Intelligence officials and Members of Congress are addressing ways to reduce intelligence spending while protecting core capabilities. Director of National Intelligence (DNI) James R. Clapper Jr. recently stated that sequestration would require a 7% cut, or roughly $4 billion, to the National Intelligence Program (NIP) budget and warned of reduced global coverage and decreased human and technical intelligence collection. Mr. Clapper also warned of repercussions similar to those that occurred in the 1990s when the intelligence community saw a 23% cut in its budget, resulting in a "damaging downward spiral." Those cuts allegedly distorted the intelligence workforce, resulting in what is sometimes referred to as a "bathtub" shaped employment curve, with large numbers of older employees and new hires but few mid-level professionals capable of steering the community through post-9/11 changes. Congress completed action on the FY2013 intelligence authorization legislation ( S. 3454 ) in December 2012. The Senate passed its version of the bill by voice vote on December 28. The House approved the Senate version by a 373-29-29 vote on December 31. The final bill was signed into law by the President on January 14, 2013 ( P.L. 112-277 ). The bill reflected funding above the President's request but below the $53.9 billion appropriated for FY2012. The attacks on the World Trade Center and the Pentagon on September 11, 2001, dramatically demonstrated the intelligence threats facing the United States in the new century. In response, Congress approved significantly larger intelligence budgets and, in December 2004, passed the most extensive reorganization of the intelligence community since the National Security Act of 1947. The Intelligence Reform and Terrorism Prevention Act of 2004 (hereinafter, the "Intelligence Reform Act") ( P.L. 108 - 458 ) created a Director of National Intelligence (separate from a Director of the Central Intelligence Agency) who heads the intelligence community, serves as the principal intelligence adviser to the President, and oversees and directs the acquisition of major collections systems. As long urged by some outside observers, one individual is now charged with concentrating on the intelligence community as a whole and possesses statutory authorities for establishing priorities for budgets, for directing collection by the whole range of technical systems and human agents, and for the preparation of community-wide analytical products. P.L. 108-458 was designed to address the findings of the National Commission on Terrorist Attacks Upon the United States, known as the 9/11 Commission, that there has been inadequate coordination of the national intelligence effort and that the intelligence community, as then organized, could not serve as an agile information gathering network in the struggle against international terrorists. The commission released its report in late July 2004, and Congress debated its recommendations through the following months. A key issue was the extent of the authorities of the DNI, especially with regard to management and budgeting for technical collection systems managed by Defense Department agencies. In the end, many of the recommendations of the 9/11 Commission regarding intelligence organization were adopted after a compromise provision was included that called for implementing the act "in a manner that respects and does not abrogate" the statutory authorities of department heads. For additional information about intelligence community reform, background on intelligence collection disciplines, and intelligence budgeting, please see Appendix A to this report. The text below provides a brief overview of the intelligence community and of enduring intelligence oversight issues and then discusses specific topics that may be addressed by the 113 th Congress. The intelligence community (defined at 50 U.S.C. 401a(4)) consists of the following: The Office of the Director of National Intelligence Central Intelligence Agency (CIA) Bureau of Intelligence and Research, Department of State (INR) Defense Intelligence Agency (DIA) National Security Agency (NSA) National Reconnaissance Office (NRO) National Geospatial-Intelligence Agency (NGA) The National Security Branch, Federal Bureau of Investigation (FBI) Army Intelligence Navy Intelligence Air Force Intelligence Marine Corps Intelligence Coast Guard Intelligence The Office of Intelligence and Analysis, Department of the Treasury The Office of Intelligence, Department of Energy The Office of National Security Intelligence, Drug Enforcement Administration (DEA) The Office of Intelligence and Analysis, Department of Homeland Security Except for the CIA, intelligence offices or agencies are components of Cabinet departments with other roles and missions. The intelligence offices/agencies, however, participate in intelligence community activities while supporting the other efforts of their departments. The CIA remains the keystone of the analytic efforts of the intelligence community. It has all-source analytical capabilities that cover the whole world outside U.S. borders. It produces a range of studies that address virtually any topic of interest to national security policymakers. The CIA also collects intelligence with human sources and, on occasion, undertakes covert actions at the direction of the President. (A covert action is an activity or activities of the U.S. government to influence political, economic, or military conditions abroad, where it is intended that the U.S. role will not be apparent or acknowledged publicly.) Three major national-level intelligence agencies in the Department of Defense (DOD)—the National Security Agency (NSA), the National Reconnaissance Office (NRO), and the National Geospatial-Intelligence Agency (NGA)—absorb the larger part of the national intelligence budget. NSA is responsible for signals intelligence and has collection sites throughout the world. The NRO develops and operates reconnaissance satellites. The NGA prepares the geospatial data—ranging from maps and charts to sophisticated computerized databases—necessary for humanitarian operations and for targeting in an era in which military operations are dependent upon precision-guided weapons. In addition to these three agencies, the Defense Intelligence Agency (DIA) is responsible for defense attachés and for providing DOD with a variety of analytical products. It serves as the premier all-source analytic unit within DOD. Although the Intelligence Reform Act provides extensive budgetary and management authorities over these agencies to the DNI, it does not revoke the responsibilities of the Secretary of Defense for these agencies. The State Department's Bureau of Intelligence and Research (INR) is one of the smaller components of the intelligence community but is widely recognized for the high quality of its analysis. INR is strictly an analytical agency; diplomatic reporting from embassies, though highly useful to intelligence analysts, is not considered an intelligence function (nor is it budgeted as one). The key intelligence functions of the FBI relate to counterterrorism and counterintelligence. The former mission has grown enormously in importance since September 2001, many new analysts have been hired, and the FBI has been reorganized in an attempt to ensure that intelligence functions are not subordinated to traditional law enforcement efforts. Most importantly, law enforcement information, including counterterrorism and counterintelligence information, is now expected to be forwarded to other intelligence agencies for use in all-source products. The intelligence organizations of the four military services concentrate largely on concerns related to their specific missions. Their analytical products, along with those of DIA, supplement the work of CIA analysts and provide greater depth on key military and technical issues. The Homeland Security Act ( P.L. 107 - 296 ) provided the new Department of Homeland Security (DHS) responsibilities for fusing law enforcement and intelligence information relating to terrorist threats to the homeland. The Office of Intelligence and Analysis in DHS participates in the inter-agency counterterrorism efforts and, along with the FBI, has focused on ensuring that state and local law enforcement officials receive information on terrorist threats from national-level intelligence agencies. The Coast Guard, now part of the DHS, deals with information relating to maritime security and homeland defense. The Energy Department analyzes foreign nuclear weapons programs as well as nuclear nonproliferation and energy-security issues. It also has a robust counterintelligence effort. The Treasury Department collects and processes information that may affect U.S. fiscal and monetary policies. Treasury also covers the terrorist financing issue. Annual intelligence authorization bills were enacted from FY1979 through FY2005, providing congressional authorization for intelligence programs and guidance to the several intelligence agencies in specific provisions and report language. No intelligence authorization legislation was enacted between December 2004 and October 2010. Annual intelligence authorization acts were first passed in 1978 after the establishment of the two congressional intelligence committees. These acts provided specific authorizations of intelligence activities and were accompanied by reports that provided detailed guidance to the nation's intelligence agencies. The absence of intelligence authorization acts meant that key intelligence issues were addressed in defense authorization acts and defense appropriations acts that focused primarily on the activities of the Department of Defense. Several Members have maintained that this procedure resulted in misplaced priorities and wasteful spending estimates that could run into billions. However, over the last two years, Congress has met its statutory requirement by passing three Intelligence Authorization bills (for FY2011, FY2012, and FY2013) that included classified schedules of authorizations and that were signed into law. Most recently, in December 2012, both the House and Senate passed S. 3454 , the Intelligence Authorization for FY2013, which was signed into law by the President on January 14, 2013 ( P.L. 112-277 ). Key issues debated during the passage of these bills included the adequacy of Director of National Intelligence (DNI) authorities, Government Accountability Office (GAO) audit authority over the Intelligence Community, and measures to combat national security leaks. These three bills appear to reflect a determination to underscore the continuing need for specific annual intelligence authorization legislation. For a complete treatment of intelligence authorization issues, see CRS Report R40240, Intelligence Authorization Legislation: Status and Challenges , by Marshall Curtis Erwin. The Intelligence Reform and Terrorism Prevention Act of 2004 tasks the DNI with ensuring the elimination of waste and unnecessary duplication within the intelligence community.