the vulnerability of the facility to certain terrorist events. The third would require the Secretary to maintain records that reflect the basis for any determination that a facility is no longer subject to the regulatory requirements due to a change in risk tier. In addition to the basis for the determination, the records would include how that basis was confirmed by the Secretary. Subsection 2101(f) of the new title would define certain terms. It would define a "covered chemical facility" as a chemical facility of interest that the Secretary determines meets certain security risk criteria. This subsection would exempt from the definition of "covered chemical facility" those facilities regulated under the Maritime Transportation Security Act of 2002 (MTSA), public water systems as defined by Section 1401 of the Safe Drinking Water Act, wastewater treatment works as defined in Section 212 of the Federal Water Pollution Control Act, any facility owned or operated by the Department of Defense or the Department of Energy, and any facility subject to regulation by the Nuclear Regulatory Commission. The existing statute exempts facilities of these types from all regulation under the statute. It would define a "chemical facility of interest" as a facility that holds certain chemicals above a certain quantity determined by the Secretary. No types of facility are exempt from the definition of "chemical facility of interest." The existing statute does not contain a similar definition. The presence of exemptions to the definition of "covered chemical facility" but not to the definition of "chemical facility of interest" may have certain impacts. Facilities of the types exempt from the definition of covered chemical facility may have to meet requirements applying to both chemical facilities of interest and covered chemical facilities, such as those found in Subsection 2101(a) of the new title. Requirements established for chemical facilities of interest may apply to those facilities even though they are exempt from further requirements applying to covered chemical facilities. Section 2102 of the new title has four provisions addressing protection and sharing of information. Three are similar to existing statutory authority. Subsection 2102(a) of the new title would protect information developed pursuant to the act from disclosure in a manner consistent with that established under MTSA. Subsection 2102(b) of the new title would allow for the sharing of information with state and local government officials, including law enforcement officials and first responders, who possess the necessary security clearances. Subsection 2102(d) of the new title would direct that in any enforcement proceeding, information submitted to or obtained by the Secretary shall be treated as if the information were classified material. These provisions in the existing statutory authority form the basis for DHS's designation of Chemical-terrorism Vulnerability Information (CVI). While Subsection 2102(a) and Subsection 2102(b) reference "information developed pursuant to this title," Subsection 2102(d) of the new title refers to proceedings and information "under this section." This reference, rather than "under this title," may limit the applicability and effectiveness of Subsection 2102(d), since Section 2102 addresses information sharing rather than the program as a whole. The equivalent language in P.L. 109-295 , Section 550, also states "under this section," but it applies to the entire existing statutory authority, since that is fully contained in Section 550. Subsection 2102(c) of the new title is not present in the existing statutory authority. It would require the Secretary to provide such information as is necessary to help ensure that first responders are prepared and provided with the situational awareness they need to respond to incidents at covered chemical facilities. It would require this information to be provided to state, local, and regional fusion centers and disseminated through the Homeland Security Information Network or the Homeland Security Data Network, as appropriate. Section 2103 of the new title contains two provisions on civil penalties, both of which are in the existing statutory authority. As under the existing statute, Subsection 2103(a) of the new title would establish a civil penalty of not more than $25,000 per day of violation. Also as under the existing statute, Subsection 2103(b) of the new title would deny any person except the Secretary a right of action to enforce any provision of the new title against an owner or operator of a covered chemical facility. Section 2104 of the new title would require the Secretary to publish on the DHS website, and in other publicly available materials, the protections that attach to an individual who provides DHS with "whistleblower" information about covered chemical facilities. The current statutory authority contains no comparable provision. Section 2105 of the new title contains three provisions addressing the relationship of the new title to other laws. Two of the provisions are present in the current statutory authority. Subsection 2105(a) of the new title would affirm that nothing in that title shall be construed to supersede, amend, alter, or affect any federal law that regulates the manufacture, distribution in commerce, use, sale, other treatment, or disposal of chemical substances or mixtures. Subsection 2105(b) of the new title would affirm that it would not preclude a state or political subdivision of a state from establishing more stringent requirements for covered chemical facilities unless an actual conflict exists. As in Section 2102 of the new title, this latter provision refers to standards "issued under this section" and "actual conflict between this Section and the law of that State" rather than referencing the new title as a whole. The third provision, Subsection 2105(c) of the new title, would require the Secretary to coordinate with the Assistant Secretary of Homeland Security (Transportation Security Administration) to "eliminate any provision of this title applicable to rail security" that would duplicate a security measure under 49 C.F.R. 1580. It also would clarify that in the case of a conflict between regulations established under the new title and those under the jurisdiction of TSA, the TSA regulation prevails. In addition, it would exempt rail transit facilities and rail facilities regulated under Subpart 3 of 49 C.F.R. 1580 (this likely refers to Subpart B of 49 C.F.R. 1580, which addresses rail cargo transportation security) from any requirement to submit Top-Screen information. This would create another statutory exemption from CFATS regulation. Currently, DHS does not require railroad facilities to submit Top-Screen information in order for DHS to determine their security risk under CFATS. Consequently, some analysts may view this language as making the current regulatory approach explicit in statute. Section 2106 of the new title contains two provisions that would create reporting requirements. These reporting requirements are not present in the current statutory authority. Subsection 2106(a) of the new title would require the Secretary to submit to Congress, no later than 18 months after enactment, a report on the CFATS program. The report would include a certification by the Secretary of significant progress in identifying all chemical facilities of interest, a description of the steps taken to achieve such progress, and the metrics used to measure it. The report would also include a certification by the Secretary that he or she has developed a risk assessment approach and corresponding tiering methodology as directed by Section 2101 of the new title. Finally, the report would require the Secretary to assess the implementation of any recommendations made by the Homeland Security Studies and Analysis Institute as outlined in the Institute's "Tiering Methodology Peer Review" (Publication Number: RP12-22-02). Subsection 2106(b) of the new title would require the Comptroller General (i.e., the Government Accountability Office) to submit a report to Congress every six months assessing the act's implementation, starting 180 days after the date of enactment. This reporting requirement would expire three years after enactment. Section 2107 of the new title addresses the issuance and use of regulations to implement the new title and contains four provisions. Subsection 2107(a) would authorize the Secretary to promulgate regulations. Subsection 2107(b) would authorize the Secretary to promulgate or amend any CFATS regulation already in effect to carry out the requirements of the new title. Subsection 2107(c) would define "CFATS regulations" as guidance published or regulations promulgated under the existing authority granted by Section 550 of P.L. 109-295 . Subsection 2107(d) would require the Secretary to rely exclusively on the authority provided in the new title for identifying chemicals of interest, designating chemicals of interest, and determining a chemical facility's security risk. The existing statute states that regulations issued under Section 550 of P.L. 109-295 shall apply until expressly superseded. Section 2108 of the new title would allow the Secretary to provide guidance and tools to small covered chemical facilities to assist in developing their physical security. It would define a small covered chemical facility as a covered chemical facility that employs fewer than 350 employees at the covered chemical facility, and is not a branch or subsidiary of another entity. The Secretary would be required to submit a report to Congress on best practices that may assist small chemical facilities in developing physical security best practices. This report would be delivered to the House Committee on Homeland Security and the Senate Committee on Homeland Security and Governmental Affairs. The existing statute contains no comparable provision. Section 2109 of the new title addresses outreach to chemical facilities of interest. It would require the Secretary to coordinate with relevant business associations and federal and state agencies to establish an outreach implementation plan within 90 days of enactment. This implementation plan would be to identify chemical facilities of interest and make available compliance assistance materials and information on education and training. The existing statute contains no comparable provision. Section 2110 of the new title would authorize appropriations to carry out the new title for FY2015 through FY2017 at the level of $81 million per year. The existing statute contains no express authorization of appropriations. For FY2015, the Administration requested $87.436 million for the Infrastructure Security Compliance Division, which implements CFATS. For FY2014, the 113 th Congress provided $81 million. Subsection 2(b) of H.R. 4007 , as passed by the House, would amend the table of contents of the Homeland Security Act to reflect the addition of the new title. Subsection 2(c) of H.R. 4007 , as passed by the House, would require the Secretary to commission a third-party study to assess vulnerabilities to acts of terrorism associated with the current CFATS program authorized under P.L. 109-295 , Section 550. Subsection 2(d) of H.R. 4007 , as passed by the House, would require the Secretary to submit a plan for using metrics to assess CFATS program effectiveness. This plan would include benchmarks for DHS use of the metrics and information on how DHS plans to use such information for program analysis. The plan would be due 180 days after enactment. Section 3 of H.R. 4007 , as passed by the House, would establish that the act would take effect 30 days after enactment. Executive branch agencies have raised several issues with regard to chemical facility security in testimony or in official reports. H.R. 4007 , as passed the House, addresses some of these issues directly. This section does not attempt to discuss these issues in the broader policy context, but instead compares them with action taken in the context of H.R. 4007 , as passed by the House. For more information on these issues, including discussion of various policy alternatives, see CRS Report R42918, Chemical Facility Security: Issues and Options for the 113 th Congress , by [author name scrubbed]. Previous debate on chemical facility security has included whether to mandate the adoption or consideration of changes in chemical processes to reduce the potential consequences following a successful attack on a chemical facility. Suggestions for such changes have included reducing the amount of chemical stored onsite and changing the chemicals used. In previous congressional debate, these approaches have been referred to as inherently safer technologies or methods to reduce the consequences of a terrorist attack. In 2010, the Obama Administration expressed its position on the use of inherently safer technologies to enhance security at high-risk chemical facilities in some circumstances. It established a series of principles directing its policy: The Administration supports consistency of inherently safer technology approaches for facilities regardless of sector. The Administration believes that all high-risk chemical facilities, Tiers 1-4, should assess [inherently safer technology] methods and report the assessment in the facilities' site security plans. Further, the appropriate regulatory entity should have the authority to require facilities posing the highest degree of risk (Tiers 1 and 2) to implement inherently safer technology methods if such methods demonstrably enhance overall security, are determined to be feasible, and, in the case of water sector facilities, consider public health and environmental requirements. The Administration believes that the appropriate regulatory entity should review the inherently safer technology assessment contained in the site security plan for all Tier 3 and Tier 4 facilities. The entity should be authorized to provide recommendations on implementing inherently safer technologies, but it would not have the authority to require facilities to implement the inherently safer technology methods. The Administration believes that flexibility and staggered implementation would be required in implementing this new inherently safer technology policy. H.R. 4007 , as passed by the House, maintains the existing statutory language that prohibits the Secretary from disapproving a site security plan based on the presence or absence of a particular security measure. The DHS has interpreted this statutory language as prohibiting it from requiring consideration or implementation of inherently safer technologies. While the Obama Administration FY2015 budget request seeks an extension of the statutory authority until October 4, 2015, the Obama Administration has also supported enacting a longer or permanent statutory authority. In response to Executive Order 13650, Improving Chemical Facility Safety and Security , the Administration established a multi-agency Chemical Facility Safety and Security Working Group co-chaired by the Department of Homeland Security, Environmental Protection Agency, and Department of Labor. In May 2014, the working group issued a report to the President that called for congressional action to provide permanent statutory authorization for the CFATS program. H.R. 4007 , as passed by the House, lacks a statutory termination date and would provide a permanent statutory authorization. It also provides a three-year authorization of appropriations through FY2017. The report of the Chemical Facility Safety and Security Working Group established in response to Executive Order 13650 also called for congressional action to change the CFATS enforcement process. The report notes that the current statute requires a multi-step enforcement process before DHS can fine or shut down a facility for noncompliance. It asserts that the ability to immediately issue orders to assess civil penalties or to close down a facility for violations, without having to first issue an order calling for correction of the violation, is an important ability that DHS lacks. The report states, "Congress should provide this streamlined enforcement authority so that, in circumstances in which a facility's noncompliance presents an immediate threat, DHS can act quickly to safeguard the facility and protect the public from potential acts of terrorism." H.R. 4007 , as passed by the House, would retain the existing statute's general enforcement structure, which requires that the Secretary provide the facility owner or operator with written notification, an opportunity for consultation, and issue an order to comply by a specific date before issuing an order for civil penalty or to cease operation. Since 2008, DHS and the Environmental Protection Agency (EPA) have called for additional authorities to regulate water and wastewater treatment facilities: The Department of Homeland Security and the Environmental Protection Agency believe that there is an important gap in the framework for regulating the security of chemicals at water and wastewater treatment facilities in the United States. The authority for regulating the chemical industry purposefully excludes from its coverage water and wastewater treatment facilities. We need to work with the Congress to close this gap in the chemical security authorities in order to secure chemicals of interest at these facilities and protect the communities they serve. Water and wastewater treatment facilities that are determined to be high-risk due to the presence of chemicals of interest should be regulated for security in a manner that is consistent with the CFATS risk and performance-based framework while also recognizing the unique public health and environmental requirements and responsibilities of such facilities. In 2010, EPA testified that the Obama Administration believes that EPA should be the lead agency for chemical security for both drinking water and wastewater systems, with DHS supporting EPA's efforts. In contrast, the May 2014 report to the President by the Chemical Facility Safety and Security Working Group called for action from Congress to remove the exemption for water and wastewater treatment facilities. According to the report, DHS could then regulate security at these facilities in collaboration with the EPA. H.R. 4007 , as passed by the House, would exempt water and wastewater treatment facilities from the definition of covered chemical facility. According to the House report accompanying H.R. 4007 , as passed the House: The Committee did not alter these exemptions from Sec. 550. First required by Congress to do vulnerability assessments and emergency response plans in 2002 under the Public Health Security and Bioterrorism Preparedness and Response Act (Safe Drinking Water Act Sections 1433-1435), drinking water facilities are covered under a mature regulatory scheme that is working well. Moreover, according to the DHS Inspector General, the United States contains approximately 52,000 community water systems and 16,500 wastewater treatment facilities. Thus, although some have called for a removal of these exemptions, the Committee believes that to expand the CFATS mission to cover an additional 70,000 facilities--at precisely the time when the program is working to successfully manage its basic responsibilities--would be misguided. Therefore, DHS would not have authority to regulate public water systems, as defined by Section 1401 of the Safe Drinking Water Act, and wastewater treatment works, as defined in Section 212 of the Federal Water Pollution Control Act, as covered chemical facilities.

The 109th Congress provided the Department of Homeland Security (DHS) with statutory authority to regulate chemical facilities for security purposes through Section 550 of the Department of Homeland Security Appropriations Act, 2007 (P.L. 109-295). This statutory authority contains a termination date, after which the statutory authority expires. The current termination date is October 4, 2014. Subsequent Congresses have attempted to provide a new authorization for the current statutory authority, which DHS implements through the Chemical Facility Anti-Terrorism Standards (CFATS). In the 113th Congress, several bills have been introduced in the House of Representatives and the Senate. One, H.R. 4007, has passed the House. H.R. 4007, as passed by the House, incorporates much of the language in the existing statute. Consequently, its authorities would generally encompass the existing authorities, and its implementation by DHS may retain a similar regulatory structure. Indeed, the bill expressly would allow DHS to use existing CFATS regulations to implement its provisions. Unlike the existing statute, H.R. 4007, as passed by the House, would amend the Homeland Security Act of 2002 (P.L. 107-296, as amended). It would create a new title, Title XXI, called Chemical Facility Anti-Terrorism Standards. Another key difference between H.R. 4007, as passed by the House, and the existing statute is the absence of a termination date for the statutory authority. The statutory authority would be permanent, though H.R. 4007, as passed by the House, includes a limited three-year authorization of appropriations. Other provisions in H.R. 4007, as passed by the House, would add to the Secretary's responsibilities. For example, H.R. 4007, as passed by the House, would require certain outreach to chemical facilities, assistance to regulated small chemical facilities, and reporting by DHS and the Government Accountability Office (GAO) on program performance. Finally, H.R. 4007, as passed by the House, would modify the discretion of the Secretary of Homeland Security in various areas. The Secretary's existing discretion to establish criteria for risk-based performance standards would be maintained. H.R. 4007, as passed by the House, would limit the Secretary's discretion when it expressly requires DHS to accept alternative security programs with respect to site security plans, mandate specific approaches with respect to personnel surety, and restrict the Secretary's ability to require covered chemical facilities to submit information to DHS about personnel entering the facility. H.R. 4007, as passed by the House, would expand the discretion of the Secretary by no longer limiting application of the statutory authority to high-risk facilities. Some experts might argue that modifying the Secretary's discretion might lead to a less efficient regulatory program. Other experts might argue that the Secretary's discretion might need further modification in order to reflect congressional intent.

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 Group of Twenty, or G-20, is a forum for advancing international economic cooperation and coordination among 20 major advanced and emerging-market economies. Originally established in 1999, the G-20 rose to prominence during the global financial crisis of 2008-2009. It is now considered to be the premier forum for international economic cooperation, a position in effect held for decades following World War II by a smaller group of advanced economies (the Group of 7, or G-7). G-20 countries account for about 85% of global economic output, 75% of world exports, and two-thirds of the world's population. The G-20 leaders meet annually, and meetings among lower-level officials are held throughout the year. The G-20's focus is generally on financial and economic issues and policies, although in recent years, the G-20 has also increasingly become a forum for discussing pressing foreign policy issues. The 2017 G-20 summit was unusually contentious, with the United States at odds with other G-20 countries on trade and climate change. Argentina is chairing the G-20 in 2018 and hosting the annual summit on October 4-5 in Buenos Aires. Argentina's theme is "building consensus for fair and sustainable development." Congress exercises oversight over the Administration's participation in the G-20, including the policy commitments that the Administration is making in the G-20 and the policies it is encouraging other G-20 countries to pursue. Additionally, legislative action may be required to implement certain commitments made by the Administration in the G-20 process. This report analyzes why countries coordinate economic policies and the historical origins of the G-20; how the G-20 operates; major highlights from previous G-20 summits, plus an overview of the agenda for the next G-20 summit; and debates about the U.S. role in the G-20 and its effectiveness as a forum for economic cooperation and coordination. Since World War II, governments have created and used formal international institutions and more informal forums to discuss and coordinate economic policies. As economic integration has increased over the past 30 years, however, international economic policy coordination has become even more active and significant. Globalization may bring economic benefits, but it also means that a country's economy can be affected by the economic policy decisions of other governments. These effects may not always be positive. For example, if one country devalues its currency or restricts imports in an attempt to reverse a trade deficit, another country's exports may decline. Instead of countries unilaterally implementing these "beggar-thy-neighbor" policies, some say they may be better off coordinating to refrain from such negative outcomes. Another reason countries may want to coordinate policies is that some economic policies, like fiscal stimulus, are more effective in open economies when countries implement them together. Governments use a mix of formal international institutions and international economic forums to coordinate economic policies. Formal institutions, such as the International Monetary Fund (IMF), the Organisation for Economic Co-operation and Development (OECD), the World Bank, and the World Trade Organization (WTO), are typically formed by an official international agreement and have a permanent office with staff performing ongoing tasks. Governments have also relied on more informal forums for economic discussions, such as the G-7, the G-20, and the Paris Club. These economic forums do not have formal rules or a permanent staff. Prior to the global financial crisis of 2008-2009, international economic discussions at the top leadership level primarily took place among a small group of developed industrialized economies. Beginning in the mid-1970s, leaders from a group of five developed countries--France, Germany, Japan, the United Kingdom, and the United States--began to meet annually to discuss international economic challenges, including the oil shocks and the collapse of the Bretton Woods system of fixed exchange rates. This group, called the Group of Five, or G-5, was broadened to include Canada and Italy, and the Group of Seven, or G-7, formally superseded the G-5 in the mid-1980s. In 1998, Russia also joined, creating the G-8. Russia did not usually participate in discussions on international economic policy, which continued to occur mainly at the G-7 level. Meetings among finance ministers and central bank governors typically preceded the summit meetings. Macroeconomic policies discussed in the G-7 context included exchange rates, balance of payments, globalization, trade, and economic relations with developing countries. Over time, the G-7's, and subsequently the G-8's, focus on macroeconomic policy coordination expanded to include a variety of other global and transnational issues, such as the environment, crime, drugs, AIDS, and terrorism. Although emerging economies became more active in the international economy, particularly in financial markets, starting in the early 1990s, this was not reflected in the international financial architecture until the Asian financial crisis in 1997-1998. The Asian financial crisis demonstrated that problems in the financial markets of emerging-market countries can have serious spillover effects on financial markets in developed countries, making emerging markets too important to exclude from discussions on economic and financial issues. The G-20 was established in late 1999 as a permanent international economic forum for encouraging coordination between advanced and emerging economies. However, the G-20 was a secondary forum to the G-7 and G-8; the G-20 convened finance ministers and central bank governors, while the G-8 also convened meetings among leaders, in addition to finance ministers. Emerging markets were also granted more sway in international economic discussions when the G-8 partly opened its door to them in 2005. The United Kingdom's Prime Minister Tony Blair invited five emerging economies--China, Brazil, India, Mexico, and South Africa--to participate in G-8 discussions but not as full participants (the "G-8 +5"). The presence of emerging-market countries gave them some input in the meetings but they were clearly not treated as full G-8 members. Brazil's finance minister is reported to have complained that developing nations were invited to G-8 meetings "only to take part in the coffee breaks." It is only with the outbreak of the global financial crisis in fall 2008 that emerging markets have been invited as full participants to international economic discussions at the highest (leader) level. There are different explanations for why the shift from the G-7 to the G-20 occurred. Some emphasize recognition by the leaders of developed countries that emerging markets have become sizable players in the international economy and are simply "too important to bar from the room." Others suggest that the transition from the G-7 to the G-20 was driven by the negotiating strategies of European and U.S. leaders. It is reported that France's president, Nicolas Sarkozy, and Britain's prime minister, [author name scrubbed], pushed for a G-20 summit, rather than a G-8 summit, to discuss the economic crisis in order to dilute perceived U.S. dominance over the forum, as well as to "show up America and strut their stuff on the international stage." Likewise, it is reported that President George W. Bush also preferred a G-20 summit in order to balance the strong European presence in the G-8 meetings. Some attribute the G-20's staying power to the political difficulties of reverting back to the G-7 after having convened the G-20 leaders. The G-20 meetings among heads of state, or "summits," are the focal points of the G-20 discussions. Starting in 2011, the G-20 leaders began convening annually, although various lower-level officials meet frequently before the summits to begin negotiations and after the summits to discuss the logistical and technical details of implementing the agreements announced at the summits. Specifically, the G-20 finance ministers and central bank governors meet several times a year, and other ministers may also be called to meet at the request of the G-20 leaders. In addition, there are meetings among the leaders' personal representatives, known as "sherpas." Overall, the G-20 process has led to the creation of a complex set of interactions among many different levels of G-20 government officials. Some argue that the high frequency of interactions is conducive to forming open communication channels, while others argue that the G-20 process has created undue administrative burden on the national agencies tasked with implanting and managing their countries' participation in the G-20 process. Within the U.S. government, the Department of the Treasury is the lead agency in coordinating U.S. participation in the G-20 process. However, the G-20 works on a variety of issues, and the Department of the Treasury works closely with other U.S. agencies in the G-20 process, including the Federal Reserve, the State Department, the U.S. Agency for International Development, and the Department of Energy. The White House, particularly through the National Security Council and the U.S. Trade Representative, is also heavily involved in the G-20 planning process. The U.S. sherpa is the Deputy National Security Advisor for International Economic Affairs, a position recently held by Everett Eissenstat. Unlike formal international institutions, such as the United Nations and the World Bank, the G-20 does not have a permanent headquarters or staff. Instead, each year, a G-20 member country serves as the chair of the G-20. The chair hosts many of the meetings, and is able to shape the year's focus or agenda. The chair also establishes a temporary office that is responsible for the group's secretarial, clerical, and administrative affairs, known as the temporary "secretariat." The secretariat also coordinates the G-20's various meetings for the duration of its term as chair and typically posts details of the G-20's meetings and work program on the G-20's website. The chair rotates among members and is selected from a different region each year. Table 1 lists the G-20 chairs since 1999, as well as the countries scheduled to chair the G-20 through 2020. The United States has never officially chaired the G-20, although the United States did host G-20 summits in 2008 and 2009 during the height of the global financial crisis. In addition to the G-20 members, some countries attended the G-20 summits at the invitation of the country chairing the G-20. In 2010, the G-20 formalized the participation of five non-G-20 members at the leaders' summit, of which at least two would be African countries. Several regional organizations and international organizations also attend G-20 summits. For example, official participants typically have included representatives from the European Commission; the European Council; the International Labour Organization (ILO); the International Monetary Fund (IMF); the Organisation for Economic Co-operation and Development (OECD); the United Nations (U.N.); the World Bank; and the World Trade Organization (WTO). All agreements, comments, recommendations, and policy reforms reached by the G-20 finance ministers, central bankers, and leaders are done so by consensus. There is no formal voting system as in some formal international economic institutions, like the IMF. Participation in the G-20 meetings is restricted to members and invited participants and is not open to the public. After each meeting, however, the G-20 publishes online the agreements reached among members, typically as communiques or declarations. The G-20 does not have a way to enforce implementation of the agreements reached by the G-20 at the national level beyond moral suasion; the G-20 has no formal enforcement mechanism and the commitments are nonbinding. This contrasts with the World Trade Organization (WTO), for example, which does have formal enforcement mechanisms in place. The G-20 summits are the key meetings where major G-20 policy commitments are typically announced. The types of commitments or agreements reached at the G-20 summits have evolved as global economic conditions have changed, from the pressing height of the global financial crisis, to signs of recovery amid high unemployment in some advanced economies, to concerns about the Eurozone crisis. In addition, as the pressing nature of the global financial crisis has abated, the scope of issues covered by the G-20 has expanded to other issues, such as development and the environment. Table A-1 presents information about major highlights from the summits held to date. G-20 policy announcements and commitments are nonbinding, and the record of implementing these commitments is wide ranging. Examples of major G-20 initiatives include coordination of fiscal policies during the global financial crisis, a tripling of IMF resources, and strengthening the Financial Stability Board (FSB) to coordinate and monitor international progress on regulatory reforms, among others. However, progress on other G-20 commitments has been much slower, such as correcting global imbalances, concluding the WTO Doha Round of multilateral trade negotiations, and eliminating fossil fuel subsidies. Tracking progress on G-20 commitments can be complicated, as subsequent summits may extend the timelines for completing policy reforms, reiterate previous commitments, or drop discussion of prior policy pledges. Previous G-20 summits have typically attracted protesters from a broad mix of movements, including environmentalists, trade unions, socialist organizations, faith-based groups, antiwar camps, and anarchists. At the 2009 summit in Pittsburgh, for example, thousands of protestors gathered in the streets, holding signs with slogans such as "We Say No To Corporate Greed" and "G20=Death By Capitalism." Likewise, the 2017 summit in Hamburg attracted thousands of protestors. Protests turned violent, with more than 100 police officers injured and 45 protestors jailed. Not all G-20 summits are marked by large-scale demonstrations. For example, the 2014 summit in Australia and the 2016 summit in China were relatively quiet, which may be related to the distance required to travel to Australia and the tight control on protests in China. Since the G-20 leaders started meeting in 2008, the G-20 leaders have met 12 times, 10 of which were attended by then-President Barack Obama. The 2017 summit, hosted by Germany in Hamburg on July 7-8, was the first attended by President Donald Trump. In the lead-up to the summit, speculation focused on potential discord between President Trump and other G-20 leaders. President Trump, who campaigned on an "America First" platform and has signaled a reorientation of U.S. foreign policy, has clashed with other G-20 countries over key policy issues, particularly trade and climate change. In January 2017, President Trump withdrew from the Trans-Pacific Partnership (TPP), a free trade agreement between the United States and 11 Asia-Pacific countries. In June, he announced his intent to withdraw the United States from the Paris Agreement, an international agreement outlining goals and a structure for international cooperation to address climate change and its impacts over decades to come, a decision rebuked by France, Italy, and Germany in an unusual joint statement. Commitments to combat climate change and support free trade are traditionally core outcomes of G-20 summits. Given changes in U.S. policy under the Trump Administration, analysts speculated for the first time whether leaders would be able to reach consensus on a communique. Negotiations among the countries were reportedly heated, and some analysts argue that the United States was more isolated at this G-20 summit than any other. Although agreed unanimously, the communique reflects the split between the United States and other G-20 countries, most notably on climate change. The communique notes the U.S. decision to withdraw from the Paris Agreement and the United States' commitment to an approach that "lowers emissions while supporting economic growth and improving energy security needs." In contrast, leaders of the other G-20 members state that the Paris Agreement is "irreversible." It is unusual for a stark division among G-20 members to be reflected in a G-20 communique. Reportedly, the United States undertook efforts to persuade some countries, including Australia, Poland, Saudi Arabia, and Turkey, to move to the U.S. position on climate change, but such efforts were unsuccessful. On trade, discussions reflected key divisions between the United States and other G-20 countries, particularly in Europe. Reportedly, during the 2017 negotiations, several European leaders, including UK Prime Minister Theresa May and French President Emmanuel Macron, offered forceful defenses of free trade. German Chancellor Angela Merkel noted that, "the fact that negotiations on trade were extraordinarily difficult is due to the specific positions that the United States has taken." Ultimately, the communique reaffirms a commitment to keep markets open, which Merkel considered a win. The commitment went further than in March, when the G-20 finance ministers dropped their typical pledge to keep global trade free and open at the insistence of the Trump Administration. However, the communique also notes "the importance of reciprocal and mutually advantageous trade and investment frameworks" and a commitment to combat "all unfair trade practices and recognize the role of legitimate trade defense instruments in this regard." This language reflects trade priorities articulated by the Trump Administration, which has emphasized a need for both "reciprocal" trade relationships and countering " unfair" trade practices. In comparison, in 2016, leaders committed unequivocally to oppose protectionism in "all forms," and committed to a "standstill and rollback" of protectionist measures until the end of 2018, pledges dropped from the 2017 communique. Some analysts view the 2017 communique as a further rejection of free trade. Not all issues discussed at the G-20 meeting were as contentious, and several other agreements were reached. These include, among others, calling on the Global Forum on Steel Excess Capacity, created at the 2016 G-20 summit, to rapidly develop concrete policy solutions to reduce steel excess capacity; welcoming the launch of the Women Entrepreneurs Financing Initiative (We-Fi), a new World Bank Trust Fund, to which the United States has pledged $50 million amid broader foreign aid cuts; and launching a G-20 Africa Partnership to foster growth and development. The communique also reiterated pledges from previous summits, such as enhancing cooperation on the refugee crisis and bolstering the resiliency of the global financial system, with varying levels of consequence and specificity. The G-20 meeting and outcomes are contributing to ongoing debate about the U.S. leadership in the world under the Trump Administration. Some commentators are concerned that the United States was isolated at the G-20, reflecting a growing trend of abdication of U.S. leadership and abandonment of U.S. allies. Others are more optimistic, arguing that differences between the United States and other countries were overblown and that President Trump is pursuing foreign policies consistent with his campaign pledges. Trump Administration officials argued that the summit helped strengthen alliances around the world and demonstrated a resurgence of American leadership to bolster common interests, affirm shared values, confront mutual threats, and achieve renewed prosperity. Argentina is chairing the G-20 in 2018 and hosting the annual summit on October 4-5 in Buenos Aires. Argentina's theme is "building consensus for fair and sustainable development." To advance this agenda, Argentina is proposing a focus on three key issues: (1) the future of work; (2) infrastructure for development; and (3) food security. In addition, Argentina will seek to build on previous G-20 work on empowering women, fighting corruption, strengthening financial governance, building a strong and sustainable financial system, improving the fairness of the global tax system, cooperating on trade and investment, taking responsibility on climate action, and transitioning toward cleaner, more flexible, and more transparent energy systems. There are questions about how discussions will proceed at the summit. The 2017 G-20 summit was contentious, with the United States increasingly isolated on trade and climate change issues. It is not clear that divisions on these issues have resolved over the past year. The G-7 summit hosted by Canada was also divisive, with President Trump taking the unprecedented step of withdrawing his initial support for the G-7 communique. Trade divisions have also arisen in G-20 discussions among finance ministers and central bank governors in July 2018, amid escalating tariffs among many G-20 countries. Meanwhile, Argentina is embroiled in its own financial crisis, with the government struggling to regain investor confidence following rapid depreciation of its currency and IMF program in June 2018, raising questions about the extent to which the Argentine government will be able to focus its energies on the G-20 process. The summit also raises questions about the G-20's usefulness. Some argue it is a vital forum for a diverse set of countries to discuss their differences. Others wonder whether the G-20, which initially brought together leaders to coordinate the response to the global financial crisis of 2008-2009, has become less consequential over time. Three broad scenarios for the future of the G-20 have been discussed. Specifically, the G-20 as a coordinating forum will be (1) effective; (2) ineffective; or (3) effective in some instances but not others. These possible scenarios are discussed in greater detail below. Some believe that the G-20 will be an effective forum for international economic cooperation moving forward. The G-20 will be able to play this role, it is argued, for three reasons. First, the G-20 includes all the major economic players at the table, but at the same time is small enough to facilitate concrete negotiations. Second, the involvement of national heads of state in the negotiations could serve to facilitate commitments in major policy areas. Third, as the issues discussed by the G-20 leaders expand, the G-20 may be able to facilitate cooperation by enabling trade-offs among major concerns, such as climate change and trade, that are not possible in issue-specific forums and institutions. G-20 optimists typically point to the G-20's successes at the height of the financial crisis, when the G-20 played a unique, strong, and central role in steering the recovery efforts. The G-20 was the source of major decisions regarding fiscal stimulus, regulatory reform, tripling the IMF's lending capacity, and other response efforts. The G-20 also tasked other international organizations, such as the Bank for International Settlements (BIS), the IMF, the World Bank, and the Financial Stability Board (FSB), with facilitating, monitoring, or implementing various aspects of the response to the crisis. Finally, G-20 proponents argue that, even if agreement on policies is not always reached, it is a critical forum for discussing major policy initiatives across major countries and encouraging greater cooperation. Others are skeptical that the G-20 will be an effective forum for international cooperation moving forward for at least four reasons. First, the G-20 includes a diverse set of countries with different political and economic philosophies. As economic recovery becomes more secure, it is argued that this heterogeneous group with divergent interests will have trouble reaching agreements on global economic issues. Some argue that the G-20 has failed to provide adequate leadership in responding to the Eurozone crisis or in helping forge a conclusion to the Doha negotiations. Second, some believe the G-20 does not include the right mix of countries. It is argued that Europeans are overrepresented at the G-20 (with Germany, France, Italy, the United Kingdom, and the European Union accounting for 5 of the 20 slots), while some important emerging-market countries are excluded. Poland, Thailand, Egypt, and Pakistan have been cited as examples (see Appendix B ). By concentrating European interests while excluding important emerging markets from the negotiating table, it will be difficult, it is argued, to achieve cooperation on economic issues of global scope. Third, some experts believe that the G-20 will be ineffective because it has no enforcement mechanism beyond "naming and shaming" and with little follow-up will not be able to enforce its commitments. As evidence that the G-20 is an ineffective steering body in the international economy, G-20 skeptics point to the portions of recent G-20 declarations that merely reiterate commitments made by countries in other venues and institutions or at previous G-20 summits. Likewise, some of the declarations identify areas that merit further attention or study, without including concrete policy commitments. Fourth, some argue that the G-20's effectiveness since the crisis has diminished because the issues covered by the G-20 have broadened, but there is now little follow-through from one summit to the next. For example, a major deliverable from the Toronto summit in June 2010 was targets for fiscal consolidation among advanced economies. However, these targets received little attention in the subsequent G-20 summit in Seoul in November 2010, where the focus shifted to development, among other issues. Likewise, France's focus for the November 2011 summit was on reform of the international monetary system, but it is not clear how much attention was focused on that issue at subsequent summits. A third scenario represents a middle ground between the previous two, namely, that the G-20 will be effective in some instances but not others. It is argued the G-20 could be an effective body in times of economic crisis, when countries view cooperation as critical, but less effective when the economy is strong and the need for cooperation feels less pressing. Proponents of this view point to the strong commitments achieved during the height of the crisis compared to what many view as the weaker outcomes of subsequent summits, when financial markets were more stable. Another variant is that the G-20 will prove effective in facilitating cooperation over some issue areas but not others. For example, the G-20 could be effective in coordinating monetary policy across the G-20 countries, by providing a formal structure for finance ministers, central bankers, and leaders to gather and discuss monetary policy issues. In most countries, central banks exercise largely autonomous control over monetary policy issues and would have the authority to implement decisions reached in G-20 discussions. Likewise, the G-20 may be effective at tasking other international organizations, such as the IMF and the FSB, with various functions to perform or reports to write. By contrast, it is argued that the G-20 could find coordination of other policies more difficult. One example may be fiscal policies, because although finance ministers and national leaders undoubtedly can influence fiscal policies at the national level, control over fiscal policies in many countries ultimately lies with national legislatures. It is not clear to what extent national legislatures will feel bound in their policymaking process by decisions reached at the G-20 and thus how effective G-20 coordination on these issues will be. Appendix A. G-20 Summits: Context and Major Highlights Appendix B. World's Largest Countries and Entities

The Group of Twenty (G-20) is a forum for advancing international cooperation and coordination among 20 major advanced and emerging-market economies. The G-20 includes Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, and the United States, as well as the European Union (EU). G-20 countries account for about 85% of global economic output, 75% of global exports, and two-thirds of the world's population. Originally established in 1999, the G-20 rose to prominence during the global financial crisis of 2008-2009 and is now the premier forum for international economic cooperation. Since the crisis, the G-20 leaders typically meet annually (at "summits"). Meetings among lower-level officials, including finance ministers and central bank governors, are scheduled throughout the year. G-20 meetings primarily focus on international economic and financial issues, although related topics are also discussed, including development, food security, and the environment, among others. Congress exercises oversight over the Administration's participation in the G-20, including the policy commitments that the Administration is making in the G-20 and the policies it is encouraging other G-20 countries to pursue. Additionally, legislative action may be required to implement certain commitments made by the Administration in the G-20 process. The G-20 in 2018 Argentina is chairing the G-20 in 2018 and hosting the annual summit on October 4-5 in Buenos Aires. Argentina's theme for the year is "building consensus for fair and sustainable development." To advance this agenda, Argentina is proposing a focus on three key issues: (1) the future of work; (2) infrastructure for development; and (3) food security. In addition, Argentina will seek to build on previous G-20 work on empowering women, fighting corruption, strengthening financial governance, building a strong and sustainable financial system, improving the fairness of the global tax system, cooperating on trade and investment, taking responsibility on climate action, and transitioning toward cleaner, more flexible, and more transparent energy systems. There are questions about how discussions will proceed at the summit. The 2017 G-20 summit was contentious, with the United States increasingly isolated on trade and climate change issues. It is not clear that divisions on these issues have resolved over the past year. The G-7 summit hosted by Canada was also divisive, with President Trump withdrawing his initial support for the communique. Trade divisions have also arisen in G-20 discussions among finance ministers and central bank governors earlier this year. Meanwhile, Argentina is embroiled in its own financial crisis, with the government struggling to regain investor confidence following rapid depreciation of its currency and IMF program in June 2018. U.S. Leadership and Effectiveness of the G-20 The G-20 meeting and outcomes are contributing to ongoing debate about the U.S. leadership in the world under the Trump Administration. Some commentators are concerned that U.S. isolation at international summits reflects a growing trend of abdication of U.S. leadership and abandonment of U.S. allies. Others are more optimistic, arguing that differences between the United States and other countries were overblown and that President Trump is pursuing foreign policies consistent with his campaign pledges. The summit also raises questions about the G-20's usefulness. Some argue it is a vital forum for a diverse set of countries to discuss their differences. Others wonder whether the G-20, which initially brought together leaders to coordinate the response to the global financial crisis of 2008-2009, has become less consequential over time.

The Goldwater-Nichols Act of 1986 led to major changes in officer training and career development through the establishment of a joint management system. This system includes four basic components: Joint Professional Military Education (JPME) in joint schools, a Joint Duty Assignment List (JDAL), Joint Specialty Officer (JSO) designation, and joint criteria for promotions. This report focuses mainly on JPME requirements in the context of the intent of the Goldwater-Nichols reforms. Although it refers to joint officer assignments and promotions, it does not address the joint officer management system as a whole. The first sections provide background on joint education and the changes put in place by GNA. The following sections discuss the implementation and evolution of JPME over the past 30 years. The final section lays out some of the stakeholders' concerns and issues with the current state of JPME that Congress may consider as they conduct their GNA review. The education of military officers in joint operations predates any legislation requiring both joint education and experience. The Army Industrial College had been established in 1924 to educate officers in mobilization, supply, and industrial support, but no similar school was devoted to the study of joint operations. During World War II, following the U.S. military's exposure to working with allies in joint operations, military leaders saw a critical need for officers to be trained and educated in joint and combined operations. To fill this void, the Joint Chiefs of Staff established the Army-Navy Staff College in 1943 to provide a four-month course for selected senior officers assigned to unified command and staff duties. A memo by General Henry H. "Hap" Arnold, then-Commanding General of the Army Air Forces, described the purpose of this War College as: (1) To train selected officers of the Army and Navy for command and staff duties with unified (Army-Navy) commands. (2) To develop methods and ideas for the most effective unified employment of all arms and services and to translate lessons learned in the field into appropriate doctrines. Conclusions reached should be spread through the services both by service publications and by the influence of the graduates of the College in planning and conducting operations. The original Army-Navy Staff College evolved into the National War College in 1946 and the Army Industrial College was later renamed the Industrial College of the Armed Forces (ICAF). The Armed Forces Staff College (AFSC) was also formed in 1946 to provide joint operational instruction to mid-grade officers (O-4 to O-6). By 1946, and primarily at the initiative of the senior military leadership, there were three military institutions devoted to various aspects of joint education--the National War College, the ICAF, and the AFSC. The services retained their service-centric professional military education schools. (A current listing of service and joint colleges and universities certified to provide JPME with geographic locations can be found in Figure A-1 .) Nevertheless, for much of the Cold War era, despite the availability of joint courses at these colleges, there was a general lack of enthusiasm among military officers for joint education and joint assignments. In 1981, only 13% of officers assigned to the Office of the Joint Chiefs of Staff had attended the joint course at AFSC and only 25% of O-6s (Colonels or Navy Captains) had graduated from the National War College or ICAF. Some argued that joint commitments were detrimental to an officer's career, as they took them away from service-specific education and assignments that were seen as more valuable for promotion. By the early 1980s, a number of unsuccessful joint military operations, including the aborted rescue of American hostages in Iran, had generated questions by many in Congress about DOD's capability to execute joint operations. On June 16, 1980, during a nomination hearing before the Senate Armed Services Committee, General David C. Jones addressed what he saw as the main impediments to building a joint culture within DOD. One issue area that he raised was the need to "have greater incentives for the best people to go into joint jobs." Jones's comments sparked a broader reform effort that eventually became the 1986 Goldwater-Nichols Department of Defense Reorganization Act (GNA). The GNA reorganized the Department of Defense and established the first formal requirements for the services to train and operate in a joint environment. Title IV of the GNA established a number of requirements, guidelines, and goals as part of a joint officer management framework. The goals of the GNA in terms of personnel management were threefold: improving the (1) quality, (2) experience, and (3) education of joint officers (see Table 1 ). Under this framework established by GNA, completion of specific requirements for JPME, along with joint experience gained through assignments from the joint duty assignment list (JDAL), could result in joint qualification and designation as a joint specialty officer (JSO). The connection between joint criteria and promotion potential was intended to incentivize officers to qualify as JSOs. The designation of an officer as a JSO signified proficiency in "joint matters." Goldwater-Nichols focused on the effective management of military officers who were "particularly trained in, and oriented toward, joint matters." While JPME curriculum was not specifically defined, the legislation did define "joint matters" as "matters relating to the integrated employment of land, sea, and air forces." JPME requirements are noted in two sections of the original legislation: Section 661 (Management policies for Joint Specialty Officers) required successful completion of a JPME program prior to an officer being nominated for joint qualification or being assigned to a joint duty position, with minor exceptions. Section 663 (Education) contained additional requirements specifically related to JPME. It required (1) attendance at a Capstone Course for all new generals and flag officers, (2) periodic review of the curriculum for the National Defense University and other JPME schools by the Secretary of Defense with advice and assistance from the Chairman of the Joint Chiefs of Staff (CJCS), and (3) review of service schools' curricula to strengthen the focus on joint matters and to ensure that graduates were adequately prepared for joint duty assignments. On November 13, 1987, Representative Les Aspin, then-Chairman of the House Armed Services Committee, appointed a panel on military education with a mandate to review Department of Defense plans for implementing the joint professional military education requirements of the Goldwater-Nichols Act with a view toward assuring that this education provides the proper linkage between the service competent officer and the competent joint officer. The panel should also assess the ability of the current Department of Defense military education system to develop professional military strategists, joint warfighters and tacticians. Representative Ike Skelton chaired what became known as the Skelton Panel. Between 1987 and 1989, the Skelton Panel held 28 hearings with 48 witnesses and published its final report on April 21, 1989. The House Armed Services Committee held additional hearings on JPME from August 2, 1989, to September 26, 1990. The key recommendation of the Skelton Panel with regard to JPME was to "establish a two-phase Joint Specialist Officer (JSO) education process with Phase I taught in service colleges with a follow-on, temporary, Phase II taught at the Armed Forces Staff College (AFSC)." Congress integrated this recommendation into the FY1990-1991 NDAA as a statement of congressional policy. It urged the Secretary of Defense to establish a JPME framework and the legislation specifically noted that the curriculum at AFSC should emphasize multiple "hands on" exercises. These two phases of instruction were intended to be sequential but exceptions were permitted "for compelling cause." The FY1990-1991 NDAA further stipulated that the course of instruction at AFSC had to be a minimum of three months long. Since its inception, the joint education and qualification system has undergone a number of statutory changes. Updated rules designate the institutions eligible to provide JPME and allow some portions of JPME to be done via "distance learning." Other changes have strengthened the incentive system for attendance by offering accredited master's degrees and offering more flexibility in follow-on assignments to manage individual career paths and service-specific requirements. The National Defense Authorization Act for Fiscal Year 1994 provided a congressional finding concerning the roles of military schools in providing professional military education (PME) and JPME. It stipulated that: (1) the primary mission of the professional military education schools of the Army, Navy, Air Force, and Marine Corps is to provide military officers with expertise in their particular warfare specialties and a broad and deep understanding of the major elements of their own service; (2) the primary mission of the joint professional military education schools is to provide military officers with expertise in the integrated employment of land, sea, and air forces, including matters relating to national security strategy, national military strategy, strategic planning and contingency planning, and command and control of combat operations under unified command; and (3) there is a continuing need to maintain professional military education schools for the Armed Forces and separate joint professional military education schools. Other sections of the FY1994 NDAA allowed the National Defense University to confer masters of science degrees in national security strategy and national resource strategy (Section 922), and provided more flexibility in assignment of officers following graduation from a JPME school by allowing some to serve in a joint duty assignment as their second (rather than first) assignment after graduation (Section 933). As DOD was nearing the 20 th anniversary of Goldwater-Nichols reform, some in DOD and Congress questioned whether the joint officer management system should evolve to reflect changes in doctrine and operations. The National Defense Authorization Act for Fiscal Year 2002 required DOD to initiate an independent study of Joint Officer Management (JOM) and Joint Professional Military Education (JPME) to assess the ability of the existing practice, policy, and law to meet the demands of the future. In terms of JPME, the study was required to: 1. review the sequencing of JPME and the first joint duty assignment; 2. assess the continuing utility of the requirement for use of officers in joint billets following JPME; 3. recommend initiatives to ensure JPME occurred before the first joint duty assignment; 4. recommend goals for attendance at the Joint Services Staff College (JFSC); 5. determine whether all JPME programs should remain "in-resident" or, if not, to identify any potential role for distributed learning in JPME; and 6. examine options for increasing the training capacity of JFSC. The consultancy firm Booz Allen Hamilton conducted the independent study. While it was underway, the Government Accountability Office (GAO) published a study of the impediments to full implementation of Goldwater-Nichols and recommended that DOD develop a strategic approach to the development of officers in joint matters. In 2003, the completed independent study indicated that practice, policy, and law regarding joint officer management and JPME should be updated to meet the demands of a new era. Following these studies, DOD asked the RAND Corporation to develop a strategic approach for reforming the joint officer management system. RAND found that while DOD had become increasingly "joint" there was still some resistance to the development of joint officers within DOD. RAND recommended a strategic human resource approach for identifying joint positions, linking them to joint education and experience, and better managing officer career paths to fill those positions. Following the recommendations from these studies, as well as concerns expressed by the House Armed Services Committee that DOD lacked a "coherent, comprehensive context," and an "overall vision for joint officer management and education," the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005 required DOD to develop a strategic plan for joint officer management and JPME that would ensure that sufficient numbers of qualified officers would be available to serve in the joint environment. The Secretary of Defense was required to submit the plan to the Committees on Armed Services of the Senate and House not later than January 15, 2006. As part of the submission to Congress, DOD was required to identify and assess any problems associated with the linkage of promotion eligibility to completion of JPME, the viability of the use of incentives for those successfully completing JPME (such as awarding military decorations), the feasibility and utility of a written entrance examination as part of the selection criteria for admission to a JPME school, the effects of enrolling additional private-sector civilians at NDU on the educational experience, and the implications of providing joint specialty qualification to reserve component officers who have completed JPME statutory prerequisites. The FY2005 NDAA also established a new chapter in Title 10 United States Code entitled "Professional Military Education," to consolidate JPME. This chapter specified definitions relating to JPME, Capstone Course requirements, curriculum content for Phase II, and student and faculty ratios for Phase II institutions. The legislation also established a new, tiered approach to JPME with the sequencing of Phase I, Phase II and the Capstone Course, and required completion of Phase I before proceeding to Phase II after September 30, 2009. In response to the FY2005 NDAA requirements, DOD submitted its strategic plan to Congress on April 3, 2006. The plan emphasized the importance of joint experience as a pathway to joint qualification; however, it gave less attention to the connection between JPME and joint duty assignments. In the National Defense Authorization Act for Fiscal Year 2007, Congress significantly modified joint officer personnel policy by allowing DOD to establish different levels of joint qualification, as well as the criteria for qualification at each level.... Each level shall, as a minimum have both joint education criteria and joint experience criteria. The legislation also removed the requirement that officers complete JPME I and II prior to a joint duty assignment. In response, DOD published its implementation plan for the new Joint Qualification System (JQS) on March 30, 2007. This plan established four levels of qualification and provided dual tracks--a standard/education path and an experience path--for earning joint qualifications (see Table 2 ). Under DOD's new policy, joint experience points could be earned in non-JDAL assignments such as joint or interagency assignments. The FY2007 NDAA also allowed the Secretary of Defense to waive the requirement for JPME for officers below the grade of O-7 (brigadier general or rear admiral), but only if the officer has completed two full tours in a joint duty assignment and the types of joint duty experiences completed by the officer have been of sufficient breadth to prepare the officer for service as a general or flag officer in a joint duty assignment position. The legislation replaced the previous terminology of "a joint professional military education school" with "a school within the National Defense University" and clarified that NDU included only the National War College, the Industrial College of the Armed Forces, and the Joint Forces Staff College. In April 2010, the House Armed Services Committee, Subcommittee on Oversight and Investigations released a committee print reporting the findings of a review of Professional Military Education (PME) to include JPME. Key committee findings in relation to JPME were as follows: Due to the removal of the statutory requirement for JPME prior to serving in a joint duty assignment it was not clear whether JDAL positions were being filled with appropriately qualified officers. Amid increasing joint and service-specific staff duty requirements, a significant number of officers serving in JDAL positions were too junior to have completed JPME I prior to their joint assignment. Approximately one-third of officers who had completed JPME II prior to a joint assignment considered the course to have low preparatory value and, on average, the 10- or 12-week JPME II courses were given practically the same rating as the 10-month course in terms of usefulness. JPME I provides insufficient preparation for the competencies needed to serve in joint duty assignments. Completion of and demand for JPME appear to be more closely tied to promotion potential than to developing required competencies to serve in joint duty assignments. Competing demands over the course of an officer's career for training, education, and operational experience, make it difficult to manage joint education and assignment. The JPME model for developing joint officers focuses on building generalists and does not adequately address a requirement for specific joint competencies. There is a greater need for joint subject matter to be taught at the primary level. The National Defense Authorization Act for Fiscal Year 2011 did not include any reference to JPME; however, it included a provision with respect to joint officer management that expanded how joint assignments and experience could be determined. Section 521 revised the definition of joint matters to specify that "integrated military forces" includes more than one military department, or one military department and one or more of the following: other departments and agencies of the United States, military forces or agencies of other countries, and non-governmental persons or agencies. In the past five years Congress has made minor changes to JPME. Section 552 of the National Defense Authorization Act for Fiscal Year 2012 authorized DOD to carry out a five-year pilot program for JPME II instruction on a nonresident basis at not more than two combatant commands. In response, DOD established a JPME course at the Joint Special Operations University (JSOU) at MacDill Air Force Base, Florida, which is home to both the U.S. Special Operations Command (USSOCOM) and the U.S. Central Command (USCENTCOM). JSOU was established as a satellite program of the JFSC. Section 552 of the FY2012 NDAA also authorized credit for completion of JPME I at the National Defense Intelligence College (now known as the National Intelligence University). The National Defense Authorization Act for Fiscal Year 2015 amended 10 U.S.C. SS2154 to authorize senior level service courses of at least 10 months to meet the requirements of JPME II if designated and certified by the Secretary of Defense. Previous law required JPME to be taught in residence at the Joint Forces Staff College or senior level service schools. This legislation appears to provide more flexibility to DOD in how JPME II coursework is completed. Over the past few years, Congress has been concerned with how to improve recruitment, retention, and career management for the acquisition workforce. By statute, Joint Specialty Officers are those that are "particularly trained in or oriented toward, joint matters." "Joint matters," by statute, are currently defined as: matters related to the achievement of unified action by multiple military forces in operations conducted across domains such as land, sea, or air, in space, or in the information environment, including matters relating to - National military strategy; Strategic planning and contingency planning; Command and control of operations under unified command; National security planning with other departments and agencies of the United States; and Combined operations with military forces of allied nations. Provisions in the Senate-passed FY2016 NDAA ( S. 1356 ) added acquisition matters to this list of "joint matters," thus extending joint duty credit for military personnel who serve in acquisition-related assignments. The act also includes provisions that would allow officers to pursue a dual career track with a primary specialty in combat arms with a functional sub-specialty in an acquisition field. In addition, the conferees encouraged the Secretary to ensure that the curriculum for Phase II joint professional military education includes matters in acquisition to ensure the successful performance in the acquisition or acquisition-related fields. While there have been few substantial changes to JPME in recent years, some within DOD and Congress have raised concerns about the state of joint education. Secretary of Defense Ashton Carter announced in December 2015 that the Department of Defense (DOD) would be launching a review of the department's structure and efficiency in the context of the GNA reforms. A DOD memorandum dated January 4, 2016, outlined the key questions that would be addressed in this review. With respect to the joint officer management system, DOD plans to consider, Do current law and policy governing joint duty qualifications provide the right human capital development to meet our joint warfighting requirements? Are there adjustments that can be made to balance the often competing demands of joint professional development and other specialized expertise or other career development considerations? A spokesman for DOD indicated that this review might result in internal policy changes and/or legislative proposals. Other questions that have been raised by those in the defense community include Questions about faculty and staff at institutions certified to provide JPME: Are faculty knowledgeable and do they have the appropriate qualifications? Is there an appropriate mix of civilian and military faculty? Is faculty compensation appropriate? Are the students-to-faculty and administrator-to-faculty ratios appropriate? Questions about the adequacy of JPME curricula in providing necessary knowledge and skills: Does the curriculum adequately deliver desired leader attributes? Should the curriculum be expanded? Does the curriculum provide the right mix of tactical v. technical skills needed to serve in joint billets? Questions about how JPME is delivered: What is the appropriate mix of students (e.g., military-civilian, branch of service, officer-enlisted, foreign military/civilians)? Can JPME be adequately provided in a non-resident setting? Is there adequate coordination between JPME-granting institutions? Could JPME credit be earned at additional degree-granting institutions (e.g., additional service schools or civilian institutions)? Questions about the role of JPME in terms of career management and officer development: What should the appropriate balance be between service-centric PME and JPME? Should completion of JPME continue to be tied to officer promotion? What should the JPME requirements be for Reserve Component (RC) members? What should the balance be between joint experience and joint education in terms of joint officer qualification? Do existing assignment policies allow for return-on-investment for JPME? Congress may consider these and other questions with regard to JPME and the joint officer management system as part of the GNA review and in future legislative initiatives. Acronyms

In November 2015, the Senate Armed Services Committee initiated a review of the Goldwater-Nichols Act (GNA). This piece of legislation, enacted in 1986 and amended in subsequent years, led to major reforms in defense organization. The year 2016 will mark the 30th anniversary of this landmark legislation, and lawmakers have expressed interest in whether the changes, as implemented, are achieving the goals of the reform, and whether further reforms are needed to achieve current and future national security goals. One of Congress's main goals of the legislation was to improve joint interoperability among the military services through a series of structural changes and incentives for participation in joint matters. Joint matters, by statute (10 U.S.C. SS661), are currently defined as, ...matters related to the achievement of unified action by multiple military forces in operations conducted across domains such as land, sea, or air, in space, or in the information environment... Modifications of the officer management system under the GNA reforms were intended to enhance the quality, experience, and education of joint officers. The law required, for the first time, that officers complete Joint Professional Military Education (JPME) in order to be eligible for certain joint assignments and promotion categories. Some have questioned the extent to which these statutory JPME requirements are achieving the goals of the reform and whether they should be amended or repealed. Others have questioned whether the JPME curriculum, method of delivery and instruction, course structure, and career timing are appropriate in the context of today's strategic environment and force structure needs. In parallel to congressional efforts, Secretary of Defense Ashton Carter announced in December 2015 that the Department of Defense (DOD) would be launching a review of the department's structure and efficiency in the context of the GNA reforms. A DOD memorandum dated January 4, 2016, outlined the key questions that would be addressed in this review. With respect to the joint officer management system, DOD plans to consider, Do current law and policy governing joint duty qualifications provide the right human capital development to meet our joint warfighting requirements? Are there adjustments that can be made to balance the often competing demands of joint professional development and other specialized expertise or other career development considerations? A spokesman for DOD indicated that this review might result in internal policy changes and/or legislative proposals. Any reforms to the military personnel management system might also be considered in conjunction with DOD's "Force of the Future" initiative, the first phase of which was launched by Secretary Carter on November 18, 2015. The purpose of this initiative is to improve the department's ability to recruit and retain the talent it needs to adapt to future mission requirements.

During the 113 th Congress, the Obama Administration announced that certain federal agencies would not enforce specific aspects of the Affordable Care Act (ACA) for a period of time in order to allow the public to further prepare for proper compliance with the law in the future. This has led to numerous questions regarding how courts treat administrative delays of regulatory programs. This report will discuss the general legal principles applicable to judicial review of administrative delays in two different contexts: (1) delays in meeting a specific statutory deadline for implementing rules or completing particular adjudications, and (2) delays in the enforcement of a provision of law on the public at large. The report will then address whether the procedures outlined in the Administrative Procedure Act (APA) apply to these delays. The first type of agency delay--delays in meeting a specific statutory deadline for implementing rules or completing particular adjudications--arises when Congress has enacted a statute that expressly requires an agency to take a specific action by a specific date. For example, the ACA includes a number of mandatory rulemaking provisions that require agencies to issue certain substantive rules by certain dates. An agency's failure to meet this type of statutory deadline is generally assessed pursuant to a multi-factor balancing test established in Telecommunications Research & Action Center v. FCC , discussed further below. The second type of delay occurs when an agency delays the enforcement of a statutory prohibition or requirement that Congress has imposed on third parties. An agency generally implements this delay by announcing that, as an enforcement policy, the agency will not pursue or punish non-compliance with the law for a certain period of time. The underlying law takes legal effect and conduct in violation of that law remains unlawful, but the agency--in an exercise of its enforcement discretion--does not take action in response to violations of the provision until after a certain date. For example, although a provision in the ACA requiring that health plans meet certain minimum coverage requirements became effective in January 2014, the Center for Medicaid Services has announced that it will not enforce these requirements for certain plans for at least one year. This type of enforcement delay would generally be assessed, if at all, pursuant to standards established for determining whether non-enforcement decisions are "committed to agency discretion by law" under the APA. Given this framework, it would appear that the context in which an agency delay arises may alter the manner in which the court evaluates the delay. We now turn to the question of the legal standards to be applied in the two identified scenarios: where an agency delay has resulted in the failure to meet a statutory deadline, and where an agency is relying on enforcement discretion to delay the enforcement of a duly enacted law. The APA does not provide concrete time limits for agency action--instead, it leaves most deadlines for Congress to establish, if at all, in the particular agency's enabling statute. Even absent a specific deadline, however, the APA states that an agency must "proceed to conclude a matter presented to it ... within a reasonable time." Further, Section 706 of the APA states that courts shall "compel agency action unlawfully withheld or unreasonably delayed." As such, the APA provides individuals with a cause of action when an agency takes an unreasonable amount of time to act. However, a claim of unreasonable delay can only be brought against an agency for actions that the agency is legally obligated to take. The Supreme Court has stated that "a claim under SS 706(1) [of the APA] can proceed only when a plaintiff asserts that an agency failed to take a discrete agency action that it is required to take." If the decision to act is "committed to agency discretion by law," then no claim can be made against the agency for failing to take such an action. In other words, an agency must be required to act by law in order to establish a claim that the agency has unreasonably delayed in acting. Cases involving claims that an agency has unreasonably delayed taking required actions are typically brought when an agency has failed to meet a statutorily mandated deadline. For example, if Congress requires an agency to promulgate rules by a certain date, or to complete adjudications within a specified period of time, a claimant may file suit against the agency for unreasonable delay if the statutory deadline has passed. Although courts generally are more willing to compel an agency to act if it has missed a statutory deadline, they will not necessarily do so. Instead, courts will often undertake a balancing test to determine whether the court should force the agency to act. The balancing test commonly used by most federal courts is referred to as the TRAC factor test, after the case in which the test was first established, Telecommunications Research & Action Center v. FCC (" TRAC "). Under such an analysis, a court will assess whether Congress has established any indication for how quickly the agency should proceed; determine whether a danger to human health is implicated by the delay; consider the agency's competing priorities; evaluate the interests prejudiced by the delay; and determine whether the agency has treated any party less favorably than others. A court balances these TRAC factors on a case-by-case basis to determine whether agency action should be compelled. It can be difficult to predict which way a court will decide any particular case as "[t]here is no per se rule as to how long is too long to wait for agency action." Courts will often take a missed deadline into heavy consideration, but, generally, will still evaluate the remaining factors when determining the outcome of the case. If Congress is not satisfied with relying on judicial enforcement of statutory deadlines, Congress may insert "hammer" provisions into the text of certain statutes. These provisions dictate what is to happen if a regulatory deadline is missed. The consequences for missing a deadline vary. Some laws establish a regulatory scheme that will be put in place if an agency misses a deadline, while others mandate that the agency's proposed rule will go into effect if a final rule is not promulgated by the deadline. Finally, at least one law has withheld funding from an agency until certain rules are promulgated. Although these provisions can force an agency to act quickly, they can also be challenging for Congress to establish due to the extensive time that is often required to develop an effective regulatory scheme. In addition to these hammer provisions, Congress may always use political pressure, congressional hearings, and the appropriations process to influence agencies to act with more urgency. These types of administrative delay are relatively common as agencies may encounter difficulties in meeting statutory deadlines. However, they differ fundamentally from situations where agencies use "administrative enforcement discretion" when deciding whether to enforce a statute or regulatory scheme. When an agency decides not to enforce a statute against regulated parties for a certain period of time, courts are likely to review this as an act of enforcement discretion. Federal agencies generally have flexibility in determining whether and when to initiate an enforcement action against a third party for violations of a law the agency is charged with administering. This freedom in setting enforcement priorities, allocating resources, and making specific strategic enforcement decisions is commonly described as "administrative enforcement discretion" and arises principally from a combination of the President's constitutionally assigned obligation to "take care that the laws be faithfully executed," and the APA's command that courts avoid reviewing discretionary agency decisions. Discretionary enforcement activities may include any range of actions, including, but not limited to, the imposition of penalties or the initiation of an agency investigation, prosecution, adjudication, lawsuit, or audit. In situations where an agency refrains from bringing an enforcement action, courts have historically been cautious in reviewing the agency determination--generally holding that such non-enforcement decisions are "committed to agency discretion" and therefore not subject to judicial review under the APA. The seminal case on this topic is Heckler v. Cha ney , a Supreme Court case in which death row inmates challenged the Food and Drug Administration's refusal to initiate an enforcement action to block the use of certain drugs in lethal injection. In rejecting the challenge, the Supreme Court held that "an agency's decision not to prosecute or enforce ... is a decision generally committed to an agency's absolute discretion." The Court noted that agency enforcement decisions involve a "complicated balancing of a number of factors which are peculiarly within [the agency's] expertise," including whether agency resources are best spent on this violation or another, whether the agency is likely to succeed if it acts, whether the particular enforcement action requested best fits the agency's overall policies, and, indeed, whether the agency has enough resources to undertake the action at all. An agency generally cannot act against each technical violation of the statute it is charged with enforcing. Agencies, the court reasoned, are "far better equipped" to evaluate "the many variables involved in the proper ordering of its priorities" than are the courts. Consistent with this deferential view, the Heckler opinion proceeded to establish the standard for the reviewability of agency non-enforcement decisions, holding that an "agency's decision not to take enforcement action should be presumed immune from judicial review ." However, the Court also clearly indicated that the presumption against judicial review of agency non-enforcement decisions may be overcome in certain situations. The Heckler Court suggested that a court may review an agency enforcement determination "where the substantive statute has provided guidelines for the agency to follow in exercising its enforcement powers." Additionally, the Court suggested that judicial review of non-enforcement may be appropriate when an agency has "consciously and expressly adopted a general policy that is so extreme as to amount to an abdication of its statutory responsibilities." However, lower federal courts have only rarely had the opportunity to clarify these exceptions to Heckle r's presumption of non-reviewability. It should be noted that dismissal of a challenge to an agency non-enforcement decision under the APA is not necessarily recognition by the court that the agency was acting within its authority. A legal distinction must be made between a decision in which a court reviews the merits of a challenge and approves of the agency action or inaction, and one in which a court dismisses the challenge for lack of jurisdiction before reviewing the merits. Although, as a practical matter, either decision results in the same outcome (i.e., the continuation of the agency decision), it would be inappropriate to state that a court that has dismissed a claim against an agency for lack of jurisdiction has accorded legal approval to the agency action or inaction. The Heckler opinion specifically recognized Congress's authority to curtail an agency's ability to exercise enforcement discretion "either by setting substantive priorities, or by otherwise circumscribing an agency's power to discriminate among issues or cases it will pursue." Congress may, for instance, choose to remove an agency's discretion by indicating "an intent to circumscribe agency enforcement discretion" and "provid[ing] meaningful standards for defining the limits of that discretion." In this manner, Congress essentially overrides the inherent discretion possessed by the agencies in the enforcement of federal law and provides a reviewing court with a standard upon which to review the agency inaction. Although the exercise of agency discretion may therefore be influenced by congressional controls, it would appear that Congress's intent to curtail the agency enforcement discretion must be made explicit, as courts are hesitant to imply such limitations. In applying this standard, the Heckler Court held that the Food Drug and Cosmetic Act (FDCA) had not curtailed the FDA's discretion in a manner sufficient to allow the Court to review the agency's non-enforcement determination. The FDCA provided only that the Secretary was "authorized to conduct examinations and investigations" and not that he was required to do so. Moreover, the Court determined that the FDCA's requirement that any person who violates the act "shall be imprisoned ... or fined" could not be read to mandate that the FDA initiate an enforcement action in response to every violation. The FDCA's prohibition on certain conduct, although framed in mandatory terms, was insufficient to permit review of non-enforcement absent additional language delineating how and when the agency was to respond to violations. "The Act's enforcement provisions," held the Court, "thus commit complete discretion to the Secretary to decide how and when they should be exercised." However, in a pre- Heckler case, Dunlop v. Bachowski , the Court found that a statute had removed agency discretion with regard to its enforcement in a particular circumstance. In Dunlop , a union member challenged the Secretary of Labor's refusal to bring an enforcement action to set aside a union election. The Labor-Management Reporting and Disclosure Act (L-MRDA) provides that upon the filing of a complaint, "[t]he Secretary shall investigate such complaint and, if he finds probable cause to believe that a violation ... has occurred ... he shall ... bring a civil action." The Court rejected the agency's argument that the Secretary's determination of whether to bring a civil action was an unreviewable exercise of administrative discretion. In doing so, the Court cited approvingly to the appellate court's conclusion that [T]he factors to be considered by the Secretary, however, are more limited and clearly defined: SS 482(b) of the L-MRDA provides that after investigating a complaint, he must determine whether there is probable cause to believe that violations of SS 481 have occurred affecting the outcome of the election. Where a complaint is meritorious ... the language and purpose of SS 402(b) indicate that Congress intended the Secretary to file suit. Thus, [] the Secretary's decision whether to bring suit depends on a rather straightforward factual determination, and we see nothing in the nature of that task that places the Secretary's decision "beyond the judicial capacity to supervise. In Heckler , the Supreme Court confirmed the continued validity of the Dunlop decision, but distinguished the two decisions, holding that unlike the FDCA, the L-MRDA "quite clearly withdrew discretion from the agency and provided guidelines for exercise of its enforcement power." As discussed above, the language held to override the presumption against review of agency non-enforcement in Dunlop contained an express trigger for when enforcement was to take place. Federal statutes that do not contain language defining how and when the agency is to exercise its enforcement discretion, even when framed in mandatory terms, generally have not been held to override agency enforcement discretion. For example, a congressional command that an agency "shall enforce" a particular statute, without additional guidelines as to the circumstances under which enforcement is to occur, is generally insufficient to permit review of a non-enforcement decision. The Heckler court suggested as much, noting that it could not "attribute such a sweeping meaning" to language that was commonly found in criminal provisions. In Heckler , the Supreme Court also suggested that the presumption against the review of non-enforcement may be overcome if the agency has "'consciously and expressly adopted a general policy' that is so extreme as to amount to an abdication of its statutory responsibilities." The Court, however, was non-committal as to whether such an agency policy would in fact be reviewable, stating only that "[a]lthough we express no opinion on whether such decisions would be unreviewable under [the APA], we note that in those situations the statute conferring authority on the agency might indicate that such decisions were not "committed to agency discretion." In raising the "statutory abdication" argument, the Court cited to Adams v. Richardson , a decision from the United States Court of Appeals for the D.C. Circuit (D.C. Circuit). Adams involved a challenge to the Secretary of Health, Education, and Welfare's (HEW's) failure to enforce Title VI of the Civil Rights Act of 1964 (Title VI). The law in question "authorizes and directs" federal agencies to ensure that federal financial assistance is not provided to segregated educational institutions. The Secretary asserted that the law provided federal agencies with "absolute discretion" with respect to whether to take action to cut off funding. The court disagreed, holding--in language characteristic of the "statutory guidelines" exception--that "Title VI not only requires the agency to enforce the Act, but also sets forth specific enforcement procedures." The court appeared to give great weight to the scope of the Secretary's non-enforcement, noting, "More significantly, this suit is not brought to challenge HEW's decisions with regard to a few school districts in the course of a generally effective enforcement program. To the contrary, appellants allege that HEW has consciously and expressly adopted a general policy which is in effect an abdication of its statutory duty." The court determined that HEW had consistently and unsuccessfully relied on voluntary compliance as a means of enforcing Title VI without resorting to the more formal and effective enforcement procedures available to the agency. This "consistent failure" was a "dereliction of duty reviewable in the courts." Given the sparse case law associated with this exception, it is difficult to assess what level of non-enforcement constitutes an abdication of statutory responsibilities. It seems that if an agency announced that it would no longer enforce a provision of law against any individual at any time, regardless of the nature of the violation, a court could be willing to review the policy. Whether more limited non-enforcement policies--for instance if an agency announced that it will not enforce a particular provision against a particular group or that it will delay enforcement of a particular provision for a specified period of time--could also be subject to review would appear to be less clear. For example, in Schering Corp. v. Heckler , the D.C. Circuit held that the FDA decision not to pursue an enforcement action against a drug manufacturer for a specific period of time fell "squarely within the confines of [ Heckler ]" and was therefore not reviewable. It is clear, however, that announced agency policies of widespread non-enforcement are much more likely to satisfy the "statutory abdication" standard than more traditional, case-by-case, enforcement decisions. Indeed, in Crowley Caribbean Transportation v . Pena , the D.C. Circuit made a clear distinction between "single-shot non-enforcement decisions" on one hand, and "an agency's statement of a general enforcement policy" on the other. The court determined that an agency's "general enforcement policy" was reviewable where the agency had (1) "expressed the policy as a formal regulation"; (2) "articulated [the policy] in some form of universal policy statement"; or (3) otherwise "[laid] out a general policy delineating the boundary between enforcement and non-enforcement" that "purport[s] to speak to a broad class of parties." The court articulated its reasons for finding review of general enforcement policies to be appropriate as follows: By definition, expressions of broad enforcement policies are abstracted from the particular combinations of facts the agency would encounter in individual enforcement proceedings. As general statements, they are more likely to be direct interpretations of the commands of the substantive statute rather than the sort of mingled assessments of fact, policy, and law that drive an individual enforcement decision and that are, as Chaney recognizes, peculiarly within the agency's expertise and discretion. Second, an agency's pronouncement of a broad policy against enforcement poses special risks that it "has consciously and expressly adopted a general policy that is so extreme as to amount to an abdication of its statutory responsibilities," a situation in which the normal presumption of non-reviewability may be inappropriate. Finally, an agency will generally present a clearer (and more easily reviewable) statement of its reasons for acting when formally articulating a broadly applicable enforcement policy, whereas such statements in the context of individual decisions to forego enforcement tend to be cursory, ad hoc, or post hoc. Whether an agency must follow notice and comment rulemaking procedures when it declares its intent to delay enforcement of certain provisions of a statute depends on whether the declaration is considered a "rule" for the purposes of Section 553 of the APA. Only "legislative rules" are subject to the informal rulemaking procedures outlined in the APA; an agency may promulgate guidance documents and interpretive rules without having to undergo notice and comment procedures. A party may challenge an agency's characterization of any action and argue that a particular statement should have been issued pursuant to notice and comment procedures. However, courts sometimes have difficulty differentiating between general statements of policy, such as guidance documents, and legislative rules. Courts have described a legislative rule to be a rule through which an agency "intends to create a new law, rights or duties," or a rule that is "issued by an agency pursuant to statutory authority and which implement[s] the statute." Similarly, one court explained that a rule is legislative if "in the absence of the rule there would not be an adequate legislative basis for enforcement action or other agency action to confer benefits or ensure the performance of duties." Notably, courts distinguish legislative rules from guidance documents because they have a binding effect: "[I]f a statement has a present-day binding effect, it is legislative." Guidance documents, which are not defined by the APA, generally are considered to be a particular type of agency rule, known as a "general statement of policy." The APA provides that an agency may issue these general statements of policy without having to undergo notice and comment rulemaking procedures. According to the Office of Management and Budget's (OMB's) Final Bulletin on Agency Good Guidance Practices, the term "guidance document" is defined as "an agency statement of general applicability and future effect, other than a regulatory action ... that sets forth a policy on a statutory, regulatory or technical issue or an interpretation of a statutory or regulatory issue." Similarly, the Supreme Court has defined the term "general statement of policy" to be a statement "issued by an agency to advise the public prospectively of the manner in which the agency proposes to exercise a discretionary power." Therefore, guidance documents do not create new legal obligations on the public, but, instead, inform the public on how an agency intends to carry out certain agency functions. One court notes that a statement cannot be characterized as a guidance document, and is instead a legislative rule, if the pronouncement "narrowly limits administrative discretion or establishes a binding norm." Although it can be difficult to ascertain whether a court would characterize an agency statement delaying enforcement actions as a guidance document or a legislative rule, the following examples of such agency statements may provide some guidance on this issue. It appears that, at least in some circumstances, a statement addressing agency enforcement priorities could qualify as a guidance document. When an agency declares that it will only enforce a particular law at a certain time or under certain circumstances, it is not imposing a new legal obligation on the public. In fact, the underlying legal obligation technically remains in effect. Instead, the agency has simply informed the public that it will not seek to enforce the provisions of the statute in the enumerated situations. As addressed in Heckler , it seems the agency could be viewed as exercising administrative discretion when it determines that enforcement of the law in a particular situation should not proceed. Because an agency's decision to enforce a statute in a given situation is discretionary, an agency's announcement of its enforcement policy would appear to qualify as a guidance document under the Supreme Court's decision in Lincoln v. Vigil , which describes a general statement of policy as a statement "issued by an agency to advise the public prospectively of the manner in which the agency proposes to exercise a discretionary power." Further, because such a declaration would not appear to impose any new legal obligations on the public, it would seem that a court could determine that such a statement would not require notice and comment procedures prior to promulgation. For example, on July 3, 2013, the Internal Revenue Service (IRS) issued Notice 2013-45 (Notice), stating that the IRS would not enforce the "employer mandate" of the ACA during 2014 in order to allow for "additional time for input from employers" on how the law can be effectively implemented. The Notice further encourages employers to "voluntarily comply with the information reporting provisions." The IRS promulgated the Notice without undergoing notice and comment rulemaking procedures. However, the IRS does not appear to impose a new legal obligation on any parties, but, rather, the IRS seems to notify the public of its intent to not enforce these provisions against employers during 2014. A court would likely find that such a statement is a guidance document, because it merely notifies the public on how the agency plans to perform a discretionary function--enforcement discretion. However, in other circumstances, an agency's declaration of a delay or enforcement policy could require notice and comment procedures. In February 2014, the IRS announced final regulations implementing the employer mandate from the Affordable Care Act. In those regulations, the IRS provided for "transition relief" from the employer mandate tax for certain employers--that is, qualifying employers would not have to pay the tax. In order to be eligible for transition relief, employers must certify that they have met certain requirements established by the agency. Here, because the IRS is requiring employers to conduct a specific activity in order to be eligible for the transition relief--that is, provide certification--the transition relief is imposing a legal obligation on a party in order to qualify for a specific form of tax treatment. It would appear that an agency taking this approach to delaying a statutory provision would have to use informal rulemaking procedures because the agency would impose a legal obligation on a party, who wanted to benefit from the delay. Under the other form of agency delay--that is, where an agency fails to take a discrete action by a statutory deadline--no rulemaking is required. Often the agency has simply not been able to accomplish the required action within the time provided by Congress. In this type of situation, the agency has not taken any action; therefore, no rulemaking procedures are required. However, as mentioned above, an agency may be subject to a suit by a party seeking to compel the agency to take action.

Congress regularly authorizes and requires administrative agencies to implement and enforce regulatory programs. As such, agencies routinely make decisions about when to promulgate regulations and when to enforce statutory requirements against parties who violate the law. During the 113th Congress, the Obama Administration announced that certain federal agencies would not enforce specific aspects of the Affordable Care Act (ACA) for a period of time in order to allow the public to further prepare for proper compliance with the law in the future. This has led to numerous questions regarding how courts treat administrative delays of regulatory programs. When can a suit be brought to force the agency to apply the law? It is important to distinguish between two distinct types of agency delays: (1) delays resulting from when an agency fails to meet a statutory deadline for promulgating rules or completing particular adjudications, and (2) affirmative decisions to withhold enforcement of a provision of law on the public at large. The former arises in a scenario in which Congress has enacted a statute that expressly requires an agency to take a specific action by a certain date that the agency fails to meet. Because agencies can often struggle to meet tight congressional deadlines imposed by laws, courts have established a balancing test, known as the TRAC test, to determine whether the agency should be compelled to take action. The second type of delay occurs in a scenario in which an agency refuses, for a period of time, to enforce a statutory prohibition or requirement that Congress has imposed on third parties. This type of delay is generally implemented by announcing a period of non-enforcement during which the agency will not pursue or punish non-compliance with the law. Courts determine whether these delays are reviewable in court by following the Supreme Court's holding in Heckler v. Chaney. This report will discuss the general legal principles applied in determining whether administrative delays are reviewable in court in these two different contexts and then address whether the procedures outlined in the Administrative Procedure Act (APA) are applicable to these delays.

Presidential establishment of national monuments under the Antiquities Act of 1906 (16 U.S.C. SSSS431-433) has protected valuable sites, but also has been contentious. President Clinton used his authority 22 times to proclaim 19 new monuments and to enlarge 3 others (see Appendix ). With one exception, the monuments were designated during President Clinton's last year in office, on the assertion that Congress had not acted quickly enough to protect federal land. The establishment of national monuments by President Clinton raised concerns, including the authority of the President to create large monuments; impact on development within monuments; access to monuments for recreation; and lack of a requirement for environmental studies and public input in the monument designation process. Lawsuits challenged several of the monuments on various grounds, described below. The Bush Administration examined monument actions of President Clinton and the Interior Department is developing management plans for DOI-managed monuments. Recent Congresses have considered, but not enacted, bills to restrict the President's authority to create monuments and to establish a process for input into monument decisions. Monument supporters assert that changes to the Antiquities Act are neither warranted nor desirable, courts have supported presidential actions, and segments of the public support such protections. The Antiquities Act of 1906 authorizes the President to proclaim national monuments on federal lands that contain "historic landmarks, historic and prehistoric structures, and other objects of historic or scientific interest." The act does not specify particular procedures for creating monuments. It was a response to concerns over theft and destruction of archaeological sites, and was designed to provide an expeditious means to protect federal lands and resources. Congress later limited the President's authority in Wyoming (16 U.S.C. SS431a) and Alaska (16 U.S.C. SS3213). Presidents have designated about 120 national monuments, totaling more than 70 million acres, although most of this acreage is no longer in monument status. Congress has abolished some monuments outright, and converted many more into other designations. For instance, Grand Canyon initially was proclaimed a national monument, but was converted into a national park. Congress itself has created monuments on federal lands, and has modified others. President Clinton's 19 new and 3 enlarged monuments comprise about 5.9 million federal acres. Only President Franklin Delano Roosevelt used his authority more often--28 times--and only President Jimmy Carter created more monument acreage--56 million acres in Alaska. Various issues regarding presidentially-created monuments have generated both controversy and lawsuits. Issues have included the size of the areas and types of resources protected, the inclusion of non-federal lands within monument boundaries, restrictions on land uses that may result, the manner in which the monuments were created, the selection of the managing agency, and other legal issues. Courts have upheld both particular monuments and the President's authority to create them. For instance, a court dismissed challenges to Clinton monuments which were based on improper delegation of authority by Congress; size; lack of specificity; non-qualifying objects; increased likelihood of harm to resources; and alleged violations of the National Forest Management Act of 1976 (NFMA, 16 U.S.C. SS1601 et seq .), Administrative Procedure Act (APA, 5 U.S.C. SS551 et seq .), and National Environmental Policy Act (NEPA, 42 U.S.C. SS4321 et seq .). In another case, a court found that plaintiffs did not allege facts sufficient to support the court's inquiry into whether the President might have acted beyond the authority given him in the Antiquities Act. Critics assert that large monuments violate the Antiquities Act, in that the President's authority was intended to be narrow and limited. The monuments designated by President Clinton range in size from 2 acres to 1,870,800 acres. Defenders argue that the Antiquities Act gives the President discretion to determine the acreage necessary to ensure protection of the designated resources, while reserving "the smallest area compatible with the proper care and management of the objects to be protected" (16 U.S.C. SS431). Critics also contend that President Clinton used the Antiquities Act for impermissibly broad purposes, such as general conservation and scenic protection. Supporters counter that the act's wording--"other objects of historic or scientific interest"--grants broad discretion to the President. Further, some claim that the Antiquities Act is designed to protect only objects that are immediately endangered or threatened, but others note that the Antiquities Act lacks such a specific requirement. To date, the courts have upheld the authority of the President on these issues. Non-federal lands are contained within the boundaries of some national monuments. Some state and private landowners have been concerned that development of such non-federal land is, or could be, more difficult because it might be judged incompatible with monument purposes or constrained by management of surrounding federal lands. Monument supporters note that concerned state and local landowners can pursue land exchanges with the federal government. State and local officials and other citizens have been concerned that monument designation can limit or prohibit development on federal lands. They argue that local communities are hurt by the loss of jobs and tax revenues that result from prohibiting or restricting future mineral exploration, timber development, or other activities. The potential effect of monument designation on energy development has been particularly contentious, given the current emphasis on energy production. Subject to valid existing rights, most of the recent proclamations bar new mineral leases, mining claims, prospecting or exploration activities, and oil, gas, and geothermal leases, by withdrawing the lands within the monuments from entry, location, selection, sale, leasing, or other disposition under the public land laws, mining laws, and mineral and geothermal leasing laws. Further, the FY2006 Interior, Environment, and Related Agencies Appropriations Act ( P.L. 109-54 ) continued a ban on using funds for energy leasing activities within the boundaries of national monuments as they were on January 20, 2001, except where allowed by the presidential proclamations that created the monuments. Mineral activities that would be allowed may have to adhere to a higher standard of environmental regulation to ensure compatibility with the monument designation and purposes. Others claim that monuments have positive economic impacts, including increased tourism, recreation, and relocation of businesses in those areas. Some maintain that development is insufficiently limited because recent monument proclamations typically have preserved valid existing rights for particular uses, such as mineral development, and continued certain activities, such as grazing. Some recreation groups and other citizens have opposed restrictions on recreation, such as hunting and off-road vehicle use. Proclamations typically have restricted some such activities to protect monument resources, and additional restrictions are being considered for management plans in development. Critics of the Antiquities Act argue that its use is inconsistent with the intent of the Federal Land Policy and Management Act of 1976 (FLPMA, 43 U.S.C. SS1701 et seq .) to restore land withdrawal policy to Congress. A withdrawal restricts the use or disposition of public lands, e.g., for mineral leasing. In enacting FLPMA, Congress repealed much of the President's withdrawal authority and limited the ability of the Secretary of the Interior to make land withdrawals. It required congressional review of secretarial withdrawals exceeding 5,000 acres, and contains notice and hearing procedures for withdrawals. Supporters note that in enacting FLPMA, Congress did not repeal or amend the Antiquities Act and thus desired to retain presidential withdrawal authority. Critics of the Antiquities Act also assert that there has been insufficient public input and environmental studies on presidentially-created monuments, and favor amending the Antiquities Act to require public and scientific input similar to that required under NEPA, FLPMA, and other laws. Others counter that such changes would impair the ability of the President to act quickly and could result in resource impairment or additional expense. They assert that Presidents typically consult in practice , and that NEPA applies only to proposed actions that might harm the environment and not to protective measures. Whereas previously the National Park Service (NPS) had managed most monuments, President Clinton selected the Bureau of Land Management (BLM) and other agencies to manage many of the new monuments. Some critics have expressed concern that the BLM lacks sufficient expertise or dedication to land conservation to manage monuments. President Clinton chose BLM where its own lands were involved, to increase the agency's emphasis on land protection, and possibly both to protect the lands and manage them for multiple uses. Mineral development, timber harvesting, and hunting are the principal uses that would be legally compatible with BLM management but not with management by the NPS. Grazing also typically is allowed on BLM lands, but often precluded on NPS lands. The "Property Clause" of the Constitution (Article IV, sec. 3, cl. 2) gives Congress the authority to dispose of and make needed rules and regulations regarding property belonging to the United States. Some have asserted that the Antiquities Act is an unconstitutionally broad delegation of Congress' power, because the President's authority to create monuments is essentially limitless since all federal land has some historic or scientific value. A court dismissed a suit raising this issue, and this holding was affirmed on appeal. (See footnote 2 ). The recent monument designations renewed discussion of whether a President can modify or eliminate a presidentially-created national monument. While it appears that a President can modify a monument, it has not been established that the President, like Congress, has the authority to revoke a presidential monument designation. (For more information, see CRS Report RS20647, Authority of a President to Modify or Eliminate a National Monument , by [author name scrubbed] (pdf).) The Bush Administration examined the monument actions of President Clinton, including whether to exclude private, state, or other non-federal lands from the boundaries of newly-created monuments. There has been no comprehensive Administration effort to redesignate the monuments with altered boundaries. While the monument designation does not apply to these non-federal lands, most of President Clinton's monument proclamations stated that they will become part of the monument if the federal government acquires title to the lands from the current owners. Also, the Interior Department continues to develop management plans for new monuments within its jurisdiction. Further, President Bush reestablished one monument--the Governors Island National Monument in New York--on February 7, 2003. Legislation to amend the Antiquities Act of 1906 has not been introduced thus far in the 109 th Congress, but was considered in recent Congresses. For instance, H.R. 2386 of the 108 th Congress sought to amend the Antiquities Act to make presidential designations of monuments exceeding 50,000 acres ineffective unless approved by Congress within two years. The measure also would have established a process for public input into presidential monument designations and required monument management plans to be developed in accordance with the National Environmental Policy Act of 1969. Other legislation in recent Congresses has sought to alter particular monuments, for instance, to exclude private land from within their boundaries.

Presidential creation of national monuments under the Antiquities Act of 1906 often has been contentious. Controversy was renewed over President Clinton's creation of 19 monuments and expansion of 3 others. Issues have related to the size of the areas and types of resources protected, the inclusion of non-federal lands within monument boundaries, restrictions on land uses, and the manner in which the monuments were created. The Bush Administration reviewed President Clinton's monument actions and continues to develop management plans for some of the monuments. Congress has considered measures to limit the President's authority to create monuments and to alter particular monuments. Monument supporters assert that these changes are not warranted and that the courts and segments of the public have supported monument designations. This report will be updated to reflect changes.

T he U.S. Army Corps of Engineers (USACE) is an agency within the Department of Defense with both military and civil works responsibilities. Congress directs USACE's civil works activities through authorizations legislation, annual and supplemental appropriations, and oversight activities. This report summarizes USACE's annual discretionary appropriations for civil works activities and its supplemental appropriations, principally following major flood and hurricane disasters. The appropriations described are for those accounts and activities that typically are funded through Title I of annual Energy and Water Development appropriations acts. As part of USACE's civil works activities, Congress has authorized and appropriated funds for the agency to perform the following: water resource projects for maintaining navigable channels, reducing flood and storm damage, and restoring aquatic ecosystems, among other purposes; regulation of activities affecting certain waters and wetlands activities; and remediation of sites involved in the development of U.S. nuclear weapons from the 1940s through the 1960s, administered under the Formerly Utilized Sites Remedial Action Program (FUSRAP). For FY2019, Congress has provided the agency with almost $7.00 billion for civil works activities; these funds are primarily used for the agency's water resource activities, and $200 million is available for USACE regulatory activities and $150 million is available for FUSRAP. In February 2018, Congress also provided more than $17.40 billion in emergency supplemental appropriations in the Bipartisan Budget Act of 2018 (BBA 2018; P.L. 115-123) to certain USACE accounts related to water resource projects. Most of these supplemental funds are directed to repairing damage to existing USACE facilities, paying for flood fighting and repair of certain levees and dams maintained by nonfederal entities and constructing new riverine and coastal flood control improvements. Although this report references USACE's FUSRAP and regulatory accounts, its discussion focuses on funding for the agency's water resources projects. Congress generally authorizes USACE water resource studies and construction projects prior to funding them. For information on the authorization process, see CRS Report R45185, Army Corps of Engineers: Water Resource Authorization and Project Delivery Processes, by [author name scrubbed]. The report first addresses USACE annual appropriations; second, it discusses USACE supplemental appropriations. These discussions address various policy issues for congressional and other decisionmakers associated with USACE funding. The Appendix to this report focuses on how the Trump Administration is using the monies provided to USACE through BBA 2018. USACE civil works activities are led by a civilian Assistant Secretary of the Army for Civil Works (ASACW), who reports to the Secretary of the Army. A military Chief of Engineers oversees the agency's civil and military operations and reports on civil works matters to the ASACW. A civilian Director of Civil Works reports to the Chief of Engineers. The agency's civil works responsibilities are organized under eight geographically based divisions, which are further divided into 38 districts. The Trump Administration released a proposal in June 2018 to remove USACE civil works from the Department of Defense. Although some Members of Congress have indicated support for looking at what USACE functions may not need to be in the Department of Defense, the conference report that accompanied the USACE appropriations for FY2019, H.Rept. 115-929 , opposed the Administration's proposal and indicated that "no funds provided in the Act or any previous Act to any agency shall be used to implement this proposal." USACE water resource projects attract congressional attention because these projects can have significant local and regional economic benefits and environmental effects. Unlike federal funding for highways and municipal water infrastructure, the majority of federal funds provided to USACE are not distributed by formula to states or through competitive grant programs. Instead, USACE generally has been directly engaged in the planning and construction of projects; the majority of its appropriations are used to perform work on geographically specific studies and projects authorized by Congress. USACE operates more than 700 dams; has built 14,500 miles of levees; and improves and maintains more than 900 coastal, Great Lakes, and inland harbors, as well as 13,000 miles of deep-draft channels and 12,000 miles of inland waterways. For most activities, Congress requires a nonfederal sponsor to share some portion of project costs. For some project types (e.g., levees), nonfederal sponsors own the completed works after construction and are responsible for operation and maintenance. As nonfederal entities have become more involved in USACE projects and their funding, these entities have expressed frustration with the time it takes USACE to complete studies and construction. Only a subset of authorized USACE construction activities are included in the President's budget request and funded annually by federal appropriations. Consequently, numerous authorized USACE projects or project elements have yet to receive federal construction funding. An estimated $96 billion in authorized USACE construction projects and dam safety work is eligible for USACE construction appropriations; discretionary appropriations for the USACE Construction account in annual Energy and Water Development appropriations bills have averaged $2 billion in recent years. Congress enacted an omnibus USACE authorization bill in 2014, the Water Resources Reform and Development Act of 2014 (WRRDA 2014; P.L. 113-121 ). Congress followed WRRDA 2014 with enactment in December 2016 of the Water Resources Development Act of 2016, which was Title I of the Water Infrastructure Improvements for the Nation Act ( P.L. 114-322 ). Among other things, these laws expanded authorities providing alternative ways to advance and deliver USACE studies and projects. To expand delivery options, Congress increased the flexibility in nonfederal funding of USACE-led activities and nonfederal leadership of USACE studies and projects. Competition for USACE discretionary appropriations also has increased interest in alternative project delivery and innovative financing , including private financing and public-private partnerships. In addition, Congress in WRRDA 2014 authorized new financing mechanisms for water resource projects. These statutes also provided that the costs of these nonfederally led activities generally are shared by the federal government largely as if USACE had performed them. That is, subject to the availability of federal appropriations, nonfederal entities advancing water resource projects may be eligible to receive credit or reimbursement (without interest) for their investments that exceed the required nonfederal share of project costs. These authorities typically require that the nonfederal entity leading the project comply with the same laws and regulations that would apply if the work were being performed by USACE. Congress typically funds USACE water resource activities through an annual Energy and Water Development appropriations bill. Because Congress in recent decades has authorized construction of water resource projects at a rate that exceeds the agency's annual construction appropriations, only a subset of authorized activities typically are included in the President's budget request and eventually funded by enacted appropriations. This situation results in competition for funds among authorized activities during the budget development and appropriations processes. Since the 112 th Congress, site-specific project line items added by Congress (i.e., congressionally directed spending , also referred to as earmarks ) have been subject to House and Senate earmark moratoriums. Consequently, appropriators generally have refrained from inserting in appropriations bills and accompanying reports funds for specific projects that were not requested in the President's budget. This practice has resulted in post-enactment agency work plans that identify how funds provided by Congress that were not requested by the President are being distributed across authorized USACE studies and projects. In the congressional reports and explanatory statements that accompany the annual appropriations bills for USACE, Congress has provided guidance to the Administration on activities to prioritize during the development of the work plan. Congress also has authorized the Chief of Engineers to undertake certain flood fighting activities and to repair damage to certain nonfederal flood control works. To fund these activities and repairs to USACE-operated projects (e.g., dredging to clear a navigation channel following a storm), Congress often has provided supplemental funds to certain USACE accounts. At times, including in BBA 2018, Congress also has funded construction of new flood control projects in areas affected by recent flood disasters. As discussed in detail later in this report (see below section, " USACE Annual Appropriations "), Congress has provided USACE accounts with almost $45 billion in supplemental appropriations in response to flood disasters since FY2005, of which almost $24 billion was for construction of flood control projects. Congress provided $15 billion of the $24 billion in construction funds in BBA 2018. As shown in Figure 1 , Congress often appropriates more for USACE civil works than is requested by the President. In the text of enacted appropriations laws, Congress generally provides money to USACE at the account level. Accompanying appropriations reports (i.e., conference reports, committee reports, or explanatory statements), which sometimes are incorporated into law by reference, often identify specific USACE projects to receive appropriated funds. With the heightened attention to and restrictions on congressionally directed spending since FY2010, the projects identified in these reports have been limited largely to the projects included in the President's budget request; that is, Congress has not been adding new project-specific funding amounts. Instead, congressional action on USACE appropriations generally has been the provision of additional funding for various types of USACE activities (see below section, " Principal Documents and Process, Including Additional Funding ") and guidance on the use of the additional funding. In annual appropriations bills, Congress generally provides the majority of the agency's funding to two accounts--the Construction account and the Operations and Maintenance (O&M) account. The O&M account has made up a growing portion of the agency's use of annual appropriations, as shown in Figure 2 . The O&M account has increased from 39% of the USACE annual appropriations in FY2005 and 37% in FY2006 and FY2007 to 53% in FY2017, FY2018, and FY2019. This shift is consistent with efforts by recent Administrations and Congresses to limit funding for new construction activities (referred to as new starts or new construction starts ) and to focus instead on completing existing projects and on actions to address aging infrastruct ure. Enacted appropriations bills since FY2014 have allowed the agency to initiate a specified number of USACE new start studies and construction projects. For example, as in FY2018, Congress will allow FY2019-enacted funding to be used to initiate a maximum of five new construction projects. Congress uses the Flood Control and Coastal Emergencies (FCCE) account for USACE flood fighting and related emergency response preparedness and for repair of damage to certain nonfederal flood control works. For more on this account, see the below box titled "Flood Fighting and the Flood Control and Coastal Emergencies (FCCE) Account." The Mississippi River and Tributaries account (MR&T) account consists of flood control and navigation projects for the lower Mississippi River Valley. The President's budget request for USACE typically includes funding information at the account level (i.e., Investigation, Construction, and O&M), as shown in the appendix to the President's FY2019 budget request. More detailed information regarding the request is available in the agency's budget justification; the budget justification provides information for specific activities, such as identifying the level of funding requested for particular USACE studies and construction projects. USACE also publishes a summary of this information in a document it refers to as the p ress b ook . The press book shows the requested funding for USACE projects for each state, and it shows how the President's requests for various accounts are distributed across the agency's business line s (i.e., types of activities, such as navigation, restoration, and recreation). In recent years, the executive branch has justified decisions about which projects to fund and at what level through a number of metrics, including benefit-cost ratios and other metrics outlined in USACE budget development guidance each year. For decades through the annual discretionary appropriations process, Congress identified numerous USACE projects to receive funding that were not in the President's request and provided more funding than requested for others that were in the President's request. Since the 112 th Congress, congressional funding for site-specific projects has been subject to House and Senate earmark moratoriums. Since the 112 th Congress, in lieu of increasing funding for specific projects, Congress has provided additional funding for specific categories of work within some USACE budget accounts. That is, in recent appropriations cycles, Congress has included additional funding categories for various types of USACE projects (e.g., additional funding for ongoing maintenance of small, remote, or subsistence harbors), along with directions and limitations on the use of these funds on authorized studies and projects. USACE typically has been directed to report back to Congress in annual work plans on how these funds will be allocated at the project level. Recent levels of additional funding are shown below in Figure 3 . The work plan is developed by the Administration after enactment of the appropriations bill. For example, Congress in P.L. 115-244 provides $2.21 billion more than the President's request for FY2019; of this $2.21 billion, $2.07 billion is identified as additional funding for a total of 25 categories of USACE activities in four budget accounts. The accompanying conference report, H.Rept. 115-929 , calls for USACE, within 60 days of enactment, to issue a work plan that included the specific amount of additional funding to be used for each project. These work plans typically consist of a few pages of tables that list the projects, the amount of the additional funding that each project will receive, and in some cases a brief description of what is to be accomplished with the funds. For projects that were not in the budget justifications accompanying the President's initial budget request, the information included in the work plan is in many cases the extent of the Administration's explanation of how these funds are to be used. USACE administers two congressionally authorized trust funds, and both require annual appropriations to draw on their balances; that is, these funds are "on budget." The Harbor Maintenance Trust Fund (HMTF) and the Inland Waterways Trust Fund (IWTF) support cost-shared investments in federal navigation infrastructure for harbors and inland waterways, respectively. Use of HMTF monies is restricted largely to maintenance, and use of IWTF monies is limited largely to construction. Federal funding for harbor-related maintenance activities is funded in large part from the HMTF. This trust fund receives revenues from taxes on waterborne commercial cargo imports, domestic cargo, and cruise ship passengers at federally maintained ports. Similarly, the IWTF is authorized to fund roughly half of inland waterways construction; the IWTF receives the proceeds of a fuel tax on barge fuel for vessels engaged in commercial transport on designated waterways. In recent fiscal years, the HMTF has developed a surplus balance (nearly $10 billion at the start of FY2019), as appropriations from the fund have been less than receipts accruing to it. Conversely, the limited IWTF balance in recent years prevented the fund from supporting earlier levels of expenditures on waterway construction. Both trust funds were addressed in 2014 authorizing legislation, and spending from both funds has subsequently increased. Whether these trust funds will continue to provide for increased spending on inland and coastal navigation will depend in part on future appropriations legislation and actions on other legislative proposals. For example, H.R. 1908 , Investing In America: Unlocking the Harbor Maintenance Trust Fund Act, if enacted would make an amount equivalent to the harbor maintenance tax collections during the previous fiscal year available for authorized harbor maintenance. In January 2017, USACE estimated the cost to achieve and maintain constructed widths and depths of coastal navigation channels at $7.6 billion over the subsequent five-year period (i.e., $1.5 billion annually) and an additional $7.0 billion for the five years that follow. In FY2017, USACE used $1.2 billion (most of which was derived from the HMTF) on coastal navigation maintenance. The economic benefit of maintaining channels to these dimensions would vary from channel to channel depending on the cost of the dredging and the reduced transportation cost to shippers (and the benefits to the broader economy) resulting from improved navigation conditions. Most inland waterway construction and major rehabilitation costs are shared by the federal government (50%) and commercial users through the IWTF (50%). IWTF monies derive primarily from a fuel tax on commercial vessels on 27 designated federal waterways. At times, the level of collections from the fuel tax have been a limiting factor in the construction of inland waterways projects. In P.L. 113-295 , Congress authorized a $0.09 per gallon increase in the fuel tax, resulting in a barge fuel tax of $0.29 per gallon beginning in April 2015. As part of its FY2019 budget request, the Administration submitted a proposal that would establish a new user fee on vessels transporting commercial cargo on the inland waterways, allow the IWTF to cover 10% of O&M expenses, and designate additional federal waterways. P.L. 115-244 did not address the Administration's proposal; instead, Congress chose to alter the use of the IWTF by decreasing the IWTF contribution to the Chickamauga Lock construction on the Tennessee River from 50% to 15% during FY2019, thereby expanding the funding available for other inland navigation construction projects. This 85% General Treasury and 15% IWTF cost sharing is similar to what Congress enacted in WRRDA 2014 for the completion of the Olmsted Locks and Dam. The Olmsted project, which facilitates navigation on the Ohio River, had an extended construction period starting in the early 1990s. The project, which is anticipated to have a total construction cost of $2.78 billion (of which $1.00 billion derived from the IWTF), is anticipated to be completed in FY2019. USACE also undertakes flood fighting activities and other natural disaster response and recovery activities. In recent years, Congress has provided supplemental appropriations through various pieces of legislation, primarily for flood disaster response and disaster recovery. From FY1990 through FY2018, Congress in total provided USACE accounts with almost $50.63 billion in supplemental appropriations, more than $49.20 billion of which was provided from FY2005 through FY2018. Of the more than $49.20 billion provided since FY2005, almost $44.63 billion (91%) was for response to and recovery from flooding and other natural disasters, and $4.58 billion (9%) was for economic stimulus under the American Recovery and Reinvestment Act ( P.L. 111-5 ). The majority of the $44.63 billion for disaster response and recovery was associated with storms in three years--storms including Hurricane Katrina in 2005 (approximately $16 billion); Hurricane Sandy in 2012 ($5.3 billion); and Hurricanes Harvey, Irma, and Maria in 2017 (at least $10.5 billion of the almost $17.4 billion of funds provided in BBA 2018). All USACE civil works supplemental funding from FY2000 through FY2018 is shown in Table 1 and Figure 4 . For context, annual appropriations for USACE flood-related activities nationally that were provided in Energy and Water Development appropriations acts from FY2005 though FY2018 totaled around $23.10 billion. Table 1 shows account-level funding in enacted USACE supplemental appropriations bills. Figure 4 , using data in Table 1 and adjusting the appropriations to 2018 dollars, shows how the amounts provided to USACE through supplemental appropriations have increased over the last three decades. During its deliberations on USACE supplemental appropriations, Congress often considers various issues and special conditions associated with the provision of these funds. These considerations include what type of flood damage reduction efforts to support (e.g., repair of existing infrastructure, construction of new infrastructure), Congress's role in authorizing the construction of USACE projects that receive supplemental funds, and whether to maintain or alter requirements for nonfederal cost sharing. For examples of the special considerations for USACE funds provided by BBA 2018, see the Appendix to this report. Supplemental USACE funding debates also raise broader questions for policymakers, such as the effectiveness and efficiency of processes such as those for post-disaster supplemental appropriations and USACE annual budget development, especially in regard to identifying and supporting priority investments in reducing the nation's flood risk. The following sections discuss three current policy topics related to USACE supplemental appropriations in more detail: transparency on the use of USACE supplemental appropriations; funding nonfederal interests to study and construct federal flood control projects; and the level of supplemental appropriations for construction activities. Enacted supplemental bills typically define what, if any, congressional reporting is required related to the use of USACE supplemental funds. For example, P.L. 113-2 , which provided funds to USACE largely for repair and recovery from Hurricane Sandy, required two reports of the agency. The second of the two reports identified on which projects USACE planned to spend roughly $2.16 billion of the $3.46 billion in construction funding provided to USACE; no further project-level public reporting was required. On August 9, 2018, the ASACW provided detailed policy guidance for how most of the USACE funds provided in BBA 2018 are to be implemented, including defining key terms and clarifying when nonfederal cost sharing would not be required. A few weeks earlier, on July 5, 2018, USACE released tables listing which USACE projects were to receive much of the funding provided by BBA 2018. Similar to the work plans, these tables provide little information beyond the project name and in some cases the estimated cost to be covered by the funds. For more information on the Trump Administration actions associated with the USACE accounts funded by BBA 2018, see the Appendix to this report. The August 9, 2018, ASACW implementation guidance for BBA 2018 includes the following statement: "In addition the Corps should consider the use of various authorities (such as WRRDA 2014, Section 1043) that encourage expanded non-Federal participation in studies and projects." The statement appears in the portion of the guidance related to the long-term disaster recovery activities, which include activities funded through the Investigations, Construction, and Mississippi River and Tributaries accounts. Section 1043 of WRRDA 2014 authorizes a study and construction pilot program that can be used to transfer federal funds to nonfederal interests for them to perform studies and construct projects; unlike with other authorities that allow nonfederal interests to lead USACE studies and projects and then be reimbursed for what would have been the federal costs, the Section 1043 authority would allow the pilot studies and construction projects to have federal funds up front. As of the end of September 2018, USACE had not publicly released implementation guidance for Section 1043 of WRRDA 2014, and there is no publicly available indication that the provision's authority has been used to transfer to nonfederal interests annual or supplemental federal appropriations. Supplemental bills have funded various USACE accounts. For many years, Congress principally limited its supplemental funding for USACE to the FCCE account and the O&M account. Since FY2005, Congress also has regularly provided supplemental funding for other USACE accounts, such as the Construction account. BBA 2018 provided 87% ($15.055 billion) of its $17.398 billion to the USACE Construction account; $55 million of this was for repairs of USACE construction projects damaged by floods, and the remaining $15.0 billion was designated for construction of riverine and coastal flood risk reduction projects. Of the supplemental funds that Congress provided to USACE for Hurricanes Katrina and Sandy, 31% and 65%, respectively, went to the Construction account. In contrast, after other disasters, Congress has not provided supplemental appropriations for post-disaster USACE construction, including for the 2008 Hurricane Ike-impacted Texas coast, the Midwest areas impacted by the 2011 and 1993 floods, or the 1992 Hurricane Andrew-impacted areas. Of the amounts provided to the agency's Construction account from FY2005 through FY2018, supplemental construction appropriations totaled $23.76 billion (exclusive of the American Recovery and Reinvestment Act; P.L. 111-5 ), and annual Construction account appropriations for riverine and coastal flood control projects totaled almost $12.83 billion, as shown in Figure 5 . That is, with enactment of BBA 2018, supplemental funding for flood-related construction outpaced flood-related construction funded through annual appropriations from FY2005 through FY2018. Pursuant to the text of the supplemental appropriations legislation, these supplemental appropriations typically are available only for USACE activities in flood-affected areas, states, or territories. Although some of the funding has provided for (or is expected to provide for) the completion of ongoing construction projects in flood-affected areas, a significant portion of the funding has been allocated to construction projects that were not funded for construction prior to the flood event or the enactment of the supplemental appropriations law. Also supplemental bills often alter or waive various requirements that otherwise are standard for USACE activities, such as cost shares, project cost increase limitations, and congressional limits on new studies and new construction starts. Supporters of supplemental appropriations for the Construction account for USACE flood control projects in natural disaster-affected areas view these projects as part of recovery efforts and as means to improve the affected areas' flood resilience. Congress may provide these funds with special considerations (e.g., designated as emergency funding and not requiring budgetary offsets; and waiving nonfederal cost-share requirements). Other stakeholders support more funding for flood risk reduction in the annual appropriations process, in which authorized projects in all states and insular areas compete with one another for the annual funding. Still other stakeholders would prefer more attention and funding that supports other programs and measures to reduce the nation's flood risks. (For an overview of federal flood-related assistance programs, see CRS Report R45017, Flood Resilience and Risk Reduction: Federal Assistance and Programs , by [author name scrubbed] et al.) This report describes four shifts in the funding of USACE activities: Shift to Operations and Maintenance. An increasing share of annual discretionary appropriations is used on USACE O&M activities. The O&M account has increased from 39% of the USACE annual appropriations in FY2005 to 53% in FY2019. Shift to Administration Work Plans. Congress has provided an increasing portion of USACE annual appropriations to various additional funding categories of work. In FY2012 and FY2019, Congress provided $0.5 billion and $2.2 billion, respectively, in additional funding to USACE through the annual appropriations process. The Administration follows congressional guidance to develop post-enactment agency work plans that specify which projects receive the additional funding. Unlike the justification documents that accompany the President's budget request, the project-level details in the work plan are quite limited. Flood-Related Investments Occurring More Through Supplemental Ap p ropriations Than Annual Appropriations . Since FY2005, Congress has provided USACE with more than $44.6 billion in supplemental appropriations in response to flood disasters, of which almost $23.8 billion was for construction of control projects. The Administration identifies which eligible USACE projects or nonfederal-led USACE projects are to receive these funds. Nonfederal Entities Leading Studies and Construction May Expand to Activities Funded by Supplemental Appropriations . Since 2014, Congress has expanded authorizing authorities that allow nonfederal entities to lead USACE studies and construction projects; the Administration has released guidance indicating its interest in using the authority in Section 1043 of WRRDA 2014 to provide federal funds up front for nonfederal-led projects for BBA 2018 funds. At the same time, BBA 2018 eliminated the nonfederal cost share for studies and may fund ongoing construction projects. These trends may raise broader questions for policymakers. Examples of these policy questions include the following: How has Congress's role shifted vis-a-vis USACE and the agency's appropriations, and does that shift affect the type of information and engagement that Congress may pursue in the future regarding USACE's use of appropriations? How do these trends affect the effective, efficient, and accountable use of federal funding provided to USACE? What do these trends portend for USACE's long-term planning, budgeting, and duties? Do the ad hoc enactment of USACE supplemental appropriations and the waivers and geographic limitations often associated with supplemental appropriations result in an equitable use of federal funding? How effective and efficient are annual and supplemental appropriations processes in identifying and supporting priority investments in reducing the nation's flood risk? In the Bipartisan Budget Act of 2018 (BBA 2018; P.L. 115-123 ), Congress has provided $17.398 billion in supplemental appropriations to the following U.S. Army Corps of Engineers (USACE) accounts: $135 million for Investigations for flood risk reduction studies; $15,055 million for Construction (of which $15,000 million is specifically for construction of flood risk reduction projects and $55 million is for short-term repairs to damaged construction projects); $770 million for Mississippi River and Tributaries; $608 million for Operations and Maintenance; $810 million for Flood Control and Coastal Emergencies; and $20 million for Expenses. Congress has designated all funds provided to USACE accounts in the act "as being for an emergency requirement pursuant to section 251(b)(2)(A)(i) of the Balanced Budget and Emergency Deficit Control Act of 1985." This means that these funds are not subject to the statutory limits on discretionary spending. The study and construction funding represents 87% of the $17.398 billion in supplemental appropriations provided by BBA 2018 to USACE. Of the monies in the Construction account, Congress has provided that $15.000 billion was to be used for the following: $10.425 billion is designated for expedited construction of flood and storm damage reduction projects in states and territories affected by Hurricanes Harvey, Irma, and Maria. $4.575 billion is to be used for USACE flood and storm damage reduction construction activities in any state or territory with more than one flood-related major disaster declaration in calendar year (CY) 2014, CY2015, CY2016, or CY2017. Of this amount, $50 million is set aside for smaller projects that reduce the risk of flooding and storm damage being performed under the agency's programmatic authorities (known as continuing authorities programs). BBA 2018 establishes requirements for states and insular areas to be eligible for BBA 2018 study and construction funds. The geographic constraints on BBA 2018 funds mean that some states and territories are eligible for all the funding, some states and territories are eligible for some of the study and construction monies, and some states and territories do not meet the requirements for the BBA 2018 study and construction funds. USACE projects in five states (Florida, Georgia, Louisiana, South Carolina, and Texas) and two territories (U.S. Virgin Islands and Puerto Rico) meet the eligibility requirements for funding from both the $10.425 billion and the $4.575 billion, as shown in Figure A-1 . A total of 33 states and 3 territories meet the criterion of one flood-related major disaster declaration in CY2014, CY2015, CY2016, or CY2017, as shown in Figure A-1 ; that is, $4.575 billion in BBA 2018 funds are available for use on USACE construction projects in these 33 states and 3 territories. Seventeen states (e.g., North Carolina, which was affected by Hurricane Matthew in 2016 and Hurricane Florence in 2018) do not qualify for USACE supplemental construction appropriations provided by the BBA 2018. When using BBA 2018 construction funds (but not when using annual appropriations), projects in Puerto Rico and the U.S. Virgin Islands and ongoing construction projects are 100% federally funded; all other construction activities using these funds follow normal cost-sharing arrangements (e.g., typically 65% federal and 35% nonfederal for construction of flood control projects, but these percentages vary by project due to project-specific conditions). On July 5, 2018, USACE assigned most of the BBA 2018 funds provided for construction and studies to specific USACE projects; that is, of the $15.000 billion, $1.131 billion in construction funds remains unassigned. On August 9, 2018, the Office of the Assistant Secretary of the Army (Civil Works) issued Policy Guidance on Implementation of Supplemental Appropriations in the Bipartisan Budget Act of 2018 ; it provides a definition for key terms, including ongoing construction project, and whether the projects on the July 5, 2018, list qualify as ongoing construction. Table A-1 combines the project-level information for construction projects in the July 5, 2018, list and the August 9, 2018, guidance. The August 9, 2018, guidance identifies ongoing construction projects as: (1) authorized projects that had received funding from the USACE Construction account in FY2015, FY2016, or FY2017, and (2) authorized projects that a nonfederal sponsor was constructing during those three fiscal years pursuant to a potential reimbursement agreement with USACE. Of the $135 million for the Investigation account, BBA 2018 requires that $75 million be available for states and territories affected by Hurricanes Harvey, Irma, and Maria; the statute also states that the remainder (i.e., $60 million) is to be available for "high-priority studies of projects" in any state or territory with more than one flood-related major disaster declaration in CY2014, CY2015, CY2016, or CY2017. When using these funds (but not when using annual appropriations), study costs are 100% federal. Construction Authorization and Role of Congress BBA 2018 amends the role of Congress for some construction projects that receive supplemental USACE construction funds provided in the legislation. The standard process for USACE projects is that after the completion of a multistep project development process (which includes, among other measures, a completed feasibility study and environmental documentation and a report by the agency's Chief of Engineers known as a Chief's Report ), Congress authorizes the project's construction. The authorization is typically in an omnibus water project authorization bill. Division B, Title IV of BBA 2018 includes the following language, which allows for some projects to proceed to construction without project-specific congressional authorization: $15,000,000,000 is available to construct flood and storm damage reduction, including shore protection, projects which are currently authorized or which are authorized after the date of enactment of this subdivision, and flood and storm damage reduction, including shore protection, projects which have signed Chief's Reports as of the date of enactment of this subdivision or which are studied using funds provided under the heading "Investigations" if the Secretary determines such projects to be technically feasible, economically justified, and environmentally acceptable. A deviation from the standard authorization process also is provided for use of USACE funds from the Hurricane Sandy supplemental appropriation while maintaining a role for the House and Senate Committees on Appropriations. Division B, Title X, Chapter 4 of P.L. 113-2 states that upon approval of the Committees on Appropriations of the House of Representatives and the Senate these funds may be used to construct any project under study by the Corps for reducing flooding and storm damage risks in areas along the Atlantic Coast within the North Atlantic Division of the Corps that were affected by Hurricane Sandy that the Secretary determines is technically feasible, economically justified, and environmentally acceptable. Hurricane Sandy Projects in the Bipartisan Budget Act of 2018 In Section 20402, BBA 2018 transfers unobligated balances from the monies provided by P.L. 113-2 to the USACE Flood Control and Coastal Emergencies account ($518.9 million) and the USACE Operations and Maintenance account ($210.0 million) to the Construction account for Hurricane Sandy-related construction projects. The August 9, 2018, Assistant Secretary of the Army for Civil Works implementation guidance for BBA 2018 does not provide explicit guidance on how these transferred funds are to be implemented.

The U.S. Army Corps of Engineers (USACE) is an agency within the Department of Defense with both military and civil works responsibilities. The agency's civil works activities consist largely of the planning, construction, and operation of water resource projects to maintain navigable channels, reduce flood and storm damage, and restore aquatic ecosystems. Congress directs USACE's civil works activities through authorization legislation, annual and supplemental appropriations, and oversight. For Congress, the issue is not only the level of USACE appropriations but also how efficiently the agency is delivering flood control, navigation, and ecosystem restoration projects. These projects can have significant local as well as national economic and environmental benefits. Annual and Supplemental Appropriations USACE discretionary appropriations, which typically are provided through annual Energy and Water Development appropriations acts, have ranged from $4.7 billion to $7.0 billion during the decade from FY2009 to FY2019 and have been increasing since FY2013. In recent years, Congress has directed that more than 50% of the enacted appropriations be used for operation and maintenance of USACE's aging infrastructure. USACE also has a prominent role in responding to natural disasters, especially floods, in U.S. states and territories. Congress increasingly is using supplemental appropriations not only to perform emergency response and repair for damaged flood control works and USACE projects but also to study and construct new projects that reduce flood risks in areas recently affected by hurricanes and floods. From FY2005 through FY2018, Congress enacted 13 supplemental bills related to flooding and natural disasters, providing a total of almost $45 billion to USACE; for the same period, annual discretionary appropriations for USACE's flood-related projects and activities totaled $23 billion. Supplemental appropriations bills often alter or waive various requirements for USACE activities, such as cost shares and project cost limitations, and establish project selection and reporting requirements that differ from requirements for USACE activities funded through annual discretionary appropriations. Issues for Congress Issues for Congress include the significant role of supplemental appropriations in advancing studies and construction of flood control projects since FY2005 and the agency's backlog of authorized but unconstructed projects. The agency has reported a $96 billion backlog of authorized construction projects; for context, annual appropriations for the USACE Construction account (which funds most USACE construction projects) in FY2018 and FY2019 are $2.1 billion and $2.2 billion, respectively. Congress also has limited the number of new studies and construction projects initiated with annual discretionary appropriations (e.g., a limit of five new construction starts using FY2019 appropriations). Given that only a few construction projects typically are started each fiscal year, numerous projects authorized for construction by previous Congresses remain unfunded. USACE may fund some of the authorized flood control projects in its backlog with the more than $17 billion in emergency supplemental appropriations provided to USACE accounts in the Bipartisan Budget Act of 2018 (BBA; P.L. 115-123). Although no numerical limits on starting new studies or construction projects are associated with these funds, the study and construction funds have some geographic limitations that tie their use to areas affected by flooding by the hurricanes in 2017 or by more than one flood in calendar years 2014 through 2017. As a result of this limitation, seventeen states (including North Carolina, which was affected by Hurricane Matthew in 2016 and Hurricane Florence in 2018) did not qualify for USACE supplemental construction appropriations provided through the BBA 2018. Related policy questions for Congress and other decisionmakers include the following: How have the roles of Congress and the Administration shifted vis-a-vis USACE and its appropriations, and does that shift affect the type of information and engagement that Congress may pursue in the future regarding USACE's use of appropriations? How do trends in annual and supplemental appropriations amounts, processes, and requirements influence the effective, efficient, and accountable use of federal funding provided to USACE? What do these trends portend for USACE's long-term planning, budgeting, and duties?

In May of 2013, news broke that the Department of Justice (DOJ) had subpoenaed telephone toll records for numerous telephone lines, including some personal telephone lines, of reporters at the Associated Press (AP). The DOJ had issued these subpoenas and obtained the toll record information prior to notifying the AP The AP and many other news organizations have responded critically, noting that the DOJ's decision not to negotiate with the AP regarding the release of the records deprived AP of the ability to attempt to quash the subpoena in federal court. Some in the media argue this action enabled the DOJ to evade judicial review of its subpoenas. In defending its decision to issue the subpoenas, the DOJ argued that it had complied with its own internal guidelines regarding obtaining information from news media in the course of a criminal investigation, which allowed the agency to circumvent a requirement to negotiate with the affected news media entities if negotiations would pose a substantial threat to the integrity of the investigation. When controversies surrounding the government gaining access to reporters' confidential information arise, news media and other journalists often respond by arguing that journalists should receive special protection from government investigation and interference because the First Amendment's protections of a free press are of paramount importance in a free society. For example, on July 6, 2005, a federal district court in Washington, DC, found Judith Miller of the New York Times in contempt of court for refusing to cooperate in a grand jury investigation relating to the leak of the identity of an undercover CIA agent. The court ordered Ms. Miller to serve time in jail. Ms. Miller spent 85 days in jail. She secured her release only after her informant, I. Lewis Libby, gave her permission to reveal his identity. This incident drew attention to the question whether journalists should have a right to withhold information sought in judicial proceedings and a number of proposals were introduced in Congress to create a federal shield law. The circumstances surrounding the DOJ subpoenas of AP toll records have drawn attention to the issue again in 2013. Forty-nine states afford journalists some protection from compelled release of their confidential sources. The question remains, however, as to whether a concomitant federal privilege exists. The Supreme Court has addressed the issue of journalists' privilege under the First Amendment only once; in Branzburg v. Hayes , it held that the First Amendment provided no privilege to refuse to testify before a grand jury, but it left open the question of whether the First Amendment provides journalists with a privilege in any other circumstances. But, whether or not the First Amendment provides a privilege for journalists to refuse to reveal confidential sources, Congress may provide a privilege through legislation. The Supreme Court has written only one opinion on the subject of journalists' privilege: Branzburg v. Hayes , in which the Court decided three cases. After explaining the grounds on which journalists seek a privilege, the Court noted that the reporters in the cases it was considering were seeking only a qualified privilege not to testify: "Although the newsmen in these cases do not claim an absolute privilege against official interrogation in all circumstances, they assert that the reporter should not be forced either to appear or to testify before a grand jury or at trial until and unless sufficient grounds are shown for believing that the reporter possesses information relevant to a crime the grand jury is investigating, that the information the reporter has is unavailable from other sources, and that the need for the information is sufficiently compelling to override the claimed invasion of First Amendment interests occasioned by the disclosure." In Branzburg , however, the Court held that the First Amendment did not provide even a qualified privilege for journalists to refuse "to appear and testify before state or federal grand juries." The only situation it mentioned in which the First Amendment would allow a reporter to refuse to testify was in the case of "grand jury investigations ... instituted or conducted other than in good faith.... Official harassment of the press undertaken not for purposes of law enforcement but to disrupt a reporter's relationship with his news sources would have no justification." The reporters in all three of the cases decided in Branzburg had sought a privilege not to testify before grand juries. At one point in its opinion, however, the Court wrote that "reporters, like other citizens, [must] respond to relevant questions put to them in the course of a valid grand jury investigation or criminal trial." The reference to criminal trials should be considered dictum, and therefore not binding on lower courts. Branzburg was a 5-4 decision, and, though Justice Powell was one of the five in the majority, he also wrote a concurring opinion in which he found that reporters have a qualified privilege to refuse to testify regarding criminal conduct: Indeed, if the newsman is called upon to give information bearing only a remote and tenuous relationship to the subject of the investigation, or if he has some other reason to believe that his testimony implicates confidential source relationships without a legitimate need of law enforcement, he will have access to the Court on a motion to quash and an appropriate protective order may be entered. The asserted claim to privilege should be judged on its facts by the striking of a proper balance between freedom of the press and the obligation of all citizens to give relevant testimony with respect to criminal conduct. Powell's opinion leaves it uncertain whether the First Amendment provides a qualified privilege for journalists to refuse to testify before grand juries. But "courts in almost every circuit around the country interpreted Justice Powell's concurrence, along with parts of the Court's opinion, to create a balancing test when faced with compulsory process for press testimony and documents outside the grand jury context." Whether or not the First Amendment provides a journalists' privilege, Congress and state legislatures may enact statutory privileges, and federal and state courts may adopt common-law privileges. Congress has not enacted a journalists' privilege, though bills that would do so were introduced in the 110 th and 111 th Congresses. Thirty-three states and the District of Columbia have enacted journalists' privilege statutes, which are often called "shield" statutes. In federal courts, Federal Rule of Evidence 501 provides that "the privilege of a witness ... shall be governed by the principles of the common law as they may be interpreted by the courts of the United States in the light of reason and experience." The federal courts have not resolved whether the common law provides a journalists' privilege. The U.S. Court of Appeals for the District of Columbia, for one, "is not of one mind on the existence of a common law privilege [in federal court].... However, all [three judges on the panel for the case] believe that if there is any such privilege, it is not absolute and may be overcome by an appropriate showing." As for state courts, many states without statutory privileges provide common law protection, making a total of 49 states plus the District of Columbia that have a journalists' privilege. Wyoming is the state without either a statutory or common-law privilege. Outside of the potential existence of a qualified federal privilege, in 1980, the Department of Justice adopted a rule for obtaining information from media organizations, which remains in effect without amendment. The rule provides, in part, "In determining whether to request issuance of a subpoena to a member of the news media, or for telephone toll records of any member of the news media, the approach in every case must be to strike the proper balance between the public's interest in effective law enforcement and the fair administration of justice." In re: Grand Jury Subpoena, Judith Miller is the federal court of appeals decision that declined to overturn the finding of civil contempt against journalists Judith Miller and Matthew Cooper for refusing to give evidence in response to subpoenas served by Special Counsel Patrick Fitzgerald in his investigation of the disclosure of the identity of a CIA agent. After the Supreme Court declined to review the decision, Matthew Cooper agreed to testify, but Judith Miller continued to refuse and was imprisoned as a result. The case was decided by a three-judge panel that issued an opinion for the court written by Judge Sentelle, with all three judges--Sentelle, Henderson, and Tatel--issuing separate concurring opinions. The court's opinion, citing Branzburg , held that the First Amendment does not permit journalists to refuse to testify before a grand jury and said (as quoted above) that the court was not of one mind on the existence of a common-law privilege but that, even if there is one, the special counsel had overcome it. As for the three concurring opinions, Judge Sentelle expressed his view that there is no common-law privilege; Judge Henderson expressed her view that, in the interest of judicial restraint, the court should not "decide anything more today than that the Special Counsel's evidentiary proffer overcomes any hurdle, however high, a federal common-law reporter's privilege may erect"; and Judge Tatel addressed the issues of both the constitutional privilege and the common-law privilege. As for the constitutional privilege, Judge Tatel said that he was "uncertain," in the light of Justice Powell's "enigmatic concurring opinion" in Branzburg , that there is no "constitutional reporter privilege in the grand jury context." Even if there is, however, he agreed that such a privilege would not benefit Miller or Cooper in the case before the court. As for the common-law privilege, Judge Tatel concluded that "'reason and experience' [quoting Federal Rule of Evidence 501] as evidenced by the laws of forty-nine states and the District of Columbia, as well as federal courts and the federal government, support recognition of a privilege for reporters' confidential sources." Judge Tatel found, however, that, in the present case, "the special counsel has established the need for Miller's and Cooper's testimony." The existence of a qualified reporters' privilege, whether constitutional or otherwise, therefore, remained unresolved following In re Grand Jury Subpoena, Judith Miller . Up to this point, this report has discussed court cases analyzing the existence of a reporters' privilege in federal law, because the reporters in question had the opportunity to oppose the requirement that they produce the information or testimony in court. In a recent example, reporters did not have that opportunity because the government obtained the information without informing the journalists involved. As discussed above, the DOJ, without first consulting the AP, subpoenaed two months of telephone records for more than 20 telephone lines used by AP reporters. The records were presumably obtained from phone companies. While there is no federal statutory shield law, Department of Justice guidelines exist for determining whether to request subpoenas for the news media, or the telephone toll records of the news media. The DOJ acknowledges that the "approach in every case must be to strike the proper balance between the public's interest in effective law enforcement and the fair administration of justice." The guidelines say that negotiations with the affected members of the news media should be pursued in all cases where a subpoena may be issued for telephone toll records, provided that the responsible Assistant Attorney General determines that such negotiations would not pose "a substantial threat to the integrity of the investigation in connection with the records" being sought. The determination that negotiating would not pose a substantial threat to the integrity of the investigation must be authorized by the Attorney General. Furthermore, any subpoena issued for the toll records of a member of the news media must be authorized by the Attorney General. However, in this case, Attorney General Eric Holder recused himself, but later clarified that the deputy attorney general in charge of the case signed off on the subpoenas. Lastly, the guidelines say that if a subpoena is issued, it should be limited as to scope, time, and volume of unpublished material requested. Deputy Attorney General (DAG.) James M. Cole, in his letter to Gary Pruitt, the president and CEO of AP, explained that the toll records had been subpoenaed as part of a criminal investigation into the unauthorized disclosure of classified information. DAG Cole assured the AP that the DOJ had conducted a thorough investigation, exhausting all other avenues of obtaining the information needed before issuing the subpoenas. Cole also explained that the DOJ believed this to be a case in which a substantial threat to the integrity of the investigation existed; therefore, the DOJ did not negotiate with AP. Cole stated this was all accomplished in accordance with the DOJ's guidelines, and that the subpoenas were limited in scope, covering only a two-month period of time. The AP disagrees that the subpoenas were limited in scope and duration, as the DOJ claims, and instead contends that the obtained "records potentially reveal communications with confidential sources across all of the newsgathering activities undertaken by the AP during a two-month period, provide a road map to AP's newsgathering operations, and disclose information about AP's activities and operations that the government has no conceivable right to know." The Reporters Committee for Freedom of the Press has called the seizure of records in this case an unprecedented and overreaching dragnet that "puts an arctic chill on the invaluable information reporters glean from confidential sources every day." The organization has, therefore, asked the DOJ to return the records obtained through the subpoenas to the AP. Lynn Oberlander, the general counsel for The New Yorker , has argued that the AP should have been notified prior to the issuance of the subpoenas in order to give the AP the opportunity to fight the subpoenas in federal court. Other prominent news media organizations have voiced their criticism of the DOJ's actions, as well. It is unclear whether the DOJ adhered to its own guidelines based on the limited amount of information currently publicly available. Nonetheless, this incident, not unlike the case of Judith Miller in 2005, appears to have revived the debate over whether Congress should enact a federal statutory shield law for reporters. The Reporters Committee for Freedom of the Press has already suggested such a remedy. The White House announced its support for the enactment of a federal shield law, as well. Those supporting the enactment of a federal shield law argue that the controversy surrounding the subpoena of the AP toll records would have been avoided had there been a federal statute in place. The theory is that under a federal shield law, like the bills that would have created a qualified privilege for journalists proposed in previous Congresses, the DOJ likely would not have been permitted to seek the AP's toll records in secret. Instead, the DOJ would have been required to negotiate with the AP for the release of the records and the AP likely would have had the opportunity to oppose the subpoenas in federal court. While the DOJ may have obtained the records anyway, the process would have been subject to judicial review, and, it is possible that the scope of the records covered by the subpoena would have been narrowed. On May 14, 2013, Representative Poe introduced H.R. 1962 , which is a new version of the Free Flow of Information Act in the House of Representatives. The following day, Senator Charles Schumer introduced companion legislation in the Senate, S. 987 , also entitled the Free Flow of Information Act. The bills are substantially similar to legislation that was introduced and debated in 2007 and 2009. The bills would create statutory procedures by which federal entities would be required to abide when obtaining testimony or records from journalists and their communications service providers. The result of the enactment of these procedures would be a privilege for journalists against testifying or providing documents to the federal government unless the journalists were given notice and an opportunity to be heard in court and the government has met its burden for requiring the production of the documents or testimony. H.R. 1962 would apply the privilege in cases arising under federal law in which a "Federal entity" sought to compel testimony or the production of any document in the possession of a person covered by the privilege. The bill would define a "Federal entity" as "an entity or employee of the judicial or executive branch or an administrative agency of the Federal Government with the power to issue a subpoena or issue other compulsory process," but not the legislative branch. In other words, any time the federal government (with the exception of Congress or any legislative agency) sought to compel journalists to disclose information created as a part of engaging in journalism, the privilege would apply. The privilege would not apply in state court or to matters arising under state law. H.R. 1962 would protect (subject to qualifications discussed below) any testimony and any documents, defined as "writings, recordings, and photographs, as those terms are defined by Federal Rule of Evidence 1001 (28 U.S.C. App.)," that were obtained or created by a "covered person as part of engaging in journalism." Even if one of the exceptions allowing disclosure applies, H.R. 1962 would place limitations on compelled disclosure. Disclosure that is compelled if the privilege is overcome could "not be overbroad, unreasonable, or oppressive and, as appropriate, be limited to the purpose of verifying published information or describing any surrounding circumstances relevant to the accuracy of such published information; and be narrowly tailored ... so as to avoid production of peripheral, nonessential, or speculative information." One of the thornier questions facing this legislation is the question of how to define the group of people covered by the privilege. It is clear that lawmakers and media advocates believe that the privilege should apply to journalists employed by The New York Times , the Associated Press, or the Cleveland Plain Dealer . However, the question of whether a person should be considered a journalist becomes murkier when the entity or person in question is a blogger, or a web site like Wikileaks.org. H.R. 1962 would define "covered person" to mean a person who, for financial gain or livelihood, is engaged in journalism, and includes any entity that employs that person, but does not include foreign powers or those designated as terrorist organizations. The bill goes on to define journalism as the "gathering, preparing, collecting, photographing, recording, writing, editing, reporting, or publishing of news or information that concerns local, national, or international events or other matters of public interest for dissemination to the public." In other words, people who earn money as journalists, and those entities that employ them, are covered by the bill. Whether an entity that acts solely as a host or conduit for information it receives from outside sources, such as Wikilieaks.org, could be said to be engaging in journalism under this definition is unclear, and would likely need to be determined by a court. H.R. 1962 would allow the government to compel testimony or the production of information from journalists after the journalist has been given notice and an opportunity to be heard in court if the government shows by a preponderance of the evidence that the information is necessary to a criminal investigation or civil matter. The burden of proof would be higher when the government is seeking information that would reveal the identity of a confidential source. In a civil case, a federal entity would not be permitted to compel disclosure of most testimony or information unless a court determined that the government had exhausted all reasonable alternatives for obtaining the information it sought, and that the testimony or document sought is necessary to the successful completion of the matter. In a criminal case, a federal entity would not be permitted to compel disclosure unless a court determined first that the government had exhausted all reasonable alternatives for acquiring the testimony or information, that there were reasonable grounds to believe a crime had occurred, and that the testimony or document is critical to the investigation, prosecution, or defense. If the information or testimony sought in either a criminal or civil case could lead to the revelation of the identity of a confidential source, in addition to the findings in the previous paragraph, the court also would have to find that one of three special circumstances were met before compelling the disclosure or testimony. First, confidential source information may be compelled if it was necessary to prevent an act of terrorism, or other significant harm to national security with the objective of preventing that harm. Second, confidential source information could be disclosed if the information is necessary to prevent imminent death or significant bodily harm. Third, disclosure of confidential source information could be compelled if it was necessary to identify a person who had disclosed a trade secret in violation of the law, individually identifiable health information in violation of federal law, or nonpublic personal financial information protected by the Gramm Leach Bliley Act. Noticeably, the exception for disclosure related to national security threats relates only to disclosure that would prevent terrorist attacks or other breaches of national security, and does not appear to cover identifying confidential sources that may have provided information about attacks or breaches that occurred in the past. Furthermore, it is also worth noting that the exceptions for revealing the identity of confidential sources that may have broken the law do not apply to those sources who may have leaked classified government information in violation of federal law. Lastly, after weighing all of the above factors in either a criminal or civil case where the government seeks to compel disclosure by a journalist, the court would then be required to determine that the public interest in compelling disclosure outweighs the public interest in gathering or disseminating news and information before ordering the journalist to produce the documents in question or provide testimony. The bill's privilege also would apply to compelled disclosure from communications service providers. Generally, if the privilege would apply to the person whose records are being sought, the government must provide notice to that covered person and an opportunity for that person to be heard in court in the same manner described above, before the communications service provider may be compelled to produce that document, record or testimony, under this bill. A "communications service provider" would be defined as "any person that transmits information of the customer's choosing by electronic means; and ... includes a telecommunications carrier, an information service provider, an interactive computer service provider, and an information content provider (as such terms are defined in the sections 3 and 230 of the Communications Act of 1934 (47 U.S.C. 153, 230))." The bill would allow notice of the covered person to be delayed until after disclosure had been compelled only if a court determined by clear and convincing evidence that such notice would pose a substantial threat to the integrity of a criminal investigation. Under this exception, the government would be able to obtain the telephone or communications records of a journalist or a media company without the knowledge of the journalists involved, but the exception still would require a high burden of proof on the part of the government and the review and approval of a court. Furthermore, notice could only be delayed, not prevented entirely. The government would be required to disclose to the journalists that it did obtain the records after the threat to its criminal investigation had abated. It should be noted that S. 987 would create a more narrow privilege, in general, than H.R. 1962 . S. 987 would cover only certain information gathered by covered persons, instead of all information. Furthermore, it would define those eligible to be covered by the privilege more narrowly than the House bill. Lastly, the bill would create a more narrow privilege in general, making compelled disclosure by the federal government easier, particularly in the case of criminal investigations that implicate national security, than the House version of the bill. Under the Senate's version of the Free Flow of Information Act of 2013, like the House version, the privilege would apply in cases arising under federal law in which a "Federal entity" seeks disclosure of "protected information" from a "covered person." An important distinction between the House and Senate bills is that H.R. 1962 's privilege would apply whenever any information is sought from a covered person by a federal entity, but S. 987 's privilege only would apply when the information sought is "protected information" as defined by the bill. This distinction will be discussed more fully below. Like H.R. 1962 , S. 987 defines a "Federal entity" as "an entity or employee of the judicial or executive branch or an administrative agency of the Federal Government with the power to issue a subpoena or issue other compulsory process," but does not include the legislative branch. The privilege provision in the bill would not apply in state courts or other state entities or to state law claims that were brought in federal court. S. 987 defines those eligible to invoke the privilege more narrowly than the House version described above. Under the Senate bill, "covered persons" would be defined as those individuals, and the organizations that employ them, who investigate events and procure material via collection of documents, interviews, personal observations, and analysis on a regular basis; have primary intent to disseminate such news and analysis at the inception of the information gathering process; and obtain the information or news in order to disseminate the news to the public by one of the many means of distributing media. One of the primary differences between this definition and the House bill's definition is that it explicitly requires that the person have the intent to disseminate the information at the beginning of the information gathering process. Furthermore, the Senate bill provides a longer list of individuals that would be excluded from the definition of covered persons including agents of foreign powers, individuals on the terrorist watch list, those affiliated with designated terrorist organizations, and those who have committed terrorist acts. Whereas H.R. 1962 would apply to all information obtained or created by covered persons as part of engaging in journalism, S. 987 would apply only to a subset of such information, which the bill would define as "protected information." The main difference between the bills is that S. 987 would protect information gathered by covered persons engaged in journalism if that information were obtained upon a promise of confidentiality or if the information would reveal the identity of a confidential source who had provided information to the covered person under a promise of confidentiality. S. 987 would create a tiered system for the federal government to obtain information from covered persons in which it would be most difficult to obtain information in the course of a civil case, and least difficult to obtain information in the course of a criminal case or investigation, particularly one that involves matters of national security. More specifically, under the bill, federal entities would not be allowed to compel disclosure of "protected information" from a "covered person," unless a court, after notice and an opportunity for the "covered person" to be heard, determined that one of the following exceptions applied. For cases other than criminal investigations (civil cases and investigations), disclosure may be compelled if the court found, by a preponderance of the evidence, that the party seeking production of the testimony or document had exhausted "all reasonable alternative sources (other than the covered person) of the testimony or document," and, based on information obtained from sources other than the covered person, "the protected information sought [was]essential to the successful completion of the matter." Lastly, for disclosure to be compelled, the party seeking to compel the disclosure would be required to establish that the government interest in disclosure clearly outweighed the public interest in gathering and disseminating news. In criminal cases or prosecutions, the government would face a lower bar to compelling disclosure from covered persons. Furthermore, the government would not be required to demonstrate that disclosure is in the public interest in criminal cases. Instead, the burden would be on the covered person to demonstrate that disclosure is not in the public interest. In criminal cases under S. 987 , disclosure may be compelled if the court found, first, that the party seeking to compel disclosure had exhausted all reasonable alternative sources other than the covered person; second, that, based on information obtained from sources other than the covered person, "there [were] reasonable grounds to believe that a crime [had] occurred; the testimony or documents sought [were] essential to the investigation, or prosecution, or to the defense against prosecution"; if the information is being sought by the Justice Department, that the Attorney General certified that the decision to request the information be compelled was made in a manner consistent with the Justice Department's regulations for compelling disclosure from the media; and, finally, the covered person had not established by clear and convincing evidence that the disclosure of the protected information would be contrary to the public interest. Unlike H.R. 1962 , S. 987 enumerates three explicit instances in which the privilege is not available to covered persons when the federal government seeks to obtain protected information. In other words, in these enumerated scenarios, covered persons are not required to be given notice or an opportunity to be heard in court prior to being required to disclose the protected information, further narrowing the availability of the privilege under the Senate version of the bill. First, the privilege would not apply to any "information, record, document, or item obtained as a result of the eyewitness observations of alleged criminal conduct or commitment of alleged tortious conduct by the covered person," unless the alleged criminal or tortious conduct is the act of communicating the information at issue. Second, the privilege would not apply to any protected information that is "reasonably necessary to stop, prevent, or mitigate a specific case of death, kidnapping, substantial bodily harm," criminal conduct against a minor, or the incapacitation or destruction of critical infrastructure. Third, the privilege would not apply in a criminal investigation of the allegedly unlawful disclosure of classified information, if a federal court had found by a preponderance of the evidence that the protected information would assist in preventing an act of terrorism, or other significant and articulable harm to national security; and in any other criminal investigation, the privilege would not apply where the court found by a preponderance of the evidence that the information sought would materially assist the government in preventing, mitigating, or identifying the perpetrator of an act of terrorism, or other acts that have caused or are reasonably likely to cause significant harm to national security. In assessing whether the harm to national security is or would be significant, the court would be required to give deference to the executive branch's assessment. Lastly, S. 987 would limit the availability of this exception for cases involving the unauthorized disclosure of classified information to only those cases in which the information is sought in order to mitigate harm related to an act of terrorism or other significant harm to national security. As a result, not every criminal investigation into the unauthorized disclosure of classified information would be unprotected by the privilege; only those investigations related to acts of terrorism and threats to national security would be unprotected. When the court does find that documents or testimony may be compelled, under S. 987 , the content of those documents or testimony would be required, to the extent possible, to be "limited to the purposes of verifying published information or describing the surrounding circumstances relevant to the accuracy of published information." Furthermore, the documents and testimony compelled, to the extent possible, would be required to be "narrowly tailored in subject matter and period of time covered so as to avoid compelling production of peripheral, nonessential, or speculative information." These limitations are similar to the limitations in the House bill. Under S. 987 , the privilege would apply to information pertaining to covered persons held by communications service providers in the same way that it would if the information were sought from the covered person, unless the disclosure was being sought pursuant to 18 U.S.C. SS2709, which lays out procedures for disclosure to federal investigators of telephone toll records for counterintelligence purposes. If disclosure is sought pursuant to SS2709, a modified privilege would apply. When information or records pertaining to a covered person is sought from a communications service provider, notice and an opportunity to be heard would be required to be provided to the covered person who is a customer or party to the communication sought to be disclosed. However, notice may be delayed if a federal court determines by "clear and convincing evidence that notice would pose a substantial threat to the integrity of a criminal investigation, a national security investigation, or intelligence gathering, or that exigent circumstances exist."

In May of 2013, news broke that the Department of Justice (DOJ) had subpoenaed telephone toll records for numerous telephone lines, including some personal telephone lines, of reporters at the Associated Press (AP). The DOJ had issued these subpoenas and obtained the toll record information prior to notifying the AP The AP and many other news organizations have responded critically, noting that the DOJ's failure to negotiate with the AP regarding the release of the records deprived AP of the ability to attempt to quash the subpoena in federal court. The media argues this action enabled the DOJ to evade judicial review of its subpoenas. In defending its decision to issue the subpoenas, the DOJ argued that it had complied with its own internal guidelines regarding obtaining information from news media in the course of a criminal investigation, which allowed the agency to circumvent a requirement to negotiate with the affected news media entities if negotiations would pose a substantial threat to the integrity of the investigation. When controversies surrounding the government gaining access to reporters' confidential information arise, news media and other journalists often respond by arguing that journalists should receive special protection from government investigation and interference because the First Amendment's protections of a free press are of paramount importance in a free society. The circumstances surrounding the DOJ subpoenas of AP toll records have been no different. The Supreme Court has only decided one case related to a constitutional privilege allowing journalists to refuse to divulge confidential information to the government. In Branzburg v. Hayes, 408 U.S. 665, 679-680 (1972), the Supreme Court held that the First Amendment did not provide even a qualified privilege for journalists to refuse "to appear and testify before state or federal grand juries." The only situation it mentioned in which the First Amendment would allow a reporter to refuse to testify was in the case of harassment or grand jury investigations instituted in bad faith. Nonetheless, a concurrence by Justice Powell that has been followed by a number of federal circuits suggested that there may be a qualified privilege for journalists in grand jury investigations. Despite the fact that there may be either limited or no constitutional protection for journalists, statutory and common law protections do exist. Though many states do have either judicially created or statutory "shield laws" in place, there is no federal statutory shield law. It has been argued that if there had been a federal shield law in place at the time the controversial AP toll record subpoenas were issued, many of the issues raised by the incident could have been avoided. The Obama Administration announced a renewed interest in enacting a federal statute that would grant a qualified evidentiary privilege to reporters. New versions of the Free Flow of Information Act, which has been debated by a number of Congresses in the past, have already been introduced in the House (H.R. 1962) and Senate (S. 987). This report will provide an overview of the constitutional status of a journalist's privilege under the First Amendment; a description of two recent cases in which the government sought confidential information from the press (the Judith Miller case, and the recent AP case); and an analysis of the current proposals for enacting a federal shield law.

The Trump Administration requested $76.2 billion for the Department of Transportation (DOT) for FY2019, 8.6% ($10 billion) less than DOT received in FY2018. The Administration proposed significant cuts in funding for competitive grant programs, zeroing out the BUILD (formerly TIGER) grant program and railroad discretionary grant programs, cutting the Essential Air Service (EAS) program significantly, and reducing funding for public transportation capital grants and Amtrak by half or more. On May 23, 2018, the House Committee on Appropriations reported H.R. 6072 , the FY2019 Transportation, Housing and Urban Development, and Related Agencies (THUD) appropriations bill. The committee recommended $87.8 billion for DOT, a 1.8% ($1.6 billion) increase over the comparable FY2018 amount and 15% ($11.6 billion) above the Administration request. On August 1, 2018, the Senate passed H.R. 6147 ; Division D of that bill is the FY2019 THUD appropriations bill. It would provide a total of $86.6 billion in new budget authority for DOT for FY2019, less than 1% ($427 million) above the comparable FY2018 amount and 14% ($10.4 billion) above the Administration request. With inflation forecast at 2.0% for FY2019, the House committee bill would result in roughly level inflation-adjusted funding for DOT compared to FY2018, while the Senate bill would likely result in a slight reduction in inflation-adjusted funding for DOT compared to its FY2018 level. DOT's funding arrangements are unusual compared to those of most other federal agencies, in that most of its funding is mandatory budget authority coming from trust funds, and most of its expenditures take the form of grants to states and local government authorities. For most federal agencies most, if not all, of their annual funding is discretionary funding. But roughly two-thirds to three-fourths of DOT's funding is mandatory budget authority derived from trust funds. Around one-third to one-fourth of DOT's budget authority is discretionary authority. Table 1 shows the breakdown between the discretionary and mandatory funding in DOT's budgets in recent years. Two large trust funds, the Highway Trust Fund and the Airport and Airway Trust Fund, have typically provided around 90% of DOT's annual funding in recent years (92% in FY2017). That proportion changed significantly in FY2018 as a result of a large increase in the discretionary funding portion of DOT's appropriation (see Table 2 ). The scale of the funding coming from these trust funds is not entirely obvious in DOT budget tables, because most of the funding from the Airport and Airway Trust Fund is categorized as discretionary budget authority and so is combined with the discretionary budget authority provided from the general fund. Approximately 80% of DOT's funding is distributed to states, local authorities, and Amtrak in the form of grants (see Table 3 ). Of DOT's largest subagencies, only the Federal Aviation Administration, which is responsible for the operation of the air traffic control system and employs roughly 83% of DOT's 56,252 employees, many as air traffic controllers, has a budget whose primary expenditure is not grants. Since most DOT funding comes from trust funds whose revenues typically come from taxes, the periodic reauthorizations of the taxes supporting these trust funds, and the apportionment of the budget authority from those trust funds to DOT programs, are a significant aspect of DOT funding. The highway, transit, and rail programs are currently authorized through FY2020, but the authorization for the federal aviation programs is scheduled to expire on September 30, 2018. Reauthorization of this program may affect both its structure and funding level. In current-year (nominal) dollars, DOT's nonemergency annual funding has risen from a recent low of $70 billion in FY2012 to $86 billion in FY2018. However, adjusting for inflation tells a different story. DOT's inflation-adjusted funding peaked in FY2010 at $87.5 billion (in constant 2018 dollars) and declined from that point until FY2015, then began rising again in FY2016 (see Figure 1 ). DOT's real funding, adjusted for inflation, was roughly the same in FY2016 and FY2017 as in FY2006; from FY2012-FY2017, DOT's inflation-adjusted funding was lower than during the FY2007-FY2011 period. Table 4 presents a selected account-by-account summary of FY2019 appropriations for DOT, compared to FY2018. Virtually all federal highway funding and most federal transit funding come from the Highway Trust Fund, the revenues of which come largely from the federal motor fuels excise tax ("gas tax"). For many years, annual expenditures from the fund have exceeded revenues; for example, for FY2018, revenues and interest are projected to be approximately $41 billion, while authorized outlays are projected to be approximately $54 billion, and this shortfall is expected to continue. Congress transferred about $143 billion, mostly from the general fund of the Treasury, to the Highway Trust Fund during the period FY2008-FY2016 to keep the trust fund solvent. One reason for the shortfall in the fund is that the federal gas tax has not been raised since 1993. The tax is a fixed amount assessed per gallon of fuel sold, not a percentage of the cost of the fuel sold: whether a gallon of gas costs $1 or $4, the highway trust fund receives 18.3 cents for each gallon of gasoline and 24.3 cents for each gallon of diesel. Meanwhile, the value of the gas tax has been diminished by inflation (which has reduced the purchasing power of the revenue raised by the tax) and increasing automobile fuel efficiency (which reduces growth in gasoline sales as vehicles are able to travel farther on a gallon of fuel). The Congressional Budget Office (CBO) has forecast that gasoline consumption will be relatively flat through 2024, as continued increases in the fuel efficiency of the U.S. passenger fleet are projected to offset increases in the number of miles driven. Consequently, CBO expects Highway Trust Fund revenues of $39 billion to $41 billion annually from FY2018 to FY2027, well short of the annual level of projected expenditures from the fund. Congress provided $1.5 billion for national infrastructure investment grants, also called BUILD (Better Utilizing Investments to Leverage Development) Transportation grants, for FY2018. (This program was previously known as the TIGER grant program.) The House Committee on Appropriations recommended $750 million, while the Senate-passed bill would provide $1 billion. In its committee report accompanying the bill, the Senate Committee on Appropriations noted that last year it had expressly forbidden DOT to use the federal share requested for a project as a criterion in selecting which projects would receive grants (i.e., giving preference to projects that requested a lower federal share), but that DOT had nevertheless said it would use an applicant's willingness to create new sources of nonfederal revenue for transportation projects as a selection criterion. The committee report prohibits DOT from using this criterion, and directs it to use the selection criteria listed in the FY2016 grant process. The TIGER grant program originated in the American Recovery and Reinvestment Act ( P.L. 111-5 ), where it was called "national infrastructure investment." It is a discretionary grant program intended to address two criticisms of the current structure of federal transportation funding: that virtually all of the funding is distributed to state and local governments, which select projects based on their individual priorities, making it difficult to fund projects that have national or regional impacts but whose costs fall largely on one or two states; and that most federal transportation funding is divided according to mode of transportation, making it difficult for projects in different modes to compete for funds on the basis of comparative benefit. Perhaps the best illustration of these challenges is Amtrak's Gateway Program, a set of projects concentrated in a short stretch of its Northeast Corridor rail line around the New York/New Jersey border. The biggest single component of the project is the replacement of a deteriorating tunnel under the Hudson River through which hundreds of Amtrak and New Jersey Transit trains pass each day. While this project would benefit Amtrak passengers (and arguably users of other modes) from Washington, DC, to Boston, MA, the burden of paying for the $13 billion-plus project falls on New York and New Jersey. For more information on the Gateway Program, see " The Hudson Tunnels and Amtrak's Gateway Program ," below. The BUILD program provides grants to projects of national, regional, or metropolitan-area significance in various modes on a competitive basis, with recipients selected by DOT. Although the program is, by description, intended to fund projects of national, regional, and metropolitan-area significance, in practice its funding has gone more toward projects of regional and metropolitan-area significance. In large part this is a function of congressional intent, as Congress has directed that the funds be distributed equitably across geographic areas, between rural and urban areas, and among transportation modes, and has set relatively low minimum grant thresholds ($5 million for urban projects, $1 million for rural projects). Congress has continued to support the BUILD/TIGER program through annual DOT appropriations. It is heavily oversubscribed, typically receiving applications totaling many times the amount of funding available for that year. In the past some critics have argued that TIGER grants went disproportionately to urban areas. For several years Congress directed that at least 20% of TIGER funding should go to projects in rural areas, which was roughly equivalent to the portion of the U.S. population living in rural areas. In FY2018 Congress increased the portion of funding that should go to projects in rural areas to 30%. The House Appropriations Committee report on the FY2019 appropriations bill specifies that 33% of the recommended funding should go to projects in rural areas (and directs that bridge projects in rural areas be prioritized); the Senate-passed bill repeats the 30% rural portion from FY2018. The House report also directs that another 33% of the recommended funding should go to projects in and around major seaports, with the remaining 33% for projects in urban areas over 200,000 in population. As Table 5 illustrates, the BUILD/TIGER grant appropriation process has followed two patterns in recent years. First, the Obama Administration would request as much as or more than Congress had previously provided, the House would propose a large cut, the Senate would propose an amount similar to the previously enacted appropriation, and Congress would agree on a final enacted amount similar to the previously enacted amount. In FY2018 the Trump Administration requested no funding, but Congress funded the program. This pattern appears to be playing out again in the FY2019 appropriations bills. The Essential Air Service (EAS) program is funded through a combination of mandatory and discretionary budget authority. In addition to the annual discretionary appropriation, there is a mandatory annual authorization, estimated at $140 million for FY2019, financed by overflight fees collected from commercial airlines by FAA. These overflight fees apply to international flights that fly through U.S. airspace, but do not land in or take off from the United States. The fees are to be reasonably related to the costs of providing air traffic services to such flights. As Table 6 shows, the Trump Administration requested $93 million in discretionary funding for the EAS program in FY2019, $62 million less than the program received in FY2018. The House committee bill recommended a $175 million discretionary appropriation, $20 million more than the FY2018 level. The Senate-passed bill likewise recommends a $175 million discretionary appropriation. Combined with the estimated mandatory funding of $140 million ($9.5 million more than the FY2018 amount), $175 million in discretionary funding would result in a 10% ($29.5 million) increase over the FY2018 total funding level of $285.8 million. The EAS program seeks to preserve commercial air service to small communities by subsidizing service that would otherwise be unprofitable. The cost of the program in real terms has doubled since FY2008, in part because route reductions by airlines resulted in new communities being added to the program (see Table 7 ). Congress made changes to the program in 2012, including allowing no new entrants, capping the per-passenger subsidy for a community at $1,000, limiting communities that are less than 210 miles from a hub airport to a maximum average subsidy per passenger of $200, and allowing smaller planes to be used for communities with few daily passengers. Supporters of the EAS program contend that preserving airline service to small communities was a commitment Congress made when it deregulated airline service in 1978, anticipating that airlines would reduce or eliminate service to many communities that were too small to make such service economically viable. Supporters also contend that subsidizing air service to smaller communities promotes economic development in rural areas. Critics of the program note that the subsidy cost per passenger is relatively high, that many of the airports in the program have very few passengers, and that some of the airports receiving EAS subsidies are little more than an hour's drive from major airports. In 2008 Congress directed railroads to install positive train control (PTC) on certain segments of the national rail network by the end of 2015. PTC is a communications and signaling system that is capable of preventing incidents caused by train operator or dispatcher error. Freight railroads have reportedly spent billions of dollars thus far to meet this requirement, but most of the track required to have PTC installed was not in compliance at the end of 2015; in October 2015 Congress extended the deadline to the end of 2018--with an option for individual railroads to extend to 2020 with Federal Railroad Administration (FRA) approval. In recent years Congress has provided some funding to help railroads with the expenses of installing PTC: $50 million in FY2016, $199 million in FY2017 (for commuter railroads), and at least $250 million in FY2018. The Trump Administration's FY2019 budget request did not include any funding for the cost of PTC implementation. The House-reported bill specified that $150 million (of the Consolidated Rail Infrastructure and Safety Improvement grant program funding) was for PTC projects; the Senate-passed bill does not set aside an amount for PTC projects, but the committee report directs DOT to prioritize PTC projects in making grants from the Consolidated Rail Infrastructure and Safety Improvements grant program. The Passenger Rail Reform and Investment Act of 2015 (Title XI of P.L. 114-94 ) reauthorized Amtrak while changing the structure of its federal grants: instead of getting separate grants for operating and capital expenses, it now receives separate grants for the Northeast Corridor and the rest of its national network. This act also authorized three new programs to make grants to states, public agencies, and rail carriers for intercity passenger rail development: Consolidated Rail Infrastructure and Safety Improvement Grants Federal-State Partnership for State of Good Repair Grants Restoration and Enhancement Grants The Administration's FY2019 budget requested a total of $738 million for intercity passenger rail funding, all of it for grants to Amtrak; no funding was requested for the three grant programs. The House Appropriations Committee recommended $1.9 billion for Amtrak, a total of $800 million for two of the new grant programs, plus another $150 million for the Magnetic Levitation Technology Deployment Program, which has received no funding in over a decade. It specified that $150 million of the funding for the Consolidated Rail Infrastructure and Safety Improvement program was for PTC implementation projects. The Senate bill would provide $1.9 billion for Amtrak and a total of $565 million for the three new grant programs (see Table 8 ), and directed FRA to accelerate the pace of grant-making and to prioritize PTC projects in its grant-making. Congress has historically provided little or no funding for intercity passenger rail development other than annual grants to Amtrak. That changed briefly in FY2009 and FY2010, when Congress appropriated a total of $10.5 billion for DOT's high-speed and intercity passenger rail grant program. From FY2011 to FY2016, Congress returned to providing no funding for intercity passenger rail development (save for PTC implementation); at the beginning of that period, in FY2011, it also rescinded $400 million that had been appropriated in FY2010 for that purpose but not yet obligated. In FY2017 Congress provided $98 million for three new intercity passenger rail grant programs, rising to $863 million in FY2018. The majority of the Federal Transit Administration's (FTA's) roughly $13 billion in funding is funneled to state and local transit agencies through several programs that distribute the funding by formula. Of the few transit grant programs that are discretionary (i.e., awarding funding to applicants selectively, usually on a competitive basis), the largest is the Capital Investment Grants program (CIG), which is often referred to as the New Starts program, as that is the largest and best known of its component grant programs. It funds new fixed-guideway transit lines and extensions to existing lines. The program has three components: New Starts grants are for capital projects with total costs over $300 million that are seeking more than $100 million in federal funding; Small Starts grants are for capital projects with total costs under $300 million that are seeking less than $100 million in federal funding; and Core Capacity grants are for projects that will increase the capacity of existing systems that are already at full capacity, or will be in five years, by at least 10%. There is also an Expedited Project Delivery Pilot, intended to provide funding for eight projects that are eligible for any of the three programs, seek no more than a 25% federal share, and are supported, in part, by a public-private partnership. Grant funds for large projects are typically disbursed over a period of years. Much of the funding for this program each year is committed to projects with multiyear grant agreements signed in previous years that are now under construction. For FY2019 the Trump Administration requested $1.0 billion for Capital Investment Grants, $1.6 billion less than the $2.645 billion provided in FY2018. The Administration repeated its intention, announced in its FY2018 request, not to approve any new project, but to provide funding only to projects that have existing full funding grant agreements (FFGAs). The House Committee on Appropriations recommended $2.614 billion, slightly ($31 million) less than the FY2018 amount. The Senate-passed bill would provide $2.553 billion. Congress has expressed concern regarding the Administration's stance toward the CIG program. On the one hand, the Administration has championed infrastructure investment and easing of regulatory obstacles to speed project development, and has acknowledged the demand for transit projects. On the other hand, the Administration has broken with previous federal policy and taken the position that state and local governments should be responsible for funding transit projects, without any contribution from the federal government. Following this stance, it has not requested funding for any new transit projects in either its FY2018 or FY2019 DOT budget requests. Congress has not supported the Administration's policy proposal to end federal assistance for new transit projects. Congress provided more than twice as much funding as FTA requested for the CIG program in FY2018, and directed the agency to carry out the CIG program as described in statute. Similarly, both the House-reported bill and the Senate-passed bill for FY2019 would provide more than twice the amount requested by FTA for the CIG program, and the committee reports for these bills direct FTA to continue to advance eligible projects through the program. The Senate Appropriations Committee report also notes that the Government Accountability Office (GAO) found that FTA has failed to comply with congressional directives regarding improvements to the CIG program, and that FTA told GAO that it had no plans to comply with the statutory mandates because the Administration is not requesting funding for any new projects. The Senate Appropriations Committee report also expressed concern about FTA creating unnecessary delays for projects in the project development pipeline. Transportation for America, a transportation advocacy group, asserts that, contrary to the Administration's stated goal of reducing delays to transportation project development, FTA is deliberately delaying the project development process for transit projects. It asserts that, of $2.3 billion that Congress provided for new transit projects under the CIG program in the FY2017 and FY2018 DOT appropriations acts, FTA has issued only $533 million in grants, and that FTA is drawing out the review process for projects that have applied for funding. One alleged result is that project sponsors are facing increased costs due to this lengthened process; in some cases, bids received for construction have expired before FTA completed its review of agencies' applications, forcing the agencies to rebid the projects. FTA denies that it is delaying the project review process. A New Starts grant, by statute, can be up to 80% of the net capital project cost. Since FY2002, DOT appropriations acts have included a provision directing FTA not to sign any FFGAs for New Starts projects that would provide a federal share of more than 60%; in the FY2018 DOT appropriations act the limit was lowered to 51%. The House-reported FY2019 bill includes a provision prohibiting New Starts grant agreements with a federal share greater than 50%. The Senate-passed bill does not have such a provision. Critics of lowering the federal share provided for New Starts projects note that the federal share for highway projects is typically 80%, and in some cases is higher. They contend that the higher federal share makes highway projects relatively more attractive than public transportation projects for communities considering how to address transportation problems. Advocates of this provision note that the demand for New Starts funding greatly exceeds the amount available, so requiring a higher local match allows FTA to support more projects with the available funding. They also assert that requiring a higher local match likely encourages communities to estimate the costs and benefits of proposed transit projects more carefully, reducing the risk of subsequent cost overruns and of project ridership falling short of expectations. Among the challenges to funding transportation infrastructure is that most federal transportation funding is distributed by mode, and most of the funding is distributed to states by formula. There are grant programs reserved for highways, for public transportation, for rail, and for airport development, but sponsors of projects involving multiple modes may have difficulty amassing significant amounts of federal funding. And while Congress provides some $55 billion annually for surface transportation programs, the vast majority of that funding is automatically divided among the states, making it difficult for a state to accumulate the funding needed for a major project in addition to meeting its other needs. One project that is highlighting this situation is Amtrak's Gateway Program, and specifically the Hudson Tunnel replacement project. Amtrak's Gateway Program is a set of projects intended to increase capacity and reliability of rail service between northern New Jersey and Manhattan, the most heavily used section of intercity and commuter rail track in the nation. The program would replace bridges, expand track capacity from two to four parallel tracks, and, most critically, add a new rail tunnel under the Hudson River. The existing tunnel, the only link connecting the Northeast Corridor from New Jersey to New York, is over a century old, was flooded with seawater during Hurricane Sandy in 2012, and is deteriorating. The estimated cost of the Gateway Program is at least $24 billion, and likely will increase as project planning advances; the estimated cost of just the new Hudson River Tunnel is $11.1 billion. Since the new tunnel would carry both intercity and commuter rail traffic, it is eligible for DOT funding from both the intercity rail program and the public transportation Capital Investment Grants program. But other than the annual grants to keep Amtrak going, relatively little funding has been available in recent years for intercity rail projects: the largest rail grant program in FY2017 was funded at $68 million, which was increased to $593 million in FY2018 (but $285 million was reserved for projects for which the Hudson Tunnel project would not qualify). The Capital Investment Grants program has significantly more funding to award--$2.6 billion in FY2018--but competition for that funding is intense, and the largest grant awarded to a single project in the past 10 years was $2.6 billion. In 2016, under the previous Administration, media reports indicated an agreement had been reached between DOT, Amtrak, and the States of New Jersey and New York to share the costs of building the new Hudson Tunnel, with one-third to be covered each by DOT/Amtrak, New Jersey/New Jersey Transit, and New York State. The Trump Administration has indicated that it does not feel bound by the previous agreement. In any case, it would be up to Congress to provide the money. Neither the House nor Senate Appropriations Committees mentioned the Gateway Program or Hudson Tunnel project in their FY2019 THUD committee reports. But both committees recommended significant funding for rail and transit grant programs that Gateway projects could be eligible for, as well as recommending $240 million more for Amtrak's Northeast Corridor account than Amtrak requested for FY2019. The Passenger Rail Investment and Improvement Act of 2008 authorized $1.5 billion over 10 years in grants to the Washington Metropolitan Area Transit Authority (WMATA) for preventive maintenance and capital grants, to be matched by funding from the District of Columbia and the States of Maryland and Virginia. This money is in addition to around $310 million WMATA receives under FTA formula programs. The Senate Appropriation Committee's report accompanying its FY2018 DOT appropriations bill noted that the FY2018 grant was the final installment of the $1.5 billion funding commitment Congress made in 2008, but that WMATA's budget assumed that the annual funding would continue to be provided. The Administration requested $120 million for this grant to WMATA for FY2019; the House Appropriations Committee recommended $150 million, and the Senate-passed bill would provide $150 million. The Senate Appropriation Committee's FY2019 committee report direct WMATA, the local jurisdictions, and FTA to continue working with the authorizing committees on extending the authorization for this grant. Both the House and Senate Appropriation Committee reports direct WMATA to continue working to implement the congressional directive that wireless service be provided throughout the rail system. WMATA is dealing with a backlog of maintenance needs due to inadequate maintenance investment over many years, and it has experienced several fatal incidents, most recently in January 2015. A number of other incidents have raised questions about the safety culture of the agency. An investigation that found numerous instances of mismanagement of federal funding led FTA to restrict WMATA's use of federal funds. An FTA audit of WMATA's safety practices in 2015 produced many recommendations for change, and in October 2015 FTA assumed oversight of WMATA's safety compliance practices from the Tri-State Oversight Committee, the agency created by the governments of the District of Columbia, Maryland, and Virginia to oversee WMATA safety performance. FTA continues to exercise safety oversight of WMATA, conducting inspections, leading accident investigations, and directing that federal funds received by WMATA are used to improve safety. In February 2017, FTA notified leaders of the three jurisdictions that it would withhold 5% of their FY2017 transit Urbanized Area formula funds until they meet the requirements to create a new State Safety Oversight Program to replace the Tri-State Oversight Committee. The jurisdictions passed legislation establishing a new safety oversight agency (the Metrorail Safety Commission) soon after, but the agency must be in operation before FTA will release the funding. On September 6, 2018, FTA outlined the steps the new Metrorail Safety Commission must take in order to complete the transition of oversight responsibility from FTA to the Commission. The National Transportation Safety Board has recommended that oversight of WMATA's rail operations be assigned to FRA, which has a long history of safety enforcement, rather than FTA, whi ch is primarily a grant management agency. However, Congress would have to act to give FRA authority to oversee WMATA, while FTA already has such authority.

The Trump Administration proposed a $76.2 billion budget for the Department of Transportation (DOT) for FY2019: $16 billion in discretionary funding and $60 billion in mandatory funding. That is approximately $11 billion less than was provided for FY2018. The budget request reflected the Administration's call for significant cuts in funding for transit and rail programs. The DOT appropriations bill funds federal programs covering aviation, highways and highway safety, public transit, intercity rail, maritime safety, pipelines, and related activities. Federal highway, transit, and rail programs were reauthorized in fall 2015, and their future funding authorizations were somewhat increased. There is general agreement that more funding is needed for transportation infrastructure, but Congress has not been able to agree on a source that could provide the additional funding. The federal excise tax on motor fuel, which is the primary funding source for federal highway and transit programs, has not been increased in over 20 years, and does not raise enough revenue to support even the current level of spending. To address this shortfall, Congress periodically transfers money from the general fund to the Highway Trust Fund to provide sufficient funding for the programs. The annual appropriations for DOT are combined with those for the Department of Housing and Urban Development (HUD) in the Transportation, Housing and Urban Development, and Related Agencies (THUD) appropriations bill. The House Appropriations Committee reported H.R. 3353, the THUD FY2019 appropriations bill, in which Division A provides FY2019 appropriations for DOT. The committee recommended $87.8 billion in new budget authority for DOT, approximately 1.8% ($1.6 billion) more than the comparable figure in FY2018. The Senate passed H.R. 6147, a bill containing appropriations for several federal agencies; Division D is an FY2019 THUD appropriations bill, in which Division A is DOT appropriations. The Senate bill would provide $86.6 billion in new budget authority, less than 1% ($427 million) more than the comparable FY2018 amount. Notable differences between the House-reported and Senate-passed bills include funding for the federal-aid highway program (the House committee bill would provide $900 million more than the Senate) and for intercity passenger rail (the House committee would provide $950 million for grants, including $150 million for the maglev program, compared to the Senate's $565 million, with no funding for maglev). With inflation forecast at 2.0% for FY2019, the House committee bill would result in roughly level inflation-adjusted funding for DOT compared to FY2018, while the Senate bill would likely result in a slight decrease in inflation-adjusted funding.

Proposals to limit Senate debate are as old as the Senate itself. Over the 216-year history of the body, numerous procedures have been proposed to allow the Senate to end discussion and act. The most important debate-limiting procedure enacted was the adoption in 1917 of the "cloture rule," codified in paragraph 2 of Senate Rule XXII. Under the current version of this rule, a process for ending debate on a given measure or matter may be set in motion following a super-majority vote of the Senate. Since the Senate's adoption of the cloture rule in 1917, proposals have been advanced to repeal or amend it in almost every session of Congress. At times, Senators of both political parties, as well as the parties themselves, have debated the merits of the Senate's tradition of free and unlimited debate and argued for and against making cloture easier to invoke. These debates occurred at different times and under different sets of circumstances, for example, as Senators attempted to prevent filibusters of civil rights measures, pass consumer protection legislation, or secure the confirmation of judicial or executive branch nominations. Debates on the cloture rule have frequently focused on whether or not the Senate must consider amendments to it under the body's existing rules, including Rule XXII itself. This argument rests on the principle that the Senate is a "continuing body" which regards its rules as staying in force from one Congress to the next. A contrary argument contends that this principle has the effect of "entrenching" the existing rules against change, a situation which amounts to an unconstitutional limit on the power of the body to set the terms of its own operation. To overcome these difficulties, Senators attempting to change Rule XXII have employed various procedural tactics, including seeking to invoke cloture by majority vote, seeking opinions by the Vice President acting as presiding officer that the cloture rule itself is unconstitutional, and arguing that the rules do not apply on the first day of a Congress. Although many attempts have been made to amend paragraph 2 of Rule XXII, only six amendments have been adopted since the cloture rule was enacted in 1917: those undertaken in 1949, 1959, 1975, 1976, 1979 and 1986. Each of these changes was made within the framework of the existing or "entrenched" rules of the Senate, including Rule XXII. In 1949, the cloture rule was amended to apply to all "matters," as well as measures, a change which expanded its reach to nominations, most motions to proceed to consider measures and other motions. A decade later, in 1959, its reach was further expanded to include debate on motions to proceed to consider changes in the Senate rules themselves. The threshold for invoking cloture was lowered in 1975 from two-thirds present and voting to three fifths of the full Senate except on proposals to amend Senate Rules. In a change made in 1976, amendments filed by Senators after cloture was invoked were no longer required to be read aloud in the chamber if they were available at least 24 hours in advance. In 1979, Senators added an overall "consideration cap" to Rule XXII to prevent so-called post-cloture filibusters, which occurred when Senators continued dilatory parliamentary tactics even after cloture had been invoked. In 1986, this "consideration cap" was reduced from 100 hours to 30 hours to meet the demands of a modern Senate whose proceedings were televised nationally. In its current form, which was adopted in 1986, Rule XXII provides that a cloture motion must be signed by 16 senators and presented on the Senate floor. One hour after the Senate meets on the second calendar day after a cloture motion has been filed and after a quorum has been ascertained, the presiding officer puts the question, "Is it the sense of the Senate that the debate shall be brought to a close?" The cloture motion is then subject to a yea-and-nay vote. If three-fifths of Senators--60 if there are no vacancies in the body--vote for the cloture motion, the Senate must take final action on the matter on which it has invoked cloture by the end of 30 total hours of additional consideration. Invoking cloture on a proposal to amend the Senate's standing rules requires a higher threshold, approval by two-thirds of the Senators present and voting, or 67 senators if there are no vacancies and all Senators vote. Once cloture has been invoked, the clotured matter remains the pending business of the Senate until it is disposed of and no Senator may speak for more than one hour. Senators may yield all or part of their allotted hour to a floor manager or floor leader, who may then yield time to other Senators. Each floor manager and leader, however, can have no more than two hours in total yielded to him or her. As with most Senate procedures, any of these requirements may be waived by unanimous consent. After cloture has been successfully invoked, no dilatory amendments or motions are permitted, and all debate and amendments must be germane. Only amendments filed before the cloture vote may be considered, and Senators may not call up more than two amendments until every other Senator has had an opportunity to do likewise. Printed amendments that have been available for at least 24 hours are not read when called up. Time for votes, quorum calls, and other actions is charged against the 30-hour limit on consideration. This time limit may be extended by joint leadership motion if three-fifths of all senators vote for a non-debatable motion to do so. Senators who have not used or yielded ten minutes of their hour are guaranteed up to ten minutes to speak. When all time expires, the Senate immediately votes on any pending amendments and then on the underlying matter. Concern by some Senators over an inability to halt debate and obtain a confirmation vote on several pending judicial nominations led to a renewed interest in the 108 th Congress and the 109 th Congress in amending the Senate cloture rule. In the 108 th Congress several resolutions were introduced on the subject. Proposals currently under discussion include: Media reports have focused on the possible use of what has been called a "nuclear" parliamentary option to end debate and vote on certain stalled nominations. Under such a scenario, the chair, perhaps occupied by the Vice President serving as Presiding Officer or by the President Pro Tempore of the Senate, would set aside the existing provisions of Rule XXII and rule that cloture could be invoked by simple majority vote. Supporters of such an approach argue that if such a ruling were appealed by opponents or submitted to the Senate for decision, and then sustained by a majority vote, debate would end and the pending business could then be brought to a vote. In another version of this scenario, a Senator might raise a constitutional point of order against the decision that cloture had not been invoked on a matter, and the same end achieved if the point of order were sustained by a majority vote of Senators. Supporters argue that this proceeding would be permissible because under the Constitution, the Senate has the express right to make, or change, the rules of its proceedings at any time. They further point out that such constitutional questions are traditionally submitted to a vote of the full chamber for decision. Under this latter scenario, however, the chair would likely have to also ignore the precedent that constitutional questions are debatable, perhaps by stating that the body has a right to "get to the question" at hand. Those concerned about the filibuster of judicial nominations have also argued that the inability of the Senate to reach a final vote on a nomination represents an abdication of the Senate's duty to perform a constitutional duty, that of advising and consenting to nominations. Majority Leader Bill Frist told his Senate colleagues on January 4, 2005, that he was willing to take steps to use one of the "nuclear" or "constitutional" options in the 109 th Congress, if he felt it was necessary. So let me say this: If my Democratic colleagues exercise self-restraint and do not filibuster judicial nominees, Senate traditions will be restored. It will then be unnecessary to change Senate procedures. Self-restraint on the use of filibuster for nominations--the very same self-restraint that Senate minorities exercised for more than two centuries--will alleviate the need for any action. But if my Democratic colleagues continue to filibuster judicial nominees, the Senate will face this choice: Fail to do its constitutional duty or reform itself and restore its traditions, and do what the Framers intended. Right now, we cannot be certain that judicial filibusters will cease. So I reserve the right to propose changes to Senate Rule XXII and do not acquiesce to carrying over all the rules from the last Congress. Opponents have used the term "nuclear" to describe these scenarios because of their belief that its use would destroy the comity and senatorial courtesy necessary in a body that operates largely by unanimous consent. They further argue that such an approach might destroy the unique character of the Senate itself, making it more like the House of Representatives, where a majority has the ability to halt debate any time it wishes. Observers point out that such a parliamentary proceeding is not unprecedented. On several occasions, Vice Presidents acting as presiding officer, including Vice Presidents Richard Nixon, Hubert Humphrey and Nelson Rockefeller, offered advisory opinions from the chair that the provisions of Rule XXII can be changed by a majority vote of the Senate at the beginning of a Congress. In 1975, a ruling to this effect, submitted to the chamber by Vice President Nelson Rockefeller, was sustained by a vote of the Senate. The Senate later reversed itself by recorded vote, but whether this obliterated the precedent permitting cloture by majority vote has been a source of disagreement. For example, Senator Robert C. Byrd, the architect of the 1975 cloture amendment, observed that the reversal vote "erased the precedent of majority cloture established two weeks before, and reaffirmed the "continuous" nature of Senate rules." Others argued that such a precedent was established and was not overturned. Senator Walter F. Mondale observed, " ... the Rule XXII experience was significant because for the first time in history, a Vice President and a clear majority of the Senate established that the Senate may, at the beginning of a new Congress and unencumbered by the rules of previous Senates, adopt its own rules by majority vote as a constitutional right. The last minute votes attempting to undo that precedent in no way undermine that right." In the 108 th Congress, Senator Frist introduced another proposal to amend the cloture rule. His resolution ( S.Res. 138 ) would have added a new section to the end of Rule XXII, and created a cloture process applicable only to the confirmation of nominees. Any nomination requiring Senate confirmation would have been subject to this new procedure, including nominees to the U.S. Supreme Court, the U.S. Court of Appeals, District Courts, members of the President's cabinet, and lower-level agency executives. As under the current rule, the new cloture procedure envisioned by Senator Frist's S.Res. 138 would have begun with the filing of a written cloture petition that contains the signatures of 16 Senators, which would lie over before being considered on the following calendar day plus one. Under S.Res. 138 , however, the number of votes needed to invoke cloture on a nomination would have diminished steadily over time. Under the procedure proposed by Senator Frist, as with current practice, the first cloture petition filed on a nomination would need the votes of 60 Senators for cloture to be invoked. If 60 Senators did not vote for cloture, a second petition could then be submitted. When the Senate voted on that petition, just 57 Senators would be required to invoke cloture. On the third petition, the required vote would fall to 54 Senators, and on a fourth petition the votes of 51 Senators would invoke cloture. The cloture threshold would never drop below a majority vote of the full Senate. As with current cloture procedure, there would be no guarantee that the Senate would actually debate the nomination during the time that the cloture petitions must lay over. Instead, as is current practice, the Senate could chose to consider other measures or matters. Senator Frist's proposal was similar to a proposal to amend Rule XXII offered in 1995 by Senators Tom Harkin and Joseph I. Lieberman. Under that proposal, the majority required to close debate on all measures on the executive and legislative calendars (not just nominees as in the Frist proposal) would decline on successive cloture votes from 60, to 57, to 54, and finally to 51. Additionally, the Frist resolution would have prohibited the filing of a further cloture petition on a nomination until the Senate had disposed of other pending cloture motions on that nomination. Currently, cloture petitions can be filed on successive days, or even on the same day, without first disposing of the previous petition. In addition, the Frist resolution would have required that no cloture petition be filed until a nomination had been pending in the Senate for 12 hours. The Senate Committee on Rules and Administration held a hearing on the Frist resolution on June 5, 2003 and ordered the resolution reported by voice vote on June 24. On November 12, 13 and 14, 2003, the Senate debated the Frist resolution and cloture motions on several judicial nominations for a period of 40 hours. Supporters of Senator Frist's resolution have argued that extended debate in the Senate is particularly troubling when it comes to presidential nominations. John C. Eastman, constitutional law professor at the Chapman University School of Law, told the Senate Rules and Administration Committee on June 5 that inherent in the Constitution is the requirement that nominations be confirmed only by majority vote. "The advice and consent role envisioned by the Constitution's text," Eastman argued, "is one conferred on the Senate as a body, acting pursuant to the ordinary principle [sic] of majority rule." Because it takes 60 votes to invoke cloture, the process of filibustering a nomination is inherently unconstitutional, he argued. Supporters of the Frist resolution contend that the filibuster of nominations takes power away from the President. "Obstructionist delay in the consideration of either executive or judicial nominations harms the separation of powers," said Douglas W. Kmiec, Dean of The Catholic University of America School of Law. "There is a constitutional duty to provide timely advice and consent on judicial nominees." While there are other avenues for a Senator trying to get a bill that is being filibustered through the process (such as by amending some other measure or with the aid of a House colleague), Senator Frist noted, there is no other way to have a nomination confirmed except by a vote of the full Senate. "There is no safety valve. Filibustering nominations is filibustering in its most potent and virulent form, and even if a majority of Senators stand ready to confirm, such filibusters can be fatal," he said. Those who oppose the Frist resolution argued that it would tilt the balance of power too heavily toward the President in the nomination and confirmation process. They also maintained that there is not enough evidence of a problem to merit changing one of the basic features of the Senate, the potential for unlimited debate. Finally, they asserted that such a change could challenge the Senate's ability to exercise its constitutional and institutional right to independently assess the qualifications of nominees. "If we cede power to the President, I don't think we'll ever get it back," said Christopher J. Dodd, ranking Democrat on the Senate Rules Committee at the June 5 hearing. "[The Frist] resolution ... would fundamentally undermine the Senate's role in our constitutional democracy, cede enormous powers to the Executive and upset the deliberate system of checks and balances intended by the Framers." Senator Dodd noted that the bulk of President George W. Bush's nominees have been confirmed, pointing out that in the 107 th Congress, President Bush submitted 347 nominations, of which 297 were confirmed, two were withdrawn and 48 were returned to him. During the 106 th Congress, President William Jefferson Clinton submitted 136 nominations and made 18 recess appointments to full-time positions requiring Senate confirmation. The Senate confirmed 108 nominations and returned 24; the President withdrew four nominations. "Our paramount and overriding concern should be to protect the role of the Senate under the Constitution," argued Senator Edward M. Kennedy. "Under the [Frist] proposal now before us, the number of votes required to terminate debate on nominations would be reduced from 60 to 51. A simple majority of the Senate would be able to end debate, and the Senate would put itself on a course to destroy the very essence of our constitutional role." The proposal, "would inevitably lead to pressure to make the same change for ending debate on legislation." William and Mary law professor Michael J. Gerhardt testified that a filibuster of a nominee does not completely block the President from filling the vacancy at issue, pointing out that the President can fill the seat by making a recess appointment, which would not require Senate confirmation (although the office would be filled only until the end of the next session) or appointing an acting official under the Federal Vacancies Reform Act. Two other proposals to amend the cloture rule were introduced in the 108 th Congress by Senator Zell Miller. Senator Miller introduced a resolution ( S.Res. 85 ) that would have altered the cloture procedure for all measures, motions, or matters to come before the Senate. The new process was identical to that proposed by Senator Frist in S.Res. 138 , except where the Frist resolution would have applied only to presidential nominations, Senator Miller's proposal to have a gradually declining threshold for invoking cloture would have applied to all Senate business except changes to the Senate's standing rules. Changes to the standing rules would have still required the votes of two-thirds of those present and voting to stop debate. On October 22, 2003, Senator Miller introduced a second resolution ( S.Res. 249 ) that would delete paragraph 2 of Rule XXII entirely. Senator Miller argued that by removing provisions within Senate rules for invoking cloture, it would then require a simple majority to end a filibuster. The cloture rule, however, is the only mechanism by which debate can be stopped in the United States Senate. Before the cloture rule was enacted in 1917, it was not possible to stop debate without achieving unanimous consent. Another option that has been suggested is to establish procedures to limit debate by means other than changing Senate standing rules. One example of this might be to amend the standing orders of the Senate, instead of its standing rules. Another possible example of such an approach would be to pass an expedited procedure statute. Expedited procedure statutes, often called "fast track" statutes, are laws that establish special procedures for the consideration of measures in one or both chambers of Congress. These laws frequently mandate timely floor scheduling, limit time for committee consideration, floor debate, and amendment, and establish mandatory 'hookup' procedures to ensure that both chambers act on the same measure. Numerous expedited procedure statutes are currently in effect and act as the equivalent of standing rules of the House and Senate, including such well-known examples as the Congressional Budget Act, the War Powers Act, the Nuclear Waste Policy Act, the Trade Act of 1974 and the Congressional Review Act, by which the Senate can vote on resolutions to disapprove proposed agency regulations. A potential advantage of an expedited procedure statute is that it presumably would only require 60, rather than, 67 Senators normally required to invoke cloture on such a proposal. This would presumably also apply to amendments to the Senate's standing orders. This is because the special provision for cloture on rules proposals is understood to apply only to amendments to the standing rules. By relying on statute, provisions of this type might be passed as a freestanding measure, or attached to another piece of legislation. If supporters thought it aided them, an expedited procedure statute limiting debate might even originate in the House of Representatives where they could be attached by special rule to one or more pieces of 'must pass' legislation, creating momentum for their consideration in the Senate. Why would it be appropriate for procedures governing nominations to be placed in statute? Supporters might argue that it is precisely because they deal with a power in which both the legislative and executive branches of government are involved. Such an approach might also offer proponents political arguments over attempts to change standing Senate rules. For example, supporters might argue, "If it is the law that the Senate must vote on disapproving government regulations on arcane subjects like migratory birds or the content of upholstered furniture, shouldn't it be the law of the land that something as important as nominations for our federal courts receive an up or down vote?" Opponents of using expedited procedures or changes in the standing orders might argue that it violates the spirit of Senate tradition by changing Senate rules outside the regular process for amending them. Opponents might also argue that while expedited procedures are fine for a few individual pieces of legislation or functions, such as disapproving agency regulations, they are not appropriate for an important constitutional function like the confirmation of presidential nominees. In its 214-year history, numerous proposals have been put forth to limit Senate debate. These include the following: amending Rule XXII to provide for cloture by majority vote; adopting a rule providing for the use of a motion for the previous question, of the type used in the U.S. House of Representatives to end debate; adopting a rule that debate and amendment must be germane to the subject under consideration, either to all business at all times, or only to specific business or only at limited times. (For example, to appropriations and revenue bills, or in the closing days of a congressional session.); limiting the duration of debate by special rule, as in the House; enforcing the existing rules of the Senate by requiring a speaking Senator to stand and not sit or walk around; enforcing the rule that "no Senator shall speak more than twice upon any one question in debate on the same day without leave of the Senate, which shall be determined without debate"; taking a Senator "off his feet" for using unparliamentary language; making a point of order against frequent quorum calls that no business has intervened since the last roll call; having the chair rule against dilatory motions on points of order raised from the floor; objecting to the reading of papers; enforcing the provision of Jefferson's Manual that "No one is to speak impertinently or beside the question, superfluously, or tediously;" letting the chair reverse the precedent, established in 1872, that Senators may not be called to order for irrelevancy of debate; letting the chair make use of the power of recognition; letting there be objection to yielding, even though the Senator who has the floor consents to an interruption; and resorting to prolonged or continuous sessions to make it more difficult on those who want to stage a filibuster. It is a key safeguard of the American system of government that the Senate so strongly protects the rights of a block of Senators who do not command a majority (51). Supporters of this argument believe that legislative minorities have rights which no majority should be able to easily override. Further, they argue, obstruction is justified to prevent a majority from trampling upon the rights of a minority until a broad political consensus has developed on an issue. The structure of the Senate was intended to protect the rights of smaller states, and it is asserted that such a change would undermine this intent. Defenders of extended debate also contend that, in the long run, matters that are truly in the nation's best interest have not been permanently blocked by extended debate. Nearly every important bill blocked by a filibuster, they maintain, eventually has been enacted and those bills which ultimately failed because of an extended debate would have been bad for the country. Likewise, the Senate's tradition of debate has protected both political parties at different times in history. The cloture rule has been in effect for nearing 100 years with little ill effect, they contend. Supporters of extended debate believe that the ability of any Senator to speak at length about virtually any topic at any time is a unique characteristic of the Senate which allows the chamber to play a vital role in the legislative process, cooling passions and forcing deliberation. Furthermore, supporters argue, this feature was one that was intended by the Framers, differentiating the Senate from the House. Removed of this deliberative function, the Senate would become a shadow of the larger House of Representatives, they say. In addition, because the Senate alone has the right to act on executive business, nominations and treaties, the function of extended debate can act as a check on the executive branch. The ability of a Senate minority to block actions supported by a clear majority thwarts one of the basic premises of American government, majority rule. Supporters of changing the system argue that it is undemocratic to allow a determined minority to prevent an institutional majority from working its will--the current process, they say, gives too much power to the minority at the expense of the majority. Further, they believe, it undermines public accountability of the majority, which is in charge of running the chamber, if they cannot get their agenda considered and passed by the Senate because of procedural problems. The Senate is a legislative body and should be able to act on matters before it in a timely and efficient manner. Extended debate by one Senator or a small group of Senators is to waste time and money, supporters of changing debate rules argue, and brings public disrepute because the Senate cannot act in a timely fashion on important issues. Much legislation and several qualified nominations have been delayed or defeated by extended debate, they contend. Changing the rules would not inhibit freedom of speech in the Senate. Current proposals to change the rules would provide those who oppose a bill or matter significant time to discuss the proposal, but would not allow them to block action on it if a majority of the Senate supported it. All a limitation on debate demands, supporters say, is the ability to have a fair up or down vote; it does not mandate a particular outcome. Other points raised during discussion of the cloture issue include the following: Some argue that a number of Senators might view proposed changes to the cloture rule as a diminution of their rights, by making it much more difficult to block confirmation of a nominee. As a result, if the rules change is adopted, it raises the question whether it would increase pressure to require Senate confirmation for more executive branch positions, so as to allow the Senate to retain a robust role in the confirmation process. The rule change proposed by the Frist and Miller resolutions would apply to all presidential nominations. Some have wondered whether nominations for the courts, the third branch of government, should be treated the same as those to the executive branch or whether the two groups of nominations should have different thresholds for approval or different procedures for stopping debate. Could stronger enforcement of existing rules--such as the two speech rule--and disallowing informal but time consuming practices--such as suggesting the absence of a quorum--permit more efficient action on nominations or other matters? Is the greater use of filibusters a sign that traditional checks and balances in the nomination and confirmation system, such as the blue-slip which affords home-state Senators a great deal of say in selecting individuals for the federal bench, are no longer working as they were intended or have in the past?

Paragraph 2 of Senate Rule XXII, also known as the "cloture rule," was adopted in 1917. It established a procedure, amended several times over the intervening years, by which the Senate may limit debate and act on a pending measure or matter. Aside from unanimous consent agreements, cloture is the only way the Senate can limit debate. Recently, concern by some Senators over an inability to halt consideration and obtain a confirmation vote on several pending judicial nominations has led to a renewed interest in amending the Senate cloture rule. One option, called the "nuclear option" by some and the "constitutional" option by others, would seek to use a ruling by the presiding officer or a majority vote of the chamber to end debate outside of the terms of Rule XXII. It is possible that this option may be attempted in the 109th Congress. Several measures were introduced in the 108th Congress to amend the cloture rule. S.Res. 138, which was introduced by Senate Majority Leader Bill Frist would have established a diminishing threshold for invoking cloture on presidential nominations that were subject to Senate approval. S.Res. 85, which was introduced by Senator Zell Miller, would have applied the same idea to all Senate business, with the exception of amendments to the Senate's standing rules. A third proposal, S.Res. 249, also authored by Senator Miller, called for the elimination of the cloture rule altogether. This report provides a brief history of the Senate cloture rule, outlines past and present proposals to amend it, and presents arguments both in support of, and in opposition to, the Senate's tradition of unlimited debate. This report will be updated as events warrant.

Agricultural conservation began in the 1930s with a focus on soil and water issues associated with production and environmental concerns on the farm. By the 1980s, agricultural conservation policies broadened to include environmental issues beyond soil and water, especially issues related to production (off the farm). Many of the current agricultural conservation programs were enacted as part of the 1985 farm bill ( P.L. 99-198 , Food Security Act of 1985). These programs have been reauthorized, modified, and expanded, and several new programs have been created, particularly in subsequent omnibus farm bills. While the number of programs has increased and new techniques to address resource problems continue to emerge, the basic approach has remained unchanged--voluntary farmer participation encouraged by financial and technical assistance, education, and basic and applied research. The Conservation title (Title II) of the Agricultural Act of 2014 ( P.L. 113-79 ), the 2014 farm bill, was largely uncontroversial. Both the House-passed farm bill ( H.R. 2642 ) and the Senate-passed farm bill ( S. 954 ) reauthorized many of the largest conservation programs and consolidated others to create new ones. The major difference between the two bills was the extension of conservation compliance provisions to the federally funded portion of crop insurance and the total reduction in funding for the title. Total mandatory spending for the title is projected at $28.3 billion over 5 years (FY2014-FY2018) and $57.6 billion over 10 years (FY2012-FY2023). The estimated spending impact of the 2014 farm bill's Conservation title is projected to decrease by $208 million over 5 years and close to $4.0 billion over 10 years. Agricultural conservation has been a stand-alone title in farm bills beginning with the Agriculture and Food Act of 1981 (1981 farm bill, P.L. 97-98 ). Its significance has grown with each passing omnibus farm bill. Debate on the 2014 farm bill focused on a number of controversial issues. While many did not consider conservation to be controversial, nonetheless, a number of policy issues shaped the final version of the title and ultimately its role in the enacted farm bill. Before the 1985 farm bill, few conservation programs existed and only two would be considered large by today's standards. Prior to the 2014 farm bill, there were over 20 distinct conservation programs with annual spending greater than $5 billion. The differences and number of these programs created general confusion about the purpose, participation, and policies of the programs (see below for a list of conservation program acronyms). Discussion about simplifying or consolidating conservation programs to reduce overlap and duplication, and to generate savings, has continued for a number of years. The 2014 farm bill contained several program consolidation measures, including the repeal of 12 active and inactive programs, the creation of two new programs, and the merging of two programs into existing ones. Specific programmatic changes are discussed further in the " Program Changes " section. Federal policies and programs traditionally have offered voluntary incentives to producers to plan and apply resource-conserving practices on private lands. It was not until the 1985 farm bill that Congress took an alternative approach to agricultural conservation with the enactment of highly erodible land conservation (sodbuster) and wetland conservation (swampbuster)--collectively known as "conservation compliance." Both provisions remain significant today and require that in exchange for certain U.S. Department of Agriculture (USDA) program benefits, including commodity support payments, disaster payments, farm loans, and conservation program payments, to name a few, a producer agrees to maintain a minimum level of conservation on highly erodible land and to not convert wetlands to crop production. One of the most controversial issues in the 2014 farm bill debate was whether federal crop insurance subsidies should be included on the list of program benefits that could be lost if a producer were found to be out of compliance. Ultimately the 2014 farm bill did add federal crop insurance subsidies to the list of benefits that could be lost and extended limited protection for native sod in select states (sodsaver). Specific programmatic changes are discussed further in the " Compliance Programs " section below. Land retirement programs (e.g., the Conservation Reserve Program, CRP) provide producers with financial incentives to temporarily remove from production and restore environmentally sensitive land. In contrast, working lands programs (e.g., the Environmental Quality Incentives Program, EQIP) allow land to remain in production and provide producers with financial incentives to adopt resource-conserving practices. Over time, high commodity prices, changing land rental rates, and new conservation technologies have led to a shift in farm bill conservation policy away from the more traditional land retirement programs toward an increased focus on conservation working lands programs. Some of this shift has already occurred in the last decade and was continued in the 2014 farm bill as the percentage of mandatory program funding for land retirement programs has declined relative to working lands programs (see Figure 1 ). Most conservation and wildlife organizations support both land retirement and working lands programs; however, the appropriate "mix" continues to be debated. Some are still divided between shorter-term land retirement programs such as CRP and longer-term easement programs such as the new wetland reserve easements under the Agricultural Conservation Easement Program (ACEP). Unlike land retirement programs, easement programs impose a permanent or longer-term land-use restriction that is voluntarily placed on the land in exchange for a government payment. Supporters of easement programs cite a more cost-effective investment in sustainable ecosystems for long-term wildlife benefits. Short-term land retirement program supporters cite the increased flexibility, which can generate broader participation than permanent or long-term easement programs. There has also been a rising interest in programs that partner with state and local communities to target conservation funding to local areas of concern. These partnership programs leverage private funding with federal funding to multiply the level of assistance in a select area. A number of these partnership programs were repealed in the 2014 farm bill and replaced with the new Regional Conservation Partnership Program (RCPP). RCPP is designed to allow local organizations to partner with USDA to address resource concerns specific to that area. Partners are required to supply a significant portion of the overall cost of the project. Most farm bill conservation programs are authorized to receive mandatory funding. The Conservation title makes up 6% of the total projected farm bill spending, or $58 billion of the total $956 billion in 10-year mandatory funding authorized in the 2014 farm bill. Like many titles in the farm bill debate, discussion was driven in part by the need for budget reduction. While a few titles did receive an increase in authorized mandatory funding over the projected baseline, three major titles did not, including Conservation. Ultimately the Conservation title was reduced by $3.97 billion over 10 years, or 24% of the total $16.5 billion in savings (see Figure 2 ). If the baseline to write the 2014 farm bill had not been reduced by sequestration, the enacted 2014 farm bill could have been credited for reducing conservation spending by about $6 billion over 10 years. But sequestration had already been factored into the baseline, so the official CBO score remains at $3.97 billion reduction from the Conservation title. In addition to sequestration, other budgetary dynamics may have an effect on farm bill conservation programs in the future. Since the 1996 farm bill, the number and size of conservation programs receiving mandatory funding has continued to grow. Currently the level of mandatory spending for conservation is roughly five times that of discretionary spending for conservation. For more than a decade, appropriators have placed limits on mandatory spending authorized in the farm bill, including a number of conservation programs. These limits are also known as CHIMPS, "changes in mandatory program spending." Many of these mandatory programs usually are not part of the appropriations process since funding is authorized in the farm bill for a specific time period (FY2014-FY2018) and is assumed to be available based on the statute and without further congressional action. Most of these conservation spending reductions, however, were at the request of both the Bush and Obama Administrations. The mix of programs and amount of reduction has varied from year to year. Some programs, such as CRP, have not been reduced by appropriators in recent years, while others, such as EQIP, have been repeatedly reduced below authorized levels. Even with these reductions, total mandatory funding for conservation programs has remained relatively constant at around $5 billion annually for the past five years. Conservation advocates are concerned that future CHIMPS would further deepen the cuts made by potential future sequestration and the 2014 farm bill reductions. The 2014 farm bill reauthorized, repealed, consolidated, and amended a number of conservation programs. Generally, farm bill conservation programs can be grouped into the following categories based on similarities: working land programs, land retirement programs, easement programs, conservation compliance programs, and other programs and overarching provisions (see Table 1 and page 2 for a list of conservation program acronyms). Most of these programs are authorized to receive mandatory funding (i.e., they do not require an annual appropriation) and include authorities that expire with other farm bill programs at the end of FY2018. Other types of conservation programs--such as watershed programs, emergency programs, and technical assistance--are authorized in other non-farm bill legislation. Most of these programs have permanent authorities and receive appropriations annually through the discretionary appropriations process. These programs are not generally addressed in the context of a farm bill and are not covered in detail in this report, except for cases where the 2014 farm bill made amendments to the program. General programmatic amendments, reauthorizations, and consolidations are discussed in the sections below. The Appendix provides a series of tables detailing the changes enacted in the 2014 farm bill as compared to prior law. The 2014 farm bill included several program consolidation measures, including the repeal of 12 active and inactive programs, the creation of two new programs, and the merging of two programs into existing ones. Table 1 and Figure 3 illustrate these consolidation measures. Working lands conservation programs are typically classified as programs that allow private land to remain in production, while implementing various conservation practices to address natural resource concerns specific to the area. Program participants receive some form of conservation technical assistance and planning to guide the decision on the most appropriate practices to apply, given the natural resource concerns and land condition. If selected, participants receive federal financial support to defray a portion of the cost to install or maintain the vegetative, structural, or management practices agreed to in the terms of the contract. The two main working lands programs are the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP). Other working lands programs, such as the Wildlife Habitat Incentives Program (WHIP) and Agricultural Water Enhancement Program (AWEP), were repealed and incorporated into either new or existing programs. The Agricultural Management Assistance (AMA) program is generally amended in Title XI (Crop Insurance) because its original authorizing statute resides in the Federal Crop Insurance Act. However, 50% of the funding is used as a conservation working lands program. Both the House- and Senate-passed farm bills included amendments to AMA, but none were adopted in the conference agreement. The 2014 farm bill reauthorized and amended EQIP at a total of $8 billion between FY2014 and FY2018. The program provides financial and technical assistance to producers and landowners to plan and install structural, vegetative, and land management practices on eligible lands to alleviate natural resource problems. Eligible producers enter into contracts to receive payment for implementing conservation practices. Approved activities are carried out according to an EQIP plan developed in conjunction with the producer that identifies the appropriate conservation practice(s) to address resource concerns on the land. The program is reauthorized through FY2018 with a graduating level of mandatory funding--$1.35 billion (FY2014); $1.6 billion (FY2015); $1.65 billion (FY2016-FY2017); and $1.75 billion (FY2018). A similar progression was authorized in the 2008 farm bill; however, EQIP funding has been reduced in the annual appropriations process (CHIMPS) since 2003, and has never received its full authorized level of funding (see " Budget and Baseline " discussion above). One of the major changes to EQIP in the 2014 farm bill was the incorporation of the WHIP. WHIP provided technical and financial assistance to private landowners to develop upland wildlife, wetland wildlife, threatened and endangered species, fish and other types of wildlife habitat. The program operated very similarly to EQIP, but had a direct focus on improving wildlife habitat. The 2014 farm bill repeals WHIP and amends EQIP to require that 5% of total EQIP payments benefit wildlife habitat. Other elements of WHIP are also incorporated, including the requirement for consulting with State Technical Committees annually to determine eligible wildlife habitat practices. The farm bill also reauthorizes the requirement that 60% of all EQIP payments benefit livestock. The two EQIP subprograms--AWEP and Conservation Innovation Grants (CIG)--are discussed further below. A detailed analysis of EQIP changes may be found in Table A-3 . The 2014 farm bill also reauthorized and amended CSP. The program provides financial and technical assistance to producers to maintain and improve existing conservation systems, and adopt additional conservation activities. Under CSP, participants must meet a "stewardship threshold" for a set number of priority resource concerns when they apply for the program, and then must agree to meet or exceed the stewardship threshold for additional priority resource concerns by the end of the five-year contract. In exchange, participants receive annual payments that are based, in part, on conservation performance. The program is limited by the number of acres available for enrollment each fiscal year, not total funding. Enrollment is offered through a continuous sign-up and applications are accepted year-round. The 2014 farm bill amended CSP by making a whole-program substitution of statutory text. This did not mean, however, that all elements of the program changed as a result of the amendment. Primarily the changes reorganized the statutory language and refocused the program on generating additional conservation benefits. The amendments also raise the entry bar for participants, who are now required to address two priority resource concerns upon entry and meet or exceed one additional priority resource concern by the end of the contract. Contract renewal participants must meet the threshold for two additional priority resources concerns or exceed the threshold for two existing priority resource concerns. The 10% limitation on nonindustrial private forest land was lifted and flexible transition options are available for land coming out of CRP. Another major change was the reduction in enrollable acres. Under the 2008 farm bill, CSP could enroll up to 12.769 million acres annually. The FY2014 farm bill reduces this to 10 million acres annually. This reduction creates an estimated $2.272 billion in savings over 10 years (see Figure 2 ). CSP was reduced in FY2011 and FY2012, when appropriators placed limits on mandatory spending (CHIMPS). The program was further reduced in FY2013 by sequestration. If these reductions continue, then the lower 10 million acre cap authorized in the farm bill would continue to slow program growth. At the end of FY2013, 59 million acres were enrolled in CSP. A detailed analysis of the programmatic changes may be found in Table A-2 . Land retirement programs provide federal payments to private agricultural landowners for temporary changes in land use or management to achieve environmental benefits. The primary land retirement program--the Conservation Reserve Program (CRP)--was reauthorized to enroll a decreasing number until FY2018. Other sub-programs of CRP, such as the Farmable Wetlands (FW) program, were also reauthorized and amended. CRP is the largest federal, private-land retirement program in the United States, spending more than $2 billion annually. The program provides financial compensation for landowners (annual rental rate) to voluntarily remove land from agricultural production for an extended period (typically 10 to 15 years) for the benefit of soil and water quality improvement and wildlife habitat. The 2014 farm bill reauthorized CRP and reduced the enrollment cap from the previous 32 million acres to 24 million acres in FY2018. While CRP enrollment has fluctuated since its creation in the 1985 farm bill, recent enrollment has declined from its peak in FY2007 (with 36.8 million acres enrolled) to 25.6 million acres in FY2013. Further reduction in the farm bill was viewed as inevitable, given the fiscal challenges. Conservation and wildlife groups, however, remain concerned that reduced enrollment will impact critical species habitat and soil and water quality. Others point to the reduced enrollment as a product of high commodity prices, low rental rates, and declining interest in retiring land from production. The 2014 farm bill enrollment reduction created an estimated savings of $3.3 billion over 10 years. The 2014 farm bill made several amendments to CRP, mostly centered on permitted activities. Emergency harvesting, grazing, and other use of forage are permitted, in some cases, without a reduction in rental rate, as well as livestock grazing for a beginning farmer or rancher. Other approved activities, such as annual or routine grazing, may continue to require a reduction in rental rate. The 2014 farm bill repealed the Grassland Reserve Program (GRP) and incorporated grassland contracts, similar to what was repealed under GRP, into CRP. The 2014 farm bill also allows CRP participants the opportunity to terminate their contract early if the land has been enrolled longer than five years and does not contain environmentally sensitive practices. A detailed analysis of the programmatic changes may be found in Table A-1 . Conservation easements impose a permanent land-use restriction that is voluntarily placed on the land in exchange for a government payment. The 2014 farm bill repealed the conservation easement programs--Wetlands Reserve Program (WRP), Farmland Protection Program (FPP), and GRP--and created a new Agricultural Conservation Easement Program (ACEP). The three repealed easement programs had similar but slightly different goals. All three programs were voluntary and sought to protect land from development by using permanent or long-term easements to achieve this goal. Participants were compensated based on a fair market easement value of the conservation easement. All three programs provided technical assistance and required some form of conservation planning and conservation practice adoption. The major distinctions among the three conservation easement programs were the type of land protected; whether production was allowed; the duration of the protection; and who held the easement. More information on these repealed programs is provided in the text box below. The 2014 farm bill provides permanent baseline funding for ACEP. Funding became an issue when the 2008 farm bill was not reauthorized and easement programs such as WRP and GRP did not have baseline funding. This meant that farm bill extensions did not restore funding for the programs, thus leaving them inactive until reauthorized. While permanent funding was seen as a victory by many, others pointed out that total funding for the three repealed programs (WRP, GRP, and FPP) was higher in the previous five years than the total authorized level for ACEP for the next five years. Additionally, the enacted level of funding for ACEP was less than the levels in both the House- and Senate-passed farm bills. ACEP retains most of the program provisions in the repealed easement programs by establishing two types of easements: agricultural land easements (similar to FPP and GRP) that limit non-agricultural uses on productive farm or grass lands, and wetland reserve easements (similar to WRP) that protect and restore wetlands. General program provisions are the same across both easement types, including ineligible land; subordination, exchange, modification, and termination procedures; and compliance requirements. Priority enrollment is given to expiring CRP acres. Similar to FPP, ACEP requires USDA to enter into partnership agreements with eligible entities to purchase agricultural land easements. Agreements with certified entities are a minimum of five years with a review and recertification required every three years thereafter. Agreements with non-certified entities are three to five years in length. The entities agree to share the cost of the easement; purchase easements according to USDA's requirements; and enforce and monitor easements purchased. Also similar to the repealed FPP and GRP easements, agricultural land easements allow production to continue on the land while prohibiting nonagricultural uses. ACEP provides funding to purchase easements through eligible entities and provides technical assistance for developing an agricultural land easement plan. The federal share of the easement may not exceed 50% of the fair market value of the easement. The nonfederal share must be provided by the eligible entity and should be equivalent to the USDA share. Up to 50% of the nonfederal share may be a charitable donation or qualified conservation contribution from the private landowner, assuming the remaining nonfederal share is a cash contribution from the eligible entity. These cost-share requirements may be waived for grasslands of "special environmental significance." In this case, the federal share may be up to 75% of the fair market value of the easement and the nonfederal share cash requirement may be waived entirely. Agricultural land easements are permanent or for the maximum duration allowed under state law. Much like WRP, wetland reserve easements are used to restore, protect, and enhance wetlands through the use of 30-year or permanent easements, or the use of 30-year contracts for Indian tribes. Landowners who have owned the land for at least 24 months prior to enrollment may submit an offer to USDA that will be evaluated based on its conservation benefits, cost effectiveness, and financial leverage. If selected, the landowner agrees to restore and maintain the wetland according to an approved wetland reserve easement plan. USDA, in return, provides technical and financial assistance for wetland restoration. Landowners are compensated for the wetland reserve easement based on the fair market value of the land and the length of the easement or contract. USDA is also allowed to delegate the management, monitoring, and enforcement responsibilities of a wetland reserve easement to a separate authority. A comparison of repealed program provisions (where applicable) to the new ACEP provisions may be found in Table A-4 . Similar to the consolidation of the easement programs, the 2014 farm bill consolidated a number of the "other" conservation programs that provided partnership opportunities or multi-state funding for watershed-scale projects. The Regional Conservation Partnership Program (RCPP) creates partnership opportunities to target and leverage federal conservation funding for specific areas and resource concerns. A number of eligible activities are defined in statute. However, consistent with the repealed programs, water quantity and water quality concerns continue to have a large presence in RCPP. RCPP incorporates the Agricultural Water Enhancement Program (AWEP), the Cooperative Conservation Partnership Initiative (CCPI), the Chesapeake Bay Watershed Program (CBWP), and the Great Lakes Basin Program for soil erosion and sediment control (GLBP). Both AWEP and CCPI utilized partnership agreements to focus conservation program funds to targeted areas. The CBWP provided additional funds through existing conservation programs in the Chesapeake Bay watershed. The GLBP also targeted funding to a specific watershed, but unlike the other three programs, the GLBP did not receive mandatory funding and was last funded through appropriations in FY2010. RCPP uses 7% of available conservation program funds plus an additional $100 million annually in mandatory funding to address specific natural resource concerns in selected project areas. Project areas are defined by eligible partners and are selected through a competitive state or national competition. Partnership agreements (known as Regional Conservation Partnerships, RCPs) are for five years with a possible one-year extension. In addition to defining the project area, providing assistance, and possibly acting on behalf of the producers within the project area, partners must also provide a "significant portion" of the overall cost of the project. This leverages the partner's state, local, or private funding with RCPP's federal funding. Funds are also directed through "critical conservation areas" or CCAs. These areas are selected by USDA, are limited to eight nationwide, and expire after five years. To be eligible for an RCPP contract, a producer must be located in either a CCA or RCP, but is not required to work with the sponsoring RCP partner and may choose to work directly with USDA. Figure 4 gives a general illustration of how RCPP funding may be obligated to producer contracts based on the 2014 farm bill. RCPP contracts will follow the existing rules and requirements of the covered programs (i.e., EQIP, CSP, ACEP, and the Healthy Forest Reserve Program, HFRP). Alternative funding arrangements are allowed for multistate water resources agencies. Also, five-year payments may be made to producers participating in water quantity and quality projects, specifically, conversion from irrigated to dryland farming and improved nutrient management. A comparison of repealed program provisions (where applicable) to the new RCPP provisions may be found in Table A-5 . The Conservation Innovation Grants (CIG) program is a sub-program of EQIP. The program is intended to leverage federal investment, stimulate innovative approaches to conservation, and accelerate technology transfer in environmental protection, agricultural production, and forest management. The program was reauthorized in the 2014 farm bill through FY2018 at an unspecified funding level of total EQIP funding. The farm bill reauthorized and reduced the air quality component, which requires that payments be made through CIG to producers to implement practices to address air quality concerns from agricultural operations in order to meet federal, state, and local regulatory requirements. This air quality component was previously authorized at $37.5 million annually and is reduced to $25 million annually (between FY2014 and FY2018) in the 2014 farm bill. The farm bill also adds a reporting requirement that no later than December 31, 2014, and every two years thereafter, a report must be submitted to Congress regarding CIG funding, project results, and technology transfer efforts. The 1985 farm bill included a number of conservation provisions designed to conserve soil and water resources. Two of the provisions remain in effect today--highly erodible land conservation (sodbuster) and wetland conservation (swampbuster). The provisions, collectively referred to as conservation compliance, require that in exchange for certain USDA program benefits, a producer agrees to maintain a minimum level of conservation on highly erodible land and to not convert wetlands to crop production. One of the most significant changes made by the 2014 farm bill was the addition of federal crop insurance premium subsidies to the list of benefits that could possibly be lost if a producer were found out of compliance. How compliance is calculated, where compliance provisions apply, and traditional exemptions and variances were not amended. The 2014 farm bill did create separate considerations when addressing compliance violations and the loss of federal crop insurance premium subsidies. The highly erodible land conservation provision (sodbuster) applies to land classified as highly erodible that was not in cultivation between 1980 and 1985 (i.e., newly broken land, referred to as sodbuster) and to any highly erodible land in production after 1990, regardless of when the land was put into production. Land meeting this classification can be considered eligible for USDA program benefits if the producer agrees to cultivate the land using an approved conservation plan. In addition to the application of an approved conservation plan, a number of exemptions are possible before benefits would be lost. These provisions were unchanged by the 2014 farm bill. What did change under the 2014 farm bill was the list of USDA program benefits that could be lost if a producer were found out of compliance with the sodbuster provision. The list was expanded to "include any portion of the premium paid by the Federal Crop Insurance Corporation for a policy or plan of insurance under the Federal Crop Insurance Act." This does not mean that producers cannot purchase a crop insurance plan through the federal crop insurance program; rather, if found out of compliance, they would be ineligible to receive the insurance premium subsidy paid by the federal government. The loss of the insurance premium subsidy is not retroactive and would only take effect after all administrative appeals were exhausted. The 2014 farm bill also extends the list of exemptions, allowing producers new to compliance requirements additional time (five reinsurance years) to develop and comply with a conservation plan before the loss of federal crop insurance premium subsidies. Producers with compliance violations prior to the farm bill's enactment are allowed two reinsurance years to develop and comply with a conservation plan before the loss of the subsidies. The "swampbuster" or wetland conservation provision extends the sodbuster concept to wetland areas. Producers who plant a program crop on a wetland converted after December 23, 1985, or who convert wetlands, making agricultural commodity production possible, after November 28, 1990, are ineligible for certain USDA program benefits. This means that, for a producer to be found out of compliance, crop production does not actually have to occur; production only needs to be made possible through activities such as draining, dredging, filling, or leveling the wetland. The wetlands compliance provision also includes a number of exempt lands. These provisions were unchanged by the 2014 farm bill. Similar to sodbuster, the 2014 farm bill amends the wetlands conservation provision to include crop insurance premium subsidies as an ineligible benefit if found to be out of compliance. The amendment treats the time of wetland conversion differently ( Table 2 ). The amendment also extends the list of exemptions for compliance violators, allowing additional time (one or two reinsurance years) for producers to remedy or mitigate the wetland conversion before losing crop insurance premium subsidies. Producers must continue to self-certify their compliance with the sodbuster and swampbuster provisions. USDA is required to review certifications in a "timely manner"; otherwise, producers will be held harmless with regard to eligibility even if a subsequent violation is found. Producers who do not self-certify and are found to be in violation must pay an "equitable contribution" to a wetland restoration fund, not to exceed the premium subsidy amount. USDA retains sole responsibility for implementing the conservation compliance provisions. The 2014 farm bill also amended the wetland mitigation banking program. Under wetlands conservation, compliance violators have the option of mitigating the violation through the restoration of a converted wetland, the enhancement of an existing wetland, or the creation of a new wetland. Debate over these wetland mitigation requirements arose during the 2014 farm bill and centered on the concern that some producers were required to mitigate wetlands with a greater than 1-to-1 acreage ratio. This is allowed by statute if "more acreage is needed to provide equivalent functions and values that will be lost as a result of the wetland conversion to be mitigated." The House-passed farm bill would have limited wetland mitigation to not more than a 1-to-1 acreage ratio. The Senate-passed farm bill would have required a study to assess the use of wetland mitigation, determine impacts on wildlife habitat, and provide recommendations for improving wetland mitigation procedures. Ultimately, the conference agreement adopted neither the House nor Senate provision and instead provided $10 million in mandatory funding for mitigation banking efforts. While the provision remains unchanged in statute, the conference report ( H.Rept. 113-333 ) includes language encouraging USDA to use a wetland mitigation ratio not to exceed 1-to-1 acreage. The 2008 farm bill created a compliance provision under the Crop Insurance title, known as sodsaver. The sodsaver provision would have made producers who planted crops (five or more acres) on native sod ineligible for crop insurance and the noninsured crop disaster assistance (NAP) program for the first five years of planting. The 2008 farm bill limited the provision to virgin prairie converted to cropland in the Prairie Pothole National Priority Area, but only if elected by the state. Ultimately no governors opted to participate in the program and sodsaver was never activated. The Crop Insurance title (Title XI) of the 2014 farm bill amended and expanded the sodsaver provision. Unlike the 2008 sodsaver provision, there is no opt-in requirement and the provision became effective upon enactment. The sodsaver provision also applies to native sod in six states--Minnesota, Iowa, North Dakota, South Dakota, Montana, and Nebraska--rather than only the area covered by the Prairie Pothole National Priority Area. Crop insurance premium subsidies will now be reduced by 50 percentage points for production on native sod during the first four years of planting. Crops planted on native sod will have reduced benefits under NAP. The farm bill also clarified that native sod may include land that has never been tilled or cases where the producer cannot substantiate that the ground has ever been tilled. Crop yield guarantees might also be affected for crop insurance policies. The yield guarantee for a crop insurance policy is a producer's "normal" crop yield based on actual production history (APH). In the absence of actual yield data (e.g., production on native sod or no yield documentation on existing fields), a "transition yield" (T-yield) is assigned, which is based on a portion of 10-year average county yields for the crop. The 2014 farm bill sets the T-yield factor on native sod equal to 65% of the 10-year average county yield for production on native sod. For other cropland, the percentage can be higher depending on the number of years of actual data included in the APH. Also, "yield substitution" is not allowed; that is, low farm yields must be used in the APH rather than replacing them with potentially higher T-yields as allowed for other cropland. This is expected to reduce the incentive to produce on native sod. This appendix includes a series of tables arranged by subtitle included in Title II of the Agricultural Act of 2014 ( P.L. 113-79 ). U.S. Code citations are included in brackets in the "Prior Law" column. Corresponding section numbers in P.L. 113-79 are included in brackets in the "Enacted 2014 Farm Bill" column. Funding for most Title II programs is covered in the "Funding and Administration" subtitle ( Table A-7 ). Where appropriate, funding levels are repeated within a program's corresponding subtitle table.

The Agricultural Act of 2014 (2014 farm bill, P.L. 113-79) was enacted on February 7, 2014. After years of debate and deliberation, the enacted 2014 farm bill included a number of changes to the Conservation title (Title II), including program consolidation and reauthorization, amendments to conservation compliance, and a reduction in overall funding. Debate on the 2014 farm bill focused on a number of controversial issues. While many did not consider conservation to be controversial, nonetheless, a number of policy issues shaped the final version of the title and ultimately its role in the enacted farm bill. Prior to the 2014 farm bill, there were over 20 distinct conservation programs. Discussion about simplifying or consolidating conservation programs to reduce overlap and duplication, and to generate savings, has continued for a number of years. The 2014 farm bill contained several program consolidation measures, including the repeal of 12 active and inactive programs, the creation of two new programs, and the merging of two programs into existing ones. Overall changes include the following. The act reauthorizes larger conservation programs through FY2018, including the Environmental Quality Incentives Program (EQIP), the Conservation Stewardship Program (CSP), and the Conservation Reserve Program (CRP). It authorizes a new Agricultural Conservation Easement Program (ACEP), which retains most of the program provisions in the repealed easement programs (Wetlands Reserve Program [WRP], easements under the Grasslands Reserve Program [GRP], and Farmland Protection Program [FPP]). ACEP establishes two types of easements: agricultural land easements and wetland reserve easements. It authorizes a new Regional Conservation Partnership Program (RCPP) from the repealed partnership programs (Agricultural Water Enhancement Program [AWEP], Cooperative Conservation Partnership Initiative [CCPI], Chesapeake Bay Watershed Program [CBWP], and Great Lakes Basin Program for soil erosion and sediment control [GLBP]). RCPP creates partnership opportunities to target and leverage federal conservation funding for specific areas and resource concerns. It incorporates other programs, such as the Wildlife Habitat Incentives Program (WHIP) and grazing contracts under GRP, into larger reauthorized programs--EQIP and CRP, respectively. One of the most controversial issues in the 2014 farm bill debate was whether federal crop insurance subsidies should be included on the list of program benefits that could be lost if a producer were found to be out of compliance with conservation requirements on highly erodible land and wetlands. Ultimately the 2014 farm bill did add federal crop insurance subsidies to the list of benefits that could be lost and extended limited protection for native sod in select states. The 2014 farm bill also reduced funding for the Conservation title by $3.97 billion over 10 years. Most farm bill conservation programs are authorized to receive mandatory funding, and the Conservation title makes up 6% of the total farm bill 10-year baseline, or $58 billion of the total $956 billion in mandatory funding authorized in the 2014 farm bill.

Sequestration is the automatic reduction (i.e., cancellation) of certain federal spending, generally by a uniform percentage. The sequester is a budget enforcement tool that Congress established in the Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA, also known as the Gramm-Rudman-Hollings Act; P.L. 99-177 ) intended to encourage compromise and action, rather than actually being implemented (also known as triggered ). Generally, this budget enforcement tool has been incorporated into laws to either discourage Congress from violating specific budget objectives or encourage Congress to fulfill specific budget objectives. When Congress breaks these types of rules, either through the enactment of a law or lack thereof, a sequester is triggered and certain federal spending is reduced. Sequestration is of recent interest due to its current use as an enforcement mechanism for three budget enforcement rules created by the Statutory Pay-As-You-Go Act of 2010 (Statutory PAYGO; P.L. 111-139 ) and the Budget Control Act of 2011 (BCA; P.L. 112-25 ). Currently, only the BCA mandatory sequester has been triggered and is in effect. However, the Statutory PAYGO sequester and the BCA discretionary sequester are current law and can be triggered if the budget enforcement rules are broken (and Congress does not take action to change or waive these rules). Medicare, which is a federal program that pays for covered health care services of qualified beneficiaries, is subject to a reduction in federal spending associated with the implementation of these three sequesters, although special rules limit the extent to which it is impacted. This report begins with an overview of budget sequestration and Medicare before discussing how budget sequestration has been implemented across the different parts of the Medicare program. Additionally, this report provides appendixes that include references to additional Congressional Research Service (CRS) resources related to this report and budget terminology definitions, as defined by BBEDCA. Under current law, sequestration is a budget enforcement tool that occurs because certain policy goals have not been met. When a sequester is triggered, all applicable budget accounts, unless exempted by law, are reduced by a percentage amount for a fiscal year. The percentage reduction varies between and within budget accounts depending on the categories of funding, as described below, contained within each budget account. After accounting for each category of funding within a budget account, sequestration reductions are spread evenly across all budget account subcomponents referenced in committee reports, budget justifications, and/or Presidential Detailed Budget Estimates - also known as programs, projects or activities. For budget accounts that contain only one category of funding, all sequestrable funds are reduced by the corresponding percentage. For accounts that contain multiple categories of funding, the total amount of each category of sequestrable funds is reduced by its corresponding percentage. The reduced budget resources are usually permanently cancelled. As currently used, a sequester applies to either discretionary or mandatory spending. Discretionary spending is associated with most funds provided by annual appropriations acts. While all discretionary spending is subject to the annual appropriations process, only a portion of mandatory spending is provided in appropriations acts. Mandatory spending is generally provided by permanent laws, such as the Social Security Act, which made indefinite budget authority permanently available for Medicare benefit payments. Some federal programs, such as Medicare, can receive both discretionary and mandatory funding. In the event that a sequester is triggered, the Office of Management and Budget (OMB) is responsible for calculating the across-the-board percentage reductions, and calculates separate percentages for Medicare, nondefense, and defense funding. Due to sequestration rules, which are covered later in this report, mandatory Medicare benefit payments receive a specific percentage reduction different from other types of federal spending. The methodologies used to calculate these percentages and the sequestered amounts are published in a report produced by OMB. Once the President issues a sequestration order, the associated report is made available to the public and transmitted to Congress. Currently, there are three budget enforcement rules that can trigger sequestration. Two were established by the BCA and one was established by Statutory PAYGO. The three rules and their corresponding sequesters can be summarized as follows (and are presented in Table 1 ): The BCA established a bipartisan Joint Select Committee on Deficit Reduction (Joint Committee), which was responsible for developing legislation that would reduce the deficit by at least $1.5 trillion from FY2012 to FY2021. However, the Joint Committee was unable to achieve this goal; therefore, Congress and the President were unable to enact corresponding deficit reduction legislation by a date specified in the law. As a result, two types of spending reductions were automatically triggered. One automatic spending reduction involved the sequestration of certain mandatory spending from FY2013 to FY2021. Through subsequent legislation, including, most recently, the Bipartisan Budget Act of 2018 (BBA 18; P.L. 115-123 ), Congress extended this reduction through FY2027. (This reduction is referred to in this report as the "BCA mandatory sequester".) Additionally, the BCA established statutory limits on discretionary spending for FY2013-FY2021. These discretionary spending limits (discretionary caps) restrict the amount of spending permitted through the annual appropriations process for defense and nondefense programs. Any breach of these discretionary caps results in the sequestration of nonexempt discretionary funding. (This reduction is referred to in this report as the "BCA discretionary sequester".) This was triggered once in FY2013 and can be triggered again if discretionary caps are breached in any fiscal year through FY2021 and Congress does not take action to raise these caps. Most recently, BBA 18 increased the discretionary spending caps for FY2018 and FY2019 so they would not be breached. The Statutory PAYGO Act established a budget enforcement mechanism generally requiring that direct spending and revenue legislation enacted into law not increase the deficit over a 5- and/or 10-year period. If such legislation were to become law, a sequester of certain mandatory spending would be ordered. This budget enforcement rule does not have a sunset date and therefore remains in effect under current law. (This reduction is referred to in this report as "Statutory PAYGO sequester".) Although Congress has passed legislation that has been estimated to increase the deficit since the law went into effect, the Statutory PAYGO sequester has never been triggered due to the fact that Congress has voted to prohibit the effects of specific legislation from being counted under Statutory PAYGO. A recent example of this is the Bipartisan Budget Act of 2018 (BBA 2018; P.L. 115-123 ), which included language to reduce the "scorecards" tallying the total impact of legislation on the deficit to zero. For more information on budget sequestration, see CRS Report R42050, Budget "Sequestration" and Selected Program Exemptions and Special Rules , coordinated by Karen Spar, and CRS Report R42972, Sequestration as a Budget Enforcement Process: Frequently Asked Questions , by Megan S. Lynch. Medicare, which is a federal program that pays for certain health care services of qualified beneficiaries, is subject to sequestration, although special rules limit the extent to which it is impacted. Due to the varying payment structures of the four parts of the program, sequestration is applied differently across Medicare. Medicare was established in 1965 under Title XVIII of the Social Security Act to provide hospital and supplementary medical insurance to Americans age 65 and older. Over time, the program has been expanded to also include certain disabled persons, including those with end-stage renal disease. In 2017, the program covered an estimated 58 million persons (49 million aged and 9 million disabled). The Congressional Budget Office (CBO) estimates that total Medicare spending will be about $718 billion in FY2018 and will increase to about $1,390 billion in FY2027. Almost all Medicare spending is mandatory spending that is primarily used to cover benefit payments (i.e., payments to health care providers for their services), administration, and the Medicare Integrity Program (MIP). The remaining Medicare outlays are discretionary and used almost entirely for other administrative activities that are described in more detail later in this report. Medicare consists of four distinct parts: 1. Part A (Hospital Insurance, or HI) covers inpatient hospital services, skilled nursing care, hospice care, and some home health services. Most persons aged 65 and older are automatically entitled to premium-free Part A because they or their spouse paid Medicare payroll taxes for at least 40 quarters (10 years) on earnings covered by either the Social Security or the Railroad Retirement systems. Part A services are paid for out of the Hospital Insurance Trust Fund, which is mainly funded by a dedicated 2.9% payroll tax on earnings of current workers, shared equally between employers and workers. 2. Part B (Supplementary Medical Insurance, or SMI) covers a broad range of medical services, including physician services, laboratory services, durable medical equipment, and outpatient hospital services. Enrollment in Part B is optional, but most beneficiaries with Part A also enroll in Part B. Part B benefits are paid for out of the Supplementary Insurance Trust Fund, which is primarily funded through beneficiary premiums and federal general revenues. 3. Part C (Medicare Advantage, or MA) is a private plan option that covers all Parts A and B services, except hospice. Individuals choosing to enroll in Part C must be eligible for Part A and must also enroll in Part B. About one-third of Medicare beneficiaries are enrolled in MA. Part C is funded through both the HI and SMI trust funds. 4. Part D is a private plan option that covers outpatient prescription drug benefits. This portion of the program is optional. About 76% of Medicare beneficiaries are enrolled in Medicare Part D or have coverage through an employer retiree plan subsidized by Medicare. Part D benefits are paid for out of the Supplementary Insurance Trust Fund, which is primarily funded through beneficiary premiums and federal general revenues. For more information on the Medicare program, see CRS Report R40425, Medicare Primer , coordinated by Patricia A. Davis. Beneficiaries are responsible for paying Medicare Parts B and D premiums, as well as other out-of-pocket costs, such as deductibles and coinsurance, for services provided under all parts of the Medicare program. Under Medicare Parts A, B and D, there is no limit on beneficiary out-of-pocket spending, and most beneficiaries have some form of supplemental insurance through private Medigap plans, employer-sponsored retiree plans, or Medicaid to help cover a portion of their Medicare premiums and/or deductibles and coinsurance. Medicare Advantage has limits on out-of-pocket spending. Under Medicare Parts A and B, the government generally pays providers directly for services on a fee-for-service basis using different prospective payment systems and fee schedules. Under Parts C and D, Medicare pays private insurers a monthly capitated per person amount to provide coverage to enrollees, regardless of the amount of services used. The capitated payments are adjusted to reflect differences in the relative cost of sicker beneficiaries with different risk factors including age, disability, or end-stage renal disease. The Health Care Fraud and Abuse Control Program (HCFAC) was established by the Health Insurance Portability and Accountability Act (HIPAA; P.L. 104-191 ) and is responsible for activities that fight health care fraud and waste. HCFAC is funded using both mandatory and discretionary funds and consists of three programs: (1) the HCFAC program, which finances the investigative and enforcement activities undertaken by the Department of Health and Human Services (HHS), the HHS Office of Office of Inspector General, the Department of Justice, and the Federal Bureau of Investigation, (2) Medicaid Oversight, and (3) MIP. Historically, MIP has focused on combating fee-for-service fraud in Medicare Parts A and B. However, increases in private Medicare enrollment--Parts C and D--have expanded program integrity efforts into capitated payment systems as well. While HCFAC is not a part of the Medicare program, MIP is authorized by the same title of the Social Security Act as Medicare and focuses entirely on the program. As a result, this portion of HCFAC is treated as a part of Medicare benefit payments under a sequestration order and would be subject to the Medicare mandatory sequestration percentage limits. The administration of Medicare is funded through a combination of discretionary and mandatory resources that are subject to reductions under a discretionary or mandatory sequestration order, respectively. Discretionary administration funding includes amounts for payments to contractors to process providers' claims, beneficiary outreach and education, and maintenance of Medicare's information technology infrastructure. Mandatory administration funding includes amounts for quality improvement organizations and Part B premium payments for Qualifying Individuals (QI). Special rules limit the total effect of budget sequestration on Medicare (see Table 1 ). Most notably, BBEDCA, as amended by the BCA, prohibits Medicare benefit payments from being reduced by more than 2% under a BCA mandatory sequestration order. Similarly, Statutory PAYGO prohibits Medicare benefit payments from being reduced by more than 4% under a Statutory PAYGO sequestration order. The cap does not apply to Medicare mandatory and discretionary administrative spending, which is subject to the unrestricted percentage reduction under both BCA and Statutory PAYGO sequestration orders. Under the current mandatory sequestration order triggered by the BCA, the Medicare sequestration percentage is capped at 2%. Therefore, as OMB determines the percentage reductions for each budget category through FY2027, Medicare benefit payments cannot be reduced by more than 2%; as such, another budget category may be subject to a higher percentage reduction in order to achieve the necessary amount of savings. More specifically, if OMB determines that total nonexempt, nondefense mandatory funds need to be reduced by a percentage larger than 2% in order to achieve necessary savings under a BCA sequestration order for a given year, then a 2% reduction would be made to Medicare benefit spending, and the uniform reduction percentage for the remaining non-Medicare benefit, nonexempt, nondefense mandatory programs would be recalculated and increased by an amount to achieve the necessary level of reductions. If the uniform percentage reduction needed to achieve the total amount of savings is less than 2%, then the determined percentage would be applied to all nonexempt, nondefense, mandatory accounts, including Medicare. Of note, if a mandatory sequestration order were triggered by Statutory PAYGO, the process would be the same, but the reduction of payments for Medicare benefits would be capped at 4%. In addition to these percentage caps, BBEDCA also prohibits Statutory PAYGO and BCA mandatory sequestration effects from being included in the determination of annual adjustments to Medicare payment rates established under Title XVIII of the Social Security Act. (See " Reductions in Benefit Spending ".) Finally, certain Medicare programs and activities are explicitly exempted from Statutory PAYGO and BCA sequestration orders. Specifically, Part D low-income subsidies, Part D catastrophic subsidies (reinsurance), and QI premiums cannot be reduced under a mandatory sequestration order. Once a sequester is triggered, OMB issues a sequestration order for, at most, one fiscal year, and subsequent orders are reissued for each fiscal year, as necessary. These orders can be issued either before or during the fiscal year in which they apply, depending on the trigger. Reductions in budget resources are to be made during the effective period of a sequestration order; however special rules differentiate when a sequestration order is implemented for benefit payments. As a result, sequestration orders are applied to Medicare benefit payments on a different timeline than other mandatory and discretionary Medicare funds (i.e., Medicare administration and HCFAC). Once OMB issues a sequestration order, Medicare benefit payments are sequestered beginning on the first date of the following month and remain in effect for all services furnished during the following one-year period. In the event that a subsequent sequester order is issued prior to the completion of the first order, the subsequent order begins on the first day after the initial order has been completed. As an example, the first BCA mandatory sequester order (FY2013) was issued on March 1, 2013, and took effect April 1, 2013. It remained in effect through March 31, 2014. The FY2014 order was issued on April 10, 2013, (corrected on May 20, 2013) and was in effect from April 1, 2014, to March 31, 2015. All other sequestrable funding is reduced only during the fiscal year associated with the sequester report. Using the same example, the first BCA mandatory sequester order (FY2013) reduced appropriate administrative spending from March 1, 2013, to September 30, 2013. The second order for FY2014 sequestered funds from October 1, 2013, to September 30, 2014. While OMB uses current law to determine the amount of funds available to be sequestered and corresponding percentage reductions, actual Medicare outlays will not be known until after the end of the fiscal year. Since sequestration orders are issued either before or during the fiscal year in which they are applicable, OMB estimates the total sequestrable budget authority for Medicare, and other accounts with indefinite budget authority, in order to determine necessary sequestration percentages. If Medicare outlays exceed the estimated amount included in a sequestration order for that fiscal year, the additional outlays are sequestered at the established percentage for that fiscal year. If Medicare outlays are determined to be less than the estimated amount, no adjustments are made to the sequestration order. In other words, OMB does not adjust sequestration percentages for any category of budget authority once actuals are realized for accounts with indefinite budget authority. Similarly, OMB does not adjust future orders to account for any previous discrepancies between estimates and actuals. Under Medicare Parts A and B, participating providers, such as hospitals and physicians, are paid by the federal government on a fee-for-service basis for services provided to a beneficiary. According to guidance issued by the Centers for Medicare & Medicaid Services (CMS), any sequestration reductions are to be made to claims after determining coinsurance, deductibles, and any applicable Medicare Secondary Payment adjustments. Therefore, sequestration applies only to the portion of the payment paid to providers by Medicare; the beneficiary cost-sharing amounts and amounts paid by other insurance are not reduced. As an example, if the total allowed payment for a particular service is $100 and the beneficiary has a 20% co-insurance, the beneficiary would be responsible for paying the provider the full $20 in co-insurance. The remaining 80% that is paid by Medicare would be reduced by 2% under the FY2018 sequestration order, or $1.60 in this example, resulting in a total Medicare payment of $78.40. In total, the provider would receive a payment of $98.40. This reduced payment is considered payment in full and the Medicare beneficiary is not expected to pay higher copayments to make up for the reduced Medicare payment. Part A inpatient services are considered to be furnished on the date of the individual's discharge from the inpatient facility. For services paid on a reasonable cost basis, the reduction is to be applied to payments for such services incurred at any time during each cost reporting period during the sequestration period, for the portion of the cost reporting period that occurs during the effective period of the order. For Part B services provided under assignment, the reduced payment is to be considered payment in full and the Medicare beneficiary will not pay higher copayments to make up for the reduced amount. Medicare non-participating providers, which are providers that do not elect to accept Medicare payments on all claims in a given year, are not subject to the same rules. Medicare non-participating providers receive a lower reimbursement rate from Medicare on all services provided and may charge beneficiaries a limited amount more (balance bill charge) than the fee schedule amount on non-assigned claims. In these instances, instead of the Medicare check being sent to the provider, a check that incorporates the 2% reduction is mailed to the patient. The patient must then pay the provider an amount that incorporates the sequestered amount. More specifically, as payment, the beneficiary is responsible for paying the provider the amount listed on the check, any cost sharing, balance bill charges, and the sequestered amounts taken out of the provider check. Annual adjustments to Medicare payment rates are determined without incorporating sequestration. However, the Medicare Payment Advisory Commission does incorporate the effects of sequestration when assessing the adequacy of provider payments. The commission uses these annual assessments to develop payment adjustment recommendations to the HHS Secretary and/or Congress. Under Medicare Advantage, private health plans are paid a per person monthly amount to provide all Medicare-covered benefits, except hospice, to beneficiaries who enroll in their plan. These capitated monthly payments are made to MA plans regardless of how many or how few services beneficiaries actually use. The plan is at risk if costs for all of its enrollees exceed program payments and beneficiary cost sharing; conversely, the plan can generally retain savings if aggregate enrollee costs are less than program payments and cost sharing. With respect to sequestration, reductions are uniformly made to the monthly capitated payments to the private plans administering Medicare Advantage (Medicare Advantage Organizations or MAOs). These fixed payments are determined every year with CMS approval through an annual "bid process" and the amounts can vary depending on the private plan. In general, CMS payments to MAOs are generally comprised of amounts to cover medical costs, administrative expenses, private plan profits, risk adjustments, and plan rebates to beneficiaries. MAOs have discretion to distribute any sequestration cut across these four different components but must still adhere to their legal obligations. Some MAOs have attempted to pass the reduction in their capitation rates onto providers through lower reimbursement rates; however MAOs may be limited in their ability to do so. CMS provided instructions regarding the treatment of contract and non-contract providers that provide services under Part C. Specifically, "whether and how sequestration might affect an MAO's payments to its contracted providers are governed by the terms of the contract between the MAO and the provider." Therefore, in order for MAOs to reduce provider payments by the sequestered amount, specific language within a contract must allow the reduction or the contract would need to be renegotiated. In certain instances, such as when beneficiaries receive emergency out-of-network care, MAOs need to reimburse the non-contracted providers; in such cases, the MAOs are required to pay at least the rate providers would have received if the beneficiaries had been enrolled in original Medicare. However, MAOs have the discretion whether or not to incorporate sequestration cuts into payments to non-contracted providers for those services. Non-contracted providers must accept any payments reduced by the sequestration percentage as payment in full. In addition, regulations in the annual bid process restrict MAO's potential responses to sequestration. Specifically, MAOs are limited to "reasonable" revenue margins and a set Medicare/non-Medicare profit margin discrepancy, among other requirements. Furthermore, MAOs are restricted from allowing sequestration to impact a beneficiary's plan benefits or liabilities, so it becomes difficult for MAOs to pass an entire sequestration cut onto beneficiaries through higher premiums or seek to offset lost revenue by increasing non-Medicare profits. As HHS computes annual adjustments to Medicare payment rates, the Secretary cannot take into account any reductions in payment amounts under sequestration for the Part C growth percentage. In other words, plan payment updates are to be determined as if the reductions under sequestration have not taken place. This results in larger annual adjustments as compared to baselines that incorporate sequestration cuts. Under Medicare Part D, each plan receives a base capitated monthly payment, called a direct subsidy, which is adjusted to incorporate three risk sharing mechanisms (low-income subsidies, individual reinsurance, and risk corridor payments). While each plan receives the same direct subsidy amount for each enrollee regardless of how many benefits an enrollee actually uses, plans receive different risk sharing adjustments in their monthly payments. With respect to sequestration, reductions are uniformly made only to the direct subsidy amounts. Part D risk sharing adjustments are exempt from sequestration and are therefore not reduced. Part D also contains a Retiree Drug Subsidy Program, which pays subsidies to qualified employers and union groups that provide prescription drug insurance to Medicare-eligible, retired workers. Instead of a capitated monthly payment, each sponsor receives a federal subsidy at the end of the year to cover a portion of gross prescription drug costs for each retiree during that year. Under this program, sequestration reductions are applied to the annual subsidy amount. The HHS Secretary is prohibited from taking into account any reductions in payment amounts under sequestration for purposes of computing the Part D annual growth rate. As noted, the HCFAC program is not part of Medicare but does receive mandatory and discretionary funds to ensure the programmatic integrity of the Medicare program. Under a BCA sequestration order of mandatory funds, MIP funds are treated as Medicare budget authority and are subject to the 2% sequester limit. HCFAC mandatory funding that does not exclusively address Medicare is reduced by the nondefense mandatory sequester rate, when applicable. Under either a mandatory or discretionary sequestration order, administrative spending within nonexempt Medicare and HCFAC programs is reduced by the nondefense rate determined by OMB. See Table 2 for past and current nondefense sequester percentages under the BCA mandatory sequester. Since the first BCA mandatory sequester order issued in FY2013, Medicare benefit payments have been subject to the 2% annual reduction limit established by the BCA. Nondefense mandatory budget authority reductions, which have applied to Medicare administrative spending, have fluctuated between 5.1% and 7.3% through FY2018. In the same sequestration order, Medicare administrative expenses will be sequestered by the nondefense mandatory percentage, 6.6%. The total reduction in Medicare administration budget authority, however, cannot be identified from the data presented in the OMB sequestration report. In total, Medicare benefit payments (not including administration) are estimated to account for 89% of all Medicare and non-Medicare resources available to be sequestered (sequestrable budget authority) under the FY2018 BCA mandatory sequester. Of the funds that are sequestered, Medicare benefit payments are estimated to account for 70% of sequestered funds. Traditionally, Medicare benefit payments comprise the largest single source of sequestered funds in a given mandatory sequestration order. In FY2018, Medicare benefit payments are estimated to account for the largest share of sequestrable budget authority and sequestered funds since the first BCA sequestration order was issued for FY2013, as shown in Figure 1 . Figure 2 shows how the FY2018 BCA sequestration order is estimated to apply to the various parts of Medicare. It is worth noting that although Medicare Part C is sequestered, OMB sequestration orders delineate at the trust fund level and do not distinguish each Medicare part. Part C is funded out of both the Part A and Part B trust funds and is included in these totals. For reference, from FY2016-FY2017, Medicare Advantage, on average, accounted for 32% of all HI Trust Fund benefit payments and 38% of all SMI Trust Fund benefit payments. These ratios could change in FY2018 based on actual spending. CBO estimates that Medicare benefit payment outlays will increase 96% from FY2018 to FY2027 ($708 billion to $1,387 billion), which is the last year of BCA mandatory sequestration. Most of this expected increase is due to an aging population and rising health care costs per person. In addition, most of this increase would be subject to sequestration. When Congress failed to enact legislation that reduced the deficit by at least $1.5 trillion before January 15, 2012, the BCA prompted savings from three sources: (1) the mandatory sequestration of funds, (2) reduced discretionary spending limits, and (3) lower expected interest payments on U.S. government debt, which resulted from the mandatory sequestration of funds and discretionary spending limits. Although Medicare benefit payments traditionally account for a large percentage of mandatory sequestered funds, they account for a much smaller portion of overall BCA savings--generally around 10%--because reduced discretionary spending limits account for a larger share of BCA savings than the mandatory sequester. In FY2018, sequestered Medicare benefit payments will account for approximately 10% of total FY2018 BCA savings, as determined by OMB and shown in Figure 3 . For more information on the Budget Control Act, see CRS Report R41965, The Budget Control Act of 2011 , by Bill Heniff Jr., Elizabeth Rybicki, and Shannon M. Mahan; and CRS Report R42506, The Budget Control Act of 2011 as Amended: Budgetary Effects , by Grant A. Driessen and Marc Labonte. Appendix A. Additional CRS Resources To gain a deeper understanding of the topics covered in this report, readers may also wish to consult the following CRS reports: CRS Report R40425, Medicare Primer , coordinated by Patricia A. Davis CRS Report R43122, Medicare Financial Status: In Brief , by Patricia A. Davis CRS Report R44766, Medicare Advantage (MA)-Proposed Benchmark Update and Other Adjustments for CY2018: In Brief , by Paulette C. Morgan CRS Report R40611, Medicare Part D Prescription Drug Benefit , by Suzanne M. Kirchhoff CRS Report R42506, The Budget Control Act of 2011 as Amended: Budgetary Effects , by Grant A. Driessen and Marc Labonte CRS Report R42050, Budget "Sequestration" and Selected Program Exemptions and Special Rules , coordinated by Karen Spar CRS Report R42972, Sequestration as a Budget Enforcement Process: Frequently Asked Questions , by Megan S. Lynch CRS Report R41157, The Statutory Pay-As-You-Go Act of 2010: Summary and Legislative History , by Bill Heniff Jr. CRS Report R41965, The Budget Control Act of 2011 , by Bill Heniff Jr., Elizabeth Rybicki, and Shannon M. Mahan CRS Report 98-721, Introduction to the Federal Budget Process , coordinated by James V. Saturno Appendix B. Budget Terminology Definitions As defined by Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA; P.L. 99-177 ) and simplified where appropriate: Budget Authority --Authority provided by federal law to enter into financial obligations that will result in immediate or future outlays involving federal government funds. Budgetary Resources --An amount available to enter into new obligations and to liquidate them. Budgetary resources are made up of new budget authority (including direct spending authority provided in existing statute and obligation limitations) and unobligated balances of budget authority provided in previous years. Discretionary Appropriations --Budgetary resources (except to fund direct-spending programs) provided in appropriation Acts. Mandatory Spending --Also known as direct s pending , refers to budget authority that is provided in laws other than appropriation acts, entitlement authority, and the Supplemental Nutrition Assistance Program. Medicare Benefit Payments -- All payments for programs and activities under Title XVIII of the Social Security Act. Revised Nonsecurity Category --Discretionary appropriations other than in budget function 050. Revised Security Category --Discretionary appropriations in budget function 050. Sequestration --The cancellation of budgetary resources provided by discretionary appropriations or direct spending laws. For definitions of other budget terms mentioned in this report but not defined by BBEDCA, see U.S. Government Accountability Office, A Glossary of Terms Used in the Federal Budget Process , GAO-05-734SP, September 1, 2005, p. 23, https://www.gao.gov/assets/80/76911.pdf .

Sequestration is the automatic reduction (i.e., cancellation) of certain federal spending, generally by a uniform percentage. The sequester is a budget enforcement tool that was established by Congress in the Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA, also known as the Gramm-Rudman-Hollings Act; P.L. 99-177) and was intended to encourage compromise and action, rather than actually being implemented (also known as triggered). Generally, this budget enforcement tool has been incorporated into laws to either discourage Congress from violating specific budget objectives or encourage Congress to fulfill specific budget objectives. When Congress breaks these types of rules, either through the enactment of a law or the lack thereof, a sequester is triggered and certain federal spending is reduced. Sequestration is of recent interest due to its current use as an enforcement mechanism for three budget enforcement rules created by the Statutory Pay-As-You-Go Act of 2010 (Statutory PAYGO; P.L. 111-139) and the Budget Control Act of 2011 (BCA; P.L. 112-25). At present, only the BCA mandatory sequester is triggered. Under the BCA, the sequestration of mandatory spending was originally scheduled to occur in FY2013 through FY2021; however, subsequent legislation, including the Bipartisan Budget Act of 2018 (BBA 18; P.L. 115-123), extended sequestration for mandatory spending through FY2027. The Statutory PAYGO sequester and BCA discretionary sequester are current law and can be triggered if associated budget enforcement rules are broken (and Congress does not take action to change or waive these rules). Medicare is a federal program that pays for certain health care services of qualified beneficiaries. The program is funded using both mandatory and discretionary spending and is impacted by any sequestration order issued in accordance with the aforementioned laws. Medicare is mainly impacted by the sequestration of mandatory funds since Medicare benefit payments are considered mandatory spending. Special sequestration rules limit the extent to which Medicare benefit spending can be reduced in a given fiscal year. This limit varies depending on the type of sequestration order. Under a BCA mandatory sequestration order, Medicare benefit payments and Medicare Integrity Program spending cannot be reduced by more than 2%. Under a Statutory PAYGO sequestration order, Medicare benefit payments and Medicare Program Integrity spending cannot be reduced by more than 4%. These limits do not apply to mandatory administrative Medicare spending under either type of sequestration order. These limits also do not apply to discretionary administrative Medicare spending under a BCA discretionary sequestration order. Generally, Medicare's benefit structure remains unchanged under a mandatory sequestration order and beneficiaries see few direct impacts. However, due to varying plan and provider payment mechanisms among the four parts of the program, sequestration is implemented somewhat differently across the program.

RS21283 -- Homeland Security: Intelligence Support Updated February 23, 2004 Better intelligence is held by many observers to be a crucial factor in preventing terrorist attacks. Concerns have been expressed that no single agency or office in the federal government prior to September 11, 2001 was in aposition to "connect the dots" between diffuse bits of information that might have provided clues to the plannedattacks. Testimony before the two intelligence committees' Joint Inquiry on the September 11 attacks indicated thatsignificant information in the possession of intelligence and law enforcement agencies was not fully shared withother agencies and that intelligence on potential terrorist threats against the United States was not fully exploited. For many years, the sharing of intelligence and law enforcement information was circumscribed by administrative policies and statutory prohibitions. Beginning in the early 1990s, however, much effort has gone intoimprovinginteragency coordination. (1) After the September 11attacks, a number of statutory obstacles were addressed by the USA-Patriot Act of 2001 and other legislation. (2) Nevertheless, there had been no one place where theanalyticaleffort is centered; the Department of Homeland Security (DHS) was designed to remedy that perceived deficiencyas is the Terrorist Threat Integration Center announced by the President in his January 2003 State of the Unionaddress. The Homeland Security Act ( P.L. 107-296 ), signed on November 25, 2002 established within DHS a Directorate for Information Analysis and Infrastructure Protection (IAIP) headed by an Under Secretary for Information Analysisand Infrastructure Protection (appointed by the President by and with the advice and consent of the Senate) with anAssistant Secretary of Information Analysis (appointed by the President). The legislation, especially theInformation Analysis section, seeks to promote close ties between intelligence analysts and those responsible forassessing vulnerabilities of key U.S. infrastructure. The bill envisions an intelligence entity focused on receivingandanalyzing information (3) from other governmentagencies and using it to provide warning of terrorist attacks on the homeland to other federal agencies and to stateand local officials, and for addressing vulnerabilities that terroristscould exploit. DHS is not intended to duplicate the collection effort of intelligence agencies; it will not have its own agents, satellites, or signals intercept sites. Major intelligence agencies are not transferred to the DHS, although some DHSelements, including Customs and the Coast Guard, will continue to collect information that is crucial to analyzingterrorist threats. The legislation establishing DHS envisioned an information analysis element with the responsibility for acquiring and reviewing information from the agencies of the Intelligence Community, from law enforcementagencies, stateand local government agencies, and unclassified publicly available information (known as open source informationor "osint") from books, periodicals, pamphlets, the Internet, media, etc. The legislation is explicit that, "Except asotherwise directed by the President, the Secretary [of DHS] shall have such access as the Secretary considersnecessary to all information, including reports, assessments, analyses, and unevaluated intelligence relating to threatsofterrorism against the United States and to other areas of responsibility assigned by the Secretary, and to allinformation concerning infrastructures or other vulnerabilities of the United States to terrorism, whether or not suchinformation has been analyzed, that may be collected, possessed, or prepared by any agency of the FederalGovernment." (4) DHS analysts are charged with using this information to identify and assess the nature and scope of terrorist threats; producing comprehensive vulnerability assessments of key resources and infrastructure; identifying prioritiesforprotective and support measures by DHS, by other agencies of the federal government, state and local governmentagencies and authorities, the private sector, and other entities. They are to disseminate information to assist in thedeterrence, prevention, preemption of, or response to, terrorist attacks against the U.S. The intelligence element isalso charged with recommending measures necessary for protecting key resources and critical infrastructure incoordination with other federal agencies. DHS is responsible for ensuring that any material received is protected from unauthorized disclosure and handled and used only for the performance of official duties. (This provision addresses a concern that sensitivepersonalinformation made available to DHS analysts could be misused.) As is the case for other federal agencies that handleclassified materials, intelligence information is to be transmitted, retained, and disseminated in accordance withpolicies established under the authority of the Director of Central Intelligence (DCI) to protect intelligence sourcesand methods and similar authorities of the Attorney General concerning sensitive law enforcement information. (5) Despite enactment of the Homeland Security Act, it is clear that significant concerns persisted within the executive branch about the new department's ability to analyze intelligence and law enforcement information. Mediaaccounts suggest that these concerns center on DHS' status as a new and untested agency and the potential risksinvolved in forwarding "raw" intelligence to the DHS intelligence component. (6) Another concern is that a new entity,rather than long-established intelligence and law enforcement agencies, would be relied on to produce all-sourceintelligence relating to the most serious threats facing the country. DHS Role in the Intelligence Community. The U.S. Intelligence Community consists of the Central Intelligence Agency (CIA) and some 14 other agencies; (7) it providesinformation in various forms to the White House and other federal agencies (as well as to Congress). In addition,law enforcement agencies, such as the Federal Bureau of Investigation (FBI), also collect information for use in thefederal government. (8) Within the IntelligenceCommunity, priorities for collection (and to some extent for analysis) are established by the DCI, (9) based in practice on inter-agency discussions. Being"at the table" when prioritiesare discussed, it is widely believed, helps ensure equitable allocations of limited collection resources. The Homeland Security Act makes the DHS information analysis element a member of the Intelligence Community, thus giving DHS a formal role when intelligence collection and analysis priorities are being addressed. DHSofficials have indicated that the new Department is actively participating in the process of setting priorities. The Question of "Raw" Intelligence. There has been discussion in the media whether DHS will have access to "raw" intelligence or only to finished analytical products, but thesereports may reflect uncertainty regarding the definition of "raw" intelligence. A satellite photograph standing byitself might be considered "raw" data, but it would be useless unless something were known about where and whenitwas taken. Thus, satellite imagery supplied to DHS would under almost any circumstances have to include someanalysis. The same would apply to signals intercepts. Reports from human agents present special challenges. Someassessment of the reliability of the source would have to be provided, but information that would identify a specificindividual is normally retained within a very small circle of intelligence officials so as to reduce the risk ofunauthorized disclosure and harm to the source. The issue of the extent and nature of information forwarded to DHS has proved to be difficult. Reviewing copies of summary reports prepared by existing agencies is seen by some observers as inadequate for the task ofputtingtogether a meaningful picture of terrorist capabilities and intentions and providing timely warning. On the otherhand, there is a need to ensure that DHS would not be inundated with vast quantities of data and that highly sensitiveinformation is not given wider dissemination than absolutely necessary. Analytical Quality. The key test for homeland security will of course be the quality of the analytical product -- whether terrorist groups can be identified and timely warning givenof plans for attacks on the U.S. A critical need exists for trained personnel. The types of information that have tobe analyzed come from disparate sources and require a variety of analytical skills that are not in plentiful supply. Academic institutions prepare significant numbers of linguists and area specialists, but training in the inner workingsof clandestine terrorist entities is less often undertaken. Analysts with law enforcement backgrounds may not beattuned to the foreign environments from which terrorist groups emerge. In July 2003 DHS had only some 53analysts and liaison officials with plans to increase this number to about 150. (10) President Bush, in his State of the Union address delivered on January 28, 2003, called for the establishment of a new Terrorist Threat Integration Center (TTIC) that would merge and analyze all threat information in a singlelocation under the direction of the DCI. According to Administration spokesmen, TTIC will eventually encompassCIA's Counterterrorist Center (CTC) and the FBI's Counterterrorism Division, along with elements of otheragencies, including DOD and DHS. TTIC's stated responsibilities are to "integrate terrorist-related informationcollected domestically and abroad" and to provide "terrorist threat assessments for our national leadership." (11) OnMay 1, 2003, TTIC began operations at CIA Headquarters under the leadership of John O. Brennan, who hadpreviously served as the CIA's Deputy Executive Director. By July 2003, it consisted of some 100 analysts andliaisonofficials with plans to increase to 300 by May 2004. (12) TTIC appears to be designed to assume at least some of the functions intended for DHS' information analysis division. Representative Cox, chairman of the Select Committee on Homeland Security, has welcomed theestablishment of TTIC, while noting that "The establishment of the Center in no way reduces the statutoryobligations of the Department [of Homeland Security] to build its own analytic capability. (13) " Making the DCI responsiblefor TTIC will facilitate its ability to use highly sensitive classified information and TTIC can expand upon therelationships that have evolved in the CTC that was established in CIA's Operations Directorate in the mid-1980s. According to testimony by Administration officials to the Senate Government Affairs Committee on February 26,2003, TTIC will in effect function as an information analysis center for DHS and DHS will require a smallernumber of analysts with less extensive responsibilities. Subsequent Administration testimony indicates that DHSwill receive much of the same intelligence data from other agencies and will undertake analysis. A key distinctionisthat DHS is not responsible for information relating to threats to U.S. interests overseas. (14) In FY2004, funds were appropriated for 206 intelligence analysts in IAIP;the Administration requested 225 for FY2005. Some observers express concern that the DCI's role in the TTIC -- responsibility for the analysis of domestically collected information and for maintaining "an up-to-date database of known and suspected terrorists that will beaccessible to federal and non-federal officials and entities," (15) -- may run counter to the statutory provision that excludes the CIA from "law enforcement orinternal security functions." (16) There are alsoquestions abouttransferring the FBI's Counterterrorism Division to the DCI. Some express concern about how the TTIC under theDCI will coordinate with state and local officials and with private industry as contemplated in provisions of theHouse-passed version of the FY2004 intelligence authorization bill ( H.R. 2417 ). The relationship between DHS and TTIC is also a continuing concern to Members of Congress. Some may consider modifications of the Homeland Security Act that could affect the analytical efforts of DHS. (17) Section 359 of theIntelligence Authorization Act for FY2004 ( P.L. 108-177 ) requires that the President report on the operations ofIAIP and TTIC by May 1, 2004. The report, which is to be unclassified (with the option of a classified annex), asksfor a delineation of the responsibilities of IAIP and TTIC and an assessment of whether areas of overlap, if any,"represent an inefficient utilization of resources." The President is asked to "explain the basis for the establishmentand operation of the Center [TTIC] as a 'joint venture' of participating agencies rather than as an element of theDirectorate [IAIP]...." The report is also to assess the "practical impact, if any, of the operations of the Center[TTIC]on individual liberties and privacy." Legislation creating a homeland security department recognized the crucial importance of intelligence. It proposed an analytical office within DHS that would draw upon the information gathering resources of othergovernmentagencies and of the private sector. It envisioned the DHS information analysis entity working closely with otherDHS offices, other federal agencies, state and local officials, and the private sector to devise strategies to protectU.S.vulnerabilities and to provide warning of specific attacks. The Administration appears to prefer a modification to the approach originally envisioned in the legislation that created DHS. TTIC, under the direction of the DCI, will provide the integrative analytical effort that the draftersofhomeland security legislation and others in Congress have felt to be essential in light of breakdowns incommunication that occurred prior to September 11, 2001. Whether TTIC is consistent with the intent of Congressin passingthe Homeland Security Act and whether it is ultimately the best place for the integrative effort is current a matterof discussion in Congress. Regardless of where the integrative effort is ultimately located, the task will remainfundamentally the same. Pulling together vast amounts of data from a wide variety of sources concerning terroristgroups, analyzing them, and reporting threat warnings in time to prevent attacks is and will remain a dauntingchallenge.

Legislation establishing a Department of Homeland Security (DHS) (P.L. 107-296) included provisions for an information analysis element within the new department. It did not transferto DHS existing government intelligence and law enforcement agencies but envisioned an analytical office utilizingthe products of other agencies -- both unevaluated information and finished reports -- to provide warning ofterrorist attacks, assessments of vulnerability, and recommendations for remedial actions at federal, state, and locallevels, and by the private sector. In January 2003, the Administration announced its intention to establish a newTerrorist Threat Integration Center (TTIC) to undertake many of the tasks envisioned for the DHS informationalanalysis element, known as Information Analysis and Infrastructure Protection (IAIP), but some Members ofCongress argue that TTIC cannot be a substitute for a DHS analytical effort. This report examines differentapproaches to improving the information analysis function and the sharing of information among federal agencies.It willbe updated as circumstances warrant.

The Individuals with Disabilities Education Act (IDEA) authorizes federal funding for the education of children with disabilities and requires, as a condition for the receipt of such funds, the provision of a free appropriate public education (FAPE). The statute also contains detailed due process provisions to ensure the provision of FAPE and includes a provision for attorneys' fees. Originally enacted in 1975, the act responded to increased awareness of the need to educate children with disabilities, and to judicial decisions requiring that states provide an education for children with disabilities if they provided an education for children without disabilities. The attorneys' fees provisions were added in 1986 by the Handicapped Children's Protection Act, P.L. 99-372 . These provisions were amended in 1997. The P.L. 105-17 amendments allowed the reduction of attorneys' fees if the attorney representing the parents did not provide the LEA with timely and specific information about the child and the basis of the dispute, and specifically excluded the payment of attorneys' fees for most individualized education plan (IEP) meetings. The House and Senate bills leading to the 2004 law contained very different approaches to the attorneys' fees issue. The House bill, H.R. 1350 , 108 th Cong., would have changed the determination of the amount of attorneys' fees by requiring the Governor, or other appropriate state official, to determine rates. The Senate bill, S. 1248 , 108 th Cong., kept the same general framework as in previous law with several changes. The final 2004 IDEA reauthorization was closer to the Senate version and kept many of the previous provisions on attorneys' fees but also made several additions. These include allowing attorneys' fees for the state educational agency (SEA) or the local educational agency (LEA) against the parent or the parent's attorney in certain situations. Under the new law the general provisions regarding filing a complaint and appeals have not changed except that the local educational agency may also file a complaint. A parent or LEA may file a complaint with respect to the identification, evaluation, educational placement, provision of a free appropriate public education or placement in an alternative educational setting. The parents or LEA then have an opportunity for an impartial due process hearing with a right to appeal. At the court's discretion, reasonable attorneys' fees may be awarded as part of the costs to the parents of a child with a disability who is the prevailing party. The 2004 reauthorization also allows the award of reasonable attorneys' fees against a parent's attorney to a prevailing SEA or LEA in two situations. These are when the attorney files a complaint or subsequent cause of action that is frivolous, unreasonable, or without foundation, or continues to litigate after the litigation clearly becomes frivolous, unreasonable, or without foundation. P.L. 108-446 also allows for the award of attorneys' fees against the attorney of a parent of a child with a disability or a parent to a prevailing SEA or LEA if the parent's complaint or subsequent cause of action was for an improper purpose such as to harass, to cause unnecessary delay, or to needlessly increase the cost of litigation. In the Senate debate on the attorneys' fees amendment, Senator Grassley stated that the amendment regarding attorneys' fees would "in no way limit or discourage parents from pursuing legitimate complaints against a school district if they feel their child's school has not provided a free appropriate public education. It would simply give school districts a little relief from abuses of the due process rights found in IDEA and ensure that our taxpayer dollars go toward educating children, not lining the pockets of unscrupulous trial lawyers." Senator Gregg also emphasized the need for the attorneys' fee amendment. He noted that the concept that a defendant should be able to obtain attorneys' fees when a plaintiff's actions were "frivolous, unreasonable, or without foundation" has been applied to title VII of the Civil Rights Act of 1964. The Supreme Court in Christiansburg Garment Co. v. Equal Employment Opportunity Commission held that prevailing defendants should recover attorneys' fees when a plaintiff's actions were frivolous, unreasonable, or without foundation in order to "protect defendants from burdensome litigation having no legal or factual basis." Senator Gregg observed that the standard is "very high...and prevailing defendants are rarely able to meet it and obtain a reimbursement of their attorneys fees" and that case law "directs courts to consider the financial resources of the plaintiff in awarding attorney's fees to a prevailing defendant." The attorneys' fee provision also would allow defendants to recover fees if lawsuits were brought for an improper purpose. In the Senate debate, Senator Gregg noted that this concept was drawn from Rule11of the Federal Rules of Civil Procedure and that "in interpreting this language from Rule 11, courts must apply an objective standard of reasonableness to the facts of the case." Attorneys' fees are based on the rates prevailing in the community and no bonus or multiplier may be used. There are specific prohibitions on attorneys' fees and reductions in the amounts of fees. Fees may not be awarded for services performed subsequent to a written offer of settlement to a parent in certain circumstances: if the offer is made with the time prescribed by Rule 68 of the Federal Rules of Civil Procedure or ten days before an administrative proceeding begins; if the offer is not accepted within ten days; and if the court finds that the relief finally obtained by the parents is not more favorable to the parents than the offer of settlement. Also, attorneys' fees are not to be awarded relating to any meeting of the individualized education program (IEP) team unless the meeting is convened as a result of an administrative proceeding or judicial action or, at the state's discretion, for a mediation. The 2004 reauthorization added a requirement for a "resolution session" prior to a due process hearing. Essentially, this is a preliminary meeting involving the parents, relevant members of the IEP team, and a representative of the LEA who has decision-making authority. Attorneys' fees are not allowable for the resolution session. Like previous law, P.L. 108-446 specifically provides that an award of attorneys' fees and related costs may be made to a parent who is the prevailing party if the parent was substantially justified in rejecting a settlement offer. Attorneys' fees may be reduced in certain circumstances including where the court finds that the parent or the parent's attorney unreasonably protracted the final resolution of the controversy; the amount of attorneys' fees unreasonably exceeds the hourly rate prevailing in the community for similar services by attorneys of reasonably comparable skill, reputation and experience; where the time spent and legal services furnished were excessive considering the nature of the action or proceedings; or the attorney representing the parent did not provide the school district with the appropriate information in the due process complaint. This information includes the name of the child, the child's address and school, or available contact information in the case of a homeless child, a description of the problem, including facts relating to the issue, and a proposed resolution to the problem. As in previous law, P.L. 108-446 contains a specific exception to these circumstances where attorneys' fees may be reduced. There shall be no reduction if the court finds that the SEA or LEA unreasonably protracted the final resolution of the action or proceeding or there was a violation of the section. The final regulations for P.L. 108-446 were issued on August 14, 2006. Generally, the Department of Education (ED) declined to elaborate on the statutory language, observing that "further guidance on the interpretation of this statutory language is not appropriate since judicial interpretations of statutory provisions will necessarily vary based upon case-by-case factual determinations, consistent with the requirement that the award of reasonable attorneys fees is left to a court's discretion." One of the issues ED declined to address in the regulations involved whether a court could award fees to non-attorney advocates who accompanied and advised the parents at a due process hearing. ED stated that "[l]ay advocates are, by definition, not attorneys and are not entitled to compensation as if they were attorneys." ED also noted that the Supreme Court's recent decision in Arlington Central School District Board of Education v. Murphy held that if Congress wishes to allow recovery of experts' fees by prevailing parents, it must include explicit language authorizing such a recovery. Such explicit language was not added in the 2004 reauthorization of IDEA. The Supreme Court's rationale was found by ED to be controlling concerning the fees of non-attorney experts, and the Department of Education declined to add a regulatory provision on the subject.

The Individuals with Disabilities Education Act (IDEA) authorizes federal funding for the education of children with disabilities and requires, as a condition for the receipt of such funds, the provision of a free appropriate public education (FAPE). The statute also contains detailed due process provisions to ensure the provision of FAPE and includes a provision for attorneys' fees. Attorneys' fees were among the most controversial provisions in the 2004 reauthorization of IDEA. This report analyzes the attorneys' fees provisions in P.L. 108-446 and the final regulations. For a general discussion of the 2004 reauthorization, see CRS Report RL32716, Individuals with Disabilities Education Act (IDEA): Analysis of Changes Made by P.L. 108-446, by [author name scrubbed] and [author name scrubbed]. This report will be updated as necessary.

Numerous insect epidemics appear to be damaging North American forests at unprecedented levels. Many fear that the dying trees will further increase wildfire threats, alter ecosystems, and disrupt wood supplies for current and future housing and other uses. In the past, Congress has created special research or control programs for insect epidemics. The continuing concern over wildfires and forest health may lead to congressional efforts to combat the epidemics. Some also assert that insect epidemics are exacerbated by global climate change, and that they may even contribute to that change. This report examines the mountain pine beetle ( Dendroctonus ponderosae ) epidemic because it is one of the most damaging insects affecting forests and because more is known about its life cycle than the cycles of many other forest pests. The mountain pine beetle is one of a number of bark beetles native to the western forests of North America, several of which are currently infested at epidemic levels. Mountain pine beetles inhabit most species of western pine, including ponderosa pine, white pine, sugar pine, limber pine, and whitebark pine, but epidemics are particularly associated with lodgepole pine. Lodgepole pine is a common tree from the Colorado Rockies and Sierra Nevada north to the Yukon Territory. It typically grows in dense, even-aged stands that have regenerated following intense wildfires that killed the previous stand. The mountain pine beetle is a seasonally adapted insect, successfully reproducing and occasionally reaching epidemic levels where it is univoltine --completing an entire life cycle in one year. The majority of its life is spent as larva in the phloem (innermost bark layer) of pine trees. The eggs hatch 10-14 days after being laid, and the larvae feed on the phloem. In the fall, the larvae produce glycerol , a natural antifreeze that allows them to survive winter temperatures. Larvae are vulnerable to frosts in the fall, before producing glycerol, and when they pupate. During winter, temperatures below -30degF for at least five days can kill most larvae. Larvae pupate in very late spring or early summer (usually June). Adult mountain pine beetles usually emerge in midsummer, late enough to avoid harm from late spring frosts but early enough to allow eggs to hatch into larvae; ambient air temperatures determine the timing of emergence. The adults disperse, with preference for trees of larger diameter (thicker trees have thicker phloem, and thus more food) and trees under stress (e.g., injured, diseased, or suffering from drought, and thus offering less resistance to attack). Trees less than five inches in diameter are rarely attacked, even in an epidemic. Females first attacking a tree release chemicals called aggregating pheromones , which attract males and other females in a mass attack on the tree. The beetles cannot readily attack and kill any tree. Native predators, notably woodpeckers and clerid beetles, help to control populations. In addition, the trees "have evolved significant defensive chemistry that serves to protect them from beetle attack. The mountain pine beetle, in turn, has evolved a mass-attack strategy that overwhelms tree defenses through sheer numbers of attacking beetles." Also, the beetles introduce a blue-stain fungus into the trees they attack, which clogs water transport systems and contributes to killing the trees. Thus, trees under stress--from drought, disease, injury, or other cause--are more susceptible to attack by the mountain pine beetle and blue-stain fungus. When a widespread stress (e.g., a regional drought) affects a forest with many relatively large-diameter lodgepole pine trees, the stage is set for a mountain pine beetle epidemic. Mountain pine beetle epidemics have occurred in lodgepole pine forests for thousands of years. Epidemics lasting 5 to 20 years occur at irregular intervals, affecting large areas and often killing more than 80% of the trees of more than 10 centimeters (about 4 inches) in diameter. There is wide variability in the mortality of pure lodgepole pine forests, and even forests that appear to be completely killed will have lodgepole pine seedlings and saplings released from the competition in dense stands. There is no single, simple cause for a population to reach epidemic levels. Research has provided information about the population ecology of the mountain pine beetle in lodgepole pine, but not about the transition to epidemic populations. Widespread stress in a mature forest clearly provides a setting for an outbreak, but no specific trigger has been identified. One source suggests that prolonged warm periods, especially with warm winters, may trigger epidemics, but the evidence is not conclusive. During epidemics, natural controls (e.g., woodpeckers and clerid beetles) have little effect on mountain pine beetle population levels. The current mountain pine beetle epidemic is actually three geographically or ecologically distinct epidemics, with quite different situations and consequences. One is in the lodgepole pine stands of the central Rocky Mountains--primarily in Colorado and Wyoming. Another is in the lodgepole pine stands of central British Columbia. The third is in high-elevation pines, primarily in Wyoming, Montana, and Idaho. The current mountain pine beetle epidemic in Colorado and Wyoming is extensive, but it is unclear whether the current level is unprecedented. Most researchers note that mountain pine beetle epidemics are known to have occurred in lodgepole pine forests, but that the current epidemic is more extensive than has been seen in the past century. However, one source noted the loss of 15 billion board feet of lodgepole pine timber from mountain pine beetles in Idaho and Montana from 1911 to 1935. Although the current epidemic is extensive, it may be normal and natural. Some researchers have stated: Even though insect outbreaks greatly affect forest ecosystems, they may not be detrimental from a long-term ecological perspective. Such disturbances may in fact be crucial to maintaining ecosystem integrity, a situation ... described as "normative outbreaks." The current epidemic is extensive, largely because vast areas of lodgepole pine provide suitable habitat for the mountain pine beetle. This expanse of mature lodgepole pine forests in the central Rocky Mountains is the result of natural but widespread severe wildfires in the 19 th century. Thus, while the current epidemic is unsightly and may have significant consequences (as discussed below), it is an extreme version of an undesirable but normal, natural event. The epidemic may have been exacerbated by climate change. Climate change may have altered precipitation patterns, contributing to the current extended drought in the Rocky Mountain region. This drought has put stress on the trees, leaving them vulnerable to attack by insects and diseases, including the mountain pine beetle. Thus, climate change may be a contributing factor in the mountain pine beetle outbreak in the lodgepole pine ecosystems of the central Rockies. The interior forests of British Columbia (BC), stretching west from the Rocky Mountain crest to the east side of the Coast Range, are similar to U.S. forests of the Rocky Mountains, and include extensive stretches of mature lodgepole pine. As with the lodgepole pine forests of the central U.S. Rockies, the mountain pine beetle is an endemic (native) species, with periodic epidemics. However, the current epidemic is the most severe ever recorded, and is expected to kill up to 80% of the mature lodgepole pine in BC within the next decade. The current mountain pine beetle infestation has reached farther north and east than previous epidemics. This is likely the result of climate change leading to insufficient freezing temperatures farther north than previously recorded. Thus, the mountain pine beetle can become univoltine (completing its life cycle in one year) farther north than previously recorded. While the mountain pine beetle outbreak in central and southern BC may be within historic norms, as in the central U.S. Rockies, the epidemic is likely to reach farther north than its historically normal distribution because of climate change. Mountain pine beetles are also endemic to whitebark, bristlecone, and other high-elevation pines. These trees inhabit upper mountain slopes (together with spruce and subalpine fir), and at the extreme grow in the krummholz form (German for twisted wood )--the classic stunted, wind-swept pines of timberline. Whitebark pine forests have generally been "climatically unsuited for outbreak populations of the mountain pine beetle." The high elevations have typically led to short summers (preventing univoltine populations) and to cold winters (which kill mountain pine beetles). However, a beetle epidemic in whitebark pine in central Idaho in the 1930s coincided with a series of unusually warm years. The dead trees are still standing, a stark reminder that not all forests are adapted to recover from devastating natural events. As with the mountain pine beetle outbreak in extreme northern BC, climate change is likely a significant factor in the current epidemic in high-elevation pine ecosystems, because warmer temperatures allow the mountain pine beetle to become univoltine in these areas. While insignificant for timber, the whitebark pine is a critical element in the northern U.S. Rocky Mountain ecosystems, because it produces an abundance of the large, high-protein seeds that are important mainstays for several animal species, particularly grizzly bears. The loss of whitebark pine, a key food in the fall prior to hibernation, could devastate bear populations by lowering reproductive success and forcing grizzlies to forage at lower elevations where there would be more human conflicts. These forests and animals are American symbols of wilderness and endangered species, and their decline might harm these values. Little, if anything, can be done to halt or disrupt a mountain pine beetle epidemic. Because the beetles live under the bark, it is difficult to kill them with insecticides; getting the insecticide to the beetles involves injecting every infected tree--millions of trees over thousands of acres. As one group of researchers noted, "once MPB [the mountain pine beetle] infests a tree nothing practical can be done to save that tree." Preventing the mountain pine beetle from spreading to uninfested trees is also virtually impossible. Individually valuable trees, such as those near residences or in campgrounds, can be protected by insecticide sprays, but the cost is prohibitive at a landscape scale. Silvicultural treatments (timber harvests and other tree stand management practices) are sometimes discussed as a way to restrict the spread of the mountain pine beetle, but some observers have noted that such efforts are unlikely to make a difference, at least in the short run: In the current epidemic, it is impractical to expect that silvicultural treatment of lodgepole pine forests will prevent or even impede the advance of the epidemic in Colorado and southern Wyoming. There are simply too many suitable host trees over too large an area, and unusually high insect populations. Silvicultural treatments are unlikely to have a short-term effect on mountain pine beetle epidemics for two reasons. First, "the direction and spread rate of a beetle infestation is impossible to predict." Even though prevailing winds and warming temperatures provide general directionality, epidemics spread in a random fashion. Second, even though infestations usually spread only to neighboring trees, mountain pine beetles can travel long distances to infest trees--up to 200 kilometers (125 miles). Researchers have suggested that active forest management could reduce the likelihood of future epidemics and the severity of the consequences when epidemics occur. Forest practices can provide diverse forest landscapes, with patches varying in tree age and size, and with more species diversity where feasible. Possible activities include reducing stand densities, removing unhealthy or stressed trees, and creating openings to regenerate seedlings. However, these activities can be expensive, even in places where a commercial timber industry exists to harvest and utilize the wood. Others caution that some activities, such as conventional timber harvests and salvage harvests, may have little effect on the future stand conditions. This type of harvesting might not reduce the potential for catastrophic wildfires or insect epidemics. A group of authors noted: Creating diverse patch ages and sizes (including young patches) and perhaps more mixed-species forests across the landscape may or may not reduce the spread of future mountain pine beetle outbreaks, but it likely would reduce the amount of forest susceptible through time to a monolithic [uniform, widespread] disturbance, including mountain pine beetle attack or fire. Thus while unproven, the increased landscape heterogeneity may be effective for limiting the scale and severity of future mountain pine beetle impacts. The effectiveness of such measures cannot be assured, nor are all the ecological consequences known, though even in the current epidemic, stands and patches of younger lodgepole pine trees appear to have survived the epidemic with no or only limited mortality. Creating a more diverse, less dense, less stressed forest landscape will not prevent all future mountain pine beetle epidemics. Other factors, such as temperature and precipitation, are also important in determining when and where outbreaks will occur. Researchers caution that eradicating mountain pine beetles is probably infeasible, and would be undesirable--they are a native species with important ecological roles, whose loss could harm natural ecological systems in unexpected ways. The current mountain pine beetle epidemics may have various ecological and economic consequences. The impacts depend on several factors, such as the ecosystem affected and the socioeconomic responses to the epidemic. The mountain pine beetle epidemic has two primary impacts of concern: first, the possible increase in wildfire threat, and second, forest regeneration following the epidemic. The effects on lodgepole pines in the American Rockies and British Columbia are similar, and thus are discussed together. The effects on the high-elevation pines are different, and are discussed separately. In addition to these two primary concerns, trees killed by the mountain pine beetle will eventually release their carbon to the forest soils or to the atmosphere, either quickly through wildfires or more slowly through decay. Other than new forest stands to sequester carbon and long-term wood products to store some of the carbon from beetle-killed trees, little can be done to ameliorate the carbon release. Thus, mountain pine beetles release forest carbon to the atmosphere, creating a "positive feedback loop"--forest carbon release aggravates climate change, leading to further mountain pine beetle epidemics. The initial concern about the ecological impacts of mountain pine beetles on lodgepole pines is the apparent increase in the threat of wildfire conflagrations from the large numbers of dead and dying trees. Two groups of researchers have examined this concern and found little evidence to support or refute the belief that extensive mountain pine beetle epidemics increase the threat of conflagrations. Thus, both groups chose to examine the impacts by assessing likely changes in wildfire behavior over time in lodgepole pine stands killed by mountain pine beetles. Both groups of researchers noted that wildfire is a complex phenomenon, with fire intensity depending on variations in weather (wind and fuel moisture content) as well as the level and the arrangement of fuels. Lodgepole pine forests historically burned occasionally, typically in crown fires (conflagrations that kill most of the trees in the stand) under extreme weather conditions. Both research groups concluded that the threat of a conflagration remains high while the dead needles remain on the trees--up to two years following the infestation. After the needles fall, the threat of a conflagration declines, because the forests lack the small-diameter fuels needed to start and spread the fire. After the dead trees fall--one to several decades after the outbreak--the risk increases for intense surface fires. However, both research groups also noted that even intense surface fires would be within the historic range of natural variability of lodgepole pine ecosystems, and not something unusual or catastrophic for lodgepole pine ecosystems. One of the groups did caution, however, that the magnitude and extent of the current mountain pine beetle outbreak has not been experienced since white settlers reached the Rocky Mountains, and thus: we are uncertain about fire behavior at landscape or regional scales because we have not seen systems with such heavy fuel loads over such extensive areas; and we know little about the ecological consequences of such fires at these scales. The other ecological concern is about the regeneration of lodgepole pine forests following the mountain pine beetle epidemic. Areas dominated by relatively small trees (less than 5 inches in diameter) are likely to remain green lodgepole pine forests, since trees of this size are rarely attacked. Areas with extensive beetle-killed trees will likely regenerate to lodgepole pine forests, but it may take time, since wildfire is needed to open the serotinous cones of the remaining live lodgepole pine trees. However, once such a fire occurs, vast areas can be reforested, since lodgepole pine is a prolific seed producer. As one group of researchers noted: Is re-establishment of lodgepole pine assured after the mountain pine beetle epidemic? Undoubtedly, but subtle or even large shifts in its location and plant associations are not out of the question. Others are more sanguine, suggesting that lodgepole pine trees killed by mountain pine beetles are important contributors to the stand-replacement fires that favor lodgepole regeneration. Concerns about the effects of the mountain pine beetle outbreak on high-elevation pine ecosystems are the same as for lodgepole pine ecosystems--wildfire threats and forest regeneration--but the effects are different. As in lodgepole pine ecosystems, the wildfire threat is largely unchanged by tree mortality due to mountain pine beetles. Wildfires are still likely to be of mixed intensity, with some crown fires, especially in areas with spruce and fir (which are not affected by the mountain pine beetle) mixed with the high-elevation pines. The mountain pine beetle epidemic combined with other problems might prevent successful regeneration of these pine stands. The interspersed pattern of openings created by crown fires, together with the destruction of spruce and fir by wildfire, creates opportunities for whitebark pine and other high-elevation pines (such as bristlecone and foxtail pines) to regenerate. However, mountain pine beetles typically kill the largest-diameter trees--those that produce most of the seeds needed for regeneration. In addition, the high-elevation pines are susceptible to destruction by white pine blister rust. This introduced fungus slowly kills infected five-needle pines (including the high-elevation pines), especially seedlings and saplings. With the mountain pine beetle killing seed source trees and white pine blister rust killing regeneration, the future of high-elevation pine ecosystems is uncertain. Thus, climate change that is allowing univoltine outbreaks of mountain pine beetle in the high-elevation pines might eliminate the pines from high-elevation areas. One additional ecological concern relates exclusively to the mountain pine beetle outbreak in British Columbia. As noted above, the current epidemic has reached farther north and east than any previous epidemic. Figure 1 shows the historic distribution of the beetles reaching the eastern border of BC, about 150 miles from the forested area in central Alberta where lodgepole pine mixes with the jack pine forest that stretches east to the Atlantic Ocean. An outbreak has been reported in Alberta within 30 miles of the overlap. If the mountain pine beetle infests jack pine, it could lead to a rapid and devastating eastward spread across Canada and southward into the United States, because jack pine has not evolved the defenses against the mountain pine beetle that lodgepole pine has developed. "What we are describing, here, is a potential biogeographic event of continental scale with unknown, but potentially devastating, ecological consequences implied by an invasive, native species." Furthermore, if the mountain pine beetle spreads to the Great Lakes and farther east, the beetle could infest other pine species, such as eastern white pine, and even move south to infest the southern yellow pines. Figure 1 also shows the distribution of these various pine species, and thus the potential spread of the mountain pine beetle. The potential consequences are enormous, and the potential to prevent the spread is extremely limited, as discussed above. There are several economic consequences of the extensive mountain pine beetle infestation. The most obvious economic impacts are on aesthetic values, from the expanses of dead trees, and on wood supplies. In addition, climate-change-induced or -exacerbated mountain pine beetle outbreaks can have additional effects, such as altering the timing and quality of water runoff in affected forests. Expanses of dead trees clearly hurt aesthetic values. People have built homes in these areas because they want to live in the forest. While the forests will eventually recover, as discussed above, many do not want to wait several years to decades for that recovery. These people will also face financial losses if they try to sell their homes in the woods, since others are less likely to want to buy a house surrounded by dead trees. Thus, home prices in areas with mountain pine beetle outbreaks will likely be depressed, probably for years. Also, homeowners and potential home buyers fear that the expanses of dead trees increase the vulnerability of the homes to wildfires. As noted above and discussed further elsewhere, however, expanses of dead lodgepole pine may pose little additional threat to structures, particularly if homeowners act to protect their homes. Nonetheless, home protection from wildfires might entail additional costs for homeowners. Another aesthetic effect of expanses of dead trees is the impact on tourism. In many areas of the intermountain West, beautiful scenery is a major attraction. Hillsides full of dead trees are likely to dissuade people from spending time, and money, in areas affected by mountain pine beetle outbreaks. Evidence from the wildfires in Yellowstone in 1988 clearly shows that tourism is hurt by vistas filled with dead trees. Direct economic consequences of the mountain pine beetle epidemics relate to the enormous quantity of dead wood available in the short run, and the dearth of wood supplies in the period between the end of useful salvage operations and the maturing of the regenerated forest. While there is no threat of spreading the beetles in the wood products or energy produced, it is unclear whether transporting the unprocessed logs might exacerbate the beetle's spread. There are three primary opportunities for using trees killed by the mountain pine beetle--lumber, paper, and biomass energy. Beetle-killed trees can be used to produce lumber for at least five years after they die, and up to 18 years, depending on circumstances. The blue-stain fungus in beetle-killed trees alters the appearance of the wood products but has no effect on wood product strength or adhesion properties. Thus, wood products from beetle-killed trees are perfectly acceptable in virtually all traditional wood uses, such as residential construction and shipping containers. Since trees contain substantial quantities of carbon, their death and subsequent deterioration (through wildfires or decay) releases much of that carbon back to the atmosphere. Converting the dead wood into lumber for long-term uses, such as housing, can mitigate the carbon impacts of the dying trees. Through storage in wood products, it may be possible to ameliorate the impacts of the mountain pine beetle on climate change. There are limitations to converting beetle-killed trees into lumber. One problem is lack of lumber production capacity. Lumber production levels in interior western states have fallen substantially in the past 15 years. Lumber output has fallen so much in Colorado, Utah, and Wyoming that production in these states is no longer reported separately; 2007 lumber production in Montana and the Four Corners states was about half of 1992 production. Since trees are bulky, low-value commodities, shipping them more than about 100 miles for processing is economically impractical. With the decline in production, there might be insufficient capacity to convert more than a small portion of the beetle-killed lodgepole pine into lumber. A limitation for the high-elevation pines is the lack of market value, as well as distance from processing facilities and sometimes even from roads. Whitebark, bristlecone, and other high-elevation pines generally grow in relatively short, twisted forms that cannot be readily milled into lumber. Thus, this is not an option for these mountain pine beetle-killed trees. Canadian timber faces an additional limitation. It is unclear whether lumber production capacity is a constraint on using beetle-killed trees in Canada. However, lumber markets could be a problem. The largest market for Canadian lumber is the U.S. housing market. Even presuming that the current economic difficulties will be resolved quickly, and the U.S. housing market recovers from the doldrums, Canadian shipments to the U.S. market could continue to be constrained. In October 2006, the United States and Canada signed a Softwood Lumber Agreement to settle pending litigation over U.S. efforts to restrain allegedly subsidized Canadian lumber. The seven-year agreement (with an optional two-year extension) establishes Canadian export charges, varying by weighted average lumber prices and lowered if the Canadian exporting region accepts specified volume constraints. This agreement may limit the ability of Canadian companies to sell the lumber produced from beetle-killed trees. As with lumber, it is feasible to produce paper from beetle-killed trees. The blue-stain fungus may require additional bleaching for some paper products. However, paper products generally do not provide the longer-term carbon storage afforded by lumber products. Thus, paper production offers little amelioration for the carbon release from beetle-killed trees. In addition, no roundwood (trees from the forest) in the West is used for paper production; all paper products in the region are made from sawmill wastes (log trimmings and sawdust) or plantations, typically of hybrid poplars, grown specifically for paper production. Woody biomass can be used to produce energy in two primary manners--burning directly to produce heat or electricity, or to cogenerate both (also called combined heat and power, or CHP); and digesting to produce liquid fuel (e.g., ethanol) for transportation. Direct burning of wood for heat and energy has a very long history, and wood is still used as a primary home energy source in parts of the world (especially in the dry tropical forests of Africa). Modern use of CHP facilities has been expanding slowly. It is widely used by the wood products industry, utilizing waste wood, and its use in schools and government buildings continues to expand. A few free-standing energy facilities rely on wood. In contrast, transportation fuels from wood are still largely in the experimental or development stage. The technology exists, but commercial operations have yet to prove feasible. There are some limitations to the potential use of beetle-killed timber for energy production. Currently, little capacity exists to use the substantial volume of dead wood to produce energy, either through direct burning or for transportation fuels, and what capacity does exist is not particularly near the available beetle-killed trees. Transporting the wood to existing facilities is impractical, since wood is a high-volume, low-value product with limited economic mobility. Capacity could be built, and the wood might still be available for many years, but some of the capacity to use the substantial volume would become superfluous after the available beetle-killed timber was all used. Either facilities would be idled or energy production would persist on possibly unsustainable wood harvests, damaging the forests in the long run.

The mountain pine beetle is a native insect of western U.S. pine forests. It survives by killing infested trees, usually individually, but occasionally in epidemics. Mountain pine beetle epidemics are particularly associated with lodgepole pine, a common western tree that typically grows in dense, even-aged stands. The beetle is a seasonally adapted species that thrives in areas where it can complete its life cycle in one year. The beetle has evolved a mass-attack approach to overwhelm tree defenses through large numbers, and adults congregate on large trees under stress. Widespread stress (e.g., a regional drought) sets the stage for an epidemic. Mountain pine beetle epidemics are recurrent events in western forests. The current epidemic can be separated into three distinct events: the central U.S. Rocky Mountains, interior British Columbia (Canada), and high-elevation pines. Two aspects of the current epidemic are widely believed to have been exacerbated by climate change: (1) increased temperatures farther north and at higher elevations (allowing complete life cycles in areas previously not susceptible to the beetle) and (2) possibly regional drought (making trees more susceptible to beetle attacks). Controlling a mountain pine beetle epidemic can be problematic. Individual trees can be protected by insecticide sprays, but the cost of preventive spraying at a landscape scale is prohibitive. Once a tree is infested, nothing can be done to save the tree. In the long run, silvicultural treatments to provide less dense, more diverse forests may reduce the extent of future epidemics, but epidemics cannot be prevented. One concern about the consequences of the current epidemic is the possible increase in wildfire threats. Little research has been done to assess the change in threats and impacts of wildfires. The limited existing information suggests that tree mortality due to mountain pine beetles may have little effect on the threat or impacts of wildfire in the affected areas, because lodgepole pines (live or dead) naturally burn in extensive crown fires that typically kill most of the large trees. Furthermore, because of the natural regeneration cycle of lodgepole pine and because the beetles do not kill small trees, natural regeneration of the pine forests is likely. However, warming as a result of climate change could have two consequential ecological outcomes. First, the beetle outbreak in the high-elevation pine ecosystems could significantly alter these ecosystems, because these pines are much slower to regenerate and small high-elevation pines are highly susceptible to the white pine blister rust (an introduced fungus). The second concern is the potential for the mountain pine beetle to spread across northern Canada through the boreal jack pine forest, and become an invasive pest of eastern pine forests. There are economic consequences of the mountain pine beetle epidemic. The aesthetic values of the area--such as property values and tourism--will likely be harmed by the extensive tree mortality. Much of the beetle-killed timber could be used, for lumber or for biomass energy, but the substantial volume of timber available far exceeds existing capacity to use the wood, and expanding capacity could be unsustainable--a short-run surplus and long-run shortage. Also, Canadian lumber faces restrictions on shipments to U.S. markets.

The principal law governing pollution of the nation's surface waters is the Federal Water Pollution Control Act, or Clean Water Act. Originally enacted in 1948, it was totally revised by amendments in 1972 that gave the act its current shape. The 1972 legislation spelled out ambitious programs for water quality improvement that have since been expanded and are still being implemented by industries, municipalities, and others. Congress made fine-tuning amendments in 1977, revised portions of the law in 1981, and enacted further amendments in 1987 and 2014. This report presents a summary of the law, describing the statute. It is excerpted from a larger document, CRS Report RL30798, Environmental Laws: Summaries of Major Statutes Administered by the Environmental Protection Agency . Many details and secondary provisions are omitted here, and even some major components are only briefly mentioned. Further, this report describes the statute, while other CRS products discuss implementation issues. Table 1 shows the original enactment and subsequent major amendments. Table 2 , at the end of this report, cites the major U.S. Code sections of the codified statute. Authorizations for appropriations to support the law generally expired at the end of FY1990 (September 30, 1990). Programs did not lapse, however, and Congress has continued to appropriate funds to carry out the act. Since the 1987 amendments, although Congress has enacted several bills that reauthorize and modify a number of individual provisions in the law, none comprehensively addressed major programs or requirements. The Federal Water Pollution Control Act of 1948 was the first comprehensive statement of federal interest in clean water programs, and it specifically provided state and local governments with technical assistance funds to address water pollution problems, including research. Water pollution was viewed as primarily a state and local problem, hence, there were no federally required goals, objectives, limits, or even guidelines. When it came to enforcement, federal involvement was strictly limited to matters involving interstate waters and only with the consent of the state in which the pollution originated. During the latter half of the 1950s and well into the 1960s, water pollution control programs were shaped by four laws that amended the 1948 statute. They dealt largely with federal assistance to municipal dischargers and with federal enforcement programs for all dischargers. During this period, the federal role and federal jurisdiction were gradually extended to include navigable intrastate, as well as interstate, waters. Water quality standards became a feature of the law in 1965, requiring states to set standards for interstate waters that would be used to determine actual pollution levels and control requirements. By the late 1960s, there was a widespread perception that existing enforcement procedures were too time-consuming and that the water quality standards approach was flawed because of difficulties in linking a particular discharger to violations of stream quality standards. Additionally, there was mounting frustration over the slow pace of pollution cleanup efforts and a suspicion that control technologies were being developed but not applied to the problems. These perceptions and frustrations, along with increased public interest in environmental protection, set the stage for the 1972 amendments. The 1972 statute did not continue the basic components of previous laws as much as it set up new ones. It set optimistic and ambitious goals, required all municipal and industrial wastewater to be treated before being discharged into waterways, increased federal assistance for municipal treatment plant construction, strengthened and streamlined enforcement, and expanded the federal role while retaining the responsibility of states for day-to-day implementation of the law. The 1972 legislation declared as its objective the restoration and maintenance of the chemical, physical, and biological integrity of the nation's waters. Two goals also were established: zero discharge of pollutants by 1985 and, as an interim goal and where possible, water quality that is both "fishable" and "swimmable" by mid-1983. While those dates have passed, the goals remain, and efforts to attain them continue. The Clean Water Act (CWA) today consists of two parts, broadly speaking, one being the Title II and Title VI provisions, which authorize federal financial assistance for municipal sewage treatment plant construction. The other is regulatory requirements, found throughout the act, that apply to industrial and municipal dischargers. The act has been termed a technology-forcing statute because of the rigorous demands placed on those who are regulated by it to achieve higher and higher levels of pollution abatement. Industries were given until July 1, 1977, to install "best practicable control technology" (BPT) to clean up waste discharges. Municipal wastewater treatment plants were required to meet an equivalent goal, termed "secondary treatment," by that date. (Municipalities unable to achieve secondary treatment by that date were allowed to apply for case-by-case extensions up to July 1, 1988. According to EPA, 86% of all cities met the 1988 deadline; the remainder were put under administrative or court-ordered schedules requiring compliance as soon as possible. However, many cities continue to make investments in building or upgrading facilities needed to achieve secondary treatment, and funding needs remain high; see discussion below.) Cities that discharge wastes into marine waters were eligible for case-by-case waivers of the secondary treatment requirement, where sufficient showing could be made that natural factors provide significant elimination of traditional forms of pollution and that both balanced populations of fish, shellfish, and wildlife and water quality standards would be protected. The primary focus of BPT was on controlling discharges of conventional pollutants, such as suspended solids, biochemical oxygen demanding materials, fecal coliform and bacteria, and pH. These pollutants are substances that are biodegradable (i.e., bacteria can break them down), occur naturally in the aquatic environment, and deplete the dissolved oxygen concentration in water, which is necessary for fish and other aquatic life. The act also mandated greater pollutant cleanup than BPT by no later than March 31, 1989, generally requiring that industry use the "best available technology" (BAT) that is economically achievable. BAT level controls generally focus on toxic substances. Compliance extensions of as long as two years are available for industrial sources utilizing innovative or alternative technology. Failure to meet statutory deadlines could lead to enforcement action (see below). The CWA utilizes both water quality standards and technology-based effluent limitations to protect water quality. Technology-based effluent limitations are specific numerical limitations established by EPA and placed on certain pollutants from certain sources. They are applied to industrial and municipal sources through numerical effluent limitations in discharge permits issued by states or EPA (see discussion of " Permits, Regulations, and Enforcement ," below). Water quality standards are standards for the overall quality of water. They consist of the designated beneficial use or uses of a waterbody (recreation, water supply, industrial, or other), plus a numerical or narrative statement identifying maximum concentrations of various pollutants that would not interfere with the designated use. The act requires each state to establish water quality standards for all bodies of water in the state. These standards serve as the backup to federally set technology-based requirements by indicating where additional pollutant controls are needed to achieve the overall goals of the act. In waters where industrial and municipal sources have achieved technology-based effluent limitations, yet water quality standards have not been met, dischargers may be required to meet additional pollution control requirements. For each of these waters, the act requires states to set a total maximum daily load (TMDL) of pollutants at a level that ensures that applicable water quality standards can be attained and maintained. A TMDL is both a planning process for attaining water quality standards and a quantitative assessment of pollution problems, sources, and pollutant reductions needed to restore and protect a river, stream, or lake. Based on state reports, EPA estimates that more than 40,000 U.S. waters are impaired and require preparation of TMDLs. Control of toxic pollutant discharges has been a key focus of water quality programs. In addition to the BPT and BAT national standards, states are required to implement control strategies for waters expected to remain polluted by toxic chemicals even after industrial dischargers have installed the best available cleanup technologies required under the law. Development of management programs for these post-BAT pollutant problems was a prominent element in the 1987 amendments and is a key continuing aspect of CWA implementation. Prior to the 1987 amendments, programs in the Clean Water Act were primarily directed at point source pollution, wastes discharged from discrete and identifiable industrial and municipal sources, such as pipes and other outfalls. In contrast, except for general planning activities, little attention had been given to nonpoint source pollution (runoff of stormwater or snowmelt from agricultural lands, forests, construction sites, and urban areas), despite estimates that it represents more than 50% of the nation's remaining water pollution problems. As it travels across land surface towards rivers and streams, rainfall and snowmelt runoff picks up pollutants, including sediments, toxic materials, and conventional wastes (e.g., nutrients) that can degrade water quality. The 1987 amendments authorized measures to address such pollution by directing states to develop and implement nonpoint pollution management programs (Section 319 of the act). States were encouraged to pursue groundwater protection activities as part of their overall nonpoint pollution control efforts. Federal financial assistance was authorized to support demonstration projects and actual control activities. These grants may cover up to 60% of program implementation costs. The CWA provides for special regulation of the discharge of oil or hazardous substances, because of the potentially catastrophic effects of such events on public health and welfare. Section 311 prohibits the discharge of oil or hazardous substances into U.S. waters. It also requires higher standards of care in the management and movement of oil, including a requirement for spill prevention plans; it enables the government to recover the costs of cleaning up oil and hazardous substance discharges; and it provides for penalties for such discharges. In 1990, Congress enacted the Oil Pollution Act, which partially amended Section 311 and established a comprehensive system for the cleanup of oil spills, adding a mechanism to impose liability for such spills. While the act imposes great technological demands, it also recognizes the need for comprehensive research on water quality problems. This is provided throughout the statute, on topics including pollution in the Great Lakes and Chesapeake Bay, in-place toxic pollutants in harbors and navigable waterways, and water pollution resulting from mine drainage. The act also authorizes support to train personnel who operate and maintain wastewater treatment facilities. Under this act, federal jurisdiction is broad, particularly regarding establishment of national standards or effluent limitations. The EPA issues regulations containing the BPT and BAT effluent standards applicable to categories of industrial sources (such as iron and steel manufacturing, organic chemical manufacturing, petroleum refining, and others). Certain responsibilities can be assumed by qualified states, in lieu of EPA, and this act, like other environmental laws, embodies a philosophy of federal-state partnership in which the federal government sets the agenda and standards for pollution abatement, while states carry out day-to-day activities of implementation and enforcement. Responsibilities under the act that may be carried out by qualified states include authority to issue discharge permits to industries and municipalities and to enforce permits; 46 states have been authorized to administer this permit program. EPA issues discharge permits in the remaining states--Idaho, Massachusetts, New Hampshire, New Mexico--the District of Columbia, and most U.S. territories. In addition, as noted above, all states are responsible for establishing water quality standards. Federal law has authorized grants for planning, design, and construction of municipal sewage treatment facilities since 1956 (Act of July 9, 1956, or P.L. 84-660). Congress greatly expanded this grant program in 1972 in order to assist cities in meeting the act's pollution control requirements. Since that time Congress has authorized $65 billion and appropriated more than $94 billion in CWA funds to aid wastewater treatment plant construction and other eligible projects. Grants are allocated among the states according to a complex statutory formula that combines two factors: state population and an estimate of municipal sewage treatment funding needs derived from a survey conducted periodically by EPA and the states. The most recent estimate indicated that, as of 2012, $271 billion more would be required to build and upgrade municipal wastewater treatment plants in the United States and for other types of water quality improvement projects that are eligible for funding under the act, a 20% decrease from the previous estimate from four years earlier. According to EPA, states' needs can change for a variety of reasons, such as actual changes in needs, availability of project documentation, and ability to fund and staff data collection and entry efforts. Under the Title II construction grants program established in 1972, federal grants were made for several types of projects based on a priority list established by the states. Grants were generally available for as much as 55% of total project costs. For projects using innovative or alternative technology (such as reuse or recycling of water), as much as 75% federal funding was allowed. Recipients were responsible for non-federal costs but were not required to repay federal grants. Policymakers have debated the balance between assisting municipal funding needs, which remain large, and the impact of assistance programs such as the Clean Water Act's on federal spending and budget deficits. In the 1987 amendments, Congress balanced these competing priorities by extending federal aid for wastewater treatment construction through FY1994, yet providing a transition towards full state and local government responsibility for financing after that date. Grants under the previous Title II program were authorized through FY1990. Under Title VI of the act, grants to capitalize State Water Pollution Control Revolving Funds, or loan programs, were authorized beginning in FY1989 to replace the Title II grants. States contribute matching funds, and under the revolving loan fund concept, monies used for wastewater treatment construction are repaid to the state, to be available for project loans to other communities. All states now have functioning loan programs, but the shift from federal grants to loans was easier for some than others. The new financing requirements have been a challenge for some cities (especially small towns) that have difficulty repaying project loans. Statutory authorization for grants to capitalize state loan programs expired in 1994; however, Congress has continued to provide annual appropriations. An issue affecting some cities is overflow discharges of inadequately treated wastes from municipal sewers and how cities will pay for costly remediation projects. To achieve its objectives, the CWA embodies the concept that all discharges into the nation's waters are unlawful, unless specifically authorized by a permit. Thus, more than 65,000 conventional industrial and municipal dischargers must obtain permits from EPA (or qualified states) under the act's National Pollutant Discharge Elimination System (NPDES) program (authorized in Section 402 of the act). NPDES permits also are required for more than 150,000 industrial and municipal sources of stormwater discharges. An NPDES permit requires the discharger (source) to attain technology-based effluent limits (BPT or BAT for industry, secondary treatment for municipalities, or more stringent where needed for water quality protection). Permits specify the effluent limitations a discharger must meet, and the deadline for compliance. Sources also are required to maintain records and to carry out effluent monitoring activities. Permits are issued for up to five years and must be renewed thereafter to allow continued discharge. The NPDES permit incorporates numerical effluent limitations issued by EPA. The initial BPT limitations focused on regulating discharges of conventional pollutants, such as bacteria and oxygen-consuming materials. The more stringent BAT limitations emphasize controlling toxic pollutants--heavy metals, pesticides, and other organic chemicals. In addition to these limitations applicable to categories of industry, EPA has issued water quality criteria for more than 115 pollutants, including 65 named classes or categories of toxic chemicals, or "priority pollutants." These criteria recommend ambient, or overall, concentration levels for the pollutants and provide guidance to states for establishing water quality standards that will achieve the goals of the act. A separate type of permit is required to dispose of dredged or fill material in the nation's waters, including wetlands. Authorized by Section 404 of the act, this permit program is administered by the U.S. Army Corps of Engineers, subject to and using EPA's environmental guidance. Some types of activities are exempt from permit requirements, including certain farming, ranching, and forestry practices which do not alter the use or character of the land; some construction and maintenance; and activities already regulated by states under other provisions of the act. EPA may delegate certain Section 404 permitting responsibility to qualified states and has done so twice (Michigan and New Jersey). For some time, the act's wetlands permit program has been one of the most controversial parts of the law. Some who wish to undertake development projects in wetlands maintain that federal regulation intrudes on and impedes private land-use decisions, while environmentalists seek more protection for remaining wetlands and limits on activities that are authorized to take place in wetlands. Nonpoint sources of pollution, which EPA and states believe are responsible for the majority of water quality impairments in the nation, are not subject to CWA permits or other regulatory requirements under federal law. They are covered by state programs for the management of runoff, under Section 319 of the act. Other EPA regulations under the CWA include guidelines on using and disposing of sewage sludge and guidelines for discharging pollutants from land-based sources into the ocean. (A related law, the Ocean Dumping Act, 33 U.S.C. SSSS1401-45, regulates the intentional disposal of wastes into ocean waters. ) EPA also provides guidance on technologies that will achieve BPT, BAT, and other effluent limitations. The NPDES permit, containing effluent limitations on what may be discharged by a source, is the act's principal enforcement tool. EPA may issue a compliance order or bring a civil suit in U.S. district court against persons who violate the terms of a permit. The penalty for such a violation can be as much as $25,000 per day. Stiffer penalties are authorized for criminal violations of the act--for negligent or knowing violations--of as much as $50,000 per day, three years' imprisonment, or both. A fine of as much as $250,000, 15 years in prison, or both, is authorized for "knowing endangerment"--violations that knowingly place another person in imminent danger of death or serious bodily injury. Finally, EPA is authorized to assess civil penalties administratively for certain well-documented violations of the law. These civil and criminal enforcement provisions are contained in Section 309 of the act. EPA, working with the Army Corps of Engineers, also has responsibility for enforcing against entities who fail to obtain or comply with a Section 404 permit. While the CWA addresses federal enforcement, the majority of actions taken to enforce the law are undertaken by states, both because states issue the majority of permits to dischargers and because the federal government lacks the resources for day-to-day monitoring and enforcement. Like most other federal environmental laws, CWA enforcement is shared by EPA and states, with states having primary responsibility. However, EPA has oversight of state enforcement and retains the right to bring a direct action where it believes that a state has failed to take timely and appropriate action or where a state or local agency requests EPA involvement. Finally, the federal government acts to enforce against criminal violations of the federal law. In addition, individuals may bring a citizen suit in U.S. district court against persons who violate a prescribed effluent standard or limitation or permit requirement. Citizens also may bring suit against the Administrator of EPA for failure to carry out a nondiscretionary duty under the act.

The principal law governing pollution of the nation's surface waters is the Federal Water Pollution Control Act, or Clean Water Act. Originally enacted in 1948, it was totally revised by amendments in 1972 that gave the act its current dimensions. The 1972 legislation spelled out ambitious programs for water quality improvement that have since been expanded and are still being implemented by industries and municipalities. This report presents a summary of the law, describing the statute without discussing its implementation. Other CRS reports discuss implementation, including CRS Report R42883, Water Quality Issues in the 113th Congress: An Overview, and numerous products cited in that report. The Clean Water Act consists of two major parts, one being the provisions which authorize federal financial assistance for municipal sewage treatment plant construction. The other is the regulatory requirements that apply to industrial and municipal dischargers. The act has been termed a technology-forcing statute because of the rigorous demands placed on those who are regulated by it to achieve higher and higher levels of pollution abatement under deadlines specified in the law. Early on, emphasis was on controlling discharges of conventional pollutants (e.g., suspended solids or bacteria that are biodegradable and occur naturally in the aquatic environment), while control of toxic pollutant discharges has been a key focus of water quality programs more recently. Prior to 1987, programs were primarily directed at point source pollution, that is, wastes discharged by industrial and municipal facilities from discrete sources such as pipes and outfalls. Amendments to the law in that year authorized measures to address nonpoint source pollution (runoff from farm lands, forests, construction sites, and urban areas), which is estimated to represent more than 50% of the nation's remaining water pollution problems. The act also prohibits discharge of oil and hazardous substances into U.S. waters. Under this act, federal jurisdiction is broad, particularly regarding establishment of national standards or effluent limitations. Certain responsibilities are delegated to the states, and the act embodies a philosophy of federal-state partnership in which the federal government sets the agenda and standards for pollution abatement, while states carry out day-to-day activities of implementation and enforcement. To achieve its objectives, the act is based on the concept that all discharges into the nation's waters are unlawful, unless specifically authorized by a permit, which is the act's principal enforcement tool. The law has civil, criminal, and administrative enforcement provisions and also permits citizen suit enforcement. Financial assistance for constructing municipal sewage treatment plants and certain other types of water quality improvements projects is authorized under Title VI. It authorizes grants to capitalize State Water Pollution Control Revolving Funds, or loan programs. States contribute matching funds, and under the revolving loan fund concept, monies used for wastewater treatment construction are repaid to states, to be available for future construction in other communities.

Broadly speaking, high-frequency trading (HFT) is conducted through supercomputers that give firms the capability to execute trades within microseconds or milliseconds (or, in the technical jargon, with extremely low latency ). In practice, depending on the particulars of the trade, trading opportunities can last from milliseconds to a few hours. This is by contrast to traditional trading, often called pit trading, in which traders would meet at a trading venue called the floor or pit, and communicate buy and sell orders via open outcry; and by contrast to slower electronic trading. HFT is a catch-all term used to describe "ultra-fast electronic trading in which participants hold positions for short periods." The term HTF has no universal or legal definition. Neither the Commodity Futures Trading Commission (CFTC) nor the Securities and Exchange Commission (SEC) has issued regulations defining it. In a 2012 CFTC Technical Advisory Committee meeting, its Sub-Committee on Automated and High Frequency Trading, a working group to examine such issues, developed the following loose and nonbinding definition: High frequency trading is a form of automated trading that employs: (a) algorithms for decision making, order initiation, generation, routing, or execution, for each individual transaction without human direction; (b) low-latency technology that is designed to minimize response times, including proximity and co-location services; (c) high speed connections to markets for order entry; and (d) high message rates (orders, quotes or cancellations). By most accounts, HFT has grown substantially over the past 10 years: it now accounts for roughly 55% of trading volume in U.S. equity markets and about 40% in European equity markets. In the futures markets, the percentages have also grown markedly. From October 2012 to October 2014, the CFTC found that algorithmic trading systems (ATS) were present on at least one side in nearly 80% of foreign exchange futures trading volume; 67% of interest rate futures volume; 62% of equity futures volume; 47% of metals and energy futures volume; and 38% of agricultural product futures volume. ATS has also risen to about 67% of trading in 10-year Treasury futures and 64% of Eurodollar futures markets. In general, traders that employ HFT strategies are attempting to earn small amounts of profit per trade. Some arbitrage strategies reportedly can earn profits close to 100% of the time. Earlier reports indicated that such strategies might make money on only 51% of the trades, but because the trades are transacted hundreds or thousands of times per day, the strategies may still be profitable. High-frequency traders employ a diverse range of trading strategies that may also be used in combination with each other. Some analyses broadly categorize these strategies into passive and aggressive trading strategies. Passive strategies involve the provision of limit orders--offers placed with a brokerage to buy or sell a set number of shares at a specified price or cheaper. An example of this is the market making strategy described in the next section. Aggressive strategies reportedly involve the provision of immediately executable trades such as market orders. Such strategies are said to include momentum ignition and order anticipation trading--also known as liquidity detection trading--further discussed in " HFT Strategies and Related Policy Issues ," below. The CFTC oversees any HFT, along with other types of trading, in the derivatives markets it regulates. These include futures, swaps and options on commodities, and most financial instruments or indices, such as interest rates. The SEC oversees HFT and other trading in the securities markets and the more limited securities-related derivatives markets in which it regulates. Although U.S. derivatives markets traditionally relied on human execution of trades, such as through open outcry trading pits, most trading today has moved to highly automated electronic systems that generate, transmit, manage, and execute orders through high-speed networks. Some recent research has observed generally shrinking profits among those who employ HFT due to factors such as heightened competition. For example, a January 2016 academic study found "that a continuous increase in competition--between high-speed trading algorithms themselves through predatory strategies and from professional human traders adapting and building adequate responses--has made the business more difficult and has led to shrinking profits for HFT." Much more attention has been paid to and written about HFT in an equity market context than in the futures market context. This section describes several major HFT equity market trading strategies. Some evidence, however, exists that these HFT strategies may also be employed in futures markets. Various observers, including SEC staff, have said that two related types of HFT, dubbed aggressive strategies in contrast to the other passive strategies should be a central focus of public policy concerns as they "... may present serious problems in today's market structure-- order anticipation and momentum ignition ." Although the SEC did not elaborate on its concerns, this may be because order anticipation strategies, discussed below, can potentially share some similarities with an illegal practice called front-running . Momentum ignition strategies can potentially share certain similarities with a practice called spoofing , which is also illegal in some markets. The major HFT trading strategies described below draws upon the findings in a unique 2014 SEC staff literature research survey on HFT, Equity Market Structure Literature Review Part II: High Frequency Trading , to provide a sense of the research landscape on HFT's pros and cons. Going forward, however, the reader should be aware of a caveat in the SEC staff literature survey on its limitations: "The HFT [research] datasets [used in the literature survey] generally have been limited to particular products or markets, and the data time periods now are relatively outdated, particularly given the pace of change in trading technology and practices. Accordingly, while the recent economic literature has made great progress in beginning to fill in the picture of HFT, much of the picture remains unfinished." The following is not an exhaustive description of HFT strategies, but is meant to highlight several of the main strategies addressed in this report. Passive m arket m aking is when a firm provides liquidity by matching buyer and seller orders or by buying and selling through its own securities inventories if a market maker cannot immediately match buyers and sellers. In general, these market makers do so by submitting non-marketable resting orders (i.e., offers to buy and sell certain amounts of securities at threshold prices that are not immediately available) that provide liquidity to the marketplace. They profit on the difference between the bid prices buyers are willing to pay for a security and the ask prices sellers are willing to accept. Some of this kind of HFT market making is reportedly driven by the HFT firm's receipt of so-called liquidity rebates (usually a fraction of a penny a share) provided by Electronic Communication Networks (ECNs) and stock exchanges for the limit orders that they post to those trading centers. Some argue that the subsidies help to ensure sustained market participation regardless of market conditions. The profit-making opportunities for market making HFTs can be enhanced when markets are especially volatile. The SEC staff analysis found that on average primarily passive HFT strategies appear to have a beneficial impact on various market quality metrics by reducing bid-ask spreads and price volatility (significantly changing securities prices) during the trading day. It can be argued that high-frequency traders generally tend to be better informed than many non-high-frequency traders, an attribute that derives from their comparative speed in processing securities market data. Moreover, all things being equal, when better-informed traders interact with less-informed traders, the better-informed traders are apt to buy low and sell high, earning profits, whereas the less-informed traders are apt to buy high and sell low, generating losses. The phenomenon is called adverse selection because under this scenario less-informed traders tend to be disproportionately involved in unattractive trades. Other cited research in the SEC literature survey found that the entry of a high-frequency trader that primarily engaged in market making rather inexplicably resulted in a substantial decrease in adverse selection. This is the reverse of the outcome found for aggressive HFT strategies described in the next section. Arbitrage trading is profiting from price differentials for the same or related securities. These price differences may occur between an exchange-traded fund (ETF) and an underlying basket of stocks, that are traded on different market centers, such as the London Stock Exchange and the New York Stock Exchange (NYSE), or the same stock and its derivatives, such as a specific stock and its stock's options. Within this context, various HFT firms also employ something called slow market arbitrage wherein the firms attempt to arbitrage small price differences for stocks between various exchanges resulting from infinitesimal time differences in the trading prices that they report on the same securities, a practice described in Flash Boys , the controversial 2014 book on HFT by Michael Lewis. The SEC staff survey indicated that the research that it reviewed did not "reveal a great deal about the extent or effect of the HFT arbitrage strategies." Momentum ignition is a strategy in which a proprietary trading firm initiates a series of orders or trades aimed at causing rapid up or down securities price movements. Such traders "may intend that the rapid submission and cancellation of many orders, along with the execution of some trades, will spoof 22 the algorithms of other traders into action and cause them to buy (or sell) more aggressively. Or the trader may intend to trigger standing stop loss orders that would help facilitate a price decline." As such, by establishing an early position, the high-frequency trader is attempting to profit when it subsequently liquidates the position after it spurs an incremental price movement. ( Figure 1 below gives a detailed example of spoofing.) However, the line between spoofing per se--which the Dodd Frank Act made illegal by amending the Commodity Exchange Act (CEA) --and a momentum ignition strategy can be nuanced. Unlike the CEA, federal securities laws do not outlaw spoofing by name, although the SEC has attacked spoofing by characterizing it as a manipulative practice violating antifraud and anti-manipulation prohibitions elsewhere in securities laws. Order anticipation , also known as liquidity detection trading, involves traders using computer algorithms to identify large institutional orders that sit in dark pools or other stock order trading venues. High-frequency traders may repeatedly submit small-sized exploratory trading orders intended to detect orders from large institutional investors. The process can provide the high-frequency trader with valuable intelligence on the existence of hidden large investor liquidity, which may enable the trader to trade ahead of the large order under the assumption that the order will ultimately move the security's market pricing to benefit the HFT firm. The line between this strategy and front-running , which is not permitted, can be nuanced. Front-running generally means profiting by placing one's own orders ahead of a large order based on knowledge of that impending order. However, the SEC's 2010 Concept Release on Equity Market Structure emphasized that illegal front-running may occur when a firm or person violates a duty--such as a fiduciary duty--to a large buyer or seller by trading ahead of that firm to benefit from an expected price movement. When such a duty existed, the SEC explained, there was already a violation. "The type of order anticipation strategy [which the SEC was discussing] involves any means to ascertain the existence of a large buyer (seller) that does not involve violation of a duty, misappropriation of information, or other misconduct. Examples include the employment of sophisticated pattern recognition software to ascertain from publicly available information the existence of a large buyer (seller), or the sophisticated use of orders to 'ping' different market centers in an attempt to locate and trade in front of large buyers and sellers." In other words, the SEC appeared to distinguish high-frequency order anticipation strategies as possibly distinct from front-running based on front-running involving violation of a duty to the large buyer or seller, but still expressed a desire to examine the effects of such order anticipation strategies further. In the HFT literature survey, the SEC staff analysis characterized momentum ignition and price anticipation, the two aggressive HFT strategies, as having both "positive and negative aspects." For example, one study found that these aggressive strategies can improve certain aspects of price discovery in the short run, whereas another study found that while the positive impact of price discovery is significantly higher than that by non-HFT for large-cap stocks, it is inconclusive for mid-cap stocks and significantly lower for small-cap stocks. Meanwhile, another study found that although aggressive HFT had a greater effect on price discovery in the short run (up to 10 seconds), passive non-high-frequency traders had a consistently higher impact on price discovery in the long run (up to two minutes). The staff analysis also referenced a study that found aggressive HFT increases the adverse selection costs that non-high-frequency passive traders are subject to. The staff analysis noted two studies that collectively found aggressive HFT potentially worsened the market trading transaction costs for institutional investors and helped foster extremely volatile market conditions. The SEC also flagged concerns with such strategies. For instance, in its 2010 Concept Release, the SEC cited research that referred to order anticipators as "parasitic traders" who "profit only when they can prey on other traders. They do not make prices more informative, and they do not make markets more liquid.... Large traders are especially vulnerable to order anticipators." The agency requested comments and public input on whether such order anticipation strategies significantly detract from market quality and harm institutional investors. In addition, regulators have expressed concern over whether certain aggressive HFT strategies may be associated with increased market fragility and volatility, such as that demonstrated in the "Flash Crash" of May 6, 2010; August 24, 2015 market crash in which the Dow Jones Industrial Average fell by more than 1,000 points in early trading; and October 15, 2014 day of extreme volatility in Treasury markets, among others. In an October 2015 speech analyzing the October 14, 2015 Treasury market meltdown, CFTC Chair Timothy Massad noted that CFTC staff had analyzed the frequency of "flash" events in Treasury futures and in five of the most active futures contracts: (1) corn; (2) gold; (3) West Texas Intermediate (WTI) crude oil; (4) E-mini S&P futures, which represent an agreement to buy or sell the cash value of an underlying stock index (i.e., the S&P 500) at a specified future date; and (5) the EuroFX, which reflects changes in the U.S. dollar value of the European euro. CFTC staff found that, "Movements of a magnitude similar to Treasuries on October 15 th were not uncommon in many of these contracts. In fact, corn, the largest grain futures market, averaged more than five such events per year over the last five years," Massad said. He noted there were more than 35 similar intraday flash events in 2015 alone just for WTI crude oil futures. Although the CFTC's analysis appeared to indicate an increase in such flash events, Massad did not postulate a specific cause for their increased frequency, concluding instead that regulators should "take a closer look at algorithmic--or automated--trading." Other regulators and researchers have also expressed concern over possible links between HFT and excessive market volatility or fragility. Section 747 of the Dodd Frank Act ( P.L. 111-203 ) amended the Commodity Exchange Act to expressly prohibit certain disruptive trading practices, including conduct that violates bids or offers and willful and intentional spoofing. This new provision in the CEA prohibits "any trading practice, or conduct on or subject to the rules of a registered entity that ... is, is of the character of, or is commonly known to the trade as, 'spoofing' (bidding or offering with the intent to cancel the bid or offer before execution)." This is the first U.S. provision in statute to specifically ban spoofing in commodity markets. Figure 1 provides an example of how spoofing works. Applying such a provision on spoofing to the HFT world, however, can be challenging. Since high-speed computers and algorithms can automatically generate many bids and offers in a millisecond, and cancel them quickly, it can be difficult to ascertain at times whether such automated trading practices rise to the level of spoofing. The CFTC released additional guidance in 2013 clarifying that the agency must prove a trader intended to cancel his or her bid before execution, and that reckless trading practices alone would not be considered spoofing. However, the CFTC would not need to prove that a trader intended to move the market for such activities to rise to the level of spoofing, the guidance indicated. The CFTC has used its new anti-spoofing authority in a number of recent enforcement actions. On November 3, 2015, Michael Coscia, the owner of New Jersey-based proprietary energy trading firm Panther Energy Trading, was convicted by a Chicago jury of six counts of spoofing and six counts of commodity fraud, and appears set to face jail time (sentencing is set for March 2016). The Department of Justice (DOJ) brought criminal charges against Coscia in October 2014 stemming from algorithmic trading strategies flagged by the CFTC. The CFTC in July 2013 ordered Coscia and Panther Energy to pay $2.8 million in fines, and imposed a one-year trading ban on them as the result of a CFTC enforcement action over algorithmic trading strategies Panther undertook in 2011. According to the CFTC, Panther placed orders with the intent to cancel them on a number of futures contracts traded on CME Group exchanges. These included contracts in crude oil, natural gas, wheat, and soybeans. In April 2015, the CFTC also accused U.K.-based trader Navinder Singh Sarao with unlawfully manipulating, attempting to manipulate, and spoofing--with regard to the E-mini S&P 500 futures contract. Sarao's trades allegedly contributed to the Flash Crash of May 6, 2010 when unusual market volatility caused major equity indices in both the futures and securities markets, each already down more than 4% from their prior-day close, suddenly plummeted a further 5%-6% in a matter of minutes before rebounding almost as quickly. In October, 2015, the CFTC filed a civil complaint charging Chicago-based proprietary trading firm 3Red Trading with spoofing and employing a manipulative and deceptive device while trading futures on energy, metals, equities, and stock-market futures on various futures exchanges. In more recent usage, the CFTC now often refers to HFT within the rubric of "automated trading." On November 24, 2015, the CFTC released a proposed rule, Regulation Automated Trading (Reg AT), governing certain HFT practices (without using the term HFT). In this regulation, the CFTC also refers frequently to algorithmic trading systems (ATS), which are computerized trading systems based on automated sets of rules or instructions used to execute a trading strategy. Much automated trading takes place now on futures exchanges. The largest two such exchange operators in the United States are (1) the CME Group, which owns the Chicago Mercantile Exchange, Chicago Board of Trade, and New York Mercantile Exchange; and (2) the Intercontinental Exchange (ICE). These exchanges have indicated in their public materials average order entry times of less than one millisecond in which trades can be electronically executed. The purpose of Reg AT broadly is to update the CFTC's rules on trading practices in response to the evolution from pit trading to electronic trading. According to the CFTC Chair Timothy Massad, the new regulation is aimed at minimizing the potential for disruptions and operational problems that may arise from automated trade order originations and executions, or malfunctioning algorithms. Reg AT mandates risk controls for the exchanges; large financial firms called clearing members of the exchanges; and firms that trade heavily on the exchanges for their own accounts. The rule also proposes requiring the registration of proprietary traders engaging in algorithmic trading on regulated exchanges through what is called direct electronic access . Direct electronic access generally refers to the practice of exchanges permitting, for a fee, certain trading customers to directly enter trades into the exchange's electronic trade matching system (rather than routing such trades through a broker). The apparent goal of Reg AT is to enhance CFTC oversight of such automated trading activities. Regulation AT is part of a series of recent measures undertaken by the CFTC in response to ATS' growth and particularly financial regulators' concerns regarding the impact of such systems on market volatility and market fragility. These concerns, for instance, came about from incidents such as the extreme volatility of October 15, 2014, in the U.S. Treasury securities and futures markets. In the report on this incident and in other recent regulations, the CFTC and other regulators have expressed the view that automated trading may have caused or exacerbated market disruptions particularly in times of market stress and should thus be subject to some greater level of regulation. The CFTC has also implemented rules concerning its authority to prohibit manipulative and deceptive devices and price manipulation, codified at 17 CFR 180.1 and 180.2. The majority of academic research and stated policy concerns over HFT in securities and derivatives have focused on whether it increases market volatility and diminishes trading liquidity. In Reg AT, for instance, the CFTC lists a number of policy concerns regarding risks from automated trading, such as operational risks, ranging from malfunctioning to incorrectly deployed algorithms reacting to inaccurate or unexpected data; market liquidity risks, stemming from abrupt changes in trading strategies even if a firm executes its trading strategy perfectly; risks that automated trading can provide new tools to engage in unlawful conduct (such as spoofing, discussed further below); market shocks risks , stemming from erroneous orders impacting multiple markets; the risk that, as more firms gain direct access to trading platforms, trades may not be subject to sufficient settlement risk mitigation; and the risk that increased speed of trade execution may make critical risk mitigation devices less effective. On the positive side, some research has found that HFT and automated trading can create a more efficient marketplace, by reducing bid-ask spreads (i.e., the spread or differential between the offered buying and selling prices) thereby lowering trading costs. Another study of HFT in the equities markets found that such activity lowers short-term volatility and has a positive effect on market liquidity, as well as narrowing bid-ask spreads. On the securities front, in 2015, the SEC took steps toward a registration requirement for certain HFT broker-dealers, which requires them to register with the Financial Industry Regulatory Authority (FINRA). FINRA is a self-regulatory organization created after the merger of the National Association of Securities Dealers and the New York Stock Exchange's regulation committee, which acts as the front-line regulator for broker-dealers. The SEC has regulatory oversight of FINRA, and most broker-dealers must register with it. Among other things, FINRA's registrants are subject to examinations, various disclosure requirements, and rules governing various aspects of their conduct. Under an existing SEC regulatory rule, Rule 15b9-1 of the Securities Exchange Act of 1934, many high-frequency traders who trade on other exchanges using a third-party broker-dealer, or trade on alternative trading systems, may be exempt from FINRA registration. In March 2015, the SEC voted for a proposal to limit this exemption so that previously exempt HFT broker-dealers would become subject to FINRA regulatory oversight as FINRA-registered entities. The SEC said that the regulatory change "would enhance regulatory oversight of active proprietary trading firms, such as high frequency traders." SEC Commissioner Luis Aguilar predicted that when the proposals become finalized they "will ensure that these [high frequency traders] can be held responsible for any potential misconduct." The SEC recently brought enforcement actions involving HFT against several firms, including Barclays, Credit Suisse, Athena Capital Research, and Briargate Trading. Barclays and Cred it Suisse . In January 2016, Barclays Plc and Credit Suisse each settled allegations with the New York attorney general (NYAG) and the SEC that they had misled their investors in managing their private trading platforms known as dark pools. As part of its settlement, Barclays agreed to pay $70 million, to be evenly divided between the NYAG and the SEC. Specifically, Barclays was alleged to have made client misrepresentations on how it monitored its HFT dark pools. Separately, Credit Suisse agreed to settle its charges by paying a $30 million penalty to the SEC, a $30 million penalty to the NYAG, and $24.3 million in disgorgement and prejudgment interest to the SEC for a total of $84.3 million. The SEC charged that Credit Suisse failed to operate its dark pool and alternate trading systems as advertised. Athena . In October 2014, the SEC reached a $1 million settlement with Athena Capital Research LLC, a HFT trader, which was charged with employing $40 million to rig prices of various stocks in 2009. Athena was charged with manipulating shares of Nasdaq-listed stocks, which weakened the exchange's end-of-day procedures for reducing stock price volatility, according to the SEC. More specifically, the agency charged that Athena "placed a large number of aggressive, rapid-fire trades in the final two seconds of almost every trading day during a six-month period to manipulate the closing prices of thousands of Nasdaq-listed stocks." It did so through an algorithm that was code-named Gravy to engage in this practice known as marking the close in which stocks are bought or sold near the close of trading to affect the closing price. Briargate. In October 2015, the SEC reached a $1 million settlement with Briargate Trading LLP and co-founder Eric Oscher. Between October 2011 and September 2012, Briargate was charged with orchestrating a scheme that involved placing sham trades called spoof orders for the purpose of creating "the false appearance of interest in [New York Stock Exchange] stocks" to manipulate their prices. After it entered spoof orders, Briargate's trading protocol reportedly placed bona fide orders on the opposite side of the market for the same stocks, taking advantage of the artificially inflated or depressed prices--then immediately after the bona fide orders were executed, it canceled the spoof orders. The 114 th Congress has seen the introduction of some legislation potentially impacting HFT and has held hearings touching on the subject of HFT practices and regulation as part of congressional oversight authority over the SEC and the CFTC. Although no legislation has been introduced in the 114 th Congress directly impacting the regulation or oversight of HFT, several bills have been introduced imposing a tax on a broad array of financial transactions involving securities and derivatives. These include S. 1371 , S. 1373 , and H.R. 1464 , which would each impose a tax rate that varies depending on the underlying security. Specifically, the bills would subject transactions involving stocks and interests in partnerships and trusts to a 50 basis-point-tax (0.5%), transactions involving bonds and other forms of debt (other than tax-exempt state and local bonds, and bonds with a maturity of less than 60 days) to a 10 basis-point-tax (0.10%), and derivative transactions to a half basis-point-tax (0.005%). It is unclear, however, if these proposals would have an impact on certain HFT strategies that involve issuing and then canceling a large volume of bid orders (strategies related to spoofing). This is because the bills impose "a tax on the transfer of ownership in each covered transaction with respect to any security." In HFT cases, such as spoofing, where no transfer of ownership actually occurs because bids are canceled prior to any ownership transfer, the proposal potentially might not apply. In the 113 th Congress, congressional interest in HFT was also reflected in legislation that would levy securities transaction taxes on securities trades, presumably raising the cost and thus reducing the incidence of conducting HFT, and there was also one bill aimed specifically at regulating certain HFT practices. In the 113 th Congress, S. 410 , H.R. 880 , and H.R. 1579 would have levied taxes on various financial trades, including trades conducted by high-frequency traders. H.R. 2292 would have required the CFTC to provide a regulatory definition of HFT in the derivatives markets that the agency oversees. It would also have required high-frequency traders in derivatives to register with the CFTC, submit semiannual reports to the agency, and conform to business conduct requirements that the CFTC might issue. H.R. 2292 would also have granted the CFTC the authority to impose civil penalties under the Commodity Exchange Act for violations of a HFT regulation. The amount of the fine would have been based on the duration of the violation. A number of committee and subcommittee hearings in the 114 th and 113 th Congresses have touched on the subject of HFT as part of congressional oversight authority over the SEC and the CFTC. In the 114 th Congress, a March 3, 2016 subcommittee hearing of the Senate Banking Committee discussed a number of issues related to the topic. In the hearing, Subcommittee Chair Senator Crapo and Subcommittee Ranking Member Senator Warner expressed concerns about increased market speed, complexity, and potential market fragility as a result of increased automated trading. They pressed the SEC's Division of Trading & Markets director, Stephen Luparello, and the chairman and CEO of FINRA, Richard Ketchum to speed up implementation of a number of pilot programs and proposals the SEC and FINRA have discussed for several years. These include implementation of a consolidated audit trail (CAT) aimed at improving surveillance and supervision of trading, including automated trading, and a possible pilot program aimed at temporarily eliminating rebates or inducements to brokers for routing client orders. In his March 3, 2016 testimony, SEC's Luparello noted that his division was examining introducing greater transparency into the disclosures by brokers regarding how they decide to route institutional customers' orders, to improve the "best execution" of institutional investors' trades. He also said SEC staff was working on a recommendation for the SEC to strengthen recordkeeping requirements for algorithmic trading so that key elements of the algorithm itself would be encompassed, as well as a record or orders generated by the algorithm. In addition, Luparello said SEC staff was developing a recommendation for the SEC to consider addressing the use of aggressive, destabilizing trading strategies that could exacerbate price volatility. He noted that the SEC staff was also developing a recommendation for the SEC to consider in 2016 that would subject certain active proprietary traders not registered as broker-dealers to rules surrounding broker-dealers by the SEC and by self-regulatory organizations. In addition to the March 3, 2016 hearing, which dealt more explicitly with issues related to high frequency trading in securities, the Senate Agriculture, Nutrition and Forestry Committee also held a hearing May 14, 2015, on the CFTC and market liquidity, which discussed HFT. A number of additional hearings in the 114 th Congress for oversight of the SEC and CFTC also touched upon HFT issues as part of a broader review of these agencies' missions and accomplishments.

High-frequency trading (HFT) generally refers to trading in financial instruments, such as securities and derivatives, transacted through supercomputers executing trades within microseconds or milliseconds (or, in the technical jargon, with extremely low latency). There is no universal or legal definition of HFT, however. Neither the Securities and Exchange Commission (SEC), which oversees securities markets, nor the Commodity Futures Trading Commission (CFTC), which regulates most derivatives trading, have specifically defined the term. By most accounts, high frequency trading has grown substantially over the past 10 years: estimates hold that it accounts for roughly 55% of trading volume in U.S. equity markets and about 40% in European equity markets. Likewise, HFT has grown in futures markets--to roughly 80% of foreign exchange futures volume and two-thirds of both interest rate futures and Treasury 10-year futures volumes. The CFTC oversees any HFT, along with other types of trading, in the derivatives markets it regulates. These include futures, swaps and options on commodities, and most financial instruments or indices, such as interest rates. The SEC oversees HFT and other trading in the securities markets and the more limited securities-related derivatives markets which it regulates. In general, traders that employ HFT strategies are attempting to earn small amounts of profit per trade. Broadly speaking, these strategies can be categorized as passive or aggressive strategies. Passive strategies include arbitrage trading--attempts to profit from price differentials for the same stocks or their derivatives traded on different trading venues; and passive market making, in which profits are generated by spreads between bid and ask prices. Aggressive strategies include those known as order anticipation or momentum ignition strategies. Various observers, including SEC staff, have said that these aggressive strategies should be a central focus of public policy concerns. This may be because such strategies can share some similarities to practices such as front-running and spoofing, which are generally illegal. In addition, regulators have expressed concern over whether certain aggressive HFT strategies may be associated with increased market fragility and volatility, such as that demonstrated in the "Flash Crash" of May 6, 2010; the October 15, 2014, extreme volatility in Treasury markets; and the August 24, 2015, market crash in which the Dow Jones Industrial Average fell by more than 1,000 points in early trading. The SEC and CFTC have taken recent steps to bring some HFT under closer scrutiny, both through recent regulatory proposals and enforcement actions. The SEC has proposed requiring certain HFT broker-dealers to register with the Financial Industry Regulatory Authority (FINRA), which oversees broker-dealers. In January 2016, the SEC announced settlements with Barclays and Credit Suisse totaling more than $150 million, over allegations that Barclays had misled its investors on HFT practices permitted on its private trading platforms known as dark pools, and that Credit Suisse failed to operate its trading systems as advertised. The CFTC has cracked down on spoofing, using the anti-spoofing authority granted in the Dodd-Frank Act (P.L. 111-203) in a number of recent enforcement actions involving algorithmic trading. On November 24, 2015, the CFTC released a proposed rule, Regulation Automated Trading (Reg AT), governing certain HFT practices. The purpose of Reg AT broadly is to update the CFTC's rules on trading practices in response to the evolution from pit trading to electronic trading. Reg AT mandates risk controls for the exchanges; large financial firms called "clearing members" of the exchanges; and firms that trade heavily on the exchanges for their own accounts. The rule also proposes requiring the registration of proprietary traders engaging in algorithmic trading on regulated exchanges through what is called "direct electronic access." Although no legislation has been introduced in the 114th Congress directly impacting the regulation or oversight of HFT, several bills have been introduced imposing a tax on a broad array of financial transactions that could impact HFT. These bills include S. 1371, S. 1373, and H.R. 1464. Congress has also held hearings in the 114th Congress touching on HFT issues as part of its oversight of the SEC and CFTC. This report provides background on various HFT strategies and some associated policy issues, recent regulatory developments and selected enforcement actions by the SEC and CFTC on HFT, and congressional action such as proposed legislation and hearings related to HFT.

Each year, the House and Senate armed services committees take up national defense authorization bills. The House of Representatives passed the National Defense Authorization Act for Fiscal Year 2018 ( H.R. 2810 ) on July 14, 2017. The Senate Armed Services Committee reported its version of the NDAA ( S. 1519 ) on September 18, 2017. These bills contain numerous provisions that affect military personnel, retirees, and their family members. Provisions in one version are sometimes not included in the other, are treated differently, or are identical in both versions. Following passage of each chamber's bill, a conference committee typically convenes to resolve the differences between the respective chambers' versions of the bill. The FY2018 NDAA conference report was passed by the House on November 14, 2017, and the Senate on November 16, 2017. On December 12, President Donald J. Trump signed the bill into law ( P.L. 115-91 ). This report highlights selected personnel-related issues that may generate high levels of congressional and constituent interest. CRS will update this report to reflect enacted legislation. Related CRS products are identified in each section to provide more detailed background information and analysis of the issues. For each issue, a CRS analyst is identified and contact information is provided. Some issues discussed in this report were previously addressed in the National Defense Authorization Act for Fiscal Year 2017 ( P.L. 114-328 ) and discussed in CRS Report R44577, FY2017 National Defense Authorization Act: Selected Military Personnel Issues , by [author name scrubbed] et al., or other reports. Those issues that were considered previously are designated with an asterisk in the relevant section titles of this report. Background: The authorized active duty end-strengths for FY2001, enacted in the year prior to the September 11 terrorist attacks, were as follows: Army (480,000), Navy (372,642), Marine Corps (172,600), and Air Force (357,000). Over the next decade, in response to the demands of wars in Iraq and Afghanistan, Congress substantially increased the authorized personnel strength of the Army and Marine Corps. Congress began reversing those increases in light of the withdrawal of U.S. forces from Iraq in 2011, the drawdown of U.S. forces in Afghanistan beginning in 2012, and budgetary constraints. In FY2017, Congress halted further reductions in Army and Marine Corps end-strength and provided a slight end-strength increase. End-strength for the Air Force generally declined from 2004-2015, but increased in 2016 and 2017. End-strength for the Navy declined from 2002-2012, increased in 2013, and has remained essentially stable since then. Authorized end-strengths for FY2017 and proposed end-strengths for FY2018 are in Figure 1 . Discussion: In comparison to FY2017 authorized end-strengths, the Administration's FY2018 budget proposed no change for the Army and Marine Corps, slightly higher end-strength for the Navy (+1,400) and a more substantial increase for the Air Force (+4,000). The final bill approved end-strengths higher than the Administration request by 7,500 for the Army and 1,000 for the Marine Corps. Approved end-strengths for the Navy and Air Force were identical to the Administration's request. Section 402 of the House bill would adjust the minimum end-strengths required by 10 U.S.C. Section 619 to a level equal to the authorized end-strengths set in Section 401. References: Previously discussed in CRS Report R44577, FY2017 National Defense Authorization Act: Selected Military Personnel Issues , by [author name scrubbed] et al., and similar reports from earlier years. CRS Point of Contact: [author name scrubbed], x[phone number scrubbed]. Background: The overall authorized end-strength of the Selected Reserves has declined by about 6% over the past 16 years (874,664 in FY2001 versus 820,200 in FY2017). Much of this can be attributed to the reductions in Navy Reserve strength during this period. There were also modest shifts in strength for some other components of the Selected Reserve. Authorized end-strengths for FY2017 and proposed end-strengths for FY2018 are in Figure 2 . Discussion: Relative to FY2017 authorized end-strengths, the Administration's FY2018 budget proposed increases for the Navy Reserve (+1,000 compared to FY2017 authorized), Air Force Reserve (+800), and Air National Guard (+900); and no change for the Marine Corps Reserve, Army National Guard, and Army Reserve. The final bill approved end-strengths identical to the Administration's request for all the reserve components except for the Army Reserve and Army National Guard. In comparison to the Administration's request, the final bill approved an extra 500 personnel for both the Army National Guard and Army Reserve. References: Previously discussed in CRS Report R44577, FY2017 National Defense Authorization Act: Selected Military Personnel Issues , by [author name scrubbed] et al., and similar reports from earlier years. CRS Point of Contact: [author name scrubbed], x[phone number scrubbed]. Background: Concerns with the overall cost of military personnel, combined with long-standing congressional interest in recruiting and retaining high-quality personnel to serve in the all-volunteer military, have continued to focus interest on the military pay raise. Section 1009 of Title 37 United States Code provides a permanent formula for an automatic annual increase in basic pay that is indexed to the annual increase in the Employment Cost Index (ECI). The statutory formula stipulates that the increase in basic pay for 2018 will be 2.4% unless either (1) Congress passes a law to provide otherwise; or (2) the President specifies an alternative pay adjustment under subsection (e) of 37 U.S.C. Section 1009. Increases in basic pay are typically effective at the start of the calendar year, rather than the fiscal year. The FY2018 President's Budget requested a 2.1% military pay raise, lower than the statutory formula of 2.4%. Discussion: The final bill requires the statutory formula go into effect, resulting in a 2.4% pay raise for all servicemembers effective on January 1, 2018. Section 604 of the Senate bill, which would have modified the language allowing the President to make an alternative pay adjustment, was not adopted. Reference(s): For an explanation of the pay raise process and historical increases, see CRS In Focus IF10260, Defense Primer: Military Pay Raise , by [author name scrubbed]. Previously discussed in CRS Report R44577, FY2017 National Defense Authorization Act: Selected Military Personnel Issues , by [author name scrubbed] et al., and similar reports from earlier years. CRS Point of Contact: [author name scrubbed], x[phone number scrubbed]. Background: Under current law, all servicemembers are entitled to either government-provided housing or a housing allowance. For those living in the United States, the housing allowance is known as Basic Allowance for Housing (BAH). Some servicemembers entitled to BAH live on military bases in housing that has been privatized. During the mid-1990s, Congress granted DOD a number of special authorities to enable the department to provide incentives for private firms to partner with DOD to improve the quality of housing available to servicemembers living on military installations. Since then, the Military Housing Privatization Initiative (MHPI) has enabled DOD to rely on private sector financing, expertise, and innovation for the construction and operation of housing for both families and individual servicemembers. The FY2015 NDAA allowed the Secretary of Defense to reduce BAH payments by 1% of the national average monthly housing cost. The FY2016 National Defense Authorization Act extended this authority, authorizing an additional 1% reduction per year through 2019, for a maximum reduction of 5% of the national monthly average housing cost. Discussion: The amount of money paid to the companies that operate privatized housing is tied to the Basic Allowance for Housing (BAH) rates for the individual occupying the housing. As these payments may constitute a significant source of revenue for firms owning and operating privatized military housing, reductions in BAH could lower those firms' revenues. The final bill requires the Secretary of Defense to pay an amount equal to the 2018 BAH reduction throughout 2018 to the lessors of MHPI housing, effectively offsetting the reduction for that year. The final bill would also require the Comptroller General to provide to the House and Senate Armed Services Committees a report on several aspects of MHPI. Reference: CRS Report RL33446, Military Pay: Key Questions and Answers , by [author name scrubbed] and [author name scrubbed]. CRS Point of Contact: [author name scrubbed], x[phone number scrubbed]. Background: Over the past few years, Congress has been concerned with improving the Defense Commissary Agency (DeCA) system, mandating several studies and reports on the topic. Recent reform proposals have sought to reduce DeCA's reliance on appropriated funds without compromising patrons' commissary benefits or the revenue generated by DOD's nonappropriated fund (NAF) entities. However, Congress has stopped short of major changes that would significantly reduce or eliminate the commissary subsidy. DeCA's Board of Directors establishes a desired average savings rate over commercial providers. A March 2017 GAO report found that DOD "lacks reasonable assurance that it is maintaining its desired savings rate for commissary patrons." This GAO report recommends that DOD address limitations identified in its savings rate methodology; develop a plan with objectives, goals, and time frames to improve efficiency in product management; and conduct comprehensive cost-benefit analyses for service contracts and distribution options. DOD concurred with the first two recommendations and partially concurred with the third, stating that "authorizing legislation is required." In the FY2017 NDAA, Congress authorized $1.2 billion in commissary funding. Discussion : Section 632 of the House bill would have required DOD to submit a report regarding management practices of military commissaries and exchanges no later than 180 days after enactment of the NDAA. The report would require a cost/benefit analysis with the joint goals of reducing operating costs of military commissaries and exchanges by $2 billion over FY2018-FY2022 and not raising patron costs. Section 5602 of the Senate-passed version would have required a similar report. Neither of these provisions was adopted. The conferees referred to previous reports required by the FY2015 and FY2016 NDAA and noted that "there is little additional benefit to be gained by requiring the Department to submit another report assessing methods of achieving cost savings in the commissary and military exchange systems." The President's FY2018 budget request for $1.39 billion included funding for DeCA to operate 240 commissary stores on military installations worldwide and employ a workforce of over 14,000 civilian full-time equivalent employees. H.R. 2810 , the House bill, would have authorized $1.34 billion for DeCA's commissary operations for FY2018. This is $45 million less than the Administration's proposal with reductions in civilian personnel compensation and benefits ($20 million) and commissary operations ($25 million). In the report to accompany S. 1519 ( S.Rept. 115-125 ), the Senate would have authorized $1.3 billion for DeCA in FY2018. Section 4501 authorizes the President's FY2018 budget request of $1.39 billion for commissary operations. Section 4601, military construction, authorizes $40 million for the construction of a new commissary in Stuttgart, Germany. Section 5601 of the Senate-passed bill would have required a report on use of second-destination transportation (SDT) to transport fresh fruit and vegetables to commissaries in the Asia-Pacific region no later than January 1, 2018. This provision was not adopted. References: CRS Report R44577, FY2017 National Defense Authorization Act: Selected Military Personnel Issues , by [author name scrubbed] et al.; CRS Report R44120, FY2016 National Defense Authorization Act: Selected Military Personnel Issues , coordinated by [author name scrubbed]; and CRS Report R43647, FY2015 National Defense Authorization Act: Selected Military Personnel Issues , coordinated by [author name scrubbed]. CRS Point of Contact : [author name scrubbed], x[phone number scrubbed]. Background : Under the Survivor Benefit Plan (SBP), a military retiree may have a portion of his or her monthly retired pay withheld in order to provide, after his or her death, a monthly benefit to a surviving spouse or other eligible recipients. When an active duty servicemember dies, his or her survivor's payment through the SBP is usually 55% of the retired base pay that the member would otherwise have been eligible to receive. By law, surviving spouses who receive both an annuity from DOD as a beneficiary of the SBP and from the Department of Veterans Affairs' Dependency and Indemnity Compensation (DIC) must have their SBP payments reduced by the amount of DIC. Congress first authorized a payment to such surviving spouses to offset that reduction in the FY2008 NDAA. This benefit is called the Special Survivor Indemnity Allowance (SSIA). Monthly SSIA payments are currently $310 and are taxable. Section 646 of the FY2017 NDAA extended the payment of SSIA until May 31, 2018. Discussion: Section 621 of the House-passed bill would have expressed the sense of Congress that the SSIA was created as a "stop gap" measure to assist widowed spouses by reducing the SBP/DIC offset required by law. This section also stated that the dollar-for-dollar reduction in payment to surviving spouses should be fully repealed at the first opportunity. Section 638 of the Senate-passed version was adopted by the conferees. This provision amends 10 U.S.C. Section 1450 to permanently extend the authority to pay the SSIA and would require inflation adjustments to that allowance by the amount of the military retired pay cost-of-living adjustment for each calendar year beginning in 2019. Section 622 of the final bill adopts Senate Section 631 and modifies Sections 1447 and 1452 of Title 10, United States Code, to ensure equitable treatment under the SBP of members of the uniformed services covered by the modernized retirement system who elect to receive a lump sum of retired pay, as authorized under 10 U.S.C. SS1415. References: CRS Report R44577, FY2017 National Defense Authorization Act: Selected Military Personnel Issues , by [author name scrubbed] et al., FY2017 National Defense Authorization Act: Selected Military Personnel Issues; CRS Report R40757, Veterans' Benefits: Dependency and Indemnity Compensation (DIC) for Survivors , by [author name scrubbed]; CRS Report RL34751, Military Retirement: Background and Recent Developments , by [author name scrubbed]; and CRS Report R40589, Concurrent Receipt: Background and Issues for Congress , by [author name scrubbed]. CRS Point of Contact : [author name scrubbed], x[phone number scrubbed] Background: In the past few decades, Congress has enacted legislation and appropriated funds for servicemember off-duty education (tuition assistance), credentialing programs, and transition services to support servicemembers and veterans in translating military skills and experience into post-service education and employment opportunities. Three DOD programs of note are the Transition Assistance Program (TAP); the Credentialing Opportunities Online (COOL); and the DOD Skillbridge program, which is also known as the Job Training, Employment Skills Training, Apprenticeships, and Internships (JTEST-AI) program. Discussion : The TAP curriculum culminates in a one-week course in the months immediately preceding a member's separation, retirement, or release from active duty. Congress has required that certain information be provided and specific topics covered in the associated preseparation counseling. Provisions in the final bill (Sections 528 and 541) expand some of these statutory requirements. Not adopted were provisions that would have required a review of TAP to ensure that it is meeting the needs of female servicemembers, an annual report to Congress on the participation of members of the Armed Forces in TAP, and a report on possible ways to improve the handoff between DOD and the VA during servicemember transition. Also not adopted was Section 546 of the Senate bill that would have established a two-year pilot program to integrate and coordinate the various components of DOD's education, transition, and credentialing programs with state and local programs and agencies. Conferees noted that the military services have partnered closely with state and local communities to implement programs to help servicemembers gain post-military employment. The conferees are aware of several model re-employment initiatives in states such as Florida and Arizona. Therefore, the conferees encourage the Department of Defense to replicate these model programs in other states.... In terms of licensing and credentialing, the final bill contains a provision (SS542) that seeks to improve the "accuracy and completeness" of employment skills verification and certification for members transitioning out of the military and seeking civilian employment. It requires DOD to establish a database to record all training relevant to civilian employment for the armed services and to make verifiable information available to states and potential employers. Section 616 of the House bill would have authorized DOD and DHS to reimburse a servicemember up to $500 for relicensing costs upon separation from the service and would also require the Secretaries to work with states on improving portability of licenses between states. This provision was not adopted; however, the conference report called for GAO to "assess the panoply of benefits and programs available government-wide to separating servicemembers" and to provide a report to Congress by October 1, 2018. The United Services Military Apprenticeship Program (USMAP) allows eligible servicemembers to complete civilian apprenticeships while on active duty and earn a nationally recognized "Certificate of Completion" from the Department of Labor. Program eligibility has been limited to the Coast Guard, Marine Corps, and Navy. Section 546 of the final bill expands program eligibility to all uniformed servicemembers at the Secretary of Defense's discretion. Not adopted was a Senate provision (SS14003) that would seek to broaden job training opportunities through DOD's Skillbridge program by authorizing federal agencies to participate in the program as employers and trainers. However, the conferees "strongly urge the Secretary, in consultation with the Director, OPM, to take such actions as are necessary to encourage and enable other Federal agencies to participate in the SkillBridge program." Finally, not adopted was Section 549 of the Senate bill that would have required the Secretary of Defense to brief House Armed Services Committee and Senate Armed Services Committee on the feasibility and advisability of enacting into law authority to use tuition assistance program funds for "courses or programs of education in cybersecurity skills or related skills and computer coding skills or related skills." Currently tuition assistance funds can be used for a variety of undergraduate, graduate, vocational/technical, or certificate programs. References : CRS In Focus IF10347, Military Transition Assistance Program (TAP): An Overview , by [author name scrubbed], and CRS Report R42790, Employment for Veterans: Trends and Programs , coordinated by [author name scrubbed]. CRS Point of Contact : [author name scrubbed], x[phone number scrubbed]. Background: Over the past decade, the issues of sexual assault and sexual harassment in the military have generated a good deal of congressional and media attention. In 2005, DOD issued its first department-wide sexual assault policies and procedures. These policy documents built on recommendations from the Joint Task Force for Sexual Assault Prevention and Response and on congressional requirements specified in the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005 ( P.L. 108-375 ). In the same year, the Sexual Assault Prevention and Response Office (SAPRO) was established as a permanent office serving as DOD's primary oversight body for all service-level programs. Sexual harassment policy and oversight is handled by DOD's Office of Diversity and Military Equal Opportunity. Between 2012 and 2017, DOD took a number of steps to implement its own strategic initiatives as well as dozens of congressionally mandated actions related to sexual assault prevention and response, victim services, reporting and accountability, and military justice. In FY2016, estimated sexual assault prevalence rates across the DOD's active-duty population were 4.3% for women and 0.6% for men. These estimated prevalence rates were slightly lower than reported prevalence rates in 2014 (4.9% and 0.9%, respectively). Discussion : DOD is required to produce an annual report for Congress on sex-related offenses. The final version of the bill adds additional reporting requirements including incidents of nonconsensual distribution of private sexual images (SS537) and family-member sexual assault (SS538). A House provision that would have defined "sexual coercion" for the purpose of annual reporting was not adopted. Also not adopted was House Section 532 requiring additional reviews of SAPR programs for the Army National Guard and Reserve components, with a focus on monitoring timeliness of line-of-duty determinations and investigation processing. The conferees instead directed DOD to provide a briefing to the armed services committees on the implementation of the Government Accountability Office's recommendations in the February 2017 GAO report, Sexual Assault: Better Resource Management Needed to Improve Prevention and Response in the Army National Guard and Army Reserve . Congress has raised concerns about the character of discharge for certain veterans who experienced sexual trauma while serving in the military. Psychological trauma following a sexual assault incident has been associated with negative behavioral changes in the victim such as increased drug or alcohol use, poor work performance, or other disciplinary issues. These behaviors may affect the nature of a victim's discharge from the Armed Forces. Discharges that are not under "honorable" conditions may prevent servicemembers from being eligible for certain veterans' benefits. Under certain circumstances, servicemembers may appeal these decisions through Discharge Review Boards or Boards of Correction for Military Records. Section 521 of the final bill requires DOD to provide publicly available statistics on applications to these boards from those who have alleged a relationship between sex-related offenses and the nature of their discharge. In addition, Section 522 of the final bill codifies and expands existing requirements that the services establish processes through which alleged sexual assault survivors may challenge the terms of characterization of discharge or separation. Sexual assault prevention and response training is required by law for all new accessions within 14 duty days after initial entrance on active duty or into a duty status with a reserve component. Section 535 of the final bill requires service secretaries to provide this training to enlistees in a delayed entry program prior to beginning basic training or initial active duty for training. Concerns about male victims of sexual assault prompted the House in 2012 to call for a review of DOD's policies and protocols for the provision of medical and mental health care for male servicemembers. In a 2015 report, the GAO noted a number of areas where actions were needed to specifically address support for male victims of sexual assault. In response to this report, DOD has initiated gender-specific treatment: for example, male-only therapy groups and enhanced medical staff training on responding to and treating male victims. Section 536 of the final bill adopts a House provision which requires additional training for special victims' counsels on male-specific challenges for victims of sex-related offenses. In March 2017, the Senate Armed Services Committee held hearings in response to allegations of online sexual harassment and nonconsensual sharing of intimate images and sexually explicit photos by servicemembers on the Marines United website. In the hearing, senior Navy and Marine Corps officials noted that perpetrators could potentially be held accountable for these actions under Articles 92 (failure to obey an order or regulation), 120 (rape and sexual assault), and/or 134 (good order and discipline) of the Uniform Code of Military Justice (UCMJ). However, General Robert B. Neller, Commandant of the Marine Corps, noted that a more explicit UCMJ provision might assist commanders in holding perpetrators accountable. The conference report includes a provision (SS533) that adds a punitive article to the UCMJ prohibiting the "wrongful broadcast or distribution of intimate visual images" (Article 117a, 10 U.S.C. SS917a). A provision in the Senate bill (SS521) that would also have amended the Manual for Courts-Martial for activities related to the nonconsensual dissemination of intimate images and sexually explicit conduct was not adopted. Other potential changes to judicial process that were not adopted included a House provision (SS524) that would create an o pen discovery rule. The Administration has expressed concern about this provision, stating, The Administration shares Congress' goal of preventing sexual assault in the military and holding accountable those who commit the offense. Although the Administration is sympathetic to the motivation behind Section 524, affording victim's counsel with open file discovery may have the unintended consequence of impairing the successful prosecution of cases by creating additional opportunities for the defense to challenge the victim's testimony." Although the provision was not adopted, the conferees encouraged "the President to include a provision in the Rules for Courts-Martial establishing that Special Victims' Counsel and Victims' Legal Counsel are entitled to nonprivileged case information and documentation relevant to the crimes committed against their clients." References : See also CRS Report R44944, Military Sexual Assault: A Framework for Congressional Oversight , by [author name scrubbed] and [author name scrubbed], CRS Report R43168, Military Sexual Assault: Chronology of Activity in Congress and Related Resources , by [author name scrubbed]; CRS Report R43213, Sexual Assaults Under the Uniform Code of Military Justice (UCMJ): Selected Legislative Proposals , by [author name scrubbed]. CRS Report R43928, Veterans' Benefits: The Impact of Military Discharges on Basic Eligibility , by [author name scrubbed] and [author name scrubbed]. Previously discussed in CRS Report R44577, FY2017 National Defense Authorization Act: Selected Military Personnel Issues , by [author name scrubbed] et al., and similar reports from earlier years. CRS Point of Contact : [author name scrubbed], x[phone number scrubbed]. DOD's child development program (CDP) is a military family-oriented initiative and part of a broader range of community and family support programs. The CDP delivers subsidized childcare services from birth to 12 years of age for eligible children of military personnel and certain civilian employees. About 160,000 military children receive some form of care through the CDP worldwide. The CDP includes Child Development Center (CDC) facilities that are operated on military installations and are funded by a combination of appropriated and nonappropriated funds, meaning that they are partially a fee-generating activity. By statute the amount of appropriated funds used to operate CDC cannot be less than the estimated amount of child care fee receipts. Section 558 of the final bill would require DOD to set and maintain the hours of operation of childcare development centers in a manner that considers the "demands and circumstances" of military service. In addition, this would require service secretaries to provide childcare coordinators at each military installation where significant numbers of servicemembers with accompanying dependent children are stationed. Section 575 adopts Section 558 of the Senate bill requiring the Secretary of Defense to report by September 1, 2018, on the feasibility and advisability of (1) expanding the operating hours of childcare facilities; (2) contracting with private-sector providers to expand the availability of childcare services; (3) contracting with private-sector childcare service providers to operate DOD facilities; and (4) expanding such services to members of the National Guard and Reserves if such expansion does not substantially increase costs of childcare services for the military departments or conflict with others who have higher priority for space in childcare services programs. Section 559 of the final bill would provide the Secretary of Defense with direct hire authority to recruit and appoint qualified childcare services providers to positions within DOD CDCs if the Secretary determines that (1) there is a critical hiring need, and (2) there is a shortage of providers. The Secretary would prescribe the regulations required and commence implementation of such direct hire authority no later than May 1, 2018. Section 576 of the final bill adopts Senate Section 559, which would require a review of the General Schedule pay grades for DOD childcare services provider positions to ensure that, in the words of the Senate committee report, "the department is offering a fair and competitive wage" for those positions. CRS Point of Contact : [author name scrubbed], x[phone number scrubbed]. There are three military service academies within DOD: the U.S. Military Academy (USMA), West Point, NY; the U.S. Naval Academy (USNA), Annapolis, MD; and the U.S. Air Force Academy (USAFA), Colorado Springs, CO. These are four-year bachelor degree-granting institutions. Cadets (USAFA and USMA) and midshipmen (USNA) receive free tuition, room and board, and a monthly stipend while enrolled. In addition to degree requirements, they also are required to participate in professional development activities throughout the academic year and in summer training periods. Qualified graduates are offered an appointment as a commissioned officer in the Army, Air Force, Navy, or Marine Corps, and are generally required to complete at least a five-year active duty commitment. The law allows for part or all of the commitment to be completed in the Reserve component. DOD policy prior to 2016 allowed for certain cadets and midshipmen to have their active service commitment reduced, stating Officers appointed from cadet or midshipman status will not be voluntarily released from active duty principally to pursue a professional sports activity with the potential of public affairs or recruiting benefit to the DoD during the initial 2 years of active commissioned service. A waiver to release a cadet or midshipman prior to the completion of 2 years of active service must be approved by the ASD(M&RA). Exceptional personnel with unique talents and abilities may be authorized excess leave or be released from active duty and transferred to the Selective Reserve after completing 2 years of active commissioned service when there is a strong expectation their professional sports activity will provide the DoD with significant favorable media exposure likely to enhance national recruiting or public affairs. In May 2016, then-Secretary of Defense Ashton Carter announced at the Naval Academy Commencement that he had authorized a deferment of active duty commitment for certain cadets or midshipmen who were recruited directly into professional sports. On April 29, 2017, Secretary of Defense James Mattis released a memorandum to the Secretaries of the Military Departments canceling Carter's guidance and reinstating the pre-2016 policy (DODI 1322.22) that required at least two years of active service. House Section 541 would have codified a requirement that graduates fulfill their active service commitments without exception before release to participate in professional sports (i.e., five years of active duty without early release to the Selective Reserve). Section 543 of the Senate bill would have allowed graduates selected to participate in professional athletics to accept an appointment as an officer in the Selected Reserve for the entirety of the five-year service obligation. The Administration "strongly objects" to Section 543 of the Senate bill, stating, "following graduation from a military service academy, individuals should serve as full-fledged military officers, carrying out the normal work and career expectations of an officer who has received the extraordinary benefits of a taxpayer-funded military academy education." The final bill would codify a requirement that service academy graduates complete at least two consecutive years of commissioned service prior to pursuing a career as a professional athlete. References : CRS Report RL33213, Congressional Nominations to U.S. Service Academies: An Overview and Resources for Outreach and Management , by [author name scrubbed] and [author name scrubbed]. CRS Point of Contact : [author name scrubbed], x[phone number scrubbed].

Military personnel issues typically generate significant interest from many Members of Congress and their staffs. This report provides a brief synopsis of selected sections in the National Defense Authorization Act for FY2018 (H.R. 2810), as passed by the House on July 14, 2017, and the Senate on September 18, 2017. The FY2018 NDAA conference report was passed by the House on November 14, 2017, and the Senate on November 16, 2017. On December 12, President Donald J. Trump signed the bill into law (P.L. 115-91). Issues include military end-strengths, pay and benefits, and other personnel policy issues. This report focuses exclusively on the NDAA legislative process. It does not include language concerning appropriations, or tax implications of policy choices, topics that are addressed in other CRS products. Issues that have been discussed in the previous year's defense personnel reports are designated with an asterisk in the relevant section titles of this report.

Nicaragua is a Central American nation bordering both the Caribbean sea and the Pacific ocean between Costa Rica and Honduras. Slightly smaller than the state of New York, Nicaragua has a population of roughly 5.4 million. With a per capita income level of $1,000 (2006), Nicaragua is classified by the World Bank as a lower middle income developing country. Nicaragua is still largely an agricultural country, but its non-traditional exports (textiles, tobacco products, vegetables, gold) have expanded rapidly in the last few years. Nicaragua's key development challenge is to boost growth rates to a level that can reduce poverty, which is especially severe in rural areas. Nicaragua has had a conflicted and anti-democratic past, dominated from 1936 until 1979 by the Somoza dictatorship. Anastasio Somoza and his two sons who succeeded him, though corrupt and authoritarian, were staunch anti-communists who maintained good relations with the United States. In 1979, the Somoza government was toppled by a revolution led by the Sandinista National Liberation Front (FSLN), a leftist guerrilla group that had opposed the regime since the early 1960s. That revolution resulted in the loss of some 50,000 lives. During the 1980s, Nicaragua was embroiled in a decade-long struggle between its leftist Sandinista government, which confiscated private property and maintained ties with rebel forces in neighboring El Salvador, and U.S.-backed counter-revolutionary forces. Since democratic elections were held in 1990, Nicaragua has adopted pro-market economic reforms, held free and fair elections, and worked toward building democratic institutions. Despite progress on those fronts, successive governments have made limited inroads in combating corruption and addressing the country's high levels of poverty and inequality. On January 10, 2007, Sandinista leader and former President Daniel Ortega was inaugurated to a five-year presidential term. Ortega's previous presidency (1985-1991) was marked by a civil conflict pitting the government against U.S.-backed "contras." Ortega, who had lost the last three presidential elections, won only 37.9% of the vote in the November 2006 elections, but Nicaraguan law allowed him to avoid a run-off vote since he was more than 5% ahead of the next closest candidate, Eduardo Montealegre, then head of the Nicaraguan Liberal Alliance (ALN). Ongoing disputes between powerful leaders, endemic corruption, and weak institutions have undermined the consolidation of democracy in Nicaragua. The 2006 elections followed more than a year of political tensions among then-President Enrique Bolanos, Ortega and the leftist Sandinista party, and allies of rightist former President Arnoldo Aleman. Aleman and Ortega, once longtime political foes, negotiated a power-sharing pact ("El Pacto") in 1998 that has since influenced national politics. In addition to a tendency to have caudillos like Ortega and Aleman dominate national politics, Nicaragua is known to have high levels of corruption. According to Transparency International's 2007 Corruption Perception Index, Nicaragua is one of ten Latin American countries where corruption is perceived as rampant. Currently, some opposition leaders are urging the Ortega government to publicly disclose how it is using the aid Nicaragua receives from Venezuela, including funds earned through the re-sale of Venezuelan oil bought on preferential terms through PetroCaribe. They are concerned that the president of Nicaragua's state-owned oil company, which distributes the Venezuelan oil, is also the treasurer of the Sandinista party. Finally, the politicization of government entities, including party influence over the judiciary, is an obstacle to governance in Nicaragua. Since no single party won an outright majority in Nicaragua's 90-member National Assembly in the November 2006 legislative elections, President Ortega and the Sandinistas (FSLN) must form alliances in order to enact legislation The FSLN has generally relied on an informal alliance with the Constitutionalist Liberal Party (PLC), dominated by jailed former President Aleman, to pass legislation. In December 2007, however, the PLC broke with the Ortega government by voting against its plan to increase the power of the country's Citizen Power Councils (CPCs), which are funded by the executive branch, over the existing municipal authorities. The PLC has since aligned with Eduardo Montealegre, who, until recently was head of the ALN, to contest the ruling FSLN and its allies in the November 2008 municipal elections. Those elections will test the strength of the FSLN, which currently holds 87 of the country's 153 municipalities. In 2008, the Ortega government faces the challenges of boosting the country's moderate growth rates (GDP growth was 2.9% in 2007) and reducing poverty. According to the World Bank, although overall poverty has declined in Nicaragua since the country's return to democracy (from 50.3% in 1993 to roughly 46% today), more than two-thirds of the rural population is impoverished. While Nicaragua made some progress towards development in the 1990s, much of those gains were reversed by the devastation wrought by Hurricane Mitch in 1998. As a result of sluggish growth rates, some social indicators for Nicaragua have shown little or no improvement since 1993. Nicaragua is highly dependent on foreign aid, which contributed 26% of its budget in 2006. It is also dependent on remittances sent from Nicaraguans living abroad, which totaled some $656 million in 2006 and accounted for 17% of the country's GDP. The official unemployment rate is about 5%, but underemployment is a major problem and some 60% of workers are employed in the informal sector, which doesn't provide social security and other benefits. The Ortega government has adopted a poverty reduction strategy and a 2008 budget in line with International Monetary Fund (IMF) recommendations. As a result, the IMF and the World Bank have cancelled roughly $200 million and $1.5 billion respectively in foreign debt owed by Nicaragua. President Ortega is expected to announce a development plan by mid-2008 that is likely to emphasize sustainable agro-industrial development. Obstacles to Nicaragua's growth prospects in 2008 will be the rising price of oil and the economic slowdown in the United States, which could affect trade and remittance flows. Some economists have also warned that if Ortega should engage in an increasingly radical or authoritarian manner, foreign investment in Nicaragua could decline. President Ortega is working with the United States and the IMF to boost the country's long-term prospects for economic development, but is also seeking aid from Iran and Venezuela to meet more immediate needs. Iran has pledged to invest in Nicaragua's ports, agricultural sector, and energy network, with Venezuela co-financing many infrastructure projects. Venezuela has promised to build a $3.5 billion oil refinery and to provide up to 10 million barrels of oil at preferential prices annually through the PetroCaribe program. Ortega shares an ideological affinity with President Hugo Chavez of Venezuela and the other countries comprising the Bolivarian Alternative for the Americas (ALBA) trade block (Cuba and Bolivia). President Ortega generally maintains good relations with neighboring countries in Central America, but his government has been embroiled in a serious border dispute with Colombia. In December 2007, the International Court of Justice (ICJ) upheld Colombia's sovereignty over the islands of San Andres and Providencia, but the ICJ is still determining the official maritime boundaries between the two countries. Despite initial concerns about the impact of Ortega's November 2006 re-election on U.S.-Nicaraguan relations, the bilateral relationship, though tense at times, appears to be generally intact. One cause of tension has been President Ortega's tendency to vacillate between anti-U.S. rhetoric and reassurances that he will respect private property and pursue free-trade policies. In September 2007, Ortega denounced the United States in a speech before the United Nations as "the imperialist global empire." Rhetoric aside, Ortega's interest in cooperating with the United States has been reflected in his pledge to hand over 651 Soviet-made surface-to-air missiles in exchange for military and medical equipment. Ortega has continued cooperating with the IMF, which approved a new three-year poverty reduction package for Nicaragua in October 2007. His government is also implementing the CAFTA-DR. The United States provides significant foreign assistance to Nicaragua, and the two countries cooperate on counternarcotics, trade, and security matters. The United States responded to Hurricane Mitch in 1998 by granting Temporary Protected Status (TPS) to eligible Nicaraguan migrants living in the United States. In May 2007, the U.S. government extended the TPS of an estimated 4,000 eligible Nicaraguans through January 5, 2009. In response to Hurricane Felix, a category 5 hurricane that hit Nicaragua in September 2007, the United States provided hurricane assistance to Nicaragua to help with the recovery efforts. The United States provided Nicaragua with $50.2 million in foreign aid in FY2006 and $36.9 million in FY2007, while an estimated $28.6 million is being provided in FY2008. The Administration has also requested, but Congress has not yet considered, some $2 million in FY2008 supplemental assistance for Nicaragua as part of the Administration's Merida Initiative to boost the region's capabilities to interdict the smuggling of drugs, arms, and people, and to support a regional anti-gang strategy. For FY2009, the Administration has requested $38 million for Nicaragua, not including P.L. 480 food aid. Nicaragua could also receive roughly $6.7 million of the $100 million in Merida Initiative funds for Central America included in the FY2009 budget request. The FY2009 request includes increases in funds for security reform and combating transnational crime, democracy and civil society programs, and trade capacity building programs to help Nicaragua benefit from CAFTA-DR. In addition to traditional development assistance, Nicaragua benefits from its participation in the MCA, a presidential initiative that increases foreign assistance to countries below a certain income threshold that are pursuing policies to promote democracy, social development, and sustainable economic growth. In 2005, the Bush Administration signed a five-year, $175 million compact with Nicaragua to promote rural development. The compact, which entered into force in May 2006, includes three major projects in the northwestern regions of Leon and Chinandega. Those projects aim to promote investment by strengthening property rights, boost the competitiveness of farmers and other rural businesses by providing technical and market access assistance, and reduce transportation costs by improving road infrastructure. During a recent visit to Nicaragua, John Danilovich, director of the Millennium Challenge Corporation, asserted that, despite some political differences, he believes that the United States and Nicaragua can work together to combat poverty. U.S. democracy programs aim to reform government institutions to make them more transparent, accountable and professional; combat corruption; and promote the rule of law. The United States provided some $13 million to support the November 2006 elections in Nicaragua. Some 18,000 observers monitored the elections. Following the November 2008 municipal elections, USAID is expected to help increase the capacity and transparency of local governments. Other ongoing programs seek to increase citizen advocacy and the role of the media. U.S. officials have expressed some concerns regarding respect for human rights in Nicaragua. According to the State Department's March 2008 human rights report on Nicaragua, civilian authorities generally maintained effective control of security forces, but there were some reports of unlawful killings involving the police. Some of the most significant human rights abuses included harsh prison conditions, arbitrary arrests and detentions, and widespread corruption in and politicization of government entities, including the judiciary and the Supreme Electoral Council. Human rights problems related to labor issues include child labor and violation of worker rights in some free trade zones. In October 2007, Human Rights Watch asserted that Nicaragua's current ban on all abortions, which includes cases where the mother's life is at risk, has put pregnant women's health at risk. Nicaragua is a significant sea and land transshipment point for cocaine and heroin being shipped from South America to the United States, according to the State Department's February 2008 International Narcotics Control Strategy Report (INCSR). Trafficking occurs on both the country's Atlantic and Pacific coasts, with increasing trafficking occurring on the Pacific Coast since 2006. The INCSR report asserts that Nicaraguan law enforcement were "very successful" in their counternarcotics efforts in 2007. Seizures and arrests increased dramatically, with 153 kilograms of heroin and 13 metric tons of cocaine seized (compared to 23.4 kilograms of heroin and 9.72 metric tons of cocaine in 2006) and 192 traffickers arrested (up from 67). It also asserts that corruption, particularly within the judiciary, has been an obstacle to Nicaragua's counterdrug efforts. The Ortega Administration has asked the United States for more assistance to deal with drug gangs. The FY2009 budget request includes an increase in U.S. counternarcotics aid to Nicaragua. As noted above, other assistance could be provided through the proposed Merida Initiative. Nicaragua's National Assembly approved the CAFTA-DR in October 2005 and passed related intellectual property and other reforms in March 2006. The agreement went into effect in Nicaragua on April 1, 2006. Compared to other CAFTA-DR countries, Nicaragua has attracted textile and apparel investors because of its relatively low wage costs. In addition, Nicaragua is the only CAFTA-DR country allowed to export a certain amount of apparel products composed of third country fabric to the United States duty-free. Foreign Direct Investment (FDI) in Nicaragua totaled roughly $282 million in 2006, an 18.5% increase over 2005. In 2007, FDI rose again to some $335 million. CAFTA-DR has also helped to accelerate U.S.-Nicaraguan trade. In 2006, Nicaraguan exports to the United States totaled about $1.53 billion, up 29.2% from 2005. They rose again in 2007 to roughly $1.6 billion, with particularly strong growth in exports of apparel, sugar, coffee, cigars, cheese, and fruits and vegetables. For the same period, Nicaraguan imports from the United States rose 20.6% in 2006 to $752 million as compared to 2005, and by 18.5% in 2007 to $890 million. Key Nicaragua imports from the United States include machinery, grains, fuel oil, textile fabric, plastics, pharmaceuticals, and motor vehicles. Resolution of property claims by U.S. citizens has been a contentious issue in U.S.-Nicaraguan relations since the Sandinista regime expropriated property in the 1980s. The Nicaraguan government has gradually settled many claims through compensation, including the claims of 4,500 U.S. citizens. Fewer than 700 claims registered with the U.S. Embassy remain unresolved. The Ortega government's willingness to continue processing those claims was rewarded in July 2007 by the Administration's renewal of a waiver that allows Nicaragua to continue receiving U.S. foreign assistance despite the past expropriation of property owned by U.S. citizens.

Nicaragua, the second poorest country in Latin America after Haiti, has had a difficult path to democracy, characterized by ongoing struggles between rival caudillos (strongmen), generations of dictatorial rule, and civil war. Since 1990, Nicaragua has been developing democratic institutions and a framework for economic development. Nonetheless, the country remains extremely poor and its institutions are weak. Former revolutionary Sandinista leader, Daniel Ortega, was inaugurated to a new five-year presidential term in January 2007 and appears to be governing generally democratically and implementing market-friendly economic policies. The United States, though concerned about Ortega's ties to Venezuela and Iran and his authoritarian tendencies, has remained actively engaged with the Ortega Administration. The two countries are working together to implement the U.S.-Dominican Republic-Central America Free Trade Agreement (CAFTA-DR), control narcotics and crime, and promote economic development through the Millennium Challenge Account (MCA). Nicaragua is receiving some $28.6 million in U.S. assistance in FY2008 and could benefit from the proposed Merida Initiative for Mexico and Central America. This report may not be updated.

On January 21, 2011, the Department of Labor's (DOL's) Employment and Training Administration (ETA) published in the Federal Register a notice of solicitation for grant applications (SGA) for the TAA Community College and Career Training Grant (CCCT) Program. The notice of availability of funds and solicitation for grant applications set April 21, 2011, as the closing date for the receipt of applications. H.R. 1 , the Full-Year Continuing Appropriations Act, 2011 (sections 4106-4018), as passed by the House on February 19, 2011, would prohibit the DOL from using the annual appropriation to implement the mandatory FY2011 program funding appropriated in the Health Care and Education Reconciliation Act of 2010 ( P.L. 111-152 ) in FY2011. None of the funds that would be made available by H.R. 1 could be used to carry out the provisions of P.L. 111-152 or to pay an employee at the DOL to implement the relevant provisions of P.L. 111-152 . On August 18, 2009, the Department of Commerce's Economic Development Administration (EDA) published in the Federal Register final rules and regulations governing the implementation of the Trade Adjustment Assistance for Communities (CTAA) grant program. The regulations outline the responsibilities of EDA in administering the program including determining a community's eligibility for CTAA planning and implementation grants, providing technical assistance to impacted communities, and evaluating grant applications. On January 11, 2010, EDA published in the Federal Register a notice soliciting applications for CTAA grant assistance. The notice set April 20, 2010, as the deadline for the submission of applications for CTAA grants, established the criteria for awarding funds and directed potential applicants to the grants.gov website for the complete application. On September 20, 2010, DOC announced the awarding of $36.768 million in CTAA grant funds to 36 grant recipients. The CTAA grant program was created with the passage of the American Recovery and Reinvestment Act (ARRA) of 2009, P.L. 111-5 , as part of a larger effort by the Obama Administration and the 111 th Congress to address an economic recession that began in December 2007. Included among the subtitles of Division B of ARRA was the Trade and Globalization Adjustment Assistance Act (TGAAA) of 2009. TGAAA amends the Trade Act of 1974, extending and revising trade adjustment assistance provisions affecting various constituencies including trade-impacted workers, farmers, firms, and communities. Included among the amendments to the Trade Act were provisions reestablishing a Trade Adjustment Assistance for Communities (CTAA) grant program. The CTAA program, as authorized by ARRA, comprises four subchapters: Subchapter A establishes the CTAA programs within the Department of Commerce; Subchapter B creates the Community College and Career Training Grant program (CCCT); Subchapter C establishes Industry or Sector Partnership Grants program for Communities Impacted by Trade (ISP); and Subchapter D includes general provisions related to program implementation. The 2009 amendments to Chapter 4 of Title II of the Trade Act of 1974 directed the Department of Commerce (DOC) to establish a trade adjustment assistance program for communities by August 1, 2009. The act identified key components and processes of the CTAA program, including provisions governing the responsibilities of the DOC, eligible program activities, and cost sharing and reporting requirements. Within the DOC, the Economic Development Administration (EDA) was designated as the agency responsible for administering the new CTAA grant program. EDA was charged with: making affirmative determination of a community's eligibility for assistance; providing technical assistance to eligible communities; awarding strategic planning and project implementation grants to eligible communities; and establishing an Interagency Community Assistance Working Group responsible for coordinating federal assistance to trade-impacted communities. Regulations published in the Federal Register in August 2009 outlined the rules governing the definition of an affirmative determination of a community's eligibility for assistance. Specifically, a community could apply for CTAA if on or after August 1, 2009, it met one or more of the following certifications: 1. a Department of Labor certification that a group of workers in the community are eligible to apply for Trade Adjustment Assistance for Workers (TAAW); 2. a Department of Commerce certification that a firm or firms located within the community are eligible for Trade Adjustment Assistance for Firms (TAAF); or 3. a Department of Agriculture certification that a group of agricultural producers in the community are eligible for Trade Adjustment Assistance to Farmers (TAA-Fm.). In addition, EDA was required to determine if a community was or would be significantly affected by a threatened or expected or actual loss of jobs related to one of the certifications identified above. A community was allowed to submit an affirmative determination petition for designation as a community impacted by trade at least 180 days after the date of the most recent certification. The regulations also included a grandfather provision allowing communities that met one of the three affirmative certifications related to workers, firms, or farmers issued between January 1, 2007, and August 1, 2009, to submit a petition for CTAA designation. The deadline submission of the petition was February 1, 2010. Regulations governing the program required that the petition for an affirmative determination be submitted to the appropriate EDA regional office and include the following elements: sufficient information that would allow EDA to make a determination that the petitioning community was significantly affected by the threat or actual loss of jobs associated with certification as a trade-impacted community; and information about the adverse impacts on the community from the actual or threatened loss of jobs. The regulations directed EDA to use the petitioning community's most recent civilian labor force statistics when measuring such impacts. These data are available from the Department of Labor's Bureau of Labor Statistics. Upon making an affirmative determination that a community qualifies for CTAA assistance, program regulations require EDA to promptly notify the state's governor and officials of the trade-impacted community of the availability of CTAA funds and other appropriated economic development assistance. The notification also identified the appropriate EDA regional office responsible for providing CTAA technical assistance to the community. Upon EDA's determination that a community had been impacted by trade, program regulations directed EDA to provide comprehensive technical assistance to aid the community in developing or updating a strategic plan aimed at diversifying and strengthening the community's economy. In doing so, the community's strategic plan was required to identify trade-related impediments to economic developments and address economic adjustment and worker dislocation. EDA is responsible for the coordination of federal assistance to trade impacted communities, including identifying all federal, state, and local resources available to address economic distress and assisting a trade-impacted community gain access to other federal programs. To facilitate this assistance EDA was charged with establishing the Interagency Community Assistance Working Group (ICAWG) comprised of representatives from at least eight other federal agencies. One of the principle roles of the ICAWG is to provide access to other federal programs when the trade-impacted community undertakes implementation grant activities. Program regulations require that a community must have an EDA-approved strategic plan before it can receive CTAA implementation grant funds. In developing its strategic plan each community was directed to seek the involvement of both public and private sector entities, including local educational institutions; federal, state, and local government entities serving the community; labor organizations representing workers in the impacted community; businesses; and local workforce investment boards. Program regulations outline elements that EDA must consider when evaluating a community's strategic plan. These elements can be grouped into three broad categories that are intended to assess a community's needs and assets, long-term economic adjustment prospects and commitments, and cost of implementation. Elements EDA will evaluate when reviewing a community's strategic plan are outlined in Table 1 . Implementation grants are awarded by EDA to fund projects and programs included in a community's approved strategic plan. An implementation grant may not exceed $5 million and may not cover more than 95% of the cost of a project or program. EDA must give priority in awarding grants to small and medium size communities. Program regulations also require EDA to submit an annual report to Congress identifying grants awarded during the fiscal year and assessing the impact of the grant activity on the affected community. Program regulations identified six specific categories of eligible activities including infrastructure improvements, including site acquisition and preparation, construction, rehabilitation and equipping of a facility; market and industry research and analysis; technical assistance including feasibility studies, business networking and restructuring; public services; training; and other activities included in the strategic plan that satisfy statutory and regulatory requirements. Implementation grant applications must include a copy of the EDA-approved strategic plan and a description of the proposed project or program to be funded. In addition, EDA will consider additional evaluation criteria identified in the applicable Federal Funding Opportunity announcement (FFO) when selecting recipients of implementation grants. Applicants seeking assistance under Subchapter B (community college and career training grants) or Subchapter C (sector partnership grants) must include in its implementation grant application a discussion of how projects or programs funded with implementation grants will use these two programs and other federal grant assistance. The act authorized funding totaling $337.5 million for implementation and strategic planning grants for the period that includes FY2009, FY2010, and a 90 day period from October 1, 2010, to December 31, 2010 (see Table 2 of this report). For FY2009, Congress appropriated $40 million and directed that it be split between CTAA activities and Trade Adjustment Assistance for Firms (TAAF), which is also administered by the EDA. This was far less than the amount authorized. In addition, Congress did not provide instructions covering the distribution of funds between the two programs. When it approved the Consolidated Appropriations Act of 2010, P.L. 111-117 , Congress appropriated $15.8 million to be allocated between Trade Adjustment Assistance for Firms and Subchapter A (CTAA) activities. The Obama Administration's FY2012 budget requests a decrease of $15.8 million in previously appropriated (FY2010) CTAA funds. The Administration cites high administrative costs and notes that program results are less effective or impressive than those of other EDA programs. Further, the Administration states that: EDA plans to utilize its other programs--particularly its Economic Adjustment Assistance and 21 st Century Innovation Infrastructure Program to fund investments that maximize opportunities for regions to engage in global markets, increase export potential of regional firms, mitigate threats posed by TAA, and foster greater regional competitiveness. On January 11, 2010, EDA published in the Federal Register a notice announcing the solicitation of applications for $36.768 million in CTAA planning and implementation grants and directed potential applicants to the grants.gov website. The notice of Federal Funding Opportunity (FFO) established the criteria EDA will used in ranking and awarding grants grant applications. EDA will use six weighted criteria in evaluating grant applications. They are: The extent to which the proposed activities support small and medium sized communities which are defined as communities with populations less than 100,000 persons (20%). The extent the proposed investment is targeted to the most severely trade impacted communities as measured by the number of persons receiving Trade Adjustment Assistance for workers (20%). The extent that the proposed activities will result in a high return on investment as measured by jobs created or retained, private and public sector funds leveraged and the use of best practices in the management of the project (20%). The extent the proposed activities will support regionalism, innovation, and entrepreneurship through the implementation of regional cluster strategies and the adaptation of technology for commercial usage (20%). The extent that the project supports global trade and competitiveness by supporting companies that have significant export potential (15%). The extent that the funded activity will promote the green economy through the use of renewable energy, energy efficiency and green building technology(5%). The notice identified April 20, 2010, as the deadline for the submission of applications. EDA allocated the $36.768 million among its six regional offices based on each region's share of total workers receiving assistance under the TAA for Workers program and workers who were employed by firms served by the TAA Firms program. The distribution among the six regions was as follows: Atlanta Regional Office - $8,861,419; Austin Regional Office--$3,263,046; Chicago Regional Office--$11,315,607; Denver Regional Office--$2,683,432; Philadelphia Regional Office--$6,588,807; Seattle Regional Office--$4,055,689. The FFO limited funds for strategic planning activities to no more than $25 million and limited grant awards to a single community to no more than $5 million. Based on historical experience in administering its Economic Adjustment Assistance Program, EDA estimated that grants for strategic planning activities would be between $75,000 and $200,000 while implementation awards would range between $700,000 and $3.5 million. Between August 3, 2010, and September 20, 2010, DOC announced the awarding of $36.768 million in CTAA grant funds to 36 entities. Of the total amount awarded, approximately $23 million was awarded for infrastructure improvements in support of industrial and business parks. activities. Funding to construct incubators and innovation centers was the second most funded activities. Grants supporting the development or enhancement of strategic plans accounted for $2.388 million of the amount allocated. Funded projects are expected to create 6,500 jobs and retain approximately 1,500 existing private sector jobs. grant recipients. Subchapter B directs the Department of Labor (DOL) to award competitive grants to institutions of higher education (IHEs) for use in developing, offering, or improving educational or career training programs for persons eligible for Trade Adjustment Assistance for Workers (TAAW). The act limits the number and amount of grant funds an eligible institution may receive to not more than one grant of no more than $1 million. Accredited public and private IHEs, including private for-profit (proprietary) IHEs, that are located in the 50 states, the District of Columbia, and Puerto Rico and that offer two-year or less-than-two-year programs of education are eligible to apply for funds individually or in consortia. Potential applicants may seek technical assistance from DOL in preparing their application. The act requires that each CCCT grant application include: a description of the proposed project, including the manner in which the grant will be used to develop, offer, or improve an educational or career training program that is suited to persons eligible for TAAW; the extent to which the proposed project will meet the educational or career training needs of persons eligible for TAAW in the community served by the IHE; the extent to which the proposed project fits within the community's EDA-approved strategic plan; the extent to which the project for which the grant proposal is submitted relates to any project funded by a Sector Partnership Grant; a description of the IHE's previous experience in providing educational or career training programs to persons eligible for TAAW, although a lack of experience does not disqualify an IHE; a description of the extent and outcome of the applicant's compliance with the program's required outreach activities to local educational and training providers, government agencies, local workforce investment boards, labor organizations, and at least one employer to identify the required job skills of future employment opportunities within the community and the gaps in existing educational and training programs; the extent to which the proposed project will provide the required job skills or fill the identified gaps in existing educational and training programs; a description of the extent and the outcome of the applicant's compliance with the program's required outreach activities to similar IHEs to learn best practices for providing educational or training programs to persons eligible for TAAW; a description of the extent and outcome of the applicant's compliance with the program's required outreach activities to community partnerships that have sought or received a Sector Partnership Grant in an effort to enhance the project effectiveness and avoid duplication of efforts; and the extent to which employers have demonstrated a commitment to employing workers who have participated in the proposed project. Funds are awarded based on three factors. The first factor is the merits of the proposal to develop, offer, or improve educational or career training programs to persons eligible for TAAW. The second factor is an evaluation of the likely employment opportunities made available by the proposal. The final factor is an evaluation of prior demand for training programs by persons eligible for TAAW in the community and the availability and capacity of existing training programs to meet future demand. Priority is given to applicants that serve communities, which have been eligible for CTAA within the preceding five years. The act limits the number and amount of grant funds that an eligible institution may receive to not more than one grant of no more than $1 million; however, these limitations are not applicable for the mandatory appropriations for FY2011 through FY2014. In each state, the aggregate amount awarded to IHEs and consortia must equal or exceed 0.5% of the total mandatory appropriations each year from FY2011 through FY2014. The TGAAA authorizes funding totaling $90 million in grant assistance for the period covering FY2009, FY2010, and October 1, 2010, to December 31, 2010 (see Table 1 ). Appropriated funds remain available until expended. The TGAAA prohibits grants from being used to meet the matching fund requirement of other federal grant programs. On March 30, 2010, the President signed the Health Care and Education Reconciliation Act of 2010 ( P.L. 111-152 ). P.L. 111-152 provides $500 million in mandatory funding for each of FY2011 through FY2014 (see Table 1 ). It appears that sections 4016-4018 of H.R. 1 , the Full-Year Continuing Appropriations Act, as passed by the House on February 19, 2011, would not allow the DOL to administer any appropriated grant funds in FY2011. However, DOL may be able to postpone awarding the FY2011 funds until FY2012, should funding for program administration be available for FY2012. DOL must report annually to the Senate Committee on Finance and the House Committee on Ways and Means about each grant awarded and the impact of each award on persons eligible for TAAW. The solicitation for grant applications (SGA) was issued January 20, 2011, with a closing date of April 21, 2011. DOL plans to provide 36-month awards. Applicants may apply under one of four priorities: Addressing workers with basic skills deficiencies; Improving retention and achievement rates to reduce time to education program completion; Building programs that meet industry needs, including developing career pathways; or Strengthening online and technology-enabled learning. Grant funds may be used for expenses such as salaries, training of instructors, classroom supplies and equipment, facility leases, data analysis, and information technology infrastructure. Facilities' alterations may be conducted with the DOL's approval. Grant funds may not be used for tuition, participant wages or stipends, certain participant support services, construction, the purchase of real property, or to supplant existing funds. Applicants must provide evidence that the project will be sustainable once grant funding ends. Two types of applicants are eligible to receive awards that exceed the DOL-expected amounts of $2.5 million-$5.0 million for individual applicants and $2.5 million-$20.0 million for a consortium. The first type includes applicants that propose to replicate strategies with strong or moderate evidence of effectiveness at multiple locations and/or for persons eligible for TAAW and other individuals. The second type includes applicants that propose to develop and implement online and technology-enabled courses that will be used within the local community and among diverse students over a large geographic area. In addition to the legislative requirements, the DOL uses the SGA in an effort to increase the rigor of the program's implementation and resulting evidence. For instance, all applicants must describe the proven research evidence on which their program strategies are based or the research basis for their proposed innovative strategies. Applicants must also describe how they will use process and outcome data to improve project implementation. The SGA emphasizes project and program evaluation. In addition to project-specific progress measures, each grantee must annually report on the following outcome measures: attainment of credits toward degree(s); attainment of less-than-one-year industry-recognized certificates in less than one year; attainment of industry-recognized certificates (more than one year); graduation number and rate within 150% of the program's normal completion time for degree programs; employment rate of prior participants in the first quarter after they exit from the project; employment retention rate of prior participants from the 1 st to 2 nd and 3 rd quarters after they exit from the project; average earnings of prior participants from the 2 nd and 3 rd quarters after they exit from the project if employed in the 1 st three quarters; and basic skills attainment of program participants, for those grantees addressing the application priority for workers with basic skills deficiencies. The measures must be reported for CCCT program participants and an appropriately comparable non-CCCT-funded cohort. The DOL will choose some grantees to participate in a rigorous program evaluation. The grantees so chosen "may be required to use a random-assignment lottery in enrolling project participants." In an effort to build on the research base and evidence related to educational and career training programs, grantees will be required to make all materials developed under the project available for public use under a Creative Commons Attribution 3.0 License. Materials to be made public include curricula, course materials, teacher guides, and other products developed with grant funds. The materials must be reviewed by third-party subject matter experts. Subchapter C directs the Department of Labor to award Industry or Sector Partnership Grants (ISPG) to eligible public/private partnerships. Industry and sector partnerships are voluntary organizations located in communities eligible for trade adjustment assistance for workers, firms, or farmers. Such organizations must be comprised of representatives from industry associations; local, county, or state governments; businesses in the designated industry or sector, workforce investment boards; labor unions; and education institutions. The act limits the number of grants an eligible industry partnership may be awarded by the Department of Labor to no more than one grant, or not more than $2.5 million, except in the case where the partnership is located in a community that does not receive Community College and Career Training grants. In such cases the amount may not exceed $3 million. Approved Industry and Sector Partnership Grant activities must be completed within three years. In general, grant proposals must: identify the industry or sector that will be the focus of the partnership; identify member organizations or entities involved in the partnership, including the lead agency; describe the goals and specific projects to be undertaken with grant funds; demonstrate that the partnership has the organizational capacity to carry out proposed projects; and explain whether the community has or will seek funding under the CTAA or community college and career training grant programs, or other federal programs, and how such assistance will be coordinated with industry and sector partnership grants. Partnership Grants may be used to fund skill assessments and identify training and employment gaps. This includes using funds to: develop systems to better link skill workers with firms in the targeted industry; assist firms in obtaining access to qualified job applicants; and train new workers and retrain existing workers (including remedial skills training). Funds may also be used to improve productivity, information and outreach activities, including the dissemination of information on best practices, the development of learning consortia comprised of small and medium size firms in an effort to lower the cost of training, and the identification of other resources including community college and career training grants. DOL is directed to provide technical assistance to sector partnership entities to assist them in developing and administering sector partnership grants. In order to carry out this responsibility DOL may award technical assistance grants or contracts to one or more national or state organizations. It is also responsible for developing performance measures to be used by sector partnerships to measure progress in meeting goals outlined in their grant application. DOL is required to submit annual reports to Congress that include a listing of awards and an assessment of the program's impact. The TGAAA authorizes funding totaling $90 million in grant assistance for the period covering FY2009, FY2010, and October 1, 2009 through December 31, 2010. Grantees are prohibited from using grants to meet the matching fund requirement of other federal grant programs. The TGAAA expressly states that grant funds may supplement but not supplant other federal, state, and local funds. Congress did not include an appropriation for the program for FY2009 or FY2010. In addition, the Obama Administration did not request funding for the program for FY2011. Subchapter D includes a provision stating that a worker receiving trade adjustment assistance for workers (TAAW) will not be disqualified from or ineligible for assistance under any of the provisions of trade adjustment assistance to communities. Congress appropriated significantly less funding than the $150 million it authorized for the CTAA program for FY2009. The Supplemental Appropriations Act of 2009, P.L. 111-32 , included a $40 million appropriation to be used to fund both CTAA and the Trade Adjustment Assistance for Firms programs for FY2009. In addition, the Consolidated appropriations Act for FY2010 included $15.8 million for CTAA and the Trade Adjustment Assistance for Firms programs. In appropriating funds for communities and firms Congress did not include language in the supplemental act or the accompanying conference reports outlining how it intended the funds to be split between the two programs. Given the $5 million maximum amount that can be awarded for a single CTAA implementation grant, the combined $55.8 million appropriation will only fund a modest number of CTAA grant awards. In addition, grant funds must be used to fund strategic planning grant activities and trade adjustment assistance for firms. EDA's implementation of the CTAA program may have been slowed by the process of filling vacant politically appointed positions. As a result, important agency decisions were delayed due to the absence of leadership. The agency's new Assistant Secretary for Economic Development, John R. Fernandez, was confirmed by the Senate on September 11, 2009. In addition, the appointment of a Director of Adjustment Assistance within EDA was also delayed. This absence of leadership may have also contributed to delay in the creation of the Interagency Community Assistance Working Group (ICAWG), charged with facilitating access to other federal programs in coordination with implementation grant activities under the CTAA program. EDA is the lead agency of the ICAWG.. Although EDA has published regulations governing Subchapter A, trade adjustment assistance to communities, the Department of Labor has not yet published regulations governing assistance to community colleges and sector partnership grants. The absence of such guidance may delay timely implementation of program activities and undermine the program's effectiveness. In addition, Congress did not immediately provide an initial appropriation for the Subchapter B (CCCT) and Subchapter C (ISPG ) grants for FY2009 or FY2010. Congress did appropriate $500 million for CCCT grants for each of the fiscal years FY2011 through FY2014 when it passed the Health Care and Education Reconciliation Act of 2010, P.L. 111-152 , which was signed by the President on March 30, 2010. This was well over a year after passing initial appropriations for Subchapter A activities. In addition, Congress has not yet appropriated funding for ISPG activities. The principal role of the ICAWG is to provide access to other federal programs when a CTAA designated community undertakes grant activities. The CTAA program's legislation and its rules encourage coordination with other economic development programs, directing EDA to identify possible grant assistance that might be available from other federal agencies, but does not guarantee trade adjustment assistance communities preference or priority in the awarding of such assistance. In addition, in an effort to enhance effectiveness and avoid duplication, the law anticipates a high degree of coordination between EDA and the Department of Labor's Employment and Training Administration (ETA), which is responsible for the administration of the community college-based training program grants and sector partnership grants authorized under subchapters B and C of the act. For instance, the statute requires an educational institution submitting a grant proposal to ETA for CCCT grant assistance to include a detailed description of the extent to which the proposed grant activity would fit within the strategic plan developed by a community eligible for CTAA assistance, and to explain how the CCCT grant proposal relates to any project funded by a sector partnership grant. In addition, the statute requires an entity seeking a sector or industry partnership grant to include in its grant application a discussion of whether the community impacted by trade has sought or received CTAA implementation grant funds, whether an eligible education institution had sought or received CCCT grant funds, and how the eligible sector partnership entity will use grant assistance in coordination with CTAA, CCCT, and funds from other grant sources. Congress may elect to amend the statue to more precisely define terms. For example, the legislation directs EDA to give priority to small and medium size communities when awarding implementation grants, but fails to establish or define what constitutes a small or medium size community. The definition of what constitutes a small or medium size community was not established in program regulations published in the Federal Register. This omission could lead to controversy if EDA does not target funds to appropriate sized communities consistent with congressional intent. EDA has since addressed this issue with the January 11, 2010, Federal Register publication of a notice soliciting applications for CTAA grants. The notice defined small and medium size communities as those whose population do not exceed 100,000 persons. Critics of the legislation may argue that the CTAA program duplicates the activities of other federal programs. This includes EDA's Economic Adjustment Assistance (EAA) program, which awards federal grant assistance to economically distressed communities regardless of the cause. EAA program assistance may be used to fund both the development of strategic plans (Comprehensive Economic Development Strategies--CEDS) and implementation grants intended to fund one or more the activities identified in the CEDS. Proponents may argue that trade adjustment assistance to communities is warranted because it is targeted to communities whose economic dislocation and distress can be traced to unfair trade competition. The statute attempts to address an issue raised in previous reports and studies concerning the need to promote an integrated approach to addressing the impact of economic dislocation. A 2001 report by the General Accounting Office (GAO) found that Local officials believe that dislocated worker training programs are more effective and job placement much higher when strong links exist between training and local business needs. . The CTAA grant program requires trade-impacted communities to seek the advice and involvement of a wide range of community partners when developing their strategic plans, including education institutions, labor organizations, firms, and workforce investment boards. These partners are not only essential in developing the strategic plan, but may also participate in its execution. For instance, the act also supports activities intended to identify and address deficiencies in existing education and career training opportunities available to eligible TAA workers through the use of community colleges. It also encourages the creation of public-private partnerships focusing on skills and employment assessments, and training activities by funding sector partnership grants. Both grant programs (CCCT and Sector Partnerships) require that the recipient of funds identify the link between the proposed grant and the community's strategic plan developed with CTAA funding.

The Trade Adjustment Assistance for Communities (CTAA) grant program was created with the passage of the American Recovery and Reinvestment Act (ARRA) of 2009, P.L. 111-5. Included among the subtitles of Division B of ARRA, was the Trade and Globalization Adjustment Assistance Act (TGAAA) of 2009. The CTAA program, as authorized by ARRA, comprises four subchapters: Subchapter A--Trade Adjustment Assistance to Communities (CTAA) directs the EDA to provide technical assistance and to award strategic planning and implementation grants to eligible trade-impacted communities. Subchapter B--Community Colleges and Career Training (CCCT) creates a competitive grant program administered by the Department of Labor which is intended to strengthen the role of community colleges in filling the education and skills gap of workers in trade impacted communities. Subchapter C--Industry or Sector Partnership Grants Program for Communities Impacted by Trade (ISG) creates a grant program intended to encourage the creation of public private partnerships that develop a skilled workforce. Subchapter D--General Provisions includes language prohibiting workers receiving trade adjustment assistance from being disqualified from receiving assistance under activities funded by the CTAA program. The Supplemental Appropriations Act of 2009, P.L. 111-32, included a $40 million appropriation that funded both Community Trade Adjustment Assistance and Trade Adjustment Assistance for Firms. For FY2010, the Consolidated Appropriations Act for FY2010, P.L. 111-117, included an appropriation of $15.8 million to be shared between the trade adjustment assistance programs for communities and firms. In addition, on March 30, 2010, the President signed the Health Care and Education Reconciliation Act of 2010, P.L. 111-152, which included $500 million in funding for each of the fiscal years FY2011 through FY2014 for Subchapter B, Community Colleges and Career Training Grants. On January 21, 2011, the Department of Labor's (DOL's) Employment and Training Administration (ETA) published in the Federal Register a notice of solicitation for grant applications (SGA) for the TAA Community College and Career Training Grant (CCCT) Program. The notice of availability of funds and solicitation for grant applications set April 21, 2011, as the closing date for the receipt of applications. On August 18, 2009, the Department of Commerce's (DOC) Economic Development Administration (EDA) published in the Federal Register final rules and regulations governing the CTAA program. The regulations outlined the responsibilities of EDA in administering the program, including determining a community's eligibility for CTAA grants, providing technical assistance to impacted communities, and evaluating grant applications. On January 11, 2010, EDA published in the Federal Register a notice soliciting applications for CTAA grants. Concurrently, it published the full announcement and application for assistance at http://www.grants.gov and established April 20, 2010, as the deadline for applications. Between August 3, 2010, and September 20, 2010, DOC announced the awarding of $36.768 million in CTAA grant funds to 36 grant recipients. This report will be updated as events warrant.

T he moratorium on Internet access taxes prohibits states, or their political subdivisions, from imposing new taxes on Internet access services. The moratorium was recently converted to a permanent provision as part of Trade Facilitation and Trade Enforcement Act of 2015 ( P.L. 114-125 ), after being previously extended eight times as a temporary provision. Under the Internet Tax Freedom Act (ITFA), states who taxed Internet access before 1998 can continue taxing Internet access through June 30, 2020. The Internet Tax Freedom Act of 1998 (ITFA; P.L. 105-277 ) imposed on state and local governments a three-year moratorium, from October 1, 1998, to October 1, 2001, on (1) new taxes on Internet access, and (2) multiple or discriminatory taxes on electronic commerce. It also established the Advisory Commission on Electronic Commerce. The moratorium includes a grandfather clause allowing states that already had "imposed and enforced" a tax on Internet access to continue enforcing those taxes. The evolution of the Internet, its interaction with telecommunication services, and disputes over state autonomy have led to a number of changes in the law with its successive extensions. The Internet Tax Nondiscrimination Act ( P.L. 107-75 ), enacted in 2001, was the first extension of ITFA. It extended the Internet tax moratorium and the grandfather clause protections through November 1, 2003, but made no additional changes to the law. In 2004, the Internet Tax Nondiscrimination Act (ITNA; P.L. 108-435 ) extended the Internet tax moratorium through November 1, 2007. Before the passage of ITNA, some states had implemented taxes on digital subscriber line (DSL) Internet connections, claiming they were a telecommunication service and therefore exempt from the ITFA tax moratorium. ITNA changed the definition of Internet access to include DSL connections under the moratorium. Taxes on DSL service were given grandfather protection through November 1, 2005, and grandfather protection for other Internet access taxes in place before October 1, 1998, was extended through November 1, 2007. Changes in ITNA also excluded Voice over Internet Protocol (VoIP) services from the moratorium, allowing state and local governments to tax this service. Lastly, ITNA directed the Government Accountability Office (GAO) to investigate the impact of the Internet tax moratorium on state and local government revenues and the adoption of broadband technologies. The Internet Tax Freedom Act Amendments Act of 2007 ( P.L. 110-108 ) extended the Internet tax moratorium and the original grandfather clause through November 1, 2014. Additionally, the law revoked grandfather protections if states had voluntarily repealed their Internet access taxes since the passage of ITFA in 1998. In the 113 th Congress, ITFA was extended twice but no further changes were made to its provisions. As part of a continuing appropriations resolution ( P.L. 113-164 ) enacted in 2014, ITFA was extended through December 11, 2014. Later in the 113 th Congress, ITFA was extended through October 1, 2015, as part of the Consolidated and Further Continuing Appropriations Act ( P.L. 113-235 ), but no additional changes were made. In the 114 th Congress, ITFA was extended three times before the moratorium on taxing Internet access was made permanent by P.L. 114-125 . ITFA was first extended through December 11, 2015, as part of the 2016 Continuing Appropriations Act ( P.L. 114-53 ). An 11-day extension of ITFA was then passed as part of P.L. 114-100 through December 22, 2015. Shortly thereafter, ITFA was extended through October 1, 2016, as part of the 2016 Consolidated Appropriations Act ( P.L. 114-113 ). Lastly, P.L. 114-125 extended the moratorium on taxing Internet access permanently, and temporarily extended the grandfather clause provision through June 30, 2020. The moratorium on Internet access taxes established by ITFA and its subsequent extensions prohibits states or their political subdivisions from imposing any new taxes on Internet access services. Internet access service is defined as "a service that enables users to access content, information, electronic mail, or other services offered over the Internet and may also include access to proprietary content, information, and other services as part of a package of services offered to consumers." The sale and purchase of Internet access services is exempt from taxation under ITFA; however, costs related to acquired services, such as an Internet service provider (ISP) leasing capacity over fiber, are not covered by the moratorium and thus potentially subject to taxation. Internet access is often bundled with other services such as voice or video service. In these situations, if the ISP can reasonably separate the charges related to Internet access from the other service charges, the Internet access charges remain exempt from taxation; otherwise the Internet access charges can be taxed. The moratorium on taxing Internet access affects consumers of the Internet, ISPs, and state and local governments. One of the most significant effects of ITFA is that state and local governments cannot impose their sales taxes on the monthly payments that consumers make to their ISP, such as Comcast or AT&T, in exchange for access to the Internet. The moratorium prohibits taxes on Internet access services regardless of whether the tax is imposed on the consumer or the provider. The moratorium affects state and local governments by limiting the activities that can be taxed, reducing their potential tax base, which may reduce state and local revenues. One estimate suggests that the moratorium on Internet access taxes could reduce potential state and local revenues by as much as $6.5 billion each year. It should be noted that this estimate assumes that all states and local governments would impose their sales tax on Internet access services. This revenue estimate is further discussed below in the " State Revenues and Autonomy " section. ITFA contained a grandfather clause to allow state and local governments to continue taxing Internet access if they already had a tax on Internet access that was generally imposed and actually enforced before October 1, 1998. Initially 13 states were included under the grandfather clause, but a number of states have voluntarily eliminated their Internet access taxes since the passage of ITFA. Currently seven states claim to collect tax revenue from Internet access: Hawaii, New Mexico, North Dakota, Ohio, South Dakota, Texas, and Wisconsin. According to a recent survey, these seven states collect a combined $563 million per year from their taxes on Internet access. The grandfather clause protecting taxes on Internet access implemented before October 1, 1998, is set to expire on June 30, 2020 In addition to the original grandfather clause established in ITFA, an additional grandfather clause was established as part of the Internet Tax Nondiscrimination Act (ITNA) for certain taxes on Internet access imposed and enforced before November 1, 2003. The grandfather clause established under ITNA expired on November 1, 2005, which largely applied to state and local taxes on DSL Internet access services. ITFA also prohibits state and local governments from imposing multiple or discriminatory taxes on electronic commerce. The ban on multiple taxes prohibits more than one state, or more than one local jurisdiction at the same level of government (i.e., more than one county or city), from imposing a tax on the same transaction, unless a credit is offered for taxes paid to the other jurisdiction. However, the state, county, and city in which an electronic commerce transaction takes place could all levy their own sales (or use) taxes on the transaction. The ban on discriminatory taxes prohibits additional taxes or an alternative tax rate on a good, service, or information delivered electronically that would differ from the tax or rate applied to the same, or similar, good, service, or information if it were purchased through traditional commerce (e.g., brick and mortar stores, catalog sales). In other words, under the moratorium the same tax rate must be applied to similar items regardless of how they were purchased. For example, purchasing a book through a local book store's website cannot be taxed at a higher rate than purchasing it at the local book store's physical location. ITFA also lists conditions under which a remote seller's use of a computer server, an Internet access service, or online services does not establish a minimal connection to a state for taxation purposes. These circumstances include the sole ability to access a site on a remote seller's out-of-state computer server; the display of a remote seller's information or content on the out-of-state computer server of a provider of Internet access service or online services; and processing of orders through the out-of-state computer server of a provider of Internet access service or online services. Some businesses have taken advantage of these nexus limits in ITFA's definition of discriminatory tax to establish what are referred to as Internet kiosks or dot-com subsidiaries. The businesses claim that these Internet-based operations are free from sales and use tax collection requirements. Critics object that these methods of business organization are an abuse of the definition of discriminatory tax. The collection of use taxes has become a larger issue in public debates recently; however, this issue is largely unrelated to ITFA and its moratorium on Internet taxes. ITFA deals specifically with taxes on Internet access, and multiple or discriminatory taxes on electronic commerce, while the issues related to taxing interstate electronic commerce center largely on the Supreme Court's decision in Quill Corp. v. North Dakota and the Commerce and Due Process Clauses of the Constitution. Both clauses require that an entity have some type of connection, or nexus, with a state before the state can impose a tax on it. Quill established that, under the Commerce Clause, a retailer must have a "physical presence" in the state before the state can require the retailer to collect use taxes, while due process imposes a lesser standard. A great deal of electronic commerce involves firms that have a physical presence in a single state where they house their servers or warehouse their goods but sell goods to individuals in the other 49 states. Due to the definition of nexus established in Quill, firms cannot be compelled to collect use taxes from individuals at the point of sale when engaged in transactions in states where they have no physical presence. Instead, individuals making the purchase are supposed to remit a use tax to their own state governments; compliance with this requirement is low. For further discussion of interstate electronic commerce issues see CRS Report R41853, State Taxation of Internet Transactions , by [author name scrubbed], and CRS Report R42629, "Amazon Laws" and Taxation of Internet Sales: Constitutional Analysis , by [author name scrubbed] and [author name scrubbed]. Tax policy is generally evaluated based on its equity, efficiency, and simplicity. The following sections will evaluate the ITFA, specifically the moratorium on taxing Internet access, with respect to these characteristics and other relevant factors, including its impact on state and local governments. The equity, or fairness, of tax policy can be thought of along two different axes. One axis, referred to as horizontal equity, is concerned with how the tax policy will affect similar individuals. All else equal, a tax policy which places a similar tax burden on similarly situated tax payers is considered horizontally equitable. The alternative axis, referred to as vertical equity, is concerned with how tax policy will affect dissimilar individuals. All else equal, a tax policy is viewed as vertically equitable if taxpayers with a greater ability to pay will tend to pay more in taxes, than those with a lesser ability to pay. The Internet provides numerous services that are similar to services that are provided through more traditional means and are subject to taxation by state and local governments. The moratorium on taxing Internet access therefore provides a relative tax advantage to services offered through the Internet. For example, an individual who would like phone service can obtain similar service either by purchasing plain old telephone service, which is often subject to state and local sales taxes, or they can purchase Internet access and use a free service, like Skype, to make phone calls and avoid paying any sales or use taxes. The inequitable tax treatment under the moratorium violates the principle of horizontal equity. With the current Internet tax moratorium under ITFA, two firms that provide almost identical services can be subject to different tax rates based on how the service is provided, either over the Internet or by a brick-and-mortar business. The Internet tax moratorium acts as a subsidy, lowering the effective price of purchasing Internet access by eliminating any state or local tax on the service. Higher-income individuals tend to have greater access to the Internet than low-income individuals. In 2013, 24% of adults making less than $30,000 per year did not use the Internet, while 4% of adults making more than $75,000 did not use the Internet. It is possible that this subsidy could help lower-income individuals gain access to Internet. However, only about 6% cited the cost of Internet access as the reason they do not use the Internet. The structure of the Internet access tax moratorium and resulting subsidy does not satisfy the principle of vertical equity. Upper-income individuals are likely more capable of paying state and local sales taxes on their Internet access charges than lower-income individuals, however both upper- and lower-income individuals have access to the subsidy. Because these dissimilar individuals face similar tax burdens with respect to Internet access, the moratorium does not exhibit the concept of vertical equity. The ITFA, specifically the moratorium on taxing Internet access, likely improves economic efficiency by expanding access to the Internet among individuals who may not be able to afford the service otherwise. However, the blanket nature of the moratorium, where both low- and high-income individuals receive the benefits of a lower tax burden, likely reduces the economic efficiency gains produced by this policy. Due to the nature of the Internet, having additional businesses and individuals connecting to the Internet provides benefits both to the new Internet users but also to those who were already using the Internet. Or in economic terms, when an individual purchases Internet access they receive personal benefits, in the form of increased access to goods, services, and information, but they also generate external benefits for other individuals already using the Internet, in that they now have another Internet user to interact with or engage in commercial transactions. When an individual is making a decision about whether to purchase Internet access, they tend to only consider their personal benefits from accessing the Internet and are unlikely to consider the external benefits they will create by purchasing Internet access. This results in fewer individuals accessing the Internet than is socially optimal. The moratorium on taxing Internet access acts as a subsidy to individuals and businesses by lowering the cost of Internet access. Lowering the cost of Internet access should increase the number of individuals using the Internet. And increasing the number of individuals on the Internet could improve economic efficiency by bringing the number of people on the Internet closer to the socially optimal level. Some have argued that the subsidy provided by the Internet access tax moratorium is too large in comparison to the external benefits generated by an individual joining the Internet. Additionally, scholars argue that as the Internet has grown the external benefits associated with an additional user have decreased, and at a certain point negative external consequences may arise from congestion. The subsidy offered to businesses and individuals through the moratorium on taxing Internet access also likely generates a certain amount of waste due to the blanket design of the subsidy. A large number of individuals would likely choose to purchase Internet access even if the price was higher due to state and local governments applying taxes to the service. Offering the subsidy to individuals who would have purchased Internet access regardless of the subsidy is considered wasteful from an economic perspective because the forgone revenue associated with the subsidy could be used elsewhere in a more productive capacity. Better targeting of the subsidy to individuals who struggle to afford Internet access would likely be a more economically efficient use of resources. As the Internet has grown in size and popularity, states have forgone a source of potential revenues because of the federal moratorium. As mentioned previously, one estimate suggests that states could collect as much as $6.5 billion in revenue each year from taxing Internet access. This estimate assumes that all states and local jurisdictions would impose their sales taxes on Internet access. This is unlikely to occur when considering that multiple grandfathered states eliminated their Internet access taxes voluntarily, and California even implemented a similar state-level moratorium on Internet taxes in 1999. Estimating the lost revenue from the Internet tax moratorium is difficult because it is necessary to speculate how states would have acted in the absence of the moratorium. The seven states that currently collect sales tax on Internet access raise an estimated $563 million per year. States have historically been allowed the freedom to determine how they want to raise their own revenues. ITFA is one example of a departure from this relationship in that the federal government restricted state and local governments from taxing certain activities. The National Governors Association has voiced concerns about the federal government encroaching on state autonomy, and hopes to revise parts of ITFA to shrink the definition of Internet access to allow taxation of more activities related to the provision of Internet access. The moratorium on taxing Internet access likely simplifies complying with the tax code for ISPs. It is estimated that the number of different state and local tax jurisdictions ranges from 7,600 to 14,500. For any ISPs which span multiple tax jurisdictions, the moratorium on taxing Internet access likely reduces the administrative burden of complying with those multiple tax jurisdictions.

The Internet Tax Freedom Act (ITFA; P.L. 105-277), enacted in 1998, implemented a three-year moratorium preventing state and local governments from taxing Internet access, or imposing multiple or discriminatory taxes on electronic commerce. Under the moratorium, state and local governments cannot impose their sales tax on the monthly payments that consumers make to their Internet service provider in exchange for access to the Internet. In addition to the moratorium, a grandfather clause was included in ITFA that allowed states which had already imposed and collected a tax on Internet access before October 1, 1998, to continue implementing those taxes. Previously under ITFA, the moratorium on Internet access taxes and the grandfather clause were temporary provisions. With the passage of the Trade Facilitation and Trade Enforcement Act of 2015 (P.L. 114-125), the moratorium on taxing Internet access was extended permanently, while the grandfather clause was extended temporarily through June 30, 2020. The original three-year moratorium had been extended eight times before being converted to a permanent statute. As the original moratorium was extended, changes were made to the definition of Internet access to include and exclude different services and technology. Notable changes include the inclusion of digital subscriber lines under the moratorium and the exclusion of Voice over Internet Protocol services from the moratorium. Over time the grandfather clause has protected a decreasing number of states' abilities to tax Internet access. While 13 states previously taxed Internet access and were protected under the grandfather clause, 7 states now tax Internet access. In addition, changes made to ITFA in 2007 rendered the grandfather provision inapplicable for states that repealed or nullified their taxes on Internet access before the enactment of these changes. As a public policy, the moratorium on taxing Internet access has economic and fairness implications. The policy likely improves lower income individuals' ability to purchase Internet access, which has economic benefits, but the blanket nature of the moratorium likely results in some economic waste. Additionally, the moratorium results in unequal application of state and local taxes to the provision of services depending upon how the services are delivered. Under the moratorium, state and local governments are prevented from taxing Internet access. This may have implications for state and local government revenues and provision of services. The Internet Tax Freedom Act and its subsequent extensions are often conflated with issues related to the taxation of electronic commerce across state borders. ITFA is largely unrelated to these issues. For a discussion of interstate electronic commerce and taxation issues, refer to CRS Report R41853, State Taxation of Internet Transactions, by [author name scrubbed], and CRS Report R42629, "Amazon Laws" and Taxation of Internet Sales: Constitutional Analysis, by [author name scrubbed] and [author name scrubbed].

With the official end of the most recent recession in June 2009, congressional interest remains heightened with regard to job creation and the income security of the workers in this country. Traditionally, the path to high wage growth and secure employment for workers has been to pursue and complete education through vocational schools, post-secondary schools, or other institutions. However, employment prospects remain dim for the growing number of recent graduates. Many young workers who have lost their jobs or are still in school face challenges such as unemployment, or if they have a job, underemployment. In February 2013, among individuals aged 16 to 24 in the United States, the unemployment rate was 16.3%. Workers who have lost their job through no fault of their own often rely on Unemployment Compensation (UC) benefits for income support during periods of unemployment. Current graduating students, as well as recent graduates from years past, may have worked during previous periods, or worked while they were attending school. If they earned sufficient wages to qualify for UC benefits, they may be eligible to receive this form of income support if they became subsequently unemployed (depending on state considerations). However, students who worked previously, or are concurrently working and attending school, may face barriers and impediments to their UC claims once they are unemployed. This can occur in a number of ways. For example, a student could be attending school full-time, while also working full-time in covered employment, and then lose his or her job. In addition, a worker could have a job in covered employment, and also start school, and subsequently lose his or her job. In both cases, the individual may apply for UC benefits, but the eligibility for those benefits may differ according to the governing state. Many states disqualify workers from UC benefits for school attendance, although some states make exceptions for certain students, typically those receiving approved training or training under Trade Adjustment Assistance for Workers (TAA) program, which provides federal assistance to workers adversely affected by foreign trade. This report examines the treatment of students as a special group within the UC system, and how states define student eligibility for their respective state UC programs. UC is a joint federal-state program that provides unemployment benefits to eligible workers. The U.S. Department of Labor (DOL) administers the federal portion of the UC system, which operates in each state, the District of Columbia, Puerto Rico, and the Virgin Islands. The UC program is financed by federal taxes under the Federal Unemployment Tax Act (FUTA) and by state payroll taxes under the State Unemployment Tax Acts (SUTA). In addition to establishing how the UC program is financed, these laws also establish certain criteria for UC eligibility. Federal law excludes few positions or types of workers from coverage (with certain exceptions such as the self-employed or others as noted below). Because federal law provides broad guidelines for UC coverage, eligibility, and determination, specifics of each UC program are left to the determination of each state. Although general similarities exist between states, each state establishing its own criteria results in essentially 53 different UC programs. State laws and program regulations determine UC benefit eligibility, payments, and duration. Generally, UC benefits are available to eligible workers who have lost their jobs through no fault of their own and are willing, able, and available to work. In addition, UC eligibility is typically based on attaining qualified wages and employment covered in a 12-month period (called a base period) prior to unemployment. All states require a worker to earn a certain amount of wages or to work a certain period of time (or both) within the base period to be monetarily eligible to receive any UC benefits. Nothing in federal law precludes recent graduates from receiving UC benefits if unemployed. However, the likelihood of a recent unemployed graduate receiving UC benefits is low. Recent college graduates and younger individuals may not be receiving UC benefits for a number of reasons, but basic criteria noted above often dictate eligibility. Generally, to be eligible for UC benefits, a recent graduate would need to have worked in covered employment, earned sufficient wages in his or her base period, and left his or her work involuntarily. In February 2013, the unemployment rate for individuals 16 to 24 years of age was 16.3%, with about 3.5 million individuals in this age group unemployed in the United States. Moreover, during that month, individuals 24 years of age or under received 8.9% of total UC benefits yet made up 29.1% of the unemployed population. Although younger workers generally earn lower wages and would likely therefore receive less return in UC benefits, this difference is substantial. Approximately 1 in 10 unemployed workers aged 16 to 24 receives unemployment insurance. Moreover, recent testimony before the Joint Economic Committee of Congress suggested that individuals graduating from college during a large recession are likely to face reduced earnings that persist for up to 10 years compared with graduates during a boom economy. UC benefits are financed through employer taxes that are established by federal and state law. Federal taxes on employers are provided under the authority of the Federal Unemployment Tax Act (FUTA), whereas state taxes are provided under the authority of the State Unemployment Tax Acts (SUTA). Federal law defines which jobs a state UC program must cover and provides broad guidelines concerning benefit eligibility, in order for the state's employers to avoid paying the maximum FUTA tax rate on each employee's annual pay. State laws govern student eligibility, but FUTA provides further guidelines concerning the eligibility of school personnel for UC benefits. Most states disqualify workers from UC benefits if attending school and some states extend this disqualification to vacation periods. The typical presumption behind this policy is that students are unable or unavailable to accept full-time work while in school. Workers must have established wages prior to receiving UC benefits, and the sufficiency of earned wages often depends on the part-time or full-time status of their job. States vary in how they establish definitions of a student, as well as whether they distinguish between part-time and full-time students for the purposes of UC benefits eligibility. In addition, states differ in how they establish these policies, whether through statute, regulation, or case law. FUTA requires states to disqualify school employees from UC benefits if they are unemployed between school terms or vacation periods. This denial applies if the individual has a contract or reasonable assurance of returning to work when the school reopens. This denial applies to instructional, research, or principal administrative employees. FUTA also requires states to deny benefits to these school personnel if they perform services in regular, but not successive, years or terms. For example, school personnel who only work during the academic year would not be eligible for UC benefits during the summer period. In this case, personnel are not eligible for compensation during the entire period between the regular but non-successive academic years or terms. This denial also applies to vacation or holiday periods within school years or terms. The report further discusses how states treat students in two circumstances: whether they qualify for UC benefits while attending school (e.g., a student loses his or her job while in school) or whether they qualify for UC benefits if leaving work to attend school. Most states disqualify students from UC benefits while they are attending school. States' policies tend to presume that students will be unavailable for full-time work because school hours often overlap with standard work hours. In addition, many students, if working part-time, would likely have insufficient prior earnings to qualify for UC benefits. However, if certain conditions are met, some states may allow students to remain eligible for UC benefits. Exceptions to disqualification for UC benefits vary considerably. Almost 45% of states allow students to remain eligible for UC benefits if school attendance does not interfere with the ability and availability to accept suitable work or the student can demonstrate that he or she is seeking and able to accept full-time work. In addition, almost one-third of states allow students to qualify while in school if they are attending an approved training program or can demonstrate that they are willing to quit school or adjust class hours if suitable work is offered. A few states have stricter UC eligibility requirements and do not provide exceptions for students to qualify for UC benefits. Conversely, a few states have little restriction on UC eligibility for students attending school. Table 1 shows the variation among the states. As Table 1 shows, just three states (Alabama, New York, and South Carolina) do not provide an exception to benefits disqualification if attending school. Many state UC programs will consider students eligible if certain conditions are met, namely through the combination of availability for work or seeking full-time work, or if the student is attending appropriate training. A few states specify that a student may be eligible if a major part of his or her base period wages was for services performed while in school. State laws vary with respect to workers remaining eligible for UC benefits while leaving their jobs to attend school. Just over half the states, including the District of Columbia, disqualify individuals from UC benefits for leaving work to attend school. However, many states make exceptions for students leaving work to attend approved training sessions, union apprenticeships, or training under TAA. About one-third of states allow students to remain eligible for UC benefits if leaving work and pursuing one of these forms of training. Finally, a few states do not disqualify students from UC benefits for leaving work to attend school. Table 2 shows variation among the states. As Table 2 shows, most states disqualify students if they leave their jobs to attend school. The main exceptions to this policy are if the student is leaving work to attend approved training or training under TAA. Only eight states have no restrictions on students leaving work and remaining eligible for UC benefits. Individual states approve the training programs they deem appropriate for students to attend and remain eligible for UC benefits. Typically, state workforce agencies determine the training providers that would be qualified to provide educational programs. These programs generally include those provided by a state under the Workforce Investment Act (WIA), the Trade Adjustment Assistance for Workers (TAA) program, and potentially other state-approved training programs. The Workforce Investment Act of 1998 (WIA; P.L. 105-220 ) is the primary federal program that supports workforce development. Title I of WIA authorizes state formula grants to provide job training and related services to unemployed or underemployed individuals. These programs are primarily administered through the Employment and Training Administration of DOL, but operated in partnership with each state. TAA, on the other hand, provides federal assistance to workers who have been adversely affected by foreign trade. The Trade Adjustment Assistance Extension Act of 2011 (TAAEA; Title II of P.L. 112-40 ) most recently authorized TAA. Because approved training is granted at the discretion of each state, the types of training offered vary widely, even under programs eligible through WIA and TAA. Approved training is constituted by both public and private options. These options can include employer-based training, remedial programs, prerequisite education or coursework required to enroll in an approved training program, technical skills classes, and various trade and vocational courses. Training providers may have an agreement or contract with state workforce agencies to provide these particular programs. They can be delivered in a number of ways, either through the classroom, via correspondence or web-based applications, or apprenticeships. The treatment of students within the UC program varies by state. Only a few states allow students to attend school and qualify for UC benefits if unemployed. Generally, in approximately half the states, students must be able to show that they are available for and seeking full-time work to be eligible for UC benefits. This can be a high standard to meet, as many students are attending school full-time. In addition, some states require that students demonstrate that they would be willing to quit school to work if offered a job. In the instance of workers leaving their jobs to attend school, states are less flexible in allowing individuals to continue receiving UC benefits. Generally, about one-third of states allow individuals to remain benefits eligible only if they are taking training courses under TAA, WIA, or other state-approved program. The content of approved training classes varies from state to state. Typically, each state workforce agency is granted discretion as to what constitutes approved training for the purposes of attending school and remaining benefits eligible. States identify training providers that are eligible or qualified to receive funds under WIA or TAA.

The recent economic recession and subsequent recovery period has produced one of the most challenging labor markets in recent decades. Many workers lost their jobs during this time period, as others were just entering the market for the first time. As a strategy to cope with the difficult employment situation, many individuals entered school to acquire skills to become more competitive, while others never left, remaining in school to postpone the employment search. However, due to the prolonged nature of the recovery, many students and workers remain jobless and struggle to find work. According to Bureau of Labor Statistics (BLS) data, in February 2013, approximately 12.0 million workers remained jobless, of which almost 3.5 million individuals aged 16 to 24 were unemployed. Those that have gone back to school, and have now graduated, still face a competitive job market, and may need to search for work for a prolonged period of time. According to BLS data, in June 2012, there were approximately 3.4 unemployed workers for every available job, and almost 40% of the unemployed have been jobless for more than six months. Because of this economic climate, Congress has been interested in not only job creation and how students are coping with the competitive job market, but whether they are receiving income support during times of unemployment in order to cope. Unemployment Compensation (UC) is a joint federal-state program that provides income support payments to eligible workers who lose their jobs through no fault of their own. Federal law sets out broad guidelines with regard to how the UC program operates and how it should be administered. State laws establish eligibility criteria for who qualifies for the program. In the case of a student who becomes unemployed, eligibility would depend on how their respective state treats students within the UC system. Most states disqualify students from UC benefits while they are in school or disqualify individuals from UC benefits if they leave work to attend school. This is typically due to the presumption that students would be unavailable for work during the time that they are in school. However, exceptions and variations exist from state to state. Many workers who lost their jobs and remain in school may be eligible for UC benefits depending on their circumstances and how their respective states treat students. This report describes these state variations in further detail and how states consider students within the framework of their own unique UC programs.

Domestic food assistance programs overseen by the Food and Nutrition Service of the U.S. Department of Agriculture (USDA) typically make up a large portion of federal spending aimed at helping with low-income households' day-to-day needs during economic downturns. The biggest, the Supplemental Nutrition Assistance Program (SNAP, formerly known as the Food Stamp program), spent $53.8 billion federal dollars in FY2009. Other key food assistance programs--costing a total of over $20 billion in FY2009--include The Emergency Food Assistance Program (TEFAP), child nutrition programs (like the school meal programs), and the Special Supplemental Nutrition Program for Women, Infants, and Children (the WIC program). By contrast, FY2009 federal outlays for other big programs helping lower-income households were $250 billion for Medicaid, $117 billion for Unemployment Insurance, $48 billion for the Supplemental Security Income (SSI) program, and $42 billion for Earned Income Tax Credit (EITC) payments. In 2009, the Administration and Congress took major steps to change food assistance program policies and increase federal funding available for domestic food aid in response to growing calls for assistance from those in need. These actions will continue to have significant effects over the next several years, and the Administration's FY2011 budget request envisions continued growth in federal spending on food assistance. Major increases in the demand for food assistance--most particularly the SNAP--were recorded in 2009, and participation is expected to continue to grow. The SNAP provides low-income households with monthly benefits that can be used to supplement their food spending and help free up cash for other household needs. SNAP participation jumped from 31.1 million persons in 14.0 million households in November 2008 to 38.2 million persons in 17.5 million households in November 2009 (the most recent available figures). Monthly spending on SNAP benefits (entirely funded with federal dollars) also rose dramatically from $3.6 billion in November 2008 to $5.1 billion in November 2009. For FY2010, the Administration and the Congressional Budget Office (CBO) estimate that total SNAP spending (including benefits and the federal share of administrative costs) will be at least $69 billion, with average monthly participation of almost 41 million persons--up from $53.8 billion and 33.7 million persons in FY2009. TEFAP supplies emergency feeding organizations (such as food banks and soup kitchens) with food commodities acquired by the USDA; these USDA donations typically make up 20%-25% of the food distributed by these organizations. It also provides cash payments to help states and feeding organizations with their distribution costs. Direct information as to recent increases in the number of persons served by recipient organizations supported by the TEFAP commodity donations is not available. However, Feeding America, an organization serving over 200 food banks, reported a 21% increase in the amount of food distributed between June 2008 and June 2009 and anticipates continued increases. In FY2009, TEFAP provided some $710 million worth of commodities and $89 million in distribution cost assistance, up from a total of $420 million in FY2008. In FY2010, TEFAP support may drop with the expiration of extra funding supplied by the American Recovery and Reinvestment Act of 2009 (discussed later in this report), unless "bonus" commodities donated from USDA stocks acquired for farm support purposes make up the difference. The two main child nutrition programs--the School Lunch program and the School Breakfast program--give schools cash subsidies and USDA-acquired commodities that help them cover the cost of providing school meals. Participating schools must provide free or reduced-price meals to children from low-income families. Between November 2008 and November 2009, the number of children receiving free lunches went up by 6.4% (to 17.2 million) and the number of children eating free breakfasts climbed by nearly 7% (to 8.7 million)--substantially outpacing the increase in total school enrollment. In FY2009, school meal programs and other child nutrition efforts cost some $15.4 billion, up from $14.7 billion in FY2008. For FY2010, the Administration estimates that overall child nutrition spending will rise to $17 billion, based on an estimate that the number of children receiving free school meals will rise by over 10%; the CBO projects $16.3 billion. The Special Supplemental Nutrition Program for Women, Infants, and Children (the WIC program) provides vouchers for nutrition supplemental foods to low-income pregnant women, new mothers, infants, and young children. It also provides nutrition education, medical referrals, and breastfeeding support. Between November 2008 and November 2009, WIC participation increased by 2.3% (to 9.1 million women, infants, and children). FY2009 WIC costs totaled to $6.5 billion, compared to $6.2 billion in FY2008, and the Administration's FY2011 budget estimates that FY2010 spending will be $7.2 billion--with average monthly participation growing from 9.1 million in FY2009 to 9.5 million in FY2010. In November 2009, the USDA's Economic Research Service released a report entitled Household Food Security in the United States, 2008 --available at http:// www.ers.usda.gov --which estimated that 14.6% of American households were "food insecure" at least some time during 2008, including 5.7% with "very low food security" (meaning that the food intake of one or more household members was reduced and their eating patterns were disrupted at times during the year because they lacked money or other resources for food). Prevalence rates of food insecurity and very low food security were up from 11.1% and 4.1%, respectively, in 2007, and were the highest recorded since 1995. In January 2010, the Food Research and Action Center (FRAC) released an analysis of survey data collected by Gallup for the Gallup-Healthways Well-Being Index project entitled Food Hardship: A Closer Look at Hunger -- Data for the Nation, States, 100 MSAs, and Every Congressional District (available at http:// http://www.frac.org ). This report estimated that "food hardship" for the nation as a whole rose from 16.3% of respondent households in the first quarter of 2008 to 19.5% in the fourth quarter of 2008. In 2009, the rate dropped slightly, with food hardship in the four quarters of 2009 hovering between 17.9% and 18.8%. The Gallup survey measured food hardship by asking whether there had been times in the past 12 months when the surveyed household did not have enough money to buy food that it needed. In response to the economic downturn, Congress and the Administration made substantial changes to SNAP funding, benefits, and eligibility policy in 2009. The American Recovery and Reinvestment Act (ARRA) of 2009 ( P.L. 111-5 ) included a number of substantial provisions expanding benefits and eligibility for the SNAP. At the time the ARRA was enacted, the CBO estimated that the cost of these changes would be $10.8 billion in the first two years (FY2009 and FY2010). However, because SNAP participation is rising faster than the CBO projected, FY2009-FY2010 (and possibly future) costs will very likely be greater. SNAP benefits were increased significantly, time limits on eligibility for able-bodied adults without dependents were suspended, and states received extra federal funding for administrative costs. Monthly SNAP allotments are based on the estimated cost of a minimally adequate diet. This means that the benefit for any recipient household equals the inflation-indexed cost of USDA's "Thrifty Food Plan" (the maximum benefit), varied by household size and adjusted for household income. In recognition of the possibility of unanticipated food-price inflation and the other needs of recipient households, the ARRA provided an across-the-board increase in SNAP benefits (effective in April 2009). This add-on was accomplished through raising, by 13.6%, the base Thrifty Food Plan amounts normally used to calculate benefits. It effectively boosted each recipient household's monthly benefit by an amount equal to 13.6% of the maximum benefit for its size. For a one-person household, the added benefit was $24 a month; for two persons, $44 a month; for three persons (the typical household), $63 a month; for four persons $80 a month; and for larger households, higher amounts. As a result, monthly average household benefits were increased by nearly 20% (about $20 a person). In FY2009, ARRA-provided SNAP benefits accounted for $4.3 billion in spending (about 15% of all benefit costs). In November 2009, ARRA-provided benefits totaled over $800 million (16% of benefit costs). For FY2010 and FY2011, the Administration estimates that ARRA-provided benefits will total $10.5 billion and $11.7 billion, respectively--reflecting both the ARRA add-on and increased participation. SNAP law limits eligibility for most able-bodied adults without dependents (ABAWDs) who are not working at least half-time to 3 months out of every 36 months (without regard to their financial status). Reacting to high unemployment rates, the ARRA effectively suspends this requirement for those who cannot find a job through FY2010. While SNAP benefit costs are entirely a federal responsibility, states operating the SNAP share administrative costs with the federal government. Approximately half of administrative costs are picked up by states--some $3 billion a year. As noted above, participation in the SNAP is rising dramatically, leading to higher administrative costs, which states are having difficulty meeting. The ARRA provided $145 million (FY2009) and $150 million (FY2010) in additional federal money for administrative expenses, without requiring state matching funds. Under the terms of the regular FY2009 and FY2010 Agriculture Department appropriations laws ( P.L. 111-8 and P.L. 111-80 ), minimum FY2010 funding available for the SNAP is set at $53 billion, plus $6 billion in contingency funds. This is a $5 billion increase over FY2009 spending and does not include expected funding of over $10 billion provided under the provisions of the ARRA. In addition, the FY2010 Defense Department appropriations act ( P.L. 111-118 ) appropriates (1) unlimited funding ("such sums as may be necessary") above the base amounts noted above for any SNAP emergency requirements that may arise because estimates used for appropriations purposes prove too low and (2) an extra $400 million (above regular spending and ARRA-provided amounts) for state administrative expenses related to the SNAP, with no state match required. The Administration has taken two major steps that open up access to the SNAP. In both cases, they expand on policies in place prior to 2009. The USDA's Food and Nutrition Service has taken an official stance encouraging states to use so-called "categorical eligibility" authority to expand eligibility to significant numbers of households by (1) increasing or completely lifting limits on assets that eligible households may have and (2) raising dollar limits on households' gross monthly income. To date, 27 states and two territories have taken advantage of this option, to one degree or another. The Food and Nutrition Service has the authority to grant states waivers of the requirement that households have a face-to-face interview when their initial eligibility is determined and when they are up for recertification of eligibility. A growing number of states have been granted waivers for face-to-face interviews for some or all applicants, and most states now have waivers for interviews at recertification. In FY2009, TEFAP was originally budgeted at $250 million in commodities and $50 million for distribution/storage costs, not including nearly $400 million in "bonus" commodities donated to TEFAP from USDA stocks acquired in support of the agricultural economy. The ARRA made an added $150 million available through FY2010: $100 million for commodity acquisitions and $50 million for distribution storage costs. In addition, the FY2010 Agriculture Department appropriations law ( P.L. 111-80 ) appropriated $6 million for increased support for infrastructure improvement expenses incurred by TEFAP recipient organizations. Child nutrition programs generally do not provide direct assistance to schools covering costs related to the equipment used to prepare meals. The ARRA made $100 million available to states for use in making competitive grants to schools (based on need) for school food service equipment. In addition to providing for some $17 billion in child nutrition spending, the FY2010 Agriculture Department appropriations law ( P.L. 111-80 ) included two significant provisions aimed at expanding participation in child nutrition programs. Three states and the District of Columbia were added to the 10 states eligible to receive federal subsidies for suppers served in after-school programs. A total of $25 million was appropriated for (1) grants to low-performing states to improve their rates of "direct certification" for free school meals and (2) federal technical assistance to help them improve their direct certification performance. State agencies operating the WIC program have consistently called for added support for implementing new or upgraded "management information systems" to improve their ability to deliver benefits more efficiently. Moreover, changing economic conditions and variable food-price inflation rates have made projections of the need for WIC funding increasingly uncertain. In response, the ARRA provides $400 million for a contingency reserve to support participation or food costs that exceed budget estimates. It also made $100 million available for WIC state agencies' management information system expansions/upgrades. On February 1, 2010, the Administration submitted its FY2011 budget request. It envisions substantial increases in participation and spending for virtually every USDA food assistance program. Most prominently, SNAP costs are projected to jump by almost $4 billion (to $72.8 billion) because of increased participation (rising from an average of 40.5 million persons in FY2010 to 43.3 million FY2011). Spending for child nutrition and WIC programs also is estimated to increase substantially. The FY2011 budget estimates that child nutrition initiatives like school meal programs will cost $18.3 billion, as opposed to $17 billion in FY2010, and spending for the WIC program is expected to increase from $7.2 billion to $7.8 billion. On the other hand, mandatory funding for TEFAP is scheduled for a slight decrease ($2 million) under the terms of its underlying law tying TEFAP funding to food-price inflation/deflation, although USDA donations of bonus commodities will make up any difference. The Administration's FY2011 budget also includes several proposals to change the laws governing domestic food assistance programs. It effectively asks to extend the unlimited funding authority granted to the SNAP in the FY2010 Defense Department appropriations law. It proposes to extend the suspension of SNAP eligibility rules that apply to ABAWDs enacted in the ARRA for an additional year (through FY2011). As part of a government-wide initiative, it requests that SNAP law be changed to (1) exclude as countable assets all refundable tax credits in the month of receipt and for the following 12 months and (2) increase the limit on countable assets to $10,000. At present, tax credit payments generally are counted two to three months after receipt and countable assets are limited to $2,000, or $3,000 for elderly/disabled households (unless a state has used the "categorical eligibility" option noted earlier). Without laying out specific initiatives, it proposes to add $1 billion ($10 billion over 10 years) in new spending authority for child nutrition programs in an effort to end childhood hunger by 2015. According to the budget presentation, the additional money will be "aimed at ending childhood hunger, reducing childhood obesity, improving the diets of children, and raising program performance to better serve children."

Domestic food assistance programs typically make up a large portion of federal spending for needy households during economic downturns. The need for, participation in, and the costs of these programs--like the Supplemental Nutrition Assistance Program (SNAP, formerly the Food Stamp program)--have grown dramatically. In response to the recent downturn, the Administration and Congress have taken major steps to change food assistance program policies to open up program access and to increase federal funding. Most important, SNAP benefits have been increased across the board and eligibility rules have been substantially loosened. The Administration's FY2011 budget proposes to continue funding for most of these steps. This report will be updated to reflect action on the FY2011 budget and significant changes in participation and spending figures.

T his report describes actions taken by the Administration and Congress to provide FY2018 funding for Commerce, Justice, Science, and Related Agencies (CJS) accounts. It also provides an overview of enacted FY2017 appropriations for agencies and bureaus funded as part of annual CJS appropriations. The dollar amounts in this report reflect only new funding made available at the start of the fiscal year. Therefore, the amounts do not include any rescissions of unobligated or deobligated balances that may be counted as offsets to newly enacted appropriations, nor do they include any scorekeeping adjustments (e.g., the budgetary effects of provisions limiting the availability of the balance in the Crime Victims Fund). In the text of the report, appropriations are rounded to the nearest million. However, percentage changes are calculated using whole, and not rounded, numbers, meaning that in some instances there may be small differences between the actual percentage change and the percentage change that would be calculated by using the rounded amounts discussed in the report. The following reports contain a more in-depth review of appropriations for specific CJS departments and agencies CRS Report R43908, The National Institute of Standards and Technology: An Appropriations Overview . CRS Report R44938, FY2018 Appropriations for the Department of Justice . CRS Report R44893, FY2018 Appropriations for Department of Justice Grant Programs . CRS Report R42672, The Crime Victims Fund: Federal Support for Victims of Crime . CRS Report R43935, Office of Science and Technology Policy (OSTP): History and Overview . CRS Report R43419, NASA Appropriations and Authorizations: A Fact Sheet . CRS Report R44882, Commerce, Justice, Science and Related Agencies (CJS) FY2018 Appropriations: Trade-Related Agencies . CRS Report R45009, The National Science Foundation: FY2018 Appropriations and Funding History . The annual CJS appropriations act provides funding for the Departments of Commerce and Justice, select science agencies, and several related agencies. Appropriations for the Department of Commerce include funding for agencies such as the Census Bureau, the U.S. Patent and Trademark Office, the National Oceanic and Atmospheric Administration, and the National Institute of Standards and Technology. Appropriations for the Department of Justice (DOJ) provide funding for agencies such as the Federal Bureau of Investigation; the Bureau of Prisons; the U.S. Marshals; the Drug Enforcement Administration; and the Bureau of Alcohol, Tobacco, Firearms, and Explosives, along with funding for a variety of grant programs for state, local, and tribal governments. The vast majority of funding for the science agencies goes to the National Aeronautics and Space Administration and the National Science Foundation. The annual appropriation for the related agencies includes funding for agencies such as the Legal Services Corporation and the Equal Employment Opportunity Commission. The mission of the Department of Commerce is to "create the conditions for economic growth and opportunity." The department promotes "job creation and economic growth by ensuring fair and reciprocal trade, providing the data necessary to support commerce and constitutional democracy, and fostering innovation by setting standards and conducting foundational research and development." The department has wide-ranging responsibilities including trade, economic development, technology, entrepreneurship and business development, monitoring the environment, forecasting weather, managing marine resources, and statistical research and analysis. The Department of Commerce pursues and implements policies that affect trade and economic development by working to open new markets for U.S. goods and services and promoting pro-growth business policies. It also invests in research and development to foster innovation. The agencies within the Department of Commerce, and their responsibilities, include the following: International Trade Administration (ITA) seeks to strengthen the international competitiveness of U.S. industry, promote trade and investment, and ensure fair trade and compliance with trade laws and agreements; Bureau of Industry and Security (BIS) works to ensure an effective export control and treaty compliance system and promote continued U.S. leadership in strategic technologies by maintaining and strengthening adaptable, efficient, effective export controls and treaty compliance systems, along with active leadership and involvement in international export control regimes; Economic Development Administration (EDA) promotes innovation and competitiveness, preparing American regions for growth and success in the worldwide economy; Minority Business Development Agency (MBDA) promotes the growth of minority owned businesses through the mobilization and advancement of public and private sector programs, policy, and research; Economics and Statistics Administration (ESA) is a federal statistical agency that promotes a better understanding of the U.S. economy by providing timely, relevant, and accurate economic accounts data in an objective and cost-effective manner; Census Bureau , a component of ESA, measures and disseminates information about the U.S. economy, society, and institutions, which fosters economic growth, advances scientific understanding, and facilitates informed decisions; National Telecommunications and Information Administration (NTIA) advises the President on communications and information policy; United States Patent and Trademark Office (USPTO) fosters innovation, competitiveness and economic growth, domestically and abroad, by providing high quality and timely examination of patent and trademark applications, guiding domestic and international intellectual property (IP) policy, and delivering IP information and education worldwide; National Institute of Standards and Technology (NIST) promotes U.S. innovation and industrial competitiveness by advancing measurement science, standards, and technology enhancing economic security; and National Oceanic and Atmospheric Administration (NOAA) provides daily weather forecasts, severe storm warnings, climate monitoring to fisheries management, coastal restoration, and the supporting of marine commerce. DOJ's mission is to "enforce the law and defend the interests of the United States according to the law; to ensure public safety against threats foreign and domestic; to provide federal leadership in preventing and controlling crime; to seek just punishment for those guilty of unlawful behavior; and to ensure fair and impartial administration of justice for all Americans." DOJ also provides legal advice and opinions, upon request, to the President and executive branch department heads. The major functions of DOJ offices and agencies are described below Office of the United States Attorneys prosecutes violations of federal criminal laws, represents the federal government in civil actions, and initiates proceedings for the collection of fines, penalties, and forfeitures owed to the United States; United States Marshals Service (USMS) provides security for the federal judiciary, protects witnesses, executes warrants and court orders, manages seized assets, detains and transports offenders who have not been sentenced, and apprehends fugitives; Federal Bureau of Investigation (FBI) investigates violations of federal criminal law; helps protect the United States against terrorism and hostile intelligence efforts; provides assistance to other federal, state, and local law enforcement agencies; and shares jurisdiction with the Drug Enforcement Administration for the investigation of federal drug violations; Drug Enforcement Administration (DEA) investigates federal drug law violations; coordinates its efforts with other federal, state, and local law enforcement agencies; develops and maintains drug intelligence systems; regulates the manufacture, distribution, and dispensing of legitimate controlled substances; and conducts joint intelligence-gathering activities with foreign governments; Bureau of Alcohol, Tobacco, Firearms , and Explosives (ATF) enforces federal law related to the manufacture, importation, and distribution of alcohol, tobacco, firearms, and explosives; Federal Prison System ( Bureau of Prisons; BOP ) houses offenders sentenced to a term of incarceration for a federal crime and provides for the operation and maintenance of the federal prison system; Office on Violence Against Women (OVW) provides federal leadership in developing the nation's capacity to reduce violence against women and administer justice for and strengthen services to victims of domestic violence, dating violence, sexual assault, and stalking; Office of Justice Programs (OJP) manages and coordinates the activities of the Bureau of Justice Assistance; Bureau of Justice Statistics; National Institute of Justice; Office of Juvenile Justice and Delinquency Prevention; Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking; and Office of Victims of Crime; and Community Oriented Policing Services (COPS) advances the practice of community policing by the nation's state, local, territorial, and tribal law enforcement agencies through information and grant resources. The science offices and agencies support research and development and related activities across a wide variety of federal missions, including national competitiveness, space exploration, and fundamental discovery. The primary function of the Office of Science and Technology Policy (OSTP) is to provide the President and others within the Executive Office of the President with advice on the scientific, engineering, and technological aspects of issues that require the attention of the federal government. The OSTP director also manages the National Science and Technology Council, which coordinates science and technology policy across the executive branch of the federal government, and cochairs the President's Council of Advisors on Science and Technology, a council of external advisors that provides advice to the President on matters related to science and technology policy. The National Space Council, in the Executive Office of the President, is a coordinating body for U.S. space policy. Chaired by the Vice President, it consists of the Secretaries of State, Defense, Commerce, Transportation, and Homeland Security, the Administrator of NASA, and other senior officials. The council previously existed from 1988 to 1993 and was reestablished by the Trump Administration in June 2017. The National Aeronautics and Space Administration (NASA) was created to conduct civilian space and aeronautics activities. It has four mission directorates. The Human Exploration and Operations Mission Directorate is responsible for human spaceflight activities, including the International Space Station and development efforts for future crewed spacecraft. The Science Mission Directorate manages robotic science missions, such as the Hubble Space Telescope, the Mars rover Curiosity, and satellites for Earth science research. The Space Technology Mission Directorate develops new technologies for use in future space missions, such as advanced propulsion and laser communications. The Aeronautics Research Mission Directorate conducts research and development on aircraft and aviation systems. In addition, NASA's Office of Education manages education programs for schoolchildren, college and university students, and the general public. The National Science Foundation (NSF) supports basic research and education in the nonmedical sciences and engineering. Congress established the foundation as an independent federal agency "to promote the progress of science; to advance the national health, prosperity, and welfare; to secure the national defense; and for other purposes." The NSF is a primary source of federal support for U.S. university research. It is also responsible for significant shares of the federal science, technology, engineering, and mathematics (STEM) education program portfolio and federal STEM student aid and support. The annual CJS appropriations act includes funding for several related agencies The U.S. Commission on Civil Rights informs the development of national civil rights policy and enhances enforcement of federal civil rights laws; The Equal Employment Opportunity Commission is responsible for enforcing federal laws that make it illegal to discriminate against a job applicant or an employee because of the person's race, color, religion, sex (including pregnancy, gender identity, and sexual orientation), national origin, age (40 or older), disability or genetic information; The International Trade Commission investigates the effects of dumped and subsidized imports on domestic industries and conducts global safeguard investigations, adjudicates cases involving imports that allegedly infringe intellectual property rights, and serves as a resource for trade data and other trade policy-related information; The Legal Services Corporation is a federally funded nonprofit corporation that provides financial support for civil legal aid to low-income Americans; The Mari ne Mammal Commission works for the conservation of marine mammals by providing science-based oversight of domestic and international policies and actions of federal agencies with a mandate to address human effects on marine mammals and their ecosystems; The Office of the U.S. Trade Representative is responsible for developing and coordinating U.S. international trade, commodity, and direct investment policy, and overseeing negotiations with other countries; and The State Justice Institute is a federally funded nonprofit corporation that awards grants to improve the quality of justice in state courts and foster innovative, efficient solutions to common issues faced by all courts. The Consolidated Appropriations Act, 2017 ( P.L. 115-31 ) provided a total of $66.360 billion for CJS. The total appropriation included $9.237 billion for the Department of Commerce, $28.962 billion for DOJ, $27.240 billion for the science agencies, and $921 million for the related agencies. The act also included $109 million in emergency-designated funding provided under the NASA Construction and Environmental Compliance and Restoration account for repairs at NASA-owned facilities that were damaged during recent natural disasters. The Trump Administration requested a total of $62.331 billion for CJS for FY2018, a $4.029 billion (6.1%) reduction compared to the FY2017 enacted appropriation. The request included $7.817 billion for the Department of Commerce, $28.205 billion for the DOJ, $25.751 billion for the science agencies, and $559 million for the related agencies. The Administration's budget would have reduced FY2018 funding for the Department of Commerce by $1.420 billion (-15.4%) and DOJ by $757 million (-2.6%), the science agencies by $1.489 billion (-5.5%), and the related agencies by $362 million (-39.3%). The Administration's budget included funding reductions for many CJS agencies and bureaus. Within the Department of Commerce, the Administration proposed budget cuts for the International Trade Administration (-$41 million, -8.4%), NIST (-$227 million, -23.8%), and NOAA (-$902 million, -15.9%). The Administration's request also included a $232 million (-2.6%) reduction for the FBI, which was largely a result of a proposed $187 million (-78.3%) reduction for the Construction account, but also included a $44 million (-0.5%) reduction for the Salaries and Expenses account. NASA's budget would have decreased by $670 million (-3.4%), which included account-specific reductions of $53 million (-0.9%) for Science, $36 million (-5.5%) for Aeronautics, $8 million (-1.2%) for Space Technology, $390 million (-9.0%) for Exploration, $210 million (-4.2%) for Space Operations, and $63 million (-62.7%) for Education. NSF's budget would have decreased by $819 million (-11.0%), including a $642 million (-11.1%) reduction in the Research and Related Activities account, a $26 million (-12.5%) reduction in the Major Research Equipment and Facilities Construction account, and a $119 million (-13.6%) reduction in the Education and Human Resources account. In addition to proposed decreases for many CJS accounts, the Administration also proposed shuttering several CJS agencies and programs EDA, MDBA, NIST's Hollings Manufacturing Extension Partnership, NOAA's Pacific Coastal Salmon Recovery Fund, NASA's Office of Science Education, and Legal Services Corporation. In all instances except the Pacific Coastal Salmon Recovery Fund, the Administration requested some funding to assist with the closure of these agencies or programs. Even though nearly all CJS accounts would have faced a reduction under the Administration's budget, there were some proposed increases, most of which were in DOJ Office of the United States Attorneys (+$22 million, 1.1%), USMS's Federal Prisoner Detention account (+$82 million, 5.6%), National Security Division (+$5 million, 5.2%), Interagency Law Enforcement (+$9 million, 1.7%), BOP's Salaries and Expenses account (+$76 million, 1.1%), DEA (+$61 million, 2.9%), ATF (+$15 million, 1.2%), Census Bureau's Periodic Censuses and Programs account (+$51 million, 4.3%), NTIA (+$4 million, 12.5%), and NASA's Safety, Security, and Mission Services (+$62 million, 2.2%) and Construction and Environmental Compliance and Restoration (+$26 million, 5.6%) accounts. Finally, the Administration also proposed transferring $610 million from the Crime Victims Fund to three DOJ grant accounts ($445 million to the Office on Violence Against Women, $73 million to State and Local Law Enforcement Assistance, and $92 million to Juvenile Justice Programs) to supplement appropriations from the General Fund of the Treasury. On July 17, 2017, the House Committee on Appropriations reported its version of the FY2018 CJS appropriations bill ( H.R. 3267 ). Subsequently, the text of the committee-reported FY2018 CJS appropriations bill was included as Division C of an omnibus appropriations bill ( H.R. 3354 ) that was passed by the House on September 14, 2017. The House-passed bill would have provided $65.719 billion for CJS, which was 5.2% more than the Administration's request, but 1.0% less than the FY2017 enacted appropriation. The bill included $8.350 billion for the Department of Commerce (6.9% more than the Administration's request, but 9.6% less than the FY2017 enacted appropriation), $29.310 billion for DOJ (3.5% more than the Administration's request and 1.2% more than the FY2017 enacted appropriation), $27.217 billion for the science agencies (5.7% more than the Administration's request, but 0.1% less than the FY2017 enacted appropriation), and $842 million for the related agencies (50.7% more than the Administration's request, but 8.5% less than the FY2017 enacted appropriation). The House declined to shutter the agencies and programs identified by the Administration. However, while the House-passed bill included funding for these agencies and programs, funding levels were below the FY2017 enacted appropriation, except for the Minority Business Development Administration (+$33 million, +550.0%) and the Pacific Coast Salmon Recovery Fund (+$65 million, the Administration requested no funding for this program). Reductions included -$100 million (-36.2%) for EDA, -$25 million (-19.2%) for the Hollings Manufacturing Extension Partnership, -$10 million (-10.0%) for NASA's Office of Science Education, and -$85 million (-22.1%) for the Legal Services Corporation. The House-passed bill would have funded Department of Commerce accounts at an amount above the Administration's request. However, the House would have funded agencies such as ITA (-$16 million, -3.3%), ESA (-$11 million, -10.5%), NIST (-$82 million, -8.6%), and NOAA (-$702 million, -12.4%) at levels below the FY2017 enacted appropriation. The total funding for the Census Bureau would have received an increase under the House-passed bill relative to the FY2017 levels (+$37 million, +2.5%), which was due to an increase in the Periodic Censuses and Programs account but partially offset by a decrease in the Current Surveys and Programs account. Within DOJ, the House would have increased funding for many federal law enforcement agencies compared to the FY2017 enacted appropriation. The House-passed bill included an $88 million (+3.2%) increase for the USMS, a $54 million (+2.6%) increase for the DEA, and a $36 million (+2.8%) increase for the ATF. There were also increases for the Office of the U.S. Attorneys (+$22 million, +1.1%) and BOP (+$26 million, +0.4%). The House-passed bill reduced funding for the FBI by $140 million (-1.6%), but this was due to a $187 million (-78.3%) reduction in the FBI's Construction account. The House bill did not include the Administration's proposal to supplement direct appropriations for the Office on Violence Against Women, State and Local Law Enforcement Assistance, and Juvenile Justice Programs accounts with transfers from the Crime Victims Fund. The House-passed bill would have increased funding for NASA by $110 million, or 0.6% relative to FY2017 levels, for FY2018. The bill funded four of NASA's accounts at levels below the Administration's request: Space Operations (-$64 million, -1.4%); Safety, Security, and Mission Services (-$4 million, -0.1%); Construction and Environmental Compliance and Restoration (-$10 million, -2.0%); and the Office of the Inspector General (-$1 million, -3.6%). However, only the funding for the Space Operations account was less than the FY2017 enacted appropriation. The House-passed bill included a $133 million (-1.8%) decrease for NSF, which was largely the result of a $131 million reduction (-62.8%) for the Major Research Equipment and Facilities Construction account. The House declined to adopt the Administration's proposal to reduce funding for the Research and Related Activities and Education and Human Resources accounts. The House would have funded the Commission on Civil Rights, the Equal Employment Opportunity Commission, and the State Justice Institute at the Administration's requested level. The House would have funded the U.S. Trade Representative at a level below that requested by the Administration (-$5 million, -8.0%) the one requested by the Administration. However, the House included $15 million from the Trade Enforcement Trust Fund to support the trade enforcement activities of the Office of the U.S. Trade Representative. On July 27, 2017, the Senate Committee on Appropriations reported its FY2018 CJS appropriations bill ( S. 1662 ). The bill would have provided $65.991 billion for CJS. This amount was 5.7% more than the Administration's request, but 0.6% less than the FY2017 enacted appropriation. The Senate committee-reported bill included $9.161 billion for the Department of Commerce (17.2% more than the Administration's request, but 0.8% less than the FY2017 enacted appropriation), $29.068 billion for DOJ (2.6% more than the Administration's request and 0.4% more than the FY2017 enacted appropriation), $26.846 billion for the science agencies (4.3% more than the Administration's request, but 1.4% less than the FY2017 enacted appropriation), and $916 million for the related agencies (64.0% more than the Administration's request, but 0.5% less than the FY2017 enacted appropriation). The Senate Committee on Appropriations also declined to follow the Administration's request to eliminate several CJS agencies and programs. In most instances, the committee recommended funding for these agencies and programs at the FY2017 enacted level. However, the committee-reported bill included a $22 million (-8.0%) reduction for the EDA. The Senate Committee on Appropriations recommended cuts relative to FY2017 levels for many Department of Commerce Bureaus and Offices, including ITA (-$1 million, -0.2%), ESA (-$8 million, -7.7%), NIST (-$8 million, -0.8%), and NOAA (-$85 million, -1.5%). However, in general, the committee declined to reduce funding to the levels proposed by the Trump Administration. The only agencies funded at a level below the Administration's request were BIS (-$1 million, -0.9%) and NTIA (-$4 million, -11.1%). S. 1662 included a $51 million (3.5%) increase for the Census Bureau, all of which would have been dedicated to the Periodic Censuses and Programs account. The Senate Committee on Appropriations would have funded most DOJ accounts at or above the FY2017 enacted level. The committee-reported bill included a $108 million (4.0%) increase for the USMS, a $13 million (0.6%) increase for the DEA, a $15 million (1.2%) increase for the ATF, and a $22 million (1.1%) increase for the Offices of the U.S. Attorneys relative to the FY2017 level. A few notable reductions relative to the FY2017 level were to the FBI's Construction account (-$84 million, -35.2%), and the State and Local Law Enforcement Assistance account (-$109 million, -8.6%). The Senate Committee on Appropriations largely declined to adopt the Administration's proposal to supplement funding for several grant accounts with transfers from the Crime Victims Fund. However, the committee-reported bill included a transfer of $379 million from the Crime Victims Fund to the Office on Violence Against Women. The amount the Senate Committee on Appropriations would have provided for NASA was $233 million (-1.2%) less than the FY2017 enacted appropriation, but $437 million (2.3%) more than the Administration's request. The committee-reported bill included reductions relative to the 2017 level for the Science (-$193 million, -3.3%), Aeronautics (-$10 million, -1.5%), and Space Operations (-$199 million, -4.0%) accounts. The committee recommended reductions for the Science (-$140 million, -2.5%); Safety, Security, and Mission Services (-$3 million, 0.1%); and the Office of the Inspector General (-$1 million, -3.3%) relative to the Administration's request. The committee-reported bill included a $161 million (-2.2%) reduction for NSF relative to the FY2017 level. Specifically, it recommended reductions for four NSF accounts: Research and Related Activities (-$116 million, -1.9%), Major Research Equipment and Facilities Construction (-$26 million, -12.5%), Education and Human Resources (-$18 million, -2.0%), and Agency Operations and Award Management (-$1 million, -0.5%). NSF's other two accounts, the National Science Board and the Office of the Inspector General, would have been funded at the FY2017 enacted level. However, the recommended funding for NSF was 9.9% greater than the Administration's request. The amount the Senate Committee on Appropriations recommended for the related agencies was 0.5% less than the FY2017 appropriation, and the reduction was the result of a $4 million (-7.1%) cut for the Office of the U.S. Trade Representative--all other agencies would have been funded at the FY2017 enacted level. The committee-reported amount for all related agencies, other than the Office of the U.S. Trade Representative, was greater than the Administration's request. For FY2018, Congress and the President appropriated a total of $72.119 billion for CJS. This includes $70.921 billion in regular appropriations provided in the Consolidated Appropriations Act, 2018 ( P.L. 115-141 ) and $1.198 billion in emergency-designated funding provided in the Further Additional Supplemental Appropriations for Disaster Relief Requirements Act, 2018 ( P.L. 115-123 ). The total, without emergency-designated funding, is 6.9% greater than the FY2017 enacted appropriation and 13.6% greater than the Administration's request. Including emergency-designated funding, the total is 8.7% greater than the FY2017 appropriation and 15.5% greater than the Administration's request. The FY2018 enacted appropriation for the Department of Commerce is $12.137 billion ($11.137 billion without emergency-designated funding), for the Department of Justice it is $30.384 billion ($30.299 billion without emergency-designated funding), for the science agencies it is $28.609 billion ($28.511 billion without emergency-designated funding), and for the related agencies it is $989 million ($974 million without emergency-designated funding). Total FY2018 funding for the Department of Commerce is 31.4% greater than the FY2017 appropriation (20.6% greater without emergency-designated funding) and 55.3% greater than the Administration's request (42.5% greater without emergency-designated funding). Total FY2018 funding for the Department of Justice is 4.9% greater than the FY2017 appropriation (4.6% greater without emergency-designated funding) and 7.3% greater than the Administration's request (7.0% greater without emergency-designated funding). Total FY2018 funding for the science agencies is 5.0% greater than the FY2017 appropriation (4.7% greater without emergency-designated funding) and 11.1% greater than the Administration's request (10.8% greater without emergency-designated funding). Total FY2018 funding for the related agencies is 7.4% greater than the FY2017 appropriation (5.8% greater without emergency-designated funding) and 77.0% greater than the Administration's request (74.3% greater without emergency-designated funding). The final funding agreement did not include the Administration's proposal to shutter several CJS agencies and programs. In fact, these agencies and programs were funded at or above the FY2017 enacted level (even if emergency-designated funding is excluded). Congress and the President increased regular appropriations for the EDA by $26 million, the MBDA by $5 million, NIST's Hollings Manufacturing Extension Partnership by $10 million, and the Legal Services Corporation by $25 million. In general, nearly all CJS accounts received an increase over both the FY2017 enacted appropriation and the Administration's request, even if emergency-designated funding is excluded. Some of the exceptions were the International Trade Administration (-$1 million, 0.2% less than the FY2017 enacted appropriation, but +$40 million, 8.9% more than the Administration's request), ESA (-$8 million, 7.7% less than the FY2017 enacted appropriation, but +$2 million, 2.1% more than the Administration's request), NIST's National Network for Manufacturing Innovation (-$10 million, 40.0% less than the FY2017 enacted appropriation, the same as the Administration's request), DOJ's General Legal Activities account (the same as the FY2017 enacted appropriation, -$2 million, 0.2% less than the Administration's request), DOJ's Research, Evaluation, and Statistics account (-$21 million, 18.9% less than the Administration's request), NASA's Space Operations account (-$199 million, 4.0% less than the FY2017 enacted appropriation, but +$12 million, 0.2% greater than the Administration's request), NASA's Safety, Security, and Mission Services account (+$58 million, 2.1% greater than the FY2017 enacted appropriation, -$3 million, 0.1% less than the Administration's request), and NSF's Major Research Equipment and Facilities Construction account (-$26 million, 12.5% less than the FY2017 enacted appropriation, the same as the Administration's request). Congress and the President also provided $492 million for the Office on Violence Against Women, but the entire amount is derived through a transfer from the Crime Victims Fund. Table 1 outlines the FY2017 enacted appropriations, the Administration's FY2018 request, the House-passed, the Senate committee-reported, and the FY2018 enacted amounts for the Departments of Commerce and Justice, the science agencies, and the related agencies. The FY2018 enacted amounts inc lude emergency-designated funding. Figure 1 shows the total appropriations, in both nominal and inflation-adjusted dollars, for CJS for FY2008-FY2017. (More detailed historical appropriations data can be found in Table 2 . ) The data show that nominal appropriations for CJS increased from FY2008 to FY2010. Appropriations for CJS peaked in FY2009 at $76.782 billion if emergency supplemental appropriations from the American Recovery and Reinvestment Act of 2009 (ARRA; P.L. 111-5 ) are included. (If ARRA funding is not considered, appropriations peaked in FY2010 at $69.146 billion.) ARRA provided a substantial increase in appropriations for FY2009. The $15.992 billion Congress and the President appropriated for CJS under ARRA added approximately 25% to the amount that was provided for CJS through the annual appropriations process that year. Nominal appropriations for CJS decreased from FY2010 to FY2013, but they have increased in each subsequent fiscal year. If not for the effects of sequestration, which reduced FY2013 CJS appropriations by nearly $4 billion, funding levels for CJS would have held steady at approximately $61 billion between FY2011 and FY2015. CJS appropriations increased by approximately $4 billion in FY2016, largely made possible by the increase to the discretionary spending caps enacted in the Bipartisan Budget Act of 2015 ( P.L. 114-74 ). CJS appropriations increased marginally in FY2017 ($361 million, or 0.1%). Figure 2 shows total CJS appropriations for FY2008-FY2017 by major component (i.e., the Departments of Commerce and Justice, NASA, and the NSF). Increases in CJS appropriations in FY2009 (not including ARRA funding) and FY2010 largely resulted from Congress and the President appropriating more funding for the Department of Commerce in support of the 2010 decennial census, though there were small increases during that same time in funding for DOJ, NASA, and NSF. Although decreased appropriations for the Department of Commerce mostly explain the overall decrease in CJS appropriations from FY2010 to FY2013 (a 47.4% reduction), cuts in funding for DOJ (-8.7%) and NASA (-9.8%) also contributed. Appropriations for NSF held relatively steady from FY2010 to FY2013.

This report describes actions taken by the Administration and Congress to provide FY2018 appropriations for the Commerce, Justice, Science, and Related Agencies (CJS) accounts. It also provides an overview of FY2017 appropriations for agencies and bureaus funded as part of annual CJS appropriations. Division B of the Consolidated Appropriations Act, 2017 (P.L. 115-31) provided a total of $66.360 billion (which includes $109 million in emergency-designated funding) for CJS. Under the act, the Department of Commerce received $9.237 billion, the Department of Justice received $28.962 billion, the science agencies received $27.240 billion, and the related agencies received $921 million. The Trump Administration requested a total of $62.331 billion for CJS for FY2018, a $4.029 billion (6.1%) reduction compared to the FY2017 enacted appropriation. The request included $7.817 billion for the Department of Commerce, $28.205 billion for the Department of Justice, $25.751 billion for the science agencies, and $559 million for the related agencies. The Administration's budget included cuts for most CJS accounts. In addition to the funding reductions, the Administration proposed to eliminate several CJS agencies and programs, including the Economic Development Administration, the Minority Business Development Administration, the Legal Services Corporation, and the National Aeronautics and Space Administration's Office of Education. On July 17, 2017, the House Committee on Appropriations reported its FY2018 CJS appropriations bill (H.R. 3267). The text of the FY2018 CJS committee-reported appropriations bill was included as Division C of an omnibus appropriations bill that was passed by the House on September 14, 2017 (H.R. 3354). The House-passed bill, as amended, would have provided $65.719 billion for CJS, which is 1.0% less than the FY2017 enacted appropriation, but 5.2% greater than the Administration's request. The bill included $8.350 billion for the Department of Commerce, $29.310 billion for the Department of Justice, $27.217 billion for the science agencies, and $842 million for the related agencies. The House-passed bill would have provided funding for the agencies and programs the Administration proposed eliminating. The Senate Committee on Appropriations reported its FY2018 CJS appropriations bill (S. 1662) on July 27, 2017. The committee-reported bill recommended a total of $65.991 billion for CJS for FY2018, an amount that was 0.6% less than the FY2017 enacted appropriation, but 5.7% more than the Administration's request. The committee-reported bill included $9.161 billion for the Department of Commerce, $29.068 billion for the Department of Justice, $26.846 billion for the science agencies, and $916 million for the related agencies. The Senate committee-reported bill would have provided funding for the agencies and programs the Administration proposed eliminating. For FY2018, Congress and the President provided $72.119 billion for CJS in enacted appropriations. This includes $70.921 billion in regular appropriations provided in the Consolidated Appropriations Act, 2018 (Division B, P.L. 115-141) and $1.198 billion in emergency-designated funding provided in the Further Additional Supplemental Appropriations for Disaster Relief Requirements Act, 2018 (P.L. 115-123). The total FY2018 enacted appropriation is $12.137 billion for the Department of Commerce, $30.384 billion for the Department of Justice, $28.609 billion for the science agencies, and $989 million for the related agencies. Nearly all CJS accounts saw an increase in funding for FY2018. In addition, Congress declined to adopt the Administration's earlier proposal to eliminate funding for several CJS agencies and programs.

The CG(X) cruiser is the Navy's planned replacement for its 22 existing Ticonderoga (CG-47) class Aegis-equipped cruisers, which are projected to reach retirement age between 2021 and 2029. The CG-47s are multimission ships with an emphasis on air defense. The Navy wants the CG(X) to be a multimission ship with an emphasis on air defense and ballistic missile defense (BMD). The Navy plans to equip the CG(X) with a large and powerful new radar capable of supporting BMD operations. The CG(X) may also have more missile-launch tubes than are on the DDG-1000, and one 155mm Advanced Gun System (AGS), or none, as opposed to two AGSs on the DDG-1000. The Navy's planned 313-ship fleet calls for a total of 19 CG(X)s. The FY2008-FY2013 Future Years Defense Plan (FYDP) calls for procuring the first CG(X) in FY2011 and the second in FY2013. The Navy's 30-year (FY2008-FY2037) shipbuilding plan calls for building 17 more CG(X)s between FY2014 and FY2023, including two CG(X)s per year for the seven-year period FY2015-FY2021. The Navy is currently assessing CG(X) design options in a study called the CG(X) Analysis of Alternatives (AOA), known more formally as the Maritime Air and Missile Defense of Joint Forces (MAMDJF) AOA. The Navy initiated this AOA in the second quarter of FY2006 and plans to complete it by mid-September 2007. Navy plans call for Milestone A review of the CG(X) program in the first quarter of FY2008, preliminary design review (PDR) in the third quarter of FY2010, critical design review (CDR) in the third quarter of FY2011, and Milestone B review in the fourth quarter of FY2011. Although the CG(X) AOA is examining a wide range of design options for the CG(X), the Navy has publicly stated on several occasions that would like to use the design of its new DDG-1000 destroyer as the basis for the CG(X). (The potential for using the DDG-1000 design for the CG(X) was one of the Navy's arguments for moving ahead with the DDG-1000 program.) At an April 5, 2006, hearing, for example, a Navy admiral then in charge of shipbuilding programs, when asked what percentage of the CG(X) design would be common to that of the DDG-1000 (previously called the DD(X)), stated the following: [W]e haven't defined CG(X) in a way to give you a crisp answer to that question, because there are variations in weapons systems and sensors to go with that. But we're operating under the belief that the hull will fundamentally be--the hull mechanical and electrical piece of CG(X) will be the same, identical as DD(X). So the infrastructure that supports radar and communications gear into the integrated deckhouse would be the same fundamental structure and layout. I believe to accommodate the kinds of technologies CG(X) is thinking about arraying, you'd probably get 60 to 70 percent of the DD(X) hull and integrated (inaudible) common between DD(X) and CG(X), with the variation being in that last 35 percent for weapons and that sort of [thing].... The big difference [between CG(X) and DDG-1000] will likely [be] the size of the arrays for the radars; the numbers of communication apertures in the integrated deckhouse; a little bit of variation in the CIC [Combat Information Center--in other words, the] command and control center; [and] likely some variation in how many launchers of missiles you have versus the guns. If the CG(X) is based on the DDG-1000 design, its unit procurement cost might be comparable to that of the DDG-1000. The FY2008-FY2013 FYDP includes notional "placeholder" figures of about $3.2 billion in FY2011 to procure the first CG(X) and about $3.1 billion in FY2013 to procure the second CG(X). This compares with about $3.2 billion to procure each of the first two DDG-1000s in FY2007-FY2008. Early Navy plans called for procuring two DDG-1000s per year, and a total of 16, 24, or 32 ships. In large part for affordability considerations, planned DDG-1000 procurement was reduced to one ship per year, and a total of 7 ships. If affordability considerations similarly limit CG(X) procurement to one ship per year, total CG(X) procurement might be reduced from 19 ships to perhaps no more than 12 ships, and possibly as few as eight. Some observers, including the Congressional Budget Office (CBO), have expressed concern about the prospective affordability and executibility of the Navy's long-range shipbuilding plan. Some Members of Congress, particularly Representatives Gene Taylor and Roscoe Bartlett, the chairman and ranking member, respectively, of the Seapower and Expeditionary Forces subcommittee of the House Armed Services Committee, strongly support expanding the use of nuclear propulsion to a wider array of Navy surface ships, beginning with the CG(X). Nuclear propulsion is an option being studied in the CG(X) AOA. If the CG(X) is to be a multimission ship for replacing the CG-47s, basic design options for the CG(X) include (but are not limited to) the following: a conventionally powered ship based on the hull design of the 9,200-ton Arleigh Burke (DDG-51) class Aegis destroyer, or on a variation of that hull design; a conventionally powered ship based on a new-design hull that is smaller than the DDG-1000 hull; a conventionally powered ship based on the DDG-1000 hull design or on a variation of that hull design (the Navy's stated preferred approach); a conventionally powered ship based on a new-design hull that is larger than the DDG-1000 hull; and nuclear-powered versions of each of these four ships. Basing the CG(X) on the current DDG-51 hull could produce a CG(X) design displacing roughly 9,000 tons. Lengthening the DDG-51 hull with a mid-hull plug might produce a CG(X) design displacing roughly 11,000 tons, which would be about 24% smaller than the 14,500-ton DDG-1000, and roughly as large as the six California (CGN-36) and Virginia (CGN-38) class nuclear-powered cruisers that were procured for the Navy in the 1960s and 1970s. The deck house and lower decks of the DDG-51 hull would need to be redesigned to accommodate a radar capable of supporting BMD operations, an integrated electric-drive propulsion system, other new technologies from the DDG-1000, and (if desired) missile-launch tubes large enough to accommodate a BMD interceptor now in development called the Kinetic Energy Interceptor (BMD). Since the DDG-51 hull design was originally developed in the 1980s, it may include hard-to-change features that prevent it from fully accommodating certain DDG-1000 new technologies, such as, perhaps, those permitting the ship to be operated by a substantially smaller crew. For ships of a similar type and level of complexity, relative size can be rough proxy for relative unit procurement cost. A 9,000- to 11,000-ton CG(X) would be 62% to 76% as large as a 14,500-ton DDG-1000-based CG(X). However, some shipbuilding costs, such as shipyard fixed overhead costs, do not go down proportionately with ship size. A DDG-51-based CG(X) consequently might cost more than 62% to 76% of what a 14,500-ton CG(X) would cost to procure--perhaps something more like 72% to 86%. Production of a DDG-51-based CG(X) might benefit from residual learning-curve effects of prior production of DDG-51s, the last of which was procured in FY2005. Any limitations in incorporating DDG-1000 technologies for reducing crew size could result in a ship with a larger crew than that of the DDG-1000, and thus higher crew-related life-cycle O&S costs than a DDG-1000-based CG(X). The DDG-51 hull is a conventional flared hull that slopes outward as it rises up from the waterline. A CG(X) based on the DDG-51 hull consequently would be more detectible by radar than a ship using a tumblehome (inwardly sloping) hull, like that of the DDG-1000. In addition, as ship size grows, so does the size of the ship's weapon and sensor payload. Consequently, larger ships generally have more capability than smaller ones. Indeed, due to certain economies of scale that occur in naval architecture, larger ships can have proportionately larger payloads than smaller ones. Thus, a DDG-51-based CG(X) might be less than 62% to 76% as capable as a 14,500-ton CG(X). Due to the space, weight, and energy requirements of the large and powerful BMD-capable radar to be carried by the CG(X), accommodating such a radar in a DDG-51-based CG(X) design might require steep reductions in other ship capabilities. A ship using a new-design hull smaller than the DDG-1000 hull might similarly displace roughly 9,000 to 11,000 tons. (A new-design hull larger than about 11,000 tons might be too close in size to the DDG-1000 hull to produce savings that are worthwhile compared to the option of simply reusing the DDG-1000 hull.) The unit procurement cost of such a ship might be about equal to that of a DDG-51-based design, or perhaps somewhat less, if the new-design hull incorporates producibility features (i.e., features for ease of manufacturing, such as straighter-running pipeline arrangements) that are more advanced than those of the DDG-51 hull. A new-design hull might be able to take more complete advantage of DDG-1000 technologies than a DDG-51-based design, possibly giving the ship a smaller crew and thus lower personnel-related O&S costs. The new-design hull could be a conventional flared hull, like that of the DDG-51, or a reduced-size version of the DDG-1000's tumblehome hull. The latter option could produce a ship as stealthy as (or perhaps slightly stealthier than) the DDG-1000. Due to the potential greater ability to take advantage of DDG-1000 technologies or other new technologies, a 9,000- to 11,000-ton ship based on a new-design hull might be somewhat more capable than a DDG-51-based design. A 9,000- to 11,000-ton design would still, however, be substantially less capable than a DDG-1000-based design, and perhaps proportionately less capable. As with the previous option, due to the space, weight, and energy requirements of the large and powerful BMD-capable radar to be carried by the CG(X), accommodating such a radar in a 9,000- to 11,000-ton CG(X) based on a new-design hull design might require steep reductions in other ship capabilities. This option, which is the Navy's stated preferred approach, could produce a ship about as large as the 14,500-ton DDG-1000, or (if the DDG-1000's hull is expanded) somewhat larger than the DDG-1000 (i.e., upwards of 20,000 tons). The unit procurement cost of this option would be substantially greater than those of the previous two options, but perhaps less so than a simple size comparison would suggest, due to shipbuilding costs that are fixed or relatively insensitive to ship size. Production of the ship would benefit from learning-curve effects of producing DDG-1000s. Hull-design and system-integration costs would be minimized through reuse of the DDG-1000 hull and elements of the DDG-1000 combat system, and could be substantially lower than those of the previous two options. The ship would be substantially more capable than the previous two options, and perhaps proportionately more capable, due to economies of scale in naval architecture. Thus, although this ship would be substantially more expensive to procure, it would likely offer more capability per dollar than the previous two designs. This option could produce a ship of more than 20,000 tons. In at least some respects, this option would be more capable than the previous option, and perhaps proportionately more capable. The unit procurement cost of this option would be greater than that of the previous option, but perhaps less so than a simple size comparison would suggest. Production might benefit less than would the previous option from the DDG-1000 learning curve, and hull-design and system-integration costs might be higher than those of the previous option due to less reuse of DDG-1000 hull design features and the DDG-1000 combat system. A Navy report submitted to Congress in January 2007 suggests that adding a nuclear propulsion plant to a to any of the above four options would likely increase its unit procurement cost by $600 million to $700 million in constant FY2007 dollars. If oil prices in coming years are high, much or all of the increase in unit procurement cost could be offset over the ship's service life by avoided fossil-fuel costs. Due to its larger size, the fourth option above would most easily accommodate a modified version of one-half of the new nuclear propulsion plant that has been developed and designed for the Navy's new Gerald R. Ford (CVN-78) class aircraft carriers. The third option above might also accommodate a modified version of one-half of a Ford-class propulsion plant, but perhaps less easily and with more modifications. The first two options above would likely require the design of a new nuclear propulsion plant. Designing a new nuclear propulsion plant would likely cost hundreds of millions of dollars; modifying the Ford-class plant would cost substantially less. A nuclear-powered ship would be more capable than a corresponding conventionally powered version because of the mobility advantages of nuclear propulsion, which include, for example, the ability to make long-distance transits at high speeds in response to distant contingencies without need for refueling. Building the CG(X) as a nuclear-powered ship might mean that at least part of the ship would not be built at two shipyards that have built the Navy's cruisers and destroyers in recent years, because neither of these yards are certified to build nuclear-powered ships. The basic CG(X) design options presented above can be assessed in terms of development cost and risk, unit procurement cost, annual O&S cost, and unit capability, all in the context of operational requirements or desires, the potential operational risks of not fulfilling those requirements or desires due to insufficient unit capability or insufficient ship quantities, and potential implications for the shipbuilding industrial base. The question of whether to procure a potentially smaller number of individually more expensive and more capable ships, or a potentially larger number of individually less expensive and less capable ships, is a classic ship-design and force-planning issue that the Navy, the Department of Defense, and Congress have faced many times in the past. The advantage that larger ships have in terms of unit capability and capability per dollar is one reason why the Navy has often preferred larger and more capable designs in recent decades. This advantage has been counterbalanced by the issue of unit procurement affordability, because procuring an insufficient quantity raises the risk of not having a ship in service in the right location when it is needed. Potential oversight questions for Congress include the following: How much consideration is the Navy giving in the CG(X) AOA to design options other than those based on the DDG-1000? Are other basic options being treated in the AOA simply as straw men? What are the relative costs and capabilities of the options discussed above? What is the potential tradeoff between unit capability (and unit procurement cost) on the one hand, and potential numbers procured on the other? In assessing basic CG(X) design options, is the Navy assigning too much value, not enough value, or about the right amount of value to the sunk costs of designing the DDG-1000 hull and to CG(X) production economies that can result from the DDG-1000 learning curve? Section 1012 of the House-reported version of the FY2008 defense authorization bill ( H.R. 1585 ) would make it U.S. policy to build cruisers and certain other large Navy ships with nuclear power unless the Secretary of Defense notifies Congress that nuclear power for a given class of ship would not be in the national interest. The provision is discussed on page 387 of the House Armed Services Committee's report on H.R. 1585 ( H.Rept. 110-146 of May 11, 2007).

The Navy has stated that it would like to use the design of its new DDG-1000 destroyer as the basis for its planned CG(X) cruiser. Ships based on other hull designs are possible. Nuclear propulsion is an option being studied for the CG(X). For a more general discussion of both the CG(X) and DDG-1000, see CRS Report RL32109, Navy DDG-1000 and DDG-51 Destroyer Programs: Background, Oversight Issues, and Options for Congress, by [author name scrubbed]. This report on basic CG(X) design options will be updated as events warrant.

The farm bill is an omnibus, multi-year law that governs an array of agricultural and food programs. It provides an opportunity for policymakers to periodically address a broad range of agricultural and food issue s. The farm bill has typically undergone reauthorization about every five years. In the past, farm bills have focused primarily on farm commodity program support for a handful of staple commodities--corn, soybeans, wheat, cotton, rice, dairy, and sugar. Farm bills have become increasingly expansive in their topical scope since 1973, when a nutrition title was included. Other prominent additions include conservation, horticulture, and bioenergy programs. Recent farm bills have been subject to various developments, such as insufficient votes to pass the House floor, presidential vetoes, or--as in the case of 2008 and 2014 farm bills--short-term extensions. The 2002 farm bill was the most recent to be enacted before the fiscal year expiration date for some programs. The current farm bill (the Agricultural Act of 2014, P.L. 113-79 ) has many provisions that expire in 2018. The 115 th Congress has begun but not finished a new farm bill. An initial House vote on H.R. 2 failed by vote of 198-213, but floor procedures allowed that vote to be reconsidered, and it passed by a second vote of 213-211. The Senate passed its bill as an amendment to H.R. 2 by a vote of 86-11. Conference proceedings officially began on September 5, 2018, but have not reached agreement. The timing and consequences of expiration vary by program across the breadth of the farm bill. There are two principal expiration dates: September 30 and December 31. The 2014 farm bill generally expires either at the end of FY2018 (September 30, 2018), or at the end of the 2018 crop year. Crop years vary by commodity, but the first to be affected by a new crop year is dairy, which has a 2018 crop year that ends on December 31, 2018. Expiration of a farm bill on September 30 matters for programs with fiscal year authorizations. These programs include certain nutrition, conservation, trade, and agricultural support programs (excluding the Title I commodity programs), along with many authorizations for discretionary appropriations. Although the Supplemental Nutrition Assistance Program (SNAP) has an authorization of appropriations ending on September 30, it (and other related programs in the SNAP account) can continue to operate with an appropriation. Farm commodity programs expire on a crop year. A crop year is the year in which crops are harvested and may extend into a new calendar year. In the case of dairy, the crop year is the calendar year. Following the expiration of the current farm law without replacement legislation or an extension, the first farm commodity program to be affected would be dairy, whose new crop year begins on January 1, 2019. The possible consequences of expiration include minimal disruption (if the program is able to be continued via appropriations), ceasing new activity (if its authorization to use mandatory funding expires), or reverting to permanent laws enacted decades ago (for the farm commodity programs). For example An appropriations act or a continuing resolution can continue some farm bill programs even though a n authority has expired. Programs using discretionary funding--and programs using appropriated mandatory funding such as those in the SNAP account--can continue to operate via appropriations action. Most farm bill programs with mandatory funding generally cease new operations when they expire (e.g., the Conservation Reserve Program (CRP), and Market Assistance Program (MAP)). However, existing contracts under prior-year authority could generally continue to be paid. Exceptions include SNAP and programs in the SNAP account (as discussed above), the farm commodity programs, and crop insurance (as discussed below). The mandatory farm commodity programs would begin reverting to permanent law beginning with the 2019 crop year , for which dairy is the first to be affected, beginning on January 1, 2019. However, payments for the 2018 crop year would continue to be authorized from the 2014 farm bill, including final payments for corn and soybeans that would be made as late as October 2019 after the 2018 crop's marketing year. Crop insurance is an example of a program with mandatory funding that is permanently authorized outside of the farm bill and does not expire. 9 The funding source that is authorized matters, since some programs use discretionary appropriations and some are mandatory spending. These differences affect how the farm bill is constructed under normal circumstances. They also affect what happens when the farm bill expires or if there is an extension. Farm bill programs are generally funded in two ways: 1. Discretionary authorizations. A farm bill sets the parameters for programs and authorizes them to receive funding in subsequent appropriations, but does not provide or assure actual funding. Budget enforcement is through future appropriations acts and budget resolutions. 2. Mandatory spending. A farm bill authorizes outlays and pays for them with multiyear budget estimates when the farm bill is enacted. Budget enforcement is through "PayGo" budget rules, baseline projections, and scores of the effect of proposed bills. The baseline is a projection of future federal spending on mandatory programs under current law. It is a benchmark against which proposed changes in law are measured (i.e., the score of a bill). Discretionary spending is authorized throughout the farm bill. Discretionary programs include most rural development, credit, and research programs, and some conservation and nutrition programs. Some smaller research, bioenergy, and rural development programs are authorized to receive both mandatory and discretionary funding. Most agency operations are financed with discretionary funds. SNAP--a mandatory program--also requires an appropriation and can be continued in expiration situation via appropriations action. Without a new farm bill or extension, many programs may not appear to have statutory authority to receive appropriations (an "authorization of appropriations"). However, appropriations law allows the continued operation of a program where only appropriations action has occurred. The Government Accountability Office (GAO) says there is no constitutional or statutory requirement for an appropriation to have a prior authorization. Congress distinguishes between authorizations and appropriations, but this is a congressional construct. GAO says that "the existence of a statute imposing substantive functions upon an agency that require funding for their performance is itself sufficient legal authorization for the necessary appropriations." For expired authorizations, GAO says that "appropriation of funds for a program whose funding authorization has expired ... provides sufficient legal basis to continue the program." Programs that rely on mandatory funding are perhaps the most at risk for interruption if the farm bill expires. Most farm bill programs with mandatory funding have an expiration date either on their program authority or their funding authority. These include farm commodity programs, some conservation programs, agricultural trade programs, and international food aid programs. For the most part, without reauthorization or an extension, these programs would cease to operate or undertake new activities in an expiration. Exceptions are noted above. Among the mandatory-funded programs that are usually the focus of the farm bill, there are two subcategories that may affect congressional action--some have baseline beyond FY2018 and some do not have baseline after FY2018. In an expiration, both categories of mandatory programs face similar disruption when their authorizations expire. But the difference in having or not having a baseline is important as Congress writes a farm bill or if Congress considers an extension to deal with an expiration. For example, when Congress enacted a one-year extension of the 2008 farm bill for 2013, the extension act was budget-neutral. The major programs that had baseline were extended at no additional budgetary cost. However, the subset of programs without baseline did not continue in the 2013 extension because they would have needed budgetary offsets to provide continuing funding and not increase the deficit. Providing funding for those programs without baseline would have made the extension more difficult. The current, partial expiration of the 2014 farm bill has precedent in the two most recent farm bills--the 2002 and 2008 farm bills. As the 2014 farm bill was being developed, there were two periods of expiration of the 2008 farm bill. The first was from October 1, 2012, through January 1, 2013, and the second dated from October 1, 2013, through February 6, 2014. Some programs ceased new operations, while others were able to continue. However, neither expiration lasted long enough for the farm commodity programs to revert to a "permanent law" that would have raised support prices and increased federal outlays. On the first occasion, the 2008 farm bill was extended for one year; all provisions that were in effect on September 30, 2012, were extended through FY2013 or for the 2013 crop year as applicable. Programs without baseline did not continue in FY2013 because no additional mandatory funding was provided in the extension. On the second occasion, no extension was enacted since a conference agreement was expected. The Agricultural Act of 2014 (2014 farm bill; P.L. 113-79 ) was enacted on February 7, 2014, to cover the 2014-2018 crop years and other programs through September 30, 2018. As the 2008 farm bill was being developed, the 2002 farm bill expired and portions of it were extended six times for less than a year in total. The first of those extensions continued authority for many expiring programs for about three months. Because final agreement was pending, five more extensions each covered a week to a month. With a few exceptions, these extensions continued the 2002 farm bill provisions--including the dairy and sugar programs, but not the direct, counter-cyclical, and marketing loan programs for the other supported commodities. Programs without baseline did not continue during the first part of the fiscal year because no additional mandatory funding was provided in the short term extensions. The last year for the 2014 farm bill's commodity programs is the 2018 crop year--that is, crops harvested during 2018 and marketed during the twelve months following harvest. The dairy margin protection program is the first such program that would expire, on December 31, 2018. The farm commodity income support programs raise farm income by making payments and reducing financial risks from uncertain weather and market conditions. Government-set reference prices offer payments when market prices fall below support levels. These programs collectively are known as "Title I" programs, based on where they have been placed in recent farm bills. Farm commodity support policy has evolved since the first farm bill in 1933 via successive farm bills that update and supersede prior policies. However, a set of nonexpiring provisions remain in statute and are known as "permanent law." These provisions were enacted primarily in the Agriculture Adjustment Act of 1938 and the Agricultural Act of 1949, as amended by subsequent farm bills. As more modern farm bills moved away from using the permanent law provisions, they have suspended permanent law, but only for the duration of each farm bill. If the suspension of permanent law were to expire, the commodity programs authorized by permanent law could be reactivated. The first commodity to be affected by the expiration of the 2014 farm bill would be dairy, which has a 2018 crop year that ends on December 31, 2018. Some see the existence of permanent law--and the policy and budget consequences that could result--as an assurance that the farm commodity programs will be revisited every time a farm bill expires. In general, recent farm bills have retained permanent law and continued to suspend it, though some bills over the past three decades have proposed to repeal it (see Table 1 ). The commodity support provisions of the 1938 and 1949 permanent laws are commonly viewed as being so fundamentally different from current policy and potentially costly to the federal government--and inconsistent with today's farming practices, marketing system, and international trade agreements--that Congress is unlikely to let permanent law take effect. Permanent law provides mandatory support for basic crops through nonrecourse loans. It does not authorize more modern support approaches such as loan deficiency payments, payments based on prices or revenue but not to actual production (decoupled), or dairy margin protection. Official budget estimates of reverting to permanent law have been rare. In 1979, the Congressional Budget Office studied the effect on dairy policy. In 1985, USDA analyzed more comprehensively the possible economic consequences of permanent law. It found that significant market intervention and increased government expenditures could occur. In 2013, the White House indicated that permanent law for dairy could cost $12 billion per year and result in milk prices doubling. This was consistent with an extrapolation of the 1985 USDA report by substituting modern prices and production levels, which estimated outlays between $10 billion and $12.5 billion per year for dairy. At that time, projected outlays for dairy in the 2008 farm bill were about $100 million per year. If the suspension of permanent law expires, USDA would be required to implement the permanent law statutes. When the farm bill faced expiration in 2012, USDA outlined how it would implement permanent law. To achieve implementation, however, USDA might need to write new regulations, which could take additional time. In 2013, USDA indicated that it could take at least a month to implement permanent law. The market effects of implementing permanent law may be more gradual and the effect could take weeks or months. Implementation of permanent law is based on crop years and tied to the harvest and marketing of a crop (effectively, the marketing year for the corresponding crop year), and thus would be separated from a single, fixed expiration date. For example, the 2014 farm bill covers farm production through the 2018 crop year--including 2014 farm bill payments that might occur after the 2018 crop's marketing year ends in October 2019 for corn and soybeans. The 2019 crop year would be the first year potentially covered by permanent law, and the first commodity to be affected would be dairy (on January 1, 2019), followed by wheat, barley, and oats, whose marketing year starts in June 2019. Price support under permanent law uses the concept of "parity prices." Parity refers to the relationship between prices that farmers receive for their products and prices they pay for inputs. Permanent law determines parity using the period of 1910-1914 as a benchmark. Support prices would be set to guarantee producers between 50% to 90% of the parity price, based on the commodity. Under permanent law, nonrecourse loan rates for wheat, rice, cotton, corn, and other feed grains function as farm price supports. A nonrecourse loan allows the producer to forfeit the crop to the government and keep the principal amount if market prices are below the loan rate. Unless commercial markets pay more than the nonrecourse loan prices, farmers could put their crops under loan and forfeit the commodities to USDA when the nine-month loans mature. However, to avoid forfeiture problems, USDA has permanent authority allowing farmers to repay nonrecourse loans for less than the principal (loan rate) plus interest, similar to marketing loans in the modern commodity program. Productivity gains and technological advances over the past 100 years have made ratios of parity prices out of touch with--and possibly irrelevant to--modern farming practices. Additional production controls exist for wheat and cotton. Permanent law would require USDA to announce acreage allotments and marketing quotas during the prior crop year, and to hold producer referenda on implementing marketing quotas. A two-thirds affirmative vote for marketing quotas results in the highest levels of support, with mandatory restrictions on acreage (and the quantity eligible for support). Even if support levels were set at the lower end of the range in permanent law (e.g., 50%-75% of parity prices), permanent law supports would be above 2018 market prices for all supported commodities and result in greater federal outlays than under the 2008 farm bill ( Figure 1 , Table 1 ). For example, in July 2018, the national average "all milk" farm price received was $15.40 per hundredweight (cwt.). This is less than half the permanent law support price ($39.08/cwt. at a minimum support level of 75% of parity; Table 1 ). USDA would be compelled to purchase manufactured dairy products in sufficient quantities to raise demand in order to raise the farm price of milk. By contrast, the 2014 farm bill's dairy margin protection program has generally not been making many payments at current prices and margins. Moreover, as implied by the list of commodities in Table 1 , not all commodities that are part of the 2014 farm bill would receive federal support under permanent law. The commodities that would lose mandatory support include soybeans and other oilseeds, peanuts, wool, mohair, sugar beets and sugar cane, dry peas, lentils, and small and large chickpeas. Parity-based supports once existed for wool, mohair, and peanuts, but were repealed. Parity support is not allowed for oilseeds or sugar. A different set of commodities could receive support under discretionary authority given to the Secretary of Agriculture in the Agricultural Act of 1949 and the Commodity Credit Corporation Charter Act. But for budgetary and other reasons, such discretionary authority has rarely been used. The federal crop insurance program protects producers against losses in crop revenue or yield through federally subsidized policies that are purchased by producers. The program is permanently authorized by the Federal Crop Insurance Act, as amended (7 U.S.C. 1501 et seq.). A reauthorization of the program is not needed in the farm bill. Producers who grow a crop that is ineligible for crop insurance may be eligible for a direct payment under USDA's Noninsured Crop Disaster Assistance Program (NAP). Like crop insurance, NAP has permanent authority under Section 196 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7333). USDA administers close to 20 agricultural conservation programs that are directly or indirectly available to assist producers and landowners who wish to practice conservation on agricultural lands. These programs address natural resource concerns on private agricultural and forested lands through technical and financial assistance. Many conservation programs have different expiration dates for program and funding authority. Therefore, they may be affected differently by expiration or extension of the 2014 farm bill. Table 2 separates the conservation programs by type of funding authority--mandatory and discretionary. For many conservation programs, program authority is permanent under the Food Security Act of 1985, as amended, but the authority to receive mandatory funding expires. An extension of the 2014 farm bill would allow programs with expired mandatory funding authority to continue, if the program has baseline beyond FY2018. For example, the Conservation Reserve Program's (CRP's) funding and program authority expired at the end of FY2018. Because CRP has baseline beyond FY2018, an extension would allow the program to continue for a period of time at the authorized rate of enrollment--up to 24 million acres at any one time. Without reauthorization or a further extension of mandatory funding and program authority, CRP is unable to sign new contracts or enroll additional acres after September 30, 2018. All existing contracts and agreements stay in force for the contract period, and payments continue to be made. Some mandatory conservation programs have no baseline beyond FY2018 and therefore would require offsets from other funding in order to continue (e.g., Voluntary Public Access and Habitat Incentives Program and Wetlands Mitigation Banking). In some cases, provisions within a program do not have baseline, while the parent program does (e.g., Transition Incentives Program within CRP). In these cases, the individual provisions would require offset funding in order to continue. One mandatory conservation program--the Environmental Quality Incentives Program (EQIP)--was extended in the Bipartisan Budget Act of 2018 ( P.L. 115-123 ) to September 30, 2019. While EQIP has funding authority through the end of FY2019, select program provisions expired September 30, 2018 (see text box below). Several conservation programs also have permanent program authority, but are authorized to receive discretionary appropriations only through FY2018. Funding for these programs varies and is based on appropriated levels. Similar to other discretionary programs with expired authority, the program can continue as long as it receives appropriated funding. As discussed earlier, expiration and extension of SNAP (and most of the related nutrition programs in the farm bill) particularly hinge on whether funding is provided in an explicit extension or in an appropriations act, including a continuing appropriations act (commonly referred to as a continuing resolution or CR). In the case of the 2014 farm bill, certain provisions of law include a September 30, 2018, expiration date; these are primarily authorizations of appropriations but some are program authorizations. The impact on operations is based on factors related to programs' authorizing statutes, appropriations actions, and the terms of a farm bill extension (if applicable). The 2014 farm bill reauthorized a number of domestic food assistance programs, including SNAP (formerly food stamps), the Emergency Food Assistance Program (TEFAP), the Commodity Supplemental Food Program (CSFP), the Food Distribution Program on Indian Reservations (FDPIR), the Senior Farmers' Market Nutrition Program, the Bill Emerson Hunger Fellowship Program, Community Food Projects, and nutrition assistance block grants for American Samoa and Puerto Rico. The law also created a new program, the Food Insecurity Nutrition Incentive (FINI) grants. With regard to expiration or extension, these programs fall into one of three categories: 1. Programs that are permanently authorized and funded, 2. Programs that can be continued by the enactment of further funding, or 3. Programs or authorities which would expire unless extended by statute or explicit appropriations for such purposes. These categories are elaborated upon below. The majority of farm bill nutrition programs (and the majority of nutrition spending) falls into the second category. The 2008 farm bill included an expansion of the Fresh Fruit and Vegetable Program (FFVP, "snack" program), and provided permanent funding through Section 32. FFVP's operations were not impacted by periods of expiration after the 2008 farm bill and would not be affected by expiration after September 30, 2018. Appropriations can allow a program to continue even if the underlying authorization or authorization of appropriations has not been extended. Because many of the nutrition programs are funded by the SNAP account, appropriated funds for this account would allow continued operations for most of the programs in the Food and Nutrition Act of 2008 (most recently amended by the 2014 farm bill). After September 30, 2018, the farm bill programs listed below could continue to operate if funding for the SNAP account is provided in appropriations acts, including continuing appropriations SNAP and related grant programs; Purchase and distribution of TEFAP commodities (administrative funds could continue with appropriations in the Commodity Assistance Program account); FDPIR; Nutrition assistance funding for Puerto Rico, American Samoa, and Commonwealth of Northern Mariana Islands; and Community Food Projects (administered by the National Institute of Food and Agriculture). For CSFP, in the Commodity Assistance Program account, the authority to make commodity purchases and fund administrative costs can continue with funding. During the periods of expiration before enactment of the 2014 farm bill, for example, when funding was provided, these programs continued to operate. In addition, during a partial government shutdown in October 2013, there was a period where some Commodity Assistance Program account operations were affected, but SNAP continued (discussed in text box below). Two farm bill provisions contain both the authorization of the program and the mandatory funding for the operation of the program. These programs, to continue operations, would require either (a) an extension of the authority and mandatory funding or (b) specific (or explicit) reference in appropriations acts. The Senior Farmers' Market Nutrition Program 's (SFMNP's) authorizing law (most recently amended by the 2014 farm bill) contains both the program's authority and mandatory funding (a transfer from the Commodity Credit Corporation). Therefore, operations may be affected after September 30, 2018, without an extension or specific additional funding provided. In parts of FY2013 and parts of 2014, expiration temporarily affected program operations. The 2014 farm bill created the Food Insecurity Nutrition Incentive (FINI) grant program. The 2014 farm bill provided mandatory funding (a transfer from the Commodity Credit Corporation) for FINI to operate from FY2014 through FY2018. Without enactment of an extension of such provisions or specific reference in appropriations acts, a sixth year of FINI grants (FY2019) would not be available. A third 2014 farm bill authority, SNAP Employment & Training (E&T) Pilot Projects , expired after September 30, 2018. USDA obligated the mandatory funding by the law's September 30, 2018, deadline, so even in a period of farm bill expiration, pilot project operations continue through the states' grant project periods. However, after September 30, 2018, without extension or specific appropriation, USDA does not have authority to award additional SNAP E&T pilot grants. Agricultural trade programs with mandatory funding that are affected by fiscal year expiration include export credit guarantees, facilities credit guarantees, export market promotion (the Market Access Program and the Foreign Market Development Program), and technical assistance for specialty crops. Without new mandatory program authority, the Commodity Credit Corporation would not be able to undertake new activities in these programs. Several international emergency and nonemergency food assistance programs are authorized in the farm bill to receive annual appropriations and have 2018 fiscal year expiration dates. The Food for Peace Title II, Farmer-to-Farmer, and McGovern Dole International Food for Education and Child Nutrition programs rely on discretionary funding. Therefore, these programs can continue to operate after a farm bill expires as long as the programs receive funding in annual appropriations bills. In contrast, the Bill Emerson Humanitarian Trust and the Food for Progress program rely on mandatory funding; therefore they cannot be reauthorized and continued through an annual appropriation. Their authorization to operate expires without a new or extended farm bill. Some see the existence of permanent law as an assurance for farm bill supporters that the farm commodity programs will be revisited every time a farm bill expires. Given the problematic consequences of permanent law, Congress is not likely to let a farm bill remain expired without taking some action eventually. Permanent law, however badly it may be widely perceived, has remained in statute, and each recent farm bill has suspended it for the duration of the farm bill. Several legislative options relative to permanent law exist as a farm bill approaches expiration: 1. Retain permanent law, and then do one of the following: Do nothing (revert to permanent law) Pass an extension (with its suspension of permanent law) Pass a new farm bill (and reinstate the suspension of permanent law) Suspend permanent law (without a new farm bill or extension) 2. Repeal permanent law, and then do one of the following: Do nothing (no new farm bill) Pass an extension of the current farm bill Pass a new farm bill (with or without a new permanent law provision). The existence of an outdated permanent law likely encourages Congress to take action, because, to most people, inaction is perceived to have unacceptable consequences. If Congress cannot reach agreement on a new farm bill, then a path of least resistance may be extending the current farm bill with its suspension of permanent law--but this, too, requires legislative action, which may pose political and budgetary challenges. For those who oppose the farm commodity programs, repealing permanent law would allow Congress to debate farm supports without the looming consequences of reverting to permanent law. But repealing permanent law also requires legislative action. Some believe that it is easier to negotiate and pass a new farm bill, with compromises and reforms, than to deal with the question of repealing permanent law. Throughout the 1950s and 1960s, farm bills generally used and amended the 1938 and/or 1949 acts. Amendments were sometimes made permanent and sometimes applied only to specific years. As farm commodity policy continued to evolve, farm bills in the 1970s gradually began to move away from using the permanent law provisions with their parity-based price supports and quotas. As recently as the 1970 and 1973 farm bills, the farm commodity programs were generally written into the 1938 and/or 1949 farm bills, as a form of suspension, with provisions that were applicable only for the new period of the farm bill. Thus, while those farm bills might not have directly suspended permanent law in the same way as more modern farm bills, they nonetheless supplanted some portion of the permanent law parity-based support system for the life of the farm bill, albeit from within the body of the permanent law itself. Beginning with the 1977 farm bill and continuing through the 2014 farm bill, direct suspension or nonapplicability language began to be used regarding the permanent laws. The current statute that suspends permanent law is the following: Suspension of Permanent Price Support Authority (7 USC 9092; P.L. 113-79 , Sec. 1602) (a) Agricultural Adjustment Act of 1938. The following provisions of the Agricultural Adjustment Act of 1938 shall not be applicable to the 2014 through 2018 crops of covered commodities (as defined in section 1111), cotton, and sugar and shall not be applicable to milk during the period beginning on the date of enactment of this Act through December 31, 2018: (1) Parts II through V of subtitle B of title III (7 U.S.C. 1326 et seq.). (2) In the case of upland cotton, section 377 (7 U.S.C. 1377). 3) Subtitle D of title III (7 U.S.C. 1379a et seq.). (4) Title IV (7 U.S.C. 1401 et seq.). (b) Agricultural Act of 1949. The following provisions of the Agricultural Act of 1949 shall not be applicable to the 2014 through 2018 crops of covered commodities (as defined in section 1111), cotton, and sugar and shall not be applicable to milk during the period beginning on the date of enactment of this Act and through December 31, 2018: (1) Section 101 (7 U.S.C. 1441); (2) Section 103(a) (7 U.S.C. 1444(a)); (3) Section 105 (7 U.S.C. 1444b); (4) Section 107 (7 U.S.C. 1445a); (5) Section 110 (7 U.S.C. 1445e); (6) Section 112 (7 U.S.C. 1445g); (7) Section 115 (7 U.S.C. 1445k); (8) Section 201 (7 U.S.C. 1446); (9) Title III (7 U.S.C. 1447 et seq.); (10) Title IV (7 U.S.C. 1421 et seq.), other than sections 404, 412, and 416 (7 U.S.C. 1424, 1429, and 1431); (11) Title V (7 U.S.C. 1461 et seq.); and (12) Title VI (7 U.S.C. 1471 et seq.). (c) Suspension of Certain Quota Provisions. The joint resolution, "A joint resolution relating to corn and wheat marketing quotas under the Agricultural Adjustment Act of 1938, as amended," approved May 26, 1941 (7 U.S.C. 1330 and 1340), shall not be applicable to the crops of wheat planted for harvest in the calendar years 2014-2018. Proposals to repeal permanent law have been somewhat rare, though some have advanced as far as passing either chamber. For example, a proposal to repeal permanent law advanced perhaps the farthest during the development of the 1996 farm bill. Repeal provisions may have had more saliency then because of a perceived intent that the "Freedom to Farm" plan was to end in 2002 at the end of the farm bill. The existence of permanent law could have been an obstacle. Whether or not repeal was a condition of the plan during its development, repeal was dropped in favor of continued suspension during conference negotiations in 1996. More specifically regarding the 1995-1996 developments, the initial bill considered by the House Agriculture Committee in 1995 would have continued to suspend permanent law ( H.R. 2195 , Title IV). After not passing in committee, the text of that bill, including the suspension provision, was incorporated into a broader House-passed budget reconciliation package ( H.R. 2491 , SS1105). However, the Senate-passed version of the 1995 reconciliation package included a provision to repeal permanent law ( S. 1357 , SS1101). The conference agreement for the reconciliation package adopted the Senate approach for repeal ( H.R. 2491 , SS1109). The conference agreement passed both the House and Senate, but was vetoed, albeit not because of the farm bill provisions. The next year, a stand-alone 1996 farm bill was introduced and passed in the House with the provision to repeal permanent law ( H.R. 2854 , SS109). The repeal provision was also in the Senate-reported bill ( S. 1541 , SS19). However, the Senate-passed version ( S. 1541 , SS109) did not repeal permanent law but continued to suspend permanent law. The conference agreement for the 1996 farm bill ( H.R. 2854 , SS171) followed the Senate-passed version and continued the suspension of permanent law. Other bills besides the farm bill from 1995 to 2001 proposed repealing permanent law, but were not formally considered. In 1995, several bills were introduced to restructure government agencies. A bill was introduced to abolish USDA, eliminate all price support authorities including those of permanent law, and transfer certain powers to the Department of Commerce ( H.R. 1354 , S. 586 ). A broader government-wide restructuring bill would have repealed permanent law ( H.R. 1923 ). A separate agricultural reform bill would have phased down agricultural supports and eventually repealed permanent law ( H.R. 2010 ). Two other bills to repeal permanent law were introduced in 1995 ( H.R. 2523 and H.R. 2787 ). In 1997-1998, H.R. 502 and S. 2573 would have repealed permanent law. Other bills to repeal permanent law were H.R. 328 in 1999 and S. 1571 in 2001. None of these bills advanced beyond being introduced and referred to committee. Other bills in various Congresses have been introduced with targeted repeal provisions for certain commodities, but not comprehensive repeal. These bills are not discussed here. In the 112 th Congress during consideration of the 2012 farm bill, a Senate amendment was submitted, but not actually introduced on the floor, to replace the suspension of permanent law with the repeal of those provisions (S.Amdt. 2379 to S. 3420 ). In 2013, the House-passed farm bill ( H.R. 2642 ) would have repealed the 1938 and 1949 permanent laws (SS1602). In their place, the House-proposed farm commodity program would have become the permanent law since it would have applied to "the 2014 crop year and each succeeding crop year" (SSSS1107, 1202, 1204, 1205, 1206, 1301). The Senate bill ( S. 954 ) continued the long-standing suspension of permanent law, as did the initial House-rejected bill ( H.R. 1947 ). The enacted 2014 farm bill continues to suspend permanent law.

The farm bill is an omnibus, multi-year law that governs an array of agricultural and food programs. It provides an opportunity for policymakers to periodically address a broad range of agricultural and food issues. The farm bill is typically reauthorized about every five years. Recent farm bills have been subject to various developments, such as insufficient votes to pass the House floor, presidential vetoes, or--as in the case of 2008 and 2014 farm bills--short-term extensions. The current farm bill (the Agricultural Act of 2014, P.L. 113-79) has many provisions that expire in 2018. The 115th Congress has begun but not finished a new farm bill. An initial House vote on H.R. 2 failed by vote of 198-213, but floor procedures allowed that vote to be reconsidered, and it passed by a second vote of 213-211. The Senate passed its bill as an amendment to H.R. 2 by a vote of 86-11. Conference proceedings officially began on September 5, 2018, but have not yet reached agreement. The timing and consequences of expiration vary by program across the breadth of the farm bill. There are two principal expiration dates: September 30 and December 31. The 2014 farm bill generally expires either at the end of FY2018 (September 30, 2018), or with the 2018 crop year. Crop years vary by commodity, but the first to be affected by a new crop year is dairy, whose 2018 crop year ends on December 31, 2018. The possible consequences of expiration include minimal disruption (if the program is able to be continued via appropriations), ceasing new activity (if its authorization to use mandatory funding expires), or reverting to permanent laws enacted decades ago (for the farm commodity programs). For example An appropriations act or a continuing resolution can continue some farm bill programs even though an authority has expired. Programs using discretionary funding--and programs using appropriated mandatory funding like those in the SNAP account--can continue to operate via appropriations action. Most farm bill programs with mandatory funding (except the Supplemental Nutrition Assistance Program (SNAP), the farm commodity programs, and crop insurance) generally cease new operations when they expire (e.g., the Conservation Reserve Program (CRP), and Market Assistance Program (MAP)). The mandatory farm commodity programs would begin reverting to permanent law beginning with the 2019 crop year, for which dairy is the first to be affected, beginning on January 1, 2019. Crop insurance is an example of a program with mandatory funding that is permanently authorized outside of the farm bill and does not expire. "Permanent law" refers to nonexpiring farm commodity programs that are generally from the 1938 and 1949 farm bills. A temporary suspension of permanent law has been included in all recent farm bills, but reverting to permanent law would occur if the suspension expires. The commodity support provisions of permanent law are commonly viewed as being fundamentally different from current policy--and inconsistent with today's farming practices, marketing system, and international trade agreements--as well as potentially costly to the federal government. Among the mandatory-funded programs that are usually the focus of the farm bill, there are two subcategories that may affect congressional action--some have baseline beyond FY2018 and some do not have baseline after FY2018. In an expiration, both categories of mandatory programs can face similar disruption when their authorizations expire. But the difference in having or not having a baseline is important if Congress considers an extension to deal with an expiration. Providing funding for those programs without baseline could make extension more difficult if budget offsets are needed to keep an extension budget-neutral.

The North Atlantic Treaty Organization (NATO) has been the cornerstone for transatlantic security and defense cooperation since its founding in 1949. As NATO continues to evolve to confront emerging regional and global security challenges, the 112 th Congress could play an important role in determining the future direction of the alliance and U.S. policy toward it. This includes addressing key issues that are expected to be discussed at NATO's upcoming summit in Chicago. Issues of importance to Congress could include ongoing NATO operations in Afghanistan, off the Horn of Africa, and in the Balkans; the development of allied military capabilities and a NATO territorial missile defense system; NATO's nuclear force posture; NATO's relations with non-NATO members; and implementation of NATO's 2010 Strategic Concept. Since the last NATO summit in Lisbon, Portugal, in November 2010, the alliance has recorded some important achievements and faced considerable challenges in pursuit of its agreed strategic goals. In Lisbon, the allies adopted a new Strategic Concept in an effort to clarify NATO's role in the 21 st century security environment. The new NATO blueprint outlined three core tasks: collective defense; crisis management; and cooperative security. On the issue of collective defense, the allies have committed to maintaining an appropriate mix of nuclear and conventional forces to defend alliance territory and to developing a ballistic missile defense capability based largely on the U.S. European Phased Adaptive Approach (EPAA, discussed in more detail below). Some issues remain divisive, however. For example, some allies continue to question the utility of U.S. non-strategic nuclear weapons deployed in Europe, while others have argued that a continued focus on large-scale "out-of-area" operations and unconventional security threats could compromise the alliance's ability to defend the territory of NATO member states. With respect to crisis management, ongoing operations in Afghanistan and the Balkans as well as the alliance's 2011 operation in Libya demonstrated NATO's capacity to respond simultaneously to multiple security crises. At the same time, each of the missions also exposed significant shortfalls in allied military capabilities. Calls from some allies for an accelerated transition away from combat operations in Afghanistan and the fact that no more than 14 of 28 allies participated in the Libya operation have also prompted many observers to question alliance solidarity and to express doubts about the appetite for future "out-of-area" operations, particularly on the scale of the Afghan mission. On the issue of cooperative security, NATO has sought to enhance its relations with non-NATO member states and other multilateral institutions to allow for stronger regional political and military cooperation and increased partner participation in alliance operations. However, NATO's relations with some key partners, including Russia, continue to be marked by disagreement and deadlock. The global economic downturn and ongoing European debt crisis and the budgetary constraints facing many allied governments on both sides of the Atlantic may pose one of the biggest challenges to alliance capabilities and solidarity. Most European allies have enacted far-reaching budget cuts, including to what had already been declining national defense budgets in most cases. Some observers worry that alliance members will be unable or unwilling to contribute and develop the military capabilities necessary to meet allied security objectives and that this, in turn, could lead to a diminished ability to meet NATO's collective security goals. Others argue that current fiscal constraints only heighten the importance of pooling scarcer resources at the alliance level and cooperating to realize common defense and security objectives. In any case, most observers agree that the current transatlantic burden-sharing situation, with the United States accounting for over two-thirds of alliance defense spending, could be unsustainable. Far-reaching defense budget cuts in the United States and the planned withdrawal of two of the U.S. Army's four Brigade Combat Teams based in Europe have also raised questions within the alliance about future U.S. commitments to European security. NATO's 2012 summit of alliance heads of state and government is scheduled to take place in Chicago on May 20-21. U.S. and NATO officials have outlined what they expect to be the Summit's three main agenda items: Defining the next phase of formal transition in Afghanistan and shaping a longer term NATO commitment to the country after the planned end of combat operations by the end of 2014; Securing commitments to maintain and develop the military capabilities necessary to meet NATO's defense and security goals, including through a new "Smart Defense" initiative; and Enhancing NATO's partnerships with non-NATO member states. The allies also plan to consider the results of an ongoing Deterrence and Defense Posture Review (DDPR), for which they called at the Lisbon Summit. Although NATO is not expected to issue membership invitations to any of the four countries currently seeking NATO membership, they could reaffirm their commitment to do so in the future. In Chicago, alliance leaders are expected to further develop plans for the transition of full responsibility for security to Afghans by the end of 2014 and to define NATO's role in the country after the changeover. The transition would mark the end of what has been the largest and longest combat operation in NATO's history. According to NATO Secretary General Anders Fogh Rasmussen, 22 non-NATO partners that have an interest in stabilizing Afghanistan will attend the Summit. Some analysts point out, however, that the possible absence of Pakistan--one of the region's most influential actors--from the Summit could be emblematic of the significant challenges NATO faces as it seeks to secure the cooperation of Afghanistan's neighbors in its evolving strategy. U.S. and NATO officials outline the following three Afghanistan-related priorities for Chicago: Identifying milestones in 2013 for NATO's transition from a primary emphasis on combat to a primary emphasis on support--in particular, training, advising, and assisting Afghan forces and authorities; Defining the appropriate size of the Afghan National Security Forces (ANSF) after 2014 and securing commitments from NATO member states to help fund and sustain the ANSF after the withdrawal of allied combat forces; and Refining the terms of a NATO-Afghanistan relationship after 2014. Statements by several alliance leaders earlier this year, including newly elected French President Francois Hollande and U.S. Secretary of Defense Leon Panetta, had led some observers to speculate that some allies could call for an accelerated withdrawal out of Afghanistan at the Chicago Summit. NATO officials say that a further withdrawal of forces in 2013 is in line with existing transition plans. At the same time, they highlight the importance of maintaining some level of combat forces in Afghanistan throughout 2014, even after Afghan forces have taken lead responsibility for security across the country. On May 13, 2012, Afghan President Hamid Karzai announced the beginning of the third "Tranche" of the formal transition process in Afghanistan. According to U.S. officials, Afghan forces now have lead security responsibility over half of the Afghan population. Upon completion of "Tranche 3" of the transition--which reportedly could come within six months--Afghan authorities will have lead security responsibility for 75% of the population. Between now and the end of 2014, NATO forces increasingly are to increasingly take a supporting role, focusing on training and assisting Afghan forces. The Obama Administration reportedly has been leading efforts to raise funds to sustain the ANSF beyond 2014. According to press reports, NATO and the United States estimate that maintaining the ANSF at adequate levels beyond 2014 would cost approximately $4.1 billion annually. In testimony to the Senate Foreign Relations Committee on May 10, 2012, Assistant Secretary of State Philip Gordon said that the United States is seeking a collective annual commitment of about $1.3 billion from its allies and expects the Afghan government to contribute about $500 million annually. U.S. officials reportedly have said the United States could cover the additional cost. Other allies reportedly have been reluctant thus far to make specific commitments ahead of the Summit. Observers expect such support would be necessary for at least 10 years after 2014, reflecting President Karzai's request for international support during a 10-year "transformation" period. Plans for NATO's involvement in Afghanistan after 2014 remain unclear, though some NATO member states--including the United States, United Kingdom (UK), France, and Italy--have signed bilateral agreements with the Afghan government that outline broad commitments after the NATO draw-down. Most member state governments face considerable public opposition to a significant continued combat role in Afghanistan. As of April 18, 2012 there were 128,961 troops from 50 countries serving in NATO's International Security Assistance Force (ISAF) in Afghanistan, with the 28 NATO members providing the core of the force. The largest ISAF troop deployments come from the United States (90,000), the UK (9,500), Germany (4,900), Italy (3,816), France (3,308), and Poland (2,457). Europe's current financial problems have led to heightened concern about European allies' willingness and ability to project power as a global security actor in the years ahead. The European debt crisis comes amid already long-standing U.S. concerns about a downward trend in European defense spending and shortfalls in European defense capabilities. Not counting the United States, NATO militaries have about two million personnel in uniform, but some 70% of European military forces reportedly cannot be deployed abroad, and throughout the Afghanistan mission the European members of the alliance have struggled to maintain 25,000 to 40,000 troops in the field. In 2011, only three NATO allies exceeded NATO's informal goal of 2% of GDP for defense spending (Greece, the United Kingdom, and the United States). European militaries continue to be limited by shortfalls in key capabilities such as strategic air- and sealift, aerial refueling, and Intelligence, Surveillance, and Reconnaissance (ISR). Some analysts have long asserted that defense spending in many European countries is inefficient, with disproportionately high personnel costs coming at the expense of much-needed research, development, and procurement. Analysts also argue that the European defense industry remains fractured and compartmentalized along national lines; many believe that European defense efforts would benefit from a cooperative rationalization of defense-industrial production and procurement. In Chicago, the allies are expected to commit to a "Smart Defense" initiative that will call for cooperation, prioritization, and specialization in pursuit of needed defense capabilities. NATO officials are expected to announce up to 20 multinational defense projects in which assets are pooled or shared, including acquisition, training, force protection, ISR, and logistics cooperation initiatives. This effort to enhance defense capabilities is the latest in a number of post-Cold War NATO capabilities initiatives, each of which has had mixed success. In February 2012, Secretary General Rasmussen announced agreement on a key ISR project, the Alliance Ground Surveillance (AGS) system, through which a group of 13 allies will jointly acquire five high-altitude Global Hawk strategic reconnaissance drones that will be maintained by and made available to the entire alliance beginning in 2015. Acquisition of AGS, long a priority of successive U.S. Administrations, will give European alliance members a capability that only the United States currently possesses and that played a key role in the Libya operation. Additional projects expected to be highlighted in Chicago include interim capability for a NATO-wide territorial missile defense system (see "Missile Defense" below), and NATO's long-standing Baltic Air Policing Mission. In February 2012, NATO agreed to extend the air policing mission indefinitely, subject to periodic review. Allies may also be asked to take bolder spending decisions in terms of phasing out what some perceive as unnecessary national "legacy" capabilities in order to fund collective alliance priorities. For example, U.S. officials have commended a Dutch decision to disband its army tank battalions and invest the savings in ballistic missile defense radars to be placed on Dutch frigates as part of a NATO-wide missile defense capability. Secretary General Rasmussen has announced plans for a parallel initiative to "Smart Defense," dubbed the "Connected Forces Initiative" (CFI). The goal is to enhance the capacity of military personnel from NATO member states to work together, through a focus on education and training, increased joint exercises, and better use of technology. A key element of the initiative is to increase joint exercises through the NATO Response Force (NRF), a multinational rapid reaction force of about 13,000, comprised of land, air, maritime, and special forces components. U.S. officials have said that combat units from an American-based brigade will rotate through Europe to train with the NRF after the planned withdrawal of two Brigade Combat Teams from Europe. The Obama Administration and other allied governments have pointed to NATO's 2011 mission in Libya as a positive example of transatlantic defense cooperation in which European allies and partners were not only centrally relevant, but in which they took the leading role--the mission was the first in NATO's history in which the United States did not lead military operations. At the same time, the Libya mission also exposed significant shortfalls in allied capabilities. According to U.S. officials, in Libya, the United States had to make up for a shortage of well-trained targeting specialists and shortages of key supplies and munitions in order to keep the operation going. Perhaps more importantly, European allies lacked critical enabling capabilities such as the aforementioned aerial refueling tankers and ISR. The United States reportedly supplied nearly half of the ISR aircraft in the mission and the vast majority of analytical capability. Recent reports indicate that even with U.S. help, NATO had only about 40% of the aircraft needed to intercept electronic communications in Libya. Some allied officials and observers argue that despite the criticism and shortcomings, the forces of key European allies still rank among the most capable militaries in the world; this assessment remains particularly true for France and the UK, which rank third and fourth, respectively, in global defense expenditure. Many European allies have undertaken significant defense transformation initiatives in recent years, and the EU has been exploring possibilities for greater defense integration and pooling of assets as a possible solution to the resource-capability crunch. NATO Secretary General Rasmussen and others have argued that the economic constraints facing allied governments could present an opportunity for European defense because it could help overcome long-standing political obstacles to cooperation initiatives and reforms that many have long argued are necessary in any case. In Lisbon, allies agreed to launch a Deterrence and Defense Posture Review (DDPR) that would further examine NATO's readiness and ability to address potential threats against the alliance. The results of the DDPR are expected to be presented to alliance leaders at the Chicago Summit. By most accounts, consultations in the DDPR have been "dynamic and extremely delicate," characterized by disagreements within the alliance about the future role of nuclear weapons in NATO. In testimony to Congress in November 2011, the State Department's Undersecretary for Arms Control and International Security, Ellen Tauscher, reaffirmed the Administration's position that "NATO will remain a nuclear alliance as long as nuclear weapons exist," a position that was also articulated in the 2010 Strategic Concept. Nevertheless, given persistent debates within the alliance on the issue, observers do not expect the allies to make any significant changes regarding longer-term force posture at the Chicago Summit, but rather to task NATO headquarters to study the issue further. The current debate on the role of nuclear weapons in the alliance has focused on U.S. non-strategic nuclear weapons (sometimes called tactical nuclear weapons, or NSNW) in Europe. Since the end of the Cold War, the United States is reported to have drastically reduced the number of NSNW based in Europe, but an estimated 150-200 reportedly remain deployed in five allied countries (Belgium, Germany, Italy, the Netherlands, and Turkey). The congressionally mandated Strategic Posture Commission has estimated that Russia, on the other hand. currently has around 3,800 operational non-strategic nuclear weapons. NATO's Strategic Concept states that "deterrence, based on an appropriate mix of nuclear and conventional capabilities, remains a core element of our overall strategy," and reflects the Administration's position that NATO will remain a nuclear alliance as long as nuclear weapons continue to exist. Proponents of NATO's current nuclear force posture support this view, highlighting both the need for a nuclear deterrent in a world where nuclear weapons continue to pose a security threat and the need to reassure member states for whom NATO's nuclear umbrella remains a vital component of national security. Some European leaders, however, have called for the removal of U.S. non-strategic nuclear weapons from European soil. Some members of the German government have been particularly vocal on the issue. Among other things, they argue that "the rationale for [U.S. nuclear] deployment expired with the collapse of the Warsaw Pact...and nuclear weapons based in Europe have little or no role to play in countering terrorism, the most likely external security threat to the alliance." In what could be a reflection of these views, NATO's Strategic Concept also alludes to the possibility of further reductions in nuclear weapons, both within the alliance and globally, in the future. In the document, the allies pledge to "seek to create the conditions for further reductions [of nuclear weapons] in the future," indicating that the goal in these reductions should be to "seek Russian agreement to increase transparency on its nuclear weapons in Europe and relocate these weapons away from the territory of NATO members." NATO's partnerships with non-NATO member states and other multilateral institutions are the third main agenda item at the Chicago Summit. U.S. and NATO officials increasingly emphasize the importance of working with regional and international partners to realize shared security objectives. They range from regional partners in the Mediterranean and the broader Middle East--including key contributors to the 2011 Libya operation--to partners on the other side of the globe, such as Australia, Japan, and South Korea. U.S. officials underscore that 22 non-NATO members are participating in NATO's Afghanistan mission, both in military operations and through significant financial contributions. Some analysts note that as NATO continues to face security challenges outside the Euro-Atlantic region, it could increasingly rely on the assistance of regional partners. In addition, the allies may want to enhance coordination with European partners, such as Sweden and Finland, which have been significant contributors to NATO operations, but are not members of NATO due primarily to political and historical reasons. NATO's 2010 Strategic Concept identifies the development of partnerships as a key security task for the alliance. In Lisbon, the allies launched a reform of NATO's partnership policy, intended to make "dialogue and cooperation more inclusive, flexible, meaningful and strategically oriented." A key aim of the ongoing reform of NATO's partnership programs is to streamline several distinct partnership initiatives and develop more flexible formats for the alliance to engage with partners. Currently, the alliance engages in relations with non-NATO members through at least four different programs: the 50-nation Euro-Atlantic Partnership Council and the related Partnership for Peace Program of bilateral cooperation with individual Euro-Atlantic countries; the Mediterranean Dialogue with countries in the southern Mediterranean; the Istanbul Cooperation Initiative with countries from the Gulf region; and relations with so-called "global partners" outside the Euro-Atlantic region, such as Australia, Japan, and New Zealand. Under reforms endorsed by NATO foreign ministers in April 2011, all NATO partners will have access to approximately 1,600 partnership activities laid out in a streamlined "Partnership and Cooperation Menu" (PCM), with an emphasis on training and support for security sector reform. NATO is also developing more flexible formats for cooperation among groups of partners working together to confront security issues beyond the existing partnership frameworks. This includes, for example, counter-piracy operations and cybersecurity. Relations with Russia are a central component of debates over NATO's future. That said, NATO-Russia relations are not expected to figure prominently on the Chicago Summit's agenda, especially since Russian President Vladimir is not attending the meeting. Russian representatives reportedly have been invited to attend discussions on Afghanistan, but their participation has not been confirmed. Some observers view the diminished level of Russian participation in Chicago as a telling sign of ongoing disagreements between the two sides on issues such as NATO's planned territorial missile defense system for Europe and Georgia's territorial integrity. Over the past several months, and particularly during Russia's recent election campaign, Russian leaders have engaged in what some consider hostile rhetoric toward NATO. Some NATO member states have criticized the Russian government's treatment of political protesters, resulting in angry responses from Moscow. During a meeting in Moscow on missile defense in early May 2012, Russian Chief of General Staff Nikolai Makarov reportedly suggested that Russia could use preemptive force against NATO missile defense installations if NATO moves forward with its missile defense plans without an agreement of cooperation with Russia. Secretary General Rasmussen and other allied leaders acknowledge these disagreements, but emphasize that the two sides are cooperating successfully in a range of areas, including in Afghanistan, joint counter-terrorism exercises, countering piracy, and counter-narcotics. NATO and U.S. officials highlight Afghanistan as a key example of the benefits of heightened NATO-Russia cooperation. Russia has allowed the use of air and land supply routes on its territory for the NATO mission and has agreed to bolster training for Afghan and regional counter-narcotics officers. According to U.S. officials, over 42,000 containers of cargo have transited Russia as a result of the agreement. The two sides are currently negotiating an expansion of the transit arrangement to allow for increased transit of NATO supplies out of Afghanistan during the ongoing transition. Russian helicopters, operated by civilian crews, have also begun providing transport in Afghanistan and the NATO-Russia Council established a Helicopter Maintenance Trust Fund in 2011. NATO and U.S. officials stress that they will continue to oppose Russian policies that they perceive as conflicting with the core values of the alliance. They say, for example, that NATO will not recognize a Russian sphere of influence outside its borders and will continue to reject Russia's recognition of Georgia's breakaway regions, Abkhazia and South Ossetia. There continues to be concern among some NATO allies that Russia has not changed its fundamental view of NATO as a security threat and that unresolved issues will continue to plague NATO-Russia relations. Observers and officials in some allied nations--notably the Baltic states and Poland--have at times expressed concern that NATO's reengagement with Russia could signal that the alliance is not serious about standing up to Russian behavior it has deemed unacceptable. In this vein, they have urged the United States to consider the interests and views of all NATO allies as it seeks to improve relations with Russia. As noted above, NATO enlargement is not expected to feature prominently on the Chicago Summit's agenda. Nevertheless, NATO maintains an "open door" policy on membership based on Article 10 of the alliance's founding treaty, which states that membership is open to "any European state in a position to further the principles of this Treaty and to contribute to the security of the North Atlantic Area." NATO's post-Cold War enlargement to Central and Eastern Europe was seen as a key factor in these countries' peaceful transition to democratic governance. However, in recent years, several allied governments have argued that NATO has enlarged too quickly, and that the alliance should agree on how to resolve a complex range of issues before taking in another group of new members. In April 2009, Albania and Croatia became the latest countries to join NATO. In 2008, the allies agreed that Macedonia meets the qualifications for NATO membership. In December 2009, Montenegro was offered a Membership Action Plan (MAP). In April 2010, Bosnia and Herzegovina was formally invited to join the MAP, but was told that its Annual National Program under the MAP would not be accepted until the country resolved an issue about the control of immovable defense property (mainly former military bases and barracks) on its territory. Little if any progress has been made in advancing Macedonia's stalled candidacy for NATO membership. As noted, in NATO summit communiques since 2008, the allies have agreed that Macedonia meets the qualifications for membership. However, Greece has blocked a membership invitation due to a protracted dispute over Macedonia's name. The two sides have been unable to resolve the issue during talks sponsored by the U.N. In 2008, debate over whether to place Georgia and Ukraine in the MAP process caused controversy in the alliance. Although the allies have pledged that Georgia and Ukraine will eventually become NATO members, they have not specified when that might happen. The Russia-Georgia conflict and the renunciation of NATO membership aspirations by the current government in Ukraine appear to have diminished the short- and even medium-term membership prospects for the two countries. Most observers believe that the unresolved situation in South Ossetia and Abkhazia could continue to pose a major obstacle to possible Georgian membership for the foreseeable future. They contend that as long as the territorial dispute persists, some allies could oppose defining a specific timeline for membership. Congress has played an important role in guiding U.S. policy toward NATO and in shaping NATO's post-Cold War evolution. Members of the 112 th Congress have expressed interest in each of the key agenda items to be discussed in Chicago and, to varying degrees, have called on the Administration to advance specific policy proposals at the Summit. Proposed companion legislation in the House and the Senate-- The NATO Enhancement Act of 2012 ( S. 2177 and H.R. 4243 )--endorses NATO enlargement to the Balkans and Georgia, reaffirms NATO's role as a nuclear alliance, and calls on the U.S. Administration to seek further allied contributions to a NATO territorial missile defense capability, and to urge NATO allies to develop critical military capabilities. In recent months, other Members of Congress have also called on the U.S. Administration and NATO to enhance efforts to bring Bosnia and Herzegovina, Georgia, Macedonia, and Montenegro into the alliance. In March 2012, a bipartisan group of 54 Members of the House signed a letter to President Obama urging him to ensure that Macedonia receives a formal invitation at the Chicago Summit to join NATO. In April 2012, Representative Carolyn Maloney introduced legislation apparently aimed at cautioning against formally inviting Macedonia before it resolves an ongoing dispute with Greece over Macedonia's name ( H.Res. 627 ). In the run-up to and aftermath of the Chicago Summit, Congress may want to consider a range of questions relating to NATO's current operations and activities and its longer term mission. These include the following. NATO's commitment to Afghanistan, both during the ongoing transition away from a primary emphasis on combat and after the transition. Some allied leaders--notably new French President Francois Hollande--have indicated a desire to accelerate the withdrawal of forces from Afghanistan. Congress may want to consider the implications of such decisions for NATO and U.S. security interests in Afghanistan. The allied commitment to sustaining the Afghan National Security Forces after 2014 could have particularly significant security implications for the United States, as could the extent of NATO's presence in the country after 2014. Allied military capabilities and burden-sharing within the alliance. In June 2011, then-U.S. Secretary of Defense Robert Gates lamented that many European allies are "unwilling to devote the necessary resources or make the necessary changes to be serious and capable partners in their own defense." Congress may want to consider the immediate and longer-term effects on alliance security of the continuing downward trend in European defense spending. Of particular concern could be the extent of the allied commitment to pooling and sharing resources in the framework of NATO's "Smart Defense" initiative and the extent to which European governments are consulting and coordinating with other allies when pursuing cuts to national defense budgets. In addition, if current trends in European defense spending and capabilities development continue over the medium term, how would this affect U.S. perceptions of NATO and the transatlantic security partnership? How would this affect U.S. pursuit of its security interests around the globe? Future NATO operations and allied military readiness. Some analysts assert that NATO member states would not support another "out of area" operation on the scale of the Afghanistan mission. Congress may want to consider the types of future military operations in which the alliance should be preparing to engage. What steps are being taken to ensure alliance readiness and interoperability? What effect will the planned withdrawal of two U.S. Army Brigade Combat Teams from Europe have on allied interoperability and alliance solidarity more generally? NATO's conventional and nuclear force posture. NATO allies continue to express divergent views on the appropriate force posture for the alliance. Congress may want to consider the implications for U.S. security interests of this ongoing debate within NATO. In particular, what role should U.S. non-strategic nuclear weapons play in alliance force posture? Do these weapons currently play an important deterrent role or is their presence primarily a symbol of U.S. commitment to NATO? What are the benefits of NATO's evolving territorial missile defense capability? What is the European allied commitment to that capability? NATO's relations with non-NATO member states and international organizations. Allied leaders and U.S. officials emphasize the importance of enhancing and expanding NATO's partnerships both within and outside the Euro-Atlantic region. The evolution of NATO's partnership policy could have significant political and operational implications for the alliance, including on its decision-making procedures and its force projection capabilities. Congress may want to consider the appropriate role of non-NATO members in the alliance's political structures and in allied operations. How would the increased participation of partners affect broader U.S. strategic interests? Should NATO seek to develop and/or enhance defense and security cooperation with the governments of Libya, Tunisia, Egypt, and other countries in the Mediterranean and broader Middle East region? Prospects and conditions for future NATO enlargement. Successive U.S. Administrations and some Members of Congress have emphasized the importance of NATO's "open door" membership policy. Congress may want to consider the possible implications of further NATO enlargement for U.S. and NATO security interests. What have been the costs and benefits of NATO's post-Cold War enlargement and what are the potential costs and benefits of possible future enlargement? Should there be a limit to NATO's "open door" policy? Should the alliance consider offering Russia the possibility of NATO membership? The U.S. Administration and some Members of Congress continue to view NATO as the world's preeminent military alliance and the cornerstone for transatlantic security cooperation. As NATO has evolved to confront a range of new and emerging security challenges, it has recorded some important achievements and faced considerable challenges. On the one hand, ongoing military operations in Afghanistan, the Balkans, and off the Horn of Africa demonstrate NATO's capacity to respond simultaneously to multiple security crises. On the other hand, severe budgetary constraints currently facing allied governments on both sides of the Atlantic have caused some to question NATO's ability to continue to sustain such an operational tempo. These budget constraints and public opposition in many European countries to military operations in Afghanistan could play a key role in shaping the scope of future NATO operations. As the alliance moves forward after the Chicago Summit, allied responses to these and the other challenges outlined above could be important factors in determining NATO's ability to meet and refine its strategic objectives.

NATO's 2012 summit of alliance heads of state and government is scheduled to take place in Chicago on May 20-21. U.S. and NATO officials have outlined what they expect to be the Summit's three main agenda items: Defining the next phase of formal transition in Afghanistan and shaping a longer term NATO commitment to the country after the planned end of combat operations by the end of 2014; Securing commitments to maintain and develop the military capabilities necessary to meet NATO's defense and security goals, including through a new "Smart Defense" initiative; and Enhancing NATO's partnerships with non-NATO member states. Although NATO is not expected to issue membership invitations to any of the four countries currently seeking NATO membership, it could reaffirm their commitment to do so in the future. Congress has played an important role in guiding U.S. policy toward NATO and shaping NATO's post-Cold War evolution. Members of the 112th Congress have expressed interest in each of the key agenda items to be discussed in Chicago. For example, proposed companion legislation in the House and Senate--The NATO Enhancement Act of 2012 (S. 2177 and H.R. 4243)--endorses NATO enlargement to the Balkans and Georgia, reaffirms NATO's role as a nuclear alliance, and calls on the U.S. Administration to seek further allied contributions to a NATO territorial missile defense system, and to urge NATO allies to develop critical military capabilities. In the run-up to and aftermath of the Chicago Summit, Congress may consider a range of issues relating to NATO's current operations and activities and its longer term mission. These include questions pertaining to: NATO's commitment to Afghanistan, both during the ongoing transition away from a primary emphasis on combat and after the transition; Allied conventional military capabilities and burden-sharing within the alliance; Future NATO operations and allied military readiness; NATO's future as a nuclear alliance; NATO's relations with non-NATO member states and multilateral organizations; and Prospects and conditions for future NATO enlargement.

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.

The military retirement system is a government-funded benefit system that has been viewed historically as a significant incentive in retaining a career military force. The system includes a defined benefit (i.e., pension) element for all retirees and a defined contribution element for certain eligible retirees. The defined benefit includes a monthly annuity for qualified active and reserve retirees paid out of the Military Retirement Fund. The defined contribution benefit includes government-matching payments into an individual retirement Thrift Savings Plan (TSP) account. The amount of the retirement annuity depends on time served and basic pay at retirement. It is adjusted annually by a Cost-of-Living Adjustment (COLA) to ensure that the annuity is protected from the adverse consequences of inflation. Military retirees are also entitled to nonmonetary benefits, which include exchange and commissary privileges, medical care through TRICARE, and access to Morale, Welfare and Recreation facilities and programs. The non-disability military retirement system has evolved since the late 1800s to meet four main goals. To keep the military forces of the United States young and vigorous and ensure promotion opportunities for younger members. To enable the armed forces to remain competitive with private-sector employers and the federal Civil Service. To provide a reserve pool of experienced military manpower that can be called upon in time of war or national emergency to augment active forces. To provide economic security for former members of the armed forces during their old age. Among active duty personnel, eligibility for a monthly pension is generally based on a service requirement of at least 20 years of (active) service. For reserve component personnel, the system is based on points , and reservists do not generally begin to receive retired pay until the age of 60. Both the active duty and reserve component retirement systems vest at 20 years of qualifying service. However, some members who are retired with a physical disability may receive a pension regardless of the amount of time they have spent on active duty. Disability retirement offers a choice between two retirement compensation options: one based on years of service (longevity) and one on the severity of the disability. In FY2017, approximately $53.5 billion was paid to approximately 2 million military retirees, and an additional $3.9 billion was paid to 319,431 survivors. As shown in Table 1 , the number of military retirees and the cost of their retirement benefits have increased over the past decade. Congress grapples with constituent concerns as well as budgetary constraints in considering military retirement issues. In the past, some have viewed military retirement as a place where substantial savings could be made, arguing that the military retirement compensation is overly generous relative to pension systems in the civilian sector. In particular, they note that active duty military personnel become eligible for retirement at a relatively young age. In FY2017, the average active duty non-disability enlisted retiree is 42 years old and has 21 years of service at retirement; the average officer is 46 years old and has about 23 years of service at retirement. Others argue that the military retirement system is fair given the unique demands of military service, pointing out the high operational tempo and repetitive tours of duty in overseas combat areas that servicemembers have endured over the past 15 years. In addition, some have argued that past modifications to the system intended to save money have had a deleterious effect on military recruiting and retention, particularly in times of strong economic performance. While congressionally mandated changes to the military retirement system have been infrequent, any potential changes are closely monitored by current servicemembers, retirees, survivors and the veterans' service organizations that support them. There are currently three separate but related retirement systems within the DOD: one for active duty members, one for reservists, and one for those who become medically disabled and are unable to complete a 20-year military career due to their disability. Each of these systems has distinct eligibility requirements and formulas for calculating the retirement annuity. Retirement pay calculations are based on the date when the servicemember first entered active duty and their pay base at the time of retirement. The defined benefit portion of the active and reserve component retirement systems cliff-vest s after 20 years of service. This means servicemembers who leave the service prior to completing 20 years of eligible service typically will not receive any non-disability retirement benefit. This contrasts with eligibility for disabled veterans, who are vested on their disability retirement date regardless of years of service. For active duty military personnel, there are four methods of calculating retired pay based on longevity: the Final Basic Pay System, "High Three," Redux, and the Blended Retirement System (BRS) (see Table 4 for a comparison of the benefits under each method). The applicable retirement calculation is based on the date when the servicemember first entered active duty, their pay base at the time of retirement, their years of service, and whether they chose the Redux system or the BRS (if eligible). Figure 1 shows how eligibility for retirement calculations is determined. For persons who entered military service before September 8, 1980, the pay base is the final monthly basic pay received by the servicemember at the time of retirement multiplied by 2.5% for each year of service. The minimum amount of retired pay to which a member is entitled under this formula is therefore 50% of the retired pay computation base (20 years of service times 2.5%). For example, a servicemember who retires at 25 years receives 62.5% of the computation base (25 years of service times 2.5%). The Final Basic Pay cohort that entered the military before September 8, 1980, had 30 years of service in 2010. It was expected that all members of this group would be retired by 2016. Those who entered service on or after September 8, 1980, and before January 1, 2018, are eligible to elect the High Three system. For this system the computation base is the average of the highest 3 years (36 months) of basic pay rather than the final basic pay. Otherwise, calculations are the same as under the Final Basic Pay method. The Redux military retirement system was initiated with the Military Retirement Reform Act of 1986 ( P.L. 99-348 ). The Redux formula reduced the amount of retired pay for which military servicemembers who entered the armed forces on or after August 1, 1986, were eligible. This system was broadly unpopular and by 1997 Congress began to take note of potential recruiting and retention problems associated with the change. In 1998, the Clinton Administration announced that it supported Redux repeal. The National Defense Authorization Act for Fiscal Year 2000 ( P.L. 106-65 SSSS641 and 642) repealed compulsory Redux. It allowed post-August 1, 1986, entrants to retire under the High Three system or opt for Redux plus an immediate $30,000 cash payment. The FY2016 NDAA, enacted on November 25, 2015, terminated the Redux option. Those who entered the service during the time when Redux was an option were required to select one of the following two options for calculating their retired pay within 180 days of reaching 15 years of service. Eligible servicemembers can opt to have their retired pay computed in accordance with the pre-Redux formula, described above as High Three. Eligible servicemembers can opt to have their retired pay computed in accordance with the Redux formula and receive an immediate $30,000 cash bonus called a Career Status Bonus. Those who select the Career Status Bonus (CSB) must remain on active duty until they complete 20 years of service or forfeit a portion of the bonus. In the FY2016 NDAA, based on recommendations from the Military Compensation and Retirement Modernization Commission (MCRMC), Congress adopted a new retirement system, shifting from a purely defined benefit system to a blended defined benefit plus defined contribution system. Servicemembers with 12 or fewer years of service as of December 31, 2017, were afforded an opportunity to choose the BRS. The BRS is mandatory for individuals who entered the service on or after January 1, 2018. For these servicemembers, the computation base for the defined benefit will be the average of the highest three years (36 months) of basic pay, as in the High Three System; however, the multiplier is reduced to 2.0 from 2.5. This means that the pay base is the high three average at the time of retirement multiplied by 2.0% for each year of service. Therefore a servicemember retiring at 20 years would receive 40% of his or her pay base under the new formula and a 30-year retiree would receive 60% of his or her pay base. The Blended Retirement System also allows servicemembers to receive a portion of their retired pay in a lump sum. An individual entitled to retired pay may, no later than 90 days before the date of retirement, elect to receive A lump sum payment of the discounted present value at the time of the election of an amount of the covered retired pay that the eligible person is otherwise entitled to receive for the period beginning on the date of retirement and the date the eligible person attains the eligible person's retirement age. For those who elect to receive a lump sum payment, after reaching the eligibility age for social security (usually 67), they will again receive 100% of their regular monthly annuity, which will be adjusted for annual cost of living increases. The law also allows retirees to take their lump sum payment as a single payment or up to four annual installments. The lump sum is discounted to the present value based on the annual rate published by DOD in June of each year and which goes into effect on January 1 of the following year. Lump sum payments are considered earned income and are taxed accordingly. Members under the BRS with a disability retirement do not have the option of receiving a portion of retired pay as a discounted lump sum. Reserve component members may elect the discounted lump sum option from the date the member first becomes eligible for retired pay (typically 60 years old) until the normal social security retirement age (typically 67). Based on an external study, the DOD Board of Actuaries assumes that approximately 5.2% of officers and 22.8% of enlisted members under the BRS will elect the lump sum option. Congress's decision to include a defined contribution element in the BRS was driven by the finding that under the legacy retirement systems, 83% of enlisted and 51% of officers did not complete the 20 years of service and thus received no retirement compensation for their service. This was at odds with retirement benefits in the private sector where firms increasingly offer a variety of defined contribution packages and are required by law to vest employees within a much shorter time period. Under the BRS, individuals entering service after January 1, 2018, are automatically enrolled in the Thrift Savings Plan (TSP) at an individual contribution level of 3% from his or her monthly basic pay or inactive duty pay beginning the first pay period after the member's 60 th day of service. At that time, the services will also begin automatic monthly contributions of 1% of basic pay to the servicemember's TSP account. In addition, DOD will match servicemembers' contributions up to 4% of the servicemember's basic pay starting at two years and one day after the member first enters service and ending at 26 years of service. The servicemember is required to make individual total contributions of 5% in order to receive government matching of 4% (see Table 2 for government matching percentages). The servicemember is fully vested after two complete years of service and able to take ownership of the 1% contributions as well as any subsequent matching contributions. Any earnings on government contributions are immediately vested when they accrue. Servicemembers are immediately fully vested in any personal TSP contributions. The services will also automatically enroll new servicemembers in the TSP program for individual contributions at a default amount of their basic pay unless the servicemember opts out. If the servicemember declines to make individual contributions, he or she will automatically be reenrolled every year at the default amount of 3% individual contribution. This requires the individual to make an active decision every year to not contribute to the TSP. In order to provide a mid-career retention incentive under the BRS, Congress authorized continuation pay for members who are between 8 to 12 years of service, in return for a three-year service obligation. The pay may be distributed in a lump sum, or in a series of not more than four payments. The law allows an active duty (regular component) member or reserve component member who is performing Active Guard or Reserve duty to receive a minimum amount of continuation pay equal to 2.5 times their monthly basic pay. For reserve component members not on active duty, the minimum continuation pay is equal to at least 0.5 times the monthly basic pay of an active component member of similar rank and longevity. The law also authorizes an additional amount of continuation pay, at the discretion of the Secretary concerned (see Table 3 ). For active component members that would be the amount of monthly basic pay multiplied by no more than 13. This flexibility awarded to military department Secretaries on the amount of additional continuation pay is intended to aid force-shaping by allowing the Secretaries to offer higher continuation payments to those in occupational specialties that are undermanned. Under the blended system, reserve component members within the window of eligibility would receive the minimum continuation pay as discussed above (2.5 or 0.5 times the monthly basic pay of an active component member), plus an additional amount at the discretion of the Service Secretary that would be the amount of monthly basic pay multiplied by no more than six. There are many similarities between the active and reserve retirement systems. First, reserve component (RC) members must also complete 20 qualifying years of service to become eligible for a defined retirement benefit. Second, the reserve retirement system also accrues at the rate of 2.5% per equivalent year of qualifying service (explained below) at retirement eligibility for those who entered service prior to January 1, 2018, and 2.0% for those who enter on or after January 1, 2018. The primary difference between the reserve and the active system is the points system used to calculate qualifying years and equivalent years of service, as well as the age at which the retirement annuity begins. Also, Redux is not an option for reservists. For retirement purposes, a qualifying year of service is a year in which a member of the RC earns at least 50 retirement points . Points are awarded for a variety of reserve activities one point for each day of active service, which includes annual training; fifteen points a year for membership in the Ready Reserve; one point for each inactive duty training (IDT) period; one point for each period of funeral honors duty; and one point for every three satisfactorily completed credit hours of certain military correspondence courses. With multiple opportunities to earn points, a participating member of the selected reserve normally can accrue the requisite 50 points per year and thus earn a qualifying year for retirement. The maximum number of points per year, exclusive of active duty, has varied over time but is currently capped at 130 points. When active duty points are added to this total, the reservist cannot earn more than 365 points a year. The number of points is critical in determining both the number of years of qualifying service and the number of equivalent years of service for retired pay calculation purposes. A reservist may retire after completing 20 years of qualifying service; there is no minimum age. However, the reservist will usually not become eligible for retired pay until age 60, at which time he or she also becomes eligible for military medical care. Upon retirement, the individual is normally transferred to the Retired Reserve and is entitled to a number of military benefits to include commissary and exchange privileges; access to Morale, Welfare and Recreation programs and facilities; and limited space available travel on military aircraft. Reservists in the Retired Reserve, but not yet retired pay eligible, are referred to as Gray Area retirees. Time spent in the Retired Reserve counts for longevity purposes and ultimately results in higher retired pay. For example, a lieutenant colonel who transitions to the Retired Reserve at age 45 will have their retired pay at age 60 calculated on the basic pay of a lieutenant colonel with an additional 15 years of longevity. The date the reservist became a member of the armed forces determines whether their retired pay is calculated based on the Final Basic Pay, High Three, or Blended Retirement System. Those entering before September 8, 1980, will retire under the Final Basic Pay system while those entering after September 8, 1980 but before January 1, 2018, will retire under the High Three system. Those who first perform Reserve Component service (with no prior regular or reserve service) on or after January 1, 2018, will retire under the Blended Retirement System. Those reservists with prior service who have accumulated less than 12 equivalent years of service (< 4,320 points) may elect the BRS. The actual calculation parallels the active duty system but requires adjustment to reflect the part-time nature of reserve duty. For example, consider a reserve component lieutenant colonel with 5,000 points who joined the military in January 1980 and transferred to the Retired Reserve in 2000 after completing 20 qualifying years of service. In 2015, after reaching 60 years of age, and becoming eligible to receive retired pay, the process for calculating her retired pay would be Step 1: Divide the total points by 360 to convert the points to equivalent years of service (5,000 / 360 = 13.89). Step 2: Multiply the equivalent years of service by the 2.5% multiplier (13.89 times 0.025 = 0.3472). Using the Final Basic Pay option, the 2015 pay base for a lieutenant colonel with 35 years of service (20 years of qualifying service plus 15 years in the Retired Reserve) is $8,762.40 per month. Step 3: Multiply the pay base by the retired pay multiplier ($8,762.40 times 0.3472) to produce a monthly retirement annuity of $3,042 per month. Servicemembers who, due to a disqualifying medical condition, are no longer able to perform their military duties, may qualify for disability retirement, commonly referred to as a Chapter 61 retirement . Eligibility is based on having a permanent and stable disability rated at 30% or more under the standard schedule of rating disabilities in use by the Department of Veterans Affairs at the time of determination. Some disability retirees are retired before becoming eligible for longevity retirement, while others have completed 20 or more years of service. The maximum retired pay calculation under the disability formula cannot exceed 75% of basic pay. Disability retirees are not authorized to receive a lump sum payment under the Blended Retirement System. Retired pay computed under the disability formula is subject to federal income tax, unless one or more of the following conditions applies: (1) the member's disability is the result of a combat-related injury, or (2) the individual was eligible to receive disability retirement payments prior to September 25, 1975, or (3) the individual was in the Armed Services prior to September 25, 1975, and later became eligible for disability retired pay. Retired pay under the longevity formula (for those entering after September 24, 1975) is taxable only to the extent that it exceeds what the individual would receive for a combat related injury under the disability formula. Retired enlisted members of military services with less than 30 years of service may be eligible for a 10% increase in retired pay when credited with extraordinary heroism in the line of duty as determined by the Secretary of his or her service. This increase is subject to a maximum of 75% of the member's retired or retainer pay base. In 2002, Congress extended this benefit to enlisted members of the reserve component who are eligible for reserve retired pay. Military retirees receive full Social Security benefits in addition to their military retired pay. Current military personnel do not contribute a portion of their salary as part of the military retirement pay accrual. However, they have paid taxes into the Social Security trust fund since January 1, 1957 and are entitled to full Social Security benefits based on their military service. Military retired pay and Social Security are not offset against each other. Military retired pay is not subject to withholding for Social Security tax. However, all non-disability retired pay is subject to withholding of federal income tax. A portion of the Social Security benefit may also be subject to federal income tax for individuals who have other income. Military retired pay is adjusted for inflation by statute (10 U.S.C. SS1401a). The Military Retirement Reform Act of 1986, in conjunction with changes contained in the FY2000 National Defense Authorization Act ( P.L. 106-65 ), provides for COLAs as indicated below. Congress has not modified the COLA formula since 1995. However, policymakers regularly discuss COLA modifications, typically with the aim of reducing costs and, hence, the payments to retirees. COLAs for 2007 to 2017 are shown in Table 5 . For military personnel who first entered military service before August 1, 1986, each December a COLA equal to the percentage increase in the Consumer Price Index between the third quarters of successive years will be applied to military retired pay for the annuities paid beginning each January 1. This number is rounded to the nearest one-tenth of 1%. The COLA is applied to the monthly benefit amount and the final payment is rounded down to the nearest $1.00. For those personnel who first entered military service on or after August 1, 1986, their COLAs will be calculated in accordance with either of two methods, as noted below. Those personnel who opted to have their retired pay computed in accordance with the pre-Redux (High Three) formula will have their COLAs computed as described above for pre-August 1, 1986, entrants. Those personnel who opt to have their retired pay computed in accordance with the Redux formula, have their COLAs computed using a different formula. Annual COLAs are held one percentage point below the actual inflation rate. So for example, the December 2017 COLA increase was 2.0% and Redux retirees saw a COLA increase of 1.0%. When a retiree reaches the age of 62, there is a one-time recomputation of his or her annuity to make up for the lost purchasing power caused by holding of annual COLA adjustments to the inflation rate minus one percentage point. This recomputation of COLA, in combination with the recomputation of the retired pay multiplier (discussed earlier), is a one-time increase in the member's monthly retired pay to parity with that of a similarly retired member who did not take the Redux option. After the recomputation at age 62, however, future COLA increases continue to be computed annually on the basis of the inflation rate minus one percentage point. Some advocacy groups and servicemembers have expressed concerns about the implementation of the Blended Retirement System, in particular in relation to the reduced multiplier for the defined benefit (monthly annuity) and the lump sum payment option. These include the potential impacts of the BRS on recruitment and retention, as well as on the financial well-being of military personnel. For example, there is some uncertainty as to whether the reduced multiplier for the defined benefit remains a strong enough retention incentive for mid-career personnel. A recent study for the Marine Corps that modeled potential retention outcomes found relatively small effects on force profiles, with officer retention being somewhat more sensitive than enlisted retention. The study also noted that retention may vary by occupational specialty--supporting the notion that flexibility may be needed for the services to vary the continuation pay, to offer other retention bonuses, or to lengthen minimum service requirements for high-demand fields. In terms of financial well-being, the study found that, in general, those who retire after a 20-year career and contribute to the TSP throughout their career, will have lower take-home pay from retirement to age 60 than those in the legacy retirement system, but will be better off after the age of 60 when eligible to start drawing from the TSP without penalty. The total lifetime benefit was estimated to be slightly higher under the legacy retirement system than under the BRS. Since the average military retiree upon retirement is in his or her 40s, many choose to pursue a second civilian career and may also accrue retirement savings and benefits from his or her new employer. Estimates of retirement savings are sensitive to the amount a member contributes to the TSP and the return on investment for TSP accounts. One of the ways that Congress addressed these concerns was to require financial literacy training for servicemembers in the FY2016 NDAA with the authorization for the new retirement system. Military retirement costs, which include all payments to current retirees and survivors, have been rising modestly each year, due to a predictable, slow rise in the number of retirees and survivors coupled with cost of living increases. All DOD budgets through FY1984 reflected the costs of retired pay actually being paid out to personnel who had already retired. That is, Congress appropriated the amount of money required to pay current retirees each year as part of each annual defense appropriations bill. Since FY1985, the accrual accounting concept has been used to budget for the costs of military retired pay. The unfunded liability resulting from the change in accounting practices is discussed in the next section. Under the accrual accounting system, the DOD budget for each fiscal year includes a contribution to a Military Retirement Fund (MRF) sufficient to finance future retirement payouts to current uniformed personnel when they retire, not the amount of retired pay actually paid to current retirees. These annual accrual contributions accumulate in the MRF, along with interest earned on them. Therefore, changes to military end-strength, increases or decreases in basic pay tables, or changes to retirement pay formulas, in any given year will result in same-year DOD budget obligations for military retired pay. Once military personnel retire, payments to them are made from the accumulated amounts in the MRF, not from the annual DOD budget. The amount that DOD must contribute to the MRF each year to cover future retirement costs is determined by an independent, presidentially appointed, Department of Defense Retirement Board of Actuaries, which decides how much is needed to cover future retirement costs as a percentage of military basic pay. Estimated future retirement costs are modeled based on the past rates at which active duty military personnel stayed in the service until retirement and on assumptions regarding the overall U.S. economy, including interest rates, inflation rates, and military pay levels. The model helps determine the level percentage of basic pay for each active servicemember that must be contributed from the DOD budget every year to cover future retirement costs--approximately 30 cents on every dollar of basic pay for full-time members. This is called the normal cost percentage (NCP) and is shown in Table 6 . The Military Retirement Fund also receives intergovernmental transfers from the General Fund of the Treasury to fund the initial unfunded liability of the military retirement system. This is the total future cost of military retired pay that will result from military service performed prior to the implementation of accrual accounting in FY1985. Current debates over both federal civilian and military retirement have included some discussion of unfunded liability , which consists of future retired pay costs incurred before the creation of the Military Retirement Fund in FY1985. The initial unfunded liability as of September 30, 1984 was $528.7 billion. The unfunded liability at the end of FY2016 was $742.6 billion. These obligations are being liquidated by the payment to the fund each year of an amount from the General Fund of the Treasury and are currently expected to be fully amortized by FY2025. Congressional action to change basic pay, retired pay, or associated benefits (e.g., concurrent retirement disability pay , or survivor benefit program) may affect the unfunded liability. For example, the implementation of the Blended Retirement System reduced the unfunded liability by $800 million, while the FY2017 NDAA provision authorizing an extension of the Special Survivor Indemnity Allowance (SSIA) for certain survivors of military members raised the unfunded liability by $200 million. The FY2017 NDAA extended the SSIA as a permanent benefit which annual COLA increases. The DOD Actuary estimates that this change will raise NCPs by approximately 0.1 percentage point and lead to an actuarial loss of approximately $8 billion to the Military Retirement Fund. Every four years, the President is required by law to direct a comprehensive review of the military compensation system and to forward the review, along with his recommendations, to Congress. This review is known as the Quadrennial Review of Military Compensation (QRMC). The Military Compensation and Retirement Modernization Commission (MCRMC) served as the 12 th QRMC. The sections below summarize the recommendations of these commissions. 10 th QRMC Recommendations In the 10 th Quadrennial Review of Military Compensation (QRMC), one of the directed areas of assessment was "the implications of changing expectations of present and potential members of the uniformed services relating to retirement." To accomplish this, the QRMC suggested a major revision of both the active and reserve retirement systems. Selected options were: 1. A defined benefit plan similar to the current High Three system that would vest personnel at 10 years of service, with benefits to begin either at age 60 (for personnel who have served less than 20 years of service) or age 57 (for those that served more than 20 years of service). Retirees could opt to receive the retirement annuity immediately upon retirement but the annuity would be reduced by 5% for each year under age 57. 2. Combined with the above defined benefit plan would be a defined contribution plan that would require the services to contribute up to 5% of annual base pay into a retirement account for each servicemember. The contribution would start at 2% for those with two years of service and increase incrementally until it reached 5% for those with five or more years of service. This plan would also vest at 10 years of service but withdrawals could not begin until age 60. 3. A system of gate pays would be established at specified career points to retain selected personnel in specified skill areas. 4. Separation pay would be used to encourage personnel in over-manned skills to separate prior to vesting at the 10-year point or becoming eligible for an immediate annuity at 20 years. 11 th QRMC Recommendations DOD submitted the 11 th QRMC final report in 2012. While this QRMC did not have the same focus on the entire retirement system as the previous QRMC, DOD recommended more closely aligning active and reserve retirement systems with the goal of eventually transitioning to a total force single-system approach for both the active and reserve components. The report recommended the following modification to the reserve retirement system: Reserve component members who have attained 20 qualifying years for retirement benefits could begin receiving retired pay on the 30 th anniversary of their service start date or at age 60, whichever comes first. Reserve members would receive one retirement point for each day of service, and the points needed for a qualifying year would be reduced from the current 50-point requirement to 35. Military Compensation and Retirement Modernization Commission (MCRMC) The National Defense Authorization Act (NDAA) for FY2013 ( P.L. 112-239 ) established a Military Compensation and Retirement Modernization Commission (MCRMC) to provide the President and Congress with specific recommendations to modernize pay and benefits for the armed services. In terms of retirement, the commission was mandated to provide recommendations to "Modernize and achieve fiscal sustainability for the compensation and retirement systems for the Armed Forces and the other Uniformed Services for the 21 st century." Notably, Section 674 of P.L. 112-239 mandated that the commission comply with conditions that would grandfather existing servicemembers and retirees into the existing retirement system, stating: (i) For members of the uniformed services as of such date, who became members before the enactment of such an Act, the monthly amount of their retired pay may not be less than they would have received under the current military compensation and retirement system, nor may the date at which they are eligible to receive their military retired pay be adjusted to the financial detriment of the member. (ii) For members of the uniformed services retired as of such date, the eligibility for and receipt of their retired pay may not be adjusted pursuant to any change made by the enactment of such an Act. The commission delivered its final report and recommendations to Congress on January 29, 2015. Congress adopted many of the MCRMC's recommendations in the FY2016 NDAA. Several of the most prominent changes include, reduction of the retired pay multiplier, government matching contributions, and the lump sum option. The MCRMC did not make any recommendations changing the 20-year eligibility for retirement; however, it recommended that the Secretary of Defense be given authority to modify the years-of-service requirement to shape the force profile as long as it does not impose involuntary changes on existing servicemembers. DOD expressed opposition to this proposal and Congress did not adopt a provision based on this MCRMC recommendation. The 20-year eligibility remains in current law.

The military retirement system is a government-funded, noncontributory, defined benefit system that has historically been viewed as a significant incentive in retaining a career military force. The system currently includes monthly compensation for qualified active and reserve retirees, disability benefits for those deemed medically unfit to serve, and a survivor annuity program for the eligible survivors of deceased retirees. The amount of compensation is dependent on time served, basic pay at retirement, and annual Cost-of-Living-Adjustments (COLAs). Military retirees are also entitled to nonmonetary benefits including exchange and commissary privileges, medical care through TRICARE, and access to Morale, Welfare and Recreation (MWR) facilities and programs. Currently, there are three general categories of military retiree, active component, reserve component, and disability retiree. Active component personnel are eligible for retirement (i.e., vested) after completing 20 years of service (YOS). Reserve personnel are eligible after 20 years of creditable service based on a points system, but do not typically begin to draw retirement pay until age 60. Finally, those with a disability retirement do not need to have served 20 years to be eligible for retired pay; however, they must have been found unqualified for further service due to a permanent, stable disability. In FY2017, approximately $57 billion was paid to 2.3 million military retirees and survivors. Given the size of the program, some have viewed military retirement as a place where substantial budgetary savings could be made. Others have argued that past modifications intended to save money have had a deleterious effect on military recruiting and retention. Military retirees, families, and veterans' service organizations closely monitor potential changes to the retirement system. When considering alternatives to the current system, Congress may choose to consider the balance among the benefits of the military retirement system as a retention incentive, budget constraints, and the needs and concerns of their constituents.

Recent estimates that the unauthorized (illegally present) alien population in the United States exceeds 11 million has focused renewed attention on this population. The 107 th and 108 th Congresses considered legislation to address one segment of the unauthorized population--aliens who, as children, were brought to live in the United States by their parents or other adults. In a 1982 case, the Supreme Court struck down a state law that prohibited unauthorized alien children from receiving a free public education, making it difficult, if not impossible, for states to deny an elementary or secondary education to such students." Unauthorized aliens who graduate from high school and want to attend college, however, face various obstacles. Among them, a provision enacted in 1996 as part of the Illegal Immigration Reform and Immigrant Responsibility Act (IIRIRA) discourages states and localities from granting unauthorized aliens certain "postsecondary education benefits." This provision (IIRIRA SS505) directs that an unauthorized alien-- shall not be eligible on the basis of residence within a State (or a political subdivision) for any postsecondary education benefit unless a citizen or national of the United States is eligible for such a benefit (in no less an amount, duration, and scope) without regard to whether the citizen or national is such a resident. Although IIRIRA SS505 does not refer explicitly to the granting of "in-state" residency status for tuition purposes and some question whether it even covers in-state tuition, the debate surrounding SS505 has focused on the provision of in-state tuition rates to unauthorized aliens. The Higher Education Act of 1965, as amended, also makes unauthorized alien students ineligible for federal student financial aid. In most instances, they are likewise ineligible for state financial aid. Moreover, as unauthorized aliens, they are unable to work legally and are subject to removal from the country regardless of the number of years they have lived in the United States. In the 107 th and 108 th Congresses, legislation was introduced--but not enacted--to provide relief to unauthorized alien students. These bills sought to repeal IIRIRA SS505 and, thereby, provide unauthorized students greater access to postsecondary education. These bills also would have enabled certain unauthorized students to adjust to legal permanent resident (LPR) status. Legal permanent residents, sometimes referred to as "green card holders," are able to live and work indefinitely in the United States. In most cases, they are able to apply for U.S. citizenship after five years. The unauthorized student bills introduced in the 107 th and 108 th Congresses were H.R. 1563 , Preserving Educational Opportunities for Immigrant Children Act, introduced in the 107 th Congress and reintroduced as H.R. 84 in the 108 th Congress by Representative Sheila Jackson-Lee; H.R. 1582 , Immigrant Children's Educational Advancement and Dropout Prevention Act, introduced in the 107 th Congress by Representative Luis Gutierrez; H.R. 1918 , Student Adjustment Act, introduced in the 107 th Congress and reintroduced as H.R. 1684 in the 108 th Congress by Representative Chris Cannon; S. 1291 , Development, Relief, and Education for Alien Minors Act (DREAM Act), introduced in the 107 th Congress and reintroduced (in modified form) as S. 1545 in the 108 th Congress by Senator Orrin Hatch; S. 1265 , Children's Adjustment, Relief, and Education Act (CARE Act), introduced in the 107 th Congress by Senator Richard Durbin; and Title III, Subtitle D of S. 8 , Educational Excellence for All Learners Act of 2003, introduced in the 108 th Congress by then-Senate Minority Leader Thomas Daschle. In the 107 th Congress, the Senate Judiciary Committee reported an amended version of S. 1291 , known as the DREAM Act. This amended measure represented a compromise between S. 1291 , as introduced, and S. 1265 . None of the other pending bills saw any action beyond committee referral. ( Appendix A contains a table comparing four unauthorized alien student bills introduced in the 107 th Congress.) In the 108 th Congress, S. 1291 , as reported by the Senate Judiciary Committee in the 107 th Congress, was included as part of S. 8 , an education measure introduced by then-Senate Minority Leader Daschle. In addition, a new version of the DREAM Act ( S. 1545 ) was introduced by Senator Hatch. On November 25, 2003, the Senate Judiciary Committee reported S. 1545 with an amendment. The other unauthorized alien student bills did not see any action beyond committee referrals. Four bills ( H.R. 84 , H.R. 1684 , S. 8 , and S. 1545 , as reported) would have enabled eligible unauthorized students to obtain LPR status through an immigration procedure known as cancellation of removal . (The major features of the bills are compared in Appendix B .) Cancellation of removal is a discretionary form of relief authorized by the Immigration and Nationality Act (INA), as amended, that an alien can apply for while in removal proceedings before an immigration judge. If cancellation of removal is granted, the alien's status is adjusted to that of an LPR. H.R. 84 and H.R. 1684 would have permanently amended the INA to make unauthorized alien students who meet certain requirements eligible for cancellation of removal/adjustment of status, whereas S. 8 and S. 1545 would have established temporary cancellation of removal/adjustment of status authorities separate from the INA. H.R. 1684 , S. 8 , and S. 1545 would have allowed aliens to affirmatively apply for relief without being placed in removal proceedings. Other bills, H.R. 3271 and H.R. 1830 , also would have enabled eligible unauthorized alien students to obtain LPR status, but they would not have done so through a cancellation of removal mechanism. Instead, they would have established a temporary adjustment of status authority. The INA limits the number of aliens who can be granted cancellation of removal/adjustment of status in a fiscal year to 4,000. It, however, contains exceptions for certain groups of aliens. H.R. 1684 would have amended the INA to add an exception to the numerical limitation for aliens granted cancellation of removal/adjustment of status under its terms. No numerical limit would have applied under H.R. 3271 , S. 8 , or S. 1545 . S. 1545 differed from the other bills in that it would have established a two-stage process by which aliens could obtain LPR status. Aliens granted cancellation of removal under the bill would have been adjusted initially to conditional permanent resident status. Such conditional status would have been valid for six years and would have been subject to termination. To have the condition removed and become full-fledged LPRs, the aliens would have had to submit an application during a specified period and meet additional requirements. The other bills would have adjusted all eligible aliens directly to full-fledged LPR status. As detailed in Appendix B , H.R. 84 , H.R. 1684 , H.R. 3271 , S. 8 , and S. 1545 varied in their eligibility criteria. Among these criteria, all five would have required continuous physical presence in the United States for a specified number of years. In the case of S. 8 and S. 1545 , the continuous presence requirement would have had to be satisfied prior to the date of enactment. Under H.R. 84 , H.R. 1684 , and H.R. 3271 , the continuous presence requirement would have needed to be met prior to the date of application for relief. All of the bills except H.R. 84 would have limited relief to aliens meeting specified age requirements. All five bills would have required a showing of good moral character. With respect to educational status, H.R. 1684 and H.R. 3271 would have required prospective beneficiaries to be enrolled at or above the 7 th grade level, or enrolled in, or actively pursuing admission to, an institution of higher education in the United States. S. 8 would have granted LPR status only to individuals with a high school diploma or equivalent credential. Under S. 1545 , in order to obtain conditional LPR status, aliens would have needed to gain admission to an institution of higher education or possess a high school diploma or equivalent credential. H.R. 84 contained no educational requirements. On October 16 and October 23, 2003, the Senate Judiciary Committee marked up S. 1545 . At the October 16 session, the Committee voted in favor of an amendment in the nature of a substitute proposed by Senator Hatch for himself and Senator Durbin. The substitute amended various provisions of S. 1545 , as introduced. Among the substantive amendments were changes to the confidentiality of information section. For example, the bill, as introduced, stated that information furnished by applicants could not be used for any purpose other than to make a determination on the application. The substitute amended this provision to state that information furnished by applicants could not be used to initiate removal proceedings against individuals identified in the application. At the October 23 meeting, the Judiciary Committee considered a set of amendments to S. 1545 offered by Senator Charles Grassley. Two of these amendments were the subject of debate at the markup. The first proposed to amend a provision in the bill allowing aliens who, prior to the date of enactment, met the requirements for both conditional resident status and removal of the condition, to petition for LPR status without first becoming conditional residents. The amendment would have made these aliens subject to the same period of conditional residence as other aliens eligible for relief under the bill. The second amendment proposed to place restrictions on the availability of federal student financial aid to aliens eligible for adjustment to LPR status under the bill. Under the amendment, these aliens would have been eligible only for specified student loan and work-study programs. Among the other amendments in the Grassley package was one that would have required beneficiaries of the bill to be registered in the Student and Exchange Visitor Information System (SEVIS), the monitoring system for foreign students. The Committee voted, 18-1, to approve the Grassley amendments, and voted, 16-3, to report the bill, as amended. The Committee acted, however, with the understanding that the bill would be subject to further discussion and modification prior to being reported. In S. 1545 , as reported, the Grassley amendment language on federal financial assistance was modified, as described in the next section. The rest of the Grassley amendments were unchanged. Under Title IV of the Higher Education Act of 1965, as amended, LPRs and certain other eligible noncitizens may receive federal student financial aid. Pell Grants and Stafford loans authorized under Title IV comprise 85% of postsecondary student aid. S. 1545 , as reported, would have placed restrictions on eligibility for higher education assistance for beneficiaries of the bill's adjustment provisions. With respect to assistance provided under Title IV, it would have made aliens who adjust to LPR status under the bill eligible only for student loans, federal work-study programs, and services (such as counseling, tutorial services, and mentoring), subject to the applicable requirements. Thus, aliens adjusting status under S. 1545 would not have been eligible for Pell Grants. H.R. 84 , H.R. 1684 , H.R. 3271 , and S. 8 , as introduced, did not contain restrictions on eligibility for federal student financial aid. An alien who adjusted to LPR status under any of these bills would have been eligible, as an LPR, for federal financial aid under Title IV. H.R. 84 and H.R. 1684 additionally would have extended this eligibility to unauthorized students who had applied for, but not yet been granted, cancellation of removal/adjustment of status. Appendix A. Comparison of Major Provisions of Bills in the 107 th Congress on Unauthorized Alien Students Appendix B. Comparison of Major Provisions of Bills in the 108 th Congress on Unauthorized Alien Students

Unauthorized alien students constitute a subpopulation of the total U.S. unauthorized alien population that is of particular congressional interest. These students receive free public primary and secondary education, but often find it difficult to attend college for financial reasons. A provision enacted as part of a 1996 immigration law prohibits states from granting unauthorized aliens certain postsecondary educational benefits on the basis of state residence, unless equal benefits are made available to all U.S. citizens. This prohibition is commonly understood to apply to the granting of "in-state" residency status for tuition purposes. In addition, unauthorized aliens are not eligible for federal student financial aid. More generally, as unauthorized aliens, they are not legally allowed to work in the United States and are subject to being removed from the country at any time. Bills were introduced in the 107th and 108th Congresses to address the educational and immigration circumstances of unauthorized alien students. Most of these bills had two key components. They would have repealed the 1996 provision. They also would have provided immigration relief to certain unauthorized alien students by enabling them to become legal permanent residents of the United States. In both Congresses, bills known as the DREAM Act (S. 1291 in the 107th Congress; S. 1545 in the 108th Congress) containing both types of provisions were reported by the Senate Judiciary Committee. This report will not be updated.

RS21771 -- Animal Rendering: Economics and Policy Updated March 17, 2004 Renderers convert dead animals and animal parts that otherwise would require disposal into a variety of materials, including edibleand inedible tallow and lard and proteins such as meat and bone meal (MBM). (2) These materials in turn are exported or sold todomestic manufacturers of a wide range of industrial and consumer goods such as livestock feed and pet food, soaps,pharmaceuticals, lubricants, plastics, personal care products, and even crayons (also see Table 1 on page 6). Although rendering provides an essential service to the increasingly intensive and cost-competitive U.S. animal and meat industries(and is subject to certain government food safety and environmental regulations), the industry has largely operatedoutside of publicview. However, rendering has attracted greater public attention since the discovery of bovine spongiformencephalopathy (BSE ormad cow disease) in two North American cows in 2003. U.S. officials have announced or are considering newregulatory actionsintended to reassure foreign and domestic customers that BSE will not threaten food safety or U.S. cattle herds. These actions arelikely to cause changes in renderers' business practices, costs, and product values. Any changes in the economicsof rendering likelywill affect the economics of animal and meat producers too. Renderers annually convert 47 billion pounds or more of raw animal materials into approximately 18 billion pounds of products. Sources for these materials include meat slaughtering and processing plants (the primary one); dead animals fromfarms, ranches,feedlots, marketing barns, animal shelters, and other facilities; and fats, grease, and other food waste fromrestaurants and stores. In meat animal slaughtering and processing plants, the amount of usable material from each animal depends largely upon the species. For example, at slaughter, a 1,200-pound steer can yield anywhere from 55% to 60% of human edible product,including meat forretail sale, edible fat, and variety meats (organs, tongue, tail, etc.), according to various estimates. Subtractinganother 5%-8% for theweight of the hide, which goes into leather, leaves 32%-40% of material for rendering. If this range were appliedconsistently to all35.5 million U.S. cattle slaughtered in 2003, the equivalent would represent the weight of approximately 11 millionto 14 million livecattle. (3) Elsewhere, independent renderers collect and process about half of all livestock and poultry that die from diseases or accidents beforereaching slaughter plants (Sparks 2002). U.S. farm animal mortalities in 2000 included approximately 4.1 millioncattle and calves(totaling 1.9 billion pounds); 18 million hogs (1 billion pounds); 833,000 sheep, lambs, and goats (64 millionpounds); and 82 millionchickens and turkeys (347 million pounds), according to Sparks, which examined USDA data. "Disposing of these mortalities is complicated because of the need to minimize adverse environmental consequences, such as thespread of human and animal disease or the pollution of ground or surface water," Sparks (2002) observed. "Formany producers,paying a modest fee to have a renderer remove dead carcasses is likely preferred to finding alternative on-farmdisposal methods"(i.e., burial, incineration, or composting). Number and Types of Rendering Plants. One study estimated that 137 firmsoperated 240 plants in 1997, with a total payroll of nearly 10,000 employees. (4) More recently, the National Renderers Association(NRA) estimated that Canada and the United States have a combined 250-260 rendering plants. Rendering facilitiesmay be eitherintegrated or independent operations. Integrated plants operate in conjunction with animal slaughter and meat processing plants and handle 65%-70% of all renderedmaterial. The estimated 95 U.S. and Canadian facilities (NRA) render most edible animal byproducts (i.e., fattyanimal tissue),mainly into edible fats (tallow and lard) for human consumption. Edible rendering is subject to the inspection andsafety standards ofUSDA's Food Safety and Inspection Service (FSIS) or its state counterparts, which by law already are present in themeat slaughterand processing plants. These plants also render inedible byproducts (including slaughter floor waste) into fats andproteins for animalfeeds and for other ingredients. Because a meat plant typically processes only one animal species (such as cattle,hogs, or poultry), itsassociated rendering operations likewise handle only the byproducts of that species. The inedible and ediblerendering processes aresegregated. Independent operations handle the other 30%-35% of rendered material. These plants (estimated by NRA at 165 in the United Statesand Canada) usually collect material from other sites using specially designed trucks. They pick up and process fatand bonetrimmings, inedible meat scraps, blood, feathers, and dead animals from meat and poultry slaughterhouses andprocessors (usuallysmaller ones without their own rendering operations), farms, ranches, feedlots, animal shelters, restaurants, butchers,and markets. Asa result, the majority of independents are likely to be handling "mixed species." Almost all of the resultingingredients are destinedfor nonhuman consumption (e.g., animal feeds, industrial products). The U.S. Food and Drug Administration (FDA)regulates animalfeed ingredients, but its continuous presence in rendering plants, or in feed mills that buy rendered ingredients, isnot a legalrequirement. The Rendering Process. In most systems, raw materials are ground to a uniformsize and placed in continuous cookers or in batch cookers, which evaporate moisture and free fat from protein andbone. A series ofconveyers, presses, and a centrifuge continue the process of separating fat from solids. The finished fat (e.g., tallow,lard, yellowgrease) goes into separate tanks, and the solid protein (e.g., MBM, bone meal, poultry meal) is pressed into cakefor processing intofeed. (5) Other rendering systems are used, includingthose that recover protein solids from slaughterhouse blood or that process usedrestaurant grease. This restaurant grease generally is recovered (often in 55-gallon drums) for use as yellow greasein non-humanfood products like animal feeds. Value and Use of Rendered Products. The 18 billion pounds of ingredients thatrenderers produce each year have been valued at more than $3 billion, of which $870 million is exported. Of the18 billion poundtotal, 10 billion pounds were feed ingredients with a value of approximately $1 billion (Sparks 2001). MBMaccounted for 6.6 billionpounds of this, poultry byproducts 4 billion pounds, and blood meal 226 million pounds (Sparks). (6) Such ingredients are valued fortheir nutrients -- high protein content, digestible amino acids, and minerals -- and their relatively low cost. Poultryoperations andpet food manufacturers accounted for 66% of the domestic MBM market of nearly 5.7 billion pounds in 2000, whilehog and cattleoperations took most of the rest. So long as animals are raised and processed for food, vast amounts of inedible materials will be generated, the result of prematuredeaths, herd culls, and slaughter byproducts. "Regardless of quantity, byproducts and rendered products from theslaughter processmust be sold at whatever price will clear the market or the industry (and the environment) incurs a cost fordisposal." (7) Asgovernment rules and industry practices evolve to address food safety and animal disease concerns like BSE, optionsfor using thesebyproducts may become more limited. If animal byproducts have fewer market outlets, new questions may ariseabout how todispose of them safely and who should pay. "Feed Ban" Impacts. Scientists currently maintain that infected animal feed is theprimary source of BSE transmission (although research continues into other potential sources). Therefore, U.S.officials believe thatregulation of feed ingredients is the single most effective method for controlling BSE. Following the widespreadoutbreaks of BSE inGreat Britain and Europe, the FDA in August 1997 imposed a ban on feeding most mammalian proteins to cattleand other ruminants. Prohibited proteins still can be fed to other animals such as pigs, poultry and pets. (FDA in late January 2004announced plans toexpand the list of prohibited proteins.) Estimates vary on the economic impact of the feed ban. According to a 1997 report prepared for the FDA on compliance costs andmarket impacts, the FDA feed ban could reduce MBM values by between $63 million and $252 million, or $25 to$100 per ton. (8) Sparks (June 2001) estimated that the average MBM value loss since the 1997 rule was $18 per ton, for a total of$288 million duringthe period 1996 to 2000. Sparks added that these losses likely were highly concentrated among renderers thatproduce MBMexclusively, and among those handling mixed species. The FDA-commissioned report predicted that rendererswould pass much ofthe lost value to packers by paying less for raw materials; packers in turn were expected to reduce their paymentsfor cattle. The 2001 Sparks study examined potential cost impacts of several options for more extensive feed restrictions. It estimated that atotal animal protein feed ban to ruminants would cost $100 million yearly; a total ban on all ruminant proteins toall farm animals,$636 million yearly; and a total animal protein ban to all farm animals, $1.5 billion yearly. Downers and Dead Animals. Another recent regulatory action with an impact onthe rendering industry was USDA's December 30, 2003, ban on all "downer" (nonambulatory) cattle from the humanfood supply. U.S. officials consider downers, or animals unable to rise or walk, to be one of the higher-risk cattle groups for BSE(althoughindustry officials note that most animals become nonambulatory from injuries or non-BSE diseases). Before theban, USDAestimated that 150,000-200,000 downers were entering slaughter plants. One issue is whether the downer ban hasremoved aneconomic incentive to market downers and thus made it more difficult for USDA to obtain such animals for BSE(and other disease)surveillance. On March 15, 2004, USDA announced a major expansion of its BSE surveillance program that will samplemany more downers anddead animals, adding that it is looking to renderers (among other sites) to make these animals available. Numerouspracticalproblems -- such as how to recover and store carcasses, who will sample, the costs, etc. -- now confront bothgovernment andindustry officials. (9) Disposal Questions. If renderers earn less money from rendered byproducts anddead animals, they will pay less for such materials. In the past, renderers paid for dead animals. Now most chargea fee to pick themup. (10) In its 2002 study on the cost of livestockmortalities, Sparks assumed that so long as MBM could be sold for feed, the averageper-head cost of disposing of dead cattle and calves might be $8.25 per head; if MBM is banned from animal feed,the cost could riseto $24.11 per head. Sparks estimated the per-head costs for other disposal methods at $9.33 for incineration, $10.63for burial, and$30.34 for composting. The 2002 World Health Organization (WHO) report observed that rendering, because it "sanitizes" animal wastes, "performs anessential public service: the environmental clean-up of wastes too hazardous for disposal in conventional ways. Forexample, animalwastes provide ideal conditions for the growth of pathogens that infect humans as well as animals. Incinerationwould cause major airpollution. Landfill could lead to disease transmission." (11) A USDA advisory committee in February 2004 said that along with an enhanced BSE surveillance program, "a comprehensive systemmust be implemented to facilitate adequate pathways for dead and non-ambulatory cattle to allow for collection ofsamples, and forproper, safe disposal of carcasses; this must be done to ensure protection of public health, animal health, and theenvironment; such asystem will require expending federal resources to assist with costs for sampling, transport and safe disposal." (12) Others temper this view of rendering by observing that the nation's clean air and water laws are in place to address possible adverseenvironmental impacts. These responsibilities are enforced under the purview of the U.S. Environmental ProtectionAgency (EPA)and generally through states and localities, which often impose their own environmental and health standards aswell. Whilerendering (which also must abide by such standards) certainly is one option for handling dead stock and animalbyproducts, it hasbeen argued, this option does not relieve the animal and meat industries of their environmental responsibilities. Because theseindustries created this material, they should bear the costs, not the public, particularly at a time when budget deficitsare forcingdifficult spending choices, the argument goes. Table 1. U.S. Production, Consumption, and Export of Rendered Products,1999-2003(p) Source : NRA; 2003 data preliminary (p). a. Includes poultry fat and by-product meal and raw products for pet food. b. Withheld to avoid disclosing individual firm data.

Renderers convert dead animals and animal byproducts into ingredients for a widerangeof industrial and consumer goods, such as animal feed, soaps, candles, pharmaceuticals, and personal care products. U.S. regulatoryactions to bolster safeguards against bovine spongiform encephalopathy (BSE or mad cow disease) could portendsignificant changesin renderers' business practices, the value of their products, and, consequently, the balance sheets of animalproducers and processors. Also, if animal byproducts have fewer market outlets, questions arise about how to dispose of them safely. Thisreport, which willnot be updated, describes the industry and discusses several industry-related issues that have arisen in the108th Congress. (1)

The Trump Administration requested $75.1 billion for the Department of Transportation (DOT) for FY2018, 2.6% ($2 billion) less than DOT received in FY2017. The Administration proposed significant cuts in funding for competitive grant programs, zeroing out the TIGER infrastructure investment grant program and the Essential Air Service (EAS) program, and reducing spending on public transportation capital grants and Amtrak's long-distance trains by half or more. Around 75% of DOT's funding is mandatory budgetary authority drawn from trust funds; the Administration's request would have drawn a slightly larger portion (78%) from mandatory budget authority, reducing the amount of discretionary budget authority in DOT's budget from $19.3 billion in 2017 to $16.4 billion for FY2018. On July 21, 2017, the House Committee on Appropriations reported H.R. 3353 . The committee recommended $77.5 billion for DOT, a 0.5% ($430 million) increase over the comparable FY2017 amount and 3% ($2.4 billion) above the Administration request. On July 27, 2017, the Senate Committee on Appropriations reported S. 1655 . It recommended a total of $78.6 billion in new budget authority for DOT for FY2018 ($78.5 billion after scorekeeping adjustments), 2% ($1.6 billion) above the comparable FY2017 amount and 4.7% ($3.5 billion) over the Administration request. Conflicts over funding levels and spending limits for federal agencies delayed action on final FY2018 appropriations until March 2018. Until that time, a series of continuing resolutions provided temporary funding for federal agencies. Finally, after passing legislation raising the spending limits for federal agencies for FY2018, Congress passed an omnibus spending bill, P.L. 115-141 , which included increased spending for most agencies. Title I of Division L, the DOT Appropriations Act, provided $86.2 billion, 11.8% ($9.1 billion) more than in FY2017. DOT's funding arrangements are unusual compared to those of most other federal agencies, in that most of its funding is mandatory budget authority coming from trust funds, and most of its expenditures take the form of grants to states and local government authorities. Discretionary appropriations constitute most, if not all, of the annual funding for most federal agencies. But roughly three-fourths of DOT's funding has come from mandatory budget authority derived from trust funds. A significant increase in discretionary funding for DOT in its FY2018 appropriation changed that proportion slightly, increasing the share of discretionary funding to almost a third of DOT's budget. Table 1 shows the shift in the breakdown between the discretionary and mandatory funding in DOT's budget from FY2017 to FY2018. Two large trust funds, the Highway Trust Fund and the Airport and Airway Trust Fund, have typically provided around 90% of DOT's annual funding in recent years (92% in FY2017), but in FY2018 a significant increase in discretionary budget authority resulted in the proportion drawn from trust funds dropping to 83%, despite the actual amount increasing by $1 billion; see Table 2 . The scale of the funding coming from these trust funds is not entirely obvious in DOT budget tables, because most of the funding from the Airport and Airway Trust Fund is categorized as discretionary budget authority and so is combined with the discretionary budget authority provided from the general fund. Approximately 80% of DOT's funding is distributed to states, local authorities, and Amtrak in the form of grants (see Table 3 ). Of DOT's largest sub-agencies, only the Federal Aviation Administration, which is responsible for the operation of the air traffic control system and employs roughly 83% of DOT's 56,252 employees, many as air traffic controllers, has a budget whose primary expenditure is not grants. Since most DOT funding comes from trust funds whose revenues typically come from taxes, the periodic reauthorizations of the taxes supporting these trust funds, and the apportionment of the budget authority from those trust funds to DOT programs, are a significant aspect of DOT funding. The highway, transit, and rail programs are currently authorized through FY2020, but the authorization for the federal aviation programs was scheduled to expire at the end of FY2017; it was extended to the end of FY2018. Reauthorization of this program may affect both its structure and funding level. In current (nominal) dollars, DOT's nonemergency annual funding has risen from a recent low of $70 billion in FY2012 to $86 billion in FY2018. However, adjusting for inflation tells a different story. DOT's inflation-adjusted funding peaked in FY2010 at $87.5 billion (in constant 2018 dollars) and declined from that point until FY2015, then began rising again in FY2016 (see Figure 1 ). DOT's real funding, adjusted for inflation, was roughly the same in FY2016 and FY2017 as in FY2006; from FY2012-FY2017, DOT's inflation-adjusted funding was lower than during the FY2007-FY2011 period. Table 4 presents a selected account-by-account summary of FY2018 appropriations for DOT, compared to FY2017. Virtually all federal highway funding and most federal transit funding comes from the Highway Trust Fund, whose revenues come largely from the federal motor fuels excise tax ("gas tax"). For several years, annual expenditures from the fund have exceeded revenues; for example, for FY2018, revenues and interest are projected to be approximately $41 billion, while authorized outlays are projected to be approximately $54 billion, and this shortfall is expected to continue. Congress transferred about $143 billion, mostly from the general fund of the Treasury, to the Highway Trust Fund during the period FY2008-FY2016 to keep the trust fund solvent. One reason for the shortfall in the fund is that the federal gas tax has not been raised since 1993. The tax is a fixed amount assessed per gallon of fuel sold, not a percentage of the cost of the fuel sold: Whether a gallon of fuel costs $1 or $4, the highway trust fund receives 18.3 cents for each gallon of gasoline and 24.3 cents for each gallon of diesel. Meanwhile, the value of the gas tax has been diminished by inflation (which has reduced the purchasing power of the revenue raised by the tax) and increasing automobile fuel efficiency (which reduces growth in gasoline sales as vehicles are able to travel farther on a gallon of fuel). The Congressional Budget Office (CBO) has forecast that gasoline consumption will be relatively flat through 2024, as continued increases in the fuel efficiency of the U.S. passenger fleet are projected to offset increases in the number of miles driven. Consequently, CBO expects Highway Trust Fund revenues of $39 billion to $41 billion annually from FY2018 to FY2027, well short of the annual level of projected expenditures from the fund. The Administration did not request any funding for TIGER grants for FY2018. The House committee likewise recommended no funding for FY2018, while the Senate committee recommended $550 million. The Senate bill also recommended that the portion of funding allocated to projects in rural areas be increased from 20% to 30%; the same change was included in the Senate-passed DOT appropriations bills in FY2016 and FY2017, but was not enacted. The enacted bill provided $1.5 billion for the program, increased the portion for projects in rural areas to 30%, and made planning an eligible expense. It also directed DOT to award the grants within 270 days of enactment. The Transportation Investments Generating Economic Recovery (TIGER) grant program originated in the American Recovery and Reinvestment Act ( P.L. 111-5 ), where it was called "national infrastructure investment" (as it has been in subsequent appropriations acts). It is a discretionary grant program intended to address two criticisms of the current structure of federal transportation funding: that virtually all of the funding is distributed to state and local governments, which select projects based on their individual priorities, making it difficult to fund projects that have national or regional impacts but whose costs fall largely on one or two states; and that most federal transportation funding is divided according to mode of transportation, making it difficult for projects in different modes to compete for funds on the basis of comparative benefit. The TIGER program provides grants to projects of national, regional, or metropolitan area significance in various modes on a competitive basis, with recipients selected by DOT. Although the program is, by description, intended to fund projects of national, regional, and metropolitan area significance, in practice its funding has gone more toward projects of regional and metropolitan area significance. In large part this is a function of congressional intent, as Congress has directed that the funds be distributed equitably across geographic areas, between rural and urban areas, and among transportation modes, and has set relatively low minimum grant thresholds ($5 million for urban projects, $1 million for rural projects). Congress has continued to support the TIGER program through annual DOT appropriations. It is heavily oversubscribed; for example, DOT announced that it received applications totaling $9.3 billion for the $500 million available for FY2016 grants. The U.S. Government Accountability Office (GAO) has reported that, while DOT has selection criteria for the TIGER grant program, it has sometimes awarded grants to lower-ranked projects while bypassing higher-ranked projects without explaining why it did so, raising questions about the integrity of the selection process. DOT has responded that while its project rankings are based on transportation-related criteria, such as safety and economic impact, it must sometimes select lower-ranking projects over higher-ranking ones to comply with other selection criteria established by Congress, such as geographic balance and a balance between rural and urban awards. Some critics argue that TIGER grants go disproportionately to urban areas, but for several years Congress directed that at least 20% of TIGER funding should go to projects in rural areas, which roughly equals the proportion of the U.S. population that lives in rural areas (19%, according to the 2010 Census ). In recent years, the Senate had pushed to increase that proportion to 30%, and for FY2018 grants the portion for rural areas was increased to 30%. As Table 5 illustrates, the TIGER grant appropriation process has followed a pattern for several years, with the Obama Administration requesting as much as or more than Congress had previously provided; the House zeroing out the program or proposing a large cut; the Senate proposing an amount similar to the previous appropriation; and Congress agreeing on a final enacted amount similar to the previously enacted amount. The FY2018 appropriations process changed the pattern slightly, in that the Trump Administration requested no funding for TIGER grants. The FY2018 enacted legislation included significant increases in funding for infrastructure for aviation, highways, passenger rail, and transit, in some cases beyond the authorized levels, in other cases provided in newly created accounts. The Essential Air Service program is funded through a combination of mandatory and discretionary budget authority. In addition to the annual discretionary appropriation, there is a mandatory annual authorization, estimated at $119 million for FY2018, financed by overflight fees collected from commercial airlines by FAA. These overflight fees apply to international flights that fly through U.S. airspace, but do not land in or take off from the United States. The fees are to be reasonably related to the costs of providing air traffic services to such flights. As Table 7 shows, the Trump Administration requested no discretionary funding for the EAS program in FY2018, proposing to use only the available mandatory funding for the program; it estimated that $119 million in mandatory funding would be available in FY2018. That would result in a reduction of 56% ($153 million) from the total FY2017 appropriation. The House committee bill recommended a $150 million discretionary appropriation, as was provided in FY2017; combined with the estimated mandatory funding, that would represent a 2.3% ($6 million) increase over FY2017. The Senate committee bill recommended a $155 million discretionary appropriation; combined with the estimated mandatory funding, that would result in a 4.2% ($11 million) increase. The enacted bill provided $155 million in discretionary funding, identical to the Senate bill; combined with an increase in the mandatory funding, EAS received a total of $286 million, a $22 million (8.7%) increase over FY2017. The EAS program seeks to preserve commercial air service to small communities by subsidizing service that would otherwise be unprofitable. The cost of the program in real terms has doubled since FY2008, in part because route reductions by airlines resulted in new communities being added to the program (see Table 8 ). Congress made changes to the program in 2012, including allowing no new entrants, capping the per-passenger subsidy for a community at $1,000, limiting communities that are less than 210 miles from a hub airport to a maximum average subsidy per passenger of $200, and allowing smaller planes to be used for communities with few daily passengers. Supporters of the EAS program contend that preserving airline service to small communities was a commitment Congress made when it deregulated airline service in 1978, anticipating that airlines would reduce or eliminate service to many communities that were too small to make such service economically viable. Supporters also contend that subsidizing air service to smaller communities promotes economic development in rural areas. Critics of the program note that the subsidy cost per passenger is relatively high, that many of the airports in the program have very few passengers, and that some of the airports receiving EAS subsidies are little more than an hour's drive from major airports. In 2008, Congress directed railroads to install positive train control (PTC) on certain segments of the national rail network by the end of 2015. PTC is a communications and signaling system that is capable of preventing incidents caused by train operator or dispatcher error. Freight railroads have reportedly spent billions of dollars thus far to meet this requirement, but most of the track required to have PTC installed was not in compliance at the end of 2015; in October 2015 Congress extended the deadline to the end of 2018--with an option for individual railroads to extend to 2020 with Federal Railroad Administration (FRA) approval. Congress provided $50 million in FY2010 and again in FY2016 for grants to railroads to help cover the expenses of installing PTC, and $199 million in FY2017 to help commuter railroads implement PTC. The Trump Administration's FY2018 budget request did not include any funding for the cost of PTC implementation, nor did the House or Senate Appropriations Committees recommend any funding for this purpose. The enacted FY2018 bill provided $250 million for PTC implementation under the Consolidated Rail Infrastructure and Safety Improvements grant program, and made up to $50 million of Amtrak's National Network grant available for PTC projects on state-supported routes where PTC is not required by law. The RRIF loan program provides direct loans and loan guarantees to state and local governments, government-sponsored entities, and railroads for rehabilitation or development of rail facilities and equipment. The program's resources are relatively lightly used; it is authorized to make up to $35 billion in loans, but has less than $5 billion outstanding, and has made only four loans since 2012. One of the factors that has been cited as reducing the attractiveness of the program is the requirement that loan recipients pay a credit risk premium to offset the risk of their defaulting on their loan. For the first time, the FY2018 appropriation act provided funding ($25 million) to subsidize the cost of the credit risk premium. Another point of contention with the RRIF program has been DOT's failure to repay the credit risk premium to borrowers who have paid off their loans. The program's statute calls for a borrower's credit risk premium to be repaid when all the loans in that cohort of loans have been paid off, but DOT has never defined what a cohort of loans is. Congress has directed DOT to define a cohort as all loans executed in a particular year; it reiterated that directive in the FY2018 appropriations act, and told DOT to repay the credit risk premiums when all loans in a cohort have been repaid. The Passenger Rail Reform and Investment Act of 2015 (Title XI of P.L. 114-94 ) reauthorized Amtrak while changing the structure of its federal grants: instead of getting separate grants for operating and capital expenses, it now receives separate grants for the Northeast Corridor and the rest of its national network. This act also authorized three new programs to make grants to states, public agencies, and rail carriers for intercity passenger rail development: Consolidated Rail Infrastructure and Safety Improvement Grants Federal-State Partnership for State of Good Repair Grants Restoration and Enhancement Grants The Administration's FY2018 budget requested a total of $811 million for intercity passenger rail funding: $760 million for grants to Amtrak and $51 million for two of the new grant programs. The House Appropriations Committee recommended $1.4 billion for Amtrak and a total of $525 million for two of the new grant programs. The Senate committee recommended $1.6 billion for Amtrak and a total of $124 million for the three new grant programs (see Table 9 ). It specified that $41 million of the $124 million recommended for the grant programs could be used to initiate or restore intercity passenger rail services, and advised Amtrak and other stakeholders to seek that funding for restoration of Amtrak's Gulf Coast service, which was interrupted in 2007 and never fully restored. It also noted that funding under the Federal-State Partnership for State of Good Repair program could be used for Amtrak's Hudson Tunnel replacement project (without naming that project). The final FY2018 act provided $1.9 billion for Amtrak, an increase of 30% ($447 million) over FY2017, and a total of $863 million for the new grant programs. The $98 million provided for the three new intercity passenger rail grants in FY2017 was the first funding provided for intercity passenger rail (other than annual grants to Amtrak and the occasional grants for PTC implementation) since the 111 th Congress (2009-2010), which provided $10.5 billion for DOT's high-speed and intercity passenger rail grant program. From FY2011 to FY2016, Congress provided no funding for intercity passenger rail development, and in FY2011 it rescinded $400 million that had been appropriated for that purpose but not yet obligated. The majority of the Federal Transit Administration's (FTA's) roughly $12 billion in funding is funneled to state and local transit agencies through several programs that distribute the funding by formula. Of the few transit grant programs that are discretionary (i.e., awarding funding to applicants selectively, usually on a competitive basis), the largest is the Capital Investment Grants program (often referred to as the New Starts program, as that is the largest and best known of its component grant programs). It funds new fixed-guideway transit lines and extensions to existing lines. The program has three components: New Starts funds capital projects with total costs over $300 million that are seeking more than $100 million in federal funding; Small Starts funds capital projects with total costs under $300 million that are seeking less than $100 million in federal funding; and Core Capacity grants are for projects that will increase the capacity of existing systems. There is also an Expedited Project Delivery Pilot, intended to provide funding for eight projects eligible for any of the three programs that require no more than a 25% federal share and are supported, in part, by a public-private partnership. Grant funds for large projects are typically disbursed over a period of years. Much of the funding for this program each year is committed to projects already under construction with multiyear grant agreements signed in previous years. For FY2018, the Trump Administration requested $1.2 billion for Capital Investment Grants, 50% ($1.323 billion) less than the $2.4 billion provided in FY2017. The Administration stated an intention to approve no new projects, only to provide funding to projects that had previously been approved for funding. The Administration request noted that there were "66 projects in the program seeking funding, more than at any time in the program's 30-year history--a clear indication of the intense demand from communities around the United States for new and expanded transit services." The House Committee on Appropriations recommended $1.8 billion, which is 42% ($521 million) more than requested but 27% ($660 million) below the FY2017 level. The House committee did not recommend funding for any new projects during FY2018, save for funding that appears to be provided for Amtrak's Hudson Tunnel project. The Senate Committee on Appropriations recommended $2.1 billion, 73% ($901 million) more than requested but 12% ($280 million) below the FY2017 level. The final FY2018 act provided $2.6 billion, 9.6% ($232 million) more than the FY2017 level, and over twice the amount requested by the Administration. The division of funding among the components of the Capital Investment Grants program is shown in Table 10 . Perhaps due to concerns about whether the Administration would make use of the grant funding provided in excess of the requested amount, both the House and Senate committee bills included language directing DOT to carry out the Capital Investment Program as described in statute; the enacted bill included that language, and added a directive to DOT to obligate $2.253 billion by December 31, 2019 (the amounts appropriated for Capital Investment Grants are available for obligation for four years). A New Starts grant, by statute, can be up to 80% of the net capital project cost. Since FY2002, DOT appropriations acts have included a provision directing FTA not to sign any full funding grant agreements for New Starts projects that would provide a federal share of more than 60%. The House-reported bill included a provision prohibiting grant agreements with a federal share greater than 50%. That provision was not included in the Senate-reported bill. The enacted bill followed the House lead in reducing the federal share, with a provision prohibiting New Starts grant agreements with a federal share greater than 51%. Critics of lowering the federal share provided for New Starts projects note that the federal share for highway projects is typically 80%, and in some cases is higher. They contend that the higher federal share makes highway projects relatively more attractive than public transportation projects for communities considering how to address transportation problems. Advocates of this provision note that the demand for New Starts funding greatly exceeds the amount available, so requiring a higher local match allows FTA to support more projects with the available funding. They also assert that requiring a higher local match likely encourages communities to estimate the costs and benefits of proposed transit projects more carefully, reducing the risk of subsequent cost overruns and of project ridership falling short of expectations. Among the challenges to funding transportation infrastructure is that most federal transportation funding is distributed by mode, and most of the funding is distributed to states by formula. There are grant programs reserved for highways, for public transportation, for rail, and for airport development, but sponsors of projects involving multiple modes may have difficulty amassing significant amounts of federal funding. And while Congress provides some $55 billion annually for surface transportation programs, the vast majority of that funding is automatically divided among the states, making it difficult for a state to accumulate the funding needed for a major project in addition to meeting its other needs. One project that is highlighting this situation is Amtrak's Gateway Program, and specifically the Hudson Tunnel replacement project. Amtrak's Gateway Program is a set of projects intended to increase capacity and reliability of rail service between northern New Jersey and Manhattan, the most heavily used section of intercity and commuter rail track in the nation. The program would replace bridges, expand track capacity from two to four parallel tracks, and, most critically, add a new rail tunnel under the Hudson River. The existing tunnel, the only link connecting the Northeast Corridor from New Jersey to New York, is over a century old, was flooded with seawater during Hurricane Sandy, and is deteriorating. The estimated cost of the Gateway Program is at least $24 billion, and likely will increase as project planning advances; the estimated cost of just the new Hudson Tunnel is $11.1 billion. Since the new tunnel would carry both intercity and commuter rail traffic, it is eligible for DOT funding from both the intercity rail program and the public transportation Capital Investment Grants program. But other than the annual grants to keep Amtrak going, relatively little funding has been available in recent for intercity rail projects: the largest rail grant program in FY2017 was funded at $68 million. The Capital Investment Grants program has significantly more funding to award--$2.4 billion in FY2017--but competition for that funding is intense, and the largest grant awarded to a project in the past 10 years was $2.6 billion. In 2016, under the Obama Administration, media reports indicated an agreement had been reached between DOT, Amtrak, and the states of New Jersey and New York to share the costs of building the new Hudson Tunnel, with one-third to be covered each by DOT/Amtrak, New Jersey/New Jersey Transit, and New York State. The Trump Administration's position on sharing the cost of the new tunnel is unknown. In any case, it would be up to Congress to provide the money. The House Appropriations Committee did not mention the Gateway Program or Hudson Tunnel project in its FY2018 THUD committee report, nor did it provide a significant amount of additional funding to any grant program. The committee recommended zeroing out the TIGER Grant Program, which could be one source of money for the Hudson Tunnel project, and cutting funding to the Capital Investment Grants program, another potential source, by $660 million from its FY2017 level. But the committee report noted that its Capital Investment Grants program funding recommendation included $400 million for new projects that meet the criteria of 49 U.S.C. SS5309(q): "joint public transportation and intercity passenger rail projects." The Senate Appropriations Committee did not recommend any specific funding for the Hudson Tunnel replacement. It noted that FRA's Federal-State State of Good Repair grant program could be a source of funding for projects similar to those in the Gateway Program, and encouraged Amtrak to use the $358 million recommended for its Northeast Corridor account to continue its Gateway Project. The enacted bill did not mention the Gateway Program or Hudson Tunnel project. But it provided Amtrak almost $300 million more than Amtrak requested for its Northeast Corridor, and increased funding for FRA's State of Good Repair program from $25 million in FY2017 to $250 million for FY2018, as well as increased funding for the TIGER grant prog ram and FTA's Capital Investment Grants program. The Passenger Rail Investment and Improvement Act of 2008 authorized $1.5 billion over 10 years in grants to the Washington Metropolitan Area Transit Authority (WMATA) for preventive maintenance and capital grants, to be matched by funding from the District of Columbia and the states of Maryland and Virginia. Under this agreement, Congress has provided $150 million to WMATA in each of the past nine years. WMATA faces a number of difficulties. It is dealing with a backlog of maintenance needs due to inadequate maintenance investment over many years, and it has experienced several fatal incidents, most recently in January 2015. A number of other incidents have raised questions about the safety culture of the agency. An investigation that found numerous instances of mismanagement of federal funding led FTA to restrict WMATA's use of federal funds. An FTA audit of WMATA's safety practices in 2015 produced many recommendations for change, and in October 2015 FTA assumed oversight of WMATA's safety compliance practices from the Tri-State Oversight Committee, the agency created by the governments of the District of Columbia, Maryland, and Virginia to oversee WMATA safety performance. FTA continues to exercise safety oversight of WMATA, conducting inspections, leading accident investigations, and directing that federal funds received by WMATA are used to improve safety. In February 2017, FTA notified leaders of the three jurisdictions that it would withhold 5% of their FY2017 transit Urbanized Area formula funds until they meet the requirements to create a new State Safety Oversight Program to replace the Tri-State Oversight Committee. The jurisdictions passed legislation establishing a new safety oversight agency soon after, but the agency must be in operation before FTA will release the funding. The National Transportation Safety Board has recommended that oversight of WMATA's rail operations be assigned to FRA, which has a long history of safety enforcement, rather than FTA, which is primarily a grant management agency. However, Congress would have to act to give FRA authority to oversee WMATA, while FTA already has such authority. For FY2018, the final year of the grant authorization, both the House and Senate Appropriations Committees recommended the full $150 million annual grant for WMATA. The Senate committee report expresses frustration at the slow progress WMATA has made in providing wireless service throughout its system, which Congress mandated in 2008. The Senate committee report also notes that the FY2018 grant is the final installment of the $1.5 billion funding commitment Congress made in 2008, but that WMATA's budget assumes that the annual funding will continue to be provided. The enacted bill provided the $150 million, and made grants to WMATA contingent on improvements to its safety management system.

Congress appropriated $86.2 billion for the Department of Transportation (DOT) for FY2018. This represented a $9.1 billion (11.8%) increase over the amount provided in FY2017. The principal reason for the higher spending level was increases in funding from the general fund for highways, public transportation capital investments, and passenger rail projects. The appropriation was included in an omnibus spending bill, P.L. 115-141, Title I of Division L, the DOT Appropriations Act. The DOT appropriations bill funds federal programs covering aviation, highways and highway safety, public transit, intercity rail, maritime safety, pipelines, and related activities. Federal highway, transit, and rail programs were reauthorized in fall 2015, and their future funding authorizations were somewhat increased. The Trump Administration proposed a $75 billion budget for DOT for FY2018, including $16.4 billion in discretionary funding and $58.7 billion in mandatory funding. That was approximately $2 billion less than was provided for FY2017. The budget request reflected the Administration's call for significant cuts in funding for transit and rail programs. The annual appropriations for DOT are combined with those for the Department of Housing and Urban Development (HUD) in the Transportation, Housing and Urban Development, and Related Agencies (THUD) appropriations bill. The House Appropriations Committee reported H.R. 3353, the THUD FY2018 appropriations bill, in which Division A provided FY2018 appropriations for DOT. The committee recommended $77.5 billion in new budget authority for DOT, 0.5% ($400 million) more than ultimately approved for FY2017 and roughly 3% ($2.4 billion) more than the Administration requested. The Senate Appropriations Committee reported out an FY2018 THUD bill, S. 1655, which was not taken up by the full Senate. The Senate committee recommended $78.6 billion in new budget authority, 2% ($1.6 billion) more than the comparable FY2017 amount and 4.7% ($3.5 billion) more than the Administration requested. Conflicts over funding levels and limits delayed action on final FY2018 appropriations until March 2018. Until that time, a series of continuing resolutions provided temporary funding for federal agencies. There is general agreement that more funding is needed for transportation infrastructure, and the Trump Administration has proposed an increase in spending on infrastructure, but Congress has not been able to agree on a source that could provide the additional funding. The federal excise tax on motor fuel, which is the primary funding source for federal highway and transit programs, has not been increased in over 20 years, and does not raise enough revenue to support even the current level of spending. To address this shortfall, Congress has transferred money from the general fund to the Highway Trust Fund on several occasions since 2008 to provide sufficient funding for the programs. Revenue estimates by the Congressional Budget Office (CBO) suggest that general fund transfers will continue to be required in future years to support the currently authorized level of highway and public transportation spending.

Peru has had a turbulent political history, alternating between periods of democratic and authoritarian rule. Political turmoil dates back to Peru's traumatic experience during the Spanish conquest, which gave rise to the economic, ethnic and geographic divisions that characterize Peruvian society today. Since its independence in 1821, Peru has had 13 constitutions, with only nine of 19 elected governments completing their terms. Peru's most recent transition to democracy occurred in 1980 after 12 years of military rule. The decade that followed was characterized by a prolonged economic crisis and the government's unsuccessful struggle to quell a radical Maoist guerrilla insurgency known as the Shining Path (Sendero Luminoso). In 1985, leftist Alan Garcia of the American Popular Revolutionary Alliance (APRA) was elected President. Garcia's first term (1985-1990) was characterized by many observers as disastrous. His antagonistic relationship with the international financial community and excessive spending on social programs led to hyperinflation (an annual rate above 7,600%) and a debt crisis. His security policies were unable to defeat the Shining Path, which drove Peru to the brink of collapse during his Administration. His Administration was also dogged by charges of corruption and human rights violations. By 1990, the Peruvian population was looking for a change and found it in the independent candidate Alberto Fujimori. Once in office, Fujimori implemented an aggressive economic reform program and stepped up counterinsurgency efforts. When tensions between the legislature and Fujimori increased in 1992, he initiated a "self coup," dissolving the legislature and calling a constituent assembly to write a new constitution. This allowed him to fill the legislature and the judiciary with his supporters. President Fujimori was re-elected in 1995, but his popularity began to falter as the economy slowed and civic opposition to his policies increased. He was increasingly regarded as an authoritarian leader, due in part to the strong-handed military tactics his government used to wipe out the Shining Path that resulted in serious human rights violations. President Fujimori won a third term in May 2000, deemed by international and Peruvian observers to have been neither free nor fair. That controversy, combined with the revelation of high-level corruption and allegations of human rights violations committed by his top aides, forced Fujimori first to agree to call new elections in which he would not run, and then to flee to Japan and resign in November 2000. A capable interim government, headed by President Valentin Paniagua, served from November 22, 2000 to July 28, 2001, and was credited with beginning to root out widespread political corruption, preventing the economy from sliding into recession, and conducting free and fair elections. The new President, Alejandro Toledo (2001-2006), of indigenous descent, defeated Alan Garcia, who had returned to Peru after nine years in self-imposed exile following allegations of corruption in his administration. Toledo's government was characterized by extremely low approval ratings but one of the highest economic growth rates in Latin America: 5.9% in 2005 and 8% in 2006. Toledo was able to push through several significant reforms that increased tax collection, and reduced expenditures and the budget deficit. He negotiated a free trade agreement with the United States. Toledo's presidency was marred by allegations of corruption--although they were limited in comparison to the widespread corruption of the earlier Fujimori administration--and recurrent popular protests. Garcia ran for President again in 2006. After his comeback in 2001, Garcia softened his populist rhetoric, and pledged to maintain orthodox macro-economic policies. Many observers cast him as "the lesser of two evils" compared to his opponent, Ollanta Humala, who espoused nationalist, anti-globalization policies and raised fears among middle- and upper-class Peruvians of the expropriations and authoritarianism of an earlier era. Humala is also an ally of Venezuelan President Hugo Chavez. Garcia narrowly defeated populist Humala. On June 4, 2006, Alan Garcia was elected to a second, non-consecutive term as President. President Garcia has maintained economic orthodoxy and governed as a moderate, rather than as the leftist he considered himself to be earlier in his career. Much of the political opposition has supported Garcia's economic policies to date. Garcia's party, the Peruvian Aprista Party (Partido Aprista Peruano, better known as APRA), controls only 36 of the 120 legislative seats and depends on loose alliances with other parties such as the Alliance for the Future (Alianza por el Futuro), headed by former President Alberto Fujimori's daughter, Keiko Fujimori, to pass legislation. The Garcia Administration has been shaken, first by a corruption scandal, then by deadly protests in the Amazon. In October 2008, Garcia dismissed 7 of the 17 members of his cabinet in the wake of a bribery scandal. The corruption scandal involved alleged kickbacks in the awarding of contracts for oil exploration. Wiretapped conversations implicated APRA party officials in accepting bribes. Garcia's prime minister and energy minister were among those who resigned. Garcia appointed Yehude Simon as his new prime minister on October 14. Simon was imprisoned in the 1990s for alleged ties to the Tupac Amaru insurgency, but cleared of the charges eight years later. He was elected twice as governor of the province of Lambayeque, where he established a reputation for governing effectively and fighting corruption. Garcia hoped that Simon would defuse social tensions and advance programs to reduce poverty. Instead, widespread social unrest has increased as growing inflation combines with anger that social conditions for Peru's poorest people have not improved with Peru's remarkable economic growth over the past eight years. Now, in the third year of his five-year term, President Garcia is facing the worst crisis of his presidency to date. On June 5, 2009, the unrest exploded into a deadly conflict when the government sent police to break up blockades set up by thousands of indigenous protesters in the Amazon. Estimates range from 30 to over 100 deaths of police officers and protesters. Simon resigned on July 11, and Garcia reorganized his Cabinet in response to the mishandling of the protests. The Cabinet reorganization, including the appointment of Javier Velasquez, the former head of the Congress, and a member of the now generally pro-business APRA, as Prime Minister, has raised concerns about the government's ability to negotiate with indigenous protesters. The deadly clash between indigenous protesters and police, and the reaction to it, is indicative of the polarization both within Peru and within the Andean region. The protest stems from disputes over who has the right to exploit natural resources in the Amazon and elsewhere in the country. Garcia has promoted such exploitation by foreign investors as key to development and poverty reduction. Of Peru's 173 million acres of rainforest in the Amazon basin, about 70% has been granted or offered as concessions for oil and gas exploration. Much of those concessions were made under Garcia, who argues that indigenous peoples should not be able to block investment that will benefit the country as a whole. Indigenous peoples of the Amazon rainforest counter that the government is ignoring and/or violating their property rights. Much of the area is considered ancestral communal land of the 60 tribes who live there, or private property, and under the United Nations (UN) Declaration on Indigenous Peoples--of which Peru was a proponent--indigenous peoples have the right to exercise control over traditional lands and their resources. Instead, local indigenous people say they get little or no benefits from foreign investments, and their land suffers environmental damage from the resource exploration. More than 50% of the northern Amazonian population is poor, compared to 36% nationwide. An umbrella group of indigenous peoples of the rainforest, the Interethnic Association for the Development of the Peruvian Jungle (AIDESEP), complains that the government is quick to grant concessions to oil and logging companies, but very slow to settle indigenous property claims and titles. In May, AIDESEP's leader, Alberto Pizango, called for an "insurgency," resurrecting the spectre of the violent Shining Path insurgency of the 1980s and 1990s. The call was short-lived, however, and Pizango sought asylum in Nicaragua. Despite the protesters' sometimes violent tactics, many Peruvians blame the Garcia administration for the violent outcome of the protests. In 2008, Garcia obtained special legislative powers from the Congress, and issued more than 99 decrees as he was rushing through implementation of the free trade agreement with the United States before the expiration of former President George W. Bush's term. There was widespread criticism that Garcia failed to consult adequately either the Congress or the public before issuing the decrees, not all of which were seen as necessary to the trade agreement. Following protests in August 2008, the Peruvian Congress repealed two decrees that would have made it easier to sell communal lands. Congress did not fulfill a promise to review eight other decrees that allowed the development of "unproductive" rainforest land, sparking more protests in April 2009. When some Members of the Congress moved to repeal another of the eight decrees, a forestry and wildlife law, they were blocked by Garcia's APRA party, and the conflict in the Amazon ensued. Ninety percent of Peruvians believe Garcia should have sought the support of the indigenous tribes before issuing decrees to open up their lands to mining and oil companies. Congress repealed two more of the decrees after the June violence. Some observers believe President Garcia deepened polarization in the country by using what was widely viewed as a heavy-handed response to the protests, and by referring to protesters in terms regarded as extremely derogatory to the indigenous population. Although Garcia now calls for reconciliation, some view him as responsive only to extreme pressure, and protests have spread beyond the Amazon to other sectors of society. If Garcia's dramatic loss of support and social unrest are sustained, the President may find it difficult to implement his policies. The fallout from the protests has also heightened regional tensions over how to reduce poverty and the nature of the region's foreign relations. Garcia has implied that Presidents Chavez of Venezuela and Evo Morales of Bolivia are supporting the protests in an effort to promote more leftist, populist policies like theirs in Peru. After President Morales, an Aymaran Indian, accused the Peruvian government of "genocide" in the protests, Peru withdrew its ambassador from that country. Unlike Venezuela, Bolivia, and Ecuador, who have aligned themselves together in a confrontational relationship with Washington, Peru, along with Colombia, has pursued free trade economic policies and nurtured positive relations with Washington. Garcia's ability to govern effectively may continue to be challenged by ongoing political unrest. All of these factors may favor the opposition in Peru's next congressional and presidential elections, scheduled for April 9, 2011. President Garcia is constitutionally prohibited from seeking a consecutive term, although he indicated in late 2008 that he wishes to run for a third term in 2016. Opposition leader Ollanta Humala, who placed a very close second to Garcia in the 2006 elections, says he plans to run again. Humala is a retired army officer who led a failed coup attempt against then-President Fujimori in 2000, and espouses nationalist, anti-globalization policies. His position was greatly weakened when his former party, the Union for Peru (Union por el Peru) split from an alliance with the Nationalist Peruvian Party (Partido Nacionalista Peruano, PNP) in 2006. Humala now heads the PNP, but his political inexperience is seen by some observers as limiting his influence. Furthermore, in September 2008, a Peruvian Court began investigating whether there was enough evidence to charge Humala with participating in disappearances, torture, and murders in 1992 at the Madre Mia military base. Former Prime Minister Simon had been considered a likely candidate, but that seems unlikely following his resignation, and his reputation has been severely damaged by his handling of the Amazon protests. Another presumed but undeclared candidate is Keiko Fujimori. In a landmark legal case, on April 7, 2009, former President Fujimori was convicted and sentenced to 25 years in prison for "crimes against humanity," on charges of corruption and human rights abuses, including authorizing killings by an army death squad and the abduction of a journalist and a businessman. The conviction is the first of an elected President to be found guilty of human rights abuses by a court in his own country. Analysts also regard it as a considerable accomplishment for Peru's judicial system, which has been considered weak and subject to political influence. But others still support Fujimori as the one who defeated the violent guerrilla movement Sendero Luminoso, or Shining Path. The conviction may deepen political divisions within the country and strain Garcia's tenuous congressional alliances. The trial proved difficult for Garcia in another way as well, as Fujimori's defense suggested that Garcia should be charged for alleged human rights violations during his first term in office as well. Keiko Fujimori has vowed to pardon her father if elected President. Fujimori's second trial began in mid-July 2009. Peru's economy has been stronger than virtually all other Latin American economies since 2001. Its Gross Domestic Product (GDP) growth rate has increased steadily over the past five years. Its GDP grew almost 9% in 2007 and almost 10% in 2008. According to the Economic Intelligence Unit, rising inflation and reduced demand for Peruvian products will temper economic growth to 1.3% in 2009. In April 2009, Peru's economy shrank for the first time since 2001. While Peru's sound public finances and cushion of foreign reserves can help offset damage from the global financial crisis, its institutional weaknesses could limit the effectiveness of economic stimulus measures. President Garcia has largely continued the orthodox economic policies of his predecessor, Alejandro Toledo, concentrating on reducing the fiscal deficit. The U.S. State Department describes Peru's economy as "well managed," and maintains that better tax collection and growth are increasing revenues. According to the Economist Intelligence Unit, "several years' worth of large surpluses will provide ample finance for [the Garcia] administration's social policies," although implementation of those policies will be hampered by the limited capacity of Peru's institutions. Peru's poverty rates have been dropping since 2000. The percentage of Peruvians living in poverty fell from 54.3% in 2001 to 39.3% in 2007. Peruvians living in extreme poverty, unable to purchase the most basic basket of necessities, fell from 24.1% to 13.7% during the same period. According to the World Bank, "poverty rates are still high for a country with income levels like Peru's." Social unrest has continued to rise as inflation increases and Peru's poor feel that the country's economic prosperity has not reached them. Indeed, the percentage of the population living in poverty in cities in 2007 was about 26%, while the percentage living in poverty in rural areas was about 65%. These latter statistics reflect Peru's dual economy. The relatively modern sector of the economy is concentrated along the coastal plains, where Lima is located. Economic power has been traditionally, and remains, concentrated in the hands of a small economic elite of European descent. The subsistence sector, on the other hand, is concentrated in the mountainous interior, and among the mostly indigenous population there. This is evident in Peru's enormous income distribution gap. The poorest 20% of the population receives less than 4% of national income, while the wealthiest 20% receive almost 57% of national income. Employment has risen since 2004, but underemployment remains high. More than 60% of the workforce is engaged in the informal sector, such as small-scale vendors not captured in the formal tax system. Mining and fisheries are Peru's top export earners. High international metal prices have meant that mining constituted 62% of the country's export earnings in 2007. Dependence on primary products leaves Peru vulnerable to economic shocks caused by the volatility of commodity prices--which are currently falling--and weather conditions. Manufacturing has grown in recent years, benefitting from the preferential access to the U.S. market for Peruvian exports granted by the Andean Trade Promotion and Drug-Eradication Act (ATPDEA) since 2002. The ATPDEA renewed and modified the Andean Trade Preference Act (ATPA), which has been in effect since 1991. The Peruvian government's ability to carry out poverty reduction programs is somewhat limited by its institutional capacity. The country is still recovering from the erosion of democratic institutions under Fujimori. As President, Fujimori effectively controlled both the legislature and the judiciary, inhibiting their development as independent democratic institutions. Freedom of expression and other avenues of civic discourse were also restricted, leaving the public to channel much of its frustration into protests that contributed to the fall of one government, and left another paralyzed. Post-Fujimori governments have tried to restore the independence of democratic institutions. Nonetheless, as the world economic downturn leads to a dramatic slowing of Peru's economic growth, this weak institutional capacity may also hinder the government's ability to implement responsive economic policies effectively. In February 2009, Peru began work on a $3 billion stimulus package to mitigate the effect of the global economic crisis. The package aims to ensure at least 5% economic growth in 2009 and the creation of over 400,000 new jobs. Peru and the United States have a strong and cooperative relationship. The United States supports the strengthening of Peru's democratic institutions and respect for human rights. In the economic realm, the United States supports bilateral trade relations and Peru's further integration into the world economy. The United States is Peru's top trading partner. The United States and Peru signed the U.S.-Peru Trade Promotion Agreement (PTPA) in April 2006. Both legislatures ratified the agreement, Peru's in 2006 and the U.S. Congress in 2007. In October 2008, Congress again extended the Andean Trade Promotion and Drug Eradication Act ( P.L. 109-432 ), continuing Peru's trade preferences until December 31, 2009, while Peru worked on intellectual property and environmental legislation needed before the superseding PTPA could go into effect. On January 16, 2009, then-President George W. Bush issued a proclamation to implement the PTPA as of February 1, 2009. The chairmen of the House Ways and Means Committee and Trade Subcommittee expressed disappointment, saying that Peru's legislation included "provisions inconsistent with their commitments," and that the U.S. Trade Representative should have resolved those issues prior to certification. Peru had a trade surplus in relation to the United States in 2007, according to the State Department. Peru's second largest trade partner is China, with whom it recently signed a trade agreement. The United States provided $91 million to Peru in FY2008. Just under $114 million was requested for FY2009, and the Obama Administration requested almost $119 million for FY2010. The U.S. Agency for International Development (USAID) programs focus on strengthening democratic institutions, including the fledgling regional governments; fostering continued economic growth and the integration of Peru into the world economy; promoting environmentally sound practices, including compliance with the environmental provisions of the Peru trade promotion agreement; and increasing social investments in health and education. Assistance for FY2009 includes $37 million for the Andean Counterdrug program (now part of the International Narcotics Control and Law Enforcement Assistance account); $63 million in Development Assistance; $750,000 for Foreign Military Financing; and $400,000 for International Military Education and Training. For Global Health and Child Survival funds, $20,000 will be managed by the State Department, and $12 million by USAID. The increase of funding in FY2009 over FY2008 is mainly for increased alternative development programs, and support for the Peru trade promotion agreement. It also includes a $454,000 increase in counter-narcotics programs. Increased military assistance is to improve the security forces' ability to participate in international peacekeeping operations (Peru has 210 troops in the UN's Stabilization Mission in Haiti). In June 2008, Peru and the United States signed a two-year, $35.6 million Millennium Challenge Threshold program that supports Peru's efforts to reduce corruption in public administration and improve immunization coverage. USAID is implementing the program. In October 2008, Peru and the United States signed a debt-for-nature swap that reduces Peru's debt to the United States by more than $25 million over the next seven years. In exchange, Peru promises to use those funds to support grants to protect its tropical forests. A dominant theme of relations between the two countries is the effort to stem the flow of illegal drugs, mostly cocaine, from Peru to the United States. Peru is a major cocaine producing country, although it is a distant second behind Colombia, which produces about 90% of the cocaine headed for the United States. Peru is also a major importer of precursor chemicals for cocaine production. According to the State Department's February 2009 International Narcotics Control Strategy Report (INCSR), in 2008 the Garcia Administration consolidated gains in the eradication of illicit coca cultivation, disrupted cocaine production and transshipment in land, sea, and air operations, and pressed forward on interdicting precursor chemicals. The government issued decrees against corruption, money laundering, and other organized crime. It also implemented measures to protect eradication and interdiction personnel from violent attacks. U.S. counter-narcotics assistance in Peru has supported a combination of interdiction, eradication, and alternative development. Peru is implementing its National Drug Plan for 2007-2011, which continues that strategy, but places greater emphasis on development assistance and precursor chemical interdiction. Special police training programs have improved Peru's ability to sustain interdiction and eradication in areas that have previously resisted eradication. The Peruvian Congress passed a set of laws proposed by the Garcia administration to combat drug-trafficking, money laundering, terrorism, extortion, trafficking in persons, and other organized crimes. The Justice Ministry has strengthened its capacity to carry out drug-related prosecutions, although corruption fueled by narcotics money in the judicial system remains a problem. Peru has also worked with law enforcement agencies of neighboring Bolivia, Brazil, Colombia, and Ecuador to coordinate and improve regional counter-narcotics efforts. Although about four million Peruvians use coca leaf for legal purposes, such as coca tea and leaf-chewing, more than 90% of the country's coca production is directed toward illegal drug trafficking. The U.S. and Peruvian governments have been conducting a campaign to increase public awareness of the role coca farmers play in drug trafficking, and of negative impacts of drug trafficking on Peru. This awareness has contributed to weakened support for political organizations of coca growers, or "cocaleros," who have carried out violent resistance to eradication. Such public awareness campaigns are part of U.S.-supported alternative development programs in Peru. The main part of the program provides technical assistance to help farmers grow legal crops such as cacao, coffee, and African oil palm. According to the 2008 INCSR, the alternative development program in Peru "has achieved sustainable reductions in coca cultivation through an integrated approach that increases the economic competitiveness of coca-growing areas while improving local governance." The 2009 INCSR reports that the Garcia government "consolidated gains in the eradication of illicit coca cultivation in the Upper Huallaga Valley," where most coca is grown. An independent analysis of data from the UN Office on Drugs and Crime, however, shows a net 16.4 percent increase of coca cultivation from 2005 to 2008. Various Peruvian counter-narcotics officials say that narcotics trafficking is on the rise in Peru, and that recent violence, arrests, and seizures demonstrate that Mexican drug cartels are fighting to take over drug trafficking in Peru from Colombian cartels. Drug trafficking is also linked to the Shining Path and gangs, including a Korean-Chinese gang known as Red Dragon. Peru's main concern regarding terrorism is containing the violent guerrilla movement Sendero Luminoso, or Shining Path. The Shining Path, which in the 1980s and 1990s had between 5,000 and 10,000 members, and was one of the most violent terrorist groups in the world, was practically eliminated under former President Fujimori. It has reemerged in recent years, now linked to drug-trafficking. Thwarted bomb attacks in Lima in 2007 indicated that the Shining Path maintains a limited presence and guerrilla capacity in urban areas. But the government and other analysts believe that the guerrilla movement has shifted its primary bases to remote drug-producing areas, and funds its activities through drug production and providing protection to drug traffickers. It is not currently considered a threat to national security, but appears to be growing in size and influence. Some experts estimate that Sendero Luminoso has between 200 and 800 members. The military estimates Sendero strength at about 600 guerrillas. Sendero has two factions, which appear to be cooperating currently. Escalating drug trafficking could increase the size of the Shining Path groups, according to Peruvian officials. On October 9, 2008, the group launched its most violent attack in a decade, killing 13 soldiers and two civilians. Further attacks have followed, resulting in 33 deaths and 43 injured soldiers. These attacks have led to a reevaluation by the military of its tactics and of Sendero's strength. Military leaders claimed that reduced funding for intelligence collection and military equipment had hampered their abilities. Opposition political parties have criticized the military for sending conscripts into counter-terrorism offensives, and military officials have acknowledged that doing so has contributed to the high number of army casualties in such operations. The military also says the guerrilla group is better armed than previously thought, and now has rocket launchers, grenade launchers, and heavy machine guns. Sources for their weapons include the black market; arms stolen from the military, police, and self-defense groups; explosives stolen from industrial and mining centers; and arms acquired from Colombian drug cartels, and possibly from the Colombian guerrilla group known as the Revolutionary Armed Forces of Colombia (Fuerzas Armadas Revolucionarias de Colombia, FARC). In response to renewed Sendero Luminoso activity, the government reopened several military bases and deployed counter-insurgency units in several departments over the last few years. Army commander-in-chief General Edwin Donayre proposed in late 2007 to increase police presence in areas where Sendero is active, to improve coordination between the army and the police. He also proposed combining community-based counter-insurgency patrols with increased spending on health, education and special social programs. In the past, community-based patrols, known as civil defense committees, were accused of gross violations of human rights. The government has had modest success in the Huallaga Valley, where they captured 28 suspected guerrillas in 2007. A program to open 19 counter-terrorism bases with 2,000 troops in the Apurimac-Ene River Valleys (known by its Spanish acronym, VRAE) has been less successful. According to Jane's World Insurgency and Terrorism report, the "Plan VRAE" "has failed to make headway owing to a lack of security plan, poor intelligence, a weak judiciary and resistance from the rural poor who are yet to see promised improvements in infrastructure, health, and education." The other terrorist group operating in Peru in the 1990s was the Tupac Amaru Revolutionary Movement (MRTA). It has not conducted terrorist activities since 1996, when it took hostages at the Japanese Ambassador's residence in Lima. Although there appears to be no effort to reconstitute the MRTA as a guerrilla organization, former MRTA members are working to establish a political party called the Free Fatherland Movement ("Movimiento Patria Libre") to participate in future elections. Drug trafficking has had an adverse impact on port security in Peru. According to the State Department's International Narcotics Control Strategy Report, cocaine is exported from Peru to other South American countries, Europe, the Far East, Mexico, and the United States by maritime conveyances and commercial air flights. The increased presence of Mexican drug cartels have led to increased violence in Peruvian ports. Peruvian officials consider the northern port city of Paita, near Piura, to be especially corrupt. There was a rise in maritime criminal incidents off the Latin American Pacific coast in February 2009, with most of the incidents occurring in or near the Peruvian port of Callao. Though categorized as piracy, the acts do not occur in the number or manner of piracy acts in areas such as Somalia or Indonesia. Piracy acts in this region constituted only 2% of piracy attacks committed world-wide in 2008. Criminals do not generally seize or hijack vessels. Rather, they board anchored vessels and steal goods, equipment, and personal belongings. Another maritime concern is the long-standing maritime dispute between Peru and Chile. Populist politician Ollanta Humala, President Garcia's rival in the last elections, and possible candidate in the next elections, has stirred up anti-Chile sentiment over the maritime dispute. Peru has filed a petition against Chile with the International Court of Justice in the Hague. The government of Bolivia is concerned that the decision may affect its ongoing efforts to secure the landlocked country access to the Pacific Ocean. According to the State Department's 2008 Country Reports on Human Rights Practices, the Peruvian government generally respected the human rights of its citizens. Some of Peru's human rights problems were significant, however, including the alleged unlawful killings by government forces and the disappearance of people in an area under military control. In October 2008, the Human Rights Ombudsman's office requested that a congressional commission investigate military actions in the Apurimac and Ene Valley region that resulted in the killing of four citizens and the disappearance of two others. The First Penal Prosecutor of Ayacucho was also carrying out an investigation. Other human rights problems reported by the State Department include abuse of detainees and inmates by police and prison security forces; harsh prison conditions; lengthy pretrial detention and inordinate trial delays; attacks on the media by local authorities; corruption; harassment of some civil society groups; violence and discrimination against women; violence against children, including sexual abuse; discrimination against indigenous communities, ethnic minorities, and gay and lesbian persons; failure to apply or enforce labor laws; child labor in the informal sector; and trafficking in persons, discussed in more detail below. During the trial of former President Alberto Fujimori, his defense called for President Garcia also to be investigated for alleged human rights violations during his first term. Human rights groups reported widespread human rights abuses during the guerrilla war, attributing most government abuses under the first Garcia Administration to security forces over which the Garcia Administration exerted little control. In April 2006 a Peruvian newspaper published a declassified U.S. government document stating that during Garcia's tenure as President, his party ran at least one, and perhaps several, secret paramilitary organizations, and that his Deputy Interior Minister supervised a secret police force. The document said the minister believed that APRA needed to be able to "eliminate" terrorists, but did not say whether the APRA-run forces carried out executions. The U.S. Department of State rates Peru as a Tier 2 country for human trafficking, meaning that it is a country whose government does not fully comply with the Trafficking Victims Protection Act's minimum standards, but is making significant efforts to bring itself into compliance with those standards. According to the State Department's June 2009 Trafficking in Persons Report, "Peru is a source, transit, and destination country for men, women, and children trafficked for the purposes of forced labor and commercial sexual exploitation." Most of the trafficking occurs within the country, with over 20,000 people estimated to be forced into labor in the mining and logging sectors, agriculture, the brick-making sector, domestic servitude, and for the purpose of commercial sexual exploitation. Peruvians are also trafficked abroad for sexual exploitation, to Ecuador, Spain, Italy, Japan, and the United States. Child sex tourism is also a problem. Many sex-related trafficking victims are girls and young women from Peru's poorest regions, lured with false offers of employment. According to the Trafficking report, Peru passed a comprehensive anti-trafficking law in January 2007, and approved implementing regulations in November 2008. In 2008, the Peruvian government improved its efforts to fight human trafficking over the previous year. It set up a dedicated anti-trafficking police unit. It increased law enforcement efforts against sex trafficking crimes, initiating the prosecution in 54 sex trafficking cases, and convicting five offenders. In 2007 only 15 prosecutions were initiated, and no traffickers were convicted. The government continued existing anti-trafficking activities, such as involving the private sector in its educational campaigns, but did not take additional steps to reduce demand for child or other commercial sex acts or forced labor. The State Department considers the Peruvian government's efforts to combat forced labor crimes, and to protect and assist trafficking victims to be inadequate. Peru participates in Disaster Preparedness, Response, and Management programs with the U.S. Agency for International Development's Office of Foreign Disaster Assistance (OFDA). During the last major earthquake in 2007, OFDA coordinated its response with Peruvian national and local officials, noting that local authorities were playing a large leadership role in the response to the disaster. OFDA also distributed aid through Peruvian non-governmental organizations such as the Peruvian Red Cross. Peru also participates in Health Disaster Preparedness and Response programs with the Pan American Health Organization (PAHO), to promote improved disaster preparedness and response in the health sector. Meeting many of the goals established by PAHO, Peru has a disaster management unit in the Ministry of Health, with a full-time professional staff and a defined budget. The disaster management unit coordinates with the national institutions in charge of overall disaster management and reduction. Peru not only participates in training programs with OFDA and PAHO, but offers training programs of its own. Peru has formal training programs in disaster management in its universities at the undergraduate level. PAHO notes that Peru has "made many decisions and developed activities to improve [its disaster] preparedness and risk reduction," but that there "are still many areas that require sustained attention." For example, CARE International is working at improved accountability of disaster assistance providers to communities affected by disasters in Peru, through means such as information sharing, transparency, and meaningful participation in decision making. CARE suggests that Peru form a permanent inter-agency team to develop accountability practices and to address the loss of skill and knowledge in between emergencies.

Peru shows promising signs of economic and political stability and the inclination to work with the United States on mutual concerns. President Alan Garcia is, however facing challenging times during this, the third year of his five-year term. Widespread social unrest has increased as growing inflation combines with unmet expectations that social conditions for Peru's poorest citizens would improve with Peru's economic growth. Peru's economy has been stronger than virtually all other Latin American economies since 2001. Peru's poverty rates have been dropping since 2000, but still remain high considering Peru's income levels. Economic power is, and has been traditionally, concentrated in the hands of a small economic elite of European descent. The subsistence sector, on the other hand, is concentrated in the mountainous interior, and among the mostly indigenous population there. Indeed, the percentage of the population living in poverty in cities in 2007 was about 26%, while the percentage living in poverty in rural areas was about 65%. On June 5, 2009, unrest exploded into a deadly conflict when the government sent police to break up blockades set up by thousands of indigenous protesters in the Amazon. The deadly clash between the indigenous protesters and police, and the reaction to it, is indicative of the polarization both within Peru and within the Andean region. The protest stemmed from disputes over who has the right to exploit natural resources in the Amazon and elsewhere in the country. The fallout from the protests has also heightened regional tensions over how to reduce poverty and the nature of foreign relations. While Peru's sound public finances can help offset damage from the global financial crisis, its institutional weaknesses may limit the effectiveness of economic stimulus measures and the Peruvian government's ability to carry out poverty reduction programs. As the world economic downturn leads to a dramatic slowing of Peru's economic growth, this weak institutional capacity may also hinder the government's ability to implement responsive economic policies effectively. The Garcia Administration's ability to govern may continue to be challenged by ongoing political unrest. The violent guerrilla movement Sendero Luminoso, or Shining Path, which helped drive Peru to the brink of collapse during Garcia's first presidency (1985-1990), has reemerged in recent years, now linked to drug-trafficking. On a more positive note, in a landmark legal case, on April 7, 2009, former President Fujimori was convicted and sentenced to 25 years in prison for "crimes against humanity," on charges of corruption and human rights abuses. Analysts regard the court's decision as a considerable accomplishment for Peru's judicial system, which has been considered weak and subject to political influence. Peru and the United States have a strong and cooperative relationship. The United States supports the strengthening of Peru's democratic institutions and respect for human rights. A U.S.-Peru Trade Promotion Agreement (PTPA) went into effect on February 1, 2009. The two countries also cooperate on counter-narcotics efforts, maritime concerns, combating human trafficking, and improving disaster preparedness.

Ammonium perchlorate is the key ingredient in solid fuel for rockets and missiles; other perchlorate salts are used to manufacture products such as fireworks, air bags, and road flares. Uncertainty about the health effects of perchlorate exposure has slowed efforts to establish drinking water and environmental cleanup standards. However, because of perchlorate's persistence in water and ability to affect thyroid function, concern has escalated with the detection of perchlorate in water in at least 33 states. In the absence of a federal standard, states have begun to adopt their own measures. Massachusetts set a drinking water standard of 2 parts per billion (ppb, or micrograms per liter [mg/L]) in 2006, and California adopted a 6 ppb standard in 2007. Several states have issued health goals or advisory levels ranging from 1 ppb in Maryland (advisory level) and New Mexico (drinking water screening level) to 17 ppb in Texas (residential protective cleanup level) and, also in Texas, 51 ppb (industrial cleanup level). Perchlorate has been used heavily by DOD and its contractors, and perchlorate contamination has been found near weapons and rocket fuel manufacturing facilities and disposal sites, research facilities, and military bases. Fireworks, road flares, construction sites, and other manufacturing activities and facilities also have been sources of contamination. Moreover, perchlorate occurs naturally (in West Texas, for example), is present in organic fertilizer imported from Chile, and can occur as a breakdown product of other products. It has been detected in drinking water sources, primarily in the Southwest and in scattered locations across the country. Contamination has been found most often in ground water, including some large aquifers in California. In 1999, EPA required public water systems to monitor for perchlorate under the Unregulated Contaminant Monitoring Rule (UCMR) to determine the frequency and levels at which it is present in public water supplies nationwide. The UCMR required monitoring by all systems serving more than 10,000 persons and by a sample of smaller systems. Of 3,865 public water systems tested, perchlorate was detected at levels greater than or equal to 4 ug/L (the minimum detection level of the test) in 160 (4.1%) systems in 26 states and two commonwealths, including 58 systems in California. In 14 systems, perchlorate levels exceeded EPA's preliminary remediation goal of 24.5 ppb. Approximately 1.9% (637) of a total of 34,331 samples collected by the systems had detections of perchlorate at levels of 4 ug/L or greater. The average concentration of perchlorate for the samples with positive detections was 9.85 ug/L. California has required more comprehensive monitoring, and perchlorate has been detected at least twice in 241 active or standby sources of drinking water in that state since 2002. In 2005, EPA reported perchlorate contamination had been found at 65 DOD facilities, 7 other federal facilities, and 37 private sites. All sampling results combined (i.e., soil, public and private drinking water wells, ground water monitoring wells, and surface water), the Government Accountability Office reported that perchlorate had been detected at 395 sites. Monitoring also has been conducted to assess the presence of perchlorate in foods. In 2004, the Food and Drug Administration (FDA) tested 500 samples of foods, including vegetables, milk, and bottled water for perchlorate. Samples were taken in areas where water was thought to be contaminated. The FDA found perchlorate in roughly 90% of lettuce samples (average levels ranged from 11.9 ppb to 7.7 ppb for lettuces), and in 101 of 104 bottled milk samples (with an average level of 5.7 ppb). To assess the presence of perchlorate in a wider range of foods, the FDA began testing all samples in its Total Diet Study in 2005. Perchlorate was detected in 625 of 1065 (50%) of samples, and in 211 of the 285 (74%) foods tested. In most cases, perchlorate levels were in the low single digits; however, levels were higher in some foods (e.g., shrimp, tomatoes, spinach, and bacon). The study found that 2-year-olds have the highest total perchlorate intake per kilogram body weight per day, followed by infants (6 to 12 months of age) and children 6 to 10 years of age. The widespread detection of perchlorate in food is relevant to EPA's standard-setting efforts, because EPA considers non-water exposures when determining whether to establish a standard for a contaminant, and at what level to set a standard. Perchlorate is not known to cause cancer. It is known to disrupt the uptake of iodine in the thyroid, and health effects associated with perchlorate exposure are expected to parallel those caused by iodine deficiency. Iodine deficiency decreases the production of thyroid hormones, which help regulate the body's metabolism and growth. A key concern is that impairment of thyroid function in pregnant women can affect fetuses and nursing infants and can result in delayed development and decreased learning capacity. Several human studies have indicated that thyroid changes occur in humans at significantly higher levels of perchlorate than the amounts typically observed in water supplies. However, a 2006 study by the Centers for Disease Control and Prevention (CDC) of a representative sample of the U.S. population found that environmental exposures to perchlorate have an effect on thyroid hormone levels in women with iodine deficiency. (No effect was found in men.) Fully 36% of the 1,111 women in this study were found to be iodine deficient, and the median level of urinary perchlorate measured in the women was 2.9 ppb. Over the past decade, EPA has evaluated perchlorate to determine whether a federal drinking water standard is needed. Under the Safe Drinking Water Act (SDWA, SS1412(b)(1)), EPA must regulate a contaminant if the Administrator determines that the contaminant (1) may have an adverse health effect, (2) occurs in public water systems at a frequency and level of public health concern, and (3), in the sole judgment of the Administrator, regulation of the contaminant presents a meaningful opportunity for reducing health risks. In 1997, when a sensitive detection method became available for perchlorate and detections increased, scientific information was limited. In 1998, EPA placed perchlorate on the list of contaminants that were candidates for regulation, but concluded that information was insufficient to determine whether perchlorate should be regulated under the SDWA. EPA listed perchlorate as a priority for further research on health effects and treatment technologies and for collecting occurrence data. In 1999, EPA required water systems to monitor for perchlorate under the Unregulated Contaminant Monitoring Rule to determine the frequency and levels at which it is present in public water supplies nationwide. In January 2007, EPA reported that it had collected sufficient occurrence data, and that further monitoring was not needed for the agency to make a regulatory determination (72 Fed. Reg. 367, January 4, 2007). In 1992, and again in 1995, EPA issued draft reference doses (RfDs) for perchlorate exposure. An RfD is an estimate (with uncertainty spanning perhaps an order of magnitude) of a daily oral exposure that is not expected to cause any adverse, non-cancer health effects during a lifetime. In developing an RfD, EPA incorporates factors to account for sensitive subpopulations, study duration, inter- and intraspecies variability, and data gaps. The draft RfDs range of 0.0001 to 0.0005 milligrams per kilogram (mg/kg) body weight per day translated to a drinking water equivalent level of 4 ppb-18 ppb. EPA takes the RfD into account when setting a drinking water standard; it also considers costs, the capabilities of monitoring and treatment technologies, and other sources of perchlorate exposure, such as food. EPA's 1999 draft risk characterization resulted in a human risk benchmark of 0.0009 mg/kg per day (with a 100-fold uncertainty factor), which converted to a drinking water equivalent level of 32 ppb. However, EPA determined that the available health effects and toxicity database was inadequate for risk assessment. In 1999, EPA issued an Interim Assessment Guidance for Perchlorate , which recommended that EPA risk managers use the earlier reference dose range and drinking water equivalent level (DWEL) of 4-18 ppb for perchlorate-related assessment activities at hazardous waste sites. In 2002, EPA prepared a draft risk assessment that concluded that the potential human health risks of perchlorate exposures include effects on the developing nervous system and thyroid tumors, based on rat studies that observed benign tumors and adverse effects in fetal brain development. The document included a draft RfD of 0.00003 mg/kg per day, which translated to a drinking water equivalent level of 1 ppb. This document was controversial, both for its implications for cleanup costs and for science policy reasons. (For example, some peer reviewers expressed concern over EPA's risk assessment methodology and reliance on rat studies.) DOD, water suppliers, and other commentors expressed concern that the draft RfD could lead to unnecessarily stringent and costly cleanups of perchlorate releases at federal facilities and in water supplies. In 2002, a federal interagency perchlorate working group convened to discuss perchlorate risk assessment, research and regulatory issues, and related agency concerns. Working group members included DOD, EPA, the Department of Energy, the National Aeronautics and Space Administration, the Office of Science and Technology Policy, the Council on Environmental Quality, and the Office of Management and Budget. To resolve some of the uncertainty and debate over perchlorate's health effects and the 2002 draft risk assessment, the interagency working group asked the National Research Council (NRC) to review the available science for perchlorate and EPA's draft assessment. The NRC was asked to comment and make recommendations. The NRC Committee to Assess the Health Implications of Perchlorate Ingestion issued its review in January 2005 and suggested several changes to EPA's draft risk assessment. The committee concluded that because of key differences between rats and humans, studies in rats were of limited use for quantitatively assessing human health risk associated with perchlorate exposure. Although the committee agreed that thyroid tumors found in a few rats were likely perchlorate treatment-related, it concluded that perchlorate exposure is unlikely to lead to thyroid tumors in humans. The committee noted that, unlike rats, humans have multiple mechanisms to compensate for iodide deficiency and thyroid disorders. Also, the NRC found flaws in the design and methods used in the rat studies. The committee concluded that the animal data selected by EPA should not be used as the basis of the risk assessment. The committee also reviewed EPA's risk assessment model. It agreed that EPA's model for perchlorate toxicity represented a possible early sequence of events after exposure, but it did not think that the model accurately represented possible outcomes after changes in thyroid hormone production. Further, the committee disagreed with EPA's definition of a change in thyroid hormone level as an adverse effect. Rather, the NRC defined transient changes in serum thyroid hormone as biochemical events that might precede adverse effects, and identified hypothyroidism as the first adverse effect. Because of research gaps regarding perchlorate's potential effects following changes in thyroid hormone production, the committee made the recommendation that EPA use a nonadverse effect (i.e., the inhibition of iodide uptake by the thyroid in humans) rather than an adverse effect as the basis for the risk assessment. The committee explained that "[i]nhibition of iodide uptake is a more reliable and valid measure, it has been unequivocally demonstrated in humans exposed to perchlorate, and it is the key event that precedes all thyroid-mediated effects of perchlorate exposure." Based on the use of this point of departure, the reliance on human studies, and the use of an uncertainty factor of 10 (for intraspecies differences), the NRC's recommendations led to an RfD of 0.0007 mg/kg per day. The committee concluded that this RfD should protect the most sensitive population (i.e., the fetuses of pregnant women who might have hypothyroidism or iodide deficiency) and noted that the RfD was supported by clinical studies, occupational and environmental epidemiologic studies, and studies of long-term perchlorate administration to patients with hyperthyroidism. In addition, the NRC identified data gaps and research needs. The committee has received some criticism for the extent to which it relied on a small, short-term human study, and debate over perchlorate's health risks has continued. In 2005, EPA adopted the NRC recommended reference dose of 0.0007 mg/kg per day, which translates to a drinking water equivalent level of 24.5 ppb. The DWEL is the concentration of a contaminant in water that is expected to have no adverse effects; it is intended to include a margin of safety to protect the fetuses of pregnant women who might have a preexisting thyroid condition or insufficient iodide intake. Notably, EPA based the DWEL on the assumption that all exposure would come from drinking water. If EPA were to develop a drinking water standard for perchlorate, it would lower the DWEL to account for other sources of exposure, particularly food. In January 2006, EPA's Superfund office issued guidance adopting the NRC reference dose and the DWEL of 24.5 ppb as the recommended value to be considered as the preliminary remediation goal (PRG) to guide perchlorate assessment and cleanup at Superfund sites. In March, EPA's Children's Health Protection Advisory Committee (CHPAC) wrote to the EPA Administrator that the PRG did not protect infants, who are highly susceptible to neurodevelopmental toxicity and may be more exposed than fetuses to perchlorate. The CHPAC noted that perchlorate is concentrated in breast milk and that nursing infants could receive daily doses greater than the RfD if the mother is exposed to 24.5 ppb perchlorate in tap water. The committee recommended that the Superfund office lower the PRG and that the Office of Water develop a standard for perchlorate and, in the interim, issue a drinking water health advisory that takes into account early life exposures. In October 2008, EPA announced a preliminary determination not to regulate perchlorate, noting that less than 1% of water systems have perchlorate levels above the health reference level. EPA concluded that perchlorate failed to meet two of SDWA's regulatory criteria (i.e., that a contaminant occur frequently at levels of health concern, and that establishing a national drinking water standard would provide a "meaningful opportunity for health risk reduction"). In response, EPA's Science Advisory Board's (SAB's) Drinking Water Committee argued that, given perchlorate's occurrence and well-documented toxicity, EPA must have a compelling basis to support a determination not to regulate. The SAB requested more time to review the new model EPA relied on, and to comment on the preliminary determination. On January 8, 2009, EPA announced that it would seek further advice from the NRC before making a final determination on whether or not to set a drinking water standard for perchlorate. EPA also announced that it was replacing the perchlorate preliminary remediation goal of 24.5 ppb with an interim health advisory, which contains a value of 15 ppb. Health advisories are nonregulatory, but can be useful to state and local officials in addressing drinking water contamination and making cleanup decisions for Superfund sites. EPA based the 15 ppb level on the reference dose recommended by the NRC. The agency explained that it calculated the advisory level to protect the most sensitive population that was identified by the NRC perchlorate committee (the fetuses of pregnant women), and took into account exposures from food as well as water. This approach does not appear to address a key concern of EPA's Children's Health Protection Advisory Committee which identified nursing infants as potentially more exposed than fetuses. The evaluation of impacts to infants and young children is one of the scientific issues that EPA wanted the NRC to evaluate. EPA also was considering asking the NRC to evaluate recent studies, EPA's use of models, and its derivation of the 15 ppb health reference level. In August 2009, the EPA Administrator announced that the agency would reevaluate the science regarding perchlorate's potential health effects, with particular emphasis on evaluating the effects of perchlorate exposure on infants and young children. The agency determined not to ask the NRC to conduct further review of issues related to perchlorate, having concluded that additional NRC review would unnecessarily delay the regulatory decision-making process. Instead, EPA published a Supplemental Request for Comments notice in the Federal Register, seeking public comment on additional ways to analyze data related to the regulatory determination for perchlorate. EPA noted its intent to consider a broader range of alternatives for interpreting the available data on the level of health concern, the frequency of occurrence of perchlorate in drinking water, and the opportunity for health risk reduction through a national drinking water standard. EPA is reevaluating perchlorate exposure to sensitive life stages including infants and developing children, expanding the previous emphasis on pregnant women and their developing fetuses as the most sensitive subpopulations. EPA intends to take public comments into account before making a final regulatory determination. The agency's announcement noted that the final decision may be a determination to regulate. DOD is responsible for some large releases of perchlorate into the environment and has allotted significant resources to address this problem. DOD has spent more than $114 million on research activities regarding perchlorate treatment technologies, detection methods, toxicity studies, and substitutes. Additional funds have been spent on cleanup. Although remediation has proceeded at some sites, cleanups typically are driven by drinking water standards or other established cleanup standards. With no federal standard, cleanup goals and responsibilities have been ambiguous outside of California and Massachusetts where standards have been set. In 2006, after EPA established a DWEL for perchlorate and issued cleanup guidance based on the DWEL, DOD adopted a policy setting 24 ppb as the level of concern to be used in managing perchlorate releases (unless a more stringent federal or state standard exists. The policy applies broadly to DOD installations and former military lands, and directs the services to test for perchlorate when it is reasonably expected that a release has occurred. Under the policy, if perchlorate levels exceed 24 ppb, a site-specific risk assessment must be conducted; if the assessment indicates that the perchlorate could result in adverse health effects, then the site must be prioritized for risk management. DOD uses a relative risk site evaluation framework to help prioritize environmental restoration work and to allocate resources among sites. EPA has withdrawn the 2006 perchlorate remediation guidance and recommends that its Regional offices now consider using the interim health advisory level of 15 ppb for cleanup. DOD may follow suit and adopt the new level for managing perchlorate releases. In the 111 th Congress, as in the past several Congresses, legislation has been introduced concerning the regulation of perchlorate under the Safe Drinking Water Act (SDWA). H.R. 3206 would require EPA to propose a drinking water regulation for perchlorate within 12 months of enactment of the legislation, and to promulgate a final regulation no later than 18 months after EPA published a proposed rule. Additionally, Congress has provided some funding for the remediation of perchlorate contamination of ground water and public drinking water supplies. The explanatory statement for the Department of Defense Appropriations Act, 2010 ( P.L. 111-118 , H.R. 3326 ), specifies that $1.6 million is intended for the cleanup of perchlorate contaminated drinking water wells, and another $3.5 million is intended for Inland Empire (CA) perchlorate remediation. Two similar bills, H.R. 2316 and H.R. 4252 , each entitled the Inland Empire Perchlorate Ground Water Plume Assessment Act of 2009, would direct the Secretary of the Interior, acting through the Director of the United States Geological Survey, to (1) complete a study of water resources in California, including the Rialto-Colton Basin ( H.R. 2316 ), or (2) complete a study of water resources, specifically the Rialto-Colton Basin ( H.R. 4252 ). Under both bills, the required studies would include a survey of ground water resources (including the identification of a recent surge in perchlorate concentrations in ground water). ( H.R. 4252 , H.Rept. 111-433 ) was passed by the House in March 2010, and ordered reported, without amendment, by the Senate Committee on Energy and Natural Resources in July. Relatedly, H.R. 102 would authorize additional appropriations for the San Gabriel Basin Restoration Fund, and would establish a 35% non-federal matching requirement for the recipient water districts after a specified amount of federal funds had been appropriated During the 110 th Congress, several perchlorate bills were considered, but none were enacted. Responding to EPA's 2007 decision not to require further monitoring for perchlorate as an unregulated contaminant, S. 24 was introduced to require community water systems to test for perchlorate and disclose its presence in annual consumer reports. S. 150 and H.R. 1747 would have required EPA to set a standard for perchlorate. The Senate Environment and Public Works Committee reported S. 24 ( S.Rept. 110-483 ) and S. 150 ( S.Rept. 110-484 ). Additionally, H.Con.Res. 347 expressed the sense of Congress that the CDC and FDA should take action to educate the public on the importance of adequate iodine intake, as iodine is protective against perchlorate exposure.

Perchlorate is the explosive component of solid rocket fuel, fireworks, road flares, and other products. Used heavily by the Department of Defense (DOD) and related industries, perchlorate also occurs naturally and is present in some organic fertilizer. This soluble, persistent compound has been detected in drinking water supplies, especially in California. It also has been found in milk and many foods. Because of this widespread occurrence, concern over the potential health risks of perchlorate exposure has increased, and some states, water utilities, and Members of Congress have urged the Environmental Protection Agency (EPA) to set a federal drinking water standard for this chemical. Regulatory issues have involved the health risk reduction benefits and the costs of federal regulation, including environmental cleanup and water treatment costs, both of which are driven by federal and state standards. EPA has spent years assessing perchlorate's health effects and occurrence to determine whether a national standard is warranted. The Food and Drug Administration (FDA) has supported this effort by testing produce and other foods for the presence of perchlorate. Interagency disagreements over the risks of perchlorate exposure led several federal agencies to ask the National Research Council (NRC) to evaluate perchlorate's health effects and EPA's risk analyses. In 2005, the NRC issued its report, and EPA adopted the NRC's recommended reference dose (i.e., the expected safe dose) for perchlorate exposure. Subsequent studies raised more concerns about the potential effects of low-level exposures, particularly for infants in certain cases. In October 2008, EPA made a preliminary determination not to regulate perchlorate in drinking water. Then, in early January 2009, the agency announced that it again would seek advice from the NRC before making a final determination. EPA also announced that it was replacing the preliminary remediation goal for perchlorate of 24.5 parts per billion (ppb) with an interim health advisory, which contains a value of 15 ppb. In August 2009, the EPA Administrator announced that the agency would reevaluate the science regarding perchlorate's potential health effects, with particular emphasis on evaluating the effects of perchlorate exposure on infants and young children. The agency determined not to ask the NRC to conduct further review of issues related to perchlorate, having concluded that additional NRC review would unnecessarily delay the regulatory decision-making process. EPA intends to consider public comments before making a final regulatory determination. Perchlorate legislation in this Congress includes H.R. 3206, which would require EPA to set a drinking water standard for perchlorate. No action has been taken on this bill. Among perchlorate contamination cleanup bills, the House passed H.R. 4252 to direct the U.S. Geological Survey to complete a study of water resources (including a study of perchlorate contamination of ground water) in the Rialto-Colton Basin, California. In July 2010, the Senate Committee on Energy and Natural Resources ordered H.R. 4252 to be reported, without amendment. This report reviews perchlorate contamination issues and related developments.

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

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

The Fair Housing Act (FHA) was enacted "to provide, within constitutional limitations, for fair housing throughout the United States." It prohibits discrimination on the basis of race, color, religion, national origin, sex, physical and mental handicap, and familial status. Subject to certain exemptions, the FHA applies to all sorts of housing, public and private, including single family homes, apartments, condominiums, and mobile homes. It also applies to "residential real estate-related transactions," which include both the "making [and] purchasing of loans ... secured by residential real estate [and] the selling, brokering, or appraising of residential real property." In June 2015, the Supreme Court, in Texas Department of Housing Community Affairs v. Inclusive Communities Project , confirmed the long-held interpretation that, in addition to outlawing intentional discrimination, the FHA also prohibits certain housing-related decisions that have a discriminatory effect on a protected class. Historically, courts have generally recognized two types of disparate impacts resulting from "facially neutral decision[s]" that can result in liability under the FHA. The first occurs when that decision has a greater adverse impact on one [protected] group than on another. The second is the effect which the decision has on the community involved; if it perpetuates segregation and thereby prevents interracial association it will be considered invidious under the Fair Housing Act independently of the extent to which it produces a disparate effect on different racial groups. The Supreme Court's holding in Inclusive Communities that "disparate-impact claims are cognizable under the [FHA]" mirrors previous interpretations of the Department of Housing and Urban Development (HUD) and all 11 federal courts of appeals that had ruled on the issue. However, as discussed further below, HUD and the 11 courts of appeals have not all applied the same criteria for determining when a neutral policy that causes a disparate impact violates the FHA. In a stated attempt to harmonize disparate impact analysis across the country, HUD finalized regulations in 2013 that established uniform standards for determining when such practices violate the act. The Inclusive Communities Court did not expressly adopt the standards established in HUD's disparate impact regulations. Rather, the Court adopted a three-step burden-shifting test that has some similarities with these standards. In addition, the Court outlined a number of limiting factors that lower courts and HUD should apply when assessing disparate impact claims. It likely will take years to gain a strong understanding of how the Inclusive Communities decision will affect future disparate impact litigation under the FHA (and other laws such as Title VII of the Civil Rights Act of 1964). While plaintiffs historically have faced fairly steep odds of getting their disparate impact claims past the preliminary stages of litigation, much less succeeding on the merits of those claims, it is possible that the "cautionary standards" stressed by the Inclusive Communities majority might result in even fewer successful disparate impact claims and swifter disposal of claims that are raised. This report provides an overview of how the lower courts and HUD evaluated allegations of discriminatory effects before the Supreme Court's Inclusive Communities decision. This discussion is followed by an assessment of Inclusive Communities and an analysis of the potential implications of the Court's ruling. As noted, all of the circuit courts of appeals that had previously addressed the issue held that disparate impact claims are cognizable under the FHA. The U.S. Court of Appeals for the Seventh Circuit, for example, reasoned that "a requirement that the plaintiff prove discriminatory intent before relief can be granted under the statute is often a burden that is impossible to satisfy.... A strict focus on intent permits racial discrimination to go unpunished in the absence of evidence of overt bigotry ... [which] has become harder to find." The Seventh Circuit went on to explain that interpreting the FHA so narrowly as to allow systematic discrimination in housing simply because it is done "discreetly" would be counter to congressional intent, and "[w]e therefore hold that at least under some circumstances a violation of section 3604(a) can be established by a showing of discriminatory effect without a showing of discriminatory intent." Beyond agreement that disparate impact claims are cognizable, a number of other commonalities existed among the circuits before the Inclusive Communities ruling. For example, courts typically looked to Title VII disparate impact cases in the employment context for guidance in FHA-based claims (and vice versa ). Additionally, there was general agreement among the circuits that plaintiffs must rely on more than a mere statistical anomaly to make a prima facie showing of a discriminatory effect. The Seventh Circuit, for instance, explained that "we refuse to conclude that every action which produces discriminatory effects is illegal. Such a per se rule would go beyond the intent of Congress and would lead courts into untenable results in specific cases." The circuits generally agreed that plaintiffs must provide causal evidence--that is, evidence showing that a particular practice caused the disparity on a protected class. Another important common feature prior to Inclusive Communities is that plaintiffs were rarely successful with disparate impact claims, at least at the appellate level. Rather, it appears that most of the plaintiffs' disparate impact claims that were reviewed by federal courts of appeals were dismissed in preliminary stages of litigation before trials. One scholar, who conducted a qualitative analysis of the 92 cases in which a federal court of appeals made a substantive ruling on an FHA disparate impact claim from 1971 (when the Supreme Court, in Griggs v. Duke Power , first held that disparate impact claims were cognizable under Title VII) through June 2013, found that plaintiffs obtained "positive outcomes" in only 18 cases (i.e., 19.5% of the cases); most of the cases (64 of 92 or 69.6%) were decided by the appellate courts before trials at the preliminary stages (i.e., pleading, summary judgment, or preliminary injunction) of litigation; district court rulings in favor of plaintiffs were reversed by the appellate courts two-thirds of the time (12 of 18 decisions), in spite of the fact that it is estimated that lower courts are generally affirmed approximately 80% of the time; and lower court rulings in favor of defendants were only reversed by the appellate courts 12 times out of 74 cases (i.e., 16.2% of the cases). As a result, the scholar concluded that, [w]hatever has prompted the Court's sudden interest in examining the question of disparate impact liability under the FHA [ i.e. , by granting certiorari in disparate impact cases in two successive terms], this interest cannot be attributable to plaintiffs' high rate of success or the appellate courts' general unwillingness to impose a rigorous and exacting review of the claims at every stage of the proceedings. While commonalities did exist, the courts did not agree on every aspect of disparate impact analysis. Importantly, the courts were not in agreement as to how to determine if a discriminatory effect violates the act. The First, Second, Third, Fifth, Eighth, and Ninth Circuit Courts of Appeals generally applied burden-shifting tests to assess the validity of a disparate impact claim pursuant to the FHA. Yet there were some differences in the tests applied, even among the courts that applied burden-shifting schemes. For example, all courts that used burden-shifting tests agreed that the burden is initially on the plaintiff to make a prima facie showing, generally with the use of statistics, that a specific policy results in a disparate impact upon a protected class, and that, upon such a showing, the burden shifts to the defendant to show that the policy was initiated for some nondiscriminatory, legitimate purpose. From there, most of these courts shifted the burden to the plaintiff to submit proof of a viable, less discriminatory alternative. The Second Circuit, on the other hand, upon a defendant's showing of a nondiscriminatory, legitimate purpose, kept the onus on the defendant to show there is not a less discriminatory alternative that would allow the defendant to meet the same legitimate purpose. Rather than the three-step burden-shifting test, the Seventh Circuit historically applied a four-factor balancing test originally set out in the Village of Arlington Heights decision. These factors are (1) [the] strength of the plaintiff's statistical showing; (2) the legitimacy of the defendant's interest in taking the action complained of; (3) some indication--which might be suggestive rather than conclusive--of discriminatory intent; and (4) the extent to which relief could be obtained by limiting interference by, rather than requiring positive remedial measures of, the defendant. The Sixth and Tenth Circuit Courts of Appeals applied hybrid approaches using elements from both the Seventh Circuit's balancing test and a burden-shifting framework. The Fourth Circuit applied a burden-shifting test when the defendant was a private party, but applied the four-factor balancing test with public defendants. Finally, the Eleventh Circuit has explained that "[a] showing of a significant discriminatory effect suffices to demonstrate a prima facie violation of the Fair Housing Act" but the plaintiff must also establish evidence of causality--"A plaintiff can demonstrate a discriminatory effect in two ways: it can demonstrate that the decision has a segregative effect or that it makes housing options significantly more restrictive for members of a protected group than for persons outside that group." For approximately two decades, through internal adjudicatory proceedings, appeals of those proceedings to federal courts, policy guidance, and other means, HUD has interpreted the FHA as supporting disparate impact claims. The agency did not formally adopt the policy through regulations until February 2013. HUD explained in the preamble of the Implementation of the Fair Housing Act's Discriminatory Effects Standard Final Rule (the Rule or the Disparate Impact Rule) that "[t]his regulation is needed to formalize HUD's long-held interpretation of the availability of 'discriminatory effects' liability under the Fair Housing Act and to provide nationwide consistency in the application of that form of liability." The Rule defines "discriminatory effect" as a practice that actually or predictably results in a disparate impact on a group of persons or creates, increases, reinforces, or perpetuates segregated housing patterns because of race, color, religion, sex, handicap, familial status, or national origin. HUD adopted the "three-part burden-shifting test currently used by HUD and most federal courts," as described in the previous section, to assess whether a discriminatory effect violates the FHA. Specifically, under the Rule, the plaintiff "has the burden of proving that a challenged practice caused or predictably will cause a discriminatory effect." If a plaintiff is able to successfully prove a prima facie discriminatory effect, then the burden shifts to the defendant to "prov[e] that the challenged practice is necessary to achieve one or more [of its] substantial, legitimate, nondiscriminatory interests.... " Such an interest "must be supported by evidence and may not be not hypothetical or speculative." If this burden is met, then the burden is shifted back to the plaintiff to "prov[e] that the substantial, legitimate, nondiscriminatory interest[] ... could be served by another practice that has a less discriminatory effect." On June 25, 2015, in a 5-4 decision, the Supreme Court held that "disparate-impact claims are cognizable under the Fair Housing Act (or FHA).... " However, the Court cautioned that disparate impact claims must rely on more than just "a statistical disparity" and remedies for disparate impact violations "that impose racial targets or quotas might raise [] difficult constitutional questions." The holding was surprising to some given that the Court chose to grant certiorari in the case in spite of the fact that there was no circuit split, leading to speculation that the Court was poised to overturn the lower court consensus that disparate impact claims generally are permissible. The Inclusive Communities Project, Inc. (ICP), "a Texas-based nonprofit corporation that assists low-income families in obtaining housing," sued the Texas Department of Housing and Community Affairs (DHCA) alleging that, by disproportionately distributing federal low-income housing tax credits in black-concentrated metropolitan areas as compared to white-concentrated suburban communities, DHCA perpetuated racial segregation in violation of the FHA. The federal district court held that the plaintiffs had met their initial burden of establishing that DHCA's policy had a discriminatory effect on African-Americans, but concluded that the defendants had failed to prove that there was no viable, less discriminatory alternative. Consistent with precedent in the circuit, the Fifth Circuit agreed with the district court that the FHA authorizes disparate impact claims. However, the Fifth Circuit reversed the district court's ruling because it had placed the burden of proving there were no less discriminating alternative policies on the defendant, in contravention of HUD's disparate impact regulations. A concurring opinion, which was cited favorably by the Supreme Court's majority opinion, also questioned whether the plaintiff sufficiently established a causal connection between the challenged policy and the relevant statistical disparity. The Supreme Court affirmed the Fifth Circuit's judgment that discriminatory effect claims are viable under the FHA, and remanded the case "for further proceedings consistent with this opinion," including, notably, its limiting principles regarding causality and remedies. To support its interpretation of the FHA, the Court began its analysis with two prior cases: Griggs v. Duke Power Co . and Smith v. City of Jackson , which the Court described as "provid[ing] essential background and instruction in the case now before the Court." In Griggs and Smith , the Court interpreted Title VII of the Civil Rights Act of 1964 and the Age Discrimination in Employment Act of 1967 (ADEA), respectively, as supporting disparate impact claims because both statutes contain language that focuses, not just on the intent or motivation of employers, but also on the discriminatory consequences or effects of their actions. Similarly, FHA Section 804(a) makes it unlawful "[t]o refuse to sell or rent ... or to refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, familial status, or national origin." The Court stated that "the logic of Griggs and Smith provides strong support for the conclusion that the FHA encompasses disparate impact claims ... [because] Congress' use of the phrase 'otherwise make unavailable' refers to the consequences of an action rather than the actor's intent." The Court added that this conclusion is bolstered by the fact that Congress amended the FHA in 1988 to establish three exemptions to disparate impact liability without making any changes to the statutory language that previous courts had relied upon to conclude that disparate impact claims were cognizable under the act. "In short, the 1988 amendments signal that Congress ratified disparate-impact liability." After concluding that the FHA supports disparate impact claims, the Court provided guidance as to how disparate impact claims should be assessed. The Court made clear that, before a plaintiff can establish a prima facie case of discriminatory effect based on a statistical disparity, courts should apply a "robust causality requirement" that requires the plaintiff to prove that a policy or decision led to the disparity. The Court stressed that a careful examination of the plaintiff's causality evidence should be made at preliminary stages of litigation to avoid "the inject[ion of] racial considerations into every housing decision"; the erection of "numerical quotas" and similar constitutionally dubious outcomes; the imposition of liability on defendants for disparities that they did not cause; and unnecessarily protracted litigation that might dissuade the development of housing for the poor, which would "undermine [the FHA's] purpose as well as the free-market system." The Court emphasized that disparate impact claims should be further limited by ensuring that defendants, whether private developers or governmental actors, have the ability to counter a prima facie case with evidence that the policy or decision in question is "necessary to achieve a valid interest." Further, the Court seemed to indicate that such business decisions--or in cases where the defendant is a governmental entity, decisions made in the public interest--should stand unless the "plaintiff has shown that there is an available alternative practice that has less disparate impact and serves the entity's legitimate needs." The Court also cautioned that court-ordered remedies for discriminatory effects generally should be race-neutral and focused on eradicating the policy that caused the disparate impact, rather than erecting constitutionally dubious "racial targets or quotas." The opinion concludes: Much progress remains to be made in our Nation's continuing struggle against racial isolation. In striving to achieve our "historic commitment to creating an integrated society," we must remain wary of policies that reduce homeowners to nothing more than their race. But since the passage of the Fair Housing Act in 1968 and against the backdrop of disparate-impact liability in nearly every jurisdiction, many cities have become more diverse. The FHA must play an important part in avoiding the Kerner Commission's grim prophecy that "[o]ur Nation is moving toward two societies, one black, one white--separate and unequal." Kerner Commission Report 1. The Court acknowledges the Fair Housing Act's continuing role in moving the Nation toward a more integrated society. The primary dissenting opinion, written by Justice Alito and joined by Chief Justice Roberts and Justices Thomas and Scalia, argued that the statutory text and the circumstances surrounding the original enactment of the FHA indicated that the act was only intended to bar overt discrimination--not disparate impact discrimination. The dissent also disputed the majority's "conten[tion] that the 1988 amendments provide convincing confirmation of Congress' understanding that disparate-impact liability exists under the FHA.... " Instead, the dissenting Justices viewed the 1988 amendments as a compromise between Members of Congress--some of whom agreed that disparate impact claims were cognizable under the FHA and some who did not. To support this argument, the dissent cited several opinions in which the Court rejected similar "implicit ratification" arguments. Additionally, the dissent took issue with the majority's reliance on Griggs . Justice Thomas wrote a separate dissent, to which no other Justice joined. It argued that Griggs was wrongly decided, but even if it should be afforded some precedential value, that value should be limited to Title VII cases, rather than expanded to other contexts like the FHA and ADEA. It is unclear exactly how the Inclusive Communities decision will change the way in which the lower courts and HUD will evaluate disparate impact claims going forward, and any effect likely will vary from circuit to circuit. However, a review of several of the decision's most notable holdings elucidates some potential implications. First, the Court appears to have adopted a three-step burden-shifting test for assessing disparate impact liability under the FHA. At step one, the plaintiff has the burden of establishing evidence that a housing decision or policy caused a disparate impact on a protected class. At step two, defendants can counter the plaintiff's prima facie showing by establishing that the challenged policy or decision is "necessary to achieve a valid interest." The defendant will not be liable for the disparate impact resulting from a "valid interest" unless, at step three, the plaintiff proves "that there is an available alternative practice that has less disparate impact and serves the entity's legitimate needs." As a result, circuits, such as the Fourth (in cases with public defendants) and Seventh, that historically have used a balancing test likely will begin using a burden-shifting test. Additionally, although the opinion offers scant guidance regarding step three, it seems to conclude that the burden should be on the plaintiff to establish a less discriminatory alternative. Thus, the Second Circuit likely will place the burden on the plaintiff rather than the defendant to establish a less discriminatory alternative in future decisions in light of Inclusive Communities. These changes might have taken place even in the absence of the Supreme Court ruling as a result of HUD's disparate impact rule. In addition, the specific standards that the Inclusive Communities Court detailed for each step of the burden-shifting test, though considerably similar, may not be identical to those historically applied by the lower courts and HUD. For example, the standards for steps one and two that are detailed in Inclusive Communities seem to be largely consistent with those in HUD's disparate impact rule. However, the Court used somewhat different language that could be interpreted as being more exacting on plaintiffs at step one and more deferential to defendants at step two, as compared to the Rule. Both the Court and HUD's Rule require plaintiffs to establish a prima facie case, which must include causal evidence. The Rule states that the plaintiff must "prov[e] that a challenged practice caused or predictably will cause a discriminatory effect." The Inclusive Communities Court neither expressly endorses nor disapproves of the "predictably will cause" language. The Court and the Rule agree that the burden at the second step is on the defendant. The Court states that defendants can counter a prima facie case by proving that the challenged practice is "necessary to achieve a valid interest." The Rule, in contrast, states that the defendant must "prov[e] that the challenged practice is necessary to achieve one or more substantial , legitimate, nondiscriminatory interests.... " Two other major takeaways involve how disparate impact claims should be evaluated. The Supreme Court stressed that lower courts and HUD should rigorously evaluate plaintiffs' claims to ensure that evidence has been provided to support not only a statistical disparity, but also causality. Additionally, the Court emphasized that claims should be disposed of swiftly in the preliminary stages of litigation if plaintiffs have failed to establish a prima facie case of disparate impact. As previously mentioned, over the last several decades, plaintiffs have faced fairly steep odds of getting their disparate impact claims past the preliminary stages of litigation, much less succeeding on the merits of those claims. Additionally, all of the federal courts of appeals and HUD, when assessing disparate impact claims, have stated that they were applying tests that required plaintiffs to show that a challenged policy actually caused the disparate impact in order to support a prima facie case. Nevertheless, the Inclusive Communities decision might result in some lower courts applying the causality standards more stringently than they had previously, thus making it more difficult for plaintiffs to establish prima facie cases of discriminatory effects. The Inclusive Communities majority opinion explicitly criticized one specific case--the Eighth Circuit's decision in Magner v. Gallagher , a case which the Court had previously granted certiorari , but ultimately dismissed because the parties settled out of court. The Court stated that Magner "was decided without the cautionary standards announced in this opinion." The primary point of contention likely was not with the three-step burden-shifting test that the Eighth Circuit applied, but rather with how the court applied the test. It is possible that, by its criticism, the Inclusive Communities Court might have been signaling its disapproval of the Eighth Circuit's failure to require the plaintiffs to provide evidence that directly tied the city's housing code enforcement to a reduction in the affordable housing of African-Americans. Instead, the Eighth Circuit relied on indirect evidence and "reasonable ... infer[ences]." In other words, it is possible that the Inclusive Communities Court expects lower courts to ensure that plaintiffs have provided evidence at the preliminary stages of litigation that fully "connects the dots" between the neutral policy and the disparate impact, before concluding that plaintiffs have established a prima facie case. In sum, it is possible that the "cautionary standards" stressed by the Inclusive Communities majority might result in even fewer successful disparate impact claims being raised, and swifter disposal of claims that are raised. This could, in turn, discourage claims from being raised at all.

The Fair Housing Act (FHA) was enacted "to provide, within constitutional limitations, for fair housing throughout the United States." It prohibits discrimination on the basis of race, color, religion, national origin, sex, physical and mental handicap, and familial status. Subject to certain exemptions, the FHA applies to all sorts of housing, public and private, including single family homes, apartments, condominiums, and mobile homes. It also applies to "residential real estate-related transactions," which include both the "making [and] purchasing of loans ... secured by residential real estate [and] the selling, brokering, or appraising of residential real property." There has been controversy over whether, in addition to outlawing intentional discrimination, the FHA also prohibits certain housing-related decisions that have a discriminatory effect on a protected class. That controversy was settled when, in June 2015, a divided U.S. Supreme Court ruled that disparate impact claims are cognizable under the FHA. Key Takeaways of This Report In February 2013, Department of Housing and Urban Development (HUD) for the first time issued regulations "formaliz[ing] HUD's long-held interpretation of the availability of 'discriminatory effects' liability under the Fair Housing Act and to provide nationwide consistency in the application of that form of liability." In June 2015, the Supreme Court held in Texas Department of Housing and Community Affairs v. Inclusive Communities Project that disparate impact claims are cognizable under the FHA--a view previously espoused by HUD and the 11 U.S. Courts of Appeals to render opinions on the issue. The Court also outlined certain limiting factors that should apply when assessing disparate impact claims. The Supreme Court appears to have adopted a three-step burden-shifting test for assessing disparate impact liability under the FHA. The test outlined by the Court, which is similar though not identical to the one adopted by HUD, places the initial burden on the plaintiffs to establish evidence that a housing decision or policy caused a disparate impact on a protected class. Defendants can counter the plaintiff's prima facie showing by establishing that the challenged policy or decision is "necessary to achieve a valid interest." The defendant's "valid interest" will stand unless the "plaintiff has shown that there is an available alternative practice that has less disparate impact and serves the entity's legitimate needs." Going forward, the minority of federal circuits that historically have used a different type of test likely will begin using a burden-shifting scheme consistent with the test outlined in Inclusive Communities. The Supreme Court stressed that lower courts and HUD should rigorously evaluate plaintiffs' disparate impact claims to ensure that evidence has been provided to support, not only a statistical disparity, but also causality (i.e., that a particular policy implemented by the defendant caused the disparate impact). The Court also emphasized that claims should be disposed of swiftly in the preliminary stages of litigation when plaintiffs have failed to provide sufficient evidence of causality. Although plaintiffs historically have faced fairly steep odds of getting their disparate impact claims past the preliminary stages of litigation, much less succeeding on the merits, the "cautionary standards" stressed by the Supreme Court might result in even fewer successful disparate impact claims being raised in the courts and/or swifter disposal of claims that are raised.

Congress has various legislative authorities under which it can regulate the behavior of persons and businesses, and it has significant discretion as regards the breadth and scope of such regulation. On occasion, however, Congress exercises its authority regarding a specified individual, entity, or identifiable group in such a way as to give rise to constitutional concerns. In particular, the United States Constitution expressly prohibits the federal government from enacting bills of attainder, defined by the Supreme Court as a "law that legislatively determines guilt and inflicts punishment upon an identifiable individual without provision of the protections of a judicial trial." The basis for the prohibition arises from the separation of powers concern that the enforcement of a bill of attainder would allow Congress to usurp the power of the judicial branch. For instance, there was, for a time, significant controversy about bonuses paid to employees of entities that had received Troubled Asset Relief Program (TARP) funds from the federal government under the Emergency Economic Stabilization Act of 2008. In response to this concern, various proposals were made to impose taxes on such bonuses. One such bill, which passed the House, would have taxed bonuses as income to the employee at a rate of 90%, while another, introduced in the Senate, would have imposed an excise tax equal to 35% of the bonus on both the employee and entity. Significantly, both bills would have applied retroactively to tax bonuses awarded before the legislation was passed. Concerns were expressed that, because these bills targeted the bonuses of employees of specific companies that had received funds, they could be seen as bills of attainder. A similar situation arose in response to allegations of election law and other legal violations by the Association of Community Organizations for Reform Now (ACORN), a public interest group. Here, Congress passed several appropriations bills that limited the provision of federal funds to ACORN and its affiliates. For instance, SS 163 of the 2010 Continuing Appropriation Resolution provided that: [n]one of the funds made available by this joint resolution or any prior Act may be provided to the Association of Community Organization[s] for Reform Now (ACORN) or any of its affiliates, subsidiaries, or allied organizations. Further, the 2010 Consolidated Appropriations Act provided in various places that none of the funds made available under various divisions of the act or any prior act could be provided to ACORN or any of its affiliates, subsidiaries, or allied organizations. This legislation was challenged in federal court as a bill of attainder, but was ultimately upheld by the United States Court of Appeals for the Second Circuit. Generally, a court will have reservations in declaring a provision of law unconstitutional because "legislative decisions enjoy a high presumption of legitimacy." Further, the Supreme Court has suggested that each bill of attainder case "turn[s] on its own highly particularized context." Notably, since the signing of the Constitution, the Bill of Attainder Clause has been successfully invoked only five times in the Supreme Court. Nevertheless, constitutional concerns may arise in this context when Congress proposes or passes legislation that burdens specified individuals or a defined class of persons or entities. As noted, the prohibition on bills of attainder is based on separation of powers concerns. By passing a bill of attainder, the legislature assumes judicial magistracy, pronouncing upon the guilt of the party without any of the common forms and guards of trial, and satisfying itself with proofs, when such proofs are within its reach, whether they are conformable to the rules of evidence, or not. In short, in all such cases, the legislature exercises the highest power of sovereignty, and what may be properly deemed an irresponsible despotic discretion, being governed solely by what it deems political necessity or expediency, and too often under the influence of unreasonable fears, or unfounded suspicions. At common law, a bill of attainder was a parliamentary act that sentenced a named individual or identifiable member of a group to death. It was most often used to punish political activities that Parliament or the sovereign found threatening or treasonous. A bill of pains and penalties was identical to a bill of attainder, except that it prescribed a punishment short of death such as banishment, deprivation of the right to vote, exclusion of the designated individual's sons from Parliament, or the punitive confiscation of property. The prohibition on bills of pains and penalties has been subsumed into the prohibitions of the Bill of Attainder Clause, so that a variety of penalties less severe than death may trigger its provisions. The two main criteria that the courts look to in order to determine whether legislation is a bill of attainder are (1) whether specific or identifiable individuals are affected by the statute (specificity prong), and (2) whether the legislation inflicts a punishment on those individuals (punishment prong). The Supreme Court has held that legislation meets the criteria of specificity if it either specifically identifies a person, a group of people, or readily ascertainable members of a group, or if it applies to a person or group based on past conduct. For example, where a court determines that a statute referencing a specific group of persons is based on past conduct, this legislation may in some cases be treated as a per se violation of the specificity prong. In United States v. Lovett , Congress passed Section 304 of the Urgent Deficiency Appropriation Act of 1943, which named three government employees, labeled them as subversive, and then provided that no salary should be paid to them. The employees brought suit, and the Supreme Court ruled in their favor, holding that Section 304 was a punishment of named individuals without a judicial trial. As will be discussed later, it is a defense to a bill of attainder challenge to establish that a statute is not intended to punish, but rather to implement a legitimate regulatory scheme. Although this analysis is generally considered under the second prong of the test (whether the law is punitive), it may have implications for the specificity prong. For instance, in the case of Nixon v. Administrator of General Service s , the Court evaluated the Presidential Recordings and Materials Preservation Act, which required that former President Richard Nixon, whose papers and tape recordings were specifically named in the act, turn those papers and tape recordings over to an official of the executive branch. The former President challenged the constitutionality of the act as a bill of attainder, arguing that it was based on a congressional determination of the former President's blameworthiness and represented a desire to punish him. It would appear that the identification of papers and recordings under the control of a named person (the former President) would meet the per se requirement. The Court in Nixon , however, found that the statute was constitutional despite this specificity. In Nixon , the Court found that the bill failed the second prong (punishment) of the test for a bill of attainder, since the act fulfilled the valid regulatory purpose of preserving information which was needed to prosecute Watergate-related crimes and was of historical interest. As part of this analysis, however, the Court even questioned whether the statute in question met the specificity prong of the two-part test, finding that naming an individual could be "fairly and rationally understood" as designating a "legitimate class of one." Thus, it has been suggested that Nixon stands for the proposition that any level of specificity is acceptable, even the naming of individuals, as long as a rational, non-punitive basis for the legislation can be established. A different question arises as to whether legislation that applies both retroactively and prospectively, and thus includes persons not yet identified, can violate the prohibition on bills of attainder. It does not appear to be fatal to a bill of attainder challenge that the statute in question applies to both past and future behavior. In one of the relatively few cases in which a successful bill of attainder challenge was made, the Court in United States v. Brown invalidated Section 504 of the Labor-Management Reporting and Disclosure Act, which made it a crime for anyone "who is or has been a member of the Communist Party to serve as an officer or employee of a labor union ... during or for five years after the termination of his membership in the Communist Party." In Brown, the Court did not find it significant that future members of the Communist Party would be included in the group affected. Rather, the Court focused on the fact that once a person had entered the Communist Party, his or her withdrawal did not relieve the disability for five years. So, the requirement of specificity is not defeated by the potential of future persons being added to the identified group, as long as the persons or entities identified cannot withdraw from such specified group. However, a per se finding of specificity can still fail to meet the first prong if the group specified by the statute can be justified by a regulatory purpose. This question would require an analysis of the nexus between the specificity and the regulatory purpose that is arguably served by the proposed law. In this regard, the specificity analysis would be similar to the "Functional Test" discussed below. The mere fact that focused legislation imposes burdensome consequences does not require that a court find such legislation to be an unconstitutional bill of attainder. Rather, the Court has identified three tests to determine whether legislation is "punitive": (1) whether the burden is such as has traditionally been found to be punitive (historical test); (2) whether the type and severity of burdens imposed cannot reasonably be said to further non-punitive legislative purposes (functional test); and (3) whether the legislative record evinces a congressional intent to punish (motivational test). The Supreme Court has identified various types of punishments that have historically been associated with bills of attainder. These traditionally have included capital punishment, imprisonment, fines, banishment, confiscation of property, and more recently, the barring of individuals or groups from participation in specified employment or vocations. The courts have been reluctant, however, to further expand the scope of the historical test. For instance, the United States Court of Appeals for the Second Circuit has rejected the argument that denial of federal benefits to specified individuals or organizations was the type of "punishment" traditionally engaged in by legislatures as a means of punishing individuals for wrongdoing. The Supreme Court has also indicated that some legislative burdens not traditionally associated with bills of attainder might nevertheless "functionally" serve as punishment. The Court has indicated, however, that in those cases, the type and severity of the legislatively imposed burden would need to be examined to see whether it could reasonably be said to further a non-punitive legislative purpose. The Court has specified that "legislative acts, no matter what their form, that apply either to named individuals or to easily ascertainable members of a group in such a way as to inflict punishment on them without a judicial trial are bills of attainder prohibited by the Constitution." For example, it seems clear that, in some instances, a denial of the ability to engage financially with the United States can fulfill the punishment prong of the test. As touched upon earlier in United States v. Lovett , the Court struck down a statute prohibiting specified individuals from being employed by the United States as a bill of attainder. In Lovett , the respondents, Robert Lovett, Goodwin Watson, and William Dodd, Jr., were federal government employees in good standing. Congress, however, passed a statute naming those individuals and providing that, after a certain date, no federal salary or compensation could be paid to them. The statute was passed as a result of concerns in the House Committee on Un-American Activities that "subversives" were occupying influential positions in the government and elsewhere, and that Congress had the responsibility to identify and remove those individuals. The Court noted that the character of the legislation was informed by both the particulars of the legislation and the context in which it arose. In this case, the Court found that the statute operated to bar the named individuals not only from their current jobs, but also from employment by any branch of the federal government for perpetuity. The Court also noted that the congressional proceedings relevant to the legislation had the elements of judicial process. For instance, the chairman of the House Committee on Un-American Activities, Representative Dies, told the House that the three named individuals, among others, were unfit to "hold a Government position," and other statements made during the debate included discussion of "charges" against the individuals and of having sufficient proof of "guilt." A special counsel for the House noted that the legislation in question was within the discretion of Congress's power under the Spending Clause. However, the Court in Lovett remarked that other Supreme Court decisions have invalidated legislation barring specified persons or groups from pursuing various professions where the employment bans were imposed as a brand of disloyalty. For instance, the Court has found that a ban on lawyers practicing before the Supreme Court was punishment for purposes of bill of attainder analysis, as was a ban on persons holding positions of trust related to legal proceedings. Consequently, the Court in Lovett held that the denial of the contractual right to federal employment fell squarely into the type of punishment susceptible to bill of attainder analysis. The situation can arise, however, where the burdens imposed by legislation on specified or identifiable persons or entities may be justified by a valid regulatory (non-punitive) purpose. In such a case, a court would be likely to find that such legislation is not intended to be punitive. For instance, in Flemming v. Nestor , the Court upheld termination of Social Security benefits to persons deported for events occurring before the passage of the legislation terminating benefits, reasoning that Congress was within its authority to find that the purposes of Social Security were not served by providing benefits to persons living overseas. In reaching this conclusion, the Court noted that: [O]nly the clearest proof could suffice to establish the unconstitutionality of a statute on [bill of attainder grounds]. Judicial inquiries into Congressional motives are at best a hazardous matter, and when that inquiry seeks to go behind objective manifestations it becomes a dubious affair indeed. Moreover, the presumption of constitutionality with which this enactment, like any other, comes to us forbids us lightly to choose that reading of the statute's setting which will invalidate it over that which will save it. 'It is not on slight implication and vague conjecture that the legislature is to be pronounced to have transcended its powers, and its acts to be considered as void.' Fletcher v. Peck, 6 Cranch 87, 128. However, it should be noted that the legislation in question in Flemming was but a small part of a larger regulatory scheme--the Social Security program--making any punitive intent less apparent. Another factor that may be relevant to a bill of attainder analysis is the duration of the burden imposed by legislation. For instance, if the burden imposed by legislation is of short duration, one might argue that Congress had to act quickly to address a particular situation, with an understanding that more general legislation would be forthcoming in the future. For instance, in the case of SeaRiver Maritime Financial Holdings, Inc. v. Mineta , the United States Court of Appeals for the Ninth Circuit (Ninth Circuit) suggested that the need for quick resolution of a particular regulatory concern might require a degree of specificity that would not otherwise be acceptable. The SeaRiver case is closely related to an oil spill that occurred in 1989, when the Exxon Valdez ran aground onto Bligh Reef in Alaska, spilling nearly 11 million gallons of oil into the Prince William Sound. The following year, Congress passed the Oil Pollution Act of 1990, which, among other things, excluded from the waters of Prince William Sound any vessel that had spilled more than 1 million gallons of oil into the marine environment after March 22, 1989. The act effectively barred the Exxon Valdez from operating in Prince William Sound. The owner of the Exxon Valdez brought suit, arguing that the exclusion of the Exxon Valdez under the Oil Pollution Act constituted an unconstitutional bill of attainder. While the Ninth Circuit held that the legislation in question did meet the specificity prong of the bill of attainder analysis, it found that the legislation was not intended to punish the owners of the Exxon Valdez , and thus did not violate the punishment prong of the bill of attainder test. Rather, the Ninth Circuit found that the legislation furthered a rational, non-punitive regulatory purpose. In the Oil Pollution Act, Congress recognized Prince William Sound as an "environmentally sensitive area," and included various provisions designed to protect the Sound's environment and reduce the likelihood of future oil spills. The act established the Prince William Sound Oil Spill Recovery Institute and an Oil Terminal and Oil Tanker Environmental Oversight and Monitoring Demonstration Program for Prince William Sound; provided for a Bligh Reef navigation light and a vessel tracking and alarm system; and increased equipment and requirements for oil spill response. The Ninth Circuit found that the exclusion of the Exxon Valdez from the Prince William Sound was consistent with this legislative purpose, and Congress could legitimately conclude that a vessel that spilled over 1 million gallons of oil posed a greater risk to Prince William Sound than other tank vessels, because of a pre-existing defect, damage incurred as a result of the spill, or because the spill calls into question the practices of its operators. The court found this case similar to the Supreme Court case of Nixon , which held that the Presidential Recordings and Materials Preservation Act, which only applied to the preservation of documentary materials relating to the presidency of Richard Nixon, was not a bill of attainder. In both of these cases, the reasoning was that there was a specific need for quick legislative action regarding specific situations. Regarding the Exxon Valdez , legislative action was needed to avoid another oil spill, while legislation specifically affecting President Nixon was deemed necessary to avoid the possible loss of important historical documents. In both cases, the need for Congress to "proceed with dispatch" allowed Congress to pass legislation that established "a legitimate class of one." The holdings in both of these cases appeared to assume that further regulation which applied to persons or entities outside of these "legitimate class[es] of one" would be forthcoming. A court will also consider the legislative history of a provision in evaluating whether or not legislation is intended to be punitive. The Court, however, has been reluctant to ascribe too much significance to legislative history alone, and will generally require more than just a few statements by individual Members to find such motivation. Further, it seems to be unsettled what information aside from that directly found within the legislative history of a law should be considered by a court. In some cases, extensive legislative history may suggest punitive intent. For instance, when the proposal to tax employee bonuses of TARP recipients was considered and passed by the House, a variety of remarks were made on the floor concerning the bill. While a small number of remarks addressed the issue of the regulatory purpose of prospective applications of the bill, many remarks were made that seemed to indicate that the application of these bills retrospectively was based on concern with the morality of having paid the bonuses in question, and a desire that the person receiving the bonuses not be able to enjoy their benefit. Some of these comments might have been interpreted as indicating a punitive intent on the passage of the legislation. In other situations, however, there may be less direct evidence of the motivational basis for such legislation. For instance, in the bills to limit the provision of federal monies to ACORN, there was some discussion of alleged misdeeds of ACORN during consideration of the bills. The United States Court of Appeals for the Second Circuit, however, found that a "smattering" of Members' remarks suggesting a punitive intent was not sufficient to show that the legislation was motivated by punitive intent. Consequently, it may be difficult to predict in particular cases when evidence of punitive intent in legislative history would be sufficient to establish that a bill was an unconstitutional bill of attainder.

On occasion, Congress exercises its legislative authority regarding a specified individual, entity, or identifiable group in such a way as to raise constitutional concerns. In particular, the United States Constitution expressly prohibits the federal government from enacting bills of attainder, defined by the Supreme Court as a "law that legislatively determines guilt and inflicts punishment upon an identifiable individual without provision of the protections of a judicial trial." The basis for the prohibition arises from the separation of powers concern that the enforcement of a bill of attainder would allow Congress to usurp the power of the judicial branch. For instance, in recent years, Congress proposed retroactive taxation of up to 90% of the value of bonuses paid to employees when an employer had received funds from Troubled Asset Relief Program (TARP). Additionally, in response to allegations of election law and other legal violations by the Association of Community Organizations for Reform Now (ACORN), Congress passed several appropriations bills that limited the provision of federal funds to ACORN and its affiliates. In both of these instances, suggestions were made that the legislation might be found by the courts to be prohibited bills of attainder. As regards the limitations imposed on the provision of funds to ACORN, such limitations were upheld by the United States Court of Appeals for the Second Circuit. The two main criteria that the courts use to determine whether legislation is a bill of attainder are (1) whether "specific" individuals, groups, or entities are affected by the statute, and (2) whether the legislation inflicts a "punishment" on those individuals. The U.S. Supreme Court has also identified three types of legislation that would fulfill the "punishment" prong of the test: (1) where the burden is such as has "traditionally" been found to be punitive (historical test); (2) where the type and severity of burdens imposed are the "functional equivalent" of punishment because they cannot reasonably be said to further "non-punitive legislative purposes" (functional test); and (3) where the legislative record evinces a "congressional intent to punish (motivational test)." The Court has suggested that each bill of attainder case turns on its own highly particularized facts, and notably, since the signing of the Constitution, the Bill of Attainder Clause has been successfully invoked only five times in the Supreme Court. Nevertheless, there remain potential constitutional concerns when Congress proposes or passes legislation that imposes a burden on a specified individual, entity, or identifiable group.

With military conflict in Iraq and Afghanistan, Congress has expressed an interest in how wars have been financed historically, and what effects the wars had on the economy. This report examines financing and economic issues in World War II, the Korean Conflict, the Vietnam Conflict, the Reagan Military Buildup, and the 1991 and 2003 wars in Iraq. It examines tax policy, non-military outlays, the budget balance, economic growth, inflation, and interest rates during these periods. People often assume that wars will lead to recessions, reasoning that the spending on war will lead to less spending in the rest of the economy. While this reasoning is correct, the conclusion is wrong. Recessions are characterized by a reduction in spending in the entire economy, including the military sector. Although it is true, in times of war, resources must be shifted to the military sector, because the military sector is a part of gross domestic product (GDP), the shift does not lower GDP. Wars may lead to less spending on non-military goods and services, but there is no reason to assume that they will lead to less spending on total goods and services. In fact, under certain financing methods, it is likely to lead to greater spending on total goods and services, which would increase the growth rate of aggregate demand in the short run. The increased government outlays associated with wars can be financed in four ways: through higher taxes, reductions in other government spending, government borrowing from the public (the issuance and sale of U.S. Treasury securities to the public), or money creation. Major wars have relied upon all four measures. The first two methods are unlikely to have an effect on economic growth (aggregate demand) in the short run. The expansion in aggregate demand caused by greater military outlays is largely offset by the contraction in aggregate demand caused by higher taxes or lower non-military government spending. The latter two financing methods increase aggregate demand. Thus, a by-product of wars has typically been a short-term economic boom and an increase in employment in excess of the economy's sustainable rate of growth. The sectors of the economy that are recipients of the military spending, such as the transportation sector and military equipment producers, would receive the biggest boost. Just as a military buildup in wartime typically boosts aggregate demand, the reduction in defense expenditures after a war typically causes a brief economic contraction as the economy adjusts to the return to peacetime activities. If the economy's resources are fully employed when the government boosts aggregate demand, the increase in government spending must be offset by a reduction in spending elsewhere in the economy. In the case of borrowing from the public, prices and interest rates would be expected to rise, the latter causing investment and other interest-sensitive spending to be lower than it otherwise would be. Economists refer to this phenomenon as government purchases "crowding out" private investment and interest-sensitive spending. Because private investment is crucial to long-run growth, the long-run effect of these policies would be to reduce the private capital stock and future size of the economy. Once government controls on the international flow of private capital were largely removed by the early 1970s, it became possible for government budget deficits to be financed by foreigners as well as domestic citizens. If a budget deficit is financed by foreigners, exports and import-competing goods rather than private investment would be "crowded out" by government expenditures through an appreciation of the dollar and a larger trade deficit. The appreciation occurs because demand for the dollar increases as foreigners purchase U.S. financial instruments. In the case of expenditures on a military campaign abroad, there may be less of an expansion in aggregate demand than from other forms of government spending since some of the expenditures would be used for foreign goods and services. This suggests that there would be less upward pressure on the exchange rate and less crowding out of U.S. exports and import-competing goods. How does money creation help the government raise revenues? When the government (through the Federal Reserve) prints money, it can use that money to purchase real resources. But at full employment, the government cannot increase the amount of real resources in the economy simply by printing money. In this case, if the increase in the money supply increases the resources available to the government, it must be offset by a decrease in the resources available to other individuals in the economy. This occurs through inflation, which makes money less valuable in terms of the amount of real resources for which it can be exchanged. The individuals whose wealth is reduced are those who held a portion of their wealth in the existing money at the time when the government increased the money supply. That is because the existing money they hold can now be exchanged for fewer real resources than before the new money was printed. For this reason, using money creation as a form of government finance has often been characterized by economists as an "inflation tax." Unlike borrowing from the public, money creation would not be expected to disproportionately crowd out private investment because expansionary monetary policy is likely to have the effect of reducing interest rates in the short run. Instead, the transfer of resources is likely to come about through higher inflation, affecting individuals who are unable to protect their wealth and income from inflation. Although some price inflation may be associated with borrowing from the public, money creation is typically a more inflationary method of finance. In World War II, the means by which the increase in the money supply came about was through the Federal Reserve's purchase of government bonds. In effect, the Federal Reserve made a loan to the government of newly printed money. The increase in the money supply transferred resources to the government by reducing the public's real wealth. World War II was the only conflict examined in this report in which the government relied on money creation as a significant source of revenue. In the 1950s, the Treasury- and Federal Reserve reached an "accord," and the government could no longer "borrow" directly from the Federal Reserve. In other conflicts in which inflation rose in the United States, such as the Vietnam Conflict, it would be unfair to characterize the excessive money creation that occurred as being motivated primarily by a desire to increase government revenue. It is fairer to say that excessive money creation was influenced by a desire or belief by the government that the economy could or should grow faster than was actually possible. Under normal circumstances, money creation as a means of government finance would be expected to lead to price inflation. In major wars, the government has attempted to suppress inflation through the use of widespread price controls rather than forgo the benefits of inflationary monetary policy. Economic theory suggests, and historical evidence supports, that the use of price controls may be successful at suppressing inflation for a time, but prices will eventually rise when those controls are removed, or even sooner if the administration of controls break down. The suppression of inflation increases the government's purchasing power for a given change in the money supply, making monetary finance more powerful. Strict price controls create significant market distortions and may result in shortages for some goods because they do not allow relative prices to adjust as supply and demand for individual goods change. When price controls are in effect, black market activity typically expands as citizens attempt to avoid the distortions that the controls create. All four methods of war financing raise equity questions because each method places the financing burden on different groups of individuals. The burden of financing wars through higher taxes is borne by the individuals that have their taxes raised. The burden of financing wars through a reduction in other government spending is borne by the individuals to whom the spending was previously directed. This is the essence of the famous "guns vs. butter" analogy: when military spending is financed through higher taxes or lower government spending, society consumes more "guns" (military spending) and less "butter" (non-military spending). The burden of financing wars through money creation is borne by those whose real wealth and real income fall when prices rise. Uniquely, the burden of financing wars through borrowing from the public is thought to be borne in part by future generations rather than present generations. The result of borrowing from the public is lower private investment, and lower private investment leads to a smaller future economy, and hence lower standards of living in the future. In this case, today's "guns" are financed through less "butter" in the future. Philosophically, the debt financing of wars has often been justified on the grounds that the peace or security that wars make possible is enjoyed by present and future generations. Thus, the cost should be borne by present and future generations. Unlike science experiments, economic experiments are not controlled and cannot be repeated. It is difficult to separate out the effects of a war from the countless other economic events happening simultaneously to get accurate estimates of how any given war affected the economy. The presentation of data in the tables below is not meant to imply causation. This is especially true in the case of interest rates. The economic theory that interest rates are higher than they otherwise would be when the budget is in deficit is not equivalent to the empirical observation that interest rates are high or low in any given year. For example, interest rates can rise in any given year because private investment demand rises, monetary policy is tightened, private individuals change their savings patterns, foreigners find U.S. assets less attractive, the perceived riskiness of investment increases, or because the federal budget deficit increases. Furthermore, real (or inflation-adjusted) interest rates are measured in this report based on actual inflation rates. But they are determined in part by expected inflation rates. If actual inflation turns out to be much higher than expected inflation, then real interest rates will be temporarily low. Thus, it is not unusual to see ex-post negative real interest rates in years of unexpectedly high inflation, of which there are several examples in the periods discussed below. In drawing lessons from past conflicts, it should also be stressed that larger wars require wider ranging government involvement and produce larger economic effects, as illustrated in Figure 1 . The Vietnam Conflict, the Reagan Military Buildup, and the Desert Storm Operation were not large enough events that they could be thought to dominate cause and effect in the economy at the time. And to equal the military outlays (as a percentage of GDP) undertaken at the peak of the Reagan military buildup, military outlays today would need to more than double from their level in 2001. World War II was unique among events considered in this report in that it was accompanied by fundamental (albeit temporary) changes in the structure of our market economy. Because of these measures, any economic comparison between World War II and other economic events in the post-war period is questionable, and the predicted economic outcomes could be significantly different. In World War II, the prices of consumer goods were fixed and controlled on a widespread basis from 1942 to 1945, consumer goods were rationed through the use of purchase coupons and goods and services available to individuals were purposely kept below salaries to force a higher private saving rate. Also, private factories were instructed and encouraged to change their output to war production, resources and credit were directed by the government toward companies producing war materials, the female participation rate in the labor force was temporarily raised, and nearly half of GDP was used by the federal government. Because of the size of World War II associated expenditures, the government relied on all four methods of financing. Despite the record size of government as a percentage of GDP, non-military government expenditures had fallen to less than half their pre-war level by the end of the war. As can be seen in Table 1 below, which illustrates economic conditions before, during, and after the war, budget deficits exceeded 30% of GDP at their peak. The publicly held debt reached 108.6% of GDP in 1946. This would have been impossible without government controls over private spending and investment decisions and the patriotism generated by a major war. Central to this policy was the decision by the Treasury and Federal Reserve to keep the yield on U.S. Treasuries artificially low to ease the debt financing burden. (With the desire to keep inflation low, this policy decision necessitated the use of price controls since it required rapid money creation.) About one-quarter of the debt financing of World War II occurred through the war bond program, which sold small-denomination, non-marketable bonds to private citizens. The war effort was large enough to keep the economy operating far above its sustainable rate for the entirety of the war. Furthermore, there was a high rate of unemployment before the war began, at 14.6% in 1940. Thus, the economy probably had idle resources to enlist toward the war effort, allowing growth to exceed its sustainable rate while those resources became employed. Since economic growth was so great during the war, the standard contraction following the war was also large, as the economy adjusted to a decline in government spending from about 40% of GDP to about 15% of GDP. The contraction ended in 1948, and left no lasting impact on growth in the 1950s. To finance the increase in government outlays from 9.8% of GDP in 1940 to 43.6% of GDP in 1943 through higher taxes exclusively would have involved impossibly large tax increases, with corresponding disincentive effects on work and saving. Nevertheless, the government did finance a portion of the war effort by raising taxes. Tax measures during the War included the Revenue Act of 1942, the Current Tax Payment Act of 1943, the Revenue Act of 1943, and the Individual Income Tax Act of 1944. The Revenue Act of 1942 included provisions that made the individual income tax a "mass tax" for the first time, increased the corporate tax, increased excise taxes, increased the excess profits tax to 90%, and created a 5% Victory tax that was to be repaid through a post-war tax credit. The Current Tax Payment Act of 1943 introduced tax withholding that eased the Treasury's ability to finance day-to-day expenditures. The Revenue Act of 1943 was meant to alter the distribution of taxation. It was the first tax bill to be vetoed, and Congress overrode the veto. The Individual Income Tax Act of 1944 was meant to simplify the income tax system and it also abolished the Victory Tax. The act lowered tax revenues by an estimated 0.2% of GDP. Tax rates were greatly reduced after the war ended. In contrast to World War II, President Truman relied largely on taxation and a reduction of non-military outlays, rather than borrowing from the public or money creation, to finance the Korean Conflict. Of course, this turned out to be feasible only because the Korean Conflict was so much smaller than World War II. Nevertheless, it is striking how much lower budget deficits and inflation were during this era than during the Vietnam Conflict and President Reagan's military buildup, both of which involved much smaller military expenditures as a percentage of GDP. Inflation remained low even though economic growth was kept above its sustainable rate throughout the war. When high inflation emerged in 1951, the government again resorted to widespread wage and price controls. It did not reimplement a rationing system for private consumption of goods and services, however. A change in Federal Reserve policy in 1951 assured that inflation would be kept under control. After World War II, the Treasury had adopted the position that Federal Reserve monetary policy should be directed toward keeping the yield on Treasury securities stable and artificially low to keep debt financing costs manageable while limiting the reserves available to banks. In 1951, it became clear that maintaining this policy would be inflationary, and because inflation remained the Truman administration's primary concern, the Treasury and Federal Reserve reached an "accord" to allow the Fed to focus on maintaining price stability and gradually allowing the yields on Treasury securities to become market determined. True to pattern, the economy experienced a short recession after the Korean Conflict ended. Shortly after the outbreak of the Korean Conflict, the Revenue Act of 1950 was enacted. It resurrected the income tax rates of World War II and raised taxes by an estimated 1.3% of GDP. Later in the year, the Excess Profits Tax of 1950 was enacted. The Revenue Act of 1951 raised individual income and corporate taxes, for an estimated revenue increase of 1.9% of GDP. The increase in individual and corporate taxes would have raised more revenue, but the 1951 act also contained several narrow-based tax reductions. There are no official dates to frame the period of the Vietnam Conflict. This report considers the conflict to cover the period from 1964, when American soldiers in Vietnam were increased to 20,000, to 1973, when President Nixon declared an end to the conflict. In budgetary terms, a buildup did not begin until 1966 and the war was in decline from 1970 onwards. The military buildup was not as marked as in other wars because military outlays were already high from the Cold War arms race. Arguably, fiscal policy in the 1960s and 1970s was not framed in terms of events in Vietnam; this was done in part purposely due to the domestic controversy surrounding the Conflict. Unlike World War II and the Korean Conflict, non-military expenditures were increased throughout the Vietnam era, beginning with the Great Society programs. Throughout the Conflict, the government attempted to avoid tax increases, although it did raise taxes between 1968 and 1970. Thus, borrowing from the public played a greater part in war financing than it had in the Korean Conflict. There was no explicit policy during the Vietnam Conflict instructing the Federal Reserve to keep federal interest costs low, as there was in World War II and at the beginning of the Korean Conflict. Nevertheless, inflation rose significantly as the Conflict progressed, although this was probably the result of a belief that the economy could grow at a faster rate than was actually possible, rather than a desire to use money creation as a significant source of revenue. The first tax act of the Vietnam era was a tax reduction, the Revenue Act of 1964, which was implemented to counter a perceived economic slowdown. This act embodied many of the proposals made by President Kennedy in 1961 to "get America moving again." Its major provisions included a reduction in individual income and corporate tax rates, and an expansion of the standard deduction. Nevertheless, the Vietnam Conflict put strains on the budget that ultimately influenced budgetary decisions. In 1968 and 1969, temporary 10% surcharges were applied to individual income and corporate taxes, ostensibly to curb inflation. The measure led to the last budget surplus (in 1969) until 1998. Later that year, the Tax Reform Act of 1969 was passed. It was advertised as a measure to reform the tax code and close certain loopholes, but also had the effect of raising revenue by 0.2% of GDP in 1970. Its major provisions were the repeal of the investment tax credit (revenue raising), the restriction of the tax exempt status of foundations (revenue raising), a broadening of the individual income tax base (revenue raising), and an increase in the income tax's standard deduction and personal exemption (revenue reducing). In addition, it extended the temporary surcharges for the first six months of 1970 at a rate of 5% (reduced from the previous 10%), raising an additional 0.4% of GDP. The 1971 Revenue Act reduced taxes with the aim of increasing aggregate demand. It restored the investment tax credit, accelerated planned tax reductions, and increased the standard deduction. The tax reductions contributed to larger budget deficits in the following years. The combination of rising budget deficits and expansionary monetary policy led to rapidly rising inflation in the late 1960s and early 1970s. Rather than further tighten monetary policy or fiscal policy to weaken aggregate demand, President Nixon responded with the imposition of price controls in four phases from 1971 to 1974. Under the Nixon program, prices, wages, and profits were controlled for all large firms. The prices of some commodities, imports and exports, unprocessed agricultural products, and the wages of low-wage workers were exempted. Later, in phase III, rents were exempted as well. Small firms did not have to comply with price, profit, or wage controls for some phases. During the four phases, controls were meant to be gradually reduced. In phase I, prices and wages were "frozen;" in phase II, they were "self-administered" which meant that price increases were allowed if approved by the government; in phase III, "decontrol" began. (The subsequent failure of inflation to slow in phase III led to tighter controls for some industries in phase IV, while other industries were decontrolled.) The controls proved to be very unpopular with the public, as shortages and distortions appeared in different markets. From 1973, the oil shock and ensuing "stagflation" dominated economic events. The combination of higher oil prices and the end of price controls, which released pent up inflationary pressures, led to a high inflation rate throughout the 1970s. By this point, military expenditures as a percentage of GDP had been significantly reduced. Military outlays during the Reagan military buildup were significantly lower as a percentage of GDP than they were during any of the preceding military conflicts. Neither tax increases nor money creation were used to finance the buildup. On the contrary, both taxes and inflation were lowered during this time for reasons unrelated to the military buildup. Tax cuts and their claimed supply-side effects on economic growth were one of the major themes of the Reagan era, and the main goal of the Federal Reserve under Chairman Paul Volcker was to reduce inflation from the double-digit rates prevalent in the late 1970s. (The Fed accomplished this goal by 1983, but the side effect of the Fed disinflation was the deepest recession since the Great Depression.) As a result, increased military outlays and tax cuts led to budget deficits and a reduction in non-military outlays as a percentage of GDP. The Economic Recovery Tax Act of 1981 was the major tax reduction bill of the Reagan years. The major provisions were reductions in marginal income tax rates, individual saving incentives, and more favorable capital depreciation rates. In the years following the act, the budget deficit increased from to 2.6% of GDP in 1981 to 4.0% of GDP in 1982 to 6.0% of GDP in 1983. These budget deficits were the largest budget deficits as a percentage of GDP since World War II. As theory suggests, the combination of loose fiscal policy and tight monetary policy in the 1980s led to the highest ex-post real interest rates of any period covered in this report. Since the United States operated a floating exchange rate in the 1980s, as it does at present, economists believe that one result of the large budget deficits were the large trade deficits of the mid-1980s, which were the result of foreign capital being attracted to the United States by the high interest rates that budget deficits had caused. Efforts were undertaken from 1982 onwards to reduce the budget deficit. In 1982, parts of the Economic Recovery Tax Act of 1981 that had not yet been phased in were repealed. In 1983, Social Security taxes were increased and benefits reduced. In 1984, Congress passed the Deficit Reduction Act. In 1985, Congress enacted the Gramm-Rudman-Hollings Act, which attempted (unsuccessfully) to balance the budget in five years through automatic reductions in expenditures. In 1986, the Tax Reform Act was passed; it was intended to be revenue neutral. It sought to broaden the tax base by eliminating deductions and exemptions and lowered marginal tax rates. It also eliminated the special capital gains tax rate and the investment tax credit, altered depreciation rules, expanded the Alternative Minimum Tax (AMT) on individuals and introduced an AMT on corporations. As a percentage of GDP, non-military outlays were not cut until 1984. Although President Reagan favored lower government spending in general, the size of the budget deficits was thought to be a central reason for Congress to enact these reductions in outlays. The deficit was not eliminated until 1998, however. The deficits caused interest payments on the national debt to rise from 1.9% of GDP in 1980 to 3.1% of GDP in 1985. Military outlays were not reduced until the end of the Reagan presidency, and the reductions were later accelerated by the fall of the Soviet Bloc. The economic and financing issues surrounding the Desert Storm Operation are unique in this survey in several ways. First, it was the only military operation considered that did not require any increase in military expenditures as a percentage of GDP. In fact, it took place during the long reduction in military spending as a percentage of GDP that accompanied the end of the Cold War. In this broad sense, there is no reason to consider the economic effects of financing the buildup. In fact, an economic contraction occurred during Desert Storm, unlike the typical wartime economic boom. The 1990-1991 recession is not typically attributed to the war, except for its possible negative effects on confidence. Instead, it is typically attributed to contractionary monetary policy (undertaken through 1989 to quell the rising inflation rate), problems in the banking sector, and the spike in oil prices associated with the Iraqi invasion of Kuwait. Timing supports this argument: the monetary tightening took place in 1988 and 1989, the recession began in July 1990, the oil price spike began in August 1990, and military operations began in January 1991. After the conflict ended, the economy began to expand again (in March 1991)--it did not experience post-war contraction. Unlike previous military conflicts, in which the Federal Reserve had tolerated excessive money creation, during Desert Storm the Federal Reserve sought to stamp out inflationary pressures that originated before the conflict, even at the risk of recession. After the conflict ended, the economy began to expand again. The budget deficit rose during the conflict, but it would be difficult to claim that military spending contributed to the rise in the deficit when overall military spending was declining during this time. Instead, the rising budget deficit was characterized by falling tax revenues and rising non-military outlays, both of which can be largely accounted for by automatic changes in revenues and outlays caused by the economic slowdown. To reduce the widening deficit, the Omnibus Budget Reconciliation Act of 1990 cut spending and increased taxes. It was estimated that over the following five years, 57% of the deficit reduction would come from spending cuts and 29% from tax increases (14% would come from lower interest payments). Changes to excise taxes, payroll taxes, and individual income taxes accounted for the bulk of the tax increases. The revenue raising provisions of the act were estimated to raise tax revenues by 0.3% of GDP in 1991. Most of the spending reductions were to come from reductions in military outlays and Medicare spending. Another unique aspect of the financing of the Gulf War was the financial contributions that the United States received from its allies. In effect, foreign governments financed a large part of the war effort for the United States--contributions from foreign governments equaled $48 billion, while the overall cost of the war was $61 billion in current dollars. In the balance of payments, these contributions represented a unilateral transfer to the United States, which is recorded as a reduction in the current account deficit. The exchange value of the dollar was unlikely to have been significantly affected, however, since a substantial portion of the contributions came from Saudi Arabia and Kuwait, both of whom had a de facto fixed exchange rate with the dollar. This section discusses spending and economic trends through 2008 surrounding the war in Iraq that began in 2003. Like the 1991 conflict, the 2003 war began during a period of economic weakness. Because the recession had already ended about a year and a half before the war, the war was clearly not responsible for the economic weakness. At most, it prolonged the initially sluggish nature of the recovery through the upward blip in oil prices, which mostly occurred in the months leading up to the war. Some observers had predicted the war would depress economic activity through another channel, weakened consumer and investor confidence, but this did not come to pass. Economic growth picked up in 2004, and the economy was operating around full employment in 2006. In the latter part of 2007 through the first half of 2008, rising unemployment, increasing oil and gas prices, and historically large numbers of housing foreclosures have put a strain on the economy. Initially, the war in Iraq made a substantial contribution to the widening of the budget deficit. During a period of economic sluggishness, this would be expected to stimulate aggregate demand. However, any stimulative effect was minor since military outlays increased by only 0.3 percentage points of GDP in 2003 and an additional 0.2 percentage points in 2004 (if measured by the supplemental appropriations, the increased outlays equaled about 0.6 percentage points of GDP in 2003 and 0.7 percentage points in 2004). As can be seen in Table 6 , the increase in military outlays occurring during the early years of the war was not financed through higher tax revenues or lower non-military outlays. Therefore, the war can be thought to be entirely deficit financed. As opposed to past conflicts where taxes were raised, taxes were cut in 2003. The tax cut's major provisions were an acceleration of the 2001 income tax rate reductions and a reduction in the tax rate on dividends. Because of general economic weakness, the increased military spending and resultant deficits did not initially lead to higher interest rates or inflation. Inflation began rising in 2005 though it slowed slightly in 2007. Even after the recent increase, military spending as a percentage of GDP is still lower than it was in any year before 1994. After the first couple of war years, a shift to a higher level of deficit-financed spending would not be expected to have any further stimulative effect on the economy. The increase in revenues that occurred between 2005 and 2007 was caused by rising taxable income generated as a result of strong GDP growth, contributing to lower deficits and allowing the war to be financed through this increase in revenues. Revenues are projected to fall again in 2008 due to the cost of the economic stimulus measures passed by Congress in February, as well as the slowing economy. This indicates a return to funding the war solely through deficit-financed spending. There is little reason to believe that the increase in military outlays associated with a war would cause a recession; in fact, theory predicts that it will cause an increase in aggregate demand. Even if a conflict shifted spending away from non-military goods and services, there is no reason to think overall GDP would fall because military spending is included in GDP. The increased government outlays associated with wars can be financed in four ways: through higher taxes, reductions in other government spending, government borrowing from the public (the issuance and sale of U.S. Treasury securities to the public), or money creation. The Desert Storm Operation illustrates that a military campaign of moderate size can be financed with very little impact on the budget or the economy. That campaign involved no increase in overall military outlays as a percentage of GDP. When wars get larger, tax increases almost inevitably become necessary. Big conflicts typically bring economic booms because borrowing from the public and money creation expand aggregate demand. "Total wars," such as World War II, typically draw on all four financing methods and may even lead to fundamental shifts away from a market economy. The choice of how to finance a war is mainly a question of equity, which by its nature is a political question. (The exceptions are total wars, which involve such large expenses that virtually any financing choices will lead to considerable efficiency losses.) Financing through borrowing has been justified by some on the grounds that future generations benefit from the sacrifice that present generations make by fighting the war, and should therefore bear some of the cost of the war. Borrowing has also been justified on "consumption smoothing" grounds--it is better to defray a temporary expense over time than all at once. Of the four financing methods, economists tend to reject the money creation method if it can be avoided. They argue that the "inflation tax" is the most arbitrary of all taxes because the government cannot democratically specify its incidence. It is also a financing method that leads to large efficiency losses quickly because it reduces the useful functions money serves in a market economy. It also undermines the effectiveness of monetary policy as a macroeconomic stabilization tool. Economists also tend to believe that the benefits of widespread price controls are largely illusory. Even if price controls successfully reduce recorded inflation, they create serious efficiency and welfare losses, typically lead to shortages, limit individual choice, and encourage participation in black markets. When removed, price controls have consistently led to a release of pent up inflation historically. Total wars by their nature require financing methods that lead to large efficiency losses. Money creation, increasing taxes, or borrowing from the public on a large scale could all be opposed on efficiency grounds--it would be difficult to claim that any one financing method is most efficient. In addition, governments often feel that the equity rationale makes policies such as rationing necessary, compounding the overall efficiency loss. Thus, attempting to draw general policy conclusions from the experience with total war risks comparing apples with oranges.

The increased government outlays associated with wars can be financed in four ways: through higher taxes, reductions in other government spending, government borrowing from the public, or money creation. The first two methods are unlikely to have an effect on economic growth (aggregate demand) in the short run: the expansion in aggregate demand caused by greater military outlays is offset by the contraction in aggregate demand caused by higher taxes or lower non-military government spending. The latter two methods increase aggregate demand. Thus, a by-product of American wars has typically been a wartime economic boom in excess of the economy's sustainable rate of growth. Wars may shift resources from non-military spending to military spending, but because military spending is included in GDP, it is unlikely to lead to a recession. Just as wars typically boost aggregate demand, the reduction in defense expenditures after a war removes some economic stimulus as the economy adjusts to the return to peacetime activities. The economic effect of World War II stands in a class of its own. More than one-third of GDP was dedicated to military outlays. Budget deficits were almost as large; these large deficits were made possible through policies that forced individuals to maintain a very high personal saving rate. Money creation was a significant form of financing, but the inflation that would typically accompany it was suppressed through widespread rationing and price controls. Private credit was directed toward companies producing war materials. There was a significant decrease in non-military outlays and a significant increase in taxes, including the extension of the income tax system into a mass tax system and an excess profits tax. President Truman attempted to avoid financing the Korean Conflict through borrowing from the public or money creation--budget deficits were much lower than during any other period considered--but the economy boomed anyway. Tax increases and a reduction in non-military spending largely offset the increases in military outlays. President Truman relied on price controls to prevent the money creation that did occur from being inflationary. Vietnam, the Reagan military buildup, and the two wars in Iraq were not large enough to dominate economic events of their time. The beginning of the Vietnam Conflict coincided with a large tax cut. Non-military government spending rose throughout the Vietnam era. Most of the conflict was deficit financed, although tax increases occurred at the peak of the conflict. Inflation rose throughout the period, and President Nixon turned to price controls to suppress it. The beginning of the Reagan military buildup also coincided with a large tax cut, as well as an effort by the Federal Reserve to disinflate the U.S. economy. Thus, borrowing from the public, and later a reduction in non-military outlays, offset most of the rise in military spending. Unlike earlier conflicts, liberalized international capital markets allowed the United States to borrow significantly abroad for the first time, which many economists believe caused the large trade deficits of the mid-1980s. Desert Storm took place among rising budget deficits and rising taxes. It was the only military operation considered to largely occur in a recession. The ongoing wars in Iraq and Afghanistan took place at a time of sluggish economic recovery, tax cuts, and rising budget deficits. This report will be updated as needed.

The U.S. strategy in pursuing the war on international terrorism involves a variety of missions conducted by military and civilian intelligence personnel characterized as "special operations" or paramilitary operations. The separate roles of the Department of Defense (DOD) and the Central Intelligence Agency (CIA) are not always clearly reflected in media accounts and at times there has been considerable operational overlap. Proposals such as those made by the 9/11 Commission to change organizational relationships will, however, be evaluated on the basis of separate roles and missions, operating practices, and relevant statutory authorities. DOD defines special operations as "operations conducted in hostile, denied, or politically sensitive environments to achieve military, diplomatic, informational, and/or economic objectives employing military capabilities for which there is no broad conventional force requirement." DOD defines paramilitary forces as "forces or groups distinct from the regular armed forces of any country, but resembling them in organization, equipment, training or mission." In this report, the term "paramilitary operations" will be used for operations conducted by the CIA whose officers and employees are not part of the armed forces of the United States. (In practice, military personnel may be temporarily assigned to the CIA and CIA personnel may temporarily serve directly under a military commander.) In general, special operations are distinguishable from regular military operations by degree of physical and political risk, operational techniques, and mode of employment among other factors. DOD special operations are frequently clandestine--designed in such a way as to ensure concealment; they are not necessarily covert, that is, concealing the identity of the sponsor is not a priority. The CIA, however, conducts covert and clandestine operations to avoid directly implicating the U.S. Government. USSOCOM was established by Congress in 1987 ( P.L. 99-661 , 10 U.S.C. SS167). USSOCOM's stated mission is to plan, direct and execute special operations in the conduct of the War on Terrorism in order to disrupt, defeat, and destroy terrorist networks that threaten the United States. The CIA was established by the National Security Act of 1947 (P.L. 80-253) to collect intelligence through human sources and to analyze and disseminate intelligence from all sources. It was also to "perform such other functions and duties related to intelligence affecting the national security as the President or the National Security Council may direct." This opaque phrase was, within a few months, interpreted to include a range of covert activities such as those that had been carried out by the Office of Strategic Services (OSS) during World War II. Although some observers long maintained that covert actions had no statutory basis, in 1991 the National Security Act was amended (by P.L. 102-88 ) to establish specific procedures for approving covert actions and for notifying key Members of Congress. The statutory definition of covert action ("activity or activities of the United States Government to influence political, economic, or military conditions abroad, where it is intended that the role of the United States Government will not be apparent or acknowledged publicly....") is broad and can include a wide range of clandestine efforts--from subsidizing foreign journals and political parties to participation in what are essentially military operations. In the case of paramilitary operations, there is a clear potential for overlap with activities that can be carried out by DOD. In general, the CIA would be designated to conduct operations that are to be wholly covert or disavowable. In practice, responsibilities for paramilitary operations have been assigned by the National Security Council on a case-by-case basis. In addition to acquiring intelligence to support US military operations from the Korean War era to Iraq today, the CIA has also worked closely alongside DOD personnel in military operations. On occasion it has also conducted clandestine military operations apart from the military. One example was the failed Bay of Pigs landing in Cuba in 1961. Especially important was a substantial CIA-managed effort in Laos in the 1960s and 1970s to interdict North Vietnamese resupply efforts. The CIA was directed to undertake this effort in large measure to avoid the onus of official U.S. military intervention in neutral Laos. The CIA's paramilitary operations in Afghanistan in 2001 have been widely described; CIA officers began infiltrating Afghanistan before the end of September 2001 and played an active role alongside SOF in bringing down the Taliban regime by the end of the year. According to media reports, the CIA has also been extensively involved in operations in Iraq in support of military operations. SOF have reportedly been involved in clandestine and covert paramilitary operations on numerous occasions since the Vietnam War. Operations such as the response to the TWA 847 and Achille Lauro highjackings in 1985, Panama in 1989, Mogadishu in 1993, and the Balkans in the late 1990s have become public knowledge over time but other operations reportedly remain classified to this day. Some speculate that covert paramilitary operations would probably become the responsibility of a number of unacknowledged special operations units believed to exist within USSOCOM. Recommendation 32 of the 9/11 Commission report states: "Lead responsibility for directing and executing paramilitary operations, whether clandestine or covert, should shift to the Defense Department. There it should be consolidated with the capabilities for training, direction, and execution of such operations already being developed in the Special Operations Command." The 9/11 Commission's basis for this recommendation appears to be both performance and cost-based. The report states that the CIA did not sufficiently invest in developing a robust capability to conduct paramilitary operations with U.S. personnel prior to 9/11, and instead relied on improperly trained proxies (foreign personnel under contract) resulting in an unsatisfactory outcome. The report also states that the United States does not have the money or people to build "two separate capabilities for carrying out secret military operations," and suggests that we should "concentrate responsibility and necessary legal authorities in one entity." Some observers question whether procedures are in place to insure overall coordination of effort. Press reports concerning an alleged lack of coordination during Afghan operations undoubtedly contributed to the 9/11 Commission's recommendation regarding paramilitary operations. Although such accounts have been discounted by some observers, the Intelligence Reform and Terrorism Prevention Act ( P.L. 108-458 ) included a provision (Section 1013) that requires DOD and CIA to develop joint procedures "to improve the coordination and deconfliction of operations that involve elements" of the CIA and DOD. When separate missions are underway in the same geographical area, the CIA and DOD are required to establish procedures to reach "mutual agreement on the tactical and strategic objectives for the region and a clear delineation of operational responsibilities to prevent conflict and duplication of effort." Some observers suggest that a capability to plan and undertake paramilitary operations is directly related to the Agency's responsibility to obtain intelligence from human sources. Some individuals and groups that supply information may also be of assistance in undertaking or supporting a paramilitary operation. If CIA were to have no responsibilities in this area, however, certain types of foreign contacts might not be exploited and capabilities that have proven important (in Afghanistan and elsewhere) might erode or disappear. Some question if this proposed shift in responsibility would place additional strains on SOF who are extensively committed worldwide. Others argue that SOF lack the experience and requisite training to conduct covert operations. They suggest that if SOF do undertake covert operations training, that it could diminish their ability to perform their more traditional missions. The 9/11 Report notes the CIA's "reputation for agility in operations," as well as the military's reputation for being "methodical and cumbersome." Some experts question if DOD and SOF are capable of operating in a more agile and flexible manner. They contend that the CIA was able to beat SOF into Afghanistan because they had less bureaucracy to deal with than did SOF, which permitted them to "do things faster, cheaper, and with more flexibility than the military." Some are concerned that if SOF takes over responsibility for clandestine and covert operations that they will become less agile and perhaps more vulnerable to bureaucratic interference from defense officials. Section 1208 of P.L. 108-375 permits SOF to directly pay and equip foreign forces or groups supporting the U.S. in combating terrorism. Although not a recommendation in the 9/11 Commission's report, many feel that this authority will not only help SOF in the conduct of unconventional warfare, but could also be a crucial tool should they become involved in covert or clandestine operations. In Afghanistan, SOF did not have the authority to pay and equip local forces and instead relied on the CIA to "write checks" for needed arms, ammunition, and supplies. Congress may choose to review past or current paramilitary operations undertaken by the CIA and might also choose to assess the extent of coordination between the CIA and DOD. P.L. 108-458 required that a report be submitted to defense and intelligence committees by June 2005 describing procedures established in regard to coordination and deconfliction of CIA and DOD operations. That report provided an opportunity to indicate how initiatives by the executive branch have addressed relevant issues. CIA has not maintained a sizable paramilitary force "on the shelf." When directed, it has built paramilitary capabilities by using its individuals, either U.S. or foreign, with paramilitary experience under the management of its permanent operations personnel in an entity known as the Special Activities Division. The permanent staff would be responsible for planning and for maintaining ties to former CIA officials and military personnel and individuals (including those with special language qualifications) who could be employed should the need arise. Few observers doubt that there is a continuing need for coordination between the CIA and DOD regarding paramilitary capabilities and plans for future operations. Furthermore, many observers believe that the CIA should concentrate on "filling the gaps," focusing on those types of operations that DOD is likely to avoid. Nevertheless, they view this comparatively limited set of potential operations to be a vitally important one that should not be neglected or assigned to DOD. There may be occasions when having to acknowledge an official U.S. role would preclude operations that were otherwise considered vital to the national security; the CIA can provide the deniability that would be difficult, if not impossible, for military personnel. Some experts believe that there may be legal difficulties if SOF are required to conduct covert operations. One issue is the legality of ordering SOF personnel to conduct covert activities that would require them to forfeit their Geneva Convention status to retain deniability. To operate with deniability, SOF could be required to operate without the protection of a military uniform and identification card which affords them combatant status under the Geneva Convention if captured. Also, covert operations can often be contrary to international laws or the laws of war and U.S. military personnel are generally expected to follow these laws. Traditionally, the public text of intelligence legislation has included few provisions regarding paramilitary operations; levels of funding and other details are included in classified annexes which are understood to have the force of law. The House and Senate Intelligence Committees do have considerable influence in supporting or discouraging particular covert actions. In a few cases Congress has formally voted to deny funding to ongoing covert operations. Special Forces, however, fall under the House and Senate Armed Services Committees, and it is unclear how Congress would handle oversight if covert operations are shifted to SOF as well as how disputes between the intelligence and armed services committees would be dealt with. The 109 th Congress did not address this issue legislatively. On November 23, 2004, President Bush issued a letter requiring the Secretary of Defense and the Director of Central Intelligence to review matters relating to Recommendation 32 and submit their advice to him by February 23, 2005. In unclassified testimony to the Senate Select Committee on Intelligence in February 2005, the Director of the CIA testified that the CIA and DOD disagreed with the 9/11 Commission's recommendation. In June of 2005 it was reported that the Secretary of Defense and the Director of the Central Intelligence Agency responded to the President, stating that "neither the CIA nor DOD endorses the commission's recommendation on shifting the paramilitary mission or operations." The Administration reportedly rejected the 9-11 Commission's recommendation to shift the responsibility for paramilitary operations to DOD. The 110 th Congress saw the enactment of P.L. 110-53 , Implementing Recommendations of the 9/11 Commission Act of 2007 which did not address either paramilitary operations by CIA or special operations by DOD. Opposition by the Pentagon, the Intelligence Community, and the Bush Administration undoubtedly affected the congressional response to the 9/11 Commission's recommendation to vest responsibilities for paramilitary operations in DOD. CIA's reputation may have also been assisted by the generally favorable assessments given to the Agency's post-9/11 performance, especially in the initial phases of the Afghan campaign that led to the collapse of the Taliban regime in December 2001. Although most observers believe that there remains little inclination among Members to transfer responsibilities for all paramilitary operations out of CIA, some Members have expressed concerns about apparent blurring of lines between DOD clandestine operations and CIA intelligence-gathering operations.

The 9/11 Commission Report recommended that responsibility for directing and executing paramilitary operations should be shifted from the CIA to the U.S. Special Operations Command (USSOCOM). The President directed the Secretary of Defense and Director of Central Intelligence to review this recommendation and present their advice by mid-February 2005, but ultimately, they did not recommend a transfer of paramilitary responsibilities. This Report will briefly describe special operations conducted by DOD and paramilitary operations conducted by the CIA and discuss the background of the 9/11 Commission's recommendations. For additional information see CRS Report RS21048, U.S. Special Operations Forces (SOF): Background and Issues for Congress , by [author name scrubbed].

APEC's annual Leaders' Meeting is the association's paramount event, culminating a year of meetings designed to foster trade and investment liberalization among the 21 APEC members. Because APEC operates under a system of voluntary action and "open regionalism," in which changes in trade policy are extended not just to APEC members, but to all trading partners, these meetings rarely result in concrete, binding "deliverables." The Leaders' Meeting, in particular, usually results in a joint Leaders' Declaration that enumerates a series of commitments and pledges on steps to be taken to liberalize the trade and investment regimes of the APEC members. In addition, the United States usually has taken advantage of the gathering of the 21 APEC leaders to hold bilateral meetings with selected leaders. Although President Obama did not attend this year's meeting, Secretary of State Hillary Clinton did meet with the representatives from Japan, Malaysia, Russia, Singapore, South Korea, and Taiwan while in Vladivostok. Plans for a meeting with Hong Kong's new Chief Executive Leung Chun-ying were cancelled because he was unable to attend due to important domestic duties. Prior to her arrival at the APEC Leaders' Meeting, Secretary Clinton met with Indonesia's President Susilo Bambang Yudhoyono and China's President Hu Jintao. This year's Joint Leaders' Declaration focused on the four themes selected by host member Russia: (1) Advancing trade and investment liberalization and regional economic integration; (2) strengthening food security; (3) establishing reliable supply chains; and (4) promoting cooperation to foster innovative growth. On the issue of regional economic integration, the declaration reaffirmed APEC's commitment to the Bogor Goals, as well as "APEC's role as an incubator of a FTAAP [Free Trade Area of the Asia-Pacific]." The declaration also noted the completion of a model chapter on transparency, adding to the list of model chapters developed by APEC for use by its members when negotiating bilateral or multilateral trade agreements. On trade and investment liberalization, the document highlighted the agreement of tariff reduction for environmental goods (see " Agreement on Environmental Goods Tariff Reductions " below). Regarding food security, the Leaders' Declaration called for the implementation of the Niigata Declaration of 2010 and the Kazan Declaration on Food Security (see " Food Security and Sustainable Agriculture " below) and a commitment to strengthen efforts to combat illegal trade in wildlife. The leaders also agreed to promote more reliable supply chains by various means, including reducing the "time, cost, and uncertainty of moving goods and services through the Asia-Pacific region," in order to achieve the goal of a 10% improvement in supply-chain performance by 2015. In addition, the declaration committed the APEC members to develop non-discriminatory, market-driven innovation policies that promote greater involvement of small, medium, and micro-sized enterprises (SMMEs) and women in the field of technological innovation. Although as the host for this year's meetings, Russia set the overall agenda for the Leaders' Meeting and the resulting Leaders' Declaration, the United States delegation had its own priorities to pursue in Vladivostok. Below is a summary (in alphabetical order) of the five key issues addressed at the APEC meetings in Vladivostok, according to officials with the U.S. State Department and U.S. Trade Representative's (USTR's) office. The leading outcome for the United States, according to U.S. officials, was the agreement to lower tariffs on 54 categories of "environmental goods" to 5% or less by 2015. At the 19 th Leaders' Meeting held in Honolulu in November 2011, the APEC members agreed to lower tariffs to 5% by 2015 on a then-undesignated list of environmental goods. During the ensuing 10 months, representatives of each APEC member suggested goods to be included on the list. The U.S. representatives reportedly focused on goods that were clearly related to environmental issues and would be commercially credible. According to interviews with State Department and USTR officials, the United States is generally pleased with the final list of environmental goods. Noting the "negative influence on the world's economy from carbon emissions," the leaders pledged to "strengthen APEC energy security" by promoting greater energy efficiency and the development of cleaner sources of sustainable energy. The APEC leaders also reiterated the commitment made at the 19 th Leaders' Meeting to reduce aggregate energy intensity by 45% by 2035, based on 2005 data. In Annex B to the 2012 Leaders' Declaration, the APEC members agreed to increase the use of natural gas; promote investment in energy infrastructure (including natural gas liquefaction facilities); and strengthen cooperation in the peaceful use of nuclear energy. In their declaration, the leaders recognized the global and regional challenge of providing secure access to a safe and sufficient food supply to a growing population. To that end, they made a commitment to increasing sustainable agricultural production by investing in improved agricultural technology; developing a "more open, stable, predictable, rule-based, and transparent agricultural trading system"; and combatting illegal and/or excessive fishing and harvesting of flora and fauna. Secretary Clinton, partially as the result of her August trip to Africa, reportedly pressed for stronger measures by APEC members to combat the trade in illegal wildlife. The leaders' efforts on food security and sustainable agriculture built on two previous APEC declarations. In October 2012, APEC held its first ministerial meeting on food security in Niigata, Japan, resulting in the issuance of the Niigata Declaration. The Niigata Declaration established two shared goals for APEC members: (1) The sustainable development of the agricultural sector; and (2) The facilitation of investment, trade and markets. In May 2012, APEC released the Kazan Declaration following its third ministerial meeting on food security, held in Kazan, Russia. The Kazan Declaration confirmed APEC's commitment to increasing sustainable agricultural production by promoting foreign direct investment, sharing agricultural technology and research, harmonizing domestic regulations with international standards, and improving food access for "socially vulnerable groups." The ministers made particular note of the damage caused by overfishing in the region, and called for sustainable management of marine ecosystems. The 18 th Leaders' Meeting, held in Yokohama, Japan, called for APEC to create a path for a "robust community" based in part on innovative growth. The theme of innovative growth has been further explored in subsequent Leaders' Meetings, including this year's event in Vladivostok. The 2012 Leaders' Declaration highlighted the importance of including small, medium, and micro-sized enterprises (SMMEs) and women into the development of innovation in the Asia-Pacific region. Annex A of the declaration maps other aspects of promoting innovative growth that the APEC members agreed to pursue. APEC has sought ways of improving the reliability and efficiency of supply chains in the region for several years. The 2010 Leaders' Declaration set a goal of achieving a 10% improvement in supply-chain performance by 2015, by reducing the time, cost, and uncertainty of moving goods and services through the Asia-Pacific region. This year, one of the foci of discussion was on the identification of "chokepoints" in the supply chains, and improving infrastructure and policies to ameliorate the identified "chokepoints." In addition, the Leaders' Declaration called for APEC members to promote "greener, smarter, more efficient, and intelligent supply chains." Another issue identified as critical to improving supply chain efficiency was improving export consolidation. According to U.S. officials, the APEC leaders agreed that in preparation for next year's Leaders' Meetings, the members would conduct comprehensive supply chain performance assessments. In addition, APEC would examine ways of networking smaller ports in the region into existing supply chains. During this year's meeting, the APEC leaders also discussed efforts to reduce barriers to trade and to enhance trade facilitation. The Leaders' Declaration reaffirmed their commitment to "rollback protectionist measures," such as export and investment restrictions. To reduce technical barriers to trade, the APEC members agreed to increase the transparency of their trade regulations, and continue their efforts to advance regulatory convergence based on international standards. In addition, APEC will continue its capacity building initiatives, including the exchange of best practices related to key issues, such as secure trade. According to some observers, past APEC efforts designed to lower technical barriers to trade and facilitate trade have had a significant impact on intra-regional trade and investment. A study released by APEC's Economic Committee a month after the 2012 Leaders' Meeting appears to support this assertion. The study reports that the ease of doing business in APEC economies, as measured by several commercial factors, had improved by an average of 8.2% between 2009 and 2011. The results exceeded APEC's target of a 5% improvement during the same time period, and were nearly a third of APEC's goal of a 25% improvement by 2015. During President Obama's first term, there seemed to be a subtle shift in the role of APEC in U.S. trade policy and its interaction with the ongoing TPP negotiations. The TPP was initially presented by the United States as a model for establishing a Free Trade Area of the Asia-Pacific (FTAAP) as part of APEC's efforts to promote trade and investment liberalization in the region. Other APEC members have similarly portrayed alternative regional integration models, such as the ASEAN+3 and the ASEAN+6, as possible paths towards the creation of a FTAAP. More recently, senior U.S. trade officials describe APEC as an incubator of new ideas or concepts that can eventually be incorporated into a binding and more formal TPP. In addition, the annual APEC Leaders' Meeting is often portrayed by U.S. officials as a forum at which the current TPP negotiating nations can present to the other APEC members the status of the trade talks. The 2012 Leaders' Declaration does not mention the TPP, but does direct APEC ministers to take note of "various regional undertakings that could be developed and built upon as a way towards an eventual FTAAP," which presumably includes the TPP. By various accounts, the TPP negotiations have been a source of some tension among the 21 APEC members, with some viewing the negotiations as a divisive initiative introduced by the United States. Recent Leaders' Declarations provide different portrayals of the importance of the FTAAP, as well as the TPP. The 2009 Leaders' Declaration--the first following the U.S. announcement of its intention to negotiate the TPP--refers in general terms to APEC's exploration of "a range of possible pathways" to the creation of an FTAAP without explicitly mentioning the TPP. Following the 2010 Leaders' Meeting held in Yokohama, Japan, the Leaders' Declaration was more explicit about the role of the FTAAP and its relationship to APEC: We will take concrete steps toward realization of a Free Trade Area of the Asia-Pacific (FTAAP), which is a major instrument to further APEC's regional economic integration agenda. An FTAAP should be pursued as a comprehensive free trade agreement by developing and building on ongoing regional undertakings, such as ASEAN+3, ASEAN+6, and the Trans-Pacific Partnership, among others. To this end, APEC will make an important and meaningful contribution as an incubator of an FTAAP by providing leadership and intellectual input into the process of its development, and by playing a critical role in defining, shaping, and addressing the "next generation" trade and investment issues that FTAAP should contain. APEC should contribute to the pursuit of an FTAAP by continuing and further developing its work on sectoral initiatives in such areas as investment; services; e-commerce; rules of origin; standards and conformance; trade facilitation; and environmental goods and services. While APEC official statements focus on FTAAP--not TPP--and present FTAAP as an instrument to achieve APEC's agenda, U.S. officials appear to place a greater priority on the TPP. For example, Secretary Clinton highlighted the TPP in her comments to the press in Vladivostok, saying, "[A]s leaders meet here in Russia, our negotiating partners are engaged in intense diplomacy to advance the Trans-Pacific Partnership, known as the TPP. Th is free trade agreement is central to America's economic vision in Asia [emphasis added]." For several years, critics in the United States and in Asia have questioned the value of APEC and its annual Leaders' Meeting. Despite having helped organize the first APEC Leaders' Meeting in 1993, former Australia Prime Minister Paul Keating subsequently referred to APEC as a "talk shop of debatable output." Confidential sources have suggested to CRS that given the growth in high-level events in Asia at which the President of the United States is expected to attend, the United States could be represented at future APEC Leaders' Meetings by the Secretary of State or the Vice President. Although President Obama did not attend this year due to the conflict with the Democratic Party's National Convention, the Obama Administration is consulting with Indonesia, next year's APEC host, to set dates for the Leaders' Meeting so that the President can attend. To the extent that APEC remains one of the leading economic and trade fora in Asia for U.S. foreign policy, Congress will continue to have an active interest in APEC's major meetings and any resulting commitments. In addition, Congress must appropriate funds to pay the U.S. share to support APEC's secretariat and operations. Finally, Congress may be asked to approve funding for various APEC studies and initiatives agreed to at events such as the annual Leaders' Meeting. At this year's Leaders' Meeting, the 21 APEC members pledged to reduce the tariff rates on 54 categories of environmental goods to below 5% by 2015. Under current U.S. law, 4 of those 54 categories have peak rates above 5%. As a result, the 113 th Congress may consider legislation to bring U.S. tariff rates in compliance with the APEC commitment. As an APEC member, the United States contributes to the support of the APEC secretariat in Singapore, as well as various APEC programs. The 112 th Congress provided an estimated $1.023 million to APEC-related activities in FY2012 as part of the State Department's contributions to international organizations. President Obama has requested $1.028 million for FY2013. Of that amount, $144,000 is for the 18% share of the APEC member assessments provided by the United States. The rest of the funding is for APEC-related activities. According to the Department of State Operations Congressional Budget Justification for Fiscal Year 2013, APEC-related activities involve 17 different federal departments, agencies, and supported organizations in such areas as advancing regulatory reform, enhancing Customs procedures, promoting anti-corruption efforts, and improving transportation security. The 113 th Congress will also be asked to provide funding for APEC activities, including some related to the key issues discussed in Vladivostok. The following table lists the 54 categories of goods included in the APEC agreement to lower tariff rates to 5% or less by 2015 by harmonized system code. Categories with peak tariff rates above 5% according to U.S. law are highlighted in italics.

Russia hosted the Asia-Pacific Economic Cooperation's (APEC) week-long series of senior-level meetings in Vladivostok on September 2-9, 2012. The 20 th APEC Economic Leaders' Meeting, the main event for the week, was held September 8-9, 2012. It was the first time that Russia had hosted the APEC meetings, as well as the first APEC Economic Leaders' Meeting at which all the members were also members of the World Trade Organization (WTO). U.S. expectations for the 20 th APEC Economic Leaders' Meeting were relatively low for a number of reasons. First, several of the members' leaders either did not attend (e.g., President Obama), were effectively lame ducks (e.g., President Hu Jintao of China), or were facing political uncertainty at home (e.g., Prime Minister Yoshihiko Noda of Japan), making it difficult for the members to consider major commitments. Second, in the eyes of U.S. officials involved in the preparations for the meetings, Russia's lack of experience and past lack of commitment to APEC weakened the pre-meeting preparations for the Leaders' Meeting. Third, by holding the Leaders' Meeting in September (rather than in November, as in previous years), Russia foreshortened the time to work on various initiatives. Fourth, recent events and initiatives, including the ongoing Trans-Pacific Partnership trade agreement negotiations, have raised questions within the Obama Administration about APEC's role on the promotion of greater economic integration in the Asia-Pacific region. Despite the low U.S. expectations, U.S. officials indicate that they think the week-long event in Vladivostok was relatively productive. Below is a summary of the main results of these meetings, according to senior officials in the Obama Administration: The 21 APEC members agreed to lower their tariffs on 54 categories of environmental goods to no more than 5% by 2015. The APEC members endorsed a model chapter on transparency for reference when negotiating multilateral or bilateral trade agreements. The APEC members agreed to cooperate in developing policies and technology to promote sustainable agriculture, including encouraging the harmonizing of domestic regulations on food safety. An APEC report concluded that its members had improved the ease of doing business by an average of 8.2% between 2009 and 2011, fulfilling nearly a third of APEC's goal to obtain a 25% improvement by 2015. The APEC members agreed to continue to promote technological innovation by developing non-discriminatory, market-driven innovation policies and fostering greater communication between academia, businesses, and governments. U.S. officials are apprehensive, however, about APEC's prospects for the next two years when first Indonesia and then China will be the host members. This report also examines the role of Congress with respect to APEC, including appropriations necessary to finance APEC's secretariat and U.S. support of APEC activities.

On July 19, 2006, Illinois Special State's Attorney Edward J. Egan and Chief Deputy Special State's Attorney Robert Boyle, named to investigate long standing charges of police brutality by a segment of the Chicago Police Department, released their report, Report of the Special State ' s Attorney: Appointed and Ordered by the Presiding Judge of the Criminal Division of the Circuit Court of Cook County in No. 2001 Misc. 4 (Report) . The Report , the culmination of a 4-year investigation, concluded that criminal charges might have been brought in three cases of police misconduct, but in each instance were barred by the Illinois statute of limitations. Press accounts indicate, however, the Chief Deputy Special State's Attorney Boyle, the Report 's co-author, suggested that a prosecution under federal RICO and Hobbs Act statutes might encounter less severe statute of limitations obstacles. This is a brief examination of the federal criminal statutes implicated by the Report . The Report concluded: - In the case of Andrew Wilson, there exists proof beyond a reasonable doubt that the commanding officer of Area 2 and two other officers who interrogated Wilson committed aggravated battery, perjury and obstruction of justice in violation of Illinois law, but two of the officers are deceased and the Illinois 3 year statute of limitations bars prosecution the former commander of the Area 2 Violent Crime unit, Report at 63, 16. - In the case of Phillip Adkins, there exists proof beyond a reasonable doubt that two other officers who interrogated Adkins committed aggravated battery in violation of Illinois law, but the Illinois statute of limitations bars prosecution, Report at 274, 16. - In the case of Alfonzo Pinex, there exists proof beyond a reasonable doubt that a second pair of officers who interrogated Pinex, committed aggravated battery, perjury and obstruction of justice in violation of Illinois law, but the Illinois statute of limitations bar prosecution, Report at 290, 16. Wilson was arrested at 5:15 on the morning of February 14, 1982, in connection with the investigation of the murder of two police officers, Report at 45. The arresting officers allegedly brutalized Wilson, beating him, burning him, subjecting him to electric shocks, and threatening him with a gun until he confessed, Report at 46-7. The commanding officer of the Area 2 Violent Crime Unit was purportedly present during much of the time and was said to have administered some of the mistreatment, id. At 10:00 in the evening, Wilson was taken to hospital after officers at the lock-up refused to take custody of him because of his condition. After the escorting officers remarked that he would refuse treatment if he knew what was good for him, he "was examined at about 11:15 p.m. by Dr. Geoffrey Korn. Dr. Korn [later] testified that he made note of some 15 separate injuries that were apparent on the defendant's head, chest, and right leg. Two cuts on the defendant's forehead and one on the back of his head required stitches; the defendant's right eye had been blackened, and there was bleeding on the surface of that eye. Dr. Korn also observed bruises on the defendant's chest and several linear abrasions or burns on the defendant's chest, shoulder, and chin area. Finally, Dr. Korn saw on the defendant's right thigh an abrasion from a second-degree burn; it was six inches long and 1 1/2 to 2 inches wide." Wilson was subsequently convicted for the murder of the two officers and sentenced to death, but the Illinois Supreme Court overturned the conviction on appeal because the state had failed to demonstrate that Wilson's confession was not coerced. He was retried, convicted a second time and sentenced to life imprisonment; his conviction and sentence were affirmed and his federal habeas corpus petition denied. Wilson sued the three officers, the Superintendent of Police and the City under 42 U.S.C. 1983, based on allegations of his mistreatment, and ultimately settled with the City after being awarded damages and attorney's fees at trial against the commanding officer. The Office of Professional Standards investigation of the allegations of brutality led to the commanding officer's suspension in November 1991 and, following a Police Board hearing, his dismissal in 1992, Report at 153. The commanding officer denied mistreating Wilson at the suppression hearing (November 9, 1982), in depositions relating to the civil litigation (1988, 1989), and at the hearing before the Police Board (which nevertheless found the three had tortured Wilson, fired the commander, and suspended the other two officers in 1992), Report at 28-29, 44, 49. He seems likely to have denied them to investigators during various Office of Professional Standards investigations, the last of which apparently occurred in November 1991, Report at 153, and during interviews with the Special State's Attorney's office sometime between 2001 and 2006, Report at 15. Adkins was arrested on June 7, 1984, in connection with an armed robbery during which a police officer was assaulted, Report at 266. Adkins asserts that on the way to the station police officers from Area 2 beat him to unconsciousness, Report at 267-69. He was hospitalized in the Intensive Care/Trauma Ward on June 8 and June 9 and discharged on June 10, Report at 271. Adkins successfully sued the officers and the City in federal court and the City settled for $25,000, Report at 267. Thereafter, the Chicago Office of Professional Standards conducted an investigation (May 4, 1993 to December 16, 1993) that concluded that officers had in fact beaten Adkins, Report at 266. Pinex was arrested on June 28, 1985, in connection with a murder charge, Report at 276. His statement while in custody was suppressed for failure to honor his Miranda rule rights, Report at 276-77. The court declined to address the question of whether the statement was the product of a beating, Report at 277. Charges against Pinex were dismissed and he sued alleging that two officers in Detective Area 2 had beaten him to secure his confession while he was in custody, id . The City settled for $5,000 on November 1, 1991, id . The Report addresses several other instances where detainees complained that they were beaten by officers of Detective Area 2. In each instance, the Report concludes that there is a lack of creditable evidence sufficient to convict the officers in question, Report at 178, 182, 202, 240-41, 264. The Report also considers the possibility of charges against those purported to have "covered up" the misconduct of others at Detective Area 2. It observes that, "We have found no evidence that would support a charge beyond a reasonable doubt of obstruction of justice (or 'cover-up') by any police personnel. There is insufficient evidence of wrongdoing by any member of the State's Attorneys Office, except for one person," Report at 17; see also, Report at 32-6; 112-29. The exception is apparently reserved for the prosecutor who ultimately took Wilson's recorded confession: If he was telling the truth when he testified about the sequence of events leading up to the court-reported confession of Andrew Wilson, . . . then the claim of Andrew Wilson that he had been abused before he gave that confession would be seriously undercut. If, on the other hand, [he] was not telling the truth, his false testimony would stand as strong corroboration of Andrew Wilson . . . He has testified on the motion to suppress and before the jury that convicted Wilson and sentenced him to death. He was named in the Federal civil rights action brought by Andrew Wilson. . . His deposition was taken, and he testified in both civil trials. He also testified as a witness on behalf of [the police commander] in the Police Board hearing in 1992. . . . In our judgment [he] did not tell the truth when he denied that he had been told by Andrew Wilson that he had been tortured by detectives, Report at 53-4. The Report does not indicate that its authors would seek to indict and convict the prosecutor but for impediment of the statute of limitations, nor does it speak to the weight of any evidence that might support charges of perjury or obstruction of justice against the prosecutor. Finally, the Report comments that, "the evidence supports the conclusion that [the] Superintendent [of Police] was guilty of a dereliction of duty and did not act in good faith in the investigation of the claim of Andrew Wilson," Report at 17. It makes no comment on the existence or weight of any evidence to support criminal charges. Although the purpose of the Special State's Attorney's inquiry was to determine whether prosecution under Illinois law might be had, statements contained in the Report suggest the possibility that several federal criminal laws may have been violated. The Fourth Amendment prohibits unreasonable searches and seizures; the Fifth Amendment prohibits compelling an individual to incriminate himself; the Eighth Amendment prohibits cruel and unusual punishment; each is binding upon the state and local officials by virtue of the due process clause Fourteenth Amendment. In combination, they prohibit police from torturing and otherwise brutalizing those in custody either to elicit confessions or otherwise; to do so under color of law constitutes a federal crime, 18 U.S.C. 242. It is likewise a federal crime to use force, corruption, or deceit to prevent another from providing authorities with information concerning other federal offenses, 18 U.S.C. 1512; or to directly provide a material false statement in a matter within the jurisdiction of a federal agency or department, 18 U.S.C. 1001; or to lie under oath in federal proceedings, 18 U.S.C. 1621. A fifth federal crime, the Hobbs Act, outlaws extortion under color of official right to the extent that the misconduct obstructs, delays or affects commerce, 18 U.S.C. 1951. Federal racketeering laws (RICO) proscribe operating a formal or informal enterprise, whose activities affect interstate commerce, through the patterned commission of other state or federal crimes (referred to interchangeably as racketeering activities or predicate offenses), 18 U.S.C. 1961-1963. Anyone who aids or abets the commission of a federal offense by another is liable himself for its commission and is equally punishable, 18 U.S.C. 2. The same can be said of anyone who conspires with another to commit a federal offense or to obstruct federal governmental activities--conspirators are liable and punishable for any underlying offenses committed in furtherance of the conspiracy. Conspiracy is a little different, however, in that it is also a separate crime, complete upon the criminal agreement and under the general conspiracy statute upon the commission of some overt act in furtherance of the scheme, 18 U.S.C. 371; liability attaches regardless of whether the crime which is the object of scheme is ever committed, 18 U.S.C. 371. Absent some specific exception, federal crimes are subject to a general 5-year statute of limitations; an indictment or information initiating prosecution must be filed within 5 years of the commission of the offense, 18 U.S.C. 3282. In the case of crimes like conspiracy or RICO offenses that can extend over long periods of time, the statute of limitations begins to run with the last act committed in the name of the criminal enterprise and may be considered to continue to exist until abandoned or the object of the conspiracy has been achieved. Evidence that establishes that police officers committed aggravated battery upon Wilson, Adkins, and Pinex in violation of Illinois law would presumably be sufficient to support a civil rights conviction for violation of 18 U.S.C. 242. Federal perjury charges cannot be predicated upon false statements made during Illinois judicial and administrative proceedings, but the same false statements may have been made under oath in connection with the federal civil rights suits brought by Wilson and Adkins. Statements that denied Wilson and Adkins were beaten while in police custody, if perjurious in Illinois proceedings, were likely perjurious in federal proceedings. Moreover, evidence of such false statements made to internal police and other state investigators concerning conduct that might constitute a federal civil rights violation could form the basis for a federal prosecution under either 18 U.S.C. 1001 (false statements on a matter within the jurisdiction of a federal department or agency) or 18 U.S.C. 1512 (obstructing disclosure of a federal crime to federal authorities by deception of a potential witness). Until recently, it might have been possible to argue that the use of violence or the threat of violence by law enforcement authorities to coerce prisoners to relinquish their constitutional rights constituted prohibited extortion under the Hobbs Act and as a RICO predicate. The Supreme Court's decision in Scheidler v. NOW , seems to preclude such a construction. Scheidler held that Hobbs Act extortion does not include the use of violence or the threat of violence to "restrict another's freedom of action." Moreover, Scheidler holds that the same definition of extortion applies the generic reference to state extortion laws in the RICO predicate list. The Ninth Circuit appears to have recognized the general possibility of a RICO prosecution in cases involving charges of police misconduct. The cases there, however, involved allegations of a wider range of predicate offenses, principally involved an issue critical in civil RICO cases but not relevant for purposes of a criminal RICO prosecution, and have yet to resolve the question of whether the requisite elements of a RICO have been satisfied. The cases, which grew out of the so-called "Ramparts Scandal," alleged that various officers had committed kidnaping, extortion, witness tampering, drug dealing, and attempted murder. They focused primarily on the type of injuries for which a civil RICO plaintiff has standing to recover damages. As for the possibility of a RICO prosecution based on crimes implicated here, civil rights violations of 18 U.S.C. 242 are not RICO predicate offenses, 18 U.S.C. 1961(1); neither are violations of 18 U.S.C. 1001 (false statements), of 18 U.S.C. 1621 (perjury), nor of 18 U.S.C. 371 (conspiracy), 18 U.S.C. 1961(1). Violations of 18 U.S.C. 1512, however, are RICO predicate offenses, 18 U.S.C. 1961(1)(B). In order to establish a RICO violation in this context, the government would have to prove that the commander and/or various officers of Area 2 conducted the activities of an enterprising affecting interstate commerce (either the Area 2 violent crime section or the informal association of the officers dedicated to the use of brutality to punish and obtain coerced confessions from some of those in their custody) through the patterned commission of violations of 18 U.S.C. 1512(b)(3) (i.e., denials and fabrication to investigators pursuing allegations of such brutality). But at least in part, the problem may be one of time. The Constitution's ex post facto clauses, U.S.Const. Art.I, SS9, cl.3 and Art.I, SS10, cl.1, prohibit the retroactive application of either federal or state criminal laws. Section 1512 was enacted and became effective on October 12, 1982; it cannot be applied to misconduct occurring prior to that date. Section 1512 became a RICO predicate offense on November 10, 1986; a RICO prosecution cannot be grounded on section 1512 predicate offenses occurring prior to that date. The three cases the Report found prosecutable (but for the statute of limitations) at best involve conduct straddling November 10, 1986. The denials of mistreatment to state investigators, at state proceedings, or during depositions, which provide the gravamen under section 1512 (preventing disclosure to federal authorities by deceiving those who would otherwise report the commission of a federal offense), begin with Wilson's suppression hearing on November 9, 1982, and end possibly with denials at interviews conducted by the Report 's authors, Report at 26, 7, 14. The date section 1512 was added as a RICO predicate, November 10, 1986, provides a beginning line; no prior violation of section 1512 may be used as a RICO predicate offense. There may also be a question as to the end line. It is not at all clear that section 1512(b)(3) covers situations where deceit is used to prevent disclosure of information to federal authorities concerning federal crimes for which the statute of limitations has expired. Thus, it may be that no violations of section 1512(b)(3) occurred with respect to denials made more than five years after the alleged civil rights violations on February 14, 1982 (Wilson), June 7, 1984 (Adkins), or June 28, 1985 (Pinex). On the other hand, here we have alleged civil rights violations followed by a series of denials themselves purportedly constituting violations of federal perjury and false statement statutes. A court might conclude that the end line should be marked at five years after the penultimate instance of perjury or a false statement, concealed within a more recent denial upon which a section 1512 charge may be based. In the context of the Wilson case, for example, section 1512 may permit the prosecution of any denial occurring within five years of false statements made concerning the 1982 civil rights violation during testimony at the 1992 Police Board hearing. Then there is the question of pattern. A RICO prosecution requires the government to establish not only qualified predicate offenses but to prove that they were committed as part of a pattern. The Supreme Court has explained that a "person cannot be subjected to [RICO] sanctions simply for committing two widely separate and isolated criminal offenses. Instead, the term 'pattern' itself requires the showing of a relationship between the predicates and of the threat of continuing activity. It is this factor of continuity plus relationship which combines to produce a pattern." "[P]redicate acts are related if they have 'the same or similar purposes, results, participants, victims, or methods of commission, or otherwise are interrelated by distinguishing characteristics and are not isolated events.'" RICO continuity comes in two forms, a series of predicate offenses that has ended (closed ended) and a series of predicate offenses that is continuing or bears the threat of continuation (open ended). The government "can satisfy the continuity prong either by (1) demonstrating a close-ended series of conduct that existed for such an extended period time that a threat of future harm is implicit, or (2) an open-ended series of conduct that, while short-lived, shows clear signs of threatening to continue into the future." The Report highlights three cases, each arising at least a year apart from the others, and involving three different sets of officers. Nevertheless, each is an instance where officers of Area 2 under the same commanding officer are alleged to have brutalized detainees in police custody, regularly denied wrongdoing, and offered explanations that the Report does not find creditable. Of course, the civil rights violations are not the alleged RICO predicates. The RICO predicates are instead the alleged violations of section 1512 in the form of denials and fabrications to investigators, and in state proceedings and federal depositions. More numerous than the underlying civil rights violations, they benefit and suffer from the same relationship analysis. They are relatively isolated instances involving different officers, but arising out of the same environment, reflecting common means and purpose. Even if a court should find the cases sufficiently related for RICO purposes, the question of continuity may still prove troubling. The actionable obstructions appear to run from the depositions taken in Adkins' civil case in 1987 to the depositions in Wilson's civil litigation in 1988 and 1989, and include statements in Pinex's civil litigation in 1991, testimony in the Wilson Police Board hearing in 1992, and possibly statements to investigators in the Office of Professional Standards' Adkins investigation that ended in December 16, 1993. The duration of the activity would seem sufficient, but the comparatively few instances, relatively isolated in time and circumstance, may bring into question whether the events can accurate be seen as the evidence of the continuous existence of a single enterprise. As noted earlier, federal crimes are generally subject to a 5-year statute of limitations, 18 U.S.C. 3282. The civil rights violations of which the Report speaks occurred in 1982, 1984 and 1985. The Report indicates that with the exception of its own interviews (for which it provides no dates) the denials and alleged fabrications upon which any other criminal charges would have been grounded occurred not later December 16, 1993, the date upon which the last mentioned Office of Professional Standards investigation ended, Report at 266. The Report argues that the Illinois statute of limitations precludes state prosecution, Report at 16. While citing the earlier conclusions of federal authorities, media accounts at the time the Report was released quoted one of its authors as suggesting that RICO and the longer federal statute of limitation might hold the prospect of future federal prosecution. This would seem to build upon a theory that the officers alleged to have committed the three civil rights violations in the 1980s were part of a conspiracy or RICO enterprise that encompassed not only the beating of detainees but an agreement to perpetually conceal the activity. As a general rule, the statute of limitations begins to run with the commission of the most recent overt act for conspiracies in violation of a statute which requires the government to prove both criminal agreement and some overt act in furtherance of scheme. In the case of statutes like RICO whose conspiracy proscription carries no overt act requirement, the scheme is said to continue until all its objectives have been realized or it is abandoned. In Grunewald v. United States , 353 U.S. 391 (1957), the question arose in whether in the case of an overt act conspiracy, the statute of limitations may be extended when the conspirators or one of their number acts to conceal the past workings of the scheme. The defendants in Grunewald had conspired to fix tax prosecutions and had doctored government records to conceal their misconduct, 353 U.S. at 395. When a grand jury was convened after the statute of limitations on the "tax fix" had run, the conspirators denied wrongdoing and urged other witnesses not to cooperate, 353 U.S. at 396. The prosecution argued that the conspiracy included a concealment component that meant the plot continued in place even after its principal objective, the tax fix, had been accomplished. The Court was unpersuaded, "[w]e find in all this noting more than what was involved [in our earlier cases], that is: (1) a criminal conspiracy which is carried out in secrecy; (2) a continuation of the secrecy after the accomplishment of the crime; and (3) desperate attempts to cover up after the crime begins to come to light; and so we cannot agree that this case does not fall within the ban of those prior opinions," 353 U.S. at 403. But then the Court went on the explain that "[b]y no means does this mean that acts of concealment can never have significance in furthering a criminal conspiracy. But a vital distinction must be made between acts of concealment done in furtherance of the main criminal objectives of the conspiracy, and acts of concealment done after these central objectives have been attained, for the purpose only of covering up after the crime." 353 U.S. at 405 (emphasis in the original). Subsequent lower court decisions reflect the view that an overt act of concealment will toll the statute of limitations or evidence its continued existence if the indictment charges that concealment was of the main object of the conspiracy. The Report cites two reported federal appellate court cases as examples, United States v. Masters , 924 F.2d 1362 (7 th Cir. 1991), and United States v. Maloney , 71 F.3d 645 (7 th Cir. 1995). Masters involved an attorney, a chief of police who until he lost his job took kickbacks for referring clients to the attorney, and a sheriff's department lieutenant who accepted bribes from the attorney to protect bookies from police interference, 924 F.2d at 1365. The three also participated in a plot to murder the attorney's wayward wife, 924 F.2d at 1365-366. The three were convicted under federal RICO charges predicated on the corruption offenses, 924 F.2d at 1365. The chief of police was charged and convicted only with conspiracy because the statute of limitations on the substantive corruption charges had run between the time he lost his job and the time the indictment was returned, id . The appellate court rejected the chief's statute of limitations challenge with the observation that "[t]he conspirators in this case, signally including [the chief], intended from the first to exert strenuous efforts to prevent discovery of the crime and of their involvement in it; the fact that two of the three conspirators were policemen supports the inference that concealment was part of the original conspiracy and not a spontaneous reaction to fear of arrest and prosecution. It was also a fair inference that the defendants agreed to keep trying to conceal the conspiracy for as long as they could, using their official positions where possible," 924 F.2d at 1368. Maloney involved a judge who accepted bribes to "fix" four criminal cases and then sought to make sure that the middle man through whom the bribes were funneled continued to "stand tall" in the face of criminal investigations into allegations of corruption, United States v. Maloney , 71 F.3d 645, 650-52 (7 th Cir. 1995). The statute of limitations had run on each of the bribery cases by the time indictments were returned, but the judge was charged with and convicted of a RICO conspiracy based upon the obstruction of justice predicates, 71 F.3d at 649. The judge objected that the statute of limitations barred prosecution for a conspiracy to conceal the commission of time-barred offenses, but the appellate court responded that, "[u]nlike Grunewald , however, the conspiracy's main criminal objective was never 'finally attained' in this case. . . . In the instance case, the main criminal objective, to fix cases whenever feasible, was neither accomplished nor abandoned as long as Judge Maloney remained on the bench . . . Concealment, therefore, was an overt act in furtherance of the conspiracy's main objectives. . . Maloney's statements . . . helped to preserve his position on the bench--the essential ingredient in the conspiracy's ability to fix cases. . . Thus, Grunewald does not exclude the obstruction of justice acts from the RICO conspiracy for statute of limitations purposes" 71 F.3d at 659-60. Cases from other circuits reflect the same view: Grunewald does not bar extension of the statute of limitations to include acts of concealment where concealment falls within the scope of the conspiracy; Grunewald only applies where the conspiracy's objectives have been attained and concealment follows. If federal prosecutors could establish either a conspiracy in which concealment was an initial object of the plot or a RICO violation or conspiracy, the specter of a statute of limitations bar would disappear. Otherwise the statute of limitations would appear to preclude federal prosecution on the basis of any misconduct identified in the Report . Other than its own interviews, the last of the events in question took place no later than December 16, 1993, Report at 266. The Special State's Attorney's investigation described in the Report began in 2001 and ended July 19, 2006. The commanding officers and each of the individual officers whom the Report describes as indictable were interviewed, Report at 16, 274, 290, 15. The interview statements were apparently consistent with the officers' earlier statements, for the Report would certainly have noted any incriminating statements. If the interview statements were false and material, they would constitute violations of 18 U.S.C. 1001 and 1512(b) (3); but if the statute of limitations bars the prosecution of the offenses to which the statements relate, they are not material consequently no violation. The Report suggests that dispelling statute of limitation difficulties, however, may be challenging, for on several occasions federal authorities have concluded that the passage of time bars federal prosecution: On October 3, 1990 . . . the Task Force to Confront Police Violence wrote to . . . the United States Attorney, pointing out that [it] had previously submitted information regarding incidents of torture committed by the detectives at Detective Area 2 . . . the response form the United States Attorney's Office was that the incidents had occurred more than five years before. . . On March 15, 1991, Assistant Public Defender Joseph M. Grump wrote to [the Attorney General], also referring to . . . the case of Andrew Wilson. Mr. Gump identified over 25 cases involving persons who claimed to have been abused. . . it was determined that prosecution would be declined because of the statute of limitations. The matter was reopened by the Department of Justice, and on May 18, 1993, prosecution was again declined because of the statute of limitations. Shortly after we were appointed, we were informed that persons . . . seeking prosecution of police officers met with [the] Attorney General. . . .We have received a report that the investigation . . . by the Civil Rights Section of the Justice Department was closed as of December 2001 because of the statute of limitations. Report at 30-1, 30.

The report of an Illinois Special State's Attorney, appointed to investigate allegations of police brutality committed against certain detainees during the early 1980s, concluded that in three instances indictable aggravated battery, perjury, and obstruction of justice had occurred, but that the 3-year Illinois statute of limitations barred prosecution. Media accounts, however, have suggested the possibility of federal prosecution. Statements found in the report implicate, at a minimum, federal statutes outlawing civil rights violations, perjury, false statements, obstructions of justice, conspiracy, and racketeering. In most instances, the 5-year federal statute of limitations is not likely to prove any more forgiving that the Illinois law. Federal law, however, does recognize a longer period of limitation for certain conspiracies and racketeering offenses. Yet it is unclear whether either of the exceptions is available. Federal authorities have apparently examined the question on several occasions in the past and declined to proceed at least in part on the basis of the statute of limitations. At this time, we anticipate no subsequent revisions of this report.

Congress and state legislatures have authorized the use of forfeiture for over two hundred years. Forfeiture law has always been somewhat unique. Its increased use has highlighted its eccentricities and attendant policy concerns. Present forfeiture law has its roots in early English law. It is reminiscent of three early English procedures: deodands, forfeiture of estate or common law forfeiture, and statutory or commercial forfeiture. At early common law, the object that caused the death of a human being--the ox that gored, the knife that stabbed, or the cart that crushed--was confiscated as a deodand. Coroners' inquests and grand juries, bound with the duty to determine the cause of death, were obligated to identify the offending object and determine its value. The Crown distributed the proceeds realized from the confiscation of the animal or deadly object for religious and charitable purposes in the name of the deceased. Although deodands were not unknown in the American colonies, they appear to have fallen into disuse or been abolished by the time of the American Revolution or shortly thereafter. In spite of their limited use in this country, deodands and the practice of treating the offending animal or object as the defendant have frequently been cited to illustrate the characteristics of modern civil forfeiture. Forfeiture of estate or common law forfeiture, unlike deodands, focused solely on a human offender. At common law, anyone, convicted and attained for treason or a felony, forfeited all his lands and personal property. Attainder, the judicial declaration of civil death, occurred as a consequence of the pronouncement of final sentence for treason or felony. In colonial America, common law forfeitures were rare. After the Revolution, the Constitution restricted the use of common law forfeiture in cases of treason, and Congress restricted its use, by statute, in the case of other crimes. The third antecedent of modern forfeiture, statutory or commercial forfeiture, figured prominently in cases in admiralty and on the revenue side of the Exchequer in precolonial England. It was used fairly extensively against smuggling and other revenue evasion schemes in the American colonies and has been used ever since. In most instances, the statutes called for in rem confiscation proceedings in which, as with deodands, the offending object was the defendant; occasionally, they established in personam procedures where confiscation occurred as the result of the conviction of the owner of the property. Although contemporary American forfeiture law owes much to the law of deodands and the law of forfeiture of estate, it is clearly a descendant of English statutory or commercial forfeiture. Modern forfeiture is a creature of statute. While there are some common themes and general patterns concerning the crimes that trigger forfeiture, the property subject to confiscation, and the procedures associated with forfeiture, federal forfeiture statutes are matters of legislative choice and can vary greatly. Virtually every kind of property, real or personal, tangible or intangible, may be subject to confiscation under the appropriate circumstances. The laws that call for the confiscation of contraband per se, property whose very possession has been outlawed, were at one time the most prevalent, and can still be found. Property--particularly vehicles--used to facilitate the commission of a crime and without which violation would be less likely, has long been the target of confiscatory statutes as well. In some instances, Congress has focused upon the profits of crime and authorized the confiscation of the direct and indirect proceeds of illegal activities. And under some circumstances, it has authorized the forfeiture of substitute assets, when the tainted property subject to confiscation under a particular statute has become unavailable. Traditionally, the crimes which triggered forfeiture were (1) those that threatened the government's revenue interest, for example, smuggling, tax evasion, hunting or fishing without a license, or (2) those crimes that because of their perceived threat to public health or morals might have been considered public nuisances subject to abatement, for example, gambling, or dealing in obscene material, or illicit drug use. Beginning with the racketeering statutes, a number of jurisdictions have created another category of forfeiture warranting offenses--crimes that involve substantial economic gain for the defendant even if not at the expense of government revenues, but which may greatly enhance government revenues, for example, racketeering and money laundering. A prime example of this approach is the Civil Asset Forfeiture Reform Act (CAFRA), which makes forfeitable, among other things, the proceeds from any of the crimes upon which a money laundering or RICO prosecution might be based. Following the terrorist attacks on September 11, 2001, Congress authorized the confiscation of another type of crime-related property--property owned by certain terrorists regardless of whether the property is traceable, used to facilitate, or connected in any other way to any practical crime. Forfeiture follows one of two procedural routes: criminal or civil. Although crime triggers all forfeitures, they are classified as civil forfeitures or criminal forfeitures according to the nature of the judicial procedure which ends in confiscation. Criminal forfeitures are part of the criminal proceedings against the property owner, and confiscation is only possible upon the conviction of the owner of the property and only to the extent of defendant's interest in the property. Civil forfeitures are accomplished using civil procedure. Civil forfeiture is ordinarily the product of a civil, in rem proceeding in which the property is treated as the offender. Within the confines of due process and the language of the applicable statutes, the guilt or innocence of the property owner is irrelevant; it is enough that the property was involved in a crime to which forfeiture attaches in the manner in which statute demands. Some civil forfeitures are accomplished administratively; some are not. Administrative forfeitures are, in oversimplified terms, uncontested civil forfeitures. As a general rule, since the proceedings are in rem, actual or constructive possession of the property by the court is a necessary first step in any confiscation proceeding. The arrest of the property may be accomplished either by warrant under the Federal Rules of Criminal Procedure; or, if judicial proceedings have been filed, by a warrant under the Supplemental Rules of Certain Admiralty and Maritime Claims; or without warrant, if there is probable cause and other grounds under which the Fourth Amendment permits a warrantless arrest; or pursuant to equivalent authority under state law. Because realty cannot ordinarily be seized until after the property owner has been given an opportunity for a hearing, the procedure differs slightly in the case of real property. In the interests of expediency and judicial economy, Congress has sometimes authorized the use of administrative forfeiture as the first step after seizure in "uncontested" cases. It may be somewhat misleading to characterize administrative forfeitures as uncontested forfeitures, given the procedural obstacles that the government and claimants must overcome before the government is put to its burden in a judicial proceeding. For the government the procedure begins with seizure of the property. It must notify anyone with an interest in the property and provide an opportunity to request judicial forfeiture proceedings. Anyone with an interest in the property may contest confiscation with a verified claim under the Supplemental Rules. The period within which a claimant must register his or her intent to contest can be a fairly narrow window. Moreover, the government may petition the court to dismiss a claim for want of statutory standing, which in turn may require the claimant to establish that he lawfully obtained the targeted property. If there are no viable claims, the property is summarily declared forfeited. When administrative forfeiture is unavailable, when a claimant has successfully sought judicial proceedings, or when the government has elected not to proceed administratively, the government may begin civil judicial proceedings by filing either a complaint or a libel against the property. In money laundering and other civil forfeitures governed by CAFRA, the government must establish that the property is subject to confiscation by a preponderance of the evidence. In cases such as those arising under the customs laws and cases filed before the effective date of CAFRA amendments, the government must establish probable cause to believe that the property is subject to forfeiture. If the government overcomes the initial obstacle, a claimant may successfully challenge confiscation on several grounds. He or she may be able to show that the predicate criminal offense did not occur or that his or her property lacks the statutorily required nexus to the crime. For example, when the government claims that property is forfeitable because it was used to commit or to facilitate the commission of a crime, it must "establish that there was a substantial connection between the property and the offense." A claimant's innocence or even acquittal only bars civil forfeiture to the extent that a statute permits or due process requires. For most civil forfeitures, other than those arising under the tax or customs laws, CAFRA establishes two "innocent owner" defenses. The first is available to claimants either who were unaware that their property was being criminally used or who did all that could be reasonably expected of them to prevent criminal use of their property. The second is for good-faith purchasers who did not know of the taint on the property at the time they acquired their interest. Even when the government establishes that property is subject to civil forfeiture, CAFRA affords a claimant the right to a judicial reduction of the amount of the confiscation, if the court determines the extent of the forfeiture is excessive in view of the gravity of the offense and claimant's culpability. Once less frequently invoked than civil forfeiture, criminal forfeiture appears to have become the procedure of choice when judicial proceedings are required. CAFRA added to the federal crimes punishable by criminal forfeiture various offenses involving unlawful money transmission, counterfeiting, identify fraud, credit card fraud, computer fraud, theft related to motor vehicles, health care fraud, telemarketing fraud, bank fraud, and immigration-related offenses. Like civil forfeiture, criminal forfeiture is a creature of statute. Unlike civil forfeiture, criminal forfeiture follows as a consequence of conviction. It is punishment, even though it may also serve remedial purposes very effectively. While civil forfeiture treats the property as the defendant, confiscating the interests of the innocent and guilty alike, criminal forfeiture traditionally consumes only the property interests of the convicted defendant, and only with respect to the crime for which he is convicted. When the property subject to confiscation is unavailable following the defendant's conviction, however, the court may order the confiscation of other property belonging to the defendant in its stead (substitute assets). The indictment or information upon which the conviction is based must list the property that the government asserts is subject to confiscation. When the trial is conducted before a jury, either party may insist upon a jury determination of the forfeiture issue. Since the court's jurisdiction does not depend upon initial control of the res, it need not be seized before forfeiture is declared. Although the courts are authorized to issue pretrial restraining orders to prevent depletion or transfer of property that the government contends is subject to confiscation, many are hesitant to issue pretrial restraining orders covering substitute property. In any event, the defense to criminal forfeiture differs somewhat from the defense to civil forfeiture. For example, since conviction is a prerequisite to confiscation, an overturned conviction or an acquittal will ordinarily preclude criminal forfeiture. Third-party interests are less likely to be cut off by virtue of the property's proximity to criminal conduct simply because only the defendant's interest in the property is subject to confiscation and because bona fide purchaser exceptions are more common. After conviction of the defendant and after it has met its burden of establishing forfeitability by a preponderance of the evidence, the government may elect to seek either confiscation of forfeitable property or a money judgment in the amount of its value. If the government seeks confiscation, the court must determine whether the statutory nexus between the property and the crime of conviction exists. If the government instead seeks a money judgment, the court must determine the amount the defendant must pay. At that point, the court issues a preliminary forfeiture order or order for a money judgment against the defendant in favor of the government. Upon the issuance of a preliminary forfeiture order, the government must proclaim its intent to dispose of the property and notify any third parties known to have an interest in the property. Third parties with a legal interest in the forfeited property, other than the defendant, are then entitled to a judicial hearing, provided they file a timely petition asserting their claims. Third-party claims may be grounded either in an assertion that they possessed a superior interest in the property at the time confiscation-trigger misconduct occurred, or that they are good-faith purchasers. When the government is awarded a money judgment, it is not limited to the forfeitable assets the defendant has on hand at the time, but may enforce the judgment against future assets as well. Disposal of forfeited property is ordinarily a matter of statute. The pertinent statute may require that the proceeds of a confiscation be devoted to a single purpose such as the support of education or deposit in the general fund. The statute may call for the destruction of property that cannot be lawfully possessed; or authorize rewards, the settlement of claims against the property; or remission or mitigation. It may permit distribution of the proceeds or a portion thereof as victim restitution. Intergovernmental transfers and the use of special funds, however, are the hallmarks of the more prominent federal forfeiture statutes. The Attorney General and the Secretary of the Treasury enjoy wide latitude to equitably share, that is, to transfer confiscated property to federal, state, local, and foreign law enforcement agencies to the extent of their participation in the case. Nevertheless, both must be assured that the transfers will encourage law enforcement cooperation. This "equitable sharing" transfer authority includes adoptive forfeitures. Adoptive forfeiture occurs when property is forfeitable under federal law because of its relation to conduct, such as drug trafficking, which violates both federal and state law. The Department of Justice "adopts," for processing under federal law, a forfeiture case brought to it by state or local law enforcement officials and in which the United States is not otherwise involved. Federal adoption is sometimes attractive because of the speed afforded by federal administrative forfeiture. It may also be attractive because forfeiture would be impossible or more difficult under state law or because law enforcement agencies would not share as extensively in the bounty of a successful forfeiture under state law. The Treasury and Justice Departments insist that state and local law enforcement agencies indicate the law enforcement purposes to which the transferred property is to be devoted and that the transfer will increase and not supplant law enforcement resources. Moreover, the Attorney General has prohibited adoption subject to narrow exceptions. The lion's share of confiscated cash, or the proceeds from the sale of confiscated property, however, is now deposited in either the Department of Justice Asset Forfeiture Fund, or the Department of the Treasury Forfeiture Fund. The Treasury and Justice Department Funds, together, receive over $2 billion per year. The Eighth Amendment states in its entirety that "[e]xcessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted." A "punitive forfeiture violates the Excessive Fines Clause if it is grossly disproportionate to the gravity of a defendant's offense." Forfeitures that Congress has designated as remedial civil sanctions do not implicate double jeopardy concerns unless "the statutory scheme [is] so punitive either in purpose or effect as to negate Congress' intention to establish a civil remedial mechanism." The Sixth Amendment assures the accused in criminal proceedings the right to a jury trial, to the assistance of counsel, and to the confrontation of accusers. The Supreme Court long ago held that the right to confrontation does not apply in civil forfeiture cases, and has not revisited the issue. The right to the assistance of counsel in criminal cases does not prevent the government from confiscating tainted fees paid to counsel; or, upon a probable cause showing, from obtaining a restraining order to freeze assets preventing the payment of attorneys' fees; or entitle an otherwise indigent property owner to the appointment of counsel for substitute asset forfeiture proceedings. The Amendment is by its terms only applicable "in all criminal prosecutions," and consequently there is no constitutionally required right to assistance of counsel in civil forfeiture cases. The Court's opinion to the effect that there is no right to a jury trial on disputed factual issues in criminal forfeiture, rests on a somewhat battered foundation. The fact that criminal forfeiture is a penalty within "the prescribed statutory maximum" and that Rule 32.2 of the Federal Rules of Criminal Procedure affords an expanded jury determination right would seem to shield federal criminal forfeiture procedures from Sixth Amendment challenges. Due process objections can come in such a multitude of variations that general statements are hazardous. Due process demands that those with an interest in the property which the government seeks to confiscate be given notice and opportunity for a hearing to contest. Actual notice is not required, but the government's efforts must be "reasonably calculated, under all the circumstances, to apprise" of the opportunity to contest. In some instances, due process permits the initiation of forfeiture proceedings by seizing the personal property in question without first giving the property owner either notice or the prior opportunity of a hearing to contest the seizure and confiscation. But absent exigent circumstances, the owner is entitled to the opportunity for a preseizure hearing in the case of real property where there is no real danger that the property will be spirited away in order to frustrate efforts to secure in rem jurisdiction over it. Due process also requires a probable cause determination of the forfeitability of property made subject to a post-seizure, pretrial restraining order designed to prevent dissipation. Due process does not require an adversarial determination of the existence of probable cause; a grand jury indictment will do. While due process clearly limits at some point the circumstances under which the property of an innocent owner may be confiscated, the Court has declined the opportunity to broadly assert that due process uniformly precludes confiscation of the property of an innocent owner. Any delay between seizure and hearing offends due process only when it fails to meet the test applied in speedy trial cases: Is the delay unreasonable given the length of delay, the reasons for the delay, the claimant's assertion of his or her rights, and prejudice to the claimant? In other challenges, the lower federal courts have found that due process permits: the procedure of shifting the burden of proof to a forfeiture claimant after the government has shown probable cause and allows use of a probable cause standard in civil forfeitures; postponement of the determination of third-party interests in criminal forfeiture cases until after trial in the main; an 11-year delay between issuance of a criminal forfeiture order and amendment of the original order to reach overseas assets; and fugitive disentitlement under 28 U.S.C. 2466. Section 3 of Article III of the United States Constitution does not appear to threaten most contemporary forfeiture statutes. It provides in part that "no attainder of treason shall work corruption of blood, or forfeiture except during the life of the person attainted." The section on its face seems to restrict forfeiture only in treason cases, but at least one court has suggested a broader scope. Even if Article III when read in conjunction with the due process clause reaches not only treason but all crimes, its prohibitions run only to forfeiture of estate. They do not address statutory forfeitures of the type currently found in state and federal law. The critical distinction between forfeiture of estate and statutory forfeiture is that in the first all of the defendant's property, related or unrelated to the offense and acquired before, during, or after the crime, is confiscated. In the second, confiscation is only possible if the property is related to the criminal conduct in the manner defined by the statute. Article III also declares that the judicial power of the United States extends to certain cases and controversies. If a litigant has no judicially recognized interest in the outcome of such a case or controversy, he is said to lack standing and the court lacks jurisdiction to proceed. In some instances, a statute or rule imposes additional, more demanding standing requirements. So it is with civil forfeiture. As a threshold matter, however, a claimant must satisfy Article III standing requirements. In order to meet the case-or-controversy requirement of Article III, a plaintiff (including a civil forfeiture claimant) must establish the three elements of standing, namely, that the plaintiff suffered an injury in fact, that there is a causal connection between the injury and conduct complained of, and that it is likely the injury will be redressed by a favorable decision. Claimants in civil forfeiture actions can satisfy this test by showing that they have a colorable interest in the property, which includes an ownership interest or a possessory interest. Article III's standing requirement is thereby satisfied because the owner or possessor of property that has been seized necessarily suffers an injury that can be redressed at least in part by the return of the seized property.

Forfeiture has long been an effective law enforcement tool. Congress and state legislatures have authorized its use for over 200 years. Every year, it redirects property worth billions of dollars from criminal to lawful uses. Forfeiture law has always been somewhat unique. Legislative bodies, commentators, and the courts, however, had begun to examine its eccentricities in greater detail because under some circumstances it could be not only harsh but unfair. The Civil Asset Forfeiture Reform Act (CAFRA), P.L. 106-185, 114 Stat. 202 (2000), was a product of that reexamination. Modern forfeiture follows one of two procedural routes. Although crime triggers all forfeitures, they are classified as civil forfeitures or criminal forfeitures according to the nature of the procedure that ends in confiscation. Civil forfeiture is an in rem proceeding. The property is the defendant in the case. Unless the statute provides otherwise, the innocence of the owner is irrelevant--it is enough that the property was involved in a violation to which forfeiture attaches. As a matter of expedience and judicial economy, Congress often allows administrative forfeiture in uncontested civil confiscation cases. Criminal forfeiture is an in personam proceeding, and confiscation is only possible upon the conviction of the owner of the property. The Supreme Court has held that authorities may seize moveable property without prior notice or an opportunity for a hearing but that real property owners are entitled as a matter of due process to preseizure notice and a hearing. As a matter of due process, innocence may be irrelevant in the case of an individual who entrusts his or her property to someone who uses the property for criminal purposes. Although some civil forfeitures may be considered punitive for purposes of the Eighth Amendment's excessive fines clause, civil forfeitures do not implicate the Fifth Amendment's double jeopardy clause unless they are so utterly punitive as to belie remedial classification. The statutes governing the disposal of forfeited property may authorize its destruction, its transfer for governmental purposes, or deposit of the property or of the proceeds from its sale in a special fund. Intergovernmental transfers and the use of special funds are hallmarks of federal forfeiture. Every year federal agencies transfer hundreds of millions of dollars and property to state, local, and foreign law enforcement officials as compensation for their contribution to joint enforcement efforts. This is an abridged version of CRS Report 97-139, Crime and Forfeiture, by [author name scrubbed], a longer report from which citations, footnotes, and attachments have been stripped.

RICO outlaws the collection of an unlawful debt, or the patterned commission of two or more crimes from a series of designated state and federal crimes ("racketeering activities" often referred to as predicate offenses), in order to acquire, invest in, or conduct the activities of an enterprise whose activities occur in, or affect, interstate or foreign commerce. Any person may violate RICO. The "person" need not be a mobster or even a human being; "any individual or entity capable of holding a legal or beneficial interest in property" will do. Although the "person" and the "enterprise" must be distinct in the case of a subsection 1962(c) violation (conducting an enterprise's activities through racketeering activity), a corporate entity and its sole shareholder are sufficiently distinct to satisfy the enterprise and person elements of a subsection (c) violation. The "person" and "enterprise" need not be distinct for purposes of subsection 1962(a) (investing the racketeering activity proceeds in an enterprise) or subsection 1962(b) (acquiring or maintaining an enterprise through racketeering activity) violations. On the other hand, even though governmental entities may constitute or participate in a RICO enterprise and may bring a RICO cause of action, they are not considered capable of a RICO violation. RICO addresses four forms of illicit activity reflected in the four subsections of Section 1962: (a) acquiring or operating an enterprise using racketeering proceeds; (b) controlling an enterprise using racketeering activities; (c) conducting the affairs of an enterprise using racketeering activities; and (d) conspiring to so acquire, control, or conduct. The first, 18 U.S.C. 1962(a), was designed as something of a money laundering provision. It introduces several features of its own and has been described as the most difficult to prove. Under its provisions, it is unlawful for (1) any person (2) who is liable as a principal (a) in the collection of an unlawful debt or (b) in a pattern of predicate offenses (3) to use or invest (4) the income from such misconduct (5) to acquire, establish or operate (6) a commercial enterprise. The "person," the pattern of predicate offense, and the enterprise elements are common to all of the subsections. For purposes of 1962(a), however, a legal entity that benefits from the offense may be both the "person" and the "enterprise." The person must have committed usury or a pattern of predicate offenses or aided and abetted in their commission, and have received income that would not otherwise have been received as a result. The second proscription, 18 U.S.C. 1962(b), is much the same except that it forbids acquisition or control of an enterprise through the predicate offenses themselves rather than through the income derived from the predicate offenses. It makes it unlawful for (1) any person (2) to acquire or maintain an interest in or control of (3) a commercial enterprise (4) through (a) the collection of an unlawful debt or (b) a pattern of predicate offenses. As in the case of subsection 1962(a), the "person" and the "enterprise" may be one and the same. There must be a nexus between the predicate offenses and the acquisition of control. Exactly what constitutes "interest" or "control" is a case by case determination. The defendant must be shown to have played some significant role in the management of the enterprise but a showing of complete control is not necessary. Subsection 1962(c) makes it unlawful for (1) any person, (2) employed by or associated with, (3) a commercial enterprise (4) to conduct or participate in the conduct of the enterprise's affairs (5) through (a) the collection of an unlawful debt or (b) a pattern of predicate offenses. Although on its face subsection 1962(c) might appear to be less demanding than subsections 1962(a) and (b), the courts have not always read it broadly. Thus, in any charge of a breach of its provisions, the "person" and the "enterprise" must ordinarily be distinct. The requirement cannot be avoided by charging a corporate entity as the "person" and the officers and employees through whom it must act as an "association in fact" enterprise. A corporate entity and its sole shareholder, however, are sufficiently distinct for purposes of subsection 1962(c). Moreover, the Supreme Court has identified an entrepreneurial stripe in the "conduct or participate in the conduct" element of 1962(c) under which only those who participate in the operation or management of the enterprise itself meet the definition. Nevertheless, conviction requires neither an economic predicate offense nor a predicate offense committed with an economic motive. The heart of most RICO violations is a pattern of racketeering activities, that is, the patterned commission of two or more designated state or federal crimes. The list of state and federal crimes upon which a RICO violation may be predicated includes murder, kidnaping, gambling, robbery, arson, bribery, extortion, dealing in drugs or obscene material, mail fraud, wire fraud, and federal crimes of terrorism, to name a few. To constitute "racketeering activity," the predicate offense need only be committed ; there is no requirement that the defendant or anyone else have been convicted of a predicate offense before a RICO prosecution or action may be brought. Conviction of a predicate offense, on the other hand, does not preclude a subsequent RICO prosecution, nor is either conviction or acquittal a bar to a subsequent RICO civil action. As noted the Supreme Court's decision in H.J., Inc. v. Northwestern Bell Telephone Co. , 492 U.S. 229 (1989), quoted below, the pattern of racketeering activities element of RICO requires (1) the commission of two or more predicate offenses, (2) that the predicate offenses be related and not simply isolated events, and (3) that they are committed under such circumstances that suggest either a continuity of criminal activity or the threat of such continuity. Predicates : The first element is explicit in Section 1961(5): "'Pattern of racketeering activity' requires at least two acts of racketeering activity." The two remaining elements, relationship and continuity, flow from the legislative history of RICO. That history "shows that Congress indeed had a fairly flexible concept of a pattern in mind. A pattern is not formed by sporadic activity.... [A] person cannot be subjected to the sanctions [of RICO] simply for committing two widely separate and isolated criminal offenses. Instead, the term 'pattern' itself requires the showing of a relationship between the predicates and of the threat of continuing activity. It is this factor of continuity plus relationship which combines to produce a pattern." Related predicates : The commission of predicate offenses forms the requisite related pattern if the "criminal acts ... have the same or similar purposes, results, participants, victims, or methods of commission, or otherwise are interrelated by distinguishing characteristics and are not isolated events." Continuity : "Continuity" is a question of time. "A party alleging a RICO violation may demonstrate continuity ... by proving a series of related predicates, extending over a substantial period of time. Predicate acts extending over a few weeks or months and threatening no future criminal conduct do not satisfy this requirement." But this does not mean that no RICO violation has occurred in the absence of continuity. "Often a RICO action will be brought before continuity can be established.... In such cases, liability depends on whether the threat of continuity is demonstrated." The Court characterized a pattern, extending over a period of time but which posed no threat of reoccurrence, as a pattern with "closed-end" continuity; and a pattern marked by a threat of reoccurrence as a pattern with "open-ended continuity." In the case of a "closed-ended" pattern, the lower courts have been reluctant to find predicate activity extending over less than a year sufficient for the "substantial period[s] of time" required to demonstrate continuity. Whether the threat of future predicate activity is sufficient to recognize an "open-end" pattern of continuity depends upon the nature of the predicate offenses and the nature of the enterprise. "Though the number of related predicates involved may be small and they may occur close together in time, the racketeering acts themselves include a specific threat of repetition extending indefinitely into the future, and thus supply the requisite continuity. In other cases, the threat of continuity may be established by showing that the predicate acts or offenses are part of an ongoing entity's regular way of doing business." Collection of an unlawful debt appears to be the only instance in which the commission of a single predicate offense will support a RICO prosecution or cause of action. No proof of pattern seems to be necessary. The predicate covers only usury and the collection of unlawful gambling debts. The prohibition seems to apply to both lawful and unlawful means of collection as long as the underlying debt is unlawful. The statute defines "enterprise" to include "any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity." The enterprise may be devoted to entirely legitimate ends or totally corrupt objectives, and RICO reaches efforts involving both governmental and nongovernmental enterprises. Finally as noted earlier, a corporation or other legal entity may be both the defendant and the required "enterprise" under some circumstances. As for "associated in fact" enterprises, the Supreme Court in Boyle rejected the suggestion that such enterprises must be "business-like" creatures, having discernable hierarchical structures, unique modus operandi, chains of command, internal rules and regulations, regular meetings regarding enterprise activities, or even a separate enterprise name or title, Boyle v. United States , 129 S.Ct. 2337, 2347 (2009). The statute demands only "that an association-in-fact enterprise must have at least three structural features: a purpose, relationships among those associated with the enterprise, and longevity sufficient to permit these associates to pursue the enterprise's purpose," Id. , at 2346. To satisfy RICO's jurisdictional element, the corrupt or corrupted enterprise must either engage in interstate or foreign commerce or engage in activities that affect interstate or foreign commerce. An enterprise that orders supplies and transports its employees and products in interstate commerce is "engaged in interstate commerce" for purposes of RICO. As a general rule, the impact of the enterprise on interstate or foreign commerce need only be minimal to satisfy RICO requirements. Where the predicate offenses associated with an enterprise have an effect on interstate commerce, the enterprise is likely to have an effect on interstate commerce. However, more is required where the enterprise is not engaged in economic activity. Conspiracy under subsection 1962(d) is (1) the agreement of (2) two or more (3) to invest in, acquire, or conduct the affairs of (4) a commercial enterprise (5) in a manner which violates 18 U.S.C. 1962(a), (b), or (c). The heart of the crime lies in the agreement rather than any completed, concerted violation of the other three RICO subsections. In fact, unlike the general conspiracy statute, RICO conspiracy is complete upon the agreement even if none of the conspirators ever commit an overt act towards the accomplishment of its criminal purpose. Moreover, contrary to the view once held by some of the lower courts, there is no requirement that a defendant commit or agree to commit two or more predicate offenses himself. It is enough that the defendant, in agreement with another, intended to further an endeavor which, if completed, would satisfy all of the elements of a RICO violation. A conspirator is liable not only for the conspiracy but for any foreseeable substantive offenses committed by any of the conspirators in furtherance of the common scheme, until the objectives of the plot are achieved, abandoned, or the conspirator withdraws. "To withdraw from a conspiracy, an individual must take some affirmative action either by reporting to authorities or communicating his intentions to his coconspirators." The individual bears the burden of showing he has done so. The commission of a RICO violation exposes offenders to a wide range of criminal and civil consequences: imprisonment, fines, restitution, forfeiture, treble damages, attorneys' fees, and a wide range of equitable restrictions. Criminal Liability . RICO violations are punishable by fine or by imprisonment for life in cases where the predicate offense carries a life sentence, or by imprisonment for not more than 20 years in all other cases. Although an offender may be sentenced to either a fine or a term of imprisonment under the strict terms of the statute, the operation of the applicable sentencing guidelines makes it highly likely that offenders will face both fine and imprisonment. The maximum amount of the fine for a RICO violation is the greater of twice the amount of the gain or loss associated with the crime, or $250,000 for an individual, $500,000 for an organization. Offenders sentenced to prison are also sentenced to a term of supervised release of not more than three years to be served following their release from incarceration. Most RICO violations also trigger mandatory federal restitution provisions, because the RICO offense involves a crime of violence, drug trafficking, or a crime with respect to which a victim suffers physical injury or pecuniary loss. Moreover, property related to a RICO violation is subject to confiscation. Even without a completed RICO violation, committing any crime designated a RICO predicate offense opens the door to additional criminal liability. It is a 20-year felony to launder the proceeds from any predicate offense (including any RICO predicate offense) or to use them to finance further criminal activity. Moreover, the proceeds of any RICO predicate offense are subject to civil forfeiture (confiscation without the necessity of a criminal conviction) by virtue of the RICO predicate's status as a money laundering predicate. Civil Liability . RICO violations may result in civil as well as criminal liability. "Any person injured in his business or property by reason" of a RICO violation has a cause of action for treble damages and attorneys' fees. No prior criminal conviction is required, except in the case of liability based on certain securities fraud predicates. Although the United States is apparently not a "person" that may sue for damages under RICO, the term does include local governments, state agencies, and foreign governments. On the other hand, private parties may not bring a RICO suit for damages against the United States or other governmental entities. In order to recover, the plaintiff must establish an injury to his or her business or property directly or proximately caused by the defendant's RICO violation. The injury must involve a "concrete financial loss," a "mere injury to a valuable intangible property interest" such as a right to pursue employment will not do. The courts agreed generally that Section 1964(c) does not permit recovery for personal injuries since they are not injuries to "business or property," but sometimes disagree on what constitutes a qualified injury. If the underlying violation involves subsection 1962(a), it is the use or investment of the income rather than the predicate offenses that must have caused the injury. If the underlying violation involves subsection 1962(b), it is the access or control of the RICO enterprise rather than the predicate offenses that must have caused the injury. While a criminal prosecution requires no overt act, the courts demand that RICO plaintiffs whose claim is based on a conspiracy under subsection 1962(d) prove an overt act since a mere agreement cannot be the direct or proximate cause of an injury. Moreover, the overt act itself must constitute a predicate offense. Notwithstanding the apparent inability of the United States to sue for damages under RICO, the Attorney General may seek to prevent and restrain RICO violations under the broad equitable powers vested in the courts to order disgorgement, divestiture, restitution, or the creation of receiverships or trusteeships. This authority has been invoked relatively infrequently, primarily to rid various unions of organized crime and other forms of corruption. There is some question whether private plaintiffs, in addition to the Attorney General, may seek injunctive and other forms of equitable relief. On the procedural side, the Supreme Court has held that (1) state trial courts of general jurisdiction have concurrent jurisdiction over federal civil RICO claims; (2) under the appropriate circumstances parties may agree to make potential civil RICO claims subject to arbitration; (3) the Clayton Act's four-year period of limitation applies to civil RICO claims as well, and the period begins when the victim discovers or should have discovered the injury; and (4) in the absence of an impediment to state regulation, the McCarran-Ferguson Act does not bar civil RICO claims based on insurance fraud allegations.

Congress enacted the federal Racketeer Influenced and Corrupt Organization (RICO) provisions as part of the Organized Crime Control Act of 1970, 18 U.S.C. 1961-1968. In spite of its name and origin, RICO is not limited to "mobsters" or members of "organized crime" as those terms are popularly understood. Rather, it covers those activities which Congress felt characterized the conduct of organized crime, no matter who actually engages in them. RICO proscribes no conduct that is not otherwise prohibited. Instead it enlarges the civil and criminal consequences, under some circumstances, of a list of state and federal crimes. RICO condemns: (1) any person, (2) who (a) invests in, or (b) acquires or maintains an interest in, or (c) conducts or participates in the affairs of, or (d) conspires to invest in, acquire, or conduct the affairs of (3) an enterprise (4) which (a) engages in, or (b) whose activities affect, interstate or foreign commerce (5) through (a) the collection of an unlawful debt, or (b) the patterned commission of various state and federal crimes ("racketeering activities" sometimes referred to as "predicate offenses"). Violations are punishable by fines, forfeiture, and imprisonment for not more than 20 years or life if one of the predicate offenses carries such a penalty. Civil RICO permits anyone injured in their business or property by a RICO violation to recover treble damages, costs and attorneys' fees. In exceptional cases, at least at the behest of the government, the courts will enjoin further RICO violations, order divestiture, dissolution or reorganization, or restrict an offender's future professional or investment activities. RICO comes with tailored provisions for venue and service of process, expedited judicial action in civil cases brought by the United States, in camera proceedings, and for the use of civil investigative demands. This is an abridgement of a report, which with full citations, footnotes, and various appendixes, appears as CRS Report 96-950, RICO: A Brief Sketch, by [author name scrubbed].

Some policymakers have concluded that the energy challenges facing the United States are so critical that a concentrated investment in energy research and development (R&D) should be undertaken. The Manhattan project, which produced the atomic bomb, and the Apollo program, which landed American men on the moon, have been cited as examples of the success such R&D investments can yield. Investment in federal energy technology R&D programs of the 1970s, in response to two energy crises, have generally been viewed as less successful than the earlier two efforts. This report compares and contrasts the goals of, and the investments in, the three initiatives, which may provide useful insights for Congress as it assesses and debates the nation's energy policy. The Manhattan project took place from 1942 to 1946. Beginning in 1939, some key scientists expressed concern that Germany might be building an atomic weapon and proposed that the United States accelerate atomic research in response. Following the Pearl Harbor attack in December 1941, the United States entered World War II. In January 1942, President Franklin D. Roosevelt gave secret, tentative approval for the development of an atomic bomb. The Army Corps of Engineers was assigned the task and set up the Manhattan Engineer District to manage the project. A bomb research and design laboratory was built at Los Alamos, New Mexico. Due to uncertainties regarding production effectiveness, two possible fuels for the reactors were produced with uranium enrichment facilities at Oak Ridge, Tennessee, and plutonium production facilities at Hanford, Washington. In December 1942, Roosevelt gave final approval to construct a nuclear bomb. A bomb using plutonium as fuel was successfully tested south of Los Alamos in July 1945. In August 1945, President Truman decided to use the bomb against Japan at two locations. Japan surrendered a few days after the second bomb attack. At that point, the Manhattan project was deemed to have fulfilled its mission, although some additional nuclear weapons were still assembled. In 1946, the civilian Atomic Energy Commission was established to manage the nation's future atomic activities, and the Manhattan project officially ended. According to one estimate, the Manhattan project cost $2.2 billion from 1942 to 1946 ($22 billion in 2008 dollars), which is much greater than the original cost and time estimate of approximately $148 million for 1942 to 1944. General Leslie Groves, who managed the Manhattan project, has written that Members of Congress who inquired about the project were discouraged by the Secretary of War from asking questions or visiting sites. After the project was under way for over a year, in February 1944, War Department officials received essentially a "blank check" for the project from Congressional leadership who "remained completely in the dark" about the Manhattan project, according to Groves and other experts. The Apollo program, FY1960 to FY1973, encompassed 17 missions, including six lunar landings. NASA was created in response to the Soviet launch of Sputnik in 1958 and began operation in 1959. Although preliminary discussions regarding the Apollo program began in 1960, Congress did not decide to fund it until 1961 after the Soviet Union became the first nation to launch a human into space. The goals of the Apollo program were To land Americans on the Moon and return them safely to Earth; To establish the technology to meet other national interests in space; To achieve preeminence in space for the United States; To carry out a program of scientific exploration of the Moon; and To develop man's capability to work in the lunar environment. The program included a three-part spacecraft to take two astronauts to the Moon surface, support them while on the Moon, and return them to Earth. Saturn rockets were used to launch this equipment. In July 1969, Apollo 11 achieved the goal of landing Americans on the Moon and returning them safely to Earth. The last lunar landing took place in December 1972. The Apollo program was only one part of NASA's activities during this period. NASA's peak funding during the Apollo program occurred in FY1966 when its total funding was $4.5 billion (in current dollars), of which $3.0 billion went to the Apollo program. According to NASA, the total cost of the Apollo program for FY1960-FY1973 was $19.4 billion ($97.9 billion in 2008 dollars). The activities with the greatest cost were the Saturn V rockets ($6.4 billion in current dollars) followed by the Command and Service Modules ($3.7 billion), the Lunar Modules ($2.2 billion), and Manned Space Flight Operations ($1.6 billion). The Arab oil embargo of 1973 (the "first" energy crisis) put energy policy on the national "agenda." At that time, Americans began to experience rapidly rising prices for fuel and related goods and services. Until then, energy R&D had been focused on the development of nuclear power under the Atomic Energy Commission (AEC). After the Manhattan project ended, Congress had established the AEC to manage both civilian and military projects in the Atomic Energy Act of 1946 (P.L. 79-585). In response to the energy crisis, Congress subsumed the AEC, including the Manhattan project facilities, and other energy programs, into the Energy Research and Development Administration (ERDA), which became the focus for federal energy technology R&D, and the Nuclear Regulatory Commission (NRC) as part of the Energy Reorganization Act of 1974 ( P.L. 93 - 438 ). In the Department of Energy Organization Act of 1977 ( P.L. 95 - 91 ), Congress decided to combine the activities of ERDA with approximately 50 other energy offices and programs in a new Department of Energy (DOE), which began operations on October 1, 1977. In 1979, the Iranian Revolution precipitated the "second" energy crisis that took place from 1978-1981. High oil prices and inflation lasted for several years. An ensuing recession curbed demand and oil prices fell markedly by 1986. The scale of funding for most of DOE's energy R&D programs dropped steadily during the 1980s (see Figure 1 ). The large energy technology demonstration projects funded during the late 1970s and early 1980s were viewed by some as too elaborate and insufficiently linked to either existing energy research or the marketplace. A well known example is the Synthetic Fuels Corporation (SFC). The goal of SFC was to support large-scale projects that industry was unwilling to support due to the technical, environmental, or financial uncertainties. The program ended in 1986 due to a combination of lower energy prices, environmental issues, lack of support by the Reagan Administration, and administrative challenges. Oil prices rose substantially from 2004 to 2008, but funding for energy technology R&D has not so far increased as it did during the energy crisis of the late 1970s to early 1980s. However, the appropriations process for FY2009 and FY2010 has not yet been completed. A general understanding of driving forces of and funding histories for the Manhattan project and Apollo program, and a comparison of these two initiatives to Department of Energy (DOE) energy technology R&D programs, may provide useful insights for Congress as it assesses and determines the nation's energy R&D policy. Four criteria that might be used to compare these programs are funding, perception of threat, goal clarity, and technology customer. Each is discussed in more depth below. Table 1 provides a comparison of the total and annual average program costs for the Manhattan project, Apollo program, and federal energy technology R&D program since the first energy crisis. Annual average long-term (1974-2008) DOE energy technology R&D funding was approximately $3 billion (in 2008 constant dollars) as is the FY2008 budget and the FY2009 budget request. In comparison, the annual average funding (in 2008 constant dollars) for the Manhattan project was $4 billion and for the Apollo program and the DOE energy technology program at its peak (1975-1980) was $7 billion. At the time of peak funding, the percentage of federal spending devoted to DOE energy technology R&D was half that of the Manhattan project, and one-fifth that of the Apollo program. From an overall economy standpoint, the percentage of the gross domestic product (GDP) spent on DOE energy technology R&D in the peak funding year was one-fourth that spent on either the Manhattan project or the Apollo program. As shown in Figure 2 , although cumulative funding for the DOE energy technology R&D program is greater than for the Manhattan project or the Apollo program, the annual funding for each of the historical programs was higher than that for energy technology R&D which occurred over a greater number of years. This is an important distinction: the Manhattan project and the Apollo program were specific and distinct funding efforts whereas the national energy R&D effort has been ongoing over a longer period of time. In all three cases, a rapid increase in funding was followed by a rapid decline. The Manhattan project and Apollo project were both responses to perceived threats, which compelled policymaker support for these initiatives. The Manhattan project took place during World War II. Although the public might have been unaware of the potential threat of Germany's use of nuclear weapons and the Manhattan project, the President and Members of Congress could feel confident about public support for the war effort of which the Manhattan project was a part. Similarly, the Apollo program took place during the Cold War with the Union of Soviet Socialist Republics (USSR). When the USSR launched the Sputnik satellite and first man into space, the U.S. public felt threatened by the potential that the USSR might take leadership in the development of space flight technology, and potentially greater control of outer space. President Jimmy Carter said that With the exception of preventing war, this [energy crisis] is the greatest challenge that our country will face during our lifetime ... our decision about energy will test the character of the American people and the ability of the President and the Congress to govern this Nation. This difficult effort will be the 'moral equivalent of war,' except that we will be uniting our efforts to build and not to destroy." The threat to which investment in energy technology R&D responds, however, is largely economic rather than military. In addition, the threat posed by climate change, which is related to energy consumption, will likely be gradual and long-term. Another issue is the degree to which there is clarity and consensus on the program goal. The Manhattan project had a clear and singular goal--the creation of a nuclear bomb. For the Apollo program, the goal was also clear and singular--land American astronauts on the moon and return them safely to Earth. In the case of energy technology R&D, however, the overall goal of clean, affordable, and reliable energy is multi-faceted. While "energy independence" has from time to time been a rallying cry, energy technology R&D has in fact, been driven by at least three not always commensurate goals: resource and technological diversity, commercial viability, and environmental protection. To help reduce the risk of dependence on a single energy source, diversity of resources and energy technologies have always been seen as a goal of the energy R&D program. Second, unlike the Manhattan project or the Apollo program, the DOE energy technology R&D program seeks ultimately to be commercially viable. Third, the energy R&D program must meet environmental goals, including reducing the impact of energy-related activities on land, water, air, and climate change. Another comparison criterion is the customer for technologies that may result from the R&D. The government was the customer for both the Manhattan project and Apollo program. The private sector is the ultimate customer for any energy technology developed as a result of federal energy R&D programs. Therefore, the marketability of any technologies developed will be a key determinant of the degree to which the program is successful. Moreover, the inherent involvement of the private sector raises a number of issues related to the appropriateness of different government roles. Some believe that focusing R&D on one particular technology versus another may result in government, instead of the marketplace, picking "winners and losers." Some experts believe that the most important driver for private sector deployment or commercialization is not the need for new technologies, but regulation or economic incentives. Others, however, believe that without government support and intervention, the private sector is unlikely to conduct the R&D necessary to achieve the public goal of clean, affordable, and reliable energy, and that current technologies are insufficient to achieve this goal. When the Manhattan project and the Apollo program are used as analogies for future DOE energy technology R&D, the following points may be important to consider: To be equivalent in annual average funding, DOE energy technology R&D funding would need to increase from approximately $3 billion in FY2008 to at least $4 billion per program year to match the Manhattan project funding, or $7 billion per program year to match Apollo program funding levels or DOE energy technology R&D funding at its peak. To be equivalent of peak year funding would require even greater increases. In terms of federal outlays, energy technology R&D funding would need to increase from 0.5% to 1% (Manhattan project) or 2.2 % (Apollo program) of federal outlays. As a percentage of GDP, this funding would need to increase from 0.1% to 0.4% of GDP (for both the Manhattan project and the Apollo program). Both the Manhattan project and the Apollo program had a singular and specific goal. For the Manhattan project, the response to the threat of enemy development of a nuclear bomb was the goal to construct a bomb; for the Apollo program, the threat of Soviet space dominance was translated into a specific goal of landing on the moon. For energy, however, the response to the problems of insecure oil sources and high prices has resulted in multiple, sometimes conflicting goals. Both the Manhattan project and the Apollo program goals pointed to technologies primarily for governmental use with little concern about their environmental impact; for energy, in contrast, the hoped for outcome depends on commercial viability and mitigation of the environmental impacts of the energy technologies developed. Although the Manhattan project and the Apollo program may provide some useful analogies for funding, these differences may limit their utility regarding energy policy. Rather, energy technology R&D has been driven by at least three not always commensurate goals--resource and technological diversity, commercial viability, and environmental protection--which were not goals of the historical programs. The New Manhattan Project for Energy Independence ( H.R. 513 ), a bill introduced in the House on January 14, 2009, would require the President to convene a summit to review the progress and promise of, the interrelationship of, and the additional funding needed to accelerate the progress of: (1) developing alternative technology vehicles that are not more than 10% more expensive than comparable model year vehicles; (2) developing and building energy efficient buildings that use no more than 50% of the energy of buildings of similar size and type; (3) constructing a large scale solar thermal power plant or solar photovoltaic power plant capable of generating 300 megawatts or more at a cost of 10 cents or less per kilowatt-hour; (4) developing and producing biofuel that does not exceed 105% of the cost for the energy equivalent of unleaded gasoline; (5) developing and implementing a carbon capture and storage system for a large scale coal-burning power plant that does not increase operating costs more than 15% compared to a baseline design without carbon capture and storage while providing an estimated chance of carbon dioxide escape of no greater than 1% over 5,000 years; (6) developing both a process to remediate radioactive waste so that it is not harmful for at least 5,000 years and a model that accounts for the effects of nuclear waste in that process; and (7) developing a sustainable nuclear fusion reaction capable of providing a large-scale sustainable source of electricity for residential, commercial, or government entities. The bill would also require the Secretary of Energy to implement a program to support such technologies; and competitively award cash prizes to advance the research, development, demonstration, and commercial application necessary to advance such technologies. In addition, the bill would establish a New Manhattan Project Commission on Energy Independence that would make recommendations to Congress as to the steps necessary to achieve 50% energy independence within 10 years and 100% energy independence within 20 years, as well as assessing the impact of foreign energy dependence on national security. On June 26, 2009, a proposed amendment to replace the text of H.R. 2454 with this bill failed in the House 172-256.

Some policymakers have concluded that the energy challenges facing the United States are so critical that a concentrated investment in energy research and development (R&D) should be undertaken. The Manhattan project, which produced the atomic bomb, and the Apollo program, which landed American men on the moon, have been cited as examples of the success such R&D investments can yield. Investment in federal energy technology R&D programs of the 1970s, in response to two energy crises, have generally been viewed as less successful than the earlier two efforts. This report compares and contrasts the three initiatives. In 2008 dollars, the cumulative cost of the Manhattan project over 5 fiscal years was approximately $22 billion; of the Apollo program over 14 fiscal years, approximately $98 billion; of post-oil shock energy R&D efforts over 35 fiscal years, $118 billion. A measure of the nation's commitments to the programs is their relative shares of the federal outlays during the years of peak funding: for the Manhattan program, the peak year funding was 1% of federal outlays; for the Apollo program, 2.2%; and for energy technology R&D programs, 0.5%. Another measure of the commitment is their relative shares of the nation's gross domestic product (GDP) during the peak years of funding: for the Manhattan project and the Apollo program, the peak year funding reached 0.4% of GDP, and for the energy technology R&D programs, 0.1%. Besides funding, several criteria might be used to compare these three initiatives including perception of the program or threat, goal clarity, and the customer of the technology being developed. By these criteria, while the Manhattan project and the Apollo program may provide some useful analogies for thinking about an energy technology R&D initiative, there are fundamental differences between the forces that drove these historical R&D success stories and the forces driving energy technology R&D today. Critical differences include (1) the ability to transform the program or threat into a concrete goal, and (2) the use to which the technology would be put. On the issue of goal setting, for the Manhattan project, the response to the threat of enemy development of a nuclear bomb was the goal to construct a bomb; for the Apollo program, the threat of Soviet space dominance was translated into a specific goal of landing on the moon. For energy, the response to the problems of insecure oil sources and high prices has resulted in multiple, sometimes conflicting, goals. Regarding use, both the Manhattan project and the Apollo program goals pointed to technologies primarily for governmental use with little concern about their environmental impact; for energy, in contrast, the hoped-for outcome depends on commercial viability and mitigation of environmental impacts from energy use. Although the Manhattan project and the Apollo program may provide some useful analogies for funding, these differences may limit their utility regarding energy policy. Rather, energy technology R&D has been driven by at least three not always commensurate goals--resource and technological diversity, commercial viability, and environmental protection--which were not goals of the historical programs.

The offices of the resident commissioner from Puerto Rico and the delegates to the House of Representatives from American Samoa, the District of Columbia, Guam, the U.S. Virgin Islands, and the Commonwealth of the Northern Mariana Islands are created by statute, not by the Constitution. Because they represent territories and associated jurisdictions, not states, they do not possess the same parliamentary rights afforded Members. This report examines the parliamentary rights of the delegates and the resident commissioner in legislative committee, in the House, and in the Committee of the Whole House on the State of the Union. Under clause 3 of Rule III, the delegates and the resident commissioner are elected to serve on standing committees in the same manner as Representatives and have the same parliamentary powers and privileges as Representatives there: the right to question witnesses, debate, offer amendments, vote, offer motions, raise points of order, include additional views in committee reports, accrue seniority, and chair committees and subcommittees. The same rule authorizes the Speaker of the House to appoint delegates and the resident commissioner to conference committees as well as to select and joint committees. The delegates and the resident commissioner may not vote in or preside over the House. Although they take an oath to uphold the Constitution, they are not included on the Clerk's roll of Members-elect and may not vote for Speaker. They may not file or sign discharge petitions. They may, however, sponsor and cosponsor legislation, participate in debate--including managing time--and offer any motion that a Representative may make, except the motion to reconsider. A delegate or resident commissioner may raise points of order and questions of personal privilege, call a Member to order, appeal rulings of the chair, file reports for committees, object to the consideration of a bill, and move impeachment proceedings. Under the rules of the 115 th Congress (2017-2018), the delegates and the resident commissioner may not vote in the Committee of the Whole House on the State of the Union. In a change from the rules of the prior Congress, however, they may preside over the Committee of the Whole. Under Rules III and XVIII, as adopted in both the 110 th and 111 th Congresses (2007-2010), when the House was sitting as the Committee of the Whole, the delegates and resident commissioner had the same ability to vote as Representatives, subject to immediate reconsideration in the House when their recorded votes had been "decisive" in the committee. These prior House rules also authorized the Speaker to appoint a delegate or the resident commissioner to preside as chairman of the Committee of the Whole. These rules of the 110 th and 111 th Congresses were identical in effect to those in force in the 103 rd Congress (1993-1994), which permitted the delegates and the resident commissioner to vote in, and to preside over, the Committee of the Whole. These provisions were stricken from the rules as adopted in the 104 th Congress (1995-1996) and remained out of effect until readopted in the 110 th Congress. They were again removed from House rules at the beginning of the 112 th Congress (2011-2012). At the time of the adoption of the 1993 rule, then-Minority Leader Robert H. Michel and 12 other Representatives filed suit against the Clerk of the House and the territorial delegates seeking a declaration that the rule was unconstitutional. The constitutionality of the rule was ultimately upheld on appeal based on its inclusion of the mechanism for automatic reconsideration of votes in the House. The votes of the delegates and the resident commissioner were decisive, and thus subject to automatic revote by the House, on three occasions in the 103 rd Congress. There were no instances identified in the 110 th Congress in which the votes of the delegates and the resident commissioner were decisive. In the 111 th Congress, the votes of the delegates were decisive, and subject to an automatic revote, on one occasion. The prior rule governing voting in the Committee of the Whole by delegates and the resident commissioner was not interpreted to mean that any recorded vote with a difference of six votes or fewer was subject to automatic reconsideration. In determining whether the votes of the delegates and the resident commissi oner were decisive, the chair followed a "but for" test--namely, would the result of a vote have been different if the delegates and the commissioner had not voted? If the votes of the delegates and resident commissioner on a question were determined to be decisive by this standard, the committee automatically rose and the Speaker put the question to a vote. The vote was first put by voice, and any Representative could, with a sufficient second, obtain a record vote. Once the final result of the vote was announced, the Committee of the Whole automatically resumed its sitting.

As officers who represent territories and properties possessed or administered by the United States but not admitted to statehood, the five House delegates and the resident commissioner from Puerto Rico do not enjoy all the same parliamentary rights as Members of the House. They may vote and otherwise act similarly to Members in legislative committee. They may not vote on the House floor but may participate in debate and make most motions there. Under the rules of the 115th Congress (2017-2018), the delegates and resident commissioner may not vote in, but are permitted to preside over, the Committee of the Whole. This report will be updated as circumstances warrant.

The No Child Left Behind Act of 2001 (NCLB), signed into law on January 8, 2002 ( P.L. 107-110 ), required that all paraprofessionals assigned instructional duties and employed in Title I, Part A-funded schools meet minimum qualifications by January 8, 2006. The NCLB states that paraprofessionals (also known as instructional aides) must have completed two years of college, obtained an associate's degree, or demonstrated content knowledge and an ability to assist in classroom instruction. On June 17, 2005, the Education Department (ED) announced that the paraprofessional deadline would be extended to the end of the 2005-2006 school year to coincide with the related NCLB deadline for highly qualified teachers (HQT). The use of instructional aides in U.S. classrooms has been increasing every year since data on paraprofessionals were first collected by ED's National Center for Education Statistics. Instructional aides accounted for 2.5% of total full-time equivalent instructional staff in 1970, 11.9% in 1980, 16.5% in 2000, and 17.2% in 2009. ED's interim report on NCLB teacher quality implementation revealed that paraprofessionals accounted for about one-third of instructional staff in Title I-A funded schools and districts. Instructional aides are also increasingly handling classroom responsibilities without supervision. ED's final report on NCLB teacher quality implementation indicated that 19% of paraprofessionals spent "at least half of their time working with students in the classroom without a teacher present." Recognition that the quality of instruction in U.S. schools is increasingly affected by the quality of paraprofessional staff has bolstered support for federal instructional aide standards. Prior to the NCLB, the Elementary and Secondary Education Act of 1965 (ESEA) required only that paraprofessionals possess a high school diploma. This requirement was established in previous ESEA amendments passed under the Improving America's Schools Act of 1994 ( P.L. 103-382 ). Legislative proposals establishing higher standards for paraprofessionals were supported by ED under both the Clinton and Bush Administrations, and were eventually enacted under the NCLB. As of the enactment of the NCLB on January 8, 2002, all newly hired Title I paraprofessionals whose duties include instructional support must possess the minimum qualifications prior to employment. That is, they must have completed two years of study at an institution of higher education, obtained an associate's (or higher) degree, or passed a formal state or local academic assessment, demonstrating knowledge of and the ability to assist in instructing reading, writing, and mathematics. Paraprofessionals hired on or before January 8, 2002, who were performing instructional duties in a program supported with Title I funds, were required to meet these requirements by the end of the 2005-2006 school year. The NCLB paraprofessional qualification requirements apply only to Title I paraprofessionals with instructional duties; that is, those who provide one-on-one tutoring if the tutoring is scheduled at a time when a student would not otherwise receive instruction from a teacher; assist with classroom management, such as organizing instructional and other materials; provide assistance in a computer laboratory; conduct parental involvement activities; provide support in a library or media center; act as a translator; or provide instructional services to students under the direct supervision of a teacher. Individuals who work in food services, cafeteria or playground supervision, personal care services, non-instructional computer assistance, and similar positions are not considered paraprofessionals, and do not have to meet these requirements. Also, ESEA Section 1119(e) indicates that paraprofessionals who only serve as translators or who only conduct parental involvement activities must have a secondary school diploma or its equivalent, but do not have to meet additional requirements. Under NCLB, local education agencies (LEAs) must make progress toward meeting their state's annual objectives for teacher quality and student achievement. If a state determines that an LEA has failed to make progress toward meeting those annual objectives for three consecutive years, the LEA is prohibited from using Title I-A funds on any paraprofessional hired after the date of the determination. The most recent non-regulatory guidance on paraprofessionals, issued by ED on March 1, 2004, clarifies a number of questions that have been raised during implementation of the NCLB. The guidance describes various school settings under which paraprofessionals may or may not be required to meet the NCLB rules. The requirements apply to all paraprofessionals employed in a Schoolwide Title I program without regard to whether the position is funded with federal, state, or local funds. In Targeted Assistance Title I programs, only those paraprofessionals paid with Title I funds must meet the requirements (not those paid with state or local funds); however, special education paraprofessionals in targeted assistance programs must meet the requirements even if only part of their pay comes from Title I funds. A paraprofessional who provides services to private school students and is employed by an LEA with Title I funds must meet the NCLB requirements; however, these requirements do not apply to those in the Americorps program, volunteers, or those working in either 21 st Century Community Learning Centers or Head Start programs. LEAs have discretion when it comes to considering who is an "existing" paraprofessional and whether qualified status is "portable." If an LEA laid off a paraprofessional who was initially hired on or before January 8, 2002, the LEA may consider that person an "existing" employee when the individual is subsequently recalled to duty. Also, an LEA may determine that a paraprofessional meets the qualification requirements if the individual was previously determined to meet these requirements by another LEA. The ED guidance clarifies that "two years of study" means the equivalent of two years of full-time study as determined by an "institution of higher education" (IHE)--the definition of an IHE is specified in Section 101(a) of the Higher Education Act of 1965. Continuing education credits may count toward the two-year requirement if they are part of an overall training and development program plan and an IHE accepts or translates them to course credits. Section C of the guidance discusses issues related to the assessment of paraprofessionals. The guidance indicates that a state or LEA may develop a paraprofessional knowledge and ability assessment using either a paper and pencil form, a performance evaluation, or some combination of the two. These assessments should gauge content knowledge (e.g., in reading, writing, and math) as well as competence in instruction (which may be assessed through observations). The content knowledge should reflect state academic standards and the skills expected of a child at a given school level. The results of the assessment should establish a candidate's content knowledge and competence in instruction, and target the areas where additional training may be needed. Most states are employing more than one type of written assessment along with performance evaluation. Two of the most common tests are ParaPro (developed by the Educational Testing Service). Thirty-four states and the District of Columbia allow LEAs to use ParaPro for paraprofessional assessment. In addition, 21 states allow LEAs to develop their own assessments. ECS considers 12 states to have established paraprofessional qualifications that exceed federal standards, and identifies 10 states that require paraprofessionals to obtain professional certification. The ECS also identifies 11 states that have professional development programs for paraprofessionals. Section D of the guidance discusses programmatic requirements that pertain to the supervision of paraprofessionals. The guidance points out that ESEA Section 1119(g)(3)(A) stipulates that paraprofessionals who provide instructional support must work under the "direct supervision" of a highly qualified teacher. Further, the guidance states the following: A paraprofessional works under the direct supervision of a teacher if (1) the teacher prepares the lessons and plans the instruction support activities the paraprofessional carries out, and evaluates the achievement of the students with whom the paraprofessional is working, and (2) the paraprofessional works in close and frequent proximity with the teacher. [SS200.59(c)(2) of the Title I regulations] As a result, a program staffed entirely by paraprofessionals is not permitted. In addition, the guidance states that the rules regarding direct supervision also apply to paraprofessionals who provide services under contract. That is, paraprofessionals hired by a third-party contractor to work in a Title I program must work under the direct supervision of a teacher (even though teachers employed by the contractor need not meet NCLB highly qualified teacher requirements). The ED guidance discusses funding sources for the professional development and assessment of paraprofessionals. An LEA must use not less than 5% of its Title I, Part A allocation for the professional development of teachers and paraprofessionals. LEAs may also use their general Title I funds for this purpose. Funds for professional development of paraprofessionals may also be drawn from Title II, Part A (for core subject-matter personnel); from Title III, Part A (for those serving English language learners); from Title V, Part A (for "Innovative" programs); and from Title VII, Part A, subpart 7 (for those serving Indian children). Schools and LEAs identified as needing improvement must reserve additional funds for professional development. Section B-2 of the guidance describes conditions under which LEAs are prohibited from using Title I funds to hire new paraprofessionals. Such a prohibition may be imposed by a state on an LEA that has failed to make progress toward meeting the annual measurable objectives established by the state for increasing the percentage of highly qualified teachers , and has failed to make adequate yearly progress for three cumulative years. Two exceptions to this rule are (1) if the hiring is to fill a vacancy created by the departure of another paraprofessional, and (2) if the hiring is necessitated by a significant increase in student enrollment or an increased need for translators or parental involvement personnel. Forty-two states and the District of Columbia reported data to ED on the qualifications of their paraprofessionals for the 2003-2004 school year. Among them, 10 states reported that fewer than half of their paraprofessionals met the NCLB requirements; four states reported that at least 9 of every 10 of their paraprofessionals met these standards. However, ED officials indicated that most paraprofessionals acquired the minimum qualifications by the June 30, 2006, deadline. NCLB authorized most ESEA programs through FY2007. The General Education Provisions Act (GEPA) provided an automatic one-year extension of these programs through FY2008. While most ESEA programs no longer have an explicit authorization, the programs continue to receive annual appropriations and paraprofessional quality requirements continue to be in place. LEAs in states that have received an ESEA flexibility waiver are not restricted in the use of Title I-A funds for failing to meet NCLB teacher quality and student achievement accountability requirements; however, all LEAs still must comply with the law's paraprofessional quality requirements. The 114 th Congress has acted on legislation to reauthorize the ESEA. Possible reauthorization issues concerning the paraprofessional provisions in Title I include the following: Are the assessments used to evaluate paraprofessional quality rigorous enough, and are they adequately tied to academic standards for students? Some consider the ParaPro and WorkKeys tests to be the "easy route," and claim they do not measure a instructional aide's ability to improve classroom instruction. Might a reauthorized ESEA be more explicit about the nature of these tests by linking them to other accountability provisions? Should ED be given greater authority to enforce higher standards for paraprofessional assessments? Should the paraprofessional qualification requirements be applied to a broader group of instructional aide s? For example, should these requirements be applied to all paraprofessionals with instructional responsibilities, not just to those paid with Title I-A funds? Should the exceptions currently made for computer lab assistants, translators, and those assisting with parental involvement be curtailed? Is the language regarding "direct supervision" too vague or too difficult to enforce? Do current provisions for the professional development of instructional aide s adequately encourage states to improve the paraprofessional workforce? Should states be given incentives to adopt paraprofessional certification requirements, as have been adopted in some states? Are there other ways to encourage paraprofessional development beyond the minimum qualifications that would positively affect the overall level of instructional quality? Have the paraprofessional qualification requirements significantly affected the extent to which Title I-A funds are used to hire these staff? In particular, have a significant number of paraprofessionals lost their jobs, or been assigned to non-Title I-A positions, after the end of the 2005-2006 school year because they were unable to meet the paraprofessional qualification requirements? Has this resulted in an overall decline or improvement in the quality of instruction? Should the roles of states versus LEAs in setting policies and implementing these requirements be clarified? Particularly in comparison to the teacher quality requirements of the NCLB, there has been relatively little guidance from ED, or clarity in the statute, on state-versus-LEA roles in the area of paraprofessional qualification requirements. Has the result been a constructive form of flexibility or dysfunctional ambiguity?

The No Child Left Behind Act of 2001 (NCLB) established minimum qualifications for paraprofessionals (also known as instructional aides) employed in Title I, Part A-funded schools. NCLB required that paraprofessionals must complete two years of college, obtain an associate's degree, or demonstrate content knowledge and an ability to assist in classroom instruction. Prior to the NCLB, the Elementary and Secondary Education Act of 1965 (ESEA) required only that paraprofessionals possess a high school diploma. These requirements, as enacted through NCLB, apply to all paraprofessionals employed in a Title I-A Schoolwide (SS1114) program without regard to whether the position is funded with federal, state, or local funds. In Title I-A programs known as Targeted Assistance (SS1115), only those paraprofessionals paid with Title I-A funds must meet the requirements (not those paid with state or local funds). A report by the Education Department (ED) reveals that paraprofessionals accounted for about one-third of instructional staff in Title I-A funded schools and districts. NCLB authorized most ESEA programs through FY2007. The General Education Provisions Act (GEPA) provided an automatic one-year extension of these programs through FY2008. While most ESEA programs no longer have an explicit authorization, the programs continue to receive annual appropriations and paraprofessional quality requirements continue to be in place. LEAs in states that have received an ESEA flexibility waiver are not restricted in the use of Title I-A funds for failing to meet NCLB teacher quality and student achievement accountability requirements; however, all LEAs still must comply with the law's paraprofessional quality requirements. This report describes the paraprofessional quality provisions and guidance provided by ED regarding implementation. The report concludes with discussion of issues that may arise as Congress considers reauthorization of the ESEA.

Congress is considering policies to reduce U.S. emissions of greenhouse gases. Prominent among these policies are those promoting the capture and direct sequestration of carbon dioxide (CO 2 ) from manmade sources such as electric power plants and manufacturing facilities. Carbon capture and sequestration is of great interest because potentially large amounts of CO 2 produced by the industrial burning of fossil fuels could be sequestered. Although they are still under development, carbon capture technologies may be able to remove up to 95% of CO 2 emitted from an electric power plant or other industrial source. Carbon capture and sequestration (CCS) is a three-part process involving a CO 2 source facility, a long-term CO 2 sequestration site, and an intermediate mode of CO 2 transportation--typically pipelines. Some studies have been optimistic about pipeline requirements for CO 2 sequestration. They conclude that the pipeline technology is mature, and that most major CO 2 sources in the United States are, or will be, located near likely sequestration sites, so that large investments in CO 2 pipeline infrastructure will probably not be needed. Other studies express greater uncertainty about the required size and configuration of CCS pipeline networks. A handful of regionally-focused studies have concluded that CO 2 pipeline requirements for CO 2 sources could be substantial, and thus present a greater challenge for CCS than is commonly presumed, at least in parts of the United States. Divergent views on CO 2 pipeline requirements introduce significant uncertainty into overall CCS cost estimates and may complicate the federal role, if any, in CO 2 pipeline regulation. They are also a concern because uncertainty about CO 2 pipeline requirements may impede near-term capital investment in electricity generation, with important implications for power plant owners seeking to reduce their CO 2 emissions. In the 110 th Congress, there has been considerable debate on the capture and sequestration aspects of carbon sequestration, while there has been relatively less focus on transportation. Nonetheless, there is an increasing perception in Congress that a national CCS program could require the construction of a substantial network of interstate CO 2 pipelines. The Carbon Dioxide Pipeline Study Act of 2007 (S. 2144), introduced by Senator Norm Coleman and nine cosponsors on October 4, 2007, would require the Secretary of Energy to study the feasibility of constructing and operating such a network of CO 2 pipelines. The America's Climate Security Act of 2007 (S. 2191), introduced by Senator Joseph Lieberman and nine cosponsors on October 18, 2007, and reported out of the Senate Environment and Public Works Committee in amended form on December 5, 2007, contains similar provisions (Sec. 8003). The Carbon Capture and Storage Technology Act of 2007 (S. 2323), introduced by Senator John Kerry and one cosponsor on November 7, 2007, would require carbon sequestration projects authorized by the act to evaluate the most cost-efficient ways to integrate CO 2 sequestration, capture, and transportation (Sec. 3(b)(5)). The Energy Independence and Security Act of 2007 ( P.L. 110-140 ), signed by President Bush, as amended, on December 19, 2007, requires the Secretary of the Interior to recommend legislation to clarify the appropriate framework for issuing CO 2 pipeline rights-of-way on public land (Sec. 714(7)). This report examines key uncertainties in CO 2 pipeline requirements for CCS by contrasting hypothetical pipeline scenarios in one region of the United States. The report summarizes the key factors influencing CO 2 pipeline configuration for major power plants in the region, and illustrates how the viability of different sequestration sites may lead to enormous differences in pipeline costs. Power plants, particularly coal-fired plants, are the most likely initial candidates for CCS because they are predominantly large, single-point sources, and they contribute approximately one-third of U.S. CO 2 emissions from fossil fuels. The report discusses the implications of uncertain CO 2 pipeline requirements for CCS as they relate to evolving federal policies for carbon control. Under a national CCS policy, a key question is how to establish a CO 2 pipeline network at the lowest social and economic cost given the current locations of existing CO 2 source facilities and the locations of future sequestration sites. On its face, this may appear to be a straightforward analytic problem of the type regularly addressed in other network industries. The oil and gas industry, among others, employs myriad analytic techniques to identify and optimize potential routes for new fuel pipelines. In the context of CCS, however, predicting pipeline routes is more challenging because there is considerable uncertainty about the suitability of geological formations to sequester captured CO 2 and the proximity of suitable formations to specific sources of CO 2 . One recent analysis, for example, concluded that 77% of the total annual CO 2 captured from the major North American sources could be stored in reservoirs directly underlying these sources, and that an additional 18% could be stored within 100 miles of the original sources. Other analysts suggest that captured CO 2 may need to be sequestered, at least initially, in more centralized reservoirs to reduce potential risks associated with CO 2 leaks. They suggest that, given current uncertainty about the suitability of various on-site geological formations for long-term CO 2 sequestration, certain specific types of formations (e.g., saline aquifers) may be preferred as CO 2 repositories because they have adequate capacity and are most likely to retain sequestered CO 2 indefinitely. The Department of Energy estimates that the United States has enough capacity to store CO 2 for tens to hundreds of years. However, the large-scale CO 2 experiments needed to acquire detailed data about potential sequestration reservoirs have only just begun. Given current uncertainty about potential sequestration sites, policy discussions about CCS envision various possible scenarios for the development of a CO 2 pipeline network. If CO 2 can be sequestered near where it is produced then CO 2 pipelines might evolve in a decentralized way, with individual facilities developing direct pipeline connections to nearby sequestration sites largely independent of other companies' pipelines. The resulting network might then consist of many relatively short and unconnected pipelines with a small number of longer pipelines for facilities with no sequestration sites nearby. Alternatively, if only very large, centralized sequestration sites are permitted, the result might be a network of interconnected long distance pipelines, perhaps including high-capacity trunk lines serving a multitude of feeder pipelines from individual facilities. A third scenario envisions CO 2 sequestration, at least initially, at active oil fields where injection of CO 2 may be profitably employed for enhanced oil recovery (EOR). Indeed, a CO 2 pipeline network already exists for EOR purposes in the southwestern United States, although it is limited in geographic reach. Whether CCS policies ultimately lead to one or more of these scenarios remains to be seen; however, the configuration of the resulting CO 2 pipeline network, and its associated costs, may have a significant bearing on which CCS policies best serve the public interest. Infrastructure requirements and policy implications related to CO 2 pipelines become clearer when considering what actual pipeline projects might look like. This section outlines contrasting scenarios for hypothetical CO 2 pipeline development in the region covered by the Midwest Regional Carbon Sequestration Partnership (MRCSP). The MRCSP is one of seven regional partnerships of state agencies, universities, private companies, and non-governmental organizations established by the Department of Energy to assess CCS approaches. The MRCSP serves as a good illustration of CO 2 pipeline issues because it has a varied mix of CO 2 sources and potential geologic sequestration sites, and because geologists have completed a number of focused studies relevant to CCS in this region. The MRCSP has identified key CO 2 sources and geologic formations potentially suitable for carbon sequestration within its seven-state region encompassing northeast Indiana, Kentucky, Maryland, Michigan, Ohio, Pennsylvania, and West Virginia. Figure 1 shows the locations of 11 of the largest CO 2 sources located in the MRSCP region--all coal-fired electric power plants emitting over 9 million metric tons of CO 2 annually. There are numerous other CO 2 sources in this region, including many other power plants and large industrial facilities, but the 11 power plants in this analysis include the very largest in terms of annual CO 2 emissions. Figure 1 also shows the locations of the Rose Run sandstone, a deep saline formation identified by the MRCSP as a potential carbon sequestration site. As the figure shows, the plants all lie above or near to this formation, so suitable CO 2 injection sites presumably could be located very near to each of these plants. If the Rose Run formation proves to be viable for large-scale CO 2 sequestration, then some plants may be able to inject CO 2 directly below their facilities, and CCS pipeline requirements for some of the other 11 power plants could be small. If this were the case, then the CCS CO 2 pipeline network for the 11 plants might appear as shown in Figure 2 . The hypothetical pipeline layout in Figure 2 assumes that a 25-mile diameter, non-overlapping reserve area is needed for each plant's sequestration site and that any location within the Rose Run formation is viable for sequestration. Figure 2 also assumes that each power plant is either located at or is connected to the center of its respective sequestration field by a large trunk pipeline built along existing rights of way and capable of carrying its peak CO 2 output. Smaller pipelines branching from the centrally-located plant or from the trunk line distribute the CO 2 to multiple injection wells in the sequestration site. These smaller pipelines are not considered in detail in this report. Figure 2 shows that the longest trunk pipeline for CO 2 transportation is 32 miles long, and the average pipeline is approximately 11 miles long. According to models developed at Carnegie Mellon University (CMU), the capital costs to construct an 11-mile pipeline in the Midwestern United States with a capacity of 10 million tons of CO 2 annually would be approximately $6 million. The levelized cost would be approximately $0.10 per ton of transported CO 2 , including costs for operation (e.g., compression) and maintenance. Although the Rose Run formation is identified by the MRCSP as a major potential sequestration site, it has characteristics which may ultimately limit its viability for large-scale CO 2 sequestration. The most important of these is overall sequestration capacity. Because the Rose Run formation has low to moderate permeability and thickness, geologic models show that it is unlikely all of the CO 2 emitted in the Rose Run region can be efficiently sequestered in the Rose Run formation. The Rose Run formation is also relatively fractured. Geologists have concluded that injecting pressurized CO 2 into the Rose Run formation potentially could induce minor earthquakes along certain preexisting (but undetected) faults in otherwise seismically stable areas. Faults and fractures can, in some cases, provide additional sequestration capacity and be beneficial for sequestration. But faults or fractures can also be permeable conduits for leakage and "can be a significant pathway for the loss of sequestered CO 2 ." While studies are not yet available to establish the validity of any of these concerns, future research may conclude that significant parts of the Rose Run formation would be unsuitable for large scale, permanent CO 2 sequestration. The CO 2 sequestration capacity of the Rose Run formation may turn out to be too limited because of its of overall size or integrity. If the policy goal is to sequester CO 2 from all major sources in the region, then at least some of the largest power plants in the MRCSP will need to sequester their carbon emissions elsewhere. The alternative sites for potential CO 2 sequestration nearest to Rose Run are unmineable coal beds, oil and natural gas fields, and another large saline formation--the Mount Simon sandstone. The MRCSP region contains unmineable coal beds underlying the same general geographic footprint as the Rose Run formation, but located at different depths underground. Studies suggest that such coal beds may be suitable for sequestration. In some cases injected CO 2 could replace methane trapped in the coal seam, increasing natural gas available for extraction wells in a process similar to EOR known as enhanced coal-bed methane recovery. However, the potential capacity for storing CO 2 in regional coal beds is only about 5% compared to the Rose Run sandstone, and the practicability of storing CO 2 in coal seams is virtually untested. In addition, removing groundwater from coal seams prior to CO 2 injection may create environmental problems related to water disposal, and some studies indicate that coal swelling associated with CO 2 injection may curtail the permeability of the coal seam, limiting its overall capacity to store CO 2 . The MRCSP region includes a number of oil and natural gas fields which may offer opportunities for CO 2 sequestration. The region also includes a number of natural gas storage reservoirs, both natural and manmade, which suggest that CO 2 could be similarly stored. However, according to the MRCSP, the ten largest oil and gas fields in the region have an average CO 2 sequestration potential of only 251 million tons. By comparison, the 30-year CO 2 output of the 11 plants in this analysis would range from 270 to 491 million tons at current emission levels. The oil and gas fields in the MRCSP region, therefore, even if they could achieve their stated sequestration potential, may not individually have sufficient capacity to sequester CO 2 from one of the 11 power plants in this analysis operating with current emissions over a 30-year period. Multiple fields possibly could be used by individual power plants to achieve adequate long-term sequestration, but this would require multiple pipeline networks and, consequently, could increase CO 2 transportation costs and complexity. Oil and gas production fields also present CO 2 sequestration challenges due to numerous boreholes from historical well-drilling activity. Geologists are concerned that old oil and gas wells may be inadequately sealed and that their locations may be uncertain. Increased leakage risks from old wells, as well as associated mitigation and monitoring costs, may reduce the economic CCS sequestration potential in oil or gas fields. Although revenues from CO 2 sales for EOR projects could offset CO 2 transportation and sequestration costs for some source facilities, long-term CO 2 emissions in the MRCSP region would far exceed CO 2 requirements for EOR. It is possible, therefore, that because of their limited sequestration capacity and wellbore leakage concerns, oil and natural gas fields in the MRCSP region may not be viable sequestration sites for the largest CO 2 sources either. If neither the Rose Run formation nor regional coal, oil, or gas fields can provide adequate CO 2 sequestration for the major power plants in the MRCSP region, the next best potential CO 2 sequestration site is the Mt. Simon formation. This formation is a deep saline aquifer like the Rose Run formation, but it is over four times larger in terms of sequestration capacity and is less fractured. Figure 3 shows hypothetical CO 2 pipelines which might be required if any of the major power plants in this analysis were required to transport CO 2 to the Mount Simon formation. As in the Rose Run case, Figure 3 assumes pipelines use existing rights of way and that a 25-mile diameter, non-overlapping reserve area is needed for each plant's sequestration site. However, consistent with the Rose Run limitations, the Mt. Simon scenario assumes that the thinnest parts of the formation (the easternmost contours on the contour map) are unsuitable sequestration sites. As the figure shows, the pipelines required in such a scenario could be substantial, ranging in length from 130 to 294 miles, and averaging 234 miles. According to estimates from CMU, the approximate capital costs for these pipelines would range from $70 million to $180 million, and would average $150 million. The average levelized cost would be approximately $2.00 per ton of transported CO 2 . Although Figure 3 shows a pipeline route for all the 11 power plants in question, how many of these pipelines might be needed depends upon which plants may be able to sequester their CO 2 emissions closer to home. Furthermore, there are potential scale economies for large, integrated CO 2 pipeline networks that link many sources together rather than single, dedicated pipelines between individual sources and sequestration reservoirs. The individual pipelines required in Figure 3 may be so large on their own that combining multiple CO 2 flows from multiple plants through shared trunk lines may be limited. While the Mt. Simon scenario in Figure 3 is far less favorable in terms of cost and siting requirements than the Rose Run scenario in Figure 2 , it is not necessarily the "worst" case in terms of overall pipeline requirements. Future work on sequestration capacity may conclude that the Mt. Simon sequestration sites should be located in thicker parts of the formation (in central Indiana and Michigan) to absorb the tremendous volumes of CO 2 generated by these power plants. Such a westward shift would require even longer pipelines than those illustrated here. The MRCSP pipeline scenarios, while only illustrative, nonetheless highlight several important policy considerations which may warrant congressional attention. These include concerns about CO 2 pipeline costs, siting challenges, pipeline and sequestration site relationships, and differences in sequestration potential among regions. The cost of CO 2 transportation is a function of pipeline length (among other factors), which in turn is determined by the location of sequestration sites relative to CO 2 sources. The scenarios in this report illustrate how different assumptions about sequestration site viability in the MRCSP region can lead to a 20-fold difference in CO 2 pipeline lengths and, therefore, similarly large differences in capital costs. (In this regard, CO 2 pipeline costs may present the cost component in integrated CCS schemes with the greatest potential variability.) At the international and national policy levels, some studies have recognized this potential variability. For example, an MIT analysis states that the costs of CO 2 pipelines are highly variable due to "physical ... and political considerations." The IPCC report likewise estimates total costs of CO 2 mitigation of $31- $71 per ton of CO 2 avoided for a new pulverized coal power plant, assuming CO 2 pipeline transportation costs, including operations and maintenance costs, of $0 to $5 per ton. Recent increases in the global price of steel used to make line pipe could push CO 2 pipeline costs above this range. At $5 per ton of transported CO 2 , pipeline costs account for a modest share of aggregate carbon control costs--between 7% and 16% based on the IPCC estimates. Nonetheless, if CCS technology were deployed on a national scale, overall CO 2 pipeline costs could be in the billions of dollars. Minimizing these costs while achieving environmental objectives may therefore be an important public policy objective. From the perspective of individual power plants, or other CO 2 sources, highly variable costs for CO 2 pipelines may have more immediate ramifications. If CO 2 pipeline costs for specific regions reach hundreds, or even tens, of millions of dollars per plant, then power companies may have difficulty securing the capital financing or regulatory approval needed to construct or retrofit fossil fuel-powered plants in these regions. For example, in August 2007, the Minnesota Public Utilities Commission rejected a developer's proposal to construct a new coal-fired power plant in the state, in large part because the associated costs of a 450-mile CO 2 pipeline to an EOR site in Alberta, over $635 million, were not viewed to be in the public interest. To the extent that other, lower-cost power plant options are available, the failure of a costly project like the Minnesota plant may not be a problem. However, if other generation sources are constrained (e.g., nuclear, renewable), then the inability to construct a new fossil-fueled power plant may negatively impact the regional balance of electricity supply and demand. Higher electricity prices or reliability concerns might ensue. Some analysts believe that CO 2 pipeline costs will be moderated in the future because generating companies will construct new power plants geographically near sequestration sites. Recent network cost models suggest otherwise. On a mile-for-mile basis, these models show that electricity transmission costs (including capital, operations, maintenance, and electric line losses) generally outweigh CO 2 pipeline costs in new construction. Accordingly, the least costly site for a new power plant tends to be nearer the electricity consumers (cities) rather than nearer the sequestration sites if the two are geographically separated. Analysts have therefore concluded that "a power system with significant amounts of CCS requires a very large CO 2 pipeline infrastructure." Any company seeking to construct a CO 2 pipeline must secure siting approval from the relevant regulatory authorities and must subsequently secure rights of way from landowners. There is no federal authority over CO 2 pipeline siting, so it is regulated to varying degrees by the states (as is the case for oil pipelines). The state-by-state siting approval process for CO 2 pipelines may be complex and protracted, and may face public opposition, especially in populated or environmentally sensitive areas. Securing rights of way along existing easements for other infrastructure (e.g., gas pipelines), as the scenarios in this report assume, may be one way to facilitate the siting of new CO 2 pipelines. However, questions arise as to the right of easement holders to install CO 2 pipelines, compensation for use of such easements, and whether existing easements can be sold or leased to CO 2 pipeline companies. Although these siting issues may arise for any CO 2 pipeline, they become more challenging as pipeline systems become larger and more interconnected, and cross state lines. If a widespread, interstate CO 2 pipeline network is required to support CCS, the ability to site these pipelines may become an issue requiring new federal initiatives. Due to potential CO 2 transportation costs, individual generating plants have a strong interest in the selection of specific sequestration sites under future CCS policies. Since transporting CO 2 to distant locations can impose significant additional costs to a facility's carbon control infrastructure, facility owners may seek regulatory approval for as many sequestration sites as possible and near to as many facilities as possible. Furthermore, capacity limitations at favorably located sequestration sites (like the Rose Run formation) may lead to competition among large CO 2 source facilities seeking to secure the best local sequestration sites before others do. How the development of sequestration sites will be prioritized and how competition for such sites may evolve have yet to be explored, but they may create new and significant economic differences among facilities. Because CO 2 pipeline requirements in a CCS scheme are driven by the relative locations of CO 2 sources and sequestration sites, identification and validation of such sites must explicitly account for CO 2 pipeline costs if the economics of those sites are to be fully understood. Proposals such as S. 2323, which would require an integrated evaluation of CO 2 capture, sequestration, and transportation (Sec. 3(b)(5)), appear to promote such an approach, although the details of future sequestration site selection have yet to be established. If CCS moves from pilot projects to widespread implementation, government agencies and private companies may face challenges in identifying, permitting, developing, and monitoring the large number of localized sequestration reservoirs that may be proposed. Geologists have long recognized that some regions in the United States have high potential for carbon sequestration and others do not. For example, a 2007 study at Duke University concluded that "geologic sequestration is not economically or technically feasible within North Carolina," but "may be viable if the captured CO 2 is piped out of North Carolina and stored elsewhere." Likewise, states in the Northeast, Minnesota, Wisconsin, and possibly parts of other states appear to lack geological formations with potential for large-scale sequestration of the volumes of CO 2 they produce. If national CCS policies are implemented, power plants and other CO 2 -producing facilities in these states may face more extensive, and more costly, pipeline requirements than other states if they are to sequester their CO 2 . States such as North Carolina, with limited sequestration potential and a relatively high proportion of coal or natural gas in their electric generation fuel mix, may face particular challenges in this regard. The Duke study, for example, estimated it would cost $5 billion to construct an interstate pipeline network for transporting CO 2 from North Carolina's electric utilities to sequestration sites in other states. One particular concern among some stakeholders is that high CO 2 transportation costs could increase electricity prices in "sequestration-poor" regions relative to regions able to sequester CO 2 more locally. For states like Massachusetts, for example, which has some of the highest electricity prices in the country and may have little sequestration potential, CO 2 transportation costs could raise electricity prices even higher above the national average. Moving beyond this illustrative example to evaluate comprehensively the distribution of CO 2 transportation costs across the United States is beyond the scope of this report. Nonetheless, these kinds of regional price impacts, and their implications for regional economies, may become an issue for Congress. The socially and economically efficient development of the nation's public infrastructure is an important consideration for policymakers. In the context of a national program for CCS, CO 2 pipelines may be a major addition to this infrastructure. Yet there are many uncertainties about the cost and configuration of CO 2 pipelines that would be needed to meet environmental goals within an emerging regulatory framework. Exactly who will pay for CO 2 pipelines, and how, is beyond the scope of this report, but understanding ways to minimize the cost and environmental impact of this infrastructure may be of benefit to all. In addition to specific questions about CO 2 pipeline requirements, the scenarios in this report raise larger questions about the ultimate development and allocation of sequestration capacity under a national CCS policy. How much individual companies may have to spend to transport their CO 2 depends upon where it has to go. However, even as viable sequestration reservoirs are being identified, it is unclear which CO 2 source facilities will have access to them, under what time frame, and under what conditions. While Congress is beginning to turn its attention to these questions, it will likely require sustained attention and the input of many stakeholders to refine and address them. Given the potential size of a national CO 2 pipeline network, many billions of dollars of capital investment may be affected by policy decisions made today.

Congress is considering policies promoting the capture and sequestration of carbon dioxide (CO2) from sources such as electric power plants. Carbon capture and sequestration (CCS) is a process involving a CO2 source facility, a long-term CO2 sequestration site, and CO2 pipelines. There is an increasing perception in Congress that a national CCS program could require the construction of a substantial network of interstate CO2 pipelines. However, divergent views on CO2 pipeline requirements introduce significant uncertainty into overall CCS cost estimates and may complicate the federal role, if any, in CO2 pipeline development. S. 2144 and S. 2191 would require the Secretary of Energy to study the feasibility of constructing and operating such a network of pipelines. S. 2323 would require carbon sequestration projects to evaluate the most cost-efficient ways to integrate CO2 sequestration, capture, and transportation. P.L. 110-140, signed by President Bush on December 19, 2007, requires the Secretary of the Interior to recommend legislation to clarify the issuance of CO2 pipeline rights-of-way on public land. The cost of CO2 transportation is a function of pipeline length and other factors. This report examines key uncertainties in CO2 pipeline requirements for CCS by contrasting hypothetical pipeline scenarios for 11 major coal-fired power plants in the Midwest Regional Carbon Sequestration Partnership region. The scenarios illustrate how different assumptions about sequestration site viability can lead to a 20-fold difference in CO2 pipeline lengths, and, therefore, similarly large differences in capital costs. From the perspective of individual power plants, or other CO2 sources, variable costs for CO2 pipelines may have significant ramifications. If CO2 pipeline costs for specific regions reach tens, or even hundreds, of millions of dollars per plant, then power companies may have difficulty securing the capital financing or regulatory approval needed to construct or retrofit fossil fuel-powered plants in these regions. High CO2 transportation costs also could increase electricity prices in "sequestration-poor" regions relative to regions able to sequester CO2 more locally. As CO2 pipelines get longer, the state-by-state siting approval process may become complex and protracted, and may face public opposition. Because CO2 pipeline requirements in a CCS scheme are driven by the relative locations of CO2 sources and sequestration sites, identification and validation of such sites must explicitly account for CO2 pipeline costs if the economics of those sites are to be fully understood. Since transporting CO2 to distant locations can impose significant additional costs to a facility's carbon control infrastructure, facility owners may seek regulatory approval for as many sequestration sites as possible and near to as many facilities as possible. If CCS moves to widespread implementation, government agencies and private companies may face challenges in identifying, permitting, developing, and monitoring the large number of localized sequestration reservoirs that may be proposed. However, even as viable sequestration reservoirs are being identified, it is unclear which CO2 source facilities will have access to them, under what time frame, and under what conditions. Given the potential size of a national CO2 pipelines network, many billions of dollars of capital investment may be affected by policy decisions made today.

T he Patient Protection and Affordable Care Act (ACA; P.L. 111-148 , as amended) includes a 40% excise tax on high-cost employer-sponsored health insurance coverage, often referred to as the Cadillac tax . The 40% excise tax is assessed on the aggregate cost of employer-sponsored health coverage that exceeds a dollar limit. If a tax is owed, it is levied on the entity providing the coverage (e.g., the health insurance issuer or the employer). Under the ACA, the excise tax was to go into effect in 2018; however, the Consolidated Appropriations Act of 2016 (CAA of 2016; P.L. 114-113 ) delays implementation until 2020. The excise tax is included in the ACA to raise revenue to offset the cost of other ACA provisions (e.g., the financial subsidies available through the health insurance exchanges). The most current publicly available cost estimate from the Congressional Budget Office (CBO) indicates that the excise tax was expected to increase federal revenues by $87 billion between 2016 and 2025, based on 2018 implementation. The excise tax also is expected to limit the tax advantages for employer-sponsored health coverage. Many economists contend that the tax advantages lead to an overconsumption of coverage and health care services. This report provides an overview of the excise tax. The report includes cost estimates for the excise tax and explores the excise tax's relationship with the tax advantages for employer-sponsored health coverage. The information in this report is based on statute and two notices issued by the Department of the Treasury (Treasury) and the Internal Revenue Service (IRS). Notice 2015-16 was issued February 17, 2015, and the comment period for the notice closed May 15, 2015. Notice 2015-52 was issued July 30, 2015. The comment period for the notice closed October 1, 2015. As of the date of this report, regulations related to the excise tax have not been promulgated. Many employers offer health insurance plans and other health-related benefits (e.g., health care flexible spending accounts, or FSAs). These benefits are one part of an employee's total compensation. Often employers pay for part or all of these benefits. To illustrate, 57% of employers offered health insurance plans to their employees in 2015, and on average employers covered 82% of the premiums for single coverage and 71% of the premiums for family coverage. Beginning in 2020, a 40% excise tax is to be assessed on the aggregate cost of an employee's applicable coverage that exceeds a dollar limit during a taxable period. Unlike some other ACA provisions, assessment of the excise tax is not dependent on an employer's characteristics (e.g., number of workers); assessment is dependent on whether the aggregate cost of an employee's applicable coverage exceeds a dollar limit. The entity responsible for paying the excise tax to the IRS is the coverage provider. The terms applicable coverage, dollar limit, and coverage provider are defined and described in more detail below. The excise tax is assessed on the amount by which the aggregate cost of an employee's applicable coverage exceeds a dollar limit. The amount is called the excess benefit . Determining the excess benefit requires knowing which types of coverage are considered applicable coverage and how the cost of such coverage is calculated. For example, consider an employee who has an employer-sponsored health plan, a separate vision-only plan, and a health care flexible spending account (FSA). To determine the excess benefit, if any, of the employee's coverage, it is necessary to know whether any of the coverage is considered applicable coverage and the methods for determining the cost of such coverage. Applicable coverage is defined as coverage under any group health plan made available to the employee by an employer which is excludable from the employee's gross income under section 106 [of the IRC], or would be so excludable if it were employer-provided coverage (within the meaning of such section 106). Coverage that is excluded from an employee's gross income under Section 106 of the IRC includes, but is not limited to, employers' contributions to health insurance premiums, Archer Medical Savings Accounts (MSAs), and health savings accounts (HSAs). Additionally, three arrangements are identified in the statute as applicable coverage: (1) the employee-paid portion of health insurance coverage (i.e., an employee's contribution to premiums); (2) a self-employed individual's health insurance coverage for which a deduction is allowable under Section 162(l) of the IRC; and (3) coverage under a group health plan for civilian employees of federal, state, or local governments. See Table 1 for a list of what is considered applicable coverage based on the statute and Notice 2015-16. Certain arrangements are excluded from the definition of applicable coverage ( Table 2 ). Arrangements not considered applicable coverage are not included in the calculation for determining the aggregate cost of applicable coverage. The cost of applicable coverage is to be determined under rules "similar to" the rules in Section 4980B(f)(4) of the IRC. These rules currently apply under Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA; P.L. 99-272 ). Under COBRA, an employer with 20 or more employees that provided health insurance benefits must provide qualified employees and their families the option of continuing their coverage under the employer's group health insurance plan in certain cases where the employee's coverage otherwise would end (e.g., the employee is terminated). For COBRA purposes, the rules in Section 4980B(f)(4) of the IRC are used to determine the cost of the premium for the health insurance plan in which the former employee can continue. As of the date of this report, information is not available about how the rules in Section 4980B(f)(4) of the IRC will be applied in the context of the excise tax. In Notice 2015-16, Treasury and IRS describe potential approaches they are considering for applying the COBRA rules to determine the cost of applicable coverage. The statute also includes specific calculation rules for determining the cost of applicable coverage: Any portion of the cost of applicable coverage that is attributable to the excise tax will not be taken into account. The cost of applicable coverage will be calculated separately for single coverage and non-single coverage (e.g., family coverage). In the case of applicable coverage provided to retired employees, the plan can choose to treat a retired employee who is under the age of 65 and a retired employee aged 65 or older as similarly situated beneficiaries. With respect to a health care FSA, the cost of applicable coverage is the greater of an employee's salary reduction election or the total reimbursements under the FSA. With respect to Archer MSAs, the cost of applicable coverage is equal to an employer's contributions to the Archer MSA. With respect to HSAs, the cost of applicable coverage is equal to an employer's contributions, including salary reduction contributions, to the HSA. If the cost of applicable coverage is not determined on a monthly basis, the cost of the coverage will be allocated to months on a basis prescribed by the Secretary of the Treasury. The excise tax is assessed on the excess benefit--the portion of an employee's applicable coverage that exceeds a dollar limit. Under the ACA, the dollar limits for 2018 were to be $10,200 for single coverage and $27,500 for non-single coverage (e.g., family coverage), as adjusted by the health cost adjustment percentage. For 2019, the limits were to be the 2018 limits adjusted by the Consumer Price Index for all Urban Consumers (CPI-U), plus 1%. For 2020 and beyond, the limits were to be the previous year's limits adjusted by the CPI-U. The CAA of 2016, which delayed implementation of the excise tax until 2020, did not change the 2018 dollar limits or modify how the 2018 dollar limits were to be adjusted. The Department of the Treasury has not yet issued the 2020 limits, but the Congressional Research Service estimates they will be about $10,800 for single coverage and $29,100 for non-single coverage. The dollar limits also could be subject to two different adjustments, which are described below. The CAA of 2016 did not modify these adjustments. For some employers, the dollar limits for each year could be increased based on their employees' demographic characteristics. The adjustment could occur if the age and gender characteristics of all employees of an employer are significantly different from the age and gender characteristics of the national workforce. The adjustment uses the BCBS Standard plan offered through the FEHB program. The cost of the BCBS Standard plan is determined based on the age and gender characteristics of the employer's workforce and on the age and gender characteristics of the national workforce. The amount the dollar limits could be increased is equal to the excess cost of the BCBS Standard plan adjusted for the employer's workforce as compared to the BCBS Standard plan adjusted for the national workforce. The limits also may be adjusted for (1) individuals who are qualified retirees and (2) individuals who participate in an employer-sponsored plan that has a majority of its enrollees engaged in a high-risk profession or "employed to repair or install electrical or telecommunications lines." For purposes of this adjustment, qualified retirees are retired individuals aged 55 and older who do not qualify for Medicare. Employees engaged in high-risk professions are law enforcement officers (as such term is defined in section 1204 of the Omnibus Crime Control and Safe Streets Act of 1968), employees in fire protection activities (as such term is defined in section 3(y) of the Fair Labor Standards Act of 1938), individuals who provide out-of-hospital emergency medical care (including emergency medical technicians, paramedics, and first-responders), individuals whose primary work is longshore work (as defined in section 258(b) of the Immigration and Nationality Act (8 U.S.C. 1288(b)), determined without regard to paragraph (2) thereof), and individuals engaged in the construction, mining, agriculture (not including food processing), forestry, and fishing industries. Such term includes an employee who is retired from a high-risk profession described in the preceding sentence, if such employee satisfied the requirements of such sentence for a period of not less than 20 years during the employee's employment. Under this adjustment, the dollar limits are increased for these individuals by $1,650 for self-only coverage and $3,450 for coverage other than self-only. The excise tax is not assessed on an employee; rather it is assessed on the entity providing the applicable coverage--the coverage provider . Table 3 lists the coverage providers identified in statute. It is possible that an employee's applicable coverage may not be provided by just one coverage provider. In the case of multiple coverage providers, each coverage provider is responsible for paying the excise tax on its applicable share of the excess benefit. A coverage provider's applicable share is based on the cost of the coverage provider's applicable coverage in relation to the aggregate cost of all of the employee's applicable coverage. In general, the employer is responsible for calculating the aggregate amount of applicable coverage that is in excess of the threshold and determining each coverage provider's applicable share of the tax. The employer is required to notify the Secretary of the Treasury and each coverage provider about the amount determined. A penalty may be imposed on the employer if the excess benefit is not calculated correctly. Under the ACA, the excise tax was nondeductible--coverage providers could not deduct the excise tax as a business expense. However, the CAA of 2016 includes a modification to allow coverage providers to deduct the tax. The excise tax is one of several taxes and fees included in the ACA to raise revenue to offset the cost of other ACA provisions (e.g., the financial subsidies available through the health insurance exchanges). In March 2015, the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) estimated the excise tax would increase federal revenues by $87 billion between 2016 and 2025, based on the tax's implementation beginning in 2018. CBO and JCT indicate that the revenue raised by the excise tax will come from both collection of the excise tax and increases in taxable income, with most of the revenue raised a result of increases in taxable income. The relationship between the excise tax and taxable income is discussed in the following section. Employer-sponsored health insurance and benefits generally are excluded from employees' gross income for purposes of determining employees' income tax liability. Additionally, these amounts generally also qualify for exclusion from Social Security and Medicare (FICA) taxes and unemployment (FUTA) taxes. These exclusions often are collectively referred to as the tax exclusion for employer-sponsored health insurance and benefits. Modifying or repealing the tax exclusion has been discussed for many years. One reason federal policymakers are interested in the tax exclusion is that the exclusion results in considerable revenue loss to the federal government. JCT estimates the income tax exclusion will result in $785 billion in foregone revenue for the federal government between 2014 and 2018. Ending or modifying the tax exclusion could raise a significant amount of revenue, depending on how it would be modified or repealed and how employers and workers would adjust. The excise tax does not directly modify or end the tax exclusion; however, the excise tax is seen as an indirect method for limiting the tax exclusion. As discussed above, official scores indicate that the revenue raised by the excise tax will come both from collection of the excise tax and from increases in taxable income. The increases in taxable income are a result of the expectation that employers will reduce the amount of health coverage they offer to employees to avoid paying the excise tax. Provided employers do this but keep total compensation for employees constant (i.e., shift the compensation from health benefits to taxable wages), the result will be generally higher taxable wages for affected employees. CBO and JCT have estimated that about one-quarter of the revenue raised will come from collection of the excise tax, while about three-quarters of the revenue raised will stem from employers' responses to the tax.

The Patient Protection and Affordable Care Act (ACA; P.L. 111-148, as amended) includes a 40% excise tax on high-cost employer-sponsored health coverage. This excise tax is often called the Cadillac tax. Under the ACA, the excise tax was to be implemented beginning in 2018; however, the Consolidated Appropriations Act of 2016 (P.L. 114-113) delays implementation until 2020. The excise tax applies to the aggregate cost of an employee's applicable coverage that exceeds a dollar limit. Applicable coverage includes, but is not limited to, the employer's and the employee's contribution to health insurance premiums and certain contributions to tax-advantaged health accounts (e.g., health care flexible spending accounts, or FSAs). In 2020, the Congressional Research Service (CRS) estimates the dollar limits will be about $10,800 for single coverage and $29,100 for non-single (e.g., family) coverage. The dollar limits may be adjusted based on growth in health insurance premiums and characteristics of an employer's workforce. Additionally, the dollar limits are to be adjusted for inflation in subsequent years. The entity providing the coverage, the coverage provider, is responsible for paying its share of the excise tax. A coverage provider may be an employer, a health insurer, or another entity that sponsors the coverage. The employer is responsible for calculating the amount of tax owed by each coverage provider (if any). All of this information is covered in more detail in this report, which provides an overview of how the excise tax is to be implemented. The information in the report is based on statute and guidance issued by the Department of the Treasury and the Internal Revenue Service.

According to the U.S. Department of Agriculture (USDA), the United States is expected to be the fourth-largest producer and third-largest exporter of peanuts in the world in 2016. In addition to its prominent role in international markets, U.S. peanut production and marketing is an important activity in several states located in the southeastern and southwestern United States. Peanuts have participated in federal farm support programs since the 1930s--initially under a quota system, and since 2002 under the income support programs available for other covered commodities like corn, wheat, soybeans, and rice. This report uses the most current public information available (as of September 2016) to provide a brief overview of the U.S. peanut sector and current U.S. farm policy including a discussion of how peanuts (following market adjustments spurred by a 2002 federal quota buyout) fit within current policy relative to other program crops. U.S. peanut production is located primarily in the southeastern United States. The crop is planted in an arc stretching from southern Mississippi to southern Virginia, but with some additional smaller clusters of production in Texas, Oklahoma, and New Mexico ( Figure 1 ). Georgia accounts for just under half of U.S. production, and Alabama and Florida each have 12%. Most neighboring states account for single-digit shares. This geographic location of production reflects the peanut plant's need for 120-160 frost-free days and soil that is sandy and loamy (relatively equal amounts of sand, silt, and clay) for optimal crop performance. The peanut industry is also geographically concentrated within each state, with peanuts accounting for a large share of farm and related agribusiness income earned in a number of peanut-producing counties. About three-fourths of U.S. peanut acreage is dryland (1.1 million acres in 2012), and the remainder is irrigated (0.5 million acres). The major types of peanuts grown in the United States are Runner, Virginia, Spanish, and Valencia ( Table 1 ). The Runner is the most common variety and is used in the manufacture of peanut butter. Peanut butter is the leading use of peanuts produced in the United States (45%), according to the American Peanut Council (APC). Snack nuts and in-shells account for approximately 30% of use. Candy and confections and peanut oil for cooking account for the remainder. According to APC, peanuts are the leading snack nut consumed in the United States, with a two-thirds share of the snack nut market. Peanuts were grown on 6,561 farms in the United States in 2012, according to the 2012 Census of Agricultur e , with an average farm size of 247 harvested peanut acres per farm ( Table 2 ). Similar to output for other commodities, peanut production is primarily through larger farms that typically have lower per-unit costs of production. Peanut farms with at least 250 acres account for one-third of all peanut farms and three-quarters of national production. Most peanut farmers also plant other crops such as cotton, corn, or soybeans in multi-year rotations with peanuts in order to maintain soil health and crop yields. The farm value of peanut production was $1.2 billion in 2015. After harvest, farmers move peanuts to buying points or stations located throughout the production regions. Buying stations are operated by shellers, independent dealers, or warehouse owners. These "first handlers" purchase the peanuts and provide services such as drying, cleaning, and arranging for marketing assistance loans provided by USDA. Shellers sell edible peanuts to processors for manufacturing and bid on USDA-owned stocks of peanuts (forfeitures under the marketing loan program) for processing or export. Sales between shellers and processors are arranged by brokers or done directly. Unlike markets for major crops like corn and soybeans, the U.S. peanut market is considered "thin," with only two peanut shellers reportedly buying over 80% of all peanuts from growers. No futures market exists for peanuts, and private contracts between producers and shellers reportedly account for most transactions. Given the peanut industry's structure and pricing practices (contracting), little public price and other market information is available to USDA. Two opposing but related trends have shaped peanut production during the last quarter century. Planted acreage has declined while productivity (yield measured in pounds per acre) has increased (see Figure 2 ). Acreage had been declining even prior to the policy change in 2002 from a quota system, which tended to lock acreage in place, to traditional commodity support programs (see " U.S. Farm Policy and Peanuts "). The policy change allowed market forces to play a stronger role in producer decision making. As a result, peanut production shifted to higher-yielding land with lower production costs. This acreage shift, including a greater proportion of plantings in Georgia, along with improvements in varieties and management practices, propelled a long-term uptrend in peanut yields that helped to lift peanut production in recent years ( Figure 2 ). Another phenomenon associated with the 2002 peanut quota buyout has been a substantial increase in market volatility as evidenced by the sharp up-and-down cycle of plantings and production since 2002. Some policy watchers are concerned that a new set of government policies established under the 2014 farm bill (discussed in the next section of this report) have artificially reversed the downward trend in peanut planted acreage as seen by higher plantings in 2015 and 2016. A critical long-run factor influencing peanut output is the nature of demand for peanuts. In general, the demand for peanuts and peanut products (especially peanut butter) is fairly inelastic. This implies that even small changes in supply can result in large price movements. Domestic food use has grown slowly but steadily over time. In contrast, the international marketplace has grown in importance in recent years. U.S. peanut exports averaged a 14% share of total use during the 2002 to 2011 period but jumped sharply in 2012 and have averaged 23% of total use since ( Figure 3 ). Canada, the Netherlands, and Mexico are the traditional top export markets and account for about half of U.S. exports. However, it was China--which entered the market in 2012 as a buyer because its regular supplier (India) had encountered yield problems due to drought--that was behind the surge in U.S. peanut exports. In 2015/16, China again entered the U.S. market to purchase peanuts, causing U.S. exports to jump 43% from the previous year to a record 1,544 million tons. This export surge was combined with a 28% jump in domestic peanut use to a record 5.1 million pounds, partly due to government purchases of 37.5 million pounds of processed peanut products (for distribution through domestic feeding channels) in FY2015 and another 39.1 million pounds in FY2016. This surge in total demand (+31%) contributed to an estimated 15% drop in U.S. ending stocks ( Figure 4 ), thus avoiding early-year expectations for large producer forfeitures under the marketing assistance loan program. In 2015/16 (August-July season), the average farm price of peanuts is expected to be 19.3 cents per pound--well above early-year predictions as low as 17 cents per pound. The unexpected jump in 2015/16 demand is in contrast to the trend that has evolved since 2012. High farm prices in 2011 encouraged U.S. producers to sharply increase plantings in 2012 (up 44% from the previous year). A record U.S. peanut harvest in 2012--driven by both large plantings and record yields--resulted in record large domestic ending stocks despite record exports and strong domestic use. The 2012/13 marketing year ending stocks were also record large in terms of their relative size as a share of total use (54%). The large domestic peanut supply has contributed to a strong downward trend in U.S. farm prices for peanuts since 2012 and helps to explain the pessimistic outlook for government program outlays under the new farm revenue programs of the 2014 farm bill as expressed by USDA and CBO in their February 2016 long-run outlooks. Farm policy for peanuts has followed a different policy trajectory from the other program crops for most of the last century. From the 1930s until 2002, peanuts operated under a system of marketing quotas that rigidly controlled domestic supplies and prices. In 2002, Congress eliminated peanut quotas under a new farm bill (Farm Security and Rural Investment Act of 2002, P.L. 107-171 , SS1301-SS1309) through a series of payments that offset the loss of quota rights--these payments are referred to as a "buyout." Since the 2002 buyout, farm policy for peanuts has followed essentially the same structure as for other "covered" program commodities. In addition to eligibility for major farm support programs, peanuts initially retained their long-standing eligibility for Commodity Credit Corporation (CCC) monthly storage payments (similar to the cotton storage payment program) when put under a nine-month nonrecourse marketing loan. However, eligibility for storage payments was terminated with the 2007 peanut crop. The current farm commodity program provisions in Title I of the 2014 farm bill (Agricultural Act of 2014; P.L. 113-79 ) include three types of support for covered commodities for crop years 2014-2018: Marketing Assistance Loan benefits , which offer interim (up to nine months) financing for loan commodities (covered crops plus several others) at statutory loan rates and, if prices fall below loan rates, additional low-price protection in the form of marketing loan gains, loan deficiency payments, or forfeiture; Price Loss Coverage (PLC) payments, which are triggered when the national season average farm price for a covered commodity is below its statutorily fixed "reference price"; and Agriculture Risk Coverage (ARC) payments, as an alternative to PLC, which are triggered when annual crop revenue is below its guaranteed level based on a multiyear moving average of historical crop revenue. Under the 2014 farm bill, farmers with base acres of covered commodities were given a one-time irrevocable choice between PLC and "county" ARC (based on a county guarantee) on a commodity-by-commodity basis for each farm. Alternatively, all covered crops on a farm could be enrolled in "individual" ARC, which is based on a farm-level guarantee. If no choice was made, the producer forfeited any payments for the 2014 crop year and the farm was enrolled automatically in PLC for the 2015-2018 crop years. For peanuts, almost all producers (99.7%) selected PLC because they expected it to provide higher payments and greater risk protection than would be available under ARC. Similarly most rice producers (100% for long grain and 96% for medium grain) and large majorities of barley (75%), canola (97%), sorghum (66%), and minor oilseed producers (56% to 84%) also selected PLC. In contrast, a near-unanimous majority of corn (93%) and soybean (97%) producers, and a large majority of wheat producers (56%), selected ARC. Under current peanut program provisions, the primary advantage that peanuts have over other program crops is that peanut producers participating in government support programs have a separate program payment limit--a consequence of the peanut quota buyout ( P.L. 107-171 ; SS1603(c)). As a result of this feature, a farmer that grows multiple program crops including peanuts has essentially two different program payment limits: the first payment limit of $125,000 per person is for an aggregation of program payments made to all program crops other than peanuts; the second payment limit of $125,000 per person is for program payments made exclusively to peanuts. Thus, under an extreme scenario involving large payments for both peanuts and other program crops, this could potentially double a farmer's payment limits to as much as $250,000. Peanuts and other designated crops are eligible for benefits under the Marketing Assistance Loan (MAL) program. MAL provides interim financing in the form of a government loan for up to nine months for participating producers following harvest of their crops. A farmer must produce a crop to benefit from the program because the crop serves as loan collateral if the producer applies for a loan. The MAL process begins after harvest, when farmers may request a marketing loan, which is offered by USDA at a loan rate established in statute for pledged production ( P.L. 107-171 ; SS1202)--for peanuts the loan rate is $355 per ton or equivalently, 17.75 cents per pound. If a farmer puts their crop under a marketing loan, then they receive loan proceeds equal roughly to the quantity of peanuts placed under loan times the loan rate. Farmers then closely watch the relationship between market prices and the loan rate. In the case of peanuts, USDA estimates and announces a weekly national posted price to be used in determining the marketing loan repayment rate and other benefits. Prior to loan maturity, a farmer may repay the loan principal and interest if the posted price is at or above the loan rate. As a result, the loan provides interim financing, allowing the farmer to receive cash as soon as the crop is harvested and avoiding sale of the crop during harvest when prices tend to be at their seasonal low. The program essentially provides a price floor for producers because the government will take ownership of the loan collateral (i.e., the pledged crop) if prices drop below the statutory loan rate. Defaults (or forfeitures) on marketing loans are not common because USDA provides the producer the opportunity to capture benefits even when the posted price is below the loan rate. In this case, farmers are allowed to repay the loan at the lower posted price, thus receiving a "marketing loan gain" (MLG) from the government because farmers do not repay the loan in full. The MLG is equal to the difference between the loan rate and the weekly national posted price. Also, accrued interest is waived, but the producer pays storage and handling charges for the quantity of peanuts under loan. As an alternative to putting the crop "under loan" when prices are low, farmers may request a "loan deficiency payment (LDP)," with a payment rate equal to the difference between the loan rate and the posted price (same as the MLG). Farmers then receive an LDP payment without going through the loan process. For most of the last decade, the farm (and posted) price of peanuts has been above the loan rate, so annual marketing loan benefits have been either zero or minimal ( Figure 5 ). Forfeiture of the pledged crop in lieu of loan repayment is an option that is available for all marketing loan crops. Rather than repaying the loan with cash, farmers can fulfill their loan obligation by forfeiting the crop pledged as collateral. This option can be attractive for peanut producers if the posted price is below or even slightly above the loan rate because USDA, by law, then pays for costs associated with storage, handling, and interest. For large producers, another key feature of the forfeiture option is that the "gain" associated with forfeiting the crop, unlike a gain from repaying the loan with cash (or receiving an MLG or LDP), does not count toward the payment limit of $125,000 per person. Producers decide which route to pursue (repay loan with cash or forfeit) depending on the expected value of each option, their need for loaned funds, and their likelihood of exceeding the payment limit. If a farmer chooses to forfeit the crop, USDA takes ownership of the crop. Storage costs continue to accrue to USDA until it sells the crop or, in the case of peanuts, uses the CCC-owned peanuts for domestic nutrition programs. In addition to marketing assistance loan benefits, producers with base acres for any covered commodity (including peanuts) are eligible for a second (and higher) layer of income protection under the Price Loss Coverage (PLC) program. For peanuts, PLC payments are triggered when the annual farm price is below the statutory PLC reference price of $535 per short ton (i.e., 2,000 lbs) or equivalently, 26.75 cents per pound, as established under the 2014 farm bill ( Figure 6 ). PLC and ARC payments are made after October 1 following the end of the marketing year. As a result, government payments arrive more than a year after the crop is harvested. For example, any payments associated with the 2014 peanut crop (planted in spring 2014 and harvested in summer 2014) would be made after October 1, 2015. (In contrast, marketing loan benefits are available immediately upon harvest for crop years 2014-2018.) For individual farms, payments are calculated using the national PLC payment rate and individual farm information on historical program yield and acres. The PLC payment formula is the PLC payment rate times historical farm program yield times 85% of historical peanut base acres. The national PLC payment rate is equal to the PLC reference price minus the higher of the season-average farm price or the marketing loan rate. With respect to farm program yields , during program signup in early 2015, producers were given the choice of keeping the same farm-level program yield used for calculating the farm's counter-cyclical payments under the 2008 farm bill (generally based on 1998-2001 yields or earlier) or updating the farm program yield according to the formula of 90% of the 2008-2012 average yield per planted acre for the farm. Peanut base represents historical peanut planting on each farm and totals 2 million acres nationwide. As with program yields, the 2014 farm bill provided farmers with a one-time opportunity to update individual crop base acres by reallocating acreage within their previous base to match their actual crop mix (plantings) during 2009-2012. A new feature of the 2014 farm bill income support programs is that, unlike income support programs from previous farm bills, payments under PLC and ARC are made on base acres, not current plantings. This feature--decoupling payments from current plantings--is intended to better comply with World Trade Organization (WTO) commitments on domestic support and to minimize any influence on producer behavior and subsequent market distortion. The payments are considered "partially decoupled" because the payment amount remains connected to current market prices. An exception to the decoupling is payments associated with generic base acres, whereby current plantings can affect payment acreage. PLC payments can also be made on "generic base acres." Generic base acres are the renamed cotton base acres from the 2008 farm bill. Under the 2014 farm bill, cotton is no longer a covered commodity and thus no longer eligible for PLC or ARC payments. Instead, the former cotton base, now "generic base," is added to a producer's total base for potential payments, but only if a covered crop is planted on the generic base. In other words, PLC payments on generic base acres are fully coupled to actual plantings (although payments remain subject to the 85% factor applied to eligible acres). Unlike PLC payments on peanut base acres, which are made regardless of which crop is planted, the PLC payment on generic base in any given year is proportional to a farm's plantings of peanuts and other covered crops on the entire farm. More specifically, for each crop year, generic base acres are attributed to a particular covered commodity base (for potential payment) in proportion to that crop's share of total plantings of all covered commodities on the farm in that year. The coupled nature of PLC payments on generic base is an important new program feature because of the large number of generic base acres available under the 2014 farm bill--17.5 million acres. Substantial coupled plantings could potentially occur to the extent that this land remains under cultivation (as discussed below in " Relative Planting Incentives Under Farm Programs "). It is likely that many of the former cotton base acres are no longer used for annual crops--similarly, the original decoupling under the 1996 farm bill resulted in base acres in many places returning to pasture or fallow, but still remaining eligible for assistance). Federal crop insurance is available for about 130 crops, including peanuts. Traditionally, a yield-based federal crop insurance policy was available for peanut producers to protect against yield loss due to weather, if purchased by producers. The insurance guarantees are established just prior to planting, based on historical yields and expected market prices (not statutory prices used in farm programs). The insurance premiums are subsidized by USDA, and subsidy rates vary based on the type of policy and coverage selected. The 2014 farm bill mandated a peanut revenue insurance product for the 2015 crop year so farmers could choose between a traditional yield-based policy and one that protects against declines in revenue (yield times price). Revenue policies have been available for many other farm program crops for almost two decades, but developing one for peanuts has been problematic because its relatively small market is considered "thin" and futures market prices are not available for setting the price guarantee. After considerable study, USDA's Risk Management Agency decided to base prices for the new revenue product on several factors, including the futures prices of cotton, wheat, soybean oil, and soybean meal, as well as the Brazilian price of peanuts, peanut stocks, and the USDA loan rate for peanuts. Rapid adoption of the new revenue insurance policy by peanut producers suggests that there was a strong demand for this product. For the 2015 crop, peanut producers purchased a total of 23,419 federal crop insurance policies covering nearly 1.5 million acres--44% of the policies and 68% of the covered acres were enrolled in revenue insurance. In 2015, $96.2 million was paid out in indemnities, including $77.3 million under revenue policies. As with other farm program crops, payment eligibility depends on a gross income limit and rules on being "actively engaged." To qualify for any commodity program benefits, recipients must pass an eligibility requirement based on adjusted gross income (AGI) used for federal taxes. The AGI limit is a single, total (farm and non-farm) AGI limit of $900,000 (using a three-year average). Also, to be eligible for payments, persons must be "actively engaged" in farming. Actively engaged, in general, is defined as making a significant contribution of (i) capital, equipment, or land, and (ii) personal labor or active personal management. Crop planting choices in general, and on base acres in particular, are based on relative net returns among competing crops, plus rotational considerations. Farm program payments do not figure in the determination because they are decoupled from planting decisions. In contrast, crop choices on generic base acres must consider both relative net returns as well as potential proceeds from government programs (i.e., both ARC and PLC) because of their coupling to crop plantings. Market conditions vary widely based on relative crop prices, yield prospects (both irrigated and non-irrigated), and production costs. A preliminary assessment of potential market conditions for 2016 using a combination of data from USDA and the University of Georgia suggests peanuts could be a very competitive option for producers on both irrigated and non-irrigated acres when comparing cost and returns for competing crops ( Table 3 ). It is important to note that Table 3 excludes fixed costs and thus does not attempt to predict actual profitability across crops. In the short run, crop choices can be made by comparing returns above variable costs; however, to ensure economic viability in the long run, producers must also cover fixed costs, which are not considered in this table. This consideration is particularly valid for peanuts, where equipment lines are unique to the crop and represent significant up-front costs. Also, the variable cost estimates used in Table 3 represent the estimate for a single point in time and are subject to changing market conditions for a host of farm inputs including fuel, fertilizer, pesticides, labor, and land. Furthermore, it is unclear how market conditions may evolve in 2017 and, thus, whether future prices will be near current levels. The outlook for 2016 PLC and ARC payments for major covered commodities--using USDA data from September 2016--suggests that peanuts are an attractive planting option on generic base acres relative to most other competing crops ( Table 4 ). Peanut program payments under PLC (the program choice of over 99% of peanut base owners) are projected at $290 per acre. This compares with $86/acre for wheat, $66/acre for corn, and $60/acre for sorghum. Over 90% of corn and soybean base owners chose the ARC program, compared with a negligible number of peanut producers. Under the ARC scenario presented in Table 5 , corn is projected to receive ARC payments of $92 per acre, while soybeans are not projected to receive an ARC payment in 2016. When potential PLC and ARC program payments ( Table 4 and Table 5 ) are combined with potential market returns ( Table 3 ), peanuts appear to have a strong advantage over other program crops in competing for generic base acres. This competitive edge will vary across producing zones with yield and cost conditions, as well as changes in relative prices. In an extreme case, if a producer with generic base acres expected a sizeable peanut PLC payment rate relative to other program crops, their entire farm could be planted to peanuts (or peanuts and no other covered crop), and their PLC payments on generic base would be calculated using exclusively the payment rate for peanuts. Alternatively, if expected market returns and PLC payment rates do not favor peanuts, farmers with generic base acres could plant their entire farm to crops other than peanuts. An outcome between these two extremes is expected to prevail if farmers maintain typical rotations, which are needed to maintain soil health and long-term yield potential for all crops. Nevertheless, high potential PLC payments on generic base could cause producers to "stretch" their rotations and benefit from additional peanut payments on generic base. Farm policy economists have noted that peanuts (and rice) have a statutory reference price that is set disproportionately above historical market prices, particularly when compared to the reference prices for other major program crops. Since the peanut quota buyout in 2002, monthly peanut farm prices have been below their respective reference price 88% of the time, and below the marketing loan rate 17% of the time. This compares with monthly corn farm prices (58% of the time below the reference price and 5% of the time below the marketing loan rate); soybeans (39% and 4%), wheat (55% and 4%), sorghum (59% and 11%), and barley (61% and 0%). Rice has comparable "in-the-money" percentages with 91% of the monthly Adjusted World Price (AWP) for rice falling below the reference price, and 29% below the marketing loan rate. Some contend that this potential advantage favors peanut production (relative to other program crops) on generic base acres. However, the extent to which this scenario might play out is unclear, and both agronomic and market circumstances suggest that it might be limited. The outlook for average farm prices across major program crops is likely to be a key determinant of both farm program payments and crop planting choices on generic base. This is because the size of the farm program payments increases in proportion to the decline in farm price below the reference price and loan rate. The largest impacts on planting decisions could be in states where the generic base is large relative to the total base ( Figure 7 ) because the planting mix determines the payment. At one extreme is a farm with 100% generic base, when acreage eligible for specific crop payments corresponds directly to the covered crops that are planted. At the other extreme, for a farm with no generic base acres, the payment acres are predetermined and will not change regardless of what the farmer plants--namely covered crops to the individual crop base acres. The share of generic base is more than 50% for several peanut-producing states, including Alabama, Texas, Georgia, Mississippi, and Florida ( Figure 7 and Table 6 ). These states could see additional plantings of peanuts in future years if relative returns (including government payments) favor peanuts. Table 6 summarizes peanut base acres and total generic base under the 2014 farm bill. In addition, annual planted peanut acreage for major producer states is shown for each of 2012 through 2016. The domestic and trade policy concern is that farm program payments made to plantings on generic base are fully coupled to production and thus potentially market distorting. As a result, program payments made to generic base would likely count toward the U.S. amber box limit of $19.1 billion. Furthermore, if such payments are substantial and can be linked to a surge in exports, they could potentially be vulnerable to challenge by another WTO member. As mentioned earlier, large peanut producers who have pledged their peanut crops as collateral for nine-month USDA marketing loans could confront a payment limit issue leading to forfeiture of their crop to USDA. This situation could result if incurring marketing loan benefits (i.e., marketing loan gains or loan deficiency payments) would cause them to surpass the payment limit of $125,000. In such a situation, a producer could simply forfeit the collateral peanuts to USDA (via the Commodity Credit Corporation) and keep the original loan value. The CCC would then be responsible for handling and storage costs and the eventual marketing of the peanuts. USDA, in its November 2015 crop forecast, projected U.S. peanut ending stocks for the 2015/16 crop year to be record large at 2.87 billion pounds or 52.3% of total use. However, record large U.S. exports and domestic use caused USDA to substantially lower the estimate for 2015/16 peanut ending stocks to 1.79 billion pounds, or 27.1% of total use. This revised outlook significantly reduced both the likelihood of any forfeitures and the expected level of peanut-related program outlays in 2015/16. However, the prospects for large peanut plantings--relative to recent years--remains in place heading into 2017 as farm subsidies (via generic base) provide significant incentives to plant peanuts. If future U.S. peanut supplies are large enough to depress prices for successive years, a large amount of peanuts could go under loan and forfeitures could accumulate. In a severely depressed market, USDA might have difficulty finding a buyer without offering a deep discount, which would result in large net outlays for the government. USDA could wait for a price recovery, but doing so would result in additional storage charges. Sufficient storage capacity might also be an issue if stocks increase substantially. Following the 2002 buyout of the peanut quota program, federal peanut income support payments (including storage payments and the buyout) averaged over $300 million per year through 2007. This includes peanut storage payments of $79 million per year from 1996 to 2007 (the last year of eligibility) ( Figure 8 ). From 2008 through 2015, federal peanut program outlays have averaged about $90 million. However, recent long-term budget projections suggest that federal peanut program outlays could become much larger in the future. In February 2016, USDA projected peanut program costs of $503.6 million in FY2016, $870 million in FY2017, and at least $910 million through FY2025. This included substantial peanut storage and handling costs (related to marketing loan forfeitures) that were projected to rise from $31.2 million in FY2017 to $52 million in FY2021. More recently, in August 2016, CBO projected CCC program outlays for peanuts at $413 million for FY2016, and averaging $548 million through the remainder of the 2014 farm bill period. However, CBO projections do not include costs associated with loan forfeiture but are limited to PLC, ARC, and marketing assistance loan benefits. As a point of reference, the annual market value of U.S. peanut production has traditionally been in the range of $1.1 billion to $1.4 billion, depending on crop size. Future government payments for U.S. peanut programs will depend on how market conditions evolve and how the average farm price for peanuts compares to the PLC reference price. The American Peanut Council (APC) administers the U.S. peanut industry's export market development program, receiving approximately $2 million per year in government funds under the Market Access Program (MAP). MAP aids in the creation, expansion, and maintenance of foreign markets for U.S. agricultural products. MAP funding has been targeted for reductions by some Members of Congress, who maintain that it is a form of "corporate welfare," or to help offset increased expenditures on other programs. Such efforts have been unsuccessful. For the domestic market, some in Congress have begun encouraging USDA to purchase more peanut butter for domestic food programs and for international food aid as a way to increase peanut usage. In FY2015, USDA purchased 37.5 million pounds of processed peanut products (for distribution through domestic feeding channels) and another 39.1 million pounds in FY2016. Arguments for and against the peanut support programs are the same as for U.S. farm programs in general. Proponents argue that an income safety net is needed to help producers deal with the substantial price volatility associated with commodity markets. They say a marketing assistance loan program is needed to provide greater marketing options for producers who are at a distinct market-power disadvantage when dealing with a small number of powerful buyers. And in peanut's particular case, proponents argue that farm program support is needed to help offset the substantial market volatility that has emerged since the elimination of the peanut quota system. In contrast, critics argue that market signals are sufficient to allocate resources within the sector, and that subsidies distort resources away from more efficient uses. Some critics argue that farm subsidies actually keep small, inefficient operators in business and that, in the absence of subsidies, the inefficient operators would not be competitive and the land would be maintained and operated by more efficient, technologically savvy operators who would get better yields and returns from the same acreage. Others argue further that funds allocated to farm support would have greater returns if spent in other sectors.

According to the U.S. Department of Agriculture (USDA), the United States is expected to be the fourth-largest producer and third-largest exporter of peanuts in the world in 2016. In addition to its prominent role in international markets, U.S. peanut production and marketing is an important activity in several states located in the southeastern and southwestern United States. The U.S. peanut crop has been eligible for certain federal farm support programs since the 1930s--initially under a quota system and, since 2002, under the income support programs available for other major program crops like corn, wheat, soybeans, and rice. Today, under the 2014 farm bill (Agricultural Act of 2014, P.L. 113-79), the major income support programs are marketing loan benefits and either the price loss coverage (PLC) or agriculture risk coverage (ARC) program (as determined by a one-time producer choice). For peanuts, almost all producers (99.7%) chose PLC because they expected it to provide higher payments and greater risk protection than would be available under ARC. Marketing loan benefits are available immediately after harvest and are coupled directly to planting and production. In contrast, PLC and ARC payments are made to 85% of historical base acres and thus decoupled from producer crop choices. Also, PLC and ARC payments are not available until nearly a full year after harvest--October 1 following the end of the marketing year when full information on farm prices is available. The 2014 farm bill also created "generic" base acres--former cotton base acres from the 2008 farm bill. Generic base is added to a producer's total base for potential payments, but only if a covered crop is planted on the generic base. In other words, PLC payments on generic base acres are coupled to actual plantings (although payments remain subject to the 85% factor applied to eligible acres). Under current peanut program provisions, peanuts have a separate program payment limit--a consequence of the quota buyout (P.L. 107-171; SS1603). As a result of this feature, a farmer that grows multiple program crops including peanuts has in effect two different program payment limits: the first payment limit (of $125,000) is for an aggregation of program payments made to all program crops other than peanuts; and the second (also of $125,000) is for program payments made exclusively to peanuts. Thus, under an extreme scenario involving large payments for both peanuts and other program crops, this could potentially double a farmer's payment limits. Farm policy economists have noted that peanuts have a statutory reference price that is set disproportionately above historical market prices, particularly when compared to other major program crops. Some contend that this potential advantage favors peanut production on generic base acres. However, the extent to which this scenario might play out is unclear, and both agronomic and market circumstances suggest that it might be somewhat limited. USDA estimates of peanut program outlays for FY2015 were modest at $74 million. However, most analysts expect substantial peanut program outlays in the future under both the PLC program and the marketing assistance loan program, as well as from storage and handling costs associated with peanut loan forfeitures. In February 2016, USDA projected annual average peanut program costs at $800 million for FY2016-FY2019. However, record U.S. peanut exports during the 2015/16 crop year, coupled with record domestic usage, have substantially reduced domestic peanut stocks and have likely dampened the outlook for program costs in FY2016. Going forward (FY2017-FY2019), outlays will depend on producer behavior and market conditions. As a point of reference, the annual market value of U.S. peanut production over the past 30 years has been primarily in the range of $0.8 billion to $1.2 billion.

The United States' supply of natural gas is growing due to technological improvements, such as horizontal drilling and hydraulic fracturing, which have increased producers' ability to extract natural gas from shale formations. Shale gas is projected to become the dominant source of the U.S. natural gas supply by 2040. The growth in U.S. shale gas production requires the expansion of natural gas pipeline infrastructure at the local level (to extract and gather the gas) and at the national level to transport natural gas from producing regions to consuming markets, typically in other states. Over 300,000 miles of interstate transmission pipeline already transport natural gas across the United States. However, if the growth in U.S. shale gas continues as projected, the requirement for new pipelines could be substantial. For example, an analysis by the INGAA Foundation, a pipeline industry research organization, estimates that the total cost of new gas gathering and transmission pipelines, including storage, could average over $8 billion per year and total over $200 billion through 2035. This ongoing expansion has increased congressional interest in the role of the federal government in the certification (permitting) of interstate natural gas pipelines. The Natural Gas Pipeline Permitting Reform Act ( H.R. 161 ) seeks to expedite the federal review of certificate applications by imposing deadlines on the agencies involved. This report provides an overview of the federal certification process for interstate natural gas pipelines. It discusses the length of the review for recent interstate gas pipeline applications--a topic of specific interest to Congress and industry. In this context, the report discusses the key provisions in H.R. 161 and their implications for gas pipeline certificate approval. Issues associated with Presidential Permits for natural gas pipelines crossing the international border are discussed in CRS Report R43261, Presidential Permits for Border Crossing Energy Facilities , by [author name scrubbed] and [author name scrubbed]. Under Section 7(c) of the Natural Gas Act of 1938 (NGA), the Federal Energy Regulatory Commission (FERC) is authorized to issue certificates of "public convenience and necessity" for "the construction or extension of any facilities ... for the transportation in interstate commerce of natural gas" (15 U.S.C. SS717f(c)). Thus, companies seeking to build interstate natural gas pipelines must first obtain certificates of public convenience and necessity from FERC. FERC's regulatory process for interstate gas pipeline certification consists of several principal steps, which may vary somewhat depending upon whether or not a pipeline developer opts to enter into a voluntary pre-filing process before formally applying for a pipeline certificate. Prior to applying to FERC for a pipeline certificate, developers may file a request with FERC to use the commission's pre-filing procedures (18 CFR SS157.21). The commission established the pre-filing process to encourage the pipeline industry to engage in early project-development involvement with the relevant public and government agencies. Through this process a developer notifies all stakeholders--including state, local, and other federal agencies, and potentially affected property owners--about a proposed project so that the developer and commission staff can provide a forum to hear stakeholder concerns. The pipeline developer may then incorporate proposed environmental mitigation measures into the project design, taking into account stakeholder input. The expectation is that the pre-filing will improve a developer's proposal and avoid problems during the review of a subsequent FERC certificate application. The pre-filing process involves a set of specific activities by the developer. These activities would typically include the study of potential project sites, identifying stakeholders, and holding an open house for stakeholders to discuss the project. At the conclusion of pre-filing, the developer conducts pipeline route studies and field surveys to develop a final application and submit it to FERC. Concurrent with the developer's activities, FERC staff participate in the open house and publish in the Federal Register a Notice of Intent for Preparation of an Environmental Assessment or an Environmental Impact Statement (40 CFR SS1508.22), opening a scoping period to seek public comments. FERC consults with interested stakeholders, including government agencies, and also holds public scoping meetings and site visits in the proposed project area. Although pre-filing precedes a certificate application, it is, nonetheless, part of the regulatory process and requires a written request to FERC's Office of Energy Projects. Developers wishing to begin the pre-filing process must do so seven to eight months prior to filing a certificate application. If the commission approves pre-filing, it will issue to the developer a pre-filing docket number establishing an official public record associated with the proposed pipeline project. There is, however, no provision at this stage for third parties to become formal "intervenors" in the pre-filing process, further discussed below. A pipeline developer formally files an application with FERC for a certificate of public convenience and necessity. Among other requirements, the application must contain a description of the proposed pipeline, route maps, construction plans, schedules, and a list of other statutory and regulatory requirements, such as permits needed from other agencies. The application must also include environmental reports analyzing route alternatives and studies of potential environmental impacts (on water, plants, and wildlife), cultural resources, socioeconomics, soils, geology, aesthetic resources, and land use. Upon receiving an application, the commission issues a public Notice of Application for authorization to construct and operate a new pipeline in the Federal Register and begins the application review process. FERC's decision whether to grant or deny a pipeline certificate is based upon a determination whether the pipeline project would be in the public interest. FERC accounts for several factors, including a project's potential impact on pipeline competition, the possibility of overbuilding, subsidization by existing customers, potential environmental impacts, avoiding the unnecessary use of eminent domain, and other considerations. FERC may also take into account safety concerns, but generally defers to the Department of Transportation, which has primary authority to regulate pipeline safety under the Natural Gas Pipeline Safety Act of 1968 and subsequent acts. Of the factors above, environmental review typically comprises the bulk of FERC's review. Key aspects of this review process are illustrated in Figure 1 and further discussed below. Among other factors, review of certificate applications requires examination of environmental impacts of the action in compliance with the National Environmental Policy Act (NEPA, 42 U.S.C. SS4321 et seq.) and associated regulations promulgated by the Council of Environmental Quality (CEQ, 40 C.F.R. SSSS1500-1508). NEPA requires federal agencies to consider the potential environmental impacts of an action (e.g., granting a pipeline certificate) and to inform the public of those potential impacts before proceeding with that action. The Energy Policy Act of 2005 ( P.L. 109-58 , EPAct) designates FERC as the lead agency for coordinating NEPA compliance and "all applicable Federal authorizations" in reviewing pipeline certificate applications (SS313(b)). If the applicant did not pre-file, FERC begins the environmental review process by publishing a Notice of Intent for Preparation of an Environmental Assessment or an Environmental Impact Statement. In reviewing environmental impacts associated with a certificate, the commission typically prepares an environmental assessment (EA), which is "a concise public document" intended to "briefly provide sufficient evidence and analysis" to determine whether a finding of no significant impact can be issued (40 C.F.R. SSSS1508.9). If the EA determines impacts are significant, a more extensive and detailed environmental impact statement (EIS) must be prepared (42 U.S.C. SS4332(C)). If FERC determines a project falls within a category of activities that has already been found to have no significant environmental impact, the commission may classify it as a "categorical exclusion." For example, one of FERC's categorical exclusions allows certain pipeline construction and modification projects under "blanket" certificate applications and prior notice filings (18 C.F.R SS380.4a(21)). As such, they are categorically excluded from the requirement to prepare an EIS or EA (18 C.F.R SS380.4a). When an EIS is required, it is generally prepared in two stages: a draft and final EIS. Among other requirements, the EIS must include a statement of the purpose and need for the proposed project, a description of all reasonable alternatives to meet that purpose and need, a description of the environment that would be affected by those alternatives, and an analysis of the direct and indirect effects of the alternatives, including cumulative impacts. In preparing an EIS, FERC is the "lead agency" required to obtain input from other "cooperating agencies" with jurisdiction by law or with special expertise regarding any environmental impact associated with the project (40 C.F.R. SS1508.5). Cooperating agencies for a pipeline project often include the Environmental Protection Agency; the Department of Transportation's Pipeline and Hazardous Materials Safety Administration; the Department of the Interior's Bureau of Land Management, Fish and Wildlife Service, and National Park Service; and the Army Corps of Engineers, among others. After FERC staff complete their environmental analysis and cooperating agency consultations regarding a certificate application, the commission issues a draft EIS that will include its initial recommendations for approval or denial of the pipeline certificate. Issuance of the draft EIS also begins a public comment period of at least 45 days, during which FERC will hold public meetings in the proposed project area. Notice of the availability of the draft EIS for public comment and the times and locations of public meetings are published in the Federal Register . Although FERC considers all public comments in its application review, simply filing comments does not make a commentor a party to the certificate proceeding. Only intervenors to the proceeding have the right to file briefs, attend hearings, and appeal the commission's decision regarding the certificate. They may also challenge final commission actions in the U.S. Circuit Courts of Appeal. Any person seeking to become a party to the proceeding must file a motion to intervene pursuant to the commission's rules (18 C.F.R. SS385.214). Interevenors receive the certificate applicant's filings and other FERC documents related to the case, as well as materials filed by other interested parties. After the conclusion of the public comment period for the draft EIS, FERC reviews the comments it received and revises its draft EIS as necessary in response to comments. When these revisions are completed, FERC issues a final environmental statement with final recommendations for approval or denial of the certificate. Under NEPA, a final agency record of decision--in this context a FERC order--cannot be issued until at least 30 days after FERC publishes a notice of availability of the final EIS (40 C.F.R. SS1506.10(b)(2)). However, there is no additional opportunity for public comment after the final EIS is issued. After the 30-day period is over, the commission may issue an order approving or denying the pipeline certificate application. If FERC grants a pipeline certificate, the commission's order will state the terms and conditions of the approval, including the pipeline route that has been authorized, as well as any construction or environmental mitigation measures required for the project. A FERC certificate confers on the developer eminent domain authority (15 U.S.C. SS717f(h)). Also, federal law preempts any state or local law that duplicates or obstructs that federal law (e.g., siting or zoning) relevant to the project. In this way a FERC certificate provides a pipeline developer with the authority to secure property rights to lay the pipeline if the developer cannot secure the necessary rights-of-way from landowners through negotiation. In practice, however, eminent domain authority is considered a last resort and is seldom used by developers. Although a FERC certificate authorizes a pipeline under the Natural Gas Act, it cannot preempt other federal laws that may apply--such as the Endangered Species Act, the Coastal Zone Management Act, or the Clean Water Act--so any requirements under other federal statutes must still be met by the developer. These may include, for example, securing authorizations for water crossings from the Army Corps of Engineers, permission to cross federal lands from the Bureau of Land Management, and other federal approvals. A developer must secure these other federal approvals before proceeding with pipeline construction. Once FERC issues an order granting or denying a pipeline certificate, parties to the proceeding (e.g., intervenors) who object to the order for any reason may formally request a rehearing so that the commission can reconsider its decision. A party to the proceeding must file a request for rehearing within 30 days after issuance of the final order--a statutory deadline which the commission cannot waive or extend (15 U.S.C. SS717(r)). There is no time limit for FERC to consider or conclude a rehearing. If a pipeline certificate is approved after rehearing, the pipeline project may proceed even if additional challenges have been filed in federal court. Once the developer has provided FERC with any outstanding information or taken other actions to satisfy the terms and conditions of the certificate order, including an implementation plan, FERC can issue a Notice to Proceed with Construction Activities and construction can begin. The pipeline developer must then file weekly status reports with the commission documenting project inspection and certificate compliance until construction is completed. There are no statutory time limits within which FERC must complete its own certificate review process, issue an order, or complete a rehearing. However, EPAct authorizes FERC to establish a schedule for all federal authorizations and provides for judicial petition "if a Federal or State administrative agency" fails to comply with that schedule (SS313(c)). Congress included these provisions in EPAct to address concerns that some interstate gas pipeline and other energy infrastructure approvals were being unduly delayed by a lack of coordination or insufficient action among agencies involved in the certification process. FERC has promulgated regulations under the EPAct authority requiring certificate-related final decisions from federal agencies or state agencies (acting pursuant to delegated federal authority) no later than 90 days after the commission issues its final environmental document, unless another schedule is established by federal law (18 C.F.R SS157.22). The Natural Gas Pipeline Permitting Reform Act ( H.R. 161 ) would strengthen the EPAct provisions by imposing a 12-month deadline on FERC certificate reviews for projects using FERC's pre-filing procedures and by codifying the commission's 90-day regulatory deadline for any certificate-related agency decisions. Any agency decision not meeting the 90-day deadline would be approved by default. The relevant provisions in the bill as amended are as follows: (i)(1) The Commission shall approve or deny an application for a certificate of public convenience and necessity for a prefiled project not later than 12 months after receiving a complete application that is ready to be processed, as defined by the Commission by regulation. (2) The agency responsible for issuing any license, permit, or approval required under Federal law in connection with a prefiled project for which a certificate of public convenience and necessity is sought under this Act shall approve or deny the issuance of the license, permit, or approval not later than 90 days after the Commission issues its final environmental document relating to the project. (3) The Commission may extend the time period under paragraph (2) by 30 days if an agency demonstrates that it cannot otherwise complete the process required to approve or deny the license, permit, or approval, and therefor will be compelled to deny the license, permit, or approval. In granting an extension under this paragraph, the Commission may offer technical assistance to the agency as necessary to address conditions preventing the completion of the review of the application for the license, permit, or approval. (4) If an agency described in paragraph (2) does not approve or deny the issuance of the license, permit, or approval within the time period specified under paragraph (2) or (3), as applicable, such license, permit, or approval shall take effect upon the expiration of 30 days after the end of such period. The Commission shall incorporate into the terms of such license, permit, or approval any conditions proffered by the agency described in paragraph (2) that the Commission does not find are inconsistent with the final environmental document. H.R. 161 addresses continuing concern by some in the gas industry and in Congress that, despite the EPAct provisions, FERC review of gas pipeline certificate applications can still take too long, in large part because other involved agencies have not been complying with FERC's 90-day deadline for agency decisions. Under EPAct, the possibility of judicial action is the only consequence of failing to meet FERC's deadlines--and it may not be sufficient. A December 2012 study by the INGAA Foundation concluded that, despite the schedule provisions in EPAct 2005 intended to expedite the review of FERC certificate applications for gas pipelines, "anecdotal evidence has suggested that the time required to secure regulatory approvals for such projects is increasing." The study reported that nearly 20% of FERC certifications in the study sample were delayed 90 days or longer beyond FERC's agency deadline. According to the report, few developers have petitioned the courts to compel agency compliance with FERC's 90-day deadline, perhaps because that process, like any litigation, can be costly and time-consuming as well, with its own sources of delay. Notwithstanding the findings of the INGAA Foundation study, whether FERC's existing authorities and process for pipeline certification adequately meet the needs of the market for new pipeline infrastructure is open to debate. A February 2013 Government Accountability Office (GAO) study of FERC pipeline certificate reviews reported that the average time from pre-filing to certification was 558 days (18.6 months), and the review time was 225 days (7.5 months) for projects--typically smaller ones--that skipped pre-filing and began at the application phase. However, the pre-filing process (18 CFR SS157.21) takes place prior to a developer's applying to FERC for a pipeline certificate, which is when the 12-month "clock" under H.R. 161 would start. Unfortunately, the GAO study did not report how many of the 558 days for the pre-filed applications were after the applications were actually filed. In 2004 regulatory guidance, FERC states that developers wishing to begin the pre-filing process must do so at least seven months (210 days) prior to filing a certificate application. Subtracting an estimated 210-day pre-filing period from the 558 days reported by GAO for the whole process suggests a post-application review period of at most 348 days, or about 11.6 months, on average, for projects that pre-filed. As Figure 2 shows, federal and state agencies have approved numerous pipelines associated with U.S. shale gas production since EPAct. In particular, FERC-regulated gas transmission capacity increased quickly with the onset of the shale gas expansion in 2006-2008 and continues to grow. In light of their record approving new gas pipelines, FERC commissioners were neutral or modestly supportive toward legislative proposals in the 113 th Congress for stronger certificate review authorities. In March 2013, FERC Commissioner Cheryl LaFleur stated in her written testimony before the House Committee on Energy and Commerce, Subcommittee on Energy and Power, that the nation's system for expanding pipeline capacity "has worked well overall--over the last decade, FERC has issued permits for construction of nearly 10,000 miles of new pipeline." At the same hearing, FERC Commissioner Philip Moeller similarly stated that "for the most part, people have been fairly satisfied with the process we have at FERC for new pipelines," although "it could be done quicker." Nonetheless, both commissioners acknowledged that FERC's review of certain pipeline applications had experienced significant delays, largely due to approvals needed from cooperating agencies after FERC's environmental reviews under NEPA had been completed. Both commissioners also expressed support for greater FERC authority to enforce its certificate review deadlines. Outgoing FERC Chairman Jon Wellinghoff reportedly was not opposed to legislation increasing FERC's deadline authority in this way, but did not necessarily see a need for it because, in his view, the commission had been moving quickly on pipeline certificate reviews. As stated above, H.R. 161 would make three major changes to FERC's pipeline certification process, all schedule-related. Thus, the bill would not change the way pipeline certificate applications are currently reviewed in terms of subject matter, funding, or inter-agency relationships. The bill would solely seek to impose explicit time limits on the existing process. The potential effects of the three proposed changes are discussed below. H.R. 161 would mandate a FERC certification process deadline of 12 months. The imposition by Congress of explicit agency deadlines for the review of energy project permit applications is not new. CRS has identified other statutes and legislative proposals with similar deadline provisions for the review of permit applications: for oil and gas drilling, liquefied natural gas terminals, electric transmission lines, and other facilities. These provisions are provided as examples in the Appendix . The optimal time for any deadline that Congress might impose on FERC is unclear. Compared to an 11.6-month benchmark implied by the GAO study, the 12-month deadline in H.R. 161 would be approximately the same as the average FERC certificate review time today. However, 12 months could represent a reduction in the review time that might be expected for atypically lengthy or complex pipeline projects, perhaps routed through heavily populated or environmentally sensitive areas. The safety or environmental reviews for such projects might place them in the "tail" of the review time distribution reported by GAO. For example, according to the GAO report, one pre-filed certificate review lasted 886 days. Assuming a 210-day pre-filing period for this project implies a certificate review time of 676 days, or 22.5 months. For such pipeline projects, it is unclear what FERC could do differently to shorten its review process if the bulk of the review involves a complex NEPA environmental evaluation. More information might be required to understand how FERC could adapt its process to meet a 12-month deadline for such projects and to gage the possible impact of this provision. If the 12-month deadline under H.R. 161 were imposed upon FERC, it raises the possibility that the commission might deny certificate applications for some projects solely on the grounds that it lacks sufficient time for an adequate (and legally defensible) review, especially in the case of NEPA compliance. This kind of denial is what occurred in 2012 when the State Department denied an application by TransCanada for a Presidential Permit to construct the Keystone XL oil pipeline, citing insufficient time under a 60-day deadline imposed by Congress under the Temporary Payroll Tax Cut Continuation Act of 2011 ( P.L. 112-78 ) to obtain all the necessary information to assess the project. When the 112 th Congress considered delegating permit authority for the Keystone XL Pipeline to FERC and mandating permit approval within 30 days under H.R. 3548 (see Appendix ), a senior FERC official testified that such a proposal would not provide enough time for an "adequate" public record, among other concerns. Another such permit review statute, the Mineral Leasing Act, includes a provision conditioning the deadline upon satisfying review requirements under NEPA and "other applicable law" within the given timeframe (30 U.S.C. 226(p)(2)(A)). In July 2013 testimony before the House Committee on Energy and Commerce, Commissioner Moeller stated that FERC could likely achieve the 12-month deadline proposed in H.R. 161 as long as gas pipeline certificate applications are complete when the process begins. Nonetheless, a 12-month deadline imposed upon all FERC certificate reviews may lead to the rejection or delay (due to re-application) of otherwise worthy proposals on administrative grounds if unanticipated issues arise. It might also force developers to reconfigure, or break up, larger projects into smaller proposals more "reviewable" within 12 months. The southern leg of the original Keystone XL pipeline project (now called the Gulf Coast Project) was separated this way and proceeded to construction under its own permit process. Reconfiguration of complex pipeline projects might lead to inefficiencies both in FERC certification and in the design or use of the infrastructure itself. Congress may consider whether a 12-month deadline could be made more flexible to accommodate projects which may require more review time due to their size and complexity at the discretion of FERC. H.R. 161 codifies FERC's deadline--established through regulation--for other federal or state agencies to make final certificate-related decisions within 90 days after FERC issues its final environmental document. Because FERC has the statutory authority to establish such deadlines under EPAct, the only change to the status quo of this provision would be to mandate the 90-day time period rather than leaving the length of the time period up to FERC to determine. Like the 12-month deadline imposed by FERC, it is difficult to determine whether 90 days is optimal for a statutory deadline--although FERC, in this case, has an administrative record examining the question through its rulemaking process. Note that this deadline occurs only after FERC's environmental review is completed, so other agencies would presumably have months during FERC's NEPA review to conduct reviews of approvals under their jurisdiction. Although it affirms FERC's current regulatory judgment as to how long the cooperating agency deadline should be, H.R. 161 may tie the hands of the commission if, at some future date, FERC concludes that 90 days is no longer appropriate. In that case, FERC would have to seek new legislation rather than changing the deadline under its existing EPAct authority through the regulatory process. Some might view this provision as being insurance against the commission becoming more lax in the future with respect to review deadlines. Others might view this provision as being too prescriptive. Congress may consider whether imposing a prescriptive 90-day deadline strikes the best balance between FERC's deadline enforcement authority and the commission's ability to manage its own review process. H.R. 161 would effectively issue by default any license, permit, or approval requested from a cooperating agency if the agency does not make its decision on the request within FERC's 90-day deadline. Statutory approval by default of agency decisions failing to meet a deadline appears to have few precedents in the specific context of energy project approvals. The clearest example CRS has been able to identify is P.L. 112-78 , which would have put "in effect by operation of law" the permit for the Keystone XL pipeline if the President failed to act on the permit prior to the mandated 60-day deadline (SS501(b)(3)). In that case, the result was denial of the permit. However, additional statutes with default approval provisions not involving energy projects have been cited as precedents for the provisions like those in H.R. 161 . To date, FERC has had little enforcement authority under EPAct over its 90-day deadline. H.R. 161 might lead some cooperating agencies to increase efforts to meet the deadline. If those agencies view the deadline as inadequate, however, some of them may deny approvals on the basis of having insufficient time for review and the development of necessary permit conditions as discussed above in the context of the 12-month deadline for FERC. Opponents of this provision have cited, for example, statements from the Army Corps of Engineers, the Environmental Protection Agency, the Bureau of Land Management, and the Fish and Wildlife Service expressing this concern if a 90-day deadline for their respective permit reviews were imposed. In the 113 th Congress, the Obama Administration opposed deadline and default approval provisions like those in H.R. 161 because they could create conflicts with existing statutory and regulatory requirements and practices related to agencies' programs, thereby causing confusion and increasing litigation risk. The ... requirements could force agencies to make decisions based on incomplete information or information that may not be available within the stringent deadlines, and to deny applications that otherwise would have been approved, but for lack of sufficient review time. For these reasons, the bill may actually delay projects or lead to more project denials, undermining the intent of the legislation. Congress may consider maintaining FERC's existing authorities to set the agency review schedule, while providing alternative ways to strengthen FERC's ability to enforce those authorities at the commission's discretion. The principal effect of H.R. 161 would appear to be imposing explicit (strict) time limits on the existing process for FERC certification of new natural gas pipelines. The ability of FERC and any other federal or state agencies it works with to expedite their parts of certificate review may be limited by available resources. The agencies may well have the administrative capability to meet these deadlines. That is, the review periods, public notice periods, and other regulatory requirements associated with the certificate review schedule may all be feasible. However, a shorter deadline under H.R. 161 might require more resources for agency staff, contractors, and external consultants to achieve the same level of review as a longer deadline. In considering the ability of FERC and other agencies to meet these deadlines, the availability and allocation of resources within the agencies may be important. This may be a concern not only for FERC, but also for various other federal, state, and local agencies whose ability to increase funding for regulatory review may vary considerably and may be limited due to budget constraints. Requirements similar to those proposed in H.R. 161 have been imposed by Congress on other agencies to approve or deny energy projects. A number of statutes or bills over the last 10 years have included explicit deadlines (i.e., a specific number of days) for various types of federal energy permits--including drilling permits, liquefied natural gas (LNG) terminals, a nuclear waste repository, and electric transmission lines. They are summarized below. Note that, due to the limitations of such a legislative search, there may be additional statutes CRS has not identified. The Mineral Leasing Act as amended (30 U.S.C. 226(p)) requires the Secretary of the Interior to approve or disapprove of drilling permit applications submitted by federal leaseholders within 30 days of submission unless they fail to meet certain required criteria. The Maritime Administration (MARAD) has a 330-day time limit for granting or denying a deepwater port license (33 U.S.C. SS1504), including a 45-day deadline after the last public hearing for specific agency reviews (33 U.S.C. SS1504(e)(2)). Notably, this provision applies to offshore LNG terminal applications. The Outer Continental Shelf Lands Act as amended (43 U.S.C. 1340(c)) requires the Secretary of the Interior to approve or disapprove of oil and gas exploration plans (drilling permits) submitted by federal leaseholders within 30 days of submission unless the plans fail to meet certain required criteria. The Nuclear Waste Policy Act of 1982 ( P.L. 97-425 ) requires the Nuclear Regulatory Commission to issue a final decision approving or disapproving a nuclear waste repository project proposal "not later than the expiration of 3 years after the date of the submission of such application" (SS405(b)(2)). The Energy Policy Act of 2005 ( P.L. 109-58 ) gives FERC authority to permit an electric transmission siting application if "a State commission or other entity that has authority to approve the siting of the facilities has--(i) withheld approval for more than 1 year...." (SS1221). The Energy Policy Act of 2005 ( P.L. 109-58 ) requires the Secretary of Energy to approve or disapprove a tribal energy resource agreement from an Indian tribe not later than 270 days after receiving an initial agreement or not later than 60 days after the Secretary receiving a revised agreement (SS2604(e)). The Temporary Payroll Tax Cut Continuation Act of 2011 ( P.L. 112-78 ) required the Secretary of State to issue a permit for the Keystone XL pipeline within 60 days, unless the President determined the project not to be in the national interest (SS501(a)). In addition to these statutes, CRS identified a few recent unenacted legislative proposals that would have imposed statutory deadlines on energy project permit decisions. Examples are listed below. The Energy Policy Act of 2003 ( H.R. 1644 , 108 th Congress) would have required the Federal Energy Regulatory Commission to approve or deny any permit application for an Alaska natural gas pipeline project "not more than 60 days after the issuance of the final environmental impact statement" (SS2004(c)). The American Clean Energy and Security Act of 2009 ( H.R. 2454 , 111 th Congress) would have required the Federal Energy Regulatory Commission or the Department of the Interior to complete review of "all permit decisions and related environmental reviews under all applicable Federal laws" for electric transmission project applications in the Western Interconnection within one year or, if provisions in another federal law required more time, as soon as practicable thereafter (SS216B). The Energy Exploration and Production to Achieve National Demand Act ( H.R. 4301 , 112 th Congress) would have required the Administrator of the Environmental Protection Agency and the state or governing body of an Indian tribe to approve or disapprove a consolidated permit application for the construction of a new oil refinery within 365 days, or, if all parties agreed, within an additional 90 days (SS501(b)(4)(A)). For the expansion of an existing refinery, the respective deadlines were 120 and 30 days (SS501(b)(4)(B)). The North American Energy Access Act ( H.R. 3548 , 112 th Congress) would have transferred the permitting authority over the Keystone XL pipeline project from the State Department to the Federal Energy Regulatory Commission, requiring the commission to issue a permit for the project within 30 days of enactment. The bill would have deemed a permit to have been issued if the commission did not act upon a permit application within 30 days after receipt (SS3(a)).

Growth in U.S. shale gas production involves the expansion of natural gas pipeline infrastructure to transport natural gas from producing regions to consuming markets, typically in other states. Over 300,000 miles of interstate transmission pipeline already transport natural gas across the United States. However, if the growth in U.S. shale gas continues, the requirement for new pipelines could be substantial. This ongoing expansion has increased congressional interest in the role of the federal government in the certification (permitting) of interstate natural gas pipelines. Under Section 7(c) of the Natural Gas Act of 1938, the Federal Energy Regulatory Commission (FERC) is authorized to issue certificates of "public convenience and necessity" for "the construction or extension of any facilities ... for the transportation in interstate commerce of natural gas." Thus, companies seeking to build interstate natural gas pipelines must first obtain certificates of public convenience and necessity from FERC. The Energy Policy Act of 2005 (EPAct) designates FERC as the lead agency for coordinating "all applicable Federal authorizations" and for National Environmental Policy Act (NEPA) compliance in reviewing pipeline certificate applications. There are no statutory time limits within which FERC must complete its certificate review process. However, EPAct authorizes FERC to establish a schedule for all related federal authorizations and provides for judicial petition if an agency fails to comply with that schedule. Congress included these provisions in EPAct to address concerns that some interstate gas pipeline and other energy infrastructure approvals were being unduly delayed by a lack of coordination or insufficient action among agencies involved in the certification process. FERC has promulgated regulations requiring certificate-related final decisions from other agencies no later than 90 days after the commission issues its final environmental document. Notwithstanding the EPAct provisions, there is continuing concern by some in the gas industry and in Congress that FERC review of pipeline certificate applications can still take too long. The Natural Gas Pipeline Permitting Reform Act (H.R. 161) seeks to expedite the federal review of certificate applications by imposing deadlines on the agencies involved. H.R. 161 would impose an explicit 12-month deadline on FERC certificate reviews for projects using FERC's pre-filing procedures and would codify the commission's 90-day regulatory deadline for any certificate-related agency decisions. Any agency decision not meeting the 90-day deadline would be approved by default. The optimal time for any deadline that Congress might impose on FERC or cooperating agencies is open to debate. The 12-month deadline in H.R. 161 would be approximately the same as the average FERC certificate review time today. However, 12 months could represent a reduction in the review time that might be expected for atypically lengthy or complex pipeline projects. In light of FERC's recent record approving new gas pipelines, FERC commissioners have been neutral or modestly supportive towards legislative proposals for stronger certificate review authorities. However, deadlines imposed on FERC or cooperating agencies could raise the possibility that they might deny permits for some projects solely on the grounds that they lack sufficient time for an adequate review. The ability of FERC and any other federal or state agencies it works with to expedite their parts of certificate review to meet an expedited schedule may be limited by available resources.

Federal lawmakers view many financial businesses as having an important role in the U.S. economy, and therefore warrant providing these businesses protection for their individual account holders against loss, should the firms fail. Such protections exist both to protect the individuals from risks they probably could not discern for themselves and to protect the economy against the effects of financial panics when failures occur. Panics, the attendant collapses of wealth, and severe consequences for the economy occurred before Congress created federal deposit insurance in 1934. Prior to the enactment of the Emergency Economic Stabilization Act of 2008 (EESA; P.L. 110-343 ), government policy protected customers of depository institutions--banks, thrift institutions, and credit unions--in full for accounts up to $100,000 and up to $250,000 for retirement accounts. Although the enactment of EESA on September 23, 2008, immediately raised the maximum deposit insurance to $250,000, retirement accounts remain at $250,000 until December 31, 2009. Since then, Congress and the President enacted the Helping Families Save Their Homes Act of 2009 (HFSTHA; P.L. 111-22 ), extending both the EESA increases and the Federal Deposit Insurance Corporation's (FDIC's) $30 billion borrowing authority from the U.S. Treasury to as much as $500 billion until 2013. Because of the wording of P.L. 111-22 , after 2013, it is possible that deposit insurance protection could revert back to the $100,000 and $250,000 for retirement accounts. Other institutions such as insurance companies, securities broker/dealers, and many pension funds receive government or government-sponsored guarantees on specified accounts. This report provides a summary of the major features of financial institutions' customer protection systems, reflecting safety-net provisions legislated over time, usually in reaction to specific financial collapses. Besides these explicit guarantees, regulatory bodies can attempt the rescue of failing financial enterprises, using many tools authorized by laws and regulations and often implemented in the background. Such tools include liquidity lending, arranging memoranda of understanding, issuing cease-and-desist orders against risky practices, and arranging mergers of weak entities into stronger institutions. If the entire financial economy seems threatened by pending collapse of either a sizeable financial institution that is "too big to fail" or many financial businesses collectively, the Federal Reserve (Fed) can step in as the lender of last resort to avert serious adverse consequences for the economy (e.g., use of the Fed's liberal bank liquidity policy immediately after the 911 attacks, and currently the subprime meltdown led to failures of institutions once believed to be too big to fail--Bear Stearns, Fannie Mae, Freddie Mac, and AIG--all of which were or are being assisted by the federal government). Moreover, Congress may have to provide emergency funding when parts of the federal safety net are under severe pressure. The cleanup of the savings and loan industry in the 1980s and early 1990s, for example, required appropriated funds plus a new deposit insurance fund and regulator. A more recent example is the Emergency Economic Stabilization Act of 2008, which provided $700 billion to purchase distressed assets, and has been used to make direct capital investments in troubled financial institutions. An important conceptual distinction between support structures is who ultimately pays for the protection. Lawmakers originally created federal deposit insurance using a "user fee" model of insurance, in which the government owned and operated each insurance system and charged member banks for its use. Following the banking failures of the late 1980s - early 1990s, legislation moved deposit protection part way toward an alternative "mutual" model, in which the burden of financing the system falls more clearly on the banking industry. Mutual institutions are owned by their customers, such as saving associations' depositors and insurance companies' policyholders. As a result, some analysts now claim that the banking industry "owns" the deposit insurance fund (DIF) in mutual mode. However, when the FDIC begins to draw on its credit line at the U.S. Treasury, which it has never done before, the use of the credit line would move the system back to the user fee model as the banks would have to pay their FDIC assessments as well as pay back the borrowed funds to the federal government, which owns and operates the DIF. The ultimate guarantor of deposit insurance is the economic power of the federal government, particularly the power to tax. History has shown that deposit guarantees by governments beneath the federal level have universally been inadequate to prevent panics, runs, and severe economic damage when called upon. Industry-sponsored and state-level programs have contained the collapses of their covered entities only if the damages have been small. The troubled pension benefit arrangement remains mainly in user fee mode. Credit union share insurance, in contrast, more nearly follows the mutual model. Likewise, state insurance company guaranty and federally sponsored securities investor protection arrangements follow the mutual model. However, in the current financial crisis, the National Credit Union Administration (NCUA) has joined the FDIC in accepting an increased line of credit from the U.S. Treasury to resolve failing corporate credit unions and restoring the National Credit Union Share Insurance Fund (NCUSIF). Corporate credit unions are owned by retail or natural credit unions. Corporate credit unions operate as wholesale credit unions providing financing, investments, and clearing services for natural credit unions. It was the corporate credit unions that suffered most of the industry's losses in the current subprime foreclosure turmoil. Consequently, like the FDIC, when the NCUA uses its U.S. Treasury credit line to stabilize the NCUSIF, it too would move closer to the user fee mode. The following tabulation lists the major elements and components of these safety nets. Table 1 compares account protection at depository institutions. Table 2 does the same for the non-depository supports. Readers may obtain further analysis of each system via the websites of the administering agencies noted. On October 23, 2008, in the midst of the current financial crisis, the FDIC announced its Temporary Liquidity Guarantee program to help unfreeze the U.S. short-term credit markets. At the time, financial institutions were not lending to each other, especially in the commercial paper market, which was almost completely frozen. The two-part program temporarily guarantees all new senior unsecured debt and fully guarantees funds in certain non-interest bearing accounts at FDIC-insured institutions issued between October 14, 2008, and June 30, 2009, with guarantees expiring no later than June 30, 2012. The FDIC expects these guarantees would restore the necessary confidence for investors to begin investing in obligations of depository institutions. Evidence suggests that these short-term markets returned to normal after the TLG program was implemented. The second part of the FDIC's TLG program is to guarantee 100% of non-interest-bearing transaction accounts held in insured depository institutions until December 31, 2009. This addresses the concern that many small business accounts, such as payroll accounts, frequently exceed the current maximum deposit insurance limit of $250,000. The TLG program is being paid for by additional fees placed on depository institutions that use these guarantees, not taxpayers.

After the onset of the current financial crisis and economic contraction, the 111th Congress increased some of the long-standing provisions that protect account holders from risk. Specifically, provisions in the Emergency Economic Stabilization Act of 2008 (EESA; P.L. 110-343) and the Helping Families Save Their Homes Act of 2009 (HFSTHA; P.L. 111-22) increased account holders' protection. Both laws raised the maximum deposit account insurance to $250,000, and the HFSTHA extended the higher level of risk protection until 2013. Lawmakers have long recognized the importance of protecting some forms of financial savings from risk. Such provisions apply to deposits in banks and thrift institutions and credit union "shares." Remedial and other safety net features also cover insurance contracts, certain securities accounts, and even defined-benefit pensions. Questions over how to fund and guarantee Social Security, along with the troubles of the Pension Benefit Guaranty Corporation, have renewed interest in these arrangements. This report portrays the salient features and legislation of account protection provided by the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Share Insurance Fund (NCUSIF), state insurance guaranty funds, the Securities Investor Protection Corporation, and the Pension Benefit Guaranty Corporation. It provides a discussion of the FDIC's Temporary Liquidity Guarantee Program (TLG) , which extends unlimited temporary deposit guarantees to certain depositors and debt held in insured depository institutions. Overall, the report provides a summary of the major federal risk protections for account holders. This report will be updated as appropriate.

Hurricane Katrina has resulted in the displacement of tens of thousands of families from theirhomes. While its magnitude is unprecedented, the resulting need to shelter and house displacedfamilies is not. The Department of Housing and Urban Development (HUD), the nation's agencywith a mission to provide safe and decent housing for all Americans, has played a role in meetingthose needs in the past and is playing a role in the wake of Katrina. This report is designed to lookat HUD's current programs and their ability and authority to respond to housing crises, and the waythat Congress has expanded that role and authority in the past. It does not track the Department'sresponse to Hurricane Katrina; see CRS Report RS22358 , HUD's Response to Hurricane Katrina ,by [author name scrubbed], [author name scrubbed], [author name scrubbed]. Before looking at existing housing resources, it is useful to think about the housing needs thatemerge after a disaster. Research by E.L. Quarantelli (1) identified four major stages of housing need following a disaster: emergency shelter, temporary shelter, temporary housing, and permanent housing. Emergencyshelter is designed to provide a safe location during or immediately after a disaster. In the case ofHurricane Katrina, people sought emergency shelter on roofs and overpasses, for example. Temporary shelter is one stage beyond emergency shelter, and while it lasts longer than emergencyshelter, families are generally not able to establish day-to-day routines during their stay. Temporaryshelter includes mass shelters that provide food and sleeping accommodation, and homes temporarilyshared by friends or family. Temporary housing is housing that is unique to a family and allowsthem to begin to establish day-to-day routines, but is not seen as permanent. It can last for monthsor even years, and examples include the temporary trailers often made available while damagedhomes are undergoing repair. Permanent housing is a familiar concept and can include families'return to their former residences, new residences in or near their original communities, or permanentrelocation in another community. While most aspects of emergency response are led and organized at the state and local level,the federal government provides resources to aid their efforts. (2) The Federal EmergencyManagement Agency (FEMA) generally provides assistance to meet all four states of shelter andhousing need, as authorized under the Robert T. Stafford Disaster Relief and Emergency AssistanceAct ( P.L. 93-288 ). FEMA helps localities designate evacuation areas to provide emergency shelter,and it coordinates with municipalities and organizations such as the American Red Cross and othercharitable organizations to establish temporary shelters. FEMA also provides, in conjunction withstates and municipalities, temporary housing options including rental assistance payments --sometimes under contract with HUD (3) -- that allow families to find temporary accommodation in theprivate rental market as well as temporary physical structures, such as trailer homes. Finally, FEMAalso provides loans and grants to help families repair damaged homes. (4) While FEMA is the primarydisaster response agency, other federal agencies also contribute housing resources, including theDepartment of Commerce (the Small Business Administration, primarily), the Department ofAgriculture (the Rural Housing Service), the Treasury (various tax programs and incentives,including the Low Income Housing Tax Credit (LIHTC)), and HUD, the agency that is the focus ofthis report. (5) Furthermore,a large majority of the restoration and creation of permanent housing is met through the use ofprivate and public insurance. (6) In responding to disasters, HUD generally focuses on aiding families in the final two stagesof housing need; temporary and permanent housing. HUD's programs and assistance in response todisasters fall generally into one of three categories: direct assistance, flexible block grants to statesand localities, and mortgage programs. One primary form of direct assistance provided by HUD is rental assistance provided throughthe Section 8 Housing Choice Voucher program. (7) Section 8 vouchers are used by low-income families to reduce theirhousing costs in the private market to an "affordable" level. (8) Families with vouchers pay30% of their incomes towards rent and the federal government pays the difference between thefamilies' contributions and the actual rent, up to a limit. (9) In order to be eligible, families must be very low income, (10) however,75% of allvouchers are statutorily targeted to extremely low income families. (11) The subsidies are portable,meaning families can move anywhere in the country with their vouchers. The program isadministered at the local level by quasi-governmental Public Housing Authorities (PHAs), andCongress currently funds approximately 2 million vouchers. In FY2005, Congress provided almost$15 billion for the voucher program. Another form of direct assistance provided by HUD is low-rent public housing. Very lowincome families are eligible to live in one of the nearly 1.2 million units of public housing ownedand maintained by local PHAs. Families living in public housing pay 30% of their incomes towardstheir housing costs, and PHAs receive two streams of federal subsidies -- operating funds and capitalfunds -- to help make up the difference between tenant rents and the costs of maintaining theproperties. Operating funds are used to help cover day-to-day expenses including utilities, socialservices, staff and security. Capital funds are used to meet modernization needs, such as buildingrepair and refurbishment. In FY2005, Congress provided approximately $2.5 billion each to thecapital and operating funds. (12) The final form of direct assistance provided by HUD is a hybrid between vouchers and publichousing, called project-based rental assistance. The primary project-based rental assistance programsare Section 8 project-based rental assistance, the Section 202 program for the elderly, and the Section811 program for the disabled. In all three programs, private landlords own and manage housing unitsfor which the rent is subsidized by the federal government. Families who live in the units payroughly 30% of their incomes towards rent and the federal government pays the landlord thedifference between the tenant contribution and the negotiated rent for the unit. Generally, thesebuildings are FHA-insured (see discussion of FHA insurance below). In FY2004, 1,309,427 unitsreceived project-based Section 8 rental assistance, 75,227 units received Section 202 rentalassistance, and 21,646 units received Section 811 rental assistance. In FY2005, Congress providedover $5 billion for project-based Section 8, over $230 million for Section 811, and over $740 millionfor Section 202. (13) HUD's direct assistance programs can be both affected by disasters as well as used as toolsin recovering from disasters. When public housing units are damaged, HUD can tap into an existingemergency capital reserve. For private owners of HUD-assisted units, insurance is often availableto cover damage, as are SBA loans and HUD loans (discussed below). HUD-assisted families displaced by a disaster retain their assistance. Displaced voucherholders are eligible to find another unit in which to use their vouchers. For public housing and otherproject-based assisted families, HUD identifies vacant HUD-assisted units to which they are eligibleto relocate. HUD can also provide resources to non-assisted households; in other words, households thatwere not previously receiving HUD housing assistance prior to a disaster. Vacant units of HUDdirect-assistance housing can be made available during a disaster for non-assisted households. Inthe past, Congress has also created special emergency short-term vouchers that can be used toprovide temporary housing to displaced families. HUD administers a number of flexible block grant programs that provide funds to states andlocalities. The Community Development Block Grant (CDBG) program is the largest of these,funded at $4.9 billion in FY2005. CDBG funds are formula-allocated to states and localgovernments in support of 23 categories of eligible activities, including neighborhood revitalization,economic development, and housing activities. Seventy percent of CDBG funds must be used oneligible activities and projects that principally benefit low- or moderate-income persons. CDBGgrantees are not required to provide a local match. For more information on the use of CDBG fundsfor disaster recovery, see CRS Report RS22303, Community Development Block Grant Funds inDisaster Relief and Recovery , by [author name scrubbed]. The HOME Investment Partnerships Program provides formula-based block grant fundingto states, units of local government, Indian tribes and insular areas to fund affordable housinginitiatives. Eligible activities include acquisition, rehabilitation and new construction of affordablehousing as well as rental assistance for eligible families. Grantees must meet a 25% matchrequirement, and 90% of all assistance must primarily benefit families at or below 60% of the areamedian income. For both HOME and CDBG, grantees must submit consolidated plans detailinghow they intend to use funds to meet local needs. HUD also administers several other special purpose grants and block grants targeting specialpopulations, including the Native American Housing Block Grant, the Homeless Assistance Grants,and the Housing for Persons With AIDS grants. When communities are impacted by a disaster, HUD has the authority to waive manyregulatory requirements governing the use of HOME and CDBG funds. (14) Generally, HUD will issuesuch waivers and permit local communities to redirect HOME and CDBG funds to meet disasterrecovery needs, both short and long-term. Congress has also used CDBG, and, to a smaller extent,HOME, as vehicles for providing emergency funds to communities impacted by disasters. While HUD does not provide any direct mortgage loan programs, the Federal HousingAdministration (FHA) does provide both single and multifamily mortgage insurance. Theseinsurance programs provide security to lenders to encourage them to make loans on terms that wouldnot otherwise be available to prospective homebuyers and to investors wishing to developmultifamily projects serving low- and moderate-income families. When the President declares a disaster, as in the case of Hurricane Katrina, the declarationautomatically triggers certain procedures with regard to FHA-insured mortgages in the affected areas. The procedures remain in effect for one year from the date of the declaration. The followingprocedures become effective: (1) a moratorium on foreclosures is in effect for 90 days from the dateof declaration; (2) lenders are encouraged to offer special forbearance, mortgage modification,refinancing, and waiver of late charges to affected borrowers; (3) families whose residences weredestroyed or severely damaged are eligible for 100% financing under Section 203(h) of the NationalHousing Act for the cost of reconstruction or replacement of the residences; (4) damaged propertiesbecome eligible for Section 203(k) financing under which the costs to purchase and to rehabilitatethe property are included in one loan, and HUD waives the requirement that the property has beencompleted for more than one year prior to application for a Section 203(k) mortgage; (5) theunderwriting guidelines are relaxed to permit disaster victims to qualify for loans even if their totalmonthly debt, including the proposed mortgage, would equal 45% of gross income; and (6) lendersare directed to ensure that hazard claims are expeditiously filed and settled, and lenders may notretain hazard insurance proceeds to make up an existing arrearage without the written consent of theborrower. The Section 203(h) program is available for borrowers who already own homes in theaffected area. The loans are limited to the FHA loan limit for the area, subject to the provision thatthe loan may not exceed 100% of the appraised value of the property. In some cases it may not bepossible to obtain 100% financing. It may often be the case that the cost to repair or replace theproperty exceeds the appraised value of the property. This is the reason that most lenders requireborrowers to obtain hazard insurance that covers the replacement cost of the property instead of itsappraised value. The Section 203(k) program permits borrowers who do not already own homes to purchaseand rehabilitate properties in the area that are either abandoned by owners, or are being sold byowners who do not want to repair them and remain in the area. The current FHA underwriting guidelines provide that a prospective borrower's total debt,including the proposed mortgage payment, may not exceed 41% of the borrower's gross monthlyincome. In recognition of the fact that borrowers in these areas may have to incur debt to replacepersonal property, the underwriting guidelines are relaxed to permit loans to borrowers whose totaldebt is up to 45% of gross monthly income. The limit may even be exceeded if justified bycompensating factors. In order to better understand the role of HUD in meeting the housing needs of families andcommunities impacted by disasters, the following section looks at several past disasters characterizedby major housing losses. This section is meant to be an introduction and is not meant to be acomprehensive assessment of post-disaster housing and community recovery. It does not includea discussion of broad community redevelopment nor does it include a discussion of the use of taxincentives. Table 1 lists past disasters in which Congress has provided supplemental appropriations toHUD, dating back to 1992. Table 1. Emergency Supplemental Appropriations for DisasterAssistance in Which HUD Received Funds, FY1992-FY2005 Source: CRS search of supplemental appropriations legislation identified in CRS Report RL33053 , Federal Stafford Act Disaster Assistance: Presidential Declarations, Eligible Activities, andFunding , by [author name scrubbed]. On August 24, 1992, Hurricane Andrew struck the coast of southern Florida as a category5 hurricane, and then moved across the Gulf of Mexico to Louisiana, weakening to a category 3hurricane as it moved northward. (15) The majority of the damage occurred in Florida's South DadeCounty, including the cities of Homestead, Florida City, and Miami. At the time, Andrew was themost destructive hurricane the United States had experienced. Twenty six people died,approximately 250,000 were displaced, and damage was estimated to reach $26.5 billion. (16) In all, over 25,000 homeswere destroyed, and more than 101,000 were damaged. (17) In response to Hurricane Andrew, Congress passed the Dire Emergency SupplementalAppropriations Act, which the President signed into law on September 23, 1992 ( P.L. 102-368 ). Ittransferred $183 million from FEMA to HUD for additional Section 8 vouchers, not only for victimsof Hurricane Andrew, but for those of Hurricane Iniki, which struck Hawaii on September 11, 1992,and Typhoon Omar, which struck Guam on August 28, 1992. The transfer was expected to fund anestimated 12,000 two-year vouchers for families left homeless by Hurricane Andrew. (18) Another $100 million wasallocated for the development or acquisition of public housing, including major reconstruction ofobsolete public housing projects, in the areas affected by Hurricanes Andrew and Iniki, and TyphoonOmar. Congress also appropriated $60 million for the HOME program. An additional $500,000 wasappropriated for housing counseling assistance to both tenants and homeowners. Finally, FHAreceived $30.3 million to allow it to insure loans worth up to $2.4 billion to assist with rebuildingefforts. These loans were expected to support about 95,000 units of single-family and multi-familyhousing. (19) Inconnection with use of the Section 8 funds, the public housing funds, and the HOME funds, P.L.102-368 gave the Secretary of HUD the power to waive any provision of any statute or regulationthat the Secretary administered, except those that require nondiscrimination. Hurricane Andrew destroyed over 11,000 manufactured homes in Florida and Louisiana.Manufactured homes were hit hardest by the hurricane. (20) For example, Andrew destroyed 97% of all manufactured homesin Dade County, compared to 11% of all single family homes. (21) After studying the damageto manufactured homes, HUD developed new construction standards to increase their windresistance. (22) The newrule required improved design to make structures resistant to wind up to 110 miles per hour. (23) During the summer of 1993, 10 Midwestern states experienced rainfall levels that exceededthe normal range, resulting in large-scale flooding of the Mississippi and Missouri Rivers, andvarious smaller rivers and tributaries that flow into them. (24) In nine states (Illinois, Iowa, Kansas, Minnesota, Missouri,Nebraska, North Dakota, South Dakota, and Wisconsin) rivers overflowed their banks and levees,destroying homes and requiring many to evacuate. According to FEMA, 534 counties were declaredeligible for disaster aid, and 168,340 people applied for federal assistance. Approximately 50 peopledied as a result of the floods, and 54,000 people were left homeless. Estimates of property damageranged from $12 to $16 billion. (25) In August 1993, Congress passed the Supplemental Appropriations for Relief from theMajor, Widespread Flooding of the Midwest Act ( P.L. 103-75 ). The law appropriated $50 millionfor HUD's HOME program, and $200 million for CDBG, of which $25 million was earmarked forimmediate recovery needs not reimbursable by FEMA. On February 12, 1994, P.L. 103-211 madeavailable an additional $500 million in CDBG funds for both the Midwest flood recovery efforts,and the damage caused by the 1994 Northridge earthquake in California. Of the $500 million, theHUD Secretary was given the authority to transfer up to $75 million to the HOME program. Inconnection with use of both the HOME and CDBG funds, P.L. 103-75 gave the Secretary of HUDthe power to waive any provision of any statute or regulation that the Secretary administered, exceptthose relating to fair housing, nondiscrimination, the environment, and labor standards. HUD directed that CDBG funds be used only to repair, replace or restore facilities, includinghousing, damaged by the floods. (26) HUD waived the limits on the amount of CDBG funds that couldbe used for new construction for flood-damaged properties. All nine affected states received CDBGfunds in 1993 and 1994. Illinois received $84.1 million, Iowa $96.3 million, Kansas $37.2 million,Minnesota $27.1 million, Missouri $136.8 million, Nebraska $23.1 million, North Dakota $19.6million, South Dakota $12.8 million, and Wisconsin $13.1 million. (27) HOME dollars were alsodistributed to each of the nine flood-damaged states. Illinois received $10.8 million, Iowa $11.4million, Kansas $3.4 million, Minnesota $2.7 million, Missouri $15.3 million, Nebraska $1.3million, North Dakota $2.6 million, South Dakota $1.3 million, and Wisconsin $1.3 million. After floods it is common for local communities to engage in mitigation activities that willprotect properties located on flood plains against future damage. Mitigation activities include buyouts, relocation, elevation, and flood proofing. In the buy out, local communities purchase theproperties of businesses and homeowners located on flood plains. Owners agree to sell voluntarilyso that they can afford to relocate to areas that are not at risk of flooding. Some of the cities thatwere damaged by the Midwest flood used CDBG money to buy out properties located on floodplains. For example, St. Charles County, Missouri used $8.8 million in CDBG funds together with$5.78 million from FEMA to purchase 1,159 properties located on the flood plain. (28) Arnold, Missouri used$1.4 million in CDBG funds combined with an additional $2.9 million from FEMA to buy out 72properties. After the Midwest flood, a total of 12,385 properties were mitigated through acombination of funds, including CDBG. Of these, 11,888 were bought out, 356 were relocated, 31were elevated, and 110 were flood proofed. (29) At 4:30 on the morning of January 17, 1994, a 6.7 magnitude earthquake hit the greater LosAngeles area. The Northridge Earthquake was the costliest in the nation's history, with lossesestimated at between $20 and $40 billion. More than 50 people were killed and more than 9,000were injured. (30) Over65,000 residential buildings were damaged in Los Angeles, which represented more than 250,000units of multifamily housing and almost 50,000 units of single family housing. (31) Congress responded to the disaster by passing several supplemental appropriations bills. TheNorthridge Emergency Supplemental Appropriations bill, signed into law on February 12, 1994 ( P.L.103-211 ), provided nearly $900 million in appropriations to HUD programs for impactedcommunities. Two-hundred million was directed to provide Section 8 rental assistance/vouchers toimpacted families. Twenty-five million was provided to repair damaged public housing and $100million was provided to repair damaged privately-owned assisted housing through the FlexibleSubsidy Fund. (32) Congress provided CDBG with $500 million, up to $75 million of which was transferrable to theHOME block grant program, to be used both for communities impacted by the NorthridgeEarthquake as well as those still recovering from the earlier Midwest flooding. For all of thesefunds, the Secretary was given the authority to waive or specify alternative requirements for anystatute or regulation in connection with the obligation of the Secretary or use by the recipient of thefunds, as long as the waiver was not inconsistent with the overall purpose of the statute or regulation. The waiver authority was not available in the case of fair housing, nondiscrimination, environmentalor labor standards. In addition to the funding provided, P.L. 103-211 made modifications to theSection 203(h) and Section 203(k) programs within the Federal Housing Administration, expandingthe benefits that could be provided to households impacted by the Northridge earthquake, althoughthe changes were only effective for 18 months. The Northridge Earthquake resulted in the displacement of thousands of families; as of April1994, 88,000 people had not returned home, 57,000 of whom were staying with friends and family. In recognition of the serious housing problem, Los Angeles convened a housing task force onJanuary 20, 1994 that included participants from the city, the county, the American Red Cross, theCalifornia Department of Housing and Community Development, the Governors Office ofEmergency Services, FEMA, and HUD. The task force had two main objectives; first, to get peopleinto shelters and registered with FEMA and second, to quickly get people out of shelters and intoreplacement housing. (33) Emergency short-term vouchers, funded both through the Section 8 program and throughCDBG (34) were providedto impacted families. A high percentage of those voucher holders were able to use them within thesame zip code as the home from which they were displaced. (35) City officials intervieweda year after the Northridge Earthquake expressed concern about what would happen to families withtemporary vouchers when they expired, noting that most families who had received them had notceased using them. (36) They stated that the city was pursuing options to have the vouchers made permanent and, in fact,they were eventually made permanent by Congress and absorbed into the Housing Authority of LosAngeles County's mainstream voucher program. (37) A July 26, 1994 report by the HUD Inspector General praisedHUD and the PHAs for responding quickly to the Northridge disaster by providing vouchers, butfound that there was an overlap in federal help. Families were provided vouchers without firsthaving been screened to assure that they were not also receiving FEMA assistance. HUD's Officeof Public and Indian Housing responded that families may have used the FEMA assistance forpurposes beyond rent, such as storage, purchase of furniture, moving expenses and utility connectioncharges and that the assistance should therefore not necessarily be considered duplicative. HUD used the $100 million in supplemental Flexible Subsidy Funds to develop a newprogram, introduced that spring, called the HUD Earthquake Loan Program (HELP). The funds wereavailable first for FHA-insured multifamily properties that were impacted by the earthquake, andsecond for other non-FHA-insured multifamily HUD-assisted properties that had beenimpacted. (38) HELPfunds could be used to cover mortgage payments, loss of rent, temporary staffing costs, tenantrelocation expenses, building repair or replacement, retrofitting, and to meet code requirements. AHUD Inspector General report issued in 1998 found that HUD had not designed the HELP initiativewith sufficient controls to prevent waste, fraud, and abuse. The report identified at least $7.1 millionin questionable funds awarded to 27 projects and directed the Department to investigate and attemptto recover those funds. (39) HOME and CDBG funds were used in the short-term to provide rental assistance, to meetsocial service needs (i.e. set up intake centers and provide housing counseling), (40) and some funds were usedfor longer-term redevelopment, including financing repairs on units that could not qualify for SmallBusiness Administration (SBA) loans. (41) Shortly before the earthquake struck, HUD had amended theminimum property standards to which HUD funded housing must comply to include seismic safetystandards. It was hoped that new units assisted with HELP, HOME, or CDBG funds would be betterequipped for a future earthquake as a result of the changes to these standards. (42) The 2004 Atlantic hurricane season was one of the most active and destructive in recentmemory. Eight named storms formed, four of which, in the span of about four weeks, wreakedhavoc on the southern United States across 12 states, although Florida was by far hit the hardest. On August 13, a category 4 hurricane, Charley, made landfall on the southwest coast of Florida. Thestrongest storm to hit the United States since Hurricane Andrew, Charley caused about $14 billionin damages and resulted in 10 deaths in the United States. (43) On September 6, a category 2 hurricane, Frances, made landfallin the United States, striking the central western coast of Florida. Frances left five dead in Floridaand $9 billion in damages. (44) Less than two weeks later, on September 16, Ivan, a category3 hurricane made landfall on the gulf coast of Alabama and the western Florida panhandle. Hurricane Ivan left 25 dead in the United States and over $13 billion in damages. (45) Finally, on September 26,category 3 Hurricane Jeanne struck the eastern coast of Florida, leaving four Floridians dead and$6.8 billion in damages. (46) President Bush responded by making five supplemental funding requests to Congress ofalmost $14 billion. Congress responded by passing two supplemental funding measures totaling$13.6 billion. The Military Construction Appropriations Act and Emergency HurricaneSupplemental Appropriations law ( P.L. 108-324 ), provided $150 million for CDBG. The funds weredesignated only for use for disaster relief, long-term recovery, and mitigation in communitiesaffected by disasters designated by the President between August 31, 2003, and October 1, 2004. The funds were to be awarded by the Secretary directly to states, who were permitted to allocatethem to entitlement communities. The Secretary was also given discretion to waive or specifyalternative requirements for any statute or regulation in connection with the obligation of theSecretary or use by the recipient of the funds, as long as the waiver was not inconsistent with theoverall purpose of the statute or regulation. The waiver authority did not apply to fair housing,nondiscrimination, environmental or labor standards, and at least 50% of the funds provided had tobenefit primarily low- and moderate-income families. The funds could not be used for any projectunderway before the disaster unless the project was impacted by the disaster. States were requiredto provide a 10% match. The conference report accompanying the law ( H.Rept. 108-773 ) directedHUD to coordinate with FEMA to ensure that funds were used only for disasters and targeted to theareas of greatest need. The Conferees also directed HUD to report back to the AppropriationsCommittees prior to any allocation of funds and to submit quarterly reports on their use thereafter. Prior to the allocation of emergency CDBG funds, HUD took a number of steps to respondto the 2004 Florida hurricanes. HUD identified vacant HUD subsidized multifamily units andHUD-owned homes that could be used as temporary housing, relocated displaced HUD-assistedfamilies, permitted HOME and CDBG grantees to reprogram existing funds to meet disaster needs,activated the 203(h) program and 203(k) program waivers and issued a 90-day foreclosuremoratorium for FHA-insured properties. (47) On December 10, 2005, HUD published a notice in the Federal Register informing impactedstates of their eligibility for emergency CDBG funds. The notice included the state allocations andinformed states that, in order to access the funds, they must first submit a plan detailing how theywill use the funds. The allocation formula used SBA and FEMA data on unmet housing, businessand public assistance needs for all designated areas in major disaster declarations. The formulaweighted unmet housing needs at 50%, unmet business needs at 25%, and unmet public assistanceneeds at 25%. The notice also specified waivers applicable to HOME and CDBG funds used fordisaster assistance, primarily related to planning requirements. (48) Over the course of the recovery, HUD also provided more than $26 million in emergencycapital reserve funding to repair damaged public housing units; $40 million in additional Section 8voucher funding to meet the increased costs of serving currently assisted families whose rent hadgone up because of a housing shortage caused by the hurricanes; $10 million for repair of Section202 and Section 811 properties; and $16 million to relocate displaced HUD-assisted families. (49) The four 2004 hurricanes resulted in damage to more than 700,000 homes (50) in Florida. Poor familieswere disproportionately impacted. (51) In response, on November 10, 2004, the governor of Floridanamed a hurricane housing task force to advise the state legislature on how to create more affordablehousing. On February 18, 2005, the group made its final report. It recommended, in addition to theregular allocation of housing funds, the state legislature approve a one-time infusion of $354 millionin state funds to develop several new affordable housing programs including, among others, aHurricane Housing Recovery Program, a Rental Recovery Loan Program, and a FarmworkerHousing Recovery Program. (52) In March 2005, the state of Florida Department of Community Affairs (DCA) submitted itsplan to spend its emergency CDBG funds to HUD. The Action Plan for Disaster Recovery statesthat emergency CDBG funds will be used for repairs, long-term recovery and mitigation. GivenCongress's direction that funds be used in the hardest hit areas, the DCA's plan specifies that ratherthan providing funds to all 67 areas that had been declared emergencies in the wake of thehurricanes, they will invite the 15 communities that were hardest hit to apply for emergency CDBGfunds. The plan specifies that the first priority will be given to infrastructure and public assistanceprojects. Second priority will go to economic development and business assistance projects,including those designed to promote job creation and/or retention. Third priority is given to housingrepair and development projects. The plan explains that housing projects are given the lowestpriority because of the expectation that the state legislature will fund the governor's affordablehousing plan (described earlier). (53) In times of major disaster, private citizens often cannot reasonably be expected to addresstheir own housing and shelter needs. When the United States Housing Act of 1937 set forth ahousing policy for the nation, it stated that the Federal Government should act where there is aserious need that private citizens or groups cannot or are not addressing responsibly. (54) While the Federal Emergency Management Agency is the primary federal entity chargedwith responding to a disaster, HUD is the primary entity charged with meeting the nation's housingneeds. The exact role that each agency is to play following a disaster is not entirely clear. FEMAassistance is available to meet a range of housing needs, from emergency shelters, to trailers, to homerepair grants. The review of past disasters included in this report shows that HUD's programs haveprimarily been used to provide longer-term housing aid, such as rental vouchers and new housingconstruction, as well as aid to communities to repair infrastructure and promote economicdevelopment. In the months following 2005's Hurricane Katrina, HUD's programs were not calledon to play a major role in responding to families' housing needs. FEMA's response has been metwith criticism from observers, including Members of Congress, some of whom have called for anexpansion of HUD's role. As the focus shifts from response to Katrina to the inevitable review ofthat response, the appropriate role for HUD to play following a disaster may be the subject ofCongressional debate.

Hurricane Katrina has resulted in the displacement of tens of thousands of families from theirhomes. While its magnitude is unprecedented, the resulting need to shelter and house displacedfamilies is not. The Department of Housing and Urban Development (HUD), the nation's agencywith a mission to provide safe and decent housing for all Americans, has played a role in meetingthose needs in the past and is playing a role in the wake of Katrina. This report looks at HUD'scurrent programs and how they have been used to respond to past disasters. The report begins by introducing the concept of a continuum of housing needs following adisaster. Displaced families' needs range from emergency shelter to temporary and permanenthousing. While the Federal Emergency Management Agency (FEMA) has primary responsibilityfor coordinating disaster relief efforts and providing certain services to help communities recover,other federal agencies, including HUD, also play an important role. HUD's programs fall into three distinct categories. The direct housing assistance programsinclude the Section 8 Housing Choice Voucher program, the public housing program, andproject-based rental assistance (including Section 202 and Section 811 programs for the elderly anddisabled). They can be used to provide temporary housing for both families who were receivinghousing assistance at the time of the disaster as well as those who were not. The block grantprograms, the Community Development Block Grant (CDBG) and HOME Investment PartnershipsPrograms, provide flexible funding sources to states and localities to meet housing and othercommunity development needs, including those in times of disaster. The Federal HousingAdministration (FHA) at HUD provides single-family and multi-family mortgage insurance, the rulesof which become more flexible following a disaster. In order to better understand the role HUD has played in response to disasters, this reportprofiles crises in which the housing stock was severely damaged. Congress provided emergencysupplemental funding to HUD in response to each of the following disasters: Hurricane Andrew,Midwest Flooding, the Northridge Earthquake, and the 2004 Florida Hurricanes. HUD programs have been used as a conduit for funneling short-, interim-, and long-termfunding to disaster-stricken communities many times in the past, however, Katrina's impact on theregion's housing stock eclipses that of any other natural or manmade disaster in the history of thiscountry. While looking to prior uses of HUD resources in times of disaster may be informative,given the scope of Katrina, new and broad initiatives to meet the interim- and long-term needs of theaffected region and its residents may be considered in the 109th Congress. This report containsreferences to other CRS products that track activities specifically in response to Hurricane Katrina. This report will not be updated. Key Policy Staff Division abbreviations: ALD -- American Law; DSP -- Domestic Social Policy; G&F --Government and Finance

The federal government has a long history of assisting farmers with obtaining loans for farming. This intervention has been justified at one time or another by many factors, including the presence of asymmetric information among lenders, asymmetric information between lenders and farmers, lack of competition in some rural lending markets, insufficient lending resources in rural areas compared to more populated areas, and the desire for targeted lending to disadvantaged groups (such as small farms or socially disadvantaged farmers). Several types of lenders make loans to farmers. Some are government entities or have a statutory mandate to serve agriculture. The one most controlled by the federal government is the Farm Service Agency (FSA) in the U.S. Department of Agriculture (USDA). It receives federal appropriations to make direct loans to farmers and to issue guarantees on loans made by commercial lenders to farmers who do not qualify for regular credit. FSA is a lender of last resort but also of first opportunity, because it targets loans or reserves funds for disadvantaged groups. The lender with the next-largest amount of government intervention is the Farm Credit System (FCS). It is a cooperatively owned and funded--but federally chartered--private lender with a statutory mandate to serve agriculture-related borrowers only. FCS makes loans to creditworthy farmers and is not a lender of last resort but is a government-sponsored enterprise (GSE). Third is Farmer Mac, another GSE that is privately held and provides a secondary market for agricultural loans. FSA, FCS, and Farmer Mac are described in more detail later in this report. Other lenders do not have direct government involvement in their funding or existence. These include commercial banks, life insurance companies, individuals, merchants, and dealers. Figure 1 shows that the FCS and commercial banks provide most of the farm credit (41% and 42% , respectively) followed by individuals and others (9.2%) and life insurance companies (3.5%; based on 2016 USDA data, the most recent year with such detail). FSA provides about 2.6% of the debt through direct loans. FSA also guarantees about another 4%-5% of the market through loans that are made by commercial banks and the FCS. The total amount of farm debt ($374 billion at the end of 2016) is concentrated relatively more in real estate debt (60%) than in non-real estate debt (40%). FCS is the largest lender for real estate (46%), and both commercial banks' and FCS's shares have grown as others' shares have decreased ( Figure 2 ). Commercial banks are the largest lender for non-real estate loans (49%), although FCS has gained share in recent years as the shares by others have decreased ( Figure 3 ). As the figures show, market shares among these lenders have changed over time. Commercial banks held relatively little farm real estate debt through 1985 but now hold a sizeable amount ( Figure 2 ). The share of loans from "individuals and others" has steadily decreased over time, with fewer private contracts for farm real estate and relatively less dealer financing in operating credits. FSA held a much larger share of farm debt during the farm financial crisis of the 1980s, but that ratio declined as the farm economy improved through the 1990s ( Figure 3 ). As a whole, farm sector assets have remained strong despite pressure on other real estate sectors. The value of farm assets has grown steadily since the end of the 1980s, particularly since 2003. At the end of 2017, farm sector assets totaled $3.04 trillion. In 2018, USDA forecasts that farm assets will increase 1.6% ( Figure 4 ). The Federal Reserve has found declining land values in recent years but a small recovery through 2017. Total farm assets now exceed the previous peak from 1980 in inflation-adjusted terms. Real estate is about 83% of the total amount of farm assets; machinery and vehicles are the next-largest category at about 8% of the total. Farm debt reached a historic high of $385 billion at the end of 2017 ( Figure 5 ). USDA forecasts that debt will increase 1% in 2018. In inflation-adjusted terms, however, this level of debt is still well below the peak debt levels of the 1980s. Debts and assets can be compared in a single measure by dividing debts by assets--the debt-to-asset ratio. A lower debt-to-asset ratio generally implies less financial risk to the sector than a higher ratio. Farm debt-to-asset ratio levels have declined fairly steadily since the late 1980s after the farm financial crisis and reached a historic low of 11.3% in 2006. When farm asset growth paused in 2009-2010, the debt-to-asset ratio rose slightly to 12.9% ( Figure 6 ). After returning to a historic low in 2012, the debt-to-asset ratio rose to 12.7 in 2017 and is forecasted to remain steady in 2018. But as a whole, farms are not as highly leveraged as they were in the 1980s. Net farm income has become more variable, especially since 2000. After reaching then-historic highs in 2004, net farm income fell by a third in two years ( Figure 7 ). After peaking again in 2008, net farm income fell by 25% in 2009. New net farm income highs were set in 2011 and 2013, but USDA's February 2018 forecast of $60 billion would be a 52% decline from 2013. The relatively low net farm income forecasted for 2018 is 29% below the 10-year average. Government payments to farmers have also risen from decades ago but do not always offset the variability in net farm income. Fixed direct payments that were not tied to prices or revenue were the primary form of government payments in recent years. These payments supported farm income but did not necessarily help farmers manage risks. Figure 8 shows that more of net farm income is coming from the market rather than the government compared to the 1980s. Another indicator of leverage compares debt to net farm income. A lower debt-to-income ratio (with the ratio expressing the number of years of current income that debt represents) implies less financial risk. The farm-debt-to-net-farm-income ratio is more variable than the debt-to-asset ratio. It reached a 35-year low of 2.3 in 2004 and rose to 4.3 in 2009 before falling again to 2.5 in 2013. However, the decline in net farm income into 2018 has caused it to rise to a ratio of over 6, not seen since the 1980s. This is outside the typical range of 2-4 over the past 50-years and is leading to an observed rise in repayment risk ( Figure 9 ). While the global financial crisis in 2008-2009 was slower to affect the balance sheets of farmers and agricultural lenders than the housing market, its presence was observed in agricultural lending. Credit standards were tightened (more documentation and oversight of loans was required), and lenders sometimes made less credit available to producers. As the lender of last resort, the FSA experienced significantly higher demand for its direct loans and guarantees. In 2007, 2008, and 2010, farm commodity prices were particularly high, supporting farm income at above-average levels. But in 2006 and 2009, net farm income fell by about one-third ( Figure 7 ), reducing some farmers' ability to repay loans, particularly in some farm sectors such as dairy, hogs, and poultry. Strong farm income from 2011 to 2013 improved most farmers' ability to repay loans. But weakness in farm income since 2014 has increased pressure on some farmers' repayment capacity. Delinquency rates include loans that are 30 days or more past due and still accruing interest, as well as those in nonaccrual status. The delinquency rates on residential mortgages and all loans appear to have reached a recent peak in mid-2010 (11.5% for residential mortgages and 7.4% for all commercial bank loans, Figure 10 ). The delinquency rates for agricultural loans did not begin to rise until mid-2008 after continuing to fall to historic lows while delinquencies were rising in residential mortgages and other loans. Moreover, the rate of increase in delinquencies on farm production loans at commercial banks was not as sharp as in the non-farm sectors and peaked in June 2010 at 3.3%. Delinquency rates on farm production loans at commercial banks returned to historic lows below 1% but have risen slightly since 2015 and appear to have stabilized in 2017. A more severe measure of loan performance is nonperforming loans. Nonperforming loans include nonaccrual loans and accruing loans 90 days or more past due. These loans are more in jeopardy than delinquent loans and represent a smaller subset of loans. Within the agricultural loan portfolio, the FCS nonperforming loan rate has maintained the levels of the mid-2000s that indicated that the system had recovered from the farm financial crisis of the 1980s. FCS nonperforming loans rose from 0.5% at the beginning of 2008 to a near-term peak of 2.8% on September 30, 2009, before decreasing to 0.73% at the end of 2015. While FCS nonperforming loans have risen slightly in 2016 and 2017, they remain below 0.85% into 2018 ( Figure 11 ). At commercial banks, nonperforming farm loans rose during the 2008-2010 financial crisis, recovered into 2015, but have risen again as declining farm income has stressed repayment. Nonperforming farm real estate loans at commercial banks rose from a low of 0.7% in December 2006 to 2.9% in March 2011 before declining to 1% as of December 31, 2015. Nonperforming farm production loans rose from a low of 0.6% in December 2006 to 2.4% in March 2010 before declining again to 0.4% as of December 31, 2014 ( Figure 11 ). Nonperforming loan rates at commercial banks have risen for farm real estate loans and farm production loans to about 1.5% and 1.3%, respectively, at the end of 2017. FSA is considered a lender of last resort because it makes direct farm ownership and operating loans to family-sized farms that are unable to obtain credit elsewhere. FSA also guarantees timely payment of principal and interest on qualified loans made by commercial banks and the FCS. Farm bills modify the permanent authority in 7 U.S.C. 1921. In FY2017, an appropriation of $90 million in budget authority (plus $317 million for salaries and expenses) supported $8 billion of new direct loans and guarantees. Direct loans are limited to $300,000 per borrower ($50,000 for microloans), and guaranteed loans to $1,399,000 (adjusted for inflation). Direct emergency loans are available for disasters. Part of the FSA loan program is reserved for beginning farmers and ranchers (7 U.S.C. 1994 (b)(2)). For direct loans, 75% of the funding for farm ownership loans and 50% of operating loans are reserved for the first 11 months of the fiscal year. For guaranteed loans, 40% is reserved for ownership loans and farm operating loans for the first half of the fiscal year. Funds are also targeted to "socially disadvantaged" farmers by race, gender, and ethnicity (7 U.S.C. 2003). Using these provisions, FSA is also known as lender of first opportunity for many borrowers. Congress established the FCS in 1916 to provide a dependable and affordable source of credit to rural areas at a time when commercial lenders avoided farm loans. The FCS is neither a government agency nor guaranteed by the U.S. government but is a network of borrower-owned lending institutions operating as a GSE. It is not a lender of last resort; it is a for-profit lender with a statutory mandate to serve agriculture. Funds are raised through the sale of bonds on Wall Street. Four large banks allocate these funds to 69 credit associations that, in turn, make loans to eligible creditworthy borrowers. Statutes and oversight by the House and Senate Agriculture Committees determine the scope of FCS activity (Farm Credit Act of 1971, as amended; 12 U.S.C. 2001 et seq . ). Benefits such as tax exemptions are also provided. Eligibility is limited to farmers, certain farm-related agribusinesses, rural homeowners in towns under 2,500 population, and cooperatives. The federal regulator is the Farm Credit Administration (FCA). Farmer Mac is a separate GSE that is a secondary market for agricultural loans. Some consider it related to the FCS in that FCA is its regulator and that it was created by the same legislation, but it is financially and organizationally a separate entity. Farmer Mac purchases mortgages from lenders and guarantees mortgage-backed securities that are bought by investors. The FCS is unique among the GSEs because it is a retail lender making loans directly to farmers and thus is in direct competition with commercial banks. Because of this direct competition for creditworthy borrowers, the FCS and commercial banks often have an adversarial relationship in the policy realm. Commercial banks assert unfair competition from the FCS for borrowers because of tax advantages that can lower the relative cost of funds for the FCS. They often call for increased congressional oversight. The FCS counters by citing its statutory mandate (and limitations) to serve agricultural borrowers in good times and bad times. In contrast, FSA's loan programs are supported by both the FCS and commercial banks. FSA is not regarded as a competitor since it serves farmers who otherwise may not be able to obtain credit. Commercial banks and the FCS particularly support the FSA loan guarantee program because it allows them to make and service loans that otherwise might not be possible or at reduced risk. Credit issues are not expected to be a major part of a farm bill in 2018 or to be particularly significant in the overall scope of the permanent agricultural credit statutes. Nonetheless, several issues could arise, such as (1) further targeting of FSA lending resources to beginning, socially disadvantaged, and/or veteran farmers and (2) raising the maximum loan size per borrower. The enacted 2014 farm bill ( P.L. 113-79 ) made relatively small policy changes to USDA's permanently authorized farm loan programs. It gave USDA discretion to recognize alternative legal entities and allowed alternatives to meet a farming experience requirement. It increased the maximum size of down-payment loans and eliminated term limits on guaranteed operating loans, among other changes. For the FSA farm loan program, the maximum loan size per borrower for direct loans is $300,000 (7 U.S.C. 1925(a)(2) for farm ownership loans, and 7 U.S.C. 1943(a)(1) for farm operating loans). It was last increased in the 2008 farm bill from $200,000. For FSA guaranteed loans, the maximum size per borrower is presently $1,399,000, which is a $700,000 base amount in statute increased annually by an inflation factor (same U.S. Code sections as for direct loans). It was last updated in statute in 1998, when the inflation factor was added. As the average size of farms has increased and farms have become more capital intensive, these loan limits may increasingly be seen as limiting opportunities for some farmers. Two bills in the 115 th Congress would raise these limits: S. 1736 would raise the maximum size of direct loans to $600,000. It would raise the maximum size of guaranteed loans to $2.5 million, indexed for inflation. S. 1921 would similarly raise the maximum size of direct loans to $600,000. It would raise the maximum size of guaranteed loans to $3 million, indexed for inflation. The bill would also update and increase the overall program authorization levels and provide mandatory funding. The FSA farm loan program has historically been funded with discretionary appropriations. Congress added "term limits" to the USDA farm loan program in 1992 and 1996 to restrict eligibility for government farm loans and encourage farmers to "graduate" to commercial loans. The term limits place a maximum number of years that farmers are eligible for certain types of FSA loans or guarantees. However, until the end of 2010, Congress had suspended enforcement of term limits on guaranteed operating loans to prevent some farmers from being denied credit, and the 2014 farm bill eliminated that term limit ( Table 1 ).

The federal government provides credit assistance to farmers to help assure adequate and reliable lending in rural areas, particularly for farmers who cannot obtain loans elsewhere. Federal farm loan programs also target credit to beginning farmers and socially disadvantaged groups. The primary federal lender to farmers, though with a small share of the market, is the Farm Service Agency (FSA) in the U.S. Department of Agriculture (USDA). Congress funds FSA loans with annual discretionary appropriations--about $90 million of budget authority and $317 million for salaries--to support $8 billion of new direct loans and guarantees. FSA issues direct loans to farmers who cannot qualify for regular credit and guarantees the repayment of loans made by other lenders. FSA thus is called a lender of last resort. Of about $374 billion in total farm debt, FSA provides about 2.6% through direct loans and guarantees about another 4%-5% of loans. Another federally related lender is the Farm Credit System (FCS)--cooperatively owned and funded by the sale of bonds in the financial markets. Congress sets the statutes that govern the FCS banks and lending associations, mandating that they serve agriculture-related borrowers. FCS makes loans to creditworthy farmers and is not a lender of last resort. FCS accounts for 41% of farm debt and is the largest lender for farm real estate. Commercial banks are the other primary agricultural lender, holding slightly more than FCS with 42% of total farm debt. Commercial banks are the largest lender for farm production loans. Generally speaking, the farm sector's balance sheet has remained strong in recent years. While delinquency rates on farm loans increased from 2008 into 2010 during the global financial crisis, farmers and agricultural lenders did not face credit problems as severe as those of other economic sectors. Since 2010, loan repayment rates have improved, but recent weakness in farm income has begun to put pressure on some farmers' loan repayment capacity.

T he issue of health care fraud and abuse has attracted a lot of attention in recent years, primarily because the financial losses attributed to it are estimated to be billions of dollars annually. Considering that the Centers for Medicare and Medicaid Services (CMS) is the largest purchaser of health care in the United States, and that Medicare and Medicaid combined pay about one-third of the nation's health expenditures, it is not surprising that these federal health programs have been considered prime targets for fraudulent activity. Accordingly, efforts to address this fraud and abuse continue to be a priority for Congress. The federal government has an array of statutes that it uses to fight health care fraud. This report provides a brief overview of some of the key federal statutes, including program-related civil and criminal penalties, the anti-kickback statute, the Stark law, and the False Claims Act, that are used to combat fraud and abuse in federal health care programs. Title XI of the Social Security Act contains Medicare and Medicaid program-related anti-fraud provisions, which impose penalties and exclusions from federal health care programs on persons who engage in certain types of misconduct. Under Section 1128A of the Social Security Act, the Office of the Inspector General at the Department of Health and Human Services (OIG) is authorized to impose civil penalties and assessments on a person, including an organization, agency, or other entity, who engages in various types of improper conduct with respect to federal health care programs, including the imposition of penalties against a person who knowingly presents or causes to be presented to a federal or state employee or agent certain false or fraudulent claims. For example, penalties apply to services that were not provided as claimed, or claims that were part of a pattern of providing items or services that a person knows or should know are not medically necessary. In addition, certain payments made to physicians to reduce or limit services are also prohibited. This section provides for monetary penalties of up to $10,000 for each item or service claimed, up to $50,000 under certain additional circumstances, as well as treble damages. Section 1128B of the Social Security Act provides for criminal penalties involving federal health care programs. Under this section, certain false statements and representations, made knowingly and willfully, are criminal offenses. For example, it is unlawful to make or cause to be made false statements or representations in either applying for benefits or payments, or determining rights to benefits or payments under a federal health care program. In addition, persons who conceal any event affecting an individual's right to receive a benefit or payment with the intent to either fraudulently receive the benefit or payment (in an amount or quantity greater than that which is due), or convert a benefit or payment to use other than for the benefit of the person for which it was intended may be criminally liable. Persons who have violated the statute and have furnished an item or service under which payment could be made under a federal health program may be guilty of a felony, punishable by a fine of up to $25,000, up to five years imprisonment, or both. Other persons involved in connection with the provision of false information to a federal health program may be guilty of a misdemeanor and may be fined up to $10,000 and imprisoned for up to one year. One of the most severe sanctions available under the Social Security Act is the ability to exclude individuals and entities from participation in federal health care programs. Under Section 1128 of the Social Security Act, exclusions from federal health programs are mandatory under certain circumstances, and permissive in others (i.e., OIG has discretion in whether to exclude an entity or individual). Exclusion is mandatory for those convicted of certain offenses, including (1) a criminal offense related to the delivery of an item or service under Medicare, Medicaid, or a state health care program; (2) a criminal offense relating to neglect or abuse of patients in connection with the delivery of a health care item or service; or (3) a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance. OIG has permissive authority to exclude an entity or an individual from a federal health program under numerous circumstances, including conviction of certain misdemeanors relating to fraud, theft, embezzlement, breach of fiduciary duty, or other financial misconduct; a conviction based on an interference with or obstruction of an investigation into a criminal offense; and revocation or suspension of a health care practitioner's license for reasons bearing on the individual's or entity's professional competence, professional performance, or financial integrity. In light of the concern that decisions of health care providers can be improperly influenced by a profit motive, and in order to protect federal health care programs from additional costs and overutilization, Congress enacted the anti-kickback statute. Under this criminal statute, it is a felony for a person to knowingly and willfully offer, pay, solicit, or receive anything of value (i.e., "remuneration") in return for a referral or to induce generation of business reimbursable under a federal health care program. The statute prohibits both the offer or payment of remuneration for patient referrals, as well as the offer or payment of anything of value in return for purchasing, leasing, ordering, or arranging for, or recommending the purchase, lease, or ordering of any item or service that is reimbursable by a federal health care program. Persons found guilty of violating the anti-kickback statute may be subject to a fine of up to $25,000, imprisonment of up to five years, and exclusion from participation in federal health care programs for up to one year. There are certain statutory exceptions to the anti-kickback statute. Under one exception, "remuneration" does not include a discount or other reduction in price obtained by a provider of services or other entity if the reduction in price is properly disclosed and reflected in the costs claimed or charges made by the provider or entity under a federal health care program. Another exception includes, under certain circumstances, amounts paid by a vendor of goods or services to a person authorized to act as a purchasing agent for a group of individuals that furnish services reimbursable by a federal health program. In addition to these exceptions, the Department of Health and Human Services' Office of Inspector General (OIG) has promulgated regulations that contain several "safe harbors" to prevent common business arrangements from being considered kickbacks. Safe harbors listed by regulation include certain types of investment interests, personal services and management contracts, referral services, and space rental or equipment rental arrangements. OIG has indicated that the safe harbor provisions are not indicative of the only acceptable business arrangements, and that business arrangements that do not comply with a safe harbor are not necessarily considered "suspect." Limitations on physician self-referrals were enacted into law in 1989 under the Ethics in Patient Referrals Act, commonly referred to as the "Stark law." The Stark law, as amended, and its implementing regulations prohibit certain physician self-referrals for designated health services (DHS) that may be paid for by Medicare or Medicaid. In its basic application, the Stark law provides that if (1) a physician (or an immediate family member of a physician) has a "financial relationship" with an entity, the physician may not make a referral to the entity for the furnishing of designated health services (DHS) for which payment may be made under Medicare or Medicaid, and (2) the entity may not present (or cause to be presented) a claim to the federal health care program or bill to any individual or entity for DHS furnished pursuant to a prohibited referral. It has been noted that the general idea behind the prohibitions in the Stark law is to prevent physicians from making referrals based on financial gain, thus preventing overutilization and increases in health care costs. A "financial relationship" under the Stark law consists of either (1) an "ownership or investment interest" in the entity or (2) a "compensation arrangement" between the physician (or immediate family member) and the entity. An "ownership or investment interest" includes "equity, debt, or other means," as well as "an interest in an entity that holds an ownership or investment interest in any entity providing the designated health service." A "compensation arrangement" is generally defined as an arrangement involving any remuneration between a physician (or an immediate family member of such physician) and an entity, other than certain arrangements that are specifically mentioned as being excluded from the reach of the statute. The Stark law includes a large number of exceptions, which have been added and expanded upon by a series of regulations. These exceptions may apply to ownership interests, compensation arrangements, or both. Violators of the Stark law may be subject to various sanctions, including a denial of payment for relevant services and a required refund of any amount billed in violation of the statute that had been collected. In addition, civil monetary penalties and exclusion from participation in Medicaid and Medicare programs may apply. A civil penalty not to exceed $15,000, and in certain cases not to exceed $100,000, per violation may be imposed if the person who bills or presents the claim "knows or should know" that the bill or claim violates the statute. The federal False Claims Act (FCA), codified at 31 U.S.C. Sections 3729-3733, is considered by many to be an important tool for combating fraud against the U.S. government. The FCA is a law of general applicability that is invoked frequently in the health care context. It has been reported that from January 2009 through the end of the 2015 fiscal year, the Justice Department used the False Claims Act to recover more than $16.5 billion in health care fraud cases. In general, the FCA imposes civil liability on persons who knowingly submit a false or fraudulent claim or engage in various types of misconduct involving federal government money or property. Health care program false claims often arise in terms of billing, including billing for services not rendered, billing for unnecessary medical services, double billing for the same service or equipment, or billing for services at a higher rate than provided ("upcoding"). Penalties under the FCA include a penalty of $5,500 to $11,000 for each false claim filed, plus additional damages. Civil actions may be brought in federal district court under the FCA by the Attorney General or by a person known as a relator (i.e., a "whistleblower"), for the person and for the U.S. government, in what is termed a qui tam action. The ability to initiate a qui tam action has been viewed as a powerful weapon against health care fraud, in that it may be initiated by a private party who may have independent knowledge of any wrongdoing. Popularity of qui tam actions brought under the FCA may be attributed partially to the fact that successful whistleblowers can receive between 15% and 30% of the monetary proceeds of the action or settlement that are recovered by the government.

A number of federal statutes aim to combat fraud and abuse in federally funded health care programs such as Medicare and Medicaid. Using these statutes, the federal government has been able to recover billions of dollars lost due to fraudulent activities. This report provides an overview of some of the more commonly used federal statutes used to fight health care fraud and abuse. Title XI of the Social Security Act contains Medicare and Medicaid program-related anti-fraud provisions, which impose civil penalties, criminal penalties, and exclusions from federal health care programs on persons who engage in certain types of misconduct. Penalties apply in circumstances where, among many other things, services were not provided as claimed, or claims were part of a pattern of providing items or services that a person knows or should know are not medically necessary. Under the federal anti-kickback statute, it is a felony for a person to knowingly and willfully offer, pay, solicit, or receive anything of value (i.e., "remuneration") in return for a referral or to induce generation of business reimbursable under a federal health care program. The statute prohibits both the offer or payment of remuneration for patient referrals, as well as the offer or payment of anything of value in return for purchasing, leasing, ordering, or arranging for, or recommending the purchase, lease, or ordering of any item or service that is reimbursable by a federal health care program. The Stark law and its implementing regulations prohibit physician self-referrals for certain health services that may be paid for by Medicare or Medicaid. Under the Stark law, if (1) a physician (or an immediate family member of a physician) has a "financial relationship" with an entity, the physician may not make a referral to the entity for the furnishing of these health services for which payment may be made under Medicare or Medicaid, and (2) the entity may not bill the federal health care program or any individual or entity for services furnished pursuant to a prohibited referral. The federal False Claims Act (FCA) imposes civil liability on persons who knowingly submit a false or fraudulent claim or engage in various types of misconduct involving federal government money or property. Health care program false claims often arise in billing, including billing for services not rendered, billing for unnecessary medical services, double billing for the same service or equipment, or billing for services at a higher rate than provided ("upcoding"). Civil actions may be brought in federal district court under the FCA by the Attorney General or by a person known as a relator (i.e., a "whistleblower"), for the person and for the U.S. government, in what is termed a qui tam action.

The debates and discussions among U.S. government officials and outside stakeholders about the use of partnership in support of national security are inchoate, but a number of facets of the debates are discernible, including worldview; goals; effects; priorities; resourcing; assessments; roles and responsibilities; and risk. These issues are variously addressed in recent strategic guidance documents. Key unclassified guidance documents include the 2006 Quadrennial Defense Review (QDR) Report, and its follow-on Building Partnership Capacity (BPC) roadmap; the 2010 National Security Strategy (NSS); the 2010 QDR Report; the 2010 Quadrennial Diplomacy and Development Review (QDDR); and the 2012 Defense Strategic Guidance (DSG). In addition, a wealth of internal DOD guidance reportedly addresses partnership--in particular the Guidance for the Employment of the Force (GEF) as well as planning and programming guidance documents under their various names. Yet the treatment of "partnership" by these documents is both inconsistent and partial--not all documents address all the major facets of strategy; some, such as resourcing, are barely treated; and in many cases the thrust of the guidance has changed over time. This section describes each facet of partnership strategy, analyzes its treatment in recent guidance, and raises questions that may be germane to congressional oversight. In general, a state's national security strategy is likely to derive from some worldview--a set of assumptions about the nature of the world order and the exercise of power within it, together with a view of that state's role on the world stage. That worldview, in turn, is likely to shape how a state defines its national interests. In any partnership strategy, these starting points are likely to affect what effects are desired, how efforts are prioritized, and how results are assessed. While worldview may not be explicitly stated, identifying its influence on U.S. strategy, including the role of partnership within that strategy, may be helpful to rigorous oversight. Recent strategic guidance documents vary significantly in both the extent to which worldview is explicitly stated, and the nature of their respective worldviews: The 2006 QDR went to great lengths to justify the whole idea of partnership. Partnership was depicted less as a given than as a new necessity, driven by two new realities in the global arena: the urgent threat of terrorism that required actions in new places; and the long-term, large-scale contingency operations in Iraq and Afghanistan that required more hands. In turn, the 2006 QDR ascribed to partnership a relatively linear causal logic: the United States would help build partners' capabilities, and then those partners would employ those capabilities in accordance with U.S. strategy. A basic--and in some ways remarkable--assumption of the 2006 QDR was that partners' decisions and actions would largely follow U.S. intent. The 2010 QDR adopted the worldview of the 2006 QDR, that partnership as a rule requires a rationale, as well as a similar view of the global security context. As a result it largely echoed the counter-terrorism (CT)-driven rationale for partnership from the 2006 QDR. The 2010 NSS, in contrast, is explicitly based on a worldview in which collective action in the service of common interests is taken as a given--the default way of doing business in general, and thus not an approach that needs to be justified in each case. That view, solidly echoed in the 2010 QDDR, may be contrasted with a more instrumental approach to partnership, in which specific partners are recruited, when circumstances so require, to help accomplish specific ends. Furthermore, the 2010 NSS adopts from the institutionalist school of international relations theory the premise that shared norms help shape outcomes in the international system; so part of the causal logic in the 2010 NSS is that the United States fosters shared norms through partnership efforts, and those norms in turn shape choices by other international actors. The 2012 DSG reflects the 2010 NSS worldview--that partnership is the default way of doing business. It also reflects a perception of the global security context that is very different from those described by the 2006 and 2010 QDRs. The DSG underscores that the large-scale contingencies in Iraq and Afghanistan are no longer the top U.S. defense priorities, and the sense of urgency about fostering partners with the kinds of capabilities required for those contingencies has disappeared. The DSG's fundamental "shift toward the future" underscores concern with a broad range of security challenges, in contrast to the almost singular focus on CT as a driver for partnership in 2006. With partnership as the default starting point, the DSG indicates that any or all of these challenges might be addressed in part through partnership. Key questions concerning worldview might include the following: What assumptions about the nature of the world order undergird proposed partnership initiatives? How powerful a role does U.S. leadership play in partnership activities--to what extent does strategy assume that partners will participate, and then act, based on U.S. intent? Should partnership be the default starting point for engagement on the world stage? Or does the choice to pursue partnership--given its inherent frictions and opportunity costs--require justification in each case? What role if any do shared norms play in shaping outcomes? And to what extent if any can the U.S. government shape shared norms? In principle, worldview and national interests shape national security strategy, which in turn articulates goals. One fundamental, unresolved tension in the debates about the use of partnership in support of national security concerns the fundamental goal of partnership. One possible logic argues that the global security context today presents a greater or more complex array of challenges than it did in the past, so partnership, including greater participation and contributions by partners, is now essential in order to meet those challenges. Another possible logic argues that partnership generates savings--as U.S. partners assume greater responsibilities, the United States can do less. Those two logics are not mutually exclusive, but different choices about their respective importance could have different implications for prioritizing and resourcing partnership efforts. Recent strategic guidance has tended to suggest that both logics apply without clarifying their relative importance: In the mid-aughts, both logics were powerfully alive in the Pentagon debates that shaped the 2006 QDR and other decision-making. In the wake of the terrorist attacks of 9/11, and amidst attention-grabbing cyber attacks, officials underscored that the 21 st century presented a much broader array of security challenges than ever before. The 2006 QDR called for building international partners' capabilities in order to meet those broader challenges. For example, counter-terrorism (CT) would require new, highly local approaches--and many of them--designed to cut off initial manifestations of terrorism, wherever in the world it might take root. The 2006 BPC roadmap argued more pointedly that without partnership at home and abroad, "the nation's strategic objectives are unattainable." In other words, alone--we fail. At the same time, the 2006 BPC roadmap, more explicitly than any other guidance, also invoked the idea of savings: "The Department's efforts to build the planning and operational capabilities of partner agencies and international partners have the potential to reduce the length of U.S. force deployments, minimize the range of circumstances in which U.S. forces are called upon, and preserve the Department's financial resources." What the roadmap did not do was square the circle by addressing how partnership could achieve savings in the face of a larger overall requirement. The 2010 QDR echoed the 2006 QDR's concern with an increased span of challenges as well as its premise that partnership was an important tool for addressing them. In addition, the 2010 QDR noted one way in which partnership could generate savings--by rendering some actions unnecessary or reducing the U.S. share of the burden if action were required. By "strengthening relationships" abroad, it argued, the United States would become better at averting crises altogether or--if needed--at working with others to respond to them. The 2012 DSG, in turn, seems to skew in the direction of savings. It states that partnership "remains important for sharing the costs and responsibilities of global leadership." Also, DOD official communications associated with the DSG have frequently stressed that partnership is one pillar of its plan to mitigate risk in the context of constrained resources. Key questions concerning the fundamental goals of partnership might include the following: What is the fundamental goal of partnership in support of national security? Is the logic to save money, as U.S. investments pay off over time in terms of things the U.S. government no longer has to do? Is the logic to meet a greater array of global security challenges by working by, with, and through partners--challenges that the United States would simply not have time or resources to meet on its own? To the extent that both goals apply--meeting challenges and generating savings--what is the appropriate balance between these goals in driving decisions about prioritization and resourcing? In theory, partnership might be used to help achieve any of a wide array of ends that support national security: enabling partners to do specific things (at home, abroad, or as part of multilateral efforts); giving the United States better situational understanding; ensuring U.S. access; and shaping partners' perceptions and decision-making. Moreover, many specific partnership activities may aim at multiple effects--digging a well might build local good will for further tactical-level cooperation but may also develop capabilities that host nation forces could apply at home or abroad, foster effective host nation civil-military collaboration, deepen U.S. ability to work with host nation partners on a range of issues, and/or demonstrate U.S. commitment as part of a broader, orchestrated bilateral relationship. Clearly establishing the strategic logic that links interests to desired effects, and effects to activities, is widely viewed by strategists as essential for prioritizing efforts, producing effective assessments, and providing accountability. Recent strategic guidance tends to describe desired effects omnivorously--after all, most potential effects of partnership sound desirable--without clarifying the interests-effects-activities logic trail: The 2006 QDR and its BPC roadmap, reportedly driven by a keeping-us-up-at-night view of global terrorism, were relatively specific and distinctly ambitious concerning the desired effects of partnership. The 2006 QDR helped propagate the view that effective counter-terrorism called for "going local"--countering the precursors to terrorism wherever it might take root. That approach, in turn, required working closely with interior as well as defense ministries of partners around the world. It also required a transformative approach toward state and society in partner countries: "improv[ing] states' governance, administration, internal security and the rule of law in order to build partner governments' legitimacy in the eyes of their own people and thereby inoculate societies against terrorism, insurgency, and non-state threats." This 2006 view did clearly link desired effects with U.S. interests, but that list of "effects" was unwieldy, because it failed to separate the essential from the merely desirable. Particularly from a 2012 vantage point--steeped in both emerging lessons from Iraq and Afghanistan, and a deeply austere fiscal context--the 2006 aspiration to "inoculate" may sound strikingly maximalist, and the view that the U.S. government can foster such inoculation, highly optimistic. The 2010 QDR largely echoed the CT-driven rationale for the use of partnership from the 2006 QDR, as well as its scope and high level of ambition regarding partnership's desired effects. For example, it explained that since terrorists exploit ungoverned and under-governed areas as safe havens, DOD would help strengthen the ability of local forces to provide internal security and would work with other U.S. agencies to strengthen civilian capacity. It also made an adjustment to the strategic logic of partnership by naming "building the security capacity of partner states" as one of its six key missions. While that move may have been intended to emphasize further the importance of partnership, it opened the door to confusion by suggesting that partnership was an "end" rather than a set of instruments for pursuing other ends. The 2010 NSS calls for the use of whole-of-government partnership approaches, including roles for a number of U.S. departments and agencies, to help achieve a wide array of desired effects in support of U.S. national security interests. In the NSS, the effects of "invest[ing] in the capacity of strong and capable partners" include everything from countering violent extremism and stopping proliferation, to helping sustain economic growth and fostering shared norms. Geographically, the NSS calls for pursuing those effects very broadly--with traditional allies, emerging centers of influence, and new partners. Whether or not the objectives are all laudable and the proposed categories of partners appropriate, the expansiveness of both categories raises questions about which effects are most essential for protecting U.S. interests. The 2010 QDDR uses the term "partnership" to refer to the full spectrum of U.S. engagement with other states and multilateral organizations, which makes the desired effects of partnership largely coterminous with those of U.S. foreign policy. It affirms that one major component of that partnership is security-focused, and it states broadly that "the United States is investing in the capacity of strong and capable partners and working closely with those partners to advance our common security." Within that security category, it describes a wide range of the desired effects of partnership--from improving justice sectors, to countering violent extremism, to curtailing criminal networks, to strengthening fragile states, to ending conflicts, to supporting the environment--a range that far exceeds the narrow CT focus of the 2006 and 2010 QDRs. The QDDR does not articulate how the application of partnership approaches yields specific effects, or which applications are most important for protecting U.S. interests. The 2012 DSG provides the least clarity, among the recent defense guidance documents, about the specific desired ends of partnership. That reflects both the worldview of the 2010 NSS, in which partnership is simply the way to do business, and the DSG's broader-spectrum view of future security challenges compared to previous defense guidance. In stressing the importance of partnership activities including rotational deployments of U.S. forces, and bilateral and multilateral training exercises, the DSG describes a long array of potential pay-offs including ensuring access, reinforcing deterrence, building capacity for internal and external defense, strengthening alliances, and increasing U.S. influence. But such a laundry list of desired effects does not indicate how specific activities generate specific effects, does not provide clear guidelines concerning which of the effects are most important for protecting U.S. interests, and does not convey the strategic logic, if any, by which some effects generate others. Key questions concerning effects might include the following: How exactly does building the capacity and capabilities of U.S. partners lead to outcomes that help protect U.S. national security interests? By what logic exactly do partnership activities generate their desired effects? How and under what circumstances might some partnership effects help generate others? Opportunities for partnership in support of national security are theoretically unbounded, so prioritization is essential both to focus effort and to conserve resources. In theory, priorities--always based on advancing and protecting U.S. interests--might be based on geography; or on functional concerns such as CT, countering weapons of mass destruction, and preventing or mitigating conflict; or on qualities of a potential partner such as its willingness to participate, its existing capabilities, and its general importance on the world stage aside from the dynamics of its bilateral relationship with the United States. These three possible rationales are likely to drive decision-making in quite different directions. It makes sense for partnership strategy to provide some mechanism for adjudicating among and sensibly synchronizing these three sets of concerns. Published strategic guidance documents are generally short on prioritization, while internal guidance reportedly has not settled on a single approach toward prioritization: The 2010 NSS and QDDR cast the broadest net, using "partnership" to refer to the full spectrum of U.S. government engagement around the world, providing exhaustive lists of the geographic areas ripe for partnership, the substantive arenas in which partnership should be applied, and the categories of potential partners. Not surprisingly, DOD's publicly available strategy documents do not include detailed guidance for prioritizing the use of partnership. The DSG stresses the growing importance of the Asia Pacific region and the continued importance of the Middle East, but it does not cross-walk those broad geographical priorities with functional or partner-characteristic concerns. Reportedly, DOD's internal guidance regarding partnership is more forthcoming, but the logic of prioritization that it uses has varied over time and the thinking remains unrefined. Some earlier guidance reportedly emphasized cultivating "willing and capable" partners. Yet some of the most important engagements from a U.S. strategic perspective may be precisely with those states that are not fully willing, or do not yet have all the capabilities required. These might include weak states facing significant internal turmoil that could grow into a threat to U.S. interests; or states that may take a skeptical view of the United States but whose geographic proximity to sources of U.S. concern could offer important access. While having willing and able partners might in theory be welcome, investing in all of them, and only in them, might not yield the biggest pay-offs in terms of protecting U.S. interests. Reportedly, more recent internal DOD guidance has recognized multiple potential rationales for partnership beyond the simple "willing and capable" formulation. But the use of multiple rationales has led to long lists of designated partners--each designated perhaps for a different combination of reasons. Without an agreed mechanism for rationalizing the major logics that might drive prioritization, and without some appetite suppressant on the overall scope, such guidance may provide little basis for making tough choices. Key questions concerning prioritization might include the following: By what mechanism should priorities for partnership be determined? How might concerns with specific geographic regions, with specific kinds of threats and challenges, and with key characteristics of potential partner states best be reconciled to produce a coherent approach to prioritization? To what extent and in what ways should a sense of the overall requirement drive decision-making about priorities? To the extent that partnership efforts in support of national security may include states, multi-lateral organizations, non-governmental organizations, and societies writ large, how can partnership strategy best prioritize among unlike partners? The broad partnership debates often seem to assume that partnership yields savings over time. To the extent that savings is part of the desired ends, it may be helpful for partnership strategy to outline the curves of investment and expected pay-off over time, including when and how both curves will be reflected in budget requests. As a rule, strategic guidance concerning partnership broadly intimates that partnership eventually produces savings without demonstrating how that is expected to occur. The 2006 BPC roadmap went further than other strategic guidance by recognizing a range of ways in which partnership might generate savings over time. It also required that DOD officials include "assessments of the fiscal impact" in future internal deliberations about partnership. Key questions concerning resources might include the following: To what extent, if any, does partnership, given the initial costs of investment, eventually yield savings? In what ways, and according to what broad timeline, are savings generated by partnership efforts expected to be reflected in budget requests? To what extent if any does, and should, anticipated savings drive the relative prioritization of proposed partnership activities? One potential fundamental challenge to congressional oversight of Administration partnership efforts in support of national security is the lack of a clear assessment model for gauging the impact of partnership efforts. A common but generally unhelpful approach is to assess easily quantifiable "outputs" rather than "effects"--for example, assessing a bilateral exercise as successful because the exercise did indeed take place, rather than gauging the immediate and cumulative impact of relationship-building and capabilities-fostering on protecting U.S. interests. In theory, rigorous assessment requires as a starting point a clear and specific articulation of desired ends, together with a clear logic for assessing progress toward those ends. The realm of partnership complicates assessment in two ways. First, partnership efforts may be aimed at achieving multiple effects simultaneously--ranging from immediate, concrete results to longer-term, less tangible outcomes such as stronger U.S. influence that shapes a partner's decision-making. Second, some effects may be achieved partially, along a spectrum, rather than in the binary terms of success or failure. As a rule, strategic guidance regarding partnership has been vague about desired effects, and it has not addressed the balance among qualitatively different kinds of effects. If anything, guidance tends to imply, without stating so, that accomplishing a tactical-level mission will naturally also yield an array of tangible and intangible benefits at the operational and strategic levels. Assessments depend on unambiguous statements of expected results. Among the recent guidance, only the 2006 BPC roadmap explicitly recognized the need to be able to assess return on U.S. investment, but it did not outline how to do so. Key questions concerning assessments might include the following: How can the effects of partnership efforts, and their role in protecting U.S. interests, best be assessed? How might an assessments process consider partnership efforts designed to generate multiple, tangible and intangible, discrete effects? How in particular can the growth and impact of U.S. influence best be weighed? How can an assessments process best account for the fact that the effects of partnership efforts may depend in significant part on decisions and actions by U.S. partners? What qualities must partnership strategy have in order to facilitate effective assessment? Observers have suggested that in an ideal world, the U.S. government would closely integrate all of its partnership efforts in support of national security--in diplomacy, development, and defense--not only so that these efforts do not contradict each other, but also so that they actively leverage each other and, as a whole, reflect U.S. priorities. Furthermore, the U.S. government would have a clear internal division of roles and responsibilities for partnership--among departments, and among key components within departments--in order to prevent confusion, mitigate friction, and allow effective and efficient preparation and execution by each entity. That clear division of labor would be reinforced, in turn, by congressional oversight. In general, strategic guidance tends to be strong in calling for integration of effort, though usually without prescribing mechanisms for achieving that integration; and weak in calling for, let alone clarifying, a clear division of roles and responsibilities: At the systemic level, the 2010 NSS calls resoundingly--in a three-page section--for whole-of-government approaches, noting that "we must update, balance, and integrate all the tools of American power." It broadly describes the focus of each major component of U.S. effort--defense, diplomacy, economic, development, homeland security, and intelligence. But it does not assign roles and responsibilities to specific agencies. At DOD, the most ambitious guidance documents in this regard were those issued in 2006--the QDR and its follow-on BPC roadmap. At that time, the term "building partnership capacity" was applied ambitiously to all potential DOD partners including other U.S. agencies, non-governmental organizations, and the private sector, as well as international partners. The 2006 guidance documents recognized the need for both integration of effort and clarification of roles and responsibilities across these stakeholders. To that end, the guidance called for the use of national security planning guidance (NSPG)--internal, classified guidance, issued by the White House to all agencies with a national security role, which would confirm specific priorities, and clarify and assign roles and responsibilities. The BPC roadmap argued in support of the NSPG proposal that if the U.S. government is at cross purposes internally, partnership will cost more and be less effective. The 2010 QDR echoed its predecessor in portraying close interagency integration as necessary to successful partnership. The 2010 QDR also did something singular in terms of the internal DOD division of labor on partnership matters, by calling to "strengthen and institutionalize general purpose force (GPF) capabilities for security force assistance." Such a boost for the role of GPF might suggest the need for an updated rationalization of the respective contributions of GPF and Special Operations Forces (SOF) to partnership efforts. Key questions concerning integration of effort and division of labor for partnership efforts in support of national security might include the following: How can the U.S. government best establish, and refine as needed, shared overall priorities for partnership efforts in support of national security? How can it best ensure that overall priorities for partnership efforts also support U.S. foreign policy goals writ large? What is the proper distribution of roles and responsibilities for partnership in support of national security among U.S. government departments and agencies? What would be the best mechanism for regularly updating systemic-level guidance to departments and agencies about their roles in undertaking partnership efforts in support of national security? How can the U.S. government best ensure that the distribution of authorities and resources among agencies corresponds to the most appropriate division of labor? How can the partnership roles of all stake-holding departments and agencies, once clearly defined, best be integrated? Given that many different departments and agencies are likely to share responsibility for partnership in support of national security, and that many individual programs require various combinations of participation, funding, and consent from multiple agencies, how can Congress best provide effective oversight? Many potential benefits of partnership are seemingly obvious--to the extent that they are rarely spelled out. But partnership efforts carry potential risks as well as rewards. For example, partners may, tacitly or otherwise, come to depend on U.S. assistance in lieu of fostering their own fully sustainable systems. Partners may deliberately slow their growth of capabilities, or perpetuate a negative security climate, in order to justify requests for continued assistance. Partners may accept U.S. assistance but then choose not to apply their new capabilities toward U.S. strategic objectives. Or partners may apply the skills, education, and/or weaponry gained through partnership toward ends that contradict U.S. policy, such as carrying out human rights violations and staging a coup against a legitimate government. Key questions concerning risk might include the following: What safeguards are in place to help ensure that partners appropriately assume responsibility over time? How and to what extent can the United States best encourage partners to apply new capabilities toward achieving shared objectives? What safeguards are in place to help ensure, at the very least, that partners do not misapply the benefits of their partnership with the United States? How much U.S. due diligence is enough to mitigate such risks?

Over the last few years, the term "partnership" has spread like wildfire through official U.S. national security guidance documents and rhetoric. At the Department of Defense (DOD), which spearheaded the proliferation of the term, "partnership" has been used to refer to a broad array of civilian as well as military activities in support of national security. At other U.S. government agencies, and at the White House, the use of the term "partnership" has been echoed and applied even more broadly--not only in the national security arena, but also to all facets of U.S. relationships with foreign partners. "Partnership" is not new in either theory or practice. To illustrate, U.S. strategy during the Cold War called for working with formal allies, through combined planning and the development of interoperable capabilities, in order to deter and if necessary defeat a Soviet threat. And it called for working with partners in the developing world to cultivate the allegiance of states and societies to the West, and to bolster their resistance to Soviet influence. Congress provided oversight in the forms of policy direction; resources and authorities for programs ranging from weapons sales to combined military exercises to cultural exchanges; and accountability. New in recent years is both the profusion of the use of the term partnership and--in the aftermath of both the Cold War and the first post-9/11 decade--a much less singular focus for U.S. global engagement. Recent defense and national strategic guidance clearly conveys the view that partnership is good. But as a rule, it provides much less sense of what partnership is designed to achieve and how that protects U.S. interests; it does not clearly indicate how to prioritize among partnership activities; it does not assign specific roles and responsibilities for partnership across the U.S. government; and it does not indicate how to judge whether partnership is working. A lack of sufficient strategic direction could raise a series of potential concerns for Congress: Without sufficient national-level strategic guidance, good decisions about the use of partnership tools in support of national security may still be made on a case-by-case basis. But the natural default, practitioners suggest, may be toward embracing available opportunities, building further on evident successes, and falling in on existing patterns of engagement. In effect, that approach means optimizing at the sub-systemic level--focusing on the trees rather than on the forest--which may not optimally address defense and/or national-level strategic priorities. Without a clear articulation of the "ends" of partnership in support of national security, and whether and how those ends contribute to protecting U.S. interests, it may be difficult for agencies to judiciously prioritize partnership requirements against those for other national security missions. Without a clear articulation of the "ways and means" of partnership in support of national security, it may be difficult for agencies to gauge the extent to which partnership capabilities are distinct from others, or alternatively constitute "lesser included" subsets of other capabilities; and it may be difficult for agencies to consider appropriately the implications of partnership requirements for shaping and sizing the military force and the civilian workforce. Without a clear strategy of partnership in support of national security, linking ends with ways and means over time, it may be difficult for U.S. agencies to craft appropriate assessment tools to gauge the impact of partnership efforts on achieving defense and national security objectives, rather than resorting to the common default of focusing on "outputs," such as whether or not a training event took place. Without a clear distribution of roles and responsibilities--and corresponding resources and authorities--across the U.S. government for partnership in support of national security, it may be difficult for departments and agencies to plan and execute efficiently, and to integrate their efforts effectively. Without a clearly stated premise regarding resourcing--one that links initial investments in partnership efforts to any expected future savings as partners assume greater responsibilities over time--it can be difficult to anticipate the budgetary implications of partnership in support of national security. Without sufficient strategy for partnership in support of national strategy, together with appropriate assessment tools, a clear division of labor across the U.S. government, and resourcing expectations, it can be difficult for Congress to effectively allocate resources and authorities among agencies, and to ensure accountability for effective and efficient execution.

T hirty-four temporary tax provisions expired at the end of 2016. Collectively, temporary tax provisions that are regularly extended as a group by Congress, rather than being allowed to expire as scheduled, are often referred to as "tax extenders." There are several options for Congress to consider regarding temporary provisions. Provisions that expired at the end of 2016 could be extended. The extension could be retroactive. The extensions also could be short-term, long-term, or permanent. Another option would be to allow expired provisions to remain expired. Congress may also choose to evaluate the extension of certain expiring provisions, in lieu of considering an extenders package that addresses most or all of the provisions scheduled to expire. Certain expiring energy-related provisions have received particular attention, as long-term extensions of certain energy tax benefits were provided for wind and solar, but not other technologies, in legislation enacted at the end of 2015. In recent years, Congress has chosen to extend most, if not all, recently expired or expiring provisions as part of "tax extender" legislation. The most recent tax extender package, the Protecting Americans from Tax Hikes Act of 2015 (PATH Act), enacted as Division Q of the Consolidated Appropriations Act, 2016 ( P.L. 114-113 ), broke the typical practice of temporarily extending expiring provisions by making many expiring provisions permanent. Some contend that by making many temporary provisions permanent, the need to address extenders every year or two was negated. Others have suggested that tax extenders might be addressed as part of tax reform. This report begins by reviewing the concept of tax extenders, and discusses criteria for evaluating expiring tax provisions. A list of tax provisions that expired at the end of 2016 is then provided. Information on past extensions of these expiring provisions is also provided. The report also briefly discusses recent tax extender legislation. As part of that discussion, information is included on provisions that were either made permanent or extended through 2019 in the most recent tax extenders legislation. The final sections of the report discuss the cost associated with extending expired provisions. The tax code presently contains dozens of temporary tax provisions. In the past, legislation to extend some set of these expiring provisions has been referred to by some as the "tax extender" package. While there is no formal definition of a "tax extender," the term has regularly been used to refer to the package of expiring tax provisions temporarily extended by Congress. Oftentimes, these expiring provisions are temporarily extended for a short period of time (e.g., one or two years). Over time, as new temporary provisions were routinely extended and hence added to this package, the number of provisions that might be considered "tax extenders" grew. This trend was broken with the Consolidated Appropriations Act, 2016 ( P.L. 114-113 ), which made permanent a number of provisions that had been part of previous tax extender packages. As a result, there are fewer "tax extender" provisions that expired in 2016 than in previous years. There are various reasons Congress may choose to enact temporary (as opposed to permanent) tax provisions. Enacting provisions on a temporary basis, in theory, would provide Congress with an opportunity to evaluate the effectiveness of specific provisions before providing further extension. Temporary tax provisions may also be used to provide relief during times of economic weakness or following a natural disaster. Congress may also choose to enact temporary provisions for budgetary reasons. Examining the reason why a certain provision is temporary rather than permanent may be part of evaluating whether a provision should be extended. There are several reasons why Congress may choose to enact tax provisions on a temporary basis. Enacting provisions on a temporary basis may provide an opportunity to evaluate effectiveness before expiration or extension. However, this rationale for enacting temporary tax provisions is undermined if expiring provisions are regularly extended without systematic review, as is the case in practice. In 2012 testimony before the Senate Committee on Finance, Dr. Rosanne Altshuler noted that an expiration date can be seen as a mechanism to force policymakers to consider the costs and benefits of the special tax treatment and possible changes to increase the effectiveness of the policy. This reasoning is compelling in theory, but has been an absolute failure in practice as no real systematic review ever occurs. Instead of subjecting each provision to careful analysis of whether its benefits outweigh its costs, the extenders are traditionally considered and passed in their entirety as a package of unrelated temporary tax benefits. While most expiring tax provisions have been extended in recent years, there have been some exceptions. For example, tax incentives for alcohol fuels (e.g., ethanol), which can be traced back to policies first enacted in 1978, were not extended beyond 2011. The Government Accountability Office (GAO) had previously found that with the renewable fuel standard (RFS) mandate, tax credits for ethanol were duplicative and did not increase consumption. Congress may choose not to extend certain provisions if an evaluation determines that the benefits provided by the provision do not exceed the cost (in terms of foregone tax revenue). In recent years, some tax extender packages have included all (or nearly all) expiring provisions, while other packages have left some out, effectively allowing provisions to expire as scheduled. The tax extender package in the American Taxpayer Relief Act (ATRA; P.L. 112-240 ) did not include several provisions that had been extended multiple times in the past. Most, but not all, expiring provisions were extended in the one-year, retroactive, tax extender bill enacted at the end of 2014, the Tax Increase Prevention Act ( P.L. 113-295 ). The most recent tax extender package, the Protecting Americans from Tax Hikes Act of 2015 (PATH Act), enacted as Division Q of the Consolidated Appropriations Act, 2016 ( P.L. 114-113 ), extended all expiring provisions. Unlike other recent extenders packages, the PATH Act included a permanent extension for many provisions. Other provisions were extended for five years, while most provisions were extended for two years, in more typical "tax extenders" practice. Tax policy may also be used to address temporary circumstances in the form of economic stimulus or disaster relief. Economic stimulus measures might include bonus depreciation or generous expensing allowances. Disaster relief policies might include enhanced casualty loss deductions or additional net operating loss carrybacks. Other recent examples of temporary provisions that have been enacted to address special economic circumstances include the exclusion of forgiven mortgage debt from taxable income during the housing crisis of the late 2000s, the payroll tax cut, and the grants in lieu of tax credits to compensate for weak tax-equity markets during the economic downturn (the Section 1603 grants). It has been argued that provisions that were enacted to address a temporary situation should be allowed to expire once the situation is resolved. Congress may also choose to enact tax policies on a temporary basis for budgetary reasons. If policymakers decide that legislation that reduces revenues must be paid for, it is easier to find resources to offset short-term extensions rather than long-term or permanent extensions. Additionally, the Congressional Budget Office (CBO) assumes, under the current law baseline, that temporary tax cuts expire as scheduled. Thus, the current law baseline does not assume that temporary tax provisions are regularly extended. Hence, if temporary expiring tax provisions are routinely extended in practice, the CBO current law baseline would tend to overstate projected revenues, making the long-term revenue outlook stronger. In other words, by making tax provisions temporary rather than permanent, these provisions have a smaller effect on the long-term fiscal outlook. Temporary tax benefits are a form of federal subsidy that treats eligible activities favorably compared to others, and channels economic resources into qualified uses. Extenders influence how economic actors behave and how the economy's resources are employed. Like all tax benefits, extenders can be evaluated by looking at the impact on economic efficiency, equity, and simplicity. Temporary tax provisions may be efficient and effective in accomplishing their intended purpose, though not equitable. Alternatively, an extender may be equitable but not efficient. Policymakers may have to choose the economic objectives that matter most. Extenders often provide subsidies to encourage more of an activity than would otherwise be undertaken. According to economic theory, in most cases an economy best satisfies the wants and needs of its participants if markets allocate resources free of distortions from taxes and other factors. Market failures, however, may occur in some instances, and economic efficiency may actually be improved by tax distortions. Thus, the ability of extenders to improve economic welfare depends in part on whether or not the extender is remedying a market failure. According to theory, a tax extender reduces economic efficiency if it is not addressing a specific market failure. An extender is also considered relatively effective if it stimulates the desired activity better than a direct subsidy. Direct spending programs, however, can often be more successful at targeting resources than indirect subsidies made through the tax system such as tax extenders. A tax is considered to be fair when it contributes to a socially desirable distribution of the tax burden. Tax benefits such as the extenders can result in individuals or businesses with similar incomes and expenses paying differing amounts of tax, depending on whether they engage in tax-subsidized activities. This differential treatment is a deviation from the standard of horizontal equity, which requires that people in equal positions should be treated equally. Another component of fairness in taxation is vertical equity, which requires that tax burdens be distributed fairly among people with different abilities to pay. Extenders may be considered inequitable to the extent that they benefit those who have a greater ability to pay taxes. Those individuals with relatively less income and thus a reduced ability to pay taxes may not have the same opportunity to benefit from extenders as those with higher income. The disproportionate benefit of tax expenditures to individuals with higher incomes reduces the progressivity of the tax system, which is often viewed as a reduction in equity. An example of the effect a tax benefit can have on vertical equity can be illustrated by considering two students claiming the above-the-line deduction for higher education expenses. Assume both students are single and have $1,000 in qualifying expenses. If one student has an income of $30,000, and the other student has an income of $60,000, the students would be in different tax brackets. The student with the lower income may fall in the 15% tax bracket, meaning the maximum value of the deduction would be $150 ($1,000 multiplied by 15%). The student with the higher income may fall in the 25% tax bracket, meaning the maximum value of the deduction would be $250 ($1,000 multiplied by 25%). Thus, the higher-income taxpayer, with presumably greater ability to pay taxes, receives a greater benefit than the lower-income taxpayer. Extenders contribute to the complexity of the tax code and raise the cost of administering the tax system. Those costs, which can be difficult to isolate and measure, are rarely included in the cost-benefit analysis of temporary tax provisions. In addition to making the tax code more difficult for the government to administer, complexity also increases costs imposed on individual taxpayers. With complex incentives, individuals devote more time to tax preparation and are more likely to hire paid preparers. Thirty-four temporary tax provisions expired at the end of 2016. These provisions can be categorized as primarily affecting individuals or businesses, or being energy-related. These categorizations follow those used in past "tax extender" legislation. Four individual tax provisions expired at the end of 2016 (see Table 1 ). Three of these provisions have been included in recent tax extenders packages. The above-the-line deduction for certain higher education expenses, including qualified tuition and related expenses, was first added as a temporary provision in Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA, P.L. 107-16 ), but has regularly been extended since. The other two individual extender provisions are housing-related. The provision allowing homeowners to deduct mortgage insurance premiums was first enacted in 2006 (effective for 2007). The provision allowing qualified canceled mortgage debt income associated with a primary residence to be excluded from income was first enacted in 2007. Both provisions were temporary when first enacted, but have been extended as part of the tax extenders in recent years. The other individual provision that expired at the end of 2016 is one that allows taxpayers over age 65 to deduct medical expenses in excess of 7.5% of adjusted gross income (AGI). For most taxpayers, an itemized deduction for unreimbursed medical expenses is allowed to the extent that such expenses exceed 10% of AGI. The threshold for the unreimbursed medical expense deduction was increased from 7.5% to 10%, effective in 2013 for most taxpayers, as part of the Patient Protection and Affordable Care Act ( P.L. 111-148 ). However, an exception from the increase for tax years 2013 through 2016 provided that, if either the taxpayer or their spouse was age 65 or older, the 7.5% threshold would apply during this four-year period. Three individual provisions that were previously included in the tax extenders were made permanent as part of the PATH Act. More information on provisions that were permanently extended can be found below (see Table 2 ). Fourteen business tax provisions expired at the end of 2016 (see Table 1 ). All but one of these provisions have been included in recent tax extenders legislation. The largest of these provisions, as ranked by cost of the most recent two-year extension, are the empowerment zone tax incentives and the credit for railroad track maintenance. As discussed further below, however, the cost of extending expiring business-related provisions is less than in recent tax extenders packages. Many business-related extender provisions, particularly higher-cost provisions, were made permanent as part of the PATH Act. Most of the business provisions scheduled to expire at the end of 2016 have been part of the tax code for close to a decade or longer. Several were first enacted in the 1990s, including the temporary increase in the limit on transfer or "cover-over" of rum excise tax revenues to Puerto Rico and the Virgin Islands; the Qualified Zone Academy Bond allocation of bond limitation; the Indian employment tax credit; accelerated depreciation for business property on Indian reservations; and the empowerment zone tax incentives. Several others were first enacted in the mid-2000s, including the credit for railroad track maintenance; seven-year recovery for motorsport racing facilities; the domestic production activities deduction allowable for activities in Puerto Rico; the mine rescue team training credit; expensing for mine-safety equipment; and the special expensing rules for film and television production. The one business provision expiring at the end of 2016 that has not been extended in past tax extender legislation was enacted at the end of 2015, as part of the Consolidated Appropriations Act, 2016 ( P.L. 114-113 ). Specifically, the provision provides that for taxable years beginning in 2016, corporate qualified timber gains are subject to an alternative tax rate of 23.8%. Twelve business provisions that were previously part of the tax extenders were made permanent as part of the PATH Act. Five others were extended through 2019. The provisions that were made permanent tended to be those that, in the past, cost more to extend than provisions that remain part of the tax extenders (see Table 2 ). Sixteen energy tax provisions expired at the end of 2016 (see Table 1 ). Thirteen of these provisions were extended in the PATH Act. Of the energy tax provisions that were extended in the PATH Act, the largest, as ranked by cost of the most recent two-year extension, are the incentives for biodiesel and renewable diesel, the production tax credit (PTC) for nonwind technologies, and the credit for nonbusiness energy property (also known as the credit for energy efficiency improvements to existing homes). Most of the energy provisions that expired at the end of 2016 have been included in past tax extender legislation. Division P of the Consolidated Appropriations Act, 2016 ( P.L. 114-113 ) also included extensions of certain energy tax provisions. Specifically, the Section 48 business credit rates for certain solar property and Section 25D residential energy investment credits for certain solar property were extended through 2021 (with reduced rates in 2020 and 2021). The Section 48 business and Section 25D residential energy investment credits expire at the end of 2016 for most other types of qualifying property. The production tax credit (PTC) for wind property was extended through 2019 (with reduced rates in 2017, 2018, and 2019). As noted above, the PTC for nonwind technologies was extended for two years, through 2016, in the PATH Act. For most nonsolar property, the business and residential investment tax credits are scheduled to expire at the end of 2016. Many of the components of these credits that are set to expire at the end of 2016 were first added to the code, as temporary provisions, in the Energy Policy Act of 2005 (EPACT05; P.L. 109-58 ) and subsequently included in tax extenders legislation. Under the Emergency Economic Stabilization Act of 2008 ( P.L. 110-343 ), certain temporary energy provisions were given long-term extensions, through 2016. The PATH Act did not include permanent extensions of any expiring energy tax provisions. This is in contrast to individual, business, and charitable extenders, where a number of temporary provisions were made permanent. The most recent "tax extenders" legislation was enacted as the Protecting Americans from Tax Hikes Act of 2015 (PATH Act), enacted as Division Q of the Consolidated Appropriations Act, 2016 ( P.L. 114-113 ). The PATH Act either extended or made permanent all of the 52 temporary tax provisions that had expired at the end of 2014. As noted in Table 1 , most of the provisions set to expire in 2016 were extended as part of the PATH Act. The PATH Act, unlike other recent tax extender legislation, provided long-term extensions (through 2019) for a number of provisions, while making many other temporary tax provisions permanent. These changes are summarized in Table 2 . Of the six individual tax provisions that expired at the end of 2014, three were made permanent in the PATH Act. The provisions that were permanently extended were (1) the above-the-line deduction for teacher classroom expenses; (2) the deduction for state and local sales taxes; and (3) a provision providing parity for exclusion of employer-provided mass transit and parking benefits. A permanent extension of the deduction for teacher classroom expenses had been approved by the House Committee on Ways and Means earlier in the 114 th Congress. The 114 th Congress had also passed legislation to make the deduction for state and local sales taxes permanent, before this provision was included in the PATH Act. Of the 30 business tax provisions that expired at the end of 2014, 12 were made permanent in the PATH Act, while another 5 were extended through the end of 2019. Many of these provisions had been extended multiple times. The research tax credit, for example, had been extended a total of 16 times since being enacted in 1981, before being modified and made permanent in the PATH Act. Before being included in the PATH Act, stand-alone legislation was passed in the House in both the 113 th and 114 th Congresses that would have modified and made the research credit permanent. The exception under Subpart F for active financing income, which was first enacted in 1997, was another long-standing temporary provision made permanent in the PATH Act. The House Committee on Ways and Means had approved stand-alone legislation to make this provision permanent in both the 113 th and 114 th Congresses. Provisions that were made permanent in the PATH Act, particularly the business provisions, included those with the largest revenue cost. The modification and permanent extension of the research credit had an estimated revenue cost of $113.2 billion over the 10-year budget window, while the costs associated with making permanent the exceptions under Subpart F for active financing income and the increase in expensing limits under Section 179 were $78.0 billion and $77.1 billion, respectively. By contrast, it would cost no more than $3 billion to make permanent any single business provision scheduled to expire at the end of 2016. The PATH Act made permanent all four of the charitable provisions that had expired at the end of 2014 and were previously part of the tax extenders. The House had passed legislation in both the 113 th and 114 th Congresses that would have made these provisions permanent, but permanent extension was not enacted until the PATH Act. As discussed above, the PATH Act provided a temporary extension for all energy-related provisions that expired at the end of 2016. Division P of the Consolidated Appropriations Act, 2016 ( P.L. 114-113 ) included long-term extensions of certain tax benefits for wind and solar. However, no long-term or permanent extensions of energy-related provisions were included in the PATH Act. Some of the provisions with longer-term extensions in the P.L. 114-113 included phaseouts. Specifically, the extension of 50% first-year bonus depreciation was subject to a phase down. The 50% bonus depreciation was extended through 2017, but the amount of qualifying investment that could be expensed is set to be reduced to 40% in 2018 and 30% in 2019. There were also phase downs associated with the longer-term extensions of the tax credits for wind and solar. The PTC for wind was extended through 2019, although the credit amount was reduced by 20% for facilities beginning construction in 2017, 40% for facilities beginning construction in 2018, and 60% for facilities beginning construction in 2019. The 30% ITC for business solar was extended through 2019 and the deadline changed from a placed-in-service deadline to a construction start date. The business solar ITC was set to be 26% for facilities beginning construction in 2020, and 22% for facilities beginning construction in 2021, so long as these facilities are placed in service before the end of 2023. The business solar ITC is scheduled to return to 10% in 2022. The tax credit for residential solar was extended through 2021, with a phaseout starting in 2020. The Tax Increase Prevention Act of 2014 ( P.L. 113-295 ), passed late in the 113 th Congress, made tax provisions that had expired at the end of 2013 available to taxpayers in the 2014 tax year. The act extended most (but not all) expiring tax provisions, and most of the provisions extended in P.L. 114-113 had been included in past tax extenders legislation. The cost of the tax extenders package enacted as P.L. 113-295 was estimated to be $41.6 billion over the 10-year budget window. Earlier in the 113 th Congress, the Senate Finance Committee had reported a two-year extenders package. The House had also passed legislation that would have made permanent certain expiring provisions. Ultimately, the one-year retroactive extenders legislation is what was passed by the 113 th Congress. The American Taxpayer Relief Act (ATRA; P.L. 112-240 ) extended dozens of temporary provisions that had either expired at the end of 2011, or were set to expire at the end of 2012. The provisions that had expired at the end of 2011 were extended retroactively. The cost of the tax extenders package enacted as part of ARRA was estimated to be $73.6 billion over the 10-year budget window. Several provisions that were considered "traditional extenders"--that is, they had been extended multiple times in the past--were not extended under ATRA. As lawmakers consider whether to extend expired tax provisions beyond 2016, cost is one factor. Since many provisions were made permanent in the PATH Act, a temporary extenders package for provisions that expired in 2016 would cost less than past extender packages. There are fewer provisions to extend, and many provisions with the largest revenue cost were made permanent in the PATH Act. In total, the extensions of expiring provisions or tax extenders in P.L. 114-113 are estimated to reduce federal revenues by $628.8 billion between 2016 and 2025. Of that cost, nearly one-third ($202.1 billion) is attributable to extensions of provisions that were scheduled to expire in 2017 (the reduced earnings threshold for the refundable portion of the child tax credit; the American Opportunity Tax Credit; and modifications to the earned income tax credit) and the two-year moratorium on the medical device excise tax. Thus, the cost of extending the "tax extender" provisions was an estimated $426.8 billion between 2016 and 2025. Of the total cost of the tax extenders in P.L. 114-113 , $559.5 billion, or 89% of the total cost, was associated with permanent extensions. The estimated cost of permanent extension of "tax extender" provisions (provisions that had expired in 2014 and were made permanent in P.L. 114-113 ) was $361.4 billion. Of the total cost of tax extenders in P.L. 114-113 , a small portion, $17.7 billion (or less than 3%) was for the two-year extension of provisions that had expired in 2014 through 2016. As discussed above, most provisions that expired at the end of 2016 were previously extended for two years in the PATH Act. Overall, the cost of temporary extensions of extenders provisions in the PATH Act was estimated to be $17.7 billion over the 10-year budget window (see Table 3 ). This estimate does not include the cost of temporarily extending provisions set to expire at the end of 2016 that were not extended in the PATH Act. Another option, instead of a short-term extension, is to provide long-term extensions of, or make permanent, tax provisions that are currently temporary. Federal revenues would be reduced by an estimated $158.0 billion over the 10-year budget window, if all temporary tax provisions that expired at the end of 2016 were made permanent (see Table 3 ). This, however, would remove the mechanism that short-term extensions introduce, mainly forcing policymakers to periodically reconsider extension of temporary provisions. There is no formal definition of "tax extenders" legislation. Over time, "tax extenders" legislation has come to be considered legislation that temporarily extends a group of expired or expiring provisions. Using this characterization, below is a list of what could be considered "tax extenders" legislation. Using this list, tax extenders have been addressed 17 times. The package of provisions that are included in the tax extenders has changed over time, as Congress has added new temporary provisions to the code, and as certain provisions are either permanently extended or given temporary extension in other tax legislation. Consolidated Appropriations Act, 2016 ( P.L. 114-113 ) Tax Increase Prevention Act of 2014 ( P.L. 113-295 ) American Taxpayer Relief Act of 2012 ( P.L. 112-240 ) Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 ( P.L. 111-312 ) Emergency Economic Stabilization Act of 2008 ( P.L. 110-343 ) Tax Relief and Health Care Act of 2006 ( P.L. 109-432 ) Working Families Tax Relief Act of 2004 ( P.L. 108-311 ) Job Creation and Worker Assistance Act of 2002 ( P.L. 107-147 ) Ticket to Work and Work Incentives Improvement Act of 1999 ( P.L. 106-170 ) Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999 ( P.L. 105-277 ) Taxpayer Relief Act of 1997 ( P.L. 105-34 ) Small Business and Job Protection Act of 1996 ( P.L. 104-188 ) Omnibus Budget Reconciliation Act of 1993 ( P.L. 103-66 ) Tax Extension Act of 1991 ( P.L. 102-227 ) Omnibus Budget Reconciliation Act of 1990 ( P.L. 101-508 ) Omnibus Budget Reconciliation Act of 1989 ( P.L. 101-239 ) Technical and Miscellaneous Revenue Act of 1988 ( P.L. 100-647 )

In the past, Congress has regularly acted to extend expired or expiring temporary tax provisions. Collectively, these temporary tax provisions are often referred to as "tax extenders." Most recently, in December 2015, Congress addressed tax extenders in the Protecting Americans from Tax Hikes Act of 2015 (PATH Act), enacted as Division Q of the Consolidated Appropriations Act, 2016 (P.L. 114-113). This legislation extended all of the 52 provisions that had expired at the end of 2014. Unlike past tax extenders legislation, however, a number of provisions that had expired at the end of 2014 were made permanent. Several others were extended through 2019. Many provisions were temporarily extended for two years, through 2016. Thirty-four temporary tax provisions expired at the end of 2016. Most of these provisions were extended for two years as part of the PATH Act. Options related to extenders in the 115th Congress include (1) extending all or some of the provisions that expired at the end of 2016 or (2) allowing expired provisions to remain expired. If temporary tax provisions that expired at the end of 2016 are extended, retroactive extensions may be considered so that tax incentives and provisions are available in 2017. In the past, retroactive extensions have been common for expired temporary tax provisions. There are several reasons why Congress may choose to enact tax provisions on a temporary basis. Enacting provisions on a temporary basis provides legislators with an opportunity to evaluate the effectiveness of tax policies prior to expiration or extension. Temporary tax provisions may also be used to provide economic stimulus or disaster relief. Congress may also choose to enact tax provisions on a temporary rather than permanent basis due to budgetary considerations, as the foregone revenue from a temporary provision will generally be less than if it were permanent. The provisions that expired at the end of 2016 are diverse in purpose. There are education- and housing-related provisions for individuals. For businesses, there are several provisions related to the territories, Indian tribes, and economic development, in addition to provisions for specific industries. There are also a number of energy-related tax provisions that expired at the end of 2016. As lawmakers consider whether to extend expired tax provisions beyond 2016, cost is one factor. Since many provisions were made permanent in the PATH Act, a temporary extenders package for provisions that expired in 2016 would cost less than past extender packages. There are fewer provisions to extend, and many provisions with the largest revenue cost were made permanent in the PATH Act.

Food safety in the United States is regulated mainly by the U.S. Department of Agriculture (USDA) and the Food and Drug Administration (FDA) within the U.S. Department of Health and Human Services (HHS). Although the FDA is the federal agency primarily responsible for ensuring the safety of a vast majority of foods under the current system, the USDA is responsible for regulating meat, poultry, and some egg products, as well as being responsible for animal and plant health. USDA's role in the food safety system is founded on its authority to regulate meat and poultry inspection and importation. The Food Safety and Inspection Service (FSIS) within USDA is responsible for inspecting domestic and imported meat and poultry products under the Federal Meat Inspection Act and the Poultry Products Inspection Act. This role in inspection of meat and poultry generally begins beyond the farm at slaughter and processing facilities. This authority does not include direct regulation of on-farm practices related to animal health. However, as the next step in the food chain after the farm, the standards set for inspection may be seen to indirectly regulate the health of animals on the farm. The Egg Products Inspection Act may be interpreted similarly. In other words, these acts restrict acceptance of animals that do not meet health standards at slaughtering and processing facilities, which effectively require farms to maintain healthy livestock in order to sell their livestock for food processing. Food safety regulation is not limited to processing plants. USDA has authority to exercise food safety oversight and enforcement on farms as well. Four statutes that provide the most significant authority related to on-farm activity and food safety are the Animal Health Protection Act, the Plant Protection Act, the Agricultural Marketing Agreement Act of 1937, and the Agricultural Marketing Act of 1946. The Animal and Plant Health Inspection Service (APHIS) within the USDA is responsible for the protection of health of animals and plants from agricultural pests and diseases. Issues of animal and plant health are of interest not only in the food safety context, but also in trade matters and the agricultural industry generally. Outbreaks of disease among animals may lead to negative consequences for the U.S. agricultural system and also may have negative effects on international trade if U.S. agricultural resources are deemed unsafe for import and consumption in other countries. The USDA's on-farm authority includes authority to monitor animal health, which would assist in government efforts to prevent the spread of some diseases from animals to human populations ( e.g. , bovine spongiform encephalopathy, or "mad cow disease"). Although there has been some concern about an April 2009 outbreak of influenza A(H1N1), initially dubbed "swine flu" because it contained genetic material from flu strains that normally circulate in swine, USDA has confirmed that "there is no evidence of the 2009-H1N1 virus in U.S. swine." The virus, however, is not a foodborne illness, meaning that it is not transmitted by consumption of certain foods like pork and pork products. Under authority currently in place, USDA may monitor or take other protective actions to prevent outbreaks of such diseases, whether they pose a foodborne or airborne risk to the health of other animals or humans. Congress enacted the Animal Health Protection Act (AHPA) as part of the 2002 farm bill in order to protect animal health through the prevention and control of animal diseases and pests. AHPA generally authorizes USDA to prohibit or restrict the importation, exportation, or entry of animals into interstate commerce if it determines such action is necessary to prevent the introduction or dissemination of any pest or disease of livestock. The AHPA also generally authorizes USDA to hold, seize, quarantine, or destroy any animal that is in interstate commerce and is believed to be carrying or have been exposed to any pest or disease of livestock. Most of USDA's authority under AHPA relates to animals moving in interstate commerce, but the AHPA specifically permits USDA to take some actions without explicitly requiring that the animal be in interstate commerce at the time. USDA is authorized to take protective actions such as seizing, treating, or destroying animals if the USDA determines that "an extraordinary emergency exists because of the presence in the United States of a pest or disease of livestock." For such emergencies, the presence of the pest or disease must threaten U.S. livestock and the protective action must be necessary to prevent the spread of the threat. USDA is also authorized to make inspections and seizures under the AHPA at any premises, including farms, if it obtains a warrant showing probable cause to believe there is an "animal, article, facility, or means of conveyance regulated under [the AHPA]." This inspection authority supplements USDA's authority to make warrantless inspections of any person or means of conveyance moving in interstate commerce that is believed to be carrying an animal regulated by AHPA. The AHPA also provides broad authority to USDA for detection, control, and prevention of the introduction and spread of outbreaks of animal diseases and pests. AHPA authorizes USDA to "carry out operations and measures to detect, control, or eradicate any pest or disease of livestock (including ... diagnostic testing of animals), including animals at a slaughterhouse, a stockyard, or other point of concentration." AHPA also expanded APHIS's authority to protect against the introduction of plant and animal disease and "otherwise improve the capacity of the [APHIS] to protect against the threat of bioterrorism." APHIS used this authority to implement a voluntary system of animal tracking known as the National Animal Identification System, which allows for registration of premises where livestock and poultry are raised or housed, identification of animals with unique identifier information, and tracking of identified animals. The Plant Protection Act (PPA), enacted in 2000, provides protections similar to the AHPA but specifically applies to plants, rather than animals. The PPA was enacted to control and prevent the spread of plant pests for the protection of the agriculture, environment, and economy of the United States by regulating plant pests and noxious weeds that are in or affect interstate commerce. The PPA defines plant pests as certain organisms "that can directly or indirectly injure, cause damage to, or cause disease in any plant or plant product." It defines noxious weeds as "any plant or plant product that can directly or indirectly injure or cause damage to crops ... , livestock, poultry, or other interests of agriculture, irrigation, navigation, the natural resources of the United States, the public health, or the environment." Under the PPA, the USDA has authority to prohibit or restrict the movement of plants and plant products in interstate commerce if it determines such action would be necessary to prevent the introduction or spread of plant pests or noxious weeds. APHIS has used the PPA to monitor genetically engineered crops that may cause negative effects on other agricultural products. The PPA authorizes USDA generally to hold, quarantine, treat, or destroy any plant, plant pest, or noxious weed that is moving or has moved in interstate commerce if it deems such action necessary "to prevent the dissemination of a plant pest or noxious weed that is new to or not known to be widely prevalent or distributed" in the United States. USDA may also order owners of plants, plant products, plant pests, or noxious weeds that are determined to threaten plant health to treat or destroy them. USDA's ability to impose remedial measures under this authority is limited, though. That is, USDA may not require that a plant, plant product, plant pest, or noxious weed be destroyed or exported if the Secretary believes there is a less drastic, feasible and adequate alternative available to prevent dissemination of the threat. In addition to the general authority to prevent the spread of plant pests and noxious weeds, USDA also has emergency authority under PPA. For USDA to act under its emergency authority, it must find "that the measures being taken by the State are inadequate to eradicate the plant pest or noxious weed" after consulting with the governor of the affected state. Under the PPA, if USDA determines that "an extraordinary emergency" exists, it may hold, seize, quarantine, treat, or destroy any plant, plant product, or premises that it "has reason to believe is infested with the plant pest or noxious weed." Like the limitation under its general authority to impose remedial measures, the USDA is prohibited from destroying or exporting anything under its emergency authority if there is a less drastic, feasible action "that would be adequate to prevent the dissemination of any plant pest or noxious weed new to or not known to be widely prevalent or distributed [in] the United States." Although the AHPA and PPA may provide more significant sources of authority for USDA to take regulatory actions on farms, other statutes provide USDA with oversight authority related to farm activities and food safety. The Agricultural Marketing Service (AMS) within the USDA oversees programs related to the standardization and marketing of agricultural products. The Agricultural Marketing Agreement Act of 1937 and the Agricultural Marketing Act of 1946 authorize programs that may involve oversight of producers regarding food quality and safety. The Agricultural Marketing Agreement Act of 1937 (AMAA) authorizes USDA to issue marketing orders that legally bind processors, associations of producers, and others engaged in the handling of certain agricultural commodities or products thereof. The AMAA provides a list of terms and conditions that may be included in marketing orders. Orders must include at least one of the possible terms and conditions provided by statute, and may not include other terms and conditions not provided by statute. The possible terms and conditions include regulating the amount, grade, size, or quality of the marketed commodity; regulating the containers used for packaging, transportation, sale, and handling of the marketed commodity; and requiring inspection of any commodity or product. Thus, depending on what terms and conditions are included in a marketing order, the order may create legally binding requirements relating to food quality and safety. Commodities eligible to be regulated by marketing orders include milk, fruits, vegetables, and nuts. The orders are limited to the regulation of any commodity or product "in the current of interstate or foreign commerce, or which directly burdens, obstructs, or affects, interstate or foreign commerce in such commodity or product thereof." USDA also has enforcement powers under the AMAA to ensure that entities covered by the marketing orders comply with the terms and conditions set forth. USDA may investigate individuals or entities that it believes may be in violation of provisions of orders created under the AMAA. USDA may also conduct hearings on the matter in order to determine whether to refer the matter to the Department of Justice (DOJ) for enforcement. The Agricultural Marketing Act of 1946 (AMA) authorizes the USDA to promulgate regulations related to agricultural markets and standards. The AMA does not provide specific regulatory authority to USDA, but it does authorize USDA "to inspect, certify, and identify the class, quality, quantity, and condition of agricultural products when shipped or received in interstate commerce" under regulations to be prescribed by the Secretary of Agriculture. USDA has used its authority to develop voluntary programs to allow agricultural producers "to help promote and communicate quality and wholesomeness to consumers." These programs allow interested producers to use third-party audits to certify that their products meet buyer specifications. An example of such a program includes AMS's Good Agricultural Practices and Good Handling Practices Audit Verification Program, which allows the food industry to use third-party audits to verify the conformance of producers to best practices on the farm. Although the USDA does not have a direct role in the testing and verification programs, the agency facilitates a process that provides heightened protections for consumers. USDA's role in the current food safety system appears to focus on inspections during production, but USDA appears to have authority under numerous statutes to regulate at least some on-farm activities. Although this authority does not explicitly provide for oversight of farm operations, the statutory language does not explicitly prohibit USDA from carrying out its authority on farms. Thus, it appears that USDA may apply its statutory authority to on-farm activities, if the on-farm activity is one that is generally covered by the relevant statute. The statutory authorities discussed in this report generally require that exercise of the authority provided be linked to products in interstate commerce. In the debate over food safety regulation on the farm, some have raised arguments that on-farm activities may not be sufficiently linked to commerce to justify congressional regulation. As a result, USDA's authority to implement programs related to food safety on farms before the agricultural products in question actually enter commerce has become an issue. Although it might seem obvious that agricultural products sold in stores are a part of commerce, one may question whether USDA would be authorized to take actions under these statutes on farms that do not sell their products, but rather are self-sufficient. It is likely that any farm would be subject to USDA's regulatory authority in the context of these statutes because of Congress's broad authority to act under the Commerce Clause of the U.S. Constitution. The Constitution empowers Congress "to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes," and "to make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers." The U.S. Supreme Court has found that the Commerce Clause allows for three categories of congressional regulation: the channels of interstate commerce; the instrumentalities of interstate commerce; and "those activities having a substantial relation to interstate commerce ... i.e., those activities that substantially affect interstate commerce." One of the Court's most expansive Commerce Clause rulings, Wickard v. Filburn , concerned Congress's ability to regulate the production and consumption of homegrown wheat. The Court held that economic activities, regardless of their nature, could be regulated by Congress if the activity "asserts a substantial impact on interstate commerce." In Wickard , a farmer challenged a monetary penalty he received for growing wheat in excess of a quota established by the USDA to regulate wheat prices, arguing that the wheat never went to market but was grown and consumed on his own farm and thus outside the scope of interstate commerce. Although the Court recognized that one family's production alone would likely have a negligible impact on the overall price of wheat, if combined with other personal producers, the effect would be substantial enough to make the activity subject to congressional regulation. Although the Court has arguably narrowed its interpretation of Congress's authority under the Commerce Clause in recent decades, the Court has indicated as recently as 2005 that Wickard v. Filburn is still good law, holding that Congress can regulate purely intrastate activity that is not "commercial" if it concludes that failure to regulate the activity would undercut the interstate market. The relevant on-farm statutes, particularly the AHPA and the PPA, include provisions that generally apply to agricultural products in interstate commerce, which Wickard indicates would include items still on the farm. They also include some provisions that authorize USDA to inspect agricultural products at any time, including when on a farm, to control pests and diseases that might affect agricultural commerce generally. Thus, it seems that USDA's authority to regulate animals, plants, and other agricultural products on the farm itself is a proper exercise of authority and a valid interpretation of the authority delegated by Congress.

In recent years, outbreaks of foodborne illnesses and subsequent product recalls have highlighted concerns about the current food safety system. Some have argued for a more comprehensive approach to the regulation of food products. Among the questions raised in the debate on the adequacy and potential improvements for the U.S. food safety system is the appropriate starting point of federal regulation. The current system provides regulation of various food products under differing systems of inspection and oversight. Advocates of a more comprehensive approach to food safety regulation say it could be achieved by a thorough system of oversight beginning at the point of production--on farms and ranches. Opponents of this approach argue that some proposals for on-farm oversight would impose too great a burden on small farms, would be too costly to implement, and in some cases may not be sufficiently linked to commerce to constitutionally justify congressional regulation. The U.S. Department of Agriculture (USDA) has a major role in the U.S. food safety system through its inspection authority for meat and poultry products, but it also has authority to regulate the agricultural industry in other ways. This report will analyze the authority of USDA to regulate on-farm activities in the context of food safety. Specifically, the report will provide an overview of USDA statutory authorities related to on-farm activities, including the Animal Health Protection Act, the Plant Protection Act, the Agricultural Marketing Agreement Act of 1937, and the Agricultural Marketing Act of 1946. Although these statutes do not provide explicitly for USDA actions taken on farms, they do provide USDA broad general authority to protect animal and plant health and to enforce and implement marketing programs related to the quality and safety of agricultural food products. The report will also analyze the scope of USDA's authority to act on farms under these statutes. Because Congress's authority to enact these statutes falls under the Commerce Clause, the report will also analyze the question of whether USDA's authority applies to farms that do not directly participate in interstate commerce.

Witnesses in a federal criminal case may find themselves arrested, held for bail, and in some cases imprisoned until they are called upon to testify. The same is true in most if not all of the states. Although subject to intermittent criticism, it has been so at least from the beginning of the Republic. The Supreme Court has never squarely considered the constitutionality of the federal statute or any of its predecessors, but it has observed in passing that, "[t]he duty to disclose knowledge of crime ... is so vital that one known to be innocent may be detained in the absence of bail, as a material witness" and that, "[t]he constitutionality of this [federal material witness] statute apparently has never been doubted." In spite of the concerns of some that the authority can be used as a means to jail a suspect while authorities seek to discover probable cause sufficient to support a criminal accusation or as a preventive detention measure, the lower courts have denied that the federal material witness statute can be used as a substitute for a criminal arrest warrant. Particularly in the early stages of an investigation, however, an individual's proximity to a crime may make him both a legitimate witness and a legitimate suspect. The case law and statistical information suggest that the federal statute is used with surprising regularity and most often in the prosecution of immigration offenses involving material witnesses who are foreign nationals. Critics, however, contend that since September 11, 2001, seventy individuals, mostly Muslims, have been arrested and detained in abuse of the statute's authority. An arrest warrant for a witness with evidence material to a federal criminal proceeding may be issued by federal or state judges or magistrates. The statute applies to potential grand jury witnesses as well as to potential trial witnesses. Section 3144 on its face authorizes arrest at the behest of any party to a criminal proceeding. In the case of criminal trial, both the government and the defendants may call upon the benefits of section 3144. Availability is a bit less clear in the case of grand jury proceedings. In a literal sense, there are no parties to a grand jury investigation other than the grand jury. Moreover, it seems unlikely that a suspect, even the target of a grand jury investigation, would be considered a "party" to a grand jury proceeding. The purpose of section 3144 is the preservation of evidence for criminal proceedings. Potential defendants, even if they are the targets of a grand jury investigation, have no right to present evidence to the grand jury. On the other hand, a federal prosecutor ordinarily arranges for the presentation of witnesses to the grand jury. It is therefore not surprising that the courts seem to assume without deciding that the government may claim the benefits of section 3144 in the case of grand jury witnesses. Issuance of a section 3144 arrest warrant requires affidavits establishing probable cause to believe (1) that the witness can provide material evidence, and (2) that it will be "impracticable" to secure the witness' attendance at the proceeding simply by subpoenaing him. Neither the statute nor the case law directly address the question of what constitutes "material" evidence for purposes of section 3144, but in other contexts the term is understood to mean that which has a "natural tendency to influence, or is capable of influencing, the decision of the decisionmaking body to which it was addressed." At the grand jury level, the government may establish probable cause to believe a witness can provide material evidence through the affidavit of a federal prosecutor or a federal investigator gathering evidence with an eye to its presentation to the grand jury. This may not prove a particularly demanding standard in some instances given the sweeping nature of the grand jury's power of inquiry. As to the second required probable cause showing, a party seeking a material witness arrest warrant must establish probable cause to believe that it will be impractical to rely upon a subpoena to securing the witness' appearance. The case law on point is sketchy, but it seems to indicate that impracticality may be shown by evidence of possible flight, or of an expressed refusal to cooperate, or of difficulty experienced in serving a subpoena upon a trial witness, or presumably by evidence that the witness is a foreign national who will have returned or been returned home by the time his testimony is required. Evidence that investigators have experienced difficulties serving a particular grand jury witness may not be enough to justify the issuance of an arrest warrant in all cases. With limited variations, federal bail laws apply to material witnesses arrested under section 3144. Arrested material witnesses are entitled to the assistance of counsel during bail proceedings and to the appointment of an attorney when they are unable to detain private counsel. The bail laws operate under an escalating system in which release is generally favored, then release with conditions or limitations is preferred, and finally as a last option detention is permitted. A defendant is released on his word (personal recognizance) or bond unless the court finds such assurances insufficient to guarantee his subsequent appearance or to ensure public or individual safety. A material witness need only satisfy the appearance standard. A material witness who is unable to do so is released under such conditions or limitations as the court finds adequate to ensure his later appearance to testify. If neither word nor bond nor conditions will suffice, the witness may be detained. The factors a court may consider in determining whether a material witness is likely to remain available include his deposition, character, health, and community ties. Section 3144 declares that "[n]o material witness may be detained because of inability to comply with any condition of release if the testimony of such witness can adequately be secured by deposition, and if further detention is not necessary to prevent a failure of justice." The corresponding federal deposition rule permits the witness, the government, or the defendant to request that a detained material witness' deposition be taken. A court enjoys only limited discretion to deny a detained witness' request. The Fifth Circuit has observed that, "Read together, Rule 15(a) and section 3144 provide a detained witness with a mechanism for securing his own release. He must file a written motion requesting that he be deposed. The motion must demonstrate that his testimony can adequately be secured by deposition, and that further detention is not necessary to prevent a failure of justice. Upon such showing, the district court must order his deposition and prompt release." Other courts seem to agree. The "failure of justice" limitation comes into play when release of the witness following the taking of his deposition would ultimately deny a defendant the benefit of favorable material testimony in derogation of his right to compulsory process. It does not include the fact that a judicial officer will not be present at the taking of the deposition or that the witness is an illegal alien subject to prosecution. Unlike the request of a detained witness, a government or defendant's request that a witness' deposition be taken must show "exceptional circumstances" and that granting the request is "in the interest of justice," F.R.Crim.P. 15(a)(1). Nevertheless, the fact that a witness is being detained will often be weighed heavily regardless of who requests that depositions be taken. The Circuits appear to be divided over whether in compliance with a local standing order the court may authorize depositions to be taken sua sponte in order to release a detained material witness. In any event, whether any such depositions may be introduced in later criminal proceedings will depend upon whether the defendant's constitutional rights to confrontation and compulsory process have been accommodated. The government must periodically report to the court on the continuing justification for holding an incarcerated material witness. While a material witness is being held in custody he is entitled to the daily witness fees authorized for attendance at judicial proceedings. Upon his release, the court may also order that he be provided with transportation and subsistence to enable him to return to his place of arrest or residence. Should he fail to appear after he has been released from custody he will be subject to prosecution, an offense which may be punished more severely if his failure involves interstate or foreign travel to avoid testifying in a felony case. H.R. 3199 : Witnesses at Congressional oversight hearings charged that the authority under 18 U.S.C. 3144 had been misused following September 11, 2001: [The authority has been used] to secure the indefinite incarceration of those [prosecutors] wanted to investigate as possible terrorist suspects. This allowed the government to ... avoid the constitutional protections guaranteed to suspects, including probable cause to believe the individual committed a crime and time-limited detention. . . Witnesses were typically held round the clock in solitary confinement, subjected to the harsh and degrading high security conditions typically reserved for the most dangerous inmates accused or convicted of the most serious crimes ... they were interrogated without counsel about their own alleged wrongdoing. ... [A] large number of witnesses were never brought before a grand jury or court to testify. More tellingly, in repeated cases the government has now apologized for arresting and incarcerating the "wrong guy." The material witnesses were victims of the federal investigators and attorneys who were to[o] quick to jump to the wrong conclusions, relying on false, unreliable and irrelevant information. By evading the probable cause requirement for arrests of suspects, the government made numerous mistakes. At the same hearings the Justice Department pointed out that the material witness statute is a long-standing and generally applicable law and not a creation of the USA PATRIOT Act; that it operates under the supervision of the courts; that witnesses are afforded the assistance of counsel (appointed where necessary); and that witnesses are ordinarily released following their testimony. Section 12 of H.R. 3199 as reported by the House Judiciary Committee amended section 1001 of the USA PATRIOT Act by directing periodic review of the exercise of the authority under section 3144. In its original form section 1001 instructs the Justice Department Inspector General to designate an official who is (1) to receive and review complaints of alleged Justice Department civil rights and civil liberties violations, (2) to widely advertise his availability to receive such complaints, and (3) to report to the House and Senate Judiciary Committees twice a year on implementation of that requirement, P.L. 107 - 56 , 115 Stat. 381 (2001). Section 12 amended section 1001 to impose additional responsibilities upon the Inspector General's designee , i.e., (1) to "review detentions of persons under section 3144 of title 18, United States Code, including their length, conditions of access to counsel, frequency of access to counsel, offense at issue, and frequency of appearances before a grand jury," (2) to advertise his availability to receive information concerning such activity, and (3) to report twice a year on implementation to the Judiciary Committees on implementation of this requirement. OMB announced that the Administration generally supports H.R. 3199 as passed by the House, but that "[t]he Administration strongly opposes section 12 of H.R. 3199 , which would authorize the Department of Justice's Inspector General to investigate the use of material witnesses. As it is written, this provision would entail wholesale violation of Rule 6(e) of the Federal Rules of Criminal Procedure, which protects the secrecy and sanctity of grand jury proceedings." Perhaps because of Administration opposition, the provision was dropped from H.R. 3199 prior to House passage. No similar provision could be found in H.R. 3199 ( S. 1389 ) as approved in the Senate or in the conference bill sent to the President. S. 1739 : S. 1739 , introduced by Senator Leahy, rewrites section 3144. In its recast form, section 3144, among other things, would establish a preference for postponing arrest until after a material witness has been served with a summons or subpoena and failed or refused to appear, unless the court finds by clear and convincing evidence that service is likely to result in flight or otherwise unlikely to secure the witness' attendance; make it clear that the provision applies to grand jury proceedings; explicitly permit arrest by officers who are not in physical possession of the warrant; require an initial judicial appearance without unnecessary delay in the district of the arrest or in an adjacent district if more expedient, or if the warrant was issued there and the appearance occurs on the day of arrest; limit detention to five day increments for a maximum of 30 days (10 days in the case of grand jury witness); require the Attorney General to file an annual report to the Judiciary Committees on the number of material witness warrants sought, granted and denied within the year; the number of material witnesses arrested who were not deposed or did not appear before judicial proceedings; and the average number of days arrested material witnesses were detained. In lieu of the clear and convincing evidence standard in favor of release and the time limits on detention, the existing statute insists that "no material witness may be detained because of inability to comply with any condition of release if the testimony of such witness can adequately be secured by deposition, and if further detention is not necessary to prevent a failure of justice," 18 U.S.C. 3144. The proposed amendment has no comparable provision. In light of the five day limit on detention without further judicial approval, S. 1739 would eliminate the reporting requirement now found in Rule 46(h)(2) of the Federal Rules of Criminal Procedure, i.e., "An attorney for the government must report biweekly to the court, listing each material witness held in custody for more than 10 days pending indictment, arraignment, or trial. For each material witness listed in the report, an attorney for the government must state why the witness should not be released with or without a deposition being taken under Rule 15(a)."

The federal material witness statute provides that, "If it appears from an affidavit filed by a party that the testimony of a person is material in a criminal proceeding [including a grand jury proceeding], and if it is shown that it may become impracticable to secure the presence of the person by subpoena, a judicial officer may order the arrest of the person and treat the person in accordance with the provisions of section 3142 of this title [relating to bail]. No material witness may be detained because of inability to comply with any condition of release if the testimony of such witness can adequately be secured by deposition, and if further detention is not necessary to prevent a failure of justice. Release of a material witness may be delayed for a reasonable period of time until the deposition of the witness can be taken pursuant to the Federal Rules of Criminal Procedure," 18 U.S.C. 3144. In response to objections that the authority had been misused, H.R. 3199 as reported by the House Judiciary Committee required Justice Department reports on use of the authority in a grand jury context. The provision was dropped before the bill was taken up. The version sent to the President after passage had no such provision. S. 1739 would rewrite section 3144, among other things, establishing explicit and more demanding standards for arrest and detention and imposing explicit time limitations on detention. This is an abridged version of CRS Report RL33077, Arrest and Detention of Material Witnesses: Federal Law In Brief, by [author name scrubbed], without footnotes, most citations to authority, or appendixes.

A majority of Americans have health insurance from the private health insurance (PHI) market. Health plans sold in the PHI market must comply with requirements at both the state and federal levels. This report describes selected federal statutory requirements applicable to health plans sold in the PHI market. These requirements relate to the offer, issuance, generosity, and pricing of health plans, among other issues; such requirements often are referred to as market reforms . Many of the federal requirements described in this report were established under the Patient Protection and Affordable Care Act (ACA; P.L. 111-148 , as amended); however, some were established under federal laws enacted prior to the ACA. The first part of this report provides background information about health plans sold in the PHI market and briefly describes state and federal regulation of private plans. The second part summarizes selected federal requirements and indicates each requirement's applicability to one or more of the following types of private health plans: individual, small group, large group, and self-insured. The second part of the report includes a table summarizing the applicability of federal statutory requirements across those plan types. The Appendix includes Table A-1 , which shows the applicability of federal statutory requirements across plan types pre-ACA and under current law. Whether a health plan must comply with a particular federal requirement depends on the segment of the PHI market in which the plan is sold. The individual market (or non-group market ) is where individuals and families buying insurance on their own (i.e., not through a plan sponsor) may purchase health plans. Health plans sold in the group marke t are offered through a plan sponsor, typically an employer. The group market is divided into small and large segments. For purposes of federal requirements that apply to the group market, states may elect to define small as groups with 50 or fewer individuals (e.g., employees) or groups with 100 or fewer individuals. The definition for large group builds on the small-group definition. A large group is a group with at least 51 individuals or a group with at least 101 individuals, depending on which small-group definition is used in a given state. The reference to group markets technically applies to health plans purchased by employers and other plan sponsors from state-licensed issuers and offered to employees or other groups. Health plans obtained in this way are referred to as fully insured . However, health insurance coverage provided through a group also may be self-insured . Employers or other plan sponsors that self-insure set aside funds to pay for health benefits directly, and they bear the risk of covering medical expenses generated by the individuals covered under the self-insured plan. For simplicity's sake, the term plan is used generically in this report's descriptions of federal requirements; however, Table 1 provides detailed information about the application of federal requirements to different types of plans (e.g., individual market plans). States are the primary regulators of the business of health insurance, as codified by the 1945 McCarran-Ferguson Act. Each state requires insurance issuers to be licensed in order to sell health plans in the state, and each state has a unique set of requirements that apply to state-licensed issuers and the plans they offer. Each state's health insurance requirements are broad in scope and address a variety of issues, and requirements vary greatly from state to state. State requirements have changed over time in response to shifting attitudes about regulation, the evolving health care landscape, and the implementation of federal policies. State oversight of health plans applies only to plans offered by state-licensed issuers. Because self-insured plans are financed directly by the plan sponsor, such plans are not subject to state law. The federal government also regulates state-licensed issuers and the plans they offer. Federal health insurance requirements typically follow the model of federalism: federal law establishes standards, and states are primarily responsible for monitoring compliance with and enforcement of those standards. Generally, the federal standards establish a minimum level of requirements ( federal floor ) and states may impose additional requirements on issuers and the plans they offer, provided the state requirements neither conflict with federal law nor prevent the implementation of federal requirements. For example, the federal rating restriction requirement provides that certain types of health plans may vary premiums by only four factors--type of coverage (i.e., self-only or family), geographic rating area, tobacco use, and age. Some states have expanded this requirement by prohibiting issuers from varying premiums by tobacco use and age. The federal government also regulates self-insured plans, as part of federal oversight of employment-based benefits. Federal requirements applicable to self-insured plans often are established in tandem with requirements on fully insured plans and state-licensed issuers. Nonetheless, fewer federal requirements overall apply to self-insured plans compared to fully insured plans. Federal requirements for health plans are codified in three statutes: the Public Health Service Act (PHSA), the Employee Retirement Income Security Act of 1974 (ERISA), and the Internal Revenue Code (IRC). Although the health insurance provisions in these statutes are substantively similar, the differences reflect, in part, the applicability of each statute to private plans. The PHSA's provisions apply broadly across private plans, whereas ERISA and the IRC focus primarily on group plans. Some types of plans are exempt from one or more federal requirements (as opposed to the requirement not being applicable to the plan). For example, in general, plans in the individual market must comply with the requirement to accept every applicant for health coverage (i.e., guaranteed issue); however, grandfathered health plans offered in the individual market are exempt from complying with this requirement. Plans that are exempt from one or more federal requirements are not discussed in this report. Federal requirements applicable to health plans sold in the PHI market affect insurance offered to groups and individuals; impose requirements on sponsors of coverage; and, collectively, establish a federal floor with respect to access to coverage, premiums, benefits, cost sharing, and consumer protections. The federal requirements described in this report are grouped under the following categories: obtaining coverage, keeping coverage, developing health insurance premiums, covered services, cost-sharing limits, consumer assistance and other patient protections, and plan requirements related to health care providers. Federal requirements do not apply uniformly to all types of health plans. For example, plans offered in the individual and small-group markets must comply with the federal requirement to cover the essential health benefits (EHB; see " Coverage of Essential Health Benefits ," below); however, plans offered in the large-group market and self-insured plans do not have to comply with this requirement. Table 1 provides details about the specific types of plans to which the federal requirements described in this report apply: individual, small group, large group, and self-insured. Summary descriptions of the federal requirements follow the table. Many of the federal requirements described in this report were established under the ACA, but some were established prior to the ACA. Among the requirements established prior to the ACA, some were modified or expanded under the ACA. Certain types of health plans must be offered on a guaranteed-issue basis. In general, guaranteed issue is the requirement that a plan accept every applicant for coverage, as long as the applicant agrees to the terms and conditions of the insurance offer (e.g., the premium). Individual plans are allowed to restrict enrollment to open and special enrollment periods. Plans offered in the group market must be available for purchase at any time during a year. Plans that otherwise would be required to offer coverage on a guaranteed-issue basis are allowed to deny coverage to individuals and employers in certain circumstances, such as when a plan demonstrates that it does not have the network capacity to deliver services to additional enrollees or the financial capacity to offer additional coverage. Plans are prohibited from basing applicant eligibility on health status-related factors. Such factors include health status, medical condition (including both physical and mental illness), claims experience, receipt of health care, medical history, genetic information, evidence of insurability (including conditions arising out of acts of domestic violence), disability, and any other health status-related factor determined appropriate by the Secretary of Health and Human Services (HHS). If a plan offers dependent coverage, the plan must make such coverage available to a child under the age of 26. Plans that offer dependent coverage must make coverage available for both married and unmarried adult children under the age of 26, but plans do not have to make coverage available to the adult child's children or spouse (although a plan may voluntarily choose to cover these individuals). The sponsors of health plans (e.g., employers) are prohibited from establishing eligibility criteria based on any full-time employee's total hourly or annual salary. Eligibility rules are not permitted to discriminate in favor of higher-wage employees. Additionally, sponsors are prohibited from providing benefits under a plan that discriminates in favor of higher-wage employees (i.e., a sponsor must provide all the benefits it provides to higher-wage employees to all other full-time employees). Self-insured plans currently are required to comply with these requirements; however, fully insured plans are not. The requirement for fully insured plans was established under the ACA, and the Departments of HHS, Labor, and the Treasury have determined that fully insured plans do not have to comply with this requirement until after regulations are issued. As of the date of this report, regulations have not been issued. Plans are prohibited from establishing waiting periods longer than 90 days. A waiting period refers to the time that must pass before coverage can become effective for an individual who is eligible to enroll under the terms of the plan. In general, if an individual can elect coverage that becomes effective within 90 days, the plan complies with this provision. Guaranteed renewability is a requirement to renew an individual's plan at the option of the policyholder or to renew a group plan at the option of the plan sponsor. Plans that must comply with guaranteed renewability may discontinue the plan only under certain circumstances. For example, a plan may discontinue coverage if the individual or plan sponsor fails to pay premiums or if an individual or plan sponsor performs an act that constitutes fraud in connection with the coverage. The practice of rescission refers to the retroactive cancellation of medical coverage after an enrollee has become sick or injured. In general, rescissions are prohibited, but they are permitted in cases where the covered individual committed fraud or made an intentional misrepresentation of material fact as prohibited by the terms of the plan. A cancellation of coverage in this case requires that a plan provide at least 30 calendar days' advance notice to the enrollee. Plan sponsors that have at least 20 employees are required to continue to offer coverage under certain circumstances ( qualifying event s ) to certain employees and their dependents ( qualified beneficiaries ) who otherwise would be ineligible for such coverage. Generally, plan sponsors must provide access to continuation coverage to qualified beneficiaries for up to 18 months (or longer, under certain circumstances) following a qualifying event. Beneficiaries may be charged up to 102% of the premium for such coverage. Plans are prohibited from varying premiums for similarly situated individuals based on the health status-related factors of the individuals or their dependents. Such factors include health status, medical condition (including both physical and mental illnesses), claims experience, receipt of health care, medical history, genetic information, evidence of insurability (including conditions arising out of domestic violence), and disability. However, plans may offer premium discounts or rewards based on enrollee participation in wellness programs. Plans must use adjusted (or modified) community rating rules to determine premiums. Adjusted community rating prohibits the use of health factors in the determination of premiums but allows premium variation based on other factors. The four factors by which premiums may vary are described below. Type of E nrollment. Plans may vary premiums based on whether only the individual or the individual and any number of his/her dependents enroll in the plan (i.e., self-only enrollment or family enrollment). Geographic R ating A rea. States are allowed to establish one or more geographic rating areas within the state for the purposes of this provision. The rating areas must be based on one of the following geographic boundaries: (1) counties, (2) three-digit zip codes, or (3) metropolitan statistical areas (MSAs) and non-MSAs. Tobacco U se. Plans are allowed to charge a tobacco user up to 1.5 times the premium that they charge an individual who does not use tobacco. Age. Plans may not charge an older individual more than three times the premium that they charge a 21-year-old individual. Each state must use a uniform age rating curve to specify the rates across age bands. For plan years beginning on or after January 1, 2018, plans must use one age band for individuals aged 0-14 years, one-year age bands for individuals aged 15-63 years, and one age band for individuals aged 64 years and older. Under the rate review program, proposed annual health insurance rate increases that meet or exceed a federal default threshold are reviewed by a state or the Centers for Medicare & Medicaid Services (CMS). The federal default threshold for plan years beginning in 2019 is 15%. States have the option to apply for state-specific thresholds. Plans subject to review are required to submit to CMS and the relevant state a justification for the proposed rate increase prior to its implementation, and CMS and the state must publicly disclose the information. The rate review process does not establish federal authority to deny implementation of a proposed rate increase; it is a sunshine provision designed to publicly expose rate increases determined to be unreasonable. A risk pool is used to develop rates for coverage. A health insurance issuer must consider all enrollees in plans offered by the issuer to be members of a single risk pool. Specifically, an issuer must consider all enrollees in individual plans offered by the issuer to be members of a single risk pool; the issuer must have a separate risk pool for all enrollees in small-group plans offered by the issuer. (However, states have the option to merge their individual and small-group markets; if a state does so, an issuer will have a single risk pool for all enrollees in its individual and small-group plans.) An issuer must consider the medical claims experience of enrollees in all plans offered by the issuer in a single risk pool when developing rates for the plans. Plans are prohibited from restricting the length of a hospital stay for childbirth for either the mother or newborn child to less than 48 hours for vaginal deliveries and to less than 96 hours for caesarian deliveries. Plans that provide coverage for mental health and substance use disorder services must offer coverage for those services at parity with medical and surgical services, specifically in the following four areas: annual and lifetime limits, treatment limitations, financial requirements, and in- and out-of-network covered benefits. Plans that provide coverage for mastectomies also must cover prosthetic devices and reconstructive surgery. Health insurance issuers are prohibited from (1) using genetic information to deny coverage, adjust premiums, or impose a preexisting-condition exclusion; (2) requiring or requesting genetic testing; and (3) collecting or acquiring genetic information for insurance underwriting purposes. Plans are prohibited from terminating the health coverage of an applicable student who takes a medical leave of absence from a postsecondary educational institution or other change in enrollment that causes the student to lose access to health coverage. The leave of absence must be medically necessary and must begin while the student is suffering from a serious illness or injury. These requirements are colloquially referred to as Michelle's Law . Plans must cover the essential health benefits (EHB). The benefits that comprise the EHB are not defined in federal law; rather, the law lists 10 broad categories from which benefits and services must be included. The HHS Secretary is tasked with further defining the EHB. To date, the HHS Secretary has directed each state to select an EHB benchmark plan to serve as the basis for the state's EHB. The EHB requirement does not prohibit states from maintaining or establishing state-mandated benefits. State-mandated benefits enacted on or before December 31, 2011, are considered part of the EHB. However, any state that requires plans to cover benefits beyond the EHB and what was mandated by state law prior to 2012 must assume the total cost of providing those additional benefits. In other words, states must defray the cost of any mandated benefits enacted after December 31, 2011. Plans generally are required to provide coverage for certain preventive health services without imposing cost sharing. The preventive services include the following minimum requirements: evidence-based items or services that have in effect a rating of "A" or "B" from the United States Preventive Services Task Force (USPSTF); immunizations that have in effect a recommendation for routine use from the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention; evidence-informed preventive care and screenings (for infants, children, and adolescents) provided for in the comprehensive guidelines supported by the Health Resources and Services Administration (HRSA); and additional preventive care and screenings for women not described by the USPSTF, as provided in comprehensive guidelines supported by HRSA. Additional services other than those recommended by the USPSTF may be offered but are not required to be covered without imposing cost sharing. A plan with a network of providers is not required to provide coverage for an otherwise required preventive service if the service is delivered by an out-of-network provider, and the plan may impose cost-sharing requirements for a recommended preventive service delivered out of network. Additionally, if a recommended preventive service does not specify the frequency, method, treatment, or setting for the service, then the plan can determine coverage limitations by relying on established techniques and relevant evidence. Plans are prohibited from excluding coverage for preexisting health conditions. In other words, plans may not exclude benefits based on health conditions for any individual. A preexisting health condition is a medical condition that was present before the date of enrollment for health coverage, whether or not any medical advice, diagnosis, care, or treatment was recommended or received before such date. Plans are allowed to establish premium discounts or rebates or to modify cost-sharing requirements in return for adherence to a wellness program. If a wellness program is made available to all similarly situated individuals , and it either does not provide a reward or provides a reward based solely on participation, then the program complies with federal law without having to satisfy any additional standards. If a program provides a reward based on an individual meeting a certain standard relating to a health factor, then the program must meet additional requirements specified in federal regulations and the reward must be capped at 30% of the cost of employee-only coverage under the plan. However, the Secretaries of HHS, Labor, and the Treasury have the discretion to increase the reward up to 50% of the cost of coverage if the increase is determined to be appropriate. Plans must comply with annual limits on out-of-pocket spending. The limits apply only to in-network coverage of the EHB. In 2018, the limits cannot exceed $7,350 for self-only coverage and $14,700 for coverage other than self-only. In 2019, those limits will be $7,900 and $15,800, respectively. The self-only limit applies to each individual, regardless of whether the individual is enrolled in self-only coverage or coverage other than self-only. For instance, if an individual is enrolled in a family plan and incurs $8,000 in cost sharing, the plan is responsible for covering the individual's costs above $7,350 in 2018. Plans must tailor cost sharing to comply with one of four levels of actuarial value. Actuarial value (AV) is a summary measure of a plan's generosity, expressed as the percentage of total medical expenses that are estimated to be paid by the issuer for a standard population and set of allowed charges. In other words, AV reflects the relative share of cost sharing that may be imposed. On average, the lower the AV, the greater the cost sharing for enrollees overall. Federal law requires each level of plan generosity to be designated according to a precious metal and to correspond to an AV. Regulations allow plans to fall within a specified AV range and still comply with each of the four levels. See Table 2 for details. Plans are prohibited from setting lifetime and annual limits on the EHB. Lifetime and annual limits are dollar limits on how much the plan spends for covered health benefits either during the entire period an individual is enrolled in the plan (lifetime limits) or during a plan year (annual limits). Plans are permitted to place lifetime and annual limits on covered benefits that are not considered EHBs, to the extent that such limits are otherwise permitted by federal and state law. Plans are required to provide a summary of benefits and coverage (SBC) to individuals at the time of application, prior to the time of enrollment or reenrollment, and when the insurance policy is issued. The SBC must meet certain requirements with respect to the included content and the presentation of the content. The SBC may be provided in paper or electronic form. Enrollees must be given notice of any material changes in benefits no later than 60 days prior to the date that the modifications would become effective. Plans also must provide a uniform glossary of terms commonly used in health insurance coverage (e.g., coinsurance) to enrollees upon request. Plans are required to submit a report to the HHS Secretary concerning the percentage of premium revenue spent on medical claims ( medical loss ratio , or MLR). The MLR calculation includes adjustments for quality improvement expenditures, taxes, regulatory fees, and other factors. Plans in the individual and small-group markets must meet a minimum MLR of 80%; for large groups, the minimum MLR is 85%. States are permitted to increase the percentages, and the HHS Secretary may lower a state percentage for the individual market if HHS determines that the application of a minimum MLR of 80% would destabilize the individual market within the state. Plans whose MLR falls below the specified limit must provide rebates to policyholders on a pro rata basis. Any required rebates must be paid to policyholders by August of that year. Plans must implement an effective appeals process for coverage determinations and claims. At a minimum, plans must have an internal claims appeals process; provide notice to enrollees regarding available internal and external appeals processes and the availability of any applicable assistance; and allow an enrollee to review his or her file, present evidence and testimony, and receive continued coverage pending the outcome. Plans are subject to three requirements relating to the choice of health care professionals. First, plans that require or allow an enrollee to designate a participating primary care provider are required to permit the designation of any participating primary care provider who is available to accept the individual. Second, the same provision applies to pediatric care for any child who is a plan participant. Third, plans that provide coverage for obstetrical or gynecological care cannot require authorization or referral by the plan or any person (including a primary care provider) for a female enrollee who seeks obstetrical or gynecological care from an in-network health care professional who specializes in obstetrics or gynecology. Plans also must comply with one requirement relating to benefits for emergency services. If a plan covers services in an emergency department of a hospital, the plan is required to cover those services without the need for any prior authorization and without the imposition of coverage limitations, irrespective of the provider's contractual status with the plan. If the emergency services are provided out of network, the cost-sharing requirement will be the same as the cost sharing for an in-network provider. Plans are subject to nondiscrimination and other provisions with respect to qualified individuals ' access to and costs associated with clinical trials. Specifically, plans cannot prohibit qualified individuals from participating in an approved clinical trial; deny, limit, or place conditions on the coverage of routine patient costs associated with participation in an approved clinical trial; or discriminate against qualified individuals on the basis of their participation in approved clinical trials. Plans are not allowed to discriminate, with respect to participation under the plan, against any health care provider who is acting within the scope of that provider's license or certification under applicable state law. Federal law does not require that a plan contract with any health care provider willing to abide by the plan's terms and conditions, and it also does not prevent a plan or the HHS Secretary from establishing varying reimbursement rates for providers based on quality or performance measures. The HHS Secretary was required to develop quality reporting requirements for use by specified plans, concluding no later than two years after enactment of the ACA. The Secretary was to develop these requirements in consultation with experts in health care quality and other stakeholders. The Secretary also was required to publish regulations governing acceptable provider reimbursement structures not later than two years after ACA enactment. Not later than 180 days after these regulations were promulgated, the U.S. Government Accountability Office (GAO) was required to conduct a study regarding the impact of these activities on the quality and cost of health care. To date, the Secretary has not published the required regulations; therefore, the required GAO report has not been published. However, the Department of Labor (DOL), Employee Benefits Security Administration, published a proposed rule on July 21, 2016, that would make modifications to current annual reporting requirements for pension and other employee benefit plans under ERISA Titles I and IV. Under these requirements, plans would report on the financial condition and operations of the plan, among other things, using standardized forms (Form 5500 Annual Return/Report or the Form 5500-SF). This rule proposes that a group health plan in compliance with these reporting requirements would satisfy the quality reporting requirements in PHSA Section 717, as incorporated in ERISA. Once the reporting requirements are implemented, plans will submit annually, to the HHS Secretary (and to DOL and the Department of the Treasury) and to enrollees, a report addressing whether plan benefits and reimbursement structures do the following: improve health outcomes through the use of quality reporting, case management, care coordination, and chronic disease management; implement activities to prevent hospital readmissions, improve patient safety, and reduce medical errors; and implement wellness and health promotion activities. The HHS Secretary is required to make these reports available to the public and is permitted to impose penalties for noncompliance. Wellness and health promotion activities include personalized wellness and prevention services, specifically efforts related to smoking cessation, weight management, stress management, physical fitness, nutrition, heart disease prevention, healthy lifestyle support, and diabetes prevention. These services may be made available by entities (e.g., health care providers) that conduct health risk assessments or provide ongoing face-to-face, telephonic, or web-based intervention efforts for program participants.

A majority of Americans have health insurance from the private health insurance (PHI) market. Health plans sold in the PHI market must comply with requirements at both the state and federal levels; such requirements often are referred to as market reforms. The first part of this report provides background information about health plans sold in the PHI market and briefly describes state and federal regulation of private plans. The second part summarizes selected federal requirements and indicates each requirement's applicability to one or more of the following types of private health plans: individual, small group, large group, and self-insured. The selected market reforms are grouped under the following categories: obtaining coverage, keeping coverage, developing health insurance premiums, covered services, cost-sharing limits, consumer assistance and other patient protections, and plan requirements related to health care providers. Many of the federal requirements described in this report were established under the Patient Protection and Affordable Care Act (ACA; P.L. 111-148, as amended); however, some were established under federal laws enacted prior to the ACA.

This report provides an overview of the process by which the Department of Defense (DOD) acquires weapon systems and briefly discusses recent major efforts by Congress and DOD to improve the performance of the acquisition system. For a discussion on the process for dealing with significant cost growth in weapon systems, see CRS Report R41293, The Nunn-McCurdy Act: Background, Analysis, and Issues for Congress , by [author name scrubbed]. The Department of Defense acquires goods and services from contractors, federal arsenals, and shipyards to support military operations. Acq uisition is a broad term that applies to more than just the purchase of an item or service; the acquisition process encompasses the design, engineering, construction, testing, deployment, sustainment, and disposal of weapons or related items purchased from a contractor. From a policy perspective, federal regulations and federal law generally use the terms acquisition and procurement interchangeably. The term procurement, when used within the context of acquisitions, is different from the budget definition of procurement that generally references the Procurement budget appropriations account--a funding stream that is distinct from Research and Development, Operations and Maintenance, and other budget categories. DOD's acquisition process is highly complex and does not always produce systems that meet estimated cost or performance expectations. Congress has been concerned with the structure and performance of the defense acquisition system for many years. For example, the House Armed Services Committee's report of the FY2007 defense authorization bill stated Simply put, the Department of Defense (DOD) acquisition process is broken. The ability of the Department to conduct the large scale acquisitions required to ensure our future national security is a concern of the committee. The rising costs and lengthening schedules of major defense acquisition programs lead to more expensive platforms fielded in fewer numbers. The committee's concerns extend to all three key components of the Acquisition process including requirements generation, acquisition and contracting, and financial management. Over the decades, congressional oversight has focused on many aspects of the acquisition process, from "micro-level" practices, such as characteristics of a particular contract, to "macro-level" practices, such as management and execution of the Joint Strike Fighter and other Major Defense Acquisition Programs (MDAPs). Congress has held oversight hearings and enacted legislation in an effort to improve the defense acquisition structure and its practices. Title 10 of the United States Code governs the organization, structure, and operation of the Armed Forces of the United States. Several sections within the title charge the secretaries of the military departments (Army, Navy, and Air Force) with responsibility to "equip" the armed forces. General procurement provisions, many of which apply to MDAPs and MAISs (Major Automated Information Systems), are spread throughout the title, including assignment of responsibilities, establishment of acquisition procedures, and requirements for reporting to Congress. The annual National Defense Authorization Acts are one of the principal mechanisms by which Congress modifies the defense acquisition structure, also set forth in Title 10. DOD procurement activities are generally governed by three sets of federal government regulations: The first set of regulations applies to the entire federal government (including DOD unless stated otherwise) and is found in the Federal Acquisition Regulation (FAR). The second set of regulations applies only to DOD and is found in the Defense Federal Acquisition Regulation Supplement. The third set of regulations applies only to individual DOD components and is found in component-unique FAR Supplements. Procurement actions in DOD must adhere to the various regulations, and program managers must take the regulations into account during the planning and execution of their programs. Every weapon system in the U.S. arsenal is intended to satisfy a specific military need (often referred to as a requirement ) , must be paid for by the federal budget , and is designed and built within an acquisition system . From concept to deployment, a weapon system must go through the three-step process of identifying the required weapon system, establishing a budget, and acquiring the system. These three steps are organized as follows: 1. The Joint Capabilities Integration and Development System--for identifying requirements. 2. The Planning, Programming, Budgeting, and Execution System--for allocating resources and budgeting. 3. The Defense Acquisition System--for developing and/or buying the item. These three steps (each of which is a system onto itself), taken together, are often referred to as "Big 'A'" acquisition, in contrast to the Defense Acquisition System, which is referred to as "little 'a'" acquisition (see Figure 1 ). The Joint Capabilities Integration and Development System is the process by which DOD identifies, assesses, and prioritizes what capabilities the military requires to fulfill its mission. As such, JCIDS is often referred to as the requirements generation process. Requirements identified through JCIDS can be addressed in a number of ways, including changes in doctrine, training, and organization, or the acquisition of a new item, such as a weapon system. The JCIDS process was created in 2003 in an effort to fundamentally change the way DOD developed requirements. Prior to 2003, DOD used a threat-based approach to identifying warfighter requirements. With the advent of JCIDS, DOD shifted to a capabilities-based approach to identifying warfighter needs. In other words, instead of developing, producing, and fielding systems based on specific perceived threats to the nation, DOD adopted a policy of identifying what capabilities it needs to meet the strategic direction and priorities set forth in high-level strategy and guidance documents such as the National Military Strategy, National Defense Strategy, and Quadrennial Defense Review. Many analysts suggest that under the threat-based approach, each military service identified a threat, and in response to the threat developed its own independent weapons. The shift to a capabilities-based approach served to promote a more collaborative method of identifying capability gaps across services instead of each service developing its own response. As a result, weapon systems are expected to be developed jointly among services. JCIDS is governed by the Chairman of the Joint Chiefs of Staff Instruction (CJCSI) 3170.01 H and utilizes the procedures described in the Manual f or t he Operation o f t he Joint Capabilities Integration and Development System . According to DOD policy, the first step in the process is to conduct a Capabilities Based Assessment (CBA), which analyzes the military's capability needs and gaps, and recommends both materiel and non-materiel ways to address the gaps. If, as a result of a CBA or a comparable study a materiel solution (such as a weapon system) is considered, an Initial Capabilities Document (ICD) is prepared. The ICD justifies the need for a materiel solution to satisfy the identified capability gap. The Joint Requirements Oversight Council (JROC), the organization responsible for identifying and prioritizing warfighter requirements, must approve the ICD. To approve the ICD, the JROC reviews and validates the capabilities required to perform the defined mission, the gap in capabilities required to perform the mission, and how the identified capability gap will be addressed (in whole or in part). The JROC may approve an ICD and recommend a non-materiel solution to meeting the military need, such as a change to strategy or tactics. If the JROC approves a materiel solution, the program enters the Defense Acquisition System ("little 'a'"). The documentation developed during the JCIDS process serves as the basis for decisions throughout the acquisition process. Despite its important role, the JROC does not have binding authority; it serves in an advisory role to the Chairman of the Joint Chiefs of Staff. The Chairman is responsible for advising the Secretary of Defense on "the priorities of the requirements identified by the commanders of the unified and specified combatant commands" and on the "extent to which the program recommendations and budget proposals of the military departments and other components of the Department of Defense" conform to the priorities established in strategic plans. Ultimately, the Secretary of Defense, as head of DOD, has authority, direction, and control over requirements and acquisitions (subject to the President and Congress). The Planning, Programming, Budgeting, and Execution system develops DOD's proposed budget for all acquisitions, including MDAPs. The PPBE is intended to provide DOD with the best mix of forces, equipment, manpower, and support within fiscal constraints. The PPBE is an annual process consisting of four stages: planning, programming, budgeting, and execution. Planning: During this stage, a national defense strategy is defined and a plan is developed for executing the strategy. The plan sets forth priorities for developing programs (including military force modernization, readiness, and business processes and infrastructure support) and is published in the Joint Programming Guidance. This document helps guide the DOD components' efforts to propose or modify acquisition programs. Programming: During this stage, proposed programs are fleshed out and a Program Objective Memorandum (a document that outlines the anticipated missions and objectives of the proposed weapon system and anticipated budget requirements) is submitted. These memoranda are reviewed and, as deemed appropriate, integrated into an overall defense program. Budgeting: Budgeting occurs concurrently with the programming stage. Proposed budgets are reviewed in a different manner than proposed programs. Upon completion of a program decision or as a result of a budget review, Program Budget Decisions are issued. Execution: During execution, programs are evaluated and measured against preestablished performance metrics, including rates of funding obligations and expenditures. The Defense Acquisition System is the management process by which DOD develops and buys weapons and other systems. It is governed by Directive 5000.01, The Defense Acquisition System , and Instruction 5000.02, Operation of the Defense Acquisition System , and utilizes the procedures described in the Defense Acquisition Guidebook. The Defense Acquisition System is not intended to be a rigid, one-size-fits-all process. Acquiring information technology systems is different than acquiring missiles, which is different than acquiring a nuclear attack submarine. As Instruction 5000.02 states: the structure of a DOD acquisition program and the procedures used should be tailored as much as possible to the characteristics of the product being acquired, and to the totality of circumstances associated with the program including operational urgency and risk factors. Despite these differences, and the variations of the process contained in the 5000.02 instruction, the general framework of the acquisition system remains the same. This section of the report outlines that framework (based on the hardware-intensive model), pointing out selected instances where deviations may occur. Generally, the defense acquisition system uses "milestones" to oversee and manage acquisition programs (see Figure 2 ). The milestones serve as gates that must be passed through before the program can proceed to the next phase of the acquisition process. To pass a milestone, a program must meet specific statutory and regulatory requirements and be deemed ready to proceed to the next phase of the acquisition process. There are three milestones: Milestone A--initiates technology maturation and risk reduction. Milestone B--initiates engineering and manufacturing development. Milestone C--initiates production and deployment. Each acquisition program, such as the F-35, Littoral Combat Ship, or Joint Light Tactical Vehicle, is managed by an acquisition program office. The program office is headed by a Program Manager. Program managers can be military officers or federal civil servants. They are supported by a staff that can include engineers, logisticians, contracting officers and specialists, budget and financial managers, and test and evaluation personnel. Program managers usually report to a Program Executive Officer. Program executive officers can have many program managers who report to them. Like program managers, program executive officers can be military officers or federal civil servants. They, in turn, report to a Component Acquisition Executive. Most component acquisition executives report to the Under Secretary of Defense for Acquisition, Technology, and Logistics, who also serves as the Defense Acquisition Executive. The official responsible for deciding whether a program meets the milestone criteria and proceeds to the next phase of the acquisition process is referred to as the Milestone Decision Authority (MDA). Depending on the program, the MDA can be the Under Secretary of Defense (Acquisition, Technology, & Logistics), the head of the relevant DOD component, or the component acquisition executive. For a program to enter the Defense Acquisition System, it must pass a Materiel Development Decision review, which determines whether a new weapon system is required to fill the identified gap (or whether a non-materiel solution, such as a change in training or strategy, is sufficient). The Material Development Decision is based on the requirements validated by the JROC and set forth in the Initial Capabilities Document (or equivalent document). To pass the Material Development Decision, the MDA must determine that a material solution is necessary, approve the plan for developing an Analysis of Alternatives (described in the next section), designate the DOD component that will lead the program, and identify at which phase of the acquisition system the program should begin. MDA decisions made at the Material Development Decision review are documented in an Acquisition Decision Memorandum. The Materiel Solution Analysis Phase is where competing systems are analyzed to determine which one is best suited to meet the validated requirements. This phase occurs prior to any of the milestones (see Figure 3 ). During this phase, the Analysis of Alternatives is conducted. The Analysis of Alternatives explores the competing methods of meeting the identified requirement. This analysis should include the comparative effectiveness, cost, schedule, concepts of operations, overall risks, and critical technologies associated with each proposed alternative, including the sensitivity of each alternative to possible changes in key assumptions or variables. The Analysis of Alternatives also addresses total life-cycle costs. During this phase, a program manager is selected and a program office is established. The materiel solution phase ends when the Analysis of Alternatives is completed, a specific solution is chosen to continue through the acquisition process, and the program meets the criteria for the milestone where the program will enter the acquisition system. A program must pass through Milestone A to proceed to the Technology Maturation and Risk Reduction phase (see Figure 4 ). To pass Milestone A, the Milestone Decision Authority must approve the proposed materiel solution (based on the Analysis of Alternatives) and the Acquisition Strategy, the lead component must submit a cost estimate for the proposed solution (including life-cycle costs), the program must have full funding for the length of the Future Years Defense Program, and if technology maturation is to be contracted out, the program must have a Request for Proposal (RFP) that is approved by the MDA and ready for release. MDA decisions made at this milestone are documented in an Acquisition Decision Memorandum. The Technology Maturation and Risk Reduction phase is when nascent technologies and the system design are matured to the point that a decision can be made with reasonable confidence that a system can be developed to meet military requirements and fit within affordability caps. To meet these twin objectives, requirements are refined and cost caps are finalized. During this phase, a Capability Development Document and Reliability, Availability, and Maintainability strategy must be developed and approved. These documents will inform the Preliminary Design Review, which is held during this phase to ensure that the preliminary design and basic system architecture are complete, and that there is technical confidence the capability need can be satisfied within cost and schedule goals. This phase is also where competitive prototyping occurs, which is when industry teams develop competing prototypes of a required system. The Development RFP Release Decision Point is held during this phase. This is one of the critical decision points in the acquisition process because this is when the acquisition strategy is initiated and industry is asked to bid for the development contract. As the DODI 5000.02 emphasizes, [P]rior to the release of the final RFP(s), there needs to be confidence that the program requirements to be bid against are firm and clearly stated; the risk of committing to development and presumably production has been or will be adequately reduced prior to contract award and/or option exercise; the program structure, content, schedule, and funding are executable; and the business approach and incentives are structured to both provide maximum value to the government and treat industry fairly and reasonably. Most programs begin at Milestone B, the point at which a program becomes a program of record. A program must pass through Milestone B to proceed to the Engineering and Manufacturing Development Phase (see Figure 5 ). To pass Milestone B, a program must have passed the Development RFP Release Decision Point; requirements must be validated and approved; the program must have full funding for the length of the Future Years Defense Program; an independent cost estimate must be submitted to the MDA; all sources of risk (including cost, technology development, integration, and sustainment) must be sufficiently mitigated to justify fully committing to the development of the program; and the Milestone Decision Authority must approve an updated Acquisition Strategy. Upon passing Milestone B, the MDA approves the Acquisition Program Baseline (APB), which details the performance, schedule, and cost goals of the program. The APB is signed by the MDA and the program manager, and serves as the basis against which execution of the program will be measured. MDA decisions made at this milestone are documented in an Acquisition Decision Memorandum. The Engineering and Manufacturing Development Phase is where a system is designed and developed, all technologies and capabilities are fully integrated into a single system (full system integration), and preparations are made for manufacturing (including developing manufacturing processes, designing for mass production, and managing cost). During the detail design effort, the office of Developmental Test and Evaluation tests the maturity and adequacy of the design and provides the results of its analyses to the Program Manager. During system integration, the various subsystems are integrated into one system and a development model or prototype is produced. For example, on an aircraft carrier, system integration would be when the aircraft launching system, radar, nuclear reactor, and other subsystems are all integrated onto the ship. Operational testing and evaluation also takes place during this phase, both at the subsystem and integrated-system level. Operational testing and evaluation is intended to determine whether a system is operationally effective, suitable, and survivable. A program must pass through Milestone C to proceed to the Production and Deployment phase (see Figure 6 ). To pass Milestone C, the production design must be stable, the system must pass developmental testing and operational assessment, software must meet the predetermined maturity, the system must demonstrate that it is interoperable with other relevant systems and can be supported operationally, estimated costs must be within the cost caps, the program must have full funding for the length of the Future Years Defense Program, the Capability Production Document must be approved, and the Milestone Decision Authority must approve the updated Acquisition Strategy. MDA decisions made at this milestone are documented in an Acquisition Decision Memorandum. During the Production and Deployment phase, the MDA authorizes the beginning of low-rate initial production, which is intended to both prepare manufacturing and quality control processes for a higher rate of production and provide test models for operational test and evaluation. A program can enter full-rate production when it has completed sufficient operational testing and evaluation, demonstrated adequate control over manufacturing processes, and received approval of the MDA to proceed with production. When enough systems are delivered and other predefined criteria are met, an Initial Operating Capability can be attained, allowing for some degree of operations. Full Operational Capability is achieved when the system is ready to operate as required. Operations and Support is the final phase of a weapon system's life (see Figure 7 ). In this phase, the system is fully deployed, operated, supported, and ultimately retired. Up to 70% of the total life cycle costs of a system can occur in the operations and support phase. Programs are divided into acquisition categories (ACATs) based primarily on program cost. The level of management oversight of an acquisition program increases as the cost of the program increases. The most significant DOD and congressional oversight activities apply to MDAPs, which are categorized as ACAT I programs. Table 1 illustrates the thresholds and decision authorities for all ACATs. Concerns over defense acquisitions generally center around significant cost overruns, schedule delays, and an inability to provide troops in the field with the equipment they need when they need it. Many analysts believe that cost overruns and schedule delays have a debilitating effect on the nation's military and threaten America's technological advantage and military capabilities. For more than 50 years, both Congress and DOD have initiated numerous attempts to improve defense acquisitions. Despite the numerous initiatives, studies and reports (many of which echo the same themes and highlight the same weaknesses in the acquisition process), congressional hearings, and legislative fixes, DOD acquisition reform efforts have failed to rein in cost and schedule growth. In recent years, DOD and Congress have taken another look at defense acquisitions and embarked on an effort to improve the process. Some analysts believe that the efforts currently underway are the most comprehensive in more than 20 years. In recent years, DOD has embarked on a number of initiatives aimed at improving the process for buying weapon systems. For example: On January 10, 2012, DOD issued updated versions of the instructions Charter of the Joint Requirements Oversight Council and Joint Capabilities Integration and Development System. On January 19, 2012, DOD issued an updated version of the Manual for the Operation of the Joint Capabilities Integration and Development System . On November 26, 2013, DOD issued an updated "interim" instruction Operation of the Defense Acquisition System (5000.02). DOD has also undertaken a comprehensive effort to improve the overall operation of the defense acquisition system. On September 14, 2010, then-Under Secretary of Defense for Acquisition, Technology and Logistics Ashton Carter issued the memorandum Better Buying Power: Guidance for Obtaining Greater Efficiency and Productivity in Defense Spending . The memorandum outlined 23 principal actions to improve efficiency, including making affordability a requirement, increasing competition, and decreasing the time it takes to acquire a system. In November 2012, Secretary Carter's successor, Frank Kendall, launched the Better Buying Power 2.0 initiative, an update to the original Better Buying Power effort, aimed at "implementing practices and policies designed to improve the productivity of the Department of Defense and of the industrial base that provides the products and services" to the warfighters. Better Buying Power 2.0 contained 34 separate initiatives, including reducing the frequency of senior-level reviews and improving requirements and market research. According to officials, Better Buying Power 3.0 is in development. These and other related DOD initiatives generally focus on rewriting the rules and regulations to create a more efficient and effective acquisition process, improving the culture and professionalism of the acquisition workforce, and improving the overall performance of the acquisition system. Although these efforts are not aimed solely at weapon system acquisition, if such efforts succeed in improving acquisitions writ large , weapon system acquisitions should similarly improve. In recent years, the primary mechanism through which Congress has exercised its legislative powers to reform the defense acquisition structure has been the annual National Defense Authorization Act (NDAA). Sections of the acts have prescribed requirements applicable to both specific acquisition programs and acquisition structure overall, the latter of which has typically been addressed in Section VIII, usually titled "Acquisition Policy, Acquisition Management, and Related Matters." Generally, the requirements prescribed in this section have focused on specific issues rather than a comprehensive overhaul of the entire defense acquisition structure. In the National Defense Authorization Acts for FY2008-2012, the titles dealing with acquisitions included more than 240 sections. The most recent legislation that had a significant impact on weapon system acquisitions was enacted in May 2009, when Congress passed and the President signed into law the Weapon Systems Acquisition Reform Act of 2009 ( S. 454 / P.L. 111-23 ). Key provisions in the act included the appointment of a Director of Cost Assessment and Program Evaluation within DOD who communicates directly with the Secretary of Defense and Deputy Secretary of Defense and who issues policies and establishes guidance on cost estimating and developing confidence levels for such cost estimates; the appointment of a Director of Developmental Test and Evaluation who serves as principal advisor to the Secretary of Defense on developmental test and evaluation and develops polices and guidance for conducting developmental testing and evaluation in DOD, as well as reviewing, approving, and monitoring such testing for each Major Defense Acquisition Program; the appointment of a Director of Systems Engineering who serves as principal advisor to the Secretary of Defense on systems engineering and who will develop policies and guidance for the use of systems engineering, as well as review, approve, and monitor such testing for each MDAP; a requirement that the Director of Defense Research and Engineering periodically assess technological maturity of MDAPs and annually report findings to Congress, requiring the use of prototyping, when practical; a requirement that combatant commanders have more influence in the requirements-generation process; changes to the Nunn-McCurdy Act, including rescinding the most recent milestone approval for any program experiencing critical cost growth; a requirement that DOD revise guidelines and tighten regulations governing conflicts of interest by contractors working on MDAPs; and a requirement that a principal official in the Office of the Secretary of Defense be responsible for conducting performance assessments and analyses of major defense acquisition programs that experience certain levels of cost growth.

The Department of Defense (DOD) acquires goods and services from contractors, federal arsenals, and shipyards to support military operations. Acquisition is a broad term that applies to more than just the purchase of an item or service; the acquisition process encompasses the design, engineering, construction, testing, deployment, sustainment, and disposal of weapons or related items purchased from a contractor. As set forth by statute and regulation, from concept to deployment, a weapon system must go through a three-step process of identifying a required (needed) weapon system, establishing a budget, and acquiring the system. These three steps are organized as follows: 1. The Joint Capabilities Integration and Development System (JCIDS)--for identifying requirements. 2. The Planning, Programming, Budgeting, and Execution System (PPBE)--for allocating resources and budgeting. 3. The Defense Acquisition System (DAS)--for developing and/or buying the item. The Defense Acquisition System uses "milestones" to oversee and manage acquisition programs. At each milestone, a program must meet specific statutory and regulatory requirements before the program can proceed to the next phase of the acquisition process. There are three milestones: Milestone A--initiates technology maturation and risk reduction. Milestone B--initiates engineering and manufacturing development. Milestone C--initiates production and deployment. Both Congress and DOD have been active in trying to improve defense acquisitions. A comprehensive legislative effort to improve weapon system acquisition occurred in May 2009, when Congress passed and the President signed into law the Weapon Systems Acquisition Reform Act of 2009 (S. 454/P.L. 111-23). Key provisions in the act include appointment of a Director of Cost Assessment and Program Evaluation within DOD to establish guidance on cost estimating; appointment of a Director of Developmental Test and Evaluation; appointment of a Director of Systems Engineering; and a requirement that the Director of Defense Research and Engineering periodically assess technological maturity of Major Defense Acquisition Programs. DOD has undertaken a comprehensive effort to improve defense acquisitions, including rewriting elements of the regulatory structure that govern defense acquisitions and launching the Better Buying Power and Better Buying Power II initiatives aimed at "implementing practices and policies designed to improve the productivity of the Department of Defense and of the industrial base." An oversight issue for Congress is the extent to which the Weapon Systems Acquisition Reform Act and the various DOD initiatives are having a positive effect on acquisitions, and what additional steps, if any, Congress can take to further the effort to improve defense acquisitions.

The enactment of various conservation and environmental protection statutes in the 1960s and 1970s created a new awareness of environmental harms. At the same time, the civil rights initiatives also secured nondiscrimination in a number of legal rights, including education, employment, housing, voting, etc. Over the following decades, the development of these movements eventually converged, raising concerns that minority groups face disproportionate exposure to environmental risks and harms. Although Congress has not enacted generally applicable legislation on the issue, concerns regarding disproportionate adverse environmental impacts that result from how an agency implements environmental regulations have been litigated under a number of legal theories and have been addressed administratively for several decades. This report will examine the relevant legal authorities that may be asserted to address disproportionate environmental impacts that result from how an agency implements environmental regulations, including the Equal Protection Clause of the U.S. Constitution, Title VI of the Civil Rights Act of 1964, and selected environmental and conservation statutes. It also will analyze the use of these authorities to prevent such impacts and the likelihood of success for future challenges under each legal theory. The report also will discuss administrative efforts to address "environmental justice," a term used by some advocates to refer to the distribution of environmental quality across various demographic groups, including the Environmental Protection Agency's (EPA's) Plan EJ 2014. Many commentators have used the term environmental justice to describe concerns that racial, ethnic, or low-income minority groups are affected disproportionately by environmental harm. EPA has defined environmental justice as "the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies." In environmental protection debates, the question of siting potential environmental hazards often leads to disputes over whose proverbial backyard will be affected. Many communities often resist the placement of various industrial facilities and waste disposal sites within their boundaries. Several studies that first drew awareness to the potential correlation between environmental hazards and minority communities are cited regularly in debates about environmental justice. A number of factors may explain why these communities might be affected more often than others. Aside from the possibility that the harms are directed purposely at certain communities, factors such as costs, community involvement, political clout, economic status, and education--which may or may not be related to racial or ethnic status--may contribute to any correlation. For example, because property values may be lower in minority communities, siting authorities may choose inexpensive land near these communities. These communities also may lack the educational background or civic involvement that other communities may use to counteract proposals that would result in disproportionate environmental harm. If a siting decision that caused environmental hazards to the community depended solely on economic benefits and cost-efficiency, it may be difficult to justify an environmental justice claim. On the other hand, if the decision factored in the unlikely opposition of a minority community, the decision might be alleged to be discriminatory against that community. Individuals and communities seeking legal protection against perceived or alleged disproportionate environmental harms have relied on a number of legal theories. Although basing such claims on equal protection provisions in the U.S. Constitution appears reasonable, litigants have had little success with this approach, which requires proof that the government intended to discriminate. For the same reason, Title VI of the Civil Rights Act of 1964, which prohibits discrimination in federally funded programs, has proven troublesome for litigants to enforce in courts. Those who wish to challenge the effect of environmental harms also may seek relief under the National Environmental Policy Act (NEPA) or the discretionary authority of agencies under their statutory mandates. Alleged disproportionate impacts resulting from environmental regulation by government agencies inevitably raise questions regarding whether constitutional protections may apply to protect affected communities. Legal claims of discrimination by government agencies generally are governed by principles of equal protection. The Equal Protection Clause of the Fourteenth Amendment prevents states from denying any person under their jurisdiction "the equal protection of the laws." This constitutional requirement is made applicable to the federal government through the Due Process Clause of the Fifth Amendment. When a government entity treats similarly situated individuals or communities differently, those people may have been denied equal protection. However, to succeed in a legal challenge, litigants must show that the government intended to discriminate, not merely that litigants experienced discriminatory impacts. A court's review of equal protection claims depends on the nature of the discriminatory treatment. As a general rule, statutory classifications--those which distinguish between groups of people or between types of conduct--are permissible under the U.S. Constitution if there is a rational basis for the government establishing that distinction. If, however, the classification targets a "suspect class," courts will apply a heightened review known as strict scrutiny that requires the government to have a compelling reason to justify such treatment. Suspect classifications generally may arise with laws targeting race, religion, or national origin, as well as laws affecting fundamental rights like speech, or voting. If a governmental action explicitly identifies a suspect classification, the requirement of discriminatory intent is satisfied. However, it is more likely that environmental justice claims result from laws or actions that appear to be neutral but disproportionately affect a particular community that qualifies for heightened constitutional protection. The Supreme Court has explained that a disproportionate effect on such a community does not mean that the community's constitutional right to equal protection has been denied. When reviewing whether there was an intent to discriminate, courts may consider a variety of factors, including whether there is a significant disparate impact; evidence of departure from normal procedures; legislative history; or administrative history (e.g., actions or statements during the decision-making process). Such intent also may be evidenced through discriminatory enforcement. The following examples illustrate that, as a general rule, litigants asserting disproportionate environmental harms have not been successful when claiming denial of equal protection. In one of the first cases to consider such claims, a federal district court recognized that a state health agency's permit allowing placement of a solid waste facility in a community "will affect the entire nature of the community [sic] its land values, its tax base, its aesthetics, the health and safety of its inhabitants ..." Foreshadowing the difficulties of future environmental justice claims, the court held that there was insufficient evidence of an intent to discriminate based on race, despite extensive statistical data. The court noted that the site being challenged was located in a community with roughly 60% minority population, but that about half of all of the sites in the area were located in communities with less than 25% minority population. It also rejected assertions based on the concentration of solid waste sites in particular areas, explaining that it was reasonable to "expect solid waste sites to be placed near each other and away from concentrated population areas." The court also recognized that the sites were concentrated in areas where industry was located, not necessarily because minority populations were located nearby. Noting that it did not find the siting decision wise, the court explained that though the permit was "unfortunate and insensitive," there was insufficient proof to demonstrate "purposeful racial discrimination." Other courts have treated the issue similarly, finding that a history of disproportionate impacts does not translate to discriminatory intent. One court noted that although there may be an alleged history of "locating undesirable land uses in black neighborhoods," the challenged siting must be compared to other decisions by the agency, which had placed the only other site in a mostly white neighborhood. The court recognized that the siting agency did not "actively solicit" any landfill applications and showed no improper discriminatory motivations. Although equal protection claims in these cases generally have not been successful, some litigants may pursue constitutional claims. In one example, a court denied summary judgment for the city in a case brought by residents of a neighborhood with a 99% minority population. After reviewing evidence of discriminatory treatment related to flood protection, zoning, nuisances, landfills, and funding, the court recognized that there were questions as to whether the city had discriminated against the residents based on their race in some instances and permitted the case to go to trial, though it was settled before a final decision was rendered. Title VI of the Civil Rights Act of 1964 generally prohibits discrimination in federally funded programs or activities. Section 601 states that "[n]o person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance." Section 602 directs federal agencies that administer federally funded programs to implement the nondiscrimination provision through the promulgation of regulations and related enforcement proceedings. Agencies have issued regulations under Section 602 that prohibit actions with a discriminatory intent as well as actions with a discriminatory effect (also referred to as disparate impact). Individuals who believe they are victims of discrimination under Title VI may file a complaint with the federal agency that provides the funding, or, in some cases, they may file a lawsuit in federal court. State and local environmental agencies generally receive funding from EPA, which subjects those agencies to Title VI, and some individuals and communities have relied on that basis when claiming they have been disproportionately affected by environmental regulation. However, following several Supreme Court decisions, litigants have had limited success when challenging certain types of discrimination under Title VI in federal courts. On one hand, the Court has recognized a private right of action under Section 601, meaning that individuals or communities may file a lawsuit claiming discrimination in violation of Title VI. To have a private right of action, however, the claimants must show that there was a discriminatory intent behind the challenged action. As discussed in the previous section, discriminatory intent is required in equal protection claims as well, and has proven to be a challenge for many litigants seeking relief for disproportionate environmental harms. On the other hand, despite recognizing agencies' authority to issue Section 602 regulations to prevent disparate impact discrimination, the Court held that there was no private right of action under these regulations. Thus, since 2001, legal claims of discriminatory effect have been limited to the administrative complaint process. With the difficult standards required under Section 601 and without a private right of action under Section 602, it is generally the agency's responsibility to enforce its regulations in response to administrative complaints. Consequently, if an agency does not pursue or resolve complaints, there is little recourse for those claiming disproportionate harm. Commentators have noted that there has been a significant backlog of complaints at EPA, tracing the issue to an early study which found that EPA had concerns that enforcing antidiscrimination provisions would conflict with its primary goal of environmental improvement. Because of these delays, groups with administrative complaints have sought court orders compelling agency action. For example, a community organization claiming that city officials were not addressing environmental problems in vulnerable communities filed multiple complaints with EPA under its Title VI regulations. EPA's Office of Civil Rights (OCR) did not accept or reject the complaints within the regulatory deadlines and still had not made any response two years later, leading the organization to file a lawsuit in federal court. Within weeks, the agency accepted the complaints, and the lawsuit was dismissed. After an additional two years passed without any additional response, the organization filed a second lawsuit. The U.S. Court of Appeals for the Ninth Circuit noted that the group's "experience before the EPA appears, sadly and unfortunately, typical of those who appeal to OCR to remedy civil rights violations." Citing "a consistent pattern of delay" by EPA, which responded to complaints only after lawsuits were filed, the court held the organization could seek a court order forcing EPA to process the organization's complaints. The Court's 2001 decision prohibiting a private right of action under Title VI for disparate impact claims raised questions regarding whether affected individuals or communities may assert similar claims under a different civil rights provision, commonly referred to as Section 1983. Section 1983 allows individuals to sue government officials--or others acting pursuant to law--for "deprivation of any rights, privileges, or immunities" provided under U.S. law. Thus, individuals who are precluded from enforcing Section 602 regulations arguably could claim that the rights afforded under those regulations have been infringed in violation of Section 1983. However, courts have appeared to limit the applicability of Section 1983 in later decisions. In one example, residents of a largely minority neighborhood sought to enforce disparate impact regulations after a state environmental agency approved the construction of an industrial facility in the neighborhood which already included a number of the city's other contaminated sites. Initially, the federal district court held in favor of the residents and ordered the state to review their Title VI complaint, but the court's reasoning was no longer valid after the Supreme Court's decision finding no private right of action under Section 602. The residents amended their lawsuit, seeking enforcement of their Section 602 claim under Section 1983, and the court again held in their favor. Ultimately, however, the U.S. Court of Appeals for the Third Circuit overturned the decision, holding that "an administrative regulation cannot create an interest enforceable under section 1983 unless the interest already is implicit in the statute authorizing the regulation." Because Title VI does not create a right of action for disparate impact claims, the court held that the residents could not pursue such a claim under Section 1983 either. It is notable that other federal appellate courts have disagreed on the scope of Section 1983, leaving open the possibility that litigants in other courts may pursue such claims. The National Environmental Policy Act of 1969 (NEPA) establishes national environmental policies, including encouraging "harmony between man and his environment" and promoting efforts to "prevent or eliminate damage to the environment and biosphere and stimulate the health and welfare of man." Congress enacted NEPA in recognition "that each person should enjoy a healthful environment and that each person has a responsibility to contribute to the preservation and enhancement of the environment." To achieve these policies, NEPA established a federal responsibility "to use all practicable means ... to improve and coordinate Federal plans, functions, programs, and resources" in order to reach a number of goals. Many of these goals reflect principles of preventing disproportionate environmental harm, including assuring "for all Americans safe, healthful, productive, and esthetically and culturally pleasing surroundings" and attaining "the widest range of beneficial uses of the environment without degradation, risk to health or safety, or other undesirable or unintended consequences." NEPA requires federal agencies to follow a particular process to ensure that the statutory goals inform their decisions, but it does not dictate the outcome of the agencies' considerations of a particular action. The process requires federal agencies to provide detailed statements of the environmental impacts of agency actions (e.g., permitting, operations, etc.) that "significantly [affect] the quality of the human environment." The statements must identify any adverse environmental effects and available alternatives. NEPA reviews serve both to inform the agency in its deliberative process and to inform the public of the agency's actions and considerations. Individuals affected by an agency's action may challenge the agency's NEPA review under the Administrative Procedure Act, which provides a private right of action for judicial review of agency actions or inaction. Claims of insufficient review of environmental impacts have been asserted in both administrative and judicial courts, and indeed is one of the most prolific genres of environmental litigation. Both forums have emphasized that NEPA does not require agencies to eliminate or minimize the environmental effects of a particular action. Instead, the agency is required to adequately identify and evaluate the adverse effects before making its decision. In one example, an administrative board of appeals ruled that the U.S. Bureau of Land Management (BLM) had failed to meet its obligations under NEPA regarding the effects of constructing a new visitor center on federal lands. American Indian communities had raised concerns about the increased visitation to the area that would result and potentially harm cultural resources. Noting that BLM "expressly decided not to address [this] possibility," the board explained that it could affirm the agency's finding of no significant impact only if the agency could show that it "took a 'hard look' at the environmental impacts." Although litigants cannot use NEPA to achieve a desired outcome in light of their concerns about the disparate impact of an agency's decision, requiring agencies to consider various options and alternatives, including the cumulative effect that a proposed action may have on vulnerable communities, may be helpful to those communities nonetheless. The outcome of such a lawsuit may delay the implementation of a decision with an adverse environmental effect on a particular community, or it may cause the agency to reconsider its decision in light of any additional findings after further review. In addition to these constitutional and statutory provisions that may be invoked to prevent disproportionate exposure to environmental harms, agencies may act under general discretionary authority. Congress often authorizes agencies to undertake actions related to their missions, but allows the agencies discretion in choosing how to implement those authorities. If Congress has not given the agency explicit instruction, courts generally defer to the agency's interpretation, assuming it is reasonable. Under Executive Order 12898 (discussed in detail below), federal agencies are required to identify and address "disproportionately high and adverse human health or environmental effects of [their] programs, policies, and activities on minority populations and low-income populations." To do so, they must act under these existing discretionary authorities because Congress has not enacted general legislation toward this purpose. Many agencies have broad authority to promulgate regulations that they consider necessary to exercise the functions authorized by Congress. Congress also may direct the agency to exercise its authority "to protect human health and the environment." The agency may do so through setting pollution standards, issuing permits, or implementing enforcement mechanisms. For example, the Clean Water Act authorizes EPA to establish guidelines specifying factors that the agency considers when deciding pollution control limitations. EPA may consider such "factors as the Administrator deems appropriate" and "any more stringent limitation ... established pursuant to ... any other Federal law or regulation." Additionally, EPA may have discretion under the enforcement authority provided by an array of environmental laws to consider the environmental impact of a particular action. The penalty provisions of these statutes often permit the agency or courts to consider "such other matters as justice may require" in addition to factors such as the nature of the violation, the history of similar violations, etc. These broadly worded provisions allow agencies flexibility in their exercise of delegated authority, such that they may be able to incorporate nondiscrimination principles or considerations in decision making and other agency actions. Although these environmental statutes allow agencies to consider the impacts of environmental harms, the discretionary nature of these authorities generally means that individuals and communities alleging disproportionate impacts likely cannot succeed in a legal claim based solely on these authorities. Communities claiming to be affected by a particular environmental harm may seek to avail themselves of the citizen suit provisions included in various environmental statutes, which essentially allow individuals to file lawsuits to enforce the respective laws. However, statutory authorizations for citizen suits do not apply to claims related to an agency's discretionary duties, and enforcement decisions generally are regarded as discretionary. Following the heightened study of the effects of environmental hazards on minority communities in the 1980s, EPA assembled a working group to study the issue in 1990, under the direction of President George H. W. Bush. The focus on environmental justice expanded under President Bill Clinton, who directed federal agencies to incorporate environmental justice into their mission and operations. This directive has been reiterated by various federal agencies in recent years under President Barack Obama. These actions have not provided an independent legal basis for enforcing nondiscrimination principles related to environmental harms. However, they remain pertinent because they require agencies to apply relevant existing authorities that may achieve the same goal. In 1994, President Clinton issued Executive Order 12898 (E.O. 12898) to expand the goals of environmental justice beyond EPA. E.O. 12898 required each federal agency to "make achieving environmental justice part of its mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of its programs, policies, and activities on minority populations and low-income populations ..." Individually, agencies were directed to develop an agency-wide strategy that would identify programs, policies, processes, and enforcement in need of revision to ensure equitable enforcement of health and environmental statutes; to improve public participation; and to improve access to information identifying environmental effects among minority and low-income populations. E.O. 12898 also called for a coordinated approach to addressing the goal of environmental justice and established an interagency working group. The group was directed to provide guidance to and coordinate consistency among the individual agencies and offices as they developed their respective environmental justice strategies. Under E.O. 12898, federal agencies are responsible to undertake a number of measures to promote environmental justice. For example, agencies must conduct [their] programs, policies, and activities that substantially affect human health or the environment, in a manner that ensures that such programs, policies, and activities do not have the effect of excluding persons (including populations) from participation in, denying persons (including populations) the benefits of, or subjecting persons (including populations) to discrimination under, such programs, policies, and activities, because of their race, color, or national origin. It also directs agencies "whenever practicable and appropriate" to gather and analyze data on environmental and health impacts across a range of demographic groups in order to identify potential disparities among populations. E.O. 12898 directs agencies to encourage public participation and awareness on issues considered by the agencies and the interagency working group. However, it creates no specific obligations for disclosure or other action by the agency. As such, E.O. 12898 may be thought of as an internal guidance document for the executive branch. It is binding on executive agencies and offices, but does not create or implement generally applicable rules or obligations that could be enforced against the government, its officials, or other individuals. In other words, E.O. 12898 may not be used as an enforcement mechanism for environmental justice claims. In 2011, the agencies originally included in the interagency working group established by E.O. 12898 agreed to a Memorandum of Understanding on Environmental Justice and Executive Order 12898 (EJ MOU) that reiterated the agencies' commitment to the goals of E.O. 12898. EJ MOU also expanded the opportunity for participation by other federal agencies, noting that E.O. 12898 "applies to covered agencies, [but] does not preclude other agencies from agreeing to undertake the commitments in the Order." It also imposed requirements on public reporting by participating agencies of their environmental justice strategies and progress. In 2011, EPA introduced a strategic plan known as Plan EJ 2014 to help integrate environmental justice into its programs, policies, and activities. The plan marks 20 years since the issuance of E.O. 12898 and manifests EPA's intent to set a standard for other agencies to address environmental justice. Plan EJ 2014 outlines several methods through which EPA can promote environmental justice, including rulemaking, permitting, compliance and enforcement, community-based action programs, and interagency support programs. EPA intends to report its progress toward achieving goals set in the plan in 2014. EPA has issued guidance with specific instructions on recommended procedures to incorporate environmental justice into its rule-writing process, providing suggestions on when to consider environmental justice and questions to ask in order to successfully address the relevant issues that arise. Under the guidance, EPA analysts are instructed to "[incorporate] environmental justice into the development of risk assessment, economic analysis, and other scientific input and policy choices during the development of a rule." With respect to its initiative to incorporate environmental justice into the permitting process, EPA has endeavored "to develop and implement tools to better enable overburdened communities to have full and meaningful access to the permitting process." To advance environmental justice through its compliance and enforcement actions, EJ Plan 2014 provides for the enhanced use of enforcement and compliance tools "to address the needs of overburdened communities." In other words, as EPA determines where to pursue enforcement actions, it will give priority to cases that affect communities which may be particularly vulnerable. EPA also intends to improve its communications with communities that may be at risk of environmental harms. Similarly, EJ Plan 2014 continues EPA's community programs to "support community empowerment and provide community benefits at all levels." It provides for improvement of these programs, with particular emphasis on minority and low-income communities (including tribal and indigenous communities) that have been identified as lacking "capacity to affect environmental conditions." In particular, the agency's efforts focus on expanding partnerships with communities, building capacity within communities to organize community-based efforts, and coordinating with other agencies and entities that affect the community.

The enactment of various conservation and environmental protection statutes in the 1960s and 1970s created a new awareness of environmental harms. At the same time, the civil rights initiatives also secured nondiscrimination in a number of legal rights, including education, employment, housing, voting, etc. Over the following decades, the development of these movements eventually converged, raising concerns that minority groups face disproportionate exposure to environmental risks and harms. Individuals and communities claiming to be disproportionately and adversely affected by how an agency implements environmental regulations may seek legal relief under a variety of federal laws, including equal protection under the U.S. Constitution and nondiscrimination requirements under Title VI of the Civil Rights Act of 1964. However, in many cases, these laws require proof of discriminatory intent, which can make success under these claims difficult because individuals and communities generally allege that they are subject to disproportionate adverse environmental effects as a consequence of how an agency implements environmental regulations, but not that the regulation itself is discriminatory. Alternatively, relief may be available in some circumstances under the National Environmental Policy Act (NEPA) or statutory authorities for specific agencies' actions related to the environment. Congress has never enacted generally applicable legislation on the subject, but concerns regarding disproportionate impacts arising from environmental regulation have been addressed administratively over the past two decades. Federal agencies are required by Executive Order 12898 to incorporate environmental justice into their mission and operations, and a number of agencies have reiterated their commitment to these goals in recent years. This report will examine the relevant legal authorities that may be asserted to address disproportionate impacts that result from how an agency implements environmental regulations, including the Equal Protection Clause of the U.S. Constitution, Title VI of the Civil Rights Act of 1964, and various environmental and conservation statutes. It will discuss administrative efforts to address "environmental justice," a term used by some advocates to refer to the distribution of environmental quality across various demographic groups, including the Environmental Protection Agency's (EPA's) Plan EJ 2014. It will also analyze the use of these authorities to prevent such impacts and the likelihood of success for future challenges under each legal theory.

This report is intended to provide a brief overview of the various potential restrictions or regulations within federal law on the lobbying activities of non-profit organizations. Public charities, social welfare organizations, religious groups, and other non-profit, tax-exempt organizations are not generally prohibited from engaging in all lobbying or public policy advocacy merely because of their federal tax-exempt status. There may, however, be some limitations and restrictions on lobbying by certain non-profit organizations, as well as general public disclosure and reporting requirements relative to lobbying activities of most organizations. There are, in fact, several overlapping laws, rules and regulations which may apply to various non-profits which engage in lobbying activities. In some instances, the rules and restrictions that apply may be determined by the section of the Internal Revenue Code under which an organization holds its tax-exempt status. In other instances, certain rules and regulations may apply depending on the type of non-profit organization and whether it receives federal grants, loans or awards. Finally, organizations, depending on the amount and type of lobbying in which they engage, may be required to file public registration and disclosure reports under the federal Lobbying Disclosure Act of 1995, as amended. It should be emphasized that the definitions of the terms "lobbying" or "advocacy," and which particular activities may be encompassed in or excluded from those terms, may vary among the different regulations, rules, and statutes. Organizations which are exempt from federal income taxation under section 501(c)(3) of the Internal Revenue Code (26 U.S.C. SS 501(c)(3)) are community chests, funds, corporations or foundations "organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes." These charitable organizations, which have the advantage of receiving contributions from private parties which are tax-deductible for the contributor under 26 U.S.C. SS 170(a), are limited in the amount of lobbying in which they may engage if they wish to preserve this preferred federal tax-exempt status. The general rule for a charitable organization exempt from federal taxation under SS 501(c)(3) is that such organization may not engage in lobbying activities which constitute a "substantial part" of its activities. In 1976, a so-called "safe harbor" was offered to 501(c)(3) organizations where they could elect to come within specific percentage limitations on expenditures to assure that no violations of the "substantial part" rule would occur, or they could remain under the old, unspecified "substantial part test." The specific statutory limitations upon organizational expenditures for covered lobbying activities (the "expenditure test" limitations) for electing 501(c)(3) organizations are as follows: 20% of the first $500,000 of total exempt-purpose expenditures of the organization, then 15% of the next $500,000 in exempt-purposes expenditures, then 10% of the next $500,000 in exempt-purpose expenditures, and then 5% of the organization's exempt-purpose expenditures over $1,500,000; up to a total expenditure limit of $1,000,000 on lobbying activities. There is currently a separate "grass roots" expenditure limit of 25% of the "direct" lobbying limits. The activities covered under the tax code limitations on "lobbying" by charitable organizations generally encompass both "direct" lobbying as well as "grass roots" lobbying (for which there is a separate included expense limitation). "Direct" lobbying entails direct communications to legislators, and to other government officials involved in formulating legislation (as well as direct communications to an organization's own members encouraging them to communicate directly with legislators), which refer to and reflect a particular view on specific legislation. Indirect or "grass roots" lobbying involves advocacy pleas to the general public which refer to and take a position on specific legislation, and which encourage the public to contact legislators to influence them on that legislation. The definitions of and the specific exemptions from the term "lobbying" are important in observing the expenditure limitations on an organization's activities. For example, not all public "advocacy" activities of an organization are considered "grass roots lobbying." As noted expressly by the IRS: "... clear advocacy of specific legislation is not grass roots lobbying at all unless it contains an encouragement to action." Furthermore, not all communications to legislators are considered "direct lobbying." The definition of "lobbying" for purposes of the tax code limitations expressly exempt activities such as: (a) making available nonpartisan analysis, study or research involving independent and objective exposition of a subject matter, even one that takes a position on particular legislation as long as it does not encourage recipients to take action with respect to that legislation; (b) technical advice or assistance given at the request of a governmental body; (c) so-called "self-defense" communications before governmental bodies, that is, communications on those issues that might affect the charity's existence, powers, duties, tax-exempt status, or deductibility of contributions to it; and (d) contacts with officials unrelated to affecting specific legislation, even those that involve general discussions of broad social or economic problems which are the subject of pending legislation. Organizations which are tax exempt under section 501(c)(4) of the Internal Revenue Code are generally described as "[c]ivic leagues or organizations not operated for profit but operated exclusively for the promotion of social welfare ...." If a civic league or social welfare organization is tax exempt under SS 501(c)(4) of the Internal Revenue Code, there is generally no tax consequence for lobbying or advocacy activities (as long as such expenditures are in relation to their exempt function). In fact, in upholding the limitations on lobbying by 501(c)(3) charitable organizations against First Amendment challenges, the Supreme Court noted that a 501(c)(3) organization could establish a 501(c)(4) affiliate through which its First Amendment expression could be exercised through unlimited lobbying and advocacy. The 501(c)(4) affiliate should be separately incorporated, keep separate books, and spend and use resources which are not part of or otherwise paid for by the tax-deductible contributions to the 501(c)(3) parent organization. While 501(c)(4) organizations' lobbying activities are generally unrestricted, if a 501(c)(4) organization receives federal funds in the form of a "grant" or loan, then there are express restrictions on its "lobbying activities," discussed below. Labor and agricultural organizations are tax-exempt under section 501(c)(5) of the Internal Revenue Code, and business trade associations and chambers of commerce are exempt from federal income taxation under section 501(c)(6). Neither labor or agricultural organizations, nor business trade associations or chambers of commerce, have any specific limitations upon their lobbying activities as a result of their tax-exempt status. Veterans' organizations are in a unique situation concerning lobbying, as compared to other non-profits, in that veterans' groups may engage in unlimited lobbying activities relevant to their functions, while at the same time are able to benefit from contributions to them that are tax deductible to the donor. This preferred tax position available only to veterans' groups has been justified as a policy choice of Congress to benefit those that have served the nation in its armed forces. Private foundations (as opposed to "public" charities) are generally restricted from lobbying, in a practical sense, by tax provisions which penalize expenditures by the private foundation for most forms of lobbying activities (although the law expressly exempts from the definition of lobbying such activities as issuing "nonpartisan analysis, study or research," and engaging in so-called "self-defense" lobbying). Private foundations differ from public charities generally in the manner in which they are funded, in that private foundations receive a certain percentage of their funds from other than contributions from the general public or from the Government, and instead receive large bequests from those associated with the foundation and/or receive substantial amounts of their revenue from the investment income from the foundation's financial holdings. Restrictions on "lobbying activities" by certain non-profit groups, as a condition to receiving federal grants and loans, were enacted into law in 1995. Section 18 of the Lobbying Disclosure Act of 1995 places statutory restrictions upon the lobbying activities of non-profit civic and social welfare organizations which are tax-exempt under section 501(c)(4) of the Internal Revenue Code. This provision, which is commonly called the "Simpson Amendment," prohibits section 501(c)(4) civic leagues and social welfare organizations from engaging in any "lobbying activities," even with their own private funds, if the organization receives any federal grant, loan, or award. The restrictions of the Simpson Amendment originally covered all 501(c)(4) organizations which received federal monies by way of an "award, grant, contract , loan or any other form." The term "contract," however, was subsequently removed from the provision by P.L. 104-99 , Section 129, leaving the prohibition on lobbying activities with an organization's own funds as a condition to the receipt of federal moneys only upon 501(c)(4) grantees and those seeking an award or loan, but allowing unlimited lobbying activities with organizational funds for 501(c)(4) contractors of the federal government. The Simpson Amendment now reads: "An organization described in section 501(c)(4) of the Internal Revenue Code of 1986 which engages in lobbying activities shall not be eligible for the receipt of Federal funds constituting an award, grant, or loan." The legislative history of the provision clearly indicates that a 501(c)(4) organization may separately incorporate an affiliated 501(c)(4), which would not receive any federal funds, and which could engage in unlimited lobbying. The method of separately incorporating an affiliate to lobby (or to receive and administer federal grants), which was described by the amendment's sponsor as "splitting," was apparently intended to place a degree of separation between federal grant money and private lobbying, while permitting an organization to have a voice through which to exercise its protected First Amendment rights of speech, expression and petition. As stated by Senator Simpson: "If they decided to split into two separate 501(c)(4)'s, they could have one organization which could both receive funds and lobby without limits." It may also be noted that while SS 501(c)(4)s which receive certain federal funds may not engage in "lobbying activities," the term "lobbying activities" as used in the "Simpson Amendment" prohibition in Section 18 of the Lobbying Disclosure Act is defined in Section 3 of that legislation to include only direct "lobbying contacts and efforts in support of such contacts" such as preparation, planning, research and other background work intended for use in such direct contacts. A "lobbying contact" under the Lobbying Disclosure Act is an "oral or written communication (including an electronic communication) to a covered executive branch official or a covered legislative branch official" which concerns the formulation, modification or adoption of legislation, rules, regulations, policies or programs of the Federal Government. Organizations which use their own private resources to engage only in "grass roots" lobbying and public advocacy (including specifically any communication that is "made in a speech, article, publication or other material that is distributed and made available to the public, or through radio, television, cable television, or other medium of mass communication") would, therefore, not appear to be engaging in any prohibited "lobbying activities" under this provision. The Lobbying Disclosure Act's definitions of "lobbying activities" and "lobbying contacts" exclude, and do not independently apply to activities which consist only of "grass roots" lobbying and public advocacy. Similarly, since the term "lobbying activities" relates only to the direct lobbying of covered federal officials, the "Simpson Amendment" would not appear to limit in any way an organization's use of its own private resources to lobby state or local legislators or other state or local governmental bodies or units. While direct lobbying of the Congress, or of certain high level executive branch officials, is covered under the Lobbying Disclosure Act as a "lobbying contact," and thus by definition a "lobbying activity," the acts of testifying before a congressional committee, subcommittee, or task force, or of submitting written testimony for inclusion in the public record of any such body, or of responding to notices in the Federal Register or other such publication soliciting communications from the public to an agency, or responding to any oral or written request from a Government official for information, are expressly exempt from the definition of a "lobbying contact," and thus in themselves can not qualify as a "lobbying activity." Broad prohibitions on the use of federal monies for lobbying or political activities have been in force for a number of years. Express restrictions on the use of grant funds by non-profit organizations were adopted in 1984 as part of uniform cost principles for non-profit organizations issued by the Office of Management and Budget (OMB) in OMB Circular A-122, and are now incorporated into the Federal Acquisition Regulations. Under current federal provisions, no contractor or grantee of the federal government, regardless of tax status, may be reimbursed out of federal contract or grant money for their lobbying activities, or for political activities, unless authorized by Congress. These restrictions generally apply to attempts to influence any federal or state legislation through direct or "grass roots" lobbying campaigns, political campaign contributions or expenditures, but exempt any activity authorized by Congress, or when providing technical and/or factual information related to the performance of a grant or contract when in response to a documented request. In addition to these restrictions of general applicability on the use of federal contract or grant money for lobbying activities, there may be specific statutory limitations and prohibitions on particular federal moneys or on particular federal programs. Appropriation riders, for example, may also expressly limit the use of federal monies appropriated in a particular appropriations law for lobbying, or "publicity or propaganda" campaigns directed at Congress by private grant or contract recipients. Under the provisions of federal law commonly referred to as the "Byrd Amendment," federal grantees, contractors, recipients of federal loans or those with cooperative agreements with the federal government, are expressly prohibited by law from using federal monies to "lobby" the Congress, federal agencies, or their employees, with respect to the awarding of federal contracts, the making of any grants or loans, the entering into cooperative agreements, or the extension, modification or renewal of these types of awards. Federal contractors, grantees and those receiving federal loans and cooperative agreements must also report lobbying expenditures from non-federal sources which they used to obtain such federal program monies or contracts. Agencies of the Federal Government which administer loans, grants and cooperative agreements have issued common regulations implementing the "Byrd Amendment." The restrictions of the "Byrd Amendment" apply to the making, with an intent to influence, any communications to or appearances before Congress or an agency on a covered matter. Any "information specifically requested by an agency or Congress is allowable at any time," and certain other contacts are allowable depending on the timing and nature of the communication with respect to a particular solicitation for a federal grant, contract or agreement. In 2002 a federal statute in the criminal code concerning lobbying with appropriated funds was amended to expand its applicability and prohibition beyond merely officers and employees of the Federal Government, while substituting civil fines for the former criminal penalties for violations of the law. That provision of law, at 18 U.S.C. SS 1913, prohibits the use of federal appropriations to pay for any "personal services, advertisement, telegram, telephone, letter, printed or written matter ... intended or designed to influence" Members of Congress, or officials of any governmental units, on policies, legislation or appropriations. Originally enacted in 1919, the law had applied only to the use of federal funds by officers and employees of the Federal Government, and had extended its prohibitions only to the use of such funds for certain lobbying campaigns directed at Congress. However, after the 2002 amendments the law now appears to apply to recipients of all federal monies appropriated by Congress, and extends its prohibitions to activities to influence not only the Congress, but also public officials at all levels of Government. Contractors and grantees of the Federal Government may not seek reimbursement from a federal grant or contract for, nor charge off to a federal contract or grant, the costs of lobbying and similar public policy advocacy. Organizations which engage in a particular amount of lobbying activities (which must include more than one direct lobbying contact of a covered federal official) through personnel compensated to lobby on the organization's behalf will be required to register and to file disclosure reports under the Lobbying Disclosure Act of 1995, as amended. Other than for tax-exempt religious orders, churches, and their integrated auxiliaries (which are exempt from registration, reporting, and disclosure under the Lobbying Disclosure Act ), there is no general exclusion or exception from the disclosure and registration requirements for other non-profit organizations which otherwise meet the thresholds on lobbying contacts and overall expenditures for lobbying activities. The Lobbying Disclosure Act of 1995 was intended to reach so-called "professional lobbyists," that is, those who are compensated to engage in lobbying activities on behalf of an employer or on behalf of a client. When registration is required for organizations which engage in covered "lobbying contacts" through their own staff, such registration is done by the organization, rather than by the individual employee/lobbyist. That is, the organization which has employees who qualify as "lobbyists" for the organization (so-called "in-house" lobbyists) must register and identify its employees/lobbyists. All lobbying registrations and reports are to be filed electronically, and may now be filed at a single location for both the Secretary of the Senate's Office and the Office of the Clerk of the House. An organization will be required to register its employee/lobbyists when it meets two general conditions. First, it must have one or more compensated employees who engage in covered "lobbying," that is, who make more than one "lobbying contact," and who spend at least 20% of their total time for that employer on "lobbying activities" over a three-month reporting period. A "lobbying contact" (in reference to the requirement that an employee/lobbyist make more than one "lobbying contact" per quarter) is a direct oral or written communication to a covered official, including a Member of Congress, congressional staff, and certain senior executive branch officials, with respect to the formulation, modification or adoption of a federal law, rule, regulation or policy. The term "lobbying activities" (in reference to the 20% time threshold), however, is broader than "lobbying contacts," and includes "lobbying contacts" as well as background activities and other efforts in support of such lobbying contacts. Secondly, for an organization to register its lobbyists/employees, the organization must have spent, in total expenses for such "lobbying activities," $10,000 or more in a quarterly reporting period. The $10,000 amount will include any money paid to an outside lobbyist to lobby on the organization's behalf during the reporting period. If an organization hires an outside lobbyist, then that outside lobbyist or outside lobbying firm will register on behalf of that client/organization when the lobbyist or lobbying firm meets the required threshold for contacts and income, and will identify that organization as a "client." Under the act, a "lobbyist" needs to be registered within 45 days after first making a lobbying contact or being employed to make such a contact. Registration will be with the Clerk of the House who will forward such registration to the Secretary of the Senate. The information on the registrations will generally include identification of the lobbyist, or organization with employees/lobbyists; the client or employer; an identification of any foreign entity, and disclosure of its contributions of over $5,000, if the foreign entity owns 20% of the client and controls, plans, or supervises the activities of the client, or is an interested affiliate of the client; and a list of the "general issue areas" on which the registrant expects to engage in lobbying, and those on which he or she has already lobbied for the client or employer. In addition to listing the "client" of a lobbyist in the case of, for example, a "coalition" or association which hires a lobbyist, identification must also be made of any organization other than that client-coalition which contributes more than $5,000 for the lobbying activities of the lobbyist in a three-month reporting period and "actively participates" in the planning, supervision, or control of the lobbying activities. In addition to the registration of lobbyists, quarterly and semi-annual reports are required to be filed. The quarterly reports are to cover the periods January 1 - March 31, April 1 - June 30, July 1 - September 30, and October 1 - December 31. These reports are to be filed within 20 days of the end of the applicable period, and will identify the registrant/lobbyist, identify the clients, and provide any needed updates to the information in the registration; identify the specific issues upon which one lobbied, including bill numbers, earmarks, and any specific executive branch actions; employees who lobbied; Houses of Congress and federal agencies contacted; any covered interest of a foreign entity; and provide a good faith estimate of lobbying expenditures (by organizations using their own employees to lobby), or income from clients (estimated by outside lobbying firms/practitioners) in excess of $5,000 (and rounded to the nearest $10,000. The semi-annual reports are to identify the names of all political committees established or controlled by the lobbyist or registered organization; the name of each federal candidate or officeholder, leadership PAC, or political party committee to which contributions of more than $200 were made in the semi-annual period; the date, recipient, and the amount of funds disbursed: (i) to pay the costs of an event to honor or recognize a covered government official; (ii) to an entity that is named for a covered legislative branch official, or to a person or entity "in recognition" of such official; (iii) to an entity established, maintained, or controlled by a covered government official, or an entity designated by such official; and (iv) to pay the costs of a meeting, conference, or other similar event held by or in the name of one or more covered government officials, unless the events, expenses or payments are in a campaign context such that the funds provided are to a person required to report their receipt under the Federal Election Campaign Act (2 U.S.C. SS 434). The name of each presidential library foundation and each presidential inaugural committee to whom contributions of $200 or more were made in the semi-annual reporting period must also be reported. Additionally, in the semi-annual reports registrants are required to provide a certification that the person or organization filing (i) "has read and is familiar with" the rules of the House and Senate regarding gifts and travel, and (ii) had not provided, requested, or directed that a gift or travel be offered to a Member or employee of Congress "with knowledge that the receipt of the gift would violate" the respective House or Senate rule on gifts and travel. The Lobbying Disclosure Act, in addition to covering only those who are compensated to lobby, as a prerequisite to coverage applies only to those whose activities may be described as "direct" lobbying, that is, direct communications or contacts with covered officials. The registration and disclosure requirements of the law are not separately triggered by "grass roots" lobbying by persons or organizations. That is, an organization or entity which engages only in grass roots lobbying, regardless of the amount of "grass roots" lobbying activities, will not be required under the Lobbying Disclosure Act provisions to register its members, officers or employees who engage in such activities. The Lobbying Disclosure Act also exempts from the definition of "lobbying contacts" the activities of lobbying state or local legislators or other state or local governmental bodies or units. Furthermore, while direct lobbying of Congress, or of certain high level executive branch officials, is covered under the Lobbying Disclosure Act as a "lobbying contact," the acts of testifying before a congressional committee, subcommittee, or task force, or of submitting written testimony for inclusion in the public record of any such body, or of responding to notices in the Federal Register or other such publication soliciting communications from the public to an agency, are expressly exempt from the definition of a "lobbying contact," and thus in themselves cannot qualify as a "lobbying activity." Certain public charities, that is, those that have "elected" the specific expenditure limit test for lobbying under 26 U.S.C. SS 501(h), will have the option, under the Lobbying Disclosure Act, of using the Internal Revenue Code definitions of "influencing legislation," rather than the Lobbying Disclosure Act definitions of "lobbying activities" to determine the organization's reporting obligations. This option was provided so that such groups would need to have only one set of internal record controls and standards dealing with "influencing legislation" under both the tax code and the lobbying disclosure law. Since the definition of "influencing legislation" under the tax code is different than the definition of "lobbying activities" under the lobbying law, an eligible organization may need to decide which definition is more advantageous to use, from both a tax and record-keeping standpoint, as well as in relation to the extent and nature of its planned public policy activities. Most tax-exempt, non-profit organizations (other than churches) having annual gross receipts of over $25,000 must file with the IRS a Form 990 which is open to public inspection. Charitable 501(c)(3) organizations must also file Schedule A with Form 990, providing the reporting of lobbying expenditures, that is, expenses for "influencing legislation" under the Internal Revenue Code definitions. "Electing" organizations (electing the "expenditure test" for lobbying limits under 26 U.S.C. SS 501(h)) must also compute and allocate expenses attributable to "grassroots" lobbying, as well as to "direct" lobbying; but non-electing organizations (under the "substantial part" test) must provide to the IRS a "detailed" description of their lobbying activities, information not required from "electing" organizations. Alliance for Justice, Worry-Free Lobbying for Nonprofits: How to Use the 501(h) Election to Maximize Effectiveness , 1999, 2003. http://www.afj.org/ assets/ resources/ resources2/ Worry-Free-Lobbying-for-Nonprofits.pdf Robert A. Boisture, for Independent Sector, "What Charities Need to Know To Comply With the Lobbying Disclosure Act of 1995," in Complying With the Lobbying Disclosure Act of ' 95 and the New Gift Act Restrictions , pp. 185-208 (Glasser Legal Works 1996). Comment, "Guiding Lobbying Charities Into A Safe Harbor: Final Section 501(h) and 4911 Regulations Set Limits for Tax-Exempt Organizations," 61 Miss. L.J. 157 (Spring 1991). John A. Edie, Foundations and Lobbying: Safe Ways to Affect Public Policy (Council on Foundations, 1991). Bruce H. Hopkins, The Law of Tax-Exempt Organizations , Eighth Edition (2003). Bruce R. Hopkins, Charity, Advocacy and the Law (1992). Bob Smucker, The Non-Profit Lobbying Guide , Second Edition, 1999 (Charity Lobbying in the Public Interest, Independent Sector). http://www.clpi.org/ CLPI_Publications.aspx Richard L. Winston, "The Lobbying Disclosure Act of 1995 and the Tax Code Elections," Tax Notes , 1391-1399 (June 3, 1996). U.S. House of Representatives, Office of the Clerk, "Guide to the Lobbying Disclosure Act," December 2007 (amended January 25, 2008). http://lobbyingdisclosure.house.gov/ amended_lda_guide.html CRS Report 96-264, Frequently Asked Questions About Tax-Exempt Organizations , by [author name scrubbed]. CRS Report RL31126, Lobbying Congress: An Overview of Legal Provisions and Congressional Ethics Rules , by [author name scrubbed].

Public charities, religious groups, social welfare organizations and other non-profit organizations which are exempt from federal income taxation are not generally prohibited from engaging in all lobbying or public policy advocacy activities merely because of their tax-exempt status. There may, however, be some lobbying limitations on certain organizations, depending on their tax-exempt status and/or their participation as federal grantees in federal programs. Additionally, organizations (other than churches or their affiliates) which meet specified threshold expenditure requirements on lobbying activities and which engage in direct lobbying of federal officials must register employees who are paid to lobby, and must file reports on lobbying activities, under the Lobbying Disclosure Act of 1995, as amended. As to the different categories of tax-exemption: charitable, religious or educational organizations which are exempt from federal income taxation under Section 501(c)(3) of the Internal Revenue Code, who may receive contributions from private parties that are tax-deductible for the contributor, may not engage in direct or grass roots lobbying activities which constitute a "substantial part" of their activities if they wish to preserve this preferred tax-exempt status. "Civic leagues or organizations not operated for profit but operated exclusively for the promotion of social welfare ....," tax exempt under 26 U.S.C. SS 501(c)(4), on the other hand, have no tax consequence expressed in the statute for lobbying or advocacy activities. (But note restrictions on 501(c)(4)'s receiving federal grants or loans). Labor and agricultural organizations, tax-exempt under Section 501(c)(5) of the Internal Revenue Code, and business trade associations and chambers of commerce, exempt from federal income taxation under Section 501(c)(6), also have no specific statutory limitations upon their lobbying activities as a result of their tax-exempt status. Private foundations are generally not allowed to lobby. A provision of the 1995 Lobbying Disclosure Act, commonly called the "Simpson Amendment," prohibits section 501(c)(4) civic leagues and social welfare organizations from engaging in any "lobbying activities," even with their own private funds, if the organization receives any federal grant, loan, or award. Because of the definitions under the Lobbying Disclosure Act, however, the "Simpson Amendment" limitations do not appear to apply to any "grass roots" lobbying or advocacy, nor to lobbying of state or local officials, and the amendment also exempts certain other official communications or testimony. Finally, federal contract or grant money may not be used for any lobbying, unless authorized by Congress. No organization, regardless of tax status, may be reimbursed out of federal contract or grant money for any lobbying activities, or for other advocacy or political activities, unless authorized by Congress. This applies to direct or "grass roots" lobbying campaigns at the state, local or federal level (but exempts providing technical and/or factual information related to the performance of a grant or contract when in response to a documented request). The provision of law at 18 U.S.C. SS 1913, as amended, as well as the so-called "Byrd Amendment," would also generally prohibit the reimbursement or payment from federal grants or contracts of the costs for "lobby" activities.

Venezuela continues to be in the throes of a deep political crisis under the authoritarian rule of President Nicolas Maduro. Narrowly elected to a six-year term in 2013 following the death of longtime populist President Hugo Chavez (1999-2013), Maduro is unpopular. Despite serious economic challenges and recurring protests, Maduro has various policies, including use of the courts and security forces, to repress and divide the political opposition. The Maduro regime has been accused of committing serious human rights abuses; creating a deepening humanitarian crisis in Venezuela; establishing an illegitimate legislature, the National Constituent Assembly, which has usurped power from the democratically elected National Assembly; engaging in rampant corruption; and persecuting the political opposition. Underpinning the political crisis is an acute and increasingly unstable economic crisis. Venezuela's economy is built on oil, which accounts for more than 90% of the country's exports. The 2014 collapse in oil prices hit Venezuela's economy hard. Venezuela's economy has contracted by 35% since 2013, a larger contraction than the United States experienced during the Great Depression in the 1930s. In addition, the crisis is marked by inflation, shortages of consumer goods, default on the government's debt obligations, and deteriorating living conditions with significant humanitarian consequences. Congress has long-standing interests in both U.S.-Venezuela relations and foreign economic crises that affect U.S. economic interests. This report analyzes the economic crisis in Venezuela, arguably the most acute crisis in the global economy today, including the causes, policy responses by the government, and recent developments. The report also examines how the crisis affects U.S. economic interests, including U.S. investors' holdings of Venezuelan bonds, Venezuelan assets in the United States, U.S.-Venezuelan trade and direct investment, and possible future involvement of the International Monetary Fund (IMF) in the crisis. For decades, Venezuela was one of South America's most prosperous countries, but now lags behind other key economies in the region ( Figure 1 ). Venezuela has the world's largest proven reserves of oil in the world, and its economy is built on oil. Oil accounts for more than 90% of Venezuelan exports and oil sales fund the government budget. Oil exports also provide the country with the foreign exchange it needs to import consumer goods. After years of economic mismanagement under President Hugo Chavez, Venezuela was not well equipped to withstand the sharp fall in oil prices in 2014. Economic conditions have deteriorated rapidly under President Maduro. In November 2017, the government's increasingly dire fiscal situation came to a head, as the government announced it would seek to restructure its debt. Venezuela benefited from the boom in oil prices during the 2000s. When Hugo Chavez took office in 1999, oil was $10 a barrel. Oil prices steadily rose over the following several years, reaching a peak of $133 a barrel in July 2008. Between 1999 and 2015, the Venezuelan government earned nearly $900 billion from petroleum exports, with about half ($450 billion) earned between 2007 and 2012 (Chavez's second term). President Chavez used the oil windfall to spend heavily on social programs and expand subsidies for food and energy. Social spending as a share of GDP rose from 28% to 40% between 2000 and 2013, a much bigger rise than in Latin America's other large economies. Chavez borrowed against future oil exports, running budget deficits in nine of the years when he was in office (1999-2013). Venezuela's public debt more than doubled between 2000 and 2012, from 28% of GDP to 58% of GDP. Additionally, Chavez used oil to expand influence abroad, for example through Petro C aribe , a program that allowed Caribbean countries to purchase oil at below-market prices. The Chavez government also engaged in widespread expropriations and nationalizations, with the number of private companies dropping from 14,000 in 1998 to 9,000 in 2011. It also adopted currency and price controls. Substantial government outlays on social programs helped Chavez gain political favor and drive down poverty rates in Venezuela, from 37% in 2005 to 25% in 2012. However, widespread economic mismanagement had long-term consequences. Government spending was not directed toward investment that could have helped increase economic productivity and reduce its reliance on oil. Expropriations and nationalizations discouraged foreign investment that could have provided the country with increased expertise and capital. Price controls created market distortions and stifled the private sector. Economic growth and poverty reduction in Venezuela lagged behind the rest of South America. When Nicolas Maduro was elected President in April 2013, he inherited economic policies that were broadly viewed as unsustainable and overly reliant on proceeds from oil exports. When oil prices crashed in 2014, the Maduro government was ill-equipped to soften the blow to the Venezuelan economy. While many other major commodity producers used the boom years to build foreign exchange reserves or sovereign wealth funds to mitigate risks from big swings in commodity prices, the Chavez government created no such stabilization fund to guard against a potential future fall in oil prices. Instead, Chavez had borrowed on the expectation that oil prices would remain high. The crash in oil prices led to a sharp decline in government revenue and, combined with the government's policy choices, triggered a broad economic crisis. Venezuela's economy is estimated to have contracted by nearly 35% between 2012 and 2017. The fall in oil prices strained public finances; instead of adjusting fiscal policies through tax increases and spending cuts, the Maduro government tried to address its growing budget deficit by printing money, which led to inflation. Inflation, about 20% in 2012, was projected to exceed 1,100% by the end of 2017. The government has tried to curb inflation through price controls, although these controls have been largely ineffective in restricting prices, as supplies have dried up and transactions have moved to the black market. Unemployment in Venezuela is forecast to reach 26% in 2017, more than triple the level of unemployment in 2012. Table 1 provides a snapshot of changes in key economic indicators for Venezuela since 2013. Until recently, the Maduro government had committed to repaying its debts despite tight resources, fearing the legal challenges from creditors that plagued Argentina for more than a decade after its default in 2001. Such legal challenges against the Venezuelan government could result in the seizure of Venezuela's overseas assets, such as CITGO, a subsidiary of Venezuela's state oil company, Petroleos de Venezuela, S.A. (PdVSA); oil shipments; and cash payments for oil exports. Maduro's commitment to debt service came at a high cost: to meet its international payments, the government tightened restrictions on access to foreign currency, imposed price controls, and cut imports. Venezuela's imports of goods fell from $62.9 billion in 2013 to $21.4 billion in 2016. Venezuela relies heavily on imports for most consumer goods, and cuts to imports led to severe shortages of food and medicine, creating a humanitarian crisis. The Venezuelan government pursued a variety of policies to fill its funding gaps and avoid default. The government approached allies China and Russia for financing, securing loans to be repaid through future oil exports ("oil-for-loan" deals), although it fell behind on these deals. In May 2017, the Venezuelan central bank raised funds through the sale of $2.8 billion in PdVSA bonds to Goldman Sachs Asset Management at a steep discount (Goldman paid $865 million). The deal was controversial, and the government had difficulty finding buyers for a similar transaction in subsequent months. The Venezuelan government was running out of foreign exchange reserves to make debt payments, with official reserves down from $21.5 billion at the end of 2013 to $10 billion in the third quarter of 2017. In August 2017, new U.S. sanctions exacerbated the government's precarious fiscal position. Specifically, the August 2017 sanctions restrict Venezuela's ability to borrow from U.S. investors or access U.S. financial markets. The Maduro government is pursing the creation of a new currency, "petros" backed by oil, gas, gold, and diamonds, as a way to circumvent sanctions. After months of speculation about if and when Venezuela would default, on November 2, 2017, President Maduro announced in a televised address that the country would seek to restructure and refinance its debt. The announcement signaled a significant shift in policy and highlighted the government's dire fiscal situation, but Maduro provided few details about how the restructuring would proceed. While it is difficult to find reliable data on the composition of Venezuelan debt, it is estimated that Venezuela owes about $64 billion to bondholders, $20 billion to China and Russia, $5 billion to multilateral lenders (such as the Inter-American Development Bank), and tens of billions to importers and service companies in the oil industry. Maduro blamed U.S. sanctions for Venezuela's need to restructure, arguing that U.S. sanctions made it impossible for the government to find new financing. Any comprehensive restructuring of Venezuelan debt is expected to be a long and complex process, due to the following factors: the number of parties involved, including hundreds or even thousands of bondholders who are in the early stages of organizing, as well as China and Russia, whose lending to Venezuela may be driven in part by geopolitical considerations; legal challenges likely to be initiated by bondholders, which could take years to resolve and could result in the seizure of Venezuelan assets in the United States, including CITGO (owned by PdVSA), oil shipments, and cash payments for oil; differences in legal provisions in different bonds, including differences between the sovereign and PdVSA bonds; U.S. sanctions, which prohibit U.S. investors from accepting any new debt issued in a debt restructuring or from engaging with Vice President Tareck El Aissami and Economy Minister Simon Zerpa, who are leading the debt negotiations and subject to U.S. sanctions for drug-trafficking and corruption charges; and lack of any economic reform agenda in Venezuela to accompany the restructuring, such as an IMF program. Maduro stressed his promise to continue debt service during negotiations with creditors, likely an effort to evade legal challenges from bondholders. However, the government and PdVSA missed some bond interest payments in mid-November, leading credit rating agencies and a New York-based derivatives group (the International Swaps and Derivatives Association, ISDA) to issue default notices. To advance its goal of debt restructuring, the Venezuelan government organized a bondholders meeting in Caracas on November 13, 2017. The meeting, while touted by the government as a sign of good faith in negotiations with creditors, provided little insight into how negotiations would proceed. Reportedly the bondholder meeting was sparsely attended, no bondholders were allowed to ask any questions publicly, and the meeting concluded after 30 minutes. Critics have also questioned why the government appointed two sanctioned individuals to lead its negotiating team. Some analysts have tried to parse Maduro's strategy, if any exists, for dealing with private bondholders. Maduro's stated goal of restructuring and subsequent default notices drove down the value of Venezuelan debt trading in secondary markets. Some analysts have argued that this was Maduro's intent, and strengthens the government's hand in restructuring negotiations. There is also some speculation that the Venezuela government will strategically default on its government bonds, but not the PdVSA bonds. The reasoning is that it may be harder to seize the government's assets rather than a company's assets, but it is unclear how the strategy would play out in courts given the tight linkages between the government and PdVSA. Although China and Russia have both provided financial support to Venezuela, the two creditor governments are increasingly taking divergent approaches to Venezuela's mounting fiscal problems. In mid-November, Russia agreed to restructure $3.15 billion in debt owed by Venezuela on favorable terms, despite Russia's own fiscal pressures. This eased the fiscal pressures facing the Venezuelan government, and demonstrates the geopolitical significance of Venezuela to Russia. In contrast, China seems to give priority to the economic value of its investments in Venezuela over geopolitical concerns. In late November, a U.S. subsidiary of Sinopec, one of China's biggest state-owned oil companies, sued PdVSA in a U.S. court for late payments. PdVSA settled with the subsidiary in December, perhaps showing the importance to Venezuela of maintaining good relations with the Chinese government. It appears to be the first legal challenge to Venezuela relating to its debt payment obligations. In addition to restructuring debt owed to Russia, the Venezuelan government is seeking sources of cash to keep its finances afloat. In December, the government secured a $400 million credit line from the Latin American Development Bank ( Corporacion Andina de Fomento , CAF), of which the United States is not a member. In October 2017, the IMF projected Venezuela's economy to contract by 6% in 2018 and 2% in 2019. These projections have been substantially revised since the government announced plans to restructure its debt and was declared in default by several credit rating agencies. In December 2017, the Economist Intelligence Unit projected that Venezuela's economy will contract by 11.9% in 2018 and 5.4% in 2019, a more significant contraction in economic growth than it or the IMF envisioned just two months prior. Venezuela is running a relatively large budget deficit, estimated at 18.5% of GDP in 2017. It is unclear how restructuring and/or default will impact Venezuela's finances, in part because it is unclear whether the government intends, or will be able, to continue repaying debts during the negotiations. If the government does suspend debt repayments, it could in the short term redirect funds to domestic objectives such as increasing imports of food and medicine, which could help bolster domestic political support for the Maduro regime. In the longer term, however, suspending payments to creditors could result in a substantial loss of government revenue, if creditors are able to seize oil exports or funds tied to oil exports. While there has been minimal spillover of Venezuela's economic crisis in broader global financial markets, the crisis has a number of policy implications for U.S. economic interests. Venezuela's economic and broader political crisis, combined with low oil prices, has contributed to a contraction in U.S.-Venezuela trade, and some major U.S. firms operating in Venezuela have left or curtailed operations. Many U.S. investors hold Venezuelan government and PdVSA bonds, and U.S. investors could suffer losses and become involved in complicated legal proceedings against the Venezuelan government. There are also concerns that dealings between PdVSA and the Russian state-oil company Rosneft could result in Rosneft taking partial ownership of PdVSA's Texas-based subsidiary, CITGO. The combination of low oil prices, Venezuela's declining oil production, and the overall decline in U.S. oil imports, as well as the country's major political and economic crisis, has contributed to a sharp decrease in U.S. trade with Venezuela. U.S. commodity exports to Venezuela have fallen by 60% since 2013, from $13.2 billion to $5.2 billion in 2016. U.S. commodity imports from Venezuela have fallen by about two-thirds since 2013, from $32.0 billion to $10.9 billion in 2016. The contraction in U.S.-Venezuela trade is more consequential for Venezuela than the United States. From the U.S. perspective, Venezuela is a relatively minor trading partner. U.S. imports to and exports from Venezuela accounted for less than 1% of U.S. global merchandise imports and exports in 2016. From the Venezuelan perspective, however, the United States is a critical partner. In 2016, the United States was Venezuela's largest trading partner, accounting for 22% of Venezuela's exports and 26% of Venezuela's imports. In terms of sectors, U.S.-Venezuela trade is dominated by oil. Oil accounts for more than 95% of U.S. merchandise imports from Venezuela. Most of the oil imported to the United States from Venezuela is crude oil, and Venezuela is the United States' third-largest source of crude oil imports, behind Canada and Saudi Arabia. The value of U.S. oil imports from Venezuela has fallen from $43.3 billion in 2011 to $10.9 billion in 2016. The United States exports a relatively small amount of refined oil to Venezuela ($1.7 billion), as well as light crude oil (used as a diluent for blending with Venezuelan heavy crude oil) to a PdVSA oil refinery and storage facility in Curacao. Beyond oil, top U.S. merchandise exports to Venezuela in 2016 included machinery ($847 million), cereals ($394 million), organic chemicals ($324 million), and electrical machinery ($290 million). For each of these commodities, the value of U.S. exports to Venezuela has dropped between 40% and 75% since 2013. In contrast, U.S. exports of services, estimated at $6.0 billion in 2016, has held relatively steady through the crisis. Major U.S. service exports to Venezuela include transportation, intellectual property (audiovisual-related products), and travel sectors. Although Venezuela accounts for less than 1% of total U.S. direct investment overseas, many U.S. companies have set up subsidiaries or manufacturing facilities in Venezuela. According to the State Department, more than 500 U.S. companies were represented in Venezuela in mid-2016. However, in response to the political and economic instability, several large U.S. companies have left Venezuela, curtailed operations there, or restructured subsidiaries to minimize the exposure of parent companies. Examples include Bridgestone (tire and rubber products), Colgate (household and personal care products), Delta (airline), GM (cars), Kimberly Clark (paper-based products), Mondelez (snacks), Pepsi (soft drinks), and United Airlines. Many analysts view the risk of expropriation in Venezuela as high, given the tight fiscal conditions facing the Maduro government and the past unpredictable nationalizations in various sectors under Presidents Chavez and Maduro. The United States also does not have a bilateral investment treaty or free trade agreement with Venezuela that could provide investors protection. In November 2017, five U.S. citizens were among the CITGO executives detained in Venezuela, heightening U.S. tensions with the government. Such action will likely continue to deter U.S. economic activity in Venezuela. U.S. investors could face substantial losses if Venezuela suspends payment or seeks an aggressive restructuring of its debt. Although it is difficult to find reliable data on the holdings of Venezuela's external debt obligations, Venezuelan bonds are included in the popular JP Morgan Emerging Markets Bond (EMBI) index, and are believed to be widely held among U.S. investors. However, concerns about the country's outlook have caused some investors to sell their holdings of Venezuelan and PdVSA bonds. According to one survey, nearly 41% of the 81 U.S.-based emerging-market debt funds have zero exposure to Venezuela, down from 34% a year ago. Following the government's announcement that it intends to restructure its debt, bondholders are in the early stages of organizing to enter potential restructuring negotiations with the government and/or pursue legal challenges to the restructuring. A number of U.S.-based firms have been reported as being involved in efforts to organize and advise creditors, including Cleary Gottlieb (a law firm that frequently represents debtor governments in debt restructurings), Greylock Capital (a hedge fund), the Institute of International Finance (a global association of the financial industry based in Washington, DC, which played a critical coordinating role in Greece's 2012 debt restructuring), and Millstein & Co. (a law firm frequently involved in sovereign debt restructurings). Reportedly, some U.S. firms are also exploring advising the Venezuelan government in the restructuring, but these efforts are complicated by U.S. sanctions. Venezuelan government and PdVSA dollar-denominated bonds were largely issued under New York law. If the Venezuelan government or PdVSA defaults, it is expected that bondholders would seek repayment through legal challenges against the Venezuelan government or PdVSA in the U.S. legal system. These legal challenges would presumably be similar to the court cases filed by bondholders against the Argentine government after Argentina's default in 2001. The dispute between the Argentine government and creditors took 15 years to resolve. Venezuela's restructuring and likely legal challenges are widely expected to be more complex, largely due to Venezuela's significant overseas assets that could be seized by creditors. Companies that have been subject to expropriation by the Venezuelan government are also seeking claim to Venezuelan assets in the United States. It is not clear the assets would be large enough to compensate all claimants, meaning that U.S. bondholders could still face substantial losses. In 2016, PdVSA secured a $1.5 billion loan from the Russian state-oil company Rosneft. PdVSA used 49.9% of its shares in CITGO as collateral for the loan. If PdVSA defaults on the loan from Rosneft, Rosneft would likely gain the 49.9% stake in CITGO. CITGO, based in Texas, owns substantial energy assets in the United States, including three oil refineries, 48 terminal facilities, and multiple pipelines. Some policymakers are concerned that Rosneft could gain control of critical U.S. energy infrastructure and pose a serious risk to U.S. energy security. There are also questions about whether the transaction would be compliant with U.S. sanctions on Rosneft. In a hearing before the Senate Banking Committee in May 2017, Treasury Secretary Mnuchin indicated that any such transaction would be reviewed by the Committee on Foreign Investment in the United States (CFIUS). At the end of August, it was reported that the Trump Administration stands ready to block the transaction. Reportedly, Rosneft is negotiating to swap its collateral in CITGO for oilfield stakes and a fuel supply deal. In December, Venezuela awarded licenses to Rosneft to develop two offshore gas fields, but it is unclear if this deal is related to the CITGO collateral. Congress is considering using nongovernmental organizations to provide humanitarian aid to Venezuela, including food and medicine, to address its humanitarian crisis. It appears unlikely that the Venezuelan government would accept U.S. assistance at this time. However, if the Maduro government or a new government in Venezuela engages in a significant reorientation of policy, U.S. policymakers might pursue options to provide broader economic support to rebuild Venezuela's economy. In addition to lifting sanctions that restrict Venezuela's access to the U.S. financial system, policymakers might explore how the international community, particularly the IMF, could provide an international financial assistance package, and whether debt incurred by the National Constituent Assembly, widely viewed as an illegitimate legislature, should be enforced. If there is no significant change in Venezuelan policies, the United States may reconsider its policy stance and potentially pursue harsher sanctions against the government. In multilateral and bilateral aid packages for countries experiencing crises, IMF programs are typically the seal of approval on a government's policies and the linchpin for commitments from other multilateral and bilateral donors. Venezuela has a tenuous relationship with the IMF; in fact, for more than a decade, the Venezuelan government has not permitted the IMF to engage in routine surveillance of its economy. In November 2017, the IMF formally found Venezuela to be in violation of its surveillance commitments, a process that could eventually lead to Venezuela being expelled from the institution. If the international community decided to move ahead with a package for Venezuela, an immediate consideration would be how to normalize relations between the Venezuelan government and the IMF. The United States is the IMF's largest shareholder, and would likely be an influential voice in any negotiations between the IMF and Venezuela. There are also questions about how an IMF or international assistance program would be designed to maximize its effectiveness. In particular, there may be questions about whether it is appropriate for funds in an international assistance package to be used to repay Venezuela's creditors, including private bondholders and/or the Chinese and Russian governments. Some may argue that any IMF funds be contingent upon debt restructuring with private and/or official creditors. There may also be debate about the size of a potential IMF assistance package for Venezuela. Preliminary estimates suggest that Venezuela could require financial assistance of $30 billion annually, possibly for several years. Such funding levels would likely require access to IMF resources above its normal lending limits, even if IMF funds are paired with other multilateral and bilateral funding. The IMF has procedures for extending loans above its normal limits, but exceptional access to IMF resources has come under greater scrutiny following the Eurozone crisis, during which exceptional access was controversially granted to several Eurozone countries. It is not clear whether a large IMF program for Venezuela would cause similar concerns about IMF lending practices, or whether there would be broad support for a substantial program, given the magnitude of Venezuela's crisis and the difficult humanitarian situation. If there is a change in government in Venezuela, another issue that may come to the forefront is "odious debt." Odious debt is a term and concept used by those who argue that debt incurred by a prior "illegitimate" regime that is not used for the benefit of the people should not be enforceable. Although the concept dates back to the 1920s, odious debt is not included in sovereign or international law, nor has it been invoked by any country restructuring its debts following a regime change. Some policy experts, as well as members of the opposition in Venezuela, are arguing that a new Venezuelan government may have standing to declare any debts incurred by the National Constituent Assembly, which came to power through elections widely viewed as flawed and illegitimate, as odious debt. Invoking the concept of odious debt to secure debt relief, if successful, could help ease the fiscal challenges facing Venezuela, but it would be unprecedented and raise a host of legal and public policy questions. There are differing views among policy experts about whether a new Venezuelan government would pursue such a strategy and whether it would be successful. Although the economic crisis in Venezuela has been building for years, in many ways it is still in the early stages, with no clear or quick resolution on the horizon, particularly given the concurrent political crisis. The country is facing a complex set of economic challenges embedded in a volatile political context: collapsed output, inflation, and unsustainable budget deficits and debt all plague the country. The government's policy responses, including price and import controls, vague restructuring plans, and deficit spending financed by expanding the money supply (printing money), have been widely criticized as inadequate and as exacerbating the economic situation facing the country. Over the past several decades, the international community has developed processes for helping countries respond to serious economic crises. These processes usually entail an international financial assistance package, paired with debt restructuring and an IMF reform program. In the case of Venezuela, the Maduro government has no such plan in place, nor has it shown any signs of pursuing such a program. Given the political situation there, it is unlikely that the international community is inclined to do so either. There are serious questions about how long the Maduro regime can persist amid such a severe economic crisis, but in recent months Maduro appears to have increasingly consolidated political power over the opposition. In terms of U.S. policy, the Trump Administration likely increased the fiscal challenges facing Venezuela's government through sanctions restricting Venezuela's access to the U.S. financial system. However, the sanctions are a double-edged sword. The sanctions are opposed by a majority of Venezuelan people, and may have boosted support for the Maduro regime. They also restrict the ability of U.S. investors to participate in any restructuring, and U.S. investors could face substantial losses if the Maduro regime suspends payments. Some analysts have called for stronger sanctions on Venezuela to force a change in government, but others have cautioned against potential harm to both the Venezuelan people and U.S. economic interests.

Venezuela's Economic Crisis: Overview Venezuela is facing a political crisis under the authoritarian rule of President Nicolas Maduro, who appears to have continued to consolidate power over the political opposition in recent months. Underpinning Venezuela's political crisis is an economic crisis. Venezuela is a major oil producer and exporter, and the 2014 crash in oil prices, combined with years of economic mismanagement, hit Venezuela's economy hard. Venezuela's economy has contracted by 35% since 2013, a larger contraction than the United States experienced during the Great Depression. Venezuela is struggling with inflation, shortages of food and medicine, substantial budget deficits, and deteriorating living conditions with significant humanitarian consequences. In response to the Maduro regime's increasingly undemocratic actions, the Trump Administration imposed sanctions restricting Venezuela's access to U.S. financial markets in August 2017, increasing fiscal pressure on the government. In November 2017, the Venezuelan government announced it would seek to restructure its debt. The government and the state-oil company, Petroleos de Venezuela, S.A. (PdVSA), subsequently missed key bond payments, leading credit rating agencies to issue default notices. Debt restructuring is expected to be a long and complex process, and it is unclear whether Venezuela will make coming debt repayments. The outlook for the economy is bleak; the Economist Intelligence Unit forecasts the Venezuelan economy will contract by 11.9% in 2018. Implications for U.S. Economic Interests The political crisis in Venezuela and low oil prices have contributed to a contraction in U.S.-Venezuela trade. Venezuela is a relatively minor trading partner of the United States; the contraction in bilateral trade is more consequential for Venezuela, for which the United States is its largest trading partner. In response to the political and economic instability, several large U.S. companies have left Venezuela or curtailed operations there. U.S. investors holding Venezuelan and PdVSA bonds could face substantial losses if Venezuela suspends payment or seeks an aggressive restructuring of its debt. Bondholders are in the early stages of organizing to enter restructuring negotiations and/or pursue legal challenges against the Venezuelan government. Venezuelan dollar-denominated bonds were issued under New York law, and bondholder lawsuits seeking repayment would take place in U.S. courts. Legal challenges could result in the seizure of Venezuela's assets in the United States, such as CITGO (whose parent company is PdVSA), oil exports, and cash payments for oil exports. Venezuela's precarious fiscal position also raises concerns for U.S. energy security. In 2016, Venezuela's state oil company PdVSA secured a loan from the Russian state-oil company Rosneft. PdVSA used 49.9% of its shares in CITGO as collateral. If PdVSA defaults on its Rosneft loan, it is not clear whether Venezuela's portion of CITGO ownership would be transferred to Rosneft. Reportedly, Rosneft is negotiating to swap its collateral in CITGO for other PdVSA assets. Looking Ahead Congress is considering providing humanitarian aid to Venezuela through nongovernmental organizations. If the Maduro government or a new government in Venezuela engages in a significant reorientation of policy, U.S. policymakers may be interested in providing broader economic support to rebuild Venezuela's economy. Policymakers might explore how the international community, particularly the International Monetary Fund (IMF), could provide an international financial assistance package, and whether debt incurred by the National Constituent Assembly, widely viewed as an illegitimate legislature, should be enforced. If the Maduro regime stays in power and does not reorient its policies, the United States may revisit its policies and potentially pursue harsher sanctions. For additional information on Venezuela from CRS, see CRS Report R44841, Venezuela: Background and U.S. Policy; CRS In Focus IF10230, Venezuela: Political and Economic Crisis and U.S. Policy; and CRS In Focus IF10715, Venezuela: Overview of U.S. Sanctions.

The federal Lifeline program, established in 1985 by the Federal Communications Commission (FCC), assists qualifying low-income consumers to gain access to and remain on the telecommunications network. The program assists eligible individuals in paying the reoccurring monthly service charges associated with telecommunications usage. While initially designed to support traditional landline service, in 2005 the FCC expanded the program to cover either a landline or a wireless/mobile option. On March 31, 2016, the FCC adopted an Order (2016 Order or Order) to once again expand the program to make broadband an eligible service. The Lifeline program is available to eligible low-income consumers in every state, territory, commonwealth, and on tribal lands. The Universal Service Administrative Company (USAC), an independent not-for-profit corporation, established by the FCC in 1997, is the designated administrator of the Universal Service Fund (USF) and the related support programs of which the Lifeline Program is a part. USAC administers the USF programs on behalf of the FCC. As an administrative and oversight entity, USAC does not set or advocate policy, or interpret statutes, policies, or FCC rules. The Lifeline program provides a discount in most cases of up to $9.25 per month, for eligible households to help offset the costs associated with use of the telecommunications network. The program provides a subsidy for network access for one line, either a landline or wireless/mobile option, per eligible household and does not provide a subsidy for devices (i.e., handsets or customer premises equipment). The 2016 Order has expanded the scope of the program to provide subsidies for broadband adoption. The Order provides support for stand-alone mobile or fixed broadband, as well as combined bundles of voice and broadband, and sets minimum broadband and mobile voice standards for service offerings. The Order phases down and eventually eliminates support, in most cases, for stand-alone voice services. The one line per eligible household limitation and the prohibition on support for devices remain. Most providers that offer a prepaid wireless option currently offer a wireless phone to the subscriber at no charge. The cost of this device is not covered under the Lifeline program but is borne by the designated provider. Misinformation connecting the program to payment for a "free phone" has resulted in numerous queries. Yes. There are some differences in the program for those living on tribal lands. Tribal lands are defined as any federally recognized Indian Tribe's reservation, pueblo, or colony, including former reservations in Oklahoma, Alaska, Native regions, Hawaiian Home Lands, or Indian Allotments. For those providing Lifeline service to eligible consumers living on tribal lands the Lifeline program subsidy is $34.25 ($9.25 in general support plus additional support of up to $25 per month). In addition assistance programs unique to those living on tribal lands (e.g., Bureau of Indian Affairs general assistance [BIA general assistance]) may also be used to certify subscriber eligibility. Subscribers living on tribal lands are also eligible for additional assistance under the FCC's Link Up Program. This program, while established by the FCC in 1987 for the general eligible population, was restricted in 2012 solely to those residing on tribal lands. The Link Up program assists eligible subscribers to pay the costs associated with the initiation of service and provides a one-time discount of up to $100 on the initial installation/activation of the service for the primary residence. Under the program, subscribers may pay any remaining amount on a deferred schedule interest free. A subscriber may be eligible for Link Up for a second or subsequent time only when moving to a new primary residence. Link Up support is not available to all providers offering service, but only to those who are building out infrastructure on tribal lands. Therefore, eligible subscribers residing on tribal lands may receive a monthly subsidy of up to $34.25 in Lifeline support plus a one-time initiation of service discount of up to $100 for Link Up support. To participate in the program, a consumer must either have an income that is at or below 135% of the federal poverty guidelines or be enrolled in certain qualifying needs-based programs (e.g., Medicaid). USAC has an eligibility pre-screening tool available which may assist consumers in determining eligibility. Once enrolled in the program, participants are required to verify their eligibility on a yearly basis. If a program recipient becomes ineligible for the program (e.g., due to an increase in income or de-enrollment in a qualifying program) the recipient is required to contact the provider and de-enroll from the program. Failure to de-enroll can lead to penalties and/or permanent disbarment from the program. Consumers can apply for Lifeline by contacting a Lifeline program provider in his or her state or through the state-designated public service commission. To locate a state-designated provider the consumer may call USAC's toll free number (1-888-641-8722) or access USAC's website. The National Association of Regulatory Utility Commissioners (NARUC) provides a listing of contact information for state public utility commissions. The provider, selected by the enrollee, will provide a Lifeline application form, upon request, to complete. Information required includes name, address, date of birth, and the last four digits of the enrollee's social security or tribal identification number. If applying based on household income eligibility the enrollee will be required to show proof of income documentation. If applying based on program eligibility the enrollee will be required to show documentation proving program participation. (Providers are required to keep documentation demonstrating subscriber eligibility.) The provider will process the application form and enrollee information will be entered into a nationwide USAC database to verify enrollee identity and to verify that the household is not currently receiving a Lifeline program discount. The 2016 Order establishes an independent National Lifeline Eligibility Verifier (National Verifier), under the auspices of USAC, that removes the responsibility of determining Lifeline subscriber eligibility from service providers. The National Verifier will launch in six states, Colorado, Mississippi, Montana, New Mexico, Utah, and Wyoming, in December 2017, with use required for all verifications within those states by March 13, 2018. By December 31, 2018, 20 more states will join the National Verifier. By December 31, 2019, the FCC expects that all states and territories will be required to use the National Verifier to determine Lifeline eligibility. Once enrolled, participants must be recertified annually to confirm eligibility. Recertification can be done by the provider or the provider may elect for USAC to undertake the recertification on its behalf. If the provider chooses to recertify their own enrollees they may query databases that confirm that an enrollee meets program-based or income-based eligibility requirements or the provider may send the enrollee a yearly recertification letter. The letter requires the enrollee to certify that he or she is still eligible to receive the discount, and that no other household member is receiving a Lifeline discount. If no longer eligible, participants must de-enroll or will be removed from the program. Lifeline benefits are not transferable, even to other qualifying subscribers. If an enrollee is still eligible but does not meet the recertification deadline, the discount will be lost and the participant must re-enroll to regain the discount. Those enrolled under a pre-paid wireless option where there is no charge may be de-enrolled for nonusage. If the participant either does not initiate or use the service for 30 consecutive days the provider is required to automatically de-enroll the participant 15 days from notification. This gives the participant a total of 45 days in which to demonstrate usage. No. Enrollment is limited to one discount for either a landline or wireless connection, per household. A household is defined for Lifeline program eligibility as any individual, or group of individuals, who live together at the same address, that function as a single economic unit (i.e., share income and household expenses). All adult individuals (e.g., husband, wife, domestic partner, another related or unrelated adult) living at the same address that share expenses (e.g., food, living expenses) and shares income (e.g., salary, public assistance benefits, social security payments) would be considered part of a single household. If any one of these persons is enrolled in the Lifeline program no other member of that household is eligible. However it is possible that more than one household can reside in a single dwelling if they are separate economic units. Any violation of the one-per-household rule will result in de-enrollment from the program and may subject the enrollee to criminal and/or civil penalties. Providers must be certified as "eligible telecommunications carriers" to participate in the Lifeline program. That certification is given by the state or in some cases the FCC. In most cases the state public utility regulator establishes certification criteria and approves providers for participation in the program. However, for those providing service on tribal lands and in those cases where a state utility regulator does not have jurisdiction, certification is done by the FCC. A third alternative certification path for federal Lifeline Broadband Providers (LBPs), a subset of eligible telecommunications carriers, has been established as a result of the 2016 Order. Under this certification path LBP's may receive a designation from FCC staff to solely provide broadband Lifeline services to eligible subscribers and receive subsidies under the Federal Lifeline program. The LBP designation process is an alternative to the ETC process which remains in place. However, this federal designation process is currently not in use. Yes. A recipient may transfer the discount to another provider, but no more than once every 60 days for voice services and 12 months for data services. To transfer to a new provider the recipient must contact a provider that participates in the program and ask them to transfer the benefit to them. The recipient must provide selected information to verify identity (e.g., name, date of birth, address, last four digits of his or her social security number) as well as give consent acknowledging that the benefit with the previous provider will be lost and that the new provider has explained that there may not be more than one benefit per household. In most cases no service disruption should occur. Telecommunications carriers that provide interstate service and certain other providers of telecommunications services are required to contribute to the federal Universal Service Fund (USF) based on a percentage of their end-user interstate and international telecommunications revenues. These companies include wireline telephone companies, wireless telephone companies, paging service providers, and certain Voice over Internet Protocol (VoIP) providers. The USF (and its related programs including Lifeline) receives no federal monies. Some consumers may notice a "Universal Service" line item among their telephone charges. This line item appears when a company choses to recover its USF contributions directly from its subscribers. The FCC permits, but does not require, this charge to be passed on directly to subscribers. Each company makes a business decision about whether and how to assess charges to recover its universal service obligations. The charge, however, cannot exceed the amount owed to the USF by the company. No. The Lifeline program does not have a designated funding cap, or ceiling, but the 2016 Order does establish a budget-type mechanism. Funding for the Lifeline program can increase, decrease, or remain the same depending on program need as determined on a quarterly basis by USAC. According to USAC, authorized support for the Lifeline program peaked in 2012 at $2.18 billion and has continued to decline totaling $1.49 billion in 2015. The 2016 Order has established a nonbinding yearly funding ceiling of $2.25 billion, indexed to inflation. The funding ceiling for the calendar year beginning January 1, 2018, will be $2,279,250,000. The FCC has taken steps, including the following, to combat fraud, waste, and abuse in the Lifeline program: established an annual recertification requirement for participants receiving a Lifeline subsidy. The program requires those enrolled to certify, under penalty, on a yearly basis, that they are still eligible to receive the discount and that no one else in their household is receiving the Lifeline program discount; created a National Lifeline Accountability Database (NLAD) to prevent multiple carriers from receiving support for the same household; established an independent National Eligibility Verifier, under the auspices of USAC, to confirm subscriber eligibility. Prior to this the provider who received the subsidy verified subscriber eligibility; refined the list of federal programs that may be used to validate Lifeline eligibility; revised documentation retention to require providers of Lifeline service to retain documentation demonstrating subscriber eligibility; established minimum service standards for any provider that receives a Lifeline program subsidy; increased the amount and publication of program data; and undertakes enforcement actions against providers and subscribers who have broken program rules, resulting in fines and program disbarment.

The Federal Lifeline Program, established by the Federal Communications Commission (FCC) in 1985, is one of four programs supported under the Universal Service Fund. The Program was originally designed to assist eligible low-income households to subsidize the monthly service charges incurred for voice telephone usage and was limited to one fixed line per household. In 2005 the Program was modified to cover the choice between either a fixed line or a mobile/wireless option. Concern over the division between those who use and have access to broadband versus those who do not, known as the digital divide, prompted the FCC to once again modify the Lifeline program to cover access to broadband. On March 31, 2016, the FCC adopted an Order to expand the Lifeline Program to support mobile and fixed broadband Internet access services on a stand-alone basis, or with a bundled voice service. Households must meet a needs-based criteria for eligibility. The program provides assistance to only one line per household in the form of a monthly subsidy of, in most cases, $9.25. This subsidy solely covers costs associated with network access (minutes of use), not the costs associated with devices, and is given not to the subscriber, but to the household-selected service provider. This subsidy is then in turn passed on to the subscriber. The Lifeline program is available to eligible low-income consumers in every state, territory, commonwealth, and on tribal lands.

Each year, the Senate and House Armed Services Committees report their respective versions of the National Defense Authorization Act (NDAA). These bills contain numerous provisions that affect military personnel, retirees and their family members. Provisions in one version are often not included in another; are treated differently; or, in certain cases, are identical. Following passage of each by the respective legislative body, a Conference Committee is typically convened to resolve the various differences between the House and Senate versions. This year, however, a formal Conference Committee was not appointed. Rather, a final bill was drafted by leaders of the House and Senate Armed Services Committee, who also published a "joint explanatory statement" which was essentially the equivalent of a conference report. The House amended this final version into the Senate-passed version of S. 3001 , and adopted it on September 24, 2008. The Senate then approved the bill on September 27 th , clearing it for Presidential consideration. In the course of a typical authorization cycle, congressional staffs receive many constituent requests for information on provisions contained in the annual NDAA. This report highlights those personnel-related issues that seem to generate the most intense congressional and constituent interest, and tracks their status in the FY2009 House and Senate versions of the NDAA. The Duncan Hunter National Defense Authorization Act for Fiscal Year 2009, H.R. 5658 , was introduced on March 31, 2008, reported by the House Committee on Armed Services on May 16, 2008 ( H.Rept. 110-652 ), and passed by the House on May 22, 2008. The National Defense Authorization Act for Fiscal Year 2009, S. 3001 , was introduced on May 12, 2008, reported by the Senate Committee on Armed Services on that same day ( S.Rept. 110-335 ), and passed the Senate on September 17, 2008. The entries under the headings "Original House-passed version ( H.R. 5658 )" and "Original Senate-passed version ( S. 3001 )" in the following pages are based on language in these bills, unless otherwise indicated. The entries under the heading "Final version ( S. 3001 )" are based on the language of the bill negotiated by leaders of the House and Senate Armed Services Committee and amended into S. 3001 , as discussed above. Where appropriate, other CRS products are identified to provide more detailed background information and analysis of the issue. For each issue, a CRS analyst is identified and contact information is provided. Note: some issues were addressed in the FY2008 National Defense Authorization Act and discussed in CRS Report RL34169 concerning that legislation. Those issues that were previously considered in CRS Report RL34169 are designated with a " * " in the relevant section titles of this report. Background: For several years the Administration has proposed increases in co-payments and enrollment fees for retirees and their dependents who are not Medicare-eligible. The Administration argues that the growing costs of Defense health care, both in absolute terms and as a percentage of the defense budget, require efforts to seek greater contributions by users. It argues that inasmuch as Tricare Prime enrollment fees were set in 1995 and have not been raised since, it is reasonable that they should be increased. Congress has thus far refused to give DOD the requested authority to raise the fees. Discussion: The health care portion of the Defense budget has grown from $19 billion in FY2001 to over $42 billion in FY2008. Since 2006 DOD has been attempting to raise co-payment and enrollment fees for retired military personnel and their dependents who are not eligible for Medicare. (Medicare-eligible retirees can use the Tricare for Life program which would not be affected by the proposed fee increases.) DOD asserts that retirees using Tricare Prime paid approximately 27 percent of their health care costs in 1995 but now pay only 12 percent. Consistent with recommendations of the Department of Defense Task Force on the Future of Military Health Care, the proposed DOD budget for FY2009 would have gradually raised enrollment fees for those using Tricare Prime, the HMO-like option, from the current $460 (self+dependents) to 2011 rates as high as $1,750 for retirees making over $40,000 annually. DOD also proposed creating an enrollment fee for retirees who use Tricare Standard, the fee-for-service option, of $120 per year. In addition, DOD maintains that retail prescription usage and costs have contributed significantly to the growth in health care spending and recommended increases in pharmacy co-payments (along with eliminating co-payments for pharmaceuticals provided by the DOD Mail Order Pharmacy). According to DOD, these fee increases would save some $1.2 billion in FY2009. Opposition from beneficiary organizations has been strong and the Government Accountability Office concluded in May 2007 that DOD's estimates of cost savings were over-estimated. Congress has twice denied DOD authority to increase Tricare fees in FY2007 and FY2008, and has encouraged DOD to find other approaches to restraining the growth of the health care budget. Reference(s): CRS Report RS22402, Increases in Tricare Costs: Background and Options for Congress. Task Force on the Future of Military Health Care, Final Report , December 2007 http://www.dodfuturehealthcare.net/images/103-06-2-Home-Task_Force_FINAL_REPORT_122007.pdf . Government Accountability Office, Military Health Care: TRICARE Cost-Sharing Proposals Would Help Offset Increasing Health Care Spending, but Projected Savings are Likely Overestimated , May 2007 http://www.gao.gov/new.items/d07647.pdf . CRS Point of Contact (POC): Dick Best, x[phone number scrubbed]. Background: The FY2005 Ronald W. Reagan National Defense Authorization Act ( P.L. 108-375 ) established the Tricare Reserve Select program which permitted some drilling reserve personnel to utilize Tricare but required that they pay enrollment fees interpreted to be equivalent to the 28 percent charged to Federal civil servants under the Federal Employees Health Benefits Program (FEHBP). The FY2007 John Warner National Defense Authorization Act ( P.L. 109-364 ) extended the benefit to all drilling reservists. In December 2007 the Government Accountability Office (GAO) found that the premiums DOD established had actually exceeded the costs of providing the Tricare benefit. Discussion: Tricare Reserve Select (TRS) provides a health care benefit to reservists who are in drilling status and not on active duty. (Reservists called to active duty have regular Tricare benefits that have no enrollment fees.) Current monthly premiums are $81/self or $253/self+family. Enrollment in TRS has been lower than estimated, suggesting that premium rates discourage selection or that reservists have access to more affordable civilian health care options. A GAO report published in December 2007 concluded that the premiums DOD established exceeded the reported average cost of providing care through TRS. This situation resulted, according to GAO, from DOD having used FEHBP Blue Cross/Blue Shield rates as benchmarks that in practice proved to be higher than necessary to cover DOD's costs. GAO recommended that DOD base premiums on actual costs and DOD has indicated its support for that approach consistent with available cost data. Reference(s): GAO Report Military Health Care: Cost Data Indicate that TRICARE Reserve Select Premiums Exceeded the Costs of Providing Program Benefits, GAO-08-104, December 2007 http://www.gao.gov/new.items/d08104.pdf . CRS Point of Contact (POC): Dick Best, x[phone number scrubbed]. Background: Continuing combat operations in Iraq and Afghanistan have stressed the nation's armed forces, especially the Army and Marine Corps. The FY2008 NDAA supported increasing the Army end strength by 65,000 to 547,400 by FY2012 and increasing the Marine Corps end strength by 27,000 to 202,000, also by FY2012. While the Army and Marine Corps grow, the Navy remains stable and the Air Force continues manpower reductions that began in 2005 to support the recapitalization of modernized aircraft. The Air Force is projected to reduce from 359,700 in FY2005 to approximately 300,000 in FY2009. Discussion: The Army and Marine Corps have been successful, so far, in growing to meet the congressional goals. The Army plans to meet its ultimate goal of 547,400 by 2010, two years earlier than the congressional benchmark. The Secretary of Defense recently recommended that the Air Force end strength not fall below 330,000, a strength that has not yet been integrated into the FY2009 NDAA. The House version authorized 1,023 more Navy personnel and 450 more Air Force personnel above the budget request to restore military positions in the military medical community. The Senate committee version authorized 171 more Air Force personnel above the budget request to support the operation and maintenance on 76 B-52 aircraft. Reference(s): CRS Report RL31334, Operations Noble Eagle, Enduring Freedom, and Iraqi Freedom: Questions and Answers About U.S. Military Personnel, Compensation, and Force Structure , by [author name scrubbed]. CRS Point of Contact (POC): Charles Henning, x[phone number scrubbed]. Background: Ongoing military operations in Iraq and Afghanistan, combined with end strength increases and recruiting challenges, continue to highlight the military pay issue. Title 37 U.S.C. 1009 provides a permanent formula for annual military pay raises that indexes the raise to the annual increase in the Employment Cost Index (ECI). The FY2009 President's Budget request for a 3.4 percent military pay raise was consistent with this formula. Congress, in FY2004, FY2005, FY2006, and FY2008 approved the raise as the ECI increase plus 0.5 percent. The FY2007 pay raise was equal to the ECI. Discussion: A military pay raise larger than the permanent formula is not uncommon. Mid-year, targeted pay raises (targeted at specific grades and longevity) have also been authorized over the past several years. This year's proposed legislation includes no mention of targeted pay raises. Reference(s): CRS Report RL33446, Military Pay and Benefits: Key Questions and Answers , by [author name scrubbed]. CRS Point of Contact (POC): Charles Henning at x[phone number scrubbed]. Background: Chapter 15 of Title 10, sometimes referred to as the Insurrection Act, provides the President with the authority to call the militia into federal service and to use "the armed forces" to respond to certain domestic disorders, including aiding state governments in suppressing insurrection (10 USC 331), enforcing the laws of the United States and suppressing rebellion (10 USC 332), and preventing domestic violence which interferes with the execution of federal and state laws (10 USC 333). Discussion: The amendments contained in Section 591 of the H.R. 5658 would specify that the President's authority to use the armed forces to respond to these domestic disorders includes the ability to activate members of the federal reserve components (Army Reserve, Navy Reserve, Air Force Reserve, Marine Corps Reserve, and Coast Guard Reserve) and use them as part of the response effort. Activation of the Army National Guard and Air National Guard is already provided for under the original language authorizing the President to order the militia into federal service (the militia includes, but is not limited to, the National Guard). Reference(s): CRS Report RL30802, Reserve Component Personnel Issues: Questions and Answers , by [author name scrubbed]. CRS Point of Contact (POC): [author name scrubbed], x[phone number scrubbed]. Background: Section 12304 of Title 10 allows the President to activate certain reservists for a period of up to 365 days for specified purposes. This authority is commonly referred to as Presidential Reserve Call-up (PRC) authority. A subparagraph of section 12304 prohibits the President from using this authority for "providing assistance to either the Federal Government or a State in time of a serious natural or manmade disaster, accident, or catastrophe," unless responding to an certain emergencies involving weapons of mass destruction or terrorist attacks. Discussion: Section 594 of H.R. 5658 would allow the President to use PRC authority to activate Selected Reserve units from the purely federal reserve components (but not the National Guard) to respond to disasters or emergencies which met the definitions of the Stafford Act. A somewhat similar provision was passed as part of the John Warner National Defense Authorization Act for FY2007 ( P.L. 109-364 , section 1076); however, among other differences, it applied to the National Guard as well as the federal reserves and was opposed by many state governors. It was later repealed by section 1068 of P.L. 110-181 . Reference(s): CRS Report RL30802, Reserve Component Personnel Issues: Questions and Answers , by [author name scrubbed]. CRS Point of Contact (POC): [author name scrubbed], x[phone number scrubbed]. Background: Last year Congress authorized $30 million for continuation of assistance to eligible local agencies impacted by enrollment of DOD military and civilian employee dependents, and $10 million for assistance to agencies with significant changes due to base closures, force structure changes, or force relocations. Discussion: The language contained in the final version of S. 3001 is similar to last year's efforts regarding impact aid. Reference(s): CRS Report RL34169, The FY2008 National Defense Authorization Act: Selected Military Personnel Policy Issues, p. 7-8. CRS Point of Contact (POC): [author name scrubbed] at x[phone number scrubbed]. Background: Military families are relocated quite frequently during a military career. Non-military spouses seeking employment at a new duty location are often frustrated because many of the skills they have may not be portable to a new location. Often, work skills must be learned anew. It has been reported that local employers prefer a more stable workforce with less turnover and less training needed. Discussion: Although this language is permissive in nature, if implemented, spouses may be more likely to continue a career following relocation to a new duty station. Reference(s): None. CRS Point of Contact (POC): [author name scrubbed] at x[phone number scrubbed]. Background: Each service supports educational programs that permit selected members to temporarily attend civilian educational institutions and then return to the parent service without interrupting their normal career pattern. However, there is currently no program that allows an extended break in service for personal or professional reasons. Discussion: These programs, called "Career Intermission" in the House report and "Career Flexibility" in the Senate committee version, are aimed at enhancing retention by allowing personnel an opportunity to pursue other personal or professional goals. The House and Senate programs would be capped at 40 service members per year for each armed force and require a service obligation of two months for every month of program participation. Reference(s): None CRS Point of Contact (POC): Charles Henning, x[phone number scrubbed]. Background: In recent years, both Congress and the Department of Defense have shown significant interest in increasing the ability of military personnel to operate in foreign countries by enhancing their cultural knowledge and foreign language proficiency. However, building these language and cultural skills has proven challenging due to the intensive study required for mastery and the competing demands of other training and operational requirements for currently serving personnel. There is currently statutory authority to provide bonuses to those who are already proficient in designated foreign languages (37 USC 316), but not for those who are seeking to become proficient. Discussion: Section 619 of the original House-passed and Senate-passed bills both sought to improve the language skills of new officer accessions by giving them a financial incentive to study foreign languages and cultures before they begin active service. The original House provision would have also required the Secretary of Defense to establish a pilot program for currently serving reserve personnel who undertake such studies, and it permits the Service Secretaries to use such financial incentives for currently serving active and reserve personnel who pursue such studies. The original House-passed language also had a higher maximum payment cap. The final version of S. 3001 combines both of these provisions, resulting in three distinct options (one bonus authority and two incentive pay authorities) for compensating individuals who seek to acquire foreign language proficiency or cultural skills. Existing provisions of law (37 USC 353(b) and 371(b)) would prevent an individual from receiving more than one proficiency bonus or incentive pay at a time for the same period of service and skill. Reference(s): None. CRS Point of Contact (POC): [author name scrubbed], x[phone number scrubbed]. Background: Section 411h of Title 37, U.S.C., authorizes the military departments to pay travel and transportation allowances for family members of service members who are seriously injured, seriously ill, or in a situation of imminent death when the appropriate authority (physician, commander of the military medical facility concerned, for example), determines that the family's presence may contribute to the service member's health or welfare. Discussion: This Senate report language makes no change in law but suggests that the Secretary of Defense broaden the current travel and transportation policy for family members of those with serious psychiatric conditions. Reference(s): None. CRS Point of Contact (POC): [author name scrubbed], x[phone number scrubbed]. Background: Section 586 of the National Defense Authorization Act for Fiscal Year 2008 ( P.L. 110-181 ) contains the following provision: "The Secretary of Defense shall establish appropriate procedures to ensure that an adequate family care plan is in place for a member of the Armed Forces with minor dependents who is a single parent or whose spouse is also a member of the Armed Forces when the member may be deployed in an area for which imminent danger pay is authorized under section 310 of title 37, United States Code. Such procedures should allow the member to request a deferment of deployment due to unforeseen circumstances, and the request for such a deferment should be considered and responded to promptly." Discussion: Under the change proposed in H.R. 5658 , a military member with minor children who has a spouse already serving in an imminent danger pay area and facing simultaneous deployment may request a deferment to such an area until the spouse returns from such a deployment, regardless of the existence, or lack thereof, of "unforeseen circumstances." Reference(s): None. CRS Point of Contact (POC): [author name scrubbed], x[phone number scrubbed]. Background: The Department of Defense defines sole survivors as the only remaining son or daughter in a family where the father or mother, or one or more sons or daughters, while serving in the Armed Forces, was killed, died as a result of wounds, is captured or missing, or is permanently 100% disabled. Sole survivors may voluntarily enlist if they waive their right to separation as a sole surviving son or daughter but may apply for a protective assignment which precludes their assignment to an overseas area designated as a hostile-fire or imminent danger area. Enlisted service members who become sole survivors after entering the service may apply for separation. Discussion: The administrative discharge of a sole survivor is considered a voluntary separation. Under current policy, if the separation occurs prior to the completion of the initial enlistment, there are no benefits associated with the discharge. Section 651 of the Senate bill would authorize certain benefits, typically associated with involuntary separations, for sole surviving sons and daughters who elect to separate. Reference(s): CRS Report RL31334, Operations Noble Eagle, Enduring Freedom, and Iraqi Freedom: Questions and Answers About U.S. Military Personnel, Compensation, and Force Structure , by [author name scrubbed]. CRS Point of Contact (POC): Charles Henning, x[phone number scrubbed]. Background: National Guard and Reserve personnel who qualify for disability retirement or placement on the temporary disability retired list (TDRL) have their disability retired pay calculated using a formula that factors in "years of service" or disability rating, whichever is more favorable to the service member. However, unlike regular component personnel - who are on duty every day of the year and receive a year of service for each year of duty--reserve component personnel, who normally serve part-time, have their years of service calculated using a more complex formula based on their level of participation. This method sums up a reservist's participation "points" and divides by 360 to produce the number of equivalent years of active-duty service. Given the less-than-full-time nature of reserve service, this means that an individual who has been serving in the reserves for 20 years may only have four or five years of service for retired pay computation purposes. Discussion: Section 641 of H.R. 5658 would have modified the method of calculating "years of service" for reservists who become eligible for disability retirement or are placed on the TDRL based on a combat-related injury. Rather than using the reservist's participation points to calculate active-duty equivalent years of service, as is currently done, this provision would have awarded a year of service for each year in which a reservist met the minimum participation standard of 50 points. Hence, under this provision, a reservists with 20 qualifying years of reserve service would have been awarded 20 years of service for his disability retired pay computation. It would have benefitted some combat-injured reservists, particularly those with a modest disability rating (30-40%) but many years of reserve service. Reference(s): CRS Report RL30802, Reserve Component Personnel Issues: Questions and Answers , by [author name scrubbed]. CRS Point of Contact (POC): [author name scrubbed], x[phone number scrubbed]. Background: The House Committee notes that there have been a number of recent incidents in which individuals have fraudulently claimed to have been awarded the Congressional Medal of Honor or other decorations of valor. The committee believes that false claims reduce the prestige of these decorations and that the valor of these decorations could be preserved if the general public had access to a searchable database listing individuals and the decorations for valor they have been awarded. Discussion: The House bill's report language is exploratory in nature. It is expected that this would discourage false claims as such a list would allow for easy verification of their validity. Such a database may raise privacy issues. Reference(s): None. CRS Point of Contact (POC): [author name scrubbed], x[phone number scrubbed]. Background: On May 12, 1975, in the aftermath of the Vietnam War (approximately two weeks after the fall of Saigon), a U.S. merchant ship, S.S. Mayaguez, was seized by the Khmer Rouge Navy. Thirty-nine sailors were captured and taken to the island of Koh Tang. A rescue operation was mounted and the battle began on May 15. By most accounts, the result was a failure with four U.S. helicopters shot down or disabled and 41 Marines killed. Ironically, the number killed outnumbered the number of sailors captured by the Khmer Rouge. Shortly thereafter, all 39 sailors were released. Discussion: This language in H.R. 5658 would authorize the Vietnam Service Medal for participants in the Mayaguez rescue. It is not clear what other benefits, if any, would accrue from recognizing these individuals in this manner. Reference(s): None. CRS Point of Contact (POC): [author name scrubbed], x[phone number scrubbed]. Background: Chapter 80 of Title 10 United States code is concerned with "Miscellaneous Investigation Requirements and Other Duties." It includes provisions concerning complaints of sexual harassment, civilian orders of protection and domestic violence data. Discussion: The intent of these provisions is to maintain a protective order until it has been officially resolved and to ensure that civilian authorities are aware of such orders when the individual(s) involved do not reside on a military installation. Reference(s): None. CRS Point of Contact (POC): [author name scrubbed], x[phone number scrubbed]. Background: Over the years reports of sexual assault involving military personnel have brought about a number of reforms, including changes in the Uniformed Code of Military Justice, training, and creation of the Defense Incident Based Reporting System which tracks criminal acts, especially sex crimes, and reports these data to the Justice Department. Discussion: This language would provide more centralized, more detailed and arguably better reporting of sexual assault incidents in the Armed Forces. Reference(s): None. CRS Point of Contact (POC): [author name scrubbed] at x[phone number scrubbed]. Background: At present, when a member of the armed forces becomes the father of a child and wishes to take time off for paternity purposes, he uses his regular leave. Such leave accumulates at the rate of 2 1/2 days per month of active service. Discussion: The language in the final version would provide a new type of leave for paternity purposes, which would be in addition to the service member's regular leave. It would apply only to children born on or after the date of enactment. Reference(s): None. CRS Point of Contact (POC): [author name scrubbed], x[phone number scrubbed] Background: Under 10 USC 1482(a), when a member of the armed forces dies in service, a burial flag is presented to the person designated to direct disposition of the remains and to the parents of the service member. Discussion: The House and Senate-passed bills both proposed authorizing the provision of a burial flag to a surviving spouse if someone else is authorized to direct the disposition of remains; the Senate-passed bill also allowed for providing a flag to the surviving children of the decedent. The final version of the bill permits a burial flag to be presented to the surviving spouse and each surviving child. Reference(s): CRS Report RL32769, Military Death Benefits: Status and Proposals , by [author name scrubbed] and [author name scrubbed]. CRS Point of Contact (POC): [author name scrubbed], x[phone number scrubbed]. Background: Current DOD policy requires a minimum of four months following the birth of a child before a military mother can be assigned to a dependent-restricted or unaccompanied tour. The Secretary of the military department has the authority to extend that time. The Army and the Air Force provide a minimum of four months, while the Marine Corps defers for six months and the Navy for up to one year. Discussion: The Senate report directs the Secretary of Defense to describe changes to DOD or service policies as the result of this review. Reference(s): None. CRS Point of Contact (POC): [author name scrubbed] at x[phone number scrubbed]. Background: The Survivor Benefit Plan (SBP) provides annuities to the surviving spouse, children, former spouse, or spouse/former spouse and children. If a spouse or former spouse remarries before age 55, SBP annuities cease. Children remain eligible until age 18 or 22, if a full-time student. An eligible child who marries loses SBP. If a spouse is eligible to receive benefits under the Veterans Affairs Dependency and Indemnity Compensation (DIC), the SBP is offset or reduced on a dollar- for-dollar basis. A surviving spouse of a service member killed in the line of duty is eligible to receive both SBP and DIC. To avoid the offset, Congress allowed survivors in this example to designate their children as SBP beneficiaries, allowing the surviving spouse to receive VA's DIC. Discussion: Essentially, this House language would return eligibility for SBP to a surviving spouse or former spouse, who allowed the dependent child or children to be designated as SBP beneficiaries to avoid the SBP/DIC offset, following the termination of the remarriage and the end of eligibility for the child or children. Reference(s): CRS Report RL31664, The Military Survivor Benefit Plan: A Description of Its Provisions , by [author name scrubbed]. CRS Point of Contact (POC): [author name scrubbed], x[phone number scrubbed]. Background: A Survivor Benefit Plan (SBP) eligible spouse who is eligible for Dependency and Indemnity Compensation will have his or her SBP reduced or offset on a dollar-for-dollar basis by Dependency and Indemnity Compensation (see previous page). For certain beneficiaries affected by the offset, section 644 of the National Defense Authorization Act for Fiscal Year 2008, created a new survivor indemnity allowance to be paid to survivors of service members who are entitled to retired pay, or would be entitled to reserve component retired pay but for the fact they were not yet 60 years of age. This monthly allowance, effective October 1, 2008, would be $50, and would increase annually by $10 through FY2013. Discussion: This final version of S. 3001 provides additional benefits to offset-affected survivors of active duty service members. Reference(s): CRS Report RL31664, The Military Survivor Benefit Plan: A Description of Its Provisions , by [author name scrubbed]. CRS Point of Contact (POC): [author name scrubbed], x[phone number scrubbed]. Background: The National Defense Act for Fiscal Year 1997 ( P.L. 104-201 , September 23, 1996, 110 Stat. 2489) contained language that prohibited the sale of sexually explicit material on military installations. An eight-member board (Resale Activities Board of Review) was established to review materials for resale. Once the board determined that an item was 'sexually explicit,' it was removed and not available for resale or rental on military installations. The review board reviewed 473 titles in 1998 and determined 319 to be sexually explicit. In May, 2006, the board reversed its decision with regard to Playgirl and Penthouse. A Christian group (Alliance Defense Fund) wrote a letter to Secretary of Defense Robert Gates protesting the sale of these and other items. Discussion: The House language would re-establish the existing review board and modifies its composition. Its intent grew out of efforts to ban particular items for rental or resale. This provision was included in the final version. Reference(s): None. CRS Point of Contact (POC): [author name scrubbed], x[phone number scrubbed]. Background: JROTC is a federal program sponsored by the Armed Forces in high schools to instill the values of citizenship, service to the nation, personal responsibility and a sense of accomplishment. Current law does not establish a minimum or maximum number of JROTC programs for the Department of Defense or the Services. However, there are approximately 3,300 JROTC units currently operating in high schools and overseas in the Department of Defense School System. Discussion: JROTC was created in 1916 and the program has been expanded several times. While generally viewed as a positive influence on high school youth, some have criticized the program as a military recruiting tool for the Services or a program that tends to militarize schools. Reference(s): None. CRS Point of Contact (POC): Charles Henning at x[phone number scrubbed].

Military personnel issues typically generate significant interest from many Members of Congress and their staffs. Ongoing military operations in Iraq and Afghanistan in support of what the Bush Administration terms the Global War on Terror, along with the emerging operational role of the Reserve Components, further heighten interest and support for a wide range of military personnel policies and issues. The Congressional Research Service (CRS) selected a number of the military personnel issues that Congress considered as it deliberated the National Defense Authorization Act for FY2009. In each case, this report provides a brief synopsis of sections that pertain to personnel policy. It includes background information and a discussion of the issue, along with a table that contains a comparison of the bill (H.R. 5658) passed by the House on May 22, 2008, the bill (S. 3001) passed by the Senate on September 17, 2008, and the final version (S. 3001) passed by the House on September 24, 2008 and by the Senate on September 27, 2008. Where appropriate, other CRS products are identified to provide more detailed background information and analysis of the issue. For each issue, a CRS analyst is identified and contact information is provided. Note: some issues were addressed in the FY2008 National Defense Authorization Act and discussed in CRS Report RL34169 concerning that legislation. Those issues that were previously considered in CRS Report RL34169 are designated with a "*" in the relevant section titles of this report. This report focuses exclusively on the annual defense authorization process. It does not include appropriations, veterans' affairs, tax implications of policy choices or any discussion of separately introduced legislation. This report will be updated as needed.

Congressional office spending has been a regular topic of interest to academics, interest groups, newspapers, and constituents for many years. It is a topic frequently mentioned in newspaper articles that address individual Member spending or generally discuss financial accountability among elected officials, and it has been examined by watchdog organizations and interest groups covering congressional spending on internal operations generally. A few scholars have also examined how Members typically spend their office allowances, analyzing spending within broader theories of representation. Individual office spending may be as varied as the districts Members represent. Factors affecting spending include the tenure or interests of the Member, levels of casework, geography, unexpected events, and even the congressional calendar. While Representatives have a high degree of flexibility to operate their offices in a way that supports their congressional duties and responsibilities, they must operate within a number of restrictions and regulations. The Members' Representational Allowance (MRA), the allowance provided to Members of the House of Representatives to operate their DC and district offices, may only support Members in their official and representational duties. It may not be used for personal or campaign purposes. Additional regulations or restrictions regarding reimbursable expenses may be promulgated by the Committee on House Administration, the Commission on Congressional Mailing Standards, also known as the Franking Commission, and the Committee on Standards of Official Conduct, and may be found in a wide variety of sources, including statute, House rules, committee resolutions, the Members' Handbook , the Franking Manual, the House Ethics Manual, "Dear Colleague" letters, and formal and informal guidance. This report provides a history of the MRA and overview of recent developments. It also demonstrates actual MRA spending patterns in recent years for all voting Members who served for a defined period. Spending and practices across offices and across time vary, and an examination of additional Congresses would be required for a more complete picture of congressional office spending patterns. The MRA, which was first authorized in 1996, was preceded by multiple allowances for each Member covering different categories of spending--including the former clerk hire allowance, official expenses allowances, and official mail allowance. The establishment of the MRA followed efforts by the House, dating back to the late 1970s, to move to a system of increased flexibility and accountability for Member office operations. In September 1995, the Committee on House Administration authorized the consolidation of these allowances. Subsequently, in November 1995, the FY1996 Legislative Branch Appropriations Act combined the separate appropriations for personal office staff, official office expenses, and mail costs into a single new appropriations heading, "Members' Representational Allowances." According to the House Appropriations Committee report on the FY1996 bill, the consolidation was adopted to simplify Members' accounting practices and allowed Members to more easily show savings achieved when they did not spend all of their allowance. Subsequent legislation in 1996 further defined the MRA and made it subject to regulations and adjustments adopted by the Committee on House Administration. Additional provisions included in the FY2000 Legislative Branch Appropriations Act amended language regarding official mail and repealed obsolete language and terms. Since the MRA's establishment, appropriations acts funding the legislative branch have contained--or continued, in the case of a continuing resolution--a provision requiring unused amounts remaining in the MRA be used for deficit reduction or to reduce the federal debt. This provision was included in legislative branch appropriations bills reported by the House Appropriations Committee in FY1999 and since FY2002. In some years prior to consideration of FY2002 funding, it was added by amendment, including H.Amdt. 458 (403-21, Roll no. 415) to H.R. 1854 , 104 th Congress (Legislative Branch Appropriations Act, 1996); H.Amdt. 1245 (voice vote) to H.R. 3754 , 104 th Congress (Legislative Branch Appropriations Act, 1997); H.Amdt. 287 (voice vote) to H.R. 2209 , 105 th Congress (Legislative Branch Appropriations Act, 1998); H.Amdt. 166 (voice vote) to H.R. 1905 , 106 th Congress (Legislative Branch Appropriations Act, 2000); and, H.Amdt. 865 (voice vote) to H.R. 4516 , 106 th Congress (Legislative Branch Appropriations Act, 2001). In addition to the appropriations language, numerous bills and resolutions addressing the MRA have been introduced (for examples, see tables in the Appendix ). This legislation has generally fallen into three major categories: Attempts to change the MRA procedure or regulate, prohibit, authorize, disclose, or encourage the use of funds for a particular purpose. Stand-alone legislation that would govern the use of unexpended balances, including language to require these funds to go toward deficit reduction. Bills or resolutions that would limit or change the g rowth of overall MRA or adjustment among Members. MRA-related amendments have also been offered to the legislative branch appropriations bills. These include H.Amdt. 213 , which was offered to H.R. 3219 , the FY2018 legislative branch appropriations bill, increasing funding for the Government Accountability Office, offset by a reduction in the Members' Representational Allowance, which failed by voice vote. H.Amdt. 214 , which was offered to H.R. 3219 , the FY2018 legislative branch appropriations bill, relating to the use of the Members' Representational Allowance for Member security, was agreed to by voice vote. H.Amdt. 642 , which was offered to H.R. 4487 , the FY2015 Legislative Branch Appropriations Act, on May 1, 2014. This amendment, which would have prohibited the use of the MRA for leased vehicles, excluding mobile district offices and short-term vehicle rentals, was not agreed to by a recorded vote (Roll no. 188). H.Amdt. 1284 , which was offered to H.R. 5882 , the FY2013 Legislative Branch Appropriations Act, on June 8, 2012. This amendment, which would have prohibited paid advertisements on any internet site other than an official site of the Member, leadership office, or committee involved, was not agreed to by a recorded vote (Roll no. 375). H.Amdt. 708 , which was offered to H.R. 2551 , the FY2012 Legislative Branch Appropriations Act, on July 21, 2011. The amendment, which prohibited the use of funds to make any payments from any MRA for the leasing of a vehicle in an amount that exceeds $1,000 in any month, was agreed to by voice vote. This language was included in P.L. 112-74 and subsequent legislative branch appropriations acts. H.Amdt. 709 and H.Amdt. 710 , which also proposed restrictions on the MRA, failed by voice vote. Funding is provided on a fiscal year (beginning October 1) basis and a single total amount for all Members is provided under the appropriations heading, "Members' Representational Allowances," within the House account "Salaries and Expenses" contained in the annual legislative branch appropriations bills. Allowance or authorization levels for individual Members of the House are authorized in statute and are regulated and adjusted by the Committee on House Administration pursuant to 2 U.S.C. 4313 et seq. and House Rule X(1)(j). The individual MRAs for the 441 Members, Delegates, and the Resident Commissioner are authorized for periods that correspond closely to the sessions of Congress--from January 3 of each year through January 2 of the following year. In addition to the complexity involved in different time frames and split responsibilities--with the appropriation on a fiscal year determined by the Committee on Appropriations, and the authorization roughly following the calendar year as allocated by the Committee on House Administration--the House has indicated that the total authorized level for all MRAs may be more than the total appropriation due to projections on spend-out rates. The FY1997 report accompanying the legislative branch appropriations bill, for example, stated Many Members do not expend their full allowance. That is why the Committee bill does not fully fund this account. The frugality of those Members is already projected in the bill presented by the Committee. Since these prospective savings are already taken in the bill, they reduce the need for appropriated funds and, therefore, contribute directly to the reduction in federal spending and consequently lower the projected deficit. If the Committee bill were to fully fund the Members' Representational Allowance, the amount appropriated would have to be increased by $27 million. Thus, the account is underfunded by almost 7%. A similar discussion of the use of prior spending patterns in the determination of MRA appropriations levels was included in numerous other House reports, particularly in the first few years of the MRA. It was also discussed during a hearing on the FY2009 legislative branch appropriations requests. Pursuant to law, late-arriving bills may be paid for up to two years following the end of the MRA year. The permissibility of payment for late-arriving bills does not provide flexibility in the timing of the obligation, a point emphasized in the Members' Congressional Handbook , which states: "all expenses incurred will be charged to the allowance available on the date the services were provided or the expenses were incurred" and the "MRA is not transferable between years." The MRA is funded in the House "Salaries and Expenses" account in the annual legislative branch appropriations bills. One single line-item provides funding for all Members' MRAs. The MRA funding level peaked at $660.0 million in FY2010. It was subsequently reduced to $613.1 million in FY2011 (-7.1%), and then to $573.9 million in FY2012 (-6.4%). The FY2012 funding level was continued in the FY2013 continuing resolution ( P.L. 113-6 ), not including sequestration or an across-the-board rescission (-5.2%). The FY2014 level of $554.3 million was continued in the FY2015 act ( P.L. 113-235 ) and the FY2016 act ( P.L. 114-113 ). At an April 20, 2016, markup of the FY2017 bill, the House Appropriations Committee Legislative Branch Subcommittee recommended a continuation of this level. At the May 17, 2016, full committee markup, an amendment offered by Representative Farr to increase this level by $8.3 million, to $562.6 million (+1.5%), was agreed to. This level was included in the House-passed FY2017 bill ( H.R. 5325 ). H.R. 5325 was not enacted, however, this increase was provided in the Consolidated Appropriations Act, 2017 ( P.L. 115-31 ), which was enacted on May 5, 2017. The FY2017 level was continued for FY2018. The FY2019 level of $573.6 million represents an increase of $10.998 million (+2.0%). This funding is separate from an allowance for interns in Member offices ($8.8 million was provided in the FY2019 legislative branch appropriations act for up to $20,000 per office). Figure 1 shows the appropriation for the overall MRA account for all Members from FY1996 through FY2019 in current and constant dollars. The FY2019 funding level is approximately equivalent to the funding level provided when the account was established in FY1996, when adjusted for inflation; approximately 6% below the $609.0 million provided in FY2009, not adjusted for inflation; and approximately 13% below the peak funding provided in FY2010, not adjusted for inflation. Figure 1 also shows that the MRA is the largest category of appropriations within the House of Representatives, regularly comprising approximately 50% of House appropriations. The MRA for each Member is set by the Committee on House Administration based on three components: personnel, official office expenses, and official (franked) mail. The personnel allowance component is the same for each Member. The office expenses and mail allowances components vary from Member to Member. The office expense component includes a base amount; a mileage allowance, which is calculated based on the distance between a Member's district and Washington, DC; and an office space allowance, which is based on the cost of office space in a Member's district. The official mail component is calculated based on the number of nonbusiness addresses in a Member's district. The three components result in a single MRA authorization for each Representative that can be used to pay for official expenses. Table 1 demonstrates the variation in authorization levels that resulted from this formula since 1996. Figure 2 presents this information graphically. In the 112 th Congress (2011-2012), the House agreed to H.Res. 22 , which reduced the amount authorized for salaries and expenses of Member, committee, and leadership offices in 2011 and 2012. This resolution, agreed to on January 6, 2011, stated that the MRA allowances for these years may not exceed 95% of the amount established for 2010. Individual MRAs, which reflect authorized levels from January 3 of each year through January 2 of the following year, subsequently were reduced, resulting in a total reduction of 11.08% from 2010 to 2012. Individual authorization levels for 2013 (January 3, 2013-January 2, 2014), which were affected by both redistricting and sequestration, were reduced by a total of 8.2% according to the Statement of Disbursements . For legislative year 2014 (January 3, 2014-January 2, 2015), each Member's MRA increased by 1%. The FY2015 MRA appropriations level remained unchanged from FY2014, and Members' individual allowances were continued from legislative year 2014 to 2015. The FY2016 MRA appropriations level remained unchanged from FY2014 and FY2015, although Members' individual allowances for legislative year 2016 were increased by 1.0%. The FY2017 MRA appropriations level increased by +1.5% from FY2016. According to the Statement of Disbursements , each Member's authorization for 2017 was increased "by approximately 3.9% of the average MRA." This resulted in an average increase of approximately $47,000. A shooting on June 14, 2017, at a practice for the Congressional Baseball Game, which wounded one Member of Congress, two U.S. Capitol Police (USCP) officers, and two members of the public in Alexandria, VA, had an impact on consideration of MRA funding for FY2018. The report accompanying the legislative branch appropriations bill ( H.R. 3162 ), in addition to addressing funding for the Capitol Police and the House Sergeant at Arms, indicated that the Appropriations "Committee has provided resources necessary to support the Committee on House Administration's plan to increase Member's Representational Allowance (MRA) by $25,000 per account this year for the purpose of providing Member security when away from the Capitol complex." The House approved the MRA authorization increases when it agreed to H.Res. 411 , by unanimous consent, on June 27, 2017. As stated above, during consideration in the House of the FY2018 legislative branch appropriations bill ( H.R. 3219 ) on July 26, 2017, two amendments related to the MRA were offered: H.Amdt. 214 was agreed to by voice vote, and H.Amdt. 213 failed by voice vote. Subsequently, on July 28, 2017, House Sergeant at Arms Paul D. Irving issued a "Dear Colleague" letter announcing that his office "will assume the cost of and oversee future District Office security upgrades, maintenance, and monthly monitoring fees." These upgrades were previously supported through the MRA. On August 15, 2017, the Committee on House Administration issued a "Dear Colleague" letter announcing updates to the Members' Congressional Handbook incorporating these and other changes. The MRA remains available for security measures necessitated by official duties as discussed in the letter and the Handbook . The FY2018 act continued the FY2017 level of $562.6 million. According to the Statement of Disbursements , the "Members' Representational Allowance for 2018 utilizes each Member's 2017 amount and increases that amount by $25,000." Expenses related to official and representational duties are reimbursable under the MRA in accordance with the regulations contained in the Members' Congressional Handbook . The Handbook , for example, states that a Member is personally responsible for the payment of any official and representational expenses incurred that exceed the provided MRA or that are incurred but are not reimbursable under these regulations. Certain expenses, including personal expenses, greeting cards, alcoholic beverages, and most gifts and donations, are also not reimbursable. The MRA is not transferable between years, and unspent funds from one year cannot be obligated in any subsequent year. Other limitations on the use of official funds are also contained in House Rule XXIV. "Dear Colleague" letters--which are distributed among Members, committees, and officers--frequently mention the MRA. These "Dear Colleague" letters have announced changes in the dissemination of information or the processing of vouchers, elaborated on procedures, reminded Members and staff of guidelines on the use of funds, and asked for support for MRA legislation. The Committee on House Administration, for example, has distributed regular annual "Dear Colleagues" announcing or explaining regulations, such as those pertaining to end-of-year expenses, district office space, and travel. Other letters have been issued regarding allowable franking and MRA expenses for the annual Congressional Art Competition or travel for a Member's funeral service, as well as reminders of prohibited expenses. The letters have explained the implication of new regulations, rulings, or decisions on MRA spending. They also have summarized changes to the Statement of Disbursement s . House spending is categorized by the standard budget object classes used for the federal government. These may include personnel compensation; personnel benefits; travel; rent, communications, and utilities; printing and reproduction; other services; supplies and materials; transportation of things; and equipment. The disbursement volumes also contain a category for franked mail. Certain costs are not included in the MRA and will not be reflected in these totals. The costs include the salaries of Members and certain benefits--including any government contributions toward health and life insurance and retirement--for both Members and staff. Additionally, the range of items that may be covered by an office, as well as staff pay ceilings, have changed over time. The MRA also does not reflect spending by House officers and legislative branch agencies in support of Member offices. The Statements of Disbursements are published as House documents and were historically available in bound volumes. Beginning with the disbursements for the quarter ending September 30, 2009, the Statements have been posted on the House of Representatives website, House.gov. Beginning with disbursements covering January-March 2016, this website provides SOD information in a sortable CSV (comma-separated values) format. This section examines the use of the MRA in practice in recent years. Disbursement information for each authorization year may appear in Statements for 12 quarters, since, as discussed above, late-arriving bills may be paid for up to two years following the end of the MRA year (although unspent funds from one year cannot be obligated in any subsequent year). For example, while Members could only obligate 2011 MRA expenditures from January 3, 2011, until January 2, 2012, late-arriving receipts could be paid through the quarter ending December 31, 2013. While some bills, particularly from outside vendors, may be settled up to eight quarters after the end of the MRA year, the vast majority of billing occurs during the session or in the quarter immediately following the close of the MRA year. Billing for some categories--like personnel compensation--is almost entirely within the disbursements for the calendar year of study. By examining volumes from subsequent quarters, in addition to those from the authorization year, it is possible to provide a more complete picture of spending patterns. Numerous characteristics of individual congressional districts or Member preferences can influence spending priorities, which is reflected in the flexibility provided to Members in establishing and running their offices. Despite some variations, the data, however, show a relative consistency in the overall allocation of MRA resources by category of spending both across Members and over time. Table 2 provides a distributional analysis of office-level data. As with the figures on House-wide total Member office spending in Figure 3 , the office-level data indicate that personnel compensation is by far the largest category of expense for Member offices. Spending on personnel as a percentage of total spending varied (as seen in the differences between the maximum and minimum percentages), but many offices clustered near the mean (i.e., the median and mean were close in all years). Data on other categories of spending also demonstrate that, while variations exist across offices, similar patterns have developed across the House. Table 3 shows spending as a proportion of the total individual authorization. Figure 3 demonstrates aggregate House spending in these years. As with the data on office-level spending in Table 2 , the aggregate data indicate that personnel compensation is the largest category of MRA-related expenses.

Members of the House of Representatives have one consolidated allowance, the Members' Representational Allowance (MRA), with which to operate their offices. The MRA was first authorized in 1996 and was made subject to regulations and adjustments of the Committee on House Administration. Representatives have a high degree of flexibility to use the MRA to operate their offices in a way that supports their congressional duties and responsibilities, and individual office spending may be as varied as the districts Members represent. The appropriation for the MRA decreased from a high in FY2010 of $660.0 million to $554.7 million in FY2014, FY2015, and FY2016. For FY2017, the MRA level was increased by $8.3 million, to $562.6 million (+1.5%). This level was continued for FY2018. The FY2019 level of $573.6 million represents an increase of $10.998 million (+2.0%). The reduction in the overall MRA appropriation from its FY2010 peak has corresponded with a reduction to the individual MRA authorization for each Member, which is available for expenses incurred from January 3 of each year through January 2 of the following year. In the 112th Congress, the House agreed to H.Res. 22, which reduced the amount authorized for salaries and expenses of Member, committee, and leadership offices in 2011 and 2012. This resolution, agreed to on January 6, 2011, stated that the MRA allowances for these years may not exceed 95% of the amount established for 2010. Individual MRAs were further reduced 6.4% in 2012 and 8.2% in 2013, before increasing 1.0% in 2014 and remaining flat in 2015. The 2016 allowances increased by 1.0%. The individual 2017 allowances initially increased by 3.9% from 2016, and then by another $25,000 when the House agreed to H.Res. 411. In 2018, individual allowances were increased by $25,000. Information on individual office spending is published in the quarterly Statements of Disbursements of the House (SOD), which has been made available online since 2009. Beginning with disbursements covering January-March 2016, this website provides SOD information in a sortable CSV (comma-separated values) format. In addition to recurring administrative provisions in the annual appropriations acts requiring unused amounts remaining in the MRA be used for deficit reduction or to reduce the federal debt, numerous bills and resolutions addressing the MRA have been introduced. This legislation has generally fallen into three major categories: (1) attempts to change the MRA procedure or regulate, authorize, or encourage the use of funds for a particular purpose; (2) stand-alone legislation that would govern the use of unexpended balances, including language to require these funds to go toward deficit reduction; and (3) bills that would limit or change the growth of overall MRA or adjustment among Members. This report provides a history and overview of the MRA and examines spending patterns in recent years. The data exclude nonvoting Members, including Delegates and the Resident Commissioner, as well as Members who were not in Congress for the entirety of the session. Information is provided on total spending and spending for various categories, including personnel compensation; travel; rent, utilities, and communications; printing and reproduction; other services; supplies and materials; equipment; and franked mail. The data collected demonstrate that, despite variations when considering all Members, many Members allocate their spending in a similar manner, and spending allocation patterns have remained relatively consistent over time.

Some Members of Congress have expressed interest in the judicial award of remedies for patent infringement for more than a decade. Several bills introduced in previous sessions of Congress proposed refor ms to damages and injunctions principles in patent law. These bills were not enacted, however, and the changes made by the Leahy-Smith America Invents Act (AIA), P.L. 112-29 , were more limited. Still, concerns over the availability of remedies for patent infringement remain, as evidenced by the introduction of legislation in the 115 th Congress addressing the award of injunctions. Current law calls for the award of monetary damages against adjudicated infringers at an amount adequate to compensate for the infringement, but in no event less than a reasonable royalty. It also allows courts to increase the amount of damages up to three times that amount. Courts are also authorized to grant injunctions in "accordance with the principles of equity." In addition, attorney fees may be awarded in "exceptional cases." Persistent concerns have arisen over whether judicial remedies for patent infringement are predictable and appropriate in view of the patent owner's inventive contribution. For example, determinations of the appropriate level of damages and whether an injunction should be awarded become more complex when the patented invention forms just one feature of a complex, multi-component device, such as a cellular telephone. In addition, many commercialized products implicate hundreds or thousands of patents, in addition to those asserted in a particular litigation, and are owned by numerous unrelated enterprises. Accounting for "royalty stacking" may prove to be a difficult matter in particular cases. Other observers assert that the more routine award of attorney fees to the prevailing party would discourage what they view as abusive assertions of patent rights. This report reviews the current state of the law of patent remedies and surveys reform proposals that have come before Congress. It begins with a brief review of the basic workings of the patent system. The report then considers the award of compensatory damages for patent infringement, attorney fees, and enhanced damages. It then considers the special damages rules for design patents and reviews the law of injunctions. Individuals and firms must prepare and submit applications to the U.S. Patent and Trademark Office (USPTO) if they wish to obtain patent protection. USPTO officials, known as examiners, then assess whether the application merits the award of a patent. Under the Patent Act of 1952, a patent application must include a specification that so completely describes the invention that skilled artisans are able to practice it without undue experimentation. The Patent Act also requires that applicants draft at least one claim that particularly points out and distinctly claims the subject matter that they regard as their invention. While reviewing a submitted application, the examiner will determine whether the claimed invention fulfills certain substantive standards set by the patent statute. Two of the most important patentability criteria are novelty and nonobviousness. To be judged novel, the claimed invention must not be fully anticipated by a prior patent, publication, or other knowledge within the public domain. The sum of these earlier materials, which document state-of-the-art knowledge, is termed the "prior art." To meet the standard of nonobviousness, an invention must not have been readily within the ordinary skills of a competent artisan based upon the teachings of the prior art. If the USPTO allows the application to issue as a granted patent, the owner or owners of the patent obtain the right to exclude others from making, using, selling, offering to sell, or importing into the United States the claimed invention. The term of the patent is ordinarily set at twenty years from the date the patent application was filed. Patent title therefore provides inventors with limited periods of exclusivity in which they may practice their inventions, or license others to do so. The grant of a patent permits inventors to receive a return on the expenditure of resources leading to the discovery, often by charging a higher price than would prevail in a competitive market. A patent proprietor bears responsibility for monitoring its competitors to determine whether they are using the patented invention. Patent owners who wish to compel others to observe their intellectual property rights must usually commence litigation in the federal courts. Although issued patents enjoy a presumption of validity, accused infringers may assert that a patent is invalid or unenforceable on a number of grounds. The U.S. Court of Appeals for the Federal Circuit (Federal Circuit) possesses national jurisdiction over most patent appeals. The U.S. Supreme Court retains discretionary authority to review cases decided by the Federal Circuit. A court may subject adjudicated patent infringers to several remedies that are awarded to the victorious patent proprietor. These remedies include injunctions, monetary damages, and attorney fees. The Patent Act also allows for damages to be increased up to three times for cases of willful infringement. In contrast to copyrights and trademarks, criminal sanctions do not apply to patent infringement. The Patent Act succinctly provides for the award of damages "adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use of the invention made by the infringer." In practice, patent proprietors seek to obtain their lost profits as damages when they are able to provide appropriate evidence. Otherwise a reasonable royalty serves as the default measure of damages. A patent proprietor may obtain damages based upon its lost profits if it can demonstrate that "but for" the infringement, it would have made the infringer's sales. Such an analysis must be supported by "sound economic proof of the nature of the market and likely outcomes with infringement factored out of the economic picture." For example, a patent proprietor may obtain lost profit damages if it can demonstrate that (1) the patented invention was in demand; (2) no acceptable noninfringing substitutes were available; (3) the patent proprietor possessed the manufacturing and marketing ability to exploit the demand; and (4) the amount of profit the patent proprietor would have made. If the patent proprietor cannot demonstrate entitlement to its lost profits, then it may claim damages in the form of a reasonable royalty. To determine this amount, courts typically use one of two approaches. The first, the so-called "analytical approach," provides the patent proprietor with a percentage of the infringer's profits. The second, more common approach is based upon a hypothetical negotiation. Under this technique, the reasonable royalty is set to the rate a willing patent proprietor and willing licensee would have decided upon had they negotiated the license on the date the infringement began. Courts consider many factors when determining the outcome of the hypothetical negotiation. The often cited opinion in Georgia-Pacific Corp. v. United States Plywood Corp. provides a fifteen-factor list. Actual royalty rates charged by the patent proprietor, or paid by the adjudicated infringer on comparable patents, will be considered if such evidence is available. Other factors include the advantages of the patented invention, the availability of noninfringing substitutes, the infringer's expected profits, the commercial relationship between the patent proprietor and the infringer, and industry licensing practices. For many years, reasonable royalty determinations were guided by the so-called "25% Rule." Under this principle, 25% of the infringer's profits serve as the baseline determinant for reasonable royalty damages. However, in its 2011 decision in Uniloc USA, Inc. v. Microsoft Corp ., the Federal Circuit rejected the 25% Rule. The Federal Circuit explained that the 25% Rule failed to tie a reasonable royalty base to the facts of the case at issue, even when used as a starting point. "Beginning from a fundamentally flawed premise and adjusting it based on legitimate considerations specific to the facts of the case nevertheless results in a fundamentally flawed conclusion," the Court of Appeals explained. The Patent Act limits recovery to six years prior to the filing of a complaint or counterclaim for patent infringement. For example, suppose that an inventor obtained a patent on May 1, 2007. A competitor began infringing the patent on June 1, 2008, but the inventor did not bring a suit for patent infringement until July 1, 2017. Under these facts, the period for which the inventor may recover infringement damages commences on July 1, 2011. Note that courts will ordinarily award prejudgment interest on such awards in order to compensate the patent proprietor fully for harms suffered during that six-year period, however. The availability of damages may also be limited under the so-called "marking" statute. The Patent Act encourages patent proprietors and their licensees to affix the word "patent" or the abbreviation "pat.," along with the number of the patent, on patented articles or their packaging. Alternatively, the patent holder may provide an Internet address with a posting that associates the patented article with the number of the patent. If the patent proprietor does not mark its product, then damages are available only after the infringer was specifically notified of the infringement. Filing of an action for infringement qualifies as notice under the marking statute. Ordinarily, patent proprietors may only collect damages for patent infringement that takes place during the term of a patent--that is to say, after the USPTO issues the patent and prior to its expiration date. The Patent Act provides one exception to this rule. Under current law, pending patent applications may be published "promptly after the expiration of a period of 18 months from the ... filing date." If the infringer had "actual notice" of such a published application, then the patent proprietor may obtain a reasonable royalty between the date notice was provided and the date the patent issued. Many observers have criticized patent damages awards as being uncertain and excessive, leading to social harms. For example, the Georgia Pacific factors--a list of fifteen factors to be considered within the context of a hypothetical negotiation--have been "widely criticized as ambiguous, unworkable, inherently contradictory, and circular." Others have expressed concern that patent infringement--a strict liability offense that occurs whether or not the infringer knew of the patent prior to being sued--presumes that technology users are able to discover relevant patents in advance and either design around them or negotiate patent licenses. This account may not hold true today given the number and fragmented ownership of potentially relevant patents. As a result, such preclearance may be both infeasible as a practical matter and undesirable as a matter of economic policy. On the other hand, other stakeholders believe that the possibility of a significant damages award is needed to afford patents respect in the marketplace, particularly in an era where courts are more circumspect in granting injunctions than in previous years. They also believe that limits on patent damages will reduce incentives to innovate and develop new products. Others believe that judges and juries are not well-positioned to engage in more sophisticated damages determinations, such as assessing the incremental economic value of a patented invention over the prior art. Marketplace realities often render the determination of an appropriate damages award a difficult proposition in patent litigation. In some cases, the product or process that is found to infringe may incorporate numerous additional elements beyond the patented invention. For example, the asserted patent may relate to a windshield wiper, while the accused product consists of the entire automobile. In such circumstances, a court may apply "the entire market value rule": if a party can prove that the patented invention drives demand for the accused end product, it can rely on the end product's entire market value as the royalty base. On the other hand, if the court determines that the infringing sales were due to many factors beyond the use of the patented invention, the court may apply principles of "apportionment" to reach a just measure of damages for infringement. In such cases, the "smallest salable patent-practicing unit principle provides that, where a damages model apportions from a royalty base, the model should use the smallest salable patent-practicing unit as the base." Some observers believe that "application of the entire market value rule routinely overcompensates patentees and thereby exacerbates many problems inherent in the current system for awarding patent infringement damages." They reason that the know-how, materials, and marketing efforts of the adjudicated infringer virtually always contribute some, and often substantial, value to the infringing product. Other observers disagree, believing that the courts have reasonably applied the entire market value rule and apportionment principles. In their view, apportionment devalues patents and incentives to invest in research and development. Further, they assert that to the extent problems existed a decade ago, courts have identified them and began to tighten application of the entire market value rule. Bills introduced in a previous Congress proposed statutory modifications to patent damages provisions. For example, in the 111 th Congress, the Patent Reform Act of 2009 ( H.R. 1260 ) would have required courts to conduct "an analysis to ensure that a reasonable royalty is applied only to the portion of the economic value of the infringing product or process properly attributable to the claimed invention's specific contribution over the prior art." This legislation was not enacted. "Royalty stacking" refers to circumstances where a single product, such as a smartphone or automobile, may infringe many patents. For example, one recent study determined that the numerous potential royalty demands on a smartphone could equal or exceed the cost of its components. The manufacturer of such a product must add or "stack" each of the claims for royalties in order to sell it without risk of patent litigation. Some district courts have ruled that, when determining a royalty rate for the infringement of a particular patent, they should also consider the royalty burden associated with other patents potentially covering the infringing product. Otherwise the damages award might overvalue the individual patent asserted in that litigation. This inquiry appears to be a complex endeavor, as identifying and predicting patents that might be asserted against a particular product is an uncertain exercise. The Supreme Court and Federal Circuit have yet to address the issue of royalty stacking, however, and no legislation has been placed before Congress that would address the issue. Patent cases traditionally followed the "American Rule" with respect to attorney fees. Each litigant ordinarily pays its own fees in the United States, win or lose, in contrast to the "English Rule" where the losing party must compensate the lawyers for the prevailing litigant. Current law provides for a relatively limited exception to this principle. In patent cases, 35 U.S.C. SS285 provides that the "court in exceptional cases may award reasonable attorney fees to the prevailing party." In its 2014 ruling in Octane Fitness , LLC v. Icon Health & Fitness Inc. , the Supreme Court held that an "exceptional case" is "one that stands out from others with respect to the substantive strength of a party's litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated." The Court explained that relevant factors included the frivolousness of the litigant's assertions, its motivations, objective unreasonableness, and the need to compensate one litigant or deter another. The Court further explained that district courts should resolve Section 285 determinations by considering the "totality of the circumstances." Further, a prevailing party must demonstrate its entitlement to attorney fees by a "preponderance of the evidence." In a companion case decided the same day as Octane Fitness , Highmark , Inc. v. Allcare Health Management System Inc. , the Supreme Court ruled that the Federal Circuit should review the district court's Section 285 determination under an abuse-of-discretion standard. Octane Fitness and Highmark are widely viewed as overturning more restrictive standards previously employed by the Federal Circuit. As a result, district courts possess greater discretion in deciding whether to award fees and appear to be shifting fees more frequently. Some commentators believe that these decisions may discourage a practice known as "patent trolling"--the purchase and enforcement of patents by "non-practicing" or "assertion entities" against businesses that use or sell the patented inventions. They cite, for example, the decision in Lumen View Technology, LLC v. Findthebest.com, Inc. , where the court awarded attorney fees to the accused infringer due in part to the following reasoning: The "deterrence" prong of the Octane Fitness test also weighs in favor of an exceptional case finding. The boilerplate nature of Lumen's complaint, the absence of any reasonable pre-suit investigation, and the number of substantially similar lawsuits filed within a short time frame, suggests that Lumen's instigation of baseless litigation is not isolated to this instance, but is instead part of a predatory strategy aimed at reaping financial advantage from the inability or unwillingness of defendants to engage in litigation against even frivolous patent lawsuits. The need "to advance considerations of ... deterrence" of this type of litigation behavior is evident. Commentators are quick to note, however, that fee shifting remains the exception, and not the default, following the Octane Fitness ruling. As of the publication of this report, no bill had been introduced in the 115 th Congress that concerned fee shifting in patent cases. However, several bills introduced, but not enacted, in the 114 th Congress addressed this topic. The Innovation Act, H.R. 9 in the 114 th Congress, would have amended Section 285 to require a court to award attorney fees to a prevailing party in any patent case. The bill would have established two exceptions to this general rule: (1) where the position and conduct of the nonprevailing party were reasonably justified in law and fact; or (2) that special circumstances (such as severe economic hardship to a named inventor) make an award unjust. The Protecting American Talent and Entrepreneurship Act (PATENT) Act of 2015, S. 1137 in the 114 th Congress, expressed the "sense of Congress that, in patent cases, reasonable attorney fees should be paid by a nonprevailing party whose litigation position or conduct is not objectively reasonable." The PATENT Act would have also amended Section 285 to allow for fee-shifting. Under this legislation, if the court finds that the position or conduct of the non-prevailing party was not objectively reasonable, then the court shall award reasonable attorney fees to the prevailing party. Fees would not be shifted if special circumstances, such as undue economic hardship to a named inventor or an institution of higher education, would make an award unjust. A key difference between the Innovation Act and the PATENT Act was the burden of proof. Under the Innovation Act, fees would be shifted unless the nonprevailing party could demonstrate that an exception existed. In contrast, under the PATENT Act the prevailing party carried the burden of demonstrating that it was entitled to an award. In addition, unlike the Innovation Act, the PATENT Act would have exempted from the fee-shifting provision any lawsuit that included a cause of action for patent infringement under 35 U.S.C. SS271(e)(2). Both the Innovation Act and the PATENT Act would have also required interested parties to join the litigation if the nonprevailing party alleging infringement was unable to pay the fees awarded by a court. These so-called "mandatory joinder" provisions responded to concerns that the entity asserting a patent might be a "shell company" owned by other enterprises with greater financial resources. Finally, the Support Technology and Research for Our Nation's Growth (STRONG) Patents Act of 2015, S. 632 in the 114 th Congress, did not include a fee-shifting provision. However, Section 101 of that bill asserted a congressional finding that the Supreme Court's Octane Fitness and Highmark rulings "significantly reduced the burden on an alleged infringer to recover attorney fees from the patent owner, and increased the incidence of fees shifted to the losing party." Proponents of a less restrictive fee-shifting provision believe that "allowing more liberal shifting of attorney fees against losing parties would reduce the frequency of such nuisance settlements, and would allow more defendants to challenge patents that are invalid or that have been asserted beyond what their claims reasonably allow." On the other hand, those wary of fee-shifting provisions are concerned that they may benefit wealthy corporate parties to the disadvantage of individual inventors. They assert that "[a] 'loser pays' provision will deter patent holders from pursuing meritorious patent infringement claims and protects institutional defendants with enormous resources who can use the risk of fee-shifting to force inventors into accepting unfair settlements or dismissing their legitimate claims." Section 284 of the Patent Act currently provides that the court "may increase the damages up to three times the amount found or assessed." In its 2016 decision in Halo Electronics, Inc. v. Pulse Electronics, Inc. , the Supreme Court clarified that awards of enhanced damages are "designed as a 'punitive' or 'vindictive' sanction for egregious infringement behavior." Such a circumstance is commonly termed "willful infringement." In Halo v . Pulse , the Supreme Court emphasized that the award of enhanced damages lies within the discretion of the district judges in view of all of the circumstances. Although not subject to a "rigid formula," the award of enhanced damages may depend on such factors as whether the infringer intentionally copied the patent proprietor's product; whether the infringer acted in accordance with the standards of commerce for its industry; whether the infringer made a good faith effort to avoid infringing; whether there is a reasonable basis to believe that the infringers had a reasonable defense to infringement; and whether defendants tried to conceal their infringement. The Supreme Court also clarified that the evidentiary threshold for an award of enhanced damages is the "preponderance of the evidence" and that the Federal Circuit should review awards of enhanced damages under the "abuse of discretion" standard. Commentators have widely viewed the Halo v. Pulse ruling as making awards of enhanced damages easier to obtain. Although bills directly addressing the topic of enhanced damages have not been placed before Congress in many years, these earlier proposals were more restrictive than the standards adopted in Halo v. Pulse . Indeed, in support of its ruling in Halo v. Pulse , the Supreme Court noted that Congress had considered bills calling for a higher standard of proof for willful infringement but had not enacted them. For example, in the 111 th Congress, the Patent Reform Act of 2009 ( H.R. 1260 ) would have authorized a court to find willful infringement only where the patent proprietor proved by clear and convincing evidence that (1) the infringer received specific written notice from the patentee and continued to infringe after a reasonable opportunity to investigate; (2) the infringer intentionally copied from the patentee with knowledge of the patent; or (3) the infringer continued to infringe after an adverse court ruling. In addition, under H.R. 1260 , willful infringement could be found where the infringer possessed an informed, good faith belief that its conduct was not infringing. The Leahy-Smith America Invents Act (AIA), P.L. 112-29 , incorporated a single provision relating to the law of willful infringement. Section 17 of the AIA incorporated 35 U.S.C. SS298 into the Patent Act. That provision provides: The failure of an infringer to obtain the advice of counsel with respect to any allegedly infringed patent, or the failure of the infringer to present such advice to the court or jury, may not be used to prove that the accused infringer willfully infringed the patent or that the infringer intended to induce infringement of the patent. This provision was intended "to protect attorney-client privilege and to reduce pressure on accused infringers to obtain opinions of counsel for litigation purposes." The AIA did not otherwise address the topic of willful infringement. Patent law's willful infringement doctrine has proven controversial. Some observers believe that this doctrine ensures that patent rights will be respected in the marketplace. Critics of the policy believe that the possibility of trebled damages discourages individuals from reviewing issued patents and challenging patents of dubious validity. Consequently some have argued that the patent system should shift to a "no-fault" regime of strictly compensatory damages, without regard to the state of mind of the adjudicated infringer. In addition to granting so-called "utility patents" directed towards machines, manufactures, compositions of matter and processes, the Patent Act of 1952 also allows for "design patents." An inventor may obtain a design patent by filing an application with the USPTO directed towards a "new, original and ornamental design for an article of manufacture." Most design patent applications consist primarily of drawings that depict the shape or surface decoration of a particular product. They may concern any number of products, including automobile parts, containers, electronics products, home appliances, jewelry, textile designs, and toys. To obtain protection, the design must not have been obvious to a designer of ordinary skill of that type of product. In addition, a design must be "primarily ornamental" to be awarded design patent protection. If the design is instead dictated by the performance of the article, then it is judged to be functional and ineligible for design patent protection. Issued design patents confer the right to exclude others from the "unauthorized manufacture, use, or sale of the article embodying the patented design or any colorable imitation thereof." The scope of protection of a design patent is provided by drawings within the design patent instrument. To establish infringement, the design patent proprietor must prove that "in the eye of an ordinary observer, giving such attention as a purchaser usually gives," the patented and accused designs "are substantially the same, if the resemblance is such as to deceive such an observer, inducing him to purchase one supposing it is the other." The term of a design patent is 15 years from the date the USPTO issues the patent. Design patents are subject to a distinct statutory provision with respect to damages than other sorts of patents. 35 U.S.C. SS289 provides that a person who manufactures or sells "any article or manufacture to which a [patented] design or colorable imitation has been applied shall be liable to the extent of his total profit, but not less than $250." Section 289 goes on to state that "[n]othing in this section shall prevent, lessen, or impeach any other remedy which an owner of an infringed patent has under the provisions of this title, but he shall not twice recover the profit made from the infringement." The effect of 35 U.S.C. SS289 is to provide a design patent holder with two damages options. Like other sorts of patent proprietors, a design patent holder may obtain its own lost profits or reasonable royalties from the adjudicated infringer. Alternatively, the design patent holder may obtain the profits of the adjudicated infringer due to the infringement, so long as no double recovery occurs. The 2016 Supreme Court decision in Samsung Electronics Co. v. Apple Inc. is widely perceived as interpreting this provision in a narrow fashion. In that case, Apple owned several design patents pertaining to its iPhone, including a patent claiming a black rectangular front face with rounded corners; another patent claiming a rectangular front face with rounded corners and a raised rim; and a third patent claiming a grid of 16 colorful icons on a black screen. The lower courts held that Samsung had infringed the patents and was liable for the entire profit it made selling its infringing smartphones. The Supreme Court reversed and remanded the case for a new determination of damages. The Court began its analysis by concluding that arriving at a damages calculation under SS289 involves two steps: (1) "identify the 'article of manufacture' to which the infringed design has been applied," and (2) "calculate the infringer's total profit made on that article of manufacture." The Court then determined the scope of the phrase "article of manufacture" with respect to a multi-component product like an iPhone. Rejecting the view that the "article of manufacture" must always mean the end product sold to the consumer, the Court ultimately held that the term "article of manufacture," as used in SS289, could encompasses both (1) a product sold to a consumer and (2) a component of that product, whether that component is sold separately or not. The Supreme Court therefore required that the lower courts identify the relevant article of manufacture that Samsung infringed and adjust the damages total accordingly. Reactions to the ruling in Samsung v . Apple have varied. Some commentators believe that the lower courts had allowed Apple to recover damages that were disproportionate to Samsung's infringement. They observe that smartphones incorporate many features that were unrelated to the design patents asserted by Apple. Others assert the view that designs often sell the products with which they are associated. As a result, assessing the total profits due to the infringement is appropriate. They believe that the Supreme Court's ruling adversely affects the value of design patents and obligates the lower courts to reach difficult decisions when accused infringers assert that the patented "design for an article of manufacture" is in fact less than the entirety of the product they are selling. 35 U.S.C. SS283 provides that "[t]he several courts having jurisdiction of cases under this title may grant injunctions in accordance with the principles of equity to prevent the violation of any right secured by patent, on such terms as the court deems reasonable." Prior to the issuance of the Supreme Court decision in eBay , Inc. v. MercExchange, L.L.C ., some commentators had expressed concerns that the Federal Circuit interpreted this provision as requiring courts to issue an injunction upon a finding of patent infringement absent exceptional circumstances. In their view, the threat of an injunction would encourage patent proprietors to demand royalty rates in excess of the economic contribution of the patented technology. In essence, accused infringers might have been pressured to pay a premium to "buy off" the injunction, or risk being sued and enjoined by a court, particularly in circumstances where the patented invention formed just one component of a larger, combination product. Such concerns may have motivated proposals to amend 35 U.S.C. SS283. For example, the Patent Reform Act of 2005, H.R. 2795 in the 109 th Congress, proposed to add the following language to that provision: In determining equity, the court shall consider the fairness of the remedy in light of all the facts and the relevant interests of the parties associated with the invention. Unless the injunction is entered pursuant to a nonappealable judgment of infringement, a court shall stay the injunction pending an appeal upon an affirmative showing that the stay would not result in irreparable harm to the owner of the patent and that the balance of hardships from the stay does not favor the owner of the patent. However, shortly after this proposed reform was introduced, the Supreme Court issued the eBay case. In that case the Court concluded that the Federal Circuit had inappropriately concluded that injunctions were strongly favored each time a patent was infringed. Instead, the lower courts were to consider the appropriateness of awarding of an injunction on a case-by-case basis. In particular, the patent proprietor must demonstrate that (1) it has suffered an irreparable injury; (2) remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) considering the balance of hardships between the patent proprietor and adjudicated infringer, a remedy in equity is warranted; and (4) the public interest would not be disserved by a permanent injunction. The eBay decision is regarded as having a substantial impact on patent law remedies. One empirical study concluded that since eBay , patent proprietors that practice the patented invention usually obtain permanent injunctions when they prevail. In contrast, courts generally deny injunctive relief to non-practicing entities and firms that do not compete with the adjudicated infringer in the marketplace. Although the issuance of an injunction is subject to principles of equity in most patent cases, Congress has mandated that an injunction issue in certain circumstances. Notably, in patent infringement cases brought under the Drug Price Competition and Patent Term Restoration Act of 1984 (commonly referred to as the Hatch-Waxman Act), P.L. 98-417 , and Biologics Price Competition and Innovation Act of 2009, P.L. 111-148 , the relevant statute dictates that a court "shall" order an injunction in favor of the prevailing patent proprietor. These cases ordinarily involve patented pharmaceuticals and biologics. On June 21, 2017, Senators Coons, Cotton, Durbin, and Hirono introduced S. 1390 , the Support Technology and Research for Our Nation's Growth and Economic Resilience (STRONGER) Patents Act of 2017. Section 106 of the bill, titled "Restoration of patents as property rights," provides in principal part: Upon a finding by a court of infringement of a patent not proven invalid or unenforceable, the court shall presume that-- (1) further infringement of the patent would cause irreparable injury; and (2) remedies available at law are inadequate to compensate for that injury. This proposal would therefore establish a presumption that two of the four eBay factors support the grant of an injunction in cases of patent infringement. Under current law, the patentee must demonstrate that the four eBay factors support the award of an injunction against an adjudicated infringer. The STRONGER Patents Act would instead place the burden of proof upon the adjudicated infringer to demonstrate that (1) future infringement would not cause an irreparable injury and (2) legal remedies, such as monetary damages, would compensate for future infringement. Considerable discussion of the appropriateness of patent infringement remedies occurred in connection with the reform legislation that resulted in the America Invents Act. As ultimately enacted, however, the AIA addressed only the law of willful infringement. Since the enactment of the AIA, the Supreme Court and the Federal Circuit have issued a number of additional opinions addressing this topic. Stakeholders have nonetheless expressed concerns about the fairness, predictability, and accuracy of remedies for patent infringement; although some observers believe that the level of judicial compensation to patent proprietors is appropriate. Given the significance of remedies in rewarding invention, promoting competition, encouraging patent acquisition and enforcement, and contributing to an efficient innovation environment, congressional interest in this topic appears unlikely to diminish in coming years.

For more than a decade, some Members of Congress have considered bills that have proposed reforms to the law of patent remedies. Under current law, courts may award damages to compensate patent proprietors for an act of infringement. Damages consist of the patent owner's lost profits due to the infringement, if they can be proven. Otherwise the adjudicated infringer must pay a reasonable royalty. Courts may also award enhanced damages of up to three times the actual damages in exceptional cases. In addition, courts may issue an injunction that prevents the adjudicated infringer from employing the patented invention until the date the patent expires. Finally, although usually each litigant pays its own attorney fees in patent infringement cases, win or lose, the courts are authorized to award attorney fees to the prevailing party in exceptional cases. Some observers believe that the courts are adequately assessing remedies against adjudicated patent infringers. Others have expressed concerns that the current damages system systematically overcompensates patent proprietors. Some suggest that the usual rule regarding attorney fees--under which each side most often pays its own fees--may encourage aggressive enforcement tactics by "patent assertion entities," which are sometimes pejoratively called patent trolls. Damages often occur in the context of a patent that covers a single feature of a multi-component product. In addition, many of these other components are subject to additional patents with a fragmented ownership. The courts have developed such principles as the "entire market value rule" and have also addressed the concept of "royalty stacking," in order to address these issues. Legislation was introduced before Congress relating to these matters, but these bills were not enacted. Current law allows courts to award enhanced damages in exceptional cases, which ordinarily applies to circumstances of willful infringement or litigation misconduct. Recent Supreme Court decisions appear to have increased the likelihood that enhanced damages will be awarded, in contrast to earlier legislative proposals that were more restrictive. Bills in the 114th Congress would have called for the prevailing party to be awarded its attorney fees in patent litigation. Under these proposals, fees would not be awarded if the nonprevailing party's position and conduct were justified or special circumstances made the award unjust. This legislation was not enacted, but it may be reintroduced in the 115th Congress. Design patents are subject to a special damages statute which asserts that anyone who sells an "article of manufacture" containing the patented design may be liable to the patent owner "to the extent of his total profit." In its 2016 decision in Samsung v. Apple, the Supreme Court ruled that an "article of manufacture" need not consist of the entire product sold to consumers, but could also mean a portion of a multi-component product. This ruling appears to have decreased the damages available for the infringement of design patents that apply to products with multiple features. In the 115th Congress, the STRONGER Patents Act of 2017, S. 1390, would modify the principles governing the award of an injunction against an adjudicated patent infringer. S. 1390 would establish a presumption that future infringements would cause irreparable injury and that legal remedies, such as damages, are inadequate to compensate for those infringements. This proposal would increase the likelihood that patentees could obtain an injunction against infringers.

Since November 1986, the Commemorative Works Act (CWA) has provided the legal framework for the placement of commemorative works in the District of Columbia. The CWA was enacted to establish a statutory process for ensuring "that future commemorative works in areas administered by the National Park Service (NPS) and the General Services Administration (GSA) in the District of Columbia and its environs (1) are appropriately designed, constructed, and located and (2) reflect a consensus of the lasting significance of the subjects involved." Since the CWA's enactment, 35 memorials have been authorized for placement in the District of Columbia. This report provides a catalog of the 19 memorials in the District of Columbia that have been authorized, completed, and dedicated since the passage of the CWA. A summary of the work is provided. The report also provides information--located within text boxes for easy reference--on the statute(s) authorizing the work; the authorized organization; legislative extensions, if any; the memorial's location; and the dedication date. A picture of each work is also included. The Appendix includes a map showing each memorial's location. For a further discussion of the placement of memorials in the District of Columbia see CRS Report R41658, Commemorative Works in the District of Columbia: Background and Practice , by Jacob R. Straus and CRS Report R43744, Monuments and Memorials Authorized Under the Commemorative Works Act in the District of Columbia: Current Development of In-Progress and Lapsed Works , by Jacob R. Straus. The CWA divides land under the jurisdiction of the NPS and GSA in the District of Columbia and its environs into three sections for the placement of memorials: the Reserve, Area I, and Area II. For each area, the standards for memorial placement are specified in law, and congressional approval of monument location is required. Property not under the jurisdiction of the NPS or GSA is not subject to the CWA. See Figure A-1 for a map of the commemorative works areas of the District of Columbia. The Reserve was created in November 2003, by P.L. 108-126 , to prohibit the addition of future memorials in an area defined as "the great cross-axis of the Mall, which generally extends from the United States Capitol to the Lincoln Memorial, and from the White House to the Jefferson Memorial ." This area is legally considered "a substantially completed work of civic art. " Within this area, "to preserve the integrity of the Mall ... the siting of new commemorative works is prohibited. " Created as part of the original CWA statute in 1986, Area I is reserved for commemorative works of "preeminent historical and lasting significance to the United States. " Area I is roughly bounded by the West Front of the Capitol; Pennsylvania Avenue NW (between 1 st and 15 th Streets NW); Lafayette Square; 17 th Street NW (between H Street and Constitution Avenue); Constitution Avenue NW (between 17 th and 23 rd Streets); the John F. Kennedy Center for the Performing Arts waterfront area; Theodore Roosevelt Island; National Park Service land in Virginia surrounding the George Washington Memorial Parkway; the 14 th Street Bridge area; and Maryland Avenue SW, from Maine Avenue SW, to Independence Avenue SW, at the United States Botanic Garden. Also created as part of the original CWA statute, Area II is reserved for "subjects of lasting historical significance to the American people. " Area II encompasses all sections of the District of Columbia and its environs not part of the Reserve or Area I. Since the passage of the Commemorative Works Act (CWA) in 1986, Congress has authorized 35 commemorative works to be placed in the District of Columbia or its environs, 19 of which have been completed and dedicated--16 under the auspices of the CWA and three outside of the CWA process. The other 16 authorized commemorative works are either in progress or have a lapsed authorization. Table 1 lists the commemorative works authorized and dedicated since 1986. Since 1986, 19 commemorative works have been completed within the District of Columbia and its environs. These memorials honored groups of individuals, such as women who have served in the U.S. military; veterans from World War II as well as the Korean War; and individuals including George Mason, Francis Scott Key, and Mahatma Gandhi. For each memorial, a short background and a picture is included. Additionally, a text box is provided that includes information on the authorizing statute; the sponsor organization; statutory extensions of the sponsor's authorization, if necessary; the memorial's location; and the date of dedication. In October 1986, Congress authorized the Women in Military Service for America Memorial Foundation to construct a commemorative work, on federal land, to honor women who had served in the U.S. Armed Forces. Located at the ceremonial entrance to Arlington National Cemetery, the Women in Military Service for America Memorial is a "30-foot high curved neoclassical retaining wall" and a fountain. While the foundation has raised nonfederal funds to construct the memorial, because the memorial was built to complement the existing main gate and plaza of Arlington National Cemetery, Congress authorized the Secretary of the Army to provide "engineering, design, construction management, and related services on a reimbursable basis." Figure 1 shows the Women in Military Service for America Memorial. In October 1986, the Francis Scott Key Park Foundation was authorized by Congress to construct a commemorative work on public grounds in the District of Columbia to "honor and in commemoration of Francis Scott Key, the author of the words to 'The Star Spangled Banner,' our National Anthem, who lived and practiced law in Washington, District of Columbia at the time he penned those immortal words." The memorial is located in a park close to the site of Francis Scott Key's home, which was demolished in 1947, and is adjacent to the Georgetown entrance to Key Bridge, which is also named for Francis Scott Key. The memorial consists of a round stone base and a bust of Francis Scott Key and is shown in Figure 2 . In October 1986, the American Battle Monuments Commission was authorized by Congress to construct a memorial on federal land in Washington, DC, "to honor members of the Armed Forces of the United States who served in the Korean War, particularly those who were killed in action, are still listed as missing in action, or were held as prisoners of war." Located to the southeast of the Lincoln Memorial, the Korean War Veterans Memorial contains 19 stainless steel statues, a mural wall etched with bas-relief images of photographs of Korean War scenes from the National Archives, a pool of remembrance, an honor roll, a low stone wall listing the 22 nations that participated in the war, and a dedication stone. "The memorial commemorates the sacrifices of the 5.8 million Americans who served in the U.S. armed services during the three-year period of the Korean War.... During its relatively short duration from June 25, 1950 to July 27, 1953, 54,246 Americans died in support of their country. Of these, 8,200 are listed as missing in action or lost or buried at sea. In addition 103,284 were wounded during the conflict." Figure 3 shows the Korean War Veterans Memorial. In November 1986, Congress authorized 25 private armored force committees and associations to create a memorial on federal land to "honor members of the American Armored Force who have served in armored units." The memorial was authorized to "commemorate the exceptional professionalism of the members of the American Armored Force and their efforts to maintain peace worldwide." Located on Memorial Drive at the entrance to Arlington National Cemetery, the American Armored Force Memorial ( Figure 4 ) depicts armored forces engaged in battle surrounded by the logos of the various armored divisions. In November 1988, Congress authorized the Vietnam Women's Memorial Project to establish a memorial on federal land in the District of Columbia to "honor women who served in the Armed Forces of the United States in the Republic of Vietnam during the Vietnam era." Located next to the Vietnam Veterans Memorial, the Vietnam Women's Memorial is designed to honor all women who served during the Vietnam War. The bronze statue of the Vietnam Women's Memorial statue ( Figure 5 ) depicts "a nurse--in a moment of crisis--... supported by sandbags as she serves as the life support for a wounded soldier lying across her lap. The standing woman looks up, in search of a med-i-vac helicopter or, perhaps, in search of help from God." In August 1990, the Board of Regents of Gunston Hall was authorized to build a memorial to George Mason on federal land in the District of Columbia. Located in West Potomac Park, near the Tidal Basin, Jefferson Memorial, and George Mason Memorial Bridge, the George Mason Memorial ( Figure 6 ) was designed in the style of Mason's Gunston Hall plantation and features a statue of the American patriot and statesmen seated on a bench. Following congressional authorization of the site location, the memorial was placed as an addition to an existing commemorative work to George Mason--the south-bound span of the 14 th Street Bridge--that had been authorized in 1959. In October 1992, Congress authorized the government of the District of Columbia to establish a memorial on federal land "to honor African-Americans who served with Union forces during the Civil War." Located at 12 th and U Streets NW the African-American Civil War-Union Soldiers/Sailors Memorial ( Figure 7 ) features a granite plaza surrounded by a wall of honor on three sides. In the center is a statue featuring "uniformed black soldiers and a sailor poised to leave home. Women, children, and elders on the cusp of the concave inner surface seek strength together." In October 1992, Congress authorized the Go for Broke National Veterans Association Foundation to create a memorial on federal land in the District of Columbia "to honor Japanese American patriotism in World War II." Located at the intersection of New Jersey Avenue NW, Louisiana Avenue NW, and D Street NW, the memorial contains a statue of a crane surrounded by the names of the 10 relocation camps used to house Japanese Americans during World War II. The Japanese American Patriotism in World War II Memorial ( Figure 8 ) also contains the names of Japanese Americans killed in uniform during World War II, a bell, a reflecting pond with five granite boulders, and a quotation by Senator Daniel Inouye. In May 1993, Congress authorized the American Battle Monuments Commission to establish a memorial "to honor members of the Armed Forces who served in World War II and to commemorate the participation of the United States in that war." Located on the National Mall between the Washington Monument and the Lincoln Memorial between the eastern edge of the Reflecting Pool and 17 th Street NW, the World War II Memorial ( Figure 9 ) consists of 24 bronze bas-relief panels flanking the ceremonial entrance, 56 granite columns around the Rainbow Pool to "symbolize the unprecedented wartime unity among the forty-eight states, several federal territories, and the District of Columbia." Two 43-foot tall pavilions proclaiming "American victory on the Atlantic and Pacific fronts" are located to the North and South of the pool. In December 1993, Congress authorized the National Captive Nations Committee to "construct, maintain, and operate in the District of Columbia an appropriate international memorial to honor victims of communism." Located on Massachusetts Avenue NW between New Jersey Avenue NW and G Street NW, the Victims of Communism Memorial ( Figure 10 ) features the statue "Goddess of Democracy," a "bronze replica of a statue erected by Chinese students in Tiananmen Square, Beijing, China in the spring of 1989." In October 1998, Congress authorized the government of India to establish and maintain a memorial "to honor Mahatma Gandhi on Federal land in the District of Columbia." Located outside the Embassy of India in a park surrounded by Q Street NW, Massachusetts Avenue NW and 21 st Street NW, "[t]he sculpture of Mahatma Gandhi is cast in bronze as a statue to a height of 8 feet 8 inches. It shows Gandhi in stride, as a leader and man of action evoking memories of his 1930 protest march against salt-tax, and the many padyatras (long marches) he undertook throughout the length and breadth of the Indian sub-continent." The Mahatma Gandhi Memorial ( Figure 11 ) is located in a memorial plaza, which includes "[t]hree inscription panels in ruby red granite, mounted on gray granite bases, [and] are located on the eastern side of the plaza facing the park." In October 2000, Congress authorized the placement at the Lincoln Memorial of a plaque commemorating Dr. Martin Luther King, Jr.'s August 28, 1963, "I Have a Dream" speech. Located on the Lincoln Memorial steps at the spot where Dr. King spoke, the plaque ( Figure 12 ) commemorates the speech and the August 1963 March on Washington for Jobs and Freedom. In November 2001, Congress authorized the government of the Czech Republic to maintain and "establish a memorial to honor Tomas G. Masaryk [Czechoslovakia's first president] on Federal land in the District of Columbia." Located on Massachusetts Avenue NW, Florida Avenue NW, and Q Street NW, the memorial ( Figure 13 ) "honors Tomas Garrigue Masaryk (1850-1937), the founder and first president of Czechoslovakia.... [and] was modeled from life in 1937 shortly before Masaryk died." In November 1996, Congress authorized the Alpha Phi Alpha Fraternity to establish a memorial "to honor Martin Luther King, Jr." Located on the National Mall in the northeast corner of the Tidal Basin, the Dr. Martin Luther King, Jr. Memorial ( Figure 14 ) features a statue of Dr. King "emerging from a mountain ... " referencing "a line from King's 1963 'I Have a Dream' speech. 'With this faith, we will be able to hew out of the mountain of despair a stone of hope.'" In October 2000, Congress authorized the Disabled Veterans' LIFE Memorial Foundation, Inc., to establish a commemorative work, on federal land, in the District of Columbia "to honor veterans who became disabled while serving in the Armed Forces of the United States." The American Veterans Disabled for Life Memorial is located near the Rayburn House Office Building between Washington Avenue SW and 2 nd Street SW across from the United States Botanic Garden's Bartholdi Park. The American Veterans Disabled for Life Memorial features an eternal flame ( Figure 15 ) and images of, and quotations about, disabled veterans. In October 2006, Congress authorized the government of Ukraine "to establish a memorial on Federal land in the District of Columbia to honor the victims of the Ukrainian famine-genocide of 1932-1933." The memorial is located at a site bordered by Massachusetts Avenue, North Capitol Street, and F Street NW. The memorial is termed "Field of Wheat," and "contains a six foot tall bronze wall that transitions from a high bas relief of wheat on the east end to a deep negative relief on the west, symbolizing the loss of wheat and food." ( Figure 16 ) Since 1986, three commemorative works have been authorized by Congress for placement within the District of Columbia, but were either exempted from a portion of the CWA or were ultimately placed outside of the area defined by the act. The Air Force Memorial was located near the Pentagon in Arlington, Virginia, a plaque to honor Vietnam veterans who died as a result of service in the Vietnam War was placed at the Vietnam Memorial, and a plaque to honor Senator Robert J. Dole's contribution to creating the World War II Memorial was placed at the memorial's site. In December 1993, Congress authorized the Air Force Memorial Foundation to establish a memorial to "honor the men and women who have served in the United States Air Force and its predecessors." Pursuant to P.L. 107-107 , the Air Force Memorial is located at the Arlington Naval Annex near the Pentagon in Arlington, Virginia. The United States Air Force Memorial ( Figure 17 ) was constructed on land not covered by the Commemorative Works Act and is not managed by the National Park Service or the General Services Administration. In June 2000, Congress authorized the American Battle Monuments Commission to place a plaque at the Vietnam Veterans Memorial "to honor those Vietnam veterans who died after their service in the Vietnam War, but as a direct result of that service, and whose names are not otherwise eligible for placement on the memorial wall." Located at the northeast corner of the plaza surrounding the Three Serviceman statue at the Vietnam War Memorial, the plaque ( Figure 18 ) is in memory of the soldiers who died as a result of their service in the Vietnam War, after the war's conclusion. In October 2009, in the Department of the Interior, Environment, and Related Agencies Appropriations Act, 2010, Congress authorized the placement of a plaque to honor Senator Robert J. Dole at the World War II Memorial. The plaque was to "commemorate the extraordinary leadership of Senator Robert J. Dole in making the Memorial a reality on the National Mall." Located on the south side of the World War II Memorial, the Dole Plaque ( Figure 19 ) honors the Senator for his contributions to the World War II Memorial on the National Mall. Figure A-1 shows a map with the location of commemorative works authorized and dedicated since 1986.

Since the enactment of the Commemorative Works Act (CWA) in 1986, Congress has authorized 35 commemorative works to be placed in the District of Columbia or its environs. Nineteen of these works have been completed and dedicated. This report contains a catalog of the 19 authorized works that have been completed and dedicated since 1986. For each memorial, the report provides a rationale for each authorized work, as expressed by a Member of Congress, as well as the statutory authority for its creation; and identifies the group or groups which sponsored the commemoration, the memorial's location, and the dedication date. A picture of each work is also included. The Appendix includes a map showing each completed memorial's location. For more information on the Commemorative Works Act, see CRS Report R41658, Commemorative Works in the District of Columbia: Background and Practice, by Jacob R. Straus; CRS Report R43241, Monuments and Memorials in the District of Columbia: Analysis and Options for Proposed Exemptions to the Commemorative Works Act, by Jacob R. Straus; and CRS Report R43744, Monuments and Memorials Authorized Under the Commemorative Works Act in the District of Columbia: Current Development of In-Progress and Lapsed Works, by Jacob R. Straus.

On May 27, 2015, the Army Corps of Engineers (the Corps) and the Environmental Protection Agency (EPA) finalized a rule revising regulations that define the scope of waters protected under the Clean Water Act (CWA). Discharges to waters under CWA jurisdiction, such as the addition of pollutants from factories or sewage treatment plants and the dredging and filling of spoil material through mining or excavation, require a CWA permit. The rule was proposed in 2014 in light of Supreme Court rulings that created uncertainty about the geographic limits of waters that are and are not protected by the CWA. The revised rule became effective on August 28, 2015, 60 days after publication in the Federal Register , to allow time for review under the Congressional Review Act. However, multiple legal challenges to the rule were filed in federal district and appeals courts around the country. On October 9, 2015, a federal appeals court in Cincinnati issued an order granting a request by 18 states to stay the new rule nationwide, pending further developments. On June 14, 2016, this court set the briefing schedule in the litigation; the court's schedule likely would lead to oral arguments in February 2017 or later. As a result of these judicial actions, until legal proceedings are concluded, the new rule is not in effect, and prior regulations and agency guidance will govern determinations of CWA jurisdiction. According to EPA and the Corps, the agencies' intent was to clarify CWA jurisdiction, not expand it. Nevertheless, the rule has been extremely controversial, especially with groups representing property owners, land developers, and the agriculture sector, who contend that it represents a massive federal overreach beyond the agencies' statutory authority. Most state and local officials are supportive of clarifying the extent of CWA-regulated waters, but some are concerned that the rule could impose costs on states and localities as their own actions (e.g., transportation or public infrastructure projects) become subject to new requirements. Most environmental advocacy groups welcomed the intent of the proposal to more clearly define U.S. waters that are subject to CWA protections, but beyond that general support, some favored even a stronger rule. Many critics in Congress and elsewhere urged that the proposed rule be withdrawn, but EPA and the Corps pointed out that doing so would leave in place the status quo--with determinations of CWA jurisdiction being made pursuant to existing regulations, coupled with non-binding agency guidance, and many of these determinations involving time-consuming case-specific evaluation. Still, even though the 2015 rule has been stayed by a federal court, some in Congress favor halting the agencies' approach to defining "waters of the United States" and leaving the status quo in place or giving EPA and the Corps new directions on defining CWA jurisdiction. This report discusses several options that Congress has considered that were reflected in bills in the 114 th Congress. The CWA protects "navigable waters," a term defined in the act to mean "the waters of the United States, including the territorial seas." Waters need not be truly navigable to be subject to CWA jurisdiction. The act's single definition of "navigable waters" applies to the entire law, including the federal prohibition on pollutant discharges except in compliance with the act (SS301), permit requirements (SSSS402 and 404), water quality standards and measures to attain them (SS303), oil spill liability and oil spill prevention and control measures (SS311), and enforcement (SS309). The CWA gave the agencies the authority to define the term "waters of the United States" more fully in regulations, which EPA and the Corps have done several times, most recently in 1986. While EPA is primarily responsible for implementing the CWA, EPA and the Corps share implementation of the dredge and fill permitting program in Section 404. The courts, including the Supreme Court, generally upheld the agencies' implementation until Supreme Court rulings in 2001 and 2006 ( Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers , (SWANCC) 531 U.S. 159 (2001); and Rapanos v. United States , 547 U.S. 716 (2006), respectively). Those rulings interpreted the regulatory scope of the CWA more narrowly than the agencies and lower courts were then doing, and created uncertainty about the appropriate scope of waters protected under the CWA. In 2003 and 2008, the agencies issued guidance intended to lessen confusion over the Court's rulings. The non-binding guidance sought to identify, in light of those rulings, categories of waters that remain jurisdictional, categories not jurisdictional, and categories that require a case-specific analysis to determine if CWA jurisdiction applies. The Obama Administration proposed revised guidance in 2011; it was not finalized, but it was the substantive basis for the 2014 proposed rule. In proposing to amend the regulatory definition of "waters of the United States" rather than issue another guidance document, EPA and the Corps were not only acting to reduce the confusion created by SWANCC and Rapanos . They also appeared to be picking up on the suggestion of several of the justices in Rapanos that an amended rule would be helpful. The 2015 final rule retains much of the structure of the agencies' existing definition of "waters of the United States." It focuses particularly on clarifying the regulatory status of surface waters located in isolated places in a landscape and streams that flow only part of the year, along with nearby wetlands--the types of waters with ambiguous jurisdictional status following the Supreme Court's rulings. Like the 2003 and 2008 guidance documents and the 2014 proposal, it identifies categories of waters that are and are not jurisdictional, as well as categories of waters and wetlands that require a case-specific evaluation. Under the final rule, all tributaries to the nation's traditional navigable waters, interstate waters, the territorial seas, or impoundments of these waters would be jurisdictional per se . All of these waters are jurisdictional under existing rules, but the term "tributary" is newly defined in the rule. Waters--including wetlands, ponds, lakes, oxbows, and similar waters--that are adjacent to traditional navigable waters, interstate waters, the territorial seas, jurisdictional tributaries, or impoundments of these waters would be jurisdictional by rule. The final rule for the first time puts some boundaries on what is considered "adjacent." Some waters--but fewer than under current practice--would remain subject to a case-specific evaluation of whether or not they meet the legal standards for federal jurisdiction established by the Supreme Court. The final rule establishes two defined sets of additional waters that will be a "water of the United States" if they are determined to have a significant nexus to a jurisdictional waters. The final rule identifies a number of types of waters to be excluded from CWA jurisdiction. Some are restatements of exclusions under current rules (e.g., prior converted cropland); some have been excluded by practice and would be expressly excluded by rule for the first time (e.g., groundwater, some ditches). Some exclusions were added to the final rule based on public comments (e.g., stormwater management systems and groundwater recharge basins). The rule makes no change and does not affect existing statutory exclusions: permit exemptions for normal farming, ranching, and silviculture practice and for maintenance of drainage ditches (CWA SS404(f)(1)), as well as for agricultural stormwater discharges and irrigation return flows (CWA SS402(l)). The agencies' intention was to clarify questions of CWA jurisdiction, in view of the Supreme Court's rulings and consistent with the agencies' scientific and technical expertise. Much of the controversy since the Court's rulings has centered on the many instances that have required applicants for CWA permits to seek a time-consuming case-specific evaluation to determine if CWA jurisdiction applies to their activity, due to uncertainty over the geographic scope of the act. In the rule, the Corps and EPA intended to clarify jurisdictional questions by clearly articulating categories of waters that are and are not protected by the CWA and thus limiting the types of waters that still require case-specific analysis. However, critical response to the proposal from industry, agriculture, many states, and some local governments was that the rule was vague and ambiguous and could be interpreted to enlarge the regulatory jurisdiction of the CWA beyond what the statute and the courts allow. Officials of the Corps and EPA vigorously defended the proposed rule. But they acknowledged that it raised questions that required clarification in the final rule. In an April 2015 blog post, the EPA Administrator and the Assistant Secretary for the Army said that the agencies responded to criticisms of the proposal with changes in the final rule, which was then undergoing interagency review. The blog post said that the final rule would make changes such as: defining tributaries more clearly; better defining how protected waters are significant; limiting protection of ditches to those that function like tributaries and can carry pollution downstream; and preserving CWA exclusions and exemptions for agriculture. The final rule announced on May 27, 2015, does reflect a number of changes from the proposal, especially to provide more bright line boundaries and simplify definitions that identify waters that are protected under the CWA. The agencies' intention has been to clarify the rules and make jurisdictional determinations more predictable, less ambiguous, and more timely. Based on press reports of stakeholders' early reactions to the final rule, it appears that some believe that the agencies largely succeeded in that objective, while others believe that they did not. Congressional interest in the rule has been strong since the proposal was announced in 2014. On February 4, 2015, the Senate Environment and Public Works Committee and the House Transportation and Infrastructure Committee held a joint hearing on impacts of the proposed rule on state and local governments, hearing from public and EPA and Corps witnesses. Other hearings have been held by Senate and House committees in the 114 th Congress. The proposal also was discussed at House committee hearings during the 113 th Congress. As described below, a number of bills were introduced in the 114 th Congress, most of them intended either to prohibit the agencies from finalizing the 2014 proposed rule or to detail procedures for a new rulemaking. As noted earlier, some in Congress have long favored halting EPA and the Corps' current approach to defining "waters of the United States." To do so legislatively, there are at least four options available to change the agencies' course: a resolution of disapproval under the Congressional Review Act, appropriations bill provisions, standalone legislation, and broad amendments to the Clean Water Act. The Congressional Review Act (CRA), enacted in 1996, establishes special congressional procedures for disapproving a broad range of regulatory rules issued by federal agencies. Before any rule covered by the act can take effect, the federal agency that promulgates it must submit it to both houses of Congress and the Government Accountability Office (GAO). If Congress passes a joint resolution disapproving the rule under procedures provided by the act, and the resolution becomes law, the rule cannot take effect or continue in effect. Also, the agency may not reissue either that rule or any substantially similar one, except under authority of a subsequently enacted law. Joint resolutions of disapproval of the final clean water rule have been introduced in the House ( H.J.Res. 59 ) and the Senate ( S.J.Res. 22 ). On November 4, the Senate passed S.J.Res. 22 , by a 53-44 vote, and the House passed S.J.Res. 22 on January 13, 2016, by a 253-166 vote. However, President Obama vetoed the joint resolution on January 19. On January 21, the Senate failed to invoke cloture on a motion to proceed to override the veto (52-40), and the veto message was indefinitely postponed by the Senate by unanimous consent. The CRA applies to major rules, non-major rules, final rules, and interim final rules. The definition of "rule" is sufficiently broad that it may define as "rules" agency actions that are not subject to traditional notice and comment rulemaking under the Administrative Procedure Act, such as guidance documents and policy memoranda. A joint resolution of disapproval must be introduced within a specific time frame: during a 60-days-of-continuous-session period beginning on the day the rule is received by Congress. The path to enactment of a CRA joint resolution is a steep one. In the nearly two decades since the CRA was enacted, only one resolution has ever been enacted. The path is particularly steep if the President opposes the resolution's enactment, as was the case with a resolution disapproving the EPA-Corps rule to define "waters of the United States," which, as noted, the President vetoed on January 19, 2016. Overriding a veto of a joint resolution, like any other bill, requires a two-thirds majority in both the House and Senate. The potential advantage of the CRA lies primarily in the procedures under which a resolution of disapproval can be considered in the Senate. Pursuant to the act, an expedited procedure for Senate consideration of a joint resolution of disapproval may be used at any time within 60 days of Senate session after the rule in question has been submitted to Congress and published in the Federal Register . The expedited procedure provides that, if the committee to which a disapproval resolution has been referred has not reported it by 20 calendar days after the rule has been received by Congress and published in the Federal Register , the committee may be discharged if 30 Senators submit a petition for that purpose. The resolution is then placed on the Senate Calendar. Under the expedited procedure, once a disapproval resolution is on the Senate Calendar, a motion to proceed to consider it is in order. Several provisions of the expedited procedure protect against various potential obstacles to the Senate's ability to take up a disapproval resolution. The Senate has treated a motion to consider a disapproval resolution under the CRA as not debatable, so that this motion cannot be filibustered through extended debate. After the Senate takes up the disapproval resolution itself, the expedited procedure of the CRA limits debate to 10 hours and prohibits amendments. The act sets no deadline for final congressional action on a disapproval resolution, so a resolution could theoretically be brought to the Senate floor even after the expiration of the deadline for the use of the CRA's expedited procedures. To obtain floor consideration, the bill's supporters would then have to follow the Senate's normal procedures, however. There are no expedited procedures for initial House consideration of a joint resolution of disapproval. A resolution could reach the House floor through its ordinary procedures, that is, generally by being reported by the committee of jurisdiction (in the case of CWA rules, the Transportation and Infrastructure Committee). If the committee of jurisdiction does not report a disapproval resolution submitted in the House, a resolution could still reach the floor pursuant to a special rule reported by the Committee on Rules (and adopted by the House), by a motion to suspend the rules and pass it (requiring a two-thirds vote), or by discharge of the committee (requiring a majority of the House [218 Members] to sign a petition). The CRA establishes no expedited procedure for further congressional action if the President vetoes a disapproval resolution. In such a case, Congress would need to attempt an override of a veto using its normal procedures for doing so. As noted above, if a joint resolution of disapproval becomes law, the rule at issue cannot take effect or continue in effect, and neither that rule nor a substantially similar one may be promulgated, except under authority of a subsequently enacted law. While that outcome would please most critics of the "waters of the United States" rule, it also would leave the regulated community in the situation that many of them have faulted--subject to 1986 rules that are being interpreted pursuant to non-binding agency guidance that frequently requires case-specific evaluation to determine if CWA jurisdiction applies. Including a provision in an appropriations bill is a second option for halting or redirecting the "waters of the United States" rule by limiting or preventing agency funds from being used for the rule. Congress has considered legislation to do so in the recent past, but so far, congressional opponents of the rule have not succeeded in using appropriations measures to halt or delay it. In the 114 th Congress, on May 1, 2015, the House approved the FY2016 Energy and Water Appropriations bill ( H.R. 2028 ) with a provision that would bar the Corps from developing, adopting, implementing, or enforcing any change to rules or guidance in effect on October 1, 2012, pertaining to the CWA definition of "waters of the United States." On June 18, 2015, the House Appropriations Committee approved the FY2016 Interior and Environment Appropriations bill ( H.R. 2822 ) with a similar provision to bar EPA from developing, adopting, implementing, or enforcing any change to rules or guidance pertaining to the CWA definition of "waters of the United States." The House began debate on H.R. 2822 in July 2015, but did not take final action. The Administration indicated that the President would veto both of these bills, based in part to objections to this provision. The Senate Appropriations Committee included a similar provision in legislation providing FY2016 appropriations for EPA ( S. 1645 ), which the committee approved in June 2015. The full Senate did not consider this bill. Full-year FY2016 appropriations for EPA and the Corps were provided in the Consolidated Appropriations Act, 2016, signed by the President on December 18 ( P.L. 114-113 ). The legislation did not include any provisions concerning the "waters of the United States" rule. Similar provisions were included in FY2017 appropriations bills, including H.R. 5055 , a bill providing funding for the Army Corps. The House debated this bill in May 2016, but the measure was defeated in the House on May 26 (112-305), due to controversies about other provisions. Provisions to block the rule were included in bills to fund EPA in FY2017 that were reported by the House Appropriations Committee ( H.R. 5538 ) and the Senate Appropriations Committee ( S. 3068 ), but neither bill received floor consideration. Congress did not reach final agreement on legislation to fund the Corps or EPA before the start of FY2017, on October 1, 2016. However, on September 28, the House and Senate passed a 10-week continuing resolution that extended FY2016 funding levels for these and most other federal agencies, minus a 0.496% across-the-board reduction, through December 9, 2016 ( P.L. 114-223 ). A second continuing resolution, passed in December 2016, extended FY2016 funding levels, minus a 0.1901% across-the-board reduction, from December 10, 2016, through April 28, 2017 ( P.L. 114-254 ). Neither of these stopgap funding bills included legislative language that would affect the "waters of the United States" rule. In comparison to a CRA resolution of disapproval, addressing an issue through an amendment to an appropriations bill may be considered easier, since the overall appropriations bill to which it would be included would presumably contain other elements making it "must pass" legislation, or more difficult for the President to veto. EPA and the Corps issued the final rule on May 27, 2015, before enactment of any FY2016 appropriations bills. A funding prohibition included in an FY2016 appropriations bill would not have halted finalizing the rule, but it still could attempt to block funds for implementation. In recent years, controversies over a variety of environmental issues have led to inclusion of provisions in bills reported by the House Appropriations Committee or passed by the House to restrict funds for particular EPA programs, among other agencies. Few of these environmental provisions have been enacted, however, in part due to opposition in the Senate. Some observers predicted a somewhat easier path for congressional consideration of such restrictions in the 114 th Congress, with Republican majorities in both the House and Senate. However, a bill would still have needed the President's signature, or the votes of two-thirds majorities in both chambers to override his veto. A third option is standalone targeted legislation to redirect development of a "waters of the United States" rule, either by amending the CWA or in a free-standing bill. Such a bill could be similar to a limitation in an appropriations bill with provisions to bar or prohibit EPA and/or the Corps from finalizing, adopting, implementing, or enforcing the "waters of the United States" rule, the 2011 proposed revised guidance, or any similar rule. One such bill in the 114 th Congress was H.R. 594 . It also would have directed the Corps and EPA to consult with state and local officials on CWA jurisdiction issues and develop a report on results of such consultation. Another bill in the 114 th Congress was H.R. 2599 . It would have prohibited the obligation of unobligated funds from the office of the EPA Administrator until she withdraws the "waters of the United States" rule. In the 114 th Congress, H.R. 1732 , the Regulatory Integrity Protection Act, was approved by the House on May 12, 2015, 261-155. It would have required EPA and the Corps to develop a new rule, taking into consideration public comments on the 2014 proposal and supporting documents, and, in doing so, to provide for consultation with state and local officials and other stakeholders. Under the bill, when proposing a new rule, the agencies would have to describe the consultations in detail and explain how the new proposal responds to public comments and consultations. During debate on the measure, the House adopted an amendment that would give states two years to come into compliance with a new rule without losing authority over their state permitting programs. The Obama Administration opposed H.R. 1732 and said that the President would veto the bill. In the Senate, the Federal Water Quality Protection Act ( S. 1140 ) was approved by the Senate Environment and Public Works Committee on June 10, 2015. On November 3, 2015, the Senate voted 57-41 to take up S. 1140 , thus falling short of the 60 votes needed to overcome a filibuster on the motion to proceed to the bill's consideration. (On November 4, 2015, the Senate did pass S.J.Res. 22 , a Congressional Review Act resolution disapproving the rule, as discussed above.) Like H.R. 1732 , S. 1140 would have required the agencies to develop a new rule, taking into consideration public comments on the 2014 proposal. The bill would have required the agencies to ensure that procedures established under executive orders and laws such as the Regulatory Flexibility Act, Unfunded Mandates Reform Act, and others are followed during the rulemaking. Unlike the House bill, S. 1140 identified certain principles that must be adhered to in developing a new rule, especially identifying waters that should be included in defining "waters of the United States" (e.g., reaches of streams with surface hydrological connection to traditional navigable waters with flow in a normal year of sufficient volume, duration, and frequency that pollutants in the stream would degrade water quality of the traditional navigable water) and waters that should not be so included (e.g., groundwater, isolated ponds, and prior converted cropland). The principles in the bill reflected an overall narrow interpretation of the extent of CWA jurisdiction--for example, setting the jurisdictional limits of a stream's reach to waters that have a continuous surface hydrologic connection sufficient to deliver pollutants that would degrade the water quality of a traditional navigable water, as proposed in S. 1140 , generally would follow the test of jurisdiction stated by Justice Scalia in the Rapanos case. Under the legislation, a rule not adhering to principles in the bill would have no force or effect. Another approach was reflected in S. 1178 . It would have required EPA and the Army Corps to establish a commission, with membership appointed by the agencies and the Senate and House, to develop criteria for defining whether a waterbody or wetland has a significant nexus to a traditional navigable water. It would have barred the agencies from developing, finalizing, implementing, or enforcing the 2014 proposed rule or a substantially similar rule prior to receiving a report from the commission. This bill responded in part to criticism that the science underlying the rule was not thoroughly peer-reviewed and subject to public comment before the rule was proposed in 2014. (For discussion, see CRS Report R43455, EPA and the Army Corps' Rule to Define "Waters of the United States" .) The obstacles for targeted bills are similar to those for an appropriations bill, but with the additional complication of needing to be included in non-appropriations legislation that is "must pass" or difficult for the President to veto, or that can receive two-thirds votes in both chambers to override a veto. Targeted legislation might seek to address substantive aspects of the proposed rule that were widely criticized. For example, many stakeholder groups contended that key definitions in the 2014 proposed rule--such as "tributary," "floodplain," and "significant nexus" --were ambiguous, and other terms--such as "upland," "gullies," and "rills"--were entirely undefined. Critics said that ambiguities could lead to agency interpretations that greatly expand the regulatory scope of CWA jurisdiction. However, such criticisms of the proposed rule for the most part were general in nature, rather than specific as to precise language that would clarify terms and definitions. For Congress to legislate solutions and codify remedies in the CWA is a challenge requiring technical expertise that legislators generally delegate to agencies and departments, which implement laws, but one that many in Congress believe the agencies failed to meet in this case. A fourth option could be legislation to amend the Clean Water Act more broadly. The statute has not been comprehensively amended since 1987 (the Water Quality Act of 1987, P.L. 100-4 ). Since the 2001 SWANCC and 2006 Rapanos rulings of the Supreme Court, many stakeholders have argued that what is needed is legislative action to affirm Congress's intention regarding CWA jurisdiction, not guidance or new rules. This type of legislation would have broad implications for the CWA, since questions of CWA jurisdiction are fundamental to all of the act's regulatory requirements. Bills to address CWA jurisdictional issues, but taking different approaches, have been introduced in several Congresses since 2001. Versions of one proposal (the Clean Water Authority Restoration Act) were introduced in the 107 th , 108 th , 109 th , 110 th , and 111 th Congresses. It would have provided a broad statutory definition of "waters of the United States"; would have clarified that the CWA is intended to protect U.S. waters from pollution, not just maintain their navigability; and would have included a set of findings to assert constitutional authority over waters and wetlands. In the 111 th Congress, one of these bills was reported in the Senate ( S. 787 ), but no further action occurred. Other legislation intended to restrict regulatory jurisdiction was introduced in the 108 th and 109 th Congresses (the Federal Wetlands Jurisdiction Act, which was H.R. 2658 in the 109 th Congress). Rather than broadening the statutory definition of "navigable waters," which is the key statutory term for determining jurisdiction, it would have narrowed the definition. It would have defined certain isolated wetlands that are not adjacent to navigable waters, or non-navigable tributaries and other areas (such as waters connected to jurisdictional waters by ephemeral waters, ditches or pipelines), as not being subject to federal regulatory jurisdiction. There was no legislative action on these bills. In the 114 th Congress, legislation titled the Defense of Environment and Property Act was introduced ( S. 980 ). This bill would have clarified the term "navigable waters" in the CWA by defining the term so as to be consistent with Justice Scalia's plurality opinion in the 2006 Rapanos decision, which was the narrowest of the three major opinions in the case. Similar bills were introduced in the 112 th and 113 th Congresses; there also was no legislative action on them. Another such bill in the 114 th Congress was H.R. 2705 , which would have repealed the final rule that was announced in May 2015. Similar to S. 980 , this bill would have revised the CWA definition of "navigable waters" narrowly to mean waters that are navigable-in-fact or are permanent or continuously flowing bodies of water that are connected to navigable-in-fact waters. Enacting legislation to either broaden or restrict CWA jurisdiction would likely require EPA and the Corps to issue new regulations, leading to another lengthy rulemaking process and potentially to more legal challenges in the future. So far, congressional consensus on legislation to redefine CWA jurisdiction has been elusive. While President Obama might have signed a bill such as the Clean Water Authority Restoration Act introduced in the past, passage of such legislation by the Senate and House in the 114 th Congress was unlikely. On the other hand, if the House and Senate were to pass legislation to narrowly define CWA jurisdiction, President Obama likely would have vetoed it, as he did with the CRA resolution. As with the other options previously discussed, a bill would need the President's signature, or the votes of two-thirds majorities in both chambers to override his veto. This report has discussed four legislative options that Congress could consider to halt or redirect EPA and the Corps' "waters of the United States" rule and that were reflected in bills in the 114 th Congress: the Congressional Review Act, appropriations bill limitations, standalone legislation, and broad amendments to the Clean Water Act. It is noteworthy that several of the options--a CRA resolution, appropriations bill limitations, and some current forms of standalone legislation--would not only have blocked EPA and the Corps from adopting, implementing or enforcing the 2015 rule, but also would have prohibited them from developing a similar rule. As described previously, blocking both the rule and future action (e.g., H.R. 594 , H.J.Res. 59 , and S.J.Res. 22 ), limiting the agencies through appropriations, or requiring the agencies to restart the rulemaking process (e.g., H.R. 1732 and S. 1140 ) would leave in place the status quo, with determinations of CWA jurisdiction being made pursuant to existing regulations, non-binding agency guidance issued in 2003 and 2008, and jurisdictional determinations done by 38 separate Corps district offices that in many cases require time-consuming, case-specific evaluation by regulatory staff. As described above, on October 9, 2015, a federal appeals court placed a nationwide stay on the clean water rule. The effect of the court's order is to achieve, at least temporarily, the goal of some of the legislation discussed in this report--to leave the status quo in place for determinations of CWA jurisdiction. Many critics of the 2015 rule endorse that result. Other critics favor passage of legislation that would provide direction to EPA and the Corps to develop a different rule, because legal challenges to the 2015 rule may take years to resolve. Stakeholder groups involved in the "waters of the United States" debate find agreement on few aspects of the issue. Some support the 2015 rule, some prefer the status quo rather than a rule that they consider unclear, and some have concerns with the rule but do support clarifying the extent of CWA-regulated waters. The 114 th Congress legislative activity in the Senate on S.J.Res. 22 and S. 1140 and in the House on H.R. 1732 suggests that, even with the final rule on hold nationwide for now and judicial proceedings that could continue for quite some time, there is continuing interest in Congress to change the agencies' course of action. With a change in administration in January 2017, the 115 th Congress and the new administration seem likely to revisit the "waters of the United States" issue and controversies. The new administration's legislative priorities, as well as plans for addressing the ongoing litigation of the 2015 rule or for initiating a new CWA jurisdiction rule are unclear for now. For Congress, although a resolution of disapproval under the CRA is no longer an available option to halt the rule, Congress could pursue the other legislative options to halt or redirect the rule discussed here.

On May 27, 2015, the Army Corps of Engineers (the Corps) and the Environmental Protection Agency (EPA) finalized a rule revising regulations that define the scope of waters protected under the Clean Water Act (CWA). Discharges to waters under CWA jurisdiction, such as the addition of pollutants from factories or sewage treatment plants and the dredging and filling of spoil material through mining or excavation, require a CWA permit. The rule was proposed in 2014 in light of Supreme Court rulings that created uncertainty about the geographic limits of waters that are and are not protected by the CWA. According to EPA and the Corps, their intent in proposing the rule was to clarify CWA jurisdiction, not expand it. Nevertheless, the rule has been extremely controversial, especially with groups representing property owners, land developers, and agriculture, who contend that it represents a massive federal overreach beyond the agencies' statutory authority. Most state and local officials are supportive of clarifying the extent of CWA-regulated waters, but some are concerned that the rule could impose costs on states and localities as their own actions become subject to new requirements. Most environmental advocacy groups welcomed the proposal, which would more clearly define U.S. waters that are subject to CWA protections, but beyond that general support, some in these groups favor an even stronger rule. The final rule contains a number of changes to respond to criticisms of the proposal, but the revisions may not satisfy all critics of the rule. The rule became effective August 28, 2015, replacing EPA-Corps guidance that has governed permitting decisions since the Supreme Court's rulings. However, a federal appeals court issued a nationwide stay of the rule that has been in effect since October 2015. Despite the court's stay of the rule, some in Congress favor halting EPA and the Corps' current approach to defining "waters of the United States." To do so legislatively, at least four options were reflected in bills in the 114th Congress. The Congressional Review Act. If Congress passes a joint resolution disapproving a covered rule under procedures provided by the act, and the resolution becomes law, the rule cannot take effect or continue in effect. The agency may not reissue either that rule or any substantially similar one, except under authority of a subsequently enacted law. The Senate and House passed such a joint resolution (S.J.Res. 22), but President Obama vetoed it on January 19. On January 21, a procedural vote in the Senate to override the veto failed. Appropriations bill limitations. A provision in an appropriations bill can be a mechanism to block or redirect an agency's course of action by limiting or preventing agency funds from being used for the rule. Bills with such limitations were reported in 2015 and 2016, but none of these bills were enacted. Standalone targeted legislation. Other legislation can take several forms, such as a bill similar to limits in an appropriations bill to prohibit EPA and the Corps from finalizing, implementing, or enforcing the proposed rule. Another approach could be legislation to address substantive aspects of the rule that have been criticized. The House passed one such bill (H.R. 1732) in 2015. Similar legislation was reported in the Senate, but failed to advance (S. 1140). Broad amendments to the Clean Water Act. Legislation to affirm or clarify Congress's intention regarding CWA jurisdiction would have broad implications for the CWA, since questions of jurisdiction are fundamental to all of the act's regulatory requirements. These options and related legislative activity in the 114th Congress are discussed in this report. Each option faced a steep path to enactment, because of the Obama Administration's opposition to legislation to halt or weaken a major regulatory initiative such as the "waters of the United States" rule. With a change in administration in January 2017, the 115th Congress and the new administration seem likely to revisit the "waters of the United States" issue and controversies, but how that will occur is unclear for now.

Section 1512 applies to the obstruction of federal proceedings--congressional, judicial, or executive. It consists of four somewhat overlapping crimes: use of force or the threat of the use of force to prevent the production of evidence (18 U.S.C. 1512(a)); use of deception or corruption or intimidation to prevent the production of evidence (18 U.S.C. 1512(b)); destruction or concealment of evidence or attempts to do so (18 U.S.C. 1512(c)); and witness harassment to prevent the production of evidence (18 U.S.C. 1512(d)). Subsection 1512(a) has slightly different elements depending upon whether the offense involves a killing or attempted killing--18 U.S.C. 1512(a)(1), or some other use of physical force or a threat--18 U.S.C. 1512(a)(2). In essence, it condemns the use of violence to prevent a witness from testifying or producing evidence for an investigation and sets its penalties according to whether the obstructive violence was a homicide, an assault or a threat. Subsection 1512(k) makes conspiracy to violate Section 1512 a separate offense subject to the same penalties as the underlying offense. The section serves as an alternative to a prosecution under 18 U.S.C. 371 that outlaws conspiracy to violate any federal criminal statute. Section 371 is punishable by imprisonment for not more than five years and conviction requires the government to prove the commission of an overt act in furtherance of the scheme by one of the conspirators. Subsection 1512(k) has no specific overt act element, and the courts have generally declined to imply one under such circumstances. Regardless of which section is invoked, conspirators are criminally liable under the Pinkerton doctrine for any crime committed in the foreseeable furtherance of the conspiracy. Accomplices to a violation of subsection 1512(a) may incur criminal liability by operation of 18 U.S.C. 2, 3, 4, or 373 as well. Section 2 treats accomplices before the fact as principals, that is, it declares that those who command, procure or aid and abet in the commission of a federal crime by another, are to be sentenced as if they committed the offense themselves. As a general rule, in order to aid and abet another to commit a crime it is necessary that a defendant in some way associate himself with the venture, that he participate in it as in something he wishes to bring about, that he seek by his action to make it succeed. It is also necessary to prove that someone else committed the underlying offense. Section 3 outlaws acting as an accessory after the fact, which occurs when one knowing that an offense has been committed, receives, relieves, comforts or assists the offender in order to hinder his or her apprehension, trial, or punishment. Prosecution requires the commission of an underlying federal crime by someone else. Offenders face sentences set at one half of the sentence attached to the underlying offense, or if the underlying offense is punishable by life imprisonment or death, by imprisonment for not more than 15 years (and a fine of not more than $250,000). The elements of misprision of felony under 18 U.S.C. 4 are (1) the principal committed and completed the felony alleged; (2) the defendant had full knowledge of that fact; (3) the defendant failed to notify the authorities; and (4) defendant took steps to conceal the crime. The offense is punishable by imprisonment for not more than three years and/or a fine of not more than $250,000. Solicitation to commit an offense under subsection 1512(a), or any other crime of violence, is proscribed in 18 U.S.C. 373. To establish solicitation under SS373, the Government must demonstrate that the defendant (1) had the intent for another to commit a crime of violence and (2) solicited, commanded, induced or otherwise endeavored to persuade such other person to commit the crime of violence under circumstances that strongly corroborate evidence of that intent. Section 373 provides an affirmative statutory defense if an offender prevents the commission of the solicited offense. Offenders face penalties set at one half of the sanctions for the underlying offense, but imprisonment for not more than 20 years, if the solicited crime of violence is punishable by death or imprisonment for life. A subsection 1512(a) violation opens up the prospect of prosecution for other crimes for which a violation of subsection 1512(a) may serve as an element. The federal money laundering and racketeering statutes are perhaps the most prominent examples of these. The racketeering statutes (RICO) outlaw acquiring or conducting the affairs of an interstate enterprise through a pattern of predicate offenses. Section 1512 offenses are RICO predicate offenses. RICO violations are punishable by imprisonment for not more that 20 years (or imprisonment for life if the predicate offense carries such a penalty), a fine of not more than $250,000 and the confiscation of related property. The money laundering provisions, among other things, prohibit financial transactions involving the proceeds of a predicate offense. RICO predicate offenses are by definition money laundering predicate offenses. Money laundering is punishable by imprisonment for not more than 20 years, a fine, and the confiscation of related property. The second group of offenses within Section 1512 outlaws obstruction of federal congressional, judicial, or administrative activities by intimidation, threat, corrupt persuasion or deception. In more general terms, subsection 1512(b) bans (1) knowingly, (2) using one of the prohibited forms of persuasion (intimidation, threat, misleading or corrupt persuasion), (3) with the intent to prevent a witness's testimony or physical evidence from being truthfully presented at congressional or other official federal proceedings or with the intent to prevent a witness from cooperating with authorities in a matter relating to a federal offense. It also bans any attempt to so intimidate, threaten, or corruptly persuade. The conspiracy, accomplice, RICO and money laundering attributes are equally applicable to subsection 1512(b) offenses. Subsection 1512(c) proscribes obstruction of official proceedings by destruction of evidence and is punishable by imprisonment for not more than 20 years. Subsection 1512(d) outlaws harassing federal witnesses and is a misdemeanor punishable by imprisonment for not more than one year. Both enjoy the conspiracy, accomplice, RICO and money laundering attributes that to apply to all Section 1512 offenses. Section 1513 prohibits witness or informant retaliation in the form of killing, attempting to kill, inflicting or threatening to inflict bodily injury, damaging or threatening to damage property, and conspiracies to do so. It also prohibits economic retaliation against a federal witnesses, but only witnesses in court proceedings and only on criminal cases. Its penalty structure is comparable to that of Section 1503. Section 1513 offenses are RICO predicate offenses and money laundering predicate offenses, and the provisions for conspirators and accomplices apply as well. Section 1505 outlaws obstructing congressional or federal administrative proceedings, a crime punishable by imprisonment not more than five years (not more than eight years if the offense involves domestic or international terrorism). The crime has three essential elements. First, there must be a proceeding pending before a department or agency of the United States. Second, the defendant must be aware of the pending proceeding. Third, the defendant must have intentionally endeavored corruptly to influence, obstruct or impede the pending proceeding. Section 1505 offenses are not RICO or money laundering predicate offenses. Conspiracy to obstruct administrative or congressional proceedings may be prosecuted under 18 U.S.C. 371, and the general aiding and abetting, accessory after the fact, and misprision statutes are likely to apply with equal force in the case of obstruction of an administrative or congressional proceeding. Section 371 contains both a general conspiracy prohibition and a specific obstruction conspiracy prohibition in the form of a conspiracy to defraud proscription. The elements of conspiracy to defraud the United States are: (1) an agreement of two more individuals; (2) to defraud the United States; and (3) an overt act by one of conspirators in furtherance of the scheme. The fraud covered by the statute reaches any conspiracy for the purpose of impairing, obstructing or defeating the lawful functions of any department of Government by deceit, craft or trickery, or at least by means that are dishonest. The scheme may be designed to deprive the United States of money or property, but it need not be so; a plot calculated to frustrate the functions of a governmental entity will suffice. Contempt of Congress is punishable by statute and under the inherent powers of Congress. Congress has not exercised its inherent contempt power for some time. The statutory contempt of Congress provision, 2 U.S.C. 192, outlaws the failure to obey a congressional subpoena or the refusal to answer questioning at a congressional hearing. The offense is punishable by imprisonment for not more than one year and a fine of up to $100,000. Several other federal statutes outlaw use of threats or violence to obstruct federal government activities. One, 18 U.S.C. 115, prohibits acts of violence against Members of Congress, judges, jurors, officials, former officials, and their families in order to impede the performance of their duties or to retaliate for the performance of those duties. It makes assault, kidnapping, murder, and attempts and conspiracies to commit such offenses in violation of the section subject to the penalties imposed for those crimes elsewhere in the Code. It makes threats to commit an assault punishable by imprisonment for not more than six years and threats to commit any of the other offenses under the section punishable by imprisonment for not more than 10 years. Another, 18 U.S.C. 1114, protects federal officers and employees as well as those assisting them, from murder, manslaughter, and attempted murder and manslaughter committed during or on account of the performance of their duties. The section's coverage extends to government witnesses. Other provisions protect federal officers and employees from kidnapping and assault committed during or account of the performance of their duties, but their coverage of those assisting them is less clear. Beyond these general prohibitions, federal law proscribes the murder, kidnapping, or assault of Members of Congress, Supreme Court Justices, or Cabinet Secretaries; and a number of statutes outlaw assaults on federal officers and employees responsible for the enforcement of particular federal statutes and programs. Section 201 outlaws offering or soliciting bribes or illegal gratuities in connection with judicial, congressional and administrative proceedings. Bribery is a quid pro quo offense. It condemns invitations and solicitations to corruption. The penalty structure for bribery is fairly distinctive: imprisonment for not more than 15 years; a fine of the greater of three times the amount of the bribe or $250,000; and disqualification from holding any federal position of honor or trust thereafter. The mail fraud and wire fraud statutes have been written and constructed with such sweep that they cover among other things, obstruction of government activities by corruption. They reach any scheme to obstruct the lawful functioning in the judicial, legislative or executive branch of government that involves (1) the deprivation of money, property or honest services, and (2) the use of the mail or wire communications as an integral part of scheme. Congress expanded the scope of the mail and wire fraud statutes with the passage of 18 U.S.C. 1346 which defines the "scheme to defraud" element in the fraud statutes to include a scheme "to deprive another of the intangible right of honest services." The Supreme Court in Skilling concluded that Congress intended the honest services provision to apply only to bribery or kickback schemes involving use of mails or wire communications. Prosecutors may favor a mail or wire fraud charge over or in addition to a bribery charge if for no the reason other than that under both fraud sections offenders face imprisonment for not more than 20 years rather than the 15-year maximum found in Section 201. Extortion under color of official right occurs when a public official receives a payment to which he is not entitled, knowing it is being provided in exchange for the performance of an official act. Liability may be incurred by public officers and employees, those in the process of becoming public officers or employees, those who hold themselves out to be public officers or employees, their coconspirators, or those who aid and abet public officers or employees in extortion under color or official right. The payment need not have been solicited, nor need the official act for which it is exchanged have been committed. The prosecution must establish that the extortion obstructed, delayed, or affected interstate or foreign commerce, but the impact need not have actually occurred nor been even potentially severe. Violations are punishable by imprisonment for not more than 20 years. Other than subsection 1512(c), there are three federal statutes which expressly outlaw the destruction of evidence in order to obstruct justice: 18 U.S.C. 1519 prohibits destruction of evidence in connection with federal investigation or bankruptcy proceedings, 18 U.S.C. 1520 prohibits destruction of corporate audit records, and 18 U.S.C. 2232(a) prohibits the destruction of property to prevent the government from searching or seizing it. In addition to the obstruction of justice provisions of 18 U.S.C. 1503 and 1512, there are four other general statutes that outlaw obstructing the government's business by deception. Three involve perjury: 18 U.S.C. 1623 that outlaws false swearing before federal courts and grand juries; 18 U.S.C. 1621 the older and more general prohibition that proscribes false swearing in federal official matters (judicial, legislative, or administrative); and 18 U.S.C. 1622 that condemns subornation, that is, inducing another to commit perjury. The fourth, 18 U.S.C. 1001, proscribes material false statements concerning any matter within the jurisdiction of a federal executive branch agency, and to a somewhat more limited extent with the jurisdiction of the federal courts or a congressional entity. Regardless of the offense for which an individual is convicted, his sentence may be enhanced as a consequence of any obstruction of justice for which he is responsible, if committed during the course of the investigation, prosecution, or sentencing for the offense of his conviction. The enhancement may result in an increase in his term of imprisonment by as much as four years. The enhancement is the product of the influence of SS3C1.1 of the United States Sentencing Guidelines. Section 3C1.1 instructs sentencing courts to assess an obstruction of justice enhancement: If (A) the defendant willfully obstructed or impeded, or attempted to obstruct or impede, the administration of justice with respect to the investigation, prosecution, or sentencing of the instant offense of conviction, and (B) the obstructive conduct related to (i) the defendant's offense of conviction and any relevant conduct; or (ii) a closely related offense, increase the offense level by 2 levels. U.S.S.G. SS3C1.1. Early on, the Supreme Court made it clear that an individual's sentence might be enhanced under U.S.S.G SS3C1.1, if he committed perjury during the course of his trial. Moreover, the examples provided elsewhere in the section's commentary and the cases applying the section confirm that it reaches perjurious statements in a number of judicial contexts and to false statements in a number of others. The courts have concluded that an enhancement under the section is appropriate, for instance, when a defendant has (1) given preposterous, perjurious testimony during his own trial; (2) given perjurious testimony at his suppression hearing; (3) given perjurious, exculpatory testimony at the separate trial of his girl friend; (4) made false statements in connection with a probation officer's bail report; (5) made false statements to the court in an attempt to change his guilty plea; (6) made false statements to federal investigators; and (7) made false statements to state investigators relating to conduct for which the defendant was ultimately conviction. When perjury provides the basis for an enhancement under the section, the court must find that the defendant willfully testified falsely with respect to a material matter. When based upon a false statement not under oath, the statement must still be material, that is, it must "tend to influence or affect the issue under determination." The commentary accompanying the section also states that the enhancement may be warranted when the defendant threatens a victim, witness, or juror; submits false documentations; destroys evidence; flees (in some cases); or engages in any other conduct that constitute an obstruction of justice under criminal law provisions of title 18 of the United States Code.

Obstruction of justice is the frustration of governmental purposes by violence, corruption, destruction of evidence, or deceit. It is a federal crime. In fact, it is several crimes. Obstruction prosecutions regularly involve charges under several statutory provisions. Federal obstruction of justice laws are legion; too many for even passing reference to all of them in a single report. The general obstruction of justice provisions are six: 18 U.S.C. 1512 (tampering with federal witnesses), 1513 (retaliating against federal witnesses), 1503 (obstruction of pending federal court proceedings), 1505 (obstruction of pending congressional or federal administrative proceedings), 371 (conspiracy), and contempt. Other than Section 1503, each prohibits obstruction of certain congressional activities. In addition to these, there are a host of other statutes that penalize obstruction by violence, corruption, destruction of evidence, or deceit. Moreover, regardless of the offense for which an individual is convicted, his sentence may be enhanced as a consequence of any obstruction of justice for which he is responsible, if committed during the course of the investigation, prosecution, or sentencing for the offense of his conviction. The enhancement may result in an increase in his term of imprisonment by as much as four years. This is an abridged version of CRS Report RL34304, Obstruction of Congress: a Brief Overview of Federal Law Relating to Interference with Congressional Activities, by [author name scrubbed], without the footnotes, quotations, or citations to authority found in the longer report.