For more than a decade, violent crime perpetrated by warring criminal organizations has threatened citizen security and governance in parts of Mexico. While the illicit drug trade has long been prevalent in Mexico, an increasing number of criminal organizations are fighting for control of smuggling routes into the United States and local drug markets. Organized crime-related violence has resulted in more than 109,000 killings since December 2006 and contributed to 30,000 disappearances. For the first quarter of 2017, organized crime-related violence in Mexico reached levels not seen since the end of the Felipe Calderón Administration (2006-2012; see Figure 1 , below). Although daunting challenges remain, U.S.-Mexican cooperation to improve security and the rule of law has increased significantly as a result of the Mérida Initiative, a bilateral partnership developed by the George W. Bush Administration and the government of Felipe Calderón. Between FY2008 and FY2017, Congress appropriated more than $2.8 billion for Mérida Initiative programs (see Table 1 ), more than $1.6 billion of which has been delivered. Mexico invested some $100 billion of its own resources on security and public safety through 2017. Mexican President Enrique Peña Nieto took office in December 2012, vowing to reduce violence in Mexico and adjust U.S.-Mexican security efforts to focus on violence prevention. Although Mexico's public relations approach to security issues has changed, its operational approach has remained basically the same. That approach, commonly referred to as the kingpin strategy , has focused on taking out the top- and mid-level leadership of Mexico's criminal organizations. Critics maintain that this approach has fueled violence by encouraging succession struggles and turf wars. The government's continued inability to resolve high-profile cases—including extrajudicial killings, torture, and enforced disappearances involving security forces and corruption cases involving former governors—has underscored ongoing problems with impunity. The Peña Nieto Administration's apparent inability to protect journalists and human rights defenders, as well as allegations that it spied on reporters critical of its policies, has generated international concern. Congress is continuing to fund and oversee the Mérida Initiative. The 115 th Congress provided $139 million for the Mérida Initiative in the FY2017 Consolidated Appropriations Act ( P.L. 115-31 ). Congress is now considering President Trump's FY2018 budget request, which would cut funding for the Mérida Initiative by $54 million, or 38.8%, compared to the FY2017 estimated funding level (see Table 1 ). Congress may analyze how progress under the Mérida Initiative is being measured; how U.S. funds have been used to advance Mexico's police and judicial reform efforts; and the degree to which U.S. programs in Mexico complement other U.S. counterdrug and border security efforts. Congress also may seek to ensure that funds support opium poppy drug eradication and interdiction programs given rising heroin, fentanyl (a synthetic opioid more powerful than heroin), and methamphetamine production in Mexico. This report provides a framework for examining the current status and future prospects for U.S.-Mexican security cooperation. It begins with a brief discussion of security challenges in Mexico and Mexico's security strategy. It then provides information on the evolution of congressional funding and oversight of the Mérida Initiative before delving into its four pillars. The report concludes by raising policy issues facing Congress, as it considers continued funding and as it oversees the Mérida Initiative and broader U.S.-Mexican security cooperation. Countering the movement of illegal drugs from Mexico into the U.S. market has remained a top U.S. drug control priority for decades. Mexico is the main foreign supplier to the U.S. market of heroin, methamphetamine, and marijuana. It remains a major transit country for cocaine sold in the United States and is a transit and probable supplier country of fentanyl (a potent synthetic opioid often mixed with heroin). Marijuana remains the most widely abused drug in the United States, with some of the supply coming from Mexico, although the quality of most Mexican marijuana has been considered inferior to the marijuana produced domestically. In contrast, more Mexico-produced methamphetamine is being used in the United States than U.S.-produced product. Methamphetamine seizures at the southwest border increased 305% from 2010 to 2015. There has also been particular concern about the increasing availability of Mexican-produced heroin in the United States, including in eastern states where Colombian-produced heroin used to predominate. The amount of heroin seized along the U.S.-Mexico border more than doubled from 2010 to 2015. Surging U.S. demand has fueled increasing opium cultivation and heroin production in Mexico, as well as drug trafficking-related violence in areas where groups are vying to control production. In June 2016, the Mexican government estimated the average poppy cultivation in Mexico to be 24,000 hectares for 2014-2015. Mexican transnational criminal organizations (TCOs), often in alliance with U.S. national and local gangs, continue to dominate the U.S. drug market. According to the Drug Enforcement Administration (DEA), six major Mexican TCOs operate in the United States. Of those, the Sinaloa organization has the widest reach into U.S. cities. Mexican TCOs have vied for control of illicit routes into the United States and for control over local drug distribution networks. Mexico's criminal organizations are also continuing to fragment and diversify away from drug trafficking, furthering their expansion into activities such as oil theft, alien smuggling, kidnapping, and human trafficking. Although much of the crime—particularly extortion—disproportionately affects localities and small businesses, fuel theft has become a national security threat, costing Mexico as much as $1 billion a year and fueling violent conflicts between the army and suspected thieves. Organized crime-related homicides in Mexico rose slightly in 2015 and significantly in 2016. Violence has escalated even further thus far in 2017 (4,370 such killings recorded in the first quarter as compared to 2,538 for that period in 2016). Fragmentation and infighting among criminal groups has intensified since the rise of the Jalisco New Generation or CJNG cartel, a group that shot down a military helicopter in 2015 and a police helicopter in September 2016. The recapture and extradition of "El Chapo" Guzmán has prompted succession battles within Sinaloa and emboldened the CJNG and other TCOs to challenge Sinaloa's dominance. In addition to the larger TCOs, analysts estimate that there has been an increase in smaller, regional crime groups. President Peña Nieto initially downplayed security concerns and focused on enacting economic reforms. When discussing security policy, Peña Nieto emphasized violence reduction and the importance of respect for human rights. His security strategy initially focused on (1) planning, (2) prevention, (3) protection and respect of human rights, (4) coordination, (5) institutional reform, and (6) monitoring and evaluation. Early in his term, he launched a national crime prevention plan, established a unified code of criminal procedures to cover the federal and judiciaries, and increased funding for the country's transition to an accusatorial justice system. His proposal to create a large national gendarmerie (police) to replace soldiers engaged in public security was watered down; the proposed force became a part of the federal police. Another goal—to create a centralized intelligence agency—was abandoned. While efforts to target the Zetas proved relatively successful, operations against the CJNG have yet to demonstrate success. By 2014, violence had begun to increase, high-profile cases of human rights abuses committed by security forces had captured international attention, and President Peña Nieto and his top adviser had become embroiled in conflict-of-interest scandals. Rising insecurity, social protests that have led to deadly clashes with security forces, and the government's apparent lack of new strategies to address either type of violence has continued to prompt significant concern. President Peña Nieto has maintained a reactive approach of deploying federal forces—including the military—to areas in which crime surges rather than focusing on police reform and deterring violence and human rights abuses by strengthening the criminal justice sector. Experts also are concerned about the impacts of fiscal austerity on the justice sector. Mexico's 2017 budget reduced funding for intelligence collection, crime prevention, and the prosecutorial unit charged with investigating cases of people who have disappeared. Despite criticism from human rights groups and international organizations, the Peña Nieto government has continued to rely on the Mexican military's active involvement in public security efforts. Mexico's defense minister, General Salvador Cienfuegos, has spoken out in favor of establishing a legal framework to regulate the military's involvement in internal security. The Mexican congress has debated an internal security law proposed by members of the Institutional Revolutionary Party (PRI) in 2016 but remains divided on whether the law should be approved. Human rights groups and academics hope any legislation that is enacted will increase transparency on the role of the military, hold military forces responsible for their actions (including civilian deaths), and include a plan to replace soldiers engaged in public security efforts with police as soon as possible. In February 2014, the capture of "El Chapo" Guzmán symbolized the capstone of Peña Nieto's "kingpin" strategy. Some 107 of this government's 122 top criminal targets reportedly have been arrested or killed during law enforcement operations. Many have avoided prosecution, however. In addition, many critics fault the kingpin strategy for having caused turf battles, succession struggles, and a proliferation of crime groups. Some analysts have therefore recommend that Mexico focus on taking out the middle layer of one group at a time, focusing on the most violent groups first, as the government appeared to do with the Zetas.