Department of Homeland Security Appropriations: FY2020

Summary: This report provides an overview and analysis of FY2020 appropriations for the Department of Homeland Security (DHS). The primary focus of this report is on the funding provided to DHS through the appropriations process. It includes an Appendix with definitions of key budget terms used throughout the suite of Congressional Research Service reports on DHS appropriations. It also directs the reader to other reports providing context for specific component appropriations.

Summary: As part of an overall DHS budget that the Office of Management and Budget (OMB) estimated to be $92.08 billion, the Trump Administration requested $51.68 billion in adjusted net discretionary budget authority through the appropriations process for DHS for FY2020. The request amounted to a $2.27 billion (4.6%) increase from the $49.41 billion in annual appropriations enacted for FY2019 through the Department of Homeland Security Appropriations Act, 2019 ( P.L. 116-6 , Division A).

Summary: The Administration also requested discretionary funding that does not count against discretionary spending limits and is not reflected in the adjusted net discretionary budget authority total. The Administration requested an additional $14.08 billion for the Federal Emergency Management Agency (FEMA) in disaster relief funding, as defined by the Budget Control Act ( P.L. 112-25 ; BCA), and in the budget request for the Department of Defense (DOD), $190 million in Overseas Contingency Operations designated funding (OCO) for the Coast Guard to be transferred from the Operations and Maintenance budget of the U.S. Navy.

Summary: On June 11, 2019, the House Appropriations Committee marked up H.R. 3931 , its version of the Department of Homeland Security Appropriations Act, 2020. H.Rept. 116-180 was filed July 24, 2019. Committee-reported H.R. 3931 included $52.80 billion in adjusted net discretionary budget authority, according to the Congressional Budget Office's initial score of the bill. This was $1.12 billion (2.2%) above the level requested by the Administration, and $3.39 billion (6.9%) above the enacted annual level for FY2019. Much of this increase was due to the addition of several immigration-related policy provisions in the full committee markup, which added more than $3.0 billion to the score of the bill, putting the bill over its subcommittee allocation (CBO later revised the scoring of those provisions to $1.9 billion in a separate letter on September 10, 2019).

Summary: On September 26, 2019, the Senate Appropriations Committee marked up S. 2582 , its version of the Department of Homeland Security Appropriations Act, 2020. S.Rept. 116-125 was filed the same day. Committee-reported S. 2582 included $53.18 billion in adjusted net discretionary budget authority. This was $1.50 billion (2.9%) above the level requested by the Administration, and $3.77 billion (7.6%) above the enacted annual level for FY2019. Much of this latter increase was due to the inclusion of $5 billion in funding for border barrier construction as opposed to $1.38 billion in the FY2019 act. Both the House and Senate appropriations committees recommended more discretionary funding for the Coast Guard, Transportation Security Administration, and FEMA than had been requested by the Administration.

Summary: No annual appropriations for FY2020 had been enacted as FY2019 was drawing to a close, so a continuing resolution was enacted ( P.L. 116-59 ) on September 27, 2019. It temporarily extended funding at the FY2019 rate for operations through November 21 for most DHS programs (see limited exceptions in the Department of Homeland Security section of CRS Report R45982, Overview of Continuing Appropriations for FY2020 (P.L. 116-59) ). This CR was subsequently extended through December 20.

Summary: Annual appropriations for DHS were enacted on December 20, 2019, in P.L. 116-93 , Division D. The act included $50.47 billion in adjusted net discretionary budget authority. This was $1.22 billion (2.4%) below the level requested by the Administration, and $1.06 billion (2.1%) above the enacted annual level for FY2019. The FY2020 DHS Appropriations Act included $17.35 billion for the Federal Emergency Management Agency (FEMA) in disaster relief funding, as defined by the BCA, and $190 million in OCO funding for the Coast Guard rather than as a transfer from the Navy.

Summary: This report will be updated as events warrant.

This report describes and analyzes annual appropriations for the Department of Homeland Security (DHS) for FY2020. It compares the enacted FY2019 appropriations for DHS, the Donald J. Trump Administration's FY2020 budget request, and the appropriations measures developed and ultimately enacted in response to it. This report identifies additional informational resources, reports, and products on DHS appropriations that provide context for the discussion. A list of Congressional Research Service (CRS) policy experts with whom congressional clients may consult on specific topics may be found in CRS Report R42638, Appropriations: CRS Experts .

The suite of CRS reports on homeland security appropriations tracks legislative action and congressional issues related to DHS appropriations, with particular attention paid to discretionary funding amounts. These reports do not provide in-depth analysis of specific issues related to mandatory fundingâsuch as retirement payânor do they systematically follow other legislation related to the authorizing or amending of DHS programs, activities, or fee revenues.

Discussion of appropriations legislation involves a variety of specialized budgetary concepts. The Appendix to this report explains several of these concepts, including budget authority, obligations, outlays, discretionary and mandatory spending, offsetting collections, allocations, and adjustments to the discretionary spending caps under the Budget Control Act (BCA; P.L. 112-25 ). A more complete discussion of those terms and the appropriations process in general can be found in CRS Report R42388, The Congressional Appropriations Process: An Introduction , coordinated by James V. Saturno, and the Government Accountability Office's A Glossary of Terms Used in the Federal Budget Process .

All amounts contained in CRS reports on homeland security appropriations represent budget authority. For precision in percentages and totals, all calculations in these reports use unrounded data, which are presented in each report's tables. Amounts in narrative discussions may be rounded to the nearest million (or 10 million, in the case of numbers larger than 1 billion), unless noted otherwise.

Data used in this report for FY2019 annual appropriations are derived from the conference report accompanying P.L. 116-6 , the Consolidated Appropriations Act, 2019. Division A of P.L. 116-6 is the Department of Homeland Security Appropriations Act, 2019. FY2019 supplemental appropriations data are drawn directly from two enacted measures: P.L. 116-20 , the Additional Supplemental Appropriations Act, 2019, which included funding for response and recovery from a range of natural disasters; and P.L. 116-26 , the Emergency Supplemental Appropriations for Humanitarian Assistance and Security at the Southern Border Act, 2019, which included funding for security and humanitarian needs at the U.S.-Mexico border. Data for the FY2020 requested levels and House Appropriations Committee-recommended levels of annual appropriations are drawn from H.Rept. 116-180 , which accompanied H.R. 3931 . Data for the Senate Appropriations Committee-recommended levels of annual appropriations are drawn from S.Rept. 116-125 , which accompanied S. 2582 . Data for the FY2020 enacted levels are drawn from the explanatory statement accompanying P.L. 116-93 , Division D of which is the FY2020 Department of Homeland Security Appropriations Act.

Scoring methodology is consistent across this report, relying on data provided by the Appropriations Committees that has been developed with Congressional Budget Office (CBO) methodology. CRS does not attempt to compare this data with Office of Management and Budget (OMB) data because technical scoring differences at times do not allow precise comparisons.

Note: Previous CRS reports on DHS appropriations at times used OMB data on mandatory spending for the Federal Emergency Management Agency and the U.S. Secret Service that was not listed in appropriations committee documentationâfor consistency, OMB data on mandatory spending is no longer included in this report.

Legislative Action on FY2020 DHS Appropriations

This section provides an overview of the legislative process thus far for appropriations for the Department of Homeland Security for FY2020, from the Administration's initial request, through enactment of annual appropriations in Division D of P.L. 116-93 .

On March 18, 2019, the Trump Administration released its detailed budget request for FY2020. A lapse in FY2019 annual appropriations from December 22, 2018, until January 25, 2019, delayed the full budget proposal's release past the first Monday in February, the deadline outlined in the Budget Act of 1974.

The Trump Administration requested $51.68 billion in adjusted net discretionary budget authority for DHS for FY2020, as part of an overall budget that the Office of Management and Budget estimated to be $92.08 billion (including fees, trust funds, and other funding that is not annually appropriated or does not score against discretionary budget limits). The request amounted to a $2.27 billion (4.6%) increase from the $49.41 billion in annual net discretionary budget authority in appropriations enacted for FY2019 through the Department of Homeland Security Appropriations Act, 2019 ( P.L. 116-6 , Division A).

The Trump Administration also requested discretionary funding that does not count against discretionary spending limits set by the Budget Control Act (BCA; P.L. 112-25 ) for two DHS components and is not reflected in the above totals. The Administration requested an additional $14.08 billion for the Federal Emergency Management Agency (FEMA) in disaster relief funding, as defined by the BCA, and in the budget request for the Department of Defense, $190 million in Overseas Contingency Operations/Global War on Terror designated funding (OCO), to be transferred to the Coast Guard from the Navy.

On June 11, 2019, the House Appropriations Committee marked up H.R. 3931 , the Department of Homeland Security Appropriations Act, 2020. H.Rept. 116-180 was filed on July 24, 2019. As reported by the committee, H.R. 3931 included $52.80 billion in adjusted net discretionary budget authority. This was $1.12 billion (2.2%) above the level requested by the Administration, and $3.39 billion (6.9%) above the enacted level of annual appropriations for FY2019.

The House committee bill included $14.08 billion in disaster relief-designated funding, reflecting the level in the Administration's modified request, and the House Appropriations Committee-reported Defense Appropriations bill included OCO funding to be transferred to the Coast Guard. As a result of amendments adopted in full committee markup, the initial CBO scoring of the bill exceeded the subcommittee allocation by more than $3 billion. (CBO later revised the scoring of those provisions to $1.9 billion.)

On September 26, 2019, the Senate Appropriations Committee marked up S. 2582 , its version of the Department of Homeland Security Appropriations Act, 2020. S.Rept. 116-125 was filed the same day. As reported by the committee, S. 2582 included $53.18 billion in adjusted net discretionary budget authority. This was $1.50 billion (2.9%) above the level requested by the Administration, and $3.77 billion (7.6%) above the enacted annual level for FY2019. Much of this latter increase was due to the inclusion of $5 billion in funding for border barrier construction as opposed to $1.38 billion in the FY2019 act. Both the House and Senate committees included more discretionary funding for the Coast Guard, Transportation Security Administration, and FEMA than had been requested by the Administration.

The Senate committee bill also included $17.35 billion of disaster relief-designated fundingâ$3.28 billion (23.3%) more than the Administration's modified requestâand $190 million in OCO-designated funding for the Coast Guard.

No annual appropriations for FY2020 had been enacted by late September as FY2019 was drawing to a close, so on September 27, 2019, Congress passed a continuing resolution (CR) ( P.L. 116-59 ), temporarily extending funding at the FY2019 rate for operations through November 21. This CR was subsequently extended through December 20.

P.L. 116-59 included four provisions specifically addressing needs of DHS under a CR:

Section 132 provides a special apportionment of CR funds to cover Secret Service expenses related to the FY2020 presidential campaign; Section 133 allows for an accelerated rate of apportionment for the Disaster Relief Fund (DRF) to ensure that the programs it funds can be carried out; Section 134 extends the authorization for the National Flood Insurance Program to issue new policies; and Section 135 allows funds to be allocated in accordance with a planned restructuring of some DHS management activities.

In addition, Section 101(6) extends by reference some immigration provisions that have been linked to the appropriations cycle.

For further information on the FY2020 continuing resolutions, see CRS Report R45982, Overview of Continuing Appropriations for FY2020 (P.L. 116-59) .

On December 16, 2019, the text and explanatory statements for two consolidated appropriations bills were released on the House Rules Committee website. One, which used H.R. 1158 as a legislative shell, included four appropriations measures, including the FY2020 DHS annual appropriations measure as Division D. Division D included $50.47 billion in adjusted net discretionary budget authority. This was $1.22 billion (2.4%) below the level requested by the Administration, and $1.06 billion (2.1%) above the enacted annual level for FY2019. The act included $17.35 billion for the Federal Emergency Management Agency (FEMA) in disaster relief funding, as defined by the Budget Control Act ( P.L. 112-25 ; BCA), and $190 million in Overseas Contingency Operations designated funding (OCO) in an appropriation to the Coast Guard.

The House passed the measure by a vote of 280-138 on December 17, and the Senate did so by a vote of 81-11 on December 19. The bill was signed into law of December 20, 2019, and enacted as P.L. 116-93 .

Generally, the homeland security appropriations bill includes all annual appropriations provided for DHS, allocating resources to every departmental component. Discretionary appropriations provide roughly two-thirds to three-fourths of the annual funding for DHS operations, depending how one accounts for disaster relief spending and funding for OCO. The remainder of the budget is a mix of fee revenues, trust funds, and mandatory spending.

Annual appropriations measures for DHS typically have been organized into five titles. The first four are thematic groupings of components, while the fifth provides general direction to the department, and sometimes includes provisions providing additional budget authority.

The DHS Common Appropriations Structure (CAS)

When DHS was established in 2003, components of other agencies were brought together over a matter of months, in the midst of ongoing budget cycles. Rather than developing a new structure of appropriations for the entire department, Congress and the Administration continued to provide resources through existing account structures when possible.

At the direction of Congress, in 2014 DHS began to work on a new Common Appropriations Structure (CAS), which would standardize the format of DHS appropriations across components. In an interim report in 2015, DHS noted that operating with "over 70 different appropriations and over 100 Programs, Projects, and Activities ... has contributed to a lack of transparency, inhibited comparisons between programs, and complicated spending decisions and other managerial decision-making."

After several years of work and negotiations with Congress, DHS made its first budget request in the CAS for FY2017, and implemented it while operating under a CR in October 2016. Under the CAS, legacy appropriations structures were largely converted to a four-category structure:

1. Operations and Support , which covers operating salaries and expenses; 2. Procurement , Construction, and Improvements , which funds planning, operational development, engineering, purchase, and deployment of assets to support component missions; 3. Research and Development , which provides resources needed to identify, explore, and demonstrate new technologies and capabilities to support component missions; and 4. Federal Assistance , which supports grant funding managed by DHS components.

All components have an Operations and Support (O&S) appropriation. All operational components and some support and headquarters components have a Procurement, Construction, and Improvements (PC&I) appropriation. Research and Development (R&D) appropriations are even less common, and only FEMA, the Countering Weapons of Mass Destruction Office (CWMD), and U.S. Citizenship and Immigration Services (USCIS) have federal assistance appropriations.

Even with the implementation of the CAS structure, some appropriations are not included in those four categories:

Federal Protective Service: The Federal Protective Service, which has been a part of several different components of DHS, does not have an appropriation of an explicit amount. Rather, the appropriations measure has language directing that funds credited to the FPS account may be spent by FPS to carry out its mission. It therefore has a net-zero impact on the total net discretionary spending in the bill. USCG's Retired Pay: The Coast Guard's Retired Pay appropriation supports the costs of the USCG retired personnel entitlements, including pensions, Survivor Benefits Plans, and medical care of retired USCG personnel and their dependents. This appropriation is categorized as appropriated mandatory spending: while the U.S. government has a legal obligation to make these payments, there is no permanent statutory mechanism in place to provide the funds. Because the government is required to make these payments, the Retired Pay appropriation does not count against the discretionary allocation of the bill. FEMA's Disaster Relief Fund: The Federal Emergency Management Agency (FEMA) receives a separate appropriation for its activities authorized under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. Â§5121 et seq.). This allows for more consistent tracking of FEMA's disaster assistance spending over time, and ensures more transparency into the availability of funds for disaster assistance versus FEMA's other grant activities, which are funded through the Federal Assistance appropriation. FEMA's National Flood Insurance Fund: The National Flood Insurance Program is largely mandatory spending. However, some program functions, including mission support, floodplain management, and flood mapping, are paid for through discretionary appropriations. Certain other program costs are paid for by fees collected by the government, which requires appropriations language to allow those resources to be spent. These include: Operating expenses and salaries and expenses associated with flood insurance operations; Commissions and taxes of agents; Interest on borrowings from the Treasury; and Flood mitigation actions and flood mitigation assistance.

Prior to the FY2017 act, the provisos accompanying many appropriations included directions to components or specific conditions on how the budget authority it provided could be used. Similarly, general provisions provided directions or conditions to one or more components. In the FY2017 act, a number of these provisions within appropriations and component-specific general provisions were grouped at the ends of the titles where their targeted components are funded, and identified as "administrative provisions." This practice has continued in subsequent years.

This report tracks changes in administrative and general provisions compared to the baseline of the prior year's enacted measure, noting provisions dropped, added, and modified. These changes from the baseline may take place for a variety of reasons. Due to the passage of time or enactment of permanent legislation, a provision may require adjustment or lose its relevance. Other provisions are the priority of members in one chamber or another, and as the enacted bill represents a compromise between those positions, the bills developed by a one chamber may not necessarily reflect the other chamber's priorities.

DHS Appropriations: Summary by Component Type

The following sections of the report discuss the appropriations provided for the department by type of component. It groups the 15 components of DHS into the following structure:

Law Enforcement Operational Components (funded in Title II) U.S. Customs and Border Protection Immigration and Customs Enforcement Transportation Security Administration U.S. Coast Guard U.S. Secret Service Incident Response and Recovery Operational Components (Title III) Cybersecurity and Infrastructure Security Agency Federal Emergency Management Agency Support Components (Title IV) U.S. Citizenship and Immigration Services Federal Law Enforcement Training Center Science and Technology Directorate Countering Weapons of Mass Destruction Office Headquarters Components (Title I) Office of the Secretary and Executive Management Departmental Management Directorate Analysis and Operations Office of Inspector General

Each group's and component's role is briefly described below, and their FY2019 enacted and FY2020 requested, recommended, and enacted appropriations are presented in tables arranged by grouped components. After each funding table, a brief analysis of selected administrative provisions for that group is provided.

Funding for law enforcement operational components is generally provided in Title II of the annual DHS appropriations act. This is the largest title of the bill, although not all of DHS's largest components are included in it.

U.S. Customs and Border Protection (CBP) : CBP is responsible for securing America's borders, coastlines, and ports of entry, preventing the illegal entry of persons and goods while facilitating lawful travel, trade, and immigration.

Immigration and Customs Enforcement (ICE): ICE is the principal criminal investigative agency within DHS, and is charged with preventing terrorism and combating the illegal movement of people and goods.

Transportation Security Administration (TSA): TSA provides security for the U.S. transportation system while ensuring the free and secure movement of people and goods.

U.S. Coast Guard (USCG): The USCG is the principal federal agency responsible for maritime safety, security, and environmental stewardship in U.S. ports and inland waterways. The USCG is a hybrid of a law enforcement agency, regulatory agency, and first responder, as well as being a component of DHS, the intelligence community, and of the U.S. Armed Forces.

U.S. Secret Service (USSS): The USSS is responsible for protecting the President, the Vice-President, their families and residences, past Presidents and their spouses, national and world leaders visiting the United States, designated buildings (including the White House and Vice President's Residence), and special events of national significance. The USSS also investigates and enforces laws related to counterfeiting and certain financial crimes.

Table 1 includes a breakdown of budgetary resources provided to these components controlled through appropriations legislation.

H.R. 3931 as reported by the House Appropriations Committee had 31 administrative provisions for Title II, 21 of which were unchanged from FY2019. The House committee bill dropped eight provisions which were in the FY2019 act, including

Section 208 , which allowed ICE to reprogram funding to maintain detention of aliens that were prioritized for removal; Section 214 , which mandated TSA continue to monitor airport exit lanes; Section 223 , which allowed USCG to allocate its OCO funding within the Operations and Support appropriation; Section 225 , which authorized a TSA pilot program for screening services at locations other than primary passenger terminals; Section 227 , which requires the USCG maintain the mission and staffing of its Operations Systems Center; Section 228 , which prohibited competitions to privatize activities of the USCG National Vessel Documentation Center; Section 229 , which allowed funds in the bill to alter activities of the USCG Civil Engineering program, but not reduce them; and Section 232 , which required DHS collaboration with local governments on siting border barriers within their jurisdictions.

Three previously carried administrative provisions were modified, and seven new provisions were added.

S. 2582 as reported by the Senate Appropriations Committee, had 33 administrative provisions in Title II. Only one provision was dropped from the FY2019 actâSection 225, described above. One previously carried provision was modified and three new provisions were added.

P.L. 116-93 , Div. D, includes 36 administrative provisions in Title II. Sections 225 and 232 from the FY2019 act were dropped, four provisions were modified, and six new administrative provisions were included.

Modified administrative provisions are outlined in Table 2 , while new administrative provisions proposed or included by the appropriations committees are outlined in Table 3 .

Incident Response and Recovery Operational Components

Funding for operational components which are focused on incident response and recovery is generally found in Title III of the annual DHS appropriations act. It includes funding for FEMA, which has the largest budget of any DHS componentâan appropriated budget largely driven by disaster programs authorized under the Stafford Act, and an overall budget which also includes non-appropriated funding for the National Flood Insurance Program. Title III also includes funding for the newly restructured Cybersecurity and Infrastructure Security Agency (CISA), formerly the National Protection and Programs Directorate. The reorganization included a shift of the Federal Protective Service from CISA to the Management Directorate, reducing the gross budgetary resources in this title.

Cybersecurity and Infrastructure Security Agency (CISA): Formerly known as the National Protection and Programs Directorate (NPPD), CISA promotes information sharing to build resilience and mitigate risk from cyber and physical threats to infrastructure, and leads cross-government cybersecurity initiatives.

Federal Emergency Management Agency (FEMA): FEMA leads the federal government's efforts to reduce the loss of life and property and protect the United States from all hazards, including natural disasters, acts of terrorism, and other disasters through a risk-based, comprehensive emergency management system of preparedness, protection, response, recovery, and mitigation.

Table 4 includes a breakdown of budgetary resources for these components controlled through appropriations legislation. As some annually appropriated resources were provided for FEMA from outside Title III in FY2019, by transfer and by appropriation, a separate line is included for FEMA showing a total for what is provided solely within Title III, then the non-Title III funding, followed by the total annual appropriation for FEMA. The table only reflects the impact of transfers in the discretionary funding and budgetary resource totals.

H.R. 3931 as reported by the House Appropriations Committee had eight administrative provisions in Title III, five of which were unchanged from FY2019. Two provisions were dropped from the FY2019 act: Section 301, which required a report on revised methods to assess and allocate costs for countermeasures used by the Federal Protective Service; and Section 309, which raised the federal share of costs for essential assistance and debris removal for wildfire major disasters declared in calendar year 2018 from 75% to 90%. Two previously carried administrative provisions were modified, and one new provision was added, which would allow governors to resubmit and FEMA to reconsider requests for Stafford Act individual assistance for certain disasters.

S. 2582 as reported by the Senate Appropriations Committee had six administrative provisions in Title III. The Senate Appropriations Committee chose to drop three administrative provisions from this title that were included in the FY2019 actâthe two described above, and Section 307, which provided certain waivers for SAFER Act grants. No previously carried provisions were substantively modified and no new provisions were added.

P.L. 116-93, Div. D, includes seven administrative provisions in Title III. Sections 301 and 309 from the FY2019 act as described above were dropped, two provisions were modified, and the new provision proposed in the House Appropriations Committee bill was not included.

Modified administrative provisions are tracked in Table 5 .

Funding for support components is generally found in Title IV of the annual DHS appropriations bill. The relatively small size of some of these appropriations makes changes in their funding appear more significant if expressed on a percentage basis.

U.S. Citizenship and Immigration Services (USCIS): USCIS administers U.S. immigration laws that govern temporary admission and permanent immigration to the United States.

Federal Law Enforcement Training Center (FLETC): FLETC is a technical training school for law enforcement professionals, meeting the basic and specialized training needs of approximately 100 federal agencies, as well as state and local organizations.

Science and Technology Directorate (S&T): S&T leads and coordinates research, development, testing, and evaluation work for DHS, and supports departmental acquisitions.

Countering Weapons of Mass Destruction Office (CWMD): CWMD leads DHS's efforts to develop and enhance programs and capabilities that defend against weapons of mass destruction, and includes the Department's Chief Medical Officer, who serves as the principal advisor to DHS leadership on medical and public health issues.

Table 6 includes a breakdown of budgetary resources provided to these components controlled through appropriations legislation.

H.R. 3931 as reported by the House Appropriations Committee included eight administrative provisions in Title IV, six of which were unchanged from FY2019. It dropped two: Section 402, which barred USCIS from providing immigration benefits unless it had received a background check that did not preclude providing such a benefit; and Section 408, which provided budgetary flexibility to support the transfer of the National Bio- and Agrodefense Facility to the U.S. Department of Agriculture. H.R. 3931 included two new provisions.

S. 2582 as reported by the Senate Appropriations Committee had nine administrative provisions in Title IV. The Senate Appropriations Committee chose to drop one provision from this title that was included in the FY2019 actâSection 408, described above. No previously carried provisions were substantively modified and two new provisions were added.

P.L. 116-93 , Div. D, includes seven administrative provisions in Title IV. Sections 402 and 408 from the FY2019 act as described above were dropped. One new provision was added.

New administrative provisions proposed or included by the appropriations committees are outlined in Table 7 .

Funding for headquarters components is traditionally found in Title I of the annual DHS appropriations act, although some initiatives have been funded in the past through general provisions.

Office of the Secretary and Executive Management (OSEM): OSEM provides central leadership, management, direction and oversight for all DHS components.

Departmental Management Directorate (DM): DM provides DHS-wide mission support services.

Analysis and Operations (A&O): A&O covers two separate offices:

The Office of Intelligence and Analysis (I&A), which integrates and shares intelligence with DHS components and stakeholders to allow them to identify, mitigate, and respond to threats; and the Office of Operations Coordination (OPS), which provides operations coordination, information sharing, and the common operating picture for DHS, and helps ensure DHS continuity and resilience.

Office of Inspector General (OIG): The OIG is an independent, objective audit, inspection, and investigative body that reports to the Secretary and to Congress on DHS efficiency and effectiveness, and works to prevent waste, fraud, and abuse.

Table 8 provides a breakdown of the budgetary resources provided to these components controlled through appropriations legislation. As resources were requested or provided for the Management Directorate from outside Title I, separate lines are included for each of those components showing a total for what is provided solely within Title I, then the individual items funded outside the title, followed by the total annual appropriation for the components. The table only reflects the impact of transfers in the discretionary funding and budgetary resource totals.

The title funding DHS headquarters components in H.R. 3931 (Title I) had five administrative provisions, three of which are unchanged from FY2019. Two administrative provisions were dropped: Section 101, a requirement for a monthly budget and staffing report; and Section 106, a reporting requirement on visa overstay data. One previously carried administrative provision was modified to bar the use of Treasury Forfeiture Fund resources to build border security infrastructure. One new provision was added in the House bill, to create an Immigration Detention Ombudsman.

Senate Appropriations Committee-reported S. 2582 had six administrative provisions in Title I. The Senate Appropriations Committee retained all six previously enacted provisions without substantive modifications, and no new provisions were added.

P.L. 116-93 , Div. D, includes seven administrative provisions in Title I. No provisions were dropped. The new provision proposed in the House Appropriations Committee bill creating the Immigration Detention Ombudsman was included with minor modifications.

As noted earlier, the fifth title of the annual DHS appropriations act contains general provisions, the impact of which may reach across the government, apply to the entire department, affect multiple components, or focus on a single activity. Most general provisions remain functionally unchanged from year to year, providing guidance to DHS or structure to DHS appropriations with little more than updates to effective dates or amounts.

The FY2019 DHS appropriations act included 40 such general provisions. H.R. 3931 , as reported by the House Appropriations Committee, carried 36 such provisions, including four added to the committee's initial draft in full committee markup. Four of the 36 were modified versions of FY2019 general provisions providing policy direction, while four were new. Six provisions carried in the FY2019 act were not retained in House committee version of H.R. 3931 :

Section 516 , which restricted transfer or release of detainees from Guantanamo Bay;

Section 518 , which restricted the use of funds in the bill to hire unauthorized workers;

Section 521 , which provided funding for financial systems modernization activities;

Section 522 , which required reductions in administrative spending from certain accounts;

Section 536 , which barred the use of funds to implement the Arms Trade Treaty prior to its ratification; and

Section 537 , which required the Administration to provide a list of spending cuts as alternatives to proposed fee increases that had not been authorized before the beginning of the budget year.

S. 2582 , as reported by the Senate Appropriations Committee, had 36 general provisions in Title V, 32 of which were unchanged from FY2019. One provision was added, and one was modified. Three provisions carried in the FY2019 act that reduced budget authority available to DHS were modified in the Senate committee's bill: the DHS-wide reduction in total Operations and Support appropriations (originally Section 522, now Section 521), and rescissions of prior-year appropriations (originally Section 538 and 539, now Section 536). Three other provisions carried in the FY2019 act were dropped:

Section 521 , which provided $51 million for DHS financial systems modernization; Section 531 , which provided $41 million in grants for local law enforcement costs for Presidential protection; and Section 535 , which prohibited using funds for a Principal Federal Official during a declared Stafford Act major disaster or emergency, with certain exceptions.

P.L. 116-93 , Div. D, included 40 general provisions in Title V. Two provisions were dropped from the FY2019 DHS Appropriations ActâSections 521 and 522 described above. No new policy-related general provisions were added, although the last four general provisions provided rescissions of various types:

Section 537 rescinds $233 million in emergency designated supplemental appropriations for CBP from P.L. 116-26 , which are reappropriated in Title II of this act; Section 538 rescinds $202 million in unobligated balances from across DHS; Section 539 rescinds almost $19 million in lapsed balances; Section 540 rescinds $300 million in unobligated balances from the Disaster Relief Fund.

Modified and new policy-related general provisions are outlined in Table 9 and Table 10 , respectively.

Some general provisions have a direct impact on the amount of funding in the bill. In FY2019, funding was included in Title V for the Financial Systems Modernization initiative and a grant program for Presidential Residence Protection costs. In this report, Financial Systems Modernization is listed with headquarters components, and it is managed by the DHS Office of the Chief Information Officer. Presidential Residence Protection Cost grants are listed with FEMA, as they manage the distribution of those funds. While H.R. 3931 included funding for Presidential Residence Protection Cost Grants, it did not include separate funding for Financial Systems Modernization. S. 2582 included no additional appropriations for any DHS activities in Title V. P.L. 116-93 , Div. D, included $41 million for Presidential Residence Protection Cost Grants in Title V.

In addition to provisions appropriating additional resources, rescissions of prior-year appropriationsâcancellations of budget authorityâthat reduce the net funding level in the bill are found in this title. For FY2019, Division A of P.L. 116-6 included $303 million in rescissions and a provision directing that $300 million of DRF unobligated balances be used to offset new DRF appropriations. For FY2020, the Administration proposed rescinding $250 million in prior-year funding from the portion of the DRF not dedicated to the costs of major disasters.

Section 536 of H.R. 3931 included $657 million in rescissions from other appropriations. The largest of these comes from CBP's PC&I appropriation for FY2019, reducing it by $601 millionâthe amount transferred to it from the Treasury's Asset Forfeiture Fund by the Trump Administration for construction of border security infrastructure.

S. 2582 included $62 million of provisions that reduced the score of the bill, the largest being a $33 million reduction in administrative costs to be made by DHS from certain operations and support appropriations.

P.L. 116-93 , Div. D, included $754 million in rescissions, including $300 million in rescissions from unobligated balances in the DRF, and $233 million in emergency-designated rescissions from CBP appropriations as part of redirecting funds provided in P.L. 116-26 for humanitarian care, critical life and safety improvements to CBP facilities, and electronic health records.

For additional perspectives on FY2020 DHS appropriations, see the following:

CRS Report R45972, Comparing DHS Component Funding, FY2020: In Brief ; CRS Report R44604, Trends in the Timing and Size of DHS Appropriations: In Brief ; and CRS Report R44052, DHS Budget v. DHS Appropriations: Fact Sheet .

Congressional clients also may wish to consult CRS's experts directly. Table 11 lists CRS analysts and specialists who have expertise in policy areas linked to DHS appropriations.

Appendix. Appropriations Terms and Concepts

Budget Authority, Obligations, and Outlays

Federal government spending involves a multistep process that begins with the enactment of budget authority by Congress. Federal agencies then obligate funds from enacted budget authority to pay for their activities. Finally, payments are made to liquidate those obligations; the actual payment amounts are reflected in the budget as outlays.

Budget authority is established through appropriations acts or direct spending legislation and determines the amounts that are available for federal agencies to spend. The Antideficiency Act prohibits federal agencies from obligating more funds than the budget authority enacted by Congress. Budget authority also may be indefinite in amount, as when Congress enacts appropriations providing "such sums as may be necessary" to complete a project or purpose. Budget authority may be available on a one-year, multiyear, or no-year basis. One-year budget authority is available for obligation only during a specific fiscal year; any unobligated funds at the end of that year are no longer available for spending. Multiyear budget authority specifies a range of time during which funds may be obligated for spending, and no-year budget authority is available for obligation for an indefinite period of time.

Obligations are incurred when federal agencies employ personnel, enter into contracts, receive services, and engage in similar transactions in a given fiscal yearâwhich create a legal requirement for the government to pay. Outlays are the funds that are actually spent during the fiscal year. Because multiyear and no-year budget authorities may be obligated over a number of years, outlays do not always match the budget authority enacted in a given year. Additionally, budget authority may be obligated in one fiscal year but spent in a future fiscal year, especially with certain contracts.

In sum, budget authority allows federal agencies to incur obligations and authorizes payments, or outlays, to be made from the Treasury. Discretionary funded agencies and programs, and appropriated entitlement programs, are funded each year in appropriations acts.

Gross budget authority , or the total funds available for spending by a federal agency, may be composed of discretionary and mandatory spending. Discretionary spending is not mandated by existing law and is thus appropriated yearly by Congress through appropriations acts. The Budget Enforcement Act of 1990 defines discretionary appropriations as budget authority provided in annual appropriations acts and the outlays derived from that authority, but it excludes appropriations for entitlements. Mandatory spending , also known as direct spending , consists of budget authority and resulting outlays provided in laws other than appropriations acts and is typically not appropriated each year. Some mandatory entitlement programs, however, must be appropriated each year and are included in appropriations acts. Within DHS, Coast Guard retirement pay is an example of appropriated mandatory spending.

Offsetting funds are collected by the federal government, either from government accounts or the public, as part of a business-type transaction such as collection of a fee. These funds are not considered federal revenue. Instead, they are counted as negative outlays. DHS net discretionary budget authority , or the total funds appropriated by Congress each year, is composed of discretionary spending minus any fee or fund collections that offset discretionary spending.

Some collections offset a portion of an agency's discretionary budget authority. Other collections offset an agency's mandatory spending. These mandatory spending elements are typically entitlement programs under which individuals, businesses, or units of government that meet the requirements or qualifications established by law are entitled to receive certain payments if they establish eligibility. The DHS budget features two mandatory entitlement programs: the Secret Service and the Coast Guard retired pay accounts (pensions). Some entitlements are funded by permanent appropriations, and others are funded by annual appropriations. Secret Service retirement pay is a permanent appropriation and, as such, is not annually appropriated. In contrast, Coast Guard retirement pay is annually appropriated. In addition to these entitlements, the DHS budget contains offsetting Trust and Public Enterprise Funds. These funds are not appropriated by Congress. They are available for obligation and included in the President's budget to calculate the gross budget authority.

In general practice, the maximum budget authority for annual appropriations (including DHS) is determined through a two-stage congressional budget process. In the first stage, Congress sets overall spending totals in the annual concurrent resolution on the budget. Subsequently, these totals are allocated among the congressional committees, usually through the statement of managers for the conference report on the budget resolution. These amounts are known as the 302(a) allocations . They include discretionary totals available to the Committees on Appropriations for enactment in annual appropriations bills through the subcommittees responsible for the development of the bills.

In the second stage of the process, the appropriations committees allocate the 302(a) discretionary funds among their subcommittees for each of the appropriations bills. These amounts are known as the 302(b) allocations . These allocations must add up to no more than the 302(a) discretionary allocation and form the basis for enforcing budget discipline, since any bill reported with a total above the ceiling is subject to a point of order. The 302(b) allocations may be adjusted during the year by the respective appropriations committee issuing a report delineating the revised suballocations as the various appropriations bills progress toward final enactment.

Table A-1 shows comparable figures for the 302(b) allocation for FY2020, based on the adjusted net discretionary budget authority included in Division A of P.L. 116-6 , the President's request for FY2020, and the House and Senate subcommittee allocations for the Homeland Security appropriations bill for FY2020.

A series of amendments were offered and adopted in the House full committee markup of the FY2020 DHS appropriations bill that, according to CBO, put the bill $3.066 billion over its 302(b) discretionary allocation. This scoring was later revised to $1.9 billion. These provisions were not included in the final FY2020 DHS annual appropriations act.

The Budget Control Act, Discretionary Spending Caps, and Adjustments

The Budget Control Act established enforceable discretionary limits, or caps, for defense and nondefense spending for each fiscal year from FY2012 through FY2021. Subsequent legislation, including the Bipartisan Budget Acts of 2013, 2015, 2018, and 2019, amended those caps. Most of the budget for DHS is considered nondefense spending.

In addition, the Budget Control Act allows for adjustments that would raise the statutory caps to cover funding for overseas contingency operations/Global War on Terror, emergency spending, and, to a limited extent, disaster relief and appropriations for continuing disability reviews and control of health care fraud and abuse.

Three of the four justifications outlined in the Budget Control Act for adjusting the caps on discretionary budget authority have played a role in DHS's appropriations process. Two of theseâemergency spending and overseas contingency operations/Global War on Terrorâare not limited.

The third justificationâdisaster reliefâis limited. Under the Budget Control Act, the allowable adjustment for disaster relief was determined by the Office of Management and Budget (OMB), using the following formula until FY2019:

Limit on disaster relief cap adjustment for the fiscal year = Rolling average of the disaster relief spending over the last ten fiscal years (throwing out the high and low years) + the unused amount of the potential adjustment for disaster relief from the previous fiscal year.

The Bipartisan Budget Act of 2018 amended the above formula, increasing the allowable size of the adjustment by adding 5% of the amount of emergency-designated funding for major disasters under the Stafford Act, calculated by OMB as $6.296 billion. The act also extended the availability of unused adjustment capacity indefinitely, rather than having it only carry over for one year.

In August 2019, OMB released a sequestration preview report for FY2020 that provided a preview estimate of the allowable adjustment for FY2020 of $17.5 billion âthe second-largest allowable adjustment for disaster relief in the history of the mechanism. That estimate is the sum of:

the 10-year average, dropping the high and low years ($7.9 billion); 5% of the emergency-designated Stafford Act spending since 2012 ($6.6 billion); and carryover from the previous year ($3.0 billion).

The final allowable adjustment for FY2020 may still differ from this estimate.


Individual Tax Provisions (“Tax Extenders”) Expiring in 2020: In Brief

Summary: Six temporary individual income tax provisions were extended or reinstated by the Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ). In the past, Congress has regularly acted to extend expired or expiring temporary tax provisions. These provisions are often referred to as "tax extenders." Of the six provisions that were extended through 2020, three had expired in 2017 and were extended retroactively. They are

Summary: the tax exclusion for canceled mortgage debt, the mortgage insurance premium deduction, and the above-the-line deduction for qualified tuition and related expenses.

Summary: Two of the tax provisions extended through 2020 are health related. The first of these provisions was scheduled to expire at the end of 2019. The second had expired at the end of 2018, and thus was extended retroactively. They are

Summary: the health coverage tax credit, and the 7.5% floor for the medical expense deduction.

Summary: A sixth provision, the exclusion from gross income for volunteer firefighters and emergency responders, which had expired in 2010, was reinstated and expanded for one year, through 2020. This report provides background information on individual income tax provisions that will expire in 2020. For other reports related to extenders, see

Summary: CRS Report R45347, Tax Provisions That Expired in 2017 ("Tax Extenders") , by Molly F. Sherlock; CRS Report R44990, Energy Tax Provisions That Expired in 2017 ("Tax Extenders") , by Molly F. Sherlock, Donald J. Marples, and Margot L. Crandall-Hollick; and CRS Report R46271, Business Tax Provisions Expiring in 2020, 2021, and 2022 ("Tax Extenders") , coordinated by Molly F. Sherlock.

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." There are 33 temporary tax provisions scheduled to expire at the end of 2020. This report discusses six provisions related to the individual income tax: (1) the tax exclusion for canceled mortgage debt, (2) mortgage insurance premium deductibility, (3) the above-the-line deduction for qualified tuition and related expenses, (4) the credit for health insurance costs of eligible individuals, (5) the medical expense deduction adjusted gross income (AGI) floor of 7.5%, and (6) the exclusion for income of certain state and local tax rebates and reimbursement for volunteer firefighters and emergency medical responders.

These six provisions were extended through 2020 in the Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ). The first three provisions had expired at the end of 2017 and have been included in recent tax extenders legislation. Two 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 tax extenders legislation. The above-the-line deduction for 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 ), and has regularly been extended since.

The Further Consolidated Appropriations Act, 2020, also extended through 2020 individual provisions that expired in 2019 and 2018. The credit for health insurance costs of eligible individuals (also known as the health coverage tax credit [HCTC]) was scheduled to expire after 2019, whereas the medical expense deduction adjusted gross income (AGI) floor of 7.5% had expired at the end of 2018. The act also reinstated for one year, and expanded, a provision allowing for the exclusion from income of certain state and local tax rebates and reimbursement for volunteer firefighters and emergency medical responders that had expired in 2010.

The three provisions that expired in 2018, 2019, or 2010 were not in the previous tax extenders legislation. The health coverage tax credit, which applied to recipients of trade adjustment assistance, among others, was last extended through 2019 by the Trade Preferences Extension Act of 2015 ( P.L. 114-27 ). The 7.5% floor for itemized deductions for medical expenses was provided through 2018 by the 2017 tax revision ( P.L. 115-97 , commonly known as the Tax Cuts and Jobs Act). The exclusion of reimbursements for volunteer firefighters and emergency medical respondents was originally enacted in the Mortgage Forgiveness Debt Relief Act of 2007 ( P.L. 110-142 ).

In recent years, Congress has chosen to extend most, if not all, recently expired or expiring provisions as part of tax extenders legislation. The most recent tax extenders package is in the Taxpayer Certainty and Disaster Tax Relief Act of 2019, Division Q of the Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ). The temporary reinstatement of the exclusion for volunteer firefighters and emergency medical responders was in a different part of the act, Division O, the Setting Every Community Up for Retirement Enhancement ("SECURE") Act of 2019.

The estimated cost of the extensions of temporary individual tax provisions enacted in the Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ) is provided in Table 1 . As described above, the first three provisions had expired at the end of 2017. Thus, they were extended for three years (with two years of the three-year extension being retroactive). The 7.5% medical expense deduction floor had expired at the end of 2018, meaning that one year of the two-year extension was retroactive. The health care tax credit was scheduled to expire at the end of 2019, and was extended for one year. The provision for volunteer firefighters and emergency medical responders is scheduled to be effective for one year (2020).

Tax Exclusion for Canceled Mortgage Debt2

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 which a homeowner agrees to sell a 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 the house for $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.

To understand why forgiven debt has historically been taxable, it may be helpful to explain why it is viewed as income from an economic perspective. 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. Since then, the provision has regularly been extended as part of the tax extenders. The exclusion was most recently extended through December 31, 2020, in the Taxpayer Certainty and Disaster Tax Relief Act of 2019, enacted as Division Q of the Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ).

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. The exclusion's supporters may also argue that extending the exclusion would continue to assist the recoveries of the housing market and overall economy. The exclusion's opponents 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. Some may also view the exclusion as unfair because its benefits depend on whether a homeowner is able to negotiate a debt cancelation, the taxpayer's income tax bracket, and whether the taxpayer retains ownership of the house following the debt cancellation.

Mortgage Insurance Premium Deductibility5

Traditionally, homeowners who itemize their tax deductions have been able to deduct the interest paid on their mortgages, as well as any property taxes they pay. 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 several times. The deduction was extended through December 31, 2020, in the Taxpayer Certainty and Disaster Tax Relief Act of 2019, enacted as Division Q of the Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ).

Taxpayers of all ages may be less likely to claim the mortgage insurance premium deduction compared to prior periods because other provisions of the 2017 tax revision, including a higher standard deduction (in part as a trade-off for elimination of personal exemptions) and a cap on the deduction of state and local taxes, reduced the expected number of itemizers (projected to fall from about one-third of individual income tax returns to 11%).

A justification for allowing the deduction of mortgage insurance premiums is that it helps to promote homeownership and, relatedly, the recovery of the housing market following the December 2007-June 2009 Great Recession. Homeownership is often argued to bestow certain benefits to society, such as higher property values, lower crime, and higher civic participation. Homeownership may also promote a more even distribution of income and wealth, as well as establish greater individual financial security. Furthermore, 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 affects the homeownership rate. Economists have identified the high transaction costs associated with a home purchaseâmostly resulting from the down payment requirement, but also from closing costsâas the primary barrier to homeownership. The ability to deduct insurance premiums does not lower this barrierâmost lenders will require mortgage insurance if the borrower's down payment 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 housing market's recovery. 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 is stronger than when the provision was enacted.

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, it could be argued that extending the deduction for mortgage insurance premiums would lead to a greater misallocation of resources that are directed toward the housing industry.

Above-the-Line Deduction for Qualified Tuition and Related Expenses10

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 amount that can be claimed for the deduction is generally reduced by any tax-free assistance, if that assistance can be used to pay for expenses that qualify for the deduction. Tax-free assistance includes tax-free grants and scholarships (including 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.

The above-the-line deduction for qualified tuition and related expenses was enacted temporarily by the Economic Growth and Tax Relief Reconciliation Act of 2001 ( P.L. 107-16 ). It has been extended a number of times. Most recently, the deduction was extended through December 31, 2020, in the Taxpayer Certainty and Disaster Tax Relief Act of 2019, enacted as Division Q of the Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ).

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. Some tax reform proposals have consolidated these benefits into a single education credit.

Taxpayers may claim the tuition and fees deduction instead of education tax credits for the same student. These credits include permanent tax credits: the American Opportunity Tax Credit (AOTC) and Lifetime Learning Credit. The AOTC is directed at undergraduate education and is limited to the first four years of postsecondary education. 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 $59,000 for 2020.

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 that 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.

Credit for Health Insurance Costs of EligibleÂ Individuals16

The credit for health insurance costs of eligible individuals, commonly known as the health coverage tax credit (HCTC), reduces the cost of qualified health insurance for eligible individuals. To be eligible to claim the HCTC, taxpayers must be (1) an eligible trade adjustment assistance (TAA) recipient; (2) an eligible alternative TAA recipient or reemployment TAA recipient; or (3) an eligible Pension Benefit Guaranty Corporation (PBGC) pension recipient. Additionally, an individual is not eligible for the HCTC if they have access to "other specified coverage," which includes coverage for which an employer (or former employer) incurs 50% of the cost as well as Medicare, Medicaid, the Children's Health Insurance Programs, and other federal and military health or medical benefit plans.

Under this provision, eligible taxpayers are allowed a refundable tax credit for 72.5% of the premiums they pay for qualified health insurance for themselves and their family members. Eligible taxpayers with qualified health insurance may claim the tax credit (1) when tax returns are filed or (2) as advance payments, on a monthly basis, throughout the year. This latter option helps taxpayers pay for health plan premiums as they become due. The credit is not available for months beginning on or after January 1, 2021.

The HCTC was originally authorized by the Trade Act of 2002 ( P.L. 107-210 ). The credit has been extended and modified several times. Extensions or modifications have been made in trade adjustment assistance legislation as well as tax extenders legislation. The Trade Preferences Extension Act of 2015 ( P.L. 114-27 ) extended the HCTC through December 31, 2019, and also made changes to address the interaction between the HCTC and the premium tax credit established under the Patient Protection and Affordable Care Act ( P.L. 111-148 , as amended). The credit was extended through December 31, 2020, in the Taxpayer Certainty and Disaster Tax Relief Act of 2019, enacted as Division Q of the Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ).

Medical Expense Deduction Adjusted Gross Income (AGI) Floor of 7.5%21

Individuals are allowed to deduct unreimbursed medical expenses above a specific income threshold if they itemize their deductions. Prior to 2013, these deductions were allowed only for amounts in excess of 7.5% of income. Expenses reimbursed by an employer or insurance company are not eligible for deduction.

The Patient Protection and Affordable Care Act ( P.L. 111-148 , as amended) increased the floor for individuals claiming the itemized deduction for medical expenses from 7.5% to 10% of adjusted gross income (AGI). The higher floor went into effect for taxpayers under age 65 beginning for the 2013 tax year. Individuals 65 or older, however, were still able to claim the deduction under the lower, 7.5% floor for tax years 2013 through 2016. The 2017 tax revision ( P.L. 115-97 ) temporarily allowed all taxpayers (not just those aged 65 or older) to claim the deduction subject to the 7.5% floor for the 2017-2018 tax years. The Taxpayer Certainty and Disaster Tax Relief Act of 2019, enacted as Division Q of the Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ), extends the 7.5% floor for all taxpayers through 2020. After 2020, under current law, the floor is scheduled to increase to 10% of AGI for all taxpayers.

A complicated set of rules governs the expenses eligible for the deduction. Generally speaking, these expenses include amounts paid by the taxpayer on behalf of himself or herself, his or her spouse, and eligible dependents for the following purposes: (1) health insurance premiums (including employee payments for employer-sponsored health plans, Medicare Part B premiums, and other self-paid premiums); (2) diagnosis, treatment, mitigation, or prevention of disease, or for the purpose of affecting any structure or function of the body, including dental care; (3) prescription drugs and insulin (but not over-the-counter medicines); (4) transportation primarily for and essential to medical care; and (5) lodging away from home primarily for and essential to medical care, up to $50 per night for each individual.

The current lower floor is for all taxpayers, and future extensions, if any, could make the lower floor general, or limit it to taxpayers 65 and over. Based on a 2011 special study of deductions by age, 58% of dollars deducted were by those 65 and over, who made up 39% of taxpayers claiming the deduction.

Taxpayers of all ages may be less likely to claim the medical expense deduction compared to prior periods because, as mentioned previously, other provisions of the 2017 tax revision, including a higher standard deduction (in part as a trade-off for elimination of personal exemptions) and a cap on the deduction of state and local taxes, reduced the expected number of itemizers (projected to fall from about one-third of taxpayers to 11%). These provisions are slated to expire after 2025, but are in place for the next few years. The likelihood of itemizing generally increases with income. However, the AGI floor for the medical expenses deduction reduces the likelihood that very high-income individuals would claim the deduction. For all taxpayers, medical expenses alone might not make it worthwhile to itemize unless they can also claim other itemized deductions (e.g., home mortgage interest or state and local taxes).

Benefits for Volunteer Firefighters and Emergency Medical Responders28

The Mortgage Forgiveness Debt Relief Act of 2007 ( P.L. 110-142 ) provided an exclusion from gross income of certain benefits for members of qualified voluntary emergency response organizations. These payments include the forgiveness or rebate of state and local income and property taxes or payments by states or their political subdivisions to reimburse for expenses. The exclusion was limited to $30 a month. The provision disallowed any itemized deductions for the state and local taxes otherwise excluded.

This provision was enacted after a 2002 IRS decision that a reduction in property taxes for volunteers who are emergency responders was includible in gross income.

The provision was temporary, effective from the date of enactment (December 20, 2007) through 2010. The provision was allowed to expire as scheduled.

The SECURE Act of 2019, enacted as Division O of the Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ), reinstated the provision for 2020 and increased the amount to $50 a month.

The reinstated provision is likely to have a wider scope than it previously did because of the reduction in the number of itemizers due to provisions of the 2017 tax act ( P.L. 115-97 ), which is expected to reduce the share of itemizers, previously about one-third of taxpayers, to an estimated 11%.